**EMPLOYMENT AGREEMENT**

This Employment Agreement, dated for referencepurposes as of August 5, 2004, is between MENTOR Corporation ("COMPANY"), withits executive offices at 201 Mentor Drive, Santa Barbara, California 93111 andADEL MICHAEL ("EMPLOYEE") of 381 Kingswood Lane, Danville, California, 94506.

**RECITALS**

COMPANY is in the business of manufacturing andselling medical devices and related products. EMPLOYEE has experience in thisbusiness and possesses valuable skills and experience, which will be used inadvancing COMPANY's interests. EMPLOYEE is willing to be engaged by COMPANY andCOMPANY is willing to engage EMPLOYEE, upon the terms and conditions set forthin this Agreement.

**AGREEMENT**

EMPLOYEEand COMPANY, intending to be legally bound, agree as follows:

1.         SERVICES

1.1       General Services.

1.1.1  COMPANY shall employ EMPLOYEE as Vice Chairmanof the Board of Directors of COMPANY , responsible for mergers, acquisitions,legal structures, negotiations, and special projects.  EMPLOYEE shall remain anexecutive employee of the COMPANY during the term of the Agreement.  EMPLOYEEshall perform the duties as needed by COMPANY and at the direction of the Boardof Directors.  These duties shall include, but are not limited to, consultationon issues of strategic importance to the Board of Directors and shareholders;special projects assigned by the Board of Directors; and, as requested,addressing issues of strategic importance to COMPANY's general operations.  Tothe extent that they do not reduce the scope of the responsibilities describedabove, 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. These duties shall hereinafter be referred to as "Services."  EMPLOYEE shallreport directly to the Board of Directors for Mentor Corporation.  

1.1.2  In the event that EMPLOYEE shall from time totime serve COMPANY in any other office during the term of this Agreement,EMPLOYEE shall serve in such capacity without further compensation.  

 

1

----

 

1.1.3.  EMPLOYEE shall devote his entire workingtime, attention, and energies to the business of COMPANY, and shall not, duringthe term of this Agreement, be engaged in any other business activity whetheror not such business activity is pursued for gain, profit or other pecuniaryadvantage, without the prior written consent of the Board of Directors ofCOMPANY.  This shall not be construed as preventing EMPLOYEE from investing hisassets in a form or manner that does not require any services on the part ofEMPLOYEE in the operation or affairs of the entities in which such investmentsare made, or from engaging in such civic, charitable, religious, or politicalactivities that do not interfere with the performance of EMPLOYEE's dutieshereunder.  

1.2       Best Abilities.  EMPLOYEE shallserve COMPANY faithfully and to the best of EMPLOYEE's ability.  EMPLOYEE shalluse EMPLOYEE's best abilities to perform the Services.  EMPLOYEE shall act atall times according to what EMPLOYEE reasonably believes is in the bestinterests of COMPANY.

1.3       Corporate Authority.  EMPLOYEE, asan executive officer, shall comply with all laws and regulations applicable toEMPLOYEE as a result of this Agreement including, but not limited to, theSecurities Act of 1933 and Securities Act of 1934.  Prior to the execution ofthis Agreement, EMPLOYEE has received and reviewed COMPANY's Policies andProcedures and COMPANY's Employee Handbook.  EMPLOYEE shall comply withCOMPANY's Policies and Procedures, and practices now in effect or as lateramended or adopted by COMPANY, as required of similarly-situated executives ofCOMPANY.

2.         TERM

This Agreement shall be effective as of July 1, 2004("Effective Date") and shall continue for a period of one (1) year thereafter("Initial Term"), or until terminated as provided in Section 4 of thisAgreement.  Following the expiration of the Initial Term, this Agreement may berenewed, at the sole discretion of the Board of Directors of the COMPANY, for additionalone (1) year periods (each, respectively, "Renewal Term").  

3.         COMPENSATIONAND BENEFITS

3.1  Compensation.  EMPLOYEE's totalcompensation consists of base salary, bonus potential, continued exercisabilityand vesting of stock options previously granted, and medical and other benefitsgenerally provided to employees of COMPANY.  Any compensation paid to EMPLOYEEshall be pursuant to COMPANY's policies and practices for exempt employees andshall be subject to all applicable laws and requirements regarding the withholdingof federal, state and/or local taxes.  Compensation provided in this Agreementis full payment for Services and EMPLOYEE shall receive no additionalcompensation for extraordinary services unless otherwise authorized. EMPLOYEE's entire compensation package will be reviewed annually by theCompensation Committee of the Board of Directors, a practice which isconsistent with COMPANY's Executive Compensation Program.

 

2

----

 

3.1.1  Base Compensation.  COMPANY agrees topay EMPLOYEE an annualized base salary of Three Hundred Seventy-Five ThousandDollars ($375,000.00), less applicable withholdings, payable in equalinstallments no less frequently than semi-monthly.  

3.1.2  Individualized Performance Bonus.  EMPLOYEEshall be eligible to receive a bonus in an amount equivalent to up to twiceEMPLOYEE's base compensation, which such bonus shall be payable only in theevent of and upon EMPLOYEE's achievement of certain criteria and strategicobjectives, which shall be agreed upon between EMPLOYEE and the Board of Directorsof the COMPANY.

3.1.3     EMPLOYEE shall not be eligible for theCOMPANY's Cash Incentive Bonus program, nor shall EMPLOYEE be granted anyadditional options for COMPANY's stock.

3.2   Business Expenses.  COMPANY shallreimburse EMPLOYEE for business expenses reasonably incurred in performingServices according to COMPANY's Expense Reimbursement Policy.

3.3   Additional Benefits.  COMPANY shallprovide EMPLOYEE those additional benefits normally granted by COMPANY to itsemployees subject to eligibility requirements applicable to each benefit. COMPANY has no obligation to provide any other benefits unless provided for inthis Agreement.  Currently COMPANY provides major medical, dental, life, salarycontinuation, long term disability benefits and eligibility to participate inCOMPANY's 401(k) plan.

3.4   Vacation.  EMPLOYEE shall accruevacation equal to twenty (20) days per year, at the rate of approximately 1.67days per month.  The time or times for such vacation shall be selected byEMPLOYEE and approved by the Board of Directors of COMPANY.

 

3

----

 

3.5   Automobile Expense.  COMPANY will permitEMPLOYEE to select a business automobile (four-door sedan) for lease by COMPANYfor which COMPANY will make lease payments of up to Twelve Hundred Fifty Dollars($1,250.00) per month.  COMPANY shall pay applicable taxes on the automobileand shall obtain motor vehicle insurance in an amount it deems reasonable inits sole discretion.  EMPLOYEE may obtain additional liability insurance at hisown expense if he so chooses.

4. TERMINATION

4.1   Circumstances Of Termination.  ThisAgreement and the employment relationship between COMPANY and EMPLOYEE may beterminated as follows:

4.1.1   Death.  This Agreementshall terminate upon EMPLOYEE's death, effective as of the date of EMPLOYEE'sdeath.

4.1.2      Disability.  COMPANY may, at its option, either suspendcompensation payments or terminate this Agreement due to EMPLOYEE's Disabilityif EMPLOYEE is incapable, even with reasonable accommodation by COMPANY, ofperforming the Services because of accident, injury, or physical or mentalillness for sixty (60) consecutive days, or is unable or shall have failed toperform the Services for a total period of ninety (90) within a twelve (12)month period, regardless of whether such days are consecutive.  If COMPANYsuspends compensation payments because of EMPLOYEE's Disability, COMPANY shallresume compensation payments when EMPLOYEE resumes performance of theServices.  If COMPANY elects to terminate this Agreement due to EMPLOYEE'sDisability, it must first give EMPLOYEE three (3) days advance written notice. 

4.1.3   Discontinuance Of Business. If COMPANY discontinues operating its business, this Agreement shall terminateas of the last day of the month on which COMPANY ceases its entire operationswith the same effect as if that last date were originally established astermination date of this Agreement.

4.1.4  For Cause.  COMPANY may terminate thisAgreement without advance notice for Cause.  For the purpose of this Agreement,"Cause" shall mean any failure to comply in any material respect with thisAgreement or any Agreement incorporated herein; personal or professionalmisconduct by EMPLOYEE (including, but not limited to, criminal activity orgross or willful neglect of duty); breach of EMPLOYEE's fiduciary duty to theCOMPANY; conduct which threatens public health or safety, or threatens to doimmediate or substantial harm to COMPANY's business or reputation; or any othermisconduct, deficiency, failure of performance, breach or default, reasonablycapable of being remedied or corrected by EMPLOYEE.  To the extent that abreach pursuant to this Section 4.1.4 is curable by EMPLOYEE without harm toCOMPANY and/or it's reputation, COMPANY shall, instead of immediately terminatingEMPLOYEE pursuant to this Agreement, provide EMPLOYEE with notice of suchbreach, specifying the actions required to cure such breach, and EMPLOYEE shallhave ten (10) days to cure such breach by performing the actions so specified. If EMPLOYEE fails to cure such breach within the ten (10) day period, COMPANYmay terminate this Agreement without further notice.  COMPANY's exercise of itsright to terminate under this section shall be without prejudice to any otherremedy to which COMPANY may be entitled at law, in equity, or under thisAgreement.

 

4

----

 

4.1.5.    For Convenience of Party;Resignation by EMPLOYEE for Good Reason.  This Agreement and employment relationship is terminable by eitherparty, for convenience, with or without cause, including but not limited toresignation by EMPLOYEE for Good Reason, at any time upon thirty (30) days' advance written notice to the other party. Forpurposes of this Agreement, "Good Reason" shall mean the occurrence of any ofthe following without EMPLOYEE's express written consent: (i) a significantreduction of EMPLOYEE's material duties, position, or responsibilities asprovided in this Agreement, or the removal of EMPLOYEE from the position,duties, and responsibilities contemplated by this Agreement; (ii) a reduction inBase Compensation or Individualized Incentive Bonus other than a one-timereduction of not more than 10% that also is applied to substantially all othersenior executives at the COMPANY; or (iii) a material reduction in EMPLOYEE'sbenefits as compared to the benefits in effect on the Effective Date.  IfCOMPANY terminates this Agreement forconvenience prior to July 1, 2005, or if EMPLOYEE terminates this Agreement forGood Reason prior to said date, COMPANY shall pay EMPLOYEE the basecompensation to which he would have been entitled if he had remained employeduntil July 1, 2005, less applicable withholdings.

4.1.6.    Change of Control.  If employment is terminated within twelve months afterany of the following events, EMPLOYEE shall be entitled to severance compensationpursuant to Section 4.2.5: 

 

5

----

 

(i)         the sale, lease or otherdisposition of all or substantially all of COMPANY's assets to a singlepurchaser or group of related purchasers;

(ii)        the sale, lease or otherdisposition, in one transaction or a series of related transactions of themajority of COMPANY's outstanding capital stock; or,

(iii)       the merger or consolidationof COMPANY into or with another corporation in which the stockholders ofCOMPANY shall own less than fifty (50%) percent of****the votingsecurities of the surviving corporation (all of which events shall be referredto as a Change in Control).

4.2       EMPLOYEE's Rights Upon Termination

4.2.1   Death.  Upon terminationof 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 exceptto distribute to EMPLOYEE's estate or designated beneficiary any unpaidcompensation and reimbursable expenses, less applicable withholdings, owed toEMPLOYEE prior to the date of EMPLOYEE's death.

4.2.2   Disability.   Upontermination of this Agreement because of Disability of EMPLOYEE pursuant toSections 4.1.2 above, COMPANY shall have no further obligation to EMPLOYEEunder the Agreement except to distribute to EMPLOYEE's estate or designatedbeneficiary any unpaid compensation and reimbursable expenses, less applicablewithholdings, owed to EMPLOYEE prior to the date of EMPLOYEE's termination dueto Disability.

4.2.3  Discontinuance Of Business.  Upon termination of this Agreement because ofdiscontinuation of COMPANY's business pursuant to Section 4.1.3, COMPANY shallhave no further obligation to EMPLOYEE under the Agreement except to distributeto EMPLOYEE any unpaid compensation and reimbursable expenses, less applicablewithholdings, owed to EMPLOYEE prior to the date of termination of thisAgreement.  

4.2.4   Termination With Cause. Upon termination of EMPLOYEE's employment for Cause pursuant to Section 4.1.4,COMPANY  shall have no further obligation to EMPLOYEE under this Agreementexcept to distribute to EMPLOYEE:

 

6

----

 

i.  Any compensation and reimbursable expenses owedto EMPLOYEE by COMPANY through the termination date, less applicablewithholdings; and

ii.  Severance compensation as provided for inCOMPANY's Severance Policy, if any, less applicable withholdings.

4.2.5   Termination Without Cause;Resignation for Good Reason.  In the event that, pursuant to Section 4.1.5,(i) COMPANY terminates EMPLOYEE's employment without cause during the InitialTerm or during any Renewal Term, (ii) COMPANY does not elect to renew thisAgreement after the Initial Term or after any Renewal Term, or (iii) EMPLOYEEterminates this Agreement at any time for Good Reason, COMPANY shall have nofurther obligation to EMPLOYEE under this Agreement except to distribute toEMPLOYEE:

i.  Any compensation then due EMPLOYEE in accordancewith Sections 3.1.1 and/or 3.1.2, and any reimbursable expenses owed by COMPANYto EMPLOYEE through the termination date, less applicable withholdings; 

ii.  Severance compensation totaling twenty-four (24)months base pay as provided in Section 3.1.1.  In consideration for thisseverance compensation, EMPLOYEE, on behalf of himself, his agents, heirs,executors, administrators, and assigns, expressly releases and foreverdischarges COMPANY and its successors and assigns, and all of its respectiveagents, directors, officers, partners, employees, representatives, insurers,attorneys, parent companies, subsidiaries, affiliates, and joint ventures, andeach of them, from any and all claims based upon acts or events that occurredon 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, 42U.S.C. '' 2000e, etseq., the Americans with Disabilities Act, 42U.S.C. '' 12101, etseq., the Age Discrimination in EmploymentAct, 29 U.S.C. ''  623, etseq., the Worker Adjustment andRetraining Notification Act, 29 U.S.C. '' 2101, etseq., andthe California Fair Employment and Housing Act, Cal. Gov't Code '' 12940, etseq.  EMPLOYEE acknowledges that he is familiar with section 1542 of theCalifornia Civil Code, which reads as follows:

 

7

----

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OFEXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HISSETTLEMENT WITH THE DEBTOR.

EMPLOYEE expressly acknowledges and agrees that he isreleasing all known and unknown claims, and that he is waiving all rights hehas or may have under Civil Code Section 1542 or under any other statute orcommon law principle of similar effect.  EMPLOYEE acknowledges that thebenefits he is receiving in exchange for this Release are more than thebenefits to which he otherwise would have been entitled, and that such benefitsconstitute valid and adequate consideration for this Release.  EMPLOYEE furtheracknowledges that he has read this Release, understands all of its terms, andhas consulted with counsel of his choosing before signing this Agreement.  

Severance compensation pursuant to this paragraphshall be in lieu of any other severance benefit to which EMPLOYEE wouldotherwise be entitled under COMPANY's policies in effect on the date ofexecution of this Agreement.  Severance compensation shall be paid upontermination of EMPLOYEE's employment and in one lump sum payment at the date oftermination, less applicable withholdings.

iii.  In the event such termination by COMPANYwithout cause, non-renewal of Agreement without cause, or resignation byEMPLOYEE for Good Cause pursuant to Section 4.1.5  occurs within four (4) yearsfollowing the Effective Date,  EMPLOYEE shall continue to be eligible for thebenefits provided for in Section 3.3, and any unvested and unexpired COMPANYstock options previously granted to EMPLOYEE shall continue to vest, until theexpiration of such four-year period following the Effective Date.  Companyshall be entitled to determine, in its sole discretion, the method by whichsuch benefits and options vesting shall continue, including but not limited tothe possibility of continuing to retain EMPLOYEE on the Board of Directors ofthe Company, or entering into a consulting agreement with EMPLOYEE, during suchremaining period.

4.2.6   Termination resulting fromChange of Control.  In the event COMPANY terminates EMPLOYEE's followingChange of Control in accordance with to Section 4.1.6, COMPANY shall have nofurther obligation to EMPLOYEE under this Agreement except to distribute toEMPLOYEE:

 

8

----

 

i.   Any compensation then due EMPLOYEE in accordancewith Sections 3.1.1 and/or 3.1.2, and any reimbursable expenses owed by COMPANYto EMPLOYEE through the termination date, less applicable withholdings; 

ii.  Severance compensation totaling twenty-four (24)months base pay as provided in Section 3.1.1.  In consideration for thisseverance compensation, EMPLOYEE, on behalf of himself, his agents, heirs,executors, administrators, and assigns, expressly releases and foreverdischarges COMPANY and its successors and assigns, and all of its respectiveagents, directors, officers, partners, employees, representatives, insurers,attorneys, parent companies, subsidiaries, affiliates, and joint ventures, andeach of them, from any and all claims based upon acts or events that occurredon 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, 42U.S.C. '' 2000e, etseq., the Americans with Disabilities Act, 42U.S.C. '' 12101, etseq., the Age Discrimination in EmploymentAct, 29 U.S.C. ''  623, etseq., the Worker Adjustment andRetraining Notification Act, 29 U.S.C. '' 2101, etseq., andthe California Fair Employment and Housing Act, Cal. Gov't Code '' 12940, etseq.  EMPLOYEE acknowledges that he is familiar with section 1542 of theCalifornia Civil Code, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OFEXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HISSETTLEMENT WITH THE DEBTOR.

EMPLOYEE expressly acknowledges and agrees that he isreleasing all known and unknown claims, and that he is waiving all rights hehas or may have under Civil Code Section 1542 or under any other statute orcommon law principle of similar effect.  EMPLOYEE acknowledges that the benefitshe is receiving in exchange for this Release are more than the benefits towhich he otherwise would have been entitled, and that such benefits constitutevalid and adequate consideration for this Release.  EMPLOYEE furtheracknowledges that he has read this Release, understands all of its terms, andhas consulted with counsel of his choosing before signing this Agreement.  

 

9

----

 

Severance compensation pursuant to this paragraphshall be in lieu of any other severance benefit to which EMPLOYEE would otherwisebe entitled under COMPANY's policies in effect on the date of execution of thisAgreement.  Severance compensation shall be paid upon termination of EMPLOYEE'semployment and in one lump sum payment at the date of termination, lessapplicable withholdings.

iii.  In the event such termination resulting fromChange of Control pursuant to Section 4.1.6 occurs within four (4) yearsfollowing the Effective Date, EMPLOYEE shall continue to be eligible for thebenefits provided for in Section 3.3 until the expiration of such four-yearperiod following the Effective Date.  Company shall be entitled to determine,in its sole discretion, the method by which such benefits shall continue,including but not limited to the possibility of continuing to retain EMPLOYEEon the Board of Directors of the Company, or entering into a consultingagreement with EMPLOYEE, during such remaining period.  

4.3     Resignation From Board.  Upon termination of this Agreement, EMPLOYEE shallimmediately submit his written resignation from any Board positions to which hehas been appointed or elected.  

5.         REPRESENTATIONSAND WARRANTIES

5.1  Representations of EMPLOYEE.  EMPLOYEErepresents and warrants that EMPLOYEE has all right, power, authority andcapacity, and is free to enter into this Agreement; that by doing so, EMPLOYEEwill not violate or interfere with the rights of any other person or entity;and that EMPLOYEE is not subject to any contract, understanding or obligationthat will or might prevent, interfere with or impair the performance of thisAgreement by EMPLOYEE.  EMPLOYEE shall indemnify and hold COMPANY harmless withrespect to any losses, liabilities, demands, claims, fees, expenses, damagesand costs (including attorneys' fees and court costs) resulting from or arisingout of any claim or action based upon EMPLOYEE's entering into this Agreement.

 

10

----

 

5.2  Representations of COMPANY.  COMPANYrepresents and warrants that it has all right, power and authority, without theconsent of any other person, to execute and deliver, and perform itsobligations under, this Agreement.  All corporate and other actions required tobe taken by COMPANY to authorize the execution, delivery and performance ofthis Agreement and the consummation of all transactions contemplated herebyhave been duly and properly taken.  This Agreement is the lawful, valid andlegally binding obligation of COMPANY enforceable in accordance with its terms.

5.3  Materiality of Representations.  Therepresentations, warranties and covenants set forth in this Agreement shall bedeemed to be material and to have been relied upon by the parties hereto.

6.         COVENANTS

6.1  Nondisclosure and Invention Assignment. EMPLOYEE acknowledges that, as a result of performing the Services, EMPLOYEEshall have access to confidential and sensitive information concerningCOMPANY's business including, but not limited to, their business operations,sales and marketing data, and manufacturing processes.  EMPLOYEE alsoacknowledges that in the course of performing the Services, EMPLOYEE maydevelop new product ideas or inventions as a result of COMPANY's information. Accordingly, to preserve COMPANY's confidential information and to assure itthe full benefit of that information, EMPLOYEE shall, as a condition ofemployment with COMPANY, execute COMPANY's standard form of EmployeeConfidentiality Agreement attached hereto as Exhibit A, and execute updatedversions of the Employee Confidentiality Agreement as it may be modified fromtime to time by COMPANY and as may be required of similarly-situated executivesof COMPANY.  The Employee Confidentiality Agreement is incorporated herein bythis reference.  EMPLOYEE's obligations under the Employee ConfidentialityAgreement continue beyond the termination of this Agreement.

6.2  Covenant Not to Compete.  In addition tothe provisions of the Employee Confidentiality Agreement, EMPLOYEE shall abideby the following covenant not to compete if COMPANY, at its option upon thetermination of this Agreement (regardless of the reason for the termination),exercises this Covenant Not to Compete.  COMPANY shall notify EMPLOYEE withinten (10) days of termination of this Agreement of its intention to exercisethis option and make an additional payment to EMPLOYEE  of six (6) months' basepay determined at EMPLOYEE's last rate of pay with COMPANY.  EMPLOYEE agreesthat 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 apartnership, or as an officer, director, stockholder, employee, orrepresentative of any other entity or individual, engage, directly orindirectly, in any business activity which is the same or similar to workengaged in by EMPLOYEE on behalf of COMPANY within the same geographicterritory as EMPLOYEE's work for COMPANY and which is directly competitive withthe business conducted or to EMPLOYEE's knowledge, contemplated by COMPANY atthe time of termination of this Agreement, as defined in the EmployeeConfidentiality Agreement incorporated into this Agreement by reference. EMPLOYEE may accept employment with an entity competing with COMPANY only ifthe business of that entity is diversified and EMPLOYEE is employed solely withrespect to a separately-managed and separately-operated part of that entity'sbusiness that does not compete with COMPANY.  Prior to accepting suchemployment, EMPLOYEE and the prospective employer entity shall provide COMPANYwith written assurances reasonably satisfactory to COMPANY that EMPLOYEE willnot render services directly or indirectly to any part of that entity'sbusiness that competes with the business of COMPANY.

 

11

----

 

6.3  Covenant to Deliver Records.  Allmemoranda, notes, records and other documents made or compiled by EMPLOYEE, ormade available to EMPLOYEE during the term of this Agreement concerning thebusiness of COMPANY, shall be and remain COMPANY's property and shall bedelivered to COMPANY upon the termination of this Agreement or at any othertime on request.  

6.4  Covenant Not To Recruit.  EMPLOYEE shallnot, during the term of this Agreement and for a period of one (1) yearfollowing termination of this Agreement, directly or indirectly, either onEMPLOYEE'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 anyemployee associated with COMPANY to become affiliated with him or any otherindividual or entity.  

7.         CERTAINRIGHTS OF COMPANY

7.1  Announcement.  COMPANY shall have theright to make public announcements concerning the execution of this Agreementand certain terms thereof.  

7.2  Use of Name, Likeness and Biography. COMPANY shall have the right (but not the obligation) to use, publish andbroadcast, and to authorize others to do so, the name, approved likeness andapproved biographical material of EMPLOYEE to advertise, publicize and promotethe business of COMPANY and its affiliates, but not for the purposes of directendorsement without EMPLOYEE's consent.  An "approved likeness" and"approved biographical material" shall be, respectively, anyphotograph or other depiction of EMPLOYEE, or any biographical information orlife story concerning the professional career of EMPLOYEE.  

 

12

----

 

7.3  Right to Insure.  COMPANY shall have theright to secure in its own name, or otherwise, and at its own expense, life,health, accident or other insurance covering EMPLOYEE, and EMPLOYEE shall haveno right, title or interest in and to such insurance.  EMPLOYEE shall assistCOMPANY in procuring such insurance by submitting to examinations and bysigning such applications and other instruments as may be required by theinsurance carriers to which application is made for any such insurance.

8.         ASSIGNMENT

Neither party may assign or otherwise dispose of itsrights or obligations under this Agreement without the prior written consent ofthe other party except as provided in this Section.  COMPANY may assign andtransfer this Agreement, or its interest in this Agreement, to any affiliate ofCOMPANY or to any entity that is a party to a merger, reorganization, orconsolidation with COMPANY, or to a subsidiary of COMPANY, or to any entitythat acquires substantially all of the assets of COMPANY or of any divisionwith respect to which EMPLOYEE is providing services (providing such assigneeassumes COMPANY's obligations under this Agreement).  EMPLOYEE shall, ifrequested by COMPANY, perform EMPLOYEE's duties and Services, as specified inthis Agreement, for the benefit of any subsidiary or other affiliate ofCOMPANY.  Upon assignment, acquisition, merger, consolidation orreorganization, the term "COMPANY" as used herein shall be deemed to refer tosuch assignee or successor entity.  EMPLOYEE shall not have the right to assignEMPLOYEE's interest in this Agreement, any rights under this Agreement, or anyduties 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 compensationhereunder without the express written consent of COMPANY.   

9.         RESOLUTIONOF DISPUTES

In the event of any dispute arising out of or inconnection with this Agreement or in any way relating to the employment ofEMPLOYEE which leads to the filing of a lawsuit, the parties agree that venueand jurisdiction shall be in Santa Barbara County, California.  The prevailingparty in any such litigation shall be entitled to an award of costs andreasonable attorneys' fees to be paid by the losing party.

10.       GENERALPROVISIONS

10.1  Notices.  Notice under this Agreementshall be sufficient only if personally delivered by a major commercial paiddelivery courier service or mailed by certified or registered mail (returnreceipt requested and postage pre-paid) to the other party at its address setforth in the signature block below or to such other address as may bedesignated by either party in writing.  If not received sooner, notices by mailshall be deemed received five (5) days after deposit in the United States mail.

 

13

----

 

10.2  Agreement Controls.  Unless otherwiseprovided for in this Agreement, the COMPANY's policies, procedures andpractices shall govern the relationship between EMPLOYEE and COMPANY.  If,however, any of COMPANY's policies, procedures and/or practices conflict withthis Agreement (together with any amendments hereto), this Agreement (and anyamendments hereto) shall control.

10.3  Amendment and Waiver.  Any provision ofthis Agreement may be amended or modified and the observance of any provisionmay be waived (either retroactively or prospectively) only by written consentof the parties.  Either party's failure to enforce any provision of thisAgreement shall not be construed as a waiver of that party's right to enforcesuch provision.

10.4  Governing Law.  This Agreement and theperformance hereunder shall be interpreted under the substantive laws of theState of California.

10.5  Force Majeure.  Either party shall betemporarily excused from performing under this Agreement if any force majeureor other occurrence beyond the reasonable control of either party makes suchperformance impossible, except a Disability as defined in this Agreement,provided that the party subject to the force majeure provides notice of suchforce majeure at the first reasonable opportunity.  Under such circumstances,performance under this Agreement which related to the delay shall be suspendedfor the duration of the delay provided the delayed party shall resumeperformance of its obligations with due diligence once the delaying eventsubsides.  In case of any such suspension, the parties shall use their bestefforts to overcome the cause and effect of such suspension.

10.6  Remedies.  EMPLOYEE acknowledges thatbecause of the nature of COMPANY's business, and the fact that the services tobe performed by EMPLOYEE pursuant to this Agreement are of a special, unique,unusual, extraordinary, and intellectual character which give them a peculiarvalue, a breach of this Agreement shall cause substantial injury to COMPANY forwhich money damages cannot reasonably be ascertained and for which moneydamages would be inadequate.  EMPLOYEE therefore agrees that COMPANY shall havethe right to obtain injunctive relief, including the right to have theprovisions of this Agreement specifically enforced by any court having equityjurisdiction, in addition to any other remedies that COMPANY may have.

 

14

----

 

10.7  Severability.  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, thatprovision shall be limited or eliminated to the minimum extent necessary sothis Agreement shall otherwise remain enforceable in full force and effect.

10.8  Construction.  Headings and captions areonly for convenience and shall not affect the construction or interpretation ofthis Agreement.  Whenever the context requires, words, used in the singularshall be construed to include the plural and vice versa, and pronouns of anygender shall be deemed to include the masculine, feminine, or neuter gender.

10.9  Counterpart Copies.  This Agreement maybe signed in counterpart copies, each of which shall represent an originaldocument, and all of which shall constitute a single document.

10.10 No Adverse Construction.  The rule thata contract is to be construed against the party drafting the contract is herebywaived, and shall have no applicability in construing this Agreement or theterms hereof.  

10.11 Entire Agreement.  With respect to itssubject matter, namely, the employment by COMPANY of EMPLOYEE, this Agreement(including the documents expressly incorporated therein, such as the EmployeeConfidentiality Agreement), contains the entire understanding between theparties, and supersedes any prior agreements, understandings, andcommunications between the parties, whether oral, written, implied orotherwise, including, but not limited to, the offer of employment letter datedMarch 3, 2000 and the Employment Agreement dated April 1, 2000.

10.12 Assistance of Counsel.  EMPLOYEEexpressly acknowledges that he was represented by counsel of his own choosingin connection with the negotiation and drafting of the terms of thisAgreement.  

The parties execute this Agreement as of the datestated above:

| ADEL MICHAEL              | MENTOR CORPORATION              |
|---------------------------|---------------------------------|
|                      |                            |
|  /s/ Adel Michael    | /s/ Christopher J. Conway       |
| ADEL MICHAEL              | Christopher J. Conway           |
|                      | Chairman of the Board           |
|                      |                            |
| NOTICE ADDRESS:           | NOTICE ADDRESS:                 |
| 381 KingswoodLane         | 201 Mentor Drive                |
| Danville,California 94506 | Santa Barbara, California 93111 |

 

15