Exhibit 10.1

MANAGEMENT CONTINUITY AGREEMENT

This Management Continuity Agreement (the “Agreement”) is made and entered into
effect as of March 31, 2004 by and between (the “Employee”) and Laserscope, a
California corporation (the “Company”).

RECITALS

  A.   It is expected that another company or other entity may from time to time
consider the possibility of acquiring the Company or that a change in control
may otherwise occur, with or without the approval of the Company’s Board of
Directors (the “Board”). The Board recognizes that such consideration can be a
distraction to the Employee and can cause the Employee to consider alternative
employment opportunities. The Board has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will
have the continued dedication and objectivity of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company.     B.   The Board believes that it is in the best interest of
the Company and its shareholders to provide the Employee with an incentive to
continue his or her employment with the Company.     C.   The Board believes
that it is imperative to provide the Employee with certain benefits upon a
Change of Control and, under certain circumstances, upon termination of the
Employee’s employment in connection with a Change of Control, which benefits are
intended to provide the Employee with financial security and provide sufficient
income and encouragement to the Employee to remain with the Company
notwithstanding the possibility of a Change of Control.     D.   To accomplish
the foregoing objectives, the Board of Directors has directed the Company, upon
execution of this Agreement by the Employee, to agree to the terms provided in
this Agreement.     E.   Certain capitalized terms used in the Agreement are
defined in Section 4 below.         In consideration of the mutual covenants
herein contained, and in consideration of the continuing employment of Employee
by the Company, the parties agree as follows:

  1.   At-Will Employment: The Company and the employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined under
applicable law. If the Employee’s employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company’s established employee plans and
written policies at the time of termination. The terms of this Agreement shall
terminate upon the earlier of (I) the date that all obligations of the parties
hereunder have been satisfied, (ii) two years after the new effective date, or
(iii) twenty-four (24) months after a Change of Control.

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      A termination of the terms of this Agreement pursuant to the preceding
sentence shall be effective for all purposes, except that such termination shall
not affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.

  2.   Change of Control/Stock Options. Immediately upon the effective date of
the Change of Control, each stock option granted for the Company’s securities
held by the Employee shall become immediately vested and shall be exercisable in
full in accordance with the provisions of the option agreement and plan pursuant
to which such option was granted.

  3.   Severance Benefits

  (a)   Termination Following A Change of Control. Subject to Section 5 below,
if the Employee’s employment with the Company is terminated at any time within
24 months after a Change of Control, then the Employee shall be entitled to
receive severance benefits as follows:

  (i)   Voluntary Resignation. If the Employee voluntarily resigns from the
Company (other than as an Involuntary Termination (as defined below) or if the
Company terminates the Employee’s employment for Cause (as defined below), then
the Employee shall not be entitled to receive severance payments. The Employee’s
benefits will be terminated under the Company’s then existing benefit plans and
policies in accordance with such plans and policies in effect on the date of
termination.     (ii)   Involuntary Termination. If the Employee’s employment is
terminated within 12 months of the Change of Control as a result of Involuntary
Termination other than for Cause, the Employee shall be entitled to receive
18 months {2.99 years for the CEO} severance payments (the “Severance Period”)
from the date of the Employee’s termination. If the Employee’s employment is
terminated after 12 months but within 24 months after the Change of Control, the
Employee shall be entitled to receive 9 months {12 months for the CEO} severance
payments (the “Severance Period”) from the date of the Employee’s termination.
The Employee’s severance payments shall be equal to the salary which the
Employee was receiving immediately prior to the Change of Control plus a 25%
bonus for Executive Committee members and 45% for the CEO shall be paid during
the Severance Period in accordance with the Company’s standard payroll practices
or, at the Employee’s election, shall be paid to the Employee in lump sum within
ten (10) days of the Employee’s termination date. Such election shall not affect
the length of the Severance Period nor the provision of benefits within the
Severance Period. In addition, during the Severance Period, the Employee shall
be provided with benefits substantially identical to those to which the Employee
was entitled immediately prior to the Change of Control.

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            (iii)   Involuntary Termination for Cause. If the Employee’s
employment is terminated for Cause, then the Employee shall not be entitled to
receive severance payments. The Employee’s benefits will be terminated under the
Company’s then existing benefits plans and policies in effect on the date of
termination.

  (b)   Termination Apart from Change of Control. In the event the Employee’s
employment terminates for any reason prior to the Change of Control, then the
Employee shall not be entitled to receive any severance payments under this
Agreement. The Employee’s benefits will be terminated under the Company’s then
existing benefit plans and policies in accordance with such plans and policies
in effect on the date of termination.

  4.   Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:

  (a)   Change of Control. “Change of Control” shall mean the occurrence of any
of the following events:

  (i)   Ownership. Any “person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the total voting power represented by the Company’s then outstanding
voting securities without the approval of the Board of Directors of the Company;
or     (ii)   Merger/Sale of Assets. A merger or consolidation of the Company
whether or not approved by the Board of Directors of the Company, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets.     (iii)   Change in Board Composition. A change in
the composition of the Board of Directors of the Company, as a result of which
fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (A) are directors of the Company as
of April 1 2004, or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

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  (b)   Cause. “Cause” shall mean (I) material breach of any material terms of
this Agreement, (ii) conviction of a felony, (iii) fraud, (iv) repeated
unexplained or unjustified absence, (v) willful breach of fiduciary duty under
applicable laws, this Agreement or Company policies first in effect prior to the
occurrence of a Change in Control or (vi) gross negligence or willful misconduct
where such gross negligence or willful misconduct has resulted or is likely to
result in substantial and material damage to the Company or its subsidiaries.  
  (c)   Involuntary Termination. “Involuntary Termination” will include the
Employee’s voluntary termination, upon 30 days prior written notice to the
Company, following (I) a material reduction in job responsibilities inconsistent
with the Employee’s position with the Company and the Employee’s prior
responsibilities, i.e., parent company versus subsidiary level or type
responsibility, or (ii) relocation to a facility or location more than 50 miles
from the Company’s current location, or (iii) reduction in salary.

  5.   Limitation on Payments. To the extent that any of the payments or
benefits provided for in this Agreement or otherwise payable to the Employee
constitute “parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and, but for this
Section 5, would be subject to the excise tax imposed by Section 4999 of the
code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times the Employee’s “base amount”
as defined in Section 280G (b)(3) of the Code.     6.   Successors. Any
successor to the Company (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation, or otherwise) to all or substantially
all of the Company’s business and/or assets shall assume the obligations under
this Agreement and agree expressly to perform the obligations under this
Agreement n the same manner and to the same extent as the company would be
required to perform such obligations in the absence of a succession. The terms
of this Agreement and all of the Employee’s rights hereunder shall insure to the
benefit of, and be enforceable by, the Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.     7.   Notice. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. Mailed notices to
the Employee shall be addressed to the Employee at the home address which the
Employee most recently communicated to the Company in writing. In the case of
the Company, mailed notices shall be addressed to its corporate headquarters,
and all notices shall be directed to the attention of its Secretary.     8.  
Miscellaneous Provisions.

  (a)   No Duty to Mitigate. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor, except as otherwise provided in this
Agreement, shall any such payment be reduced by any earnings that the Employee
may receive from any other source.

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            (b)   Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver, or discharge is agreed to
in writing and signed bye the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.     (c)   Whole Agreement. No
agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof. This Agreement supersedes any agreement of the same title and
concerning similar subject matter dated prior to the date of this Agreement, and
by execution of this Agreement both parties agree that any such predecessor
agreement shall be deemed null and void.     (d)   Choice of Law. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without reference to conflict of law
provisions.     (e)   Severability. If any term or provision of this Agreement
or the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions to circumstances other than those as to which it is held
invalid or unenforceable, and a suitable and equitable term or provision shall
be substituted therefore to carry out, insofar as may be valid and enforceable,
the intent and purpose of the invalid or unenforceable term or provision.    
(f)   Arbitration. Any dispute or controversy arising under or in connection
with this Agreement may be settled at the option of either party by binding
arbitration in the County of Santa Clara, California, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in a court having jurisdiction. Punitive
damages shall not be awarded.     (g)   Legal Fees and Expenses. The parties
shall each bear their own expenses, legal fees and other fees incurred in
connection with this Agreement.     (h)   No Assignment of Benefits. The rights
of any person to payments or benefits under this Agreement shall not be made
subject to option or assignment, either by voluntary or involuntary assignment
or by operation of law, including (without limitation) bankruptcy, garnishment,
attachment or other creditor’s process, and any action in violation of this
subsection (h) shall be void.     (i)   Employment Taxes. All payments made
pursuant to this Agreement will be subject to withholding of applicable income
and employment taxes.

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  (j)   Assignment by Company. The Company may assign its rights under this
Agreement to an affiliate, and an affiliate may assign its rights under this
Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of the assignment. In the
case of any such assignment, the term “Company” when used in a section of this
Agreement shall mean the corporation that actually employs the Employee.     (k)
  Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.

LASERSCOPE

                     
By:
          By:        

 

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  (Title)           (Employee)    

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