Exhibit 10.3
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
2008 EXECUTIVE OFFICER COMPENSATION SUMMARY
2008 Base Salary and Option Grants. For fiscal 2008, the company’s principal
executive officer, principal financial officer and the other two executive
officers named below will receive the base salary set forth below (effective as
of February 1, 2008), and they have been granted an option to purchase the
number of shares of company common stock set forth below. All options were
granted under the company’s 2005 Stock Incentive Plan at an exercise price of
$14.355 (equal to the average of the high and low sales price of a share of
common stock on the grant date) and, except as provided below in footnote one,
twenty-five percent of the shares vest on March 31, 2009 and then 6.25% of the
shares vest on the last day of each calendar quarter thereafter. All the options
all have a term of seven years.

                              Base     Name   Title   Salary   Options Ross A.
Longhini(1)  
Executive Vice President and Chief Operating Officer
  $ 325,000       100,000      
 
                Mark A. Heggestad  
Executive Vice President and Chief Financial Officer
  $ 280,000       40,000      
 
                Stephen J. McGill(2)  
Senior Vice President, Global Sales
  $ 263,000       —      
 
                John F. Nealon  
Senior Vice President, Business Development
  $ 250,000       25,000  

 

(1)   Mr. Longhini was appointed chief executive officer in January 2008 and
served on an interim basis through April 29, 2008. Anthony P. Bihl, III was
appointed chief executive officer effective April 30, 2008. In recognition of
Mr. Longhini’s interim service as chief executive officer, the grant of stock
options to Mr. Longhini consists of options to purchase 50,000 shares that vest
over the standard four year period described above and options to purchase
50,000 shares that vest in full on March 31, 2009.   (2)   Mr. McGill’s last day
employment was April 30, 2008.

2008 Executive Variable Incentive Plan. Our executive officers participate in
our 2008 Executive Variable Incentive Plan. The Compensation Committee
established and the board ratified a target bonus for each participant in the
plan. The plan provides for payment of a bonus based on achievement of net
sales, net income and cash flow objectives in the 2008 operating plan approved
by the Board. The total bonus is weighted 40 percent for achieving the net sales
objective, 30 percent for achieving the net income objective and 30 percent for
achieving the cash flow objective. The bonus payable under the plan is pro-rated
for achievement above the minimum threshold and increases with percentage
achievement relative to the objectives, and 100% of the target bonus will be
paid at 100% achievement of the plan objectives. The maximum bonus payable under
the plan will be 200% of the target bonus at 110% achievement of the net sales
and net income objectives and 115% achievement of the cash flow objective. The
plan provides for payment only if net sales and net income are more than 90% of
the corresponding objective, and bonuses for achieving these objectives will be
determined and paid quarterly. The plan provides for payment if cash flow is
more than 85% of the cash flow objective, and bonuses for achieving this
objective will be determined and paid annually. The target bonus for 2008 for
the company’s principal executive officer, principal financial officer and the
two other executive officers is set forth in the table below. As noted above,
Mr. McGill’s last day employment was April 30, 2008, and he participated in the
plan only for the first quarter of 2008.

              Name   Title   Target Bonus Ross A. Longhini  
Executive Vice President and Chief Operating Officer
  $ 227,500      
 
        Mark A. Heggestad  
Executive Vice President and Chief Financial Officer
  $ 140,000      
 
        Stephen J. McGill  
Senior Vice President, Global Sales
  $ 20,711      
 
        John F. Nealon  
Senior Vice President, Business Development
  $ 112,500