AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
2006 NAMED EXECUTIVE OFFICER COMPENSATION SUMMARY
2006 Base Salary and Option Grants . For fiscal 2006, each named executive officer will receive the base
salary set forth below (effective as of February 1, 2006), 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 $21.38 (equal to the “fair market value” of a share of common stock
on the grant date), vest over a period of 4 years and have a term of 7 years.
2006 Executive Variable Incentive Plan . Executive officers are also eligible to receive incentive compensation
under the 2006 Executive Variable Incentive Plan. The Compensation Committee (and the Board of Directors
with respect to executive officers) established a target bonus for each participant in the plan. The 2006 quarterly
bonus payments will be calculated at the end of each fiscal quarter based upon each fiscal quarter’s year-over-
year sales growth rate, each quarter’s year-over-year increase in sales dollars, a measure of operating income
and a cost of capital on net assets. Each quarter, the actual quarterly results for four quarters (the current plus
three past quarters) will be weighted and compared to the plan level to generate a percent of plan achievement.
This percent is applied against the participant’s target bonus for the quarter, resulting in a quarterly bonus
payment per individual. The target bonus for 2006 for each named executive officer is set forth in the table below.
Martin J. Emerson
President and Chief Executive Officer
Carmen L. Diersen
Executive Vice President, Chief Financial Officer
and Corporate Secretary
Ross A. Longhini
Executive Vice Presiden