<PAGE>

                                                                   Exhibit 10.18

                                      LASERSCOPE
                          1995 DIRECTORS' STOCK OPTION PLAN

    1.   PURPOSES OF THE PLAN.  The purposes of this Directors' Stock Option
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.

         All options granted hereunder shall be "nonstatutory stock options".

    2.   DEFINITIONS.  As used herein, the following definitions shall apply:

             (a)  "BOARD" shall mean the Board of Directors of the Company.

             (b)  "CODE" shall mean the Internal Revenue Code of 1986, as 
amended.

             (c)  "COMMON STOCK"  shall mean the Common Stock of the Company.

             (d)  "COMPANY"  shall mean Laserscope, a California corporation.

             (e)  "CONTINUOUS STATUS AS A DIRECTOR" shall mean the absence of 
any interruption or termination of service as a Director.

             (f)  "DIRECTOR" shall mean a member of the Board.

             (g)  "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company. 
The payment of a director's fee by the Company to a Director shall not be
sufficient in and of itself to constitute "employment" by the Company.

             (h)  "EXCHANGE ACT" shall mean the Securities Exchange Act of 
1934, as amended.

             (i)  "OPTION"  shall mean a stock option granted pursuant to the 
Plan. All options shall be nonstatutory stock options (i.e., options that are 
not intended to qualify as incentive stock options under Section 422 of the 
Code).

             (j)  "OPTIONED STOCK"  shall mean the Common Stock subject to an 
Option.

             (k)  "OPTIONEE"  shall mean an Outside Director who receives an 
Option.

             (l)  "OUTSIDE DIRECTOR" shall mean a Director who is not an 
Employee.

             (m)  "PARENT"  shall mean a "parent corporation", whether now or 
hereafter existing, as defined in Section 424(e) of the Code.

             (n)  "PLAN"  shall mean this 1995 Directors' Stock Option Plan.

                                         -13-

<PAGE>

             (o)  "SHARE"  shall mean a share of the Common Stock, as 
adjusted in accordance with Section 11 of the Plan.

             (p)  "SUBSIDIARY"  shall mean a "subsidiary corporation", 
whether now or hereafter existing, as defined in Section 424(f) of the Code.

    3. STOCK SUBJECT TO THE PLAN.  Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 300,000 Shares (the "Pool") of Common Stock.  The Shares may
be authorized, but unissued, or reacquired Common Stock.

             If an Option should expire or become unexercisable for any 
reason without having been exercised in full, the unpurchased Shares which 
were subject thereto shall, unless the Plan shall have been terminated, 
become available for future grant under the Plan. If Shares which were 
acquired upon exercise of an Option are subsequently repurchased by the 
Company, such Shares shall not in any event be returned to the Plan and shall 
not become available for future grant under the Plan.

    4. ADMINISTRATION OF AND GRANTS OF OPTIONS UNDER THE PLAN.

             (a)  ADMINISTRATOR.  Except as otherwise required herein, the 
Plan shall be administered by the Board.

             (b)  PROCEDURE FOR GRANTS.  All grants of Options hereunder 
shall be automatic and nondiscretionary and shall be made strictly in 
accordance with the following provisions:

                   (i)  No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors.

                   (ii) Each Outside Director shall be automatically granted an
Option to purchase Shares as follows:  (A) with respect to persons who are
Outside Directors on the effective date of this Plan, as determined in
accordance with Section 6 hereof, 45,000 Shares on such effective date, and (B)
with respect to any other person, 45,000 Shares on the date on which such person
first becomes an Outside Director, whether through election by the shareholders
of the Company or appointment by the Board of Directors to fill a vacancy.

                   (iii) Notwithstanding the provisions of subsection (ii)
hereof, in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon exercise
of Options to exceed the Pool, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of Shares remaining
available for grant by the number of Outside Directors receiving an Option on
such date on the automatic grant date.  Any further grants shall then be
deferred until such time, if any, as additional Shares become available for
grant under the Plan through action of the shareholders to increase the number
of Shares which may be issued under the Plan or through cancellation or
expiration of Options previously granted hereunder.

                                         -14-

<PAGE>

                   (iv) Notwithstanding the provisions of subsection (ii)
hereof, any grant of an Option made before the Company has obtained shareholder
approval of the Plan in accordance with Section 17 hereof shall be conditioned
upon obtaining such shareholder approval of the Plan in accordance with Section
17 hereof.

                   (vi) The terms of each Option granted hereunder shall be as
follows:

                        (1)  the Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

                        (2)  the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Option, determined in
accordance with Section 8 hereof.

                        (3)  the Option shall become exercisable in
installments cumulatively as to 1/36th of the Shares subject to the Option on
each monthly anniversary of the date of grant of the Option.

             (c)  POWERS OF THE BOARD. Subject to the provisions and 
restrictions of the Plan, the Board shall have the authority, in its 
discretion:  (i) to determine, upon review of relevant information and in 
accordance with Section 8(b) of the Plan, the fair market value of the Common 
Stock; (ii) to determine the exercise price per share of Options to be 
granted, which exercise price shall be determined in accordance with Section 
8(a) of the Plan; (iii) to interpret the Plan; (iv) to prescribe, amend and 
rescind rules and regulations relating to the Plan; (v) to authorize any 
person to execute on behalf of the Company any instrument required to 
effectuate the grant of an Option previously granted hereunder; and (vi) to 
make all other determinations deemed necessary or advisable for the 
administration of the Plan.

             (d)  EFFECT OF BOARD'S DECISION.  All decisions, determinations 
and interpretations of the Board shall be final and binding on all Optionees 
and any other holders of any Options granted under the Plan.

             (e)  SUSPENSION OR TERMINATION OF OPTION.  If the President or 
his or her designee reasonably believes that an Optionee has committed an act 
of misconduct, the President may suspend the Optionee's right to exercise any 
option pending a determination by the Board of Directors (excluding the 
Outside Director accused of such misconduct).  If the Board of Directors 
(excluding the Outside Director accused of such misconduct) determines an 
Optionee has committed an act of embezzlement, fraud, dishonesty, nonpayment 
of an obligation owed to the Company, breach of fiduciary duty or deliberate 
disregard of the Company rules resulting in loss, damage or injury to the 
Company, or if an Optionee makes an unauthorized disclosure of any Company 
trade secret or confidential information, engages in any conduct constituting 
unfair competition, induces any Company customer to breach a contract with 
the Company or induces any principal for whom the Company acts as agent to 
terminate such agency relationship, neither the Optionee nor his or her 
estate shall be entitled to exercise any option whatsoever. In making such 
determination, the Board of Directors (excluding the Outside Director accused 
of such

                                         -15-

<PAGE>

misconduct) shall act fairly and shall give the Optionee an opportunity to
appear and present evidence on Optionee's behalf at a hearing before the Board
or a committee of the Board.

    5.   ELIGIBILITY.  Options may be granted only to Outside Directors.  All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof.  An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.

              The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.

    6.   TERM OF PLAN; EFFECTIVE DATE.  The Plan shall become effective on the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company.  It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 13 of the Plan.

    7.   TERM OF OPTIONS.  The term of each Option shall be ten (10) years from
the date of grant thereof.

    8.   EXERCISE PRICE AND CONSIDERATION.

             (a)  EXERCISE PRICE.  The per Share exercise price for the 
Shares to be issued pursuant to exercise of an Option shall be 100% of the 
fair market value per Share on the date of grant of the Option.

             (b)  FAIR MARKET VALUE.  The fair market value shall be 
determined by the Board; provided, however, that where there is a public 
market for the Common Stock, the fair market value per Share shall be the 
mean of the bid and asked prices of the Common Stock in the over-the-counter 
market on the date of grant, as reported in The Wall Street Journal (or, if 
not so reported, as otherwise reported by the National Association of 
Securities Dealers Automated Quotation ("Nasdaq") System) or, in the event 
the Common Stock is traded on the Nasdaq National Market or listed on a stock 
exchange, the fair market value per Share shall be the closing price on such 
system or exchange on the date of grant of the Option, as reported in The 
Wall Street Journal.  

             (c)  FORM OF CONSIDERATION.  The consideration to be paid for 
the Shares to be issued upon exercise of an Option shall consist entirely of 
cash, check, other Shares of Common Stock having a fair market value on the 
date of surrender equal to the aggregate exercise price of the Shares as to 
which said Option shall be exercised (which, if acquired from the Company, 
shall have been held for at least six months), or any combination of such 
methods of payment and/or any other consideration or method of payment as 
shall be permitted under applicable corporate law.

    9.   EXERCISE OF OPTION.

                                         -16-

<PAGE>

         (a)  PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER.  Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable prior to
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.

              An Option may not be exercised for a fraction of a Share.

              An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company.  Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan.  Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option.  A share certificate for the number of Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.

              Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

         (b)  TERMINATION OF STATUS AS A DIRECTOR.  If an Outside Director
ceases to serve as a Director, he or she may, but only within three (3) months
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination.  Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired.  To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.

         (c)  DISABILITY OF OPTIONEE.  Notwithstanding Section 9(b) above, in
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Internal Revenue Code), he or she may, but only
within six (6) months from the date of such termination, exercise his or her
Option to the extent he or she was entitled to exercise it at the date of such
termination.  Notwithstanding the foregoing, in no event may the Option be
exercised after its term set forth in Section 7 has expired.  To the extent that
he or she was not entitled to exercise the Option at the date of termination, or
if he or she does not exercise such Option (which he or she was entitled to
exercise) within the time specified herein, the Option shall terminate.

         (d)  DEATH OF OPTIONEE.  In the event of the death of an Optionee
during the term of the Option who is, at the time of his or her death, a
Director of the Company and who shall have been in Continuous Status as a
Director since the date of grant of the Option, the Option may be

                                         -17-

<PAGE>

exercised, at any time within six (6) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Optionee was entitled to
exercise the Option at the date of death.  Notwithstanding the foregoing, in no
event may the Option be exercised after its term set forth in Section 7 has
expired.

    10.  NONTRANSFERABILITY OF OPTIONS.  The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder).  The
designation of a beneficiary by an Optionee does not constitute a transfer.  An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.

    11.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.

         (a)  ADJUSTMENT.  Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration." 
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.  Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.

         (b)  CORPORATE TRANSACTIONS.  In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Eligible Director, at the time of
adoption of the plan for liquidation, dissolution, sale, merger, consolidation
or reorganization, either a reasonable time thereafter within which to exercise
the Option, including Shares as to which the Option would not be otherwise
exercisable, prior to the effectiveness of such liquidation, dissolution, sale,
merger, consolidation or reorganization, at the end of which time the Option
shall terminate, or the right to exercise the Option, including Shares as to
which the Option would not be otherwise exercisable (or receive a substitute
option with comparable terms), as to an equivalent number of shares of stock of
the corporation succeeding the Company or acquiring

                                         -18-

<PAGE>

its business by reason of such liquidation, dissolution, sale, merger,
consolidation or reorganization.

    12.  TIME OF GRANTING OPTIONS.  The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof. 
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

    13.  AMENDMENT AND TERMINATION OF THE PLAN.

         (a)  AMENDMENT AND TERMINATION.  The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the shareholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation. 
Notwithstanding the foregoing, the provisions set forth in Section 4 of this
Plan (and any other Sections of this Plan that affect the formula award terms
required to be specified in this Plan by Rule 16b-3) shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.

         (b)  EFFECT OF AMENDMENT OR TERMINATION.  Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

         14.  CONDITIONS UPON ISSUANCE OF SHARES.  Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

    15.  RESERVATION OF SHARES.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

                                         -19-

<PAGE>

    16.  OPTION AGREEMENT.  Options shall be evidenced by written option
agreements in such form as the Board shall approve.

    17.  SHAREHOLDER APPROVAL.  Continuance of the Plan shall be subject to
approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting of an Option hereunder. 
If such shareholder approval is obtained at a duly held shareholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
thereon.  If such shareholder approval is obtained by written consent, it may be
obtained by the written consent of the holders of a majority of the outstanding
shares of the Company.  Options may be granted, but not exercised, before such
shareholder approval.

                                         -20-

<PAGE>

                                      LASERSCOPE
                          1995 DIRECTORS' STOCK OPTION PLAN
                     DIRECTOR NONSTATUTORY STOCK OPTION AGREEMENT

Optionee: [Optionee]

Address:  [Street Address]
          [City Address]

Total Shares Subject to Option:  45,000 Shares

Exercise Price Per Share: [Price Per Share]

Date of Grant: [Grant Date]

Expiration Date: [Expiration Date]

Type of Stock Option: Nonstatutory Stock Option

    1.   GRANT OF OPTION.  Laserscope (the "Company"), a California
corporation, hereby grants to the Optionee named above ("Optionee") an option
(the "Option") to purchase a total of up to Forty Five Thousand (45,000) shares
of Common Stock of the Company (the "Shares") at the exercise price per share
set forth above (the "Exercise Price"), subject to all of the terms and
conditions of this Director Nonstatutory Stock Option Agreement ("Agreement")
and the Company's 1995 Directors' Stock Option Plan (the "Plan").  The terms
defined in the Plan shall have the same defined meanings herein.

             A.   NATURE OF THE OPTION.  This Option is a nonstatutory stock 
option and is not intended to qualify for any special tax benefits to the 
Optionee.

             B.   EXERCISE PRICE.  The exercise price is PricePerShare for 
each share of Common Stock, which is 100% of the Fair Market Value of the 
Common Stock as determined on the date of grant of this Option.

    2.   EXERCISE PERIOD OF OPTION. Subject to the terms and conditions of the
Plan and this Grant, this Option shall become exercisable in installments
cumulatively as to 1/36 of the shares subject to the Option on each monthly
anniversary of the date of grant.

    3.   RESTRICTIONS ON EXERCISE. Exercise of this Option is subject to the
following limitations:

             A.   This Option may not be exercised unless such exercise is in 
compliance with the Securities Act of 1933, as amended, and all applicable 
state securities laws, as they are in effect on the date of exercise.

             B.   If, at the time of the exercise of this Option, the 
Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934, 
as amended (the "Exchange Act"), then the Optionee must comply with Rule 
16b-3 under the Exchange Act and such additional condi-

                                         -21-

<PAGE>

tions or restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan transactions.

    4.   TERMINATION OF STATUS AS A DIRECTOR. If an Outside Director ceases to
serve as a Director for any reason other than death or disability, he or she
may, but only within three (3) months after the date he or she ceases to be a
Director of the Company, exercise his or her Option to the extent that he or she
was entitled to exercise it at the date of such termination.  To the extent that
he or she was not entitled to exercise an Option at the date of such
termination, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.

    5.   DISABILITY OF DIRECTOR.  Notwithstanding Section 4 above, in the event
an Outside Director is unable to continue his or her service as a Director with
the Company as a result of total and permanent disability (as defined in Section
22(e)(3) of the Code), he or she may, but only within six (6) months from the
date of termination of such service (but in no event later than the date of
expiration of the term of this Option as set forth in the Notice of Stock Option
Grant), exercise the Option to the extent otherwise so entitled at the date of
such termination.  To the extent that he or she was not entitled to exercise the
Option at the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified in this
Agreement, the Option shall terminate.

    6.   DEATH OF DIRECTOR.  Notwithstanding Section 4 above, in the event of
the death an Outside Director while serving as a Director of the Company, the
Option may be exercised, at any time within six (6) months following the date of
death (but in no event later than the date of expiration of the term of this
Option as set forth in the Notice of Stock Option Grant), by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance to the extent the Optionee was entitled to exercise such Option on
the date of death.

    7.   MANNER OF EXERCISE.

             A.   This Option shall be exercisable by delivery to the Company 
of an executed written Director Stock Option Exercise Notice and Agreement in 
the form attached hereto as Exhibit A, or in such other form as may be 
approved by the Company, which shall set forth Optionee's election to 
exercise this Option, the number of Shares being purchased, any restrictions 
imposed on the Shares and such other representations and agreements regarding 
Optionee's investment intent and access to information as may be required by 
the Company to comply with applicable securities laws.

             B.   The Director Stock Option Exercise Notice and Agreement 
shall be accompanied by full payment of the Exercise Price for the Shares 
being purchased (i) in cash, (ii) by check, (iii) by delivery of other shares 
of Common Stock having a fair market value on the date of surrender equal to 
the aggregate exercise price of the Shares being purchased (which, if 
acquired from the Company, shall have been held for at least six months) or 
(iv) by any combination of the foregoing methods of payment.

                                         -22-

<PAGE>

             C.   Prior to the issuance of the Shares upon exercise of this 
Option, Optionee must pay or make adequate provision for any applicable 
federal or state withholding obligations of the Company.

             D.   Provided that such notice and payment are in form and 
substance satisfactory to counsel for the Company, the Company shall issue 
the Shares registered in the name of Optionee or Optionee's legal 
representative.

    8.   COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
Shares shall be subject to compliance by the Company and the Optionee with all
applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company's Common
Stock may be listed at the time of such issuance or transfer.  Optionee
understands that the Company is under no obligation to register or qualify the
Shares with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.

    9.   NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined by the Code or the
rules thereunder) and may be exercised during the lifetime of the Optionee only
by the Optionee or a transferee permitted by Section 10 of the Plan.  The terms
of this option shall be binding upon the executors, administrators, successors
and assigns of the Optionee.

    10.  FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT
HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.  THIS SUMMARY DOES NOT DISCUSS STATE OR LOCAL TAX CONSEQUENCES OF
EXERCISE OF THIS OPTION AND DISPOSITION OF THE SHARES.

             A.   TAXATION UPON EXERCISE OF OPTION. Optionee understands 
that, upon exercise of this Option, he or she will recognize income for tax 
purposes in an amount equal to the excess of the then fair market value of 
the Shares purchased over the exercise price paid for such Shares.  Since the 
Optionee is likely to be subject to Section 16(b) of the Securities Exchange 
Act of 1934, as amended, the measurement and timing of such income may be 
deferred, and the Optionee is advised to contact a tax adviser concerning the 
desirability of filing an 83(b) election in connection with the exercise of 
the Option.  Upon a resale of such Shares by the Optionee, any difference 
between the sale price and the exercise price of the Shares, to the extent 
not included in income as described above, will be treated as capital gain or 
loss, which will be long-term if the shares have been held for more than one 
year.

    11.  INTERPRETATION. Any dispute regarding the interpretation of this
agreement shall be submitted by Optionee or the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting.  The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.

    12.  ENTIRE AGREEMENT. The Plan and the Director Stock Option Exercise
Notice and Agreement attached as Exhibit A are incorporated herein by reference.
This Grant, the Plan and the Director Stock

                                         -23-

<PAGE>

Option Exercise Notice and Agreement constitute the entire agreement of the
parties regarding the Option and supersede all prior undertakings and agreements
with respect to the subject matter hereof.

                                                 LASERSCOPE

                                                 By:
                                                    -----------------------
                                                     
                                                 Its:
                                                     ----------------------

                                         -24-

<PAGE>

                                      ACCEPTANCE

    Optionee hereby acknowledges receipt of a copy of the Plan, represents that
Optionee has read and understands the terms and provisions thereof, and accepts
this Option subject to all the terms and conditions of the Plan and this Grant. 
Optionee acknowledges that there may be adverse tax consequences upon exercise
of this Option or disposition of the Shares and that Optionee should consult a
tax adviser prior to such exercise or disposition.

                                     --------------------------------------
                                          [Optionee]

                                      EXHIBIT A

           DIRECTOR NONSTATUTORY STOCK OPTION EXERCISE NOTICE AND AGREEMENT

Laserscope
3052 Orchard Drive
San Jose, CA 95134

Attention:  Chief Financial Officer

    1.   EXERCISE OF OPTION.  The undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase ______ shares of the Common Stock (the
"Shares") of Laserscope (the "Company") under and pursuant to the Company's 1995
Directors' Stock Option Plan and the Director Nonstatutory Stock Option
Agreement dated Grant Date (the "Grant Agreement").

    2.   REPRESENTATIONS OF OPTIONEE.  Optionee acknowledges that Optionee has
received, read and understood the Grant Agreement.

    3.   FEDERAL RESTRICTIONS ON TRANSFER.  Optionee understands that the
Shares must be held indefinitely unless they are registered under the Securities
Act of 1933, as amended (the "1933 Act") or unless an exemption from such
registration is available and that the certificate(s) representing the Shares
may bear a legend to that effect.  Optionee understands that the Company is
under no obligation to register the Shares and that an exemption may not be
available or may not permit Optionee to transfer Shares in the amounts or at the
times proposed by Optionee.

    4.   TAX CONSEQUENCES.  Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares.  Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

    5.   DELIVERY OF PAYMENT.  Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding taxes
required to be paid or withheld by the Company.

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    6.   ENTIRE AGREEMENT.  The Grant Agreement is incorporated herein by
reference.  This Agreement and the Grant Agreement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof.  This Agreement and the Grant Agreement are governed by California law
except for that body of law pertaining to conflict of laws.

Submitted by:                          Accepted by:

OPTIONEE:                                   LASERSCOPE


                                       By:
-----------------------------------       ------------------------------------
[Optionee]

                                       Its:
                                           -----------------------------------

Address:

[Street Address]
[City Address]

Dated:                                 Dated:
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