Exhibit 10.14

AMERICAN MEDICAL SYSTEMS, INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
For 2003

I. PURPOSE

American Medical Systems, Inc. (AMS) is dedicated to excellence in performance
and in creating a strong link between performance and compensation. This plan is
designed to reward designated management team members of AMS with
performance-based compensation for achieving and surpassing specified company
goals. These goals will reinforce contributing elements to the growth and
financial viability of AMS. The plan is designed to reward overall results,
requiring a high level of individual contribution and cross-functional
effectiveness across the senior levels of company management.

II. BONUS POTENTIAL

The participant is eligible to receive a percent of his/her base salary based on
the schedules set forth in Attachments I and II. New entrants to the Plan may
have their total compensation base/bonus mix reconfigured to position them for
their bonus schedule.

III. PERFORMANCE MEASURES – COMPANY RESULTS

Performance measures may vary somewhat from year to year; however, they will
typically be established to achieve the end goal of increased global sales and
profitability. Company results will receive the highest weight versus individual
performance.

Performance measures will be as objective as possible and include specific time
frames and numerical measures.

Company results measures will generally be consistent for plan participants in
any given year to ensure common goals, alignment and interdependence among
senior-level managers and the organization.

Sales results will be based on global shipped sales for the year per the
forecast unless otherwise noted for the individual. Company profitability will
be based on Operating Income as a percent of sales.

Attachment I indicates the current weighting by position.

 

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IV. PARTICIPATION

Participants in this Plan effective January 1, 2003 will be the Vice Presidents,
Directors, and selected individuals of the company. Any additional participants
will require the approval of the President and CEO, based on responsibility in
the company and degree of influence on company performance.

New hires after the first of the year may be able to participate for 2003 on a
pro-rated basis, particularly if the start date is before 10/1/03. If employment
of a participant is terminated due to his/her performance or the individual
voluntarily leaves the Company, the incentive award is forfeited for that Plan
year.

V. APPROVAL, AUTHORIZATION, AND TERMS

The Management Incentive Plan, its terms, policies, revisions and measures are
under the full approval of the President and CEO and the Board of Directors. Any
modifications or adjustments to the Plan and performance measures or
consideration of unusual transactions must be approved by the Board of
Directors.

Participation in the Plan is not an employment contract or any implied assurance
of continued employment.

VI. BONUS PAYMENT

Bonus payment will be issued as soon as feasible after the close of the years’
financial statements (first quarter following the Plan year). Payment will be in
lump sum unless the Board makes a different election.

Financial results will be adjusted for consideration of both positive and
negative foreign currency exchange.

If an individual’s base salary changes during the year, the award may be
prorated based on the number of months in each position.

 

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Attachment 1

Management Incentive Compensation Plan 2003
Senior Management

          Participants

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  Performance Measures (all worldwide unless noted)

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100%
  President & CEO  
•
  70% Sales    
•
  30% Operating Income           Operating Team  
100%
  (EVP Sales & Marketing,  
•
  70% Sales EVP & CFO, EVP & CTO,  
•
  30% Operating Income VP RMAQS, VP HR)           VP & GM, CryoGen  
100%
     
•
  35% CryoGen Sales    
•
  35% Worldwide Sales    
•
  30% Worldwide Operating Income           VP Global Marketing  
100%
     
•
  60% Sales    
•
  20% Sales & Marketing Operating Income    
•
  20% Functional Leadership Objectives           VP US Sales  
100%
     
•
  70% US Sales    
•
  20% US Sales & Marketing Operating Income    
•
  10% Functional Leadership Objectives

 

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Management Incentive Compensation Plan 2003
Directors

          Participants

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  Performance Measures (all world wide unless noted)

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Managing Director, Europe;
  100%    
Director of Marketing, Europe
  •   45% Europe Sales
 
  •   45% Europe Operating Income
 
  •   10% Functional Leadership Objectives
 
       
Director, Int’l. Distributor Sales
  100%    
 
  •   45% Australia, Canada & Distributor Sales
 
  •   45% Operating Income for above
 
  •   10% Functional Leadership Objectives
 
       
Marketing Directors
  100%    
 
  •   50% Product Line Results for Business (60% sales, 40% expense)
 
  •   15% Functional Leadership
 
  •   35% Project Team Support
 
       
R & D Directors
  100%    
 
  •   50% Company Financials (70% sales, 30% operating income)
 
  •   20-30% Functional Leadership
 
  •   20-30% Project Team Support
 
       
Directors (All Other)
  100%    
 
  •   50% Company Financials (60% sales, 40% operating income)
 
  •   30% Functional Leadership
 
  •   20% Project Team Support

 

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MANAGEMENT INCENTIVE PLAN
SCHEDULE — 2003
(Expressed as % of Base Salary)

Plan Achievement

                                                                             
Below 95%

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  95%

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  100%

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  105%

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  110%

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  120%

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  130%

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  140%

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  150+%

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President
                                                                       
% of Base
    0 %     20 %     50 %     55 %     60 %   70% max.     —       —       —  
Exec. VP
                                                                       
% of Base
    0 %     15 %     35 %     40 %     45 %     50 %     55 %     60 %     65 %
VP’s
                                                                       
% of Base
    0 %     15 %     30 %     35 %     40 %     45 %     50 %     55 %     60 %
Directors
                                                                        % of
Base
Tier 1     0 %     15 %     25 %     30 %     35 %     40 %     45 %     50 %  
  55 %
Directors
                                                                        % of
Base
Tier 2     0 %     10 %     20 %     25 %     30 %     35 %     40 %     45 %  
  50 %