**Exhibit 10.8**
**AMERICAN MEDICAL SYSTEMS, INC.**
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT is made and entered into effective as of March9, 2004, between American Medical Systems, Inc., a Delaware corporation (the“Company”), and Carmen L.Diersen (the “Executive”).
R E C I T A L S:
          WHEREAS, the Company recognizes that the future growth, profitability andsuccess of the Company’s business will be substantially and materially enhancedby the employment of the Executive by the Company; and
          WHEREAS, the Company desires to employ the Executive and the Executive hasindicated her willingness to provide her services to the Company, on the termsand conditions set forth herein;
          NOW, THEREFORE, on the basis of the foregoing premises and inconsideration of the mutual covenants and agreements contained herein, theparties hereto agree as follows:
          Section 1. Employment. The Company hereby agrees to employ the Executiveand the Executive hereby accepts employment with the Company, on the terms andsubject to the conditions hereinafter set forth. The Executive shall serve asthe Executive Vice President and Chief Financial Officer and Secretary, in suchcapacity, shall report directly to the Company’s Chief Executive Officer andshall have such duties as are typically performed by the Chief FinancialOfficer of a corporation, together with such additional duties, commensuratewith the Executive’s position as the Chief Financial Officer of the Company, asmay be assigned to the Executive from time to time by the Company’s ChiefExecutive Officer. The Executive shall take the office of Chief FinancialOfficer effective March 22, 2004. The principal location of the Executive’semployment shall be at the Company’s principal executive office located inMinnetonka, Minnesota, although the Executive understands and agrees that shemay be required to travel from time to time for Company business reasons.
          Section 2. Term. Unless terminated pursuant to Section 6 hereof, theExecutive’s employment hereunder shall commence on the date hereof and shallcontinue during the period ending on the second anniversary of the date hereof(the “Initial Term”). Thereafter, the Executive’s employment term shall extendautomatically for consecutive periods of one year unless either party shallprovide notice of termination not less than sixty (60) days prior to ananniversary date of this Agreement. The
 

 

Initial Term, together with any extension pursuant to this Section 2, isreferred to herein as the “Employment Term.” The Employment Term shallterminate upon any termination of the Executive’s employment pursuant toSection 6.
          Section 3. Compensation. During the Employment Term, the Executive shallbe entitled to the following compensation and benefits:
          (a) Salary. As compensation for the performance of the Executive’sservices hereunder, the Company shall pay to the Executive a base salary (the“Salary”) of $230,000 per year with increases, if any, as may be approved bythe Board of Directors or the Compensation Committee of the Board. The Salaryshall be payable in accordance with the customary payroll practices of theCompany as the same shall exist from time to time. In no event shall theSalary be decreased during the Employment Term.
          (b) Bonus. During the Employment Term, in addition to Salary, theExecutive shall be eligible to participate in such bonus plans as may beadopted from time by the Board of Directors for other officers of the Company(the “Bonus”) for each such calendar year ending during the Employment Period;provided that, unless the Board of Directors or the Compensation Committee ofthe Board determines otherwise, the Executive must be employed on the last dayof such calendar year in order to receive the Bonus attributable thereto. TheExecutive’s entitlement to the Bonus for any particular calendar year shall bebased on the attainment of performance objectives established by the Board ofDirectors or the Compensation Committee of the Board in any such bonus plan.
          (c) Benefits. Except as otherwise provided in this Agreement, inaddition to the Salary and Bonus, if any, the Executive shall be entitledduring the Employment Term to participate in health, insurance, retirement,disability, and other benefit programs provided to other officers of theCompany on terms no less favorable than those available to the other officersof the Company. The Executive shall also be entitled to the same number ofvacation days, holidays, sick days and other benefits as are generally allowedto other senior executives of the Company in accordance with the Company’spolicies in effect from time to time.
          (d) Stock Options. The Executive shall be granted stock options (the“Options”) to acquire 230,000 shares of Common Stock of American MedicalSystems Holding, Inc. (the “Parent Corporation”) at a price equal to FairMarket Value in effect on the Price Date. All of the terms and conditionsrelating to the Option, including the vesting and expiration dates, are setforth in the Stock Option Agreements executed by the Company and the Executive(the “Stock Option Agreements”).
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          Section 4. Exclusivity. During the Employment Term, the Executive shalldevote her full time to the business of the Company and its subsidiaries, shallfaithfully serve the Company and its subsidiaries, shall in all respectsconform to and comply with the lawful and reasonable directions andinstructions given to her by the Chief Executive Officer or the Board ofDirectors in accordance with the terms of this Agreement, shall use her bestefforts to promote and serve the interests of the Company and its subsidiariesand shall not engage in any other business activity, whether or not suchactivity shall be engaged in for pecuniary profit, except that the Executivemay (i) participate in the activities of professional trade organizationsrelated to the business of the Company and its subsidiaries, (ii) engage inpersonal investing activities and [(iii) serve on the board of directors of notmore than two (2) other companies whose businesses are not in competition withthe business interests of the Company?], provided that the activities set forthin these clauses (i), (ii) and (iii), either singly or in the aggregate, do notinterfere in any material respect with the services to be provided by theExecutive hereunder.
          Section 5. Reimbursement for Expenses. During the Employment Term, theExecutive is authorized to incur reasonable expenses in the discharge of theservices to be performed hereunder, including expenses for travel,entertainment, lodging and similar items in accordance with the Company’sexpense reimbursement policy, as the same may be modified by the Company fromtime to time. The Company shall reimburse the Executive for all such properexpenses upon presentation by the Executive of itemized accounts of suchexpenditures in accordance with the financial policy of the Company, as ineffect from time to time.
          Section 6. Termination and Default.
          (a) Death. The Executive’s employment shall automatically terminate uponher death and upon such event, the Executive’s estate shall be entitled toreceive the amounts specified in Section 6(e) below.
          (b) Disability. If the Executive is unable to perform the dutiesrequired of her under this Agreement because of illness, incapacity, orphysical or mental disability, the Employment Term shall continue and theCompany shall pay all compensation required to be paid to the Executivehereunder, unless the Executive is disabled such that the Executive would beentitled to receive disability benefits under the Company’s long-termdisability plan, or if no such plan exists, the Executive is unable to performthe duties required of her under this Agreement for an aggregate of 180 days(whether or not consecutive) during any 12-month period during the term of thisAgreement, in which event the Executive’s employment shall terminate.
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          (c) Cause. The Company may terminate the Executive’s employment at anytime, with or without Cause. In the event of termination pursuant to thisSection 6(c) for Cause (as defined below), the Company shall deliver to theExecutive written notice setting forth the basis for such termination, whichnotice shall specifically set forth the nature of the Cause which is the reasonfor such termination. Termination of the Executive’s employment hereundershall be effective upon delivery of such notice of termination. For purposesof this Agreement, “Cause” shall mean: (i) the Executive’s failure (exceptwhere due to a disability contemplated by subsection (b) hereof), neglect orrefusal to perform her duties hereunder which failure, neglect or refusal shallnot have been corrected by the Executive within 30 days of receipt by theExecutive of written notice from the Company of such failure, neglect orrefusal, which notice shall specifically set forth the nature of said failure,neglect or refusal, (ii) any willful or intentional act of the Executive thathas the effect of injuring the reputation or business of the Company or itsaffiliates in any material respect; (iii) any continued or repeated absencefrom the Company, unless such absence is (A) approved or excused by the ChiefExecutive Officer or (B) is the result of the Executive’s illness, disabilityor incapacity (in which event the provisions of Section 6(b) hereof shallcontrol); (iv) use of illegal drugs by the Executive or repeated drunkenness;(v) conviction of the Executive for the commission of a felony; or (vi) thecommission by the Executive of an act of fraud or embezzlement against theCompany.
          (d) Resignation. The Executive shall have the right to terminate heremployment at any time by giving notice of her resignation.
          (e) Payments. In the event that the Executive’s employment terminatesfor any reason, the Company shall pay to the Executive all amounts and benefitsaccrued but unpaid hereunder through the date of termination in respect ofSalary or unreimbursed expenses, including accrued and unused vacation. Inaddition, in the event the Executive’s employment is terminated by the Companywithout Cause, whether during or upon expiration of the then current term ofthis Agreement, in addition to the amounts specified in the foregoing sentence,(i) the Executive shall continue to receive the Salary (less any applicablewithholding or similar taxes) at the rate in effect hereunder on the date ofsuch termination periodically, in accordance with the Company’s prevailingpayroll practices, for a period of twelve (12) months following the date ofsuch termination (the “Severance Term”) and (ii) to the extent permissibleunder the Company’s health and welfare plans, the Executive shall continue toreceive any health and welfare benefits provided to her as of the date of suchtermination in accordance with Section 3(c) hereof during the Severance Term,on the same basis and at the same cost as during the Employment Term. Further,in the event the Executive’s employment is terminated without Cause by reason
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of the Company having notified the Executive that this Agreement will notbe extended pursuant to Section 2, the Executive shall be entitled to receive apro-rated amount of the Bonus in a lump sum based on the Executive’s period ofemployment during the calendar year in which such termination occurs (less anyapplicable withholding or similar taxes). Following the end of the SeveranceTerm, the Executive shall be entitled to elect health care continuationcoverage permitted under Section 601 through 608 of the Employee RetirementIncome Security Act of 1974, as amended (“ERISA”), as if her employment hadthen terminated. In the event the Executive accepts other employment orengages in her own business prior to the last date of the Severance Term, theExecutive shall forthwith notify the Company and the Company shall be entitledto set off from amounts and benefits due the Executive under this Section 6(e)(other than in respect of the Bonus) the amounts paid to and benefits receivedby the Executive in respect of such other employment or business activity.Amounts owed by the Company in respect of the Salary, Bonus or reimbursementfor expenses under the provisions of Section 5 hereof shall, except asotherwise set forth in this Section 6(e), be paid promptly upon anytermination. 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) shallnot be paid to the extent that Executive’s employment is terminated following aChange in Control under circumstances entitling the Executive to the benefitsdescribed in Section 6 (f).
          (f) Change in Control Benefit. In the event that the Executive’semployment is terminated by the Company without Cause or by the Executive forGood Reason, as defined below, during the 12-month period immediately followinga Change in Control, as defined below, whether during or upon expiration of thethen current term of this Agreement: (i) the Company shall pay to theExecutive all amounts and benefits accrued but unpaid hereunder through thedate of termination in respect of Salary or unreimbursed expenses, includingaccrued and unused vacation (less any applicable withholding or similar taxes),(ii) all unvested shares that are subject to the Options shall becomeimmediately vested and exercisable as set forth in the Stock Option Agreements,(iii) the Company shall pay to Executive a lump sum payment equal to her Salaryat the rate in effect hereunder on the date of such termination, plus hertarget Bonus for the year in which the Change in Control occurs (less anyapplicable withholding or similar taxes), and (iv) to the extent permissibleunder the Company’s health and welfare plans, the Executive shall continue toreceive, at the Company’s cost, any health and welfare benefits provided to heras of the date of such termination for the 12-month period following hertermination of employment. Following the end of the 12-month
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period described in clause (iv) of the preceding sentence, the Executiveshall be entitled to elect health care continuation coverage permitted underSections 601 through 608 of ERISA as if her employment with the Company thenterminated.
          (g) Gross-Up Payment. If the Executive becomes entitled to payments andbenefits following a Change in Control under Section 6(f) or the vesting of theOptions accelerate following a Change in Control as provided in the StockOption Agreements, the Company will cause its independent auditors promptly toreview, at the Company’s sole expense, the applicability of Code Section 4999to any payment or distribution of any type by the Company to or for theExecutive’s benefit, whether paid or payable or distributed or distributablepursuant to the terms of this Agreement, the Stock Option Agreements orotherwise (the “Total Payments”). If the auditor determines that the TotalPayments result in an excise tax imposed by Code Section 4999 or any comparablestate or local law, or any interest or penalties with respect to such excisetax (such excise tax, together with any such interest and penalties, arecollectively referred to as the “Excise Tax”), the Company will make anadditional cash payment (a “Gross-Up Payment”) to the Executive within 10 daysafter such determination equal to an amount such that after payment by theExecutive of all taxes (including any interest or penalties imposed withrespect to such taxes), including any Excise Tax, imposed upon the Gross-UpPayment, the Executive would retain an amount of the Gross-Up Payment equal tothe Excise Tax imposed upon the Total Payments. For purposes of the foregoingdetermination, the Executive’s tax rate will be deemed to be the higheststatutory marginal state and federal tax rate (on a combined basis) then ineffect. If no determination by the Company’s auditors is made prior to the timethe Executive is required to file a tax return reflecting the Total Payments,the Executive will be entitled to receive from the Company a Gross-Up Paymentcalculated on the basis of the Excise Tax the Executive reported in such taxreturn, within 10 days after the later of the date on which the Executive filessuch tax return or the date on which the Executive provides a copy thereof tothe Company. In all events, if any tax authority determines that a greaterExcise Tax should be imposed upon the Total Payments than is determined by theCompany’s independent auditors or reflected in the Executive’s tax returnpursuant to this Section 6(g), the Executive will be entitled to receive fromthe Company the full Gross-Up Payment calculated on the basis of the amount ofExcise Tax determined to be payable by such tax authority within 10 days afterthe Executive notifies the Company of such determination.
          For purposes of this Agreement, “Change in Control” shall mean:
          (i) The acquisition by any individual, entity or group (within themeaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”))
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(a “Person”) of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of 50% or more (on a fully diluted basis)of either (A) the then outstanding shares of common stock of the ParentCorporation, taking into account as outstanding for this purpose such commonstock issuable upon the exercise of options or warrants, the conversion ofconvertible stock or debt, and the exercise of any similar right to acquiresuch common stock (the “Outstanding Parent Corporation Common Stock”) or (B)the combined voting power of the then outstanding voting securities of theParent Corporation entitled to vote generally in the election of directors (the“Outstanding Parent Corporation Voting Securities”); provided, however, thatfor purposes of this subsection (i), the following acquisitions shall notconstitute a Change in Control: (x) any acquisition by the Parent Corporationor any “affiliate” of the Parent Corporation, within the meaning of 17 C.F.R. §230.405 (an “Affiliate”), (y) any acquisition by any employee benefit plan (orrelated trust) sponsored or maintained by the Parent Corporation or anyAffiliate of the Parent Corporation, (z) any acquisition by any corporation orbusiness entity pursuant to a transaction which complies with clauses (A), (B)and (C) of subsection (ii) of this Section 6(f) (persons and entities describedin clauses (x), (y) and (z) being referred to herein as “Permitted Holders”);or
          (ii) The consummation of a reorganization, merger or consolidation orsale or other disposition of all or substantially all of the assets of theParent Corporation (a “Business Combination”), in each case, unless, followingsuch Business Combination, (A) all or substantially all of the individuals andentities who were the beneficial owners, respectively, of the OutstandingParent Corporation Common Stock and Outstanding Parent Corporation VotingSecurities immediately prior to such Business Combination beneficially own,directly or indirectly, more than 60% of, respectively, the then outstandingshares of common stock and the combined voting power of the then outstandingvoting securities entitled to vote generally in the election of directors, asthe case may be, of the corporation resulting from such Business Combination(including, without limitation, a corporation which as a result of suchtransaction owns the Parent Corporation or all or substantially all of theParent Corporation’s assets either directly or through one or moresubsidiaries) in substantially the same proportions as their ownership,immediately prior to such Business Combination of the Outstanding ParentCorporation Common Stock and Outstanding Parent Corporation Voting Securities,as the case may be, and (B) no Person (excluding any Permitted Holder)beneficially owns, directly or indirectly, 50% or more (on a fully dilutedbasis) of, respectively, the then outstanding shares of common stock of thecorporation resulting from such Business Combination, taking into account asoutstanding for this purpose such common stock issuable upon the exercise ofoptions or warrants, the conversion of convertible stock or debt, and theexercise of any similar right to acquire such common stock, or the combinedvoting power
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of the then outstanding voting securities of such corporation except tothe extent that such ownership existed prior to the Business Combination and(C) at least a majority of the members of the board of directors of thecorporation resulting from such Business Combination were members of theincumbent Board of Directors of the Parent Corporation at the time of theexecution of the initial agreement providing for such Business Combination; or
          (iii) Approval by the shareholders of the Parent Corporation of acomplete liquidation or dissolution of the Parent Corporation; or
          (iv) The sale of at least 80% of the assets of the Parent Corporation toan unrelated party, or completion of a transaction having a similar effect; or
          (v) The individuals who on the date of this Agreement constitute theBoard of Directors thereafter cease to constitute at least a majority thereof;provided that any person becoming a member of the Board of Directors subsequentto the date of this Agreement and whose election or nomination was approved byeither (A) a vote of at least two-thirds of the directors who then comprisedthe Board of Directors immediately prior to such vote or (B) the NominatingCommittee of the Board of Directors shall be considered a member of the Boardof Directors on the date of this Agreement.
          For purposes of this Agreement, “Good Reason” shall mean, without theExecutive’s prior written consent, (i) a substantial diminution in theExecutive’s authority, duties or responsibilities as in effect prior to theChange in Control, (ii) a reduction by the Company in the Executive’s baseSalary as in effect immediately prior to the Change in Control or as thereafterincreased, (iii) the failure by the Company to cover the Executive underemployee benefit plans that, in the aggregate, provide substantially similarbenefits to the Executive and/or her family and dependents at a substantiallysimilar total cost to the Executive (e.g., premiums, deductibles, co-pays, outof pocket maximums, required contributions, taxes and the like) relative to thebenefits and total costs under such benefit plans in which the Executive(and/or her family or dependents) was participating at any time during the90-day period immediately preceding the Change in Control, or (iv) theCompany’s requiring the Executive to be based at any office or location that ismore than fifty (50) miles further from the office or location thereofimmediately preceding a Change in Control; provided, however, Good Reason shallnot include any of the circumstances or events described herein unless theExecutive has first provided written notice of such circumstance or event andthe Company has not corrected such circumstance or event within thirty (30)days of receipt by the Company of such written notice from the Executive.
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          (h) Survival of Operative Sections. Upon any termination of theExecutive’s employment, the provisions of Sections 6(e), 6(f), 6(g) and 7through 18 of this Agreement shall survive to the extent necessary to giveeffect to the provisions thereof.
          Section 7. Secrecy and Non-Competition**.**
          (a) No Competing Employment. The Executive acknowledges that theagreements and covenants contained in this Section 7 are essential to protectthe value of the Company’s business and assets and by her current employmentwith the Company and its subsidiaries, the Executive has obtained and willobtain such knowledge, contacts, know-how, training and experience and there isa substantial probability that such knowledge, know-how, contacts, training andexperience could be used to the substantial advantage of a competitor of theCompany and to the Company’s substantial detriment. Therefore, the Executiveagrees that for the period commencing on the date of this Agreement and endingon the first anniversary of the termination of the Executive’s employmenthereunder (such period is hereinafter referred to as the “Restricted Period”)with respect to any State in which the Company is engaged in business duringthe Employment Term, the Executive shall not participate or engage, directly orindirectly, for himself or on behalf of or in conjunction with any person,partnership, corporation or other entity, whether as an employee, agent,officer, director, partner or joint venturer, in any business activities ifsuch activity consists of any activity undertaken or expressly contemplated tobe undertaken by the Company or any of its subsidiaries or by the Executive atany time during the last three (3) years of the Employment Term. The foregoingrestrictions contained in this Section 7(a) shall not prevent the Executivefrom accepting employment with a large diversified organization with separateand distinct divisions that do not compete, directly or indirectly, with theCompany, so long as prior to accepting such employment the Company receivesseparate written assurances from the prospective employer and from theExecutive, satisfactory to the Company, to the effect that the Executive willnot render any services, directly or indirectly, to any division or businessunit that competes, directly or indirectly, with the Company. During theRestricted Period, the Executive will inform any new employer, prior toaccepting employment, of the existence of this Agreement and provide suchemployer with a copy of this Agreement.
          (b) Nondisclosure of Confidential Information. The Executive, except inconnection with her employment hereunder, shall not disclose to any person orentity or use, either during the Employment Term or at any time thereafter, anyinformation not in the public domain or generally known in the industry thatthe Company treats as confidential or proprietary, in any form, acquired by theExecutive while employed by the Company or any
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predecessor to the Company’s business or, if acquired following theEmployment Term, such information which, to the Executive’s knowledge, has beenacquired, directly or indirectly, from any person or entity owing a duty ofconfidentiality to the Company or any of its subsidiaries or affiliates,relating to the Company, its subsidiaries or affiliates, including but notlimited to information regarding customers, vendors, suppliers, trade secrets,training programs, manuals or materials, technical information, contracts,systems, procedures, mailing lists, know-how, trade names, improvements, pricelists, financial or other data (including the revenues, costs or profitsassociated with any of the Company’s products or services), business plans,code books, invoices and other financial statements, computer programs,software systems, databases, discs and printouts, plans (business, technical orotherwise), customer and industry lists, correspondence, internal reports,personnel files, sales and advertising material, telephone numbers, names,addresses or any other compilation of information, written or unwritten, whichis or was used in the business of the Company or any subsidiaries or affiliatesthereof. The Executive agrees and acknowledges that all of such information,in any form, and copies and extracts thereof, are and shall remain the sole andexclusive property of the Company, and upon termination of her employment withthe Company, the Executive shall return to the Company the originals and allcopies of any such information provided to or acquired by the Executive inconnection with the performance of her duties for the Company, and shall returnto the Company all files, correspondence and/or other communications received,maintained and/or originated by the Executive during the course of heremployment.
          (c) No Interference. During the Restricted Period, the Executive shallnot, whether for her own account or for the account of any other individual,partnership, firm, corporation or other business organization (other than theCompany), directly or indirectly solicit, endeavor to entice away from theCompany or its subsidiaries, or otherwise directly interfere with therelationship of the Company or its subsidiaries with any person who, to theknowledge of the Executive, is employed by or otherwise engaged to performservices for the Company or its subsidiaries (including, but not limited to,any independent sales representatives or organizations) or who is, or waswithin the then most recent twelve-month period, a customer or client of theCompany, its predecessors or any of its subsidiaries. The placement of anygeneral classified or “help wanted” advertisements and/or general solicitationsto the public at large shall not constitute a violation of this Section 7(c)unless the Executive’s name is contained in such advertisements orsolicitations.
          (d) Inventions, etc. The Executive hereby sells, transfers and assignsto the Company or to any person or entity designated by the Company all of theentire right, title and
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interest of the Executive in and to all inventions, ideas, disclosures andimprovements, whether patented or unpatented, and copyrightable material, madeor conceived by the Executive, solely or jointly, during her employment by theCompany which relate to methods, apparatus, designs, products, processes ordevices, sold, leased, used or under consideration or development by theCompany, or which otherwise relate to or pertain to the business, functions oroperations of the Company or which arise from the efforts of the Executiveduring the course of her employment for the Company. The Executive shallcommunicate promptly and disclose to the Company, in such form as the Companyrequests, all information, details and data pertaining to the aforementionedinventions, ideas, disclosures and improvements; and the Executive shallexecute and deliver to the Company such formal transfers and assignments andsuch other papers and documents as may be necessary or required of theExecutive to permit the Company or any person or entity designated by theCompany to file and prosecute the patent applications and, as to copyrightablematerial, to obtain copyright thereof. Any invention relating to the businessof the Company and disclosed by the Executive within one year following thetermination of her employment with the Company shall be deemed to fall withinthe provisions of this paragraph unless proved to have been first conceived andmade following such termination. The foregoing requirements of this Section7(d) shall not apply to any invention for which no equipment, supplies,facility or trade secret information of the Company was used and which wasdeveloped entirely on the Executive’s own time, and (i) which does not relatedirectly to the Company’s business or to the Company’s actual or demonstrablyanticipated research or development, or (ii) which does not result from anywork the Executive performed for the Company.
          Section 8. Injunctive Relief. Without intending to limit the remediesavailable to the Company, the Executive acknowledges that in the event of abreach of any of the covenants contained in Section 7 hereof may result inmaterial irreparable injury to the Company or its subsidiaries or affiliatesfor which there is no adequate remedy at law, that it will not be possible tomeasure damages for such injuries precisely and that, in the event of such abreach or threat thereof, the Company shall be entitled to obtain a temporaryrestraining order and/or a preliminary or permanent injunction, without thenecessity of proving irreparable harm or injury as a result of such breach orthreatened breach of Section 7 hereof, restraining the Executive from engagingin activities prohibited by Section 7 hereof or such other relief as may berequired specifically to enforce any of the covenants in Section 7 hereof.
          Section 9. Representations and Warranties of the Executive. TheExecutive represents and warrants to the Company as follows:
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          (a) This Agreement, upon execution and delivery by the Executive, will beduly executed and delivered by the Executive and (assuming due execution anddelivery hereof by the Company) will be the valid and binding obligation of theExecutive enforceable against the Executive in accordance with its terms.
          (b) Neither the execution and delivery of this Agreement, theconsummation of the transactions contemplated hereby nor the performance ofthis Agreement in accordance with its terms and conditions by the Executive (i)requires the approval or consent of any governmental body or of any otherperson or (ii) conflicts with or results in any breach or violation of, orconstitutes (or with notice or lapse of time or both would constitute) adefault under, any agreement, instrument, judgment, decree, order, statute,rule, permit or governmental regulation applicable to the Executive. Withoutlimiting the generality of the foregoing, the Executive is not a party to anynon-competition, non-solicitation, no hire or similar agreement that restrictsin any way the Executive’s ability to engage in any business or to solicit orhire the employees of any person.
          The representations and warranties of the Executive contained in thisSection 9 shall survive the execution and delivery of this Agreement and theconsummation of the transactions contemplated hereby.
          Section 10. Representations and Warranties of the Company. The Companyrepresents and warrants to the Executive as follows:
          (a) This Agreement, upon execution and delivery by the Company, will beduly executed and delivered by the Company and (assuming due execution anddelivery hereof by the Executive) will be the valid and binding obligation ofthe Company enforceable against the Company in accordance with its terms.
          (b) Neither the execution and delivery of this Agreement, theconsummation of the transactions contemplated hereby nor the performance ofthis Agreement in accordance with its terms and conditions by the Company (i)requires the approval or consent of any governmental body or of any otherperson or (ii) conflicts with or results in any breach or violation of, orconstitutes (or with notice or lapse of time or both would constitute) adefault under, any agreement, instrument, judgment, decree, order, statute,rule, permit or governmental regulation applicable to the Company.
          The representations and warranties of the Company contained in thisSection 10 shall survive the execution and delivery of this Agreement and theconsummation of the transactions contemplated hereby.
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          Section 11. Successors and Assigns; No Third-Party Beneficiaries. ThisAgreement shall inure to the benefit of, and be binding upon, the successorsand assigns of each of the parties, including, but not limited to, theExecutive’s heirs and the personal representatives of the Executive’s estate;provided, however, that neither party shall assign or delegate any of theobligations created under this Agreement without the prior written consent ofthe other party. Notwithstanding the foregoing, the Company shall have theunrestricted right to assign this Agreement and to delegate all or any part ofits obligations hereunder to any of its subsidiaries or Affiliates, but in suchevent such assignee shall expressly assume all obligations of the Companyhereunder and the Company shall remain fully liable for the performance of allof such obligations in the manner prescribed in this Agreement. Nothing inthis Agreement shall confer upon any person or entity not a party to thisAgreement, or the legal representatives of such person or entity, any rights orremedies of any nature or kind whatsoever under or by reason of this Agreement.
          Section 12. Waiver and Amendments. Any waiver, alteration, amendment ormodification of any of the terms of this Agreement shall be valid only if madein writing and signed by the parties hereto; provided, however, that any suchwaiver, alteration, amendment or modification is consented to on the Company’sbehalf by the Board of Directors. No waiver by either of the parties hereto oftheir rights hereunder shall be deemed to constitute a waiver with respect toany subsequent occurrences or transactions hereunder unless such waiverspecifically states that it is to be construed as a continuing waiver.
          Section 13. Severability and Governing Law. The Executive acknowledgesand agrees that the covenants set forth in Section 7 hereof are reasonable andvalid in geographical and temporal scope and in all other respects. If any ofsuch covenants or such other provisions of this Agreement are found to beinvalid or unenforceable by a final determination of a court of competentjurisdiction (a) the remaining terms and provisions hereof shall be unimpairedand (b) the invalid or unenforceable term or provision shall be deemed replacedby a term or provision that is valid and enforceable and that comes closest toexpressing the intention of the invalid or unenforceable term or provision.**THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWSOF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMEDENTIRELY WITHIN SUCH STATE; PROVIDED, HOWEVER, THE PROVISIONS OF THIS AGREEMENTRELATING TO THE OPTION UNDER SECTION****3(d)****HEREOF SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.**
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          Section 14. Notices.
          (a) All communications under this Agreement shall be in writing and shallbe delivered by hand or mailed by overnight courier or by registered orcertified mail, postage prepaid:
    (i) If to the Executive, at                                                                             or at suchother address as the Executive may have furnished the Company inwriting, and
    (ii) If to the Company, at 10700 Bren Road West, Minnetonka,Minnesota 55343, marked for the attention of the Chief ExecutiveOfficer, or at such other address as it may have furnished inwriting to the Executive.
          (b) Any notice so addressed shall be deemed to be given: if delivered byhand, on the date of such delivery; if mailed by courier, on the first businessday following the date of such mailing; and if mailed by registered orcertified mail, on the third business day after the date of such mailing.
          Section 15. Section Headings. The headings of the sections andsubsections of this Agreement are inserted for convenience only and shall notbe deemed to constitute a part thereof, affect the meaning or interpretation ofthis Agreement or of any term or provision hereof.
          Section 16. Entire Agreement. This Agreement, including the Exhibitshereto, constitutes the entire understanding and agreement of the partieshereto regarding the employment of the Executive. This Agreement supersedesall prior negotiations, discussions, correspondence, communications,understandings and agreements between the parties relating to the subjectmatter of this Agreement.
          Section 17. Severability. In the event that any part or parts of thisAgreement shall be held illegal or unenforceable by any court or administrativebody of competent jurisdiction, such determination shall not effect theremaining provisions of this Agreement which shall remain in full force andeffect.
          Section 18. Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original and all of whichtogether shall be considered one and the same agreement.
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                 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe date first above written.      AMERICAN MEDICAL SYSTEMS, INC.