Exhibit 10.2

 

Advanced Medical Optics, Inc.

 

NONQUALIFIED STOCK OPTION GRANT

 

TERMS AND CONDITIONS

 

As of May 2005

 

1. Definitions. Capitalized terms used in this Grant but not otherwise defined
shall have the same meanings as in the Advanced Medical Optics, Inc. 2005
Incentive Compensation Plan, as amended (the “Plan”).

 

2. The Option. You may, at your discretion and on the terms and conditions set
forth herein, purchase all or any part of an aggregate of the shares of Common
Stock at the price per share set forth in the Grant Summary (the “Summary”).

 

3. Terms of Exercise.

 

(a) Subject to the provisions of Sections 4, 5, 6, and 7 below, as applicable,
the Option shall vest and be exercisable at the option exercise price per share
(the “Option Price” or “Exercise Price”) and as to the specified number of
shares (the “Vesting Amount”) on and after the dates set forth under Vesting
Schedule and on or before the “Expiration Date” as set forth in the Summary. You
have no right to exercise the Option with respect to any installment until such
installment vests as provided in the Summary. The Option granted hereunder shall
expire and be no longer exercisable as provided in the Plan and this Grant.

 

(b) The Option may be exercised as to all or any portion of the “Options
Granted” covered by an installment of the Option that has vested and that has
not yet expired and become unexercisable as provided in the Plan or this Grant
(“Vested Installment”). Vested Installments may be exercised, in whole or in
part, by giving notice of exercise to AMO’s stock plan administrator, which
notice shall specify the number of Options Granted to be purchased and shall be
accompanied by payment in full of the purchase price in cash or: (i) in whole or
in part, through the delivery of shares of Common Stock duly endorsed for
transfer to AMO with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; provided,
however, that if such shares of Common Stock were issued to you directly from
the Company, such shares must have been owned by you for at least six months; or
(ii) through a combination of cash and the consideration provided in the
foregoing subparagraph (i). Payment of cash may be by personal check, cashier’s
check or money market draft on your own account payable to the order of AMO or
such other means as the Committee (or with respect to an Option granted to an
Independent Director, the Board) shall determine. An exercise is effective only
upon receipt of both the written notice and the payment in full of the purchase
price.

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4. Change in Control. Notwithstanding anything to the contrary in this Grant, in
the event of a Change in Control the Option shall, as of the date of such Change
in Control, immediately become vested and exercisable with respect to the full
number of Options Granted.

 

5. Termination of Employment. This Section 5 shall apply solely to Options
granted to Employees.

 

(a) Except as otherwise provided in a written agreement between you and the
Company, in the event of termination of your employment with the Company for
Cause, the Option shall become unexercisable as of the date of such termination
and you shall thereafter have no further rights to purchase any of the Optioned
Shares.

 

(b) Except as otherwise provided in a written agreement between you and the
Company, in the event of your termination of employment with the Company and its
subsidiaries for:

 

(i) Any reason other than for Cause, death, Total Disability, Normal Retirement,
or Job Elimination, the Options shall become unexercisable as of the earlier of
(A) the date the Vested Installments expire in accordance with the provisions of
Section 3(a) above or (B) three calendar months after the date of termination.

 

(ii) Death or Total Disability, the Option shall vest in its entirety as of your
last date of employment and shall expire and become unexercisable one calendar
year after the date of your termination.

 

(iii) Normal Retirement, the Option shall expire and become unexercisable as of
the earlier of (A) the date the Vested Installments expire in accordance with
the provisions at Section 3(a) above or (B) three calendar years after the date
of termination.

 

(iv) Job Elimination, the Option shall vest in its entirety as of your last date
of employment and shall expire and become unexercisable as of the earlier of (A)
the date the Vested Installments expire in accordance with the provisions at
Section 3(a) above or (B) three calendar months after the date of termination.
Notwithstanding the foregoing, if you meet the requirements for Normal
Retirement at the time your employment is terminated for Job Elimination, your
Option shall become vested as of the last date of employment, and your Option
shall expire and become unexercisable as of the earlier to occur of (Y) the date
the Option expires in accordance with the provisions of Section 3(a) above or
(Z)

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three calendar years after the date of termination. In order to receive the
accelerated vesting set forth in this section (iv), you must sign and deliver to
AMO a release and waiver with respect to any and all claims relating to your
employment with or termination from the Company in a form acceptable to AMO.

 

(c) In the event your employment terminates for Normal Retirement or for any
reason other than for Cause, death, Total Disability or Job Elimination, the
Option shall be exercisable by you (or your successor in interest in the event
of your death after your employment terminates) following your termination of
employment only to the extent that installments thereof had become exercisable
on or prior to the date of such termination and had not expired and become
unexercisable on or prior to such date.

 

(d) In the event that you are prohibited from exercising the Option within the
otherwise specified time period following termination of employment due to a
delay with respect to the administration of the Plan, the circumstances of which
are beyond your control, the period of time to exercise the Option shall be
extended and be deemed to begin on the date you are permitted to exercise the
Option. In the event that you are unable to exercise your Option after your
termination of employment because AMO has blocked all trading of Options by all
optionees for administrative or legal purposes, the days covered by the block
will not count toward your exercise period.

 

6. Term of Options Granted to Independent Directors. This Section 6 shall apply
solely to Options granted to Independent Directors.

 

(a) Except as otherwise provided in a written agreement between you and the
Company, no Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:

 

(i) The expiration of one calendar year from the date of the Independent
Director’s termination of directorship by reason of his or her death or Total
Disability;

 

(ii) The expiration of three calendar months from the date of the Independent
Director’s termination of directorship for any reason other than such
Independent Director’s death or his or her Total Disability, unless the
Independent Director dies within said three calendar month period, in which case
the Option shall expire one year from the date of the Independent Director’s
death; or

 

(iii) The expiration of 10 years from the date the Option was granted.

 

(b) In the event your service as a Director terminates, the Option shall be
exercisable by you (or your successor in interest in the event of your death

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after your service terminates) following your termination of service only to the
extent that installments thereof had become exercisable on or prior to the date
of such termination and had not expired and become unexercisable on or prior to
such date.

 

7. Term of Options Granted to Consultants. This Section 7 shall apply solely to
Options granted to Consultants.

 

(a) Except as otherwise provided in a written agreement between you and the
Company, no Option granted to a Consultant may be exercised to any extent by
anyone after the first to occur of the following events:

 

(i) The expiration of one calendar year from the date of the Consultant’s
termination of consultancy by reason of his or her death or Total Disability;

 

(ii) The expiration of three calendar months from the date of the Consultant’s
termination of consultancy for any reason other than such Consultant’s death or
his or her Total Disability, unless the Consultant dies within said three
calendar month period, in which case the Option shall expire one calendar year
from the date of the Consultant’s death; or

 

(iii) The expiration of 10 years from the date the Option was granted.

 

(b) In the event your service as a Consultant terminates, the Option shall be
exercisable by you (or your successor in interest in the event of your death
after your service terminates) following your termination of service only to the
extent that installments thereof had become exercisable on or prior to the date
of such termination and had not expired and become unexercisable on or prior to
such date.

 

8. Definitions. As used herein, “calendar month” means 30 days, and “calendar
year” means 365 days.

 

9. Grant Subject to Plan. The grant of the Option evidenced hereby is made
pursuant to all of the provisions of the Plan, and this Grant is intended, and
shall be interpreted in a manner to comply therewith. Any provision of this
Grant which is inconsistent with Plan shall be superseded by and governed by the
Plan.

 

10. Disputes and Disagreements. Any dispute or disagreement which may arise
under or as a result of or pursuant to this Grant shall be determined by the
Committee in its sole discretion, and any interpretation by the Committee (or
with respect to an Option granted to an Indpendent Director, the Board in its
sole discretion) of the terms of this Grant shall be final, binding and
conclusive.

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11. Notices. All notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficient in all respects only if delivered
in person or sent via certified mail or overnight delivery service such as
Federal Express, postage prepaid, addressed as follows:

 

If to the Company:    1700 East St. Andrew Place      Santa Ana, California
92705      Attention: General Counsel If to you:    To your address as last set
forth      in the Company’s employment records.