SC 14D9/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2)

MENTOR CORPORATION

(Name of Subject Company)

MENTOR CORPORATION

(Name of Person(s) Filing Statement)

Common Stock, par value $0.10 per share
(Title of Class of Securities)

587188103 (Common Stock)
(CUSIP Number of Class of Securities)

Joshua H. Levine
President and Chief Executive Officer
201 Mentor Drive
Santa Barbara, California 93111
(805) 879-6000

(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person(s) filing statement).

With Copies to:

Scott M. Stanton, Esq.
Morrison & Foerster LLP
12531 High Bluff Drive
Suite 100
San Diego, California 92130
(858) 720-5100 Joseph A. Newcomb, Esq.
Vice President, Secretary
and General Counsel
Mentor Corporation
201 Mentor Drive
Santa Barbara, California 93111
(805) 879-6000

TABLE OF CONTENTS

	Item 4. The Solicitation or Recommendation.
	Item 8. Additional Information.
SIGNATURE

     This Amendment No. 2 (this “Amendment”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 of Mentor Corporation (the “Company”) initially filed on December 12, 2008 (as amended or supplemented from time to time, the “Statement”). The Statement relates to the tender offer by Maple Merger Sub, Inc., a Minnesota corporation (“Offeror”), and a wholly owned subsidiary of Johnson & Johnson, a New Jersey corporation (“Parent” or “Johnson & Johnson”), disclosed in a Tender Offer Statement on Schedule TO, initially filed on December 12, 2008 (as amended or supplemented from time to time, the “Schedule TO”), to purchase all of the Company’s issued and outstanding shares of common stock, par value $0.10 per share, at a purchase price of $31.00 per share, net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 12, 2008 (as amended or supplemented from time to time, the “Offer to Purchase”), and in the related Letter of Transmittal. The Offer to Purchase and Letter of Transmittal were filed with the Statement as Exhibits (a)(1)(A) and (a)(1)(B) thereto. Except as otherwise set forth below, the information set forth in the Statement remains unchanged and is incorporated by reference as relevant to the items in this Amendment. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Statement.

Item 4. The Solicitation or Recommendation.

Subsection (b) of Item 4 entitled “Background and Reasons for the Recommendation — Reasons for Recommendation” is hereby amended and supplemented by replacing the first paragraph with the following paragraph.

“In evaluating the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, the Board consulted with the Company’s management and legal and financial advisors and, in recommending that all holders of Shares accept the Offer and tender their Shares pursuant to the Offer and, if applicable, approve the Merger and the Merger Agreement, the Board considered a number of factors that militated in favor of recommending the transactions contemplated by the Merger Agreement, including the following:”

Subsection (b) of Item 4 entitled “Background and Reasons for the Recommendation — Reasons for Recommendation” is further amended and supplemented by inserting the following paragraph before the last paragraph of such subsection.

“After considering the foregoing factors the Board determined that the factors militating in favor of recommending the transactions contemplated by the Merger Agreement outweighed the risks and uncertainties of the Offer and the Merger. The factors militating in favor of recommending the transactions contemplated by the Merger Agreement are the material reasons for the Board’s decision to recommend the Offer and the Merger.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is hereby amended and supplemented by inserting the following sentence in the seventh paragraph immediately after the second sentence thereof.

“Accordingly, such analyses may not necessarily utilize all companies, businesses or transactions that could be deemed comparable to the Company or the Offer and the Merger.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is further amended and supplemented by replacing the first sentence in the “Selected Companies Analysis” with the following:

“Citi reviewed financial and stock market information of the Company and the following 20 selected publicly traded medical device and specialty pharmaceutical companies. These companies were selected because, among other factors, such companies were publicly traded companies, which were similar in size to the Company and/or their businesses, products or product candidates were similar to, or in a similar stage of development as, the Company’s business segments, products or product candidates and, in Citi’s view, were otherwise deemed relevant for purposes of comparison.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is further amended and supplemented by replacing the fourth sentence in the “Selected Companies Analysis” with the following:

“Citi then selected (based on its professional judgment) a range of calendar year 2009 estimated EBITDA multiples of 6.5x to 8.0x and estimated P/E multiples of 8.5x to 12.5x derived from the selected companies and applied such ranges to corresponding data of the Company.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is further amended and supplemented by replacing the first sentence in the “Selected Precedent Transactions Analysis” with the following:

“Citi reviewed the transaction values of the following 17 transactions involving medical device and pharmaceutical companies. These transactions were selected because, among other factors, the target companies involved in such transactions were similar in size to the Company and/or their businesses, products or product candidates were similar to, or in a similar stage of development as, the Company’s business segments, products or product candidates and, in Citi’s view, were otherwise deemed relevant for purposes of comparison.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is further amended and supplemented by replacing the third sentence in the “Selected Precedent Transactions Analysis” with the following:

“Citi then selected (based on its professional judgment) a range of latest 12 months EBITDA multiples of 12.5x to 16.5x derived from the selected transactions and applied such range to the Company’s EBITDA for the latest 12 months ended September 26, 2008.”

Subsection (d) of Item 4 entitled “Opinion of the Company’s Financial Advisor” is further amended and supplemented by replacing the second sentence in the “Discounted Cash Flow Analysis” with the following:

“Estimated terminal values for the Company were calculated by applying to the Company’s fiscal year 2013 estimated EBITDA, under both the Management Case 1 Forecasts and the Management Case 2 Forecasts, terminal value multiples of 7.5x to 8.5x, which range of terminal value multiples was derived taking into consideration the latest 12 months EBITDA trading multiples of the selected companies referred to above under “Selected Companies Analysis.”

Item 8. Additional Information.

Item 8 is further amended and supplemented by adding the following text to the end of the subsection entitled “Certain Litigation”:

“On December 15, 2008, Police and Fire Retirement System of the City of Detroit, alleging itself to be a shareholder of the Company, filed a purported shareholder class action complaint in the Santa Barbara County Superior Court of the State of California, captioned Police and Fire Retirement System of the City of Detroit v. Mentor Corporation et al., Case No. 1304489, in connection with the Offer and the Merger. The complaint names as defendants the Company, the members of the Board, certain Company officers, Parent, Ethicon, Inc., and Does 1-25. The suit alleges that the members of the Board and certain Company officers breached their fiduciary duties to the Company’s shareholders in connection with the sale of the Company, and that the Company, Parent and Ethicon aided and abetted the purported breaches of fiduciary duties. The suit seeks various equitable relief related to the Offer and the Merger and also seeks the costs of the action, including reasonable allowances for attorneys’ fees and experts’ fees. The Company believes the allegations are without merit and intends to defend vigorously the action.

On December 17, 2008, Cinotto v. Mentor Corporation et al., Case No. 1304357, and Steamfitters Local 449 Pension Fund v. Mentor Corporation, et al., Case No. 1304364, were consolidated for all purposes as In re Mentor Corporation Shareholder Litigation, Lead Case No. 1304357, in Santa Barbara County Superior Court. The Court’s order consolidating the cases applies to cases arising out of the same events filed in Santa Barbara County Superior Court, and the Company anticipates that Police and Fire Retirement System of the City of Detroit v. Mentor Corporation, et al. will be consolidated as part of In re Mentor Corporation Shareholder Litigation, Lead Case No. 1304357.”

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

     Dated: December 19, 2008

By:	/s/ Joshua H. Levine
	Name:	Joshua H. Levine
	Title:	President and Chief Executive Officer

CORRESP

12531 HIGH BLUFF DRIVE
SUITE 100
SAN DIEGO, CALIFORNIA
92130-2040

TELEPHONE: 858.720.5100
FACSIMILE: 858.720.5125

WWW.MOFO.COM morrison & foerster llp

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December 19, 2008 Writer’s Direct Contact
858.720.5141
SStanton@mofo.com

Via Edgar

Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549

Attention: Peggy Kim, Special Counsel

Re: Mentor Corporation
Amendment No. 1 to Schedule 14D-9
Filed December 17, 2008
Schedule 14D-9
Filed December 12, 2008
File No. 005-35178

Ladies and Gentlemen:

We are writing on behalf of our client, Mentor Corporation, a Minnesota corporation (the “Company”) in response to a letter of comment from the staff of the Securities and Exchange Commission (the “Staff”) to the Company dated December 17, 2008 (the “Staff Letter”).

The paragraphs below numbered 1 and 2 restate the numbered paragraphs in the Staff Letter. The discussion set out below each such paragraph is the Company’s response to the Staff’s comment.

Schedule 14D-9

Item 4. The Solicitation or Recommendation, page 7

Reasons for the Offer and the Merger, page 15

1. This section refers to a wide variety of factors considered by the Board in connection with their evaluation of the offer. Item 4 of Schedule 14D-9 and the corresponding Item 1012(b) of Regulation M-A, however, require that the actual

Securities and Exchange Commission
December 19, 2008
Page Two

reasons be stated to explain the board’s position. Please revise this section to clarify which of the factors are in fact reasons in support of the Board’s decision to recommend that stockholders accept the tender offer.

In response to the Staff’s comment, Amendment No. 2 to the Schedule 14D-9 amends Item 4 to clarify which of the factors are reasons in support of the Board’s decision.

Opinion of the Company’s Financial Advisor, page 18

2. In light of the fact that the fairness opinion of Citi appears to have constituted a basis for your recommendation, please revise to provide a clearer discussion of the analyses performed by Citi. For each analysis, please expand your disclosure to describe the underlying data, including how Citi determined the multiples used in each analysis, the assumptions made under each method, and the criteria for choosing the companies and transactions that are part of the comparisons, as applicable, and disclose whether any companies/transactions meeting the selected criteria were not included in Citi’s analyses. Further, please disclose the meaning and significance of each analysis and draw a conclusion between the results of the analysis and the specific consideration offered in the transaction. In this regard, we note that the implied per share equity value reference range under the selected precedent transactions analysis was above the offer price. See Item 8 of Schedule 14D-9 and corresponding Item 1011(b) of Regulation M-A.

We respectfully note for the Staff that, with respect to the disclosure contained in the Schedule 14D-9 pertaining to the opinion of the Company’s financial advisor, (i) such opinion was only one of a number of factors (as indicated in the Schedule 14D-9) considered by the Board in evaluating the Offer and the Merger, (ii) the recommendation of the Board was made (also as indicated in the Schedule 14D-9) after considering the totality of the information and factors involved and (iii) the specific line items of Schedule 14D-9 do not require a summary of financial advisor opinions and related presentation materials. In light of the foregoing and after a review of the Schedule 14D-9 as a whole, the Company believes that further disclosure in the Schedule 14D-9 with respect to the opinion of the Company’s financial advisor is not necessary to make the statements required to be made in the Schedule 14D-9, in light of the circumstances under which they were made, not materially misleading. However, the Company nonetheless has attempted to address certain of the Staff’s comments as described below.

With respect to the portion of the Staff’s comment requesting a description of the underlying data, including the determination of the multiples used in each analysis, the assumptions made under each method and the criteria in choosing the selected companies and transactions, we note for the Staff the following:

Securities and Exchange Commission
December 19, 2008
Page Three

• the disclosure with respect to the determination of multiples used in each analysis has been clarified in Amendment No. 2 to the Schedule 14D-9 in response to the Staff’s comment;

• as disclosed on pages 21 and 22 of the Schedule 14D-9, Citi utilized, with respect to the selected companies and the selected precedent transactions, financial data based on publicly available research analysts’ estimates and publicly available information and, with respect to the Company, financial forecasts and other information and data that was publicly available or prepared by the Company’s management. Assumptions of the Company’s management underlying such financial forecasts were disclosed on page 17 of the Schedule 14D-9; and

• additional disclosure regarding the criteria Citi used to choose the companies and transactions selected has been included in Amendment No. 2 to the Schedule 14D-9 in response to the Staff’s comment. We supplementally note for the Staff that Citi did not exclude from its selected companies analysis or selected precedent transactions analysis companies or transactions that Citi identified as meeting the selection criteria. However, we note for the Staff that, as disclosed on page 20 of the Schedule 14D-9, no company, business or transaction used in Citi’s financial analyses as a comparison is identical or directly comparable to the Company or the Offer and the Merger and that such analyses necessarily involve judgment. In light of the foregoing and the Staff’s comment, additional disclosure has been included in Amendment No. 2 to the Schedule 14D-9 to indicate that Citi’s selected companies analysis and selected precedent transactions analysis may not necessarily utilize all companies, businesses or transactions that could be deemed comparable to the Company or the Offer and the Merger.

With respect to the portion of the Staff’s comment requesting a description of the meaning and significance of each analysis and that a conclusion be drawn between the results of each analysis and the specific consideration offered in the transaction, the Company believes that the disclosure in the Schedule 14D-9 addresses the Staff’s comment. Specifically, the disclosure presents the results (or “conclusions”) of each analysis (i.e., the implied per share equity value reference ranges derived for the Company) as evaluated and reviewed with the Board and then directly compares these results with the per share price offered (i.e., the $31.00 per share cash consideration). With respect to the Staff’s reference to the implied per share equity value reference range under the selected precedent transactions analysis relative to the offer price, we note for the Staff that, as indicated in the Schedule 14D-9, such range was approximately $31.00 to $40.00 per share and that the offer price was $31.00 per share and, accordingly, the Company respectfully disagrees with the Staff’s comment that the offer price was above the range. Notwithstanding the foregoing, we note for the Staff the disclosure appearing on page 20 of the Schedule 14D-9, which states that Citi’s ultimate opinion was

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December 19, 2008
Page Four

based on the results of all analyses undertaken by it and assessed as a whole and that Citi did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis.

* * *

Attached hereto please find the written acknowledgement from the Company requested by the Staff on pages 2 -3 of the Staff Letter.

Please direct any further comments or questions to me at (858) 720-5141.

Sincerely,
 

/s/ Scott M. Stanton  

Scott M. Stanton 

cc:  Joseph A. Newcomb (Mentor Corporation)
J. Nathan Jensen (Morrison & Foerster LLP)

December 19, 2008

Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549

Attention: Peggy Kim, Special Counsel

Re: Mentor Corporation
Amendment No. 1 to Schedule 14D-9
Filed December 17, 2008
Schedule 14D-9
Filed December 12, 2008
File No. 005-35178

Ladies and Gentlemen:

Pursuant to a letter of comment from the staff of the Securities and Exchange Commission to Mentor Corporation, a Minnesota corporation (the “Company”), dated December 17, 2008, the Company acknowledges that:

• the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

• the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Regards,

/s/ Joseph A. Newcomb  

Joseph A. Newcomb 

Vice President, Secretary and General Counsel
Mentor Corporation