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                                                                    EXHIBIT 10.5

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

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
9th day of September, 1997 by and between Opticon Medical Inc., an Iowa
corporation (the "Company"), and John LaMarche, individual resident of the state
of Iowa ("Executive").

         WHEREAS, the Company wishes to employ Executive to render services for
the Company on the terms and conditions set forth in this Agreement, and
Executive wishes to be retained and employed by the Company on such terms and
conditions.

         NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the Company and Executive set forth below, the Company and
Executive agree as follows:

         1. EMPLOYMENT. The Company hereby employs Executive, and Executive
accepts such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.

         2. TERM. Unless terminated at an earlier date in accordance with
Section 9 of this Agreement, the term of Executive's employment hereunder shall
commence on the date of this Agreement and end on December 31, 1997. Thereafter,
the term of this Agreement shall be automatically extended for successive one
(1) year periods unless either party objects to such extension by written notice
to the other party at least thirty (30) days prior to the end of the initial
term or any extension term.

         3. POSITION AND DUTIES.

                  3.01 SERVICE WITH COMPANY. During the term of this Agreement,
Executive agrees to perform such reasonable employment duties as the Chief
Executive Officer of the Company shall assign to him from time to time.
Executive also agrees to serve, for any period for which he is elected, as an
officer or director of the Company; provided, however, that Executive shall not
be entitled to any additional compensation for serving as an officer or
director. As a director of the Company, if so elected, in accordance with the
Company's Articles of Incorporation, Executive shall not be personally liable to
the Company or its shareholders for damages for breach of his fiduciary duty as
a director, except for liability (i) for breach of his director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not in
good faith which involve intentional misconduct or knowing violations of the
law, (iii) for a transaction from which Executive derived improper personal
benefit or (iv) under Section 490.833 of the Iowa Business Corporation Act.

                  3.02 PERFORMANCE OF DUTIES. Executive agrees to serve the
Company faithfully and to the best of his ability and to devote his full time,
attention and efforts to the business and affairs of the Company during the term
of this Agreement. Executive represents to the Company that he is under no
contractual commitments inconsistent with his obligations set forth in this
Agreement, and that during the term of this Agreement, he will not render or
perform services


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for any other corporation, firm, entity or person which are inconsistent with
the provisions of this Agreement, except with the prior written consent of the
Board of Directors of the Company.

         4. COMPENSATION.

                  4.01 BASE SALARY. As base compensation for all services to be
rendered by Executive under this Agreement during the initial term of this
Agreement, the Company shall pay to Executive an annual base salary of $100,000
which salary shall be paid in accordance with the Company's normal payroll
procedures and policies. The salary payable to Executive during each subsequent
one-year term of this Agreement shall be established by the Company's Board of
Directors following an annual performance review, but in no event shall the
salary for any subsequent year be less than the salary in effect for the prior
year.

                  4.02 INCENTIVE COMPENSATION. In addition to the base salary
described in Section 4.01, Executive shall be eligible to participate in any
incentive compensation plans which may be established by the Board of Directors
of the Company from time to time.

                  4.03 PARTICIPATION IN BENEFIT PLANS. Executive shall also be
entitled to participate in all employee benefit plans or programs (including
vacation time) of the Company to the extent that his position, title, tenure,
salary, age, health and other qualifications make him eligible to participate.
The Company does not guarantee the adoption or continuance of any particular
employee benefit plan or program during the term of this Agreement, and
Executive's participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.

                  4.04 EXPENSES. The Company will pay or reimburse Executive for
all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers in accordance with the Company's normal policies for
expense verification.

         5. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the term of this Agreement or at any time
thereafter, Executive shall not divulge, furnish or make accessible to anyone or
use in any way (other than in the ordinary course of the business of the
Company) any confidential or secret knowledge or information of the Company
which Executive has acquired or become acquainted with or will acquire or become
acquainted with prior to the termination of the period of his employment by the
Company (including employment by the Company or any affiliated companies prior
to the date of this Agreement), whether developed by Executive or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. Executive
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company and represents a substantial investment
of time and expense by the Company and its predecessors, and that any disclosure
or other use of such knowledge or information other than for the sole benefit of
the Company would



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be wrongful and would cause irreparable harm to the Company. Both during and
after the term of this Agreement, Executive will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. The foregoing obligations of confidentiality, however, shall not apply
to any knowledge or information which is now published or which subsequently
becomes generally publicly known in the form in which it was obtained from the
Company, other than as a direct or indirect result of the breach of this
Agreement by Executive.

         6. VENTURES. If, during the term of this Agreement, Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in such project, program or venture shall belong to the Company. Except
as formally approved by the Company's Board of Directors, Executive shall not be
entitled to any interest in such project, program or venture or to any
commission, finder's fee or other compensation in connection therewith other
than the salary to be paid to Executive as provided in this Agreement.

         7. NONCOMPETITION COVENANT.

                  7.01 AGREEMENT NOT TO COMPETE. Executive agrees that, during
the period of his employment by the Company and for a period of two (2) years
after the termination of such employment (whether such termination is with or
without cause, or whether such termination is occasioned by Executive or the
Company), he shall not, directly or indirectly, engage in competition with the
Company in any manner or capacity (e.g., as an advisor, principal, agent,
partner, officer, director, stockholder, employee, member of any association, or
otherwise) in any phase of the business which the Company is conducting during
the term of this Agreement, including the design, development, manufacture,
distribution, marketing, leasing or selling of urological products or services
being sold by the Company.

                  7.02 GEOGRAPHIC EXTENT OF COVENANT. The obligations of
Executive under Section 7.01 shall apply to any geographic area in which the
Company:

                           (a) has engaged in business during the term of this
Agreement through production, promotional, sales or marketing activity, or
otherwise, or

                                    (b) has otherwise established its goodwill,
business reputation, or any customer or supplier relations.

                  7.03 LIMITATION ON COVENANT. Ownership by Executive, as a
passive investment, of less than five percent (5%) of the outstanding shares of
capital stock of any corporation listed on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a breach of
this Section 7.

                  7.04 INDIRECT COMPETITION. Executive further agrees that,
during the term of this Agreement, he will not, directly or indirectly, assist
or encourage any other person in carrying out, directly or indirectly., any
activity that would be prohibited by the above provisions of this Section 7 if
such activity were carried out by Executive, either directly or indirectly; and
in


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particular Executive agrees that he will not, directly or indirectly, induce any
employee of the Company to carry out, directly or indirectly, any such activity.

         8. PATENT AND RELATED MATTERS.

                  8.01 DISCLOSURE AND ASSIGNMENT. Executive will promptly
disclose in writing to the Company complete information concerning each and
every invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by Executive, either
solely or in collaboration with others, during the term of this Agreement, or
within six months thereafter, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company (hereinafter referred to as "Developments").
Executive, to the extent that he has the legal right to do so, hereby
acknowledges that any and all of said Developments are the property of the
Company and hereby assigns and agrees to assign to the Company any and all of
Executive's right, title and interest in and to any and all of such
Developments.

                  8.02 FUTURE DEVELOPMENTS. As to any future Developments made
by Executive which relate to the business, products or practices of the Company
and which are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any reason
to belong to an entity or person other than the Company, Executive will promptly
disclose the same in writing to the Company and shall not disclose the same to
others if the Company, within twenty (20) days thereafter, shall claim ownership
of such Developments under the terms of this Agreement. If the Company makes
such claim, Executive agrees that, insofar as the rights (if any) of Executive
are involved, it will be settled by arbitration in accordance with the rules
then obtaining of the American Arbitration Association. The locale of the
arbitration shall be Minneapolis, Minnesota (or other locale convenient to the
Company's principal executive offices). If the Company makes no such claim,
Executive hereby acknowledges that the Company has made no promise to receive
and hold in confidence any such information disclosed by Executive.

                  8.03 LIMITATION ON SECTIONS 8.01 AND 8.02. The provisions of
sections 8.01 and 8.02 shall not apply to any Development meeting the following
conditions:

                           (a) such Development was developed entirely on
Executive's own time; and

                           (b) such Development was made without the use of any
Company equipment, supplies, facility or trade secret information; and

                           (c) such Development does not relate (i) directly to
the business of the Company, or (ii) to the Company's actual or demonstratably
anticipated research or development; and

                           (d) such Development does not result from any work
performed by Executive for the Company.




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                  8.04 ASSISTANCE OF EXECUTIVE. Upon request and without further
compensation therefor, but at no expense to Executive, and whether during the
term of this Agreement or thereafter, Executive will do all lawful acts,
including, but not limited to, the execution of papers and lawful oaths and the
giving of testimony, that in the opinion of the Company, its successors and
assigns, may be necessary or desirable in obtaining, sustaining, reissuing,
extending and enforcing United States and foreign patents, including, but not
limited to, design patents, on any and all of such Developments, and for
perfecting, affirming and recording the Company's complete ownership and title
thereto, and to cooperate otherwise in all proceedings and matters relating
thereto.

                  8.05 RECORDS. Executive will keep complete, accurate and
authentic accounts, notes, data and records of all Developments in the manner
and form requested by the Company. Such accounts, notes, data and records shall
be the property of the Company, and, upon its request, Executive will promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, Executive will surrender the same, and all copies thereof, to the
Company upon the conclusion of his employment.

                  8.06 OBLIGATIONS, RESTRICTIONS AND LIMITATIONS. Executive
understands that the Company may enter into agreements or arrangements with
agencies of the United States Government, and that the Company may be subject to
laws and regulations which impose obligations, restrictions and limitations on
it with respect to inventions and patents which may be acquired by it or which
may be conceived or developed by employees, consultants or other agents
rendering services to it. Executive agrees that he shall be bound by all such
obligations, restrictions and limitations applicable to any such invention
conceived or developed by him during the term of this Agreement and shall take
any and all further action which may be required to discharge such obligations
and to comply with such restrictions and limitations.

         9. TERMINATION.

                  9.01 GROUNDS FOR TERMINATION. This Agreement shall terminate
prior to the expiration of the initial term set forth in Section 2 or any
extension thereof in the event that at any time during such initial term or any
extension thereof:

                           (a) Executive dies, or

                           (b) Executive becomes disabled (as defined below), or

                           (c) The Board of Directors of the Company elects to
terminate this Agreement for "cause" and notifies Executive in writing of such
election, or

                           (d) The Board of Directors of the Company elects to
terminate this Agreement without "cause" and notifies Executive in writing of
such election, or

                           (e) Executive elects to terminate this Agreement and
notifies the Company in writing of such election.



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                  If this Agreement is terminated pursuant to subsection (a),
(b) or (c) of this Section 9,01, such termination shall be effective
immediately. If this Agreement is terminated pursuant to subsection (d) or (e)
of this Section 9.01, such termination shall be effective thirty (30) days after
delivery of the notice of termination.

                  9.02     "CAUSE" DEFINED.

                           (a) Executive has breached the provision of Section
5, 7 or 8 of this Agreement in any material respect, or

                           (b) Executive has engaged in willful and material
misconduct, including willful and material failure to perform Executive's duties
as an officer or employee of the Company and has failed to "cure" such default
within thirty (30) days after receipt of written notice of default from the
Company, or

                           (c) Executive has committed fraud, misappropriation
or embezzlement in connection with the Company's business, or

                           (d) Executive has been convicted or has pleaded nolo
contendere to criminal misconduct (except for parking violations and, occasional
minor traffic violations), or

                           (e) Executive's use of narcotics, liquor or illicit
drug has a detrimental effect on the performance of his employment
responsibilities, as determined by the Company's Board of Directors.

                  In the event that the Company terminates Executive's
employment for "cause" pursuant to subsection 9.01(c) and Executive objects in
writing to the Board's determination that there was proper "cause" for such
termination within twenty (20) days after Executive is notified of such
termination, the matter shall be resolved by arbitration in accordance with the
provisions of Section 10.01. If Executive fails to object to any such
determination of "cause" in writing within such twenty (20) day period, he shall
be deemed to have waived his right to object to that determination. If such
arbitration determines that there was not proper "cause" for termination, such
termination shall be deemed to be a termination pursuant to subsection 9.01 (d)
and Executive's sole remedy shall be to receive the wage continuation benefits
contemplated by Section 9.06.

                  9.03 EFFECT OF TERMINATION. Notwithstanding any termination of
this Agreement, Executive, in consideration of his employment hereunder to the
date of such termination, shall remain bound by the provisions of this Agreement
which specifically relate to periods, activities or obligations upon or
subsequent to the termination of Executive's employment.

                  9.04 "DISABILITY" DEFINED. As used in this Agreement,
Executive shall be deemed "disabled" if Executive suffers or incurs any disease,
injury or other physical or mental



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impairment or disorder which constitutes a long-term disability under the
disability insurance policy then being provided by the Company for Executive.

                  9.05 SURRENDER OF RECORDS AND PROPERTY. Upon termination of
his employment with the Company, Executive shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, which are the
property of the Company or which relate in any way to the business, products,
practices or techniques of the Company, and all other property, trade secrets
and confidential information of the Company, including, but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.

                  9.06 WAGE CONTINUATION. If Executive's employment by the
Company is terminated by the Company pursuant to subsections 9.01(b) or 9.01(d),
the Company shall continue to pay to Executive his then current base salary
(less any payments received by Executive from any disability income insurance
policy provided to him by the Company) and shall continue to provide health,
life and disability insurance benefits for Executive through the earlier of (a)
the date that Executive has obtained other full-time employment, or (b) four (4)
months from the date of termination of employment. If this Agreement is
terminated pursuant to subsection 9.01(a), 9.01(c) or 9.01(e), Executive's right
to base salary and benefits shall immediately terminate, except as may otherwise
be required by applicable law.

         10. SETTLEMENT OF DISPUTES.

                  10.01 ARBITRATION. Except as provided in Section 10.02, any
claims or disputes of any nature between the Company and Executive arising from
or related to the performance, breach, termination, expiration, application, or
meaning of this Agreement or any matter relating to Executive's employment and
the termination of that employment by the Company shall be resolved exclusively
by arbitration in Minneapolis, Minnesota in accordance with the applicable rules
then obtaining of the American Arbitration Association. The fees of the
arbitrator(s), and other costs incurred by Executive and the Company in
connection with such arbitration shall be paid by the party who is unsuccessful
in such arbitration.

                  The decision of the arbitrator(s) shall be final and binding
upon both parties. Judgment of the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. In the event of submission of
any dispute to arbitration, each party shall, not later than thirty ('30) days
prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at the
hearing and a list of all persons each party intends to call at the hearing.

                  10.02 RESOLUTION OF CERTAIN CLAIMS - INJUNCTIVE RELIEF.
Section 10.01 shall have no application to claims by the Company asserting a
violation of Section 5, 7, 8 or 9.05 or seeking to enforce, by injunction or
otherwise, the terms of Section 5, 7, 8 or 9.05. Such claims may be maintained
by the Company in a lawsuit subject to the terms of section 10.03. Executive
agrees that, in addition to, but not to the exclusion of any other available
remedy, the Company shall have the right to enforce the provisions of Sections
5, 7, 8 and 9.05 by applying for and



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obtaining temporary and permanent restraining orders or injunctions from a court
of competent jurisdiction without the necessity of filing a bond therefor, and
the Company shall be entitled to recover from the Employee its reasonable
attorneys' fees and costs in enforcing the provisions of Sections 5, 7, 8 and
9.03.

                  10.03 VENUE. Any action at law, suit in equity, or judicial
proceeding arising directly, indirectly, or otherwise in connection with, out
of, related to or from this Agreement or any provision hereof, shall be
litigated only in the courts of the state of Minnesota, County of Hennepin.
Executive waives any right the Executive may have to transfer or change the
venue of any litigation brought against Executive by the Company.

                  10.04 SEVERABILITY. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect. In furtherance and not
in limitation of the foregoing, should the duration or geographical extent of,
or business activities covered by, any provision of this Agreement be in excess
of that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities which may
validly and enforceably be covered. Executive acknowledges the uncertainty of
the law in this respect and expressly stipulates that this Agreement be given
the construction which renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.

         11. MISCELLANEOUS.

                  11.01 GOVERNING LAW. This agreement is made under and shall be
governed. by and construed in accordance with the laws of the state of
Minnesota.

                  11.02 PRIOR AGREEMENTS. This agreement contains the entire
agreement of the parties relating to the employment of Executive by the Company
and the ancillary matters discussed herein and supersedes all prior agreements
and understandings with respect to such matters, and the parties hereto have
made no agreements, representations or warranties relating to such employment or
ancillary matters which are not set forth herein.

                  11.03 WITHHOLDING TAXES. The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.

                  11.04 AMENDMENTS. No amendment or modification of this
Agreement shall be deemed effective unless made in writing and signed by the
both Executive and the Company.

                  11.05 NO WAIVER. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not



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constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

                  11.06 ASSIGNMENT. This agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party, except that the Company may, without the consent of Executive, assign its
rights and obligations under this Agreement to any corporation, firm or other
business entity with or into which the Company may merge or consolidate, or to
which the Company may sell or transfer all or substantially all of its assets,
or of which 50% or more of the equity investment and of the voting control is
owned, directly or indirectly, by, or is under common ownership with, the
Company. After any such assignment by the Company, the Company shall be
discharged from all further liability hereunder and such assignee shall
thereafter be deemed to be the Company for the purposes of all provisions of
this Agreement including this Section 11.

                  11.07 COUNTERPARTS. This agreement may be simultaneously
executed in any number of counterparts, and such counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.

                  11.08 CAPTIONS AND HEADING. The captions and paragraph
headings used in this Agreement are for convenience of reference only, and shall
not affect the construction or interpretation of this Agreement or any of the
provisions hereof.

         IN WITNESS WHEREOF, Executive and the Company have executed this
Agreement as of the date set forth in the first paragraph.

                                             OPTICON MEDICAL INC.



                                             By /s/ William J. Post
                                                --------------------------------
                                                William J. Post
                                                Chief Executive Officer


                                             JOHN LAMARCHE

                                             /s/ John LaMarche
                                             -----------------------------------



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