Document:

exv10w1

Exhibit 10.1

CHANGE IN CONTROL SEVERANCE AGREEMENT

     This Change in Control Severance Agreement (this “Agreement”), effective as of
                                        , is between American Medical Systems Holdings, Inc., a Delaware
corporation (the “Parent Corporation”), on its behalf and on behalf of all of its
Affiliates (collectively, and if the context requires, each individually, referred to herein as the
“Company”), located at 10700 Bren Road West, Minnetonka, Minnesota 55343 and
                                                             (the “Executive”).

     A. The Executive will be employed as the Company’s                                         , beginning on the
date hereof.

     B. The Board considers the operation of the Company to be of critical importance to the Parent
Corporation and therefore the establishment and maintenance of a sound and vital management team of
the Company is essential to protecting and enhancing the best interests of the Parent Corporation
and its stockholders.

     C. In this connection, the Board recognizes that the possibility of a Change in Control may
arise and that such possibility and the uncertainty and questions which such transaction may raise
among key management personnel of the Company and its subsidiaries could result in the departure or
distraction of such management personnel to the detriment of the Parent Corporation and its
stockholders.

     D. The Board has determined that appropriate steps should be taken to minimize the risk that
Company’s executive management will depart prior to a Change in Control, thereby leaving the
Company without adequate executive management personnel during such a critical period, and to
reinforce and encourage the continued attention and dedication of members of the Company’s
executive management to their assigned duties without distraction in circumstances arising from the
possibility of a Change in Control.

     E. The Board recognizes that the Executive’s position with the Company involves a substantial
commitment to the Company in terms of the Executive’s personal life and professional career and the
possibility of foregoing present and future career opportunities, for which the Company receives
substantial benefits.

     F. To induce the Executive to accept employment with the Company, this Agreement, which has
been approved by the Board, sets forth the benefits that the Company agrees will be provided to the
Executive in the event of a Change in Control under the circumstances described below.

     G. The Company and the Executive intend that the benefits provided under this Agreement will
comply, in form and operation, with an exception to or exclusion from the requirements of Section
409A of the Code and this Agreement will be construed and administered in a manner that is
consistent with and gives effect to such intention; provided, however, if any payment is or becomes
subject to the requirements of Code section 409A, the Agreement as it relates to such payment is
intended to comply with the requirements of Code section 409A. In no event may Executive, directly
or indirectly, designate the calendar year of any payment to be made under this Agreement. The
payments to be made under Section 2 are intended to be exempt from the requirements of Code section
409A because they are (i) non-

 

 

taxable benefits, (ii) welfare benefits within the meaning of Treas. Reg. Sec. 1.409A-1(a)(5),
(iii) short-term deferrals under Treas. Reg. Sec. 1.409A-1(b)(4), or (iv) payments under a
separation pay plan within the meaning of Treas. Reg. Sec. 1.409A-1(b)(9).

     H. Certain capitalized terms that are used in this Agreement are defined in Exhibit A, which
is an integral part of this Agreement.

     Accordingly, the Company and the Executive each intending to be legally bound, agree as
follows:

     1. Term of Agreement. This Agreement is effective immediately and will continue in
effect only so long as the Executive remains employed by the Company. This Agreement will
automatically terminate upon the Executive’s Termination of Employment with the Company, except for
a Termination of Employment contemplated by Section 2, in which case this Agreement will remain in
effect until the date on which the Company’s obligations to the Executive arising under or in
connection with this Agreement have been satisfied in full. Notwithstanding the foregoing, this
Agreement shall terminate immediately (and no benefit will be payable under this Agreement) in the
event, prior to a Change in Control, and in a transaction that is not a Change in Control, either
the Company ceases to be an Affiliate of the Parent Corporation or sells all or substantially all
of its assets, in one or a series of related transactions, to any Person.

     2. Benefits upon a Change in Control Termination. The Executive will become entitled
to the benefits described in this Section 2 on account of a Termination of Employment if and only
if (i) the Company terminates the Executive’s employment for any reason other than for Cause, or
the Executive terminates the Executive’s employment with the Company for Good Reason, and (ii) the
Termination of Employment occurs either within the period beginning on the date of a Change in
Control and ending on the last day of the first full calendar month following the first anniversary
date of the Change in Control or prior to a Change in Control if the Executive’s Termination of
Employment was either a condition of the Change in Control or was at the request or insistence of a
Person related to the Change in Control. 

     (a) Cash Payment. Subject to Section 2(e), not more than 10 days following the
Date of Termination, or, if later, not more than 10 days following the date of the Change in
Control, the Company will make a lump-sum cash payment to the Executive in an amount equal
to 100% of the sum of (i) the Executive’s Base Pay, plus (ii) 100% of the Executive’s target
bonus established for the year during which the Change in Control occurs.

     (b) Definitions. For purposes of this section, the “Continuation
Period” is the period beginning on the Executive’s Date of Termination and ending on (x)
the last day of the 12th month that begins after the Executive’s Date of Termination or, if
earlier, (y) the date after the Executive’s Date of Termination on which the Executive first
becomes eligible to participate as an employee in a plan of another employer providing group
health and dental benefits to the Executive and the Executive’s eligible family members and
dependents, which plan does not contain any exclusion or limitation with respect to any
pre-existing condition of the Executive or any eligible family member or dependent who would
otherwise be covered under the Company’s plan but for this clause (y).

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     (c) Group Health Plans. If the Executive elects COBRA continuation coverage
under the Company’s group health and/or dental plans, then for each month of the
Continuation Period, the Company will pay the Executive an amount equal to the excess of (i)
the portion of the monthly cost for the Executive’s coverage under the Company’s group
health and/or dental plans that was borne by the Company immediately prior to the
Executive’s Termination of Employment or, if greater, immediately prior to the Change in
Control (subject to the rule for coverage changes discussed below) over (ii) the portion of
the monthly cost for the Executive’s coverage under the Company’s group health and/or dental
plans that is borne by the Company during the Continuation Period. The Executive’s coverage
will be deemed to include any Company contribution to a Health Savings Account (or similar
arrangement) for the Executive. If the level of the Executive’s coverage changes during the
Continuation Period, as, for example, from single to family coverage or to no coverage, the
amount which the Company shall pay will be determined as if the new coverage level had been
the level of coverage in effect immediately prior to the Termination of Employment or Change
in Control, as the case may be. The Executive shall be entitled to elect health care
continuation coverage under the Company’s group health and/or dental plans for up to 12
months beyond the end of the 18-month COBRA period if he or she has not become eligible to
participate as an employee in a plan of another employer providing group health and dental
benefits to the Executive and the Executive’s eligible family members and dependents, which
plan does not contain any exclusion or limitation with respect to any pre-existing condition
of the Executive or any eligible family member or dependent who would otherwise be covered
under the Company’s plan but for this clause. If COBRA continuation coverage is not
available to the Executive during any portion of the Continuation Period (other than by
reason of his or her failure to elect COBRA continuation coverage or to pay the required
premiums for such coverage), the Company will provide comparable health benefits pursuant to
an alternative arrangement, such as an individual health insurance contract, and such
alternative benefits will be treated as part of the Company’s health and/or dental plan.
Any reimbursement made under this Section 2(c) shall be made on or before the last day of
the calendar year following the calendar year in which any continuation coverage payment was
incurred.

     (d) Life Insurance. In addition, during each month of the Continuation Period,
the Executive shall be entitled to receive life insurance coverage substantially equivalent
to the coverage Executive had on the day immediately prior to his or her Termination of
Employment, including coverage then in effect for Executive’s spouse and dependents.
Executive shall be required to pay no more for such life insurance than Executive paid as an
active employee immediately before his or her Termination of Employment. In order to
continue life insurance coverage, Executive must timely elect continuation or the
portability option available under the Company’s group life insurance policy or policies and
pay the full premium for such coverage following Termination of Employment. The Company
will reimburse Executive at least quarterly for the amount by which such life insurance
premium exceeds the amount Executive paid for such coverage as an active employee
immediately prior to his or her Termination of Employment, and in all events reimbursement
shall be made on or before the last day of the calendar year following the calendar year in
which the premium was incurred.

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     (e) Six Month Suspension for Specified Key Employees. Notwithstanding the
foregoing, if, at the time of his or her Termination of Employment, the Executive is a
Specified Employee, then to the extent any payment under Section 2 is determined by the
Company to be deferred compensation subject to the requirements of Section 409A of the Code,
payment of such deferred compensation shall be suspended and not made until the first day of
the month next following the end of the six (6) month period following the Executive’s
Termination of Employment, or, if earlier, upon the Executive’s death.

     3. Indemnification. Following a Change in Control, the Company will indemnify and
advance expenses to the Executive for damages, costs and expenses (including, without limitation,
judgments, fines, penalties, settlements and reasonable fees and expenses of the Executive’s
counsel) (the “Expenses”) incurred in connection with all matters, events and transactions
relating to the Executive’s service to or status with the Company or any other corporation,
employee benefit plan or other Person for which the Executive served at the request of the Company
to the extent that the Company would have been required to do so under applicable law, corporate
articles, bylaws or agreements or instruments of any nature with or covering the Executive,
including any indemnification agreement between Parent Corporation and the Executive, as in effect
immediately prior to the Change in Control and to any further extent as may be determined or agreed
upon following the Change in Control.

     4. Miscellaneous.

     (a) Successors. The Parent Corporation must seek to have any Successor, by
agreement in form and substance satisfactory to the Executive, assent to the fulfillment by
such Successor of the Company’s obligations under this Agreement. Failure of the Company to
obtain such assent at least three business days prior to the time a Person becomes a
Successor (or where the Parent Corporation does not have at least three business days’
advance notice that a Person may become a Successor, within one business day after having
notice that such Person may become or has become a Successor) will constitute Good Reason
for termination by the Executive of the Executive’s employment. The date on which any such
succession becomes effective will be deemed the Date of Termination, and Notice of
Termination will be deemed to have been given on that date. A Successor has no rights,
authority or power with respect to this Agreement prior to a Change in Control.

     (b) Binding Agreement. This Agreement inures to the benefit of, and is
enforceable by, the Executive, the Executive’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If the
Executive dies while employed by the Company or while any amount would still be payable to
the Executive under this Agreement if the Executive had continued to live, all such amounts,
unless otherwise provided in this Agreement, will be paid in accordance with the terms of
this Agreement to the Executive’s devisee, legatee or other designee or, if there be no such
designee, to the Executive’s estate.

     (c) No Mitigation. The Executive will not be required to mitigate the amount
of any benefits the Company becomes obligated to provide to the Executive in connection with
this Agreement by seeking other employment or otherwise. The benefits to be provided to the
Executive in connection with this Agreement may not be reduced,

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offset or subject to recovery by the Company by any benefits the Executive may receive
from other employment or otherwise.

     (d) No Setoff. The Company has no right to setoff benefits owed to the
Executive under this Agreement against amounts owed or claimed to be owed by the Executive
to the Company under this Agreement or otherwise.

     (e) Taxes. All benefits to be provided to the Executive in connection with
this Agreement will be subject to required withholding of federal, state and local income,
excise and employment-related taxes. The Company’s good faith determination with respect to
its obligation to withhold such taxes relieves it of any obligation that such amounts should
have been paid to the Executive.

     (f) Notices. For the purposes of this Agreement, notices and all other
communications provided for in, or required under, this Agreement must be in writing and
will be deemed to have been duly given when personally delivered or when mailed by United
States registered or certified mail, return receipt requested, postage prepaid and addressed
to each party’s respective address set forth on the first page of this Agreement (provided
that all notices to the Company must be directed to the attention of the President), or to
such other address as either party may have furnished to the other in writing in accordance
with these provisions, except that notice of change of address will be effective only upon
receipt.

     (g) Disputes. If the Executive so elects, any dispute, controversy or claim
arising under or in connection with Sections 2 or 3 after a Change in Control will be
settled exclusively by binding arbitration administered by the American Arbitration
Association in Minneapolis, Minnesota in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect; provided that the Executive may seek
specific performance of the Executive’s right to receive benefits until the Date of
Termination during the pendency of any dispute or controversy arising under or in connection
with this Agreement. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction. If any dispute, controversy or claim for damages arising under or in
connection with Sections 2 or 3 is settled by arbitration, the Company will pay, or if
elected by the Executive, reimburse, all fees, costs and expenses incurred by the Executive
related to such arbitration unless the arbitrators decide that the Executive’s claim was
frivolous or advanced by the Executive in bad faith. If the Executive does not elect
arbitration, the Executive may pursue all available legal remedies. The Company will pay,
or if elected by the Executive, reimburse the Executive for, all fees, costs and expenses
incurred by the Executive in connection with any actual, threatened or contemplated
litigation relating to Sections 2 or 3 to which the Executive is or reasonably expects to
become a party, whether or not initiated by the Executive, if the Executive is successful in
recovering any benefit under Sections 2 or 3 as a result of such action. The Company will
not assert in any dispute or controversy with the Executive arising under or in connection
with this Agreement the Executive’s failure to exhaust administrative remedies.

     (h) Effect of Benefits on Other Severance Plans. In the event the Executive
receives any payment under the terms of this Agreement, the Executive will not be

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eligible to receive benefits under any other severance pay plan sponsored or maintained
by the Company or agreement to which the Executive is a party.

     (i) Related Agreements and Other Arrangements. This Agreement, including
Exhibit A attached hereto and incorporated as an integral part of this Agreement,
constitutes the entire agreement of the parties with respect to the subject matter hereof,
and no agreements or representations, oral or otherwise, express or implied, with respect to
the subject matter to this Agreement have been made by any party which are not expressly set
forth in this Agreement. To the extent that any provision of any Other Arrangement limits,
qualifies or is inconsistent with any provision of this Agreement, then for purposes of this
Agreement, while such Other Arrangement remains in force, the provision of this Agreement
will control and such provision of such Other Arrangement will be deemed to have been
superseded, and to be of no force or effect, as if such Other Arrangement had been formally
amended to the extent necessary to accomplish such purpose. Nothing in this Agreement
prevents or limits the Executive’s continuing or future participation in any Other
Arrangement for which the Executive may qualify, and nothing in this Agreement limits or
otherwise affects the rights the Executive may have under any Other Arrangement. Amounts
that are vested benefits or which the Executive is otherwise entitled to receive under any
Other Arrangement at or subsequent to the Date of Termination will be payable in accordance
with such Other Arrangement.

     (j) No Employment or Service Contract. Nothing in this Agreement is intended
to provide the Executive with any right to continue in the employ of the Company for any
period of specific duration or interfere with or otherwise restrict in any way the
Executive’s rights or the rights of the Company.

     (k) Payment; Assignment. Benefits payable under this Agreement will be paid
only from the general assets of the Company. No Person has any right to or interest in any
specific assets of the Company by reason of this Agreement. To the extent benefits under
this Agreement are not paid when due to any individual, he or she is a general unsecured
creditor of the Company with respect to any amounts due. Benefits payable pursuant to this
Agreement and the right to receive future benefits may not be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered or subject to any charge.

     (l) Late Payments. Benefits not paid under this Agreement when due will accrue
interest at the rate of 10% per year, or, if lesser, the maximum rate permitted under
applicable law, and shall be paid on the 5th day of the month next following the month
during which such interest accrued.

     (m) Survival. The respective obligations of, and benefits afforded to, the
Company and the Executive which by their express terms or clear intent survive termination
of the Executive’s employment with the Company or termination of this Agreement, as the case
may be, will survive termination of the Executive’s employment with the Company or
termination of this Agreement, as the case may be, and will remain in full force and effect
according to their terms.

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     (n) Amendments; Waivers. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to in a writing
signed by the Executive, a duly authorized officer of the Company. No waiver by any party
to this Agreement at any time of any breach by another party to this Agreement of, or of
compliance with any condition or provision of this Agreement to be performed by such party
will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.

     (o) Governing Law. This Agreement and the legal relations among the parties as
to all matters, including, without limitation, matters of validity, interpretation,
construction, performance and remedies, will be governed by and construed exclusively in
accordance with the internal laws of the State of Minnesota (without regard to the conflict
of laws principles of any jurisdiction).

     (p) Further Assurances. The parties to this Agreement agree to perform, or
cause to be performed, such further acts and deeds and to execute and deliver or cause to be
executed and delivered, such additional or supplemental documents or instruments as may be
reasonably required by the other party to carry into effect the intent and purpose of this
Agreement.

     (q) Interpretation. The invalidity or unenforceability of all or any part of
any provision of this Agreement will not affect the validity or enforceability of the
remainder of such provision or of any other provision of this Agreement, which will remain
in full force and effect.

     (r) Counterparts. This Agreement may be executed in several counterparts, each
of which will be deemed to be an original, but all of which together will constitute one and
the same instrument. Facsimile execution and delivery of this Agreement shall be legal,
valid and binding execution and delivery for all purposes.

     (s) Severability and Judicial Modification. If any portion of this Agreement
is adjudicated to be invalid or unenforceable, then a court of competent jurisdiction shall
amend, modify or delete that portion thus adjudicated invalid or unenforceable. If any
portion is deemed unenforceable by virtue of its scope or limitation, the Company and the
Executive agree that a court of competent jurisdiction shall modify such provision to make
it enforceable to the fullest extent permitted by Minnesota law.

     IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement effective as of
the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	[Name]	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

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Exhibit A

DEFINITIONS

     For purposes of the Agreement, the following terms will have the meaning set forth below in
this Exhibit A unless the context clearly requires otherwise. Terms defined elsewhere in the
Agreement will have the same meaning throughout the Agreement.

     1. “Affiliate” means any person with whom the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, namely (i) any corporation at least eighty
percent (80%) of whose outstanding securities ordinarily having the right to vote at elections of
directors is owned directly or indirectly by the Parent Corporation or (ii) any other form of
business entity in which the Parent Corporation, directly or indirectly, owns eighty percent (80%)
or more of the controlling interests in such entity.

     2. “Base Pay” means the Executive’s annual base salary from the Company at the rate in
effect immediately prior to a Change in Control or at the time Notice of Termination is given,
whichever is greater. Base Pay includes only regular cash salary and is determined before any
reduction for deferrals pursuant to any nonqualified deferred compensation plan or arrangement,
qualified cash or deferred arrangement or cafeteria plan.

     3. “Benefit Plan” means any

     (a) employee benefit plan as defined in Section 3(3) of ERISA;

     (b) cafeteria plan described in Code Section 125;

     (c) plan, policy or practice providing for paid vacation, other paid time off or
short-or long-term profit sharing, bonus or incentive payments or perquisites; or

     (d) stock option, stock purchase, restricted stock, phantom stock, stock appreciation
right or other equity-based compensation plan with respect to the securities of any
Affiliate

that is sponsored, maintained or contributed to by the Parent Corporation or the Company for the
benefit of employees (and/or their families and dependents) generally or the Executive in
particular (and/or the Executive’s family and dependents).

     4. “Board” means the board of directors of the Parent Corporation duly qualified and
acting at the time in question. On and after the date of a Change in Control, any duty of the
Board in connection with this Agreement is nondelegable and any attempt by the Board to delegate
any such duty is ineffective.

     5. “Cause” means:

     (a) the Executive’s gross misconduct that is materially and demonstrably injurious to
the Company;

     (b) the Executive’s willful and continued failure to perform substantially the
Executive’s duties with the Company (other than any such failure (i) resulting from the

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Executive’s death or incapacity due to bodily injury or physical or mental illness or
(ii) relating to changes in the Executive’s duties after a Change in Control that constitute
Good Reason) after a written demand for substantial performance is delivered to the
Executive by the chair of the Board which specifically identifies the manner in which the
Executive has not substantially performed the Executive’s duties and provides for a
reasonable period of time within which the Executive may take corrective actions; or

     (c) the Executive’s conviction (including a plea of nolo contendere) of willfully
engaging in illegal conduct constituting a felony or gross misdemeanor under federal or
state law which is materially and demonstrably injurious to the Company or which impairs the
Executive’s ability to perform substantially the Executive’s duties for the Company.

     An act or failure to act will be considered “gross or willful” for this purpose only if done,
or omitted to be done, by the Executive in bad faith and without reasonable belief that it was in,
or not opposed to, the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board (or a committee thereof) or
based upon the advice of counsel for the Company will be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of the Company. It is
also expressly understood that the Executive’s attention to matters not directly related to the
business of the Company will not provide a basis for termination for Cause so long as the Board did
not expressly disapprove in writing of the Executive’s engagement in such activities either before
or within a reasonable period of time after the Board knew or could reasonably have known that the
Executive engaged in those activities. Notwithstanding the foregoing, the Executive may not be
terminated for Cause unless and until there has been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for the purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board), finding that in the good faith opinion of the Board the
Executive was guilty of the conduct set forth above in clauses (a), (b) or (c) of this definition
and specifying the particulars thereof in detail.

     6. “Change in Control” shall mean a Change in Control of the Parent Corporation, as
defined in the Parent Corporation’s 2005 Stock Incentive Plan, after the date of this Agreement.

     7. “Code” means the Internal Revenue Code of 1986, as amended (including, when the
context requires, all regulations, rulings and authoritative interpretations issued thereunder).
Any reference to a specific provision of the Code includes a reference to such provision as it may
be amended from time to time and to any successor provision.

     8. “Company” means the Parent Corporation and any Affiliate.

     9. “Date of Termination” following a Change in Control (or prior to a Change in
Control if the Executive’s termination was either a condition of the Change in Control or was at
the request or insistence of any Person related to the Change in Control) means:

     (a) if the Executive’s employment is to be terminated by the Executive, the date
specified in the Notice of Termination which in no event may be a date more than 15

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days after the date on which Notice of Termination is given unless the Company agree in
writing to a later date;

     (b) if the Executive’s employment is to be terminated by the Company for Cause, the
date specified in the Notice of Termination; or

     (c) if the Executive’s employment is terminated by reason of the Executive’s death, the
date of the Executive’s death; or

     (d) if the Executive’s employment is to be terminated by the Company for any reason
other than Cause or the Executive’s death, the date specified in the Notice of Termination,
which in no event may be a date earlier than 15 days after the date on which a Notice of
Termination is given, unless the Executive expressly agrees in writing to an earlier date.

     In the case of termination by the Company of the Executive’s employment for Cause, if the
Executive has not previously expressly agreed in writing to the termination, then within the 30-day
period after the Executive’s receipt of the Notice of Termination, the Executive may notify the
Company that a dispute exists concerning the termination, in which event the Date of Termination
will be the date set either by mutual written agreement of the parties or by the judge or
arbitrators in a proceeding as provided in Section 4(g) of the Agreement. During the pendency of
any such dispute, the Executive will continue to make the Executive available to provide services
to the Company and the Company will continue to pay the Executive the Executive’s full compensation
and benefits in effect immediately prior to the date on which the Notice of Termination is given
(without regard to any changes to such compensation or benefits that constitute Good Reason) and
until the dispute is resolved in accordance with Section 4(g) of the Agreement. The Executive will
be entitled to retain the full amount of any such compensation and benefits without regard to the
resolution of the dispute unless the judge or arbitrators decide(s) that the Executive’s claim of a
dispute was frivolous or advanced by the Executive in bad faith.

     In all cases, the Executive’s Date of Termination must be consistent with the Executive’s
Termination of Employment.

     10. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
Any reference to a specific provision of ERISA includes a reference to such provision as it may be
amended from time to time and to any successor provision.

     11. “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act or to any rule or regulation thereunder
includes a reference to such provision as it may be amended from time to time and to any successor
provision.

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     12. “Good Reason” means:

     (a) a material diminution in the Executive’s authority, duties or responsibilities as
an executive of the Company as in effect immediately prior to the Change in Control (other
than, if applicable, any such change directly attributable to the fact that the Parent
Corporation is no longer publicly owned);

     (b) a material diminution in the Executive’s base compensation as in effect immediately
prior to the Change in Control or as thereafter increased;

     (c) a material diminution in the authority, duties or responsibilities of the
supervisor to whom the Executive is required to report; or

     (d) the Company requiring the Executive to be based at any office or location that is
more than fifty (50) miles further from the office or location thereof immediately preceding
a Change in Control, except for required travel on the Company’s business, and then only to
the extent substantially consistent with the business travel obligations which the Executive
undertook on behalf of the Company during the 90-day period immediately preceding the Change
in Control (without regard to travel related to or in anticipation of the Change in Control)
or such other material, adverse change in the geographic location at which the Executive is
required to perform his or her services.

     In order to constitute Good Reason, the Executive must give written notice to the Company of
the existence of the condition constituting Good Reason within 90 days of the initial existence of
the condition and his or her intent to terminate employment with the Company for Good Reason;
provided, however, that the Executive may not terminate his or her employment earlier than the
ninetieth (90th) day following the date of the Change in Control.. If the Company
remedies any event or change described in subsections (a) through (d) within 30 days of such notice
from the Executive, such event or change shall not constitute Good Reason. The Executive’s
continued employment does not constitute consent to, or waiver of any rights arising in connection
with, any circumstances constituting Good Reason. The Executive’s termination of employment for
Good Reason as defined above will constitute Good Reason for all purposes of the Agreement
notwithstanding that the Executive may also thereby be deemed to have retired under any applicable
benefit plan, policy or practice of the Company.

     13. “Notice of Termination” means a written notice given on or after the date of a
Change in Control (unless the Executive’s termination before the date of the Change in Control was
either a condition of the Change in Control or was at the request or insistence of any Person
related to the Change in Control in which case the written notice may be given before the date of
the Change in Control) which indicates the specific termination provision in the Agreement pursuant
to which the notice is given. Any purported termination by the Company or by the Executive on or
after the date of a Change in Control (or before the date of a Change in Control if the Executive’s
termination was either a condition of the Change in Control or was at the request or insistence of
any Person related to the Change in Control) must be communicated by written Notice of Termination
to be effective; provided, however, that the Executive’s failure to provide Notice of Termination
will not limit any of the Executive’s rights under the Agreement except to the extent the Company
demonstrates that it suffered material actual damages by reason of such failure.

A-4

 

     14. “Other Arrangement” is any Benefit Plan or other plan, policy or practice of the
Company or any other agreement between the Executive and the Company, other than this Agreement.

     15. “Parent Corporation” means American Medical Systems Holdings, Inc. and any
Successor.

     16. “Person” means any individual, corporation, partnership, group, association or
other person, as such term is used in Section 13(d) or Section 14(d) of the Exchange Act, other
than the Parent Corporation, any Affiliate or any Benefit Plan(s) sponsored by the Parent
Corporation or an Affiliate.

     17. “Specified Employee” The Executive is a “Specified Employee” if on the
date of his or her Termination of Employment he or she is a “key employee” (defined below), and the
Company or any Affiliate has stock that is publicly traded on an established securities market
within the meaning of such term under Section 409A(a)(2)(B) of the Code. For this purpose,
Executive is a “key employee” during the 12-month period beginning on the April 1 immediately
following a calendar year, if he or she was employed by the Company or any Affiliate 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 and disregarding
Section 416(i)(5) of the Code). The Executive will not be treated as a Specified Employee if he or
she is not required to be treated as a Specified Employee under Treasury Regulations issued under
Section 409A of the Code.

     18. “Successor” means any Person that succeeds to, or has the practical ability to
control (either immediately or solely with the passage of time), the Parent Corporation’s business
directly, by merger, consolidation or other form of business combination, or indirectly, by
purchase of the Parent Corporation’s outstanding securities ordinarily having the right to vote at
the election of directors or all or substantially all of its assets or otherwise.

     19. “Termination of Employment” means a termination of Executive’s employment relationship
with the Company and all Affiliates or such other change in the Executive’s employment relationship
with the Company and all Affiliates that would be considered a “separation from service” under
Section 409A of the Code. The Executive’s employment relationship will be treated as remaining
intact while the Executive is on a military leave, a sick leave or other bona fide leave of absence
(pursuant to which there is a reasonable expectation that the Executive will return to perform
services for the Company or an Affiliate) but only if the period of such leave does not exceed six
(6) months, or if longer, so long as the Executive retains a right to reemployment by the Company
or an Affiliate under applicable statute or by contract, provided, however, a twenty-nine (29)
month period of absence may be substituted for such six (6) month period of absence where the
Executive’s leave is due to any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than six
(6) months and such impairment causes the Executive to be unable to perform the duties of his or
her position of employment or any substantially similar position of employment. In all cases, the
Executive’s Termination of Employment must constitute a “separation from service” under Section
409A of the Code and any “separation from service” under Section 409A of the Code shall be treated
as a Termination of Employment.

A-5exv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

The undersigned:

	1.	 	The company incorporated under the laws of the Netherlands, AMERICAN MEDICAL SYSTEMS EUROPE
B.V., hereinafter to be referred to as: “the Employer”, with registered office in Amsterdam
and place of business in Breukelen, Straatweg 66H, 3621 BR, The Netherlands, for this purpose
duly represented by Ignasi Vivas, Managing Director AMS Europe BV;

And

	2.	 	Francois Georgelin, presently residing at 65, rue Page 1050 Brussels, Belgium, hereinafter
to be referred to as: “the Employee”;

The Employer and the Employee shall collectively be referred to as the “Parties”.

WHEREAS:

The Employer wishes to employ the Employee and the Employee has agreed to accept the employment
subject to the terms and conditions as set forth below.

DECLARE TO HAVE AGREED AS FOLLOWS:

Article 1: Duration

	1.1	 	This agreement will commence on 9th January 2009 and is entered into for an indefinite period of time.
	 
	1.2	 	After the first month of the employment agreement, each of the Parties may terminate this
employment agreement with due observance of a notice period of 6 months for the Employer and a
notice period of 3 months for the Employee. Notice shall be given against the end of a
calendar month.
	 
	1.3	 	The employment agreement shall terminate in any event without notice of termination is being
required on the first day of the month in which the Employee will be entitled to an old age
pension on behalf of the Employer or on the first day of the month in which the Employee
reaches the age of 65 years.
	 
	1.4	 	In the event of a termination of this employment agreement by or on the initiative of the
Employer, the Employee is entitled to a compensation for damages in that respect of gross
€204,340. The Employee shall not be entitled to the aforementioned compensation in the event
that (i) the employment agreement is terminated during the trial period as defined in article
1.2 of this employment agreement, (ii) the employment agreement is terminated for urgent cause
as referred to in section 7:678 of the Dutch Civil Code (Burgerlijk Wetboek) (“DCC”), (iii)
the employment agreement is terminated after 2 years of illness of the Employee, (iv) the
employment agreement is terminated by the Employee or (v) if the employment agreement is
terminated for cause as referred to in article 7:685 of the Dutch Civil Code, being amongst
other things, but not limited to, (1) the Employee’s failure (except where due to a disability
as defined under (B) hereof), neglect or refusal to perform his duties hereunder which
failure, neglect or refusal shall not have been corrected by the Employee within 30 days of
receipt by the Employee of written notice from the Employer of such failure, neglect or
refusal, which notice shall specifically set forth the nature of said failure, neglect or
refusal, (2) any wilful or intentional act of the Employee that has the effect of injuring the
reputation or business of the Employer or its affiliates in any material respect; (3) any
continued or repeated absence from the Employer, unless such absence is (A) approved or
excused by the Board of Directors or (B) is the result of the Employee’s illness, disability
or incapacity (in which event the provisions of Section 6(b) hereof shall control); (4) use of
illegal drugs by the Employee or repeated drunkenness; (5) conviction of the Employee for the
commission of a felony; or (6) the commission by the Employee of an act of fraud or
embezzlement against the Employer.

Article 2: Position, rights, duties and workplace 

 

	2.1	 	The Employee enters into the Employer’s service in the position of Vice President, General
Manager EMEA.
	 
	2.2	 	The Employee shall perform, to the best of his abilities, all the duties in connection with
the business of the Employer which may reasonably be assigned to him by or on behalf of the
Employer and shall act in accordance with the instructions issued by or on behalf of the
Employer.
	 
	2.3	 	The Employee recognizes that the Employer is committed to the values and policies contained
in the Employee Handbook for American Medical Systems Europe BV, the Code of Conduct, and the
Avoidance of Patient Contact Policy, and that any violation may result in disciplinary action,
up to and including dismissal.
	 
	2.4	 	The office of the Employer at Straatweg 66H 3621 BR, Breukelen, Netherlands, will be the
normal workplace of the Employee.
	 
	2.5	 	The Employer will be entitled, after consultation with the Employee, to change the place of
employment.

Article 3: Remuneration

	3.1	 	The Employee’s salary amounts to a gross base salary of €240,393.48 per annum in thirteen
monthly payments (12 months ordinary salary and one month holiday pay, payable in May of each
year) in arrears. In addition, the Employee will also be eligible for, at a minimum, an annual
bonus of 30% of his base salary at target. In 2009, the Employee will be eligible for a target
bonus of gross €84,143.08 per annum payable on achievement of targets to be agreed upon with
the Employee’s manager. The bonus amount to be awarded will be prorated based on the
commencement date of this employment agreement and has a maximum payout of two times target in
2009. Every year the bonus scheme will be redesigned at the employer’s discretion. The
Employee will not be eligible to overtime payments.
	 
	3.2	 	The salary will be subject to the (usual) deductions. Your compensation will be reviewed
annually at year-end and increases will be purely discretionary on the part of Employer’s
management.

Article 4: Business hours

	4.1	 	Usual business hours are from Monday until Friday from 09.00 a.m. until 06.00 p.m. — the
working week will be of 40 hours duration.
	 
	4.2	 	The Employee will be obliged to work overtime at the request of the Employer, insofar as the
circumstances of the Company so require in view of the Employer. The Employer shall pay no
compensation for overtime work.

Article 5: Holidays

	5.1	 	The Employee is entitled to 25 working days vacation per annum plus all Netherlands’ bank holidays.

Article 6: Illness and other absence

	6.1	 	If the Employee is not capable of performing his duties due to illness or due to any other
disability, he will inform the Employer as soon as possible, but nevertheless before 9.00 a.m.
at the latest on the first day of sickness.
	 
	6.2	 	In case of illness or disability, the Employer will pay 100% of the basic salary, referred
to in article 3.1. to the Employee during a maximum period of 52 weeks as from the first day
of illness. In case of illness of the Employee during the weeks 53 up to and including 104,
the Employer will pay 70 % of the Employee’s gross basic salary, according to the relevant
provisions in article 7:629 Dutch Civil Code. The above applies, however, only if and to the
extent that pursuant to the requirements of article 7:629, sub 3 through 7 of the Civil Code,
the Employer is under the obligation to continue to pay the salary in accordance with article
7:629, sub 1 of the Civil Code.
	 
	6.3	 	The Employee shall not be entitled to the salary payment referred to in paragraph 2 of this
article if, and to the extent that, in connection with his sickness, he can validly claim
damages from a third party as a result of loss of salary and if and to the extent that the
payments by the Employer set forth in paragraph 2 of this

 

	 	 	article exceed the minimum obligation referred to in article 7:629 sub 1 of the Civil Code.
In this event, the Employer shall satisfy payment solely by means of advanced payments on
the compensation to be received from the third party and upon assignment by the Employee of
his rights to damages vis-à-vis the third party concerned up to the total amount of advanced
payments made. The advanced payments shall be set-off by the Employer if the compensation is
paid or, as the case may be, in proportion thereto.

Article 7: Health Insurance, Pension Plan and Stock Options

	7.1	 	The Employee is entitled to contributions by the Employer to the Employer’s health insurance
scheme as outlined in the employee handbook.
	 
	7.2	 	The Employee is entitled to contributions by the Employer to the Employer’s pension and
insurance schemes of a percentage of the base annual combined salary as outlined in the
employee handbook.
	 
	7.3	 	Pending approval of the Compensation Committee of the AMS Board of Directors, you will be
granted a Non-Qualified stock option for 100,000 shares of AMS Common Stock at Fair Market
Value on the grant date. This option will vest over a period of four years and will be
exercisable for a period of 7 years from the grant date, provided that you remain an employee
of the Employer. The details concerning the Non-Qualified stock options will be specified in
a separate stock option agreement.

Article 8: Trade secrets, Confidentiality, and documents

	8.1	 	The Employee undertakes, both during the existence of the employment agreement, as well as
after termination thereof, irrespective of the reason, not to disclose to anyone, (including
other employees in the service of the Employer, unless these persons need the information with
respect to their activities), any Trade Secrets (as defined in article 8.4), or Confidential
Information (as defined in article 8.5) or create the possibility to use working methods or
other facts (including information regarding business relations of the Employer), that were
known to the Employee as a result of his employment with the Employer and of which the
confidential character reasonably could have been assumed.
	 
	8.2	 	It is prohibited to the Employee to have or keep in his possession any books, correspondence,
notes, drawings, calculations and other documents of which the confidential character can be
assumed or copies or drawings thereof, and that belong to the Employer, to use for other
purposes than the business of the Employer, or to show or dispose to third parties without
prior written approval of the Employer.
	 
	8.3	 	All correspondence, notes, drawings, calculations, etc. as mentioned under paragraph 1 and 2
of this Article (even if they are put at the disposal of the Employee, or were personally
addressed and sent to the Employee), have to be returned at first request of the Employer, and
in any event at the termination of the employment agreement, together with all other company
properties that the Employee possesses.
	 
	8.4	 	The Employer has, and is expected to develop certain concepts, products, processes,
information, designs, ideas, policies and procedures, for the purpose of this employment
agreement collectively referred to as “Trade Secrets”, which the Employer uses in its
business and which give the Employer an advantage over competitors who do not know, understand
or use these secrets. Trade Secrets include the following information:

	•	 	information which in any way relates to the Employer’s design, engineering, manufacturing
or management activities, financial condition, financial operations, purchasing activities,
business plans and marketing activities;
	 
	•	 	information acquired or compiled by the Employer regarding actual or potential customers,
including their identities, their development prospects, financial information concerning
their business operations, identity and quantity of products or services purchased from the
Employer, and all related accounts receivable information;
	 
	•	 	information concerning or resulting from the development of internal policies, procedures,
standards, quality or productivity measures or tools; and
	 
	•	 	any other information (in whatever form) as may, from time to time, be designated by the
Employer as “Proprietary” or a “Trade Secret.”

	8.5	 	The Employer has, and is expected to develop other Confidential Information, concepts,
designs, policies, and procedures having independent economic value from not being generally
known or ascertainable by

 

	 	 	proper means which the Employee will or may learn in the course of his employment with the
Employer but which does not constitute Trade Secrets as described above. For purposes of
this employment agreement, “Confidential Information” means any proprietary,
confidential or competitively sensitive information and materials which are the property of
or relate to the Employer including, without limitation:
	 
	•	 	the identity of the Employer’s past, present and prospective customers, clients or business
contacts, and all documents, information and materials which concern or relate to such
customers, clients or business contacts;
	 
	•	 	marketing, sales, and advertising information; marketing and sales techniques, strategies,
efforts and data; business plans and product development and delivery schedules; market
research and forecasts;
	 
	•	 	organizational information, such as personnel and salary data, merger, acquisition and
expansion information; information concerning methods of operation; divestiture information,
and competitive information pertaining to the Employer’s distributors;
	 
	•	 	technical information such as product specifications, compounds, formulas, improvements,
discoveries, developments, designs, inventions, techniques, and new products;
	 
	•	 	information disclosed to the Employee as part of any specialized, proprietary training
process; and
	 
	•	 	information of third parties provided to the Employee subject to non-disclosure
restrictions for use in the Employee’s business for the Employer.

Article 9: Non-competition and Non-solicitation

	9.1	 	The Employee acknowledges that the agreements and covenants contained in this employment
agreement are essential to protect the value of the Employer’s business and assets and by his
or her current employment with the Employer, the Employee has obtained and will obtain such
knowledge, contacts, know-how, training and experience and there is a substantial probability
that such knowledge, know-how, contacts, training and experience could be used to the
substantial advantage of a competitor of the Employer and to the Employer’s substantial
detriment. In consideration of the foregoing and the other covenants and agreements of the
Employer set forth herein, the Employee agrees to the restrictions contained in this Section.
	 
	9.2	 	The Employee agrees that the Employee will not, during the Employee’s employment with the
Employer and for a period of one year following the date of the termination of the Employee’s
employment with the Employer (the “Restrictive Period”), directly or indirectly solicit, or
assist anyone else in the solicitation of, any of the Employer’s employees, or former
employees who worked for the Employer for the purpose of hiring them, engaging them as
consultants, or inducing them to leave their employment with the Employer. If the Employee is
approached by one of the Employer’s employees or former employees regarding potential
employment, consultation or contract, as described above during the Restrictive Period of
non-solicitation, the Employee must immediately (1) fully inform the employee or former
employee of the Employee’s non-solicitation obligation described above; and (2) refrain from
engaging in any communication with the employee or former employee regarding potential
employment, consultation or contract.
	 
	9.3	 	“Employer Product” means any product, product line or service that has been designed,
developed, manufactured, marketed, sold or is under research, development, or is being pursued
through acquisition or licensure, or has been the subject of disclosure to the Employer in
response to a due diligence process by the Employer, at any time during the Employee’s
employment with the Employer.
	 
	9.4	 	“Competitive Product” means goods, products, product lines or services developed, designed,
manufactured, marketed, promoted, sold, serviced, or that are in development or the subject of
research by any Person that are the same or similar, perform any of the same or similar
functions, may be substituted for, or are intended or used for any of the same purposes as an
Employer Product.
	 
	9.5	 	“Conflicting Organization” means any Person (including the Employee), and any parent,
subsidiary, partner or affiliate of any Person, that engages in, or is about to become engaged
in, the development, design, production, manufacture, promotion, marketing, sale, support or
service of a Competitive Product.
	 
	9.6	 	The Employee agrees that the he will not, during the Restrictive Period, alone or in any
capacity with another Person (e.g., as an advisor, consultant, principal, agent, partner,
officer, director, shareholder, employee or otherwise), within any geographic area where the
Employer does business:

 

	9.7	 	directly or indirectly disclose to a Conflicting Organization the names or any other
information regarding the Employer’s customers, or, on behalf of a Conflicting Organization,
call on, solicit, take away, or attempt to call on, solicit, or take away any of the customers
of the Employer on whom the Employee called, or otherwise had contact on behalf of the
Employer, or developed knowledge regarding the customer’s need for or use of Competitive
Product(s); or
	 
	9.8	 	seek or obtain employment with, work for, consult with, or lend assistance to any Conflicting
Organization in a capacity which is the same as or similar to the employment capacity the
Employee performed on behalf of the Employer; or
	 
	9.9	 	directly or indirectly participate in or support in any capacity the manufacture, invention,
development, testing or research of any Competitive Product; or
	 
	9.10	 	disrupt, damage, impair, or interfere with the business of the Employer whether by way of
interfering with or disrupting the Employer’s relationship with employees, customers, agents,
representatives or vendors.
	 
	9.11	 	During the Restrictive Period, the restrictions contained in this Section will not prevent
the Employee from accepting employment with, or providing consulting services to, a large
diversified organization with separate and distinct divisions that do not compete, directly or
indirectly, with the Employer, if prior to accepting such employment or providing such
consulting services, the Employer receives separate written assurances from the prospective
employer and from the Employee, satisfactory to the Employer, confirming that the Employee
will not render any services, directly or indirectly, to any division or business unit that
competes, directly or indirectly, with the Employer. During the Restrictive Period set forth
in this Section, the Employee will inform any new employer, prior to accepting employment or
providing consulting services, of the existence of this Agreement and provide such employer
with a copy of this Agreement.

Article 10: Additional activities

	10.1	 	Without the prior written consent of Employer, the Employee shall not undertake — whether or not against payment -
any additional
activities for/with
third parties
and/or conduct any
business for
his/her own
account.

Article 11: Penalty clause

	11	 	In the event the provisions of article 8, 9 and/or article 10 are being infringed upon, the
Employee shall forfeit to the Employer, without any further notice of default being required
to be served and by way of departure form the provisions as per subsections (3), (4) and (5)
of Section 650 of Book 7 of the Dutch Civil Code, an immediately payable penalty which shall
not be open to mitigation in the amount of EUR 10,000 per breach and EUR 1,000 for each day or
part thereof that such breach continues, without prejudice to the Employer’s right to demand
that the Employee should compensate it for its actual loss.

Article 12: Conversion

	12.1	 	If any article or paragraph of this agreement will be declared null and void, this will not
affect the validity of the rest of this agreement. Any paragraph so declared will be (re)
negotiated in good faith.

Article 13: Applicable law and jurisdiction

	13.1	 	This agreement is construed and governed by the law of the Netherlands.
	 
	13.2	 	All possible disputes with regard to or arising from this agreement will be brought before
the competent Court in the Netherlands.

Article 14: General

	14.1	 	This agreement sets forth the entire understanding of the Parties and supersedes all previous
oral or written representations.

 

	14.2	 	In order to become effective, alterations and additions to this agreement must be in writing
and with regard to the Employer, solely when a decision to that effect has been taken by the
competent body of the Employer.

Thus agreed upon and drawn up in duplicate in Breukelen, the Netherlands on 20 October 2008

	 	 	 	 
	/s/
Anthony Bihl
	 	/s/ Francois Georgelin	
	Anthony Bihl

	 	Francois Georgelin	
	President and CEO
	 	 	
	American Medical Systems, Inc.
	 	 	
	On behalf of American Medical Systems Europe B.V.

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