Exhibit 10.1

June 30, 2005

Barry G. Caldwell
4500 Lakeside Drive
Colleyville, Texas 76034

Dear Barry:

On behalf of the Board of Directors of IRIDEX Corporation, we are pleased to
present our offer to you to become the new President and Chief Executive Officer
of IRIDEX Corporation, and a member of the IRIDEX Board of Directors.

We have all enjoyed getting to know you, and look forward very much to welcoming
you and Trena to IRIDEX. All of us have been impressed with your personal
stature and character, your skills, and your achievements. We are convinced that
you are very well qualified to help lead IRIDEX to continued growth and success.
We also believe becoming President and CEO of IRIDEX is an outstanding and
timely opportunity for you to capitalize upon your talents and track record to
date, and for you to continue to attain your personal, career, and financial
goals.

Position and Duties:

Your title will be President and Chief Executive Officer. As CEO you will be
responsible for all strategic, operational, and financial aspects of running the
Company, as well as all duties customary to such position and such duties as may
be assigned to you by the Board, and you will be held accountable for delivering
the growth in shareholder value and other results expected by the Board and its
owners.

Careful thought has been given to compensation arrangements that would be
appropriate to your professional stature and to IRIDEX precedents and policies.
Accordingly, we offer you the following:

Compensation:

Salary: $11,538.47 per bi-weekly pay period (annualized to $300,000 per year).

Stock Options:

In addition to your salary, the Board of Directors has approved the following
grant of stock options, conditional upon your acceptance of this offer:

  •   Number: 300,000 Shares of IRIDEX Common Stock, approximately 4.1 % of the
7,317,000 weighted shares outstanding as reported in our Q1 financial
statements.     •   Vesting: These options will vest over a period of 48 months
and may be exercised by you in the following manner:

      ® 12/48 (75,000) shares at one year, after your date of hire.         ®
1/48 (6,250) shares per month thereafter.

  •   Option Price: Fair market value on the trading day prior to your starting
employment at IRIDEX. (i.e. If you start on July 5, 2005, the last trading day
would be July 1, 2005)     •   Incentive Stock options (ISO) and Non-qualified
(NQ) stock options: Based on current regulations only the first $100,000 of
aggregate market value of the stock options (exercise price x # of shares) may
be Incentive Stock options for any calendar year. Therefore IRIDEX will grant
you Incentive stock options up to this allowed maximum with the balance of your
option grant being Non-qualified stock options. For example, if the fair market
value of the shares were about $6.20/share then about 65,000 shares would be
ISOs and 235,000 would be NQ options.

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Incentive Compensation:

You will participate in IRIDEX’ profit and executive bonus programs as currently
constituted, and as they may be changed or amended in the future.

Other Benefits:

Insurance is available for health, dental, and prescriptions currently at a cost
of 15% of the monthly premium. The company provides for life, short-term and
long-term disability insurance, and business travel insurance. You may
participate in the 401-k Plan beginning on the following entry dates: January 1,
April 1, July 1 and October 1. Compensation for sick time is accrued in
accordance with the IRIDEX Sick Time policy. Three weeks of paid time off for
vacation is earned during your first year of employment and is accrued on a
monthly basis from your date of hire. After five years of employment, your
vacation accrual will increase as per the IRIDEX vacation policy. IRIDEX also
compensates their eligible employees for ten holidays per year. You may
participate in the Employee Stock Purchase Plan at the next enrollment date,
August 15, 2005.

Relocation:

In anticipation of you establishing full-time residence near Mountain View,
California, IRIDEX will reimburse the ordinary and necessary living, housing and
moving expenses as itemized below. In most cases such reimbursed expenses will
be grossed up by 44% to cover state and federal taxes. However, those reimbursed
expenses which you are entitled to take as itemized deductions in your 1040,
i.e. moving expenses will not be grossed up.

  •   For up to 12 months prior to your move to California:

  o   Temporary Housing     o   Two roundtrip flights per month from the Bay
Area to Fort Worth or vice versa for either you or Trena.

  •   Customary Selling costs associated with home sale in Texas not paid by the
buyer: (including commissions, legal fees, transfer taxes, mortgage prepayment
penalties, brokerage fees, title insurance, and other standard non-recurring
fees.)     •   Customary Closing costs associated with purchase of home in
California not paid by the seller: (including commissions, legal fees, transfer
taxes, brokerage fees, title insurance, and non-recurring fees. In addition
IRIDEX will reimburse you up to a maximum of a one point lending fee on your
mortgage loan.)     •   Moving Expenses:

  o   Packing, unpacking, insuring, and transporting of household and personal
goods (including 2 cars)     o   Storage (up to a maximum of three months)

If, for any reason, you voluntarily terminate your employment within twelve
(12) months from your hire date, these paid expenses will be reimbursed to
IRIDEX on a prorated basis.

Please note that this offer of employment is made “at will” in which either you
or the Company may terminate employment at any time with or without cause, with
or without notice, and for any reason or no reason. Any contrary representations
or agreements, which may have been made to you are superseded by this offer.

This offer is contingent upon your completing, signing and returning the
enclosed Change of Control and Severance Agreement; Employment Application;
Employment, Confidential Information, Invention Assignment, and Arbitration
Agreement; and providing verification of eligibility to work in the United
States in accordance with the provisions of the Immigration Reform and Control
Act of 1986 before starting work.

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You agree that, during the term of your employment with the Company, you will
not engage in any other employment, occupation, consulting or other business
activity directly related to the business in which the Company is now involved
or becomes involved during the term of your employment, nor will you engage in
any other activities that conflict with your obligations to the Company. Before
undertaking any proposed professional activities outside your duties at IRIDEX,
you shall first obtain Board approval. Similarly, you agree not to bring any
third party confidential information to the Company, including that of any
former employer, and that in performing your duties for the Company you will not
in any way utilize any such information.

To indicate your acceptance of the Company’s offer, please sign and date this
letter in the space provided below, sign the enclosed Change of Control and
Severance Agreement; Employment Application; the Employment, Confidential
Information, Invention Assignment, and Arbitration Agreement; and return them to
me. Duplicate originals are enclosed for your records. This letter, along with
the Change of Control and Severance Agreement; Employment Application and the
Employment, Confidential Information, Invention Assignment, and Arbitration
Agreement, set forth the terms of your employment with the Company and supersede
any prior representations or agreements, whether written or oral. This letter
may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument. This letter
may not be modified, amended or superseded except by a written agreement, signed
by the Company and by you and approved by the Compensation Committee of the
Board of Directors.

Barry, we look forward to your prompt acceptance of our offer, and to your
joining IRIDEX full-time as of July 5, 2005. We would appreciate your early
response to this offer, and in any event by close of business on July 1, 2005,
after which time this offer shall expire. We have very high expectations that
your capabilities, experience, and winning attitude will make you an outstanding
contributor on the IRIDEX team.

     
 
  Sincerely,
 
   
 
  /s/ Donald L. Hammond
 
   
 
  Donald L. Hammond
 
  Chairman of the Board
 
   
 
  /s/ Theodore A. Boutacoff
 
   
 
  Theodore A. Boutacoff
 
  President & CEO
 
   
AGREED AND ACCEPTED:
   
 
   
/s/ Barry G. Caldwell
 
           Barry G. Caldwell
   
 
   
July 5, 2005
 
          Date
   

Enclosures:

•   Second signature copy of this letter   •   Employment Application   •  
Change of Control and Severance Agreement   •   Employment, Confidential
Information, Invention Assignment and Arbitration Agreement

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