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Employment and Severance Agreement

EMPLOYMENT AND SEVERANCE AGREEMENT

This Employment and Severance Agreement (this ?Agreement?) is made on February 19, 2008, to be effective on the Acceptance Date (as defined in the Agreement and Plan of Merger, dated as of the date hereof, by and among Phoenix Acquisition Corp., MEDRAD, Inc. (?Medrad?) and the Company (the ?Agreement and Plan of Merger?)) (the ?Effective Date?), between Possis Medical, Inc., a Minnesota corporation, (the ?Company?), and James D. Gustafson, an individual residing in the state of Minnesota (the ?Employee?).

The Company currently employs the Employee as its Senior Vice President, Research & Development, Engineering, Clinical Evaluation and Chief Quality Officer. The Company considers it essential to its best interests to foster the continued employment of key executive management personnel in light of a proposed acquisition of substantially all of the Company?s capital stock.

Effective as of September 15, 1999, the Company created a change in control termination pay plan for the benefit of certain of its employees in the event of change of control (as amended, the ?Change of Control Plan?), and the Employee is a participant in such plan.

The Company and the Employee wish to provide for certain terms of employment between the Company following the consummation of the proposed transaction and in consideration for the rights and benefits provided to the Employee under this Agreement, the Employee is willing to forgo certain rights and benefits provided to the Employee under the Change of Control Plan.

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee, intending to be legally bound, do hereby agree as follows:

1. Employment. Effective on the Effective Date, the Company hereby employs the Employee as a Senior Vice President, Research & Development, Engineering, Clinical Evaluation and Chief Quality Officer (?SVP, R&D?), and the Employee hereby accepts such employment and agrees to perform all duties and responsibilities as are set forth in the job description attached hereto as Exhibit A and as may be assigned to him from time to time by the Chief Executive Officer of the Company. The Employee shall devote his full time, best efforts, knowledge, and experience in discharging his duties under this Agreement and shall act in conformity with and be bound by the written and oral policies of the Company and within the limits, budgets, business plans, and instructions established by the Company?s Board of Directors.

2. Compensation.

(a) Salary. Commencing on the Effective Date, the Company shall pay the Employee a salary at an annual rate of One Hundred Eighty Nine Thousand Six Hundred Dollars ($189,600.00) (the ?Base Salary?), subject to annual merit increases in accordance with the Company?s current annual merit review process, or consistent with MEDRAD?s annual merit review process for its executives, payable in accordance with the Company?s standard payroll schedule and policies, as in effect from time to time. The Company shall withhold from all payments that it makes pursuant to this Agreement as it determines to be required by applicable law.

(b) Additional Benefits.

(i) Welfare Benefits. The Employee shall be entitled to participate in all insurance and benefit plans available on a general basis to all other employees of the Company; provided, however, that the Company reserves the right, from time to time, to amend in any respect and to discontinue any such benefit plan.

(ii) Vacation Days. The Employee shall be entitled to the number of paid holidays and paid vacation days in accordance with the Company?s existing holiday and vacation policy.

(iii) Reimbursement of Expenses. During the term of the Employee?s employment hereunder, the Company shall reimburse the Employee for all reasonable out-of-pocket expenses incurred by the Employee in the lawful and ordinary course of the Company?s business and reported to the Company in accordance with its accounting procedures.

(iv) Auto. During the term of Employee?s employment hereunder, the Company will continue to provide Employee automobile benefits consistent with the Company?s existing policy, or a comparable benefit through participation in Medrad?s automobile lease or allowance programs available to its executives.

(v) Tax Preparation. For a period of one (1) year from the Effective Date the Company will continue to provide Employee tax preparation benefits consistent with the Company?s existing policy, and for the remainder of the term of Employee?s employment hereunder, Medrad shall provide the Employee participation in financial counseling and tax preparation programs available to its executives.

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