exv10w1



 






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.




 









 






	 	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




 









 






	 	 	 	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).




 








 












	 	(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




 









 






	 	 	 	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.




 









 






	 	(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)