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<title>Mentor Corporation - Form 8-K</title>







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<b>UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION<br></b></font>
<font face="Times New Roman">Washington, DC 20549</font></p>
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<b>FORM 8&#8209;K</b></font></p>
<p align=center style='text-align:center'><font face="Times New Roman" size="2">CURRENT REPORT<br>Pursuant to Section 13 or 15(d) of<br>the Securities Exchange Act of 1934</font></p>
<p align=center style='text-align:center'><font face="Times New Roman" size="2">Date of Report (Date of
earliest event reported)<br></font><font face="Times New Roman" size="4"><b>June 24,
2006</b></font></p>
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<p align=center style='text-align:center'><font face="Times New Roman" size="4">
<b>MENTOR CORPORATION<br></b></font><font face="Times New Roman" size="2">(Exact
name of registrant as specified in its charter)</font></p>
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			<font face="Times New Roman" size="2"><b><u>Minnesota</u></b></font></p>
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			<p><font face="Times New Roman" size="2"><b>&nbsp;</b></font></p>
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			<p align=center style='text-align:center'>
			<font face="Times New Roman" size="2"><b><u>001-31744</u></b></font></p>
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			<p><font face="Times New Roman" size="2"><b>&nbsp;</b></font></p>
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			<p align=center style='text-align:center'>
			<font face="Times New Roman" size="2"><b><u>41-0950791</u></b></font></p>
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			<font face="Times New Roman" size="2">(State or other
  jurisdiction of incorporation)</font></p></td>
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			<p align=center style='text-align:center'>
			<font face="Times New Roman" size="2">(Commission File
  Number)</font></p></td>
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			<p align=center style='text-align:center'>
			<font face="Times New Roman" size="2">(IRS Employer<br>Identification No.)</font></p>
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<p align=center style='text-align:center'><font face="Times New Roman" size="2">
<b>201 Mentor Drive<br>Santa
  Barbara,
 California&nbsp; 93111<br></b>(Address
of principal executive offices, including zip code)</font></p>
<p align=center style='text-align:center'><font face="Times New Roman" size="2">
<b>(805) 879-6000<br></b>(Registrant's
telephone number, including area code)</font></p>
<p><font face="Times New Roman" size="2">Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):</font></p>
<p><font face="Times New Roman" size="2">[&nbsp;
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></p>
<p><font face="Times New Roman" size="2">[&nbsp;
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>
<p><font face="Times New Roman" size="2">[&nbsp;
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))</font></p>
<p><font face="Times New Roman" size="2">[&nbsp;
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))</font></p>



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<p><b><font face="Times New Roman" size="2">Item 1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Entry
into a Material Definitive Agreement.</font></b></p>
<p style='margin-top:12.0pt;text-indent:.5in'>
<font face="Times New Roman" size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On June&nbsp;24, 2006, the Compensation
Committee (the &quot;Compensation Committee&quot;) of the Board of Directors of Mentor
Corporation (the &quot;Company&quot;) approved the employment agreement and compensation
package for Joseph A. Newcomb, the Company's Vice President, General Counsel
and Secretary, contingent upon him commencing employment.&nbsp; A copy of the press
release issued by the Company regarding Mr. Newcomb's employment is attached
hereto as Exhibit 99.1.&nbsp; The Terms of Mr. Newcomb's compensation are as
follows:</font></p>
<p style='margin-left:0in;text-indent:1in;line-height:10.85pt'>
<font face="Times New Roman" size="2">i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
Newcomb will receive an annual base salary of $300,000 and be eligible to
receive bonuses of up to 75% of his base salary.&nbsp; Bonuses will be paid in
accordance with the criteria established by the Compensation Committee for the
Fiscal Year 2007 Bonus Plan.</font></p>
<p style='margin-top:12.0pt;margin-left:0in;text-indent:1in'>
<font face="Times New Roman" size="2">ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee granted Mr. Newcomb an option to acquire 125,000 shares
of the Company's common stock under the Company's 2005 Long Term Incentive Plan
(the &quot;Plan&quot;).&nbsp; The option vests over four years with one-fourth of the shares
vesting on the first anniversary of the date of grant and the remaining shares
vesting in equal monthly installments over the 36 months thereafter.&nbsp; The per
share exercise price of the option is $41.04, the closing sales price of the
Company's common stock on the New York Stock Exchange on June&nbsp;26, 2006, the
first day of Mr. Newcomb's employment.</font></p>
<p style='margin-top:12.0pt;margin-left:0in;text-indent:1in'>
<font face="Times New Roman" size="2">iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee also granted Mr. Newcomb 20,000 shares of restricted
stock valued at the fair market value of $41.04 per
share, the closing price of the Company's common stock on the New York Stock
Exchange as of the Award Date.&nbsp; The
Restricted Stock is subject to the terms of the Plan and an individual
Restricted Stock Award Agreement (the &quot;Award Agreement&quot;) to be
executed by Mr. Newcomb (the &quot;Participant&quot;) as summarized below.
</font></p>
<p style="text-indent: .5in; margin-top: 12.0pt">
<font face="Times New Roman" size="2">In accordance with the Award
Agreement and subject to its terms, the Restricted Stock shall vest, and
restrictions shall lapse, with respect to one-fifth of the total number of
shares of Restricted Stock on each of the first, second, third, fourth and fifth
anniversaries of the Award Date.&nbsp; The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Restricted Stock. Any unvested
shares of Restricted Stock or any interest therein, generally may not be sold,
assigned, pledged or otherwise disposed of, alienated or encumbered.&nbsp; The
Participant shall be entitled to cash dividends and voting rights with respect
to the shares of Restricted Stock he has been granted even if such Restricted
Stock is unvested </font> </p>
<p style="text-align:justify;text-indent:.5in">
<font face="Times New Roman" size="2">By accepting the grant of Restricted
Stock and executing the Award Agreement, the Participant agrees to be bound by
the stock ownership guidelines set forth in the Award Agreement.&nbsp; The
Participant agrees to attain, by no later than the fifth anniversary of the
Award Date, a level of stock ownership (&quot;Ownership Threshold&quot;) at least equal to
two times the Participant's annual base salary, calculated by dividing (i) the
product of the Participant's salary times two by (ii) the fair market value of a
share of the Company's common stock on the Award Date.&nbsp; Under the Award
Agreement, the Participant further agrees to maintain this Ownership Threshold
throughout the remainder of the Participant's employment or service with the
Company and its subsidiaries. </font> </p>
<p style="margin-top:12.0pt;text-align:justify;text-indent:
..5in"><font face="Times New Roman" size="2">The Award Agreement also
provides for additional restrictions upon the vesting of the Restricted Stock
(and subject to any applicable laws or regulations and the Company's insider
trading policies), during the 5-year vesting period (&quot;Additional
Restrictions&quot;).&nbsp; Specifically, the Participant may only transfer up to 40% of
his vested shares of Restricted Stock in the aggregate to cover tax consequences
of such vesting, which such transfer restriction shall terminate on the earlier
of: (a) the fifth anniversary of the Award Date, or (b) the Participant's
severance date. <i>&nbsp; </i></font></p>
<p style="text-indent: 0.5in">
<font face="Times New Roman" size="2">The
Company's Board of Directors retains the right, in its sole discretion to reduce
or waive any Participant's Ownership Threshold or the Additional Restrictions.</font></p>



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<p style="margin-right:.5pt;text-align:justify;text-indent:
..5in"><font face="Times New Roman" size="2">If the Participant ceases to be
employed or ceases to provide services to the Company, the Participant's
unvested Restricted Stock shall be forfeited to the Company regardless of the
reason for the Participant's termination.&nbsp; Notwithstanding the foregoing, if a
Change in Control Event (as defined in the Award Agreement) occurs and any
unvested shares of Restricted Stock do not automatically accelerate or become
fully vested in connection with the Change in Control Event, and if, within 12
months of the date of the Change in Control Event the Participant is terminated
by the Company or any subsidiary for any reason other than for Cause (as defined
in the Award Agreement) or as a result of the Participant's resignation for Good
Reason (as defined in the Award Agreement), the Restricted Stock shall become
fully vested upon the Participant's termination. </font> </p>
<p style="text-align: justify; text-indent: 1in; margin-left: 0in">

<font face="Times New Roman" size="2">i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the terms of the
Company's standard executive employment agreement, into which Mr. Newcomb
entered upon commencement of his employment, he will be entitled to the
following in addition to the salary, bonus, option grant and restricted stock
grants described above:</font></p>
<ul type="disc" style="margin-bottom: 0in">
	<li class="MsoNormal" style="color: black; text-align: justify">
	<font face="Times New Roman" size="2">With respect to the provisions related to
	termination without cause or resignation for Good Reason (as described
	below), the employment agreement provides for:
	</font>
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		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">payment of full COBRA premiums for 24
		months following a termination; </font> </li>
		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">severance compensation to be calculated
		as a flat 36 months' severance, determined at the executive officer's
		then current rate of base pay; and </font> </li>
		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">a pro-rated amount, based on timing of
		the executive officer's termination or resignation relative to the end
		of the then current fiscal year, of the target bonus percentage
		applicable to the executive officer. </font> </li>
	</ul>
	</li>
</ul>
<ul type="disc" style="margin-bottom: 0in">
	<li class="MsoNormal" style="color: black; text-align: justify">
	<font face="Times New Roman" size="2">With respect to the provisions related to
	termination due to change of control, the employment agreement provides for:

	</font>

	<ul type="circle" style="margin-bottom: 0in">
		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">payment of full COBRA premiums for 24
		months following a termination; </font> </li>
		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">severance compensation to be calculated
		as a flat 36 months' severance, determined at the executive officer's
		then current rate of base pay; and </font> </li>
		<li class="MsoNormal" style="color: black; text-align: justify">
		<font face="Times New Roman" size="2">100% of the target bonus percentage
		applicable to the executive officer. </font> </li>
	</ul>
	</li>
</ul>
<p style="text-align: justify; text-indent: .5in">
<font face="Times New Roman" size="2">For purposes of the employment
agreement, &quot;Good Reason&quot; means the
occurrence of any of the following without Mr. Newcomb's express written
consent: (i) a significant reduction of Mr. Newcomb's material duties,
position,&nbsp; or responsibilities as provided in the employment agreement, or the
removal of Mr. Newcomb from the position, duties, and responsibilities
contemplated by the employment agreement; (ii) a reduction in Mr. Newcomb's
salary or 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 Mr. Newcomb's benefits as compared to the benefits
in effect on June 26, 2006; (iv) Mr. Newcomb must perform a significant portion
of his duties at a location other than Company headquarters; or (v) Company
headquarters are relocated more than 50 miles from the current location in Santa
Barbara, California.&nbsp; </font> </p>
<p style="text-align: justify; text-indent: .5in">
<font face="Times New Roman" size="2">For purposes of the employment agreement, &quot;Change
of Control&quot; shall be as defined under the provisions of the applicable equity or
other long-term incentive plan in effect at the time of such Change of Control.</font></p>
<p style="text-align: justify; text-indent: .5in">
<font face="Times New Roman" size="2">A copy of Mr. Newcomb's employment agreement is
attached hereto as Exhibit 10.1 and the prior description is qualified entirely
by such agreement, which is deemed incorporated by reference herein.</font></p>
<p style="text-indent: 0.5in; line-height: 10.85pt">
<font face="Times New Roman" size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On June&nbsp;24, 2006, the Compensation
Committee approved a separation and release agreement and a consulting agreement
for A. Christopher Fawzy, the Company's former Vice President, General Counsel
and Secretary, following his resignation with the Company.</font></p>
<font face="Times New Roman" size="2">Pursuant to the
terms of Mr. Fawzy's separation and release agreement, he will receive a
severance payment equal to 36 months of his base salary and a payment for a pro
rated bonus equal to one-third of his eligible bonus amount for fiscal 2007.&nbsp;
Mr. Fawzy will be entitled to payments of COBRA premiums for up to 24 months.&nbsp;
Mr. Fawzy executed a release of claims in favor of the Company and agreed not to
solicit the Company's employees for a period of 12 months.</font><p style='text-indent:.5in;line-height:10.85pt'>
<font face="Times New Roman" size="2">&nbsp; </font></p>



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<p style="text-indent: .5in; line-height: 10.85pt">
<font face="Times New Roman" size="2">Pursuant to the terms of the consulting agreement
with Mr. Fawzy, he will provide consulting services from the date of the
agreement through October&nbsp;31, 2007.&nbsp; Through December 31, 2006, Mr. Fawzy will
receive a flat fee of $9,000 per month for up to 36 hours of consulting services
and a fee of $250 per hour for any additional services thereafter.&nbsp; After
January 1, 2007, Mr. Fawzy will receive a flat fee of $2,400 per month for up to
8 hours of consulting services and a fee of $300 per hour for any additional
services thereafter.&nbsp; Mr. Fawzy will be eligible to receive additional payments
totaling $120,000 as certain milestones are met.&nbsp; Mr. Fawzy's unvested options
and restricted stock awards will continue to vest during his consulting period.&nbsp;
</font>
</p>
<p style="text-align: justify; text-indent: .5in">
<font face="Times New Roman" size="2">Copies of Mr. Fawzy's separation and release
agreement and consulting agreement are attached hereto as Exhibits 10.2 and
10.3, respectively, and the prior description is qualified entirely by such
agreements, which are deemed incorporated by reference herein.</font></p>
<p style="text-indent: 0.5in"><font face="Times New Roman" size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
June&nbsp;24, 2006, the Compensation Committee also approved the performance based
awards (the &quot;PSUs&quot;) under the Company's 2005 Long Term Incentive Plan.&nbsp; The PSUs
will vest subject to the attainment of specified targets for &quot;total shareholder
return&quot; as defined by the Compensation Committee from June&nbsp;24, 2006 to March&nbsp;31,
2009 and participants will receive as little as zero shares if less than 85% of
the total shareholder return criteria is met, up to 200% of the targeted number
of shares if the total shareholder return meets or exceeds 150% of the targeted
criteria. &nbsp;The PSU awards made were as follows:<br>
&nbsp;</font></p>
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			<font face="Times New Roman" size="2">
			<br>
			<u>Name of Grantee</u></font></td>
			<td width=181 valign=top style='width:136.0pt;padding:0in 5.4pt 0in 5.4pt' align="center">
			<font face="Times New Roman" size="2">Total No. of<br>
			<u>Targeted Units at 200%</u></font></td>
		</tr>
		<tr>
			<td width=314 valign=top style='width:235.85pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2"><br>
			Kathleen M.
  Beauchamp<br>Vice President, Sales &amp; Marketing<br>
&nbsp;</font></p></td>
			<td width=181 valign=top style='width:136.0pt;padding:0in 5.4pt 0in 5.4pt'>
			<p align=center style='margin-top:2.0pt;margin-right:0in;
  margin-bottom:6.0pt;margin-left:0in;text-align:center'>
			<font face="Times New Roman" size="2"><br>
			50,000</font></p></td>
		</tr>
		<tr>
			<td width=314 valign=top style='width:235.85pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">Loren L.
  McFarland <br>Vice President, Treasurer and Chief Financial Officer<br>
&nbsp;</font></p></td>
			<td width=181 valign=top style='width:136.0pt;padding:0in 5.4pt 0in 5.4pt'>
			<p align=center style='margin-top:2.0pt;margin-right:0in;
  margin-bottom:6.0pt;margin-left:0in;text-align:center'>
			<font face="Times New Roman" size="2">50,000</font></p></td>
		</tr>
		<tr>
			<td width=314 valign=top style='width:235.85pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">Joseph A. Newcomb<br>Vice President, General Counsel and Secretary<br>
&nbsp;</font></p></td>
			<td width=181 valign=top style='width:136.0pt;padding:0in 5.4pt 0in 5.4pt'>
			<p align=center style='margin-top:2.0pt;margin-right:0in;
  margin-bottom:6.0pt;margin-left:0in;text-align:center'>
			<font face="Times New Roman" size="2">50,000</font></p></td>
		</tr>
		<tr>
			<td width=314 valign=top style='width:235.85pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">Cathy
  Ullery <br>Vice President, Human Resources<br>
&nbsp;</font></p></td>
			<td width=181 valign=top style='width:136.0pt;padding:0in 5.4pt 0in 5.4pt'>
			<p align=center style='margin-top:2.0pt;margin-right:0in;
  margin-bottom:6.0pt;margin-left:0in;text-align:center'>
			<font face="Times New Roman" size="2">50,000</font></p></td>
		</tr>
	</table></div>
<p style="text-indent: .5in; margin-top: 12.0pt">
<font face="Times New Roman" size="2">Pursuant to the terms of
the Plan and the Executive Performance Stock
Unit Award Agreement (the &quot;PSU Award Agreement&quot;), the
PSUs shall vest as to an applicable percentage of the award if, during a period
from June&nbsp;23, 2006 to March&nbsp;31, 2009, the change in the market price of the
Company's common stock on the New York Stock Exchange relative to the total
change in price of the Russell 2500 Growth Index (such quotient, the &quot;TSR
Percentage&quot;).&nbsp; If the TSR Percentage is less than 85%, no portion of the PSU
will vest.&nbsp; If the TSR Percentage meets or exceeds 150%, then 200% of the
targeted PSU number will vest. The PSU will not vest unless the participant is
continuously employed or providing service through
March&nbsp;31, 2009.&nbsp; Any unvested portion
of the PSU or any interest therein, generally may not be sold, assigned, pledged
or otherwise disposed of, alienated or encumbered.&nbsp; The participant shall be
entitled to cash dividends with respect to the shares underlying the PSU but
such payments shall not be made unless the PSU vests.&nbsp; The participant shall not
have any voting rights with respect to the PSU until the PSU vests.&nbsp; Any such
rights, however, shall terminate as to any shares subject to the PSU forfeited
to the Company (as described below). </font> </p>
<p style="text-indent: .5in; line-height: 10.85pt">
<font face="Times New Roman" size="2">If the participant ceases to be
employed or ceases to provide services to the Company, the participant's
unvested PSU shall be forfeited; however, if such termination is a termination
for death, total disability, without cause or for Good Reason, the PSUs shall
remain eligible to vest and if the TSR Percentages are satisfied, shall be paid
to the participant.&nbsp; If there is a Change in Control Event (as defined in the
PSU Award Agreement) prior to March&nbsp;31, 2009, the PSUs shall vest as to the
greater of: (i) the TSR Percentage was 100% or (ii) the actual TSR Percentage
for the period between June&nbsp;23, 2006 and the closing of the Change of Control
transaction.</font></p>
<p style="text-indent: 0.5in"><font face="Times New Roman" size="2">A copy of the form
of PSU Award Agreement is attached hereto as Exhibit 10.4 and the prior
description is qualified entirely by such agreement, which is deemed
incorporated by reference herein.</font></p>
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&nbsp;</p>
<p style='layout-grid-mode:char; margin-top:0; margin-bottom:0' align="center">
&nbsp;</p>
<p style='layout-grid-mode:char; margin-top:0; margin-bottom:0' align="center">
<font face="Times New Roman" size="2">4</font></p>





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<hr size=2 width="100%" noshade color=navy align=center>

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<p style='margin-top:12.0pt'><font face="Times New Roman" size="2"><b>Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and
Exhibits.</b></font></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:.5in'><font face="Times New Roman" size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.</font></p>
<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:77.4pt;border-collapse:collapse'>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p><font face="Times New Roman" size="2"><b><u>Exhibit
  No.</u></b></font></p></td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p><font face="Times New Roman" size="2"><b><u>Description</u></b></font></p>
		</td>
	</tr>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">10.1</font></p>
		</td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='page-break-after:avoid'><font face="Times New Roman" size="2">Employment Agreement dated June&nbsp;26, 2006 between Mentor Corporation and Joseph A. Newcomb<br>
&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">10.2</font></p>
		</td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='page-break-after:avoid'><font face="Times New Roman" size="2">Separation and Release Agreement dated June&nbsp;24, 2006 between Mentor
  Corporation and A. Christopher Fawzy<br>
&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">10.3</font></p>
		</td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='page-break-after:avoid'><font face="Times New Roman" size="2">Consulting Agreement dated June&nbsp;24, 2006 between Mentor Corporation and A. Christopher Fawzy<br>
&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">10.4</font></p>
		</td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='page-break-after:avoid'><font face="Times New Roman" size="2">Form of Executive Performance Stock Unit Award Agreement</font></p>
		</td>
	</tr>
	<tr>
		<td width=101 valign=top style='width:76.1pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:6.0pt;margin-right:0in;margin-bottom:
  6.0pt;margin-left:0in'><font face="Times New Roman" size="2">99.1</font></p>
		</td>
		<td width=458 valign=top style='width:343.3pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='page-break-after:avoid'><font face="Times New Roman" size="2">Press Release dated June 26,
   2006 of Mentor Corporation</font></p></td>
	</tr>
</table>


<p align=center style='text-align:center'><font face="Times New Roman" size="2">
<b>SIGNATURES<br>&nbsp;</b></font></p>
<p style='text-indent:.5in'><font face="Times New Roman" size="2">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.<br>
&nbsp;</font></p>
<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
	<tr>
		<td width=198 style='width:148.6pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:1.0pt;margin-right:0in;margin-bottom:
  1.0pt;margin-left:0in'><font face="Times New Roman" size="2">Date:&nbsp;
  June 28,
   2006</font></p></td>
		<td width=105 valign=top style='width:78.8pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:1.0pt;margin-right:0in;margin-bottom:
  1.0pt;margin-left:0in'><font face="Times New Roman" size="2"><b>&nbsp;</b></font></p>
		</td>
		<td width=335 style='width:251.4pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:1.0pt;margin-right:0in;margin-bottom:
  1.0pt;margin-left:0in'><font face="Times New Roman" size="2"><b>MENTOR
  CORPORATION</b></font></p></td>
	</tr>
	<tr>
		<td width=198 style='width:148.6pt;padding:0in 5.4pt 0in 5.4pt'></td>
		<td width=105 valign=top style='width:78.8pt;padding:0in 5.4pt 0in 5.4pt'>
		</td>
		<td width=335 style='width:251.4pt;padding:0in 5.4pt 0in 5.4pt'></td>
	</tr>
	<tr>
		<td width=198 style='width:148.6pt;padding:0in 5.4pt 0in 5.4pt'></td>
		<td width=105 valign=top style='width:78.8pt;padding:0in 5.4pt 0in 5.4pt'>
		</td>
		<td width=335 style='width:251.4pt;padding:0in 5.4pt 0in 5.4pt'></td>
	</tr>
	<tr>
		<td width=198 style='width:148.6pt;padding:0in 5.4pt 0in 5.4pt'></td>
		<td width=105 valign=top style='width:78.8pt;padding:0in 5.4pt 0in 5.4pt'>
		<p align=right style='margin-top:1.0pt;margin-right:0in;
  margin-bottom:1.0pt;margin-left:0in;text-align:right'>
		<font face="Times New Roman" size="2">By:</font></p></td>
		<td width=335 style='width:251.4pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:1.0pt;margin-right:0in;margin-bottom:
  1.0pt;margin-left:0in'><font face="Times New Roman" size="2"><u>/s/LOREN
  L. MCFARLAND&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</u></font></p></td>
	</tr>
	<tr>
		<td width=198 style='width:148.6pt;padding:0in 5.4pt 0in 5.4pt'></td>
		<td width=105 valign=top style='width:78.8pt;padding:0in 5.4pt 0in 5.4pt'>
		<p align=right style='margin-top:1.0pt;margin-right:0in;
  margin-bottom:1.0pt;margin-left:0in;text-align:right'>
		<font face="Times New Roman" size="2">Name:<br>Title:</font></p></td>
		<td width=335 style='width:251.4pt;padding:0in 5.4pt 0in 5.4pt'>
		<p style='margin-top:1.0pt;margin-right:0in;margin-bottom:
  1.0pt;margin-left:0in'><font face="Times New Roman" size="2">Loren
  L. McFarland<br>Vice President, Treasurer and Chief Financial Officer</font></p>
		</td>
	</tr>
</table>








<font face="Times New Roman" size="2">&nbsp;





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<p align=center style='text-align:center'><font face="Times New Roman" size="2">
<b>Exhibit Index</b></font></p>
<div align=center>
	<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p><font face="Times New Roman" size="2"><b><u>Exhibit
  No.</u></b></font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p><font face="Times New Roman" size="2"><b><u>Description</u></b></font></p>
			</td>
		</tr>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">10.1</font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">Employment Agreement dated June&nbsp;26, 2006 between Mentor Corporation and Joseph A. Newcomb<br>
&nbsp;</font></p></td>
		</tr>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">10.2</font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">Separation and Release Agreement dated June&nbsp;24, 2006 between
  Mentor Corporation and A. Christopher Fawzy<br>
&nbsp;</font></p></td>
		</tr>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">10.3</font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">Consulting Agreement dated June&nbsp;24, 2006 between Mentor Corporation and A. Christopher Fawzy<br>
&nbsp;</font></p></td>
		</tr>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">10.4</font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">Form of Executive Performance Stock Unit Award Agreement<br>
&nbsp;</font></p></td>
		</tr>
		<tr>
			<td width=97 valign=top style='width:72.8pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">99.1</font></p></td>
			<td width=479 valign=top style='width:359.4pt;padding:0in 5.4pt 0in 5.4pt'>
			<p style='page-break-after:avoid'>
			<font face="Times New Roman" size="2">Press Release dated June 26,
   2006 of Mentor Corporation<br>
&nbsp;</font></p></td>
		</tr>
	</table>









	<p style="page-break-after: avoid">&nbsp;</div>














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[{"type": "8-K", "sequence": "1", "filename": "k8jun2806.htm", "description": "FORM 8-K", "secsgml_size_bytes": 36057}]
{"company-data": {"conformed-name": "MENTOR CORP /MN/", "cik": "0000064892", "assigned-sic": "3842", "irs-number": "410950791", "state-of-incorporation": "MN", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-31744", "film-number": "06930776"}, "business-address": {"street1": "201 MENTOR DR", "city": "SANTA BARBARA", "state": "CA", "zip": "93111", "phone": "8058796000"}, "mail-address": {"street1": "201 MENTOR DR", "city": "SANTA BARBARA", "state": "CA", "zip": "93111"}}
Mentor Corporation - Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8‑K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported)
June 24,
2006
MENTOR CORPORATION
(Exact
name of registrant as specified in its charter)
Minnesota
001-31744
41-0950791
(State or other
  jurisdiction of incorporation)
(Commission File
  Number)
(IRS Employer
Identification No.)
201 Mentor Drive
Santa
  Barbara,
 California  93111
(Address
of principal executive offices, including zip code)
(805) 879-6000
(Registrant's
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ 
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ 
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ 
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ 
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01               Entry
into a Material Definitive Agreement.
(a)           On June 24, 2006, the Compensation
Committee (the "Compensation Committee") of the Board of Directors of Mentor
Corporation (the "Company") approved the employment agreement and compensation
package for Joseph A. Newcomb, the Company's Vice President, General Counsel
and Secretary, contingent upon him commencing employment.  A copy of the press
release issued by the Company regarding Mr. Newcomb's employment is attached
hereto as Exhibit 99.1.  The Terms of Mr. Newcomb's compensation are as
follows:
i.            Mr.
Newcomb will receive an annual base salary of $300,000 and be eligible to
receive bonuses of up to 75% of his base salary.  Bonuses will be paid in
accordance with the criteria established by the Compensation Committee for the
Fiscal Year 2007 Bonus Plan.
ii.           The
Compensation Committee granted Mr. Newcomb an option to acquire 125,000 shares
of the Company's common stock under the Company's 2005 Long Term Incentive Plan
(the "Plan").  The option vests over four years with one-fourth of the shares
vesting on the first anniversary of the date of grant and the remaining shares
vesting in equal monthly installments over the 36 months thereafter.  The per
share exercise price of the option is $41.04, the closing sales price of the
Company's common stock on the New York Stock Exchange on June 26, 2006, the
first day of Mr. Newcomb's employment.
iii.          The
Compensation Committee also granted Mr. Newcomb 20,000 shares of restricted
stock valued at the fair market value of $41.04 per
share, the closing price of the Company's common stock on the New York Stock
Exchange as of the Award Date.  The
Restricted Stock is subject to the terms of the Plan and an individual
Restricted Stock Award Agreement (the "Award Agreement") to be
executed by Mr. Newcomb (the "Participant") as summarized below.
In accordance with the Award
Agreement and subject to its terms, the Restricted Stock shall vest, and
restrictions shall lapse, with respect to one-fifth of the total number of
shares of Restricted Stock on each of the first, second, third, fourth and fifth
anniversaries of the Award Date.  The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Restricted Stock. Any unvested
shares of Restricted Stock or any interest therein, generally may not be sold,
assigned, pledged or otherwise disposed of, alienated or encumbered.  The
Participant shall be entitled to cash dividends and voting rights with respect
to the shares of Restricted Stock he has been granted even if such Restricted
Stock is unvested
By accepting the grant of Restricted
Stock and executing the Award Agreement, the Participant agrees to be bound by
the stock ownership guidelines set forth in the Award Agreement.  The
Participant agrees to attain, by no later than the fifth anniversary of the
Award Date, a level of stock ownership ("Ownership Threshold") at least equal to
two times the Participant's annual base salary, calculated by dividing (i) the
product of the Participant's salary times two by (ii) the fair market value of a
share of the Company's common stock on the Award Date.  Under the Award
Agreement, the Participant further agrees to maintain this Ownership Threshold
throughout the remainder of the Participant's employment or service with the
Company and its subsidiaries.
The Award Agreement also
provides for additional restrictions upon the vesting of the Restricted Stock
(and subject to any applicable laws or regulations and the Company's insider
trading policies), during the 5-year vesting period ("Additional
Restrictions").  Specifically, the Participant may only transfer up to 40% of
his vested shares of Restricted Stock in the aggregate to cover tax consequences
of such vesting, which such transfer restriction shall terminate on the earlier
of: (a) the fifth anniversary of the Award Date, or (b) the Participant's
severance date.
The
Company's Board of Directors retains the right, in its sole discretion to reduce
or waive any Participant's Ownership Threshold or the Additional Restrictions.
2
If the Participant ceases to be
employed or ceases to provide services to the Company, the Participant's
unvested Restricted Stock shall be forfeited to the Company regardless of the
reason for the Participant's termination.  Notwithstanding the foregoing, if a
Change in Control Event (as defined in the Award Agreement) occurs and any
unvested shares of Restricted Stock do not automatically accelerate or become
fully vested in connection with the Change in Control Event, and if, within 12
months of the date of the Change in Control Event the Participant is terminated
by the Company or any subsidiary for any reason other than for Cause (as defined
in the Award Agreement) or as a result of the Participant's resignation for Good
Reason (as defined in the Award Agreement), the Restricted Stock shall become
fully vested upon the Participant's termination.
i.           
Pursuant to the terms of the
Company's standard executive employment agreement, into which Mr. Newcomb
entered upon commencement of his employment, he will be entitled to the
following in addition to the salary, bonus, option grant and restricted stock
grants described above:
With respect to the provisions related to
	termination without cause or resignation for Good Reason (as described
	below), the employment agreement provides for:
payment of full COBRA premiums for 24
		months following a termination;
severance compensation to be calculated
		as a flat 36 months' severance, determined at the executive officer's
		then current rate of base pay; and
a pro-rated amount, based on timing of
		the executive officer's termination or resignation relative to the end
		of the then current fiscal year, of the target bonus percentage
		applicable to the executive officer.
With respect to the provisions related to
	termination due to change of control, the employment agreement provides for:
payment of full COBRA premiums for 24
		months following a termination;
severance compensation to be calculated
		as a flat 36 months' severance, determined at the executive officer's
		then current rate of base pay; and
100% of the target bonus percentage
		applicable to the executive officer.
For purposes of the employment
agreement, "Good Reason" means the
occurrence of any of the following without Mr. Newcomb's express written
consent: (i) a significant reduction of Mr. Newcomb's material duties,
position,  or responsibilities as provided in the employment agreement, or the
removal of Mr. Newcomb from the position, duties, and responsibilities
contemplated by the employment agreement; (ii) a reduction in Mr. Newcomb's
salary or bonus
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 Mr. Newcomb's benefits as compared to the benefits
in effect on June 26, 2006; (iv) Mr. Newcomb must perform a significant portion
of his duties at a location other than Company headquarters; or (v) Company
headquarters are relocated more than 50 miles from the current location in Santa
Barbara, California.
For purposes of the employment agreement, "Change
of Control" shall be as defined under the provisions of the applicable equity or
other long-term incentive plan in effect at the time of such Change of Control.
A copy of Mr. Newcomb's employment agreement is
attached hereto as Exhibit 10.1 and the prior description is qualified entirely
by such agreement, which is deemed incorporated by reference herein.
(b)           On June 24, 2006, the Compensation
Committee approved a separation and release agreement and a consulting agreement
for A. Christopher Fawzy, the Company's former Vice President, General Counsel
and Secretary, following his resignation with the Company.
Pursuant to the
terms of Mr. Fawzy's separation and release agreement, he will receive a
severance payment equal to 36 months of his base salary and a payment for a pro
rated bonus equal to one-third of his eligible bonus amount for fiscal 2007. 
Mr. Fawzy will be entitled to payments of COBRA premiums for up to 24 months. 
Mr. Fawzy executed a release of claims in favor of the Company and agreed not to
solicit the Company's employees for a period of 12 months.
3
Pursuant to the terms of the consulting agreement
with Mr. Fawzy, he will provide consulting services from the date of the
agreement through October 31, 2007.  Through December 31, 2006, Mr. Fawzy will
receive a flat fee of $9,000 per month for up to 36 hours of consulting services
and a fee of $250 per hour for any additional services thereafter.  After
January 1, 2007, Mr. Fawzy will receive a flat fee of $2,400 per month for up to
8 hours of consulting services and a fee of $300 per hour for any additional
services thereafter.  Mr. Fawzy will be eligible to receive additional payments
totaling $120,000 as certain milestones are met.  Mr. Fawzy's unvested options
and restricted stock awards will continue to vest during his consulting period.
Copies of Mr. Fawzy's separation and release
agreement and consulting agreement are attached hereto as Exhibits 10.2 and
10.3, respectively, and the prior description is qualified entirely by such
agreements, which are deemed incorporated by reference herein.
(c)           On
June 24, 2006, the Compensation Committee also approved the performance based
awards (the "PSUs") under the Company's 2005 Long Term Incentive Plan.  The PSUs
will vest subject to the attainment of specified targets for "total shareholder
return" as defined by the Compensation Committee from June 24, 2006 to March 31,
2009 and participants will receive as little as zero shares if less than 85% of
the total shareholder return criteria is met, up to 200% of the targeted number
of shares if the total shareholder return meets or exceeds 150% of the targeted
criteria.  The PSU awards made were as follows:
Name of Grantee
Total No. of
Targeted Units at 200%
Kathleen M.
  Beauchamp
Vice President, Sales & Marketing
50,000
Loren L.
  McFarland
Vice President, Treasurer and Chief Financial Officer
50,000
Joseph A. Newcomb
Vice President, General Counsel and Secretary
50,000
Cathy
  Ullery
Vice President, Human Resources
50,000
Pursuant to the terms of
the Plan and the Executive Performance Stock
Unit Award Agreement (the "PSU Award Agreement"), the
PSUs shall vest as to an applicable percentage of the award if, during a period
from June 23, 2006 to March 31, 2009, the change in the market price of the
Company's common stock on the New York Stock Exchange relative to the total
change in price of the Russell 2500 Growth Index (such quotient, the "TSR
Percentage").  If the TSR Percentage is less than 85%, no portion of the PSU
will vest.  If the TSR Percentage meets or exceeds 150%, then 200% of the
targeted PSU number will vest. The PSU will not vest unless the participant is
continuously employed or providing service through
March 31, 2009.  Any unvested portion
of the PSU or any interest therein, generally may not be sold, assigned, pledged
or otherwise disposed of, alienated or encumbered.  The participant shall be
entitled to cash dividends with respect to the shares underlying the PSU but
such payments shall not be made unless the PSU vests.  The participant shall not
have any voting rights with respect to the PSU until the PSU vests.  Any such
rights, however, shall terminate as to any shares subject to the PSU forfeited
to the Company (as described below).
If the participant ceases to be
employed or ceases to provide services to the Company, the participant's
unvested PSU shall be forfeited; however, if such termination is a termination
for death, total disability, without cause or for Good Reason, the PSUs shall
remain eligible to vest and if the TSR Percentages are satisfied, shall be paid
to the participant.  If there is a Change in Control Event (as defined in the
PSU Award Agreement) prior to March 31, 2009, the PSUs shall vest as to the
greater of: (i) the TSR Percentage was 100% or (ii) the actual TSR Percentage
for the period between June 23, 2006 and the closing of the Change of Control
transaction.
A copy of the form
of PSU Award Agreement is attached hereto as Exhibit 10.4 and the prior
description is qualified entirely by such agreement, which is deemed
incorporated by reference herein.
4
Item 9.01               Financial Statements and
Exhibits.
(c)           Exhibits.
Exhibit
  No.
Description
10.1
Employment Agreement dated June 26, 2006 between Mentor Corporation and Joseph A. Newcomb
10.2
Separation and Release Agreement dated June 24, 2006 between Mentor
  Corporation and A. Christopher Fawzy
10.3
Consulting Agreement dated June 24, 2006 between Mentor Corporation and A. Christopher Fawzy
10.4
Form of Executive Performance Stock Unit Award Agreement
99.1
Press Release dated June 26,
   2006 of Mentor Corporation
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date: 
  June 28,
   2006
MENTOR
  CORPORATION
By:
/s/LOREN
  L. MCFARLAND
Name:
Title:
Loren
  L. McFarland
Vice President, Treasurer and Chief Financial Officer
5
Exhibit Index
Exhibit
  No.
Description
10.1
Employment Agreement dated June 26, 2006 between Mentor Corporation and Joseph A. Newcomb
10.2
Separation and Release Agreement dated June 24, 2006 between
  Mentor Corporation and A. Christopher Fawzy
10.3
Consulting Agreement dated June 24, 2006 between Mentor Corporation and A. Christopher Fawzy
10.4
Form of Executive Performance Stock Unit Award Agreement
99.1
Press Release dated June 26,
   2006 of Mentor Corporation
6