MENTOR CORP /MN/
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>ex10-5.htm
<TEXT>
<html>

<head>


<title>Exhibit 10.5</title>



</head>

<body lang=EN-US>

<p align=center style='text-align:center'><b><u>EMPLOYMENT AGREEMENT</u></b></p>



<p style='text-indent:.5in'>This
Employment Agreement, effective as of August 5, 2004, is by and between MENTOR
Corporation (&quot;COMPANY&quot;), with its executive offices at 201 Mentor Drive, Santa
Barbara, California 93111, and Loren McFarland (&quot;EMPLOYEE&quot;) of 6173 La Goleta
Road, Goleta, California 93117.</p>



<p style='text-indent:.5in'><b>RECITALS</b></p>



<p style='text-indent:.5in'>COMPANY
is in the business of manufacturing and selling medical devices and related
products. EMPLOYEE has experience in this business and possesses valuable
skills and experience, which will be used in advancing COMPANY's interests.
EMPLOYEE is willing to be engaged by COMPANY and COMPANY is willing to engage
EMPLOYEE in an executive capacity responsible for ALL FINANCIAL<b><i> </i></b>functions
of COMPANY, upon the terms and conditions set forth in this Agreement. </p>



<p style='text-indent:.5in'><b>AGREEMENT</b></p>



<p>EMPLOYEE and COMPANY,
intending to be legally bound, agree as follows:</p>



<p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SERVICES</p>



<p style='text-indent:.5in'>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>General
Services.</u></p>



<p style='margin-left:1.0in'>1.1.1&nbsp;
Company shall employ EMPLOYEE as VICE PRESIDENT OF FINANCE/CHIEF FINANCIAL
OFFICER/TREASURER. EMPLOYEE shall perform the duties customarily performed by
one holding such position in a similar business as that engaged in by COMPANY.&nbsp;
To the extent that they do not reduce the scope of the responsibilities
described above, EMPLOYEE's duties may change from time to time on reasonable
notice, based on the needs of COMPANY and EMPLOYEE's skills as determined by
COMPANY.&nbsp; These duties shall hereinafter be referred to as &quot;Services.&quot;&nbsp;
EMPLOYEE shall report directly to the President/CEO of Mentor Corporation.&nbsp; </p>



<p style='margin-left:1.0in'>1.1.2&nbsp;&nbsp; In the event that EMPLOYEE shall from time
to time serve COMPANY as a director or shall serve in any other office during
the term of this Agreement; EMPLOYEE shall serve in such capacities without
further compensation. </p>



<p style='margin-left:1.0in'>1.1.3.&nbsp;
EMPLOYEE shall devote his entire working time, attention, and energies to the
business of COMPANY, and shall not, during the term of this Agreement, be
engaged in any other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage, without the prior written
consent of the Board of Directors of COMPANY.&nbsp; This shall not be construed as
preventing EMPLOYEE from investing his assets in a form or manner that does not
require any services on the part of EMPLOYEE in the operation or affairs of the
entities in which such investments are made, or from engaging in such civic,
charitable, religious, or political activities that do not interfere with the
performance of EMPLOYEE's duties hereunder.&nbsp; </p>



<p align="center">&nbsp;</p>



<p align="center">1</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Best
Abilities.</u>&nbsp; EMPLOYEE shall serve COMPANY faithfully and to the best of
EMPLOYEE's ability.&nbsp; EMPLOYEE shall use EMPLOYEE's best abilities to perform
the Services.&nbsp; Employee shall act at all times according to what EMPLOYEE
reasonably believes is in the best interests of COMPANY.</p>



<p style='margin-left:.5in'>1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Corporate
Authority.</u>&nbsp;&nbsp; EMPLOYEE, as an executive officer, shall comply with all laws
and regulations applicable to EMPLOYEE as a result of this Agreement,
including, but not limited to, the Securities Act of 1933 and Securities Act of
1934. Prior to the execution of this Agreement, EMPLOYEE has received and
reviewed COMPANY's Policies and Procedures and COMPANY's Employee Handbook.&nbsp;
EMPLOYEE shall comply with COMPANY's Policies and Procedures, and practices now
in effect or as later amended or adopted by COMPANY, as required of similarly-situated
executives of COMPANY.</p>



<p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TERM</p>



<p style='text-indent:.5in'>This
Agreement shall commence upon the execution of this Agreement and shall continue
until terminated as provided in Section 4 of this Agreement.&nbsp; </p>



<p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; COMPENSATION
AND BENEFITS</p>



<p style='margin-left:.5in'>3.1&nbsp;
<u>Compensation.</u>&nbsp; EMPLOYEE's total compensation consists of base salary,
bonus potential, stock options, and medical and other benefits generally
provided to employees of COMPANY.&nbsp; Any compensation paid to EMPLOYEE shall be
pursuant to COMPANY's policies and practices for exempt employees and shall be
subject to all applicable laws and requirements regarding the withholding of
federal, state and/or local taxes.&nbsp; Compensation provided in this Agreement is
full payment for Services and EMPLOYEE shall receive no additional compensation
for extraordinary services unless otherwise authorized.&nbsp; EMPLOYEE's entire
compensation package will be reviewed annually by the Compensation Committee of
the Board of Directors, a practice which is consistent with COMPANY's Executive
Compensation Program.</p>



<p style='margin-left:1.0in'>3.1.1&nbsp;
<u>Base Compensation.</u>&nbsp; COMPANY agrees to pay EMPLOYEE an annualized base
salary of TWO HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($250,000.)<i> </i>less
applicable withholdings, payable in equal installments no less frequently than
semi-monthly.&nbsp; </p>



<p align="center">&nbsp;</p>



<p align="center">2</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:1.5in;text-indent:-.5in'>3.1.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Cash Incentive Bonus.</u>&nbsp; EMPLOYEE shall be eligible for a cash incentive
bonus of up to FIFTY (50)<b><i> </i></b>Percent of EMPLOYEE's annual base
salary, subject to applicable withholdings and subject to approval by COMPANY's
Compensation Committee and Board of Directors.&nbsp; Any cash incentive bonus shall
accrue and become payable to EMPLOYEE only if EMPLOYEE is employed with COMPANY
on the last day of the fiscal year for which the cash incentive bonus is
calculated.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>3.1.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Stock Options.</u> Based upon satisfactory performance, under the Plan,
COMPANY expects that EMPLOYEE will qualify for grants of options to acquire
common stock of COMPANY subject to determination by the Board of Directors, of
an amount which is consistent with COMPANY's Executive Compensation Program.&nbsp;
Any such grants shall also be subject to performance considerations as well as
the determination of the Board of Directors.</p>

<p style='margin-left:.5in'>3.2&nbsp;&nbsp;
<u>Business Expenses.</u>&nbsp; COMPANY shall reimburse EMPLOYEE for business
expenses reasonably incurred in performing Services according to COMPANY's Expense
Reimbursement Policy.</p>



<p style='margin-left:.5in'>3.3&nbsp;&nbsp;
<u>Additional Benefits.</u>&nbsp; COMPANY shall provide EMPLOYEE those additional
benefits normally granted by COMPANY to its employees subject to eligibility
requirements applicable to each benefit.&nbsp; COMPANY has no obligation to provide
any other benefits unless provided for in this Agreement. Currently COMPANY
provides major medical, dental, life, salary continuation, long term disability
benefits and eligibility to participate in COMPANY's 401(k) plan.</p>



<p style='margin-left:.5in'>3.4&nbsp;&nbsp;
<u>Vacation.</u>&nbsp; Employee shall accrue vacation equal to TWENTY (20) days per
year, at the rate of approximately 1.67 days per month.&nbsp; The time or times for
such vacation shall be selected by EMPLOYEE and approved by the President and
Chief Executive Officer of COMPANY.</p>



<p>4.&nbsp; TERMINATION</p>



<p style='margin-left:.5in'>4.1&nbsp;&nbsp;
<u>Circumstances Of Termination.</u>&nbsp; This Agreement and the employment
relationship between COMPANY and EMPLOYEE may be terminated as follows:</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.1.1&nbsp; &nbsp; <u>Death.</u>&nbsp; This Agreement shall
terminate upon EMPLOYEE's death, effective as of the date of EMPLOYEE's death.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.1.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Disability.</u>&nbsp; COMPANY may, at its option, either suspend
compensation payments or terminate this Agreement due to EMPLOYEE's Disability
if EMPLOYEE is incapable, even with reasonable accommodation by COMPANY, of
performing the Services because of accident, injury, or physical or mental
illness for ONE HUNDRED EIGHTY (180) consecutive days, or is unable or shall
have failed to perform the Services for a total period of ONE HUNDRED EIGHTY (180)
within a TWELVE (12) month period, regardless of whether such days are
consecutive.&nbsp; If COMPANY suspends compensation payments because of EMPLOYEE's
Disability, COMPANY shall resume compensation payments when EMPLOYEE resumes
performance of the Services.&nbsp; If COMPANY elects to terminate this Agreement due
to EMPLOYEE's Disability, it must first give EMPLOYEE TEN (10) WORKING days
advance written notice. </p>



<p align="center">&nbsp;</p>



<p align="center">3</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.1.3&nbsp; &nbsp; <u>Discontinuance Of Business.</u>&nbsp; If
COMPANY discontinues operating its business, this Agreement shall terminate as
of the last day of the month on which COMPANY ceases its entire operations with
the same effect as if that last date were originally established as termination
date of this Agreement.</p>



<p style='margin-left:1.0in'>4.1.4&nbsp;
<u>For Cause.</u>&nbsp; COMPANY may terminate this Agreement without advance
notice for Cause.&nbsp; For the purpose of this Agreement, &nbsp;&quot;Cause&quot; shall mean
any failure to comply in any material respect with this Agreement or any
Agreement incorporated herein; personal or professional misconduct by
EMPLOYEE (including, but not limited to, criminal activity or gross or willful
neglect of duty); breach of&nbsp; EMPLOYEE's fiduciary duty to the COMPANY;
conduct which threatens public health or safety, or threatens to do
immediate or substantial harm to COMPANY's business or reputation; or
any other misconduct, deficiency, failure of performance, breach or default,
reasonably capable of being remedied or corrected by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EMPLOYEE.&nbsp; To
the extent that a breach pursuant to this Section 4.1.4 is curable by
EMPLOYEE without harm to COMPANY &nbsp;and/or it's reputation, COMPANY
shall, instead of immediately&nbsp; terminating EMPLOYEE pursuant to this
Agreement, provide &nbsp; EMPLOYEE with notice of such breach, specifying the
actions required to cure such breach, and EMPLOYEE shall have ten
(10)  days to cure such breach by performing the actions so specified.&nbsp; If &nbsp;EMPLOYEE
fails to cure such breach within the ten (10) day period, &nbsp; COMPANY may
terminate this Agreement without further notice.&nbsp; COMPANY's
exercise of its right to terminate under this section&nbsp; shall be without
prejudice to any other remedy to which COMPANY may be entitled at law, in
equity, or under this Agreement.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.1.5.&nbsp;&nbsp;&nbsp;
<u>For Convenience Of Party;
Resignation by EMPLOYEE for Good Reason.&nbsp; </u>This Agreement and employment relationship is terminable by either
party, for convenience, with or without cause, including but not limited to
resignation by EMPLOYEE for Good Reason, at any time upon THIRTY (30) days'
advance written notice to the other party. For purposes of this Agreement,
&quot;Good Reason&quot; shall mean the occurrence of any of the following without
EMPLOYEE's express written consent: (i) a significant reduction of EMPLOYEE's
material duties, position,&nbsp; or responsibilities as provided in this Agreement,
or the removal of EMPLOYEE from the position, duties, and responsibilities
contemplated by this Agreement; (ii) a reduction in Base Compensation or Cash
Incentive Bonus<i> </i>other than a one-time reduction of not more than 10%
that also is applied to substantially all other senior executives at the
COMPANY; (iii) a material reduction in EMPLOYEE's benefits as compared to the
benefits in effect on the Effective Date; (iv) EMPLOYEE must perform a
significant portion of his duties at a location other than at COMPANY
headquarters; or (v) COMPANY headquarters are relocated more than 50 miles from
the current location in Santa Barbara, California.</p>



<p align="center">&nbsp;</p>



<p align="center">4</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:1.5in;text-indent:-.5in'><b>4.1.6.&nbsp;&nbsp;&nbsp;</b><u>Change of Control</u>.&nbsp; If employment is terminated within TWELVE (12)
months after the occurrence of any of the events described as a Change of
Control under the provisions of the Long-Term Incentive Plan as then defined at
the time of such Change of Control, &nbsp;EMPLOYEE
shall be entitled to severance
compensation pursuant to Section 4.2.6 (i) and (ii),&nbsp; and (iii).<b> </b></p>

<p style='text-indent:.5in'>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>EMPLOYEE's
Rights Upon Termination</u></p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.2.1 &nbsp;&nbsp; <u>Death</u>.&nbsp; Upon termination of this
Agreement because of death of EMPLOYEE pursuant to Section 4.1.1 above, COMPANY
shall have no further obligation to EMPLOYEE under the Agreement except to
distribute to EMPLOYEE's estate or designated beneficiary any unpaid
compensation and reimbursable expenses, less applicable withholdings, owed to
EMPLOYEE prior to the date of EMPLOYEE's death.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.2.2 &nbsp;&nbsp; <u>Disability.</u>&nbsp;&nbsp; Upon termination of
this Agreement because of Disability of EMPLOYEE pursuant to Sections 4.1.2
above, COMPANY shall have no further obligation to EMPLOYEE under the Agreement
except to distribute to EMPLOYEE's estate or designated beneficiary any unpaid
compensation and reimbursable expenses, less applicable withholdings, owed to
EMPLOYEE prior to the date of EMPLOYEE's termination due to Disability.</p>

<p style='margin-left:1.5in;text-indent:-.5in'>4.2.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Discontinuance Of Business.</u>&nbsp; Upon termination of this Agreement because of
discontinuation of COMPANY's business pursuant to Section 4.1.3, COMPANY shall
have no further obligation to EMPLOYEE under the Agreement except to distribute
to EMPLOYEE any unpaid compensation and reimbursable expenses, less applicable
withholdings, owed to EMPLOYEE prior to the date of termination of this
Agreement. </p>



<p align="center">&nbsp;</p>



<p align="center">5</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.2.4&nbsp; &nbsp; <u>Termination With Cause.</u>&nbsp; Upon
termination of EMPLOYEE's employment for Cause pursuant to Section 4.1.4,
COMPANY&nbsp; shall have no further obligation to EMPLOYEE under this Agreement
except to distribute to EMPLOYEE:</p>



<p style='margin-left:1.5in'>i.&nbsp;
Any compensation and reimbursable expenses owed to EMPLOYEE by COMPANY through
the termination date, less applicable withholdings; and</p>



<p style='margin-left:1.5in'>ii.&nbsp;
Severance compensation as provided for in COMPANY's Severance Policy, if any,
less applicable withholdings.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.2.5&nbsp; &nbsp; <u>Termination Without Cause; Resignation
for Good Reason.</u>&nbsp; Upon termination of EMPLOYEE's employment by COMPANY
without cause pursuant to Section 4.1.5, or if EMPLOYEE terminates this
Agreement at any time for Good Reason, COMPANY shall have no further obligation
to EMPLOYEE under this Agreement except to distribute to EMPLOYEE:</p>



<p style='margin-left:2.0in;text-indent:-.5in'>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any compensation then due EMPLOYEE
in accordance with Section 3.1.1 , and reimbursable expenses owed by COMPANY to
EMPLOYEE through the termination date, less applicable withholdings; and</p>



<p style='margin-left:2.0in;text-indent:-.5in'>ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of full COBRA premium
for TWELVE (12) months following termination.&nbsp; Should EMPLOYEE discontinue
COBRA coverage or elect alternative coverage, a cash payment will not be
provided in lieu of payment of premium; and </p>



<p style='margin-left:2.0in;text-indent:-.5in'>iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance compensation
totaling TWELVE- (12) months base pay, plus ONE (1) month base pay for each
full year of service, determined at EMPLOYEE's then-current rate of base pay. &nbsp;In
consideration for this severance compensation, EMPLOYEE, on behalf of himself,
his agents, heirs, executors, administrators, and assigns, expressly releases
and forever discharges COMPANY and its successors and assigns, and all of its
respective agents, directors, officers, partners, employees, representatives,
insurers, attorneys, parent companies, subsidiaries, affiliates, and joint
ventures, and each of them, from any and all claims based upon acts or events
that occurred on or before the date on which EMPLOYEE accepts the severance
compensation, including any claim arising under any state or federal statute or
common law, including, but not limited to, Title VII of the Civil Rights Act of
1964, 42 U.S.C. &quot; 2000e, <u>et seq</u>., the Americans with Disabilities Act,
42 U.S.C. &quot; 12101, <u>et seq</u>., the Age Discrimination in Employment Act, 29
U.S.C. &quot; 623, <u>et. seq</u>., the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. &quot; 2101, <u>et. seq</u>., and the California Fair
Employment and Housing Act, Cal. Gov't Code &quot; 12940, <u>et seq</u>. EMPLOYEE
acknowledges that he is familiar with section 1542 of the California Civil
Code, which reads as follows:</p>



<p align="center">&nbsp;</p>



<p align="center">6</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-top:0in;margin-right:.5in;margin-bottom:0in;
margin-left:2.0in;margin-bottom:.0001pt'>A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.</p>



<p style='margin-left:2.0in'>EMPLOYEE
expressly acknowledges and agrees that he is releasing all known and unknown
claims, and that he is waiving all rights he has or may have under Civil Code
Section 1542 or under any other statute or common law principle of similar
effect.&nbsp; EMPLOYEE acknowledges that the benefits he is receiving in exchange
for this Release are more than the benefits to which he otherwise would have
been entitled, and that such benefits constitute valid and adequate
consideration for this Release.&nbsp; EMPLOYEE further acknowledges that he has read
this Release, understands all of its terms, and has consulted with counsel of
his choosing before signing this Agreement.&nbsp; </p>



<p style='margin-left:2.0in'>Severance
compensation pursuant to this paragraph shall be in lieu of any other severance
benefit to which EMPLOYEE would otherwise be entitled, under either any other
provision to this Agreement or any COMPANY policies in effect on the date of
execution of this Agreement.&nbsp; Severance compensation shall be paid upon
termination of EMPLOYEE's employment and in one lump sum payment at the date of
termination, less applicable withholdings.</p>



<p style='margin-left:1.5in;text-indent:-.5in'>4.2.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Termination Due to Change
Of Control. </u>&nbsp;&nbsp;If employment is terminated
within TWELVE (12) months AFTER any of the events delineated in Section 4.1.6
of this Agreement (&quot;Change of Control&quot;), COMPANY
shall have no further obligation to EMPLOYEE under this Agreement except to
distribute to EMPLOYEE:</p>



<p align="center">&nbsp;</p>



<p align="center">7</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:2.0in;text-indent:-.5in'>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any compensation then due EMPLOYEE
in accordance with Section 3.1.1&nbsp; and reimbursable expenses owed by COMPANY to
EMPLOYEE through the termination date, less applicable withholdings; and</p>



<p style='margin-left:2.0in;text-indent:-.5in'>ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A pro-rated share of the Cash
Incentive Bonus that would be due to EMPLOYEE if EMPLOYEE had remained employed
with COMPANY through the last day of the fiscal year for which the cash
incentive bonus is calculated, less applicable withholdings and/or any other
applicable bonus or compensation program as approved by the Board of Directors;
and</p>



<p style='margin-left:2.0in;text-indent:-.5in'>iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any options awarded and
pursuant to the Long-Term Incentive Plan applicable to EMPLOYEE's option
award(s); and</p>



<p style='margin-left:2.0in;text-indent:-.5in'>iv.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of full COBRA premium
for TWELVE (12) months following termination. Should EMPLOYEE discontinue COBRA
coverage or elect alternative coverage, a cash payment will not be provided in
lieu of payment of premium; and</p>



<p style='margin-left:2.0in;text-indent:-.5in'><b>v.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b>Severance compensation
totaling TWELVE (12) months base pay, plus ONE (1) month base pay for each full
year of service, determined at EMPLOYEE's then-current rate of base pay.&nbsp; In consideration
for this severance compensation, EMPLOYEE, on behalf of himself, his agents,
heirs, executors, administrators, and assigns, expressly releases and forever
discharges COMPANY and its successors and assigns, and all of its respective
agents, directors, officers, partners, employees, representatives, insurers,
attorneys, parent companies, subsidiaries, affiliates, and joint ventures, and
each of them, from any and all claims based upon acts or events that occurred
on or before the date on which EMPLOYEE accepts the severance compensation,
including any claim arising under any state or federal statute or common law,
including, but not limited to, Title VII of the Civil Rights Act of 1964, 42
U.S.C. '' 2000e, <u>et</u> <u>seq</u>., the Americans with Disabilities Act, 42
U.S.C. '' 12101, <u>et</u> <u>seq</u>., the Age Discrimination in Employment
Act, 29 U.S.C. '' &nbsp;623, <u>et</u> <u>seq</u>., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. ''&nbsp;2101, <u>et</u> <u>seq</u>., and
the California Fair Employment and Housing Act, Cal. Gov't Code ''&nbsp;12940, <u>et</u>
<u>seq</u>.&nbsp; EMPLOYEE acknowledges that he is familiar with section 1542 of the
California Civil Code, which reads as follows:</p>



<p align="center">&nbsp;</p>



<p align="center">8</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:2in'>A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME  OF EXECUTING THE RELEASE,
WHICH IF KNOWN  BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR.</p>



<p style='margin-left:2in'>EMPLOYEE
expressly acknowledges and agrees that he is &nbsp; releasing all known and unknown
claims, and that he is waiving all rights he has or may have under
Civil Code Section 1542 or under any other statute or common law principle
of similar effect.&nbsp; EMPLOYEE acknowledges that the benefits he is
receiving in exchange for this Release are more than the benefits to
which he otherwise would have been entitled, and that such benefits
constitute valid and &nbsp;adequate consideration for this Release.&nbsp; EMPLOYEE further
acknowledges that he has read this Release, &nbsp;understands all of its terms,
and has consulted with counsel of his choosing before signing this
Agreement.</p>



<p style='margin-left:2in'>Severance
compensation pursuant to this paragraph shall be  in lieu of any other
severance benefit to which EMPLOYEE would otherwise be entitled, either under
any provision to this Agreement or&nbsp; any COMPANY policies in effect on the  date
of execution of this Agreement.&nbsp; Severance compensation shall be
paid upon termination of &nbsp;EMPLOYEE's employment and in one lump sum
payment &nbsp; at the date of termination, less applicable withholdings.</p>









<p>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; REPRESENTATIONS
AND WARRANTIES</p>



<p style='margin-left:.5in'>5.1&nbsp;
<u>Representations of EMPLOYEE.</u>&nbsp; EMPLOYEE represents and warrants that
EMPLOYEE has all right, power, authority and capacity, and is free to enter
into this Agreement; that by doing so, EMPLOYEE will not violate or interfere
with the rights of any other person or entity; and that EMPLOYEE is not subject
to any contract, understanding or obligation that will or might prevent,
interfere with or impair the performance of this Agreement by EMPLOYEE.&nbsp;
EMPLOYEE shall indemnify and hold COMPANY harmless with respect to any losses,
liabilities, demands, claims, fees, expenses, damages and costs (including
attorneys' fees and court costs) resulting from or arising out of any claim or
action based upon EMPLOYEE's entering into this Agreement.</p>



<p align="center">&nbsp;</p>



<p align="center">9</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>5.2&nbsp;
<u>Representations of COMPANY.</u>&nbsp; COMPANY represents and warrants that it has
all right, power and authority, without the consent of any other person, to
execute and deliver, and perform its obligations under, this Agreement.&nbsp; All
corporate and other actions required to be taken by COMPANY to authorize the
execution, delivery and performance of this Agreement and the consummation of
all transactions contemplated hereby have been duly and properly taken.&nbsp; This
Agreement is the lawful, valid and legally binding obligation of COMPANY
enforceable in accordance with its terms.</p>



<p style='margin-left:.5in'>5.3&nbsp;
<u>Materiality of Representations.</u>&nbsp; The representations, warranties and
covenants set forth in this Agreement shall be deemed to be material and to
have been relied upon by the parties hereto.</p>







<p>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; COVENANTS</p>



<p style='margin-left:.5in'>6.1&nbsp;
<u>Nondisclosure and Invention Assignment.</u>&nbsp; EMPLOYEE acknowledges that, as
a result of performing the Services, EMPLOYEE shall have access to confidential
and sensitive information concerning COMPANY's business including, but not
limited to, their business operations, sales and marketing data, and
manufacturing processes.&nbsp; EMPLOYEE also acknowledges that in the course of
performing the Services, EMPLOYEE may develop new product ideas or inventions
as a result of COMPANY's information.&nbsp; Accordingly, to preserve COMPANY's
confidential information and to assure it the full benefit of that information,
EMPLOYEE shall, as a condition of employment with COMPANY, execute COMPANY's
standard form of Employee Confidentiality Agreement attached hereto as Exhibit
A, and execute updated versions of the Employee Confidentiality Agreement as it
may be modified from time to time by COMPANY and as may be required of
similarly-situated executives of COMPANY.&nbsp; The Employee Confidentiality
Agreement is incorporated herein by this reference.&nbsp; EMPLOYEE's obligations
under the Employee Confidentiality Agreement continue beyond the termination of
this Agreement.</p>



<p style='margin-left:.5in'>6.2&nbsp;
<u>Covenant Not to Compete.</u>&nbsp; In addition to the provisions of the Employee
Confidentiality Agreement, EMPLOYEE shall abide by the following covenant not
to compete if COMPANY, at its option upon the termination of this Agreement
(regardless of the reason for the termination), exercises this Covenant Not to
Compete.&nbsp; COMPANY shall notify EMPLOYEE within ten (10) days of termination of
this Agreement of its intention to exercise this option and make an additional
payment to EMPLOYEE of six (6) months' base pay determined at EMPLOYEE's last
rate of pay with COMPANY.&nbsp; EMPLOYEE agrees that for a period of one (1) year
following the termination of this Agreement, he shall not directly or
indirectly for EMPLOYEE, or as a member of a partnership, or as an officer,
director, stockholder, employee, or representative of any other entity or
individual, engage, directly or indirectly, in any business activity which is
the same or similar to work engaged in by EMPLOYEE on behalf of COMPANY within
the same geographic territory as EMPLOYEE's work for COMPANY and which is
directly competitive with the business conducted or to EMPLOYEE's knowledge,
contemplated by COMPANY at the time of termination of this Agreement, as
defined in the Employee Confidentiality Agreement incorporated into this
Agreement by reference.&nbsp; EMPLOYEE may accept employment with an entity
competing with COMPANY only if the business of that entity is diversified and
EMPLOYEE is employed solely with respect to a separately-managed and
separately-operated part of that entity's business that does not compete with
COMPANY.&nbsp; Prior to accepting such employment, EMPLOYEE and the prospective
employer entity shall provide COMPANY with written assurances reasonably
satisfactory to COMPANY that EMPLOYEE will not render services directly or
indirectly to any part of that entity's business that competes with the
business of COMPANY.</p>



<p align="center">&nbsp;</p>



<p align="center">10</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>6.3&nbsp;
<u>Covenant to Deliver Records.</u>&nbsp; All memoranda, notes, records and other
documents made or compiled by EMPLOYEE, or made available to EMPLOYEE during
the term of this Agreement concerning the business of COMPANY, shall be and
remain COMPANY's property and shall be delivered to COMPANY upon the
termination of this Agreement or at any other time on request.&nbsp; </p>



<p style='margin-left:.5in'>6.4&nbsp;
<u>Covenant Not To Recruit.</u>&nbsp; EMPLOYEE shall not, during the term of this
Agreement and for a period of one (1) year following termination of this Agreement,
directly or indirectly, either on EMPLOYEE's own behalf, or on behalf of any
other individual or entity, solicit, interfere with, induce (or attempt to
induce) or endeavor to entice away any employee associated with COMPANY to
become affiliated with him or any other individual or entity.&nbsp; </p>



<p>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CERTAIN RIGHTS
OF COMPANY</p>



<p style='margin-left:.5in'>7.1&nbsp;
<u>Announcement.</u>&nbsp; COMPANY shall have the right to make public announcements
concerning the execution of this Agreement and certain terms thereof.&nbsp; </p>



<p style='margin-left:.5in'>7.2&nbsp;
<u>Use of Name, Likeness and Biography.</u>&nbsp; COMPANY shall have the right (but
not the obligation) to use, publish and broadcast, and to authorize others to
do so, the name, approved likeness and approved biographical material of
EMPLOYEE to advertise, publicize and promote the business of COMPANY and its
affiliates, but not for the purposes of direct endorsement without EMPLOYEE's
consent.&nbsp; An &quot;approved likeness&quot; and &quot;approved biographical
material&quot; shall be, respectively, any photograph or other depiction of
EMPLOYEE, or any biographical information or life story concerning the
professional career of EMPLOYEE.&nbsp; </p>



<p align="center">&nbsp;</p>



<p align="center">11</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>7.3&nbsp;
<u>Right to Insure.</u>&nbsp; COMPANY shall have the right to secure in its own
name, or otherwise, and at its own expense, life, health, accident or other
insurance covering EMPLOYEE, and EMPLOYEE shall have no right, title or
interest in and to such insurance.&nbsp; EMPLOYEE shall assist COMPANY in procuring
such insurance by submitting to examinations and by signing such applications
and other instruments as may be required by the insurance carriers to which
application is made for any such insurance.</p>



<p>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ASSIGNMENT</p>



<p style='text-indent:.5in'>Neither
party may assign or otherwise dispose of its rights or obligations under this
Agreement without the prior written consent of the other party except as
provided in this Section.&nbsp; COMPANY may assign and transfer this Agreement, or
its interest in this Agreement, to any affiliate of COMPANY or to any entity
that is a party to a merger, reorganization, or consolidation with COMPANY, or
to a subsidiary of COMPANY, or to any entity that acquires substantially all of
the assets of COMPANY or of any division with respect to which EMPLOYEE is
providing services (providing such assignee assumes COMPANY's obligations under
this Agreement).&nbsp; EMPLOYEE shall, if requested by COMPANY, perform EMPLOYEE's
duties and Services, as specified in this Agreement, for the benefit of any
subsidiary or other affiliate of COMPANY.&nbsp; Upon assignment, acquisition,
merger, consolidation or reorganization, the term &quot;COMPANY&quot; as used herein
shall be deemed to refer to such assignee or successor entity.&nbsp; EMPLOYEE shall
not have the right to assign EMPLOYEE's interest in this Agreement, any rights
under this Agreement, or any duties imposed under this Agreement, nor shall
EMPLOYEE or his spouse, heirs, beneficiaries, executors or administrators have
the right to pledge, hypothecate or otherwise encumber EMPLOYEE's right to
receive compensation hereunder without the express written consent of
COMPANY.&nbsp;&nbsp; </p>



<p>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RESOLUTION OF
DISPUTES</p>



<p style='text-indent:.5in'>In
the event of any dispute arising out of or in connection with this Agreement or
in any way relating to the employment of EMPLOYEE which leads to the filing of
a lawsuit, the parties agree that venue and jurisdiction shall be in Santa
Barbara County, California.&nbsp; The prevailing party in any such litigation shall
be entitled to an award of costs and reasonable attorneys' fees to be paid by
the losing party.</p>



<p>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GENERAL
PROVISIONS</p>



<p style='margin-left:.5in'>10.1&nbsp;
<u>Notices.</u>&nbsp; Notice under this Agreement shall be sufficient only if
personally delivered by a major commercial paid delivery courier service or
mailed by certified or registered mail (return receipt requested and postage
pre-paid) to the other party at its address set forth in the signature block
below or to such other address as may be designated by either party in
writing.&nbsp; If not received sooner, notices by mail shall be deemed received five
(5) days after deposit in the United States mail. </p>



<p align="center">&nbsp;</p>



<p align="center">12</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>10.2&nbsp;
<u>Agreement Controls.</u>&nbsp; Unless otherwise provided for in this Agreement,
the COMPANY's policies, procedures and practices shall govern the relationship
between EMPLOYEE and COMPANY.&nbsp; If, however, any of COMPANY's policies,
procedures and/or practices conflict with this Agreement (together with any
amendments hereto), this Agreement (and any amendments hereto) shall control.</p>



<p style='margin-left:.5in'>10.3&nbsp;
<u>Amendment and Waiver.</u>&nbsp; Any provision of this Agreement may be amended or
modified and the observance of any provision may be waived (either
retroactively or prospectively) only by written consent of the parties.&nbsp; Either
party's failure to enforce any provision of this Agreement shall not be
construed as a waiver of that party's right to enforce such provision.</p>



<p style='margin-left:.5in'>10.4&nbsp;
<u>Governing Law.</u>&nbsp; This Agreement and the performance hereunder shall be
interpreted under the substantive laws of the State of California.</p>



<p style='margin-left:.5in'>10.5&nbsp;
<u>Force Majeure.</u>&nbsp; Either party shall be temporarily excused from
performing under this Agreement if any force majeure or other occurrence beyond
the reasonable control of either party makes such performance impossible,
except a Disability as defined in this Agreement, provided that the party
subject to the force majeure provides notice of such force majeure at the first
reasonable opportunity.&nbsp; Under such circumstances, performance under this
Agreement which related to the delay shall be suspended for the duration of the
delay provided the delayed party shall resume performance of its obligations
with due diligence once the delaying event subsides.&nbsp; In case of any such
suspension, the parties shall use their best efforts to overcome the cause and
effect of such suspension.</p>



<p style='margin-left:.5in'>10.6&nbsp;
<u>Remedies.</u>&nbsp; EMPLOYEE acknowledges that because of the nature of COMPANY's
business, and the fact that the services to be performed by EMPLOYEE pursuant
to this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character which give them a peculiar value, a breach of this
Agreement shall cause substantial injury to COMPANY for which money damages
cannot reasonably be ascertained and for which money damages would be
inadequate.&nbsp; EMPLOYEE therefore agrees that COMPANY shall have the right to
obtain injunctive relief, including the right to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, in
addition to any other remedies that COMPANY may have.</p>



<p style='margin-left:.5in'>10.7&nbsp;
<u>Severability.</u>&nbsp; If any term, provision, covenant, paragraph, or condition
of this Agreement is held to be invalid, illegal, or unenforceable by any court
of competent jurisdiction, that provision shall be limited or eliminated to the
minimum extent necessary so this Agreement shall otherwise remain enforceable
in full force and effect.</p>



<p style='margin-left:.5in'>10.8&nbsp;
<u>Construction.</u>&nbsp; Headings and captions are only for convenience and shall
not affect the construction or interpretation of this Agreement.&nbsp; Whenever the
context requires, words, used in the singular shall be construed to include the
plural and vice versa, and pronouns of any gender shall be deemed to include
the masculine, feminine, or neuter gender.</p>



<p align="center">&nbsp;</p>



<p align="center">13</p>



<hr color="#000080"> <p style="page-break-after: always"></p>



<p align="center">&nbsp;</p>



<p style='margin-left:.5in'>10.9&nbsp;
<u>Counterpart Copies.</u>&nbsp; This Agreement may be signed in counterpart copies,
each of which shall represent an original document, and all of which shall
constitute a single document.</p>



<p style='margin-left:.5in'>10.10
<u>No Adverse Construction.</u>&nbsp; The rule that a contract is to be construed
against the party drafting the contract is hereby waived, and shall have no
applicability in construing this Agreement or the terms hereof.&nbsp; </p>



<p style='margin-left:.5in'>10.11
<u>Entire Agreement.</u>&nbsp; With respect to its subject matter, namely, the
employment by COMPANY of EMPLOYEE, this Agreement (including the documents
expressly incorporated therein, such as the Employee Confidentiality
Agreement), contains the entire understanding between the parties, and
supersedes any prior agreements, understandings, and communications between the
parties, whether oral, written, implied or otherwise, including, but not
limited to, the original offer of employment letter.</p>



<p style='margin-left:.5in'>10.12
<u>Assistance of Counsel</u>.&nbsp; EMPLOYEE expressly acknowledges that he was
given the right to be represented by counsel of his own choosing in connection
with the terms of this Agreement.</p>





<p style='margin-left:.5in;text-indent:-.5in'>The parties execute this Agreement as of the date
stated below:</p>





<div align="left">
  <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="740" id="AutoNumber1">
    <tr>
      <td width="369">





<p style='margin-left:.5in;text-indent:-.5in'>EMPLOYEE<b>/</b>DATE</p>









      </td>
      <td width="371">MENTOR
CORPORATION/DATE</td>
    </tr>
    <tr>
      <td width="369">









/s/ Loren McFarland</td>
      <td width="371">By /s/ Joshua Levine</td>
    </tr>
    <tr>
      <td width="369">Loren McFarland/Date</td>
      <td width="371">Joshua
Levine/Date</td>
    </tr>
    <tr>
      <td width="369">&nbsp;</td>
      <td width="371">President/CEO</td>
    </tr>
    <tr>
      <td width="369">&nbsp;</td>
      <td width="371">Mentor
Corporation</td>
    </tr>
    <tr>
      <td width="369">&nbsp; </td>
      <td width="371">&nbsp; </td>
    </tr>
    <tr>
      <td width="369">

<p style='margin-top:0in;margin-right:-13.5pt;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt'>&nbsp;
</p>



      </td>
      <td width="371">&nbsp;</td>
    </tr>
    <tr>
      <td width="369">



<p style='margin-left:.5in;text-indent:-.5in'>NOTICE ADDRESS</p>

      </td>
      <td width="371">NOTICE
ADDRESS:</td>
    </tr>
    <tr>
      <td width="369">

<p style='margin-left:.5in;text-indent:-.5in'>6173 La Goleta  </p>

      </td>
      <td width="371">201
Mentor Drive</td>
    </tr>
    <tr>
      <td width="369">

<p style='margin-left:.5in;text-indent:-.5in'>Goleta, California 93117&nbsp;</p>

      </td>
      <td width="371">Santa
Barbara, California 93111</td>
    </tr>
  </table>
</div>



<p align="center">&nbsp;</p>



<p align="center">14</p>



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