10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 28, 2001

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 0-11634

STAAR SURGICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 1911 Walker Avenue Monrovia, California (Address of principal executive offices) 95–3797439 (I.R.S. Employer Identification No.) 91016 (Zip Code)

(626) 303-7902

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 Par Value

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES  x   NO  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this Chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 22, 2002 was approximately $76,726,000 based upon the closing price per share of the Common Stock of $4.540 on that date.

The number of shares outstanding of the issuer’s classes of Common Stock as of March 22, 2002:

Common Stock, $.01 Par Value—17,197,879 shares

DOCUMENTS INCORPORATED BY REFERENCE

Information required by Part III (Items 10, 11, 12 and 13) is incorporated by reference to the Company’s definitive proxy statement for its 2002 Annual Meeting of Stockholders.

ADVISEMENT

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry. Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” and other similar expressions identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, the following:

• whether or not our newer products are accepted by the marketplace and the pace of any such acceptance,

• our ability to obtain regulatory approvals,

• changes in government regulation relating to reimbursement practices,

• pricing policies resulting from decisions made by health care organizations or policies set by various government agencies,

• improvements in the technologies of our competitors,

• changing economic conditions,

• fluctuations in foreign currency exchange rates,

• political unrest and changing economic conditions in our markets abroad,

and other factors, some of which will be outside our control. You are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

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PART I

ITEM 1.    BUSINESS

STAAR Surgical Company (referred to in this discussion as “we” “us” or “the Company”) (Nasdaq National Market symbol “STAA”) was incorporated in California in 1982 as a successor to a partnership that was created for the purpose of developing, producing, and marketing Intraocular Lenses (“IOLs”) and other products for minimally invasive ophthalmic surgery. We reincorporated in Delaware in April 1986. We have evolved to become a developer, manufacturer and global distributor of products used by ophthalmologists and other eye care professionals to improve or correct vision in patients with refractive conditions, cataracts and glaucoma. Unless the context indicates otherwise, when this document refers to “we”, “us” or “the Company”, it is referring to STAAR Surgical Company and its consolidated subsidiaries.

Initially, our primary product was the foldable IOL, which is implanted in the eye using minimally invasive surgical techniques, restoring vision that has been adversely affected by cataracts. Our product line for treating cataracts has expanded and today, these products include not only our line of IOLs, but also the SonicWAVE^™ Phacoemulsification System, STAARVISC^™ II, a viscoelastic material and the UltraVac^™ V1 tubing, used with certain Venturi-type Phacoemulsification machines. We have also expanded our product lines to include our Implantable Contact Lenses^™ (ICL^™) and Toric Intraocular Lens, both of which are used in correcting refractive conditions such as myopia (near-sightedness), hyperopia (far-sightedness) and astigmatism. For patients whose vision is affected by glaucoma we have developed the AquaFlow^™ Collagen Glaucoma Drainage Device (the “AquaFlow Device”), an alternative to current methods of treating open angle glaucoma. We also sell other instruments, devices and equipment that we manufacture or that are manufactured by others in the ophthalmic products industry. Highlights of the general development of our business during the year 2001 are discussed below.

Review of 2001 Fiscal Year

Continued Management Reorganization

During the year ending December 28, 2001 we took significant steps toward completing our goal of strengthening the Company’s senior management. At the annual meeting of our stockholders held on May 25, 2001, Mr. David Morrison and Mr. John Gilbert were elected to our board of directors. In August 2001 we created the position of Senior Vice President of Global Operations which was filled by Mr. Richard D. Simmons, who was also appointed as President of our European subsidiary, STAAR Surgical A.G. In January 2002, Mr. John Bily was appointed as our Chief Financial Officer, succeeding Mr. John Santos, who now holds the position of Vice President, Corporate Planning and Development. In November 2001 Mr. Steven Ziemba resigned as our Vice President, Regulatory Affairs. In January 2002 Dr. Helene Lamielle joined us as Vice President, Scientific Affairs. All of the individuals comprising our new management have significant experience in the ophthalmic industry.

Product Information

In April 2001 we received CE Mark for our SonicWAVE^™ Phacoemulsification System, allowing us to market the system in the European Union. In the same month, we added to our line of cataract products and began to market STAARVISC II, a viscoelastic material. With the addition of this product, we are now able to offer a complete product package for the cataract procedure, allowing us to market in a single package to those facilities desiring to purchase all of the products used in cataract surgery from one vendor.

In July 2001 we received a Medical Device License from Health Canada allowing us to market our ICL throughout Canada. The approval represented the first approval of any phakic implant in North America and came earlier than anticipated. The lens may be implanted in individuals with hyperopia with refractive error ranging from +3.0 diopters to +20.0 diopters and myopia with refractive error ranging from –6.0 diopters to

–20.0 diopters.

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Also in July 2001 we received pre-market approval from the United States Food and Drug Administration for our AquaFlow Device, which is used in the treatment of open-angle glaucoma. In anticipation of receiving pre-market approval, we trained over 300 physicians to implant this product and were able to begin supplying the product immediately after pre-market approval was received. The AquaFlow Device has been approved and marketed in other countries, including the European Union, for several years.

In September 2001 we presented positive clinical findings related to the ICL that was gathered from our FDA clinical trials. This data was presented at our Canadian ICL training courses which must be attended by surgeons who wish to treat patients with the ICL. The data showed a low rate of natural crystaline lens opacities 2+ years after the surgery. We believe this result was achieved due to enhanced lens design, a refinement in the method used to determine ICL size, and consistent training of surgeons.

In September 2001 we also applied for an investigational device exemption (IDE) for a toric version of the ICL. In January 2002, the FDA conditionally approved an IDE for the Toric ICL. The IDE allows us to begin clinical investigation on the lens in the United States with patients having myopia in the range of –3.0 diopters to –20.0 diopters and astigmatism in the range of –1.0 to –4.0 diopters. According to industry sources, approximately 20% of the population in the United States has astigmatism, a corneal irregularity causing impairment of sight, with the percentage much higher among severely myopic patients.

In October 2001 we introduced an improved disposable tubing set to be used with certain Venturi-type phacoemulsification machines, one of the two types of phacoemulsification machines routinely used by ophthalmic surgeons during cataract surgery. One of the major disadvantages of the Venturi-type system was the direct correlation between vacuum and flow, which could potentially cause the collapse of the anterior chamber of the patient’s eye. The UltraVac V1 tubing breaks the direct link between vacuum and flow, allowing the surgeon to increase surgical efficiency during the cataract procedure while achieving greater anterior chamber stability.

In December 2001, the Korean Ministry of Health issued a conditional acceptance for the ICL under its Safety and Effectiveness Evaluation of the product. The acceptance provides the foundation necessary for licensing the ICL for myopia ranging from –3.0 diopters to –20.0 diopters. We anticipate receiving full approval of the ICL for myopia from the Korean Ministry of Health.

Restructuring, Summary Financial and Other Information

In June 2001, management completed an extensive operational review of the Company. Based upon that review, in August 2001 the Company implemented a plan that management believes will allow the Company to become profitable. As a result of implementing the plan, the Company significantly changed its manufacturing processes and locations, including consolidating lathing activity into the Swiss manufacturing site from the current dual site operations and reducing molded lens capacity at the California site. The Company also reduced its workforce and closed certain overseas operations. In conjunction with the implementation of the plan, the Company recorded pretax charges of approximately $7.8 million in the third and fourth quarters of fiscal year 2001. Planned charges included approximately $3.7 million in fixed asset write-offs, $0.3 million in severance and employee relocation costs, and $1.0 million for subsidiary closures. Additionally, the Company reserved $2.1 million of notes receivable from former officers and directors of the Company and paid $0.7 million in consideration for the early termination of a consulting contract with the president of one of the Company’s European distributors.

The Company also wrote off $6.4 million of inventory related to voluntary product recalls and excess and obsolete inventory in the second and fourth quarters of 2001. The amount is included in cost of sales at December 28, 2001.

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In April 2001 a letter was sent to certain customers offering them an exchange for specific silicone lenses made from a single lot of raw material that internal tests revealed might be more prone to tearing. In June 2001 the Company recalled its Collamer three-piece IOL. This voluntary recall was prompted when quality monitoring of existing inventory showed a potential for the pouches in which the lenses were packaged to open while in the unit boxes.

Revenues for 2001 were $50.8 million, a decrease of $3.6 million, or 7%, from 2000. Net loss for 2001 amounted to $14.8 million, or $0.87 per share, compared to a net loss of $18.9 million, or $1.23 per share, reported in 2000. Significant operational matters that affected net earnings for 2001 included inventory write-offs and nonrecurring charges totaling $14.2 million before tax benefit taken during 2001. Excluding the impact of this charge, the net loss for 2001 was $1.6 million or $0.09 per share, compared to $780,000 of net loss, or  $0.5 per share reported for 2000.

In September 2001 we resolved our dispute with Canon Inc. and Canon Sales Company, Inc., members of Canon-STAAR Company, Inc., our Japanese joint venture. As a result of the settlement, the parties reaffirmed our partnering arrangement whereby Canon-STAAR Company, Inc. will distribute our ophthalmic products in Asia. In connection with the settlement, all legal actions between the parties, including the arbitration proceeding before the Japanese Arbitration Authority, were dismissed and Canon-STAAR Company, Inc. paid the Company a dividend of approximately $280,000.

In October 2001 NovaStaar Investments, LLC and Mr. LaMar Laster, Jr. dismissed the action they filed in the Delaware Chancery Court demanding inspection of certain books and records belonging to the Company.

Financial Information About Industry Segments

Beginning in 1998 we began expanding our marketing focus beyond the cataract market to include the refractive and glaucoma markets as well. However, during 2001 the cataract market remained the primary source of our revenues. See Note 16 to the Consolidated Financial Statements, for geographic segments. The Company operates as one business segment.

Narrative Description of Business

Background

The human eye is a specialized sensory organ capable of light reception and able to receive visual images that are transmitted to the visual center in the brain. The main parts of the eye are the cornea, the iris, the lens, the retina, and the trabecular meshwork. The cornea is a spherically shaped window in the front of the eye through which light passes. The iris is a muscular curtain located behind the cornea which opens and closes to regulate the amount of light entering the eye through the pupil, an opening at the center of the iris. The lens is a clear structure located behind the iris that changes shape to better focus the light to the retina, located in the back of the eye. The retina is a layer of nerve tissue consisting of millions of light receptors called rods and cones, which receive the light image and transmit it to the brain via the optic nerve. The anterior chamber of the eye, located in front of the iris, is filled with a watery fluid called the aqueous humour, while the portion of the eye behind the lens is filled with a jelly-like material called the vitreous humour. The trabecular meshwork, a drainage channel located between the cornea and the surrounding white portion of the eye, maintains a low pressure in the anterior chamber of the eye by draining excess aqueous humour.

The eye is affected by common visual refractive disorders such as myopia, hyperopia, astigmatism and presbyopia, and a number of ocular diseases, such as cataracts and glaucoma. Myopia and hyperopia are caused by an anatomical imbalance between the shape of the eye and the resulting distance between the cornea and the retina. Astigmatism is caused by irregularities in the smoothness and curvature of the cornea, causing improper focusing of the incoming light on the retina and consequential blurring of vision. Presbyopia is far-sightedness resulting from a loss of elasticity in the lens of the eye, usually as a result of aging. Cataracts are an irreversible

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and progressive ophthalmic condition wherein the eye’s natural lens loses its normal transparency and becomes opaque. Glaucoma represents a condition that is manifest by a series of symptoms, including an increase in intraocular pressure, a decrease or loss of visual field, or damage to the optic nerve fiber layer or optical disc. The presence of some or all of these symptoms is generally accepted as indicative of glaucoma (although a patient may manifest one or all of the symptoms and not be diagnosed with glaucoma). If left untreated, glaucoma may result in a gradual and permanent loss of vision.

Industry Segments

According to industry analysts, the market for ophthalmic products is approximately $11 billion worldwide. The major factors influencing this market are:

• the introduction of new methods of correcting vision problems and significant medical technology advancements which have created cost effective treatments and therapies,

• an aging worldwide population,

• the importance of reimbursement, government and private, and

• the growing importance of international markets.

Our products serve the following segments of the ophthalmic market:

Refractive Vision Correction.    It is estimated that 52% of the U.S. population, or 162 million people are in need of some form of vision correction. Of this group, the Company’s target market has been defined as those people between 18 and 55 years of age and within a socioeconomic bracket where elective surgery is affordable. The target market is estimated at 54.4 million people. Of the target market, approximately 3 million people (5.4%) have severe myopia (which is defined as greater than 7.5 diopters) and approximately 1.6 million people have severe hyperopia (which is defined as greater than 3.0 diopters). In addition, it is estimated that 20% of the total population has some form of astigmatism, although in the Company’s target population, the percentage of those with astigmatism is believed to be significantly higher than in the general population. The market outside the U.S. is larger than the U.S. market. It is estimated that approximately 50% of the world’s population needs some form of vision correction.

In the United States, people are seeking to correct their vision by means other than glasses and contact lenses. It is estimated that approximately 1.7 million laser procedures to correct vision problems were performed in 2001, up 21% from an estimated 1.4 million in 2000 and an increase of 46% from an estimated 960,000 procedures in 1999. The number of surgeons performing laser procedures increased from 4,000 in 2000 to 4,300 in 2001. We believe that the laser market is creating awareness about alternatives to glasses and contact lenses. We anticipate that this growing awareness will make it easier for phakic implants to enter the refractive products market in the U.S.

Cataract Treatment.    Cataracts occur in varying degrees in approximately one-half of Americans age 65 or older. Cataract surgery involves removing the damaged lens from the eye and surgically inserting an IOL. Industry sources estimate that approximately 2.51 million IOLs were implanted in the United States in 2001, generating approximately $260 million in sales. We believe that a similar number of IOLs were implanted outside the United States (excluding China and Russia, for which no reliable data exists), generating an additional $250 million in sales. We believe that approximately 90% of the domestic market for IOLs in 2001 was held by foldable IOLs, compared to approximately 15% in 1992, and that approximately 60% of the international market share is presently held by foldable IOLs. We believe the share of the worldwide market held by foldable IOLs will continue to increase due to the benefits of foldable IOLs over non-foldable IOLs.

Glaucoma Treatment.    The treatment for glaucoma encompasses drug therapies as well as traditional and laser surgical procedures. There is no known cure for glaucoma. The most commonly prescribed glaucoma drugs either inhibit the build-up of intraocular fluid or promote increased drainage of intraocular fluid, in either case reducing intraocular pressure and the potential for optic nerve damage. Traditional

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surgical procedures for glaucoma (trabeculectomies and shunts) and laser surgical procedures for glaucoma (trabeculoplasties) remove a portion of the trabecular meshwork to create a channel for fluid to drain from the eye. The selection of drug treatment over a surgical or laser procedure is, in part, dependent upon the stage of the disease and the prevailing glaucoma treatment used in the country in which the treatment is prescribed.

While we believe that glaucoma currently afflicts approximately 3 million persons in the U.S., only about 50% of those persons have actually been diagnosed with the disease. Industry analysts estimate that approximately 67 million people worldwide have glaucoma. The worldwide market for glaucoma drugs is approximately $2 billion. We estimate that 125,000 conventional surgical procedures and 250,000 laser surgeries were performed in the U.S. alone in 2000, which we believe represents total expenditures of approximately $750 million.

Glaucoma drugs are prescribed for patients to control the build-up of intraocular fluid and corresponding increase in intraocular pressure. In some cases, patients build up a tolerance to the medications and they must be changed or combined to improve response. Patients may experience side effects that range from burning and stinging eyes to allergies or more serious systemic problems. For many patients, the symptoms of glaucoma are not readily apparent, which may result in their failure to adhere to the drug regimen.

Conventional surgical and laser procedures for glaucoma create a channel for fluid to drain from the eye. According to one study, conventional and laser surgery for glaucoma has an estimated initial success rate within one to two years of only 70% to 80%, with the success rate decreasing to 46% within five years.

Products

Our products are designed to:

• improve patient outcomes,

• minimize patient risk and discomfort, and

• where possible, simplify ophthalmic procedures and/or post-operative care for the surgeon and the patient.

We sell our products worldwide, principally to ophthalmologists, surgical centers, hospitals, managed care providers, health maintenance organizations and group purchasing organizations. Demand for our products is not seasonal.

Refractive Correction—Implantable Contact Lenses (ICLs).    ICLs are lenses implanted in the eye to permanently correct common refractive disorders such as myopia, hyperopia and astigmatism. The ICL is targeted at persons with moderate to severe myopia and hyperopia.

The ICL is folded and implanted into the eye behind the iris and in front of the natural lens using minimally invasive surgical techniques similar to implanting an IOL during cataract surgery, except that the human lens is not removed. The surgical procedure to implant the ICL is typically performed with topical anesthesia on an outpatient basis. Visual recovery is within one to 24 hours.

We believe the use of an ICL will potentially afford a number of advantages over existing refractive surgical procedures, including being able to:

• correct significantly greater levels of myopia, hyperopia and astigmatism than other procedures,

• provide superior predictability of surgical outcomes,

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• decrease the risk of loss of best corrected vision as a result of complications,

• enable faster recovery of vision,

• produce superior optical correction, ensuring clear vision, and

• correct or improve other vision problems, such as amblyopia (lazy eye) and keratoconus (a condition causing marked astigmatism) and provide an alternative to corneal refractive surgery in patients with thin corneas.

We commenced commercial sales of ICLs in late 1996 on a limited basis in South Africa, China, and selected countries in Europe and South America. In August 1997 we received CE Mark allowing us to sell the ICL in each of the countries comprising the European Union. The lenses are currently also sold in South Africa and Israel. In February 1997, the FDA granted us an investigational device exemption (IDE) to commence clinical studies consisting of three distinct phases within the U.S. We have completed enrollment of Phase III of the IDE clinical trials for the correction of myopia and we are presently engaged in completing enrollment of Phase III of the IDE for the correction of hyperopia. We anticipate filing a pre-market approval application for the ICL correcting myopia in 2002. The Company is awaiting final approval in Korea and is also in the process of submitting for approval in Australia and Brazil.

In September 2001 we applied for an IDE for a toric version of the ICL. In January 2002, the FDA conditionally approved an IDE for the Toric ICL. The IDE allows us to begin clinical investigation on the lens in the United States with patients having myopia in the range of –3.0 diopters to –20.0 diopters and astigmatism in the range of –1.0 diopters to –4.0 diopters. According to industry sources, approximately 20% of the U.S. population has astigmatism, a corneal irregularity causing impairment of sight, with the percentage much higher among severely myopic patients.

Intraocular Lenses (IOLs) And Related Cataract Treatment Products.    We produce and market a line of foldable IOLs for use in minimally invasive cataract surgical procedures. Our IOLs can be folded or otherwise deformed, and therefore can be implanted into the eye through an incision as small as 2.65 mm. Once inserted, the IOL unfolds naturally into the capsular bag that previously held the cataractous lens.

Our foldable IOLs are manufactured from both our proprietary Collamer material and silicone. Both materials are offered in two differently configured styles, the single-piece plate haptic design and the three-piece design where the optic is combined with polyimide loop haptics. During fiscal 2001 a packaging problem required the Company to recall its three-piece Collamer lens, which is currently undergoing a design change. The Company will introduce a modified version of this lens in 2002. The selection of one style over the other is primarily based on the preference of the ophthalmologist. Sales of foldable IOLs accounted for approximately 71% of total revenues for the 2001 fiscal year, 69% of total revenues for the 2000 fiscal year and approximately 70% of total revenues for the 1999 fiscal year.

We have developed and currently market globally the Toric IOL, a toric version of our single-piece silicone IOL, which is specifically designed for patients with pre-existing astigmatism. The Toric IOL is the only IOL that has FDA approval to include in its labeling that it improves uncorrected visual acuity. The Toric IOL is the first refractive product we offered in the U.S., and is a significant addition to our line of cataract products. In May 2000 the Health Care Financing Administration, now known as the Centers for Medicare and Medicaid (CMS), granted our application to have the Toric IOL designated as a “new technology”. The “new technology” designation allows ambulatory surgical centers to receive an additional $50 per lens above the standard Medicare reimbursement rate through May 2005. Furthermore, CMS granted our application for “pass-through” status for our Toric IOL which, until April 1, 2002, allows hospitals to pay us our list price for the lenses and pass through the total amount to CMS for reimbursement. Pass-through status may last for a period of two to three years, although re-evaluation and adjustment is possible in January of each year. The adjustment announced for 2002 significantly changes the impact of pass-through status in that it reimburses only a percentage of the invoiced amount. We anticipate that this change may have a negative effect on the pricing of our Toric IOLs to hospitals, although the full impact of the adjustment will not known until the final regulations are issued.

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In April 2000, we received approval from the FDA for our single-piece Collamer IOL for cataract surgery, allowing us to market the lens throughout the United States. The Collamer IOL was approved for use in Canada and the European Union during 1999. We believe that the Collamer material, which is a biomaterial, is superior to other materials used in the manufacture of IOLs in the marketplace because collagen is incorporated into it.

Phacoemulsification (phaco) machines are used during cataract surgery to remove the patient’s cataractous lens, usually through a small incision. The most desired equipment will improve surgical outcomes and make cataract surgery simpler for the physician and safer for the patient. There are approximately 1,000 to 1,500 phaco machines sold annually at prices ranging from $20,000 to $85,000. The market for this equipment ranges from $50 million to $100 million annually and the market for accessories such as hand pieces, surgical packs, and phaco tips ranges from $50 million to $75 million annually. During 1998 we introduced the WAVE Phacoemulsification Machine, the precursor to our SonicWAVE Phacoemulsification System, launched in October 2000, which we believe represents the next generation of this product. The SonicWAVE Phacoemulsification System offers physicians the ability to use standard ultrasound as well as sonic technology, which removes cataract material by using low frequency sonic pulses. Sonic pulses avoid the generation of heat at the surgery site, thereby reducing the risk of burns to the cornea. The SonicWAVE Phacoemulsification System has 510(k) approval. We received CE Mark in April 2001, and began international shipments of this product on April 16, 2001.

In August 2001 the Company entered into an agreement with Surgin Surgical Instruments, Inc. to distribute UltraVac V1 phaco packs for certain Venturi-type phaco systems. The UltraVac V1 coiled tubing allows surgeons to operate more efficiently at potentially higher levels of vacuum with the assurance of greater anterior chamber stability.

As part of our approach to providing a complete line of complementary products for use in minimally invasive cataract surgery, we also market several styles of lens injectors and sterile cartridges used to insert our IOLs and several styles of disposable and reusable surgical packs and ultrasonic cutting tips to be used with the SonicWAVE Phacoemulsification System.

AquaFlow Collagen Glaucoma Drainage Device.    Our AquaFlow Device is surgically implanted in the outer tissues of the eye to maintain a space that allows increased drainage of intraocular fluid so as to reduce intraocular pressure. It is made of collagen, a porous material that is compatible with human tissue and facilitates drainage of excess eye fluid. The AquaFlow Device is specifically designed for patients with open-angled glaucoma, which is the most prevalent type of glaucoma. In contrast to conventional and laser glaucoma surgeries, implantation of the AquaFlow Device does not require penetration of the anterior chamber of the eye. Instead, a small flap of the outer eye is folded back and a portion of the sclera and trabecular meshwork is removed. The AquaFlow Device is placed above the remaining trabecular meshwork and Schlemm’s canal and the outer flap is refolded into place. The device swells, creating a space as the body heals. It is absorbed into the surrounding tissue within six months to nine months after implantation, leaving the open space and possibly creating new fluid collector channels. The 15 to 45 minute surgical procedure to implant the AquaFlow Device is performed under local or topical anesthesia, typically on an outpatient basis.

We believe that the compatibility of the human eye with the material from which the AquaFlow Device is made and the minimally invasive nature of the surgery offer several advantages over existing surgical procedures, including:

• reduced risk of surgical complications compared to trabeculectomy,

• a longer-term solution than medications,

• predictable outcomes, making case management easier and less time consuming,

• less need for pressure-reducing medications,

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• enabling the patient to have minimally invasive Nd:YAG laser surgery if further pressure reduction becomes necessary over the long term, and

• cost effectiveness compared to surgical and medication alternatives.

We believe the AquaFlow Device is an attractive product for:

• ophthalmic surgeons who have traditionally referred their patients to glaucoma specialists;

• managed care and health maintenance organizations and group purchasing organizations that desire to control their costs and at the same time provide their customers with a higher standard of health care; and

• less developed countries which lack the resources and infrastructure to provide the continuous treatments mandated by drug therapy.

While we believe this market is very conservative, there is a continuing interest in learning the surgical procedure to implant the AquaFlow Device. Adoption by ophthalmic surgeons, however, will be dependent upon the rate at which they learn to perform the surgical procedure or the development of instrumentation to simplify the procedure. Our trained technical sales staff and several surgical specialists educate surgeons on implanting the AquaFlow Device. We have also established regional Centers of Excellence, where surgeons are successfully implanting the AquaFlow Device, to assist in training new surgeons and in promoting the product.

We introduced the AquaFlow Device in late 1995 for commercial sale on a limited basis in South Africa and selected countries in Europe and South America. In August 1997 we received CE Mark for the AquaFlow Device, allowing us to sell it in each of the countries comprising the European Union. In January 2000 the Canadian government, through Health Canada, issued a Medical Device License, allowing us to sell the AquaFlow Device in Canada. In July 2001 we received pre-market approval for the AquaFlow Device from the FDA.

Distribution And Customers

We maintain a highly trained sales force that works closely with our customers (primarily surgeons and other health care providers) to educate them on the benefits of our products, and the skills and techniques needed to perform minimally invasive surgical procedures. We supplement our direct sales efforts through promotional materials, publications and by sponsoring surgical procedure courses, seminars and technical presentations given by leading ophthalmologists.

Our products are sold domestically through a network of independent territorial representatives who are compensated by commission programs geared to our yearly sales objectives. We have eight independent and employee regional managers located throughout the United States and Canada to whom the territorial representatives report. International sales are primarily conducted through our subsidiaries, which sell through direct and independent sales representatives and through country or independent area medical distributors.

We market our products to ophthalmologists, surgical centers, hospitals, managed care providers, health maintenance organizations and group purchasing organizations. No material part of our business, taken as a whole, is dependent upon a single or a few customers.

Sources And Availability Of Manufacturing Materials

We manufacture our IOLs and our AquaFlow glaucoma device at our facilities located in California and Switzerland, and our ICLs at our facilities located in Switzerland. Many components of our products are purchased to our specifications from suppliers or subcontractors. Most of these components are standard parts

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available from multiple sources at competitive prices. We presently have one supplier of silicone, the principal raw material for our silicone IOLs, however this raw material is available from several other distributors. We currently purchase plastic resin for our lens delivery systems from a supplier who has stopped manufacturing the specific material used by the Company. We are currently in the process of validating alternate suppliers and believe we will be able to secure a source with little or no disruption of supply. We also purchase products manufactured by others in the eye care industry. If any of these supply sources becomes unavailable, we believe that we would be able to secure alternate supply sources within a short period of time and with minimal or no disruption. The proprietary collagen based raw materials used to manufacture IOLs, ICLs, and AquaFlow Device are internally sole-sourced at one of our facilities in California. If the supply of these collagen based raw materials is interrupted we know of no alternate supplier, therefore any such interruption could result in our inability to produce these products.

Our SonicWAVE Phacoemulsification System is manufactured by our subsidiary, Circuit Tree Medical, Inc. The components used in the manufacture of the SonicWAVE Phacoemulsification System are available from multiple sources at competitive prices.

Intellectual Property And Licenses

We and/or our licensors have pending patent applications and issued patents in various countries relating specifically to our products or various aspects of them, including our core patent (the “Mazzocco Patent”) relating to methods of folding or deforming an IOL or ICL for use in minimally invasive surgery. The Mazzocco Patent was granted by the United States Patent Office in March 1986 to Thomas Mazzocco, M.D., who was a practicing ophthalmologist and a co-founder of the Company. The Mazzocco Patent will expire in the year 2003. We do not derive significant revenues from this patent, and we do not believe that its expiration is of material importance in relation to our overall sales. We have also acquired or applied for several patents for insertion devices, glaucoma devices and other products for ophthalmic use.

In May 1995, Intersectional Research and Technology Complex Eye Microsurgery (IRTC) granted an exclusive royalty bearing license to our subsidiary, STAAR Surgical AG, to manufacture, use and sell IRTC’s glaucoma devices in the United States, Europe, Latin America, Africa, and Asia, and non-exclusive rights with respect to the countries in the Commonwealth of Independent States (the former Union of Soviet Socialists Republic) and China. In January 1996, IRTC granted an exclusive royalty bearing license to STAAR Surgical AG to manufacture, use and sell implantable contact lenses using IRTC’s biocompatible materials in the United States, Europe, Latin America, Africa, and Asia, and non-exclusive rights with respect to the Commonwealth of Independent States. The terms of these licenses extend for the lives of the patents. In connection with these licenses, IRTC also assigned to us its patent for its biocompatible material, which we use in manufacturing our ICLs and some of our IOLs. We have since adopted IRTC’s biocompatible material and glaucoma device design for our AquaFlow Device, and have incorporated IRTC’s biocompatible materials for use with our proprietary ICL design. These patents and the technology rights are of material importance to our refractive products market segment. Each of these patents will expire in the year 2009. We are continuing to expand our patent portfolios of refractive and glaucoma products so that we do not become dependent on the protection of any single patent.

In connection with our acquisition of a majority of the outstanding shares of Circuit Tree Medical, Inc. in December 1999, we acquired patents relating to the SonicWAVE Phacoemulsification System and other related technologies.

We have registered the mark “STAAR” and our associated logo with the United States Patent and Trademark Office. We also have common law trademark rights to other marks and we have applied for registration for some of these marks.

We have granted licenses to certain of our patents, trade secrets and technology, including our foldable technology, to other companies for use in connection with their cataract products. The licenses under the patents extend for the life of the patents. The licensees include Allergan Medical Optics (“AMO”), Alcon Surgical, Inc.

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(“Alcon”), Bausch & Lomb Surgical (“Bausch & Lomb”), CIBA Vision, Pharmacia & Upjohn, Inc. (“Pharmacia & Upjohn”) and Canon STAAR Company, Inc., a joint venture we own with Canon, Inc. and Canon Sales Co., Inc. We licensed certain of our patented foldable technology on an exclusive basis to Canon STAAR Company, Inc. (for Japan only), on a non-exclusive basis to Alcon, Bausch & Lomb, CIBA Vision and Canon STAAR Company, Inc. (with respect to the world other than Japan), and on a co-exclusive basis to AMO. At the time these licenses were granted, we received substantial pre-payments of royalties on all but one of the licenses. We expect to receive continuing revenues from only one of these licenses. Our business strategy is not dependent upon realizing royalties from these licenses in the future.

Competition

Competition in the medical device field is intense and characterized by extensive research and development and rapid technological change. Development by competitors of new or improved products, processes or technologies may make our products obsolete or less competitive. We will be required to devote continued efforts and significant financial resources to enhance our existing products and to develop new products for the ophthalmic industry.

Our ICL will face significant competition in the marketplace from products that improve or correct refractive conditions, such as corrective eyeglasses and external contact lenses, and particularly from providers of conventional and laser surgical procedures. These are products long established in the marketplace and familiar to patients in need of refractive correction. Furthermore, corrective eyeglasses and external contact lenses are more easily obtained, in that a prescription is usually written following a routine eye examination in a doctor’s office, without admitting the patient to a hospital or surgery center. We believe that the following providers of laser surgical procedures comprise our primary competition in the marketplace for patients requiring refractive corrections: Summit Technology, Inc. (“Summit”), VISX, Incorporated (“VISX”), Bausch & Lomb and Nidek Co., Ltd. Excimer lasers for photo-refractive keratectomy which are manufactured and marketed by Summit, VISX, Nidek Co., Ltd., Alcon, and Laser Sight are the only products that have received pre-market approval from the FDA for sale within the United States. There are other phakic refractive lenses being manufactured by OPHTEC BV and Medennium that are offered for sale outside the United States. AMO recently licensed the Artisan lens manufactured by OPHTEC BV. We do not know when these lenses might obtain FDA approval for sale in the United States.

We believe our primary competition in the development and sale of products used to surgically correct cataracts, namely foldable IOLs and phacoemulsification machines, includes Bausch & Lomb, AMO, Alcon, Pharmacia & Upjohn, Inc. and CIBA Vision. Each of these competitors is a licensee of our foldable technology. Significant competitors in the hard IOL market include Bausch & Lomb, AMO, Pharmacia & Upjohn, Inc., Alcon and CIBA Vision. These competitors have been established for longer periods of time than we have and have significantly greater resources than we have, factors that give them the advantages of greater name recognition and larger sales operations.

Our primary competition in the development and sale of products used to treat glaucoma is from pharmaceutical companies, primarily because drug therapy is, and for years has been, the accepted treatment for glaucoma. The portion of this market held by medical devices used to treat glaucoma is insignificant at present. We believe that Merck & Company, Inc., Pharmacia, Novartis, Alcon, Allergan and Bausch & Lomb are the largest providers of drugs used to treat glaucoma within the United States, and CIBA Vision Corporation, Pharmacia & Upjohn, Inc. and Lederle Laboratories, a subsidiary of American Home Products, are the largest internationally. There are other devices under development to be used in conjunction with a non-penetrating deep sclerectomy for the surgical management of glaucoma. These devices are manufactured by Alcon, Corneal, Optonol and Glaukos.

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Regulatory Requirements

Our products are subject to regulatory approval or clearance in both the United States and in foreign countries. The following discussion outlines the various kinds of reviews to which our products or production facilities may be subject.

Clinical Regulatory Requirements Within The United States.    Under the “Medical Device Amendments of 1976” (the “Medical Device Act”), a section of the Federal Food, Drug & Cosmetic Act, the FDA has the authority to adopt regulations that:

• set standards for medical devices,

• require proof of safety and effectiveness prior to marketing devices which the FDA believes require pre-market clearance,

• require test data approval prior to clinical evaluation of human use,

• permit detailed inspections of device manufacturing facilities,

• establish “good manufacturing practices” that must be followed in device manufacture,

• require reporting of serious product defects to the FDA, and

• prohibit device exports that do not comply with the Medical Device Act unless they comply with established foreign regulations, do not conflict with foreign laws, and the FDA and the health agency of the importing country determine export is not contrary to public health.

Most of our products are “medical devices intended for human use” within the meaning of the Medical Device Act and are, therefore, subject to FDA regulation.

The Medical Device Act establishes complex procedures for compliance based upon FDA regulations that designate devices as Class I (general controls, such as compliance with labeling and record-keeping requirements), Class II (performance standards in addition to general controls) or Class III (pre-market approval application (“PMAA”) before commercial marketing). Class III devices are the most extensively regulated because the FDA has determined they are life-supporting, are of substantial importance in preventing impairment of health, or present a potential unreasonable risk of illness or injury. The effect of assigning a device to Class III is to require each manufacturer to submit to the FDA a PMAA that includes information on the safety and effectiveness of the device.

A medical device that is substantially equivalent to a directly related medical device previously in commerce may be eligible for the FDA’s abbreviated pre-market notification “510(k) review” process. FDA 510(k) clearance is a “grandfather” process. As such, FDA clearance does not imply that the safety, reliability and effectiveness of the medical device has been approved or validated by the FDA, but merely means that the medical device is substantially equivalent to a previously cleared commercially-related medical device. The review period and FDA determination as to substantial equivalence should be made within 90 days of submission of a 510(k) application, unless additional information or clarification or clinical studies are requested or required by the FDA. As a practical matter, the review process and FDA determination often take significantly longer than 90 days.

Our IOLs and ICLs are Class III devices, and our lens injectors, phacoemulsification equipment, ultrasonic cutting tips, AquaFlow Device and surgical packs are Class II devices. We have received FDA pre-market approval for our IOLs (including the Toric and the Collamer IOLs) and AquaFlow Device and FDA 510(k) clearance for our phacoemulsification equipment, lens injectors, ultrasonic cutting tips and surgical packs. We have completed the enrollment for Phase III of the clinical study of the ICL that corrects myopia and we continue to enroll patients in Phase III of the clinical study of the ICL that corrects hyperopia. In September 2001 we applied for an investigation device exemption (IDE) for a toric version of the ICL. In January 2002 the FDA

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conditionally approved an IDE for the Toric ICL. We expect to submit an application to the FDA for pre-market approval of our ICL to correct myopia in 2002.

As a manufacturer of medical devices, our manufacturing processes and facilities are subject to continuing review by the FDA and various state agencies to insure compliance with good manufacturing practices. These agencies inspect our facilities from time to time to determine whether we are in compliance with various regulations relating to manufacturing practices, validation, testing, quality control and product labeling.

We are also subject to regulation by the local Air Pollution Control District and the United States Environmental Protection Agency as a result of some of the chemicals used in our manufacturing processes.

Medical device laws and regulations similar to those described above are also in effect in some of the countries to which we export our products. These range from comprehensive device approval requirements for some or all of our medical device products to requests for product data or certifications.

Clinical Regulatory Requirements In Foreign Countries.    There is a wide variation in the approval or clearance requirements necessary to market products in foreign countries. The requirements range from minimal requirements to a level comparable to or even greater than those of the FDA. For example, many countries in South America have minimal regulatory requirements, while many developed countries, such as Japan, have requirements at least as stringent as those of the FDA. FDA acceptance is not always a substitute for foreign government approval or clearance.

As of June 1998 the member countries of the European Union (the “Union”) require that all medical products sold within their borders carry a Conformite’ Europeenne Mark (CE Mark). The CE Mark denotes that the applicable medical device has been found to be in compliance with guidelines concerning manufacturing and quality control, technical specifications and biological or chemical and clinical safety. The CE Mark supersedes all current medical device regulatory requirements for Union countries. We have obtained the CE Mark for all of our principal products including our ICLs, IOLs (including the Toric IOL and Collamer IOL), SonicWAVE Phacoemulsification System and our AquaFlow Device.

Other Regulatory Requirements.    Sales of our products may be affected by health care reimbursement practices. For example, in January 1994, the Health Care Financing Administration adopted rules that limit Medicare reimbursement for IOLs implanted in Medicare patients to a flat fee of $150.

We are also subject to various federal, state and local laws applicable to our operations including, among other things, working conditions, laboratory and manufacturing practices, and the use and disposal of hazardous or potentially hazardous substances.

Research And Development

We are focused on furthering technological advancements in the ophthalmic products industry through continuous innovative development of ophthalmic products and materials and related surgical techniques. We maintain an active internal research and development program comprised of 29 employees. Over the past year, we have principally focused our research and development efforts on

• developing our Toric ICL, enhancing our AquaFlow Device and developing IOLs and ICLs for the correction of presbyopia,

• improving insertion and delivery systems for our foldable products,

• generally improving the manufacturing systems and procedures for all products to reduce manufacturing costs,

• improving the SonicWAVE Phacoemulsification System, and

• developing products for the refractive market.

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Research and development expenses amounted to approximately $3,800,000, $4,215,000, and $4,338,000 for our 2001, 2000 and 1999 fiscal years, respectively.

Environmental Matters

The Company is subject to federal, state, local and foreign environmental laws and regulations. We believe that our operations comply in all material respects with applicable environmental laws and regulations in each country where we have a business presence. We do not anticipate that compliance with these laws will have any material impact on our capital expenditures, earnings or competitive position. We currently have no plans to invest in material capital expenditures for environmental control facilities for the remainder of our current fiscal year or for the next fiscal year. We are not aware of any pending litigation or significant financial obligations arising from current or past environmental practices that are likely to have a material adverse impact on our financial position. However, environmental problems relating to our properties could develop in the future, and such problems could require significant expenditures. Additionally, we are unable to predict changes in legislation or regulations that may be adopted or enacted in the future and that may adversely affect us.

Significant Subsidiaries

The Company’s only significant subsidiary is STAAR Surgical AG, a wholly owned entity incorporated in Switzerland. This subsidiary develops, manufactures and distributes products worldwide including Collamer IOLs, ICLs and the AquaFlow Device. STAAR Surgical AG also controls 80% of Domilens GMBH, a European sales subsidiary that distributes both STAAR products and products from various competitors.

Employees

Together with our subsidiaries, we had a total of 258 employees as of December 28, 2001, including 46 in administration, 86 in marketing and sales, 29 in research and development and technical services and 97 in manufacturing, quality control and shipping.

Financial Information About Foreign And Domestic Operations

Approximately $27,994,000, $30,712,000 and $28,658,000 of our overall revenues were generated in the United States for the 2001, 2000 and 1999 fiscal years, respectively, constituting approximately 55%, 56% and 48% of overall revenues for those years. We believe that international markets represent a significant opportunity for continued growth. Europe, which is our principal foreign market, generated approximately $20,623,000, $19,729,000 and $23,995,000 in revenues for the 2001, 2000 and 1999 fiscal years, respectively, constituting approximately 41%, 36% and 41% of overall revenues for those fiscal years. The remaining foreign sales were attributed to the Canadian, Asian/Pacific, Middle Eastern, South African and South American geographic areas. Most all products sold in 2001 were manufactured in the United States and Switzerland. See Note 16 to the Consolidated Financial Statements.

A significant portion of our revenues relate to our international sales and operations. We expect this to continue to be the case in the future. Our international sales and operations subject us to several potential risks, including:

• risks associated with fluctuating exchange rates,

• the regulation of fund transfers by foreign governments,

• United States and foreign export and import duties and tariffs, and

• political instability.

The occurrence of any of the foregoing could materially and adversely affect our business. We have not previously engaged in activities to mitigate the effects of foreign currency fluctuations, because historically we

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have been generally paid in U.S. dollars with respect to our international operations. As earnings from international operations increase, our exposure to fluctuations in foreign currencies may increase, and we may utilize forward exchange rate contracts or engage in other efforts to mitigate foreign currency risks.

Our continued growth is in part dependent on the expansion of international sales of our products, however this expansion will involve operations in markets where we may not be experienced. We may not be successful in capturing a significant portion of these markets for many reasons, including unsuccessful distribution efforts and an inability to obtain regulatory approvals.

ITEM 2.    DESCRIPTION OF PROPERTY

Our operations are conducted in leased facilities throughout the world. Our executive offices, manufacturing, warehouse and distribution, and primary research facilities are located in Monrovia, California. STAAR Surgical AG maintains office, manufacturing, warehouse and distribution, and research facilities in Nidau, Switzerland. The Company has two additional facilities in California, one for raw material support and another for research and manufacturing. Outside the United States, the Company leases facilities in Germany, Australia, South Africa, Switzerland, France, Sweden, Austria and Canada. We believe our present facilities are adequate for our current needs.

ITEM 3.    PENDING LEGAL PROCEEDINGS

We are party to various claims and legal proceedings arising out of the normal course of our business. These claims and legal proceedings relate to contractual rights and obligations, employment matters, and claims of product liability. In addition to legal proceedings arising out of the normal course of our business, on December 28, 2001 we were named as a party in the following on-going actions.

Mario Pelegrina v. Andrew F. Pollet, John R. Wolf, Peter J. Utrata, Volker D. Anhaeusser, Joseph Priske, William Huddleston, Carl Manisco, individuals, Pollet & Richardson, a California corporation, and Iotech, Inc., a California corporation, Defendants, and STAAR Surgical Company, Nominal Defendant, Court of Chancery of the State of Delaware, Case No. 18556. In December 2000, Mario Pelegrina filed this shareholder derivative suit against us and certain named directors and officers. Mr. Pelegrina alleges that these directors and officers breached their fiduciary duties by engaging in self-dealing and waste of our assets. Because this is a shareholder derivative action, we are a putative plaintiff and stand to receive any damages that may be awarded.

John R. Wolf v. STAAR Surgical Company, Los Angeles Superior Court; Case No. BC235396. On August 18, 2000 John R. Wolf, our former President and Chief Executive Officer and a former member of the Board of Directors, filed this action seeking declaratory and injunctive relief. Mr. Wolf alleges he has the right to exercise certain options in order to purchase shares of our Common Stock and to receive copies of certain documents related to his prior employment. Mr. Wolf is seeking declaratory and injunctive relief, including a declaration of his rights and obligations as they relate to the exercise of stock options and an indemnification for loss of value of the Common Stock represented by the options. We have filed a cross-complaint seeking compensatory damages and ancillary relief on claims arising from Mr. Wolf’s employment.

STAAR Surgical Company v. John R. Wolf, Los Angeles Superior Court; Case No. BC235396. On September 18, 2000 we filed a cross-complaint for declaratory relief and monetary damages against Mr. Wolf. In our action, we seek to obtain a judgment from the Court declaring that we are not obligated to issue to Mr. Wolf the Common Stock that he alleges he is entitled to receive. We are also asking the Court to enforce Mr. Wolf’s promise to transfer to us 243,067 shares of our Common Stock in payment of certain loans made by the Company to him, or, alternatively, to enforce his promise to pay the loans with cash. Finally, we have asked the Court to declare that Mr. Wolf breached his fiduciary duties to the Company and that the Company had cause to terminate his employment.

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John R. Wolf v. STAAR Surgical Company, Andrew F. Pollet, Mary Ann Sapone, David Bailey, Volker Anhaeusser and Peter Utrata, Cross-Complaint filed in Los Angeles Superior Court, Case No. BC235396. On or about March 2, 2001, the Company was served with a cross-complaint filed by Mr. Wolf alleging breach of his employment contract, civil conspiracy to breach his employment contract, intentional infliction of emotional distress, negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, wrongful termination in violation of public policy based on discrimination, violation of section 12941 of the California Government Code, conversion, fraud and deceit, and violation of sections 12921 and 12945.2 of the California Labor Code. Mr. Wolf has asked to be awarded damages according to proof.

Richard Leza v. STAAR Surgical Company, Pollet & Richardson, Los Angeles Superior Court, Case Number BC257159: This action was filed on August 30, 2001. Plaintiff Richard Leza was the Company’s former Vice President of Finance, Business Development and Corporate Strategy. He was terminated on November 1, 2000. Mr. Leza alleges that no cause existed for his termination, that he was entitled to acceleration of an option to purchase 50,000 shares of the Company’s Common Stock, that a loan in the amount of $120,000 made to him by the Company should have been forgiven, and that he is entitled to a severance payment of $130,000. Mr. Leza also alleged that the Company breached the implied covenant of good faith and fair dealing and terminated him in violation of public policy.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the quarter ended December 28, 2001.

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PART II

ITEM 5.    MARKET FOR THE REGISTRANT’S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

Our Common Stock is quoted on the National Association of Securities Dealers Automatic Quotation (“NASDAQ”) National Market under the symbol “STAA.” The following table sets forth the reported high and low bid prices of the Common Stock as reported by Nasdaq for the calendar periods indicated:

Period	High		Low
2001
Fourth Quarter	$	4.250	$	1.700
Third Quarter		5.250		1.550
Second Quarter		5.500		2.000
First Quarter		13.875		3.563
2000
Fourth Quarter	$	18.875	$	10.500
Third Quarter		17.750		11.000
Second Quarter		14.500		9.375
First Quarter		13.875		9.125

The last reported sale price for our Common Stock on the Nasdaq National Market on March 22, 2002 was $4.54 per share. As of March 22, 2002, there were approximately 711 record holders of our Common Stock.

We have not paid any cash dividends on our Common Stock since our inception. We currently anticipate that all income will be retained to further develop our business and that no cash dividends on the Common Stock will be declared in the foreseeable future.

On October 2, 2000 we completed a private placement of 1,500,000 shares of our Common Stock. CIBC World Markets and Adams, Harkness & Hill, Inc. acted as placement agents for this offering. The Common Stock was sold to institutions. The aggregate offering price of the Common Stock sold in this private placement was $21 million. Of this amount, a total of 7% of the gross proceeds raised from the sale, or $1,470,000, was paid to the placement agents. The Common Stock was sold pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933, based upon the fact that there were less than 35 purchasers and all purchasers were accredited investors.

On November 29, 1999 we purchased an additional 20% interest in Domilens, a German distributorship, in exchange for cash and 125,000 shares of our Common Stock. This issuance was exempt from registration under the Securities Act of 1933 pursuant to the exemptions from registration provided by Section 4(2) of the Act.

On December 3, 1999 we purchased a majority of the shares of Circuit Tree Medical, Inc. from its two shareholders in exchange for cash and a total of 145,772 shares of our Common Stock. This issuance was exempt from registration under the Securities Act of 1933 pursuant to the exemptions from registration provided by Section 4(2) of the Act.

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ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data with respect to the five most recent fiscal years ended December 28, 2001, December 29, 2000, December 31, 1999, January 1, 1999, and January 2, 1998. The selected consolidated statement of income data set forth below for each of the three most recent fiscal years, and the selected consolidated balance sheet data set forth below at December 28, 2001, December 29, 2000 and December 31, 1999, are derived from the Consolidated Financial Statements which have been audited by BDO Seidman, LLP, independent certified public accountants, as indicated in their report which is included elsewhere in this Annual Report. The selected consolidated statement of income data set forth below for each of the two fiscal years in the periods ended January 1, 1999 and January 2, 1998, and the consolidated balance sheet data set forth below at December 31, 1999, January 1, 1999, and January 2, 1998 are derived from the Company’s audited consolidated financial statements not included in this Annual Report. The selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements of the Company, and the Notes thereto, included elsewhere in this Annual Report, and “Management’s Discussion And Analysis Of Financial Condition And Results Of Operations” in Item 7.

	Fiscal Year Ended (In thousands except per share data)
	December 28, 2001			December 29, 2000			December 31, 1999			January 1, 1999			January 2, 1998
Statement of Operations
Sales	$	50,237		$	53,986		$	58,955		$	54,244		$	42,480
Royalty and other income		549			448			253			899			3,040
Total revenues		50,786			54,434			59,208			55,143			45,520
Cost of sales		28,203			26,329			22,935			18,533			10,262
Gross profit		22,583			28,105			36,273			36,610			35,258
Selling, general, and administrative
General and administrative		8,746			8,593			7,939			6,770			6,334
Marketing and selling		20,043			21,254			19,879			18,709			12,719
Research and development		3,800			4,215			4,338			3,570			3,936
Restructuring, impairment, and other non-recurring charges		7,780			15,276			—			—			—
Total selling general and administrative		40,369			49,338			32,156			29,049			22,989
Operating income (loss)		(17,786	)		(21,233	)		4,117			7,561			12,269
Total other income (expense)		(455	)		(4,162	)		(682	)		(763	)		(579	)
Income before income taxes, minority interest and cumulative effect of change in accounting method		(18,241	)		(25,395	)		3,435			6,798			11,690
Income tax provision (benefit)		(3,547	)		(6,580	)		862			1,999			4,271
Minority interest		139			87			419			662			—
Net income (loss) before accounting change		(14,833	)		(18,902	)		2,154			4,137			7,419
Cumulative effect of accounting change		—			—			—			1,680			—
Net income (loss)	$	(14,833	)	$	(18,902	)	$	2,154		$	2,457		$	7,419
Diluted income (loss) per share before effect of change in accounting method	$	(0.87	)	$	(1.23	)	$	0.15		$	0.29		$	0.53
Basic net income (loss) per share	$	(0.87	)	$	(1.23	)	$	0.15		$	0.18		$	0.57
Diluted net income (loss) per share	$	(0.87	)	$	(1.23	)	$	0.15		$	0.17		$	0.53
Weighted average number of basic shares		17,003			15,378			14,157			13,542			13,124
Weighted average number of diluted shares		17,003			15,378			14,756			14,268			14,113
Balance Sheet Data
Working capital	$	17,141		$	24,303		$	25,590		$	26,925		$	24,936
Total assets		65,805			80,152			85,273			73,290			62,391
Notes payable and current portion of long-term debt		8,216			7,944			2,691			2,312			1,608
Long-term debt		—			—			13,673			10,021			6,666
Stockholders’ equity	$	46,446		$	58,465		$	52,684		$	47,706		$	44,783

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for the historical information contained in this Annual Report, the matters discussed in Management’s Discussion And Analysis Of Financial Condition And Results Of Operations are forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Actual results may differ significantly from the discussion of such matters in the forward-looking statements.

Critical Accounting Policies

The company believes the following represent its critical accounting policies.

Revenue Recognition

In general, the Company supplies foldable IOLs on a consignment basis to customers, primarily ophthalmologists, surgical centers, hospitals and other eye care providers and recognizes sales when the IOLs are implanted. Sales of the AquaFlow Device, the ICL, and sales to foreign distributors are recognized upon shipment. Revenue from license and technology agreements is recorded as income over the term of the respective agreement when the Company has satisfied the terms of such agreements and has received notification of the amount of sales of the Company’s products.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Realization of the deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Management believes that it is more likely than not that future taxable income will be sufficient to realize the recorded deferred tax assets, net of the existing valuation allowance at December 28, 2001. Future taxable income is based on management’s forecast of the operating results of the Company and there can be no assurance that such results will be achieved. Management continually reviews such forecasts in comparison with actual results and expected trends. In the event management determines that sufficient future taxable income may not be generated to fully realize the net deferred tax assets, the Company will increase the valuation allowance by a charge to income tax expense in the period of such determination.

Patents

The Company capitalizes the costs of acquiring patents and licenses as well as the legal costs of successfully defending its rights to these patents. Amortization is computed on the straight-line basis over the estimated useful lives, which range from 12 to 17 years. Patent and license costs are reviewed each year to assess recoverability from future operations using undiscounted future cash flows of the related products. A write-down would be recorded when the cash flows is less than the carrying value of these assets.

The Company’s ability to compete effectively is materially dependent upon the proprietary nature of the designs, processes, technologies and materials owned, used by or licensed to the Company. The Company has been and will continue to be involved in litigation to protect its copyrights, patents and proprietary properties and technologies.

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Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired and is being amortized on a straight-line basis over periods ranging from fifteen to twenty years. The Company assesses the recoverability of goodwill by determining whether the amortization of the goodwill balance over the remaining life can be recovered through undiscounted future operating cash flows.

Results of Operations

The following table sets forth the percentage of total revenues represented by certain items reflected in the Company’s income statement for the period indicated and the percentage increase or decrease in such items over the prior period.

	Percentage of Total Revenues						Percentage Change
	December 28, 2001		December 29, 2000		December 31, 1999		2001 vs. 2000		2000 vs. 1999
Total revenues	100.0	%	100.0	%	100.0	%	(6.7	)%	(8.1	)%
Cost of sales	55.5	%	48.4	%	38.7	%	7.1	%	14.8	%
Gross Profit	44.5	%	51.6	%	61.3	%	(19.6	)%	(22.5	)%
Costs and expenses:
General and administrative	17.2	%	15.8	%	13.4	%	1.8	%	8.2	%
Marketing and selling	39.5	%	39.0	%	33.6	%	(5.7	)%	6.9	%
Research and development	7.5	%	7.7	%	7.3	%	(9.8	)%	(2.8	)%
Restructuring, impairment and other non-recurring charges	15.3	%	28.1	%	—		(49.1	)%	—
Total costs and expenses	79.5	%	90.6	%	54.3	%	(18.2	)%	53.4	%
Operating income (loss)	(35.0	)%	(39.0	)%	7.0	%	(16.2	)%	—
Other expense, net	(0.9	)%	(7.6	)%	(1.2	)%	(89.1	)%	—
Income (loss) before income taxes	(35.9	)%	(46.6	)%	5.8	%	(28.2	)%	—
Income tax provision (benefit)	(7.0	)%	(12.1	)%	1.5	%	(46.1	)%	—
Minority interest	0.3	%	0.2	%	0.7	%	59.8	%	(79.2	)%
Net income (loss)	(29.2	)%	(34.7	)%	3.6	%	(21.5	)%	—

2001 Fiscal Year Compared to 2000 Fiscal Year

Revenues for the year ended December 28, 2001 were $50.8 million, representing a 6.7% decrease over the $54.4 million in revenues for the year ended December 29, 2000. The decrease in revenues resulted primarily due to decreased sales of the Company’s Elastic^™ and Elastimide^™ silicone intraocular lenses due to the impact of a voluntary product recall in the second quarter of 2001. The decrease in silicone IOL sales was partially offset by increased sales of the Company’s Collamer, Toric, and acrylic IOLs. The Company anticipates a continued shift in product mix in fiscal 2002. Revenues also decreased in 2001 for sales in 2000 of subsidiaries that were closed in the same year and sales of the Company’s Sonic WAVE Phacoemulsification System also decreased. This decrease was due to the elimination of a dedicated sales force as a result of cost containment measures taken during fiscal 2001 and a general decline in the economy resulting in a decline in capital equipment spending. In addition to increased sales of Collamer, Toric and acrylic IOLs, sales of the Company’s AquaFlow Device, which was approved for sale in the United States in the third quarter of fiscal 2001 and STAARVISC II also increased.

The Company is expanding its market focus beyond the cataract market to also include the refractive and glaucoma markets. The Company anticipates that its growth in the refractive and glaucoma product markets will increase significantly as the Company’s refractive lenses (ICL and Toric IOL) and its AquaFlow Device continue to gain market acceptance and regulatory approvals. The Company believes its sales of products used for the treatment of cataracts will grow with the introduction or reintroduction of various products including the Collamer three-piece IOL, STAARVISC II, UltraVac V1 tubing and the SonicWAVE Phacoemulsification System.

Cost of Sales.    Cost of sales were $28.2 million or 55.5% of revenue for the year ended December 28, 2001 compared to $26.3 million or 48.4% of revenue for the year ended December 29, 2000. The increase in cost of

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sales resulted from a 23% increase in inventory write-offs over the prior year, primarily relating to voluntary product recalls. Excluding the impact of inventory write-offs, cost of sales as a percent of revenues increased from 38.9% in fiscal 2000 to 43.0% in fiscal 2001. This increase is primarily due to increased unit costs of silicone IOLs and a change in product mix. Silicone IOL unit costs increased significantly due to lower production levels necessitated by reduced sales demand and improved inventory management. The Company expects the cost of units produced in 2002 to decrease over 2001 levels.

General and Administrative.    General and administrative expense for the year ended December 28, 2001 was $8.7 million, or 17.2% of revenue, as compared to $8.6 million, or 15.8% of revenue for the year ended December 29, 2000. The primary reason for the increase as a percent of revenue is due to decreased revenues. The slight increase in dollars is primarily attributable to relocation costs of executive management, increased administrative salaries, and increased professional fees offset by decreased expenses from a subsidiary that was closed in the prior year.

Marketing and Selling.    Marketing and selling expense for the year ended December 28, 2001 was $20.0 million or 39.5% of revenue, as compared to $21.3 million or 39.0% of revenue for the year ended December 29, 2000. The primary reason for the increase as a percent of revenue is due to decreased revenues. Actual expense decreased by $1.2 million due to decreased commissions, decreased costs from a subsidiary that was closed in fiscal 2000 and cost containment measures taken during fiscal 2001.

Research and Development.    Research and development expense for the year ended December 28, 2001 was $3.8 million, or 7.5% of revenue as compared to $4.2 million or 7.7% of revenue for the year ended December 29, 2000. Research and development expense decreased over the prior year due primarily to decreased  staffing during the first six months of 2001. The Company expects research and development expense to increase as employees have been and will be added to support planned projects.

Restructuring, impairment and non-recurring charges.    In June 2001 management completed an extensive operational review of the Company. Based upon that review, in August 2001 the Company implemented a plan that management believes will allow it to become profitable. As a result of implementing the plan, the Company significantly changed its manufacturing processes and locations, including consolidating lathing activity into the Swiss manufacturing site from the current dual site operations and reducing molded lens capacity at the California site. The Company also reduced its workforce and closed certain overseas operations. In conjunction with the implementation of the plan, the Company recorded pretax charges of approximately $7.8 million in the third and fourth quarters of the 2001 fiscal year. Planned charges included approximately $3.7 million in fixed asset write-offs, $0.3 million in severance and employee relocation costs, and $1.0 million for subsidiary closures. Additionally, the Company reserved $2.1 million of notes receivable from former officers and directors of the Company and paid $0.7 million for the early termination of a consulting contract with the president of one of the Company’s European subsidiaries.

The Company also wrote off $6.4 million of inventory related to voluntary product recalls and excess and obsolete inventory in the second and fourth quarters of 2001. The amount is included in cost of sales at December 28, 2001.

Other Expense, Net.    Other expense, net for the year ended December 28, 2001 was approximately $0.5 million or 0.9% of revenues as compared to approximately $4.2 million or 7.6% of revenues for the year ended December 29, 2000. This decrease resulted from decreased interest expense and amounts written off in fiscal 2000 related to the Company’s joint venture with Canon STAAR Co., Inc.

Income Tax Benefit.    The income tax benefit was $3.5 million for the year ended December 28, 2001 as compared to a benefit of $6.6 million for the year ended December 29, 2000. The primary reason for this decrease relates to decreased U.S. losses over the prior fiscal year resulting in a lower overall tax benefit. The tax benefit for fiscal 2001 was further reduced by approximately $2.8 million in valuation allowances that were recorded against the Company’s deferred tax assets.

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Realization of the deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Management believes that it is more likely than not that future taxable income will be sufficient to realize the recorded deferred tax assets, net of the existing valuation allowance of $4.3 million at December 28, 2001. Future taxable income is based on management’s forecast of the operating results of the Company and there can be no assurance that such results will be achieved. Management continually reviews such forecasts in comparison with actual results and expected trends. In the event management determines that sufficient future taxable income may not be generated to fully realize the net deferred tax assets, the Company will increase the valuation allowance by a charge to income tax expense in the period of such determination.

2000 Fiscal Year Compared to 1999 Fiscal Year

Revenues.    Revenues for the year ended December 29, 2000 were $54.4 million, representing an 8.1% decrease over the $59.2 million in revenues for the year ended December 31, 1999. The primary reasons for the decrease in revenues were the reduced U.S. dollar amounts recorded by international subsidiaries due to the strength of the U.S. dollar as compared to foreign currencies, most specifically the German Mark, decreased sales to the Company’s joint venture, Canon-STAAR Company, Inc., the continuing decline in sales of the Company’s silicone IOLs in Europe and lower average selling prices on international sales of the Company’s ICLs due to the change from direct selling to selling through international distributors. These decreases were offset by increased sales of the SonicWAVE Phacoemulsification System, which was introduced in the third quarter, increased revenue from the sales of the Collamer single piece IOL, approved for sale in April 2000, increased revenues from sales of the Toric IOL and increased revenues from a full year of sales of custom surgical packs to our U.S. customers, which began in mid-year 1999. Other revenue in 2000 increased over 1999 by $195,000.

Cost of Sales.    Cost of sales increased to 48.4% of revenue for the year ended December 29, 2000 from 38.7% of revenue for the year ended December 31, 1999. The primary reasons for this 14.8% increase relates to an inventory write-off of $5.2 million, recorded during the second quarter of 2000, of various items that no longer fit the Company’s future direction. Additionally, despite higher average selling prices for IOLs, higher average unit cost caused the cost of sales as a percentage of revenue exclusive of the above-mentioned write-off to increase slightly to 38.8%. The increase in average selling price was due to the change in product mix to the Company’s premium priced IOLs (Toric and Collamer). The higher average cost of IOLs was due principally to the changes in product mix to the Collamer IOL and, to a lesser extent, increased unit cost due to lower manufacturing activity levels which resulted in the units produced carrying a higher per unit cost from absorption of fixed expenses. Additionally, the full year of sales of custom surgical packs in the U.S. have a higher cost of sales as a percentage of sales when compared to the other products the Company offers.

General and Administrative.    General and administrative expense for the year ended December 29, 2000 was $8.6 million, or 15.8% of revenue, as compared to $7.9 million, or 13.4% of revenue for the year ended December 31, 1999. This increase in dollars is primarily attributable to increases in expenditures for professional service fees, expenses recorded in the second quarter at the time of the Company’s restructuring plan, and increased expenses year over year from subsidiaries acquired or created in late 1999. The increase as a percent of revenues was due to the expenses increasing at a rate greater than the current growth rate of revenues.

Marketing and Selling.    Marketing and selling expense for the year ended December 29, 2000 was $21.3 million or 39.0% of revenue, as compared to $19.9 million or 33.6% of revenue for the year ended December 31, 1999. The primary reasons for this increase are the compensation and travel costs of direct sales management hired in late 1999 and 2000 to sell IOLs and the Company’s SonicWAVE Phacoemulsification Systems, increased commissions generated by the graduated commission schedule which has higher percentage rates as IOL sales prices increase, and average selling price increases over 1999 due to the change in IOL mix to the Company’s proprietary IOLs. Additionally, the Company has continued to increase the expenses for product management to prepare for broader entry into the refractive and glaucoma markets. These increases were offset, in part, as a result of the reduced U.S. dollar amounts recorded by international subsidiaries due to the strength of the U.S. dollar as compared to foreign currencies, most specifically, the German Mark.

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Research and Development.    Research and development expense for the year ended December 29, 2000 was $4.2 million, or 7.7% of revenue as compared to $4.3 million or 7.3% of revenue for the year ended December 31, 1999. Research and development expense decreased slightly over the prior year due to a reduction in research and development staffing offset by increased spending related to the monitoring of clinical trials for the ICL for the correction of myopia, the ICL for the correction of hyperopia, and the AquaFlow Device. Additionally, expenses relating to the development and improvement of the Company’s SonicWAVE Phacoemulsification System increased.

Restructuring, impairment and other non-recurring charges.    On June 22, 2000 the Company announced the details of its plan of restructuring. In conjunction with the implementation of the plan, the Company recorded a pre-tax charge to earnings of $13.8 million in the second quarter of fiscal 2000. The charges include approximately $0.9 million for restructuring of certain subsidiaries, approximately $4.0 million to write-off patents that were considered questionable in providing future value to the Company, approximately $1.9 million of costs incurred by the Company relating to activities that were abandoned, approximately $4.1 million relating to severance and other employee separation costs, approximately $1.9 million relating to the disposition of investment and assets related to the Company’s abandoned entry into the Lasik market, and approximately $1.0 million relating to the closure of a foreign subsidiary. 19 employees were laid-off, terminated or resigned as part of the Company’s restructuring plan. Also included is a $1.5 million charge related to a note receivable from a former officer, which is currently under-collateralized.

Other Expense, Net.    Other expense, net for the year ended December 29, 2000 was approximately $4.2 million or 7.6% of revenues as compared to approximately $0.7 million or 1.2% of revenues for the prior year. The primary reason for this increase was a $4.7 million charge the Company recorded relating to the write-off of its Japanese joint venture.

Income Tax Provision.    Income tax benefit was $6.6 million for the year ended December 29, 2000 as compared to a provision of $0.9 million for the year ended December 31, 1999. The reasons for the change relate to the dramatic reduction in income before income taxes, which was due primarily to the charges taken in the second quarter totaling $24 million before income taxes. During 2000, the Company recorded a deferred tax asset that resulted from the losses recorded for the year. The Company would have been profitable in the 2000 fiscal year with the exclusion of charges relating to the restructuring plan and the reserve for notes receivable.

Liquidity And Capital Resources

The Company has funded its activities over the past several years principally from cash flow generated from operations, credit facilities provided by institutional domestic and foreign lenders, the private placement of Common Stock and the exercise of stock options and warrants.

In June 2001 management completed an extensive operational review of the Company. Based upon that review, in August 2001 the Company implemented a plan that management believes will allow it to become profitable. As a result of implementing the plan, the Company significantly changed its manufacturing processes and locations, including consolidating lathing activity into the Swiss manufacturing site from the current dual site operations and reducing molded lens capacity at the California site. The Company also reduced its workforce and closed certain overseas operations. In conjunction with the implementation of the plan, the Company recorded pretax charges of approximately $7.8 million in the third and fourth quarters of the 2001 fiscal year. Planned charges included approximately $3.7 million in fixed asset write-offs, $0.3 million in severance and employee relocation costs, and $1.0 million for subsidiary closures. Additionally, the Company reserved $2.1 million of notes receivable from former officers and directors of the Company and paid $0.7 million for the early termination of a consulting contract with the president of one of the Company’s European subsidiaries.

The Company also wrote off $6.4 of inventory related to voluntary product recalls and excess and obsolete inventory in the second and fourth quarters of 2001. The amount is included in cost of sales at December 28, 2001.

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Of the total $14.2 million in charges taken during the year, approximately $13.2 million were non-cash charges.

On October 31, 2000, the Company renegotiated its line-of-credit with its current domestic lender. The agreement provided for borrowings of up to $7.0 million at a rate of interest equal to the prime rate (4.75% at December 28, 2001) and granted the lender a security interest in the Company’s accounts receivable, inventories, property, plant, and equipment, and other general intangibles. The agreement required the Company to satisfy certain financial tests, which included positive and negative covenants and also required the maintenance of minimum cash balances.

The note was amended various times during the fiscal year 2001. Amended terms as of December 28, 2001 extended the due date of the note to February 1, 2002, provided for a commitment fee on the unused portion of the line of credit payable to the bank in the amount of .25% per annum, and interest equal to prime plus 1%. The amended terms also required the Company to maintain $2.0 million in restricted cash on deposit with the bank as security for the loan and also provided for various reporting requirements. Borrowings outstanding as of December 28, 2001 and December 29, 2000, were $5.7 million and $5.7 million, respectively. As of December 28, 2001, the Company was not in compliance with the net income covenant. The Lender has agreed to waive its rights and remedies under the loan agreement relating to this non-compliance.

On March 27, 2002 the Company and its domestic lender executed a commitment letter memorializing the lender’s agreement to extend the maturity date of the Company’s line of credit for one year. This agreement is conditioned upon

• the execution and delivery to the lender of definitive documentation, satisfactory to the lender, evidencing the extension;

• the delivery to the lender of a good standing certificate from the state of Delaware;

• payment to the lender of fees and costs associated with the transaction; and

• the lender’s determination that there has been no material adverse change in the Company’s financial condition or business nor any material decline in the market value of the collateral.

The lender may also require other conditions precedent, although it has not done so to date. The lender has prepared the definitive agreement and the Company is in the process of reviewing it.

The Company has a revolving credit facility with a Swiss bank, which, as amended in fiscal year 2001, provides for borrowings of up to approximately $3.0 million (5.0 million Swiss Francs “CHF”) based on the exchange rate at December 28, 2001. The credit facility is split into two parts: Part A provides for borrowings of up to $1.8 million (CHF 3.0 million based on the exchange rate at December 28, 2001) and does not have a termination date; Part B provides for borrowings of up to $1.2 million (CHF 2.0 million based on the exchange rate at December 28, 2001) and will be reduced by $149,000 (CHF 250,000 based on the exchange rate at December 28, 2001) semi-annually beginning June 30, 2002. The credit facility is secured by a general assignment of claims.

The loan agreement provides for borrowings on a current basis at an interest rate of 5.5% per annum and a commission rate of 0.25% is payable each quarter or for a fixed term. The base interest rate for fixed term advances follows Euromarket conditions for loans of the corresponding term and currency plus an individual margin. Fixed term advances, which, as amended in fiscal year 2001, provides for borrowings of up to $1.5 million (CHF 2.5 million based on the exchange rate at December 28, 2001) for a maximum duration of twelve months and for borrowings of up to the remaining $1.5 million (CHF 2.5 million based on the exchange rate at December 28, 2001) for a maximum duration of six months with minimum advances of $298,000 (CHF 500,000).

Borrowings outstanding under the current account as of December 28, 2001 and December 29, 2000 were approximately $513,000 (862,000 CHF, based on the exchange rate at December 28, 2001) and $1.5 million (2.5 million CHF, based on the exchange rate at December 29, 2000), respectively. Fixed term advances at December 28, 2001 were $1.5 million (2.6 million CHF, based on the exchange rate at December 28, 2001) at an interest rate of 4.52%. There were no fixed term borrowings at December 28, 2001.

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The Company had a revolving credit facility with a German bank which provided for borrowings of up to approximately $903,000 (2.0 million Deutsch Marks (DEM) at the exchange rate at December 28, 2001) at an interest rate of 8% until August 31, 2001. In view of the currency change in Germany from Deutsch Marks to Euro (EUR) the credit facility was renewed with a due date of February 28, 2003 and provides for borrowing of up to $662,000 (750,000 EUR at the exchange rate at December 28, 2001). Payments in the amount of $44,000 (50,000 EUR at the exchange rate at December 28, 2001) are due monthly, beginning December 31, 2001. The loan is secured by an assignment of accounts receivable and inventory. Borrowings outstanding as of December 28, 2001 and December 29, 2000 were $421,000 (EUR 477,000 based at the exchange rate at December 28, 2001) and $683,000 (EUR 649,000 based at the exchange rate at December 29, 2000), respectively.

As of December 28, 2001, the Company had net working capital of approximately $17.1 million as compared to $24.3 million as of December 29, 2000. The decrease in working capital is primarily due to the write-off of inventories as a result of voluntary product recalls, decreased accounts receivable due to decreased sales, decreased cash (used for operations), and decreases in other receivables and prepaids, deposits and other current assets offset by an increase in deferred tax assets and a decrease in current liabilities.

Cash and cash equivalents were $0.9 million at December 28, 2001 compared to $6.1 million at December 29, 2000. This $5.2 million decrease in cash is due primarily to $2.0 million in cash that was restricted during the year in connection with an agreement with the Company’s domestic lender, $2.6 million in cash, which was used for operations and $0 .7 million in cash used for investing activities, principally investments in property and equipment.

Cash flows used in operating activities for the year ended December 28, 2001 were approximately $2.6 million, compared to 2000 when operating activities used approximately $5.4 million. The decreased cash used in operations relates to decreased working capital investments, primarily inventory, over the prior fiscal year. The Company is actively managing its inventory and reduced consigned units by almost 40% during 2001. Despite the reduction in inventory units, inventory increased due to increased unit costs of silicone IOLs and a change in product mix. The Company expects unit costs to decrease in 2002 as a result of cost savings initiatives implemented in 2001.

Cash used in investing activities for the year ended December 28, 2001 was $0.7 million compared to $3.8 million for the year ended December 29, 2000. The change relates primarily to decreased investments in patents of approximately $0.5 million and decreased purchases of property and equipment of approximately $2.2 million due to cost containment measures put into place in fiscal 2001. The Company’s planned expenditures for property, plant and equipment and patents in 2002 are $2.0 million and $0.3 million, respectively.

Cash flows used in financing activities for the year ended December 28, 2001 were approximately $1.7 million compared to December 29, 2000 when cash flows from financing activities provided approximately $12.2 million from a private placement of the Company’s common stock. For fiscal 2001, the primary use of cash for financing activities relates to a requirement of the Company’s domestic lender to restrict $2.0 million in cash as collateral on its line of credit.

Management believes that cash flow from operations and available credit facilities, together with its current cash balances, will provide adequate economic resources to fund existing operations.

Foreign Exchange

Management does not believe that the fluctuation in the value of the dollar in relation to the currencies of its suppliers or customers in the last three fiscal years has adversely affected the Company’s ability to purchase or sell products at agreed upon prices. No assurance can be given, however, that adverse currency exchange rate fluctuations will not occur in the future, which would affect the Company’s operating results.

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Inflation

Management believes inflation has not had a significant impact on the Company’s operations during the past three years.

New Accounting Pronouncements

In June 2001 the FASB finalized FASB Statements No. 141, “Business Combinations” (SFAS 141), and No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires the Company to recognize acquired intangible assets apart from goodwill if they meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001. It also requires, upon adoption of SFAS 142, that the Company reclassify the carrying amounts of intangible assets and goodwill based on criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. It also requires the Company to complete a transitional goodwill impairment test by six months from the date of adoption. For purchase business combinations completed prior to June 30, 2001, the net carrying amount of goodwill was $5,985,000 as of December 28, 2001. The Company also has other intangible assets, consisting of patents and licenses, with a net carrying value of $9,896,000 as of December 28, 2001. The estimated useful life of these intangible assets is based on legal and contractual provisions that limit their useful lives. For the fiscal year ended December 28, 2001, goodwill amortization expense was $372,000. The Company is assessing but has not yet determined how the adoption of SFAS 141 and SFAS 142 will affect its future financial position and results of operations.

In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 143 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company believes the adoption of this statement will have no material impact on its financial statements.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), which supercedes SFAS 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed Of”. SFAS 144 addresses financial accounting and reporting requirements for the impairment or disposal of long-lived assets. This statement also expands the scope of a discontinued operation to include a component of an entity, and eliminates the current exemption to consolidation when control over a subsidiary is likely to be temporary. The provisions of this statement are effective for fiscal years beginning after December 15, 2002 and interim periods within those fiscal years, although early adoption is permitted. The Company is assessing but has not yet determined how the adoption of SFAS 144 will affect its future financial position and results of operations.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

All sales by the Company are denominated in U.S. dollars or the currency of the country of origin and, accordingly, the Company does not enter into hedging transactions with regard to any foreign currencies. Currency fluctuations can, however, increase the price of the Company’s products to its foreign customers which can adversely impact the level of the Company’s export sales from time to time. The majority of the Company’s cash equivalents are bank accounts, and the Company does not believe it has significant market risk exposure with regard to its investments. We are also exposed to the impact of interest rate changes. For example, based on average bank borrowings of $10 million during a three-month period, if the interest rate indices on which our bank borrowing rates are based were to increase 100 basis points in the three-month period, interest incurred would increase and cash flow would decrease by $25,000.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements and the Report of Independent Certified Public Accountants are filed with this Annual Report on Form 10-K in a separate section following Part IV, as shown on the index under Item 14(a) of this Annual Report.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

                   FINANCIAL DISCLOSURE

Not applicable.

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PART III

ITEMS 10., 11., 12. AND 13.

The information required in this item is incorporated herein by reference to portions of the Proxy Statement for Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission within 120 days of the close of the fiscal year ended December 28, 2001.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

			Page
(a	)(1)	Financial statements required by Item 14 of this form are filed as a separate part of this report following Part IV
		Report of Independent Certified Public Accountants	F-2
		Consolidated Balance Sheets at December 28, 2001 and December 29, 2000	F-3
		Consolidated Statements of Income for the years ended December 28, 2001, December 29, 2000, and December 31, 1999	F-4
		Consolidated Statements of Stockholders’ Equity for the years ended December 28, 2001, December 29, 2000, and December 31, 1999	F-5
		Consolidated Statements of Cash Flows for the years ended December 28, 2001, December 29, 2000, and December 31, 1999	F-6
		Notes to Consolidated Financial Statements	F-12

(2)  Schedules required by Regulation S-X are filed as an exhibit to this report:

I. Independent Certified Public Accountants’ Report on Schedule

II. Independent Certified Public Accountants’ Consent

III. Valuation and Qualifying Accounts and Reserves

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements and the notes thereto

(3)  Reports on Form 8-K

On October 12, 2001 the Company filed a Form 8-K disclosing the Settlement Agreement entered into among the Company, Canon, Inc., Canon Sales Co., Inc. and Canon-STAAR Co., Inc.

(4)  Exhibits

3.1	Certificate of Incorporation, as amended(8)
3.2	By-laws, as amended(9)
4.1	1990 Stock Option Plan(1)
4.2	1991 Stock Option Plan(2)
4.3	1995 STAAR Surgical Company Consultant Stock Plan(3)
4.4	1996 STAAR Surgical Company Non-Qualified Stock Plan(4)
4.5	Stockholders’ Rights Plan, dated effective April 20, 1995(9)
4.6	1998 STAAR Surgical Company Stock Plan, adopted April 17, 1998(5)
10.1	Joint Venture Agreement, dated May 23, 1988, between the Company, Canon Sales Co, Inc. and Canon, Inc.(7)

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10.2	Promissory Note dated February 28, 1991 from John R. Wolf to the Company(4)
10.3	Stock Pledge/Security Agreement, dated February 28, 1991, between John R. Wolf, the Company and Pollet & Associates(4)
10.4	Promissory Note dated February 28, 1991 from William C. Huddleston to the Company(4)
10.5	Modification dated August 21, 2000 to Promissory Note dated February 28, 1991 from William C. Huddleston to the Company(9)
10.6	Stock Pledge/Security Agreement, dated February 28, 1991, between William C. Huddleston, the Company and Pollet & Associates(4)
10.7	Promissory Note, dated May 26, 1992, from the Andrew F. Pollet and Sally M. Pollet Revocable Trust dated March 6, 1990(6)
10.8	Deed of Trust, dated September 21, 1992, by the Andrew F. Pollet and Sally M. Pollet Revocable Trust dated March 6, 1990(6)
10.9	Promissory Note dated July 3, 1992, from William C. Huddleston to the Company(6)
10.10	Modification dated August 21, 2000 to Promissory Note dated July 3, 1992 from William C. Huddleston to the Company(9)
10.11	Stock Pledge/Security Agreement dated July 3, 1992, between William C. Huddleston the Company and Pollet & Associates(6)
10.12	Lease, dated November 9, 1992, by and between Linda Lee Brown and Phyllis Ann Bailey and the Company regarding real property located at 1911 Walker Avenue, Monrovia, California(6)
10.13	Indenture of Lease dated September 1, 1993 between the Company and FKT Associates(9)
10.14	Second Amendment to Indenture of Lease dated September 21, 1998 between the Company and FKT Associates(9)
10.15	Indenture of Lease dated October 20, 1983, between Dale E. Turner & Francis R. Turner(6)
10.16	Promissory Note dated March 18, 1993, from William C. Huddleston to the Company(9)
10.17	Modification dated August 21, 2000 to Promissory Note dated March 18, 1993 from William C. Huddleston to the Company(9)
10.18	Patent License Agreement, dated May 24, 1995, with Eye Microsurgery Intersectoral Research and Technology Complex(9)
10.19	Patent License Agreement, dated January 1, 1996, with Eye Microsurgery Intersectoral Research and Technology Complex(9)
10.20	Agreement dated December 31, 1997 between the Company and Mentor Corporation(7)
10.21	Promissory Note dated September 4, 1998 from John R. Wolf to the Company(7)
10.22	Stock Pledge Agreement, dated September 4, 1998, between the Company and John R. Wolf(7)
10.23	Stock Pledge Agreement dated September 4, 1998 between the Company and William C. Huddleston(7)
10.24	Promissory Note dated September 4, 1998 from Andrew F. Pollet to the Company(7)
10.25	Stock Pledge Agreement dated September 4, 1998 between the Company and Andrew F. Pollet(7)
10.26	License and Supply Agreement dated May 6, 1999 between LensTec Incorporated, Lenstec Barbados Inc., STAAR Surgical AG and the Company (8)
10.27	Equipment Purchase and Sale Agreement dated May 6, 1999 between Lenstec, Incorporated and the Company(8)
10.28	Employment Agreement dated April 28, 1999 between the Company and John Santos(9)

30

10.29	Modification to Employment Agreement dated May 31, 2000 between the Company and John Santos(9)
10.30	Second Modification to Employment Agreement dated September 5, 2000 between the Company and John Santos(9)
10.31	Promissory Note dated June 16, 1999 from Peter J. Utrata, M.D. to the Company(8)
10.32	Stock Pledge Agreement dated June 16, 1999 by Peter J. Utrata, M.D. in favor of the Company(8)
10.33	Promissory Note dated November 11, 1999 from Peter J. Utrata, M.D. to the Company (8)
10.34	Promissory Note dated November 12, 1999 from John R. Wolf to the Company(8)
10.35	Promissory Note dated November 17, 1999 from William C. Huddleston to the Company (8)
10.36	Standard Industrial/Commercial Multi-Tenant Lease-Gross dated April 5, 2000 entered into between the Company and Kilroy Realty, L.P.(9)
10.37	Promissory Note dated April 7, 2000 from William C. Huddleston to the Company(9)
10.38	Modification dated August 21, 2000 to Promissory Note dated April 7, 2000 from William C. Huddleston to the Company(9)
10.39	Description of oral agreement between John R. Wolf and the Company dated April 18, 2000(9)
10.40	Promissory Note dated June 2, 2000 from Peter J. Utrata, M.D. to the Company(9)
10.41	Stock Pledge Agreement dated June 2, 2000 between the Company and Peter J. Utrata, M.D.(9)
10.42	Resignation, Settlement and Release Agreement dated June 9, 2000 between the Company and Michael Lloyd(9)
10.43	Parking Lot and Storage Lease dated June 11, 2000 between the Company and Gilbert Bates and LaVonne Bates(9)
10.44	Promissory Note dated September 5, 2000 from Andrew F. Pollet to the Company(9)
10.45	Deed of Trust dated September 5, 2000 against real property commonly known as 10934 Alto Court, Oak View, California executed in favor of the Company by Andrew F. Pollet and Sally M. Pollet, as individuals and as trustees of the Andrew F. and Sally M. Pollet Revocable Trust dated March 6, 1990(9)
10.46	Consulting Agreement dated September 19, 2000 between the Company and Donald R. Sanders, Ltd.(9)
10.47	Form of Purchase Agreement entered into between the Company and Fortis Advantage Portfolios, Inc.—Capital Appreciation Portfolio(9)
10.48	Form of Purchase Agreement entered into between the Company and Fortis Series Fund, Inc.—Aggressive Growth Series(9)
10.49	Form of Purchase Agreement entered into between the Company and Phoenix Edge Series Fund Engemann Small & Mid Cap Growth Series(9)
10.50	Form of Purchase Agreement entered into between the Company and Phoenix-Engemann Small Cap Fund(9)
10.51	Form of Purchase Agreement entered into between the Company and Phoenix-Engemann Small & Mid-Cap Growth Fund(9)
10.52	Form of Purchase Agreement entered into between the Company and Pequot Scout Fund, L.P.(9)
10.53	Form of Purchase Agreement entered into between the Company and Pequot Navigator Offshore Fund, Inc.(9)
10.54	Form of Purchase Agreement entered into between the Company and Baystar International, Ltd.(9)
10.55	Form of Purchase Agreement entered into between the Company and Baystar Capital, L.P.(9)

31

10.56	Form of Purchase Agreement entered into between the Company and Invesco Global Health Sciences Fund(9)
10.57	Promissory Note dated October 23, 2000 from Andrew F. Pollet to the Company(9)
10.58	Settlement Agreement and Mutual Release dated October 27, 2000 between the Company and Vladimir Feingold(9)
10.59	Letter Agreement between the Company and Wells Fargo Bank, National Association and Revolving Line of Credit Note(9)
10.60	Promissory Note dated November 1, 2000 from Andrew F. Pollet to the Company(9)
10.61	Settlement Agreement and Mutual Release dated December 19, 2000 between the Company and William C. Huddleston(9)
10.62	Employment Agreement dated December 20, 2000 between the Company and David Bailey(9)
10.63	Stock Option Agreement dated December 20, 2000 between the Company and David Bailey(9)
10.64	Letter Amendment dated December 22, 2000 between the Company and Wells Fargo Bank, N. A.(10)
10.65	Consulting Agreement dated March 1, 2001 between the Company and David R. Morrison(10)
10.66	Letter Agreement dated April 1, 2001 between the Company and Wells Fargo Bank, N.A.(10)
10.67	Letter Amendment dated July 1, 2001 between the Company and Wells Fargo Bank, N.A.(10)
10.68	Letter Agreement dated July 1, 2001 between the Company and Wells Fargo Bank, N.A.(10)
10.69	Severance and Release Agreement dated August 21, 2001 between the Company and Thomas J. Chambers (including Consulting Agreement dated August 9, 2001)(10)
10.70	Settlement Agreement between the Company, Canon, Inc., Canon Sales Co., Inc., and Canon-STAAR Co. Inc. dated September 28, 2001(10)
10.71	Fifth Amendment to Credit Agreement dated October 1, 2001 between the Company and Wells Fargo Bank, N.A.(10)
10.72	Settlement and Release Agreement dated October 5, 2001 between the Company and Gunther Roepstorff(10)
10.73	Stock Option Agreement dated November 13, 2001 between the Company and David Bailey(10)
10.74	Stock Option Agreement dated November 13, 2001 between the Company and David R. Morrison(10)
10.75	Stock Option Certificate dated November 13, 2001 between the Company and Richard D. Simmons(10)
10.76	Sixth Amendment to Credit Agreement dated December 20, 2001 between the Company and Wells Fargo Bank, N.A.(10)
10.77	Letter Agreement dated January 25, 2002 between the Company and Wells Fargo Bank, N.A.(10)
21.	List of Significant Subsidiaries(10)

(Footnotes to Exhibits):

  (1) Incorporated by reference from the Company’s Registration Statement on Form S-8, File No. 33-37248, as filed on October 11, 1990

  (2) Incorporated by reference from the Company’s Registration Statement on Form S-8, File No. 33-76404, as filed on March 11, 1994

  (3) Incorporated by reference from the Company’s Registration Statement on Form S-8, File No. 33-60241, as filed on June 15, 1995

  (4) Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended January 3, 1997, as filed on April 2, 1997

32

  (5) Incorporated by reference from the Company’s Proxy Statement for its Annual Meeting of Stockholders held on May 29, 1998, as filed on May 4, 1999.

  (6) Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended January 1, 1998, as filed on April 1, 1998

  (7) Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended January 1, 1999, as filed on April 1, 1999

  (8) Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, as filed on March 28, 2000

  (9) Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 29, 2000, as filed on March 29, 2001

(10) Filed herewith

33

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 28, 2002.

STAAR SURGICAL COMPANY
By:	/s/    DAVID BAILEY
	David Bailey President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant on March 28, 2002 and in the capacities indicated.

Name	Title
/s/    DAVID BAILEY         David Bailey	President, Chief Executive Officer, Chairman and Director
/s/    JOHN BILY         John Bily	Chief Financial Officer (principal accounting and financial officer)
/s/    JOHN R. GILBERT         John R. Gilbert	Director
/s/    PETER UTRATA, M.D.         Peter Utrata, M.D.	Director
/s/    DAVID MORRISON         David Morrison	Director
/s/    VOLKER ANHAEUSSER         Volker Anhaeusser	Director

34

STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 28, 2001,

DECEMBER 29, 2000 AND DECEMBER 31, 1999

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors

STAAR Surgical Company

We have audited the accompanying consolidated balance sheets of STAAR Surgical Company and subsidiaries as of December 28, 2001 and December 29, 2000, and the related consolidated statements of operations, stockholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 28, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of STAAR Surgical Company as of December 28, 2001 and December 29, 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 28, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/     BDO SEIDMAN, LLP

Los Angeles, California

March 5, 2002

(except for Note 19 which is dated March 27, 2002)

F-2

STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 28, 2001 and December 29, 2000

	2001			2000
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	853		$	6,087
Restricted cash		2,000			—
Accounts receivable, less allowance for doubtful accounts		7,903			9,662
Other receivables		2,041			2,979
Inventories		15,231			20,808
Prepaids, deposits and other current assets		2,470			4,175
Deferred income tax, current		5,304			1,763
Total current assets		35,802			45,474
Investment in joint venture		466			—
Property, plant and equipment, net		8,742			13,626
Patents and licenses, net of accumulated amortization of $4,034 and $3,148		9,896			10,538
Goodwill, net of accumulated amortization of $1,385 and $1,039		5,985			6,357
Deferred income tax, non-current		3,982			3,088
Other assets		932			1,069
Total assets	$	65,805		$	80,152
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	8,216		$	7,944
Accounts payable		5,593			6,199
Other current liabilities		4,852			7,028
Total current liabilities		18,661			21,171
Other long-term liabilities		316			312
Total liabilities		18,977			21,483
Minority interest		382			204
Commitments and contingencies
Stockholders’ equity:
Common stock, $.01 par value; 30,000 shares authorized; issued and outstanding 17,158 and 16,949		172			169
Capital in excess of par value		75,573			75,047
Accumulated other comprehensive income		(1,728	)		(1,583	)
Accumulated deficit		(24,263	)		(9,430	)
		49,754			64,203
Notes receivable from officers and directors		(3,308	)		(5,738	)
Total stockholders’ equity		46,446			58,465
Total liabilities and stockholders’ equity	$	65,805		$	80,152

See accompanying summary of accounting policies and notes to consolidated financial statements.

F-3

STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 28, 2001 and December 29, 2000 and December 31, 1999

	2001			2000			1999
	(In thousands, except per share amounts)
Sales	$	50,237		$	53,986		$	58,955
Royalty and other income		549			448			253
Total revenues		50,786			54,434			59,208
Cost of sales		28,203			26,329			22,935
Gross profit		22,583			28,105			36,273
Selling, general and administrative expenses:
General and administrative		8,746			8,593			7,939
Marketing and selling		20,043			21,254			19,879
Research and development		3,800			4,215			4,338
Restructuring, impairment, and nonrecurring charges		7,780			15,276			—
Total selling, general and administrative expenses		40,369			49,338			32,156
Operating income (loss)		(17,786	)		(21,233	)		4,117
Other income (expense):
Equity in earnings (loss) of joint venture		389			(4,698	)		586
Interest income		270			1,294			364
Interest expense		(640	)		(1,496	)		(1,047	)
Other income (expense)		(474	)		738			(585	)
Total other expense, net		(455	)		(4,162	)		(682	)
Income (loss) before income taxes and minority interest		(18,241	)		(25,395	)		3,435
Income tax (benefit) provision		(3,547	)		(6,580	)		862
Minority interest		139			87			419
Net income (loss)	$	(14,833	)	$	(18,902	)	$	2,154
Earnings (loss) per share:
Basic	$	(.87	)	$	(1.23	)	$	.15
Diluted	$	(.87	)	$	(1.23	)	$	.15

See accompanying summary of accounting policies and notes to consolidated financial statements.

F-4

STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

Years Ended December 28, 2001 and December 29, 2000 and December 31, 1999

	Common Stock	Capital in Excess of Par Value	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income			Notes Receivable			Total
	(In thousands)
Balance, at January 1, 1999	$140	$46,039	$7,318		$(536)			$(5,254)			$47,707
Common stock issued upon exercise of options	5	3,291	—		—			(1,605)			1,691
Common stock issued as payment for acquisitions	3	2,497	—		—			—			2,500
Common stock repurchased and cancelled	(1)	(622)	—		—			—			(623)
Foreign currency translation adjustment	—	—	—		(745)			—			(745)
Net income	—	—	2,154		—			—			2,154
Balance, at December 31, 1999	147	51,205	9,472		(1,281)			(6,859)			52,684
Common stock issued upon exercise of options	5	3,519	—		—			(1,167)			2,357
Common stock issued upon exercise of warrants	1	171	—		—			—			172
Common stock issued as payment for services	1	1,486	—		—			—			1,487
Common stock issued in private placement	15	18,666	—		—			—			18,681
Proceeds from notes receivable	—	—	—		—			788			788
Notes receivable reserve	—	—	—		—			1,500			1,500
Foreign currency translation adjustment	—	—	—		(302)			—			(302)
Net loss	—	—	(18,902)		—			—			(18,902)
Balance, at December 29, 2000	169	75,047	(9,430)		(1,583)			(5,738)			58,465
Common stock issued upon exercise of options	1	62	—		—			—			63
Common stock issued as payment for services	2	411	—		—			—			413
Options issued for services	—	53	—		—			—			53
Proceeds from notes receivable	—	—	—		—			321			321
Notes receivable reserve	—	—	—		—			2,109			2,109
Foreign currency translation adjustment	—	—	—		(145)			—			(145)
Net loss	—	—	(14,833)		—			—			(14,833)
Balance, at December 28, 2001	$172	$75,573	$(24,263)		$(1,728)			$(3,308)			$46,446
Comprehensive income (loss) and its components consist of the following:
				2001			2000			1999
Net income (loss)				$	(14,833	)	$	(18,902	)	$	2,154
Foreign currency translation adjustment					(328	)		(302	)		(745	)
Comprehensive income (loss)				$	(15,161	)	$	(19,204	)	$	1,409

See accompanying summary of accounting policies and notes to consolidated financial statements.

F-5

STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 28, 2001 and December 29, 2000 and December 31, 1999

Increase (Decrease) in Cash and Cash Equivalents

	2001			2000			1999
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(14,833	)	$	(18,902	)	$	2,154
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property and equipment		2,364			2,140			2,173
Amortization of intangibles		1,259			1,590			2,054
Write-off of accounts receivable		—			449			—
Change in deferred revenue		—			(448	)		(232	)
Equity in operations of joint venture		(746	)		3,577			(586	)
Deferred income taxes		(4,435	)		(6,632	)		(17	)
Stock-based compensation expense		53			—			—
Common stock issued for services		413			1,224			—
Non-cash restructuring and inventory write-down		13,230			18,029			—
Minority interest		178			(332	)		(320	)
Changes in working capital, net of effects of acquisitions
Accounts receivable		1,679			(1,102	)		740
Other receivable		938			(202	)		(637	)
Inventories		(1,316	)		(4,020	)		(2,178	)
Prepaids, deposits and other current assets		1,582			(98	)		(1,817	)
Accounts payable		(574	)		(1,250	)		2,473
Other current liabilities		(2,350	)		605			1,045
Net cash provided by (used in) operating activities		(2,558	)		(5,372	)		4,852
Cash flows from investing activities:
Acquisition of property and equipment		(1,180	)		(3,339	)		(4,469	)
Increase in patents and licenses		(245	)		(775	)		(3,912	)
Proceeds from notes receivable and other		321			788			—
(Increase) decrease in other assets		137			(474	)		(1,939	)
Dividends received from joint venture		280			—			187
Acquisitions (net of cash acquired)		—			—			(541	)
Net cash used in investing activities		(687	)		(3,800	)		(10,674	)
Cash flows from financing activities:
Increase in borrowings under notes payable and long-term debt		276			414			3,733
Payments on notes payable and long-term debt		—			(6,370	)		(1,474	)
Net borrowings (payments) under line-of-credit		—			(3,028	)		1,894
Restricted cash		(2,000	)		—			—
Proceeds from the exercise of stock options and warrants		63			2,520			1,511
Proceeds from private placement		—			18,681			—
Payments for repurchase of common stock		—			—			(442	)
Net cash provided by (used in) financing activities		(1,661	)		12,217			5,222
Effect of exchange rate changes on cash and cash equivalents		(328	)		(302	)		(745	)
Increase (decrease) in cash and cash equivalents		(5,234	)		2,743			(1,345	)
Cash and cash equivalents, at beginning of year		6,087			3,344			4,689
Cash and cash equivalents, at end of year	$	853		$	6,087		$	3,344

See accompanying summary of accounting policies and notes to consolidated financial statements.

F-6

STAAR SURGICAL COMPANY AND SUBSIDIARIES

SUMMARY OF ACCOUNTING POLICIES

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

Organization and Description of Business

STAAR Surgical Company (the “Company”), a Delaware corporation, was incorporated in 1982 for the purpose of developing, producing, and marketing Intraocular Lenses (“IOLs”) and other products for minimally invasive ophthalmic surgery. The Company has evolved to become a developer, manufacturer and global distributor of products used by ophthalmologists and other eye care professionals to improve or correct vision in patients with refractive conditions, cataracts and glaucoma. Products manufactured by the Company for use in correcting refractive conditions such as myopia (near-sightedness), hyperopia (far-sightedness) and astigmatism include the Implantable Contact Lenses (“ICL^™”) and Toric Intraocular Lens. Products manufactured by the Company for use in restoring vision adversely affected by cataracts include its line of IOLs, the SonicWAVE^™ Phacoemulsification System, STAARVISC^™ II, a viscoelastic material and the UltraVac^™ V1 tubing, used with certain Venturi-type Phacoemulsification machines. The Company’s AquaFlow^™ Collagen Glaucoma Drainage Device is surgically implanted in the outer tissues of the eye to maintain a space that allows increased drainage of intraocular fluid thereby reducing intraocular pressure, which may lead to deterioration of vision in patients with glaucoma. The Company also sells other instruments, devices and equipment that are manufactured either by the Company or by others in the ophthalmic products industry.

The Company’s most significant subsidiary is STAAR Surgical AG, a wholly owned subsidiary formed in Switzerland to develop, manufacture and distribute worldwide certain of the Company’s products, including the ICL and its AquaFlow Device. The Company and STAAR Surgical AG have also formed or acquired a number of directly or indirectly owned subsidiaries to distribute and market the Company’s products in selected foreign countries. STAAR Surgical AG also controls 80% of a major European sales subsidiary that distributes both the Company’s products and products from various other manufacturers.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company, its wholly and its majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Assets and liabilities of foreign subsidiaries are translated at rates of exchange in effect at the close of the year. Revenues and expenses are translated at the weighted average of exchange rates in effect during the year. The resulting translation gains and losses are deferred and are shown as a separate component of stockholders’ equity as accumulated other comprehensive income. During 2001, 2000 and 1999, the net foreign translation loss was $328, $302 and $745, respectively and net foreign currency transaction loss was $204, $182 and $157, respectively.

Investment in the Japanese joint venture is accounted for using the equity method of accounting except for the nine-months ended September 29, 2001 and the year ended December 28, 2000 when the investment was written off and earnings were recognized on a cash basis (see Note 4).

The Company’s fiscal year ends on the Friday nearest December 31.

Revenue Recognition

In general, the Company supplies foldable IOLs on a consignment basis to customers, primarily ophthalmologists, surgical centers, hospitals and other eye care providers and recognizes sales when the IOLs are implanted. Sales of the AquaFlow, the ICL, and sales to foreign distributors are recognized upon shipment.

F-7

STAAR SURGICAL COMPANY AND SUBSIDIARIES

SUMMARY OF ACCOUNTING POLICIES

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

Revenue from license and technology agreements is recorded as income over the term of the respective agreement when the Company has satisfied the terms of such agreements and has received notification of the amounts of sales of the Company’s products.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Realization of the deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Management believes that it is more likely than not that future taxable income will be sufficient to realize the recorded deferred tax assets, net of the existing valuation allowance at December 28, 2001. Future taxable income is based on management’s forecast of the operating results of the Company and there can be no assurance that such results will be achieved. Management continually reviews such forecasts in comparison with actual results and expected trends. In the event management determines that sufficient future taxable income may not be generated to fully realize the net deferred tax assets, the Company will increase the valuation allowance by a charge to income tax expense in the period of such determination.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Restricted cash is invested in money market accounts, which mature within one year, and is held as security for notes payable.

Inventories

Inventories are valued at the lower of cost (first-in, first-out) or market (net realizable value). Inventory costs are comprised of material, direct labor, and overhead.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost and are depreciated over their useful lives using the straight- line method. Expenditures for maintenance and repairs are expensed as incurred.

Generally, estimated useful lives range from five to ten years for machinery, equipment, furniture and fixtures and leasehold improvements. Property, plant and equipment are reviewed each year to determine whether any events or circumstances indicate that the carrying amount of the assets may not be recoverable. Such review is performed based on estimated undiscounted cash flows compared with the carrying value of the assets. If the future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.

Patents

The Company capitalizes the costs of acquiring patents and licenses as well as the legal costs of successfully defending its rights to these patents. Amortization is computed on the straight-line basis over the estimated useful

F-8

STAAR SURGICAL COMPANY AND SUBSIDIARIES

SUMMARY OF ACCOUNTING POLICIES

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

lives, which range from 12 to 17 years. Patent and license costs are reviewed each year to assess recoverability from future operations using undiscounted future cash flows of the related products. A write-down would be recorded when the cash flows is less than the carrying value of these assets.

The Company’s ability to compete effectively is materially dependent upon the proprietary nature of the designs, processes, technologies and materials owned, used by or licensed to the Company. The Company has been and will continue to be involved in litigation to protect its copyrights, patents and proprietary properties and technologies.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired and is being amortized on a straight-line basis over periods ranging from fifteen to twenty years. The Company assesses the recoverability of goodwill by determining whether the amortization of the goodwill balance over its remaining life can be recovered through undiscounted future operating cash flows.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Fair Value of Financial Instruments

The carrying values reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and notes payable approximate their fair values because of the short maturity of these instruments.

Net Income Per Share

The Company presents income per share data in accordance with the provision of Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS 128”) which provides for the calculation of Basic and Diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could occur if securities or other contracts (such as stock options and warrants) to issue common stock were exercised or converted into common stock. For the years ended December 28, 2001 and December 29, 2000, 5 and 5 warrants and 2,911 and 1,892 options to purchase shares of the Company’s common stock, respectively, were outstanding. These potential common shares were excluded from the computation of dilutive earnings per share for fiscal years 2001 and 2000 because their inclusion would have an anti-dilutive effect.

Stock Based Compensation

The Company accounts for its stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and

F-9

STAAR SURGICAL COMPANY AND SUBSIDIARIES

SUMMARY OF ACCOUNTING POLICIES

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

related Interpretations. Accordingly, the Company records expense in an amount equal to the excess of the quoted market price on the grant date over the option price. Such expense is recognized at the grant date for options fully vested. For options with a vesting period, the expense is recognized over the vesting period.

Comprehensive Income

The Company presents comprehensive income in its Consolidated Statement of Stockholders’ Equity in accordance with Statement of Financial Accounting Standard No. 130, “Reporting Comprehensive Income” (“SFAS 130”). For the Company, comprehensive income consists of net income and foreign currency translation adjustments.

Segments of an Enterprise

The Company reports segment information in accordance with Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information,” (“SFAS 131”). Under SFAS 131 all publicly traded companies are required to report certain information about the operating segments, products, services and geographical areas in which they operate and their major customers. While the Company has expanded its marketing focus beyond the cataract market to include the refractive and glaucoma markets, the cataract market remained its primary source of revenues and accordingly operates as one business segment. See Note 16, Geographic and Product Data for geographic segments.

Reclassifications

Certain reclassifications have been made to the prior year consolidated financial statements to conform to the 2001 presentation.

New Accounting Pronouncements

In June 2001, the FASB finalized FASB Statements No. 141, “Business Combinations” (SFAS 141), and No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires the Company to recognize acquired intangible assets apart from goodwill if they meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001. It also requires, upon adoption of SFAS 142 that the Company reclassify the carrying amounts of intangible assets and goodwill based on criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. It also requires the Company to complete a transitional goodwill impairment test by six months from the date of adoption. For purchase business combinations completed prior to June 30, 2001, the net carrying amount of goodwill was $5,985 as of December 28, 2001. The Company also has other intangible assets,

F-10

STAAR SURGICAL COMPANY AND SUBSIDIARIES

SUMMARY OF ACCOUNTING POLICIES

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

consisting of patents and licenses, with a net carrying value of $9,896 as of December 28, 2001. The estimated useful life of these intangible assets is based on legal and contractual provisions that limit their useful lives. For the fiscal year ended December 28, 2001, goodwill amortization expense was $372. The Company is assessing but has not yet determined how the adoption of SFAS 141 and SFAS 142 will affect its future financial position and results of operations.

In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 143 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company believes the adoption of this statement will have no material impact on its financial statements.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), which supercedes SFAS 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed Of”. SFAS 144 addresses financial accounting and reporting requirements for the impairment or disposal of long-lived assets. This statement also expands the scope of a discontinued operation to include a component of an entity, and eliminates the current exemption to consolidation when control over a subsidiary is likely to be temporary. The provisions of this statement are effective for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years, although early adoption is permitted. The Company is assessing but has not yet determined how the adoption of SFAS 144 will affect its future financial position and results of operations.

F-11

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Years Ended December 28, 2001 and December 29, 2000

NOTE 1—ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at December 28, 2001 and December 29, 2000:

	2001		2000
Domestic	$	5,152	$	6,756
Foreign		3,519		3,687
		8,671		10,443
Less allowance for doubtful accounts		768		781
	$	7,903	$	9,662

NOTE 2—INVENTORIES

Inventories consisted of the following at December 28, 2001 and December 29, 2000:

	2001		2000
Raw materials and purchased parts	$	1,610	$	2,845
Work in process		3,252		3,615
Finished goods		10,369		14,348
	$	15,231	$	20,808

NOTE 3—PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at December 28, 2001 and December 29, 2000:

	2001		2000
Machinery and equipment	$	11,116	$	19,041
Furniture and fixtures		7,639		6,587
Leasehold improvements		4,480		4,642
		23,235		30,270
Less accumulated depreciation and amortization		14,493		16,644
	$	8,742	$	13,626

F-12

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 4—INVESTMENT IN JOINT VENTURE

The Company owns a 50% equity interest in a joint venture, the CANON-STAAR Company, Inc. (“CSC”), with Canon Inc. and Canon Sales Co, Inc., together the “Canon Companies.” The Company sold CSC an exclusive license to manufacture, market and sell the Company’s IOL products in Japan. The investment in the Japanese joint venture is accounted for using the equity method of accounting except for the nine-months ended September 29, 2001 and the year ended December 28, 2000 when the Company’s investment of $3,577 was written off, due to disputes between the Company and the Canon Companies. During the fourth quarter of fiscal year 2001, the Company executed an agreement with the Canon Companies resolving all claims between the parties and reaffirming the partnering arrangement to manufacture and distribute ophthalmic products based on the Company’s technology. The financial statements of CSC include assets of approximately $8,684 and $10,028, and liabilities of approximately $1,788 and $2,494, as of December 28, 2001 and December 29, 2000, respectively.

The Company’s equity in earnings of the joint venture is calculated as follows:

	Q4 2001			2000			1999
Joint venture net income	$	134		$	—		$	1,172
Equity interest		50	%		50	%		50	%
Total joint venture net income		67			—			586
Charge related to write-off of joint venture		—			(4,698	)		—
Equity in earnings (loss) of joint venture	$	67		$	(4,698	)	$	586

During the 3rd quarter of 2001, the Company received dividend income related to 2000 and 1999 joint venture earnings of approximately $322.

The Company recorded sales of certain IOL products to CSC of approximately $118, $344 and $1,917 in 2001, 2000 and 1999, respectively.

NOTE 5—NOTES PAYABLE

On October 31, 2000, the Company renegotiated its line-of-credit with its current domestic lender. The agreement provided for borrowings of up to $7,000 at a rate of interest equal to the prime rate (4.75% at December 28, 2001) and granted the lender a security interest in the Company’s accounts receivable, inventories, property, plant, and equipment, and other general intangibles. The agreement required the Company to satisfy certain financial tests, which included positive and negative covenants and also required the maintenance of minimum cash balances.

The note was amended at various times during the fiscal year 2001. Amended terms as of December 28, 2001 extend the due date of the note to February 1, 2002, provide for a commitment fee on the unused portion of the line of credit payable to the bank in the amount of .25% per annum, and interest equal to prime plus 1%. The amended terms also require the Company to maintain $2,000 in restricted cash to be held with the bank and also provides for various reporting requirements. Borrowings outstanding as of December 28, 2001 and December 29, 2000, were $5,734 and $5,724, respectively. As of December 28, 2001, the Company was not in compliance with the net income covenant. The Lender has agreed to waive its rights and remedies under the loan agreement relating to this non-compliance.

F-13

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On March 27, 2002 the Company and its domestic lender executed a commitment letter memorializing the lender’s agreement to extend the maturity date of the Company’s line of credit for one year. This agreement is conditioned upon the execution and delivery to the lender of definitive documentation, satisfactory to the lender, evidencing the extension, the delivery to the lender of a good standing certificate from the state of Delaware, and payment to the lender of fees and costs associated with the transaction. Furthermore, the extension is conditioned upon the lender’s determination that there has been no material adverse change in the Company’s financial condition or business nor any material decline in the market value of the collateral. The lender may also require other conditions precedent, although it has not done so to date. The lender has prepared the definitive agreement and the Company is in the process of reviewing it.

The Company has a revolving credit facility with a Swiss bank, which, as amended in fiscal year 2001, provides for borrowings of up to $2,975 (5,000 Swiss Francs “CHF”) based on the exchange rate at December 28, 2001. The credit facility is split into two parts: Part A provides for borrowings of up to $1,785 (CHF 3,000 based on the exchange rate at December 28, 2001) and does not have a termination date; Part B provides for borrowings of up to $1,190 (CHF 2,000 based on the exchange rate at December 28, 2001) and will be reduced by $149 (CHF 250 based on the exchange rate at December 28, 2001) semi-annually beginning June 30, 2002. The credit facility is secured by a general assignment of claims.

The loan agreement provides for borrowings on a current basis at an interest rate of 5.5% perannum and a commission rate of 0.25% is payable each quarter or for a fixed term. The base interest rate for fixed term advances follows Euromarket conditions for loans of the corresponding term and currency plus an individual margin. Fixed term advances, which, as amended in fiscal year 2001, provides for borrowings of up to $1,488 (CHF 2,500 based on the exchange rate at December 28, 2001) for a maximum duration of twelve months and for borrowings of up to the remaining $1,488 (CHF 2,500 based on the exchange rate at December 28, 2001) for a maximum duration of six months with minimum advances of $298 (CHF 500).

Borrowings outstanding under the current account as of December 28, 2001 and December 29, 2000 were $513 (862 CHF, based on the exchange rate at December 28, 2001) and $1,537 (2,512 CHF, based on the exchange rate at December 29, 2000), respectively. Fixed term advances at December 28, 2001 were $1,547 (2,600 CHF, based on the exchange rate at December 28, 2001) at an interest rate of 4.52%. There were no fixed term borrowings at December 28, 2001.

The revolving credit facility noted above requires the Company to satisfy certain financial tests, which include positive and negative covenants. The Company was in compliance with the financial covenants as of December 28, 2001.

The Company had a revolving credit facility with a German bank which provided for borrowings of up to approximately $903 (2,000 Deutsch Marks (DEM) at the exchange rate at December 28, 2001) at an interest rate of 8% until August 31, 2001. In view of the currency change in Germany from Deutsch Marks to Euro (EUR) the credit facility was renewed with a due date of February 28, 2003 and provides for borrowing of up to $662 (750 EUR at the exchange rate at December 28, 2001). Payments in the amount of $44 (50 EUR at the exchange rate at December 28, 2001) are due monthly, beginning December 31, 2001. The loan is secured by an assignment of accounts receivable and inventory.

Borrowings outstanding as of December 28, 2001 and December 29, 2000 were $421 (EUR 477 based at the exchange rate at December 28, 2001) and $683 (EUR 649 based at the exchange rate at December 29, 2000), respectively.

F-14

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 6—INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes.

The provision (benefit) for income taxes consists of the following:

	2001			2000			1999
Current tax provision (benefit):
United States federal	$	484		$	(393	)	$	481
State		146			18			(650	)
Foreign		258			317			963
Total current provision (benefit)		888			(58	)		794
Deferred tax provision (benefit):
U.S. federal and state		(4,435	)		(6,522	)		68
Foreign		—			—			—
Total deferred provision (benefit)		(4,435	)		(6,522	)		68
Provision (benefit) for income taxes	$	(3,547	)	$	(6,580	)	$	862

Included in the fiscal year 2000 current United States federal net tax benefit is the carryback of a portion of the 2000 net taxable loss to 1998. This carryback resulted in a refund (received January, 2002) of $839 of taxes previously paid. Prior to legislation enacted March 9, 2002 (HR 3090), the Company had federal net operating loss carryforwards from 2000 and 2001 of approximately $4,663 and $10,775 respectively, expiring on various dates through 2021. The result of the new law enables the Company to carryback portions of the federal 2000 and 2001 losses to 1996, 1997 and 1998. Consequently, the federal net operating loss carryforwards from 2000 and 2001 will be $910 and $10,775. These carrybacks will result in refunds of approximately $959. As the law was not enacted as of the end of the fiscal year 2001, no receivable for the refund is recorded.

The Company has net income taxes recoverable at December 28, 2001 and December 29, 2000 of $852 and $1,631, respectively, reported on the balance sheet as other receivables.

The provision (benefit) based on income before taxes differs from the amount obtained by applying the statutory federal income tax rate to income before taxes as follows:

	2001		2000		1999
Computed provision (benefit) for taxes based on income at statutory rate	(34.0	)%	(34.0	)%	34.0	%
Permanent differences	.3		.3		21.8
State taxes, net of federal income tax benefit	(4.1	)	(2.3	)	(22.3	)
Tax effect attributed to foreign operations	(1.9	)	2.0		(8.4	)
Loss related to previously excluded foreign earnings	—		2.8		—
Valuation allowance	20.3		5.4		—
Effective tax provision (benefit) rate	(19.4	)%	(25.8	)%	25.1	%

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $5 million at December 28, 2001. Undistributed earnings are considered to be indefinitely reinvested and, accordingly, no provision for United States federal and state income taxes has been provided thereon.

Upon distribution of earnings in the form of dividends or otherwise, the Company would be subject to both United States income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the

F-15

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

various foreign countries. Determination of the amount of unrecognized deferred United States income tax liability is not practicable because of the complexities associated with its hypothetical calculation.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) as of December 28, 2001 and December 29, 2000 are as follows:

	2001			2000
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$	174		$	219
Inventory reserves and uniform capitalization		2,478			541
Accrued vacation		177			203
State taxes		14			(375	)
Deferred revenue		87			85
Reserve for note receivable		—			591
Reserve for restructuring costs		2,387			556
Other accruals		(13	)		—
Discount on trade receivables		—			(57	)
Total current deferred tax assets (liabilities)	$	5,304		$	1,763
Non-current deferred tax assets (liabilities):
Net operating loss and capital loss carryforwards		6,025			5,387
Business, foreign and AMT credit carryforwards		885			1,164
Depreciation and amortization		(447	)		(2,400	)
State taxes		—			115
Reserve for notes receivable		1,405			—
Reserve for restructuring costs		402			333
Valuation allowance		(4,288	)		(1,511	)
Total non-current deferred tax assets (liabilities)	$	3,982		$	3,088

NOTE 7—BUSINESS ACQUISITIONS

On November 29, 1999, the Company acquired an additional 20% of the shares of a major European distributor increasing its equity in the distributorship to 80%. Consideration paid for the shares totaled approximately $1,500 in cash, $1,000 in shares and debt of $325, resulting in goodwill of approximately $2,800.

On January 4, 1999 the Company acquired all of the issued and outstanding shares of a distributor of ophthalmic products in exchange for $130 cash, $150 in product allowances and $100 in assumption of liabilities. As part of the Company’s restructuring plan, the subsidiary was closed during fiscal year 2000 (see Note 14).

On December 5, 1999 the Company acquired 80% of the issued and outstanding shares of a medical equipment manufacturer, in exchange for approximately $500 in cash, $1,500 in the Company’s common stock and $500 in debt. The purchase price was allocated to the fair value of net tangible assets acquired of approximately $87, and to the fair value of patents of approximately $2,400.

Pro forma amounts for the acquisitions are not included, as the effect on operations is not material to the Company’s consolidated financial statements.

F-16

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 8—PATENTS AND LICENSING AGREEMENTS

During 1995, the Company acquired from the Intersectoral Research and Technology Complex Eye Microsurgery (“IRTC”), a Russian Federation located in Moscow, Russia, exclusive patent rights to use and sell glaucoma devices in the United States and certain foreign countries. During 1996, the Company acquired from IRTC exclusive rights to several domestic and foreign patents associated with the Company’s ICLs. The transactions involve a specified amount for the patent rights and payments of royalties over the life of the patents.

In 1996, the Company acquired a license, as part of the settlement of litigation with Allergan Medical Optics, relating to an apparatus for insertion of an intraocular lens. The amount paid is included in patents in the accompanying consolidated balance sheet.

The Company has entered into license agreements with Allergan Medical Optics, Alcon Surgical, Inc., Pharmacia & Upjohn, Bausch and Lomb Surgical and Ciba Vision (collectively “Licensees”). Under the terms of the respective agreements, in consideration of a certain amount of royalties prepaid by the Licensees, the Licensees are entitled to use certain Company patents involving foldable IOLs in the United States and selected foreign countries. Royalties received from Licensees are utilized as sales of licensed products are made. During fiscal year 2001, 2000 and 1999, the Company recorded royalty income of $549, $448, and $253, respectively, from these Licenses.

In connection with its acquisition of 80% of the shares of a medical equipment manufacturer, the Company acquired patent assets related to the SonicWAVE Phacoemulsification System and other related technologies. The patent assets are being amortized on a straight-line basis over their estimated useful lives of 17 years.

During 2000, as part of the Company’s restructuring plan, patent assets totaling approximately $4,000 were written off (see Note 14).

NOTE 9—STOCKHOLDERS’ EQUITY

Common Stock

In fiscal year 1999, the Company issued 271 shares as partial consideration for business acquisitions. Also, during 1999, the Company repurchased and cancelled 40 shares.

In fiscal year 2000, the Company issued 143 shares to consultants for services rendered to the Company. Also, during 2000, the Company completed a private placement with institutional investors of 1,500 shares of the Company’s common stock, for net proceeds of $18,700.

In fiscal year 2001, the Company issued 192 shares to consultants for services rendered to the Company.

Receivables from Officers and Directors

As of December 28, 2001 and December 29, 2000, notes receivable from officers and directors totaling $5,408 and $7,238, respectively, were outstanding. The notes were issued in connection with purchases of the Company’s common stock and bear interest at rates ranging between 3.69% and 8% per annum, or at the lowest federal applicable rate allowed by the Internal Revenue Service. The notes are secured by stock pledge agreements and mature on various dates through November 1, 2005.

F-17

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During fiscal year 2001 and 2000, the Company recorded a $2,100 and $1,500 reserve against the notes receivable of a former president and a board member. The action was considered necessary due to a sharp decline in the price of the Company’s stock which was pledged as collateral for the notes.

Options

The table below summarizes the transactions in the Company’s stock option plans:

	Number of Shares		Weighted Average Exercise Price
Balance at January 1, 1999	1,545		$	6.69
Options granted	453		$	10.07
Options exercised	(538	)	$	6.13
Options forfeited / cancelled	—			—
Balance at December 31, 1999	1,460		$	7.75
Options granted	1,604		$	10.35
Options exercised	(498	)	$	7.03
Options forfeited / cancelled	(674	)	$	8.05
Balance at December 29, 2000	1,892		$	9.95
Options granted	1,114		$	6.98
Options exercised	(18	)	$	3.57
Options forfeited / cancelled	(77	)	$	9.77
Balance at December 28, 2001	2,911		$	8.85
Options exercisable (vested) at December 28, 2001	1,808		$	9.59

Under provisions of the Company’s 1991 Stock Option Plan, 2,000 shares were reserved for issuance. Generally, options under this plan are granted at fair market value at the date of the grant, become exercisable over a 3-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. At December 28, 2001, December 29, 2000, and December 31, 1999 options for 384, 434, and 123 shares were outstanding, with exercise prices ranging between $2.50 to $14.50 per share.

In fiscal year 1996, the Board of Directors approved the 1996 Non-Qualified Stock Plan, authorizing the granting of options to purchase or awards of the Company’s common stock. Under provisions of the Non-Qualified Stock Plan, 600 shares were reserved for issuance. Generally, options under the plan are granted at fair market value at the date of the grant, become exercisable over a 3-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Pursuant to this plan, options for 170, 175, and 152 shares were outstanding at December 28, 2001, December 29, 2000 and December 31, 1999, respectively. The options were originally issued with an exercise price of $12.50 per share. During fiscal year 1998 the exercise price was reduced to $6.25 per share by action of the Board of Directors.

In fiscal year 1998, the Board of Directors approved the 1998 Stock Option Plan, authorizing the granting of incentive options and/or non-qualified options to purchase or awards of the Company’s common stock. Under the provisions of the plan, 1,000 shares were reserved for issuance; however, the maximum number of shares authorized may be increased provided such action is in compliance with Article IV of the Plan. During fiscal year 2001, pursuant to Article IV of the Plan, the shareholders of the Company authorized an additional 1,500 shares. Generally, options under the plan are granted at fair market value at the date of the grant, become exercisable

F-18

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

over a 3-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Pursuant to the plan, options for 1,385, 810 and 998 shares were outstanding at December 28, 2001, December 29, 2000 and December 31, 1999, respectively, with exercise prices ranging between $2.00 and $15.75 per share.

In fiscal year 1999, officers, employees and others exercised 538 options from the 1990, 1991, and non-qualified stock option plans at prices ranging from $1.60 to $12.00 resulting in cash, notes and stock proceeds totaling $3,296.

In fiscal year 2000, officers, employees and others exercised 499 options from the 1990, 1991, 1996, 1998 and non-qualified stock option plans at prices ranging from $2.50 to $13.63 resulting in cash and note proceeds totaling $3,524.

In fiscal year 2001, officers, employees and others exercised 18 options from the 1991 and 1996 stock option plans at prices ranging from $2.50 to $6.25 resulting in cash proceeds totaling $63.

SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), requires the Company to provide pro forma information regarding net income and earnings per share as if compensation expense for the Company’s stock option plans had been determined in accordance with the fair value based method. In determining the estimated fair value of stock options at the grant date, the Company uses the Black-Scholes option-pricing model. Weighted-average assumptions used for grants in 2001 were; dividend yield of 0 percent; expected volatility of 64 percent; risk free interest rate of 4.5 percent, and expected lives of 1-3 years; in 2000; dividend yield of 0 percent; expected volatility of 42 percent; risk free interest rate of 4.5 percent, and expected lives of 1-5 years; and in 1999; dividend yield of 0 percent; expected volatility of 73 percent; risk free rate of 6.5 percent; and expected lives of 3 years.

The weighted average fair value of options granted during the year ended December 28, 2001, December 29, 2000, and December 31, 1999 were $0.55 to $3.72, $1.32 to $4.55 and $5.62, respectively.

Pro forma net income and earnings per share for fiscal year 2001, 2000 and 1999 had the Company accounted for stock options issued to employees and others in accordance with the fair value method of SFAS 123 are as follows:

	2001			2000			1999
Net income (loss)
As reported	$	(14,833	)	$	(18,902	)	$	2,154
Pro forma	$	(16,321	)	$	(20,499	)	$	1,584
Basic earning (loss) per share
As reported	$	(0.87	)	$	(1.23	)	$	.15
Pro forma	$	(0.96	)	$	(1.33	)	$	.11
Diluted earnings (loss) per share
As reported	$	(0.87	)	$	(1.23	)	$	.15
Pro forma	$	(0.96	)	$	(1.33	)	$	.11

Due to the fact that the Company’s stock option programs vest over many years and additional awards are made each year, the above pro forma numbers are not indicative of the financial impact had the disclosure provisions of SFAS 123 been applicable to all years of previous option grants. The above numbers do not include the effect of options granted prior to 1995 that vested in 1996 through 2001.

F-19

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes information about stock options outstanding and exercisable at December 28, 2001.

Range of Exercise Prices	Number Outstanding at 12/28/01	Options Outstanding Weighted-Average Remaining Contractual Life	Weighted-Average Exercise Price	Number Exercisable at 12/28/01	Weighted-Average Exercise Price
$1.70 to $2.55	274	5.1 years	$  1.98	28	$  2.06
$3.35 to $5.05	358	3.7 years	$  4.11	130	$  4.05
$5.85 to $8.80	425	5.3 years	$  6.32	415	$  6.29
$9.35 to $14.05	1,832	6.9 years	$11.31	1,233	$11.45
$14.50 to $15.75	22	3.8 years	$15.64	2	$14.50
$1.70 to $15.75	2,911	6.1 years	$  8.85	1,808	$  9.59

Warrants

The table below summarizes the transactions related to warrants to purchase the Company’s common stock:

	Number of Shares		Weighted-Average Exercise Price
Balance at January 1, 1999	60		$3.94
Warrants exercised	—		—
Balance at December 31, 1999	60		$3.94
Warrants exercised	(55	)	$3.10
Balance at December 28, 2001 and December 29, 2000	5		$1.20

All warrants are exercisable as of December 28, 2001.

NOTE 10—COMMITMENTS AND CONTINGENCIES

Lease Obligations

The Company leases certain property, plant and equipment under capital and operating lease agreements.

Annual future minimum lease payments under non-cancelable operating lease commitments as of December 28, 2001 are as follows:

Fiscal Year
2002	$   973
2003	622
2004	295
2005	273
2006	254
Thereafter	8
Total	$2,425

F-20

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Rent expense was approximately $1,091, $1,109 and $1,125 for the years ended December 28, 2001, December 29, 2000 and December 31, 1999, respectively.

Supply Agreement

In May 1999, the Company entered into a license and supply agreement with another manufacturer to license and re-sell one of the manufacturer’s products. Under the terms of the agreement, the Company was committed to purchase the specified product for total sum of $3,172 over 18 months. In September 2001, the supply agreement was amended reducing the minimum contractual amount that the Company is obligated to purchase from the manufacturer to $2,460 over a 24 month period commencing September 1, 2001. The agreement, as amended, is in effect for a minimum of two years, and can be cancelled thereafter by either party upon four months written notice. Purchases under this agreement for fiscal 2001 were approximately $735.

In December 2000, the Company entered into a minimum purchase agreement with another manufacturer for the purchase of viscoelastic solution, an adjunct product used in cataract surgery which received FDA approval during fiscal 2001. In addition to the minimum purchase requirement, the Company is also obligated to pay an annual regulatory maintenance fee. The agreement contains provisions to increase the minimum annual purchases in the event that the Seller gains regulatory approval of the product in other markets, as requested by the Company. Purchases under this agreement for fiscal 2001 were approximately $184.

As of December 31, 2001 estimated annual purchase commitments under these contracts are as follows:

2002	$   911
2003	1,830
2004	600
2005	600
2006	600
Total	$4,541

Litigation and Claims

The Company is party to various claims and legal proceedings arising out of the normal course of its business. These claims and legal proceedings relate to contractual rights and obligations, employment matters, shareholder suits and claims of product liability. While there can be no assurance that an adverse determination of any such matters could not have a material adverse impact in any future period, management does not believe, based upon information known to it, that the final resolution of any of these matters will have a material adverse effect upon the Company’s consolidated financial position and annual results of operations and cash flows.

The Company was in dispute with its Japanese joint venture partners Canon, Inc. and Canon Sales Co., Inc. (collectively the “Canon Companies”). The Canon Companies alleged that the Company breached the joint venture agreement and certain distributor and license agreements. The Canon Companies were seeking unspecified monetary damages for these alleged breaches. In its counterclaim, the Company sought an accounting from the Canon Companies for profits made by the Canon Companies as a result of unfair dealing, for a transfer of the Canon Companies’ interest in the joint venture to the Company at book value, and, in the event the Company’s request for a transfer was not granted, for the winding up, liquidation and dissolution of the joint venture. During fiscal year 2001, the Company executed an agreement with the Canon Companies resolving all claims between the parties and reaffirming the partnering arrangement to manufacture and distribute ophthalmic products based on the Company’s technology by the joint venture company, Canon STAAR Company, Inc. The

F-21

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

agreement settles the Federal lawsuit previously filed by STAAR in the U.S. District Court and the parties’ respective claims previously filed with the Japanese Commercial Arbitration

The Company terminated its former President and Chief Executive Officer, John R. Wolf, on May 30, 2000. Mr. Wolf filed an action against the Company claiming that his termination was wrongful. Mr. Wolf also filed an action for declaratory relief and injunctive relief relating to his attempt to exercise stock options. The Company believes it has claims against Mr. Wolf relating to loans made by the Company to him, and has filed an action against Mr. Wolf on that basis. The Company’s action also seeks a declaration that the Company had cause to terminate Mr. Wolf’s employment.

NOTE 11—OTHER LIABILITIES

Other Current Liabilities

Included in other current liabilities at December 28, 2001 and December 29, 2000 are approximately $1,402 and $1,386 of commissions due to outside sales representatives; income tax payable of $997 and $784; deferred revenue of $224 and $0; and accrued restructuring costs of $100 and $2,236, respectively.

Other Long-Term Liabilities

Included in other long-term liabilities at December 28, 2001 and December 29, 2000 is a pension obligation related to an officer of a foreign subsidiary of approximately $257 and $248, respectively.

NOTE 12—RELATED PARTY TRANSACTIONS

The Company has had significant related party transactions as discussed in Notes 4 and 9.

The Company issues options to purchase 60,000 shares of its common stock at fair market value on the date of grant to members of its Board of Directors upon election or reelection for services provided as Board members.

The Company holds various promissory notes from current and former officers and directors of the Company. The notes, which provide for interest at the lowest applicable rate allowed by the Internal Revenue Code, expire on various dates through November 11, 2002. Amounts due from officers and directors and included in Prepaids, Deposits, and Other Current Assets at December 28, 2001 and December 29, 2000 were $460 and $540, respectively.

The Company has a consulting contract with one of the members of its Board of Directors. Under the agreement, dated March 1, 2001, the consultant is to provide certain services for a period of one year. In exchange for the services, the Company issued an option to purchase 20 shares of the Company’s common stock at fair market value on the date of grant, 50% vested on the grant date of April 27, 2001 and 50% will vest at the end of the contract period. In addition, the contract provides for payment of a minimum monthly retainer of $9 for six days work. Days worked in excess of six are compensated at a rate of $2 per day. Upon the grant of options, the minimum monthly retainer was reduced to $6, and the per-diem rate after six days worked to $1. Amounts paid under the contract as of December 28, 2001 were $93.

The Company had a consulting contract with a corporation owned by an employee of one of its foreign subsidiaries. The consulting contract, which began October 1, 1999 and ending October 1, 2005, provided for monthly payments of $20 in exchange for specified services. During fiscal year 2001, the parties agreed to

F-22

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

terminate the contract at a discount in exchange for cash and forgiveness of a note receivable due the subsidiary from the employee. Debt forgiveness totaled $658 (1,404 DM at the exchange rate in effect on the settlement date). During fiscal year 2001, 2000, and 1999, amounts paid or accrued under the contract totaled $180, $240, and $40, respectively. Amounts due from the employee and included in Prepaids, Deposits, and Other Current Assets at December 28, 2001 and December 29, 2000 were $523 (1,158 DM at the exchange rate on December 28, 2001) and $766 (1,611 DM at the exchange rate on December 29, 2000).

During fiscal year 2001, 2000 and 1999, a law firm, of which a principal was an officer, director and stockholder of the Company, received approximately $1,496, $2,000 and $247, respectively, for fees in connection with legal services performed on behalf of the Company.

The Company paid an override sales commission, based upon a percentage of the Company’s sales, to a corporation owned by an officer of the Company in its capacity as a sales representative for the Company. This agreement dates back to 1983, when the officer initially became associated with the Company in a sales and marketing capacity. Commissions paid or accrued under this arrangement totaled approximately $0, $0 and $337 during fiscal year 2001, 2000 and 1999, respectively. During fiscal year 1999, the Company paid $1,250 in consideration for the cancellation of the agreement. The amount was included in Other Assets at December 31, 1999 and was written off during fiscal year 2000 as part of the Company’s plan of restructuring (see Note 14).

NOTE 13—SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Net cash provided by operating activities includes interest paid of approximately $640, $1,496 and $1,047 for the years ended December 28, 2001, December 29, 2000 and December 31, 1999, respectively. Income taxes paid amounted to approximately $479, $648 and $1,312 for the years ended December 28, 2001, December 29, 2000 and December 31, 1999, respectively.

	2001		2000		1999
Non cash financing activities:
Notes receivable from officers and directors (Note 9)	$	—	$	1,167	$	1,605
Acquisition of business:
Assets acquired	$	—	$	—	$	4,403
Goodwill		—		—		3,137
Liabilities assumed		—		—		(1,763	)
Common stock issued		—		—		(2,500	)
Cash paid		—		—		(2,197	)
Debt incurred	$	—	$	—	$	(1,080	)

NOTE 14—RESTRUCTURING AND ASSET IMPAIRMENT

On June 22, 2000, the Company announced the details of its plan of restructuring. In conjunction with the implementation of the plan, the Company recorded a pretax charge to earnings of approximately $13,800 in the second quarter of fiscal year 2000. The charges include approximately $900 for restructuring of certain subsidiaries, approximately $4,000 to write-off patents that were determined to have no future value to the Company, approximately $l,900 of costs incurred by the Company relating to activities that were abandoned, approximately $4,100 relating to severance and other employee separation costs, approximately $1,900 relating to the disposition of investment and assets related to the Company’s abandoned entry into the Lasik market, and approximately $1,000 relating to the closure of a foreign subsidiary. As part of the restructuring plan, a total of 19 employees were laid-off, terminated or resigned.

F-23

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In addition, the Company wrote-off approximately $5,200 in inventory that no longer fit the Company’s future direction and recorded an approximate $4,700 charge related to the write-off of its Japanese joint venture. At December 28, 2001 and December 29, 2000, the Company had approximately $100 and $2,200 of accrued restructuring charges consisting of future payments to former employees and lease obligations, respectively.

In June 2001 management completed an extensive operational review of the Company. Based upon that review, in August 2001 the Company implemented a plan that management believes will allow the Company to become profitable. As a result of implementing the plan, the Company significantly changed its manufacturing processes and location including consolidating lathing activity into the Swiss manufacturing site from the current dual site operations and reducing molded lens capacity at the California site. The Company also reduced its workforce and closed certain overseas operations. In conjunction with the implementation of the plan, the Company recorded pretax charges of approximately $7,800 in the third and fourth quarters of fiscal year 2001. Planned charges include approximately $3,700 in fixed asset write-offs, $300 in severance and employee relocation costs, and $1,000 for subsidiary closures. Additionally, the Company reserved $2,100 of notes receivable from former officers and directors of the Company and paid $700 in consideration for the early termination of a consulting contract with the president of one of the Company’s European distributors.

The Company also wrote off $6,400 of inventory related to voluntary product recalls and excess and obsolete inventory in the second and fourth quarters of 2001. The amount is included in cost of sales at December 28, 2001.

NOTE 15—NET INCOME PER SHARE

The following is a reconciliation of the weighted average number of shares used to compute basic and diluted earnings (loss) per share:

	2001	2000	1999
Basic weighted average shares outstanding	17,003	15,378	14,157
Diluted effect of stock options and warrants	—	—	599
Diluted weighted average shares outstanding	17,003	15,378	14,756

NOTE 16—GEOGRAPHIC AND PRODUCT DATA

The Company develops, manufactures and distributes medical devices used in minimally invasive ophthalmic surgery. Substantially all of the Company’s revenues result from the sale of the Company’s medical devices. The Company distributes its medical devices in the cataract, refractive and glaucoma segments within ophthalmology. During the years presented, revenues from the refractive and glaucoma segments were less than 5% of total revenue. Accordingly, the difference is not significant enough for the Company to account for these products separately or to justify segmented reporting by product type.

F-24

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company markets and sells its products in over 40 countries and has manufacturing sites in the United States and Switzerland. Other than the United States and Germany, the Company does not conduct business in any country in which its sales in that country exceed 5% of consolidated sales. Sales are attributed to countries based on location of customers. The composition of the Company’s sales to unaffiliated customers between those in the United States, Germany, and those in other locations for each year, is set forth below.

	2001		2000		1999
Sales to unaffiliated customers
U.S.	$	27,465	$	29,501	$	27,976
Germany		14,907		14,182		16,916
Other		7,865		10,303		14,063
Total	$	50,237	$	53,986	$	58,955

The composition of the Company’s property, plant and equipment between those in the United States, Switzerland, and those in other countries is set forth below.

	2001		2000		1999
Property, Plant and Equipment
U.S.	$	6,316	$	10,920	$	9,705
Switzerland		2,123		2,270		2,198
Other		303		436		773
Total	$	8,742	$	13,626	$	12,676

The Company sells its products internationally, which subject the Company to several potential risks, including fluctuating exchange rates (to the extent the Company’s transactions are not in U.S. dollars), regulation of fund transfers by foreign governments, United States and foreign export and import duties and tariffs and political instability.

NOTE 17—QUARTERLY FINANCIAL DATA (UNAUDITED)

Summary unaudited quarterly financial data from continuing operations for fiscal 2001 and 2000 is as follows:

December 28, 2001	1st Qtr.			2nd Qtr.			3rd Qtr.			4th Qtr.
	(in thousands except per share data)
Revenues	$	13,001		$	12,890		$	12,154		$	12,741
Gross Profit		7,822			1,865			6,688			6,208
Net Loss		(230	)		(4,177	)		(1,991	)		(8,435	)
Basic Income Per Share		(.01	)		(.25	)		(.12	)		(.49	)
Diluted Income Per Share		(.01	)		(.25	)		(.12	)		(.49	)
December 29, 2000	1st Qtr.			2nd Qtr.			3rd Qtr.			4th Qtr.
Revenues	$	14,138		$	12,848		$	13,664		$	13,784
Gross Profit		8,658			2,718			8,310			8,419
Net Income (Loss)		264			(18,514	)		542			(1,194	)
Basic Income Per Share		.02			(1.25	)		.04			(.07	)
Diluted Income Per Share		.02			(1.25	)		.04			(.07	)

F-25

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 18—FOURTH QUARTER SIGNIFICANT ITEMS

In connection with the Company’s comprehensive review of its global operations to increase efficiencies and return on assets, planned and unplanned charges recorded in the fourth quarter of 2001 were as follows: $799 in obsolete Collamer inventory, $658 related to the termination of a consulting contract, $3,700 in fixed asset write-offs, and $1,059 for subsidiary closures (see Notes 12 and 14).

NOTE 19—SUBSEQUENT EVENTS

On March 27, 2002 the Company and its domestic lender executed a commitment letter memorializing the lender’s agreement to extend the maturity date of the Company’s line of credit for one year. This agreement is conditioned upon the execution and delivery to the lender of definitive documentation, satisfactory to the lender, evidencing the extension, the delivery to the lender of a good standing certificate from the state of Delaware, and payment to the lender of fees and costs associated with the transaction. Furthermore, the extension is conditioned upon the lender’s determination that there has been no material adverse change in the Company’s financial condition or business nor any material decline in the market value of the collateral. The lender may also require other conditions precedent, although it has not done so to date. The lender has prepared the definitive agreement and the Company is in the process of reviewing it.

Legislation enacted March 9, 2002 (HR 3090), enables the Company to carryback portions of its federal 2000 and 2001 losses to 1996, 1997 and 1998. Consequently, the federal net operating loss carryforwards from 2000 and 2001 will be $910 and $10,775. These carrybacks will result in refunds of approximately $959. As the law was not enacted as of the end of the fiscal year 2001, no receivable for the refund is recorded.

F-26

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’

REPORT ON SCHEDULE

To the Board of Directors

STAAR Surgical Company

The audits referred to in our report dated March 5, 2002 (except for Note 19 which is dated March 27, 2002), included the related financial statement schedule as of December 28, 2001, and for each of the three years in the period ended December 28, 2001, included in the annual report on Form 10-K of STAAR Surgical Company and Subsidiaries. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audit. In our opinion, such financial statement schedule presents fairly, in all material respects, the information set forth therein.

/S/     BDO SEIDMAN, LLP

Los Angeles, California

March 5, 2002

(except for Note 19 which is dated March 27, 2002)

F-27

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’ CONSENT

To the Board of Directors

STAAR Surgical Company

We consent to incorporation by reference in the Registration Statement (No. 33-37248) (No. 33-76404) and (No. 33-60241) on Form S-8 of STAAR Surgical Company of our report dated March 5, 2002 (except for Note 19 which is dated March 27, 2001) relating to the consolidated balance sheets of STAAR Surgical Company and Subsidiaries as of December 28, 2001 and December 29, 2000 and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows and related schedule for each of the three years in the period ended December 28, 2001, which report appears in the December 28, 2001 annual report on Form 10-K of STAAR Surgical Company and subsidiaries.

/S/     BDO SEIDMAN, LLP

Los Angeles, California

March 5, 2002

(except for Note 19 which is dated March 27, 2002)

F-28

EX-10.64

                                                     San Gabriel Valley RCBO
                                                     1000 Lakes Drive, Suite 250
                                                     West Covina, CA 91790

[LETTERHEAD] WELLS FARGO

                                December 22, 2000

John Santos, Chief Financial Officer
Staar Surgical Company
1911 Walker Avenue
Monrovia, CA 91016

Dear Mr. Santos:

     This letter amendment (this "Amendment") is to confirm the changes agreed
upon between Wells Fargo Bank, National Association ("Bank") and Staar Surgical
Company ("Borrower") to the terms and conditions of that certain letter
agreement between Bank and Borrower dated as of October 31, 2000, as amended
from time to time (the "Agreement"). For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
that the Agreement shall be amended as follows to reflect said changes.

     1. Paragraphs V.10 and V.16 are hereby deleted in their entirety, and the
following substituted therefor:

          "10. Liquidity. Maintain unencumbered liquid assets (defined as cash,
               ---------
     cash equivalents and/or publicly traded/quoted marketable securities
     acceptable to Bank) with banks and/or brokers within the U.S. having an
     aggregate fair market value not at any time less than Two Million Five
     Hundred Thousand Dollars ($2,500,000.00).

          16. Loans, Advances, Investments. Not make any loans or advances to or
              ----------------------------
     investments in any person or entity, except any of the foregoing disclosed
     by Borrower to, and deemed acceptable by, Bank prior to Bank's extension of
     any credit to Borrower, and additional intercompany loans or advances to
     STAAR Surgical AG, a wholly-owned subsidiary of Borrower ("Swiss Sub"), in
     amounts not to exceed an aggregate of U.S.$8,500,000.00 outstanding at any
     one time (whether such loans or advances are evidenced in a written
     document or instrument, by internal bookkeeping entry, or otherwise, and
     including without limitation amounts owed by Swiss Sub to Borrower for
     product sold from time to time by Borrower to Swiss Sub).

     2. Except as specifically provided herein, all terms and conditions of
the Agreement remain in full force and effect, without waiver or modification.
All terms defined in the Agreement shall have the same meaning when used herein.
This Amendment and the Agreement shall be read together, as one document.






Staar Surgical Company
December 18, 2000
Page 2

     3. Borrower hereby remakes all representations and warranties contained in
the Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of Borrower's acknowledgment set forth below there
exists no default or defined event of default under the Agreement or any
promissory note or other contract, instrument or document executed in connection
therewith, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute such a default or defined event of
default.

     Your acknowledgment of this Amendment shall constitute acceptance of the
foregoing terms and conditions.

                                                     Sincerely,

                                                     WELLS FARGO BANK,
                                                     NATIONAL ASSOCIATION


                                                     By: /s/ Nancy Martorano
                                                         -----------------------
                                                         Nancy Martorano
                                                         Vice President

Acknowledged and accepted as of                      :
                               ---------------------

STAAR SURGICAL COMPANY


By:
   -----------------------
   John Santos
   Chief Financial Officer

EX-10.65

                              CONSULTING AGREEMENT

     This Consulting Agreement ("Agreement") is made on this 1st day of March
2001 by and between David R. Morrison, an individual, whose address is 20, North
End Rd, Quainton, Bucks, U.K., ("Consultant") and STAAR Surgical Company, a
Delaware corporation, whose address is 1911 Walker Avenue, Monrovia, California
91016 ("Company"), in reference to the following:

                                    RECITALS

     A. The Company is in the business of manufacturing and selling medical
products used for surgical implantation in the human eye.

     B. The Company wishes to retain the Consultant, and the Consultant wishes
to be retained by the Company, to assist the Company to improve overall
financial performance and shareholder value.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Consultant
agree as follows:

                                    AGREEMENT

     1. Term. The Company retains the Consultant and the Consultant accepts this
        ----
appointment with the Company for a continuous period with a minimum of twelve
(12) months.

     2. Duties of Consultant. The Consultant will work from time to time on
        --------------------
assignments of a varied nature as determined by the Company CEO to whom
Consultant will report directly.

     3. Compensation. The Company shall pay to the Consultant, a minimum
        ------------
retainer of $9,000.00 (Nine Thousand Dollars) per month for 6 days work and this
sum will be payable whether or not Company can provide 6 days work. Should
Consultant work more than 6 days, he will be paid on a pro-rata per diem basis
of $1,500.00 (One Thousand and Five Hundred Dollars). Workdays will include all
time involved in travel associated with the assignment. Company will promptly
pay the amount owed Consultant into an account to be designated by Consultant on
the last day of each calendar month.

          3.1 Issuance of Stock Option Grant. Immediately upon the issue of a
stock option grant of not less than 20,000 (Twenty Thousand) shares, the minimum
monthly retainer for 6 days consultancy will be reduced to $6,000.00 (Six
Thousand Dollars) with the pro-rata per diem for any additional days worked
being reduced to $1,000.00 (One Thousand Dollars).

          3.2 Stock Option Grant. The Company will use its best efforts to
obtain a stock option grant for Consultant which will be for not less than
20,000 (Twenty Thousand) shares of common stock; the share option price will be
the price at which the stock closed on the last trading day prior to the grant
being issued. A total of 50% of the options will vest immediately at the time
the grant is issued, with the remaining 50% vesting on the first anniversary of
Agreement having been

                                        1



executed whether or not the grant is made after the date of execution of
Agreement. Should this Agreement continue in force for more than one year,
additional stock option grants of not less than 20,000 (Twenty Thousand) shares
will be issued annually with the same vesting formula as will apply to the
initial grant. Should David Bailey cease to be CEO of Company and as a result,
Consultant determines to terminate Agreement (with 30 day's notice), then any
unvested stock options will vest on the last day of Consultant's assignment -
even if this is less than 12 months from first date of execution of Agreement.

     4. Nondisclosure.
        -------------

          4.1 Property Belonging to Company. The Consultant agrees that all
developments, ideas, devices, improvements, discoveries, apparatus, practices,
processes, methods, concepts and products relating to microsurgical and/or
implantable devices, cryosurgical and/or colposcopic devices ("inventions")
developed during the term of this Agreement on the Company's time and with the
Company's equipment, supplies, facilities, or confidential proprietary
information are the exclusive property of the Company and shall belong to the
Company. The Consultant agrees to assign all such inventions to the Company, if
the Company so requests.

          4.2 Property Belonging to Consultant. The Company agrees that the
Company shall have no rights in any invention that the Consultant develops
entirely on the Consultant's own time, without using the Company's equipment,
supplies, facilities, or confidential proprietary information, except for
inventions that either (i) relate, at the time the invention is conceived or
reduced to practice, to the Company's business or to actual or anticipated
research or development of the Company; or (ii) result from any work performed
by the Consultant for the Company.

          4.3 Access to Confidential Information. The Consultant agrees that
during the term of the business relationship between the Consultant and the
Company, the Consultant will have access to and become acquainted with
confidential proprietary information which is owned by the Company and is
regularly used in the operation of the Company's business. The Consultant
acknowledges that all files, records, documents, drawings, specifications,
equipment and similar items relating to the business of the Company and to its
confidential proprietary information, whether they are prepared by the
Consultant or come into the Consultant's possession in any other way, shall
remain the exclusive property of the Company. Consultant will sign a standard
Company Confidentiality and Non-disclosure Agreement.

          4.4 No Unfair Use by Consultant. The Consultant promises and agrees
that the Consultant shall not misuse, misappropriate, or disclose in any way to
any person or entity any of the Company's confidential proprietary information,
either directly or indirectly, nor will the Consultant use the confidential
proprietary information in any way or at any time except as required in the
course of the Consultant's business relationship with the Company. The
Consultant agrees that the sale or unauthorized use or disclosure of any of the
Company's confidential proprietary information which is obtained by the
Consultant during the Consultant's business relationship with the Company
constitutes unfair competition. The Consultant promises and agrees not to engage
in any unfair competition with the Company.

                                        2



          4.5 Further Acts. The Consultant agrees that, at any time during the
term of this Agreement or any extension thereof, upon the request of the Company
and without further compensation, but at no expense to the Consultant, the
Consultant shall perform any lawful acts, including the execution of papers and
oaths and the giving of testimony, that in the opinion of the Company, its
successors or assigns, may be necessary or desirable in order to obtain,
sustain, reissue and renew, and in order to enforce, perfect, record and
maintain, patent applications and United States and foreign patents on the
Company's inventions, and copyright registrations on the Company's inventions.

          4.6 Obligations Survive Agreement. The Consultant's obligations under
this section 4 shall survive the expiration or termination, for any reason, of
this Agreement.

          4.7 Conflict of Interest. The Consultant is currently engaged by
Santen, Ltd. Company recognizes that some work may continue to be performed by
Consultant for Santen; provided that this does not represent a conflict of
interest. Consultant will not accept any engagements from any competitor of
Santen during the duration of Agreement.

     5. Effect of Merger. This Agreement may be terminated by the Company in the
        ---------------
event of any voluntary or involuntary dissolution of the Company resulting from
any merger or consolidation in which the Company is not the surviving
corporation or any transfer of all or substantially all of the assets of the
Company. In the event of such termination of the agreement, Consultant will be
paid an indemnity equal to 3 months minimum retainer and any unvested options
will immediately vest.

     6. Termination without Cause.
        -------------------------

          6.1 Termination. The Agreement is continuous with a minimum duration
of 12 months. Either party to the Agreement must give 3 months written notice of
an intention to terminate the Agreement unless termination is for cause. Upon
termination, any unvested options will immediately vest.

          6.2 Termination Due to Death. This Agreement shall be terminated upon
the death of the Consultant and no further payments shall be made pursuant to
its terms.

          6.3 Termination Due to Disability. The Company reserves the right to
terminate this Agreement immediately after the Consultant suffers any physical
or mental disability that, in the Company's sole determination, would prevent
the performance of the Consultant's duties under this Agreement. A termination
pursuant to this section shall be effected by giving ten days written notice of
termination to the Consultant.

          6.4 Termination Not For Cause. Termination of this Agreement under
this section shall not be considered "for cause."

     7. Termination for Cause.
        ----------------------

                                        3



          7.1 Termination for Cause. The Company reserves the right to
immediately terminate this Agreement if the Consultant willfully breaches or
habitually neglects the duties which he is required to perform under the terms
of this Agreement, or if he commits acts of dishonesty, fraud, or
misrepresentation, or if he engages in competition with the Company as
contemplated by sections 4 and 5 above. The Company reserves the right to
immediately terminate this Agreement if the Consultant fails to promptly and
faithfully comply with all present and future policies, requirements,
directions, requests and rules and regulations of the Company or fails to
conform to all laws and regulations or commits any act or becomes involved in
any situation or occurrence tending to bring the Company into public scandal or
ridicule or which will reflect unfavorably on the reputation of the Company.

          7.2 Notice of Termination/No Election of Remedies. If the Company
terminates this Agreement pursuant to section 7.1 above, the Company shall give
written notice of termination to the Consultant without prejudice to any other
remedy to which the Company may be entitled, either at law or in equity, under
this Agreement.

          7.3 Termination For Cause. Termination of this Agreement under this
section shall be considered termination "for cause."

     8. Termination by Consultant. With the exception of the Consultant's
        -------------------------
obligations under section 4 of this Agreement, which represent a continuing
obligation of the Consultant and shall survive the termination or expiration of
this Agreement, the Consultant may terminate his obligations under this
Agreement by giving the Company at least thirty days written notice.

     9. Status of Consultant. The Consultant understands and agrees that he is
        --------------------
not an employee of the Company and that he shall not be entitled to receive
employee benefits from the Company, including, but not limited to, sick leave,
vacation, retirement, death benefits, or an automobile, except as provided for
in clause 11. The Consultant shall be responsible for providing, at the
Consultant's expense and in the Consultant's name, disability, worker's
compensation or other insurance as well as licenses and permits usual or
necessary for conducting the services hereunder. Furthermore, the Consultant
shall pay, when and as due, any and all taxes incurred as a result of the
Consultant's compensation hereunder, including estimated taxes, and shall
provide the Company with proof of said payments, upon demand. The Consultant
hereby indemnifies the Company for any claims, losses, costs, fees, liabilities,
damages or injuries suffered by the Company arising out of the Consultant's
breach of this section.

     10. Representations by Consultant. The Consultant represents that the
         -----------------------------
Consultant has the qualifications and ability to perform the services in a
professional manner, without the advice, control, or supervision of the Company.
The Consultant shall and does hereby indemnify, defend, and hold harmless the
Company, and the Company's officers, directors, and shareholders from and
against any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies, including, without
limitation, interest, penalties, and reasonable attorney fees and costs, that
the Company may incur or suffer and that arise, result from, or are related to
any breach or failure of the Consultant to perform any of the representations,
warranties and agreements contained in this Agreement.

                                        4



     11. Business Expenses. The Company shall reimburse the Consultant for all
         -----------------
reasonable business expenses incurred by the Consultant provided that each such
expenditure qualifies as a proper deduction on the Company's federal and state
income tax return. Each such expenditure shall be reimbursable only if the
Consultant furnishes to the Company adequate records and other documentary
evidence required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of that expenditure as an
income tax deduction. The expense category will be "business class" air travel
and equivalent level hotel accommodation/T&E/car rental or hire. The Company
will also reimburse communication and administrative expenses incurred in
conjunction with work performed for Company and also reasonable
life/travel/health insurance. The Company shall, in its sole discretion,
reimburse the Consultant or not, for any business expense which exceeds such
amount determined by Company and which is incurred by the Consultant without the
prior written consent of the Company. The Company will provide Consultant with a
$15,000.00 (Fifteen Thousand Dollar) advance to facilitate funding of initial
expenses, which will be reimbursed by Consultant upon termination of Agreement,
less any outstanding expensed owed by the Company to the Consultant.

     12. Notices. Unless otherwise specifically provided in this Agreement, all
         -------
notices or other communications (collectively and severally called "Notices")
required or permitted to be given under this Agreement, shall be in writing, and
shall be given by: (A) personal delivery (which form of Notice shall be deemed
to have been given upon delivery), (B) by telegraph or by private
airborne/overnight delivery service (which forms of Notice shall be deemed to
have been given upon confirmed delivery by the delivery agency), or (C) by
electronic or facsimile or telephonic transmission, provided the receiving party
has a compatible device or confirms receipt thereof (which forms of Notice shall
be deemed delivered upon confirmed transmission or confirmation of receipt).
Notices shall be addressed to the address set forth in the introductory section
of this Agreement, or to such other address as the receiving party shall have
specified most recently by like Notice, with a copy to the other party.

     13. Choice of Law and Venue. This Agreement shall be governed according to
         -----------------------
the laws of the state of California. Venue for any legal or equitable action
between the Company and the Consultant which relates to this Agreement shall be
in the county of Los Angeles.

     14. Entire Agreement. This Agreement supersedes any and all other
         ----------------
agreements, either oral or in writing, between the parties hereto with respect
to the services to be rendered by the Consultant to the Company and contains all
of the covenants and agreements between the parties with respect to the services
to be rendered by the Consultant to the Company in any manner whatsoever. Each
party to this agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement, or promise not contained in this Agreement shall be
valid or binding on either party.

     15. Counterparts. This Agreement may be executed manually or by facsimile
         ------------
signature in two or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute but one and the same
instrument.

                                        5

EX-10.66

                                                     San Gabriel Valley RCBO
                                                     1000 Lakes Drive, Suite 250
                                                     West Covina, CA 91790

[LETTERHEAD] WELLS FARGO

                                  April 1, 2001

Staar Surgical Company
1911 Walker Avenue
Monrovia, CA 91016

Gentlemen:

     This letter is to confirm that Wells Fargo Bank, National Association
("Bank") has agreed to extend the maturity date of that certain credit
accommodation granted by Bank to Staar Surgical Company ("Borrower") in the
maximum principal amount of Seven Million Dollars ($7,000,000.00) pursuant to
the terms and conditions of that certain Letter Agreement between Bank and
Borrower dated as of October 31, 2000, as amended from time to time (the
"Agreement").

     The maturity date of said credit accommodation is hereby extended until
July 2, 2001. Until such date, all terms and conditions of the Agreement which
pertain to said credit accommodation shall remain in full force and effect,
except as expressly modified hereby. The promissory note dated as of October 31,
2000, executed by Borrower and payable to the order of Bank which evidences said
credit accommodation, a copy of which is attached hereto as Exhibit A (the
                                                            ---------
"Note"), shall be deemed modified as of the date this letter is acknowledged by
Borrower to reflect the new maturity date set forth above. All other terms and
conditions of the Note remain in full force and effect, without waiver or
modification.

     An Event of Default exists under the Agreement as a result of Borrower's
failure to maintain a positive net income after taxes as of the fiscal quarter
ended December 31, 2000 (the "Existing Event of Default"). This letter will
confirm that Bank has decided to waive its default rights with respect to the
Existing Event of Default. This waiver applies only to the Existing Event of
Default. It is not a waiver of any breach of the same provision of the Agreement
after December 31, 2000, nor is it a waiver of any breach of any other provision
of the Agreement.

     Borrower acknowledges that Bank has not committed to make any renewal or
further extension of the maturity date of the above-described credit
accommodation beyond the new maturity date specified herein, and that any such
renewal or further extension remains in the sole discretion of Bank. This letter
constitutes the entire agreement between Bank and Borrower with respect to the
maturity date extension and default waiver for the above-described credit
accommodation, and supersedes all prior negotiations, discussions and
correspondence concerning said extension.



Staar Surgical Company
April 1, 2001
Page 2

     Please acknowledge your acceptance of the terms and conditions contained
herein by dating and signing one copy below and returning it to my attention at
the above address on or before April 10, 2001.

                                                     Very truly yours,

                                                     WELLS FARGO BANK,
                                                     NATIONAL ASSOCIATION


                                                     By: Nancy Martorano
                                                         -----------------------
                                                         Nancy Martorano
                                                         Vice President

Acknowledged and accepted as of 4/2/01 :
                                ------
STAAR SURGICAL COMPANY


By: /s/ John Santos
    -----------------
Title: VP CFO



                                   EXHIBIT A

WELLS FARGO BANK                                   REVOLVING LINE OF CREIDT NOTE

$7,000,000.00
                                                         West Covina, California
                                                                October 31, 2000

     FOR VALUE RECEIVED, the undersigned Staar Surgical Company ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at San Gabriel Valley RCBO, 1000 Lakes Drive, Suite 250, West
Covina, CA 91790, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of $7,000,000.00, or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

INTEREST:

     (a) Interest. The outstanding principal balance of this Note shall bear
         --------
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum equal to the Prime Rate in effect from time to time. The "Prime
Rate" is a base rate that Bank from time to time establishes and which serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto. Each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank.

     (b) Payment of Interest. Interest accrued on this Note shall be payable on
         -------------------
the 1st day of each month, commencing November 1, 2000.

     (c) Default Interest. From and after the maturity date of this Note, or
         ----------------
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

     (a) Borrowing and Repayment. Borrower may from time to time during the term
         -----------------------
of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on April 1, 2001.

     (b) Advances. Advances hereunder, to the total amount of the principal sum
         --------
available hereunder, may be made by the holder at the oral or written request of
(i) John Santos, any one acting alone, who are authorized to request advances
and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (ii) any person, with respect to advances deposited to the credit of
any deposit account of any Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of each Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.

     (c) Application of Payments. Each payment made on this Note shall be
         -----------------------
credited first, to any interest then due and second, to the outstanding
principal balance hereof.



EVENTS OF DEFAULT:

     The occurrence of any of the following shall constitute an "Event of
Default" under this Note:

     (a) The failure to pay any principal, interest, fees or other charges when
due hereunder or under any contract, instrument or document executed in
connection with this Note.

     (b) The filing of a petition by or against any Borrower, any guarantor of
this Note or any general partner or joint venturer in any Borrower which is a
partnership or a joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as
amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for debtors;
the appointment of a receiver, trustee, custodian or liquidator of or for any
part of the assets or property of any Borrower or Third Party Obligor; any
Borrower or Third Party Obligor becomes insolvent, makes a general assignment
for the benefit of creditors or is generally not paying its debts as they become
due; or any attachment or like levy on any property of any Borrower or Third
Party Obligor.

     (c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.

     (d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which any Borrower or Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder.

     (e) Any financial statement provided by any Borrower or Third Party Obligor
to Bank proves to be incorrect, false or misleading in any material respect.

     (f) Any sale or transfer of all or a substantial or material part of the
assets of any Borrower or Third Party Obligor other than in the ordinary course
of its business.

     (g) Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note.

MISCELLANEOUS:

     (a) Remedies. Upon the occurrence of any Event of Default, the holder of
         --------
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
any Borrower or any other person or entity.

     (b) Obligations Joint and Several. Should more than one person or entity
         -----------------------------
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.



     (c) Governing Law. This Note shall be governed by and construed in
         -------------
accordance with the laws of the State of California.

     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

Staar Surgical Company


By: /s/ John Santos
    -----------------------
    John Santos,
    Chief Financial Officer

EX-10.67

[LETTERHEAD] WELLS FARGO

                                  July 1, 2001

John Santos, Chief Financial Officer
Staar Surgical Company
1911 Walker Avenue
Monrovia, CA 91016

Dear Mr. Santos:

     This letter amendment (this "Amendment") is to confirm the changes agreed
upon between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") and STAAR SURGICAL
COMPANY ("Borrower") to the terms and conditions of that certain letter
agreement between Bank and Borrower dated as of October 31, 2000, as amended
from time to time (the "Agreement"). For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
that the Agreement shall be amended as follows to reflect said changes.

     1. Paragraph V.3 (d) is hereby relettered as Paragraph V.3 (e) and the
following is hereby added to the Agreement as the new Paragraph V.3. (d):

               "(d) no later than July 30, 2001, a detailed financial plan in
          form and substance satisfactory to Bank."

     2. Paragraph V.10 is hereby deleted in its entirety, and the following
substituted therefor:

               "10. Liquidity. Maintain unencumbered liquid assets (defined as
                    ---------
          cash, cash equivalents and/or publicly traded/quoted marketable
          securities acceptable to Bank) held with Bank having an aggregate fair
          market value not at any time less than Two Million Dollars
          ($2,000,000.00)."

     3. Except as specifically provided herein, all terms and conditions of the
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Agreement shall have the same meaning when used herein.
This Amendment and the Agreement shall be read together, as one document.

     4. Borrower hereby remakes all representations and warranties contained in
the Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of Borrower's acknowledgment set forth below there
exists no default or defined event of default under the Agreement or any
promissory note or other contract, instrument or document executed in connection
therewith, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute such a default or defined event of
default.






Staar Surgical Company
July 1, 2001
Page 2

     Your acknowledgment of this Amendment shall constitute acceptance of the
foregoing terms and conditions.

                                                     Sincerely,

                                                     WELLS FARGO BANK,
                                                     NATIONAL ASSOCIATION


                                                     By:
                                                         --------------------
                                                         Nancy Martorano
                                                         Vice President

Acknowledged and accepted as of 6/30/01 :
                                -------
STAAR SURGICAL COMPANY


By: /s/ John Santos
    ---------------
    John Santos
    Chief Financial Officer

EX-10.68

[LETTERHEAD] WELLS FARGO

                                   July 1, 2001

John Santos, Chief Financial Officer
Staar Surgical Company
1911 Walker Avenue
Monrovia, CA 91016

Dear Mr. Santos:

     This letter is to confirm that WELLS FARGO BANK, NATIONAL ASSOCIATION
("Bank") has agreed to extend the maturity date of that certain credit
accommodation granted by Bank to STAAR SURGICAL COMPANY ("Borrower") in the
maximum principal amount of Seven Million Dollars ($7,000,000.00) pursuant to
the terms and conditions of that certain letter agreement between Bank and
Borrower dated as of October 31, 2000, as amended from time to time (the
"Agreement").

     The maturity date of said credit accommodation is hereby extended until
October 1, 2001. Until such date, all terms and conditions of the Agreement
which pertain to said credit accommodation shall remain in full force and
effect, except as expressly modified hereby. The promissory note dated as of
October 31, 2000, executed by Borrower and payable to the order of Bank which
evidences said credit accommodation, a copy of which is attached hereto as
Exhibit A (the "Note"), shall be deemed modified as of the date this letter is
- ---------
acknowledged by Borrower to reflect the new maturity date set forth above. All
other terms and conditions of the Note remain in full force and effect, without
waiver or modification.

     Borrower acknowledges that Bank has not committed to make any renewal or
further extension of the maturity date of the above-described credit
accommodation beyond the new maturity date specified herein, and that any such
renewal or further extension remains in the sole discretion of Bank. This letter
constitutes the entire agreement between Bank and Borrower with respect to the
maturity date extension for the above-described credit accommodation, and
supersedes all prior negotiations, discussions and correspondence concerning
said extension.



Staar Surgical Company
July 1, 2001
Page 2

     Please acknowledge your acceptance of the terms and conditions contained
herein by dating and signing one copy below and returning it to my attention at
the above address on or before July 16, 2001.

                                                     Very truly yours,

                                                     WELLS FARGO BANK,
                                                     NATIONAL ASSOCIATION


                                                     By:
                                                        -----------------------
                                                        Nancy Martorano
                                                        Vice President

Acknowledged and accepted as of                 :
                               -----------------

STAAR SURGICAL COMPANY


By: /s/ John Santos
   ----------------------------
    John Santos
    Chief Financial Officer



WELLS FARGO BANK                                   REVOLVING LINE OF CREDIT NOTE
- --------------------------------------------------------------------------------

                                    EXHIBIT A

$7,000,000.00
                                                         West Covina, California
                                                                October 31, 2000

     FOR VALUE RECEIVED, the undersigned Staar Surgical Company ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at San Gabriel Valley RCBO, 1000 Lakes Drive, Suite 250, West
Covina, CA 91790, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of $7,000,000.00, or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

INTEREST:

     (a) Interest. The outstanding principal balance of this Note shall bear
         --------
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum equal to the Prime Rate in effect from time to time. The "Prime
Rate" is a base rate that Bank from time to time establishes and which serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto. Each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank.

     (b) Payment of Interest. Interest accrued on this Note shall be payable on
         -------------------
the 1st day of each month, commencing November 1, 2000.

     (c) Default Interest. From and after the maturity date of this Note, or
         ----------------
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

     (a) Borrowing and Repayment. Borrower may from time to time during the term
         -----------------------
of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms, and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on April 1, 2001.

     (b) Advances. Advances hereunder, to the total amount of the principal sum
         --------
available hereunder, may be made by the holder at the oral or written request of
(i) John Santos, any one acting alone, who are authorized to request advances
and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (ii) any person, with respect to advances deposited to the credit of
any deposit account of any Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of each Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.

     (c) Application of Payments. Each payment made on this Note shall be
         -----------------------
credited first, to any interest then due and second, to the outstanding
principal balance hereof.



     (c) Governing Law. This Note shall be governed by and construed in
         -------------
accordance with the laws of the State of California.

     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

Staar Surgical Company


By: John Santos
    --------------------
    John Santos, Chief Financial Officer

EX-10.69

                         SEVERANCE AND RELEASE AGREEMENT
                         -------------------------------

          This Severance and Release Agreement ("Agreement") is entered into by
and between STAAR Surgical Company, a Delaware corporation (the "Company") and
Thomas J. Chambers, an individual ("Chambers"), this 21/st/ day of August, 2001
based upon the following:

                                    RECITALS
                                    --------

     Whereas, on September 20, 1996 the Company and Chambers entered into that
certain "Employment Agreement";

     Whereas, the Company terminated Chambers' employment on July 6, 2000;

     Whereas, on or about November 12, 2000, Chambers filed a complaint with the
Department of Fair Employment and Housing alleging discrimination relating to
the termination of his employment (the "Complaint"); and

     Whereas, both Chambers and the Company wish to settle, finally and forever,
any and all issues relating to Chamber's employment with the Company and the
termination of his employment, including the Complaint;

     Whereas, the Company and Chambers wish to memorialize their agreement
relating to the termination of Chambers employment with the Company, the
severance benefits that are to be transferred or paid to Chambers as a result of
the termination of his employment, and Chambers waiver of all rights and claims
which he may have against the Company, if any.

     Now, therefore, in consideration of the mutual covenants and promises
contained herein and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Chambers agree as
follows:

                                    AGREEMENT
                                    ---------

     1. Incorporation of Recitals. The recitals to this Agreement are an
        -------------------------
integral part of this Agreement and are hereby incorporated as a part of this
Agreement as if set forth in it.

     2. Consideration for Agreement. In exchange for Chambers release of the
        ---------------------------
Company from any past, present and future obligations (if any), whether monetary
or otherwise, allegedly owed by the Company to Chambers based upon Chambers
employment and the termination thereof, the Company shall enter into a
Consulting Agreement with Chambers, a copy of which is attached hereto as Annex
A.

     3. Waiver of All Claims. Chambers agrees that he is not entitled to
        --------------------
receive, will not claim and expressly waives any entitlement to rights, benefits
or compensation from the Company other than as expressly set forth in this
Agreement.

                                       1



     4. Complete Release by Chambers.
        ----------------------------

          (a) Release. Chambers irrevocably and unconditionally releases all of
the claims described in subsection (b) of this section 4 that he may now have
against the following persons or entities (the "Releasees"): the Company, all of
its past and present employees, officers, directors, stockholders, owners,
representatives, assigns, attorneys, agents, insurers, employee benefit programs
(and the trustees, administrators, fiduciaries and insurers of such programs)
and any other persons acting by, through, under or in concert with any of the
persons or entities listed in this subsection.

          (b) Claims Released. The claims released include all claims, promises,
debts, causes of action or similar rights of any type or nature Chambers has or
had which in any way relate to (i) Chambers employment with the Company, or the
termination of that employment, such as claims for compensation, bonuses,
commissions, lost wages or unused accrued vacation or sick pay, (ii) the design
or administration of any employee benefit program or Chambers entitlement to
benefits under any such program, (iii) any claims to attorneys' fees and/or
other legal costs, (iv) the Complaint, and (v) any other claims or demands
Chambers may, on any basis, have. The claims released include, but are not
limited to, claims arising under any of the following statutes or common law
doctrines:

               (i) Anti-Discrimination Statutes, such as the Age Discrimination
          in Employment Act, which prohibits age discrimination in employment;
          the Civil Rights Act of 1991, Title VII of the Civil Rights Act of
          1964, and Section 1981 of the Civil Rights Act of 1866, which prohibit
          discrimination based on race, color, national origin, religion or sex;
          the Equal Pay Act, which prohibits paying men and women unequal pay
          for equal work; the Americans With Disabilities Act, which prohibits
          discrimination against the disabled; the California Fair Employment
          and Housing Act, which prohibits discrimination in employment based
          upon race, color, national origin, ancestry, physical or mental
          disability, medical condition, martial status, sex, or age; and any
          other federal, state or local laws or regulations prohibiting
          employment discrimination.

               (ii) Federal Employment Statutes, such as the Employee Retirement
          Income Security Act of 1974, which, among other things, protects
          pension or health plan benefits; and the Fair Labor Standards Act of
          1938, which regulates wage and hour matters.

               (iii) Other Laws, such as any federal, state or local laws
          restricting an employer's right to terminate employees or otherwise
          regulating employment; any federal, state or local law enforcing
          express or implied employment contracts or requiring an employer to
          deal with employees fairly or in good faith; and any other federal,
          state or local laws providing recourse for alleged wrongful discharge,
          physical or personal injury, emotional distress, fraud, negligent
          misrepresentation, libel, slander, defamation and similar or related
          claims. The laws referred to in this paragraph include statutes,
          regulations, other administrative guidance and common law doctrines.

                                       2



          (c) Release Extends to Both Known and Unknown Claims. This release
covers both claims that Chambers knows about and those Chambers does not know
about. Chambers understands the significance of this release of unknown claims
and his waiver of any statutory protection against a release of unknown claims.
Chambers expressly waives the protection of any such governmental statutes or
regulations.

          More particularly, and without limitation, Chambers acknowledges that
Chambers has read and is familiar with and understands the provisions of Section
1542 of the California Civil Code, which provides: "A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN TO HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

          CHAMBERS EXPRESSLY WAIVES ANY RIGHT OR CLAIM OF RIGHT CHAMBERS MAY
HAVE UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE.

          (d) Ownership of Claims. Chambers represents that he has not assigned
or transferred, or purported to assign or transfer, all or any part of any claim
released by this Agreement.

          (e) Release Does Not Extend to Consulting Agreement. Nothing in this
section 4 will release the Company from its obligations under the Consulting
Agreement.

     5.   Chambers Promises. In addition to the release of claims provided for
          -----------------
in section 4, Chambers promises never to file or prosecute a lawsuit,
administrative complaint or charge, or other complaint or charge asserting any
claims that are released by this Agreement. Chambers represents that, with the
exception of the Complaint, he has not filed or caused to be filed any lawsuit,
complaint or charge with respect to any claim this Agreement releases. Chambers
further agrees to request any government agency or other body assuming
jurisdiction of the Complaint or any other complaint or charge relating to a
released claim to withdraw from the matter or dismiss the matter with prejudice.

     6.   Consulting with Attorney. Chambers acknowledges that the Company has
          ------------------------
advised him to obtain the services of an attorney to review this Agreement and
to advice him regarding it. Chambers acknowledges he has had ample opportunity
to consult with an attorney prior to executing this Agreement and has, in fact,
done so.

     7.   Period for Consideration of Agreement. Chambers acknowledges that
          -------------------------------------
Chambers was given a period of 21 days to review and consider this Agreement
before signing it. Chambers further acknowledges that: (1) Chambers took
advantage of this period to consider this Agreement before signing it; (2)
Chambers carefully read this Agreement; and (3) Chambers fully understands this
Agreement and is entering into it voluntarily and without coercion or duress.

                                       3



     8.   Severability. The provisions of this Agreement are severable. If any
          ------------
part of it is found to be unenforceable, all other provisions shall remain fully
valid and enforceable.

     9.   Choice of Laws/Venue. This Agreement shall be governed by the laws of
          --------------------
the State of California, and any action or proceeding relating to this Agreement
shall be heard solely before the Courts of the County of Los Angeles,
California.

     10.  Nature, Effect and Interpretation of this Agreement.
          ---------------------------------------------------

          (a) Entire Agreement. This is the entire Agreement between Chambers
and the Company; it may not be modified or cancelled in any manner except by a
writing signed by both the Company and Chambers. The Company has made no
promises or representations to Chambers other than those in this Agreement and
the Consulting Agreement and Chambers has made no promises or representations to
the Company other than those in this Agreement and the Consulting Agreement.

          (b) Successors and Assigns. This Agreement shall bind both the
Company's and Chambers' heirs, administrators, representatives, executors,
successors and assigns, and shall inure to the benefit of all Releasees and
their respective heirs, administrators, representatives, executors, successors
and assigns.

          (c) Interpretation. This Agreement shall be construed as a whole
according to its fair meaning, and not strictly for or against any of the
parties. Unless the context indicates otherwise, the term "or" shall be deemed
to include the term "and" and the singular or plural number shall be deemed to
include the other. Paragraph headings used in this Agreement are intended solely
for convenience of reference and shall not be used in the interpretation of any
of this Agreement. It is acknowledged that neither party shall be construed to
be solely responsible for the drafting hereof, and therefore any ambiguity shall
not be construed against either party as the alleged draftsman of this
Agreement.

          (d) Counterparts and Facsimiles. For the convenience of the parties to
this Agreement, this document may be executed by facsimile signatures and in
counterparts that shall together constitute the agreement of the parties as one
and the same instrument.

          (e) Implementation. The Company and Chambers both agree that, without
the receipt of further consideration, they will sign and deliver any documents
and do anything else that is necessary in the future to make the provisions of
this Agreement effective.

     11. Notices. Unless otherwise specifically provided in this Agreement, all
         -------
notices, demands, requests, consents, approvals or other communications
(collectively and severally called "Notices") required or permitted to be given
hereunder, or which are given with respect to this Agreement, shall be in
writing, and shall be given by: (1) personal delivery (which form of Notice
shall be deemed to have been given upon delivery), (2) by telegraph or by
private airborne/overnight delivery service (which forms of Notice shall be
deemed to have been given upon confirmed delivery by the delivery agency), (3)
by electronic or facsimile or telephonic transmission, provided the receiving
party has a compatible device or confirms receipt thereof (which forms of
Notice shall be deemed delivered upon confirmed transmission or confirmation of
receipt), or (4) by mailing in the United States mail by registered or certified
mail, return receipt requested, postage prepaid (which forms of Notice shall be
deemed to have been given upon the fifth (5th) business day following the date
mailed). Notices shall be addressed to the parties as follows:


         Chambers:       Mr. Thomas J. Chambers
                         112 Harvard Avenue, #342
                         Claremont, California 91711


         Company:        STAAR Surgical Company
                         1911 Walker Avenue
                         Monrovia, California 91016
                         Attn: Chief Executive Officer

     12. Revocation Period. Chambers understands that he has a period of seven
         -----------------
days to revoke this Agreement from the date he signs it.

         PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

     Executed at Claremont, California this 21st day of August 2001.
                                            ----

                                            "Chambers"


                                            /s/ Thomas J. Chambers
                                            __________________________________
                                            Thomas J. Chambers

     Executed at Monrovia, California this 30th day of August 2001.
                                           ----

                                            "COMPANY"

                                            STAAR Surgical Company


                                            By: /s/ David Bailey
                                               _______________________________
                                               David Bailey, President




                                        4



                                     ANNEX A

                              CONSULTING AGREEMENT

                                        6



                              CONSULTING AGREEMENT

THIS AGREEMENT is made effective as of August 9, 2001, by and between STAAR
Surgical Company (hereafter "STAAR"), 1911 Walker Avenue, California 91016, and
Thomas Chambers (hereafter " Mr. Chambers"), 112 Harvard Avenue # 342,
Claremont, California 91711 as follows:

     1. Term. STAAR hereby retains Mr. Chambers for consulting services pursuant
to the terms described herein, and hereby accepts such retention, commencing as
of the date of this Agreement and expiring on August 8, 2003 (hereafter the
"Term").

     2. Consulting Services. Mr. Chambers shall perform consulting services as
mutually agreed upon between Mr. Chambers and STAAR (hereafter the "Consulting
Services") as follows:

     Be available at mutually agreeable times, but no more time than eight hours
in any one calendar month, to provide background information personally to David
Bailey, the President, or subsequent Presidents, of STAAR Surgical Company
related to past events that occurred during Mr. Chambers' employment with STAAR
which ended on July 6, 2000.

     3. Compensation. As consideration for Mr. Chambers' performance of the
Consulting Services, STAAR hereby grants to Mr. Chambers the STAAR stock option
grant totaling 10,000 units now available under a stockholder approved stock
option plan. Pricing would be at the close of business on the day of Chambers'
signing. All such stock options must be exercised within three (3) months
following the expiration date of this Agreement; any options remaining
unexercised after such three month period shall expire. In addition, Mr.
Chambers shall receive cash compensation in the total of $107,692.30 paid in
even installments over the first 8 months of this Agreement. The first amount to
be due and payable 28 days from Mr. Chambers' receipt of the Consulting
Agreement and the Severance and Release Agreement, and the effective date of the
agreement. Subsequent payments to be made on the 25th of each month.

     4. Outside Employment. STAAR acknowledges that during the term of this
Agreement, Mr. Chambers may be engaged by one or more entities, businesses or
institutions that are in direct competition with Staar. Mr. Chambers represents
that he is not and shall not become a party to any agreement which conflicts
with the Consulting Services described herein. Staar acknowledges that the
information sought from Mr. Chambers shall not compromise or otherwise conflict
with his present engagements or employment.

     5. "STAAR Confidential information" shall mean all financial, operational
and administrative records, research data and information, technical
information, commercial and research strategies, trade secrets, and know-how
disclosed by STAAR to Mr. Chambers prior to July 7, 2000. Any research data and
technical information, commercial and research strategies, and know-how
independently obtained by Mr. Chambers after his employment at STAAR shall not
be considered "STAAR Confidential information".

                                        1



     (a) Confidentiality and Non-Use. Except as provided above, Mr. Chambers
will maintain the STAAR Confidential Information in confidence, and will not
disclose any STAAR Confidential Information to any third party without STAAR's
prior written consent. Mr. Chambers will use the STAAR Confidential Information
solely for the purpose of providing the Consulting Services to STAAR unless
STAAR shall otherwise agree in writing.

     (b) Exceptions. In addition to the exceptions described above, Mr.
Chambers' obligations of non-use and confidentiality shall not apply to any
information and know-how which: (i) can be shown by contemporaneous
documentation to have rightfully been in Mr. Chambers' possession prior to
disclosure by STAAR; (ii) at the time of disclosure hereunder is, or thereafter
becomes, through no fault of Mr. Chambers, part of the public domain; or (iii)
is furnished to Mr. Chambers by a third party after the time of disclosure
hereunder without the breach of any duty to STAAR.

     6. Execution of Papers, Oaths and Testimony. Mr. Chambers agrees that at
any time, whether it be during the term of this Agreement or any extension
thereof, or after the expiration or termination of this Agreement, upon the
request of STAAR and without further compensation, but at no expense to Mr.
Chambers, Mr. Chambers shall perform any lawful acts, including the execution of
papers and oaths and the giving of testimony, that in the opinion of STAAR, its
successors or assigns may be necessary or desirable in order to obtain, sustain,
reissue and renew, and in order to enforce, perfect; record and maintain, patent
applications and United States and foreign patents on STAAR's inventions, and
copyright registrations on STAAR's inventions.

     7. Notice. Any notice to STAAR shall be addressed as follows or as shall be
specified by a party in writing:

If to STAAR:                                             If to Tom Chambers:

STAAR Surgical Company                                   Tom Chambers
1911 Walker Avenue                                       112 Harvard Avenue #342
Monrovia, California 91016                               Claremont, CA 91711
Attention: David Bailey

     8. Amendment and Survival. This Agreement may be amended or renewed only
with the written agreement of both parties and for new consideration.

     9. Assignment and Governing Law. This Agreement and any rights under it may
not be assigned by Mr. Chambers without STAAR's prior written consent. Any
unauthorized attempt to assign by Mr. Chambers shall be void. This Agreement
shall be governed by the laws of the State of California, and any action
connected herewith shall be brought in Los Angeles County Courts.

     10. Not an Employee. Mr. Chambers is an independent contractor and is not
an employee or agent of STAAR Mr. Chambers shall not be entitled to any benefits
or compensation from STAAR except as set forth in this Agreement. Mr. Chambers
shall be solely responsible for meeting all of his tax requirements.
Additionally, nothing contained in this Agreement shall entitle Mr. Chambers to
the right or authority to make any representation on behalf of or bind STAAR to
others in any manner, except as may be specifically authorized in writing by
STAAR.

                                        2



     11. Waiver and Severability. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver. In the event of a conflict between the provisions in the body of this
Agreement, the terms in the body of this Agreement will control.

     12. Entire Agreement. This Agreement is the entire agreement of the parties
relating to the subject matter hereof. Any prior negotiations, correspondence,
memoranda or agreements relating to the Consulting Services are superseded in
total by this Agreement; and the parties' rights, duties liabilities and
remedies with respect to the Consulting Services and this Agreement are limited
to those expressly set forth in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

STAAR SURGICAL COMPANY                        THOMAS CHAMBERS


By: /s/ David Bailey          8/30/01         /s/ Thomas J. Chambers  8/21/01
    ---------------------------------         -------------------------------
    David Bailey                Date          Signature                 Date
    Chief Executive Officer
    and President

                                        3



                                   Appendix A

Be available to provide background information to the President of STAAR
Surgical Company related to past events that occurred during Tom Chambers'
employment with STAAR. Conditions to be honored by STAAR.

     .    Reasonable notice and mutually agreed timing for any meeting or
          discussion
     .    Maximum time not to exceed eight hours in any one-month period.

                                        4

EX-10.70

                             SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (the "Agreement") is made as of September 28th, 2001
by and among Staar Surgical Company having its principal offices at 1911 Walker
Avenue, Monrovia, California 91016, U.S.A. (hereinafter "Staar Surgical"), Canon
Inc. having its principal offices at 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo
146-8501, Japan (hereinafter "CINC"), Canon Sales Co., Inc. having its principal
offices at 11-28 , Mita 3-chome, Minato-ku, Tokyo 108-8011, Japan (hereinafter
"CSCO"), and Canon Staar Co., Inc. having its principal offices at 13-29, Konan
2-chome, Minato-ku, Tokyo 108-0075, Japan (hereinafter "Canon Staar"), each
hereinafter individually referred to as the "party" and collectively as the
"parties" to this Agreement.


In consideration of the resolution of disputes raised among the parties and the
mutual promises and agreements contained herein and such other good and valuable
consideration, the parties agree as follows:

1. Canon Staar, the joint venture between Staar Surgical and CINC and CSCO,
   shall continue with the same name.

2. The parties reconfirm the validity and enforceability of the Joint Venture
   Agreement made as of May 23, 1988 by and among Staar Surgical, CINC and CSCO
   and the Technical Assistance and License Agreement made as of September 6,
   1988 by and between Staar Surgical and Canon Staar (the "1988 TALA") and
   agree to abide by the terms thereof.

3. Upon full execution of this Agreement, Staar Surgical shall promptly commence
   the transfer of all of its new or advanced technology to Canon Staar under
   the 1988 TALA. This technology includes, but is not limited to, collamer IOL,
   glaucoma wicks and ICL. The details and exact timing of such technology
   transfer shall be mutually agreed upon by Staar Surgical and Canon Staar.

                                       1





4. In addition to the licenses and rights granted to Canon Staar in the 1988
   TALA, Staar Surgical further grants Canon Staar a payment-free and royalty-
   free, fully paid-up perpetual exclusive license and right under LICENSED
   TECHNOLOGY (which term is defined in the 1988 TALA) to (i) make and have made
   any and all products in China and (ii) to use, sell, lease and otherwise
   dispose of such products made in China, in Japan and China: provided that:

   (a) up and until March 3, 2003, the expiration date of all of the Mazzocco US
       Patent No.4,573,998 and its foreign corresponding patents. Canon Staar
       agrees, with respect to foldable intraocular lens products, to respect
       the Staar Surgical's commitment of "most favored nations" clause made by
       Staar Surgical in its license agreements for foldable intraocular lens
       products and LICENSED TECHNOLOGY with others (except Staar Surgical's
       affiliates) entered into prior to August 22, 2001 and existing in force
       as of the date hereof and covering China; the above Canon Staar's
       agreement in this subsection (a) is conditioned on Staar Surgical's
       representation and warranty that (i) its commitment of "most favored
       nations" clause above expires as of March 3, 2003, the expiration date of
       all of the Mazzocco US Patent No.4,573,998 and its foreign corresponding
       patents, and thus, as of March 4, 2003 the agreement of Canon Staar with
       respect to Staar Surgical's commitment of "most favored nations" clause
       shall terminate and (ii) with respect to products other than the foldable
       intraocular lens product, the license and right granted to Canon Staar
       under this Section 4 shall have full force without condition (except
       subsection (b) below); and

   (b) Canon Staar agrees that the grant of the license and right under this
       Section 4 in China shall be subject to the non-exclusive licenses and
       rights of others in China granted by Staar Surgical under LICENSED
       TECHNOLOGY prior to August 22, 2001 and continuing in force as of the
       date hereof.

5. STAAR Surgical and Canon Staar shall promptly enter into a raw material
   supply agreement for the supply of raw materials from Staar Surgical to Canon
   Staar. The terms of such agreement shall be negotiated by Staar Surgical and
   Canon Staar in good faith; provided that until such time as

                                       2




     the new agreement is executed, the terms currently employed for the supply
     of raw materials shall continue as before; provided, further, that Staar
     Surgical agrees to supply the raw materials on a timely basis to Canon
     Staar so that it will not hinder Canon Staar's production.

6.   CSCO and Canon Staar shall promptly enter into a distribution agreement for
     the distribution of Canon Staar's products in Japan by CSCO. The terms of
     such agreement shall be negotiated by CSCO and Canon Staar in good faith;
     provided that the selling prices by Canon Staar of its products to CSCO
     shall be in the range of fifty percent (50%) to seventy percent (70%) of
     the sales price of such products from CSCO to its end customers through its
     own sales channel; provided, further, that until such time as the Board of
     Canon Staar reaches unanimous approval and CSCO agrees on the pricing, the
     selling prices currently employed by Canon Staar of its products to CSCO
     shall continue as before so long as they are in the range of fifty percent
     (50%) to seventy (70%) of the sales price from CSCO to its end customers
     through its own sales channel. This pricing shall be reviewed annually with
     detailed terms subject to unanimous approval of the Board of Canon Staar
     and agreement of CSCO.

7.   Upon full execution of this Agreement, Staar Surgical agrees that the case
     titled STAAR Surgical Company v CANON Inc., CANON Sales Co., Inc. and Norio
            --------------------------------------------------------------------
     Kuroda (United States District Court, Central District of California, Case
     ------
     No. 00-04835) shall be dismissed with prejudice pursuant to a document
     drafted by counsel to Defendants and signed by Plaintiff.

8.   Upon full execution of this Agreement, CINC and CSCO agree that the Japan
                                                                         -----
     Commercial Arbitration Association (JCAA) Case No. 00-03. Tokyo shall be
     ---------------------------------------------------------------
     dismissed. Any document necessary for submission to the JCAA for dismissal
     shall be prepared by CINC, CSCO and Staar Surgical.

                                       3



9.   With respect to two (2) patent infrigngement lawsuits brought by Canon
     Staar against Allergan K.K. in Tokyo, Japan, upon full execution of this
     Agreement, Canon Staar shall commence negotiation of settlement with the
     assistance of Staar Surgical, CINC and CSCO and taking into account the
     parties' respective positions. Any settlement of the foregoing lawsuits
     with Allergan K.K. shall be subject to unanimous approval of the Board of
     Canon Staar.

10.  This Settlement Agreement and the terms hereof shall be treated by the
     parties as confidential, except as otherwise agreed to by the parties or
     required by laws and local regulations.

11.  This Agreement is an amendment to the 1988 TALA pursuant to Section 4 above
     and shall be governed by and construed in accordance with the laws of
     Japan.

12.  Staar Surgical, CINC and CSCO, each for itself and its successors and
     assigns, hereby RELEASE, WAIVE, DISCHARGE AND CONVENANT NOT TO SUE each
     other, or each other's parent, subsidiaries, affiliates and their present
     and former directors, officers, agents and employees, and each of them,
     from or related to any and all claims, losses, damages, costs and
     obligations, known or unknown, which they may now have or have ever had,
     arising out of, or related to, the disputes which are based on the
     performances, non-performances or acts made prior to the date hereof,
     including without limitation, those alleged in the case titled STAAR
                                                                    -----
     Surgical Company v CANON Inc., CANON Sales Co., Inc. and Norio Kuroda
     ---------------------------------------------------------------------
     (United States District Court, Central District of California, Case No. 00-
     04835) and the Japan Commercial Arbitration Association (JCAA) Case No. 00-
                    ------------------------------------------------------------
     03, Tokyo, except for the parties respective obligations under this
     ---------
     Agreement. The forgoing release, waiver, discharge and covenant not to sue
     shall not apply to any claims that may be made against the former president
     of Canon Staar, John Wolf, by Staar Surgical, CINC, CSCO or Canon Staar.

13.  Each party shall bear its costs and expenses, including attorney fees, in
     connection with the subject matter hereof.

                                       4




14.  Subject to full execution hereof by the parties, this Agreement shall
     become effective as of the date first above written.

IN WITNESS WHEREOF, the parties have entered in to this Settlement Agreement as
the date first above written.

CANON INC.                                        STAAR SURGICAL COMPANY

By: /s/ Fujio Mitarai                             By: /s/ David Bailey
   ------------------------                          -----------------------
       Fujio Mitarai                                     David Bailey
Title: President & CEO                            Title: President & CEO
      ---------------------                             --------------------

CANON SALES CO., INC.                             CANON STAAR CO., INC

By: /s/ Haruo Muress                              By: /s/ David Bailey
   ------------------------                          -----------------------
       Haruo Muress                                      David Bailey
Title: President
      ---------------------

                                                  By: /s/ Norio Kuroda
                                                     -----------------------
                                                         Norio Kuroda

                                       5

EX-10.71

                                 October 1, 2001

Staar Surgical Company
1911 Walker Avenue
Monrovia, California 91016

Attention:      David Bailey
                Chief Executive Officer

       Re:      Fifth Amendment to Credit Agreement

Ladies and Gentlemen:

     We refer to (a) the letter agreement dated as of October 31, 2000, as
amended by the letter amendment dated December 22, 2000, the letter amendment
dated April 1, 2001 and two letter amendments dated July 1, 2001 (said letter
agreement, as so amended, herein called the "Credit Agreement"), between Staar
                                             ----------------
Surgical Company, a Delaware corporation (the "Borrower"), and Wells Fargo Bank,
                                               --------
National Association, a national banking association (the "Bank"), and (b) the
                                                           ----
Revolving Line of Credit Note dated October 31, 2000, as amended by the letter
amendment dated April 1, 2001 referred to above by and one of the letter
amendments dated July 1, 2001 referred to above (said Note, as so amended,
herein called the "Line of Credit Note"), in the amount of $7,000,000 made by
                   -------------------
the Borrower in favor of the Bank. Terms defined in the Credit Agreement and not
otherwise defined herein have the same respective meanings when used herein.

     1. Amendments to Credit Agreement. Effective as of the date of this letter
        ------------------------------
amendment but subject to satisfaction of the terms and conditions specified
herein, the Credit Agreement is hereby amended as set forth below.

          (a) The first sentence of the second paragraph of the Credit Agreement
is amended by deleting the date "April 1, 2001" and substituting the date
"January 4, 2002." follows:

          (b) A new paragraph II.5 is added to the Credit Agreement to read as
follows:

          "5. Commitment Fee. Borrower will pay Bank a commitment fee at the
              --------------
     rate of 0.25% per annum (computed on the basis of a 360-day year and actual
                   --- -----
     days elapsed) on the average daily unused portion of the Line of Credit;
     from October 1, 2001 until the maturity date of the Line of Credit, payable
     monthly in arrears on the first business day of each calendar month,



Staar Surgical Company
October 1, 2001
Page 2

     commencing on November 1, 2001, and on the maturity date of the Line of
     Credit."

          (c) Paragraph III.4 of the Credit Agreement is amended by deleting the
words "the date hereof ' and substituting the date "October 1, 2001."

          (d) Paragraph III.5 of the Credit Agreement is amended by (i) deleting
the date "June 30, 2000" and substituting the date "June 30, 2001" and (ii)
deleting the words "prior to the date hereof."

          (e) Part III of the Credit Agreement is amended by adding new
paragraphs III.12 and III.13 to read as follows:

          "12. Patents. No patent has been issued in the United States to or for
               -------
     the benefit of, and no patent application has been filed in the United
     States by or on behalf of, Borrower or any subsidiary thereof, except as
     listed in Schedule 1 attached hereto or as otherwise disclosed to Bank in
     writing from time to time.

          13. Credit Facilities. Since September 30, 2001, no credit facility
              -----------------
     has been available to Borrower or any subsidiary thereof except for (a) the
     credit facility made available to Borrower by Bank pursuant to this letter,
     (b) the credit facility or facilities made available to Borrower and/or one
     or more subsidiaries thereof, the principal terms of which are described in
     Schedule 2 attached hereto, and (c) such other credit facilities (including
     the principal terms thereof) as disclosed by Borrower to Bank in writing
     from time to time."

          (f) Paragraph V.3 of the Credit Agreement is amended by deleting the
word "and" at the end of paragraph V.3(c), deleting paragraph V.3(e) and adding
the following after paragraph V.3(d):

          "(e) within 30 days after the end of each calendar month, commencing
     with September of 2001, unaudited consolidated and consolidating balance
     sheets of Borrower as of the end of such month and unaudited consolidated
     and consolidating statements of income and cash flows of Borrower for the
     period commencing at the end of the preceding fiscal year and ending with
     the end of such month, all in form, scope and detail satisfactory to Bank
     and duly certified (subject to normal-year end audit adjustments and the
     absence of footnotes) by the chief financial officer or chief accounting
     officer of Borrower as having been prepared in accordance with generally
     accepted accounting principles;








Staar Surgical Company
October 1, 2001
Page 3

          (f) not later than the third Friday of each calendar month, (i)
     commencing on October 19, 2001, a projection of the consolidated cash flow
     of Borrower, detailing cash receipts and cash disbursements, for the
     13-week period commencing on such Friday and (ii) commencing on November
     16, 2001, a comparison of Borrower's actual consolidated cash flow to the
     projection of such cash flow, together with a written explanation of any
     variance exceeding 15%, in each case in form, scope and detail satisfactory
     to Bank and duly certified by an officer of Borrower, and in a manner,
     acceptable to Bank;

          (g) not later than the last business day of each calendar month,
     commencing on October 31, 2001, an aged listing of the United States
     domestic accounts receivable and United States domestic accounts payable of
     Borrower and its United States domestic subsidiaries as of the last day of
     the preceding calendar month, in form, scope and detail satisfactory to
     Bank and duly certified by an officer of Borrower, and in a manner,
     acceptable to Bank;

          (h) not later than 60 days after the end of each fiscal quarter of
     Borrower, commencing with the fiscal quarter ended on September 30, 2001, a
     comparison of Borrower's actual consolidated financial performance to the
     projection of such financial performance contained in the financial
     projections for various periods in 2001, 2002, 2003 and 2004 first
     delivered by Borrower to Bank on July 25, 2001, together with a written
     explanation of any variance exceeding 15%, all in form, scope and detail
     satisfactory to Bank and duly certified by an officer of Borrower, and in a
     manner, acceptable to Bank;

          (i) within 3 days after completion by Brian Testo Associates LLC of
     its written appraisal of Borrower's inventory and equipment conducted in
     September of 2001, a copy of such appraisal; and

          (j) promptly upon request by Bank, such other information concerning
     the business, condition (financial or otherwise), operations, performance,
     properties or prospects of Borrower or any subsidiary thereof as Bank may
     from time to time reasonably request."

          (g) Part V of the Credit Agreement is amended by adding a new
paragraph V.18 to read as follows:

          "18. Appraisals, Etc. At any reasonable time and from time to time,
               ---------------
     upon reasonable prior notice to Borrower, permit Bank and its (or its
     counsel's)



Staar Surgical Company
October 1, 2001
Page 4

     consultants, agents and representatives to examine and make copies of and
     abstracts from the records and books of account of, and visit the
     properties and have access to the assets of, Borrower and its subsidiaries
     and to discuss the affairs, finances and accounts of Borrower and its
     subsidiaries with any of their respective officers, directors and employees
     and with their independent certified public accountants, including for the
     purpose of conducting (a) an appraisal of the patents, patent applications
     and related agreements and other documents of Borrower and its subsidiaries
     and (b) if Bank is not satisfied with the appraisal referred to in
     paragraph V.3(i) hereof, an appraisal of the inventory and equipment of
     Borrower and its subsidiaries, all at the sole cost and expense of
     Borrower."

          (h) New Schedules 1 and 2 are added to the end of the Credit Agreement
in the forms of Schedules 1 and 2, respectively, attached to this letter
amendment.

     2. Amendments to Line of Credit Note. Effective as of the date of this
        ---------------------------------
letter amendment but subject to satisfaction of the terms and conditions
specified herein, the Line of Credit Note is hereby amended as set forth below.

          (a) The first sentence of paragraph (a) under the caption "Interest"
in the Line of Credit Note is amended in full to read as follows:

     "The outstanding principal balance of this Note shall bear interest
     (computed on the basis of a 360-day year, actual days elapsed) at a rate
     per annum equal to the sum of the Prime Rate in effect from time to plus
     1.0% per annum."

          (b) Paragraph (c) under the caption "Interest" in the Line of Credit
Note is amended in full to read as follows:

          "(c) Default Interest. Upon the occurrence and during the -
               ----------------
     continuation of any Event of Default, the outstanding principal balance of
     this Note shall bear interest until paid in full at an increased rate per
     annum (computed on the basis of a 360-day year, actual days elapsed) equal
     to 4% above the rate of interest from time to time otherwise applicable to
     this Note."

          (c) The last sentence of paragraph (a) under the caption "Borrowing
and Repayment" in the Line of Credit Note is amended by deleting the date
"October 1, 2001" and substituting the date "January 4, 2002."



Staar Surgical Company
October 1, 2001
Page 5

          (d) Paragraph (e) under the caption "Events of Default" in the Line of
Credit Note is amended by adding the words "or representation made" after the
word "provided."

     3. Waiver of Events of Default under Credit Agreement. Effective as of the
        --------------------------------------------------
date of this letter amendment but subject to satisfaction of the terms and
conditions specified herein, the Bank hereby waives (a) the Event of Default
caused by the Borrower's violation of its covenant contained in paragraph V.9(b)
of the Credit Agreement with respect to the Borrower's fiscal quarter ended on
June 30, 2001 and (b) the Event of Default expected to be caused by the
Borrower's violation of its covenant contained in paragraph V.9(b) of the Credit
Agreement with respect to the Borrower's fiscal quarter ended on September 30,
2001.

     4. Representations and Warranties. The Borrower hereby represents and
        ------------------------------
warrants for the benefit of the Bank that (a) the representations and warranties
of the Borrower contained in the Loan Documents are correct in all material
respects on and as of the date of this letter amendment, before and after giving
effect to the same, as if made on and as of such date, and (b) no event has
occurred and is continuing, or would result from the effectiveness of this
letter amendment, that constitutes an Event of Default.

     5. Conditions Precedent. This letter amendment shall become effective as of
        --------------------
the date first set forth above, subject to the conditions subsequent set forth
in paragraph 6 below, when and if, on or before October 5, 2001, (a) the
Borrower and the Bank execute counterparts of this letter amendment and deliver
them to each other and (b) the Borrower pays the Bank an extension fee of
$10,500 (which the Bank is hereby authorized to collect on or after October 1,
2001 by charging the Borrower's account number 4159-251172 (or any other
account) with the Bank, in accordance with paragraph II.4 of the Credit
Agreement).

     6. Conditions Subsequent. The Borrower's delivery to the Bank of the
        ---------------------
documents specified below, in form and substance satisfactory to the Bank and in
the number of originals requested thereby, by the respective dates specified
below shall be conditions subsequent to the effectiveness of this letter
amendment:

          (a) not later than October 15, 2001, the following: (i) a certificate
of the Secretary of the Borrower as to the incumbency, and setting forth a
specimen signature, of each person who has signed this letter amendment, or will
sign any Loan Document or modification thereof in the future, on behalf of the
Borrower; and (ii) a certificate of the Secretary of Borrower certifying that
the copy of the resolutions of the Board of Directors of the Borrower attached
to such certificate, authorizing the Borrower to enter into, deliver and perform
its obligations under this letter amendment, is correct and complete and in full
force and effect; and



Staar Surgical Company
October 1, 2001
Page 6

          (b) not later than October 31, 2001, the following: (i) projected
consolidated balance sheets of the Borrower as of the quarter-end and year-end
dates, through December 31, 2004, of the financial projections for various
periods in 2001, 2002, 2003 and 2004 delivered by the Borrower to the Bank on
July 25, 2001, such balance sheets to be certified by an officer of the
Borrower, and in a manner, acceptable to the Bank; (ii) a copy of (A) each
"prepayment letter agreement" or equivalent agreement (including any amendments
or waivers with respect thereto) with St. Luke's Cataract and Laser Institute to
which the Borrower or any subsidiary thereof is a party and (B) Borrower's
standard form of consignment contract, in each case certified by an officer of
the Borrower, and in a manner, acceptable to the Bank; (iii) a list of all
insurance policies maintained for the Borrower or any subsidiary thereof,
together with copies of such policies (including any amendments or waivers with
respect thereto), certified by an officer of the Borrower, and in a manner,
acceptable to the Bank; (iv) one or more insurance certificates naming the Bank
as additional insured and/or loss payee, as the Bank may require, under such of
the aforementioned insurance policies as the Bank may require; and (v) a list of
all patents issued outside the United States to or for the benefit of, and all
patent applications filed outside the United States by or on behalf of, the
Borrower or any subsidiary thereof, certified by an officer of the Borrower, and
in a manner, acceptable to the Bank

     7. Release of Claims. The Borrower represents and warrants to the Bank that
        -----------------
it has diligently and thoroughly investigated the existence of any Claim (as
defined below) and that, to its knowledge and belief, no Claim exists and no
facts exist that could give rise to or support a Claim. As additional
consideration for the Bank's entering into this letter amendment, the Borrower
and each of its agents, employees, directors, officers, attorneys, affiliates,
subsidiaries, successors and assigns (each a "Releasing Party") hereby release
                                              ---------------
and forever discharge the Bank and each of its agents, direct and indirect
shareholders, employees, directors, officers, attorneys, branches, affiliates,
subsidiaries, successors and assigns (each a "Released Party") from any and all
                                              --------------
damages, losses, claims, demands, liabilities, obligations, actions and causes
of action whatsoever (collectively "Claims") that the Releasing Parties or any
                                    ------
of them may, as of the date hereof, have or claim to have against any or all of
the Released Parties, in each case whether currently known or unknown or with
respect to which the facts are known (or should have been known), that could
give rise to or support a Claim on account of or in any way relating to, arising
out of or based upon any Loan Document, any amendment, waiver or other
modification with respect thereto, the negotiation or documentation hereof or
thereof, any of the transactions contemplated hereby or thereby, or any action
or omission in connection with any of the foregoing, including all such damages
losses, claims, demands, liabilities, obligations, actions and causes of action
heretofore sustained or that may arise as a consequence of the dealings between
the parties up to the date hereof in connection with or in any way related to
any Loan Document or any amendment,



Staar Surgical Company
October 1, 2001
Page 7

waiver or other modification with respect thereto. Each Releasing Party further
represents and warrants that it has not heretofore assigned, and covenants and
agrees that it will not hereafter sue any Released Parry upon, any Claim
released or purported to be released under this section. Each Releasing Party
will indemnify and hold harmless the Released Parties against any loss or
liability on account of any actions brought by any Releasing Party or its
assigns or prosecuted on behalf of any Releasing Party and relating to any Claim
released or purported to be released under this section. It is further
understood and agreed that any and all rights under the provisions of Section
1542 of the California Civil Code are expressly waived by each of the Releasing
Parties. Section 1542 of the California Civil Code provides as follows:

     "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
     NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
     RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
     SETTLEMENT WITH THE DEBTOR."

     8. Reference to and Effect on Loan Documents. On and after the effective
        -----------------------------------------
date of this letter amendment, (a) each reference in the Credit Agreement to
"this letter," "hereunder," "hereof," "herein" or words of like import referring
to the Credit Agreement, and each reference in the other Loan Documents to "the
Agreement," "thereunder," "thereof," "therein" or words of like import referring
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended by this letter amendment, and (b) each reference in the Line of
Credit Note to "this Note," "hereunder," "hereof," "herein" or words of like
import referring to the Line of Credit Note, and each reference in the other
Loan Documents to "the Line of Credit Note," "thereunder," "thereof," "therein"
or words of like import referring to the Line of Credit Note, shall mean and be
a reference to the Line of Credit Note as amended by this letter amendment. The
Credit Agreement and the Line of Credit Note, as amended by this letter
amendment, are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.

     9. Execution in Counterparts. This letter amendment may be executed in any
        -------------------------
number of counterparts and by the parties hereto in separate counterparts, each
of which counterparts shall be an original and all of which taken together shall
constitute one and the same letter amendment.



Staar Surgical Company
October 1, 2001
Page 8

     10. GOVERNING LAW. THIS LETTER AMENDMENT SHALL BE GOVERNED BY, AND
         -------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REFERENCE TO THE CHOICE-OF-LAW PRINCIPLES THEREOF.

                                                     Very truly yours,

                                                     WELLS FARGO BANK,
                                                     NATIONAL ASS0CIATION


                                                    By:  /s/ EDITH R. LIM
                                                         -----------------------
                                                    Name: EDITH R. LIM
                                                    Title: Vice President

Agreed as of the date first written above:

STAAR SURGICAL COMPANY


By:   /s/ John S Santos
      ------------------
Name: John S Santos
Title: VP CFO



                                                                      SCHEDULE 1

                         PATENTS AND PATENT APPLICATIONS
                         -------------------------------

                       To be delivered to Wells Fargo by
                                October 12, 2001


                                                      By: /s/ John S. Santos
                                                            --------------------
                                                            STAAR Surgical Co.


                                                         /s/ Edith R. Lim
                                                            --------------------
                                                            Wells Fargo



                          STAAR SURGICAL COMPANY, INC.



===================================================================================================
COUNTRY          REFERENCE#        TYPE   FIELD        SERIALS#     ISSUED       PATENTS     STATUS
===================================================================================================
                                                                        
TRANSVERSE HINGED DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-111P-CIP      CIP    10/25/1995   08/547,295   4/15/1997    5,620,450   ISSUED
UNITED STATES    080-205P-CIP      CIP    8/2/1996     08/691,491   7/27/1999    5,928,245   ISSUED
UNITED STATES    080-104P-CON1     CON    12/18/1996   08/768,459   11/7/2000    6,143,000   ISSUED

SPRING BIASED DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-140P-GATT     NEW    8/2/1996     08/691,489   6/16/1998    5,766,181   ISSUED
UNITED STATES    080-140P-CON      CON    6/11/1998    09/095,562   6/13/2000    6,074,397   ISSUED

DEFORMABLE INTRAOCULAR LENS INSERTION SYSTEM
- ---------------------------------------------------------------------------------------------------
NEW ZEALAND      080-132-PCT-NZ    CEQ    3/7/1996     305567       6/8/2000     305567      ISSUED
NEW ZEALAND      080-154-CIP-NZ    CEQ    10/24/1996   321437       6/8/2000     321437      ISSUED
UNITED STATES    080-134P-CIP      CIP    10/25/1995   08/547,908   4/1/1997     5,616,148   ISSUED
UNITED STATES    080-132P-WLK      CIP    3/10/1995    08/401,523   9/15/1998    5,807,400   ISSUED
UNITED STATES    080-154P-WLK      CIP    12/11/1995   08/570,564   6/30/1998    5,772,666   ISSUED

METHOD OF LOADING AN INTRAOCULAR LENS INTO A LENS INJECTING APPARATUS, AND IMPLANTING
THE INTRAOCULAR LENS THROUGH A SMALL INCISION MADE IN AN EYE
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-108P-DIV1     DIV    3/11/1998    09/038,058   5/11/1999    5,902,307   ISSUED

INTRAOCULAR LENS INSERTION SYSTEM
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-133P-WLK      NEW    1/4/1995     08/368,197   12/10/1996   5,582,614   ISSUED
UNITED STATES    080-133P-CON1     CON    12/10/1996   08/762,731   2/9/1999     5,868,751   ISSUED
UNITED STATES    080-169P-CON      CON    12/13/1995   08/571,454   4/6/1999     5,891,152   ISSUED

BIOLOGICAL MATERIAL, METHOD OF PREPARING SUCH MATERIALS, USES THEREOF AND PRODUCTS
MADE THEREFROM
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-203P-CIP2     CIP    9/16/1997    08/931,448   12/26/2000   6,165,490   ISSUED

INTRAOCULAR LENS FOR CORRECTING MODERATE TO SEVERE HYPERMETROPIA
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-216P-WLK      NEW    12/30/1996   08/777,445   6/16/1998    5,766,245   ISSUED

FROSTED HAPTIC INTRAOCULAR LENS
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-252P-WLK      NEW    12/10/1997   08/988,185   10/10/2000   6,129,759   ISSUED

BIOCOMPATIBLE POLYMERIC MATERIALS, METHODS OF PREPARING SUCH MATERIALS AND USES THEREOF
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-214P-WLK      NEW    11/18/1996   08/751,706   11/30/1999   5,993,796   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS WITH DEFORMABLE TIP PLUNGER
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-154P-CON      CON    6/16/1998    09/097,694   12/19/2000   6,162,229   ISSUED

METHOD OF PREPARING A BIOLOGICAL MATERIAL FOR USE IN OPHTHALMOLOGY
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-215P-WLK      NEW    1/29/1997    08/790,083   1/5/1999     5,856,120   ISSUED
UNITED STATES    080-215P-DIV1     DIV    11/17/1998   09/192,526   8/10/1999    5,936,256   ISSUED
UNITED STATES    080-215P-DIV2     DIV    11/17/1998   09/192,527   3/14/2000    6,037,144   ISSUED

IRRIGATION SLEEVE FOR PHACOEMULSIFICATION APPARATUS
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-209P-WLK      NEW    12/911996    08/762,123   11/3/1998    5,830,192   ISSUED

A GLAUCOMA DRAIN IMPLANTING DEVICE AND METHOD
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-211-PCT-AVS   CEQ    2/2711998    64,164/198   4/19/2001    728,354     ISSUED
UNITED STATES    080-211P-WLK      NEW    2/2811997    08/808,577   4/l3/1999    5,893,837   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS WITH TRANSVERSE HINGED LENS
CARTRIDGE
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-205-GAT-AUS   CEQ    7/31/1997    38210/97     8/17/2000    719064      ISSUED
UNITED STATES    080-205P-WLK      NEW    8/2/1996     08/691,492   3/2/1999     5,876,406   ISSUED
- ---------------------------------------------------------------------------------------------------
INTRAOCULAR CONTACT LENS AND METHOD OF IMPLANTATION
- ---------------------------------------------------------------------------------------------------
NEW ZEALAND      080-110-PCT-NZ    CEQ    10/5/1995    294525       1/12/2000    294525      ISSUED
UNITED STATES    080-110P-FWC      CON    12/2/1996    08/755,886   6/22/1999    5,913,898   ISSUED






===================================================================================================
COUNTRY          REFERENCE#        TYPE   FIELD        SERIALS#     ISSUED       PATENTS     STATUS
===================================================================================================
                                                                        
INTRAOCULAR CONTACT LENS AND METHOD OF IMPLANTATION continued...
UNITED STATES    080-110P-CIP      CIP    10/24/1996   08/736,433   8/22/2000    6,106,553   ISSUED

BIOCOMPATIBLE OPTICALLY TRANSPARENT POLYMERIC MATERIAL BASED UPON COLLAGEN AND METHOD OF MAKING
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-141-PCT AUS   CEQ    6/7/1996     61701/96     7/27/2000    718546      ISSUED
CHIN             080-141-PCT-CHN   CEQ    6/7/1996     96194593.1                1187213A    ISSUED
EUROPE           080-105-PCT-EPC   CEQ    7/21/1995    95928100.7                0772645     ISSUED
EUROPE           080-141-PCT-EPC   CEQ    6/7/1996     96919343.2                0830412     ISSUED
UNITED STATES    080-141P-CIPQ     CIP    6/7/1995     08/485,253   8/5/1997     5,654,388   ISSUED
UNITED STATES    080-150P-CIP      CIP    6/7/1995     08/475,574   8/5/1997     5,654,349   ISSUED
UNITED STATES    080-151P-SHK      CIP    6/7/1995     08/475,578   8/5/1997     5,654,363   ISSUED
UNITED STATES    080-152P-CIP      CIP    6/7/1995     08/485,252   8/26/1997    5,590,749   ISSUED
UNITED STATES    080-231P-CIP      CIP    5/28/1997    08/865,420   6/8/1999     5,910,537   ISSUED

IMPLANTATION DEVICE WITH DEFORMABLE NOZZLE TIP FOR IMPLANTING A DEFORMABLE
INTRAOCULAR LENS
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-230P-CIP      CIP    2/28/1997    08/808,576   5/2/2000     6,056,757   ISSUED

INTRAOCULAR LENS INSERTION SYSTEM
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-101-PCT-AU    CEQ    9/29/1993    692425                    692425      ISSUED
AUSTRALIA        080-108-PCT-AUS   CEQ    11/17/1995   45017/96                  714145      ISSUED
AUSTRALIA        080-101-AUS-DIV   DIV    4/17/1998    61974/98     7/20/2000    717897      ISSUED
AUSTRALIA        080-103-AUS-DIV   DIV    3/17/1999    21253/99     7/27/2000    718363      ISSUED
CANADA           080-101-PCT-CAN   CEQ    9/29/1993    2,144,741    4/8/1997     2144741     ISSUED
NEW ZEALAND      080-108-NZ-DIV    DIV    3/18/1998    329985       11/17/1995   329985      ISSUED
UNITED STATES    080-117P-CON      CON    4/1/1994     08/221,013   2/27/1996    5,494,484   ISSUED
UNITED STATES    080-102P-FWC      CIP    9/20/1996    08/706,140    3/2/1999    5,876,440   ISSUED
UNITED STATES    080-108P-FWC      CON    11/12/1996   08/747,308   3/17/1998    5,728,102   ISSUED
UNITED STATES    080-103P-WLK      CIP    2/17/1994    08/197,604   3/19/1996    5,499,987   ISSUED
UNITED STATES    080-140P-CIP      CIP    8/2/1996     08/691,490   1/19/1999    5,860,984   ISSUED
UNITED STATES    080-140P-CON2     CON    11/18/1998   09/195,448   1/16/2001    6,174,315   ISSUED

HINGELESS LENS CARTRIDGE FOR INSERTION OF DEFORMABLE INTRAOCULAR LENS
- ---------------------------------------------------------------------------------------------------
NEW ZEALAND      080-104-NZ-DIV    DIV    2/15/1995    330333       6/8/2000     330333      ISSUED
UNITED STATES    080-104P-WLK      CIP    2/15/1994    08/196,855   8/24/1999    5,941,886   ISSUED
UNITED STATES    080-104P-CON2     CON    8/23/1999    09/378,959   6/5/2001     6,241,737   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING SYSTEM
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-135P-FWC     CON    10/16/1997   08/951,311   9/1/1998     5,800,442   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING DEVICE
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-135P-DIV     DIV    12/13/1996   08/766,022   2/8/2000     6,022,358   ISSUED

INTRAOCULAR LENS INSERTION SYSTEM
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-118P-FWC      CON    12/5/1996    08/760,327   12/14/1999   6,001,107   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING DEVICE
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-135-PCT-AUS   CEQ    3/13/1996    53,098/96    9/7/2000     720,114     ISSUED
NEW ZEALAND      080-135-PCT-NZ    CEQ    3/13/1996    305154       6/8/2000     035154      ISSUED

INJECTION SYSTEM AND METHOD FOR USE WITH A DEFORMABLE INTRAOCULAR LENS
- ---------------------------------------------------------------------------------------------------
AUSTRALIA        080-138-PCT-AUS   CEQ    5/24/1996    59,339/96    2/24/2000    712,574     ISSUED
NEW ZEALAND      080-138-PCT-NZ    CEQ                 309324       5/24/1996    309324      ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTING SYSTEM
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-138P-CON2     CON    3/30/1998    09/050,056   4/11/2000    6,048,348   ISSUED

DEFORMABLE INTRAOCULAR LENS INJECTION SYSTEM, AND METHOD THEREOF
- ---------------------------------------------------------------------------------------------------
UNITED STATES    080-138P-DIV      DIV    12/19/1996   08/769,420   5/9/2000     6,059,791   ISSUED

A METHOD AND APPARATUS FOR FOLDING A DEFORMABLE INTRAOCULAR LENS
- ---------------------------------------------------------------------------------------------------
NEW ZEALAND      080-107-PCT-NZ    CEQ    1/4/1996     301954                    301954      ISSUED






=======================================================================================================
COUNTRY          REFERENCE#        TYPE   FILED        SERIAL#         ISSUED       PATENT#      STATUS
=======================================================================================================
                                                                            
ELECTRICAL SURGICAL APPARATUS INCLUDING PERSONAL COMPUTER
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-278P-CIP1     CIP    11/6/1998    09/187,347      12/5/2000    6,155,975    ISSUED

CORRECTIVE INTRAOCULAR LENS
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-262L-WLK      NEW                                 11/2/1993    5,258,025    ISSUED

SURGICAL IMPLANTATION APPARATUS
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-306P-WLK      NEW    6/25/1999    09/344,355      4/24/2001    6,221,078    ISSUED

VACUUM CANNULA APPARATUS AND METHOD FOR POSITIONING AN INTRAOCULAR LENS IN THE EYE
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-308P-WLK      NEW    7/22/1999    09/358,434      8/14/2001    6,273,894    ISSUED

PROCESS FOR PRODUCING COLLAGEN-BASED CROSS-LINKED BIOPOLYMER, AND IMPLANT FROM SAID
BIOPOLYMER, METHOD FOR PRODUCING SAID IMPLANT, AND METHOD FOR HERMETIZATION OF
CORNEAL OR SCLERAL WOUNDS INVOLVED IN
- -------------------------------------------------------------------------------------------------------
GERMANY          080-267L-WLK      NEW    6/7/1989     P3918628.8-09                P3918628.8   ISSUED

BIOCOMPATIBLE POLYMAR MATERIAL AND A PROCESS FOR PRODUCING SAME
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-165L-WLK      NEW    7/6/1990     07/549,452      2/15/1994    5,286,829    ISSUED

CORRECTIVE OPTIC FOR AN INTACT NATURAL EYE
- -------------------------------------------------------------------------------------------------------
GERMANY          080-167L-WLK      NEW                 P4129668.0-09   5/27/1992    4129668      ISSUED

Japanese Patent No. 2078621
- -------------------------------------------------------------------------------------------------------
JAPAN            080-265L          NEW                 2078621                      2078621      ISSUED

PROCESS FOR PRODUCING COLLAGEN-BASED CROSS-LINKED BIOPLOYMER, AN IMPLANT FROM SAID
BIOPOLYMER, METHOD FOR PRODUCING SAID IMPLANT, AND METHOD FOR HERMETIZATION OF
CORNEAL OR SCLERAL WOUNDS INVOLVED IN
- -------------------------------------------------------------------------------------------------------
UNITED STATES    080-142L-WLKI     NEW    5/23/1989    356,263      12/18/1990      4,978,352    ISSUED

CORRECTIVE INTRAOCULAR LENS
- -------------------------------------------------------------------------------------------------------
ITALY            080-264L-WLK      CEQ    6/12/1989    1234738                      1234738      ISSUED
UNITED STATES    080-263L-WLK      NEW    4/22/1994    231,549      1/2/1996        5,480,428    ISSUED
=======================================================================================================
                                  END OF REPORT                               TOTAL ITEMS SELECTED = 76






                          STAAR SURGICAL COMPANY, INC.
==========================================================================================================
COUNTRY          REFERENCE#        TYPE   FILED        SERIAL#          ISSUED      PATENT#      STATUS
==========================================================================================================
                                                                            
DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS WITH TRANSVERSE HINGED LENS CARTRIDGE
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-205P-CON      CON    7/26/1999    09/359,804                                PENDING

SPRING BIASED DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-140-PCT-AUS   CEQ    7/31/1997    40,457/97                                 PENDING
CANADA           080-140-PCT-CAN   CEQ    7/31/1997    2,262,891                                 PENDING
EUROPE           080-140-PCT-EP    CEQ    7/31/1997    97938042.5                                PENDING
JAPAN            080-140PCT-JPN    CEQ    7/31/1997    10-507987                                 PUBLISHED
WIPO             080-140-GAT-PCT   CEQ    7/31/1997    PCT/US97/13084                            PENDING

TORIC INTRAOCULAR LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-109P-FWC      CON    1/29/1997    08/790,100                                PENDING

DEFORMABLE INTRAOCULAR LENS INSERTION SYSTEM
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-132-AUS-DIV   DIV    5/9/2000     n/a                                       PENDING
CANADA           080-132-PCT-CAN   CEQ    3/7/1996     2,214,638                                 PENDING
CANADA           080-154-CIP-CAN   CEQ    10/24/1996   2,234,002                                 PENDING
CHINA            080-132-PCT CN    CEQ    3/7/1996     96192467.5                                PENDING
CHINA            080-154-CIP-CHI   CEQ    10/24/1996   96197847.3                                PUBLISHED
EUROPE           080-132-PCT-EPC   CEQ    3/7/1996     96910389.4                                PENDING
EUROPE           080-154-CIP-EP    CEQ    10/24/1996   96936995.8                                PUBLISHED
SOUTH KOREA      080-132-PCT-KR    CEQ    3/7/1996     97-706196                                 PENDING
SOUTH KOREA      080-154-PCT-KOR   CEQ    10/24/1996   1998-702968                               PENDING
WIPO             080-132-PCT       CEQ    3/7/1996     PCT/US96/03184                            PENDING
WIPO             080-154-PCT-CIP   CEQ    10/24/1996   PCT/US96/17182                            PENDING

DEFORMABLE INTRAOCULAR LENS INSERTION SYSTEM
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-132P-CON1     CON    1/21/1998    09/010,527                                PENDING
UNITED STATES    080-132P-CON2     CON    1/16/2001    09/759,298                                PENDING

INTRAOCULAR LENS INSERTION DEVICE
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-169P-CON2     CON    3/11/1999    09/265,870                                PENDING

METHODS OF IMPLANTATION OF DEFORMABLE INTRAOCULAR LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-150P-CON      CON    8/4/1997     08/905,322                                PENDING

BIOCOMPATIBLE POLYMERIC MATERIALS, METHODS OF MAKING AND USING SAME AND PRODUCTS
MADE THEREFROM
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-202P-CIP      CIP    12/31/1996   08/775,331                                PENDING

BIOLOGICAL MATERIAL, METHOD OF PREPARING SUCH MATERIALS, USES THEREOF AND PRODUCTS
MADE THEREFROM
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-203P-CON3     CON    12/26/2000   09/745,446                                PENDING

FROSTED HAPTIC INTRAOCULAR LENS
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-252-PCT-AUS   CEQ    12/10/1998   18033/99                                  PENDING
CANADA           080-252-PCT-CAN   CEQ    12/10/1998   2,313,334                                 PENDING
CHINA            080-252-PCT-CHN   CEQ    6/12/2000    98812070.4                                PENDING
EUROPE           080-252-PCT-EP    CEQ    6/5/2000     98962893.8                                PENDING
JAPAN            080-252-PCT-JAP   CEQ    6/12/2000    2000-523943                               PENDING
SOUTH KOREA      080-252-PCT-KOR   CEQ    6/10/2000    1020007006368                             PENDING
NEW ZEALAND      080-252-PCT-NZ    CEQ    12/10/1998   504960                                    PENDING
UNITED STATES    080-252P-CON1     CON    10/10/2000   09/685,029                                PENDING
WIPO             080-252-PCT       CEQ    12/10/1998   PCT/US98/25718                            PENDING

DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS WITH DEFORMABLE TIP PLUNGER
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-154P-CON2     CON    12/19/2000   09/739,109                                PENDING

IRRIGATION SLEEVE FOR PHACOEMULSIFICATION APPARATUS
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-209-PCT-AUS   CEQ    12/8/1997    53,689/98                                 PENDING






==========================================================================================================
COUNTRY          REFERENCE#        TYPE   FILED        SERIAL#          ISSUED      PATENT#      STATUS
==========================================================================================================
                                                                            
IRRIGATION SLEEVE FOR PHACOEMULSIFICATION APPARATUS continued...
CANADA           080-209-PCT-CAN   CEQ    12/8/1997    2,274,543                                 PENDING
EUROPE           080-209-PCT-EP    CEQ    12/8/1997    97950777.9                                PUBLISHED
NEW ZEALAND      080-209-PCT-NZ    CEQ    12/8/1997    335842                                    PENDING
UNITED STATES    080-209P-CIP      CIP    4/28/1998    09/066,671                                PENDING
UNITED STATES    080-209P-CIP1     CIP    6/1/1998     09/088,051                                PENDING
WIPO             080-209-PCT       CEQ                 PCT/US97/22028                            PUBLISHED
WIPO             080-209-PCTCIP2   CIP    5/28/1999    PCT/US99/10477                            PENDING

A GLAUCOMA DRAIN IMPLANTING DEVICE AND METHOD
- ----------------------------------------------------------------------------------------------------------
CANADA           080-211-PCT-CAN   CEQ    2/27/1998    2,281,472                                 PENDING
CHINA            080-211-PCT-CHN   CEQ    2/27/1998    98802954.5                                PUBLISHED
EUROPE           080-211-PCT-EP    CEQ    2/27/1998    98909704.3                                PENDING
NEW ZEALAND      080-211-PCT-NZ    CEQ    2/27/1998    337059                                    PENDING
UNITED STATES    080-211P-DIV      DIV    4/12/1999    09/289,537                                PENDING
WIPO             080-211-PCT       CEQ    2/27/1998    PCT/IB98/00504                            PENDING

DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS WITH TRANSVERSE HINGED LENS
CARTRIDGE
- ----------------------------------------------------------------------------------------------------------
CANADA           080-205-PCT-CAN   CEQ    7/31/1997    2,262,934                                 PENDING
JAPAN            080-205-GATT-JP   CEQ    7/31/1997    10-508049                                 PUBLISHED
WIPO             080-205-PCT       CEQ    7/31/1997    PCT/US97/13431                            PENDING

INTRAOCULAR CONTACT LENS AND METHOD OF IMPLANTATION
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-110-PCT AUS   CEQ    10/5/1995    37,351/95                                 PENDING
AUSTRALIA        080-110-AUS-DIV   DIV    10/19/1999   56042/99                                  PENDING
CANADA           080-110-PCT-CAN   CEQ    10/5/1995    2,201,936                                 PENDING
CHINA            080-110-PCT-CHN   CEQ    10/5/1995    95195490.3                                PUBLISHED
EUROPE           080-110-PCT-EP    CEQ    10/5/1995    95935260.0                                PUBLISHED
SOUTH KOREA      080-110-PCT-KOR   CEQ    10/5/1995    97-702214                                 PENDING
UNITED STATES    080-110P-CON      CON    8/22/2000    09/642,887                                PENDING
WIPO             080-110-PCT       CEQ    10/5/1995    PCT/US95/12614                            PENDING

BIOCOMPATIBLE OPTICALLY TRANSPARENT POLYMERIC MATERIAL BASED UPON COLLAGEN AND
METHOD OF MAKING
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-105-PCT-AUS   CEQ    7/21/1995    713336                                    PENDING
AUSTRALIA        080-231-CIP-AUS   CEQ    5/28/1998    78,018/98                                 PENDING
CANADA           080-105-PCT-CAN   CEQ    7/21/1995    2,195,567                                 PENDING
CANADA           080-141-PCT-CAN   CEQ    6/7/1996     2,223,442                                 PENDING
CANADA           080-231-CIP-CAN   CEQ    5/28/1998    2,289,834                                 PENDING
CHINA            080-105-PCT-CHI   CEQ    7/22/1997    95194293.X                                PENDING
CHINA            080-231-CIP-CHI   CEQ    11/24/1999   98805421.3                                PUBLISHED
EUROPE           080-231-PCT-EUR   CEQ    5/28/1998    98926104.5                                PUBLISHED
JAPAN            080-231-CIP-JAP   CEQ    2/28/1998    11-500896                                 PENDING
SOUTH KOREA      080-105-PCT-KOR   CEQ    1/21/1997    97-700386                                 PENDING
SOUTH KOREA      080-141-pct-kor   CEQ    6/7/1996     97-708642                                 PENDING
NEW ZEALAND      080-141-PCT-NZ    CEQ    6/7/1996     310832                                    PENDING
NEW ZEALAND      080-231-CIP-NZ    CEQ    5/28/1998    500866                                    PENDING
WIPO             080-105-PCT       CEQ    7/21/1995    PCT/US95/09202                            PENDING
WIPO             080-141-PCT       CEQ    6/7/1996     PCT/US96/10013                            PENDING
WIPO             080-231-PCT-CIP   CEQ    5/28/1998    PCT/US98/10866                            PUBLISHED

METHOD OF PRELOADING A DEFORMABLE INTRAOCULAR LENS INTO A LENS INJECTING APPARATUS
FOR STORAGE AND/OR SHIPMENT
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-108P-DIV2     DIV    3/11/1998    09/038,053                                PENDING

IMPLANTATION DEVICE WITH  DEFORMABLE  NOZZLE TIP FOR IMPLANTING A DEFORMABLE INTROCULAR LENS
- ----------------------------------------------------------------------------------------------------------
AUSTRALIA        080-230-CIP-AUS   CEQ    2/27/1998    63,064/98                                 PENDING
CANADA           080-230-CIP-CAN   CEQ    2/27/1998    2,281,652                                 PENDING
CHINA            080-230-CIP-CHN   CEQ    8/30/1999    98802955.3                                PUBLISHED
EUROPE           080-230-CIP-EP    CEQ    2/27/1998    98907113.9                                PENDING
NEW ZEALAND      080-230-CIP-NZ    CEQ    8/4/1999     337057                                    PENDING






==========================================================================================================
COUNTRY          REFERENCE#        TYPE   FILED        SERIAL#          ISSUED      PATENT#      STATUS
==========================================================================================================
                                                                            
PHACOEMULSIFICATION MACHINE "THE WAVE"
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-282S-WLK      NEW                 N/A                                       PENDING

DEFORMABLE INTRAOCULAR LENSES, AND METHOD OF ANCHORING A DEFORMABLE INTRAOCULAR LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-287P-WLK      NEW    4/1/1999     09/283,913                                PENDING
UNITED STATES    080-287P-CIP      CIP    4/12/1999    09/289,538                                PENDING
WIPO             080-287P-CIP-PCT  CEQ    3/31/2000    PCT/US00/08511                            PUBLISHED

JOHN MCADAMS PATENT SEARCH
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-290P-WLK      NEW                 N/A                                       PENDING

RONALD A. SCHACHAR, PRESY CORPORATION SEARCH
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-291S-WLK      NEW                 N/A                                       PENDING

METHODS OF REFRACTIVE CORRECTION OF THE EYE
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-294P-WLK      NEW    5/6/1999     09/306,428                                PENDING

PHACOEMULSIFICATION NEEDLE
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-305P-WLK      NEW                 N/A                                       PENDING

VACUUM CANNULA APPARATUS AND METHOD FOR POSITIONING AN INTRAOCULAR LENS IN THE EYE
- ----------------------------------------------------------------------------------------------------------
WIPO             080-308-PCT       CEQ    7/19/2000    PCT/US00/19596                            PENDING

SURGICAL APPARATUS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-310P-WLK      NEW    11/9/1999    09/436,759                                PENDING

INTRAOCULAR LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-311P-WLK      NEW    9/10/1999    09/393,697                                PENDING
WIPO             080-311-PCT       CEQ    9/8/2000     PCT/US00/24611                            PUBLISHED

SIZING A PHAKIC REFRACTIVE LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-312P-WLK      NEW    10/22/1999   09/422,638                                PENDING
WIPO             080-312-PCT       CEQ    10/19/2000   PCT/US00/41252                            PENDING

DEFORMABLE INTRAOCULAR LENS INJECTING APPARATUS AND METHOD
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-283P-WLK      NEW    10/22/1999   09/422,984                                PENDING
UNITED STATES    080-283P-CIP      CIP    3/1/2000     09/516,767                                PENDING
WIPO             080-283-PCT       CEQ    10/19/2000   PCT/US00/41251                            PENDING
WIPO             080-283PCT-CIP    CEQ    2/28/2001    PCT/US00/06259                            PENDING

PHACOEMULSIFICATION APPARATUS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-321P-WLK      NEW    12/3/1999    09/453,563                                PENDING
WIPO             080-321-PCT       CEQ    12/1/2000    PCT/US00/42426                            PENDING

FAR DOMINANT VISUAL CORRECTION POSTERIOR CHAMBER MULTIFOCAL DEFORMABLE
INTRAOCULAR PHAKIC REFRACTIVE LENS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-332P-WLK      NEW    3/17/2000    09/527,674                                PENDING

MEDICAL ULTRASONIC MEASURING AND/OR MAPPING APPARATUS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-333P-WLK      NEW    5/5/2000     09/565,386                                PENDING

ULTRASONIC APPARATUS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-343P-WLK      NEW    5/17/2000    09/572,094                                PENDING

PROCESS FOR PRODUCING COLLAGEN-BASED CROSS-LINKED BIOPOLYMER, AND IMPLANT FROM
SAID BIOPOLYMER, METHOD FOR PRODUCING SAID IMPLANT, AND METHOD FOR HERMETIZATION
OF CORNEAL OR SCLERAL WOUNDS INVOLVED IN
- ----------------------------------------------------------------------------------------------------------
FRANCE 080-266L-WLK NEW 6/2/1989 89 07330 PENDING

PHACOEMULSIFICATION APPARATUS
- ----------------------------------------------------------------------------------------------------------
UNITED STATES    080-356P-WLK      NEW    1/22/2001    09/765,591                                PENDING
==========================================================================================================
                                 END OF REPORT                                TOTAL ITEMS SELECTED =   153




United States Patent[19]                     [11] Patent Number :      4,573,998

Mazzocco                                     [45] Date Of Patent:   Mar. 4, 1986
- --------------------------------------------------------------------------------

[54] METHODS FOR IMPLANTATION OF DEFORMABLE INTRAOCULAR LENSES
[75] Inventor:  Thomas R. Mazzocco, Granada Hills, Calif.
[73] Assignee:  Staar Surgical Co., Monrovia, Calif
[21] Appl. No.: 346,105
[22] Filed:     Feb. 5, 1982
[51] Int. Cl./4/....................... A61F 2/16; A61B 17/00;
                                                     A61B 17/28
[52] U.S. Cl. ..................................623/6;128/303 R;
                                                        128/321
[58] Field of Search .....................   3/13, 1; 351/160 R,
                                                      351/160 H
[56]                            References Cited

                              U.S. PATENT DOCUMENTS

3,034,403    5/1962   Neefe ......................................3/13 X
3,760,045    9/1973   Thiele et al.  .............................3/13 X
3,991,426   11/1976   Flom et al. ..................................3/13
3,992,563   11/1976   Tanaka .....................................3/13 X
4,110,848    9/1978   Jensen .......................................3/13
4,131,604   12/1978   Szycher ...................................3/1 A X
4,153,641    5/1979   Deichert et al. .......................351/160 H X
4,172,297   10/1979   Schlegel .....................................3/13
4,206,518    6/1980   Jardon et al. ................................3/13
4,242,291   12/1980   Hughes et al. .........................351/160 H X
4,244,060    1/1981   Hoffer .......................................3/13
4,253,199    3/1981   Banko ........................................3/13
4,285,073    8/1981   Szycher ......................................3/13
4,315,337    2/1982   Choyce  ......................................3/13
4,365,360   12/1982   Ong  .........................................3/13
4,377,329    3/1983   Poler ......................................3/13 X

                            FOREIGN PATENT DOCUMENTS

               2717706 10/1978 Fed. Rep. of Germany ...................3/13
               1103399 5/1955  France .................................3/13

Primary Examiner-Ronald L. Frinks
Attorney, Agent, or Firm-Frank Frisenda, Jr.

[57]                                ABSTRACT

The invention provides an improved intraocular lens structure comprising a
deformable optical zone portion with prescribed memory characteristics and
methods and devices for implantation of such lens in the eye. The unique optical
zone portion of the lens can be deformed by compressing, rolling, folding,
stretching, or can be deformed by a combination of these techniques to
temporarily reduce the optical zone portion to a diameter of about 80% or less
of the cross-sectional diameter of the optical zone portion in an unstressed
state. After insertion into the eye, the optical zone portion returns to its
original configuration, full size and fixed focal length. The inventive methods
and devices for implantation permit insertion of the improved lens through a
relatively small incision made in the ocular tissue, thereby providing a safer,
more convenient surgical procedure and more comfortable fit for the eye.

                          24 Claims, 63 Drawing Figures

                                    [GRAPHIC]

                                   -5-













                                                                      SCHEDULE 2

                             OTHER CREDIT FACILITIES
                             -----------------------

A.   Credit Facility Provided to                    by
     ---------------------------------------------------------------------------

     1.   date commencement of facility:

     2.   date of termination or maturity of facility:

     3.   maximum amount available under facility (in U.S.dollars):

     4.   amount outstanding under facility (in U.S.dollars) as of 9/30/01:

     5.   interest rate:

     6.   amortization, if any:

     7.   name(s) of guarantor(s), if any:

     8.   collateral, if any:

               To be delivered to Wells Fargo by October 12, 2001.


                                                      By: /s/ Illegible
                                                          ----------------------
                                                          STAAR Surgical Co.


                                                         /s/ Illegible
                                                         -----------------------
                                                           Wells Fargo



                                                                      SCHEDULE 2
                                                                      ----------

                             OTHER CREDIT FACILITIES
                             -----------------------

A.   Credit Facility Provided to STAAR SURGICAL AG by UBS AG,BERNE
- --   -------------------------------------------------------------

     1.   date of commencement of facility: November,27,2000
     --   --------------------------------------------------

     2.   date of termination or maturity of facility: until further notice
     --   -----------------------------------------------------------------

     3.   maximum amount available under facility (in dollars):
     --   -----------------------------------------------------

          a)   USD 1,859,543 (CHF 3,000,000)
          ----------------------------------
          b)   USD 1,239,695 (CHF 2,000,000)
          ----------------------------------

     4.   amount outstanding under facility (in U.S. dollars) as of 9/30/01:
          ------------------------------------------------------------------

     5.   interest rate:
          -------------

          fixed advance: 4.49%
          --------------------
          fixed advance: 4.73%
          --------------------
          current acct: 5.5%(pa) + 0,25% (per quater) credit commission
          -------------------------------------------------------------

     6.   amortization, if any:
          ---------------------

          a) none
          -------
          b)USD 309,924 (CHF 500,000) per annum, payable half-yearly with USD
          -------------------------------------------------------------------
          154,962 (CHF 250,000) each time on June 30 and December 31; for the
          -------------------------------------------------------------------
          first time on June 30,2002.
          ---------------------------

     7.   name(s) of guarantor(s), if any: none
     --   -------------------------------------

     7.   collateral, if any:
          -------------------

          General Purposes Assignment of Claims (Global Assignment)
          ---------------------------------------------------------



                                                                      SCHEDULE 2
                                                                      ----------
                             OTHER CREDIT FACILITIES
                             -----------------------

A.   Credit Facility Provided to DOMILENS GmbH by Bankhaus Wolbern & Co.
- --   -------------------------------------------------------------------

     1.   date of commencement of facility: 01.06.2000
     --   --------------------------------------------

     2.   date of termination or maturity of facility:
          --------------------------------------------

          from 01.09.2001- 31.10.2001  EURO 1.000.000,-- USD 914.409,--
          from 01.11.2001- 30.11.2001  EURO   750.000,-- USD 685.807,--
          from 01.12.2001 up to 28.02.2003 the amount reduces monthly by around
          figure of                    EURO 50.000,-- USD 45.720,--

     3.   maximum amount available under facility (in U.S.dollars):
          ---------------------------------------------------------

     4.   amount outstanding under facility (in U.S.dollars) as of 9/30/01:
          -----------------------------------------------------------------

          point 3 and 4: this is just a credit line up to EURO 1,0 Mio we are
          always using.

     5.   interest rate:            9% pa
     --   -------------------------------

     6.   amortization, if any: None
     --   --------------------------

     7.   name(s) of guarantor(s), if any:                Gunther Roepstorff and
     --   ----------------------------------------------------------------------
          DOMILENS GmbH
          -------------

     8.   collateral, if any: None
     --   ------------------------

EX-10.72

                        SETTLEMENT AND RELEASE AGREEMENT
                        --------------------------------

          This SETTLEMENT AND RELEASE AGREEMENT ("Agreement") is entered into on
this 5th day of October 2001 by and between STAAR Surgical Company (the
"Company"), and Gunther Roepstorff (the "Releasor"), with reference to the
following facts:

                                    RECITALS
                                    --------

          WHEREAS, effective January 1, 1998 the Company entered into that
certain "Independent Contractor Agreement" (the "Consulting Agreement") with the
Releasor; and

          WHEREAS, the Company and the Releasor desire to terminate the
Consulting Agreement in accordance with the terms of this Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties to this
Agreement (hereinafter collectively the "parties" and individually a "party")
agree as follows:

                                   AGREEMENT
                                   ---------

     1.   PURPOSE.
          -------

          It is the desire and intention of the Releasor and the Company to
effect a final termination of the Consulting Agreement and a settlement and
resolution of all known and unknown claims arising in favor of the Releasor out
of the Consulting Agreement, regardless of their nature or basis.

     2.   TERMINATION OF CONSULTING AGREEMENT.
          -----------------------------------

          Upon execution of this Agreement, the Consulting Agreement shall
terminate and shall be of no further force and effect. Irrespective of the
foregoing, the Releasor agrees that he shall continue to be bound by paragraph 7
of the Consulting Agreement, requiring him to keep confidential the Company's
proprietary or confidential information.

     3.   CONSIDERATION.
          -------------

          As consideration for the execution of this Agreement by the Releasor,
the Company shall pay to the Releasor the sum of 500,000 German Deutsche Marks
and agrees that the Releasor shall be relieved of the obligation to repay
Domilens, the Company's subsidiary, the sum of 1,284,000 German Deutsche Marks,
constituting 80% of a loan totaling 1,700,000 German Deutsche Marks made to the
Releasor by Domilens.

                                       1



     4.   RELEASE OF CLAIMS.
          -----------------

          By executing this Agreement, the Releasor does hereby generally and
specifically release, discharge and acquit the Company and its respective
subsidiaries, affiliates, officers, employees, directors, attorneys, successors,
predecessors, assignors, assignees, and each of them, from any and all claims,
cross-claims, third-party claims, counterclaims, demands, actions, charges,
causes of action, suits, liabilities, obligations, promises, damages, losses,
expenses, costs (including but not limited to attorneys' fees and costs actually
incurred) of whatever nature and kind, wherever filed or prosecuted, and whether
or not yet asserted, known or unknown, suspected or unsuspected, which are
related to or are in any manner incidental to the Consulting Agreement and the
termination of the Consulting Agreement.

     5.   WAIVER.
          ------

          The Releasor acknowledges that there is a risk that subsequent to the
execution of this Agreement he will discover, incur or suffer claims which were
unknown or unanticipated at the time of this Agreement, including, without
limitation, unknown or unanticipated claims which arise from, are based upon, or
are related to facts underlying the Consulting Agreement, which, had they been
known, may have materially affected his decision to execute this Agreement. By
executing this Agreement, the Releasor expressly assumes the risk of such
unknown and unanticipated claims and agrees that this Agreement applies to all
such potential claims.

          By executing this Agreement, the Releasor acknowledges that he has
read and is familiar with Section 1542 of the California Civil Code which
provides:

          "A general release does not extend to claims which the creditor does
          not know or suspect to exist in his favor at the time of executing the
          release, which if known by him must have materially affected his
          settlement with the debtor."

          By executing this Agreement, the Releasor expressly waives and
relinquishes all rights and benefits which he has or may have under Section 1542
of the California Civil Code to the full extent that he may lawfully waive all
such rights and benefits pertaining to the subject matter of this Agreement.

     6.   PROMISES OF RELEASOR.
          --------------------

          The Releasor hereby irrevocably covenants to refrain from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or causing
to be commenced, any proceeding of any kind against any the Company, based upon
any matter purported to be released hereby. Without in any way limiting any of
the rights and remedies otherwise available to the Company, the Releasor shall
indemnify and hold harmless the Company from and against all loss, liability,
claim, damage (including incidental and consequential damages) or expense
(including costs of investigation and defense and reasonable attorney's fees)
whether or not involving third party claims, arising directly or indirectly from
or in connection with (i) the assertion by or on behalf of the Releasor of any
claim or other matter purported to be released

                                       2



pursuant to this Release and (ii) the assertion by any third party of any claim
or demand against the Company which claim or demand arises directly or
indirectly from, or in connection with, any assertion by or on behalf of the
Releasor against such third party of any claims or other matters purported to be
released pursuant to this Release.

     7.   ADVICE OF COUNSEL.
          -----------------

          By executing this Agreement, the Releasor acknowledges that he has
consulted with and had the advice and counsel of an attorney and that he has
executed this Agreement after careful and independent investigation, and not
under fraud, duress or undue influence.

     8.   NO ASSIGNMENT.
          -------------

          The Releasor represents and warrants that he has not assigned or
otherwise transferred or subrogated and shall not assign or otherwise
transfer or subrogate any interest in any claims and/or cross-claims that he may
have against the Company which are the subject matter of this Agreement.

     9.   AUTHORIZATION.
          -------------

          Each party to this Agreement warrants that it or he has the power to
settle and release fully and completely all claims, causes of action, demands,
charges and liabilities against the other parties to this Agreement arising out
of or relating to the Consulting Agreement.

     10.  NO INDUCEMENT.
          -------------

          The parties to this Agreement declare and represent that no promises,
inducements, or agreements not expressly contained herein have been made and
that this Agreement contains the entire agreement among the parties.

     11.  BINDING EFFECT.
          --------------

          The provisions of this Agreement will be binding upon and inure to the
benefit of the heirs, executors, administrators, personal representatives,
successors in interest and assigns to the respective parties to it.

     12.  CALIFORNIA LAW.
          --------------

          This Agreement shall in all respects be interpreted, enforced and
governed under the laws of the state of California. The language and all parts
of this Agreement shall be in all cases construed as a whole according to its
very meaning and not strictly for or against any individual party.

                                       3



     13.  NO MODIFICATION.
          ---------------

          This Agreement memorializes and constitutes the entire agreement and
understanding among the parties, and supersedes all prior negotiations, proposed
agreements and agreements, whether written or unwritten. The parties acknowledge
that no other party, nor any agent or attorney of any other party, has made any
promises, representations, or warranties whatsoever, expressly or impliedly,
which are not expressly contained in this Agreement, and the parties further
acknowledge that they have not executed this Agreement in reliance upon any
collateral promise, representation, warranty, or in reliance upon any belief as
to any fact or matter not expressly recited in this Agreement.

     14.  FURTHER ASSISTANCE.
          ------------------

          The parties shall hereafter execute all documents and do all that is
necessary, convenient or desirable in the reasonable opinion of the other party
to effect the provisions of this Agreement.

     15.  COUNTERPARTS AND FACSIMILES.
          ---------------------------

          For the convenience of the parties to this Agreement, this document
may be executed by facsimile signatures and in counterparts which shall together
constitute the agreement of the parties as one and the same instrument. It is
the intent of the parties that a copy of this Agreement signed by any party
shall be fully enforceable against that party.

     16.  SEVERABILITY.
          ------------

          Should any provision of this Agreement be declared or determined by
any court to be illegal or invalid, the validity of the remaining parts, terms
or provisions shall not be affected thereby and, in lieu of such illegal or
invalid provision, there shall be added a provision as similar in terms and
amount to such illegal or invalid provision as may be possible and, if such
illegal or invalid provision cannot be so modified, then it shall be deemed not
to be a part of this Agreement.

     17.  NOTICE.
          ------

          Unless otherwise specifically provided in this Agreement, all notices,
demands, requests, consents, approvals or other communications (collectively and
severally called "Notices") required or permitted to be given hereunder, or
which are given with respect to this Agreement, shall be in writing, and shall
be given by: (A) personal delivery (which form of Notice shall be deemed to have
been given upon delivery), (B) by telegraph or by private airborne/overnight
delivery service (which forms of Notice shall be deemed to have been given upon
confirmed delivery by the delivery agency) or (C) by electronic or facsimile or
telephonic transmission, provided the receiving party has a compatible device or
confirms receipt thereof (which forms of Notice shall be deemed delivered upon
confirmed transmission or confirmation of receipt). Notices shall be addressed
to the parties at the addresses set forth below their names on the signature
page of this Agreement.

                                       4



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     Average (1 days): 2.13240

     High:             2.14760

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                                        "RELEASOR"


                                        ----------------------------------------
                                        Gunther Roepstorff
                                        Achtern Felin 20
                                        D-25474 Hasloh
                                        Germany

                                        "COMPANY"

                                        STAAR Surgical Company


                                        By:
                                           -------------------------------------
                                          1911 Walker Avenue
                                          Monrovia, California 91016

                                        5



                                [LOGO] DOMILENS

For a partial payment of DM 120,000.- out of a first payment of DM 500,000.-
(consulting agreement) STAAR Surgical agreed to pay the amount of DM 120,000.-
out of the DOMILENS GmbH Germany account.


/s/ Illegible
- -------------------------      ----------------------------
October 08th, 2001             David Bailey
                               CEO and President
                               STAAR Surgical

DOMILENS GmbH
Holsteiner Chaussee 303 a
D-22457 Hamburg

Postfach 61 12 63
D-22438 Hamburg

Telefon (040) 55 98 80-0
Telefax (040) 55 98 80-80
E-mail: domilens@domilens.de
web: www.domilens.de

Bestellservice zum
Nulltarif (0800) 60 33 000

Amtsgericht Hamburg B 38182
Geschaftsfuhrer: Gunther Roepstorff

EX-10.73

                             STAAR SURGICAL COMPANY
                         STOCK OPTION PLAN AND AGREEMENT
                          FOR CHIEF EXECUTIVE OFFICER

                                    RECITALS
                                    --------

     On the Grant Date, the Board of Directors of STAAR Surgical Company (the
"Company") granted to David Bailey (the "Optionee") an option to purchase shares
of the Company's Common Stock at the Exercise Price specified in the Grant
Notice in consideration for his agreement to render services to the Company as
its Chief Executive Officer and President.

     This STAAR Surgical Company Stock Option Plan and Agreement for Chief
Executive Officer (the "Agreement") will govern the terms and conditions of the
option grant. All capitalized terms in this Agreement shall have the meanings
assigned to them in this Agreement, in the Grant Notice, or in the attached
Appendix.

                                    AGREEMENT
                                    ---------

     NOW, THEREFORE, it is hereby agreed as follows:

     1. Grant of Option. The Company hereby confirms the grant to the Optionee,
        ---------------
as of the Grant Date, an option (the "Option") to purchase up to the number of
Option Shares specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the term specified in Paragraph 2 at the
Exercise Price.

     2. Option Term. The Option shall have a term of five (5) years measured
        -----------
from the Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Paragraph 5 or
Paragraph 6.

     3. Limited Transferability. During the Optionee's lifetime, the Option
        -----------------------
shall be exercisable only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following the Optionee's death.

     4. Dates of Exercise. The Option shall become exercisable for the Option
        -----------------
Shares in one or more installments as specified in the Grant Notice. As the
Option becomes exercisable for such installments, those installments shall
accumulate and the Option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the term under
Paragraph 5 or Paragraph 6.

     5. Cessation of Service. The term specified in Paragraph 2 shall terminate
        --------------------
(and the Option shall cease to be outstanding) prior to the Expiration Date
should any of the following events occur:

          (a) If the Optionee's service is Terminated because of the Optionee's
death or Disability (or the Optionee dies within three (3) months after a
Termination other than for Cause or because of the Optionee's Disability), then
the Option may be exercised only to the extent that it would have been
exercisable by the Optionee on the Termination Date and must be exercised by the
Optionee (or the Optionee's legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date, but in any event no
later than the Expiration Date.

                                       1



          (b) In the event (i) the Company makes an Election to Release the
Optionee from providing Service, (ii) the Company makes an Election to Terminate
the Optionee's Service, or (iii) the Optionee's service is Terminated as a
result of a Corporate Transaction, the provisions of Paragraph 6 shall govern
the period for which the Option is to remain exercisable following the
Optionee's cessation of Service and shall supersede any provisions to the
contrary in this Paragraph 5.

          (c) If the Optionee ceases to remain in Service for any reason (other
than a reason set forth in sub-paragraphs (a) and (b) of this Paragraph 5) while
the Option is outstanding, then the Optionee shall have a period of thirty (30)
days (commencing with the date of Termination) during which to exercise the
Option, but in no event shall the Option be exercisable at any time after the
Expiration Date. During the limited period of post-Service exercisability, the
Option may not be exercised in the aggregate for more than the number of Option
Shares in which the Optionee is, at the time of the Optionee's cessation of
Service, vested pursuant to the Vesting Schedule specified in the Grant Notice.
Upon the expiration of such limited exercise period or (if earlier) upon the
Expiration Date, the Option shall terminate and cease to be outstanding for any
vested Option Shares for which the Option has not been exercised. To the extent
the Optionee is not vested in the Option Shares at the time of the Optionee's
cessation of Service, the Option shall immediately terminate and cease to be
outstanding with respect to those Option Shares.

     6.   Accelerated Vesting and Exercise.
          --------------------------------

          (a) In the event (i) the Company makes an Election to Release the
Optionee from providing Service, (ii) the Company makes an Election to Terminate
the Optionee's Service, or (iii) the Optionee's Service is Terminated as a
result of a Corporate Transaction, the Option Shares at the time subject to the
Option but not otherwise vested shall automatically vest in full so that the
Option shall, immediately prior to the effective date of the Company's Election
to Release, Election by the Company to Terminate, or Termination of the
Optionee's Service as a result of a Corporate Transaction, become fully
exercisable for all of such Option Shares. However, in the event of a Corporate
Transaction, the Option Shares shall not vest on such an accelerated basis if
                                     ---
and to the extent the Optionee's Service is not Terminated and (i) the Option is
assumed, converted or replaced by the successor corporation (or parent thereof)
in the Corporate Transaction or (ii) the Option is replaced with an equivalent
award or with substantially similar consideration as was provided to the
Company's stockholders in the Corporate Transaction.

          (b) In the event (i) the Company makes an Election to Release the
Optionee from providing Service or (ii) the Company makes an Election to
Terminate the Optionee's Service, the Optionee may exercise the Option no later
than three (3) months after the Termination Date, but in any event no later than
the Expiration Date.

          (c) Immediately following a Corporate Transaction, the Option shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.

          (d) If the Option is assumed in connection with a Corporate
Transaction, then the Option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the Option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
       --------

                                       2



          (e) This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

     7. Adjustment in Option Shares. Should any change be made to the Common
        ---------------------------
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Company's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to the Option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

     8. Shareholder Rights. The holder of the Option shall not have any
        ------------------
shareholder rights with respect to the Option Shares until such person shall
have exercised the Option, paid the Exercise Price and become a holder of record
of the purchased shares.

     9. Manner of Exercising Option.
        ---------------------------

          (a) In order to exercise the Option with respect to all or any part of
the Option Shares for which the Option is at the time exercisable, the Optionee
(or any other person or persons exercising the Option) must take the following
actions:

               (1) Execute and deliver to the Company a Notice of Exercise of
          Stock Option, in a form substantially similar to Exhibit A to this
          Agreement, for the Option Shares for which the Option is exercised.

               (ii) Pay the aggregate Exercise Price for the purchased shares in
          one or more of the following forms:

                    (A) by cancellation of indebtedness of the Company to the
               Optionee;

                    (B) if approved by the Board of Directors, by surrender of
               shares of Common Stock that either: (1) have been owned by the
               Optionee for more than six (6) months and have been paid for
               within the meaning of SEC Rule 144 (and, if such shares were
               purchased from the Company by use of a promissory note, such note
               has been fully paid with respect to such shares); or (2) were
               obtained by the Optionee in the public market;

                    (C) if approved by the Board of Directors, by tender of a
               full recourse promissory note having such terms as may be
               approved by the Board of Directors and bearing interest at a rate
               sufficient to avoid imputation of income under Sections 483 and
               1274 of the Internal Revenue Code;

                    (D) if approved by the Board of Directors, by waiver of
               compensation due or accrued to the Optionee for services
               rendered;

                    (E) with respect only to purchases upon exercise of an
               Option, and provided that a public market for the Company's stock
               exists:

                                       3







                         (1) through a "same day sale" commitment from the
               Optionee and a broker-dealer that is a member of the National
               Association of Securities Dealers (an "NASD Dealer") whereby the
               Optionee irrevocably elects to exercise the Option and to sell a
               portion of the Option Shares so purchased to pay for the Exercise
               Price, and whereby the NASD Dealer irrevocably commits upon
               receipt of such shares to forward the Exercise Price directly to
               the Company; or

                         (2) through a "margin" commitment from the
               Optionee and an NASD Dealer whereby the Optionee irrevocably
               elects to exercise the Option and to pledge the shares so
               purchased to the NASD Dealer in a margin account as security for
               a loan from the NASD Dealer in the amount of the Exercise Price,
               and whereby the NASD Dealer irrevocably commits upon receipt of
               such shares to forward the Exercise Price directly to the
               Company; or

                    (F) by any combination of the foregoing. Except to the
               extent the sale and remittance procedure is utilized in
               connection with the Option exercise, payment of the Exercise
               Price must accompany the Notice of Exercise of Stock Option
               delivered to the Company in connection with the Option exercise.

               (iii) Furnish to the Company appropriate documentation that the
          person or persons exercising the Option (if other than Optionee) have
          the right to exercise the Option.

               (iv) Execute and deliver to the Company such written
          representations as may be requested by the Company in order for it to
          comply with the applicable requirements of federal and state
          securities laws.

               (v) Make appropriate arrangements with the Company for the
          satisfaction of all federal, state and local income and employment tax
          withholding requirements applicable to the Option exercise.

          (b) As soon as practicable after the Exercise Date, the Company shall
issue to or on behalf of the Optionee (or any other person or persons exercising
this option) a certificate for the purchased Option Shares, with the appropriate
legends affixed thereto.

          (c) In no event may the Option be exercised for any fractional shares.

     10. Special Tax Election. The acquisition of the Option Shares may result
         --------------------
in adverse tax consequences that may be avoided or mitigated by filing an
election under Internal Revenue Code Section 83(b). Such election must be filed
within thirty (30) days after the Exercise Date. A description of the tax
consequences applicable to the acquisition of the Option Shares is set forth in
Exhibit B. THE OPTIONEE SHOULD CONSULT WITH HIS TAX ADVISOR TO DETERMINE THE TAX
CONSEQUENCES OF ACQUIRING THE OPTION SHARES AND THE ADVANTAGES AND DISADVANTAGES
OF FILING THE SECTION 83(b) ELECTION. THE OPTIONEE ACKNOWLEDGES THAT IT IS THE
OPTIONEE'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION
UNDER SECTION 83(b), EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS BEHALF.

                                       4



     11.  Compliance with Laws and Regulations.
          ------------------------------------

          (a) The exercise of the Option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Company and the
Optionee with all requirements of applicable law and with all applicable
regulations of any stock exchange (or the Nasdaq Stock Market, if applicable) on
which the Common Stock may be listed for trading at the time of such exercise
and issuance.

          (b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to the Option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.

     12. Successors and Assigns. Except to the extent otherwise provided in
         ----------------------
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Company and its successors and assigns and the
Optionee, the Optionee's assigns and the legal representatives, heirs and
legatees of the Optionee's estate.

     13. Notices. Any notice required to be given or delivered to the Company
         -------
under the terms of this Agreement shall be in writing and addressed to the
Company at its principal corporate offices. Any notice required to be given or
delivered to the Optionee shall be in writing and addressed to the Optionee at
the address indicated below the Optionee's signature line of this Agreement. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

     14. Governing Law. The interpretation, performance and enforcement of this
         -------------
Agreement shall be governed by the laws of the State of Delaware without resort
to that State's conflict-of-laws rules.

     15. Additional Terms Applicable to an Incentive Option. In the event the
         --------------------------------------------------
Option is designated an Incentive Stock Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:

          (a) The Option shall cease to qualify for favorable tax treatment as
an Incentive Stock Option if (and to the extent) the Option is exercised for one
or more Option Shares: (i) more than three (3) months after the date the
Optionee ceases to be an employee for any reason other than death or Disability
or (ii) more than twelve (12) months after the date the Optionee ceases to be an
Employee by reason of Disability.

          (b) The Option shall not become exercisable in the calendar year in
which granted if (and to the extent) the aggregate fair market value (determined
at the Grant Date) of the Common Stock for which the Option would otherwise
first become exercisable in such calendar year would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock and any other securities for which one or more other Incentive
Stock Options granted to the Optionee prior to the Grant Date first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. To the extent the exercisability of the Option is
deferred by reason of the foregoing limitation, the deferred portion shall
become exercisable in the first calendar year or years thereafter in which the
One Hundred Thousand Dollar ($100,000) limitation of this Paragraph 15(b) would
not be contravened, but such deferral shall in all events end immediately prior
to the effective date

                                       5



of a Corporate Transaction in which the Option is not to be assumed, whereupon
the Option shall become immediately exercisable as a Non-Statutory Option for
the deferred portion of the Option Shares.

          (c) Should the Optionee hold, in addition to the Option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this Option, then the foregoing limitations on
the exercisability of such options as Incentive Stock Options shall be applied
on the basis of the order in which such options are granted.

     16. Early Exercise Rights. The Optionee may elect to exercise a portion or
         ---------------------
all of the Option prior to the date of vesting. If the Optionee makes this
election, the Company will place such Option Shares into escrow. The Option
Shares will vest in the same manner that the unvested portion of the Option to
which the Option Shares relate was to vest. For example, if the Optionee would
be entitled to exercise a portion of the Option to purchase 10,000 shares of
Common Stock on December 31, 2002, but elects to exercise that portion of the
Option on December 31, 2001, then 10,000 shares of Common Stock will be placed
in escrow for the Optionee until December 31, 2002, at which time the Common
Stock will be released to the Optionee. In the event, prior to the end of the
escrow period, (i) the Optionee's Service is terminated due to his death or
Disability, (ii) the Company makes an Election to Release the Optionee from
providing Service, (iii) the Company makes an Election to Terminate the
Optionee's Service, or (iv) the Optionee's Service is Terminated as a result of
a Corporate Transaction, any Option Shares in escrow shall be released to the
Optionee, free of the vesting conditions. If the Optionee ceases to render
Service for any other reason, the Company shall have the right, but not the
obligation, for a period of 90 days following the cessation of Optionee's
Service, to purchase some or all of the Option Shares in escrow at a price equal
to the Exercise Price. If the Company fails to purchase some or all of the
Option Shares in escrow, the unpurchased Option Shares shall be released to the
Optionee.

IN WITNESS WHEREOF, the parties have executed this Agreement on this 13th day of
November 2001.

                              STAAR Surgical Company, a Delaware corporation


                              By: /s/ John S Santos
                                  ----------------------------------------------
                              Name: John S Santos
                              Title: VP CFO, Secretary.

                              Optionee


                              /s/ David Bailey
                              --------------------------------------------------
                              David Bailey

                              Address:
                                      ------------------------------------------

                              --------------------------------------------------

                                       6



                                    APPENDIX

        The following definitions shall be in effect under the Agreement:

     1. Agreement shall mean this Stock Option Agreement.
        ---------

     2. Cause shall mean any cause, as defined by applicable law or by the
        -----
Employment Agreement.

     3. Common Stock shall mean the Company's common stock.
        ------------

     4. Corporate Transaction shall mean:
        ---------------------

          (a) a dissolution or liquidation of the Company;

          (b) the sale or disposition by the Company to an unrelated third party
     of 50% or more of its business or assets,

          (c) the sale of the capital stock of the Company in connection with
     the sale or transfer of a controlling interest in the Company to an
     unrelated third party, or

          (d) the merger or consolidation of the Company with another
     corporation as part of a sale or transfer of a controlling interest in the
     Company to an unrelated third party.

"A controlling interest" shall be defined as 50% or more of the Company's
outstanding capital stock.

     5. Disability means a disability, whether temporary or permanent, partial
        ----------
or total, as determined by the Board of Directors.

     6. Election to Release means the Company's election to release the Optionee
        -------------------
from providing Service pursuant to Paragraph 13(e)(ii) of the Employment
Agreement.

     7. Election to Terminate means the Company's exercise of its election to
        ---------------------
terminate the Optionee's Service pursuant to Paragraph 13(d) of the Employment
Agreement.

     8. Employment Agreement means that certain Employment Agreement entered
        --------------------
into between the Company and the Optionee on December 20, 2000.

     9. Exercise Date shall mean the date on which the Option shall have been
        -------------
exercised in accordance with Paragraph 9 of the Agreement.

     10. Exercise Price shall mean the exercise price payable per Option Share
         --------------
as specified in the Grant Notice.

     11. Expiration Date shall mean the date on which the Option expires as
         ---------------
specified in the Grant Notice.

     12. Grant Date shall mean the date of grant of the Option as specified in
         ----------
the Grant Notice.

                                       7



     13. Grant Notice shall mean the Notice of Grant of Stock Option
         ------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

     14. Incentive Option shall mean an option which satisfies the requirements
         ----------------
of Internal Revenue Code Section 422.

     15. Non-Statutory Option shall mean an option not intended to satisfy the
         --------------------
requirements of Internal Revenue Code Section 422.

     16. Option Shares shall mean the number of shares of Common Stock subject
         -------------
to the Option.

     17. Optionee shall mean the person to whom the option is granted as
         --------
specified in the Grant Notice.

     18. Service shall mean employment services rendered by the Optionee
         -------
pursuant to the Employment Agreement.

     19. Terminated or Termination shall mean that the Optionee has for any
         -------------------------
reason ceased to provide services as an employee, officer, and director of the
Company. The Optionee will not be deemed to have ceased to provide services in
the case of (i) sick leave, (ii) military leave, or (iii) any other leave of
absence approved by the Company, provided that such leave is for a period of not
more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to a
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. The Board of Directors will have sole
discretion to determine whether the Optionee has ceased to provide services and
the effective date on which the Optionee ceased to provide services (the
"Termination Date").

     20. Vesting Schedule shall mean the vesting schedule specified in the Grant
         ----------------
Notice pursuant to which the Optionee is to vest in the Option Shares in a
series of installments over his period of Service.

                                       8



                                    EXHIBIT A

                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

           [To be signed by the Optionee only upon exercise of Option]

TO:     Secretary
        STAAR Surgical Company
        1911 Walker Avenue
        Monrovia, California 91016

     The undersigned, the holder of an Option pursuant to that certain STAAR
Surgical Company Stock Option Plan and Agreement for Chief Executive Officer
dated March      , 2001 (the "Option Agreement"), between STAAR Surgical
           ------             ----------------
Company, a Delaware corporation (the "Company") and the undersigned (the
                                      -------
"Optionee"), hereby irrevocably elects, in accordance with the terms and
 --------
conditions of the Option Agreement, to exercise the undersigned's Option to
purchase               (          )/(1)/ shares of the common stock, $.01 par
        --------------  ----------
value ("Common Stock") of the Company (collectively and severally, the "Option
        ------ -----                                                    ------
Shares"), for the aggregate purchase price of               ($          )/(2)/.
- ------                                       --------------    ---------

     /(1)/ Insert number of Option Shares as specified in the Notice of Grant of
           Stock Option that are vested Option Shares that the Optionee is
           exercising pursuant to this Notice.

     /(2)/ Number of Option Shares to be purchased multiplied by the Exercise
           Price per share.

     The Optionee hereby acknowledges that the following legend (or any
variation thereof determined appropriate by the Company) will be placed on the
share certificate or certificates for the Option Shares to comply with
applicable federal and state securities laws:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN (1) REGISTERED
     UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE
     UPON AN EXEMPTION FROM REGISTRATION AFFORDED BY SUCH ACT, OR (2) REGISTERED
     OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE OR TERRITORY OF THE
     UNITED STATES WHICH MAY BE APPLICABLE, IN RELIANCE UPON AN EXEMPTION FROM
     REGISTRATION OR QUALIFICATION AFFORDED BY SUCH STATE OR TERRITORIAL
     SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR THE HOLDER'S OWN
     ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW FOR RESALE OR
     DISTRIBUTION.


                              Signature:
                                            ------------------------------------
                              Print Name:
                                            ------------------------------------
                              Address:
                                            ------------------------------------

                                            ------------------------------------

                                        9



                              Date:         ------------------------------------

                                       10



                                    EXHIBIT B
                       FEDERAL INCOME TAX CONSEQUENCES OF
                           SECTION 83(b) TAX ELECTION

     1. Federal Income Tax Consequences and Section 83(b) Election For Exercise
        -----------------------------------------------------------------------
of Non-Statutory Option. If the Option Shares are acquired pursuant to the
- -----------------------
exercise of a Non-Statutory Option, as specified in the Grant Notice, then under
Internal Revenue Code Section 83, the excess of the Fair Market Value of the
Option Shares on the date any forfeiture restrictions applicable to such shares
lapse over the Exercise Price paid for such shares will be reportable as
ordinary income on the lapse date. For this purpose, the term "forfeiture
restrictions" includes vesting requirements. However, the Optionee may elect
under Internal Revenue Code Section 83(b) to be taxed at the time the Option
Shares are acquired, rather than when and as such Option Shares cease to be
subject to such forfeiture restrictions. Such election must be filed with the
Internal Revenue Service within thirty (30) days after the date of the
Agreement. Even if the Fair Market Value of the Option Shares on the date of the
Agreement equals the Exercise Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. FAILURE
TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD WILL RESULT IN
THE RECOGNITION OF ORDINARY INCOME BY OPTIONEE AS THE FORFEITURE RESTRICTIONS
LAPSE.

     2. Federal Income Tax Consequences and Conditional Section 83(b) Election
        ----------------------------------------------------------------------
For Exercise of Incentive Stock Option. If the Option Shares are acquired
- --------------------------------------
pursuant to the exercise of an Incentive Stock Option, as specified in the Grant
Notice, then the following tax principles shall be applicable to the Option
Shares:

          (i) For regular tax purposes, no taxable income will be recognized at
     the time the Option is exercised.

          (ii) The excess of (a) the Fair Market Value of the Option Shares on
     the date the Option is exercised or (if later) on the date any forfeiture
     restrictions applicable to the Option Shares lapse over (b) the Exercise
     Price paid for the Option Shares will be includable in Optionee's taxable
     income for alternative minimum tax purposes.

          (iii) If Optionee makes a disqualifying disposition of the Option
     Shares, then Optionee will recognize ordinary income in the year of such
     disposition equal in amount to the excess of (a) the Fair Market Value of
     the Option Shares on the date the Option is exercised or (if later) on the
     date any forfeiture restrictions applicable to the Option Shares lapse over
     (b) the Exercise Price paid for the Option Shares. Any additional gain
     recognized upon the disqualifying disposition will be either short-term or
     long-term capital gain depending upon the period for which the Option
     Shares are held prior to the disposition.

          (iv) For purposes of the foregoing, the term "forfeiture restrictions"
     will include vesting requirements. The term "disqualifying disposition"
     means any sale or other disposition/1/ of the Option Shares within two (2)
     years after the Grant Date or within one (1) year after the exercise date
     of the Option.

- ----------
/1/ Generally, a disposition of shares purchased under an Incentive Stock Option
includes any transfer of legal title, including a transfer by sale, exchange or
gift, but does not include a transfer to the Optionee's spouse, a transfer into
joint ownership with right of survivorship if the Optionee remains one of the
joint owners, a pledge, a transfer by bequest or inheritance or certain tax free
exchanges permitted under the Internal Revenue Code.

                                       11



          (v) In the absence of final Treasury Regulations relating to Incentive
     Stock Options, it is not certain whether the Optionee may, in connection
     with the exercise of the Option for any Option Shares at the time subject
     to forfeiture restrictions, file a protective election under Internal
     Revenue Code Section 83(b) which would limit (a) the Optionee's alternative
     minimum taxable income upon exercise and (b) the Optionee's ordinary income
     upon a disqualifying disposition to the excess of the Fair Market Value of
     the Option Shares on the date the Option is exercised over the Exercise
     Price paid for the Option Shares. Accordingly, such election if properly
     filed will only be allowed to the extent the final Treasury Regulations
     permit such a protective election.

                                       12



                             STAAR SURGICAL COMPANY
                         NOTICE OF GRANT OF STOCK OPTION
                         -------------------------------

     Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of STAAR Surgical Company, a Delaware
corporation (the "Company"):

     l. Optionee: David Bailey
        --------

     2. Grant Date: December 20, 2000
        ----------

     3. Vesting Commencement Date: On the Grant Date as to one-third; on the
        -------------------------
first anniversary of the Grant Date as to one-third; and on the second
anniversary of the Grant Date as to one-third.

     4. Exercise Price: $11.125 per share
        --------------

     5. Number of Option Shares: Five hundred thousand (500,000)
        -----------------------

     6. Expiration Date: The date which is the
        ---------------

                         [xx] tenth

                         [  ] fifth

        anniversary of the Grant Date.

     7. Type of Option:  [xx] Incentive Stock Option
        --------------

                         [  ] Non-Statutory Stock Option

     8. Date Exercisable: Immediately upon fulfillment of vesting conditions.
        ----------------

     9. Vesting Schedule: The shares shall fully vest over a three (3) year
        ----------------
period as follows: (a) 166,667 shares shall vest on the Grant Date; (b) 166,667
shares shall vest on the date which is the first anniversary of the Grant Date;
and (c) 166,666 shares shall vest on the date which is the second anniversary of
the Grant Date. Any fractional shares will be rounded upwards to the nearest
whole share, which in the aggregate shall not exceed the Number of Option
Shares. Any unvested shares shall fully vest in the event (x) the Company makes
an Election to Release the Optionee from providing service, (y) the Company
makes an Election to Terminate the Optionee's service, or (z) the Optionee's
service is Terminated as a result of a Corporate Transaction.

     10. No Employment or Service Contract. Nothing in this Notice or in the
         ---------------------------------
attached Stock Option Agreement shall confer upon Optionee any right to continue
in service in any capacity, including as an employee, for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Parent or Subsidiary employing or retaining Optionee) or of
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee's service and/or employment at any time for any reason, with or without



cause, so long as such termination is pursuant to that certain Employment
Agreement executed by Optionee and the Company on December 20, 2000.

     11. Definitions. All capitalized terms in this Notice shall have the
         -----------
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.

Dated: November 13, 2001
                              STAAR Surgical Company


                              By: /s/ John S Santos
                                  ----------------------------------------------
                                 Name: John S Santos
                                 Title: VP CFO, Secretary

                              Optionee


                              By: /s/ David Bailey
                                  ----------------------------------------------
                                 Name: David Bailey
                                 Address:
                                         ---------------------------------------

                                         ---------------------------------------

ATTACHMENT: STAAR Surgical Company Stock Option Agreement

EX-10.74

                             STOCK OPTION AGREEMENT
                             ----------------------

     This Stock Option Agreement is entered into between STAAR Surgical Company,
a Delaware corporation (the "Company"), whose principal executive office is
                             -------
located at 1911 Walker Avenue, Monrovia, California 91016, and DAVID MORRISON
(the "Recipient") whose address is North End Lodge, 20 North End Road, Quainton,
      ---------
Buck, United Kingdom, HP22 4BD, pursuant to that certain 1995 STAAR Surgical
Company Consultant Stock Plan (the "Plan") adopted by the Board of Directors on
                                    ----
May 31, 1995.

     1. Grant of Option. This Stock Option Agreement certifies that the Company
        ---------------
has granted to the Recipient, pursuant to the terms of the Plan, a stock option
(the "Option") to purchase, in whole or in part, Twenty Thousand (20,000) shares
      ------
of the Company's voting common stock, par value $.01 (the "Common Stock")
                                                           ------------
(collectively and severally, the "Option Shares"), at the price of Three dollars
                                  -------------
and Ninety-nine cents ($ 3.99) per Option Share (the "Option Price"), subject to
                                                      ------------
the terms and conditions included in this Agreement. The date of this grant is:
April 27, 2001, (the "Grant Date").
                      ----------

     2. Plan; Plan Summary. Subject to the terms of this Stock Option Agreement,
        ------------------
the Recipient's rights to purchase the Option Shares are governed by the Plan,
the terms of which are incorporated herein by this reference.

     3. Character of Option. This Option is a Non-Qualified Option.
        -------------------

     4. Expiration of Option. The right to exercise the Option granted by this
        --------------------
Stock Option Agreement shall expire and be null and void and of no further force
or effect to the extent not exercised by 5:00 p.m. Pacific Time, on the 26th day
of April, 2006 (the "Option Expiration Date").
                     ----------------------

     5. Exercise; Vesting Conditions. The Option Shares are (i) [_] fully
        ----------------------------
vested upon date of grant, or (ii) [ X ] subject to the following vesting
                                    ---
schedule:

                                          Cumulative Vested
      Date                           Percentage of Option Shares
      ----                           ---------------------------
April 27, 2001                                      50%
March 1, 2002                                      100%

     6. Manner of Exercise and Payment. This Option shall be exercised by (a)
        ------------------------------
delivery of a Notice of Exercise of Stock Option, in a form substantially
similar to Exhibit A to this Agreement, to the Secretary of the Company, (b)
together with full payment for the Option Shares to be purchased in good funds
(in U.S. dollars) by cash or check, and/or the following items (if checked by
the Company): (i) [_] shares of Common Stock pursuant to Section 5 (f)(ii)(2)
                                                           -------------------
(A) of the Plan, (ii)[_] surrender or relinquishment of rights to acquire
- ---
Common Stock pursuant to Section 5(f)(ii)(2)(B) of the Plan, or (iii) [_] a
                         ----------------------
full recourse promissory note pursuant to Section 5(f)(ii)(2)(C) of the Plan,
                                          ---------------------
and (c) such representations and documents as the Plan Committee deems necessary
or advisable to effect compliance with all

                                       1



applicable provisions of the Securities Act of 1933 and any other federal or
state securities laws or regulations.

     7. Limited Transferability. During the Recipient's lifetime, the Option
        -----------------------
shall be exercisable only by the Recipient and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following the Recipient's death.

     8. Forfeiture. The Option Shares are subject to the vesting schedule set
        ----------
forth above and to the Recipient's continued performance of services as a
consultant.

          (a) If the Recipient's service is terminated because of the
Recipient's death or disability, then the Option may be exercised only to the
extent that it would have been exercisable by the Recipient on the termination
date and must be exercised by the Recipient (or the Recipient's legal
representative or authorized assignee) no later than twelve (12) months after
the termination date, but in any event no later than the Option Expiration Date.

          (b) If the Recipient ceases to remain in service for any reason (other
than a reason set forth in sub-paragraph (a) above) while the Option is
outstanding, then the Recipient shall have a period of thirty (30) days
(commencing with the date of termination) during which to exercise the Option,
but in no event shall the Option be exercisable at any time after the Option
Expiration Date. During the limited period of post-service exercisability, the
Option may not be exercised in the aggregate for more than the number of Option
Shares in which the Recipient is, at the time of the Recipient's cessation of
service, vested pursuant to the vesting schedule set forth in paragraph 5 above.
Upon the expiration of such limited exercise period or (if earlier) upon the
Option Expiration Date, the Option shall terminate and cease to be outstanding
for any vested Option Shares for which the Option has not been exercised. To the
extent the Recipient is not vested in the Option Shares at the time of the
Recipient's cessation of service, the Option shall immediately terminate and
cease to be outstanding with respect to those Option Shares.

     9. Shareholder Rights. The Recipient shall not have any shareholder rights
        ------------------
with respect to the Option Shares until the Recipient shall have exercised the
Option, paid the Exercise Price and become a holder of record of the purchased
shares.

     10. Special Tax Election. The acquisition of the Option Shares may result
         --------------------
in adverse tax consequences that may be avoided or mitigated by filing an
election under Internal Revenue Code Section 83(b). Such election must be filed
within thirty (30) days after the date of exercise. A description of the tax
consequences applicable to the acquisition of the Option Shares is set forth in
Exhibit B. THE RECIPIENT SHOULD CONSULT WITH HIS TAX ADVISOR TO DETERMINE THE
TAX CONSEQUENCES OF ACQUIRING THE OPTION SHARES AND THE ADVANTAGES AND
DISADVANTAGES OF FILING THE SECTION 83(b) ELECTION. THE RECIPIENT ACKNOWLEDGES
THAT IT IS THE RECIPIENT'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A
TIMELY ELECTION UNDER SECTION 83(b).

     11. Compliance with Laws and Regulations.
         ------------------------------------

                                       2



          (a) The exercise of the Option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Company and the
Recipient with all requirements of applicable law and with all applicable
regulations of any stock exchange (or the Nasdaq Stock Market, if applicable) on
which the Common Stock may be listed for trading at the time of such exercise
and issuance.

          (b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to the Option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.

     12. Governing Law. The interpretation, performance and enforcement of this
         -------------
Agreement shall be governed by the laws of the State of Delaware without resort
to that State's conflict-of-laws rules.

     13. Interpretation.
         --------------

          (a) The Recipient acknowledges and agrees that this Stock Option
Agreement, together with and subject to the Plan: (1) is the final, complete and
exclusive statement of the agreement of the parties with respect to the subject
matter hereof; (2) supersedes any prior or contemporaneous agreements or
understandings of any kind, oral or written (collectively and severally, the
"prior agreements"), and that any such prior agreements are of no force or
 ----------------
effect except as expressly set forth herein; and (3) may not be varied,
supplemented or contradicted by evidence of prior agreements, or by evidence of
subsequent oral agreements.

          (b) Except as expressly otherwise provided herein, neither this Stock
Option Agreement nor any of its terms may be amended, supplemented, discharged
or terminated (other than by performance), except as provided in the Plan or by
a written instrument or instruments signed by all of the parties to this Stock
Option Agreement. No waiver of any acts or obligations hereunder shall be
effective unless such waiver shall be in a written instrument or instruments
signed by each party claimed to have given or consented to such waiver and each
party affected by such waiver.

          (c) If any term or provision of this Stock Option Agreement or the
application thereof to any person or circumstance shall, to any extent, be
determined to be invalid, illegal or unenforceable under present or future laws
effective during the term of this Stock Option Agreement, then, and in that
event: (A) the performance of the offending term or provision (but only to the
extent its application is invalid, illegal or unenforceable) shall be excused as
if it had never been incorporated into this Stock Option Agreement, and, in lieu
of such excused provision, there shall be added a provision as similar in terms
and amount to such excused provision as may be possible and be legal, valid and
enforceable, and (B) the remaining part of this Stock Option Agreement
(including the application of the offending term or provision to persons or
circumstances other than those as to which it is held invalid, illegal or
unenforceable) shall not be affected thereby and shall continue in full force
and effect to the fullest extent provided by law.

                                       3



          (d) The Recipient may not delegate any of his or her duties or
obligations under this Stock Option Agreement, in whole or in part, without the
prior written consent of the Company. Subject to the foregoing, all of the
representations, warranties, covenants, conditions and provisions of this Stock
Option Agreement shall be binding upon and shall inure to the benefit of each
party and such party's respective successors and permitted assigns, spouses,
heirs, executors, administrators, and personal and legal representatives.

          (e) Unless otherwise specifically provided in this Stock Option
Agreement, all notices, demands, requests, consents, approvals or other
communications (collectively and severally called "notices") required or
                                                   -------
permitted to be given hereunder, or which are given with respect to this Stock
Option Agreement, shall be in writing, and shall be given by: (A) personal
delivery (which form of notice shall be deemed to have been given upon
delivery), (B) by telegraph or by private airborne/overnight delivery service
(which forms of notice shall be deemed to have been given upon confirmed
delivery by the delivery agency), (C) by electronic or facsimile or telephonic
transmission, provided the receiving party has a compatible device or confirms
receipt thereof (which forms of notice shall be deemed delivered upon confirmed
transmission or confirmation of receipt), or (D) by mailing in the United States
mail by registered or certified mail, return receipt requested, postage prepaid
(which forms of notice shall be deemed to have been given upon the fifth {5th}
business day following the date mailed).

     WHEREFORE, the parties hereto have for purposes of this Stock Option
Agreement executed this Stock Option Certificate in the City of Monrovia, County
of Los Angeles, State of California, effective as of the 13th day of November
2001.

                                         COMPANY:

                                         STAAR Surgical Company,
                                         a Delaware corporation


                                         By:/s/ David Bailey
                                            ------------------------------------
                                            David Bailey, President
ATTEST:


                                         By:/s/ John Santos
                                            ------------------------------------
                                            John Santos,Chief Financial Officer

                                         RECIPIENT:

                                         ---------------------------------------

                                       4



                                    EXHIBIT A
                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

          [To be signed by the Recipient only upon exercise of Option]

TO: Secretary
    STAAR Surgical Company
    1911 Walker Avenue
    Monrovia, California 91016

     The undersigned, the holder of an Option pursuant to that certain Stock
Option Agreement dated                      ,2001 (the "Option Agreement"),
                      --------------- -----             ----------------
between STAAR Surgical Company, a Delaware corporation, (the "Company") and
                                                              -------
the undersigned (the "Recipient"), hereby irrevocably elects, in accordance
                      ---------
with the terms and conditions of the Option Agreement, to exercise
the undersigned's Option to purchase               (      )/(1)/ shares of
                                     -------------  ------
the common stock, $.01 par value ("Common Stock") of the Company (collectively
                                   ------------
and severally, the "Option Shares"), for the aggregate purchase price of
                    -------------
              ($              )/(2)/.
- -------------   -------------

/(1)/ Insert number of Option Shares that are vested Option Shares that the
      Recipient is exercising pursuant to this Notice.

/(2)/ Number of Option Shares to be purchased multiplied by the Exercise Price
      per share.

                         Signature:
                                     -------------------------------

                         Print Name:
                                     -------------------------------

                         Address:
                                     -------------------------------

                                     -------------------------------

                         Date:
                                     -------------------------------

                                       5



                                    EXHIBIT B

                       FEDERAL INCOME TAX CONSEQUENCES OF
                           SECTION 83(b) TAX ELECTION

     1. Federal Income Tax Consequences and Section 83(b) Election For Exercise
        -----------------------------------------------------------------------
of Non-Statutory Option. If the Option Shares are acquired pursuant to the
- -----------------------
exercise of a Non-Statutory Option, as specified in the Grant Notice, then under
Internal Revenue Code Section 83, the excess of the Fair Market Value of the
Option Shares on the date any forfeiture restrictions applicable to such shares
lapse over the Exercise Price paid for such shares will be reportable as
ordinary income on the lapse date. For this purpose, the term "forfeiture
restrictions" includes vesting requirements. However, the Recipient may elect
under Internal (Revenue Code Section 83(b) to be taxed at the time the Options
Shares are acquired, rather than when and as such Option Shares cease to be
subject to such forfeiture restrictions. Such election must be filed with the
Internal Revenue Service within thirty (30) days after the date of the Agreement
 . Even if the Fair Market Value of the Option Shares on the date of the
Agreement equals the Exercise Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. FAILURE
TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD WILL RESULT IN
THE RECOGNITION OF ORDINARY INCOME BY THE RECIPIENT AS THE FORFEITURE
RESTRICTIONS LAPSE.

     2. Federal Income Tax Consequences and Conditional Section 83(b) Election
        ----------------------------------------------------------------------
For Exercise of Incentive Stock Option. If the Option Shares are acquired
- --------------------------------------
pursuant to the exercise of an Incentive Stock Option, as specified in the Grant
Notice, then the following tax principles shall be applicable to the Option
Shares:

          (i) For regular tax purposes, no taxable income will be recognized at
     the time the Option is exercised.

          (ii) The excess of (a) the Fair Market Value of the Option Shares on
     the date the Option is exercised or (if later) on the date any forfeiture
     restrictions applicable to the Option Shares lapse over (b) the Exercise
     Price paid for the Option Shares will be includable in the Recipient's
     taxable income for alternative minimum tax purposes.

          (iii) If the Recipient makes a disqualifying disposition of the Option
     Shares, then the Recipient will recognize ordinary income in the year of
     such disposition equal in amount to the excess of (a) the Fair Market Value
     of the Option Shares on the date the Option is exercised or (if later) on
     the date any forfeiture restrictions applicable to the Option Shares lapse
     over (b) the Exercise Price paid for the Option Shares. Any additional gain
     recognized upon the disqualifying disposition will be either short-term or
     long-term capital gain depending upon the period for which the Option
     Shares are held prior to the disposition.

          (iv) For purposes of the foregoing, the term "forfeiture restrictions"
     will include vesting requirements. The term "disqualifying disposition"
     means any sale or other disposition /1/

- ----------
/1/ Generally, a disposition of shares purchased under an Incentive Stock Option
includes any transfer of legal title, including a transfer by sale, exchange or
gift, but does not include a transfer to the Recipient's spouse, a transfer into

                                       6



of the Option Shares within two (2) years after the Grant Date or within one (1)
year after the exercise date of the Option.

          (v) In the absence of final Treasury Regulations relating to Incentive
     Stock Options, it is not certain whether the Recipient may, in connection
     with the exercise of the Option for any Option Shares at the time subject
     to forfeiture restrictions, file a protective election under Internal
     Revenue Code Section 83(b) which would limit (a) the Recipient's
     alternative minimum taxable income upon exercise and (b) the Recipient's
     ordinary income upon a disqualifying disposition to the excess of the Fair
     Market Value of the Option Shares on the date the Option is exercised over
     the Exercise Price paid for the Option Shares. Accordingly, such election
     if properly filed will only be allowed to the extent the final Treasury
     Regulations permit such a protective election.

- --------------------------------------------------------------------------------
joint ownership with right of survivorship if the Recipient remains one of the
joint owners, a pledge, a transfer by bequest or inheritance or certain tax free
exchanges permitted under the Internal Revenue Code.

                                       7



                            STOCK OPTION CERTIFICATE
                            ------------------------

     This Stock Option Certificate is entered into between STAAR Surgical
Company, a Delaware corporation (the "Company"), whose principal executive
                                      -------
office is located at 1911 Walker Avenue, Monrovia, California 91016, and DAVID
MORRISON (the "Recipient") whose address is North End Lodge, 20 North End Road,
               ---------
Quainton, Bucks, United Kingdom, HP22 4BD, pursuant to that certain 1998 STAAR
Surgical Company Stock Plan (the "Plan") adopted by the Board of Directors on
                                  ----
April 17, 1998 and approved by the shareholders on May 29, 1998.

     l. Grant of Option. Subject to the terms and conditions included herein,
        ---------------
this Stock Option Certificate certifies that the Company has granted to the
Recipient, pursuant to the terms of the Plan, an option (the "Option") to
                                                              ------
purchase, in whole or in part, Sixty Thousand (60,000) shares of the Company's
voting common stock, par value $.01 (the "Common Stock") (collectively and
                                          ------------
severally, the "Option Shares"), at the price of Three dollars and Forty-nine
                ------ ------
cents ($ 3.49) per Option Share (the "Option Price"). The date of this grant is:
                                      ------ -----
May 25, 2001, (the "Grant Date").
                    ----- ----

     2. Plan; Plan Summary. The Recipient's rights to purchase the Option Shares
        ------------------
are governed by the Plan, the terms of which are incorporated herein by this
reference.

     3. Character of Option. This Option is [ X ] a Non-Qualified Option or [_]
                                             ---
an Incentive Option


     4. Capacity of Recipient. This Option is granted to the Recipient in the
        ---------------------
Recipient's capacity as (1) [_] an employee, (ii) [ X ] a director, or (iii)
                                                   ---
[_] a consultant.


     5. Expiration of Option. Subject to the terms and conditions set forth in
        --------------------
this Stock Option Certificate and in the Plan, the right to exercise the Options
granted by this Stock Option Certificate shall expire and be null and void and
of no further force or effect to the extent not exercised by 5:00 p.m. Pacific
Time, on the 25th day of May, 2006 (the "Option Expiration Date").
                                         ------ ---------- ----

     6. Exercise Vesting Conditions. The Option is (i) [_] fully vested upon
        ---------------------------
date of grant, or (ii) [ X ] subject to the following vesting schedule as well
                        ---
as based upon Recipient's continued performance of services in the capacity
hereinabove indicated:

                                    Cumulative Vested
                                     Percentage of
    Date                                 Shares
    ----                            -----------------
May 25, 2001                            33 1/3%
May 25, 2002                            66 2/3%
May 25, 2003                             100.0%

     7. Manner of Exercise and Payment. This Option shall be exercised by
        ------------------------------
delivery of this

                                       1



Option Certificate to the Secretary of the Company, together with:

          (a) A Consent of Spouse (as such consent is defined in the Plan) from
     the spouse of the Recipient, if any, duly signed by such spouse; and

          (b) Full payment for the Option Shares to be purchased in goods funds
     (in U.S. dollars) by cash or check or through a "same day sale" commitment
     from the Recipient and a broker-dealer that is a member of the National
     Association of Securities Dealers (an "NASD Dealer") whereby the Recipient
     irrevocably elects to exercise the Option and to sell a portion of the
     Option Shares so purchased to pay for the Option Price, and whereby the
     NASD Dealer irrevocably commits upon receipt of such Option Shares to
     forward the Option Price directly to the Company.

     8. Forfeiture; Vesting Conditions. This Option (i) [_] will be fully vested
        ------------------------------
upon date of grant, or (ii) [X] will be subject to Article V, Section 5.05 and
                             -                     ---------  ------------
Article X of the Plan, inasmuch as the Option will be subject to: (A) the
- ---------
vesting schedule set forth above and (B) the special rules regulating vesting
and forfeiture on Termination of Recipient.

     9. Recipient's Representations. The Recipient represents that the Recipient
        ---------------------------
has received a Section 10(a) Prospectus, which explains the administration and
operation of the Plan, and has received a copy of the Plan.

     10. Miscellaneous.
         -------------

          (a) Preparation of Stock Option Certificate. This Stock Option
              ---------------------------------------
Certificate was prepared by the Company or its legal counsel solely on behalf of
the Company. It is acknowledged by the Recipient that he or she was not
represented by the Company or any of its officers, directors, employees or
agents (including the Company's legal counsel) in connection with the
transaction contemplated by this Stock Option Certificate, and that the
Recipient had separate and independent advice of counsel. In light of the
foregoing it is acknowledged by the Recipient that the Company shall not be
construed to be solely responsible for the drafting hereof, and that any
ambiguity in the Plan or this Stock Option Certificate, or the interpretation
thereof or hereof, shall not be construed against the Company as the alleged
draftsman of this Stock Option Certificate.

          (b) Interpretation.
              --------------

               (i) Entire Agreement/No Collateral Representations. The Recipient
                   ----------------------------------------------
acknowledges and agrees that this Stock Option Certificate, together with and
subject to the Plan: (1) is the final, complete and exclusive statement of the
agreement of the parties with respect to the subject matter hereof; (2)
supersedes any prior or contemporaneous agreements or understandings of any
kind, oral or written (collectively and severally, the "prior agreements"), and
                                                        ----- ----------
that any such prior agreements are of no force or effect except as expressly set
forth herein; and (3) may not be varied, supplemented or contradicted by
evidence of prior agreements, or by evidence of subsequent oral agreements.

                                       2



               (ii) Amendment; Waiver. Except as expressly otherwise provided
                    -----------------
herein, neither this Stock Option Certificate nor any of its terms may be
amended, supplemented, discharged or terminated (other than by performance),
except as provided in the Plan or by a written instrument or instruments signed
by all of the parties to this Stock Option Certificate. No waiver of any acts or
obligations hereunder shall be effective unless such waiver shall be in a
written instrument or instruments signed by each party claimed to have given or
consented to such waiver and each party affected by such waiver.

               (iii) Severability. If any term or provision of this Stock Option
                     ------------
Certificate or the application thereof to any person or circumstance shall, to
any extent, be determined to be invalid, illegal or unenforceable under present
or future laws effective during the term of this Stock Option Certificate, then,
and in that event: (A) the performance of the offending term or provision (but
only to the extent its application is invalid, illegal or unenforceable) shall
be excused as if it had never been incorporated into this Stock Option
Certificate, and, in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as may be
possible and be legal, valid and enforceable, and (B) the remaining part of this
Stock Option Certificate (including the application of the offending term or
provision to persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable) shall not be affected thereby and shall
continue in full force and effect to the fullest extent provided by law.

          (c) Enforcement. This Stock Option Certificate and the rights and
              -----------
remedies of each party arising out of or relating to this Stock Option
Certificate shall be solely governed in accordance with the laws (without regard
to the conflicts of law principles thereof) of the state of Delaware.

          (d) Successors and Assigns. The Recipient may not assign his rights or
              ----------------------
benefits or delegate any of his duties or obligations under this Stock Option
Certificate, in whole or in part, without the prior written consent of the
Company, except pursuant to the terms of the Plan. Subject to the foregoing, all
of the representations, warranties, covenants, conditions and provisions of this
Stock Option Certificate shall be binding upon and shall inure to the benefit of
each party and such party's respective successors and permitted assigns,
spouses, heirs, executors, administrators, and personal and legal
representatives.

          (e) Notices. Unless otherwise specifically provided in this Stock
              -------
Option Certificate, all notices, demands, requests, consents, approvals or other
communications (collectively and severally called "notices") required or
                                                   -------
permitted to be given hereunder, or which are given with respect to this Stock
Option Certificate, shall be in writing, and shall be given by: (A) personal
delivery (which form of notice shall be deemed to have been given upon
delivery), (B) by telegraph or by private airborne/overnight delivery service
(which forms of notice shall be deemed to have been given upon confirmed
delivery by the delivery agency), (C) by electronic or facsimile or telephonic
transmission, provided the receiving party has a compatible device or confirms
receipt thereof (which forms of notice shall be deemed delivered upon confirmed
transmission or confirmation of receipt), or (D) by mailing in the United States
mail by registered or certified mail, return receipt requested, postage prepaid
(which forms of notice shall be deemed to have been given upon the fifth {5th}
business day following the date mailed).

     WHEREFORE, the parties hereto have for purposes of this Stock Option
Certificate executed this Stock Option Certificate in the City of Monrovia,
County of Los Angeles, State of California, effective as of

                                       3



the 13th day of November 2001.
                                            COMPANY:

                                            STAAR Surgical Company,
                                            a Delaware corporation


                                            By: /s/ David Bailey
                                                --------------------------------
                                                David Bailey

ATTEST:

          [SEAL]


                                            By: /s/ John Santos, Secretary
                                                --------------------------------
                                                John Santos, Secretary

                                            RECIPIENT:

                                            ------------------------------------

                                       4




                                   Attachment
                                       to
                            Stock Option Certificate

                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

                                       5



                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

          [To be signed by the Recipient only upon exercise of Option]

TO:       Secretary
          STAAR Surgical Company
          1911 Walker Avenue
          Monrovia, California 91016

     The undersigned, the holder of an Option under that certain Stock Option
Certificate dated effective the            day of           ,      (the "Option
                                ----------       -----------  ----       ------
Certificate"), between STAAR Surgical Company, a Delaware corporation (the
- -----------
"Company") and the undersigned (the "Recipient"), hereby irrevocably elects, in
 -------                             ---------
accordance with the terms and conditions of that certain 1998 STAAR Surgical
Company Stock Plan (the "Plan") adopted by the Board of Directors on April 17,
                         ----
1998 and approved by the shareholders on May 29, 1998, under which the Option
Certificate was granted, to exercise the undersigned's Option to purchase
                                                                          ------
                              (    )/(1)/ shares of the Company's voting common
- ----------------------------   ----
stock, $ .01 per share par value ("Common Stock") (collectively and severally,
                                   ------ -----
the "Option Shares"), for the aggregate purchase price of
     ------ ------                                         ------------------
($       )/(2)/.
   ------

     /(1)/ Insert number of Option Shares as specified in the Option Certificate
          which are vested Option Shares (as defined by the Plan) which the
          Recipient is exercising the Option to purchase.

     /(2)/ Number of Option Shares to be exercised as hereinabove specified
          multiplied by the Option Price per share.

                    Signature:
                               ------------------------
                    Print Name:
                               ------------------------
                    Address:
                             --------------------------

                    -----------------------------------
                    Date:
                          -----------------------------

                                       6

EX-10.75

                            STOCK OPTION CERTIFICATE
                            ------------------------

     This Stock Option Certificate is entered into between STAAR Surgical
Company, a Delaware corporation (the "Company"), whose principal executive
                                      -------
office is located at 1911 Walker Avenue, Monrovia, California 91016, and RICHARD
D. SIMMONS (the "Recipient") whose address is 30 Laburnum Way, Nayland, Near
                 ---------
Colchester, Essex, CO6 4LG, United Kingdom, pursuant to that certain 1998 STAAR
Surgical Company Stock Plan (the "Plan") adopted by the Board of Directors on
                                  ----
April 17, 1998 and approved by the shareholders on May 29, 1998.

     1. Grant of Option. Subject to the terms and conditions included herein,
        ---------------
this Stock Option Certificate certifies that the Company has granted to the
Recipient, pursuant to the terms of the Plan, an option (the "Option") to
                                                              ------
purchase, in whole or in part, One Hundred Thousand (100,000) shares of the
Company's voting common stock, par value $.01 (the "Common Stock") (collectively
                                                    ------ -----
and severally, the "Option Shares"), at the price of Four dollars and
                    ------ ------
Eighty-three cents ($ 4.83) per Option Share (the "Option Price"). The date of
                                                   ------------
this grant is: June 30, 2001, (the "Grant Date").
                                    ----- ----

     2. Plan; Plan Summary. The Recipient's rights to purchase the Option Shares
        ------------------
are governed by the Plan, the terms of which are incorporated herein by this
reference.

     3. Character of Option. This Option is [_] a Non-Qualified Option or [X]
        -------------------                                                -
an Incentive Option.

     4. Capacity of Recipient. This Option is granted to the Recipient in the
        ---------------------
Recipient's capacity as (i) [X] an employee, (ii) [_] a director,or (iii) [_]
                             -
a consultant.

     5. Expiration of Option. Subject to the terms and conditions set forth in
        --------------------
this Stock Option Certificate and in the Plan, the right to exercise the Options
granted by this Stock Option Certificate shall expire and be null and void and
of no further force or effect to the extent not exercised by 5:00 p.m. Pacific
Time, on the 30th day of June, 2006 (the "Option Expiration Date").
                                          ------ ---------- ----

     6. Exercise Vesting Conditions. The Option is (i) [_] fully vested upon
        ---------------------------
date of grant, or (ii) [X] subject to the following vesting schedule as well as
                        -
based upon Recipient's continued performance of services in the capacity
hereinabove indicated:

                                   Cumulative Vested
                                     Percentage of
     Date                                 Shares
     ----                          ------------------
June 30, 2002                           33 1/3%
June 30, 2003                           66 2/3%
June 30, 2004                            100.0%

The above vesting schedule will be accelerated according to the Recipient's
achievement of certain goals

                                       1



and objectives to be determined at a later date. A summary of the milestones
will be attached to this agreement and will have the same force and effect as if
the milestones were stated herein.

     7. Manner of Exercise and Payment. This Option shall be exercised by
        ------------------------------
delivery of this Option Certificate to the Secretary of the Company, together
with:

          (a) A Consent of Spouse (as such consent is defined in the Plan) from
     the spouse of the Recipient, if any, duly signed by such spouse; and

          (b) Full payment for the Option Shares to be purchased in goods funds
     (in U.S. dollars) by cash or check or through a "same day sale" commitment
     from the Recipient and a broker-dealer that is a member of the National
     Association of Securities Dealers (an "NASD Dealer") whereby the Recipient
     irrevocably elects to exercise the Option and to sell a portion of the
     Option Shares so purchased to pay for the Option Price, and whereby the
     NASD Dealer irrevocably commits upon receipt of such Option Shares to
     forward the Option Price directly to the Company.

     8. Forfeiture; Vesting Conditions.This Option (i)[_] will be fully vested
        ------------------------------
upon date of grant, or (ii) [X] will be subject to Article V, Section 5.05 and
                            ---                    ---------  ------------
Article X of the Plan, inasmuch as the Option will be subject to: (A) the
- ---------
vesting schedule set forth above and (B) the special rules regulating vesting
and forfeiture on Termination of Recipient.

     9. Recipient's Representations. The Recipient represents that the Recipient
        ---------------------------
has received a Section 10(a) Prospectus, which explains the administration and
operation of the Plan, and has received a copy of the Plan.

     10. Miscellaneous.
         -------------
          (a) Preparation of Stock Option Certificate. This Stock Option
              ---------------------------------------
Certificate was prepared by the Company or its legal counsel solely on behalf of
the Company. It is acknowledged by the Recipient that he or she was not
represented by the Company or any of its officers, directors, employees or
agents (including the Company's legal counsel) in connection with the
transaction contemplated by this Stock Option Certificate, and that the
Recipient had separate and independent advice of counsel. In light of the
foregoing it is acknowledged by the Recipient that the Company shall not be
construed to be solely responsible for the drafting hereof, and that any
ambiguity in the Plan or this Stock Option Certificate, or the interpretation
thereof or hereof, shall not be construed against the Company as the alleged
draftsman of this Stock Option Certificate.

          (b) Interpretation.
              --------------

               (i) Entire Agreement/No Collateral Representations. The Recipient
                   ----------------------------------------------
acknowledges and agrees that this Stock Option Certificate, together with and
subject to the Plan: (1) is the final, complete and exclusive statement of the
agreement of the parties with respect to the subject matter hereof, (2)
supersedes any prior or contemporaneous agreements or understandings of any
kind, oral or

                                       2



written (collectively and severally, the "prior agreements"), and that any such
                                          ----- ----------
prior agreements are of no force or effect except as expressly set forth herein;
and (3) may not be varied, supplemented or contradicted by evidence of prior
agreements, or by evidence of subsequent oral agreements.

               (ii) Amendment; Waiver. Except as expressly otherwise provided
                    -----------------
herein, neither this Stock Option Certificate nor any of its terms may be
amended, supplemented, discharged or terminated (other than by performance),
except as provided in the Plan or by a written instrument or instruments signed
by all of the parties to this Stock Option Certificate. No waiver of any acts or
obligations hereunder shall be effective unless such waiver shall be in a
written instrument or instruments signed by each party claimed to have given or
consented to such waiver and each party affected by such waiver.

               (iii) Severability. If any term or provision of this Stock Option
                     ------------
Certificate or the application thereof to any person or circumstance shall, to
any extent, be determined to be invalid, illegal or unenforceable under present
or future laws effective during the term of this Stock Option Certificate, then,
and in that event: (A) the performance of the offending term or provision (but
only to the extent its application is invalid, illegal or unenforceable) shall
be excused as if it had never been incorporated into this Stock Option
Certificate, and, in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as may be
possible and be legal, valid and enforceable, and (B) the remaining part of this
Stock Option Certificate (including the application of the offending term or
provision to persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable) shall not be affected thereby and shall
continue in full force and effect to the fullest extent provided by law.

          (c) Enforcement. This Stock Option Certificate and the rights and
              -----------
remedies of each party arising out of or relating to this Stock Option
Certificate shall be solely governed in accordance with the laws (without regard
to the conflicts of law principles thereof) of the state of Delaware.

          (d) Successors and Assigns. The Recipient may not assign his rights or
              ----------------------
benefits or delegate any of his duties or obligations under this Stock Option
Certificate, in whole or in part, without the prior written consent of the
Company, except pursuant to the terms of the Plan. Subject to the foregoing, all
of the representations, warranties, covenants, conditions and provisions of this
Stock Option Certificate shall be binding upon and shall inure to the benefit of
each party and such party's respective successors and permitted assigns,
spouses, heirs, executors, administrators, and personal and legal
representatives.

          (e) Notices. Unless otherwise specifically provided in this Stock
              -------
Option Certificate, all notices, demands, requests, consents, approvals or other
communications (collectively and severally called "notices") required or
                                                   -------
permitted to be given hereunder, or which are given with respect to this Stock
Option Certificate, shall be in writing, and shall be given by: (A) personal
delivery (which form of notice shall be deemed to have been given upon
delivery), (B) by telegraph or by private airborne/overnight delivery service
(which forms of notice shall be deemed to have been given upon confirmed
delivery by the delivery agency), (C) by electronic or facsimile or telephonic
transmission, provided the receiving party has a compatible device or confirms
receipt thereof (which forms of notice shall be deemed delivered upon confirmed
transmission or confirmation of receipt), or (D) by mailing in the United States
mail by registered or certified mail, return receipt requested, postage prepaid
(which forms of notice shall be deemed to have

                                       3



been given upon the fifth {5th} business day following the date mailed).

     WHEREFORE, the parties hereto have for purposes of this Stock Option
Certificate executed this Stock Option Certificate in the City of Monrovia,
County of Los Angeles, State of California, effective as of the 13th day of
November 2001.

                                            COMPANY:

                                            STAAR Surgical Company, a Delaware
                                            corporation


                                            By: /s/ David Bailey
                                                --------------------------------
                                                David Bailey

ATTEST:

          [SEAL]


                                            By: /s/ John Santos
                                                --------------------------------
                                                John Santos,Secretary

                                            RECIPIENT:


                                            /s/ Richard D. Simmons
                                            ------------------------------------

                                       4



                                   Attachment
                                       to
                            Stock Option Certificate.

                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

                                       5



                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------

          [To be signed by the Recipient only upon exercise of Option]

TO:       Secretary
          STAAR Surgical Company
          1911 Walker Avenue
          Monrovia, California 91016

     The undersigned, the holder of an Option under that certain Stock Option
Certificate dated effective the        day of               ,       (the "Option
                                ------        --------------  -----       ------
Certificate"), between STAAR Surgical Company, a Delaware corporation (the
- -----------
"Company") and the undersigned (the "Recipient"), hereby irrevocably elects, in
 -------                             ---------
accordance with the terms and conditions of that certain 1998 STAAR Surgical
Company Stock Plan (the "Plan") adopted by the Board of Directors on April 17,
                         ----
1998 and approved by the shareholders on May 29, 1998, under which the Option
Certificate was granted, to exercise the undersigned's Option to purchase
                      (  )/1/ shares of the Company's voting common stock, $ .01
- ---------------------- --
per share par value ("Common Stock") (collectively and severally, the "Option
                      ------ -----                                     ------
Shares"), for the aggregate purchase price                        of
- ------                                     ----------------------
($     )./(2)/
  -----

     /(1)/Insert number of Option Shares as specified in the Option Certificate
          which are vested Option Shares (as defined by the Plan) which the
          Recipient is exercising the Option to purchase.

     /(2)/ Number of Option Shares to be exercised as hereinabove specified
          multiplied by the Option Price per share.


                         Signature:
                                   ---------------------------------------------
                         Print Name:
                                    --------------------------------------------
                         Address:
                                 -----------------------------------------------

                         -------------------------------------------------------
                         Date:
                              --------------------------------------------------

                                       6

EX-10.76

                               December 20, 2001


Staar Surgical Company
1911 Walker Avenue
Monrovia, California 91016

Attention:    David Bailey
              Chief Executive Officer

        Re:   Sixth Amendment to Credit Agreement

Ladies and Gentlemen:

     We refer to (a) the letter agreement dated as of October 31, 2000, as
amended by the letter amendment dated December 22, 2000, the letter amendment
dated April 1, 2001, the two letter amendments dated July 1, 2001 and the Fifth
Amendment to Credit Agreement dated October 1, 2001 (said letter agreement, as
so amended, herein called the "Credit Agreement"), between Staar Surgical
                               ----------------
Company, a Delaware corporation (the "Borrower"), and Wells Fargo Bank, National
                                      --------
Association, a national banking association (the "Bank"), and (b) the Revolving
                                                  ----
Line of Credit Note dated October 31, 2000, as amended by the letter amendment
dated April 1, 2001 referred to above, one of the letter amendments dated July
1, 2001 referred to above and the Fifth Amendment to Credit Agreement referred
to above (said Note, as so amended, herein called the "Line of Credit Note"), in
                                                       -------------------
the amount of $7,000,000 made by the Borrower in favor of the Bank. Terms
defined in the Credit Agreement or the Line of Credit Note and not otherwise
defined herein have the same respective meanings when used herein.

     1. Amendments to Credit Agreement. As of the effective date of this letter
        ------------------------------
amendment but subject to satisfaction of the terms and conditions specified
herein, the Credit Agreement is hereby amended as set forth below.

          (a) The first sentence of the second paragraph of the Credit Agreement
is amended by deleting the date "January 4, 2002" and substituting the date
"February 1, 2002."

          (b) The first paragraph of Paragraph 1.2 of the Credit Agreement is
amended by adding the following sentence at the end thereof:

     "Within five (5) business days after Borrower's or its subsidiaries'
     filing of any application with the United States Patent and Trademark
     Office, the United States Copyright Office or any other office in
     regards to Borrower's or its



Staar Surgical Company
December 20, 2001
Page 2

     subsidiaries' interest in any and all intellectual property, Borrower
     will deliver a copy of such application to Bank."

          (c) Paragraph II.5 of the Credit Agreement is amended in full to read
as follows:

          "5. Commitment Fee. Borrower will pay Bank a commitment fee (i) from
              --------------
     and including October 1, 2001 to but excluding January 4, 2002, at the rate
     of 0.25% per annum (computed on the basis of a 360-day year and actual days
              --- -----
     elapsed) on the average daily unused portion of the Line of Credit, payable
     monthly in arrears on the first business day of each calendar month,
     commencing on November 1, 2001 and ending on January 4, 2002, and (ii) from
     and including January 4, 2002 to but excluding the maturity date of the
     Line of Credit, at the rate of 0.50% per annum (computed on the basis of a
                                          --- -----
     360-day year and actual days elapsed) on the average daily unused portion
     of the Line of Credit, payable on the maturity date of the Line of Credit
     (i.e., February 1, 2002)."
      ----

          (d) Paragraph III.5 of the Credit Agreement is amended by deleting the
date "June 30, 2001" and substituting the date "October 31, 2001."

          (e) Paragraphs V.3(f), (g) and (h) of the Credit Agreement are amended
in full to read as follows:

          "(f) not later than Friday of each calendar week, (i) commencing on
January 18, 2002, a projection of the consolidated cash flow of Borrower,
detailing cash receipts and cash disbursements, for the 13-week period
commencing on such Friday and (ii) commencing on January 25, 2002, a comparison
of Borrower's actual consolidated cash flow for the immediately preceding week
to the projection of such cash flow, together with a written explanation of any
variance exceeding 15%, in each case in form, scope and detail satisfactory to
Bank and duly certified by an officer of Borrower, and in a manner, acceptable
to Bank;

          (g) within thirty days after the end of each calendar month,
commencing with December of 2001, an aged listing of the United States domestic
accounts receivable and United States domestic accounts payable of Borrower and
its United States domestic subsidiaries as of the last day of such calendar
month, in form, scope and detail satisfactory to Bank and duly certified by an
officer of Borrower, and in a manner, acceptable to Bank;



Staar Surgical Company
December 20, 2001
Page 3

          (h) within thirty days after the end of each calendar month and
     simultaneously with the delivery of the financial statements referred to in
     Paragraph V.3(e), commencing with November of 2001, a covenant compliance
     certificate substantially in the form of Exhibit A attached hereto with
     respect to Borrower's compliance (or failure to comply), as of the last day
     of such calendar month, with the covenants referred to therein, all in
     form, scope and detail satisfactory to Bank and duly certified by an
     officer of Borrower, and in a manner, acceptable to Bank;."

          (f) Paragraph V.10 of the Credit Agreement is amended in full to read
as follows:

          "10. Liquidity. Maintain unencumbered (except for a lien in favor of
               ---------
     Bank) liquid assets (defined as cash, cash equivalents and/or publicly
     traded/quoted marketable securities acceptable to Bank) with Bank having an
     aggregate fair market value not at any time less than Two Million Dollars
     ($2,000,000.00)."

          (g) Paragraph V.13 of the Credit Agreement is amended in full to read
as follows:

          "13. Other Indebtedness. Not create, incur, assume or permit to exist
               ------------------
     any indebtedness or liabilities resulting from borrowings, loans, advances
     or capitalized leases, whether secured or unsecured, matured or unmatured,
     liquidated or unliquidated, joint or several, except (a) the liabilities of
     Borrower to Bank, (b) any other liabilities of Borrower existing as of, and
     disclosed to Bank prior to, the date hereof, and (c) purchase money
     indebtedness and capitalized leases incurred in connection with the
     purchase or lease of equipment hereafter, so long as the outstanding
     principal amount of indebtedness incurred in connection with the purchase
     or lease of equipment, whether before or after the date hereof, at no time
     exceeds $3,000,000 in the aggregate."

          (h) Paragraph V.17 of the Credit Agreement is amended in full to read
as follows:

          "17. Pledge of Assets. Not, and not permit any of its subsidiaries to,
               ----------------
     mortgage, pledge, grant or permit to exist a security interest in, or lien
     upon, all or any portion of Borrower's or such subsidiary's assets now
     owned or hereafter acquired (including, without limitation, all or any part
     of the shares of any direct



Staar Surgical
Company December 20, 2001
Page 4

     or indirect subsidiary of Borrower), except any of the foregoing in favor
     of Bank or which are existing as of, and disclosed to Bank in writing prior
     to, the date hereof."

     2. Amendments to Line of Credit Note. As of the effective date of this
        ---------------------------------
letter amendment but subject to satisfaction of the terms and conditions
specified herein, the Line of Credit Note is hereby amended as set forth below.

          (a) The first sentence of paragraph (a) under the caption "Interest"
in the Line of Credit Note is amended in full to read as follows:

     "The outstanding principal balance of this Note shall bear interest
     (computed on the basis of a 360-day year, actual days elapsed) at a
     rate per annum equal to the sum of the Prime Rate in effect from time
     to time plus (i) from and including October 1, 2001 to but excluding
     January 4, 2002, 1.0% per annum and (ii) from and including January 4,
     2002 to but excluding the maturity date of this Note, 2.0% per annum."

          (b) The last sentence of paragraph (a) under the caption "Borrowing
and Repayment" in the Line of Credit Note is amended by deleting the date
"January 4, 2002" and substituting the date "February 1, 2002."

     3. Waiver of Events of Default under Credit Agreement. As of the effective
        --------------------------------------------------
date of this letter amendment but subject to satisfaction of the terms and
conditions specified herein, the Bank hereby waives (a) the Events of Default
caused by the Borrower's violation of covenants contained in paragraph V.3 of
the Credit Agreement with respect to documents required to be delivered to Bank
thereunder on or before November 30, 2001 and (b) the Event of Default expected
to be caused by the Borrower's violation of its covenant contained in paragraph
V.9(b) of the Credit Agreement with respect to the Borrower's fiscal quarter
ending on December 31, 2001.

     4. Representations and Warranties. The Borrower hereby represents and
        ------------------------------
warrants for the benefit of the Bank that (a) the representations and warranties
of the Borrower contained in the Loan Documents are correct in all material
respects on and as of the effective date of this letter amendment, before and
after giving effect to the same, as if made on and as of such date, and (b) no
event has occurred and is continuing, or would result from the effectiveness of
this letter amendment, that constitutes an Event of Default.

     5. Condition Precedent. This letter amendment shall become effective on
        -------------------
January 4, 2002, subject to the conditions subsequent set forth in paragraph 6
below, when and if, on



Staar Surgical Company
December 20, 2001
Page 5

or before December 31, 2001, the Borrower and the Bank execute counterparts of
this letter amendment and deliver them to each other.

     6. Conditions Subsequent. The Borrower's delivery to the Bank of the
        ---------------------
documents specified below (and the Borrower's taking of the action specified
below), in form and substance satisfactory to the Bank and, in the case of
documents, in the number of originals requested by the Bank, by the respective
dates specified below shall be conditions subsequent to the effectiveness of
this letter amendment:

          (a) not later than January 11, 2002, copies of all agreements
documenting the credit facility made available by UBS AG to Staar Surgical AG, a
Swiss corporation, including, to the extent applicable, each credit agreement,
promissory note, security agreement, guaranty and other document evidencing,
securing or assuring repayment of such credit facility (including any and all
amendments, restatements or other modifications to such documents, instruments
and agreements);

          (b) not later than January 25, 2002, new financial projections of the
Borrower, including a balance sheet, income statement and cash-flow statement
(with all assumptions stated therein) as of the end of each quarter in 2002,
such projections to be certified by an officer of the Borrower, and in a manner,
acceptable to the Bank; and

          (c) promptly upon request by the Bank, such security agreements with
respect to patents, trademarks and copyrights, and such other documents to
perfect the security interests granted thereby, as the Bank may request, in each
case duly executed by the Borrower, together with such other action by the
Borrower as the Bank may request.

     7. Release of Claims. The Borrower represents and warrants to the Bank that
        -----------------
it has diligently and thoroughly investigated the existence of any Claim (as
defined below) and that, to its knowledge and belief, no Claim exists and no
facts exist that could give rise to or support a Claim. As additional
consideration for the Bank's entering into this letter amendment, the Borrower
and each of its agents, employees, directors, officers, attorneys; affiliates,
subsidiaries, successors and assigns (each a "Releasing Party") hereby release
                                              ---------------
and forever discharge the Bank and each of its agents, direct and indirect
shareholders, employees, directors, officers, attorneys, branches, affiliates,
subsidiaries, successors and assigns (each a "Released Party") from any and all
                                              --------------
damages, losses, claims, demands, liabilities, obligations, actions and causes
of action whatsoever (collectively "Claims") that the Releasing Parties or any
                                    -----
of them may, as of the effective date of this letter amendment, have or claim to
have against any or all of the Released Parties, in each case whether currently
known or unknown or with respect to which the facts are known (or should have
been known), that could give rise to or support a Claim on account of or in any
way relating to, arising out of or based upon any



Staar Surgical
Company December 20, 2001
Page 6

Loan Document, any amendment, waiver or other modification with respect thereto,
the negotiation or documentation hereof or thereof, any of the transactions
contemplated hereby or thereby, or any action or omission in connection with any
of the foregoing, including all such damages, losses, claims, demands,
liabilities, obligations, actions and causes of action heretofore sustained or
that may arise as a consequence of the dealings between the parties up to the
effective date of this letter amendment in connection with or in any way related
to any Loan Document or any amendment, waiver or other modification with respect
thereto. Each Releasing Party further represents and warrants that it has not
heretofore assigned, and covenants and agrees that it will not hereafter sue any
Released Party upon, any Claim released or purported to be released under this
section. Each Releasing Party will indemnify and hold harmless the Released
Parties against any loss or liability on account of any actions brought by any
Releasing Party or its assigns or prosecuted on behalf of any Releasing Party
and relating to any Claim released or purported to be released under this
section. It is further understood and agreed that any and all rights under the
provisions of Section 1542 of the California Civil Code are expressly waived by
each of the Releasing Parties. Section 1542 of the California Civil Code
provides as follows:

     "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
     NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
     RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
     SETTLEMENT WITH THE DEBTOR."

     8. Reference to and Effect on Loan Documents. On and after the effective
        -----------------------------------------
date of this letter amendment, (a) each reference in the Credit Agreement to
"this letter," "hereunder," "hereof," "herein" or words of like import referring
to the Credit Agreement, and each reference in the other Loan Documents to "the
Agreement," "thereunder," "thereof," "therein" or words of like import referring
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended by this letter amendment, and (b) each reference in the Line of
Credit Note to "this Note," "hereunder," "hereof," "herein" or words of like
import referring to the Line of Credit Note, and each reference in the other
Loan Documents to "the Line of Credit Note," "thereunder," "thereof," "therein"
or words of like import referring to the Line of Credit Note, shall mean and be
a reference to the Line of Credit Note as amended by this letter amendment. The
Credit Agreement and the Line of Credit Note, as amended by this letter
amendment, are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.

     9. Execution in Counterparts. This letter amendment may be executed in any
        -------------------------
number of counterparts and by the parties hereto in separate counterparts, each
of which



Staar Surgical Company
December 20, 2001
Page 7

counterparts shall be an original and all of which taken together shall
constitute one and the same letter amendment.

     10. GOVERNING LAW. THIS LETTER AMENDMENT SHALL BE GOVERNED BY, AND
         -------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REFERENCE TO THE CHOICE-OF-LAW PRINCIPLES THEREOF.

                                    Very truly yours,

                                    WELLS FARGO BANK,
                                    NATIONAL ASSOCIATION


                                    By:/S/ EDITH R. LIM
                                       -----------------------
                                    Name:EDITH R. LIM
                                    Title:Vice President


Agreed as of the date first written above:

STAAR SURGICAL COMPANY


By: /s/ John S Santos
    -------------------------
Name: John S Santos
Title: VP CFO

EX-10.77

                             [LOGO] WELLS FARGO BANK

Edith R Lim, Vice President-Principal                      333 So Grand Avenue
Wells Fargo Bank, N A                                      9th Floor
213-253-8859(phone)/5913(fax)                              MAC E2084-098
e-mail elim@wellsfargo.com                                 Los Angeles, CA 90071

January 25, 2002

Staar Surgical Company
1911 Walker Avenue
Monrovia, California 91016

Attention:          John Bily
                    Chief Financial Officer

     Re: Extension of Maturity Date of the Line of Credit

Ladies and Gentlemen.

     We refer to (a) the Letter Agreement dated as of October 31, 2000, as
amended by the Letter Amendment dated December 22, 2000, the Letter Amendment
dated April 1, 2001, the two Letter Amendments dated July 1, 2001, the Fifth
Amendment to Credit Agreement dated October 1, 2001 and the Sixth Amendment to
Credit Agreement dated December 20, 2001 (said Letter Agreement, as so amended,
herein called the "Credit Agreement"), between Staar Surgical Company, a
                   ----------------
Delaware corporation (the "Borrower"), and Wells Fargo Bank, National
                           --------
Association, a national banking association (the "Bank"), and (b) the Revolving
                                                  ----
Line of Credit Note dated October 31, 2000, as amended by the Letter Amendment
dated April 1, 2001 referred to above, one of the Letter Amendments dated July
1, 2001 referred to above; the Fifth Amendment to Credit Agreement referred to
above and the Sixth Amendment to Credit Agreement referred to above (said
Note, as so amended, herein called the "Line of Credit Note"), in the amount of
                                        -------------------
$7,000,000 made by the Borrower in favor of the Bank. Terms defined in the
Credit Agreement or the Line of Credit Note and not otherwise defined herein
have the same respective meanings when used herein.

     The Borrower has requested that the maturity date of the Line of Credit be
extended from February 1, 2002 to March 29, 2002. The Bank will agree to the
Borrower's request subject to the following conditions:

     (1) By no later than February 28, 2002, the Borrower shall pledge to the
Bank the maximum amount permitted by applicable law of the capital stock of
Staar Surgical AG as additional collateral to secure the Borrower's obligations
to Bank under the Credit Agreement.

     (2) The Borrower shall pledge to the Bank all of the capital stock of
Circuit Tree Medical if Circuit Tree Medical is a subsidiary of the Borrower.

     (3) From and after the date of this letter, the Borrower shall not have the
right to request standby letters of credit from the Bank pursuant to Paragraph
1.1.(b) of the Credit Agreement.

                                       1



     (4) The Borrower will pay to Bank a commitment fee from and including
February 1, 2002 to but excluding the maturity date of the Line of Credit, at
the rate of 0.75% per annum (computed on the basis of a 360-day year and actual
                  --- -----
days elapsed) on the average daily unused portion of the Line of Credit, payable
monthly in arrears on the first business day of each calendar month and with the
last payment on the maturity date of the Line of Credit (i.e., March 29, 2002).
                                                         ----

     (5) From and including February 1, 2002 to but excluding the maturity date
of the Line of Credit Note, the outstanding principal balance of the Line of
Credit Note shall accrue interest (computed on the basis of a 360-day year,
actual days elapsed) at a rate per annum equal to the sum of the Prime Rate in
effect from time to time plus 3.0% per annum.

     (6)  The Borrower shall execute a release of claims in favor of the Bank.

     (7)  The foregoing terms are subject to final documentation in form and
          substance satisfactory to the Bank in its sole and absolute discretion
          and such documentation shall contain all other terms and conditions
          that the Bank deems appropriate. On the day of closing of such
          documentation, the Borrower shall pay to the Bank all accrued and
          unpaid attorneys' fees and costs incurred by the Bank in connection
          herewith. Except to the extent modified herein or pursuant to the
          terms of the final documentation, the existing provisions of the
          Credit Agreement and the other Loan Documents shall remain in full
          force and effect.

     (8)  The Borrower shall cooperate with the Bank in executing any other
          documents necessary to perfect or to continue the Bank's existing
          security interest in the collateral of the Borrower

     The Bank's willingness to extend the maturity date of the Line of Credit to
March 29, 2002 shall be further conditioned upon the Borrower's delivery of a
signed counterpart of this letter to the Bank by no later than January 31, 2002.

                                                         Very truly yours,

                                                         WELLS FARGO BANK
                                                         NATIONAL ASSOCIATION


                                                         By: /s/ EDITH.R.LIM
                                                             -----------------
                                                         Name: EDITH.R.LIM
                                                         Title: Vice President

Agreed as of the date first written above:

STAAR SURGICAL COMPANY


By: /s/ John Bily
    ----------------------------
Name:   John Bily
Title:  Chief Financial Officer

                                       2

EX-21

EXHIBIT 21

LIST OF SIGNIFICANT SUBSIDIARIES

Name of Significant Subsidiary	State or Other Jurisdiction of Incorporation or Organization of each such Significant Subsidiary, and Names (if any) under which Each such Significant Subsidiary does Business
STAAR Surgical AG	Switzerland

1