Exhibit 10.1 
FORM OF MANAGEMENT CONTINUITY AGREEMENT
     This Management Continuity Agreement (the “Agreement”) is made and entered
into effect as of December 21, 2005, 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 effective date, or
(iii) twenty-four (24) months after a Change of Control. 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.

 

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  2.   Change of Control/Stock Options and other deferred compensation.
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. In addition, Employee’s interest in any other current or future Company
deferred compensation or equity incentive plans, whether securities, cash or
other instrument, shall become immediately and fully vested in accordance with
any such plan.     3.   Severance Benefits

  (a)   Termination Following A Change of Control. Subject to Sections 5 and 6
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 [24 months for CFO and General Counsel] [2.99 years for CEO] of base
pay as 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 12 months [2.99 years for CEO] of base pay as 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 bonus
equal to 40% of base pay for Executive Committee members and 50% of base pay 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. Election for payment method will be made at least five
business days before the termination, otherwise payment will be made as lump sum
as described in the preceding sentence. Such election shall not affect the
length of the Severance Period nor the provision of health insurance benefits
within the Severance Period. In addition, during the Severance Period, the
Employee shall be provided with health

 

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      insurance benefits substantially identical to those to which the Employee
was entitled immediately prior to the Change of Control.     (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 a 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 December 21, 2005, 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.   Reformation. It is the
parties’ intent that no payment made or to be made hereunder shall be subject to
the provisions of Code Section 409A(a)(1)(B). Accordingly, notwithstanding any
payment date or schedule specified above, the parties agree to work
expeditiously to amend this Agreement to conform to their intent as set forth in
this Section 6.     7.   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 in 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 inure to the benefit of, and be enforceable
by, the Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.     8.   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

 

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      headquarters, and all notices shall be directed to the attention of its
Secretary.     9.   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.     (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.

 

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  (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.     (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.
    (l)   Further amendments. To the extent that any of the payments or benefits
provided for in this Agreement or otherwise payable to the Employee, or the
structure or contents of this Agreement would cause the imposition of penalties
and additional taxes under Section 409A of the Internal Revenue Code, and any
regulations (proposed or final) issued thereunder, the Company shall amend this
Agreement to achieve the intended benefits for the Employee to the maximum
extent possible.

     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:        
 
                     
 
  (Title)           (Employee)