Amended 2007 Performance Objectives



 EXHIBIT 10.4 
  

			
	AMO BONUS PLAN	 	



  

	
	
	 2007 PERFORMANCE OBJECTIVE
  
 (Amended Effective July 25, 2007)
  


  

 2007 PERFORMANCE OBJECTIVE 
 The funding for the 2007 Bonus Plan is weighted as follows: 
  

	o	75% based on achievement of the Adjusted Operating Income goal, and 

  

	o	25% based on achievement of the Revenue goal. 

 The goals will be for the
full year of AMO performance. 
 “Adjusted Operating Income” is defined as sales less cost of goods sold and all basic operating expenses of the
business. “Adjusted Operating Income” excludes the impact of charges or write-offs associated with acquisitions, recapitalizations, and unrealized gains or losses on derivative instruments. “Revenue” is defined as the total
dollar payment for goods and services that are credited to the income statement over the measurement period. Targets for both Adjusted Operating Income and Revenue include the impact of the May 2007 product recall. The target bonus funding level has
been reduced from 100% to 85% of previously set individual targets. 
 Each segment of the bonus is funded when AMO achieves the levels of Adjusted Operating
Income and Revenue performance, respectively, as indicated below. The plan will be funded at a minimum of 40%. 
  

 FUNDING TRIGGER ELEMENTS 
  

																	
	75% - ADJUSTED OPERATING INCOME	 	 	 	25% -
REVENUE
	 Performance
 Level
	 	2007 Adj Op
Range
Variance to
Target	 	Funding %
to Adj Op
Target	 	Plan
Funding	 	 	 	 Performance
 Level
	 	2007 Revenue
Range
Variance to
Target	 	 Funding %
to Revenue
 Target
	 	Plan
Funding
	 Threshold
	 	-5.84 mm	 	50%	 	31.875%  	 		 	Threshold	 	-53.00 mm	 	50%	 	10.625%
	 	 	 	 	 	 	 	 		 	Tier 1	 	-10.00 mm	 	95%	 	 
	 	 	Target	 	100%	 	63.75%	 		 	 	 	Target	 	100%	 	21.25%
	 	 	 	 	 	 	 	 		 	Tier 2	 	+10.00 mm	 	102%	 	 
	 Maximum
	 	+5.83 mm	 	150%	 	95.625%	 		 	Maximum	 	+159.00 mm	 	150%	 	31.875%
	 If actual Adjusted Operating Income results fall
 between the performance levels shown above, the

portion of bonus funding will be prorated accordingly.
	 	 	 	 If actual
Revenue results fall between the Tiers shown
 above, the portion of bonus funding will be prorated
accordingly.


  








 BONUS POOL FUNDING 
 At the end of the year, the President and Chief Executive Officer of Advanced Medical Optics, Inc. may recommend adjustments to the bonus funding levels to the
Organization, Compensation and Corporate Governance Committee (the “Committee”) after consideration of key operating results. When calculating Adjusted Operating Income and Revenue performance for purposes of this Plan, the Committee has
the discretion to include or exclude any or all of the following items: 
  

	•	 	 Extraordinary, unusual or non-recurring items 


  

	•	 	 Effects of accounting changes 


  

	•	 	 Effects of financing activities 


  

	•	 	 Expenses for restructuring or productivity initiatives 


  

	•	 	 Other non-operating items 


  

	•	 	 Spending for acquisitions 


  

	•	 	 Effects of divestitures 


  

 BONUS POOL DIFFERENTIATION BY BUSINESS UNIT/FUNCTION 
 The target bonus pool is determined by performance against Adjusted Operating Income (75%) and Revenue (25%). The factors below will be considered for allocation of SBU/function bonus pools: 
 CORPORATE STAFFS 
  

	•	 	 Corporate Adjusted Operating Income 


  

	•	 	 Corporate Revenue 


  

	•	 	 Strategic metrics and milestones 


 STRATEGIC
BUSINESS UNITS 
  

	•	 	 Business Unit Adjusted Operating Income 


  

	•	 	 Business Unit Revenue 


  

	•	 	 Strategic metrics 


 RESEARCH &
DEVELOPMENT, WORLD WIDE MANUFACTURING, GLOBAL CUSTOMER SERVICES, IT 
  

	•	 	 Strategic metrics and milestones 










 INDIVIDUAL BONUS AWARD CALCULATION 
 Target bonus awards are expressed as a percentage of the participant’s year-end annualized base salary. The target percentages for managers other than corporate
officers, as revised for 2007, vary by salary grade: 
  

			
	 SALARY GRADE
	 	 TARGET BONUS

	  5E *
	 	4.25%
	  6E *
	 	8.5%
	   7E    
	 	12.75%
	   8E    
	 	17%
	   9E    
	 	21.25%
	 10E    
	 	25.5%
	 11E    
	 	29.75%

 Target percentages or amounts for corporate officers are individually established by the Committee. The 2007
performance objectives do not apply to corporate officers who have been designated as 162(m) Participants. Performance targets for 162(m) Participants have not been amended. 
 A participant’s actual bonus award may vary above or below the targeted level based on the supervisor’s evaluation of his or her performance in relation to the predetermined MBOs. Each participant may
receive from 0% to 150% of his or her target bonus amount, which may be adjusted upwards or downwards based on the Company’s relative attainment of the pre-established financial performance objectives. 
 * U.S. and Puerto Rico employees only.