American Medical Systems Holdings, Inc.
Non-employee Director Compensation Summary
In July 2006, the Board of Directors of American Medical Systems Holdings, Inc.
approved the following revised compensation schedule for independent directors:
Annual Retainer
We pay our independent directors an annual retainer for serving on the Board and
Committees as follows:

         
Board member
  $ 40,000  
Audit Committee chair
  $ 20,000  
Audit Committee member
  $ 10,000  
Compensation Committee chair
  $ 10,000  
Compensation Committee member
  $ 5,000  
Nominating/Corporate Governance Committee chair
  $ 7,500  
Nominating/Corporate Governance Committee member
  $ 2,500  

Stock Options
Our current compensation program also provides for the grant of stock options to
our independent directors. In 2006, we granted each of our independent directors
options to purchase 20,000 shares of our common stock. For future fiscal years,
each independent director who is reelected as a director at the annual meeting
of stockholders or continues to serve as a director after such meeting will be
granted an option to purchase a number of shares of our common stock, as
determined by the Board each year prior to the annual meeting for such year. The
Board anticipates that value (based on customary valuation methods) of future
option grants will be approximately equal to the value of the options to
purchase a total of 20,000 shares granted to independent directors in 2006. The
options have an exercise price equal to the fair market value of the shares on
the date of grant. The options vest over a three-year period from the date of
grant, as long as the non-employee director continues to serve on the board, and
become immediately exercisable in full upon a change in control. The options
expire seven years from the date of grant.
Expenses
In addition, we reimburse our non-employee directors for reasonable travel,
food, lodging and other incidental expenses incurred in connection with
attending meetings of the Board or Committees.