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                                                                Exhibit 10.32

                                EMPLOYMENT AGREEMENT


              This Employment Agreement ("Agreement") is entered into as of 
March 1, 1998 between Image Guided Technologies, Inc., a Colorado corporation 
(the "Company"), and William O'Connor ("O'Connor").

              In consideration of the mutual covenants and conditions set 
forth herein, the parties hereby agree as follows:

              1.     EMPLOYMENT.  The Company hereby employs O'Connor in the 
capacity of Vice President and Chief Operating Officer of the Company's 
Boulder and Springfield operations.  O'Connor accepts such employment and 
agrees to perform such services as are customary to such office and as shall 
from time to time be assigned to him by the Chairman of the Board, the 
President or the Board of Directors.

              2.     TERM.  Subject to earlier termination as provided in 
Section 5, the employment hereunder shall be for a period of one year, 
commencing on March 1, 1998 (the "Commencement Date") and ending on February 
28, 1999 and shall automatically be renewed on the same terms and conditions 
for two additional one-year periods unless either party notifies the other at 
least 90 days prior to the expiration of the initial term or the first 
renewal term, as the case may be, not to renew the Agreement (i.e., unless 
earlier terminated, the initial term and the two renewal terms will end on 
February 28, 2001). O'Connor's employment will be on a full-time basis 
requiring the devotion of such amount of his productive time as is necessary 
for the efficient operation of the business of the Company.

              3.     COMPENSATION AND BENEFITS.

                     3.1.   SALARY.  For the performance of O'Connor's duties 
hereunder, the Company shall pay O'Connor an annual salary of $135,000, 
payable (less required withholdings) no less frequently than twice monthly.

                     3.2.   BENEFITS.  O'Connor shall be entitled to such 
medical, disability and life insurance coverage and such vacation, sick leave 
and holiday benefits, if any, as are made available to the Company's top 
executive personnel, all in accordance with the Company's benefits program in 
effect from time to time.

                     3.3.   REIMBURSEMENT OF EXPENSES.  O'Connor shall be 
entitled to be reimbursed for all reasonable expenses, including but not 
limited to expenses for travel, meals and entertainment, incurred by O'Connor 
in connection with and reasonably related to the furtherance of the Company's 
business.

              4.     CHANGE OF CONTROL.  In the event of a Change of Control 
of the Company (as defined below), all options then granted to O'Connor which 
are unvested at the date of the Change of Control will be immediately vested. 
In addition, in the event of a termination of 

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O'Connor's employment during the term hereof for any reason (other than as 
set forth in Section 5.1(f)) following a Change of Control, the Company will 
promptly pay O'Connor, in addition to the amounts required under Section 
5.2(a), severance in accordance with Section 5.2(b) below.

              As used herein, a "Change of Control" of the Company shall be 
deemed to have occurred:

              (a)    Upon the consummation, in one transaction or a series of 
related transactions, of the sale or other transfer of voting power 
(including voting power exercisable on a contingent or deferred basis as well 
as immediately exercisable voting power) representing effective control of 
the Company to a person or group of related persons who, on the date of this 
Agreement, is not affiliated (within the meaning of the Securities Act of 
1933) with the Company, whether such sale or transfer results from a tender 
offer or otherwise; or

              (b)    Upon the consummation of a merger or consolidation in 
which the Company is a constituent corporation and in which the Company's 
shareholders immediately prior thereto will beneficially own, immediately 
thereafter, securities of the Company or any surviving or new corporation 
resulting therefrom having less than a majority of the voting power of the 
Company or any such surviving or new corporation; or

              (c)    Upon the consummation of a sale, lease, exchange or 
other transfer or disposition by the Company of all or substantially all its 
assets to any person or group of related persons.

              5.     TERMINATION.

                     5.1.   TERMINATION EVENTS.  The employment hereunder 
will terminate upon the occurrence of any of the following events 
("Termination Event"):

                     (a)    O'Connor dies;

                     (b)    The Company, by written notice to O'Connor or his 
personal representative, discharges O'Connor due to the inability to perform 
the duties assigned to him hereunder for a continuous period exceeding 90 
days by reason of injury, physical or mental illness or other disability, 
which condition has been certified by a physician; provided, however, that 
prior to discharging O'Connor due to such disability, the Company shall give 
a written statement of findings to O'Connor or his personal representative 
setting forth specifically the nature of the disability and the resulting 
performance failures, and O'Connor shall have a period of ten (10) days 
thereafter to respond in writing to the Board of Directors' findings;

                     (c)    O'Connor is discharged by the Board of Directors 
of the Company for cause.  As used in this Agreement, the term "cause" shall 
mean:

                            (i)  O'Connor's conviction of (or pleading guilty 
or nolo contendere to) a felony or any misdemeanor involving dishonesty or 
moral turpitude; or

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                            (ii)  (a) The willful and continued failure of 
O'Connor to substantially perform his duties with the Company (other than any 
such failure resulting from illness or disability) after a demand for 
substantial performance is requested by the Company's Board of Directors, 
which specifically identifies the manner in which it is claimed O'Connor has 
not substantially performed his duties, or (b) O'Connor is willfully engaged 
in misconduct which has a direct and material adverse monetary affect on the 
Company.  For purposes of this subpart (ii) no act or failure to act on 
O'Connor's part shall be considered "willful" unless done, or omitted to be 
done, by O'Connor not in good faith and without reasonable belief that 
O'Connor's action or omission was in the best interest of the Company.  No 
termination shall be effected for cause pursuant to this subpart (ii) unless 
O'Connor has been provided with specific information as to the acts or 
omissions which form the basis of the allegation of cause, and O'Connor has 
had an opportunity to be heard, with counsel if he so desired, before the 
Board of Directors and such Board determines in good faith that O'Connor was 
guilty of conduct constituting "cause" as herein defined, specifying the 
particulars thereof in detail;

                     (d)    O'Connor is discharged by the Board of Directors 
of the Company without cause, which the Company may do at any time upon 
notice to O'Connor, or if the Agreement is not renewed by the Company at the 
end of the initial term or the first renewal term as provided in Section 2;

                     (e)    O'Connor voluntarily terminates his employment 
due to either (i) a default by the Company in the performance of any of its 
obligations hereunder, or (ii) an Adverse Change in Duties (as defined 
below), which default or Adverse Change in Duties remains unremedied by the 
Company for a period of ten days following its receipt of written notice 
thereof from O'Connor; or

                     (f)    O'Connor voluntarily terminates his employment 
for any reason other than the Company's default or an Adverse Change in 
Duties, which O'Connor may do at any time with at least 30 days advance 
notice, or if the Agreement is not renewed by O'Connor at the end of the 
initial term or the first renewal term as provided in Section 2.

              As used herein, "Adverse Change in Duties" means an action or 
series of actions taken by the Company, without O'Connor's prior written 
consent, which results in:

                     (1)    A change in O'Connor's reporting 
responsibilities, titles, job responsibilities or offices which, in 
O'Connor's reasonable judgment, results in a diminution of his status, 
control or authority; or

                     (2)    The assignment to O'Connor of any positions, 
duties or responsibilities which, in O'Connor's reasonable judgment, are 
inconsistent with O'Connor's positions, duties and responsibilities or status 
with the Company; or

                     (3)    A requirement by the Company that O'Connor be 
based or perform his duties anywhere other than (i) at the Company's 
corporate office location on the date of this Agreement, or (ii) if the 
Company's corporate office location is moved after the date of this 
Agreement, at a new location that is no more than 60 miles from such prior 
location.

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              5.2.   EFFECTS OF TERMINATION.

                     (a)    Upon termination of O'Connor's employment 
hereunder for any reason, the Company will promptly pay O'Connor all 
compensation owed to O'Connor and unpaid through the date of termination 
(including, without limitation, salary and employee expense reimbursements).

                     (b)    In addition, if O'Connor's employment is 
terminated under Section 4 or under Sections 5.1(a), (b), (d) or (e), the 
Company shall also pay O'Connor:  

                            (i)    if terminated within the first three 
months of employment, O'Connor is not entitled to any compensation.  

                            (ii) if terminated after the first three months 
of employment, the Company shall continue to pay O'Connor $11,250.00 per 
month for a period equal to one year (or total severance of $135,000).

                     (c)    Upon termination of O'Connor's employment 
hereunder for any reason, O'Connor agrees that for the twelve (12) month 
period following the Termination Event:

                            (i)  O'Connor will not directly or indirectly, 
whether for his own account or as an individual, employee, director, 
consultant or advisor, or in any other capacity whatsoever, provide services 
to any person, firm, corporation or other business enterprise which is 
involved in the design, development or marketing of optical localizers or 
image guided surgical products unless he obtains the prior written consent of 
the Board of Directors.

                            (ii)  O'Connor will not directly or indirectly 
encourage or solicit, or attempt to encourage or solicit, any individual to 
leave the Company's employ for any reason or interfere in any other manner 
with the employment relationships at the time existing between the Company 
and its current or prospective employees.

                            (iii)  O'Connor will not induce or attempt to 
induce any customer, supplier, distributor, licensee or other business 
relation of the Company to cease doing business with the Company or in any 
way interfere with the existing business relationship between any such 
customer, supplier, distributor, licensee or other business relation and the 
Company.

              O'Connor acknowledges that monetary damages may not be 
sufficient to compensate the Company for any economic loss which may be 
incurred by reason of breach of the foregoing restrictive covenants.  
Accordingly, in the event of any such breach, the Company shall, in addition 
to any remedies available to the Company at law, be entitled to obtain 
equitable relief in the form of an injunction precluding O'Connor from 
continuing to engage in such breach. 

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              If any restriction set forth in this paragraph is held to be 
unreasonable, then O'Connor and the Company agree, and hereby submit, to the 
reduction and limitation of such prohibition to such area or period as shall 
be deemed reasonable.

              6.     GENERAL PROVISIONS.

                     6.1.   ASSIGNMENT.  O'Connor may not assign or delegate 
any of his rights or obligations under this Agreement.

                     6.2.   ENTIRE AGREEMENT.  This Agreement contains the 
entire agreement between the parties with respect to the subject matter 
hereof and supersedes any and all prior agreements between the parties 
relating to such subject matter.

                     6.3.   MODIFICATIONS.  This Agreement may be changed or 
modified only by an agreement in writing signed by both parties hereto.

                     6.4.   SUCCESSORS AND ASSIGNS.  The provisions of this 
Agreement shall inure to the benefit of, and be binding upon, the Company and 
its successors and assigns and O'Connor and O'Connor's legal representatives 
and heirs. 

                     6.5.   GOVERNING LAW.  This Agreement shall be governed 
by, and construed in accordance with, the laws of Colorado.

                     6.6.   SEVERABILITY.  If any provision of the Agreement 
is held by a court of competent jurisdiction to be invalid, void or 
unenforceable, the remaining provisions shall nevertheless continue in full 
force and effect.

                     6.7.   FURTHER ASSURANCES; COMMITTEES OF BOARD.  The 
parties will execute such further instruments and take such further actions 
as may be reasonably necessary to carry out the intent of this Agreement.  
The term "Board of Directors" shall include any committee of the Board.

                     6.8.   NOTICES.  Any notices or other communications 
required or permitted hereunder shall be in writing and shall be deemed 
received by the recipient when delivered personally or, if mailed, five (5) 
days after the date of deposit in the United States mail, certified or 
registered, postage prepaid and addressed, in the case of the Company, to 
5710-B Flatiron Parkway, Boulder, CO 80301, and in the case of O'Connor, to 
the address shown for O'Connor on the signature page hereof, or to such other 
address as either party may later specify by at least ten (10) days advance 
written notice delivered to the other party in accordance herewith.

                     6.9.   NO WAIVER.  The failure of either party to 
enforce any provision of this Agreement shall not be construed as a waiver of 
that provision, nor prevent that party thereafter from enforcing that 
provision or any other provision of this Agreement.

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                     6.10.  LEGAL FEES AND EXPENSES.  In the event of any 
disputes under this Agreement, each party shall be responsible for their own 
legal fees and expenses which it may incur in resolving such dispute.

                     6.11.  COUNTERPARTS.  This Agreement may be executed in 
counterparts, each of which shall be deemed to be an original, but all of 
which together shall constitute one and the same instrument.

              IN WITNESS WHEREOF, the Company and O'Connor have executed this 
Agreement effective as of the date first above written.


COMPANY                                O'CONNOR

Image Guided Technologies, Inc.


By: /s/ Paul L. Ray                    /s/ William O'Connor
   ---------------------               -------------------------
    Paul L. Ray                        William O'Connor
    President