Document:

EX-10.26

Exhibit 10.26

American Medical Systems Holdings, Inc.

Non-employee Director Compensation Summary

Annual Retainer 

We pay our independent directors an annual retainer for serving on the Board and Committees as
follows:

	 	 	 	 	 
	Annual Board Retainer
	 	$	40,000	 
	Lead Director Retainer
	 	$	30,000	 
	Audit Committee member
	 	$	10,000	 
	Audit Committee chair
	 	$	20,000	 
	Compensation Committee member
	 	$	5,000	 
	Compensation Committee chair
	 	$	10,000	 
	Nominating/Corporate Governance Committee member
	 	$	3,000	 
	Nominating/Corporate Governance Committee chair
	 	$	7,500	 
	Technology/Business Development member
	 	$	4,000	 
	Technology/Business Development chair
	 	$	6,000	 

Stock Options 

Our current compensation program also provides for the grant of stock options to our non-employee
directors effective as of the date of the director’s first appointment or election to the board and
on an annual basis thereafter. On May 8, 2008 (the date of our 2008 annual meeting of
stockholders), we granted Mr. Emmitt, Ms. Kiernan, Dr. McLellan, Dr. Porter, Mr. Sharma and Mr.
Timbie each an option to purchase 30,282 shares of our common stock. Also on May 8, 2008, we
granted Mr. Graf an option to purchase 45,423 shares of our common stock. All options were granted
under our 2005 Stock Incentive Plan. These options have an exercise price equal to the fair market
value of one share of common stock on the date of grant (as determined under the plan as the
average of the high and low market price on the date of grant), and expire seven years from the
grant date. The options become exercisable on May 1 of each of the first three years after the
grant date. Upon a change in control, all outstanding options would become immediately exercisable
in full and remain exercisable for a period of up to five years, not to exceed the expiration date
of the option. Each non-employee director who is reelected as a director at the annual meeting of
stockholders or continues to serve as a director after such meeting will be granted an option to
purchase a number of shares of our common stock, as determined by the board each year prior to the
annual meeting for such year. The board anticipates that value (based on customary valuation
methods) of future option grants will be approximately equal to the value of the options to
purchase a total of 30,282 shares granted to independent directors in 2008 (or in the case of the
lead director, 45,432 shares).

Expenses 

In addition, we reimburse our non-employee directors for reasonable out-of-pocket expenses incurred
in connection with attending regularly scheduled meetings.EX-10.28

Exhibit 10.28

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

2009 NAMED EXECUTIVE OFFICER COMPENSATION SUMMARY

2009 Base Salary and Option Grants. For fiscal 2009, the company’s principal executive officer,
principal financial officer and each other named executive officer currently employed by the
company will receive the base salary set forth below (effective as of February 2, 2009), and has
been granted an option to purchase the number of shares of company common stock set forth below.
All options were granted under the company’s 2005 Stock Incentive Plan at an exercise price of
$10.825 (the average of high and low sale prices on the grant date). All options vest with respect
to twenty-five percent of the shares on March 31, 2010 and with respect to 6.25% of the shares on
the last day of each calendar quarter thereafter. All options have a term of seven years.

	 	 	 	 	 	 	 	 	 	 	 
	Name	 	Title	 	Base Salary	 	Options
	Anthony P. Bihl, III	 	President and Chief Executive Officer
	 	$	500,000	 	 	 	125,000	 
	Ross A. Longhini	 	Executive Vice President and Chief Operating Officer
	 	$	339,600	 	 	 	60,000	 
	Mark A. Heggestad	 	Executive Vice President and Chief Financial Officer
	 	$	295,000	 	 	 	60,000	 
	Whitney D. Erickson	 	Vice President and General Manager,
Men’s Health
	 	$	277,000	 	 	 	50,000	 
	John F. Nealon	 	Senior Vice President and General
Manager, Women’s Health
	 	$	273,000	 	 	 	50,000	 

2009 Executive Variable Incentive Plan. Our executive officers participate in our 2009 Executive
Variable Incentive Plan (2009 EVIP). The Compensation Committee (and the Board of Directors with
respect to executive officers) established a target bonus for each participant in the 2009 EVIP.
The 2009 EVIP provides for payment of a bonus based on achievement of net sales, net income and
cash flow objectives in the 2009 operating plan approved by the Board. The total bonus is weighted
40% for achieving the net sales objective, 30% for achieving the net income objective and 30% for
achieving the cash flow objective. The bonus payable under the 2009 EVIP is pro-rated for
achievement above the minimum threshold and increases with percentage achievement relative to the
objectives, and 100% of the target bonus will be paid at 100% achievement of the 2009 EVIP
objectives. The maximum bonus payable under the 2009 EVIP will be 200% of the target bonus at 110%
achievement of the net sales and net income objectives and 115% achievement of the cash flow
objective. Bonuses for achieving the net sales and net income objectives will be paid beginning at
95% achievement of the net sales objective and 90% achievement of the net income objectives,
respectively. Bonuses for achieving these objectives will be determined and paid quarterly.
Bonuses for achieving the cash flow objective will be paid beginning at 85% achievement of the cash
flow objective, and bonuses for achieving this objective will be determined and paid annually. The
target bonus for 2009 for the company’s principal executive officer, principal financial officer
and each other named executive officer currently employed by the company is set forth in the table
below.

	 	 	 	 	 	 	 
	Name	 	Title	 	Target Bonus
	Anthony P. Bihl, III	 	President and Chief Executive Officer
	 	$	500,000	 
	Ross A. Longhini	 	Executive Vice President and Chief Operating Officer
	 	$	237,720	 
	Mark A. Heggestad	 	Executive Vice President and Chief Financial Officer
	 	$	177,000	 
	Whitney D. Erickson	 	Vice President and General Manager, Men’s Health
	 	$	138,500	 
	John F. Nealon	 	Senior Vice President and General Manager, Women’s Health
	 	$	136,500EX-10.29

Exhibit 10.29

AMERICAN MEDICAL SYSTEMS, INC.

EXECUTIVE VARIABLE INCENTIVE PLAN

For 2009

I. PURPOSE

American Medical Systems, Inc. (AMS) is dedicated to excellence in performance and in creating a
strong link between performance and compensation. This Plan is designed to reward senior AMS
management team members with performance-based compensation for achieving and surpassing specified
company financial goals related to long-term company growth and business improvement. The Plan is
intended to align executive incentives with shareholder value drivers of sales growth, operating
profit and cash flow.

II. PERFORMANCE MEASURES

Bonus payments under the Plan will be determined by comparing three key corporate performance
measures — Net Sales, Net Income and Cash Flow — to budgeted performance established in the 2009
Operating Plan, as approved by the Board. Each of these measures is assessed separately. If there
is a material unanticipated event such as an acquisition, actual results may be adjusted to exclude
the event for purposes of the Plan, and/or the operating plan may be adjusted to reflect the event.
Any such proposed adjustment will be approved by the Compensation Committee of the Board of
Directors, with the exception of non-recurring type charges, which management determines should be
excluded for external reporting of Non-GAAP financial results (e.g. IPRD charge).

Net Sales performance is 40% of the total target bonus and is evaluated quarterly based upon net
sales reported in the applicable earnings release, as adjusted for the impact of currency
fluctuations from the original plan, described below. Net Sales performance is measured quarterly
on the basis of actual results for the quarter, compared to the operating plan for the quarter to
calculate the percentage of weighted achievement. No bonus will be earned with respect to Net Sales
performance for a relevant measurement period until 95% of operating plan performance for the
relevant period is achieved. Below 95% performance, 0% of the target bonus is paid, at 95%
performance, 50% of the target bonus for Net Sales will be paid. Above 95%, the bonus percent
increases on a linear scale, with 100% of the target bonus for Net Sales paid at 100% performance
compared to the operating plan for the relevant period. Above 100%, the bonus percent also
increases on a linear scale in which 10% of bonus is paid for every 1% of incremental Plan
achievement and a maximum of two times target bonus for Net Sales is paid at 110% of performance
compared to the operating plan for the relevant period. For purposes of this calculation, Net
Sales is defined as GAAP-determined Net Revenue, restated to the US Dollar equivalent net sales,
using the exchange rates established for use in the 2009 operating plan, a table of which is
published as part of the operating plan for the given year.

Net Income performance is 30% of the total target bonus and is evaluated quarterly based upon net
income reported in the applicable earnings release. Net Income performance is measured quarterly
on the basis of actual results for the quarter, compared to the operating plan for the quarter to
calculate the percentage of achievement. No bonus will be earned with respect to Net Income
performance for a relevant measurement period until 90% of operating plan performance for the
relevant period is achieved. At 90% performance, 0% of the target bonus for Net Income will be
paid. Above 90%, the bonus percent increases on a linear scale, with 100% of the target bonus for
Net Income paid at 100% performance compared to the operating plan for the relevant period. Above
100%, the bonus percent also increases on a linear scale in which 10% of bonus is paid for every 1%
of incremental Plan achievement and a maximum of two times target bonus for Net Income is paid at
110% of performance compared to the operating plan for the relevant period. For purposes of this
calculation, Net Income will not be adjusted for foreign exchange fluctuations and will exclude
non-recurring charges, as described above.

Cash Flow, defined as net cash provided by operating activities, less capital expenditures, is 30%
of the total target bonus and is evaluated annually based upon results reported in the applicable
earnings release. No bonus will be earned with respect to Cash Flow performance for the year if
actual results are less than 85% of the operating plan for this measure. Above 85%, the bonus
percent increases on a linear scale, with 100% of the target bonus for Cash Flow paid at 100%
performance compared to the operating plan for the relevant period. Above 100%, the bonus percent
also increases on a linear scale, with 133% of bonus paid at 105% and 167% of bonus paid at 110%
and a maximum of two times target bonus for Cash Flow paid at 115% of performance compared to the
annual operating

 

 

plan. Cash Flow will not be adjusted for foreign exchange fluctuations and will exclude
non-recurring charges, as described above.

III. BONUS PAYOUT

Target bonus amounts are established for each individual participant in the Plan based upon his/her
position. If a Plan participant’s position changes during the year, the individual’s target bonus
may be changed, if so approved by the President and CEO and the Compensation Committee. Any
change to the target bonus rate should become effective in the quarter following the change.

For each quarter, the actual bonus payout will be equal to 25% of the participant’s annual
target, multiplied by the plan achievement percentage for each of Net Sales and Net Income
(weighted 40% and 30% respectively). For the fourth quarter, the bonus will also include any
full-year payout for Cash Flow, which will represent the full year, weighted 30%.

Bonus payments will be issued as soon as feasible after public filing of the applicable earnings
release for a completed quarterly or annual measurement period. In the unlikely event an
adjustment occurs to financial results issued as part of the earnings release, prior to filing the
applicable Form 10-Q or Form 10-K, the impact of this adjustment would be reflected in the
following quarter. The payout for the 4th quarter bonus and full-year bonus for 2009
will occur by March 15, 2010.

IV. PARTICIPATION

The participants in the Plan are as designated for participation by the Compensation Committee, and
any new officers and Vice Presidents appointed during the year and approved by the Compensation
Committee. Each position has its own target bonus based on market data.

In order to receive payment for the bonus, the executive must be employed through the end of the
quarter, for respective quarterly payouts and through the end of the calendar year for annual
payouts. If a participant’s employment is terminated for any reason prior to the end of a quarter
or year, the unpaid amount will be forfeited unless otherwise determined by the Compensation
Committee and, in the case of any executive officer, the Board of Directors.

V. APPROVAL, AUTHORIZATION, AND TERMS

This Plan has been approved by the Compensation Committee of the Board of Directors. Any
modifications or adjustments to the Plan must be approved by the Compensation Committee of the
Board of Directors.

Participation in the Plan is not an employment contract or any implied assurance of continued
employment or any benefit hereunder.

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