DANNINGER MEDICAL TECHNOLOGY INC
10-Q, 1996-11-14
ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES
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<PAGE>


                                                   THIS PAPER DOCUMENT IS BEING
                                                   SUBMITTED PURSUANT TO RULE
                                                   901(d) OF REGULATION S-T
x

                                      FORM 10-Q

                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

       (Mark One)
      [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended September 30, 1996
                                           
                                          OR
                                           
      [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                For the transition period from        to            
                                              --------  ----------

                        Commission File Number:      000-16893

                          DANNINGER MEDICAL TECHNOLOGY, INC.
                (Exact name of registrant as specified in its charter)


          DELAWARE                                               31-0992628
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                               Identification No)


                            5160-B BLAZER MEMORIAL PARKWAY
                                     DUBLIN, OHIO
                                      43017-1339
                       (Address of principal executive offices)

                                    (614) 718-0500
                           (Registrant's telephone number)


    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days

                                  Yes   x      No
                                      -----      -----

                                      4,864,424
                          Shares of Common Stock Outstanding
                                        As Of
                                  September 30, 1996



<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                    (In thousands)


<TABLE>

                                                            September 30,      December 31,
                                                                1996               1995
                                                             (Unaudited)         (Audited)
                                                            -------------      ------------
                   ASSETS
                   ------
<S>                                                         <C>                <C>

CURRENT ASSETS:
  Cash                                                      $     241
  Accounts receivable trade (net of allowance for
       doubtful accounts of $354 and $204 for
       1996 and 1995, respectively)                             5,940          $     3,497
  Inventories                                                   5,193                4,227
  Prepaid expenses, and other current assets                      631                  409
  Deferred income taxes                                           185                  174
                                                            -------------      ------------
       Total current assets                                    12,190                8,307
                                                            -------------      ------------


  Property and equipment, net                                   1,561                  724
                                                            -------------      ------------


OTHER ASSETS:
  Other asset                                                     102                  102
  Intangibles (net of accumulated amortization
              of $84 and $31 for 1996 and 1995,
              respectively)                                     3,318                  202
  Deferred income taxes                                           132                  182
                                                            -------------      ------------
       Total assets                                         $  17,303          $     9,517
                                                            -------------      ------------
                                                            -------------      ------------
</TABLE>



                     The accompanying notes are an integral part
                             of the financial statements


                                          1


<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                         (In thousands except share amounts)

<TABLE>
                                                      September 30,     December 31,
                                                          1996              1995
                                                       (Unaudited)        (Audited)
                                                      -------------     ------------
 
       LIABILITIES AND SHAREHOLDERS' EQUITY
       ------------------------------------
<S>                                                    <C>               <C>
CURRENT LIABILITIES:
  Cash overdraft                                                        $       167
  Current portion, term debt                          $       712             3,380
  Current portion, capital lease obligations                   52                26
  Accounts payable, trade                                   2,306             1,146
  Accrued expenses, and other liabilities                     612               402
                                                      -------------     ------------
       Total current liabilities                            3,682             5,121
                                                      -------------     ------------

  Non-current portion, term debt                            8,797               839
                                                      -------------     ------------
  Obligations under capital leases, net of current
    maturities                                                114                35
                                                      -------------     ------------
  Commitments and Contingencies

SHAREHOLDERS' EQUITY:
  Common stock, $.01 par value:
      Authorized, 10,000,000 shares; issued and
      outstanding 4,864,424 and 4,707,490 shares
      for 1996 and 1995, respectively                          49                47
  Paid-in capital                                           4,079             3,367
  Retained earnings                                           582               108
                                                      -------------     ------------
       Total shareholders' equity                           4,710             3,522
                                                      -------------     ------------

       Total liabilities and shareholders' equity     $    17,303       $     9,517
                                                      -------------     ------------
                                                      -------------     ------------
</TABLE>


                     The accompanying notes are an integral part
                             of the financial statements


                                          2

<PAGE>

<TABLE>
                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
    For the three month and nine month periods ending September 30, 1996 and 1995
                  (In thousands except share and per share amounts)
                                     (Unaudited)

_________________________________________________________________________________________________________
                                         Three             Three              Nine             Nine
                                      Months Ended      Months Ended       Months Ended     Months Ended
                                      September 30,     September 30,      September 30,    September 30,
                                          1996              1995               1996             1995
_________________________________________________________________________________________________________

<S>                                    <C>              <C>                <C>              <C>

Revenue:
    Net sales                          $    3,999       $     2,758        $    11,162      $     8,451
    Lease and rental revenue                  543               236              1,210              492
                                       ----------       -----------        -----------      -----------
                                            4,542             2,994             12,372            8,943

    Cost of goods sold                      1,873             1,988              5,451            4,626
                                       ----------       -----------        -----------      -----------
         Gross margin                       2,669             1,006              6,921            4,317
                                       ----------       -----------        -----------      -----------
Operating expenses:
    Sales and marketing                     1,255               915              3,209            2,327
    General and administrative                708               503              1,959            1,474
    Research and development                  308               332                763              904
                                       ----------       -----------        -----------      -----------
                                            2,271             1,750              5,931            4,705
                                       ----------       -----------        -----------      -----------
         Operating income (loss)              398              (744)               990             (388)

Other expense:     
    Interest expense, net                     153                76                370              199
    Other                                                         4                                   4
                                       ----------       -----------        -----------      -----------
                                              153                80                370              203  

         Income (loss) before     
         income taxes                         245              (824)               620             (591)

Income tax expense (benefit)                   54               (58)               146               18
                                       ----------       -----------        -----------      -----------

         Net income (loss)             $      191       $      (766)       $       474      $      (609)

                                       ----------       -----------        -----------      -----------
                                       ----------       -----------        -----------      -----------
Earnings per share:
    Net income (loss) per share        $      .04       $     ( .16)       $       .09      $      (.13)
                                       ----------       -----------        -----------      -----------

Weighted average shares 
    outstanding including common 
    stock equivalents                   5,013,661         4,687,739          5,008,837        4,621,986
_______________________________________________________________________________________________________
</TABLE>

                     The accompanying notes are an integral part
                              of the financial statements


                                          3


<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
            For the nine month periods ending September 30, 1996 and 1995
                                    (In thousands)
                                     (Unaudited)


                                                     1996           1995
                                                  ---------      ---------
    
                              
Net cash used in operating activities                (1,136)        (1,918)
                                                  ---------      ---------
Cash flows used in investing activities:
    Payments received on notes receivable                              113 
    Purchases of property and equipment                (415)          (416)
    Purchase of business, net of cash
            acquired                                   (976)
                                                  ---------      ---------
    Net cash used in investing activities            (1,391)          (303)
                                                  ---------      ---------
Cash flows from financing activities:
    Proceeds from term debt                           1,334          1,831
    Proceeds from convertible subordinated 
            debenture offering                        5,250
    Repayment of term debt and capitalized
            lease obligations                        (3,314)            17
    Debt issue costs                                   (542)
    Cash overdraft                                     (167)
    Proceeds from exercise of stock options             207            407
                                                  ---------      ---------

            Net cash provided by 
                 financing activities                 2,768          2,255
                                                  ---------      ---------

            Net increase in cash                        241             34

Cash balance at the beginning of the period               0              3
                                                  ---------      ---------
Cash balance at the end of the period             $     241     $       37
                                                  ---------      ---------
                                                  ---------      ---------


                     The accompanying notes are an integral part
                             of the financial statements


                                          4


<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
                                           

1.   Management's Statement

     In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring
in nature) necessary to present fairly the financial position of Danninger
Medical Technology, Inc. and Subsidiaries at September 30, 1996, and the results
of operations and cash flows for the three month and nine month periods
ending September 30, 1996 and 1995. The notes to the Consolidated Financial
Statements which are contained in the 1995 Annual Report to Shareholders should
be read in conjunction with these Consolidated Financial Statements.


2.   Inventories

     Inventories are valued at the lower of first-in, first-out cost or market
and consisted of the following (in thousands):

                                         September        December    
                                           1996             1995

         Raw materials                   $    858        $    671
         Work-in-process                       88             108
         Finished goods                     3,137           2,686
         Consigned inventory                1,110             762
                                         --------         -------
                                         $  5,193         $ 4,227
                                         --------         -------
                                         --------         -------

3.   Income Taxes

     The Company provides for federal, state, and local income taxes in interim
periods using an estimated effective tax rate for the year.  The Company
maintains valuation allowances of $584,000 against net deferred tax assets.

4.   Intangibles

     Intangible assets include patents and goodwill. Intangible assets 
including goodwill are amortized over their useful lives from five to 25 
years. Management periodically evaluates the recoverability of all intangible 
assets based on estimated future cash flows.

5.   Term Debt

     Term debt included $5,250,000 of Convertible Subordinated Debentures 
("Debentures") at 8.5% interest due June 1, 2003. The Debentures are 
convertible prior to maturity or redemption into the Company's Common Stock 
at $8.125 per share beginning July 1, 1999. The Company will be obligated to 
redeem Debentures tendered by June 1, 1999 at their fair amount plus accrued 
interest. Redemption may be accelerated in the event of a change in control 
of the Company and in certain other circumstances as described in the bond 
indenture. The Debentures contain certain convenants with respect to default 
of interest and redemption of payments and defaults under other indebtedness 
of the Company in excess of $1,000,000.

     In connection with the acquisition of SOS, a $1,500,000 note payable to 
the seller with interest at the prime rate (8.25% at September 30, 1996). 
Interest only in payable monthly and the note is due in September 1999.

6.   Accounting Estimates

     The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

7.   New Accounting Standards

     In October 1995, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 123, Accounting for 
Stock-Based Compensation. The Company does not plan to adopt the expense 
recognition provisions of this Standard; therefore, the adoption of this 
Standard will have no effect on the Company's financial condition or results 
of operations.

     In March 1995, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 121, Accounting for the Impairment of 
Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company 
adopted this Statement effective January 1, 1996. The adoption of this 
Standard had no effect on the Company's fianncial conditions or results of 
operations as of September 30, 1996.

8.   Contingency

      The Company maintains a claims made product liability insurance policy
with $50,000 per occurrence and $250,000 aggregate retention limits.  Beyond
these retention limits, the policy covers aggregate insured claims made during
each policy year up to $5,000,000.

      The Company and other spinal implant manufacturers have been named as
defendants in various class action product liability lawsuits alleging that the
plaintiffs were injured by spinal implants supplied by the Company and others. 
All such lawsuits were consolidated for pretrial proceedings in the Federal
District Court for the Eastern District of Pennsylvania and on February 22,
1995, the plaintiffs were denied class certification.  In response to the denial
of class certification, a large number of additional individual lawsuits have
been filed alleging, in addition to damages from spinal implants, a 


                                          5

<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                     (UNAUDITED)

conspiracy among manufacturers, physicians and other spinal implant industry 
members.  Approximately 500 such lawsuits have been filed in which the 
Company is a party.  Approximately fifteen of such cases involve individual 
plaintiffs utilizing implants supplied by the Company.  The Company cannot 
estimate precisely at this time the number of such lawsuits that may 
eventually be filed.  The vast majority of such lawsuits are pending in 
federal courts and are in preliminary stages.  Discovery proceedings, 
including the taking of depositions, have commenced in certain lawsuits.  
Plaintiffs in these cases typically seek relief in the form of monetary 
damages, often in unspecified amounts.  While the aggregate monetary damages 
eventually sought in all of such individual actions is substantial and 
exceeds the limits of the Company's product liability insurance policies, the 
Company believes that it has affirmative defenses, and that these individual 
lawsuits are otherwise without merit.  An estimate of the amount of loss 
cannot be made as the Company does not have sufficient information on which 
to base an estimate.  All pending cases are being defended by the Company's 
insurance carrier, in some cases under a reservation of rights.  There can be 
no assurance, however, that the $5,000,000 per annum limit of the Company's 
coverage will be sufficient to cover the cost of defending all lawsuits or 
the payment of any amounts that may be paid in satisfaction of any 
settlements of judgments.  Further, there can be no assurance that the 
Company will continue to be able to obtain sufficient amounts of product 
liability insurance coverage at commercially reasonable premiums.

      In addition to the above, in the ordinary course of business the Company
has been named as a defendant in various other legal proceedings.  These
actions, when finally concluded, will not, in the opinion of the Company, have a
material adverse affect upon the financial position or results of operations of
the Company.  However, there can be no assurance that future quarterly or
annually operating results will not be materially adversely affected by the
final resolution of these matters.

      Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade accounts receivable
(domestic and international).  The Company follows certain guidelines in
determining the credit-worthiness of domestic and foreign customers.  The credit
risk associated with each customer and each country is reviewed before a credit
decision is made.  All international sales are denominated in U.S. dollars.

      Certain of the Company's accounts receivable result from third party
reimbursements that may be dependent on limitations imposed by the payor on the
amount of reimbursement.  The Company records the receivable and related revenue
net of such limitations.

9.    Acquisition of Business

      In September 1996, the Company acquired all of the outstanding stock of 
Surgical & Orthopedic Specialties, Inc. (SOS) for approximately $3.0 million. 
The acquisition has been accounted for on the purchase method. The 
consideration was comprised of $1.1 million cash, $0.5 million of common 
stock, $1.5 million in a seller financed note payable. SOS is engaged in the 
rental of recovery products. Intangible assets in the accompanying 
consolidated balance sheet includes approximately $2.5 million of goodwill 
resulting from this transaction which is amortized over 25 years. The 
acquisition of SOS was accounted for under the purchase method. Accordingly, 
the purchase price has been allocated to the assets acquired and liabilities 
assumed based on their estimated fair values at the date of acquisition. The 
results of operations of SOS have been included in the Consolidated 
Statements of Operations from the acquisition date.

Business acquired (in thousands):
Fair value of assets                    $3,794
Fair value of liabilities                 (818)
Common stock issued                       (500)
Acquisition indebtedness                (1,500)
                                        -------
Net cash paid                           $  976
                                        -------
                                        -------

                                          6

<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The following table shows the Company's operating results as a percent 
of revenues for the periods indicated for certain items reflected in the 
statement of operations.  

_______________________________________________________________________________
                                        Percent                  Percent
                                      of Revenues               of Revenues
                                          for                      for
                                      three months              nine months 
                                         ending                   ending
                                      September 30,             September 30,
_______________________________________________________________________________

                                  1996         1995         1996         1995
                                  ----         ----         ----         ----

Net sales                         88.0%        92.1%        90.2%        94.5%
Lease/rental revenue              12.0%         7.9%         9.8%         5.5%
                                  ----         ----         ----         ----
                                 100.0%       100.0%       100.0%       100.0%

Cost of goods sold                41.2%        66.4%        44.1%        51.7%

Gross margin                      58.8%        33.6%        55.9%        48.3% 
 
Operating expenses:
    Sales and marketing           27.6%        30.6%        25.9%        26.0%

    General and administrative    15.6%        16.8%        15.8%        16.5%

    Research and development       6.8%        11.1%         6.2%        10.1%

Interest expense, net              3.4%         2.5%         3.0%         2.2%

Other expense                                    .1%                       .1%

Income (loss) before income
  taxes                            5.4%       (27.5%)        5.0%        (6.6%)

Income tax expense (benefit)       1.2%        (1.9%)        1.2%          .2%

Net income (loss)                  4.2%       (25.6%)        3.8%        (6.8%)
________________________________________________________________________________


                                          7


<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


GENERAL

    The Company continues to develop its strategy of focusing on increasing
market penetration with its Synergy-TM- spinal implant system as it continues to
expand its distribution network in the United States and internationally.  The
Company also continues to assess and develop new products to add to its existing
spinal implant line.

    In addition, the Company continues to analyze the rental market for 
orthopedic rehabilitation devices.  In 1994, the Company formed a subsidiary 
to determine the feasibility of entering this market.  In September, 1996, 
the Company acquired Surgical and Orthopedic Specialities, Inc. (SOS), an 
independent orthopedic dealer, for $3 million (in stock, cash, note, and 
non-compete agreement).  The Company expects to continue negotiating 
additional similar transactions with other independent dealers. There can be 
no assurance, however, that the Company will be able to successfully 
implement this strategy by reaching final purchase agreements with the 
independent dealers.

FINANCIAL CONDITION AS OF SEPTEMBER 30, 1996

     As of September 30, 1996, the Company's working capital position 
increased by $5,322,000 resulting in a working capital ratio of 3.31 to 1.  
The increase in working capital is principally attributable to the retirement 
of the $3,000,000 line of credit facility with the proceeds from the 
Company's $5,250,000 convertible subordinated debenture offering which was 
completed in May.  The $3,000,000 line of credit facility has been renewed 
and is available to fund future working capital requirements.  As of 
September 30, 1996, $3,000,000 is available. In addition, working capital 
increased due to the operating results experienced by the Company during the 
third quarter of 1996.

     Accounts receivables increased by $2,443,000, inventories increased by 
$966,000 and trade payables increased by $1,160,000.  The increase in 
accounts receivables is attributable to increased sales in the third quarter. 
Also, accounts receivable increased by approximately $765,000 and accounts 
payable increased by approximately $201,000 when the Company acquired SOS.  
The increase in the inventory is primarily due to supporting the growing 
spinal implant business.   

     During the second quarter of 1996, the Company received $5,250,000 
during the debenture offering.  During the third quarter of 1996, the Company 
entered into a note payable and a non-compete agreement for $1,500,000 during 
the acquisition of SOS.  During 1996, the Company had additional borrowings 
of $1,827,000 which contributed to an overall increase in liabilities.

     The Company believes its bank loan facility, working capital, and funds
anticipated to be generated by operations will be sufficient to fund the
Company's growth plans for the foreseeable future.


                                          8

<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                           

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED
TO THE THREE MONTHS ENDED SEPTEMBER 30, 1995

     Total revenue increased 51.7% for the three months ended September 30, 1996
to $4,542,000 from $2,994,000 for the three months ended September 30, 1995. 
The increase is primarily attributable to increased sales of the Company's
Synergy-TM- spinal implant system.  In addition, the Company benefited from
continued penetration into the orthopedic home care rental market.

     Cost of sales as a percentage of total revenue decreased to 41.2% for 
the three months ended September 30, 1996 from 66.4% for the three months 
ended September 30, 1995.  The decrease is primarily due to the establishment 
of an inventory reserve of $312,000 or approximately 10% of sales during the 
third quarter of 1995.  The decrease was also impacted by a change in the 
sales mix from 1995 to 1996, from recovery products which have high cost of 
sales percentages to the spinal implant business and the orthopedic home care 
rental business which have lower cost of sales percentages.

     Sales and marketing expense decreased to 27.6% from 30.6% of total 
revenue for the three months ended September 30, 1996 and 1995, respectively. 
The Company has been effective at reducing the amount and cost of sales 
travel.  General and administrative expenses decreased to 15.6% from 16.8% of 
total revenue for the three months ended September 30, 1996 and 1995, 
respectively. Research and development expenses decreased to 6.8% from 11.1% 
of total revenue for the three months ended September 30, 1996 and 1995, 
respectively, principally as a result of higher level of expenditures in 1995 
in connection with obtaining Section 510(k) approval of the Synergy-TM- 
spinal implant system.

     These factors resulted in an overall increase in operating income to
$398,000 or 8.8% of total revenue for the three months ended September 30, 1996
from $(744,000) or (24.8%) for the three months ended September 30, 1995.  

     Interest expense increased to 3.4% from 2.5% of total revenue for the 
three months ended September 30, 1996 and 1995, respectively, as a result of 
increased borrowings to provide additional working capital.

     Net income (loss) increased to $191,000 from $(766,000) for the three
months ended September 30, 1996 and 1995, respectively, and earnings per share
increased to $.04 from $(.16) for the same periods.


                                          9

<PAGE> 

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES
                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                           

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED
TO THE NINE MONTHS ENDED SEPTEMBER 30, 1995

     For the nine months ended September 30, 1996 total revenue increased 38.3%
to $12,372,000 from $8,943,000 for the nine months ended September 30, 1995. 
Cost of goods sold decreased to 44.1% from 51.7% for the nine months ended
September 30, 1996 and 1995, respectively.  As a percentage of total revenue,
sales and marketing expense remained constant to 25.9% from 26.0%, general and
administrative expenses decreased to 15.8% from 16.5% and research and
development expense decreased to 6.2% from 10.1% for the nine months ended
September 30, 1996 and 1995, respectively.  Interest expense, net increased to 
3.0% from 2.2% for the same periods.

     Net income (loss) for the nine months ended September 30, 1996 increased to
$474,000 from $(609,000) for the nine months ended September 30, 1995.  Earnings
per share increased to $.09 from $(.13) for the same periods.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT 
OF 1995

     Except for the historical information in this report, it includes
forward-looking statements that involve risks and uncertainties, including, but
not limited to quarterly fluctuations in results, the management of growth, and
other risks detailed from time to time in the Company's Securities and Exchange
Commission filings, including the Company's Form 10-K for the fiscal year ended
December 31, 1995.  Actual results may differ materially from management
expectations.


                                          10

<PAGE>

                            PART II  -  OTHER INFORMATION

ITEM 1.     Legal Proceedings

      The Company maintains a claims made product liability insurance policy
with per occurrence ($50,000) and aggregate ($250,000) retention limits.  Beyond
these retention limits, the policy covers aggregate insured claims made during
each policy year up to $5,000,000.

      The Company and other spinal implant manufacturers have been named as 
defendants in various class action product liability lawsuits alleging that 
the plaintiffs were injured by spinal implants supplied by the Company and 
others. All such lawsuits were consolidated for pretrial proceedings in the 
Federal District court for the Eastern District of Pennsylvania and on 
February 22, 1995 the plaintiffs were denied class certification.  In 
response to the denial of class certification, a large number of additional 
individual lawsuits have been filed alleging, in addition to damages from 
spinal implants, a conspiracy among manufacturers, physicians and other 
spinal implant industry members.  Approximately 500 such lawsuits have been 
filed in which the Company is a party.  Approximately fifteen of such cases 
involve individual plaintiffs utilizing implants supplied by the Company.  
The Company cannot estimate precisely at this time the number of such 
lawsuits that may eventually be filed. The vast majority of such lawsuits are 
pending in federal courts and are in preliminary stages.  Discovery 
proceedings, including the taking of depositions, have commenced in certain 
of the lawsuits.  Plaintiffs in these cases are typically seek relief in the 
form of monetary damages, often in unspecified amounts.  While the aggregate 
monetary damages eventually sought in all of such individual actions is 
substantial and exceeds the limits of the Company's product liability 
insurance policies, the Company believes that it has affirmative defenses, 
and that these individual lawsuits are otherwise without merit.  An estimate 
of the amount of loss cannot be made as the Company does not have sufficient 
information on which to base an estimate.  All pending cases are being 
defended by the Company's insurance carrier, in some cases under a 
reservation of rights.  There can be no assurance, however, that the 
$5,000,000 per annum limit of the Company's coverage will be sufficient to 
cover the cost of defending all lawsuits or the payment of any amounts that 
may be paid in satisfaction of any settlements or judgments.  Further, there 
can be no assurance that the Company will continue to be able to obtain 
sufficient amounts of product liability insurance coverage at commercially 
reasonable premiums.

      In addition to the above, in the ordinary course of business the Company
has been named as a defendant in various other legal proceedings.  These
actions, when finally concluded, will not, in the opinion of the Company, have a
material adverse affect upon the financial position or results of operations of
the Company.  However, there can be no assurance that future quarterly or
annually operating results will not be materially adversely affected by the
final resolution of these matters.


ITEM 6.     Exhibits and Reports on Form 8-K

  (a)    Exhibits

         The exhibits listed in the accompanying index to exhibits are filed as
         a part of this Report.

  (b)    Reports on Form 8-K

         The Company filed the following Current Report on Form 8-K since 
         June 30, 1996:

         Current Report on Form 8-K, dated September 20, 1996, filed with the
         Securities and Exchange Commission on September 20, 1996 (Items 2 
         and 7)


                                         11 
<PAGE>

                                  Signatures

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                           DANNINGER MEDICAL TECHNOLOGY, INC.
                                                      (Registrant)





Dated:  November 13, 1996                      /S/ Joseph A. Mussey
                                                   Joseph A. Mussey
                                            Chief Executive Officer, President,
                                                      and Treasurer





Dated:  November 13, 1996                      /S/ Paul A. Miller
                                                   Paul A. Miller
                                                Chief Financial Officer
                                       (Principal Financial/Accounting Officer)



                                          12



<PAGE>

                 DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES

                                      FORM 10-Q
                                    EXHIBIT INDEX


Exhibit No.    Exhibit                                              

   10(a)       Employment Agreement, dated November 7, 1996,
               between the Company and Joseph A. Mussey.

   10(b)       Employment Agreement, dated November 7, 1996,
               between the Company and Paul A. Miller.

   10(c)       Employment Agreement, dated November 7, 1996,
               between the Company and Ira Benson.

   10(d)       Employment Agreement, dated November 7, 1996,
               between the Company and Thomas E. Zimmer.

   10(e)       Employment Agreement, dated November 7, 1996,
               between the Company and Paul A. Mellinger.

   10(f)       Non-Competition Agreement dated September 6, 1996,
               between the Company and Stephen R. Draper.

   11          Statement re:  Computation of Per Share Earnings       

   27          Financial Data Schedules                               





                                          13


<PAGE>
                                                                   Exhibit 10(a)

                      DANNINGER MEDICAL TECHNOLOGY, INC.


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


     THIS EMPLOYMENT AGREEMENT is made this 7th day of November, 1996,
("Agreement") between Danninger Medical Technology, Inc., a Delaware corporation
("Danninger"), and Joseph A. Mussey ("Executive").


                             Recitals

     A.   Danninger is the owner, directly or indirectly, of all of the issued
capital stock of Cross Medical Products, Inc., an Ohio corporation, and
Danninger Healthcare, Inc., an Ohio corporation (individually a "Subsidiary" and
collectively the "Subsidiaries").

     B.   Danninger and its Subsidiaries (collectively, the "Company") design,
manufacture, sell and lease medical and surgical equipment, devices and
instruments.

     C.   The Executive is currently employed as an executive of Danninger or
one of its Subsidiaries.

     D.   The Company considers the continued services of the Executive to be in
the best interest of the Company and desires to assure the continued services of
the Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an attempt to obtain
control of the Company.

     E.   The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security in the event of
a change in control of the Company.

     F.   Danninger and the Executive desire to enter into an employment
relationship upon the terms and conditions contained herein.

     NOW, THEREFORE, the parties agree as follows:

     1.   EMPLOYMENT.  Danninger hereby employs the Executive and the Executive
accepts such employment upon the terms and conditions hereinafter set forth.

     2.   DUTIES.  The Executive shall be employed:

          (a)  to serve as President and Chief Executive Officer of Danninger,
     and to serve in other capacities for each of Danninger and the
     Subsidiaries, if so elected, subject


<PAGE>

     to the authority and direction of the Board of Directors of Danninger or 
     such Subsidiary, as the case may be; and

          (b)  to perform such other duties and responsibilities similar to
     those performed by the Executive prior hereto and exercise such other
     authority, perform such other or additional duties and responsibilities and
     have such other or different title (or have no title) as the Board of
     Directors of Danninger may, from time to time, prescribe.

     So long as he is employed under this Agreement, the Executive agrees to
devote his full time and efforts exclusively on behalf of the Company and to
competently, diligently, and effectively discharge his duties hereunder.  The
Executive shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.  The
Executive further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.

     3.   COMPENSATION.  As his entire compensation for all services rendered to
the Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to the Executive during the term hereof a minimum base salary
at the rate of $160,000.00 per year ("Basic Salary"), payable monthly or in
other more frequent installments, as determined by the Company.  The Basic
Salary may be increased, but not decreased, from time to time, by the Board of
Directors.

     In addition, the Executive will be entitled to receive incentive
compensation pursuant to the terms of plans adopted by the Board of Directors
from time to time.

     4.   BUSINESS EXPENSES.  The Company shall promptly pay directly, or
reimburse the Executive for, all business expenses to the extent such expenses
are paid or incurred by the Executive during the term of employment in
accordance with Company policy in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by the Executive of
the Company's business and properly substantiated.

     5.   FRINGE BENEFITS.  During the term of this Agreement and the
Executive's employment hereunder, the Company shall provide to the Executive
such insurance, vacation, sick leave and other like benefits as are provided
from time to time to its other employees holding equivalent executive positions
with the Company in accordance with the policy of the Company as may be
established from time to time; provided, however, that the Company shall
maintain at least the level of benefits presently provided to the Executive.

     6.   TERM; TERMINATION.  The Executive is employed by the Company "at
will." The Executive's employment may be terminated at any time as provided
below.  For purposes of this Section 6, "Termination Date" shall mean the date
on which any notice period required under


                                       2
<PAGE>

this Section 6 expires or, if no notice period is specified in this Section 6, 
the effective date of the termination referenced in the notice.
 
          (a)  TERMINATION BY THE EXECUTIVE.  The Executive may terminate his
     employment upon giving at least 30 days' advance written notice to the
     Company and the Company will pay the Executive the earned but unpaid
     portion of the Executive's Basic Salary through the Termination Date.  If
     the Executive gives notice of termination hereunder, the Company shall have
     the right to relieve the Executive, in whole or in part, of his duties
     under this Agreement and to advance the Termination Date from the date set
     by the Executive's notice to a date not less than 14 days from the receipt
     of the Executive's notice of termination.

          (b)  TERMINATION BY COMPANY WITHOUT CAUSE.  The Company may terminate
     the Executive's employment without cause upon giving 30 days' advance
     written notice to the Executive.  If the Executive's employment is
     terminated without cause under this Section 6(b), the Company will pay the
     Executive the earned but unpaid portion of the Executive's Basic Salary
     through the Termination Date and will continue to pay the Executive his
     Basic Salary for 12 months following the Termination Date ("Severance
     Period"); provided, however, that the Company may terminate payment of the
     Basic Salary during the Severance Period if the Executive accepts other
     employment or is in breach of obligations under Sections 7 or 8 of this
     Agreement.
          
          (c)  TERMINATION BY COMPANY FOR GOOD CAUSE.  The Company may terminate
     the Executive's employment  upon a determination by the Company that "Good
     Cause" exists for the Executive's termination and the Company serves
     written notice of such termination upon the Executive.  As used in this
     Agreement, the term "Good Cause" shall refer only to any one or more of the
     following actions by the Executive:

               (i) commission of an act of dishonesty, including, but not
          limited to, misappropriation of funds or any property of the Company;

               (ii) engagement in activities or conduct clearly injurious to the
          reputation of the Company;

               (iii) refusal to perform his assigned duties and
          responsibilities;

               (iv) gross insubordination;

               (v) the clear violation of any of the material terms and
          conditions of this Agreement or any written agreement or agreements
          the Executive may from time to time have with the Company (following
          30-days' written notice from the Company specifying the violation and
          the Executive's failure to cure such violation within such 30-day
          period); or


                                       3
<PAGE>


               (vi) commission of a misdemeanor involving an act of moral
          turpitude or a felony.

In the event of a termination under this Section 6(c), the Company will pay the
Executive the earned but unpaid portion of the Executive's Basic Salary through
the Termination Date.

          (d)  TERMINATION UPON DEATH OR PERMANENT DISABILITY.  The Executive's
     employment shall terminate upon the death or permanent disability of the
     Executive.  For purposes hereof, "permanent disability," shall mean the
     inability of the Executive, as determined by the Board of Directors of the
     Company, by reason of physical or mental illness to perform the duties
     required of him under this Agreement for more than 180 days in any one year
     period.  Successive periods of disability, illness or incapacity will be
     considered separate periods unless the later period of disability, illness
     or incapacity is due to the same or related cause and commences less than
     six months from the ending of the previous period of disability.  Upon a
     determination by the Board of Directors of Danninger that the Executive's
     employment shall be terminated under this Section 6(d), the Board of
     Directors shall give the Executive 30 days' prior written notice of the
     termination.  If a determination of the Board of Directors under this
     Section 6(d) is disputed by the Executive, the parties agree to abide by
     the decision of a panel of three physicians.  The Company will select a
     physician, the Executive will select a physician and the physicians
     selected by the Company and the Executive will select a third physician. 
     The Executive agrees to make himself available for and submit to
     examinations by such physicians as may be directed by the Company.  Failure
     to submit to any examination shall constitute a breach of a material part
     of this Agreement.  In the event of a termination under this Section 6(d),
     the Company will pay Executive or his duly appointed and qualified executor
     or other personal representative the earned but unpaid portion of the
     Executive's Basic Salary through the Termination Date.

          (e)  TERMINATION FOLLOWING CHANGE OF CONTROL.    If a "Change in
     Control", as defined in Section 6(e)(v), shall have occurred and within one
     year following such Change in Control the Company terminates the employment
     of the Executive for other than Good Cause, as defined in Section 6(c), or
     the Executive terminates his employment for Good Reason, as that term is
     defined in Section 6(e)(vii), then the Executive shall be entitled to the
     benefits described below:

               (i)  The Executive shall be entitled to the unpaid portion of his
          Basic Salary plus credit for any vacation accrued but not taken and
          the amount of any unpaid but earned bonus, incentive compensation or
          any other benefit to which he is entitled under this Agreement through
          the date of the termination as a result of a Change in Control, plus 2
          times the Executive's "Current Annual Compensation" as defined in this
          Section 6(e)(i) ("Salary Termination Benefit").  For this purpose
          "Current Annual Compensation" shall mean the total of Executive's
          Basic Salary in effect at the Termination Date, plus any performance
          bonuses received by Executive in


                                       4
<PAGE>

          the prior twelve months, and shall not include the value of any stock 
          options granted or exercised, contributions to 401(k) or other 
          qualified plans, medical, dental, or other insurance benefits, or 
          other fringe benefits.  The Salary Termination Benefit shall be paid 
          to the Executive in 24 equal consecutive monthly payments commencing 
          on the first day of the month after termination of employment 
          following a Change in Control.
     
               (ii)  All outstanding stock options issued to the Executive shall
          become 100% vested and thereafter exercisable in accordance with such
          governing stock option agreements and plans.
     
               (iii)  The Company shall maintain for the Executive's benefit
          until the earlier of (y) 24 months after termination of employment
          following a Change in Control, or (z) the Executive's commencement of
          full-time employment with a new employer, all life insurance, medical,
          health and accident, and disability plans or programs in which the
          Executive shall have been entitled to participate prior to termination
          of employment following a Change in Control, provided the Executive's
          continued participation is permitted under the general terms of such
          plans and programs after the Change in Control ("Fringe Termination
          Benefits";  collectively the Salary Termination Benefit and the Fringe
          Termination Benefit are referred to as the "Termination Benefits"). 
          In the event the Executive's participation in any such plan or program
          is not permitted, the Company will provide directly the benefits to
          which the Executive would be entitled under such plans and programs.
     
               (iv)  The Termination Benefits shall be payable to the Executive
          as severance pay in consideration of his past service and of his
          continued services from the date hereof.  Executive shall have no duty
          to mitigate his damages by seeking other employment, and the Company
          shall not be entitled to set off against amounts payable hereunder any
          compensation which the Executive may receive from future employment.

               (v)  A "Change in Control" shall be deemed to have occurred if
          and when, after the date hereof, (i) Danninger, or in one or more
          transactions 50% or more of its assets or earning power, is acquired
          by or combined with a person, partnership, corporation, trust or other
          entity ("Person") and less than a majority of the outstanding voting
          shares of the Person surviving such transaction (or the ultimate
          parent of the surviving Person) after such acquisition or combination
          is owned, immediately after the acquisition or combination, by the
          owners of the voting shares of the Company outstanding immediately
          prior to such acquisition or combination; or (ii) during any period of
          two consecutive years during the term of this Agreement, individuals
          who at the beginning of such period constitute the Board of Directors
          of Danninger cease for any reason to constitute at least two-


                                       5
<PAGE>

          thirds thereof, unless the election of each director who was not a 
          director at the beginning of such period has been approved in advance 
          by directors representing at least two-thirds of the directors then in
          office who were directors at the beginning of the period.

               (vi)  If the payments and benefits provided under this Agreement
          to the Executive, either alone or with other payments and benefits,
          would constitute "excess parachute payments" as defined in 
          Section 280G of the Internal Revenue Code of 1986, as amended 
          ("Code"), then the payments and other benefits under this Agreement 
          shall be reduced to the extent necessary so that no portion thereof 
          shall be subject to the excise tax imposed by Section 4999 of the 
          Code.  Either the Company or the Executive may request a determination
          as to whether the payments or benefits would constitute an excess 
          parachute payment and, if requested, such determination shall be made 
          by independent tax counsel selected by the Company and approved by the
          Executive.  At the Executive's election and to the extent not 
          otherwise paid, the Executive may determine the amount of cash and/or 
          elements of non-cash fringe benefits to reduce so that such payments 
          and benefits will not constitute excess parachute payments.


               (vii)   As used in this Agreement, the term "Good Reason" means,
          without the Executive's written consent, 

                    (a) a change in status, position or responsibilities which,
               in the Executive's reasonable judgment, does not represent a
               promotion from existing status, position or responsibilities as
               in effect immediately prior to the Change in Control; the
               assignment of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with such
               status, position or responsibilities; or any removal from or
               failure to reappoint or reelect the Executive to any of such
               positions, except in connection with the termination for total
               and permanent disability, death or Good Cause or by him other
               than for Good Reason; 

                    (b) a reduction by the Company in the Executive's base
               salary as in effect on the date hereof or as the same may be
               increased from time to time during the term of this Agreement or
               the Company's failure to increase (within twelve months of the
               Executive's last increase in base salary) the Executive's base
               salary after a Change in Control in an amount which at least
               equals, on a percentage basis, the average percentage increase in
               base salary for all executive and senior officers of the Company
               effected in the preceding twelve months; 


                                       6
<PAGE>

                    (c) the relocation of the Company's principal executive
               offices to a location outside the Columbus metropolitan area or
               the relocation of the Executive by the Company to any place other
               than the location at which the Executive performed duties prior
               to a Change in Control, except for required travel on the
               Company's business to an extent substantially consistent with
               business travel obligations at the time of a Change in Control; 

                    (d) the failure of the Company to continue in effect any
               incentive, bonus or other compensation plan in which the
               Executive participates, including but not limited to the
               Company's stock option plans, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan),
               evidenced by the Executive's written consent, has been made with
               respect to such plan in connection with the Change in Control, or
               the failure by the Company to continue the Executive's
               participation therein, or any action by the Company which would
               directly or indirectly materially reduce participation therein; 

                    (e) the failure by the Company to continue to provide the
               Executive with benefits substantially similar to those enjoyed or
               entitled under any of the Company's pension, profit sharing, life
               insurance, medical, dental, health and accident, or disability
               plans at the time of a Change in Control, the taking of any
               action by the Company which would directly or indirectly
               materially reduce any of such benefits or deprive the Executive
               of any material fringe benefit enjoyed or entitled to at the time
               of the Change in Control, or the failure by the Company to
               provide the number of paid vacation and sick leave days to which
               the Executive is entitled on the basis of years of service with
               the Company in accordance with the Company's normal vacation
               policy in effect on the date hereof; 

                    (f) the failure of the Company to obtain a satisfactory
               agreement from any successor or assign of the Company to assume
               and agree to perform this Agreement or; 

                    (g) any request by the Company that the Executive
               participate in an unlawful act or take any action constituting a
               breach of the Executive's professional standard of conduct. 
               Notwithstanding anything in this Section to the contrary, the
               Executive's right to terminate the employment pursuant to this
               Section shall not be affected by incapacity due to physical or
               mental illness.

               (viii)  Upon any termination or expiration of this Agreement or
          any cessation of the Executive's employment hereunder, the Company
          shall have no further obligations under this Agreement and no further
          payments shall be payable


                                       7
<PAGE>

          by the Company to the Executive, except as provided in Sections 6(b) 
          and 6(e) above and except as required under any benefit plans or 
          arrangements maintained by the Company and applicable to the Executive
          at the time of such termination, expiration or cessation of the 
          Executive's employment, including, without limitation thereto, salary,
          incentive compensation, sick leave, and vacation pay.

               (ix)   ENFORCEMENT OF AGREEMENT.  The Company is aware that upon
          the occurrence of a Change in Control, the Board of Directors or a
          shareholder of the Company may then cause or attempt to cause the
          Company to refuse to comply with its obligations under this Agreement,
          or may cause or attempt to cause the Company to institute, or may
          institute litigation seeking to have this Agreement declared
          unenforceable, or may institute litigation seeking to have this
          Agreement declared unenforceable, or may take or attempt to take other
          action to deny the Executive the benefits intended under this
          Agreement.  In these circumstances, the purpose of this Agreement
          could be frustrated.  It is the intent of the Company that the
          Executive not be required to incur the expenses associated with the
          enforcement of any rights under this Agreement by litigation or other
          legal action, nor be bound to negotiate any settlement of any rights
          hereunder, because the cost and expense of such legal action or
          settlement would substantially detract from the benefits intended to
          be extended to the Executive hereunder.  Accordingly, if following a
          Change in Control it should appear to the Executive that the Company
          has failed to comply with any of its obligations under this Agreement
          or in the event that the Company or any other person takes any action
          to declare this Agreement void or enforceable, or institutes any
          litigation or other legal action designed to deny, diminish or to
          recovery from the Executive the benefits entitled to be provided to
          the Executive hereunder, and that the Executive has complied with all
          obligations under this Agreement, the Company irrevocably authorizes
          the Executive from time to time to retain counsel of the Executive's
          choice, at the expense of the Company as provided in this Section, to
          represent the Executive in connection with the initiation or defense
          of any litigation or other legal action, whether such action is by or
          against the Company or any Director, officer, shareholder, or other
          person affiliated with the Company, in any jurisdiction. 
          Notwithstanding any existing or prior attorney-client relationship
          between the Company and such counsel, the Company irrevocably consents
          to the Executive entering into an attorney-client relationship with
          such counsel, and in that connection the Company and the Executive
          agree that a confidential relationship shall exist between the
          executive and such counsel.  The reasonable fees and expenses of
          counsel selected from time to time by the Executive as hereinabove
          provided shall be paid or reimbursed to the Executive by the Company
          on a regular, periodic basis upon presentation by the Executive of a
          statement or statements prepared by such counsel in accordance with
          its customary practices, up to a maximum aggregate amount of $200,000.
          Any legal expenses incurred by the Company by reason of any dispute
          between the parties as to enforceability of or the terms contained in
          this Agreement, notwithstanding the outcome of any such dispute,


                                       8
<PAGE>

          shall be the sole responsibility of the Company, and the Company shall
          not take any action to seek reimbursement from the Executive for such
          expenses.

     7.   NON-COMPETITION.  

          (a) The Executive agrees that he will not during the term of this
     Agreement, any extension hereof, and for a period of 12 months after
     termination of employment with the Company, whether voluntary or
     involuntary or with or without cause:

               (i)  engage or participate, directly or indirectly, either as
          principal, agent, employee, employer, consultant, stockholder (except
          as the holder of not more than two percent of the stock of any
          publicly traded corporation), or in any other individual or
          representative capacity whatsoever, in the operation, management or
          ownership of any business, firm, corporation, association, or other
          entity engaged in the design, manufacture, marketing, sale or lease of
          continuous passive motion, thermal therapy or similar orthopedic
          rehabilitation devices, spinal implants, or spinal instruments, or any
          other business engaged in by the Company at any time during the term
          of this Agreement, or during the 12 month period after termination;
          and,

               (ii)  directly or indirectly, for himself or in conjunction with
          or on behalf of any other individual or entity, solicit, divert, take
          away or endeavor to take away from the Company any customer, account
          or employee of the Company at any time during the term of this
          Agreement, as of the date of the Executive's termination of employment
          with the Company, or during the 12 month period after termination.
 
          (b)  In the event of a violation of this Section 7, the 
     non-competition time period provided in Section 7(a) shall be tolled 
     during the time of such violation.

     8.   CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS.

          (a)  As used herein, the term "Confidential Information" includes, but
     is not limited to, all information and materials belonging to, used by, or
     in the possession of the Company (i) which have been disclosed or made
     known to, or has come into the possession of the Executive as a consequence
     of or through the Executive's relationship with the Company prior to or
     after the date hereof, (ii) which are related to the Company's  customers,
     potential customers, suppliers, distributors, business strategies or
     policies, financial or sales results, sales and management techniques,
     marketing plans, research or development, reports, records, software,
     systems, source or object code, software documentation or instruction or
     user manuals, and (iii) which have not generally been made available to the
     public (not including customers) by the Company pursuant to a specific
     authorization in the ordinary course of business by the Company of the
     release of


                                       9
<PAGE>

     such information to the public or otherwise published and released by the 
     Company to the general public.  Notwithstanding the foregoing, the 
     Executive may release Confidential Information if (1) required by law, 
     (2) necessary to establish a lawful claim or defense against the Company, 
     (3) necessary to establish a lawful claim or defense against a person or 
     entity other than the Company, but only with the permission, which shall 
     not be unreasonably withheld, of the Company, or (4) necessary to respond 
     to process or appropriate governmental inquiry, but then in each case only 
     with prior notice to the Company.

          (b)  The Executive agrees:

               (i)  that the Executive will promptly disclose and grant and does
          hereby grant to the Company his entire right, title and interest in
          and to all customer lists, discoveries, developments, designs,
          improvements, inventions, formulae, software, documentation,
          processes, techniques, know-how, patents, trade secrets and
          trademarks, copyrights and all other data conceived, developed or
          acquired by him during the period of his employment with the Company,
          both prior to and after the execution of this Agreement, whether or
          not patentable or registrable under copyright or similar statutes,
          made or conceived or reduced to practice or learned by the Executive,
          either alone or jointly with others, that result from or are conceived
          during the performance of tasks assigned to the Executive by the
          Company or result from use of property, equipment, or premises owned,
          leased or contracted for by the Company ("Inventions").  The Executive
          agrees to execute and deliver, from time to time, such documents as
          may be necessary or convenient to effectuate the transfer of such
          Confidential Information to the Company and shall cooperate with and
          assist the Company in every proper way (at the expense of the Company)
          in obtaining and from time to time enforcing patents, copyrights,
          trade secrets, other proprietary rights and protections relating to
          Inventions in any and all countries;

               (ii) that the Executive will during the term of this Agreement
          and thereafter safeguard all Confidential Information and, except as
          specifically permitted in Section 8(b)(iii) and Section 8(b)(iv), the
          Executive will never disclose or use for any purpose or benefit (other
          than for the purpose or benefit of the Company) any Confidential
          Information;

               (iii) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter directly or indirectly, disclose,
          disseminate or otherwise make known or provide any Confidential
          Information, whether in original form or in duplicated or copied form
          or extracts therefrom, and whether orally or in writing, to any
          individual, partnership, company or other entity, unless the Company
          has given its prior written consent thereto;


                                      10
<PAGE>

               (iv) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter, remove any Confidential Information from
          the premises of the Company either in original form or in duplicated
          or copied form or extracts therefrom; and that upon any termination of
          Executive's employment by the Company, Executive will immediately
          surrender to the Company, without request, all Confidential
          Information, whether in original or duplicated or copied form or
          extracts therefrom.

     9.   NO CONFLICTS.  The Executive represents that the performance by the
Executive of all the terms of this Agreement, as a former or continuing employee
of the Company  does not and will not breach any agreement as to which the
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust.  The Executive has not entered into,
and will not enter into, any agreement either written or oral in conflict
herewith.  

     10.  REASONABLENESS OF RESTRICTIONS.  The Executive acknowledges that the
restrictions contained in this Agreement are reasonable but should any
provisions of this Agreement be determined to be invalid, illegal or otherwise
unenforceable to its full extent, or if any such restriction is found by a court
of competent jurisdiction to be unreasonable under applicable law, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction.  The
Executive acknowledges that the validity, legality and enforceability of the
other provisions shall not be affected thereby.  The Executive hereby
acknowledges and confirms that the business of the Company extends at least
throughout the world and that, without limitation of any  remedies for breach of
such covenant, the Company shall be entitled to temporary and permanent
injunctive relief.

     11.  REMEDIES; VENUE; PROCESS.  

          (a) The Executive hereby acknowledges and agrees that the Confidential
     Information disclosed to the Executive prior to and during the term of this
     Agreement is of a special, unique and extraordinary character, and that any
     breach of this Agreement will cause the Company irreparable injury and
     damage, and consequently the Company  shall be entitled, in addition to all
     other remedies available to it, to injunctive and equitable relief to
     prevent or cease a breach of Sections 7 or 8 of this Agreement without
     further proof of harm and entitlement; that the terms of this Agreement, if
     enforced by the Company, will not unduly impair the Executive's ability to
     earn a living or pursue his vocation; and further, that the Company may
     withhold compensation and benefits if the Executive fails to comply with
     this Agreement, without restricting the Company from other legal and
     equitable remedies.  The parties agree that the prevailing party shall be
     entitled to all costs and expenses (including reasonable legal fees and
     expenses) which it


                                      11
<PAGE>

     incurs in successfully enforcing this Agreement and in prosecuting or 
     defending any litigation (including appellate proceedings) arising out 
     of this Agreement.

          (b)  The parties agree that jurisdiction and venue in any action
     brought pursuant to this Agreement to enforce its terms or otherwise with
     respect to the relationships between the parties shall properly lie in the
     Court of Common Pleas of Franklin County, Ohio.  Such jurisdiction and
     venue is exclusive, except that the Company may bring suit in any
     jurisdiction and venue where jurisdiction and venue would otherwise be
     proper if Executive has breached Sections 7 or 8 of this Agreement.  The
     parties further agree that the mailing by certified or registered mail,
     return receipt requested, of any process required by any such court shall
     constitute valid and lawful service of process against them, without the
     necessity for service by any other means provided by statute or rule of
     court.
     
     12.  WITHHOLDING.  The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.

     13.  ASSIGNMENT.  This Agreement is personal to the Executive and the
Executive may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.

     14.  WAIVER.  The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.

     15.  NOTICES.  Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to the Executive at:

          Joseph A. Mussey
          8967 Dunskeath Ct.
          Dublin, OH  43017

and to the Company at:  

          Danninger Medical Technology, Inc.
          5160-B Blazer Memorial Parkway
          Dublin, OH 43017-1339
          Attention: President


                                      12
<PAGE>


with a copy to:     

          Curtis A. Loveland, Esq.
          Porter, Wright, Morris & Arthur
          41 South High Street
          Columbus, Ohio 43215


     16.  GOVERNING LAW.  This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts made
and to be wholly performed within such state.

     17.  AMENDMENT.  This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.

     18.  SECTION HEADINGS.  Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.

     19.  ENTIRE AGREEMENT.  This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of the Executive with the Company, written or oral, entered into
between the parties hereto, and this Agreement contains the entire understanding
of the parties hereto with respect to the subject matter of this Agreement. 
This Agreement was fully reviewed and negotiated on behalf of each party and
shall not be construed against the interest of either party as the drafter of
this Agreement.    THE EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT AND
HAS THIS DAY RECEIVED A COPY HEREOF.

     20.  SEVERABILITY.  The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.

     21.  SURVIVAL.  Sections 6 through 13 of this Agreement and this Section 21
shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


EXECUTIVE:                             DANNINGER MEDICAL TECHNOLOGY, INC.


/s/ Joseph A. Mussey                       By:  /s/ Joseph A. Mussey
- ----------------------------------         ------------------------------------
Joseph A. Mussey                           Joseph A. Mussey, President


                                      13

<PAGE>
                                                                   Exhibit 10(b)

                      DANNINGER MEDICAL TECHNOLOGY, INC.

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

     THIS EMPLOYMENT AGREEMENT is made this 7th day of November, 1996,
("Agreement") between Danninger Medical Technology, Inc., a Delaware corporation
("Danninger"), and Paul A. Miller ("Executive").


                             Recitals

     A.   Danninger is the owner, directly or indirectly, of all of the issued
capital stock of Cross Medical Products, Inc., an Ohio corporation, and
Danninger Healthcare, Inc., an Ohio corporation (individually a "Subsidiary" and
collectively the "Subsidiaries").

     B.   Danninger and its Subsidiaries (collectively, the "Company") design,
manufacture, sell and lease medical and surgical equipment, devices and
instruments.

     C.   The Executive is currently employed as an executive of Danninger or
one of its Subsidiaries.

     D.   The Company considers the continued services of the Executive to be in
the best interest of the Company and desires to assure the continued services of
the Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an attempt to obtain
control of the Company.

     E.   The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security in the event of
a change in control of the Company.

     F.   Danninger and the Executive desire to enter into an employment
relationship upon the terms and conditions contained herein.

     NOW, THEREFORE, the parties agree as follows:

     1.   EMPLOYMENT.  Danninger hereby employs the Executive and the Executive
accepts such employment upon the terms and conditions hereinafter set forth.

     2.   DUTIES.  The Executive shall be employed:

          (a)  to serve as Vice President and Chief Financial Officer of
     Danninger, and to serve in other capacities for each of Danninger and the
     Subsidiaries, if so elected,


<PAGE>

     subject to the authority and direction of the Board of Directors of 
     Danninger or such Subsidiary, as the case may be; and

          (b)  to perform such other duties and responsibilities similar to
     those performed by the Executive prior hereto and exercise such other
     authority, perform such other or additional duties and responsibilities and
     have such other or different title (or have no title) as the Board of
     Directors of Danninger may, from time to time, prescribe.

     So long as he is employed under this Agreement, the Executive agrees to
devote his full time and efforts exclusively on behalf of the Company and to
competently, diligently, and effectively discharge his duties hereunder.  The
Executive shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.  The
Executive further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.

     3.   COMPENSATION.  As his entire compensation for all services rendered to
the Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to the Executive during the term hereof a minimum base salary
at the rate of $95,000.00 per year ("Basic Salary"), payable monthly or in other
more frequent installments, as determined by the Company.  The Basic Salary may
be increased, but not decreased, from time to time, by the Board of Directors.

     In addition, the Executive will be entitled to receive incentive
compensation pursuant to the terms of plans adopted by the Board of Directors
from time to time.

     4.   BUSINESS EXPENSES.  The Company shall promptly pay directly, or
reimburse the Executive for, all business expenses to the extent such expenses
are paid or incurred by the Executive during the term of employment in
accordance with Company policy in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by the Executive of
the Company's business and properly substantiated.

     5.   FRINGE BENEFITS.  During the term of this Agreement and the
Executive's employment hereunder, the Company shall provide to the Executive
such insurance, vacation, sick leave and other like benefits as are provided
from time to time to its other employees holding equivalent executive positions
with the Company in accordance with the policy of the Company as may be
established from time to time; provided, however, that the Company shall
maintain at least the level of benefits presently provided to the Executive.

     6.   TERM; TERMINATION.  The Executive is employed by the Company "at
will." The Executive's employment may be terminated at any time as provided
below.  For purposes of this Section 6, "Termination Date" shall mean the date
on which any notice period required under


                                       2
<PAGE>

this Section 6 expires or, if no notice period is specified in this Section 6, 
the effective date of the termination referenced in the notice.
 
          (a)  TERMINATION BY THE EXECUTIVE.  The Executive may terminate his
     employment upon giving at least 30 days' advance written notice to the
     Company and the Company will pay the Executive the earned but unpaid
     portion of the Executive's Basic Salary through the Termination Date.  If
     the Executive gives notice of termination hereunder, the Company shall have
     the right to relieve the Executive, in whole or in part, of his duties
     under this Agreement and to advance the Termination Date from the date set
     by the Executive's notice to a date not less than 14 days from the receipt
     of the Executive's notice of termination.

          (b)  TERMINATION BY COMPANY WITHOUT CAUSE.  The Company may terminate
     the Executive's employment without cause upon giving 30 days' advance
     written notice to the Executive.  If the Executive's employment is
     terminated without cause under this Section 6(b), the Company will pay the
     Executive the earned but unpaid portion of the Executive's Basic Salary
     through the Termination Date and will continue to pay the Executive his
     Basic Salary for 6 months following the Termination Date ("Severance
     Period"); provided, however, that the Company may terminate payment of the
     Basic Salary during the Severance Period if the Executive accepts other
     employment or is in breach of obligations under Sections 7 or 8 of this
     Agreement.
          
          (c)  TERMINATION BY COMPANY FOR GOOD CAUSE.  The Company may terminate
     the Executive's employment  upon a determination by the Company that "Good
     Cause" exists for the Executive's termination and the Company serves
     written notice of such termination upon the Executive.  As used in this
     Agreement, the term "Good Cause" shall refer only to any one or more of the
     following actions by the Executive:

               (i) commission of an act of dishonesty, including, but not
          limited to, misappropriation of funds or any property of the Company;

               (ii) engagement in activities or conduct clearly injurious to the
          reputation of the Company;

               (iii) refusal to perform his assigned duties and
          responsibilities;

               (iv) gross insubordination;

               (v) the clear violation of any of the material terms and
          conditions of this Agreement or any written agreement or agreements
          the Executive may from time to time have with the Company (following
          30-days' written notice from the Company specifying the violation and
          the Executive's failure to cure such violation within such 30-day
          period); or


                                       3
<PAGE>

               (vi) commission of a misdemeanor involving an act of moral
          turpitude or a felony.

In the event of a termination under this Section 6(c), the Company will pay the
Executive the earned but unpaid portion of the Executive's Basic Salary through
the Termination Date.

          (d)  TERMINATION UPON DEATH OR PERMANENT DISABILITY.  The Executive's
     employment shall terminate upon the death or permanent disability of the
     Executive.  For purposes hereof, "permanent disability," shall mean the
     inability of the Executive, as determined by the Board of Directors of the
     Company, by reason of physical or mental illness to perform the duties
     required of him under this Agreement for more than 180 days in any one year
     period.  Successive periods of disability, illness or incapacity will be
     considered separate periods unless the later period of disability, illness
     or incapacity is due to the same or related cause and commences less than
     six months from the ending of the previous period of disability.  Upon a
     determination by the Board of Directors of Danninger that the Executive's
     employment shall be terminated under this Section 6(d), the Board of
     Directors shall give the Executive 30 days' prior written notice of the
     termination.  If a determination of the Board of Directors under this
     Section 6(d) is disputed by the Executive, the parties agree to abide by
     the decision of a panel of three physicians.  The Company will select a
     physician, the Executive will select a physician and the physicians
     selected by the Company and the Executive will select a third physician. 
     The Executive agrees to make himself available for and submit to
     examinations by such physicians as may be directed by the Company.  Failure
     to submit to any examination shall constitute a breach of a material part
     of this Agreement.  In the event of a termination under this Section 6(d),
     the Company will pay Executive or his duly appointed and qualified executor
     or other personal representative the earned but unpaid portion of the
     Executive's Basic Salary through the Termination Date.

          (e)  TERMINATION FOLLOWING CHANGE OF CONTROL.    If a "Change in
     Control", as defined in Section 6(e)(v), shall have occurred and within one
     year following such Change in Control the Company terminates the employment
     of the Executive for other than Good Cause, as defined in Section 6(c), or
     the Executive terminates his employment for Good Reason, as that term is
     defined in Section 6(e)(vii), then the Executive shall be entitled to the
     benefits described below:

               (i)  The Executive shall be entitled to the unpaid portion of his
          Basic Salary plus credit for any vacation accrued but not taken and
          the amount of any unpaid but earned bonus, incentive compensation or
          any other benefit to which he is entitled under this Agreement through
          the date of the termination as a result of a Change in Control, plus 2
          times the Executive's "Current Annual Compensation" as defined in this
          Section 6(e)(i) ("Salary Termination Benefit").  For this purpose
          "Current Annual Compensation" shall mean the total of Executive's
          Basic Salary in effect at the Termination Date, plus any performance
          bonuses received by Executive in


                                       4
<PAGE>

          the prior twelve months, and shall not include the value of any stock 
          options granted or exercised, contributions to 401(k) or other 
          qualified plans, medical, dental, or other insurance benefits, or 
          other fringe benefits.  The Salary Termination Benefit shall be paid 
          to the Executive in 24 equal consecutive monthly payments commencing 
          on the first day of the month after termination of employment 
          following a Change in Control.
     
               (ii)  All outstanding stock options issued to the Executive shall
          become 100% vested and thereafter exercisable in accordance with such
          governing stock option agreements and plans.
     
               (iii)  The Company shall maintain for the Executive's benefit
          until the earlier of (y) 24 months after termination of employment
          following a Change in Control, or (z) the Executive's commencement of
          full-time employment with a new employer, all life insurance, medical,
          health and accident, and disability plans or programs in which the
          Executive shall have been entitled to participate prior to termination
          of employment following a Change in Control, provided the Executive's
          continued participation is permitted under the general terms of such
          plans and programs after the Change in Control ("Fringe Termination
          Benefits";  collectively the Salary Termination Benefit and the Fringe
          Termination Benefit are referred to as the "Termination Benefits"). 
          In the event the Executive's participation in any such plan or program
          is not permitted, the Company will provide directly the benefits to
          which the Executive would be entitled under such plans and programs.
     
               (iv)  The Termination Benefits shall be payable to the Executive
          as severance pay in consideration of his past service and of his
          continued services from the date hereof.  Executive shall have no duty
          to mitigate his damages by seeking other employment, and the Company
          shall not be entitled to set off against amounts payable hereunder any
          compensation which the Executive may receive from future employment.

               (v)  A "Change in Control" shall be deemed to have occurred if
          and when, after the date hereof, (i) Danninger, or in one or more
          transactions 50% or more of its assets or earning power, is acquired
          by or combined with a person, partnership, corporation, trust or other
          entity ("Person") and less than a majority of the outstanding voting
          shares of the Person surviving such transaction (or the ultimate
          parent of the surviving Person) after such acquisition or combination
          is owned, immediately after the acquisition or combination, by the
          owners of the voting shares of the Company outstanding immediately
          prior to such acquisition or combination; or (ii) during any period of
          two consecutive years during the term of this Agreement, individuals
          who at the beginning of such period constitute the Board of Directors
          of Danninger cease for any reason to constitute at least two-


                                       5
<PAGE>

          thirds thereof, unless the election of each director who was not a 
          director at the beginning of such period has been approved in advance 
          by directors representing at least two-thirds of the directors then in
          office who were directors at the beginning of the period.

               (vi)  If the payments and benefits provided under this Agreement
          to the Executive, either alone or with other payments and benefits,
          would constitute "excess parachute payments" as defined in 
          Section 280G of the Internal Revenue Code of 1986, as amended 
          ("Code"), then the payments and other benefits under this Agreement 
          shall be reduced to the extent necessary so that no portion thereof 
          shall be subject to the excise tax imposed by Section 4999 of the 
          Code.  Either the Company or the Executive may request a determination
          as to whether the payments or benefits would constitute an excess 
          parachute payment and, if requested, such determination shall be made 
          by independent tax counsel selected by the Company and approved by the
          Executive.  At the Executive's election and to the extent not 
          otherwise paid, the Executive may determine the amount of cash and/or 
          elements of non-cash fringe benefits to reduce so that such payments 
          and benefits will not constitute excess parachute payments.


               (vii)   As used in this Agreement, the term "Good Reason" means,
          without the Executive's written consent, 

                    (a) a change in status, position or responsibilities which,
               in the Executive's reasonable judgment, does not represent a
               promotion from existing status, position or responsibilities as
               in effect immediately prior to the Change in Control; the
               assignment of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with such
               status, position or responsibilities; or any removal from or
               failure to reappoint or reelect the Executive to any of such
               positions, except in connection with the termination for total
               and permanent disability, death or Good Cause or by him other
               than for Good Reason; 

                    (b) a reduction by the Company in the Executive's base
               salary as in effect on the date hereof or as the same may be
               increased from time to time during the term of this Agreement or
               the Company's failure to increase (within twelve months of the
               Executive's last increase in base salary) the Executive's base
               salary after a Change in Control in an amount which at least
               equals, on a percentage basis, the average percentage increase in
               base salary for all executive and senior officers of the Company
               effected in the preceding twelve months; 


                                       6
<PAGE>

                    (c) the relocation of the Company's principal executive
               offices to a location outside the Columbus metropolitan area or
               the relocation of the Executive by the Company to any place other
               than the location at which the Executive performed duties prior
               to a Change in Control, except for required travel on the
               Company's business to an extent substantially consistent with
               business travel obligations at the time of a Change in Control; 

                    (d) the failure of the Company to continue in effect any
               incentive, bonus or other compensation plan in which the
               Executive participates, including but not limited to the
               Company's stock option plans, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan),
               evidenced by the Executive's written consent, has been made with
               respect to such plan in connection with the Change in Control, or
               the failure by the Company to continue the Executive's
               participation therein, or any action by the Company which would
               directly or indirectly materially reduce participation therein; 

                    (e) the failure by the Company to continue to provide the
               Executive with benefits substantially similar to those enjoyed or
               entitled under any of the Company's pension, profit sharing, life
               insurance, medical, dental, health and accident, or disability
               plans at the time of a Change in Control, the taking of any
               action by the Company which would directly or indirectly
               materially reduce any of such benefits or deprive the Executive
               of any material fringe benefit enjoyed or entitled to at the time
               of the Change in Control, or the failure by the Company to
               provide the number of paid vacation and sick leave days to which
               the Executive is entitled on the basis of years of service with
               the Company in accordance with the Company's normal vacation
               policy in effect on the date hereof; 

                    (f) the failure of the Company to obtain a satisfactory
               agreement from any successor or assign of the Company to assume
               and agree to perform this Agreement or; 

                    (g) any request by the Company that the Executive
               participate in an unlawful act or take any action constituting a
               breach of the Executive's professional standard of conduct. 
               Notwithstanding anything in this Section to the contrary, the
               Executive's right to terminate the employment pursuant to this
               Section shall not be affected by incapacity due to physical or
               mental illness.

               (viii)  Upon any termination or expiration of this Agreement or
          any cessation of the Executive's employment hereunder, the Company
          shall have no further obligations under this Agreement and no further
          payments shall be payable


                                       7
<PAGE>

          by the Company to the Executive, except as provided in Sections 6(b) 
          and 6(e) above and except as required under any benefit plans or 
          arrangements maintained by the Company and applicable to the Executive
          at the time of such termination, expiration or cessation of the 
          Executive's employment, including, without limitation thereto, salary,
          incentive compensation, sick leave, and vacation pay.

               (ix)   ENFORCEMENT OF AGREEMENT.  The Company is aware that upon
          the occurrence of a Change in Control, the Board of Directors or a
          shareholder of the Company may then cause or attempt to cause the
          Company to refuse to comply with its obligations under this Agreement,
          or may cause or attempt to cause the Company to institute, or may
          institute litigation seeking to have this Agreement declared
          unenforceable, or may institute litigation seeking to have this
          Agreement declared unenforceable, or may take or attempt to take other
          action to deny the Executive the benefits intended under this
          Agreement.  In these circumstances, the purpose of this Agreement
          could be frustrated.  It is the intent of the Company that the
          Executive not be required to incur the expenses associated with the
          enforcement of any rights under this Agreement by litigation or other
          legal action, nor be bound to negotiate any settlement of any rights
          hereunder, because the cost and expense of such legal action or
          settlement would substantially detract from the benefits intended to
          be extended to the Executive hereunder.  Accordingly, if following a
          Change in Control it should appear to the Executive that the Company
          has failed to comply with any of its obligations under this Agreement
          or in the event that the Company or any other person takes any action
          to declare this Agreement void or enforceable, or institutes any
          litigation or other legal action designed to deny, diminish or to
          recovery from the Executive the benefits entitled to be provided to
          the Executive hereunder, and that the Executive has complied with all
          obligations under this Agreement, the Company irrevocably authorizes
          the Executive from time to time to retain counsel of the Executive's
          choice, at the expense of the Company as provided in this Section, to
          represent the Executive in connection with the initiation or defense
          of any litigation or other legal action, whether such action is by or
          against the Company or any Director, officer, shareholder, or other
          person affiliated with the Company, in any jurisdiction. 
          Notwithstanding any existing or prior attorney-client relationship
          between the Company and such counsel, the Company irrevocably consents
          to the Executive entering into an attorney-client relationship with
          such counsel, and in that connection the Company and the Executive
          agree that a confidential relationship shall exist between the
          executive and such counsel.  The reasonable fees and expenses of
          counsel selected from time to time by the Executive as hereinabove
          provided shall be paid or reimbursed to the Executive by the Company
          on a regular, periodic basis upon presentation by the Executive of a
          statement or statements prepared by such counsel in accordance with
          its customary practices, up to a maximum aggregate amount of $200,000.
          Any legal expenses incurred by the Company by reason of any dispute
          between the parties as to enforceability of or the terms contained in
          this Agreement, notwithstanding the outcome of any such dispute,


                                       8
<PAGE>

          shall be the sole responsibility of the Company, and the Company shall
          not take any action to seek reimbursement from the Executive for such
          expenses.

     7.   NON-COMPETITION.  

          (a) The Executive agrees that he will not during the term of this
     Agreement, any extension hereof, and for a period of 12 months after
     termination of employment with the Company, whether voluntary or
     involuntary or with or without cause:

               (i)  engage or participate, directly or indirectly, either as
          principal, agent, employee, employer, consultant, stockholder (except
          as the holder of not more than two percent of the stock of any
          publicly traded corporation), or in any other individual or
          representative capacity whatsoever, in the operation, management or
          ownership of any business, firm, corporation, association, or other
          entity engaged in the design, manufacture, marketing, sale or lease of
          continuous passive motion, thermal therapy or similar orthopedic
          rehabilitation devices, spinal implants, or spinal instruments, or any
          other business engaged in by the Company at any time during the term
          of this Agreement, or during the 12 month period after termination;
          and,

               (ii)  directly or indirectly, for himself or in conjunction with
          or on behalf of any other individual or entity, solicit, divert, take
          away or endeavor to take away from the Company any customer, account
          or employee of the Company at any time during the term of this
          Agreement, as of the date of the Executive's termination of employment
          with the Company, or during the 12 month period after termination.
 
          (b)  In the event of a violation of this Section 7, the 
     non-competition time period provided in Section 7(a) shall be tolled 
     during the time of such violation.

     8.   CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS.

          (a)  As used herein, the term "Confidential Information" includes, but
     is not limited to, all information and materials belonging to, used by, or
     in the possession of the Company (i) which have been disclosed or made
     known to, or has come into the possession of the Executive as a consequence
     of or through the Executive's relationship with the Company prior to or
     after the date hereof, (ii) which are related to the Company's  customers,
     potential customers, suppliers, distributors, business strategies or
     policies, financial or sales results, sales and management techniques,
     marketing plans, research or development, reports, records, software,
     systems, source or object code, software documentation or instruction or
     user manuals, and (iii) which have not generally been made available to the
     public (not including customers) by the Company pursuant to a specific
     authorization in the ordinary course of business by the Company of the
     release of


                                       9
<PAGE>

     such information to the public or otherwise published and released by the 
     Company to the general public.  Notwithstanding the foregoing, the 
     Executive may release Confidential Information if (1) required by law, 
     (2) necessary to establish a lawful claim or defense against the Company, 
     (3) necessary to establish a lawful claim or defense against a person or 
     entity other than the Company, but only with the permission, which shall 
     not be unreasonably withheld, of the Company, or (4) necessary to respond 
     to process or appropriate governmental inquiry, but then in each case only 
     with prior notice to the Company.

          (b)  The Executive agrees:

               (i)  that the Executive will promptly disclose and grant and does
          hereby grant to the Company his entire right, title and interest in
          and to all customer lists, discoveries, developments, designs,
          improvements, inventions, formulae, software, documentation,
          processes, techniques, know-how, patents, trade secrets and
          trademarks, copyrights and all other data conceived, developed or
          acquired by him during the period of his employment with the Company,
          both prior to and after the execution of this Agreement, whether or
          not patentable or registrable under copyright or similar statutes,
          made or conceived or reduced to practice or learned by the Executive,
          either alone or jointly with others, that result from or are conceived
          during the performance of tasks assigned to the Executive by the
          Company or result from use of property, equipment, or premises owned,
          leased or contracted for by the Company ("Inventions").  The Executive
          agrees to execute and deliver, from time to time, such documents as
          may be necessary or convenient to effectuate the transfer of such
          Confidential Information to the Company and shall cooperate with and
          assist the Company in every proper way (at the expense of the Company)
          in obtaining and from time to time enforcing patents, copyrights,
          trade secrets, other proprietary rights and protections relating to
          Inventions in any and all countries;

               (ii) that the Executive will during the term of this Agreement
          and thereafter safeguard all Confidential Information and, except as
          specifically permitted in Section 8(b)(iii) and Section 8(b)(iv), the
          Executive will never disclose or use for any purpose or benefit (other
          than for the purpose or benefit of the Company) any Confidential
          Information;

               (iii) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter directly or indirectly, disclose,
          disseminate or otherwise make known or provide any Confidential
          Information, whether in original form or in duplicated or copied form
          or extracts therefrom, and whether orally or in writing, to any
          individual, partnership, company or other entity, unless the Company
          has given its prior written consent thereto;


                                      10
<PAGE>

               (iv) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter, remove any Confidential Information from
          the premises of the Company either in original form or in duplicated
          or copied form or extracts therefrom; and that upon any termination of
          Executive's employment by the Company, Executive will immediately
          surrender to the Company, without request, all Confidential
          Information, whether in original or duplicated or copied form or
          extracts therefrom.

     9.   NO CONFLICTS.  The Executive represents that the performance by the
Executive of all the terms of this Agreement, as a former or continuing employee
of the Company  does not and will not breach any agreement as to which the
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust.  The Executive has not entered into,
and will not enter into, any agreement either written or oral in conflict
herewith.  

     10.  REASONABLENESS OF RESTRICTIONS.  The Executive acknowledges that the
restrictions contained in this Agreement are reasonable but should any
provisions of this Agreement be determined to be invalid, illegal or otherwise
unenforceable to its full extent, or if any such restriction is found by a court
of competent jurisdiction to be unreasonable under applicable law, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction.  The
Executive acknowledges that the validity, legality and enforceability of the
other provisions shall not be affected thereby.  The Executive hereby
acknowledges and confirms that the business of the Company extends at least
throughout the world and that, without limitation of any  remedies for breach of
such covenant, the Company shall be entitled to temporary and permanent
injunctive relief.

     11.  REMEDIES; VENUE; PROCESS.  

          (a) The Executive hereby acknowledges and agrees that the Confidential
     Information disclosed to the Executive prior to and during the term of this
     Agreement is of a special, unique and extraordinary character, and that any
     breach of this Agreement will cause the Company irreparable injury and
     damage, and consequently the Company  shall be entitled, in addition to all
     other remedies available to it, to injunctive and equitable relief to
     prevent or cease a breach of Sections 7 or 8 of this Agreement without
     further proof of harm and entitlement; that the terms of this Agreement, if
     enforced by the Company, will not unduly impair the Executive's ability to
     earn a living or pursue his vocation; and further, that the Company may
     withhold compensation and benefits if the Executive fails to comply with
     this Agreement, without restricting the Company from other legal and
     equitable remedies.  The parties agree that the prevailing party shall be
     entitled to all costs and expenses (including reasonable legal fees and
     expenses) which it


                                      11
<PAGE>

     incurs in successfully enforcing this Agreement and in prosecuting or 
     defending any litigation (including appellate proceedings) arising out of 
     this Agreement.

          (b)  The parties agree that jurisdiction and venue in any action
     brought pursuant to this Agreement to enforce its terms or otherwise with
     respect to the relationships between the parties shall properly lie in the
     Court of Common Pleas of Franklin County, Ohio.  Such jurisdiction and
     venue is exclusive, except that the Company may bring suit in any
     jurisdiction and venue where jurisdiction and venue would otherwise be
     proper if Executive has breached Sections 7 or 8 of this Agreement.  The
     parties further agree that the mailing by certified or registered mail,
     return receipt requested, of any process required by any such court shall
     constitute valid and lawful service of process against them, without the
     necessity for service by any other means provided by statute or rule of
     court.
     
     12.  WITHHOLDING.  The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.

     13.  ASSIGNMENT.  This Agreement is personal to the Executive and the
Executive may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.

     14.  WAIVER.  The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.

     15.  NOTICES.  Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to the Executive at:

          Paul A. Miller
          6597 Masefield St.
          Worthington, OH  43085

and to the Company at:  

          Danninger Medical Technology, Inc.
          5160-B Blazer Memorial Parkway
          Dublin, OH 43017-1339
          Attention:  President


                                      12
<PAGE>

with a copy to:     

          Curtis A. Loveland, Esq.
          Porter, Wright, Morris & Arthur
          41 South High Street
          Columbus, Ohio 43215


     16.  GOVERNING LAW.  This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts made
and to be wholly performed within such state.

     17.  AMENDMENT.  This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.

     18.  SECTION HEADINGS.  Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.

     19.  ENTIRE AGREEMENT.  This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of the Executive with the Company, written or oral, entered into
between the parties hereto, and this Agreement contains the entire understanding
of the parties hereto with respect to the subject matter of this Agreement. 
This Agreement was fully reviewed and negotiated on behalf of each party and
shall not be construed against the interest of either party as the drafter of
this Agreement.    THE EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT AND
HAS THIS DAY RECEIVED A COPY HEREOF.

     20.  SEVERABILITY.  The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.

     21.  SURVIVAL.  Sections 6 through 13 of this Agreement and this Section 21
shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

EXECUTIVE:                             DANNINGER MEDICAL TECHNOLOGY, INC.


/s/ Paul A. Miller                         By: /s/ Joseph A. Mussey
- ----------------------------------         ------------------------------------
Paul A. Miller                             Joseph A. Mussey, President


                                      13

<PAGE>
                                                                   Exhibit 10(c)

                      DANNINGER MEDICAL TECHNOLOGY, INC.


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


     THIS EMPLOYMENT AGREEMENT is made this 7th day of November, 1996,
("Agreement") between Danninger Medical Technology, Inc., a Delaware corporation
("Danninger"), and Ira Benson ("Executive").


                             Recitals

     A.   Danninger is the owner, directly or indirectly, of all of the issued
capital stock of Cross Medical Products, Inc., an Ohio corporation, and
Danninger Healthcare, Inc., an Ohio corporation (individually a "Subsidiary" and
collectively the "Subsidiaries").

     B.   Danninger and its Subsidiaries (collectively, the "Company") design,
manufacture, sell and lease medical and surgical equipment, devices and
instruments.

     C.   The Executive is currently employed as an executive of Danninger or
one of its Subsidiaries.

     D.   The Company considers the continued services of the Executive to be in
the best interest of the Company and desires to assure the continued services of
the Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an attempt to obtain
control of the Company.

     E.   The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security in the event of
a change in control of the Company.

     F.   Danninger and the Executive desire to enter into an employment
relationship upon the terms and conditions contained herein.

     NOW, THEREFORE, the parties agree as follows:

     1.   EMPLOYMENT.  Danninger hereby employs the Executive and the Executive
accepts such employment upon the terms and conditions hereinafter set forth.

     2.   DUTIES.  The Executive shall be employed:

          (a)  to serve as Vice President of Sales and Marketing of Cross
     Medical Products, Inc., and to serve in other capacities for each of
     Danninger and the Subsidiaries,


<PAGE>

     if so elected, subject to the authority and direction of the Board of 
     Directors of Danninger or such Subsidiary, as the case may be; and

          (b)  to perform such other duties and responsibilities similar to
     those performed by the Executive prior hereto and exercise such other
     authority, perform such other or additional duties and responsibilities and
     have such other or different title (or have no title) as the Board of
     Directors of Danninger may, from time to time, prescribe.

     So long as he is employed under this Agreement, the Executive agrees to
devote his full time and efforts exclusively on behalf of the Company and to
competently, diligently, and effectively discharge his duties hereunder.  The
Executive shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.  The
Executive further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.

     3.   COMPENSATION.  As his entire compensation for all services rendered to
the Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to the Executive during the term hereof a minimum base salary
at the rate of $108,000.00 per year ("Basic Salary"), payable monthly or in
other more frequent installments, as determined by the Company.  The Basic
Salary may be increased, but not decreased, from time to time, by the Board of
Directors.

     In addition, the Executive will be entitled to receive incentive
compensation pursuant to the terms of plans adopted by the Board of Directors
from time to time.

     4.   BUSINESS EXPENSES.  The Company shall promptly pay directly, or
reimburse the Executive for, all business expenses to the extent such expenses
are paid or incurred by the Executive during the term of employment in
accordance with Company policy in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by the Executive of
the Company's business and properly substantiated.

     5.   FRINGE BENEFITS.  During the term of this Agreement and the
Executive's employment hereunder, the Company shall provide to the Executive
such insurance, vacation, sick leave and other like benefits as are provided
from time to time to its other employees holding equivalent executive positions
with the Company in accordance with the policy of the Company as may be
established from time to time; provided, however, that the Company shall
maintain at least the level of benefits presently provided to the Executive.

     6.   TERM; TERMINATION.  The Executive is employed by the Company "at
will." The Executive's employment may be terminated at any time as provided
below.  For purposes of this Section 6, "Termination Date" shall mean the date
on which any notice period required under


                                       2
<PAGE>

this Section 6 expires or, if no notice period is specified in this Section 6, 
the effective date of the termination referenced in the notice.
 
          (a)  TERMINATION BY THE EXECUTIVE.  The Executive may terminate his
     employment upon giving at least 30 days' advance written notice to the
     Company and the Company will pay the Executive the earned but unpaid
     portion of the Executive's Basic Salary through the Termination Date.  If
     the Executive gives notice of termination hereunder, the Company shall have
     the right to relieve the Executive, in whole or in part, of his duties
     under this Agreement and to advance the Termination Date from the date set
     by the Executive's notice to a date not less than 14 days from the receipt
     of the Executive's notice of termination.

          (b)  TERMINATION BY COMPANY WITHOUT CAUSE.  The Company may terminate
     the Executive's employment without cause upon giving 30 days' advance
     written notice to the Executive.  If the Executive's employment is
     terminated without cause under this Section 6(b), the Company will pay the
     Executive the earned but unpaid portion of the Executive's Basic Salary
     through the Termination Date and will continue to pay the Executive his
     Basic Salary for 12 months following the Termination Date ("Severance
     Period"); provided, however, that the Company may terminate payment of the
     Basic Salary during the Severance Period if the Executive accepts other
     employment or is in breach of obligations under Sections 7 or 8 of this
     Agreement.
          
          (c)  TERMINATION BY COMPANY FOR GOOD CAUSE.  The Company may terminate
     the Executive's employment  upon a determination by the Company that "Good
     Cause" exists for the Executive's termination and the Company serves
     written notice of such termination upon the Executive.  As used in this
     Agreement, the term "Good Cause" shall refer only to any one or more of the
     following actions by the Executive:

               (i) commission of an act of dishonesty, including, but not
          limited to, misappropriation of funds or any property of the Company;

               (ii) engagement in activities or conduct clearly injurious to the
          reputation of the Company;

               (iii) refusal to perform his assigned duties and
          responsibilities;

               (iv) gross insubordination;

               (v) the clear violation of any of the material terms and
          conditions of this Agreement or any written agreement or agreements
          the Executive may from time to time have with the Company (following
          30-days' written notice from the Company specifying the violation and
          the Executive's failure to cure such violation within such 30-day
          period); or


                                       3
<PAGE>

               (vi) commission of a misdemeanor involving an act of moral
          turpitude or a felony.

In the event of a termination under this Section 6(c), the Company will pay the
Executive the earned but unpaid portion of the Executive's Basic Salary through
the Termination Date.

          (d)  TERMINATION UPON DEATH OR PERMANENT DISABILITY.  The Executive's
     employment shall terminate upon the death or permanent disability of the
     Executive.  For purposes hereof, "permanent disability," shall mean the
     inability of the Executive, as determined by the Board of Directors of the
     Company, by reason of physical or mental illness to perform the duties
     required of him under this Agreement for more than 180 days in any one year
     period.  Successive periods of disability, illness or incapacity will be
     considered separate periods unless the later period of disability, illness
     or incapacity is due to the same or related cause and commences less than
     six months from the ending of the previous period of disability.  Upon a
     determination by the Board of Directors of Danninger that the Executive's
     employment shall be terminated under this Section 6(d), the Board of
     Directors shall give the Executive 30 days' prior written notice of the
     termination.  If a determination of the Board of Directors under this
     Section 6(d) is disputed by the Executive, the parties agree to abide by
     the decision of a panel of three physicians.  The Company will select a
     physician, the Executive will select a physician and the physicians
     selected by the Company and the Executive will select a third physician. 
     The Executive agrees to make himself available for and submit to
     examinations by such physicians as may be directed by the Company.  Failure
     to submit to any examination shall constitute a breach of a material part
     of this Agreement.  In the event of a termination under this Section 6(d),
     the Company will pay Executive or his duly appointed and qualified executor
     or other personal representative the earned but unpaid portion of the
     Executive's Basic Salary through the Termination Date.

          (e)  TERMINATION FOLLOWING CHANGE OF CONTROL.    If a "Change in
     Control", as defined in Section 6(e)(v), shall have occurred and within one
     year following such Change in Control the Company terminates the employment
     of the Executive for other than Good Cause, as defined in Section 6(c), or
     the Executive terminates his employment for Good Reason, as that term is
     defined in Section 6(e)(vii), then the Executive shall be entitled to the
     benefits described below:

               (i)  The Executive shall be entitled to the unpaid portion of his
          Basic Salary plus credit for any vacation accrued but not taken and
          the amount of any unpaid but earned bonus, incentive compensation or
          any other benefit to which he is entitled under this Agreement through
          the date of the termination as a result of a Change in Control, plus 2
          times the Executive's "Current Annual Compensation" as defined in this
          Section 6(e)(i) ("Salary Termination Benefit").  For this purpose
          "Current Annual Compensation" shall mean the total of Executive's
          Basic Salary in effect at the Termination Date, plus any performance
          bonuses received by Executive in


                                       4
<PAGE>

          the prior twelve months, and shall not include the value of any stock 
          options granted or exercised, contributions to 401(k) or other 
          qualified plans, medical, dental, or other insurance benefits, or 
          other fringe benefits.  The Salary Termination Benefit shall be paid 
          to the Executive in 24 equal consecutive monthly payments commencing 
          on the first day of the month after termination of employment 
          following a Change in Control.
     
               (ii)  All outstanding stock options issued to the Executive shall
          become 100% vested and thereafter exercisable in accordance with such
          governing stock option agreements and plans.
     
               (iii)  The Company shall maintain for the Executive's benefit
          until the earlier of (y) 24 months after termination of employment
          following a Change in Control, or (z) the Executive's commencement of
          full-time employment with a new employer, all life insurance, medical,
          health and accident, and disability plans or programs in which the
          Executive shall have been entitled to participate prior to termination
          of employment following a Change in Control, provided the Executive's
          continued participation is permitted under the general terms of such
          plans and programs after the Change in Control ("Fringe Termination
          Benefits";  collectively the Salary Termination Benefit and the Fringe
          Termination Benefit are referred to as the "Termination Benefits"). 
          In the event the Executive's participation in any such plan or program
          is not permitted, the Company will provide directly the benefits to
          which the Executive would be entitled under such plans and programs.
     
               (iv)  The Termination Benefits shall be payable to the Executive
          as severance pay in consideration of his past service and of his
          continued services from the date hereof.  Executive shall have no duty
          to mitigate his damages by seeking other employment, and the Company
          shall not be entitled to set off against amounts payable hereunder any
          compensation which the Executive may receive from future employment.

               (v)  A "Change in Control" shall be deemed to have occurred if
          and when, after the date hereof, (i) Danninger, or in one or more
          transactions 50% or more of its assets or earning power, is acquired
          by or combined with a person, partnership, corporation, trust or other
          entity ("Person") and less than a majority of the outstanding voting
          shares of the Person surviving such transaction (or the ultimate
          parent of the surviving Person) after such acquisition or combination
          is owned, immediately after the acquisition or combination, by the
          owners of the voting shares of the Company outstanding immediately
          prior to such acquisition or combination; or (ii) during any period of
          two consecutive years during the term of this Agreement, individuals
          who at the beginning of such period constitute the Board of Directors
          of Danninger cease for any reason to constitute at least two-


                                       5
<PAGE>

          thirds thereof, unless the election of each director who was not a 
          director at the beginning of such period has been approved in advance 
          by directors representing at least two-thirds of the directors then in
          office who were directors at the beginning of the period.

               (vi)  If the payments and benefits provided under this Agreement
          to the Executive, either alone or with other payments and benefits,
          would constitute "excess parachute payments" as defined in 
          Section 280G of the Internal Revenue Code of 1986, as amended 
          ("Code"), then the payments and other benefits under this Agreement 
          shall be reduced to the extent necessary so that no portion thereof 
          shall be subject to the excise tax imposed by Section 4999 of the 
          Code.  Either the Company or the Executive may request a determination
          as to whether the payments or benefits would constitute an excess 
          parachute payment and, if requested, such determination shall be made 
          by independent tax counsel selected by the Company and approved by the
          Executive.  At the Executive's election and to the extent not 
          otherwise paid, the Executive may determine the amount of cash and/or 
          elements of non-cash fringe benefits to reduce so that such payments 
          and benefits will not constitute excess parachute payments.


               (vii)   As used in this Agreement, the term "Good Reason" means,
          without the Executive's written consent, 

                    (a) a change in status, position or responsibilities which,
               in the Executive's reasonable judgment, does not represent a
               promotion from existing status, position or responsibilities as
               in effect immediately prior to the Change in Control; the
               assignment of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with such
               status, position or responsibilities; or any removal from or
               failure to reappoint or reelect the Executive to any of such
               positions, except in connection with the termination for total
               and permanent disability, death or Good Cause or by him other
               than for Good Reason; 

                    (b) a reduction by the Company in the Executive's base
               salary as in effect on the date hereof or as the same may be
               increased from time to time during the term of this Agreement or
               the Company's failure to increase (within twelve months of the
               Executive's last increase in base salary) the Executive's base
               salary after a Change in Control in an amount which at least
               equals, on a percentage basis, the average percentage increase in
               base salary for all executive and senior officers of the Company
               effected in the preceding twelve months; 


                                       6
<PAGE>

                    (c) the relocation of the Company's principal executive
               offices to a location outside the Columbus metropolitan area or
               the relocation of the Executive by the Company to any place other
               than the location at which the Executive performed duties prior
               to a Change in Control, except for required travel on the
               Company's business to an extent substantially consistent with
               business travel obligations at the time of a Change in Control; 

                    (d) the failure of the Company to continue in effect any
               incentive, bonus or other compensation plan in which the
               Executive participates, including but not limited to the
               Company's stock option plans, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan),
               evidenced by the Executive's written consent, has been made with
               respect to such plan in connection with the Change in Control, or
               the failure by the Company to continue the Executive's
               participation therein, or any action by the Company which would
               directly or indirectly materially reduce participation therein; 

                    (e) the failure by the Company to continue to provide the
               Executive with benefits substantially similar to those enjoyed or
               entitled under any of the Company's pension, profit sharing, life
               insurance, medical, dental, health and accident, or disability
               plans at the time of a Change in Control, the taking of any
               action by the Company which would directly or indirectly
               materially reduce any of such benefits or deprive the Executive
               of any material fringe benefit enjoyed or entitled to at the time
               of the Change in Control, or the failure by the Company to
               provide the number of paid vacation and sick leave days to which
               the Executive is entitled on the basis of years of service with
               the Company in accordance with the Company's normal vacation
               policy in effect on the date hereof; 

                    (f) the failure of the Company to obtain a satisfactory
               agreement from any successor or assign of the Company to assume
               and agree to perform this Agreement or; 

                    (g) any request by the Company that the Executive
               participate in an unlawful act or take any action constituting a
               breach of the Executive's professional standard of conduct. 
               Notwithstanding anything in this Section to the contrary, the
               Executive's right to terminate the employment pursuant to this
               Section shall not be affected by incapacity due to physical or
               mental illness.

               (viii)  Upon any termination or expiration of this Agreement or
          any cessation of the Executive's employment hereunder, the Company
          shall have no further obligations under this Agreement and no further
          payments shall be payable


                                       7
<PAGE>

          by the Company to the Executive, except as provided in Sections 6(b) 
          and 6(e) above and except as required under any benefit plans or 
          arrangements maintained by the Company and applicable to the Executive
          at the time of such termination, expiration or cessation of the 
          Executive's employment, including, without limitation thereto, salary,
          incentive compensation, sick leave, and vacation pay.

               (ix)   ENFORCEMENT OF AGREEMENT.  The Company is aware that upon
          the occurrence of a Change in Control, the Board of Directors or a
          shareholder of the Company may then cause or attempt to cause the
          Company to refuse to comply with its obligations under this Agreement,
          or may cause or attempt to cause the Company to institute, or may
          institute litigation seeking to have this Agreement declared
          unenforceable, or may institute litigation seeking to have this
          Agreement declared unenforceable, or may take or attempt to take other
          action to deny the Executive the benefits intended under this
          Agreement.  In these circumstances, the purpose of this Agreement
          could be frustrated.  It is the intent of the Company that the
          Executive not be required to incur the expenses associated with the
          enforcement of any rights under this Agreement by litigation or other
          legal action, nor be bound to negotiate any settlement of any rights
          hereunder, because the cost and expense of such legal action or
          settlement would substantially detract from the benefits intended to
          be extended to the Executive hereunder.  Accordingly, if following a
          Change in Control it should appear to the Executive that the Company
          has failed to comply with any of its obligations under this Agreement
          or in the event that the Company or any other person takes any action
          to declare this Agreement void or enforceable, or institutes any
          litigation or other legal action designed to deny, diminish or to
          recovery from the Executive the benefits entitled to be provided to
          the Executive hereunder, and that the Executive has complied with all
          obligations under this Agreement, the Company irrevocably authorizes
          the Executive from time to time to retain counsel of the Executive's
          choice, at the expense of the Company as provided in this Section, to
          represent the Executive in connection with the initiation or defense
          of any litigation or other legal action, whether such action is by or
          against the Company or any Director, officer, shareholder, or other
          person affiliated with the Company, in any jurisdiction. 
          Notwithstanding any existing or prior attorney-client relationship
          between the Company and such counsel, the Company irrevocably consents
          to the Executive entering into an attorney-client relationship with
          such counsel, and in that connection the Company and the Executive
          agree that a confidential relationship shall exist between the
          executive and such counsel.  The reasonable fees and expenses of
          counsel selected from time to time by the Executive as hereinabove
          provided shall be paid or reimbursed to the Executive by the Company
          on a regular, periodic basis upon presentation by the Executive of a
          statement or statements prepared by such counsel in accordance with
          its customary practices, up to a maximum aggregate amount of $200,000.
          Any legal expenses incurred by the Company by reason of any dispute
          between the parties as to enforceability of or the terms contained in
          this Agreement, notwithstanding the outcome of any such dispute,


                                       8
<PAGE>

          shall be the sole responsibility of the Company, and the Company shall
          not take any action to seek reimbursement from the Executive for such
          expenses.

     7.   NON-COMPETITION.  

          (a) The Executive agrees that he will not during the term of this
     Agreement, any extension hereof, and for a period of 12 months after
     termination of employment with the Company, whether voluntary or
     involuntary or with or without cause:

               (i)  engage or participate, directly or indirectly, either as
          principal, agent, employee, employer, consultant, stockholder (except
          as the holder of not more than two percent of the stock of any
          publicly traded corporation), or in any other individual or
          representative capacity whatsoever, in the operation, management or
          ownership of any business, firm, corporation, association, or other
          entity engaged in the design, manufacture, marketing, sale or lease of
          continuous passive motion, thermal therapy or similar orthopedic
          rehabilitation devices, spinal implants, or spinal instruments, or any
          other business engaged in by the Company at any time during the term
          of this Agreement, or during the 12 month period after termination;
          and,

               (ii)  directly or indirectly, for himself or in conjunction with
          or on behalf of any other individual or entity, solicit, divert, take
          away or endeavor to take away from the Company any customer, account
          or employee of the Company at any time during the term of this
          Agreement, as of the date of the Executive's termination of employment
          with the Company, or during the 12 month period after termination.
 
          (b)  In the event of a violation of this Section 7, the 
     non-competition time period provided in Section 7(a) shall be tolled during
     the time of such violation.

     8.   CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS.

          (a)  As used herein, the term "Confidential Information" includes, but
     is not limited to, all information and materials belonging to, used by, or
     in the possession of the Company (i) which have been disclosed or made
     known to, or has come into the possession of the Executive as a consequence
     of or through the Executive's relationship with the Company prior to or
     after the date hereof, (ii) which are related to the Company's  customers,
     potential customers, suppliers, distributors, business strategies or
     policies, financial or sales results, sales and management techniques,
     marketing plans, research or development, reports, records, software,
     systems, source or object code, software documentation or instruction or
     user manuals, and (iii) which have not generally been made available to the
     public (not including customers) by the Company pursuant to a specific
     authorization in the ordinary course of business by the Company of the
     release of


                                      9
<PAGE>

     such information to the public or otherwise published and released by the 
     Company to the general public.  Notwithstanding the foregoing, the 
     Executive may release Confidential Information if (1) required by law, 
     (2) necessary to establish a lawful claim or defense against the Company, 
     (3) necessary to establish a lawful claim or defense against a person or 
     entity other than the Company, but only with the permission, which shall 
     not be unreasonably withheld, of the Company, or (4) necessary to respond 
     to process or appropriate governmental inquiry, but then in each case only 
     with prior notice to the Company.

          (b)  The Executive agrees:

               (i)  that the Executive will promptly disclose and grant and does
          hereby grant to the Company his entire right, title and interest in
          and to all customer lists, discoveries, developments, designs,
          improvements, inventions, formulae, software, documentation,
          processes, techniques, know-how, patents, trade secrets and
          trademarks, copyrights and all other data conceived, developed or
          acquired by him during the period of his employment with the Company,
          both prior to and after the execution of this Agreement, whether or
          not patentable or registrable under copyright or similar statutes,
          made or conceived or reduced to practice or learned by the Executive,
          either alone or jointly with others, that result from or are conceived
          during the performance of tasks assigned to the Executive by the
          Company or result from use of property, equipment, or premises owned,
          leased or contracted for by the Company ("Inventions").  The Executive
          agrees to execute and deliver, from time to time, such documents as
          may be necessary or convenient to effectuate the transfer of such
          Confidential Information to the Company and shall cooperate with and
          assist the Company in every proper way (at the expense of the Company)
          in obtaining and from time to time enforcing patents, copyrights,
          trade secrets, other proprietary rights and protections relating to
          Inventions in any and all countries;

               (ii) that the Executive will during the term of this Agreement
          and thereafter safeguard all Confidential Information and, except as
          specifically permitted in Section 8(b)(iii) and Section 8(b)(iv), the
          Executive will never disclose or use for any purpose or benefit (other
          than for the purpose or benefit of the Company) any Confidential
          Information;

               (iii) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter directly or indirectly, disclose,
          disseminate or otherwise make known or provide any Confidential
          Information, whether in original form or in duplicated or copied form
          or extracts therefrom, and whether orally or in writing, to any
          individual, partnership, company or other entity, unless the Company
          has given its prior written consent thereto;


                                      10
<PAGE>

               (iv) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter, remove any Confidential Information from
          the premises of the Company either in original form or in duplicated
          or copied form or extracts therefrom; and that upon any termination of
          Executive's employment by the Company, Executive will immediately
          surrender to the Company, without request, all Confidential
          Information, whether in original or duplicated or copied form or
          extracts therefrom.

     9.   NO CONFLICTS.  The Executive represents that the performance by the
Executive of all the terms of this Agreement, as a former or continuing employee
of the Company  does not and will not breach any agreement as to which the
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust.  The Executive has not entered into,
and will not enter into, any agreement either written or oral in conflict
herewith.  

     10.  REASONABLENESS OF RESTRICTIONS.  The Executive acknowledges that the
restrictions contained in this Agreement are reasonable but should any
provisions of this Agreement be determined to be invalid, illegal or otherwise
unenforceable to its full extent, or if any such restriction is found by a court
of competent jurisdiction to be unreasonable under applicable law, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction.  The
Executive acknowledges that the validity, legality and enforceability of the
other provisions shall not be affected thereby.  The Executive hereby
acknowledges and confirms that the business of the Company extends at least
throughout the world and that, without limitation of any  remedies for breach of
such covenant, the Company shall be entitled to temporary and permanent
injunctive relief.

     11.  REMEDIES; VENUE; PROCESS.  

          (a) The Executive hereby acknowledges and agrees that the Confidential
     Information disclosed to the Executive prior to and during the term of this
     Agreement is of a special, unique and extraordinary character, and that any
     breach of this Agreement will cause the Company irreparable injury and
     damage, and consequently the Company  shall be entitled, in addition to all
     other remedies available to it, to injunctive and equitable relief to
     prevent or cease a breach of Sections 7 or 8 of this Agreement without
     further proof of harm and entitlement; that the terms of this Agreement, if
     enforced by the Company, will not unduly impair the Executive's ability to
     earn a living or pursue his vocation; and further, that the Company may
     withhold compensation and benefits if the Executive fails to comply with
     this Agreement, without restricting the Company from other legal and
     equitable remedies.  The parties agree that the prevailing party shall be
     entitled to all costs and expenses (including reasonable legal fees and
     expenses) which it


                                      11
<PAGE>

     incurs in successfully enforcing this Agreement and in prosecuting or 
     defending any litigation (including appellate proceedings) arising out of 
     this Agreement.

          (b)  The parties agree that jurisdiction and venue in any action
     brought pursuant to this Agreement to enforce its terms or otherwise with
     respect to the relationships between the parties shall properly lie in the
     Court of Common Pleas of Franklin County, Ohio.  Such jurisdiction and
     venue is exclusive, except that the Company may bring suit in any
     jurisdiction and venue where jurisdiction and venue would otherwise be
     proper if Executive has breached Sections 7 or 8 of this Agreement.  The
     parties further agree that the mailing by certified or registered mail,
     return receipt requested, of any process required by any such court shall
     constitute valid and lawful service of process against them, without the
     necessity for service by any other means provided by statute or rule of
     court.
     
     12.  WITHHOLDING.  The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.

     13.  ASSIGNMENT.  This Agreement is personal to the Executive and the
Executive may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.

     14.  WAIVER.  The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.

     15.  NOTICES.  Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to the Executive at:

          Ira Benson
          5790 Rushwood Drive
          Dublin, OH  43017

and to the Company at:  

          Danninger Medical Technology, Inc.
          5160-B Blazer Memorial Parkway
          Dublin, OH 43017-1339
          Attention:  President


                                      12
<PAGE>

with a copy to:     

          Curtis A. Loveland, Esq.
          Porter, Wright, Morris & Arthur
          41 South High Street
          Columbus, Ohio 43215


     16.  GOVERNING LAW.  This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts made
and to be wholly performed within such state.

     17.  AMENDMENT.  This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.

     18.  SECTION HEADINGS.  Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.

     19.  ENTIRE AGREEMENT.  This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of the Executive with the Company, written or oral, entered into
between the parties hereto, and this Agreement contains the entire understanding
of the parties hereto with respect to the subject matter of this Agreement. 
This Agreement was fully reviewed and negotiated on behalf of each party and
shall not be construed against the interest of either party as the drafter of
this Agreement.    THE EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT AND
HAS THIS DAY RECEIVED A COPY HEREOF.

     20.  SEVERABILITY.  The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.

     21.  SURVIVAL.  Sections 6 through 13 of this Agreement and this Section 21
shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


EXECUTIVE:                             DANNINGER MEDICAL TECHNOLOGY, INC.


/s/ Ira Benson                             By: /s/ Joseph A. Mussey
- ----------------------------------         ------------------------------
Ira Benson                                 Joseph A. Mussey, President


                                      13

<PAGE>
                                                                   Exhibit 10(d)

                       DANNINGER MEDICAL TECHNOLOGY, INC.


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


     THIS EMPLOYMENT AGREEMENT is made this 7th day of November, 1996,
("Agreement") between Danninger Medical Technology, Inc., a Delaware corporation
("Danninger"), and Thomas E. Zimmer ("Executive").


                             Recitals

     A.   Danninger is the owner, directly or indirectly, of all of the issued
capital stock of Cross Medical Products, Inc., an Ohio corporation, and
Danninger Healthcare, Inc., an Ohio corporation (individually a "Subsidiary" and
collectively the "Subsidiaries").

     B.   Danninger and its Subsidiaries (collectively, the "Company") design,
manufacture, sell and lease medical and surgical equipment, devices and
instruments.

     C.   The Executive is currently employed as an executive of Danninger or
one of its Subsidiaries.

     D.   The Company considers the continued services of the Executive to be in
the best interest of the Company and desires to assure the continued services of
the Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an attempt to obtain
control of the Company.

     E.   The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security in the event of
a change in control of the Company.

     F.   Danninger and the Executive desire to enter into an employment
relationship upon the terms and conditions contained herein.

     NOW, THEREFORE, the parties agree as follows:

     1.   EMPLOYMENT.  Danninger hereby employs the Executive and the Executive
accepts such employment upon the terms and conditions hereinafter set forth.

     2.   DUTIES.  The Executive shall be employed:

          (a)  to serve as Vice President of Manufacturing of Danninger, and to
     serve in other capacities for each of Danninger and the Subsidiaries, if so
     elected, subject to the


<PAGE>

     authority and direction of the Board of Directors of Danninger or such 
     Subsidiary, as the case may be; and

          (b)  to perform such other duties and responsibilities similar to
     those performed by the Executive prior hereto and exercise such other
     authority, perform such other or additional duties and responsibilities and
     have such other or different title (or have no title) as the Board of
     Directors of Danninger may, from time to time, prescribe.

     So long as he is employed under this Agreement, the Executive agrees to
devote his full time and efforts exclusively on behalf of the Company and to
competently, diligently, and effectively discharge his duties hereunder.  The
Executive shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.  The
Executive further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.

     3.   COMPENSATION.  As his entire compensation for all services rendered to
the Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to the Executive during the term hereof a minimum base salary
at the rate of $85,000.00 per year ("Basic Salary"), payable monthly or in other
more frequent installments, as determined by the Company.  The Basic Salary may
be increased, but not decreased, from time to time, by the Board of Directors.

     In addition, the Executive will be entitled to receive incentive
compensation pursuant to the terms of plans adopted by the Board of Directors
from time to time.

     4.   BUSINESS EXPENSES.  The Company shall promptly pay directly, or
reimburse the Executive for, all business expenses to the extent such expenses
are paid or incurred by the Executive during the term of employment in
accordance with Company policy in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by the Executive of
the Company's business and properly substantiated.

     5.   FRINGE BENEFITS.  During the term of this Agreement and the
Executive's employment hereunder, the Company shall provide to the Executive
such insurance, vacation, sick leave and other like benefits as are provided
from time to time to its other employees holding equivalent executive positions
with the Company in accordance with the policy of the Company as may be
established from time to time; provided, however, that the Company shall
maintain at least the level of benefits presently provided to the Executive.

     6.   TERM; TERMINATION.  The Executive is employed by the Company "at
will." The Executive's employment may be terminated at any time as provided
below.  For purposes of this Section 6, "Termination Date" shall mean the date
on which any notice period required under


                                       2
<PAGE>

this Section 6 expires or, if no notice period is specified in this Section 6, 
the effective date of the termination referenced in the notice.
 
          (a)  TERMINATION BY THE EXECUTIVE.  The Executive may terminate his
     employment upon giving at least 30 days' advance written notice to the
     Company and the Company will pay the Executive the earned but unpaid
     portion of the Executive's Basic Salary through the Termination Date.  If
     the Executive gives notice of termination hereunder, the Company shall have
     the right to relieve the Executive, in whole or in part, of his duties
     under this Agreement and to advance the Termination Date from the date set
     by the Executive's notice to a date not less than 14 days from the receipt
     of the Executive's notice of termination.

          (b)  TERMINATION BY COMPANY WITHOUT CAUSE.  The Company may terminate
     the Executive's employment without cause upon giving 30 days' advance
     written notice to the Executive.  If the Executive's employment is
     terminated without cause under this Section 6(b), the Company will pay the
     Executive the earned but unpaid portion of the Executive's Basic Salary
     through the Termination Date and will continue to pay the Executive his
     Basic Salary for 6 months following the Termination Date ("Severance
     Period"); provided, however, that the Company may terminate payment of the
     Basic Salary during the Severance Period if the Executive accepts other
     employment or is in breach of obligations under Sections 7 or 8 of this
     Agreement.  
          
          (c)  TERMINATION BY COMPANY FOR GOOD CAUSE.  The Company may terminate
     the Executive's employment  upon a determination by the Company that "Good
     Cause" exists for the Executive's termination and the Company serves
     written notice of such termination upon the Executive.  As used in this
     Agreement, the term "Good Cause" shall refer only to any one or more of the
     following actions by the Executive:

               (i) commission of an act of dishonesty, including, but not
          limited to, misappropriation of funds or any property of the Company;

               (ii) engagement in activities or conduct clearly injurious to the
          reputation of the Company;

               (iii) refusal to perform his assigned duties and
          responsibilities;

               (iv) gross insubordination;

               (v) the clear violation of any of the material terms and
          conditions of this Agreement or any written agreement or agreements
          the Executive may from time to time have with the Company (following
          30-days' written notice from the Company specifying the violation and
          the Executive's failure to cure such violation within such 30-day
          period); or


                                      3
<PAGE>

               (vi) commission of a misdemeanor involving an act of moral
          turpitude or a felony.

In the event of a termination under this Section 6(c), the Company will pay the
Executive the earned but unpaid portion of the Executive's Basic Salary through
the Termination Date.

          (d)  TERMINATION UPON DEATH OR PERMANENT DISABILITY.  The Executive's
     employment shall terminate upon the death or permanent disability of the
     Executive.  For purposes hereof, "permanent disability," shall mean the
     inability of the Executive, as determined by the Board of Directors of the
     Company, by reason of physical or mental illness to perform the duties
     required of him under this Agreement for more than 180 days in any one year
     period.  Successive periods of disability, illness or incapacity will be
     considered separate periods unless the later period of disability, illness
     or incapacity is due to the same or related cause and commences less than
     six months from the ending of the previous period of disability.  Upon a
     determination by the Board of Directors of Danninger that the Executive's
     employment shall be terminated under this Section 6(d), the Board of
     Directors shall give the Executive 30 days' prior written notice of the
     termination.  If a determination of the Board of Directors under this
     Section 6(d) is disputed by the Executive, the parties agree to abide by
     the decision of a panel of three physicians.  The Company will select a
     physician, the Executive will select a physician and the physicians
     selected by the Company and the Executive will select a third physician. 
     The Executive agrees to make himself available for and submit to
     examinations by such physicians as may be directed by the Company.  Failure
     to submit to any examination shall constitute a breach of a material part
     of this Agreement.  In the event of a termination under this Section 6(d),
     the Company will pay Executive or his duly appointed and qualified executor
     or other personal representative the earned but unpaid portion of the
     Executive's Basic Salary through the Termination Date.

          (e)  TERMINATION FOLLOWING CHANGE OF CONTROL.    If a "Change in
     Control", as defined in Section 6(e)(v), shall have occurred and within one
     year following such Change in Control the Company terminates the employment
     of the Executive for other than Good Cause, as defined in Section 6(c), or
     the Executive terminates his employment for Good Reason, as that term is
     defined in Section 6(e)(vii), then the Executive shall be entitled to the
     benefits described below:

               (i)  The Executive shall be entitled to the unpaid portion of his
          Basic Salary plus credit for any vacation accrued but not taken and
          the amount of any unpaid but earned bonus, incentive compensation or
          any other benefit to which he is entitled under this Agreement through
          the date of the termination as a result of a Change in Control, plus 2
          times the Executive's "Current Annual Compensation" as defined in this
          Section 6(e)(i) ("Salary Termination Benefit").  For this purpose
          "Current Annual Compensation" shall mean the total of Executive's
          Basic Salary in effect at the Termination Date, plus any performance
          bonuses received by Executive in


                                      4
<PAGE>

          the prior twelve months, and shall not include the value of any stock 
          options granted or exercised, contributions to 401(k) or other 
          qualified plans, medical, dental, or other insurance benefits, or 
          other fringe benefits.  The Salary Termination Benefit shall be paid 
          to the Executive in 24 equal consecutive monthly payments commencing 
          on the first day of the month after termination of employment 
          following a Change in Control.
     
               (ii)  All outstanding stock options issued to the Executive shall
          become 100% vested and thereafter exercisable in accordance with such
          governing stock option agreements and plans.
     
               (iii)  The Company shall maintain for the Executive's benefit
          until the earlier of (y) 24 months after termination of employment
          following a Change in Control, or (z) the Executive's commencement of
          full-time employment with a new employer, all life insurance, medical,
          health and accident, and disability plans or programs in which the
          Executive shall have been entitled to participate prior to termination
          of employment following a Change in Control, provided the Executive's
          continued participation is permitted under the general terms of such
          plans and programs after the Change in Control ("Fringe Termination
          Benefits";  collectively the Salary Termination Benefit and the Fringe
          Termination Benefit are referred to as the "Termination Benefits"). 
          In the event the Executive's participation in any such plan or program
          is not permitted, the Company will provide directly the benefits to
          which the Executive would be entitled under such plans and programs.
     
               (iv)  The Termination Benefits shall be payable to the Executive
          as severance pay in consideration of his past service and of his
          continued services from the date hereof.  Executive shall have no duty
          to mitigate his damages by seeking other employment, and the Company
          shall not be entitled to set off against amounts payable hereunder any
          compensation which the Executive may receive from future employment.

               (v)  A "Change in Control" shall be deemed to have occurred if
          and when, after the date hereof, (i) Danninger, or in one or more
          transactions 50% or more of its assets or earning power, is acquired
          by or combined with a person, partnership, corporation, trust or other
          entity ("Person") and less than a majority of the outstanding voting
          shares of the Person surviving such transaction (or the ultimate
          parent of the surviving Person) after such acquisition or combination
          is owned, immediately after the acquisition or combination, by the
          owners of the voting shares of the Company outstanding immediately
          prior to such acquisition or combination; or (ii) during any period of
          two consecutive years during the term of this Agreement, individuals
          who at the beginning of such period constitute the Board of Directors
          of Danninger cease for any reason to constitute at least two-


                                       5
<PAGE>

          thirds thereof, unless the election of each director who was not a 
          director at the beginning of such period has been approved in advance 
          by directors representing at least two-thirds of the directors then in
          office who were directors at the beginning of the period.

               (vi)  If the payments and benefits provided under this Agreement
          to the Executive, either alone or with other payments and benefits,
          would constitute "excess parachute payments" as defined in 
          Section 280G of the Internal Revenue Code of 1986, as amended 
          ("Code"), then the payments and other benefits under this Agreement 
          shall be reduced to the extent necessary so that no portion thereof 
          shall be subject to the excise tax imposed by Section 4999 of the 
          Code.  Either the Company or the Executive may request a determination
          as to whether the payments or benefits would constitute an excess 
          parachute payment and, if requested, such determination shall be made 
          by independent tax counsel selected by the Company and approved by the
          Executive.  At the Executive's election and to the extent not 
          otherwise paid, the Executive may determine the amount of cash and/or 
          elements of non-cash fringe benefits to reduce so that such payments 
          and benefits will not constitute excess parachute payments.


               (vii)   As used in this Agreement, the term "Good Reason" means,
          without the Executive's written consent, 

                    (a) a change in status, position or responsibilities which,
               in the Executive's reasonable judgment, does not represent a
               promotion from existing status, position or responsibilities as
               in effect immediately prior to the Change in Control; the
               assignment of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with such
               status, position or responsibilities; or any removal from or
               failure to reappoint or reelect the Executive to any of such
               positions, except in connection with the termination for total
               and permanent disability, death or Good Cause or by him other
               than for Good Reason; 

                    (b) a reduction by the Company in the Executive's base
               salary as in effect on the date hereof or as the same may be
               increased from time to time during the term of this Agreement or
               the Company's failure to increase (within twelve months of the
               Executive's last increase in base salary) the Executive's base
               salary after a Change in Control in an amount which at least
               equals, on a percentage basis, the average percentage increase in
               base salary for all executive and senior officers of the Company
               effected in the preceding twelve months; 


                                       6
<PAGE>

                    (c) the relocation of the Company's principal executive
               offices to a location outside the Columbus metropolitan area or
               the relocation of the Executive by the Company to any place other
               than the location at which the Executive performed duties prior
               to a Change in Control, except for required travel on the
               Company's business to an extent substantially consistent with
               business travel obligations at the time of a Change in Control; 

                    (d) the failure of the Company to continue in effect any
               incentive, bonus or other compensation plan in which the
               Executive participates, including but not limited to the
               Company's stock option plans, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan),
               evidenced by the Executive's written consent, has been made with
               respect to such plan in connection with the Change in Control, or
               the failure by the Company to continue the Executive's
               participation therein, or any action by the Company which would
               directly or indirectly materially reduce participation therein; 

                    (e) the failure by the Company to continue to provide the
               Executive with benefits substantially similar to those enjoyed or
               entitled under any of the Company's pension, profit sharing, life
               insurance, medical, dental, health and accident, or disability
               plans at the time of a Change in Control, the taking of any
               action by the Company which would directly or indirectly
               materially reduce any of such benefits or deprive the Executive
               of any material fringe benefit enjoyed or entitled to at the time
               of the Change in Control, or the failure by the Company to
               provide the number of paid vacation and sick leave days to which
               the Executive is entitled on the basis of years of service with
               the Company in accordance with the Company's normal vacation
               policy in effect on the date hereof; 

                    (f) the failure of the Company to obtain a satisfactory
               agreement from any successor or assign of the Company to assume
               and agree to perform this Agreement or; 

                    (g) any request by the Company that the Executive
               participate in an unlawful act or take any action constituting a
               breach of the Executive's professional standard of conduct. 
               Notwithstanding anything in this Section to the contrary, the
               Executive's right to terminate the employment pursuant to this
               Section shall not be affected by incapacity due to physical or
               mental illness.

               (viii)  Upon any termination or expiration of this Agreement or
          any cessation of the Executive's employment hereunder, the Company
          shall have no further obligations under this Agreement and no further
          payments shall be payable


                                       7
<PAGE>

          by the Company to the Executive, except as provided in Sections 6(b) 
          and 6(e) above and except as required under any benefit plans or 
          arrangements maintained by the Company and applicable to the Executive
          at the time of such termination, expiration or cessation of the 
          Executive's employment, including, without limitation thereto, salary,
          incentive compensation, sick leave, and vacation pay.

               (ix)   ENFORCEMENT OF AGREEMENT.  The Company is aware that upon
          the occurrence of a Change in Control, the Board of Directors or a
          shareholder of the Company may then cause or attempt to cause the
          Company to refuse to comply with its obligations under this Agreement,
          or may cause or attempt to cause the Company to institute, or may
          institute litigation seeking to have this Agreement declared
          unenforceable, or may institute litigation seeking to have this
          Agreement declared unenforceable, or may take or attempt to take other
          action to deny the Executive the benefits intended under this
          Agreement.  In these circumstances, the purpose of this Agreement
          could be frustrated.  It is the intent of the Company that the
          Executive not be required to incur the expenses associated with the
          enforcement of any rights under this Agreement by litigation or other
          legal action, nor be bound to negotiate any settlement of any rights
          hereunder, because the cost and expense of such legal action or
          settlement would substantially detract from the benefits intended to
          be extended to the Executive hereunder.  Accordingly, if following a
          Change in Control it should appear to the Executive that the Company
          has failed to comply with any of its obligations under this Agreement
          or in the event that the Company or any other person takes any action
          to declare this Agreement void or enforceable, or institutes any
          litigation or other legal action designed to deny, diminish or to
          recovery from the Executive the benefits entitled to be provided to
          the Executive hereunder, and that the Executive has complied with all
          obligations under this Agreement, the Company irrevocably authorizes
          the Executive from time to time to retain counsel of the Executive's
          choice, at the expense of the Company as provided in this Section, to
          represent the Executive in connection with the initiation or defense
          of any litigation or other legal action, whether such action is by or
          against the Company or any Director, officer, shareholder, or other
          person affiliated with the Company, in any jurisdiction. 
          Notwithstanding any existing or prior attorney-client relationship
          between the Company and such counsel, the Company irrevocably consents
          to the Executive entering into an attorney-client relationship with
          such counsel, and in that connection the Company and the Executive
          agree that a confidential relationship shall exist between the
          executive and such counsel.  The reasonable fees and expenses of
          counsel selected from time to time by the Executive as hereinabove
          provided shall be paid or reimbursed to the Executive by the Company
          on a regular, periodic basis upon presentation by the Executive of a
          statement or statements prepared by such counsel in accordance with
          its customary practices, up to a maximum aggregate amount of $200,000.
          Any legal expenses incurred by the Company by reason of any dispute
          between the parties as to enforceability of or the terms contained in
          this Agreement, notwithstanding the outcome of any such dispute,


                                       8
<PAGE>

          shall be the sole responsibility of the Company, and the Company shall
          not take any action to seek reimbursement from the Executive for such
          expenses.

     7.   NON-COMPETITION.  

          (a) The Executive agrees that he will not during the term of this
     Agreement, any extension hereof, and for a period of 12 months after
     termination of employment with the Company, whether voluntary or
     involuntary or with or without cause:

               (i)  engage or participate, directly or indirectly, either as
          principal, agent, employee, employer, consultant, stockholder (except
          as the holder of not more than two percent of the stock of any
          publicly traded corporation), or in any other individual or
          representative capacity whatsoever, in the operation, management or
          ownership of any business, firm, corporation, association, or other
          entity engaged in the design, manufacture, marketing, sale or lease of
          continuous passive motion, thermal therapy or similar orthopedic
          rehabilitation devices, spinal implants, or spinal instruments, or any
          other business engaged in by the Company at any time during the term
          of this Agreement, or during the 12 month period after termination;
          and,

               (ii)  directly or indirectly, for himself or in conjunction with
          or on behalf of any other individual or entity, solicit, divert, take
          away or endeavor to take away from the Company any customer, account
          or employee of the Company at any time during the term of this
          Agreement, as of the date of the Executive's termination of employment
          with the Company, or during the 12 month period after termination.
 
          (b)  In the event of a violation of this Section 7, the 
     non-competition time period provided in Section 7(a) shall be tolled during
     the time of such violation.

     8.   CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS.

          (a)  As used herein, the term "Confidential Information" includes, but
     is not limited to, all information and materials belonging to, used by, or
     in the possession of the Company (i) which have been disclosed or made
     known to, or has come into the possession of the Executive as a consequence
     of or through the Executive's relationship with the Company prior to or
     after the date hereof, (ii) which are related to the Company's  customers,
     potential customers, suppliers, distributors, business strategies or
     policies, financial or sales results, sales and management techniques,
     marketing plans, research or development, reports, records, software,
     systems, source or object code, software documentation or instruction or
     user manuals, and (iii) which have not generally been made available to the
     public (not including customers) by the Company pursuant to a specific
     authorization in the ordinary course of business by the Company of the
     release of 


                                       9
<PAGE>

     such information to the public or otherwise published and released by the 
     Company to the general public.  Notwithstanding the foregoing, the 
     Executive may release Confidential Information if (1) required by law, 
     (2) necessary to establish a lawful claim or defense against the Company, 
     (3) necessary to establish a lawful claim or defense against a person or 
     entity other than the Company, but only with the permission, which shall 
     not be unreasonably withheld, of the Company, or (4) necessary to respond 
     to process or appropriate governmental inquiry, but then in each case only 
     with prior notice to the Company.

          (b)  The Executive agrees:

               (i)  that the Executive will promptly disclose and grant and does
          hereby grant to the Company his entire right, title and interest in
          and to all customer lists, discoveries, developments, designs,
          improvements, inventions, formulae, software, documentation,
          processes, techniques, know-how, patents, trade secrets and
          trademarks, copyrights and all other data conceived, developed or
          acquired by him during the period of his employment with the Company,
          both prior to and after the execution of this Agreement, whether or
          not patentable or registrable under copyright or similar statutes,
          made or conceived or reduced to practice or learned by the Executive,
          either alone or jointly with others, that result from or are conceived
          during the performance of tasks assigned to the Executive by the
          Company or result from use of property, equipment, or premises owned,
          leased or contracted for by the Company ("Inventions").  The Executive
          agrees to execute and deliver, from time to time, such documents as
          may be necessary or convenient to effectuate the transfer of such
          Confidential Information to the Company and shall cooperate with and
          assist the Company in every proper way (at the expense of the Company)
          in obtaining and from time to time enforcing patents, copyrights,
          trade secrets, other proprietary rights and protections relating to
          Inventions in any and all countries;

               (ii) that the Executive will during the term of this Agreement
          and thereafter safeguard all Confidential Information and, except as
          specifically permitted in Section 8(b)(iii) and Section 8(b)(iv), the
          Executive will never disclose or use for any purpose or benefit (other
          than for the purpose or benefit of the Company) any Confidential
          Information;

               (iii) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter directly or indirectly, disclose,
          disseminate or otherwise make known or provide any Confidential
          Information, whether in original form or in duplicated or copied form
          or extracts therefrom, and whether orally or in writing, to any
          individual, partnership, company or other entity, unless the Company
          has given its prior written consent thereto;


                                      10
<PAGE>

               (iv) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter, remove any Confidential Information from
          the premises of the Company either in original form or in duplicated
          or copied form or extracts therefrom; and that upon any termination of
          Executive's employment by the Company, Executive will immediately
          surrender to the Company, without request, all Confidential
          Information, whether in original or duplicated or copied form or
          extracts therefrom.

     9.   NO CONFLICTS.  The Executive represents that the performance by the
Executive of all the terms of this Agreement, as a former or continuing employee
of the Company  does not and will not breach any agreement as to which the
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust.  The Executive has not entered into,
and will not enter into, any agreement either written or oral in conflict
herewith.  

     10.  REASONABLENESS OF RESTRICTIONS.  The Executive acknowledges that the
restrictions contained in this Agreement are reasonable but should any
provisions of this Agreement be determined to be invalid, illegal or otherwise
unenforceable to its full extent, or if any such restriction is found by a court
of competent jurisdiction to be unreasonable under applicable law, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction.  The
Executive acknowledges that the validity, legality and enforceability of the
other provisions shall not be affected thereby.  The Executive hereby
acknowledges and confirms that the business of the Company extends at least
throughout the world and that, without limitation of any  remedies for breach of
such covenant, the Company shall be entitled to temporary and permanent
injunctive relief.

     11.  REMEDIES; VENUE; PROCESS.  

          (a) The Executive hereby acknowledges and agrees that the Confidential
     Information disclosed to the Executive prior to and during the term of this
     Agreement is of a special, unique and extraordinary character, and that any
     breach of this Agreement will cause the Company irreparable injury and
     damage, and consequently the Company  shall be entitled, in addition to all
     other remedies available to it, to injunctive and equitable relief to
     prevent or cease a breach of Sections 7 or 8 of this Agreement without
     further proof of harm and entitlement; that the terms of this Agreement, if
     enforced by the Company, will not unduly impair the Executive's ability to
     earn a living or pursue his vocation; and further, that the Company may
     withhold compensation and benefits if the Executive fails to comply with
     this Agreement, without restricting the Company from other legal and
     equitable remedies.  The parties agree that the prevailing party shall be
     entitled to all costs and expenses (including reasonable legal fees and
     expenses) which it


                                      11
<PAGE>

     incurs in successfully enforcing this Agreement and in prosecuting or 
     defending any litigation (including appellate proceedings) arising out of 
     this Agreement.

          (b)  The parties agree that jurisdiction and venue in any action
     brought pursuant to this Agreement to enforce its terms or otherwise with
     respect to the relationships between the parties shall properly lie in the
     Court of Common Pleas of Franklin County, Ohio.  Such jurisdiction and
     venue is exclusive, except that the Company may bring suit in any
     jurisdiction and venue where jurisdiction and venue would otherwise be
     proper if Executive has breached Sections 7 or 8 of this Agreement.  The
     parties further agree that the mailing by certified or registered mail,
     return receipt requested, of any process required by any such court shall
     constitute valid and lawful service of process against them, without the
     necessity for service by any other means provided by statute or rule of
     court.
     
     12.  WITHHOLDING.  The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.

     13.  ASSIGNMENT.  This Agreement is personal to the Executive and the
Executive may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.

     14.  WAIVER.  The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.

     15.  NOTICES.  Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to the Executive at:

          Thomas E. Zimmer
          325 Greenglade Ave.
          Worthington, OH  43085

and to the Company at:  

          Danninger Medical Technology, Inc.
          5160-B Blazer Memorial Parkway
          Dublin, OH 43017-1339
          Attention:  President


                                      12
<PAGE>

with a copy to:     

          Curtis A. Loveland, Esq.
          Porter, Wright, Morris & Arthur
          41 South High Street
          Columbus, Ohio 43215


     16.  GOVERNING LAW.  This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts made
and to be wholly performed within such state.

     17.  AMENDMENT.  This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.

     18.  SECTION HEADINGS.  Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.

     19.  ENTIRE AGREEMENT.  This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of the Executive with the Company, written or oral, entered into
between the parties hereto, and this Agreement contains the entire understanding
of the parties hereto with respect to the subject matter of this Agreement. 
This Agreement was fully reviewed and negotiated on behalf of each party and
shall not be construed against the interest of either party as the drafter of
this Agreement.    THE EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT AND
HAS THIS DAY RECEIVED A COPY HEREOF.

     20.  SEVERABILITY.  The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.

     21.  SURVIVAL.  Sections 6 through 13 of this Agreement and this Section 21
shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


EXECUTIVE:                             DANNINGER MEDICAL TECHNOLOGY, INC.


/s/ Thomas E. Zimmer                       By: /s/ Joseph A. Mussey
- ----------------------------------         ------------------------------------
Thomas E. Zimmer                           Joseph A. Mussey, President


                                      13

<PAGE>
                                                                   Exhibit 10(e)

                      DANNINGER MEDICAL TECHNOLOGY, INC.

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


     THIS EMPLOYMENT AGREEMENT is made this 7th day of November, 1996,
("Agreement") between Danninger Medical Technology, Inc., a Delaware corporation
("Danninger"), and Philip A. Mellinger ("Executive").


                             Recitals

     A.   Danninger is the owner, directly or indirectly, of all of the issued
capital stock of Cross Medical Products, Inc., an Ohio corporation, and
Danninger Healthcare, Inc., an Ohio corporation (individually a "Subsidiary" and
collectively the "Subsidiaries").

     B.   Danninger and its Subsidiaries (collectively, the "Company") design,
manufacture, sell and lease medical and surgical equipment, devices and
instruments.

     C.   The Executive is currently employed as an executive of Danninger or
one of its Subsidiaries.

     D.   The Company considers the continued services of the Executive to be in
the best interest of the Company and desires to assure the continued services of
the Executive on behalf of the Company on an objective and impartial basis and
without distraction or conflict of interest in the event of an attempt to obtain
control of the Company.

     E.   The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security in the event of
a change in control of the Company.

     F.   Danninger and the Executive desire to enter into an employment
relationship upon the terms and conditions contained herein.

     NOW, THEREFORE, the parties agree as follows:

     1.   EMPLOYMENT.  Danninger hereby employs the Executive and the Executive
accepts such employment upon the terms and conditions hereinafter set forth.

     2.   DUTIES.  The Executive shall be employed:

          (a)  to serve as Director of Research and Development of Cross Medical
     Products, Inc., and to serve in other capacities for each of Danninger and
     the Subsidiaries,


<PAGE>

     if so elected, subject to the authority and direction of the Board of 
     Directors of Danninger or such Subsidiary, as the case may be; and

          (b)  to perform such other duties and responsibilities similar to
     those performed by the Executive prior hereto and exercise such other
     authority, perform such other or additional duties and responsibilities and
     have such other or different title (or have no title) as the Board of
     Directors of Danninger may, from time to time, prescribe.

     So long as he is employed under this Agreement, the Executive agrees to
devote his full time and efforts exclusively on behalf of the Company and to
competently, diligently, and effectively discharge his duties hereunder.  The
Executive shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.  The
Executive further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.

     3.   COMPENSATION.  As his entire compensation for all services rendered to
the Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to the Executive during the term hereof a minimum base salary
at the rate of $80,000.00 per year ("Basic Salary"), payable monthly or in other
more frequent installments, as determined by the Company.  The Basic Salary may
be increased, but not decreased, from time to time, by the Board of Directors.

     In addition, the Executive will be entitled to receive incentive
compensation pursuant to the terms of plans adopted by the Board of Directors
from time to time.

     4.   BUSINESS EXPENSES.  The Company shall promptly pay directly, or
reimburse the Executive for, all business expenses to the extent such expenses
are paid or incurred by the Executive during the term of employment in
accordance with Company policy in effect from time to time and to the extent
such expenses are reasonable and necessary to the conduct by the Executive of
the Company's business and properly substantiated.

     5.   FRINGE BENEFITS.  During the term of this Agreement and the
Executive's employment hereunder, the Company shall provide to the Executive
such insurance, vacation, sick leave and other like benefits as are provided
from time to time to its other employees holding equivalent executive positions
with the Company in accordance with the policy of the Company as may be
established from time to time; provided, however, that the Company shall
maintain at least the level of benefits presently provided to the Executive.

     6.   TERM; TERMINATION.  The Executive is employed by the Company "at
will." The Executive's employment may be terminated at any time as provided
below.  For purposes of this Section 6, "Termination Date" shall mean the date
on which any notice period required under


                                       2
<PAGE>

this Section 6 expires or, if no notice period is specified in this Section 6, 
the effective date of the termination referenced in the notice.
 
          (a)  TERMINATION BY THE EXECUTIVE.  The Executive may terminate his
     employment upon giving at least 30 days' advance written notice to the
     Company and the Company will pay the Executive the earned but unpaid
     portion of the Executive's Basic Salary through the Termination Date.  If
     the Executive gives notice of termination hereunder, the Company shall have
     the right to relieve the Executive, in whole or in part, of his duties
     under this Agreement and to advance the Termination Date from the date set
     by the Executive's notice to a date not less than 14 days from the receipt
     of the Executive's notice of termination.

          (b)  TERMINATION BY COMPANY WITHOUT CAUSE.  The Company may terminate
     the Executive's employment without cause upon giving 30 days' advance
     written notice to the Executive.  If the Executive's employment is
     terminated without cause under this Section 6(b), the Company will pay the
     Executive the earned but unpaid portion of the Executive's Basic Salary
     through the Termination Date and will continue to pay the Executive his
     Basic Salary for 6 months following the Termination Date ("Severance
     Period"); provided, however, that the Company may terminate payment of the
     Basic Salary during the Severance Period if the Executive accepts other
     employment or is in breach of obligations under Sections 7 or 8 of this
     Agreement.
          
          (c)  TERMINATION BY COMPANY FOR GOOD CAUSE.  The Company may terminate
     the Executive's employment  upon a determination by the Company that "Good
     Cause" exists for the Executive's termination and the Company serves
     written notice of such termination upon the Executive.  As used in this
     Agreement, the term "Good Cause" shall refer only to any one or more of the
     following actions by the Executive:

               (i) commission of an act of dishonesty, including, but not
          limited to, misappropriation of funds or any property of the Company;

               (ii) engagement in activities or conduct clearly injurious to the
          reputation of the Company;

               (iii) refusal to perform his assigned duties and
          responsibilities;

               (iv) gross insubordination;

               (v) the clear violation of any of the material terms and
          conditions of this Agreement or any written agreement or agreements
          the Executive may from time to time have with the Company (following
          30-days' written notice from the Company specifying the violation and
          the Executive's failure to cure such violation within such 30-day
          period); or


                                       3
<PAGE>

               (vi) commission of a misdemeanor involving an act of moral
          turpitude or a felony.

In the event of a termination under this Section 6(c), the Company will pay the
Executive the earned but unpaid portion of the Executive's Basic Salary through
the Termination Date.

          (d)  TERMINATION UPON DEATH OR PERMANENT DISABILITY.  The Executive's
     employment shall terminate upon the death or permanent disability of the
     Executive.  For purposes hereof, "permanent disability," shall mean the
     inability of the Executive, as determined by the Board of Directors of the
     Company, by reason of physical or mental illness to perform the duties
     required of him under this Agreement for more than 180 days in any one year
     period.  Successive periods of disability, illness or incapacity will be
     considered separate periods unless the later period of disability, illness
     or incapacity is due to the same or related cause and commences less than
     six months from the ending of the previous period of disability.  Upon a
     determination by the Board of Directors of Danninger that the Executive's
     employment shall be terminated under this Section 6(d), the Board of
     Directors shall give the Executive 30 days' prior written notice of the
     termination.  If a determination of the Board of Directors under this
     Section 6(d) is disputed by the Executive, the parties agree to abide by
     the decision of a panel of three physicians.  The Company will select a
     physician, the Executive will select a physician and the physicians
     selected by the Company and the Executive will select a third physician. 
     The Executive agrees to make himself available for and submit to
     examinations by such physicians as may be directed by the Company.  Failure
     to submit to any examination shall constitute a breach of a material part
     of this Agreement.  In the event of a termination under this Section 6(d),
     the Company will pay Executive or his duly appointed and qualified executor
     or other personal representative the earned but unpaid portion of the
     Executive's Basic Salary through the Termination Date.

          (e)  TERMINATION FOLLOWING CHANGE OF CONTROL.    If a "Change in
     Control", as defined in Section 6(e)(v), shall have occurred and within one
     year following such Change in Control the Company terminates the employment
     of the Executive for other than Good Cause, as defined in Section 6(c), or
     the Executive terminates his employment for Good Reason, as that term is
     defined in Section 6(e)(vii), then the Executive shall be entitled to the
     benefits described below:

               (i)  The Executive shall be entitled to the unpaid portion of his
          Basic Salary plus credit for any vacation accrued but not taken and
          the amount of any unpaid but earned bonus, incentive compensation or
          any other benefit to which he is entitled under this Agreement through
          the date of the termination as a result of a Change in Control, plus 2
          times the Executive's "Current Annual Compensation" as defined in this
          Section 6(e)(i) ("Salary Termination Benefit").  For this purpose
          "Current Annual Compensation" shall mean the total of Executive's
          Basic Salary in effect at the Termination Date, plus any performance
          bonuses received by Executive in


                                       4
<PAGE>

          the prior twelve months, and shall not include the value of any stock 
          options granted or exercised, contributions to 401(k) or other 
          qualified plans, medical, dental, or other insurance benefits, or 
          other fringe benefits.  The Salary Termination Benefit shall be paid 
          to the Executive in 24 equal consecutive monthly payments commencing 
          on the first day of the month after termination of employment 
          following a Change in Control.
     
               (ii)  All outstanding stock options issued to the Executive shall
          become 100% vested and thereafter exercisable in accordance with such
          governing stock option agreements and plans.
     
               (iii)  The Company shall maintain for the Executive's benefit
          until the earlier of (y) 24 months after termination of employment
          following a Change in Control, or (z) the Executive's commencement of
          full-time employment with a new employer, all life insurance, medical,
          health and accident, and disability plans or programs in which the
          Executive shall have been entitled to participate prior to termination
          of employment following a Change in Control, provided the Executive's
          continued participation is permitted under the general terms of such
          plans and programs after the Change in Control ("Fringe Termination
          Benefits";  collectively the Salary Termination Benefit and the Fringe
          Termination Benefit are referred to as the "Termination Benefits"). 
          In the event the Executive's participation in any such plan or program
          is not permitted, the Company will provide directly the benefits to
          which the Executive would be entitled under such plans and programs.
     
               (iv)  The Termination Benefits shall be payable to the Executive
          as severance pay in consideration of his past service and of his
          continued services from the date hereof.  Executive shall have no duty
          to mitigate his damages by seeking other employment, and the Company
          shall not be entitled to set off against amounts payable hereunder any
          compensation which the Executive may receive from future employment.

               (v)  A "Change in Control" shall be deemed to have occurred if
          and when, after the date hereof, (i) Danninger, or in one or more
          transactions 50% or more of its assets or earning power, is acquired
          by or combined with a person, partnership, corporation, trust or other
          entity ("Person") and less than a majority of the outstanding voting
          shares of the Person surviving such transaction (or the ultimate
          parent of the surviving Person) after such acquisition or combination
          is owned, immediately after the acquisition or combination, by the
          owners of the voting shares of the Company outstanding immediately
          prior to such acquisition or combination; or (ii) during any period of
          two consecutive years during the term of this Agreement, individuals
          who at the beginning of such period constitute the Board of Directors
          of Danninger cease for any reason to constitute at least two-


                                       5
<PAGE>

          thirds thereof, unless the election of each director who was not a 
          director at the beginning of such period has been approved in advance 
          by directors representing at least two-thirds of the directors then in
          office who were directors at the beginning of the period.

               (vi)  If the payments and benefits provided under this Agreement
          to the Executive, either alone or with other payments and benefits,
          would constitute "excess parachute payments" as defined in 
          Section 280G of the Internal Revenue Code of 1986, as amended 
          ("Code"), then the payments and other benefits under this Agreement 
          shall be reduced to the extent necessary so that no portion thereof 
          shall be subject to the excise tax imposed by Section 4999 of the 
          Code.  Either the Company or the Executive may request a determination
          as to whether the payments or benefits would constitute an excess 
          parachute payment and, if requested, such determination shall be made 
          by independent tax counsel selected by the Company and approved by the
          Executive.  At the Executive's election and to the extent not 
          otherwise paid, the Executive may determine the amount of cash and/or 
          elements of non-cash fringe benefits to reduce so that such payments 
          and benefits will not constitute excess parachute payments.


               (vii)   As used in this Agreement, the term "Good Reason" means,
          without the Executive's written consent, 

                    (a) a change in status, position or responsibilities which,
               in the Executive's reasonable judgment, does not represent a
               promotion from existing status, position or responsibilities as
               in effect immediately prior to the Change in Control; the
               assignment of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with such
               status, position or responsibilities; or any removal from or
               failure to reappoint or reelect the Executive to any of such
               positions, except in connection with the termination for total
               and permanent disability, death or Good Cause or by him other
               than for Good Reason; 

                    (b) a reduction by the Company in the Executive's base
               salary as in effect on the date hereof or as the same may be
               increased from time to time during the term of this Agreement or
               the Company's failure to increase (within twelve months of the
               Executive's last increase in base salary) the Executive's base
               salary after a Change in Control in an amount which at least
               equals, on a percentage basis, the average percentage increase in
               base salary for all executive and senior officers of the Company
               effected in the preceding twelve months; 


                                       6
<PAGE>

                    (c) the relocation of the Company's principal executive
               offices to a location outside the Columbus metropolitan area or
               the relocation of the Executive by the Company to any place other
               than the location at which the Executive performed duties prior
               to a Change in Control, except for required travel on the
               Company's business to an extent substantially consistent with
               business travel obligations at the time of a Change in Control; 

                    (d) the failure of the Company to continue in effect any
               incentive, bonus or other compensation plan in which the
               Executive participates, including but not limited to the
               Company's stock option plans, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan),
               evidenced by the Executive's written consent, has been made with
               respect to such plan in connection with the Change in Control, or
               the failure by the Company to continue the Executive's
               participation therein, or any action by the Company which would
               directly or indirectly materially reduce participation therein; 

                    (e) the failure by the Company to continue to provide the
               Executive with benefits substantially similar to those enjoyed or
               entitled under any of the Company's pension, profit sharing, life
               insurance, medical, dental, health and accident, or disability
               plans at the time of a Change in Control, the taking of any
               action by the Company which would directly or indirectly
               materially reduce any of such benefits or deprive the Executive
               of any material fringe benefit enjoyed or entitled to at the time
               of the Change in Control, or the failure by the Company to
               provide the number of paid vacation and sick leave days to which
               the Executive is entitled on the basis of years of service with
               the Company in accordance with the Company's normal vacation
               policy in effect on the date hereof; 

                    (f) the failure of the Company to obtain a satisfactory
               agreement from any successor or assign of the Company to assume
               and agree to perform this Agreement or; 

                    (g) any request by the Company that the Executive
               participate in an unlawful act or take any action constituting a
               breach of the Executive's professional standard of conduct. 
               Notwithstanding anything in this Section to the contrary, the
               Executive's right to terminate the employment pursuant to this
               Section shall not be affected by incapacity due to physical or
               mental illness.

               (viii)  Upon any termination or expiration of this Agreement or
          any cessation of the Executive's employment hereunder, the Company
          shall have no further obligations under this Agreement and no further
          payments shall be payable


                                       7
<PAGE>

          by the Company to the Executive, except as provided in Sections 6(b) 
          and 6(e) above and except as required under any benefit plans or 
          arrangements maintained by the Company and applicable to the Executive
          at the time of such termination, expiration or cessation of the 
          Executive's employment, including, without limitation thereto, salary,
          incentive compensation, sick leave, and vacation pay.

               (ix)   ENFORCEMENT OF AGREEMENT.  The Company is aware that upon
          the occurrence of a Change in Control, the Board of Directors or a
          shareholder of the Company may then cause or attempt to cause the
          Company to refuse to comply with its obligations under this Agreement,
          or may cause or attempt to cause the Company to institute, or may
          institute litigation seeking to have this Agreement declared
          unenforceable, or may institute litigation seeking to have this
          Agreement declared unenforceable, or may take or attempt to take other
          action to deny the Executive the benefits intended under this
          Agreement.  In these circumstances, the purpose of this Agreement
          could be frustrated.  It is the intent of the Company that the
          Executive not be required to incur the expenses associated with the
          enforcement of any rights under this Agreement by litigation or other
          legal action, nor be bound to negotiate any settlement of any rights
          hereunder, because the cost and expense of such legal action or
          settlement would substantially detract from the benefits intended to
          be extended to the Executive hereunder.  Accordingly, if following a
          Change in Control it should appear to the Executive that the Company
          has failed to comply with any of its obligations under this Agreement
          or in the event that the Company or any other person takes any action
          to declare this Agreement void or enforceable, or institutes any
          litigation or other legal action designed to deny, diminish or to
          recovery from the Executive the benefits entitled to be provided to
          the Executive hereunder, and that the Executive has complied with all
          obligations under this Agreement, the Company irrevocably authorizes
          the Executive from time to time to retain counsel of the Executive's
          choice, at the expense of the Company as provided in this Section, to
          represent the Executive in connection with the initiation or defense
          of any litigation or other legal action, whether such action is by or
          against the Company or any Director, officer, shareholder, or other
          person affiliated with the Company, in any jurisdiction. 
          Notwithstanding any existing or prior attorney-client relationship
          between the Company and such counsel, the Company irrevocably consents
          to the Executive entering into an attorney-client relationship with
          such counsel, and in that connection the Company and the Executive
          agree that a confidential relationship shall exist between the
          executive and such counsel.  The reasonable fees and expenses of
          counsel selected from time to time by the Executive as hereinabove
          provided shall be paid or reimbursed to the Executive by the Company
          on a regular, periodic basis upon presentation by the Executive of a
          statement or statements prepared by such counsel in accordance with
          its customary practices, up to a maximum aggregate amount of $200,000.
          Any legal expenses incurred by the Company by reason of any dispute
          between the parties as to enforceability of or the terms contained in
          this Agreement, notwithstanding the outcome of any such dispute,


                                       8
<PAGE>

          shall be the sole responsibility of the Company, and the Company 
          shall not take any action to seek reimbursement from the Executive 
          for such expenses.

     7.   NON-COMPETITION.  

          (a) The Executive agrees that he will not during the term of this
     Agreement, any extension hereof, and for a period of 12 months after
     termination of employment with the Company, whether voluntary or
     involuntary or with or without cause:

               (i)  engage or participate, directly or indirectly, either as
          principal, agent, employee, employer, consultant, stockholder (except
          as the holder of not more than two percent of the stock of any
          publicly traded corporation), or in any other individual or
          representative capacity whatsoever, in the operation, management or
          ownership of any business, firm, corporation, association, or other
          entity engaged in the design, manufacture, marketing, sale or lease of
          continuous passive motion, thermal therapy or similar orthopedic
          rehabilitation devices, spinal implants, or spinal instruments, or any
          other business engaged in by the Company at any time during the term
          of this Agreement, or during the 12 month period after termination;
          and,

               (ii)  directly or indirectly, for himself or in conjunction with
          or on behalf of any other individual or entity, solicit, divert, take
          away or endeavor to take away from the Company any customer, account
          or employee of the Company at any time during the term of this
          Agreement, as of the date of the Executive's termination of employment
          with the Company, or during the 12 month period after termination.
 
          (b)  In the event of a violation of this Section 7, the 
     non-competition time period provided in Section 7(a) shall be tolled during
     the time of such violation.

     8.   CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS.

          (a)  As used herein, the term "Confidential Information" includes, but
     is not limited to, all information and materials belonging to, used by, or
     in the possession of the Company (i) which have been disclosed or made
     known to, or has come into the possession of the Executive as a consequence
     of or through the Executive's relationship with the Company prior to or
     after the date hereof, (ii) which are related to the Company's  customers,
     potential customers, suppliers, distributors, business strategies or
     policies, financial or sales results, sales and management techniques,
     marketing plans, research or development, reports, records, software,
     systems, source or object code, software documentation or instruction or
     user manuals, and (iii) which have not generally been made available to the
     public (not including customers) by the Company pursuant to a specific
     authorization in the ordinary course of business by the Company of the
     release of


                                       9
<PAGE>

     such information to the public or otherwise published and released by the 
     Company to the general public.  Notwithstanding the foregoing, the 
     Executive may release Confidential Information if (1) required by law, 
     (2) necessary to establish a lawful claim or defense against the Company, 
     (3) necessary to establish a lawful claim or defense against a person or 
     entity other than the Company, but only with the permission, which shall 
     not be unreasonably withheld, of the Company, or (4) necessary to respond 
     to process or appropriate governmental inquiry, but then in each case only 
     with prior notice to the Company.

          (b)  The Executive agrees:

               (i)  that the Executive will promptly disclose and grant and does
          hereby grant to the Company his entire right, title and interest in
          and to all customer lists, discoveries, developments, designs,
          improvements, inventions, formulae, software, documentation,
          processes, techniques, know-how, patents, trade secrets and
          trademarks, copyrights and all other data conceived, developed or
          acquired by him during the period of his employment with the Company,
          both prior to and after the execution of this Agreement, whether or
          not patentable or registrable under copyright or similar statutes,
          made or conceived or reduced to practice or learned by the Executive,
          either alone or jointly with others, that result from or are conceived
          during the performance of tasks assigned to the Executive by the
          Company or result from use of property, equipment, or premises owned,
          leased or contracted for by the Company ("Inventions").  The Executive
          agrees to execute and deliver, from time to time, such documents as
          may be necessary or convenient to effectuate the transfer of such
          Confidential Information to the Company and shall cooperate with and
          assist the Company in every proper way (at the expense of the Company)
          in obtaining and from time to time enforcing patents, copyrights,
          trade secrets, other proprietary rights and protections relating to
          Inventions in any and all countries;

               (ii) that the Executive will during the term of this Agreement
          and thereafter safeguard all Confidential Information and, except as
          specifically permitted in Section 8(b)(iii) and Section 8(b)(iv), the
          Executive will never disclose or use for any purpose or benefit (other
          than for the purpose or benefit of the Company) any Confidential
          Information;

               (iii) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter directly or indirectly, disclose,
          disseminate or otherwise make known or provide any Confidential
          Information, whether in original form or in duplicated or copied form
          or extracts therefrom, and whether orally or in writing, to any
          individual, partnership, company or other entity, unless the Company
          has given its prior written consent thereto;


                                      10
<PAGE>

               (iv) that, except in connection with the ordinary course of the
          Company's business, the Executive will not, either during the term of
          this Agreement or thereafter, remove any Confidential Information from
          the premises of the Company either in original form or in duplicated
          or copied form or extracts therefrom; and that upon any termination of
          Executive's employment by the Company, Executive will immediately
          surrender to the Company, without request, all Confidential
          Information, whether in original or duplicated or copied form or
          extracts therefrom.

     9.   NO CONFLICTS.  The Executive represents that the performance by the
Executive of all the terms of this Agreement, as a former or continuing employee
of the Company  does not and will not breach any agreement as to which the
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust.  The Executive has not entered into,
and will not enter into, any agreement either written or oral in conflict
herewith.  

     10.  REASONABLENESS OF RESTRICTIONS.  The Executive acknowledges that the
restrictions contained in this Agreement are reasonable but should any
provisions of this Agreement be determined to be invalid, illegal or otherwise
unenforceable to its full extent, or if any such restriction is found by a court
of competent jurisdiction to be unreasonable under applicable law, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction.  The
Executive acknowledges that the validity, legality and enforceability of the
other provisions shall not be affected thereby.  The Executive hereby
acknowledges and confirms that the business of the Company extends at least
throughout the world and that, without limitation of any  remedies for breach of
such covenant, the Company shall be entitled to temporary and permanent
injunctive relief.

     11.  REMEDIES; VENUE; PROCESS.  

          (a) The Executive hereby acknowledges and agrees that the Confidential
     Information disclosed to the Executive prior to and during the term of this
     Agreement is of a special, unique and extraordinary character, and that any
     breach of this Agreement will cause the Company irreparable injury and
     damage, and consequently the Company  shall be entitled, in addition to all
     other remedies available to it, to injunctive and equitable relief to
     prevent or cease a breach of Sections 7 or 8 of this Agreement without
     further proof of harm and entitlement; that the terms of this Agreement, if
     enforced by the Company, will not unduly impair the Executive's ability to
     earn a living or pursue his vocation; and further, that the Company may
     withhold compensation and benefits if the Executive fails to comply with
     this Agreement, without restricting the Company from other legal and
     equitable remedies.  The parties agree that the prevailing party shall be
     entitled to all costs and expenses (including reasonable legal fees and
     expenses) which it


                                      11
<PAGE>

     incurs in successfully enforcing this Agreement and in prosecuting or 
     defending any litigation (including appellate proceedings) arising out of 
     this Agreement.

          (b)  The parties agree that jurisdiction and venue in any action
     brought pursuant to this Agreement to enforce its terms or otherwise with
     respect to the relationships between the parties shall properly lie in the
     Court of Common Pleas of Franklin County, Ohio.  Such jurisdiction and
     venue is exclusive, except that the Company may bring suit in any
     jurisdiction and venue where jurisdiction and venue would otherwise be
     proper if Executive has breached Sections 7 or 8 of this Agreement.  The
     parties further agree that the mailing by certified or registered mail,
     return receipt requested, of any process required by any such court shall
     constitute valid and lawful service of process against them, without the
     necessity for service by any other means provided by statute or rule of
     court.
     
     12.  WITHHOLDING.  The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.

     13.  ASSIGNMENT.  This Agreement is personal to the Executive and the
Executive may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.

     14.  WAIVER.  The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.

     15.  NOTICES.  Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to the Executive at:

          Philip A. Mellinger
          1094 Kirk Avenue
          Worthington, OH  43085

and to the Company at:  

          Danninger Medical Technology, Inc.
          5160-B Blazer Memorial Parkway
          Dublin, OH 43017-1339
          Attention:  President


                                      12
<PAGE>

with a copy to:     

          Curtis A. Loveland, Esq.
          Porter, Wright, Morris & Arthur
          41 South High Street
          Columbus, Ohio 43215


     16.  GOVERNING LAW.  This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts made
and to be wholly performed within such state.

     17.  AMENDMENT.  This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.

     18.  SECTION HEADINGS.  Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.

     19.  ENTIRE AGREEMENT.  This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of the Executive with the Company, written or oral, entered into
between the parties hereto, and this Agreement contains the entire understanding
of the parties hereto with respect to the subject matter of this Agreement. 
This Agreement was fully reviewed and negotiated on behalf of each party and
shall not be construed against the interest of either party as the drafter of
this Agreement.    THE EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT AND
HAS THIS DAY RECEIVED A COPY HEREOF.

     20.  SEVERABILITY.  The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.

     21.  SURVIVAL.  Sections 6 through 13 of this Agreement and this Section 21
shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.


EXECUTIVE:                             DANNINGER MEDICAL TECHNOLOGY, INC.


/s/ Philip A. Mellinger                    By: /s/ Joseph A. Mussey
- ----------------------------------         ------------------------------------
Philip A. Mellinger                        Joseph A. Mussey, President


                                      13

<PAGE>
                                                                   Exhibit 10(f)

                           NONCOMPETITION AGREEMENT
                           ------------------------


     In consideration of (i) the purchase all of the outstanding stock of
Surgical & Orthopedic Specialties, Ltd., a Michigan corporation ("Surgical"),
from Stephen R. Draper ("Draper") by Danninger Medical Technology, Inc., a
Delaware corporation ("Danninger"), pursuant to the terms of that certain Stock
Purchase Agreement among Draper, Surgical, and Danninger of even date herewith
("Stock Purchase Transaction"), and (ii) the payment to Draper the sum of
$100,000.00 pursuant to the terms of a Noncompetition Note, attached hereto as
Exhibit A, Draper, without reservation, freely enters into this Agreement with
Danninger and any of its present or future subsidiaries (collectively referred
to herein as the "Danninger Companies").
     
A.   NONCOMPETITION

     Draper agrees that for a period of five years after the closing date of the
Stock Purchase Transaction ("Noncompetition Period"), Draper will not:

     (1)  engage or participate, directly or indirectly, either as principal,
agent, employee, employer, consultant, stockholder (except as the holder of not
more than two percent of the stock of any publicly traded corporation), or in
any other individual or representative capacity whatsoever, in the operation,
management or ownership of any business, firm, corporation, association, or
other entity engaged in the design, manufacture, marketing, sale or lease of
continuous passive motion, thermal therapy or similar orthopedic rehabilitation
devices, spinal implants, or spinal instruments, or any other business engaged
in by the Danninger Companies at any time during the Noncompetition Period; or,

     (2)  directly or indirectly, for himself or in conjunction with or on
behalf of any other individual or entity, solicit, divert, take away or endeavor
to take away from the Danninger Companies any customer, account or employee of
the Danninger Companies at any time during the Noncompetition Period.

     In the event of a violation of this Agreement, the Noncompetition Period
shall be tolled during the time of such violation.

B.   EMPLOYMENT STATUS

     Draper understands and acknowledges that this Agreement does not constitute
an employment contract with Danninger.  The provisions contained herein in no
way alter, amend, or modify that certain Employment Agreement between Draper and
Danninger of even date herewith.


                                     -1-
<PAGE>

C.   SAVING

     If any provision of this Agreement shall be found invalid, illegal, or
unenforceable in whole or in part, neither the validity of the remaining part of
such provision nor the validity of any other provision shall be in any way
affected thereby.  Moreover, if any provision is for any reason held to be
excessively broad as to time, duration, geographical scope, activity, or
subject, such provision shall be construed by limiting and reducing it to
preserve enforceability to the maximum extent compatible with the applicable
law.

D.   WAIVER BY DANNINGER COMPANIES OF BREACH OF AGREEMENT

     Waiver by the Danninger Companies of a breach of any provision of this
Agreement by Draper shall not operate or be construed as a waiver of any
subsequent breach by Draper.

E.   GOVERNING LAW

     This Agreement shall be construed in accordance with the laws of the State
of Ohio, without reference to its conflicts of laws principles.

F.   FINAL AGREEMENT

     Except for that certain Employment Agreement between Draper and Danninger
of even date herewith, this Agreement supersedes any existing agreement entered
into between Draper and Danninger relating to the same subject matter and may be
changed only by an agreement in writing signed by Draper and a duly authorized
representative of Danninger.

G.   INJUNCTIVE RELIEF

     In the event of an actual threat or breach by Draper of the provisions of
this Agreement, the Danninger Companies shall be entitled to an injunction
restraining Draper from owning, managing, operating, controlling, being employed
by, participating in, or being in any way so connected with the business which
is a competitor of the Danninger Companies within any geographic area in which
the Danninger Companies compete and do business, or from otherwise violating
this Agreement.  Nothing herein stated shall be construed as prohibiting the
Danninger Companies from pursuing any other remedies available to the Danninger
Companies for such breach or threatened breach, including recovery of damages. 
Any action relating to this Agreement or any breach thereof shall be brought in
the Court of Common Pleas of Franklin County, Ohio; each party submits to the
personal jurisdiction of such court for such purpose and waives any objection to
venue in such court.


                                     -2-
<PAGE>

     THE UNDERSIGNED PARTIES HEREBY ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTOOD,
AND RECEIVED A COPY OF THIS AGREEMENT, AND HAVE ENTERED INTO IT VOLUNTARILY.



                                       /s/ Stephen R. Draper
                                       ----------------------------------------
                                       Stephen R. Draper

                                       Date:  September 6, 1996


                                       EMPLOYER:

                                       DANNINGER MEDICAL TECHNOLOGY, INC.


                                       By: /s/ Joseph A. Mussey
                                          -------------------------------------

                                       Its: President
                                           ------------------------------------

                                       Date:  September 6, 1996






                                     -3-

<PAGE>




                  DANNINGER MEDICAL TECHNOLOGY, INC. AND SUBSIDIARY
                                      EXHIBIT 11
                         COMPUTATION OF NET INCOME PER SHARE
            For the three month periods ending September 30, 1996 and 1995


<TABLE>

___________________________________________________________________________________________________________________

                                               Three Months Ended September 30,     Nine Months Ended September 30,
                                                    1996              1995               1996             1995
___________________________________________________________________________________________________________________

<S>                                              <C>                 <C>              <C>               <C>

Weighted average number of common
    shares outstanding                           4,776,571           4,687,739        4,754,819         4,621,986

Shares issuable pursuant to
    stock option plans and stock warrants,
    less shares assumed repurchased at
    the average market prices                      237,090                              254,018
                                                 ---------           ---------        ---------         ---------
Weighted average shares outstanding,
    including common stock equivalents           5,013,661           4,687,739        5,008,837         4,621,986
                                                 ---------           ---------        ---------         ---------

Net income                                      $  191,000          $ (766,000)      $  474,000        $ (609,000)
                                                 ---------           ---------        ---------         ---------

Net income per share                            $      .04          $     (.16)      $      .09        $     (.13)
                                                 ---------           ---------        ---------         ---------
__________________________________________________________________________________________________________________

</TABLE>

Note:  The application of the higher of quarter-end or year end market prices
       in calculating fully-diluted earnings per share does not result in a
       change to the calculation of primary earnings per share.



                                          
                                          
                                          14



<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 1, 2 AND 3 OF THE COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                             241
<SECURITIES>                                         0
<RECEIVABLES>                                    6,294
<ALLOWANCES>                                       354
<INVENTORY>                                      5,193
<CURRENT-ASSETS>                                12,190
<PP&E>                                           4,317
<DEPRECIATION>                                   2,756
<TOTAL-ASSETS>                                  17,303
<CURRENT-LIABILITIES>                            3,682
<BONDS>                                          9,675
                                0
                                          0
<COMMON>                                            49
<OTHER-SE>                                       4,661
<TOTAL-LIABILITY-AND-EQUITY>                    17,303
<SALES>                                         12,372
<TOTAL-REVENUES>                                12,372
<CGS>                                            5,451
<TOTAL-COSTS>                                    5,451
<OTHER-EXPENSES>                                 5,931
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 370
<INCOME-PRETAX>                                    620
<INCOME-TAX>                                       146
<INCOME-CONTINUING>                                474
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       474
<EPS-PRIMARY>                                      .09
<EPS-DILUTED>                                      .09
        

</TABLE>


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