clause. If COBRA continuation coverage is not available to theExecutive during any portion of the Continuation Period (other than byreason of his or her failure to elect COBRA continuation coverage or to paythe required premiums for such coverage), the Company will providecomparable medical benefits pursuant to an alternative arrangement, such asan individual medical insurance contract, and such alternative benefits willbe treated as part of the Company’s health and/or dental plan. Anyreimbursement made under this Section 6(e)(2) shall be made on or before thelast day of the calendar year following the calendar year in which theexpense was incurred.     (3) Further, in the event the Executive’s Termination of Employmentwithout Cause by reason of the Company having notified the Executive thatthis Agreement will not be extended pursuant to Section 2, the Executiveshall be entitled to receive a pro-rated amount of the Bonus in a lump sumbased on the Executive’s period of employment during the calendar year inwhich such termination occurs (less any applicable withholding or similartaxes), which Bonus shall be paid following the end of the calendar year.     (4) In the event the Executive accepts other employment or engages inhis own business prior to the last date of the Severance Term, the Executiveshall forthwith notify the Company and the Company shall be entitled to setoff from amounts and benefits due the Executive under Section 6(e)(2) and(3) the amounts paid to and benefits received by the Executive in respect ofsuch other employment or business activity.     (5) Amounts owed by the Company in respect of the Salary, Bonus orreimbursement for expenses under the provisions of Section 5 hereof shall,except as otherwise set forth in this Section 6(e), be paid promptly uponany termination, but not more than 90 days following such termination.     (6) The payments and benefits to be provided to the Executive as setforth in this Section 6(e) in the event the Executive’s employment isterminated by the Company without Cause: (i) shall be lieu of any and allbenefits otherwise provided under any severance pay policy, plan or programmaintained from time to time by the Company for its employees, and (ii)shall not be paid to the extent that Executive’s employment is terminatedfollowing a ‘change in control’ under circumstances entitling the Executiveto benefits under his Change in Control Severance Agreement.     (7) Notwithstanding the foregoing, if, at the time of his or herTermination of Employment, the Executive is a ‘specified employee’ (definedbelow), and the Company reasonably determines that any salary continuationpayment due under Section 6(e)(2) and (3) constitutes deferred compensationsubject to the requirements of Code Section 409A, then such payments shallbe suspended and not made until the first day after the end of the six (6)month period following the Executive’s Termination of Employment, or, ifearlier, upon the Executive’s death. If any such suspended payment is notmade within 10 days of the end of such six month period, the Company willpay the Executive interest, equal to the applicable Federal rate in effectfor each month, from the date of Termination of Employment through the dateof payment. The Executive is a ‘Specified Employee’ if on the dateof his or her Termination of Employment he or she is a ‘key employee’(defined below), and the Company or any entity that owns 50% or more of theCompany and has stock that is publicly traded on an established securitiesmarket within the meaning of such term under Section 409A(a)(2)(B) of theCode. For this purpose, Executive is a ‘key employee’ during the 12-monthperiod beginning on the April 1 immediately following a calendar year, if heor she was employed by the Company (or any other entity with whom theCompany would be treated as a single employer under Section 414(b) or 414(c)of the Code) and satisfied, at any time during such preceding calendar year,the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code(applied in accordance with the regulations issued thereunder anddisregarding Section 416(i)(5) of the Code). The Executive will not betreated as a Specified Employee if he or she is
 

 
not required to be treated as a Specified Employee under Treasuryregulations issued under Section 409A of the Code.     (8) When used in this Agreement, ‘Termination of Employment’ means atermination of Executive’s employment relationship with the Company and allAffiliates or such other change in the Executive’s employment relationshipwith the Company and all Affiliates that would be considered a ‘separationfrom service’ under Section 409A of the Code. The Executive’s employmentrelationship will be treated as remaining intact while the Executive is on amilitary leave, a sick leave or other bona fide leave of absence (pursuantto which there is a reasonable expectation that the Executive will return toperform services for the Company or an Affiliate) but only if the period ofsuch leave does not exceed six (6) months, or if longer, so long as theExecutive retains a right to reemployment by the Company or an Affiliateunder applicable statute or by contract, provided, however, where theExecutive’s leave is due to any medically determinable physical or mentalimpairment that can be expected to result in death or can be expected tolast for a continuous period of not less than six (6) months and suchimpairment causes the Executive to be unable to perform the duties of his orher position of employment or any substantially similar position ofemployment, a twenty-nine (29) month period of absence shall be substitutedfor such six (6) month period of absence. In all cases, the Executive’sTermination of Employment must constitute a ‘separation from service’ underSection 409A of the Code and any ‘separation from service’ under Section409A of the Code shall be treated as a Termination of Employment. For thispurpose, ‘Affiliate’ means any entity that, together with the Company, istreated as a single employer under Code Section 414(b) or (c).” 2. Sections 6(f), (g), (h) and (i) of the Employment Agreement are deleted andSection 6(i) is redesignated as 6(f) and amended and restated to read as follows:“(f) Survival of Operative Sections. Upon any termination of theExecutive’s employment, the provisions of Sections 6(e) and 7 through 18 of thisAgreement shall survive to the extent necessary to give effect to the provisionsthereof.”B. MISCELLANEOUS 1. No Other Amendment. Except as set forth herein, the EmploymentAgreement shall remain in full force and effect in accordance with its terms.  2. Definitions. All capitalized terms that are not defined herein shallbe as defined in the Employment Agreement.  3. Counterparts. This Amendment may be executed in one or morecounterparts, each of which shall be deemed an original and all of which together shallbe considered one and the same agreement. Facsimile execution and delivery of thisAgreement shall be legal, valid and binding execution and delivery for all purposes.     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first abovewritten.         AMERICAN MEDICAL SYSTEMS, INC.           By: