-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CCOm3oXaMRotjCJxKdl7vBZ7aD8D0OzDIDNRnoju21/Zmkff9hdR1egC0tIbY4oo xK5qodb/96Yto9wWtbCN1A== 0000893220-96-001744.txt : 19961028 0000893220-96-001744.hdr.sgml : 19961028 ACCESSION NUMBER: 0000893220-96-001744 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19961025 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESCALON MEDICAL CORP CENTRAL INDEX KEY: 0000862668 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 330272839 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20127 FILM NUMBER: 96647844 BUSINESS ADDRESS: STREET 1: 182 TAMARACK CIRCLE CITY: SKILLMAN STATE: NJ ZIP: 08558 BUSINESS PHONE: 609497-9141 MAIL ADDRESS: STREET 1: 182 TAMARACK CIRCLE CITY: SKILLMAN STATE: NJ ZIP: 08558 FORMER COMPANY: FORMER CONFORMED NAME: INTELLIGENT SURGICAL LASERS INC DATE OF NAME CHANGE: 19930328 10-K/A 1 FORM 10-K/A ESCALON MEDICAL CORP. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (Mark One) / X / Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended JUNE 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 0-20127 ESCALON MEDICAL CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER.) California 33-0272839 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 182 Tamarack Circle Skillman, New Jersey 08558 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 609-497-9141 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of each class: Name of each exchange on which registered: None None - ------------------------------------------------ ------------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, without par value ---------------------------------------------------- Class A Redeemable Common Stock Purchase Warrants, exercisable for the purchase of one share of Common Stock, without par value ---------------------------------------------------- Class B Redeemable Common Stock Purchase Warrants, exercisable for the purchase of one share of Common Stock, without par value ---------------------------------------------------- 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 --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / X / The aggregate market value of the voting stock held by non-affiliates of the registrant is approximately $6,479,534. Such aggregate market value was computed by reference to the bid and asked price of the Common Stock in the when-issued trading market on September 23, 1996. For purposes of making this calculation only, the registrant has defined affiliates as including all directors and beneficial owners of more than ten percent of the Common Stock of the Company. The number of shares of the registrant's Common Stock outstanding as of September 23, 1996 was 10,518,814. DOCUMENTS INCORPORATED BY REFERENCE 2 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K This amendment to the Registrant's Form 10-K for the fiscal year ended June 30, 1996 (the "1996 Form 10-K") amends and modifies the 1996 Form 10-K only to reflect the filing of exhibits 10.35, 10.36 and 10.37 by confirming electronic copy. Financial Statements See Index to Financial Statements at page F-1 of the 1996 Form 10-K. Financial Statement Schedules All schedules have been omitted because they are not applicable, or not required, or the information is shown in the financial statements or notes thereto. Reports on Form 8-K A report on Form 8-K was filed on April 10, 1996 and related to the resignation of Mr. Heinz R. Gisel, former Chairman of the Company, and Mr. Edward M. Lake, former Executive Vice President of the Company. Exhibits The following is a list of exhibits filed as part of the 1996 Form 10-K. This exhibit list is being amended to reflect the filing of exhibits 10.35, 10.36 and 10.37 by confirming electronic copy. Where so indicated by footnote, exhibits which were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated parenthetically, followed by the footnote reference to the previous filing. 2.1 Assets Sale and Purchase Agreement between Registrant and Escalon Ophthalmics, Inc., dated October 9, 1995. (8) 3.1 (a) Restated Articles of Incorporation of Registrant. (9) (b) Certificate of Amendment of Restated Articles of Incorporation of Registrant dated November 8, 1993. (9) (c) Certificate of Amendment of Restated Articles of Incorporation of Registrant dated February 12, 1996. (9) 3.2 Amended and Restated Bylaws of Registrant. (1) 4.1 Form of Class A Redeemable Common Stock Purchase Warrants. (4) 4.2 Form of Class B Redeemable Common Stock Purchase Warrants. (4) 4.3 Form of Class C Common Stock Purchase Warrants. (4) 4.4 Form of Underwriters Class A Common Stock Purchase Warrants. (4) 4.5 Form of Underwriters Class B Common Stock Purchase Warrants. (4) 4.6 (a) Warrant Agreement between the Registrant and U.S. Stock Transfer Corporation. (4) (b) Amendment to Warrant Agreement between Registrant and U.S. Stock Transfer Corporation. (6) (c) Amendment to Warrant Agreement between Registrant and American Stock Transfer Company. (7) 10.1 (a) 1988 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1988 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1988 Stock Option Plan. (1) 10.2 (a) 1989 Stock Option Plan of Registrant. (1)
3 (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1989 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1989 Stock Option Plan. (1) 10.3 (a) 1990 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1990 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1990 Stock Option Plan. (1) 10.4 (a) 1991 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1991 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1991 Stock Option Plan. (1) 10.5 (a) 1992 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1992 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1992 Stock Option Plan. (1) 10.6 (a) 1993 Stock Option Plan of Registrant. (5) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1993 Stock Option Plan. (5) (c) Form of Incentive Stock Option Agreement of Registrant under the 1993 Stock Option Plan. (5) 10.7 Series D Preferred Stock Purchase Agreement dated January 17, 1992. (1) 10.8 Amendment No. 1 to Series D Preferred Stock Purchase Agreement dated March 6, 1992. (1) 10.9 (a) Registration Rights Agreement dated as of January 17, 1992, among Registrant; Stuart I. Brown, M.D.; Josef F. Bille, Ph.D.; and the Purchasers of Preferred Stock of Registrant pursuant to Preferred Stock Purchase Agreements. (1) (b) Amendment No. 1 to Registration Rights Agreement dated as of March 6, 1992. (1) (c) Amendment No. 2 to Registration Rights Agreement dated as of April 24, 1992. (1) (d) Waiver and Consent dated June 8, 1992. (3) 10.10 Proprietary Information and Patent Royalty Agreement dated January 13, 1989, between Registrant and Shui T. Lai. (1) 10.11 Manufacturing Agreement dated March 12, 1990, between Registrant and Carl-Zeiss-Stiftung. (1) 10.12 LTS License Agreement dated April 6, 1990, between Registrant and Heidelberg Instruments, GmbH. (1) 10.13 Distributor Agreement dated November 30, 1990, between Registrant and Europhtalmica. (1) 10.14 Rescission and Stock Option Agreement dated August 2, 1989, between Registrant and David J. Schanzlin, M.D., assigned by Assignment dated October 1990, from Dr. Schanzlin to Bethesda Eye Institute. (1) 10.15 Stock Option Agreement dated January 22, 1992, between Registrant and Shiley Eye Center. (1) 10.16 Consultant Agreement dated December 13, 1994, between Registrant and Carmen A. Puliafito, M.D. (7) 10.17 Independent Contractor Agreement dated March 1, 1988, between Registrant and Josef F. Bille, Ph.D., as amended by Amendment to Independent Contractor Agreement dated as of February 28, 1990. (1) 10.18 Form of Indemnification Agreement between the Registrant and each of its directors and executive officers. (2) 10.19 Research Agreement dated July 6, 1989, between Registrant and Bethesda Eye Institute. (1) 10.20 Form of Proprietary Information Agreement. (1) 10.21 Consulting Agreement dated June 17, 1993, between Registrant and Forster Systems Engineering. (3) 10.22 Distribution Agreement dated July 27, 1993, between Registrant and ASKIN & Co. (3) 10.23 Distribution Agreement dated April 15, 1992, between Registrant and Designs for Vision. (3) 10.24 Distribution Agreement between Registrant and Sigmacon (Canada) Ltd. (3)
4 10.25 Distribution Agreement dated May 28, 1993, between Registrant and KOWA Company, Ltd. (3) 10.26 Employment Agreement dated August 26, 1993, between Registrant and Edward M. Lake. (4) + 10.27 Non-Qualified Unit Option Agreement. (4) 10.28 Underwriting Agreement between the Registrant and the Underwriter. (4) 10.29 Unit Purchase Option between the Registrant and the Underwriter. (4) 10.30 Consulting Agreement dated May 13, 1991, between the Company and Carmen A. Puliafito, M.D. (4) 10.31 Letter Agreement respecting the employment of S. Michael Sharp dated February 16, 1994. (7)+ 10.32 Consulting Agreement entered into between the Registrant and Mark G. Speaker, M.D., Ph.D. dated as of December 1, 1993. (6) 10.33 Registration Rights Agreement between Registrant and Genentech, Inc. dated as of February 12, 1996. (9) 10.34 Registration Rights Agreement between Registrant and EOI Corp. dated as of February 12, 1996. (9) 10.35 Employment Agreement between Registrant and Sterling C. Johnson dated April 30, 1989, as amended as of January 1, 1991 and as further amended as of January 1, 1995. (CE)+* 10.36 Employment Agreement between Registrant and John T. Rich dated January 15, 1990, as amended as of January 15, 1995 and as further amended on September 12, 1995. (CE)+* 10.37 Employment Agreement between Registrant and Ronald Hueneke dated October 4, 1991. (CE)+* 10.38 Distribution and License Agreement between Registrant and The Purdue Frederick Company dated August 31, 1995. (P)(9) 10.39 Distribution and Development Agreement between Registrant and Adatomed Pharmazeutische Und Medizintechnische Gesellschaft Mbh dated January 1, 1990, as amended January 26, 1993 and as further amended May 17, 1993. (P)(9) 10.40 Distributorship Agreement between Registrant and Scott Medical Products dated as of September 8, 1992, as amended September 8, 1995. (P)(9) 10.41 Joint Marketing Agreement between Registrant and Akorn, Inc. dated June 23, 1993. (P)(9) 10.42 Research and Development Agreement between Registrant and The West Company, Incorporated dated April 3, 1995. (P)(9) 10.43 Supply and Distribution Agreement between Registrant and Storz Instrument Company dated as of July 7, 1995. (P)(9) 23.1 Consent of Ernst & Young LLP, independent auditors. (9) 27.1 Financial Data Schedule. (9) - --------------- * Filed herewith (1) Filed as an exhibit to the Company's Registration Statement on Form S-1 dated April 24, 1992 (Registration No. 33-47439). (2) Filed as an exhibit to Pre-Effective Amendment No. 7 to the Company's Registration Statement on Form S-1 dated August 20, 1992 (Registration No. 33-47439). (3) Filed as an exhibit to the Company's Registration Statement on Form S-1 dated September 24, 1993 (Registration No. 33-69360). (4) Filed as an exhibit to Pre-Effective Amendment No. 2 to the Company's Registration Statement on Form S-1 dated November 9, 1993 (Registration No. 33-69360). (5) Filed as an exhibit to the Company's Registration Statement on Form S-8 dated June 13, 1994 (Registration Number 33-80162). (6) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1994.
5 (7) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1995. (8) Filed as an appendix to the Registration Statement on Form S-4 dated December 5, 1995 (Registration Statement No. 33-80037). (9) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1996. (P) Filed in paper under cover of Form SE pursuant to Rule 202 of Regulation S-T under the Securities Act of 1933. (CE) Confirming electronic copy of document that was filed (as an exhibit to the Company's Form 10-K for the year ended June 30, 1996) in paper under cover of Form SE pursuant to Rule 202 of Regulation S-T under the Securities Act of 1933.
+ Management contract or compensatory plan. 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ESCALON MEDICAL CORP. (Registrant) Dated: October 24, 1996 By: /s/JOHN T. RICH ------------------------------------------ John T. Rich Vice President, Finance and Administration 7 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 2.1 Assets Sale and Purchase Agreement between Registrant and Escalon Ophthalmics, Inc., dated October 9, 1995. (8) 3.1 (a) Restated Articles of Incorporation of Registrant. (9) (b) Certificate of Amendment of Restated Articles of Incorporation of Registrant dated November 8, 1993. (9) (c) Certificate of Amendment of Restated Articles of Incorporation of Registrant dated February 12, 1996. (9) 3.2 Amended and Restated Bylaws of Registrant. (1) 4.1 Form of Class A Redeemable Common Stock Purchase Warrants. (4) 4.2 Form of Class B Redeemable Common Stock Purchase Warrants. (4) 4.3 Form of Class C Common Stock Purchase Warrants. (4) 4.4 Form of Underwriters Class A Common Stock Purchase Warrants. (4) 4.5 Form of Underwriters Class B Common Stock Purchase Warrants. (4) 4.6 (a) Warrant Agreement between the Registrant and U.S. Stock Transfer Corporation. (4) (b) Amendment to Warrant Agreement between Registrant and U.S. Stock Transfer Corporation. (6) (c) Amendment to Warrant Agreement between Registrant and American Stock Transfer Company. (7) 10.1 (a) 1988 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1988 Stock Option Plan.(1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1988 Stock Option Plan. (1) 10.2 (a) 1989 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1989 Stock Option Plan.(1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1989 Stock Option Plan. (1) 10.3 (a) 1990 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1990 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1990 Stock Option Plan. (1) 10.4 (a) 1991 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1991 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1991 Stock Option Plan. (1) 10.5 (a) 1992 Stock Option Plan of Registrant. (1) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1992 Stock Option Plan. (1) (c) Form of Incentive Stock Option Agreement of Registrant under the 1992 Stock Option Plan. (1) 10.6 (a) 1993 Stock Option Plan of Registrant. (5) (b) Form of Nonqualified Stock Option Agreement of Registrant under the 1993 Stock Option Plan. (5) (c) Form of Incentive Stock Option Agreement of Registrant under the 1993 Stock Option Plan. (5)
8
Exhibit No. Description - ----------- ----------- 10.7 Series D Preferred Stock Purchase Agreement dated January 17, 1992. (1) 10.8 Amendment No. 1 to Series D Preferred Stock Purchase Agreement dated March 6, 1992. (1) 10.9 (a) Registration Rights Agreement dated as of January 17, 1992, among Registrant; Stuart I. Brown, M.D.; Josef F. Bille, Ph.D.; and the Purchasers of Preferred Stock of Registrant pursuant to Preferred Stock Purchase Agreements. (1) (b) Amendment No. 1 to Registration Rights Agreement dated as of March 6, 1992. (1) (c) Amendment No. 2 to Registration Rights Agreement dated as of April 24, 1992. (1) (d) Waiver and Consent dated June 8, 1992. (3) 10.10 Proprietary Information and Patent Royalty Agreement dated January 13, 1989, between Registrant and Shui T. Lai. (1) 10.11 Manufacturing Agreement dated March 12, 1990, between Registrant and Carl-Zeiss-Stiftung. (1) 10.12 LTS License Agreement dated April 6, 1990, between Registrant and Heidelberg Instruments, GmbH. (1) 10.13 Distributor Agreement dated November 30, 1990, between Registrant and Europhtalmica. (1) 10.14 Rescission and Stock Option Agreement dated August 2, 1989, between Registrant and David J. Schanzlin, M.D., assigned by Assignment dated October 1990, from Dr. Schanzlin to Bethesda Eye Institute. (1) 10.15 Stock Option Agreement dated January 22, 1992, between Registrant and Shiley Eye Center. (1) 10.16 Consultant Agreement dated December 13, 1994, between Registrant and Carmen A. Puliafito, M.D. (7) 10.17 Independent Contractor Agreement dated March 1, 1988, between Registrant and Josef F. Bille, Ph.D., as amended by Amendment to Independent Contractor Agreement dated as of February 28, 1990. (1) 10.18 Form of Indemnification Agreement between the Registrant and each of its directors and executive officers. (2) 10.19 Research Agreement dated July 6, 1989, between Registrant and Bethesda Eye Institute. (1) 10.20 Form of Proprietary Information Agreement. (1) 10.21 Consulting Agreement dated June 17, 1993, between Registrant and Forster Systems Engineering. (3) 10.22 Distribution Agreement dated July 27, 1993, between Registrant and ASKIN & Co. (3) 10.23 Distribution Agreement dated April 15, 1992, between Registrant and Designs for Vision. (3) 10.24 Distribution Agreement between Registrant and Sigmacon (Canada) Ltd. (3) 10.25 Distribution Agreement dated May 28, 1993, between Registrant and KOWA Company, Ltd. (3) 10.26 Employment Agreement dated August 26, 1993, between Registrant and Edward M. Lake. (4) + 10.27 Non-Qualified Unit Option Agreement. (4) 10.28 Underwriting Agreement between the Registrant and the Underwriter. (4) 10.29 Unit Purchase Option between the Registrant and the Underwriter. (4) 10.30 Consulting Agreement dated May 13, 1991, between the Company and Carmen A. Puliafito, M.D. (4) 10.31 Letter Agreement respecting the employment of S. Michael Sharp dated February 16, 1994. (7)+ 10.32 Consulting Agreement entered into between the Registrant and Mark G. Speaker, M.D., Ph.D. dated as of December 1, 1993. (6) 10.33 Registration Rights Agreement between Registrant and Genentech, Inc. dated as of February 12, 1996. (9)
9
Exhibit No. Description - ----------- ----------- 10.34 Registration Rights Agreement between Registrant and EOI Corp. dated as of February 12, 1996. (9) 10.35 Employment Agreement between Registrant and Sterling C. Johnson dated April 30, 1989, as amended as of January 1, 1991 and as further amended as of January 1, 1995. (CE)+* 10.36 Employment Agreement between Registrant and John T. Rich dated January 15, 1990, as amended as of January 15, 1995 and as further amended on September 12, 1995. (CE)+* 10.37 Employment Agreement between Registrant and Ronald Hueneke dated October 4, 1991. (CE)+* 10.38 Distribution and License Agreement between Registrant and The Purdue Frederick Company dated August 31, 1995. (P)(9) 10.39 Distribution and Development Agreement between Registrant and Adatomed Pharmazeutische Und Medizintechnische Gesellschaft Mbh dated January 1, 1990, as amended January 26, 1993 and as further amended May 17, 1993. (P)(9) 10.40 Distributorship Agreement between Registrant and Scott Medical Products dated as of September 8, 1992, as amended September 8, 1995. (P)(9) 10.41 Joint Marketing Agreement between Registrant and Akorn, Inc. dated June 23, 1993. (P)(9) 10.42 Research and Development Agreement between Registrant and The West Company, Incorporated dated April 3, 1995. (P)(9) 10.43 Supply and Distribution Agreement between Registrant and Storz Instrument Company dated as of July 7, 1995. (P)(9) 23.1 Consent of Ernst & Young LLP, independent auditors. (9) 27.1 Financial Data Schedule. (9) - --------------- * Filed herewith (1) Filed as an exhibit to the Company's Registration Statement on Form S-1 dated April 24, 1992 (Registration No. 33-47439). (2) Filed as an exhibit to Pre-Effective Amendment No. 7 to the Company's Registration Statement on Form S-1 dated August 20, 1992 (Registration No. 33-47439). (3) Filed as an exhibit to the Company's Registration Statement on Form S-1 dated September 24, 1993 (Registration No. 33-69360). (4) Filed as an exhibit to Pre-Effective Amendment No. 2 to the Company's Registration Statement on Form S-1 dated November 9, 1993 (Registration No. 33-69360). (5) Filed as an exhibit to the Company's Registration Statement on Form S-8 dated June 13, 1994 (Registration Number 33-80162). (6) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1994. (7) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1995. (8) Filed as an appendix to the Registration Statement on Form S-4 dated December 5, 1995 (Registration Statement No. 33-80037). (9) Filed as an exhibit to the Company's Form 10-K for the year ended June 30, 1996. (P) Filed in paper under cover of Form SE pursuant to Rule 202 of Regulation S-T under the Securities Act of 1933. (CE) Confirming electronic copy of document that was filed (as an exhibit to the Company's Form 10-K for the year ended June 30, 1996) in paper under cover of Form SE pursuant to Rule 202 of Regulation S-T under the Securities Act of 1933.
+ Management contract or compensatory plan. EX-10.35 2 EMPLOYMENT AGREEMENT BETWEEN STERLING C. JOHNSON 1 EXHIBIT 10.35 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT made this 30th day of April, 1989 between ESCALON OPHTHALMICS, INC., a Pennsylvania corporation (the "Employer") and STERLING C.JOHNSON (the "Employee"). R E C I T A L The parties desire to enter into this Agreement to provide for the employment of the Employee by the Employer and for certain matters in connection with such employment, all as set forth more fully in this Agreement. NOW, THEREFORE, in consideration of the premises and covenants set forth herein and intending to be legally bound hereby, the parties to this Agreement hereby agree as follows: 1. DUTIES. The Employer agrees that the Employee shall be employed by the Employer during the term of this Agreement (as defined in Section 2 hereof) to serve as President and Chief Executive Officer of the Employer. During the term of this Agreement, the Employee shall also be recommended to the stockholders of the Employer for election to the Board of Directors (the "Board") of the Employer. The Employee agrees to be so employed by the Employer and to devote his best efforts and substantially all of his business time to advance the interests of the Employer and discharge adequately his duties hereunder. 2. TERM. Subject to Sections 4 and 5 hereof, the initial term of the Employee's employment hereunder shall commence on January 1, 1990 and shall continue for a term of five (5) years. This Agreement shall be renewed automatically upon the expiration of its initial term and each renewal term for successive terms of one year unless either party notifies the other party in writing at least 90 days prior to the expiration of any term of such party's determination not to renew this Agreement beyond the then existing term. 3. COMPENSATION. (a) Salary. During the term of his employment under this Agreement, the Employee shall be paid an annual salary. The 1990 salary shall be $140,000 provided the Employer has successfully completed a fund raising program, or a lesser sum to be determined by the Board if funding of the Employer is delayed beyond January 1,1990. Such salary shall be reviewed annually thereafter by the Board and shall be increased each year by a percentage not less than the sum of (i) the percentage increase in the cost of living index for the Philadelphia area for the year then ended and (ii) 2%. The Employee's salary shall be paid in accordance with the 2 Employer's regular payroll practices. In addition, the Employee may be paid an annual performance bonus as determined by the Board in its sole discretion. (b) Stock. The Employee shall be granted an option to purchase from the Employer at a price of $0.01 per share, in cash, 300,000 shares of the Employer's Common Stock (the "Shares") according to the following vesting schedule: Execution of Agreement - 60,000 Shares January 1,1991 - 60,000 Shares January 1,1992 - 60,000 Shares January 1,1993 - 60,000 Shares January 1,1994 - 60,000 Shares
In addition, the Employee may be offered additional rights (including options) to purchase additional equity securities of the Employer as determined by the Board in its sole discretion. (c) Fringe Benefits. The Employee, to the extent he is insurable, shall be entitled to the following fringe benefits: (i) Medical and dental insurance coverage for the Employee and/or his family, at no cost to the Employee and in accordance with Company policy; (ii) Long-term disability insurance based upon the Employee's salary, commencing when compensation ceases under Section 4(b); (iii) Term life insurance coverage equal to two times the Employee's salary; (iv) Participation in such other fringe benefit programs or profit sharing programs of the Employer to the extent and on the same terms and conditions as are accorded to other officers and key employees of the Employer. In the event the Employer/Employee is uninsurable for medical insurance purposes, the Employer shall pay up to $10,000 of medical expenses of the Employee during each year of this Agreement. (d) Reimbursement of Expenses. The Employee shall be reimbursed for all normal items of travel and entertainment and miscellaneous expenses reasonably incurred by him on behalf of the Employer upon presentation or appropriate vouchers and substantiation therefor, including the use of a personal car on business of the Employer. -2- 3 (e) Moving Expenses. If, during the term of this Agreement, the Employer decides to locate the Employer's principal place of business in a location that requires the Employee to move the location of his principal residence, the Employer agrees to pay the reasonable and necessary moving expenses of the Employee, including reasonable and necessary selling expenses associated with the sale of his present principal residence and the reasonable purchase expenses associated with the purchase of his new residence. Expenses may including, but are not limited to, broker commissions, legal fees and mortgage related expenses. (f) Entire Compensation. The compensation provided for in this Agreement shall constitute full payment for the services to be rendered by the Employee to the Employer hereunder. 4. DEATH OR TOTAL DISABILITY OF THE EMPLOYEE. (a) Death. In the event of the death of the Employee during the term of this Agreement, this Agreement shall terminate effective as of the date of the Employee's death, and the Employer shall not have any further obligation or liability under this Agreement except that the Employer shall pay to the Employee's estate any portion of the Employee's salary for the period up to the Employee's date of death that remains unpaid. (b) Total Disability. In the event of the Total Disability (as that term is hereinafter defined) of the Employee for a period of 90 consecutive days at any time during the term of this Agreement, the Employer shall have the right to terminate the Employee's employment hereunder by giving the Employee 30 days' written notice thereof, and, upon expiration of such 30-day period, the Employer shall not have any further obligation or liability under this Agreement except that the Employer shall pay to the Employee any portion of the Employee's salary for the period up to the date of termination that remains unpaid. The term "Total Disability" when used herein, shall mean a mental or physical condition which in the reasonable opinion of the Board of the Employer, including the advice of an outside licensed physician renders the Employee unable or incompetent to carry out the job responsibilities required by his position as President and Chief Executive Officer. -3- 4 5. TERMINATION OF EMPLOYEE. (a) For Cause; Resignation. The Employer may discharge the Employee and thereby terminate his employment hereunder for cause which shall be deemed to include the following: (i) habitual intoxication; (ii) drug addiction; (iii) conviction of a felony; (iv) failure to execute such duties as are within the scope of this Agreement and are reasonably required of an employee holding his positions; (v) a breach by the Employee of any material term of this Agreement; (vi) engaging in conduct that, in the reasonable opinion of the Board of the Employer and as supported by an unrelated third party assessment, has injured or would injure the business or reputation of the Employer or would otherwise adversely affect its interests; or (vii) misappropriation of any corporate funds or property of the Employer, theft embezzlement or fraud. In the event that the Employer shall discharge the Employee for cause pursuant to this Section 5(a), or in the event that Employee shall resign his employment with the Employer, the Employer shall not have any further obligation or liability to the Employee under this Agreement, except that the Employer shall pay to the Employee any portion of the Employee's salary for the period up to the date of termination that remains unpaid. (b) Without Cause. If the Employer discharges the Employee without cause hereunder (i.e., for a reason other than as set forth in Section 5(a)), the Employer shall not have any further obligation or liability to the Employee under this Agreement, except that: (i) the Employer shall pay to the Employee any portion of the Employee's salary and fringe benefits for the period up to the date of termination that remains unpaid; and -4- 5 (ii) the Employer shall continue the Employee's salary and fringe benefits for a period of one year after termination. 6. NON-DISCLOSURE AND NON-COMPETITION. (a) Non-Disclosure. The Employee recognizes and acknowledges that he will have access to certain confidential information of the Employer and that such information constitutes valuable, special and unique property of the Employer. The Employee agrees that he will not, for any reason or purpose whatsoever, during or after the term of his employment, disclose any such confidential information to any person without express authorization of the Employer, except (i) as necessary in the ordinary course of performing his duties hereunder or (ii) with regard to information that is in the public domain or that the Employee learns outside of the scope of his employment. The Employee also agrees to abide by the terms of any non-disclosure agreements entered into by the Employer with any third parties. (b) Non-Competition. The Employee agrees that: (i) during his employment by the Employer hereunder; and (ii) for an additional period of two years after the termination of the Employee's employment hereunder, neither the Employee nor any firm or corporation in which he may be interested as a partner, trustee, director, officer, employee, agent, shareholder, lender of money or guarantor, or for which he performs services in any capacity (including as a consultant or independent contractor) shall at any time during such period be engaged, directly or indirectly, in any Competitive Business (as that term is hereinafter defined); provided, however, that the business activities of the Employee on behalf of any other entity that is in control of, controlled by or under common control with the Employer shall not be deemed to violate the Employee's undertakings as set forth in this Section 6(b). Nothing herein contained shall be deemed to prevent the Employee from investing in or acquiring one percent or less of any class of securities of any company is such class of securities is listed on a national securities exchange or is quoted on the NASDAQ system. For purposes of this Section 6(b), the term "Competitive Business" shall mean any business that develops, produces, or markets ophthalmic products, devices or equipment, whether of a diagnostic, prophylactic or therapeutic nature, which are competitive with the -5- 6 Employer's products at the time of termination. Notwithstanding the foregoing, this Section 6(b) shall not apply if the Employee is terminated by the Employer without cause under Section 5(b). (c) Injunctive Relief. The Employee acknowledges that his compliance with the agreements in Sections 6(a) and 6(b) hereof is necessary to protect the good will and other proprietary interests of the Employer and that he is the Chief Executive Officer of the Employer and conversant with its affairs, its trade secrets, its customers and other proprietary information. The Employee acknowledges that a breach of his agreements in Sections 6(a) and 6(b) hereof will result in irreparable and continuing damage to the Employer for which there will be no adequate remedy at law; and the Employee agrees that in the event of any breach of the aforesaid agreements, the Employer and its successors and assigns shall be entitled to injunctive relief and to such other and further relief as may be proper. (d) Survival of Covenants. The provisions of this Section 6 shall survive the termination of this Agreement. 7. SUPERSEDES OTHER AGREEMENTS. This Agreement supersedes and is in lieu of any and all other employment arrangements between Employee and the Employer, but shall not supersede any existing confidentiality or non-disclosure agreements between the Employee and the Employer. 8. AMENDMENTS. Any amendment to this Agreement shall be made in writing an signed by the parties hereto. 9. ENFORCEABILITY. If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed, and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted or as if such provision had not been originally incorporated herein, as the case may be. -6- 7 10. CONSTRUCTION. The Agreement shall be construed and interpreted in accordance with the internal laws of the State of New Jersey. 11. ASSIGNMENT. (a) By the Employer. The rights and obligations of the Employer under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Employer. (b) By the Employee. This Agreement and the obligations created hereunder may not be assigned by the Employee. 12. NOTICES. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when mailed by certified mail, return receipt requested, or delivered by a national overnight delivery service addressed to the intended recipient as follows: IF TO THE EMPLOYEE: Sterling C. Johnson 36 Richmond Drive Skillman, New Jersey 08558 IF TO THE EMPLOYER: Escalon Ophthalmics, Inc. 1608 Walnut Street Suite 1702 Philadelphia, PA 19103 Attn: Richard J. DePiano WITH A COPY TO: Sheldon M. Bonovitz, Esquire Duane, Morris & Heckscher One Liberty Place Philadelphia, PA 19102 -7- 8 Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents. 13. WAIVERS. No claim or right arising out of a breach or default under this Agreement shall be discharged in whole or in part by a waiver of that claim or right unless the waiver is supported by consideration and is in writing and executed by the aggrieved party hereto or his or its duly authorized agent. A waiver by any party hereto of a breach or default by the other party hereto of any provision of this Agreement shall not be deemed a waiver of future compliance therewith, and such provisions shall remain in full force and effect. IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first above written. ESCALON OPHTHALMICS, INC. By: ---------------------- Chairman of the Board By: ---------------------- STERLING C. JOHNSON -8- 9 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT FIRST AMENDMENT TO EMPLOYMENT AGREEMENT dated as the lst day of January, 1991, by and between ESCALON OPHTHALMICS, INC. ("Employer") and STERLING C. JOHNSON ("Employee"). R E C I T A L WHEREAS, by Employment Agreement dated April 30, 1989, Employee became an employee of Employer; and WHEREAS, pursuant to Section 3(b) of the Employment Agreement, Employee was granted options to purchase up to 300,000 shares of common stock of Employer over five years in accordance with the vesting schedule set forth therein (the "Options"); and WHEREAS, Employee will recognize ordinary income under Section 83 of the Internal Revenue Code of 1986, as amended (the "Code") upon exercise of the Options equal to the difference between the then fair market value of the shares of common stock received and the exercise price; and WHEREAS, Employer desires to reimburse Employee for the federal and state income taxes imposed on Employee by reason of such recognition of such ordinary income. NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 1. (a) Employer shall reimburse Employee, as additional compensation, an amount sufficient to enable Employee to pay the aggregate federal and state income taxes imposed on Employee by reason of the recognition of ordinary income under Section 83 of the Code upon exercise of the Options received by Employee pursuant to the Employment Agreement. (b) The amount of such reimbursement shall include an amount sufficient to enable Employee to pay the federal and state income taxes imposed on the reimbursement itself, that is, the reimbursement shall be "grossed up" to reflect the income taxes imposed on the reimbursement itself. (c) The reimbursement for federal taxes shall take into account any deduction available to Employee for the payment of state income taxes. 10 (d) Employer shall also reimburse Employee for the cost and expense of obtaining personal tax advice regarding the tax treatment and the proper reporting of the tax consequences upon receipt and exercise of the Options. 2. In the event of any disagreement between Employer and Employee regarding the computation of the reimbursement required to be made in paragraph 1 hereof, such disagreement shall be resolved by Employer's accountants, whose determination shall be binding on Employee and Employer and their respective heirs, personal representatives, successors and assigns. 3. Employee shall cooperate with Employer in furnishing all information required to enable Employer to compute the reimbursement required to be made pursuant to paragraph 1 hereof. 4. In all other respects, the Employment Agreement is hereby ratified and affirmed by the parties. IN WITNESS WHEREOF, this First Amendment has been executed by the parties as of the date first above written. ESCALON OPHTHALMICS, INC. By: ---------------------------- Chairman of the Board -------------------------------- Sterling C. Johnson 11 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT This SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ("Second Amendment") dated this 1st day of January, 1995 is executed between ESCALON OPHTHALMICS, INC., a Pennsylvania corporation (the "Employer") and STERLING C.JOHNSON (the "Employee"). RECITALS Whereas the Employer and the Employee executed an initial Employment Agreement ("Agreement") dated April 30, 1989, and a First Amendment on January 1, 1991, which Agreement and First Amendment terminated on December 31, 1994; and, Whereas the parties have agreed that the Employee should continue to render services to the Employer for an additional term of employment; and, Whereas the parties desire to enter into this Second Amendment to the Agreement ("Second Amendment") to provide for the continued employment of the Employee by the Employer, and for certain matters in connection with such employment, all as set forth more fully in this Second Amendment. NOW, THEREFORE, in consideration of the premises and covenants set forth herein and intending to be legally bound hereby, the parties to this Second Amendment hereby agree as follows: 1. NEW TERM. Subject to Sections 4 and 5 of the Agreement, the new term of the Employee's employment hereunder the Second Amendment shall commence on January 1, 1995 and shall continue for a term of three (3) years. Employment shall be automatically renewed upon the expiration of the term of the Second Amendment and each renewal term for successive terms of one year unless either party notifies the other party in writing at least 90 days prior to the expiration of any term of such party's determination not to renew this Second Amendment beyond the then existing term. 2. COMPENSATION AND AUTOMOBILE. During the term of his employment under this Second Amendment, the Employee shall be paid an annual salary. The 1995 salary shall be $154,000, plus the costs associated with the lease of an automobile, not to exceed $500.00 per month. Such salary shall be reviewed annually thereafter by the Board and shall be increased each year at the sole discretion of the Board. The Employee's salary shall be paid in accordance with the Employer's regular payroll practices. In addition, the Employee may be paid an annual performance bonus as determined by the Board in its sole discretion. 12 SECOND AMENDMENT PAGE TWO 3. BACK PAY. The Employer agrees that during the term of the Agreement (1990 to 1994) the Employee was not paid all the salary due him. The total unpaid compensation exceeds $118,000, including $33,046 for 1994. In order for the Employee to be duly compensated for past services the parties agree that the Employer will issue the Employee 50,000 shares of Escalon common stock, and pay the Employee $60,000 by December 31, 1996, or, in the event of a merger of the Employer with another company, within thirty (30) days following the closing of the merger. The sum of the back pay is shown as Attachment I to this Second Amendment. 4. STOCK. The Employee shall be continue to be eligible to receive incentive stock options to granted the Employee at the sole discretion of the Employer as approved by the Board of Directors. All other terms and conditions of the Agreement and First Amendment remain the same. IN WITNESS WHEREOF, this Second Amendment has been executed by the parties as of the date first above written. ESCALON OPHTHALMICS, INC. By: ----------------------- Jay L. Federman, M.D. Chairman of the Board By: ----------------------- STERLING C. JOHNSON -2- 13 ATTACHMENT I
Cost of Living Change By Year - ----------------------------- 1991 versus 1990 4.2% 1992 versus 1991 3.0% 1993 versus 1992 3.2% 1994 versus 1993 2.9%
Year Base Salary Amount Paid Shortfall - ---- ----------- ----------- --------- 1990 $140,000 $ 98,115 $ 41,885 1991 148,680 145,569 3,111 1992 156,114 152,403 3,711 1993 164,232 146,968 17,264 1994 172,279 120,207 52,072 -------- Total Shortfall $118,043
* The formula in the Employment Agreement is that the base salary was $140,000 for the year 1990, and was to increase by a minimum of the Cost of Living Index (COLI) for the Philadelphia Area plus two percent (2%). For example, the COLI change of from 1990 to 1991 of 4.2% plus 2% equals 6.2%. This number times the base of $140,000 in 1990 equals $148,680 in 1991. -3- EX-10.36 3 EMPLOYMENT AGREEMENT BETWEEN JOHN T. RICH 1 EXHIBIT 10.36 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT made this 15th day of January, 1990 between ESCALON OPHTHALMICS, INC., A Pennsylvania Corporation (The "Employer") AND JOHN T. RICH, 4 Oxcart Lane, Hamilton, New Jersey 08619 (the "Employee"). R E C I T A L : The parties hereto desire to enter into this Agreement to provide for the employment of the Employee by the Employer and for certain other matters in connection with such employment, all as set forth more fully in this Agreement. NOW, THEREFORE, in consideration of the premises and convenants set forth herein an intending to be legally bound hereby, the parties to this Agreement hereby agree as follows: 1. DUTIES. The Employer agrees that the Employee shall be employed by the Employer during the term of this Agreement (as defined in Section 2 hereof) to serve as Director of Finance and Administration and/or the other position(s) as determined by the Employer. The Employee agrees to be so employed by the Employer and to devote his best efforts and substantially all of his business time to advance the interests of the Employer and discharge adequately his duties hereunder. 2. TERM. Subject to Sections 4 and 5 hereof, the initial term of the Employee's employment hereunder shall commence on the Employment Date (as hereinafter defined) and shall continue for a term of five (5) years. This Agreement shall be renewed automatically upon the expiration of its initial term and each renewal term for successive terms of one year unless either party notifies the other party in writing at least 90 days prior to the expiration of any term of such party's determination not to renew this Agreement beyond the then existing term. For purposes of this Section 2, the term "Employment Date" shall mean the date the Employee begins performing services for the Employer, if ever, but not later than March 1, 1990. IF the Employer does not achieve its goal of raising capital equal to at least $3,000,000 through an offering of shares of its common stock, this Agreement shall automatically terminate. 3. COMPENSATION. (a) Salary. During the term of his employment under this Agreement, the Employee shall be paid an annual salary at the rate of $90,000 commencing on the Employment date. The Employee's salary shall be paid in accordance with the Employer's regular payroll practices. 1 2 Such salary shall be reviewed annually by the Employer's Compensation Committee. In addition, the Employee may be paid an annual performance bonus as determined by the Compensation Committee in its sole discretion. (b) Stock. The Employee shall be given the option to purchase from the Employer at a price equal to the lower of 33-1/3% of the most recent selling price of the Employee's Common Stock by the Employer to a non-employee or 100% of the most recent selling price of the Employer's Class A Convertible Preferred Stock, determined on the Employment Date, at a price of $________________ per share, up to 50,000 shares of the Employer's Common Stock under the Employer's stock option plan, on or after the date hereof, subject to the vesting schedule of Section 3(b) hereof. In addition, the Employee may be offered additional equity securities of the Employer as determined by the Board of Directors in its sole discretion. (c) Vesting Schedule. (i) The Employee shall be permitted to purchase shares of Common Stock of the Employer pursuant to the Employer's stock option plan according to the following schedule:
Vesting Schedule ---------------- Section 3(b) ------------ 1st Anniversary of Employment Date 10,000 shares 2nd Anniversary of Employment Date 10,000 shares 3rd Anniversary of Employment Date 10,000 shares 4th Anniversary of Employment Date 10,000 shares 5th Anniversary of Employment Date 10,000 shares ------------- TOTAL 50,000 shares -------------
(ii) In the event that (i) this Agreement shall automatically terminate pursuant to Section 2 hereof, (ii) the Employer shall cause a termination of the Employee's employment with cause or the Employee shall resign pursuant to Section 5(a), or (iii) the Employee shall die or become totally disabled, in any such event, the unvested options shall expire as of the date of such event. (iii) In the event that (i) Employer shall cause a termination of the Employee's employment without cause pursuant to Section 5(b), (ii) substantially all of the assets of the Employer are sold or otherwise disposed of by merger, consolidation or similar transaction, or (iii) voting control of the Employer is acquired in a transaction 2 3 other than a stock offering made by the Employer, then notwithstanding any of the foregoing, all of the unvested options shall thereupon be treated as vested. (d) Fringe Benefits. The Employee shall be entitled to the following fringe benefits: (i) Medical and Dental Insurance coverage for the Employee and his family, at no cost to the Employee and in accordance with company policy; (ii) Long-term disability insurance based upon the Employee's salary, commencing when compensation ceases under Section 4(b); (iii) Group Term life insurance coverage equal to two times the Employee's salary; and (iv) Participation in such other fringe benefit, retirement or profit sharing programs of the Employer, to the extent and on the same terms and conditions as are accorded to other officers and key employees of the Employer. (e) Reimbursement of Expenses. The Employee shall be reimbursed for all normal items of travel and entertainment and miscellaneous expenses reasonably incurred by him on behalf of the Employer upon presentation of appropriate vouchers and substantiation therefor, including the use of a personal car on business of the Employer. (f) Moving Expenses. If, during the term of this Agreement, the Employer decides to locate the Employer's principal place of business in a location, greater than forty (40) miles from the Employee's principal residence, that requires the Employee to move the location of his principal residence, the Employer shall pay the reasonable and necessary selling expenses associated with the sale of his present principal residence and the reasonable purchase expenses associated with the purchase of his new residence. Expenses may include, but are not limited to, broker commissions, legal fees and mortgage related expenses. (g) Entire Compensation. The compensation provided for in this Agreement shall constitute full payment for the services to be rendered by the Employee to the Employer hereunder. 3 4 4. DEATH OR TOTAL DISABILITY OF THE EMPLOYEE (a) Death. In the event of the death of the Employee during the term of this Agreement, this Agreement shall terminate effective as of the date of the Employee's death, and the Employer shall not have any further obligation or liability under this Agreement except that the Employer shall pay to the Employee's estate any portion of the Employee's salary for the period up to the Employee's date of death that remains unpaid. (b) Total Disability. In the event of the Total Disability )as that term is hereinafter defined) of the Employee for a period of 90 consecutive days at any time during the term of this Agreement, the Employer shall have the right to terminate the Employee's employment hereunder by giving the Employee 30 days' written notice thereof, and upon expiration of such 30-day period, the Employer shall not have any further obligation or liability under this Agreement except that the Employer shall pay to the Employee any portion of the Employee's salary for the period up to the date of termination that remains unpaid. The term "Total Disability" when used herein, shall mean a mental or physical condition which in the reasonable opinion of the Board of Directors of the Employer, including the advice of an outside licensed physician, renders the Employee unable or incompetent to carry out the job responsibilities required by his position as Director of Finance and Administration and/or such other positions to which he is assigned by the Employer's Board of Directors. 5. Termination of Employee. (a) For Cause; Resignation. The Employer may discharge the Employee and thereby terminate his employment hereunder for cause which shall be deemed to include the following: (i) Habitual intoxication; (ii) Drug addiction; (iii) Conviction of a felony; (iv) Material failure to execute such duties as are within the scope of this Agreement and are reasonably required of an employee holding his position(s); (v) a breach by the Employee of any material term of this Agreement; (vi) engaging in conduct that, in the reasonable opinion of the Board of Directors of the Employer and as supported by an unrelated third party assessment, has injured or would injure the business or reputation of the Employer or would otherwise adversely affect its interests; or (vii) misappropriation of any corporate funds or property of the Employer, theft, embezzlement or fraud. 4 5 In the event that the Employer shall discharge the Employee or cause pursuant to this Section 5(a), within thirty (30) days written notice, or in the event the Employee shall resign his employment with the Employer, the Employer shall not have any further obligation or liability to the Employee under this Agreement, except that the Employer shall pay to the Employee any portion of the Employee's salary, and continue to provide fringe and retirement benefits, for the period up to the date of termination that remains unpaid. (b) Without Cause. If the Employee discharges the Employee without cause hereunder (i.e., for a reason other than as set forth in Section 5(a), the Employer shall not have any further obligation or liability to the Employee under this Agreement, except that: (i) The Employer shall pay to the Employee any portion of the Employee's salary and fringe benefits and retirement benefits, if applicable, for the period up to the date of termination that remains unpaid; and (ii) The Employer shall continue the Employee's salary and fringe benefits benefits and retirement benefits, if applicable, for a period of one year after termination. 6. Non-Disclosure and Non-Competition (a) Non-Disclosure. The Employee recognizes and acknowledges that he will have access to certain confidential information of the Employer and that such information constitutes valuable, special and unique property of the Employer. The Employee agrees that he will not, for any reason or purpose whatsoever, during or after the term of his employment, disclose any such confidential information to any person without express authorization of the Employer, except (i) as necessary in the ordinary course of performing his duties hereunder or (ii) with regard to information that is in the public domain or that the Employee learns outside of the scope of his employment. The Employee also agrees to abide by the terms of any non-disclosure agreements entered into by the Employer with any third parties. (b) Non-Competition. The Employee agrees that: (i) during his employment by the Employer hereunder; and (ii) for an additional period of two years after the termination of the Employee's employment hereunder, neither the Employee nor any firm or corporation in which he may be interested as a partner, trustee, director, officer, employee, agent, shareholder, lender of money or guarantor, or for which he performs services in any capacity (including as a consultant or independent contractor) shall at any time during such period be engaged, directly 5 6 or indirectly, in any competitive business (as that term is hereinafter defined); provided, however, that the business activities of the Employee on behalf of any other entity that is in control of, controlled by or under common control with the Employer shall not be deemed to violate the Employee's undertakings as set forth in this Section 6(b). Nothing herein contained shall be deemed to prevent the Employee from investing in or acquiring one percent or less of any class of securities of any company if such class of securities if listed on a national securities exchange or is quoted on the NASDAQ system. For purposes of this Section 6(b), the term "Competitive Business" shall mean any business that develops, produces or markets ophthalmic products, devices or equipment including, but not limited to, liposomal and other lipid-based topical, intravitreal and periocular injectable ophthalmic pharmaceutical products, whether of a diagnostic or therapeutic nature, which are competitive with and marketed within the same geographic regions as the Employer's products at the time of termination. Notwithstanding the foregoing, this Section 6(b) shall not apply if the Employee is terminated by the Employer without cause under Section 5(b) or if this Agreement is terminated pursuant to Section 2. (c) Injunctive Relief. The Employee acknowledges that his compliance with the agreements in Sections 6(a) and 6(b) hereof is necessary to protect the good will and other proprietary interests of the Employer and that he is a Director of Finance and Administration of the Employer and conversant with its affairs, its trade secrets, its customers and other proprietary information. The Employee acknowledges that a breach of his agreements in Sections 6(a) and 6(b) hereof will result in irreparable and continuing damage to the Employer for which there will be no adequate remedy at law; and the Employee agrees that in the event of any breach of the aforesaid agreements, the Employer and its successors and assigns shall be entitled to injunctive relief and to such other and further relief as may be proper. (d) Survival of Covenants. The provisions of this Section 6 shall survive the termination of this Agreement, except as what otherwise is determined herein. 7. Supersedes Other Agreements. This agreement supersedes and is in lieu of any and all other employment arrangements between the Employee and the Employer, but shall not supersede any existing confidentiality or nondisclosure agreements between the Employee and the Employer. 8. Amendments. Any amendment to this Agreement shall be made in writing and signed by the parties hereto. 9. Enforceability. If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, 6 7 and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted or as if such provision had not been originally incorporated herein, as the case may be. 10. Construction. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New Jersey. 11. Assignment (a) By the Employer. The rights and obligations of the Employer under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Employer. (b) By the Employee. This Agreement and the obligations created hereunder may not be assigned by the Employee. 13. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when mailed by certified mail, return receipt requested, or delivered by a national overnight delivery service addressed to the intended recipient as follows: IF TO THE EMPLOYEE: John T. Rich 4 Oxcart Lane Hamilton, NJ 08619 IF TO THE EMPLOYER: Escalon Ophthalmics, Inc. 1608 Walnut Street Suite 1702 Philadelphia, Pa. 19103 WITH A COPY TO: Sheldon M. Bonovitz, Esquire Duane, Morris & Heckscher 1500 One Franklin Plaza Philadelphia, Pa. 19102 Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents. 7 8 14. Waivers. No claim or right arising out of a breach or default under this Agreement shall be discharged in whole or in part by a waiver of that claim or right unless the waiver is supported by consideration and is in writing and executed by the aggrieved party hereto or his or its dully authorized agent. A waiver by any party hereto of a breach or default by the other party hereto of any provision of this Agreement shall not be deemed a waiver of future compliance therewith, and such provisions shall remain in full force and effect. IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first above written. ESCALON OPHTHALMICS, INC. BY: ------------------------- President ---------------------------- JOHN T. RICH 8 9 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT FIRST AMENDMENT TO EMPLOYMENT AGREEMENT made as of this 15th day of January, 1990 between ESCALON OPHTHALMIC, INC., A Pennsylvania corporation (the "Employer") and JOHN T. RICH (the "Employee"). R E C I T A L WHEREAS, the parties entered into an Employment Agreement of even date and desire to amend said Employment Agreement as set forth herein. NOW, THEREFORE, in consideration of the promises and covenants set forth herein and in the Employment Agreement, and intending to be legally bound hereby, the parties hereto agree as follows: 1. Paragraph 2 is hereby amended to delete the last sentence thereof. 2. Paragraph 3(b) is hereby amended to provide that the purchase price for the 50, 000 shares of the Employer's Common Stock referred to therein shall be $.25 per share. 3. Paragraph 3(c)(ii) is hereby amended to delete clause (i) thereof. 4. Paragraph 6(b) is hereby amended to delete the words "or if this Agreement is terminated pursuant to Section 2" at the end thereof. 5. In all other aspects, the Employment Agreement is ratified and affirmed by the parties. IN WITNESS WHEREOF, this First Amendment has been executed by the parties as of the date first above written. ESCALON OPHTHALMICS, INC. By: ------------------------------ President --------------------------------- JOHN T. RICH 10 EXTENSION TO EMPLOYMENT AGREEMENT This EXTENSION TO EMPLOYMENT AGREEMENT ("Extension") dated September 12, 1995 is executed between Escalon Ophthalmics, Inc. ("Employer") and John T. Rich, 4 Oxcart Lane, Hamilton, New Jersey 08619 ("Employee"). Whereas on January 15, 1990 the Employer and the Employee entered into an Employment Agreement ("Agreement") under which the parties agreed that the Employee would serve as the Director of Finance and Administration for the Employer, or such other positions as the Employer determined, for a period of five (5) years, and; Whereas, the Agreement provides that the Agreement will automatically extend for periods of one (1) year unless either party notifies the other of its intention to terminate the Agreement, and; Whereas, the Agreement automatically extended for the period of January 15, 1995 to January 14, 1996 because neither party notified the other of its intention to terminate, and during the ensuing period the Employee was promoted to the position of Vice President of Finance and Administration, and the parties now mutually desire that the term of the Agreement be extended for an additional one (1) year period. NOW, THEREFORE, the Employer and Employee mutually agree that this Extension be executed, and the term of the Agreement is extended for an additional one (1) year period, from January 15, 1996 until January 14, 1997, and that all other terms and conditions of the Agreement remain the same. Escalon Ophthalmics, Inc. John T. Rich 182 Tamarack Circle 4 Oxcart Lane Skillman, NJ 08558 Hamilton, NJ 08619 -------------------- ------------------- Sterling C. Johnson President and CEO Date: September 12, 1995 September 12, 1995 EX-10.37 4 EMPLOYMENT AGREEMENT BETWEEN RONALD HUENEKE 1 EXHIBIT 10.37 EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is made this 4th day of October, 1991 by and between Escalon Ophthalmics, Inc., a Pennsylvania corporation ("Employer"), and Ronald Hueneke, an individual residing at 7150 Horizon Drive, Greendale, Wisconsin 53129 ("Employee"). WHEREAS, Employer desires to employ Employee as Vice President of Clinical and Regulatory Affairs - Instruments and Employee desires to accept such employment on the terms set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. DUTIES. Employer hereby employs Employee effective as of the date hereof to serve as Vice President in charge of Medical and Regulatory Affairs. Employee agrees to be so employed by Employer and to devote his best efforts to advance the interests of Employer. Employee agrees to devote a reasonable number of hours per week during the first two years of the term of this Agreement, and thereafter substantially all of his business time to performing his duties hereunder; provided, however, that Employer acknowledges that Employee has, and shall 2 be permitted to continue to devote a portion of his business time to performing services under an existing agreement with Solos Endoscopy until October 1, 1993, and with Medical College of Wisconsin indefinitely. Employee shall not be required to relocate from Wisconsin to any other location at which Employer conducts business. 2. TERM. Subject to the provisions of Section 4 hereof, the term of Employee's employment hereunder shall commence on the date hereof and shall continue for a term of five (5) years; provided, however, that the term hereof shall thereafter be renewed automatically from year to year unless Employer or Employee shall have given the other notice of termination, effective at the end of the current term, not less than ninety (90) days prior to the expiration thereof. 3. COMPENSATION. a. BASE SALARY. For the services rendered by the Employee under this Agreement, the Employer agrees to pay the Employee a salary at the rate of forty-five thousand dollars ($45,000) per annum during the first two years of the term of this Agreement and thereafter not less than Ninety-Five Thousand Dollars ($95,000) per annum (such salary, as adjusted from time to time is herein called the "Salary"), payable in equal, bi-weekly installments. b. STOCK OPTIONS. For the services rendered by the Employee under this Agreement, the Employer agrees to grant to the Employee options to acquire from the Employer an aggregate of 75,000 shares of the common stock of the Employer at a price 2 3 of $1.00 per share, 15,000 shares of which will be exercisable by the Employee on each of the first through fifth yearly anniversaries of the date of this Agreement, all pursuant to the Nonqualified Stock Option Agreement attached to this Agreement as Exhibit A and Employer's 1991 Equity Incentive Plan. c. FRINGE BENEFITS. During the term of this Agreement, Employer shall provide to Employee life, health and dental insurance and any other insurance provided for executive employees of Employer on the same terms as such insurance is provided to such employees. d. ADDITIONAL COMPENSATION. As additional incentive compensation the Employer shall make to the Employee for the period set forth herein an additional payment (the "Bonus") equal to 3 1/3% of the gross sales, minus returns and reasonable allowances ("Gross Income"), derived from the sale by the Employer or any affiliate of Employer in the ordinary course of business of the Glaucoma Mechanical Trephine Product and related disposable products (the "GMT Product"). The Bonus shall be paid for the period beginning January 1, 1992 and ending on December 31, 1996. The payment of the Bonus shall be secured by a security agreement in the form attached hereto as Exhibit A. The Bonus computed for each calendar year shall be paid in two equal installments; the first on or before April 30 of the immediately subsequent calendar year and the second on or before March 15 of the second subsequent calendar year. Interest shall be paid on the second installment for the period beginning April 30 of the preceding year on the outstanding balance at a rate of interest equal to the prime rate of interest as published in the Wall Street Journal. 3 4 The computation of Gross Income shall be made by a certified public accountant selected by the Employer (who may be the regularly engaged certified public accountant of the Employer). The Employee shall be entitled at his request to an explanation of the manner in which the Gross Income is computed and if the Employee should disagree with any such computation the undisputed amount of Gross Income shall be used to compute a payment under this Section 3(d) within the normal time period prescribed, and the disputed amount shall be determined as follows. The Employee shall be permitted at his own cost to engage a certified public accountant to compute the Gross Income. If the Gross Income as computed by the certified public accountant selected by the Employee is no greater than 1.01% of the Gross Income computed by the certified public accountant selected by the Employer, the Gross Income computed by the certified public accountant selected by the Employer shall be the Gross Income for purposes of this Section 3(d). If the Gross Income computed by the certified public accountant selected by the Employee shall be greater than 1.05% of the Gross Income computed by the certified public accountant selected by the Employer, the two certified public accountants shall mutually select a third certified public accountant who shall compute the Gross Income (at the Employer's expense) and whose computation shall in all cases constitute the Gross Income for purposes of this Section 3(d). If the Gross Income computed by the third certified public accountant is greater than or equal to the Gross Income computed by the certified public accountant selected by the Employee, the Employer shall bear the cost of the services provided by the certified public accountant selected by the Employee. 4 5 Employer shall use its best efforts to develop and market the GMT product with the intent to maximize market penetration during the five year period during which the Bonus is payable. Employer shall conduct market research studies, conduct physician training programs, advertise and promote the GMT Product at meetings of glaucoma specialists and in trade journals and train sales personnel in the sale of the GMT Product. Employer shall no later than October 5, 1992 appoint a "marketing manager" who shall spend at least 90% of his or her working time on the GMT Product. Employer shall spend a minimum of $100,000 for literature, advertising, promotion, meeting and conferences and sales support with respect to the GMT Product during the one year period beginning on January 1, 1992. On an annual basis Employer and Employee shall review the efforts of Employer to develop and market the GMT Product and shall mutually determine if Employer is using its best efforts. In the annual review of the performance of Employer in promoting and selling the GMT Product consideration shall be given to various negative market factors including: (i) loss of sales due to competition if the patent attributable to the GMT Product is not issued; (ii) adverse clinical results published in an ophthalmic journal; (iii) insufficient supply of raw materials for production of the GMT Product; and (iv) general lack of product acceptance due to the presence in the market of superior products and technology (which factor shall not, however, relieve Employer of its obligation to continue its development efforts to improve the GMT Product). If at the end of each year during the five year period during which the Bonus is payable it is agreed by Employer and Employee that Employer has used its best efforts in the development and marketing of the GMT Product, Employer shall retain the right to the GMT Product. If it 5 6 is determined that Employer has not used its best efforts in the development and marketing of the GMT Product then Employee may elect to have Employer assign to him an undivided one-third interest in the GMT Product, including an assignment of a one-third interest in any patent rights attributable to the GMT Product. If there should be any disagreement between Employer and Employee as to whether Employer has used its best efforts in the development and marketing of the GMT Product which disagreement is not settled within a period of 120 days, Employer and Employee hereby agree to subject the disagreement to binding arbitration of an independent panel of three arbitrators selected by and operating under the rules of the American Arbitration Association ("AAA") as modified by this Section 3(d) to the extent inconsistent with the rules of AAA. Upon written notice by a party to the other party of a request for arbitration hereunder, the Buyer and Seller shall each select an arbitrator within thirty (30) days after the date of such notice, and the Two (2) arbitrators so selected shall use their best efforts to select a mutually acceptable arbitrator within thirty (30) days after their selection. If the two (2) arbitrators are unable to agree upon a third arbitrator within said thirty (30) day period, the third arbitrator shall be selected by the AAA pursuant to its rules. The arbitration shall be conducted in an expeditious manner, the parties using their best efforts to cause the arbitration to be completed within sixty (60) days after selection of the arbitrator. In the arbitration, there shall be no discovery except as the arbitrators shall permit following a determination by the arbitrators that the party seeking such discovery has substantial demonstrable need. All other procedural matters shall be within 6 7 the discretion of the arbitrators. In the event a party fails to comply with the procedures in any arbitration in a manner deemed material by the arbitrators, the arbitrators shall fix a reasonable period of time for compliance and, if the party does not comply within said period, a remedy deemed just by the arbitrators, including an award of default, may be imposed. The determination of the arbitrators by majority vote shall be final and binding on the parties. The expense of the arbitration and all expenses incurred by the parties with respect thereto (including without limitation reasonable counsel fees and fees of experts) shall be borne by the party not prevailing in the arbitration, as determined by the arbitrator. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. 14. Termination. The provisions of this Section 4 shall be applicable notwithstanding anything to the contrary contained herein. a. Death. In the event of the death of Employee during the term of this Agreement, this Agreement shall terminate effective as of the date of Employee's death, and Employer shall have no further obligation or liability hereunder except that Employer shall pay to Employee's estate the portion, if any, of Employee's Salary for the period through the date of Employee's death which remains unpaid, and the full amount of Additional Compensation provided pursuant to Section 3(d) hereof as and when otherwise payable. b. Total Disability. In the event of a mental or physical condition which in the reasonable opinion of Employer renders Employee unable or incompetent to perform his duties hereunder ("Total Disability") which continues for a period of 180 7 8 consecutive days during the term of this Agreement, Employer shall have the right to terminate Employee's employment hereunder by giving Employee 10 days' written notice thereof and, upon expiration of such 10-day period, Employer shall have no further obligation or liability under this Agreement except: Employer shall pay to Employee the portion, if any, of Employee's Salary for the period through the date of termination which remains unpaid and Employer shall pay to Employee the full amount of Additional Compensation provided pursuant to Section 3(d) hereof as and when otherwise payable. c. No Other Termination. Except as otherwise expressly set forth in this Section 4, Employer shall not be permitted to terminate Employee's employment hereunder. In the event of a breach of this Section 4, Employee shall be entitled to receive from Employer as his sole damages and remedy, and Employer agrees to pay as liquidated damages, all compensation to which Employee would have been entitled under Section 3 hereof as and when such compensation would have been received had Employee's employment not been terminated, for the remainder of the initial five (5) year term of this Agreement, without regard to other events occurring thereafter which would cause a termination of employment under this Section 4, except for a violation of Section 5 hereof. Employee shall receive the liquidated damages agreed to herein without any obligation to prove actual damages. 5. Nondisclosure and Noncompetition. a. Employee shall not, during and after the term of this Agreement, directly or indirectly disclose or use at any time any secret or confidential information, knowledge or data of Employer (whether or not obtained, acquired or developed by Employee) without the prior written consent of Employer except as is necessary in the 8 9 ordinary course of performing his duties hereunder. Upon termination of this Agreement, Employee shall turn over to Employer all notes, memoranda, notebooks, drawings or other documents made or compiled by or delivered to him concerning any customers, distributors, sources of supply, products, apparatus or process manufactured, used, developed, investigated, distributed or sold by Employer during the term hereof, it being agreed that all such documents and the information contained therein are and shall remain at all times the property of Employer. b. During and after the term of this Agreement, Employee shall have no right, title or interest in any patent, trademark, trade name or character names belonging to or used by Employer or any material or matter of any sort prepared for or used in connection with product development, advertising, promotion of the products manufactured or distributed by Employer, whether produced, prepared, or published in whole or in part by Employee, nor shall Employee make any claims with respect thereto. Employee recognizes that Employer has and shall continue to have and retain the sole and exclusive rights in any and all of the aforementioned patents, trademarks, trade names, character names, material or matter. c. Except as is necessary in the ordinary course of performing his duties hereunder, during and after the term of this Agreement, Employee will not for any purpose whatsoever use for his personal benefit or disclose, communicate or divulge to, or use for the direct or indirect benefit of, any person, firm, association or other entity other than Employer any programs, trade secrets, forms, formulations, adaptations, list of names and 9 10 addresses of customers or potential customers and/or sources of business or list of names and addresses of sources of supply to Employer made known to Employee or learned or acquired by Employee during the term of this Agreement, except to the extent such information is readily available to the public at large. d. During the term of this Agreement, and for a period of two years thereafter, Employee shall not, for any reason whatsoever, within the United States, directly or indirectly, whether as an employee, owner, partner, agent, director, officer or shareholder of more than five percent (5%) of the equity of any corporation or other entity, do any of the following: (i) Engage in same business or businesses conducted by Employer during and at the end of the term of this Agreement. (ii) Solicit, divert, accept business from or otherwise take away any customer of Employer who is or was a customer of Employer during the term hereof, including all customers directly or indirectly generated or produced by Employee; or (iii) Solicit, induce or contract with any of Employer's employees to leave Employer or to work for Employee or any company with which Employee is connected. If the Employee is terminated without cause or this Agreement is not renewed after the initial five year term, such restrictions shall not apply beyond the initial five year term. e. In the event that Employer terminates Employee's employment hereunder for any reason other than those permitted in Section 4 of this Agreement, the provisions of this Section 5 shall continue in full force and effect during the period that 10 11 Employee is receiving liquidated damages from Employer pursuant to Section 4(d) hereof, and with respect to Section 5(d) hereof, for two years thereafter. 6. Supersedes Other Agreements. This Agreement represents the entire agreement between the parties regarding the subject matter hereof and supersedes and is in lieu of any and all other employment arrangement or agreement, oral or written, between Employer and Employee. 7. Amendments. Any amendment to this Agreement shall be made in writing and signed by the parties hereto. 8. Enforceability. If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. 9. Construction. This Agreement shall be construed and interpreted in accordance with the laws of the State of Wisconsin. 10. Assignment. a. The rights and obligations of Employer under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of Employer. b. This Agreement and the obligations created hereunder may not be assigned by Employee. 11 12 11. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when mailed by certified or registered mail, return receipt requested, addressed to the intended recipient as follows: If to Employee: Ronald Hueneke 7150 Horizon Drive Greendale, Wisconsin 53129 With a copy to: Godfrey & Kahn, S.C. 780 North Water Street Milwaukee, WI 53202-3590 Attention: John A. Dickens, Esquire If to Employer: Escalon Ophthalmics, Inc. Montgomery Knoll 182 Tamarack Circle Skillman, NJ 08558 With a copy to: Duane, Morris & Heckscher 4200 One Liberty Place Philadelphia, PA 19103-7396 Attention: Sheldon M. Bonovitz, Esquire 12 13 Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents. 12. Waiver. No claim or right arising out of a breach or default under this Agreement shall be discharged in whole or in part by a waiver of that claim or right unless the waiver is supported by consideration and is in writing and executed by the aggrieved party hereto or his or its dully authorized agent. A waiver by any party hereto of a breach or default by the other party hereto of any provision of this Agreement shall not be deemed a waiver of future compliance therewith, and such provisions shall remain in full force and effect. 13. Right of Set-Off. Employer shall be permitted to set-off against any amount owed to Employee hereunder any amount with respect to which Employer has made a claim for indemnification against Employee pursuant to, and in accordance with the provision contained in, Section 9(e) of an Agreement and Plan of Merger dated October 4, 1991 between Trek Medical Products and Trek Acquisition Corp. 13 14 IN WITNESS WHEREOF, this Agreement has been executed by the parties on the date first above written. ------------------------------------ Ronald Hueneke ESCALON OPHTHALMICS, INC. By: ------------------------------- Sterling C. Johnson, President 14 -----END PRIVACY-ENHANCED MESSAGE-----