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MENTOR CORPORATION
(Name of Registrant as Specified In Its Charter)

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o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders (the "Annual Meeting") of Mentor Corporation, a Minnesota corporation (the "Company"), will be held Thursday, September 12, 2002 at 10:00 a.m. (Central Daylight Time) at the Minneapolis Hilton and Towers, 1001 Marquette Avenue, Minneapolis, Minnesota, to consider and take action upon the following matters:

The Board of Directors has fixed the close of business on July 15, 2002 as the record date for the determination of the shareholders entitled to vote at the meeting or any adjournments or postponements thereof. Only shareholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.

This Proxy Statement is furnished to the shareholders of Mentor Corporation (the "Company") in connection with the solicitation by the Company's Board of Directors of the enclosed proxy for use at the Annual Meeting of Shareholders to be held Thursday, September 12, 2002, at 10:00 a.m. (Central Daylight Time) at the Minneapolis Hilton and Towers, 1001 Marquette Avenue, Minneapolis, Minnesota, or at any adjournments or postponements thereof (the "Annual Meeting") for the purposes set forth in the Notice of Annual Meeting of Shareholders. All Common Stock represented by proxies in the form solicited will be voted in accordance with the instructions indicated therein, but proxies may be revoked at any time before being exercised by delivery to the Secretary of the Company of a written notice of revocation of the proxy's authority or a duly executed proxy bearing a later date. You may also revoke your proxy by attending the Annual Meeting and voting in person. A shareholder who attends the Annual Meeting need not revoke his or her proxy and vote in person, unless he or she wishes to do so.

The Company will pay expenses in connection with the solicitation of proxies. Proxies are being solicited primarily by mail, but, in addition, directors, officers and regular employees of the Company may solicit proxies personally, by telephone or by special letter. The Company has no present plans to hire special employees or paid solicitors to assist in obtaining proxies, but reserves the option of doing so if it should appear that a quorum otherwise might not be obtained.

So far as the management of the Company is aware, no matters other than those described in this Proxy Statement will be acted upon at the meeting. In the event that any other matters calling for a vote of shareholders properly come before the Annual Meeting, the persons named as proxies in the enclosed form of proxy will vote in accordance with their judgment on such other matters.

The Annual Report of the Company for the fiscal year ended March 31, 2002 is being furnished to each shareholder with this Proxy Statement.

The principal executive offices of the Company are located at 201 Mentor Drive, Santa Barbara, California 93111. The approximate mailing date of this Proxy Statement and the accompanying form of proxy is July 30, 2002.

The Common Stock of the Company, par value $.10 per share, is the only authorized voting security of the Company. Only the holders of the Company's Common Stock whose names appear of record on the Company's books on July 15, 2002 will be entitled to notice of, and to vote at, the Annual Meeting. At the close of business on July 15, 2002, a total of 23,341,294 shares of Common Stock were outstanding, each entitled to one vote. Holders of Common Stock do not have cumulative voting rights. The presence in person or by proxy of the holders of a majority of the outstanding shares of Common Stock will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes are each included in the number of shares present for quorum purposes. All votes will be tabulated by the inspector of election appointed for the meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Abstentions, which may be specified on all proposals other than the election of directors, are counted in tabulations of the votes cast on proposals presented to shareholders and will have the same effect as negative votes, whereas broker non-votes are not counted for purposes of determining whether a proposal has been approved.

Proposals 1 and 3 require the approval of a majority of the shares present at the meeting and entitled to vote thereat. Therefore, abstentions as to Proposals 1 and 3 will have the same effect as votes against such proposals. Broker non-votes as to Proposals 1 and 3, however, will be deemed shares not entitled to vote on such proposals, and will not be counted as votes for or against such proposals, and will not be included in calculating the number of votes necessary for approval of such proposals. Proposal 2 requires the approval of a majority of the shares of the outstanding voting stock and, therefore, abstentions and broker non-votes as to Proposal 2 will have the same effect as votes against such proposal.

Proposals of shareholders of the Company that are intended to be presented by such shareholders at the Company's 2003 Annual Meeting must be received no later than March 31, 2003, in order to be included in the proxy statement and form of proxy relating to that meeting. However, if the date of the 2003 Annual Meeting is changed by more than 30 days from the date of this year's Annual Meeting (September 12th), then the deadline for submission of shareholder proposals would be reasonable time before the Company begins to print and mail its proxy materials.

Pursuant to the proxy rules under the Securities Exchange Act of 1934, the Company's shareholders are notified that the deadline for providing the Company with timely notice of any shareholder proposal to be submitted outside the Rule 14a-8 process for consideration at the 2003 Annual Meeting will be June 15, 2003. As to matters which the Company does not have notice on or prior to that date, discretionary authority to vote on such proposals shall be granted to the persons designated in the Company's proxy related to the 2003 Annual Meeting.

The Company's By-Laws provide that the Board of Directors must consist of not less than three directors, with the number to be determined by a resolution of the shareholders. Currently the Board of Directors consists of six (6) directors. The number as set by the Shareholders shall continue in effect unless changed by the Board of Directors pursuant to the By-Laws or by subsequent shareholder resolution.

It is the intention of the proxy holders named in the enclosed proxy to vote such proxies for the six nominees named below, all of which are currently directors, to hold office until the 2003 Annual Meeting of Directors or until their successors are elected and qualified.

Each nominee has indicated a willingness to serve, but in the event any nominee is not a candidate at the meeting for reasons not now known to the Company, the proxies named in the enclosed form of proxy may vote for a substitute nominee in their discretion. Information regarding these nominees is set forth in the table below.

Board of Directors. During fiscal 2002, the Board held five meetings and the committees held a total of nine meetings. The directors' attendance at the Board and committee meetings averaged 92%, and each director attended at least 75% of all meetings of the Board and of the Committees on which the director served except Mr. Faster, who attended 71%.

Audit Committee. The Company has an Audit Committee, currently consisting of Messrs. Faster, Nakonechny, Rossi and Young. All members of the Audit Committee are "independent" directors under the Nasdaq listing standards applicable to the Company. The Audit Committee met five times during the fiscal year ended March 31, 2002.

The Audit Committee has adopted procedures providing for its prior review and consideration of the effect of non-audit services on the independence of Ernst & Young LLP and the approval of the types of, and estimated fees for, professional services which are expected to be performed by Ernst & Young LLP during the forthcoming fiscal year.

The Company has adopted a formal written Audit Committee charter, which complies with the Nasdaq's Marketplace Rules. The Audit Committee reviews and assesses the adequacy of the charter on an annual basis.

Compensation Committee. The Company has a standing Compensation Committee, currently consisting of Messrs. Faster, Nakonechny, Rossi and Young. The principal functions of the Compensation Committee are to review and recommend compensation for executive personnel. The Compensation Committee met once during the fiscal year ended March 31, 2002.

Stock Option Committee. The Company has a Stock Option Committee, currently consisting of Messrs. Faster, Nakonechny, Rossi and Young. The principal function of the Stock Option Committee is to administer the Company's stock option plan. The Stock Option Committee met three times during the fiscal year ended March 31, 2002.

Nominating Committee. The Company has a separately constituted committee to nominate candidates for election to the Board of Directors of the Company, currently consisting of Messrs. Faster, Nakonechny, Rossi and Young. Such candidates are chosen by taking into consideration the recommendations of the Company's executive officers and shareholders. Shareholders wishing to submit recommendations for nomination should send them in writing to the attention of Mr. Walter W. Faster at the Company's principal executive office within sixty days after the end of the Company's fiscal year. The Nominating Committee did not meet in fiscal 2002. The Committee met early in fiscal 2003 and nominated the individuals named in this Proposal 1 for the election to the Board of Directors at this annual meeting.

Board members who are employees of the Company do not receive compensation for their services as directors. During the Company's fiscal year ended March 31, 2002 and currently, individual non-employee Board members received an annual fee of $20,000. Under the terms of the Company's 1991 Stock Option Plan (the "1991 Plan"), which expired in June 2001, each person who was a non-employee director on the date of an annual meeting of shareholders was entitled to receive an automatic option grant under the 1991 Plan of options to purchase 6,000 shares of Common Stock at an exercise price equal to the fair market value per share of the Common Stock on the date of such grant. These options remain in effect and have a term of ten years and become exercisable in four equal annual installments over the optionee's period of Board service, beginning one year after the grant date. Under the 1991 Plan, each person who was a newly elected or appointed as a non-employee director received, on the date of election or appointment, an automatic option grant to purchase 20,000 shares of Common Stock. The maximum number of shares of Common Stock that a non-employee director could receive under the 1991 Plan was 90,000, which is less than number of options previously granted to that Board member under prior plans. Each member of the Board of Directors other than Mr. Rossi received options to purchase 30,000 shares on May 17, 1994, and 30,000 shares on May 15, 1997. Mr. Rossi received options to purchase 20,000 on November 11, 1999. All non-employee members of the Board of Directors except Mr. Rossi received the maximum number of shares under the 1991 Plan.

Following shareholder approval of the Company's 2000 Long-Term Incentive Plan in October 2000, each non-employee director was granted a one-time option to purchase 30,000 shares of Common Stock at an exercise price equal to the fair market value per share of the Common Stock on the date of such grant. These options have a term of ten years and become exercisable in four equal annual installments over the optionee's period of Board service, beginning one year after the grant date. Additional grants of options provided to non-employee directors may be made in accordance with the provisions of such Plan.

The Securities and Exchange Commission rules now require the Company to include in its Proxy Statement a report from the Audit Committee of the Board. The following report concerns the Audit Committee's activities regarding oversight of the Company's financial reporting and auditing process.

The Audit Committee is comprised solely of independent directors, as defined in the Marketplace Rules of The Nasdaq Stock Market, and it operates under a written charter adopted by the Board of Directors. The composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis.

As described more fully in its charter, the purpose of the Audit Committee is to assist the Board of Directors in its general oversight of the Company's financial reporting, internal control and audit functions. Management is responsible for the preparation, presentation and integrity of the Company's financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. Ernst & Young LLP, the Company's independent auditing firm, is responsible for performing an independent audit of the consolidated financial statements in accordance with generally accepted auditing standards.

The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent auditor. However, the Audit Committee cannot certify that the independent auditor is "independent" under applicable rules. The Audit Committee serves a broad-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors and the experience of the Committee's members in business, financial and accounting matters.

Among other matters, the Audit Committee monitors the activities and performance of the Company's internal and external auditors, including the audit scope, external audit fees, auditor independence matters and the extent to which the independent auditor may be retained to perform non-audit services. The Audit Committee and the Board have ultimate authority and responsibility to select, evaluate and, when appropriate, replace the Company's independent auditor. The Audit Committee also reviews the results of the internal and external audit work with regard to the adequacy and appropriateness of the Company's financial, accounting and internal controls. Management and independent auditor presentations to and discussions with the Audit Committee also cover various topics and events that may have significant financial impact or are the subject of discussions between management and the independent auditor. In addition, the Audit Committee generally oversees the Company's internal compliance programs.

The Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditor. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the independent auditor represented that its presentations included the matters required to be discussed with the independent auditor by Statement on Auditing Standards No. 61, as amended, "Communication with Audit Committees."

The Company's independent auditor also provided the Audit Committee with the written disclosures required by Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees," and the Audit Committee discussed with the independent auditor that firm's independence. However, the Audit Committee cannot certify that the independent auditor is "independent" under applicable rules. The Audit Committee has also considered whether the provision of non-audit services by Ernst & Young LLP is compatible with the firm's independence.

Following the Audit Committee's discussions with management and the independent auditor, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's annual report on Form 10-K for the year ended March 31, 2002.

The affirmative vote of the holders of a majority of the voting power of the outstanding shares of Common Stock, present or represented by proxy and voting at the Annual Meeting, will be required to approve Proposal 1.

On May 22, 2002, the Board of Directors of the Company adopted, subject to shareholder approval, an amendment to the Company's Restated Articles of Incorporation (the "Articles") to increase the total authorized shares of Common Stock of the Company from 50,000,000 to 150,000,000. Such increase in the number of authorized shares of Common Stock of the Company would be effected by restating the first paragraph of current Article VI of the Articles to read as follows:

The additional shares of Common Stock for which authorization is sought herein would be part of the existing class of Common Stock and, if and when issued, would have the same rights and privileges as the shares of Common Stock presently outstanding. Holders of Common Stock have no preemptive or other subscription rights.

As of July 15, 2002, 23,341,294 shares of Common Stock were issued and outstanding, 3,503,273 shares were reserved for issuance pursuant to outstanding options under the Company's stock option plans and 2,172,930 shares were reserved and available for future option grants under the Company's stock option plans. Therefore, of the 50,000,000 shares currently authorized by the Articles, approximately 20,982,503 shares are presently available for general corporate purposes.

The increase in authorized shares of Common Stock is recommended by the Board of Directors in order to provide a sufficient reserve of such shares for the present and future needs and growth of the Company. In September 1995, shareholders of the Company approved an increase in the Company's authorized Common Stock from 20,000,000 shares to 50,000,000 shares. Since that time the Company has utilized that increase in authorized shares primarily to effect a two-for-one stock split in 1995, as consideration in connection with various acquisitions, and for issuance pursuant to the exercise of stock options. The number of authorized shares currently available for issuance would not be sufficient to implement another such stock split. Such additional authorized shares would be available for issuance at the discretion of the Board of Directors without further shareholder approval (subject to certain provisions of state law) to take advantage of future opportunities for equity financing, to improve the Company's capital structure, in connection with possible acquisitions, in connection with stock dividends or stock splits, and for other corporate purposes.

The Board of Directors does not intend to issue any Common Stock or securities convertible into Common Stock except on terms that the Board deems to be in the best interests of the Company and its shareholders. The Company's management has no arrangements, agreements, understandings or plans at the present time for the issuance or use of the additional shares of Common Stock to be authorized by the proposed amendment to the Articles.

The proposed amendment to increase the authorized number of shares of Common Stock could, under certain circumstances, have an anti-takeover effect. The issuance of additional shares of Common Stock, other than on a pro rata basis to all current shareholders, would dilute the ownership interest of a person seeking to obtain control of the Company, and such issuance could be used as an anti-takeover device to discourage a change in control of the Company by making it more difficult or costly. However, as previously stated, the only intended purpose of the proposed amendment is to increase the number of shares of Common Stock available in order to give the Board of Directors more flexibility in conducting normal business operations by providing a sufficient reserve of such shares for present and future needs of the Company. The Company is not aware of anyone seeking to accumulate Common Stock or obtain control of the Company, and the proposal is not being presented as, nor is it part of, a plan to adopt anti-takeover measures.

The affirmative vote of the holders of a majority of the total voting power of all outstanding shares of Common Stock will be required to approve this Proposal 2.

Pursuant to authority delegated to the Audit Committee by the Board of Directors, the Audit Committee has appointed the firm of Ernst & Young LLP to act as principal independent auditors for the Company for the fiscal year ending March 31, 2003. This appointment is being submitted to the Company's shareholders for ratification. This firm has audited the financial statements of the Company for the fiscal year ended March 31, 2002, and for prior years, and has advised the Company that neither the firm nor any of its partners has any direct or indirect material financial interests in the Company or its subsidiaries, nor have they had any connection during the past three years with the Company or its subsidiaries in any capacity other than that of independent accountants and auditors. A representative of Ernst & Young LLP will be present at the 2002 Annual Meeting and will have an opportunity to make a statement if he or she desires to do so. It is anticipated that such representative will be available to respond to appropriate questions from shareholders.

In the event the shareholders do not ratify the appointment of Ernst & Young LLP, the selection of other independent auditors will be considered by the Board of Directors.

The following table shows the fees paid or accrued by the Company for the audit and other services provided by Ernst & Young LLP for fiscal year 2002.

The affirmative vote of the holders of a majority of the voting power of the outstanding shares of Common Stock, present or represented by proxy and voting at the Annual Meeting, will be required to approve this Proposal 3.

The following table sets forth certain information known to the Company with respect to the beneficial ownership of the Common Stock of the Company as of July 10, 2002, by (i) each person who beneficially owns more than five percent (5%) of such stock, (ii) each director and nominee for director of the Company, (iii) each of the executive officers named in the Summary Compensation Table below, and (iv) all current directors and executive officers as a group.

*Less than 1%

Executive compensation is determined by the Board of Directors based on the recommendations of the Compensation Committee, which is composed entirely of independent, outside directors. The following information relates to compensation paid by the Company for services rendered during the three (3) fiscal years ended March 31, 2002 for the Company's Chief Executive Officer and each of the other four (4) most highly compensated executive officers.

SUMMARY COMPENSATION TABLE

OPTIONS GRANTED IN LAST FISCAL YEAR

EQUITY COMPENSATION PLAN INFORMATION
AT FISCAL YEAR END

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's Compensation Committee (the "Committee") is composed entirely of independent, outside members of the Company's Board of Directors. The Committee reviews and approves each of the elements of the executive compensation program and assesses the effectiveness and competitiveness of the overall program.

Mentor's executive compensation program is designed to accomplish several goals, including:

The Company's executive compensation plan consists of three components: base salary, annual incentive bonus, and long-term incentive in the form of stock options. The Company has established a link between pay and performance by emphasizing variable components of the plan, that is, annual incentive bonus and stock options.

Base Salary. The Committee determines base salaries for executive officers on the basis of a number of factors, including an assessment of competitive compensation levels for U.S.-based publicly traded medical equipment and supply companies performed by an independent consulting firm, the Company's financial condition, any changes in job responsibilities, and the performance of each executive. Executive officer base salaries generally are set to be within a competitive range of comparable compensation data. Base salaries below the competitive range are adjusted to be within the competitive range. Base salaries within the competitive range are increased annually by an equal percentage to adjust for inflation and other external factors. The percentage increase in fiscal 2002 was 3%.

Annual Incentive Bonus. Executive officers are eligible to receive annual incentive compensation equivalent to a specified percentage of their salaries under the Company's bonus plan. The Company establishes bonus pay-out targets (ranging from 40% to 60% of base salary plus the potential for a 20% additional bonus for outstanding results, which increases the range to 40% to 72%) that are designed to bring the level of total annual cash compensation (base salary plus annual incentive bonus) within the range for comparable positions at similar U.S.-based medical equipment and supply companies when superior performance is achieved. Performance is measured at the corporate, functional unit and individual level. The total potential bonus for each executive is broken down into several factors as appropriate for that executive's area of responsibility. Each factor is then weighted with emphasis placed on profitability measures. These factors, and the relative weight given to each factor, vary with each executive officer at the Committee's sole discretion. For each factor, the Committee establishes a threshold, target and outstanding goal. No bonus is paid for performance below threshold levels. In fiscal 2002, the executive officers were eligible for an additional incentive bonus program which provided for bonus pay-out of 20% of base salary for individual and functional level performance measured by spending controls and budget adherence.

Long-term Incentive (Stock Options). Generally, the Company awards stock options to executive officers on an annual basis. Each grant is designed to align the interests of the executive officer with those of the shareholders and provide each individual with a significant incentive to manage the Company from the perspective of an owner with an equity stake in the business. Awards to specific employees, including the Chief Executive Officer, are made on the basis of each employee's job responsibilities and recommendations of the executive officers of the Company concerning the individual's contributions (both historical and potential) to the success of the Company, without regard to prior awards of stock option grants. These recommendations also take into consideration competitive practice for stock option grants as determined by an independent compensation consultant using survey information. The survey information encompasses data on both competitive grant levels for individual executives and total options granted as a percentage of shares outstanding.

Mr. Conway was reappointed as President and Chief Executive Officer ("CEO") of the Company on September 28, 2000. The Company previously entered into a transition agreement with Mr. Conway under which he received annual compensation of $390,000 and other benefits which would have expired on August 1, 2001. This agreement was terminated by mutual consent of the parties on September 28, 2000 when Mr. Conway resumed his previous position as President and CEO, but the annual compensation amount and the other benefits generally remain in effect.

Mr. Conway does not currently have an employment agreement with the Company. Mr. Conway's base salary, annual incentive bonus and stock option grants are set by the Compensation Committee of the Board of Directors using the same policies and criteria used for other executives. In setting Mr. Conway's salary for fiscal 2002, the Compensation Committee considered competitive information for U.S-based publicly traded medical equipment and supply companies provided by an independent compensation consultant, the Company's financial performance and other factors. Mr. Conway is currently paid at the targeted competitive position base salary, which has been set by the Compensation Committee to be within the range of comparable competitive compensation data. Mr. Conway's base salary was increased by 3% on July 1, 2001 from $390,000 to $401,700.

Mr. Conway's incentive bonus for fiscal 2002 was based upon the achievement of an "outstanding" corporate level performance as measured by operating income goals. The incentive bonus was equal to 72% of his base salary on March 31, 2002, or $289,224. In addition, Mr. Conway received an additional bonus as measured by achievement of corporate level spending controls and budget adherence. He received a bonus equal to 20% of his base salary under this bonus plan or $80,340.

On May 23, 2001, Mr. Conway was granted a stock option to purchase 50,000 shares of Common Stock of the Company. The exercise price of the stock option was set at fair market value on the grant date. Subject to the terms applicable to his grant and the terms of the option plan, the stock option may be exercised based on a four year vesting schedule and expires ten years from the grant date.

The Company has previously entered into an Employment Agreement with Mr. Michael in connection with his employment as Senior Vice President, Finance/Treasurer and Chief Financial Officer. Mr. Michael's agreement provides that he will receive in fiscal 2002: (i) a base salary of $265,000, (ii) bonus potential of up to 40% of base salary, and (iii) a one-time grant of options to purchase 50,000 shares. Beginning in fiscal 2003, Mr. Michael's base salary, potential bonus and stock option grants, if any, will be determined annually by the Compensation Committee. Mr. Michael's employment agreement also provides that upon termination of Mr. Michael's employment by the Company, without Cause (as defined therein), Mr. Michael will be entitled to severance compensation equal to 12 months of base salary plus one month of base salary for each complete year of service with the Company.

The Company has previously entered into an Employment Agreement with each of Mr. Glover and Mr. Purkait on November 28, 2000. These agreements provided for (i) an initial base salary of $250,000 (ii) an incentive bonus of up to 40% of base salary, (iii) a one-time grant of options to purchase 50,000 shares to Mr. Glover (iv) in the case of termination without cause, severance compensation equal to three months salary plus one additional month for each full year of service, and (v) in the case of change in control of the Company, (as defined in the applicable agreement), pro-rata bonus for the year plus severance pay equal to 12 months salary and one additional month for each full year of service. Beginning in fiscal 2002 and thereafter, Mr. Glover's and Mr. Purkait's base salary, potential bonus and stock option grants, if any, will be determined by the Compensation Committee.

The Company has previously entered into an Employment Agreement with Mr. Levine in connection with his employment as Vice President, Sales and Marketing, Aesthetics, on August 3, 2000. Mr. Levine's agreement provides that he will receive (i) an initial base salary of $195,000, (ii) an annual incentive bonus potential of up to 30%, pro-rated for the first year, (iii) an one-time grant of options to purchase 25,000 shares of common stock, and (iv) certain transition payments totaling $30,000. After the first year, Mr. Levine's base salary was subject to the Company's annual merit review. In September 2001, Mr. Levine became an executive officer of the Company, and accordingly the Compensation Committee will fix his base salary, potential bonus and stock option grants, if any, annually. Mr. Levine's employment agreement also provides that upon termination of Mr. Levine's employment by the Company, without Cause (as defined therein), Mr. Levine will be entitled to severance compensation equal to three months of base salary plus two weeks of base salary for each complete year of service with the Company including prior service, but in no case less than six months of base compensation.

Policy with Respect to Section 162(m) of the Internal Revenue Code. Subject to certain exceptions, Section 162(m) of the Code disallows a federal income tax deduction for compensation over $1 million paid to certain executive officers in a taxable year. One exception applies to compensation paid pursuant to shareholder-approved plans that are performance-based. At the 2001 Annual Meeting, the Company obtained shareholder approval for the Company's Amended 2000 Long Term Incentive Plan which was designed to assure that any compensation deemed paid in connection with the exercise of stock options granted under that plan will qualify as performance-based compensation. As a result, the Company believes that stock options granted to its executives qualify for the performance-based exception to the deduction limit. However, there can be no assurance that the options will so qualify.

The cash compensation paid to the Company's executive officers for the 2002 fiscal year did not exceed the $1 million limit per officer, nor is the cash compensation to be paid to the Company's executive officers for the 2003 fiscal year expected to reach that level. Because it is unlikely that the cash compensation payable to any of the Company's executive officers in the foreseeable future will approach the $1 million limitation, the Compensation Committee has decided not to take action at this time to limit or restructure the elements of cash compensation payable to the Company's executive officers. The Compensation Committee intends to continue to comply with Section 162(m) in the future to the extent consistent with the best interests of the Company.

The following graph compares the yearly percentage changes in the cumulative total shareholder return on the Company's Common Stock with the cumulative total return on the NASDAQ Market Value Index and the Media General Financial Services Medical Appliances and Equipment Index ("MG Index") during the five fiscal years ended March 31, 2002. The comparison assumes $100 was invested on March 31, 1997 in the Company's Common Stock and in each of the foregoing indices and assumes reinvestment of dividends.

Notwithstanding anything to the contrary set forth in any of the Company's previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this Proxy Statement, in whole or in part, the preceding Compensation Committee Report on Executive Compensation and the preceding Company Stock Performance Graph are not to be incorporated by reference into any such filings, nor are such Report or Graph to be incorporated by reference into any future filings.

During fiscal 2002, Messrs. Faster, Nakonechny, Young and Rossi served on the Compensation Committee. No member of the Compensation Committee was an officer or employee of the Company at any time during fiscal 2002 or at any other time.

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, among others, to file with the Securities and Exchange Commission (the "SEC") and The Nasdaq Stock Market, Inc. an initial report of ownership of the Company's stock on Form 3 and reports of changes in ownership on a Form 4 or a Form 5. Persons subject to Section 16 are required by SEC regulations to furnish the Company with copies of all Section16(a) forms that they file. Under SEC rules, certain forms of indirect ownership and ownership of Company stock by certain family members are covered by these reporting rules. As a matter of practice, the Company's administrative staff assists the Company's executive officers and directors in preparing initial reports of ownership and reports of changes in ownership, and in filing these reports on their behalf.

To the Company's knowledge, based solely upon a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended March 31, 2002, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were complied with, except that (i) the initial reports on Form 3 for each of the three new officers appointed in September 2001, Messrs. Levine, Shepard and Scherff, were filed eleven days late, (ii) Messrs. Shepard and Purkait each failed to file a Form 4 to report the exercise of stock options and concurrent sales of the Company stock received and (iii) Mr. Levine failed to file a Form 4 to report a sale of Company stock. The transactions that Messrs. Levine, Shepard, and Purkait failed to report were subsequently reported on Form 5, the Annual Statement of Changes in Beneficial Ownership.

Since 1991 the Company has had an exclusive agreement with Rochester Medical Corporation ("Rochester") to market and distribute certain external catheter products developed by Rochester. The Company purchased $860,000 in products under the agreement in fiscal year 2002. Certain directors and executive officers of Rochester, a public company, are siblings of Christopher J. Conway, the Chairman and Chief Executive Officer of the Company.

The Company knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the enclosed form of Proxy to vote the shares they represent as the Board of Directors may recommend. Discretionary authority with respect to such other matters is granted by the execution of the enclosed Proxy.

The undersigned hereby appoints Christopher J. Conway and Adel Michael, and each of them, as attorneys-in-fact, proxies with power of substitution to vote on behalf of the undersigned all shares which the undersigned may be entitled to vote at the annual meeting of shareholders of the Company to be held at the Minneapolis Hilton and Towers, 1001 Marquette Avenue, Minneapolis, Minnesota, at 10:00 a.m., on September 12, 2002, and any adjournments thereof, with all powers the undersigned would possess if personally present, with respect to the following:

(Continued and to be signed on the other side)

(Continued from other side)

The undersigned hereby ratifies and confirms all that said attorneys-in-fact and proxies shall lawfully do or cause to be done by virtue hereof, and hereby revokes any and all proxies heretofore given by the undersigned to vote at the annual meeting or any adjournment thereof.

Please mark, date and sign exactly as name appears hereon, including designation as executor, trustee, etc., if applicable. A corporation must sign in its name by the president or other authorized officer. All co-owners must sign.