Exhibit 4.5


 


2004 STOCK INCENTIVE PLAN


 


Amended and Restated May 29,
2008


 


The 2004 STOCK INCENTIVE PLAN (the “Plan”) is hereby
amended and restated by Advanced Medical Optics, Inc., a Delaware
corporation (“AMO”).


 


ARTICLE I.

GENERAL PROVISIONS


 


1.1            Purposes
of the Plan


 


The purposes of the Plan are (a) to enhance the
ability to attract and retain the services of officers, qualified employees,
directors and outside consultants and service providers, upon whose judgment,
initiative and efforts the successful conduct and development of IntraLase’s
businesses and the businesses of its parent company, AMO, largely depend, and (b) to
provide additional incentives to such persons to devote their utmost effort and
skill to the advancement and betterment of IntraLase and AMO by providing them
an opportunity to participate in the ownership of AMO and thereby have an
interest in the success and increased value of AMO that coincides with the
financial interests of the AMO’s stockholders.


 


1.2            Definitions


 


As used herein the following terms shall have the meanings
set forth below:


 


(a)  “AMO” means Advanced Medical Optics, Inc.,
a Delaware corporation, or any successor thereto.


 


(b)  “Board” means the Board of Directors
of AMO.


 


(c)  “Cause” means, with respect to the
discharge by the Company of any Participant, any conduct that under Company
policies as set forth from time to time in the employee handbook of the Company
(or any successor thereto) would be considered to constitute “serious
misconduct” that would justify immediate termination without benefit of a
counseling review or severance pay.


 


(d)  “Change in Control” means the
following and shall be deemed to occur if any of the following events occur:


 


(i)  Any “person,” as
such term is used in Sections 13(d) and 14(d) of the Exchange Act (a “Person”),
is or becomes the “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act (a “Beneficial Owner”), directly or


 


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indirectly, of securities of AMO representing (i) 20%
or more of the combined voting power of AMO’s then outstanding voting
securities, which acquisition is not approved in advance of the acquisition or
within 30 days after the acquisition by a majority of the Incumbent Board (as
hereinafter defined) or (ii) 33% or more of the combined voting power of
AMO’s then outstanding voting securities, without regard to whether such
acquisition is approved by the Incumbent Board;


 


(ii)  Individuals who,
as of the Effective Date, constituted the Board of Directors of AMO (the “Incumbent
Board”), cease for any reason to constitute at least a majority of the Board of
Directors of AMO, provided that any person becoming a Director of AMO subsequent
to Effective Date, whose election, or nomination for election by AMO’s
stockholders, is approved by a vote of at least a majority of the Directors of
AMO then comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the Directors
of AMO, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall, for the purposes of this Plan, be
considered as though such person were a member of the Incumbent Board of AMO;


 


(iii)  The
consummation of a merger, consolidation or reorganization involving AMO, other
than one which satisfies both of the following conditions:


 


(A)  a
merger, consolidation or reorganization which would result in the voting securities
of AMO outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of another
entity) at least 55% of the combined voting power of the voting securities of
AMO or such other entity resulting from the merger, consolidation or
reorganization (the “Surviving Corporation”) outstanding immediately after such
merger, consolidation or reorganization and being held in substantially the
same proportion as the ownership in AMO’s voting securities immediately before
such merger, consolidation or reorganization, and


 


(B)  a
merger, consolidation or reorganization in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of AMO representing 20%
or more of the combined voting power of AMO’s then outstanding voting
securities; or


 


(iv) Complete liquidation of AMO or a sale of all or
substantially all of AMO’s assets.


 


Additionally, notwithstanding the preceding provisions of
this Paragraph (d), a Change in Control shall not be deemed to have occurred if
the Person described in the preceding provisions of this Paragraph (d) is (1) an
underwriter or underwriting syndicate that has acquired any of AMO’s then
outstanding voting securities solely in connection with a public offering of
AMO’s securities, (2) AMO or any subsidiary of AMO or (3) an


 


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employee stock ownership plan or other employee benefit
plan maintained by the AMO or any of its subsidiaries that is qualified under
the provisions of the Code. In addition, notwithstanding the preceding
provisions of this Paragraph (d), a Change in Control shall not be deemed to
have occurred if the Person described in the preceding provisions of this
Paragraph (d) becomes a Beneficial Owner of more than the permitted amount
of outstanding securities as a result of the acquisition of voting securities
by AMO which, by reducing the number of voting securities outstanding,
increases the proportional number of shares beneficially owned by such Person, provided,
that if a Change in Control would occur but for the operation of this sentence
and such Person becomes the Beneficial Owner of any additional voting
securities (other than through the exercise of options granted under any stock
option plan of AMO or through a stock dividend or stock split), then a Change
in Control shall occur.


 


(e)  “Code” means the Internal Revenue Code of
1986, as amended. Where the context so requires, a reference to a particular
Code section shall also refer to any successor provision of the Code to such
section.


 


(f)  “Committee” means the committee appointed
by the Board to administer the Plan. The Committee shall be composed entirely
of members who meet the requirements of Section 1.4(a) hereof.


 


(g)  “Common Stock” means the common stock of
IntraLase Corp., subject to the provisions of (and substitution of AMO common
stock pursuant to the merger contemplated by the Merger Agreement) Section 9.1(a).


 


(h)  “Company” means AMO, IntraLase Corp. or any
Subsidiary, as determined from time to time.


 


(i)  “Consultant” means any consultant or
adviser if:


 


(i)  The
consultant or adviser renders bona fide services to the Company;


 


(ii)  The
services rendered by the consultant or adviser are not in connection with the
offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Company’s
securities; and


 


(iii)  The
consultant or adviser is a natural person who has contracted directly with the
Company to render such services.


 


(j)  “Director” shall mean a member of the
Board.


 


(k)  “Dividend Equivalent” means an amount
payable in cash, Common Stock or a combination thereof to a holder of a Stock
Option, Stock Appreciation Right or other Incentive Award denominated in shares
of Common Stock that is equivalent to the amount of dividends paid to
stockholders with respect to a number of shares of Common Stock equal to the
number of shares upon which such Incentive Award is based.


 


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(l)  “Effective Date” means the Effective
Date as defined by the Merger Agreement.


 


(m)  “Employee” means any individual
classified by the Company as a regular, full-time or part-time employee of the
Company, and with respect to individuals employed by the Company, whose income
is subject to withholding of income tax and/or for whom Social Security
contributions are made by the Company, except that such term shall not include
any individual who (a) performs services for the Company and who is
classified or paid as an independent contractor (regardless of his or her
classification for federal tax or other legal purposes) by the Company or (b) performs
services for the Company pursuant to an agreement between the Company and any
other person including a leasing organization.


 


(n)  “Exchange Act” means the Securities
Exchange Act of 1934, as amended. Where the context so requires, a reference to
a particular section of the Exchange Act shall also refer to any successor provision
to such section.


 


(o)  “Fair Market Value” means: (a) the
closing price of a share of Common Stock on the principal exchange on which
shares of Common Stock are then trading, if any (or as reported on any
composite index which includes such principal exchange), on the trading day
next preceding such date on which a trade occurred, or (b) if Common Stock
is not traded on an exchange but is quoted on Nasdaq or a successor quotation
system, the mean between the closing representative bid and asked prices for
the Common Stock on the trading day next preceding such date as reported by
Nasdaq or such successor quotation system, or (c) if Common Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor
quotation system, the Fair Market Value of a share of Common Stock as
established by the Committee acting in good faith.


 


(p)  “Incentive Award” means any Stock
Option, Dividend Equivalent, Restricted Stock, Restricted Stock Unit, Stock
Appreciation Right, Stock Payment, Performance Award or other award granted or
sold under the Plan.


 


(q)  “Incentive Stock Option” means an
incentive stock option, as defined under Code Section 422 and the
regulations thereunder.


 


(r)  “Independent Director” shall mean a
member of the Board who is not an Employee (or otherwise an employee of the
Company).


 


(s)  “Merger Agreement” means the
Agreement and Plan of Merger, dated January 5, 2007, by and among Advanced
Medical Optics, Inc., Ironman Merger Corporation, and IntraLase Corp.


 


(t)  “Nonqualified Stock Option” means a
Stock Option other than an Incentive Stock Option. To the extent that any
Option designated as an Incentive Stock Option fails in whole or in part to
qualify as an Incentive Stock Option, including, without limitation, for
failure to meet the limitations applicable to a 10% Stockholder or because it
exceeds the annual limit provided for in Section 1.3(d) below, it
shall to that extent constitute a Nonqualified Option.


 


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(u)  “Normal Retirement” means any
termination of an Employee’s employment (other than for Cause or death or Total
Disability) after such Employee has attained age 55 and has been employed by
the Company for a minimum of five (5) years.


 


(v)  “Option” or “Stock Option” means a
right to purchase Common Stock and refers to both Incentive Stock Options and
Nonqualified Stock Options.


 


(w)  “Participant” means an individual
who has received an Incentive Award pursuant to the Plan.


 


(x)  “Payment Event” means the event or
events giving rise to the right to payment of a Performance Award.


 


(y)  “Performance Award” means an award,
payable in Common Stock, Restricted Stock, Restricted Stock Units or a
combination thereof, the terms and conditions of which may be determined by the
Committee at the time the Performance Award is granted.


 


(z)  “Performance Criteria” shall mean
the following business criteria as established by the Committee:


 


	
  (i)

  	
   

  	
  Sales;

  
	
  (ii)

  	
   

  	
  Revenues;

  
	
  (iii)

  	
   

  	
  Operating income;

  
	
  (iv)

  	
   

  	
  Pre-tax income;

  
	
  (v)

  	
   

  	
  Earnings before interest, taxes, depreciation and
  amortization (“EBITDA”);

  
	
  (vi)

  	
   

  	
  Gross margin;

  
	
  (vii)

  	
   

  	
  Return on equity;

  
	
  (viii)

  	
   

  	
  Return on capital;

  
	
  (ix)

  	
   

  	
  Earnings per share;

  
	
  (x)

  	
   

  	
  Consolidated net income divided by the average
  consolidated common stockholders equity;

  
	
  (xi)

  	
   

  	
  Cash and cash equivalents derived from either
  (i) net cash flow from operations, or (ii) net cash flow from
  operations, financings and investing activities;

  
	
  (xii)

  	
   

  	
  Adjusted operating cash flow return on income;

  
	
  (xiii)

  	
   

  	
  Cost containment or reduction;

  
	
  (xiv)

  	
   

  	
  Product development;

  
	
  (xv)

  	
   

  	
  Market share;

  
	
  (xvi)

  	
   

  	
  Customer satisfaction;

  
	
  (xvii)

  	
   

  	
  Employee satisfaction;

  
	
  (xviii)

  	
   

  	
  The percentage increase in the market price of the
  common stock over a stated period;

  
	
  (xix)

  	
   

  	
  Strategic transactions; and

  
	
  (xx)

  	
   

  	
  Individual business objectives.

  



 


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(aa)  “Plan” means this 2004 Stock Incentive
Plan, as set forth herein, as amended from time to time.


 


(bb)  “Purchase Price” means the purchase price
(if any) to be paid by a Participant for Restricted Stock or Restricted Stock
Units as determined by the Committee (which price shall be at least equal to
the minimum price required under applicable laws and regulations for the
issuance of Common Stock which is nontransferable and subject to a substantial
risk of forfeiture until specific conditions are met).


 


(cc)  “Restricted Stock” means Common Stock
which is the subject of an Incentive Award under this Plan and which is
nontransferable and subject to a substantial risk of forfeiture until specific
conditions are met as set forth in this Plan and in any instrument evidencing
the grant of such Incentive Award.


 


(dd)  “Restricted Stock Unit” means a right
granted pursuant to Section VI of the Plan to receive a share of Common
Stock at a future date set by the Committee or over a vesting period
established by the Committee.


 


(ee)  “Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended from time
to time.


 


(ff)  “Securities Act” means the Securities Act
of 1933, as amended.


 


(gg)  “Stock Appreciation Right” or “Right”
means a right granted pursuant to Section VII of the Plan to receive a
number of shares of Common Stock or, in the discretion of the Committee, an
amount of cash or a combination of shares of Common Stock and cash, based on
the increase in the Fair Market Value of the shares of Common Stock subject to
the right during such period as is specified by the Committee.


 


(hh)  “Stock Payment” means a payment in shares
of Common Stock to replace all or any portion of the compensation (other than
base salary) that would otherwise become payable to any Employee.


 


(ii)  “Subsidiary” means any corporation in an
unbroken chain of corporations beginning with AMO if each of the corporations
other than the last corporation in the unbroken chain then owns stock
possessing 50% of the total combined voting power of all classes of stock in
one of the other corporations in such chain.


 


(jj)  “10% Stockholder” means a person who, as
of a relevant date, owns or is deemed to own (by reason of the attribution rules applicable
under Code Section 424(d)) stock possessing more than 10% of the total
combined voting power of all classes of stock of AMO.


 


(kk)  “Total Disability” means the inability of
a person, by reason of mental or physical illness or accident, to perform any
and every duty of the occupation for the Company for which such person was
employed, engaged, appointed or elected when such disability commenced, which
disability is expected to continue for a period of at least 12


 


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months. Any determination as to the date and extent of any
disability shall be made by the Committee upon the basis of such information as
the Committee deems necessary or desirable including, without limitation, a
determination by the insurance provider with respect to a Participant under the
Company’s long term disability program or a disability award letter with
respect to a Participant from the Social Security Administration.


 


1.3 Shares of Common Stock Subject to the
Plan


 


(a)  Pursuant to the authorization
received by the stockholders of IntraLase Corp. prior to the Merger Agreement,
and subject to the provisions of Section 1.3 (c) and Section 9.1
of the Plan, a total of 2,171,480 shares of Common Stock may be issued under
the Plan as of April 2, 2007.(1) Subject to the provisions of Section 1.3
(c) and Section 9.1 of the Plan, in no event will more than 2,171,480
shares of Common Stock, be available for issuance pursuant to the exercise of
Incentive Stock Options.


 


(b)  The Common Stock to be issued under
this Plan will be made available, at the discretion of the Board or the
Committee, either from authorized but unissued shares of Common Stock or from
previously issued shares of Common Stock reacquired by AMO, including shares
purchased on the open market.


 


(c)  Shares of Common Stock subject to
unexercised portions of any Incentive Award granted under this Plan that
expires or is terminated, cancelled, or substituted or exchanged for an award
for a different kind of shares or other securities, and shares of Common Stock
issued pursuant to an Incentive Award under this Plan that are reacquired by
AMO pursuant to the terms of the Incentive Award under which such shares were issued,
will again become available for the grant of further Incentive Awards under
this Plan. Additionally, shares of Common Stock which are delivered by an
Employee (either actually or by attestation) or withheld by the Company upon
the exercise of any Incentive Award under the Plan, in payment of the exercise
price thereof or tax withholding thereon, may again be optioned, granted or
awarded hereunder.


 


(d)  The maximum number of shares of
Common Stock with respect to which Incentive Awards may be granted to any
individual in any given calendar year is 335,750 shares. To the extent required
for “incentive stock option” treatment under Code Section 422, the
aggregate Fair Market Value (determined as of the time of grant) of the Common
Stock, with respect to which Incentive Options granted under this Plan and any
other plan of the Company become exercisable for the first time by an Optionee
during any calendar year, shall not exceed $100,000.


 






	
  (1)

  	
   

  	
  The stockholders of IntraLase Corp. previously authorized the
  issuance of 5,607,640 shares of common stock of IntraLase Corp. under the
  Plan. The numbers of Common Stock listed in this Section 1.3 are in
  terms of common stock of AMO, into which the common stock of IntraLase Corp.
  was converted.

  



 


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1.4 Administration of the Plan


 


(a)  The Plan will be administered by the
Committee, which will consist of two or more Independent Directors appointed by
the Board, each of whom is both a “non-employee director” as defined by Rule 16b-3
and an “outside director” for purposes of Code Section 162(m). Appointment
of Committee members shall be effective upon acceptance of appointment.
Committee members may resign at any time by delivering written notice to the
Board. Vacancies in the Committee may be filled by the Board.


 


(b)  The Committee has and may exercise
such powers and authority of the Board as may be necessary or appropriate for
the Committee to carry out its functions as described in the Plan Subject to
the provisions of the Plan, the Committee has authority in its discretion to
select the eligible Employees and Consultants to whom, and the time or times at
which, Incentive Awards shall be granted or sold, the nature of each Incentive
Award, the number of shares of Common Stock or the number of rights that make
up each Incentive Award, the period for the exercise of each Incentive Award,
the Performance Criteria (which need not be identical) utilized to measure the
value of Performance Awards and such other terms and conditions applicable to
each individual Incentive Award as the Committee shall determine. The Committee
may grant at any time new Incentive Awards to an Employee or Consultant who has
previously received Incentive Awards or other grants (including other stock
options) whether such prior Incentive Awards or such other grants are still
outstanding, have previously been exercised in whole or in part, or are
cancelled in connection with the issuance of new Incentive Awards. The
Committee may grant Incentive Awards singly or in combination or in tandem with
other Incentive Awards as it determines in its discretion. The purchase price
or initial value and any and all other terms and conditions of the Incentive
Awards may be established by the Committee without regard to existing Incentive
Awards or other grants. Further, the Committee may, with the consent of the
holder of an Incentive Award, amend in a manner consistent with the Plan the
terms of such Incentive Award. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b-3
or Code Section 162(m), or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee. Notwithstanding the foregoing, the full Board, acting by a majority
of its members in office, shall conduct the general administration of the Plan
with respect to Incentive Awards granted to Independent Directors, in which
case any reference in the Plan to the “Committee” shall be deemed a reference
to the Board.


 


(c)  Subject to the express provisions of
the Plan, the Committee has the authority to interpret the Plan, to determine
the terms and conditions of Incentive Awards and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee has authority to prescribe, amend and rescind rules and
regulations relating to the Plan. All interpretations, determinations and
actions by the Committee shall be final, conclusive and binding upon all
parties. Any action of the Committee with respect to the administration of the
Plan shall be taken pursuant to a majority vote or by the unanimous written
consent of its members.


 


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(d) Members of the Committee shall receive
such compensation, if any, for their services as members as may be determined
by the Board. All expenses and liabilities which members of the Committee incur
in connection with the administration of the Plan shall be borne by the
Company. The Committee may, with the approval of the Board, employ attorneys,
consultants, accountants, appraisers, brokers or other persons. The Committee,
AMO and AMO’s officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. No member of the Board or the
Committee nor any designee thereof will be liable for any action or
determination made in good faith by the Board or the Committee with respect to
the Plan or any transaction arising under the Plan.


 


(e) The Committee may, but need not, delegate
from time to time some or all of its authority to grant Incentive Awards under
the Plan to a committee consisting of one or more members of the Committee or
of one or more officers of AMO; provided, however, that the
Committee may not delegate to any such committee, the Committee’s authority to
grant Incentive Awards to officers. Any delegation hereunder shall be subject
to the restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee. At
all times, any committee appointed under this Section 1.4(e) shall
serve in such capacity at the pleasure of the Committee.


 


1.5          Award
Instrument


 


At the time of the grant of each Incentive Award
pursuant to this Plan, the Committee shall deliver, or cause to be delivered,
to the Participant to whom the Incentive Award is granted an instrument
evidencing the grant of the Incentive Award and setting forth such terms and
conditions applicable to the Incentive Award as the Committee may in its
discretion determine consistent with the Plan. For all purposes of this Plan,
electronic communications may be considered written instruments.


 


ARTICLE II.

DIVIDEND EQUIVALENTS


 


2.1          Dividend
Equivalents


 


Any holder of an Incentive Award of Restricted Stock Units
may, in the discretion of the Committee, be granted, at no additional cost,
Dividend Equivalents based on the dividends declared on the Common Stock on
record dates during the period between the date an Incentive Award of
Restricted Stock Units is granted and the date such Incentive Award of
Restricted Stock Units is exercised (or expires, or is terminated or cancelled)
or such other period as is determined by the Committee and specified in the
instrument that evidences the grant of the Incentive Award. Such Dividend
Equivalents shall be converted to additional shares or cash by such formula as
may be determined by the Committee.


 


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Dividend Equivalents shall be computed as of each dividend
record date in such manner as may be determined by the Committee and shall be
payable to Participants at such time or time as the Committee in its discretion
may determine.


 


ARTICLE III.

OPTION GRANTS TO EMPLOYEES AND CONSULTANTS


 


3.1          Eligibility


 


Any Employee or Consultant selected by the Committee shall
be eligible to be granted an Option; provided, however, that only
Employees shall be eligible to receive “incentive stock options” within the
meaning of Code Section 422 and the regulations promulgated thereunder.


 


3.2          Option
Price


 


The purchase price of Common Stock under each Option (the “Option
Exercise Price”) will be determined by the Committee at the date such Option is
granted. The Option Exercise Price may not be less than the Fair Market Value
on the date of grant of the Common Stock subject to the Option. If the person
to whom an Incentive Stock Option is granted is a 10% Stockholder on the date
of grant, the Exercise Price shall not be less than 110% of Fair Market Value
on the date the Option is granted. However, an Option may be granted with an
exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Code Section 424.


 


3.3          Option
Period


 


Options may be exercised as determined by the Committee,
but: (a) in the absence of specific action by the Committee, or (b) in
the case of an Incentive Stock Option, in no event after ten years from the
date of grant of such Option (or with respect to an Incentive Stock Option,
such other period as is necessary to enable such Option to be treated as an “incentive
stock option” within the meaning of Code Section 422 and the regulations
promulgated thereunder).


 


3.4          Exercise
of Options


 


At the time of the exercise of an Option, the purchase
price shall be paid in full in cash or other equivalent consideration
acceptable to the Committee, in its sole discretion, consistent with the Plan’s
purpose and applicable law and as set forth in the instrument evidencing the
grant of the Option; provided, however, that the Company shall
not lend money to any Participant to finance an option exercise. If the
purchase price is paid 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, and if such shares of Common Stock were issued to
the Participant directly from AMO, such shares must have been owned by the
Participant for at least six months. No fractional shares will be issued


 


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pursuant to the exercise of an Option nor will any cash
payment be made in lieu of fractional shares. 


 


3.5          Limitation
on Exercise of Incentive Stock Options


 


The aggregate Fair Market Value (determined at the time
the Option is granted) with respect to which Incentive Stock Options are exercisable
for the first time by any Employee during any calendar year (under all stock
option plans of the Company) shall not exceed $100,000 or such other limit as
is prescribed by the Code. Any Options granted as Incentive Stock Options
pursuant to the Plan in excess of such limitation shall be treated as
Nonqualified Stock Options.


 


3.6          Termination
of Employment


 


(a) Except as otherwise provided in a written
employment agreement or instrument between the Company and the Employee
evidencing the grant of the Option, in the event of the termination of an
Employee’s employment with the Company for Cause, all of the Employee’s
unexercised Options shall expire as of the date of such termination.


 


(b) Except as otherwise provided in a written
employment agreement or instrument between the Company and the Employee
evidencing the grant of the Option, in the event of an Employee’s termination
of employment for:


 


(i) Any reason other
than for Cause, death, Total Disability, Normal Retirement or Job Elimination
(as defined below), the Employee’s Options shall expire and become
unexercisable as of the earlier of (A) the date such Options expire in
accordance with their terms or (B) three calendar months after the date of
termination.


 


(ii) Death or Total
Disability, all of the Employee’s unvested Options shall become vested as of
the last date of employment, and the Employee (or his or her successor in
interest) shall have twelve (12) months after the date of termination within
which to exercise Options that have not expired on or before such date.


 


(iii) Normal
Retirement, the Employee’s Options shall expire and become unexercisable as of
the earlier of (A) the date such Options expire in accordance with their
terms or (B) three (3) years after the date of termination.


 


(iv) Job
Elimination, all of the Employee’s unvested Options shall become vested as of
the last date of employment, and the Employee’s Options shall expire and become
unexercisable as of the earlier of (A) the date such Options expire in
accordance with their terms or (B) three calendar months after the date of
termination. Notwithstanding the foregoing, if an Employee meets the
requirements for Normal Retirement at the time his or her employment is
terminated for Job Elimination, the Employee’s Options shall become vested as
of the last date of employment, and the Employee’s Options shall expire and
become


 


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unexercisable as of the earlier to occur of (Y) the
date such Options expire in accordance with their terms or (Z) three
calendar years after the date of termination. “Job Elimination” occurs when an
Employee ceases to be an Employee of the Company as a result of a reduction in
force or transfer to a new organization outside of the Company as a result of a
divestiture, other than a spin-off or other distribution to AMO’s stockholders.
A “reduction in force” occurs under the Plan when the Employee is terminated
pursuant to a plan to reduce headcount and is not offered an alternative job at
the Company. In order to receive the accelerated vesting set forth in this
section (iv), the  Employee must sign and deliver to the Company a release
and waiver with respect to any and all claims relating to the Employee’s
employment with or termination from the Company in a form acceptable to AMO.


 


(c) Notwithstanding anything to the contrary
in Paragraphs (a) or (b) above, the Committee may in its discretion
designate such shorter or longer periods to exercise Options following an
Employee’s termination of employment; provided, however, that any
shorter periods determined by the Committee shall be effective only if provided
for in the instrument that evidences the grant to the Employee of such Options
or if such shorter period is agreed to in writing by the Employee. In the case
of an Incentive Stock Option, notwithstanding anything to the contrary herein,
in no event shall such Option be exercisable after the expiration of ten years
from the date such Option is granted (or such other period as is provided in
Code Section 422 and the regulations promulgated thereunder). This Plan
provides for automatic acceleration of vesting of Options in the event of an
Employee’s termination due to death or Total Disability or Job Elimination. In
all other situations, with the exception of terminations for Cause, Options
shall be exercisable by an Employee (or his successor in interest) following
such Employee’s termination of employment only to the extent that installments
thereof had become exercisable on or prior to the date of such termination; provided,
however, that the Committee, in its discretion, may elect to accelerate
the vesting of all or any portion of any Options that had not become
exercisable on or prior to the date of such termination.


 


3.7          Limitations
on Exercise of Options Granted to Consultants


 


Unless otherwise prescribed by the Committee in the
instrument evidencing the grant of the Option, no Option granted to a
Consultant may be exercised to any extent by anyone after the first to occur of
the following events:


 


(a) The expiration of 12 months from the date
of the Consultant’s termination of consultancy by reason of his or her death or
Total Disability;


 


(b) The expiration of three 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-month period, in which case the Option shall expire 12
months from the date of the Consultant’s death; or


 


12

















 


(c) The expiration of 10 years from the date
the Option was granted. An Incentive Option granted to a person who is a 10%
Stockholder on the date of grant shall not be exercisable more than five (5) years
after the date it is granted.


 


3.8          No
Reload Rights


 


Options granted under this Plan shall not contain
any provision entitling the Employee or Consultant to the automatic grant of
additional options in connection with any exercise of the original Option.


 


3.9          Rights
as Stockholder


 


Notwithstanding anything to the contrary, a
recipient of an Option or permitted transferee of an Option shall have no
rights or privileges as a stockholder with respect to any shares covered by an
Option until such Option has been duly exercised and certificates representing
shares purchased upon such exercise have been issued to such person.


 


ARTICLE IV.

DIRECTOR OPTIONS


 


4.1          Discretionary
Grants


 


Notwithstanding the foregoing, the Board may, in
its discretion, grant Options to Independent Directors at any time and from time
to time, the terms of which shall be determined by the Board. In the discretion
of the Board, Options granted hereunder to Independent Directors may be granted
in lieu of director fees.


 


4.2          Terms
of Options Granted to Independent Directors


 


Unless otherwise prescribed by the Board in the
instrument evidencing the grant of the Option, the price per share of the
shares subject to each Option granted to an Independent Director shall equal
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted. Unless otherwise prescribed by the Board in the instrument
evidencing the grant of the Option, each Option granted to an Independent
Director shall become fully exercisable on the day immediately preceding the
date of the first annual meeting of stockholders subsequent to the date the
Option was granted, provided such person is an Independent Director as
of such date. Subject to Section 4.3, the term of each Option granted to
an Independent Director shall be 10 years from the date the Option is granted.
No portion of an Option which is unexercisable at termination of directorship
shall thereafter become exercisable. Payment of the exercise price with respect
to an Option granted to an Independent Director shall be made in accordance
with Section 3.4. Notwithstanding the foregoing, in the event of a Change
in Control, Options granted to Independent Directors shall, as of the date of
such Change in Control, immediately become fully vested and exercisable. The
limitations under Section 3.8 shall apply to Options granted to
Independent Directors.


 


13

















 


4.3          Limitations
on Exercise of Options Granted to Independent Directors


 


Unless otherwise prescribed by the Board in the
instrument evidencing the grant of the Option, no Option granted to an
Independent Director may be exercised to any extent by anyone after the first
to occur of the following events:


 


(a) The expiration of 12 months from the date
of the Independent Director’s termination of directorship by reason of his or
her death or Total Disability;


 


(b) The expiration of three 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-month period, in which
case the Option shall expire 12 months from the date of the Independent
Director’s death; or


 


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


 


ARTICLE V.

PERFORMANCE AWARDS


 


5.1          Grant
of Performance Awards


 


(a) Any Employee or Consultant selected by the
Committee may be granted one or more Performance Awards. At the time of grant,
the Committee shall determine the Performance Criteria (which need not be identical)
to be utilized to calculate the value of a Performance Award, the term of such
Performance Award, the Payment Event, the form of payment of the Performance
Award (in shares of Common Stock, Restricted Stock Units or shares of
Restricted Stock) and the time of payment of the Performance Award. The
specific terms and conditions of each Performance Award shall be set forth in a
written statement evidencing the grant of such Performance Award (the “Performance
Award Agreement”).


 


(b) Notwithstanding any other provision of the
Plan or the applicable Performance Award Agreement, the Committee may, in its
sole discretion, reduce the amount of any Performance Award, whether it
provides for settlement in shares of Common Stock, Restricted Stock, or Restricted
Stock Units and regardless of the extent to which the Performance Criteria
specified in the Performance Award Agreement were attained, to an amount less
than the amount set forth in the Performance Award Agreement, including zero.
However, under no circumstances will the Committee have the authority to
increase the amount of a Performance Award that would otherwise be payable
under a Performance Award Agreement.


 


(c) The occurrence of the Payment Event shall
be tolled until the Committee certifies in writing whether and to the extent to
which the Performance Criteria specified in any Performance Award Agreement was
attained.


 


14

















 


5.2         Payment of Award; Limitation


 


Upon the occurrence of a Payment Event, payment of
a Performance Award will be made to the Participant (in shares of Common Stock,
shares of Restricted Stock, or Restricted Stock Units, as determined by the
Committee at the time of grant). The Committee may impose a limitation on the
amount payable upon the occurrence of a Payment Event, which limitation shall
be set forth in the written statement evidencing the grant of the Performance
Award; provided, however, that such limitation shall not exceed
the limit set forth in Section 1.3(d).


 


5.3         Expiration of Performance Award


 


If a Participant’s employment, or if applicable,
consultancy with the Company is terminated for any reason other than death,
Total Disability or, with respect to an Employee, Normal Retirement, prior to
the occurrence of the Payment Event, all of the Participant’s rights under the
Performance Award shall expire and terminate unless otherwise determined by the
Committee. In the event of termination of employment or consultancy by reason
of death, Total Disability or, with respect to an Employee, Normal Retirement,
the Committee, in its discretion, may determine what portions, if any, of the
Performance Award should be paid to the Participant.


 


ARTICLE VI.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS


 


6.1         Award of Restricted Stock and Restricted Stock Units


 


The Committee may grant awards of Restricted Stock and/or
Restricted Stock Units to Employees, Consultants and Independent Directors. The
Committee shall determine the number of shares of Restricted Stock or
Restricted Stock Units awarded, Purchase Price (if any), the terms of payment
of the Purchase Price, the restrictions upon the Restricted Stock and/or
Restricted Stock Units, and when and under what circumstances such restrictions
shall lapse. The terms and conditions of the Restricted Stock and/or Restricted
Stock Units shall be set forth in the statement evidencing the grant of such
award of Restricted Stock and/or Restricted Stock Units.


 


6.2         Requirements


 


All shares of Restricted Stock and Restricted Stock Units
granted or sold, pursuant to the Plan will be subject to the following
conditions:


 


(a) The Restricted Stock and Restricted Stock
Units may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, alienated or encumbered until the restrictions are
removed or expire;


 


(b) The Committee may require that the
certificates representing Restricted Stock granted or sold to a Participant
pursuant to the Plan remain in the physical custody of an escrow holder or AMO
until all restrictions are removed or expire;


 


15

















 


(c) Each certificate representing Restricted
Stock granted or sold to a Participant pursuant to the Plan will bear such
legend or legends making reference to the restrictions imposed upon such Restricted
Stock as the Committee in its discretion deems necessary or appropriate to
enforce such restrictions; and


 


(d) The Committee may impose such other
conditions on Restricted Stock and Restricted Stock Units as the Committee may
deem advisable including, without limitation, restrictions under the Securities
Act, under the Exchange Act, under the requirements of any stock exchange upon
which shares of the same class are then listed and under any blue sky or other
securities laws applicable to such shares.


 


6.3          Lapse
of Restrictions


 


The restrictions imposed upon Restricted Stock and
Restricted Stock Units pursuant to Section 6.2 above will lapse in
accordance with such schedule or other conditions as are determined by the
Committee and set forth in the statement evidencing the grant or sale.


 


6.4          Rights
of Participant


 


Subject to the provisions of Section 6.2 or
restrictions imposed pursuant to Section 6.2, and to the payment of the
full Purchase Price, if any, the Participant will have all rights of a stockholder
with respect to the Restricted Stock granted or sold to such Participant under
the Plan, including the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto; provided, however,
that in the discretion of the Committee, any non-cash distributions with
respect to the Common Stock shall be subject to the restrictions set forth in Section 6.2.
Holders of Restricted Stock Units will have no rights of a stockholder until
shares of Common Stock are issued upon vesting of the units.


 


6.5          Termination
of Employment, Consultancy or Directorship


 


Upon a Participant’s termination of employment or,
if applicable, termination of consultancy or directorship, for death or Total
Disability, all of the restrictions imposed on the Participant’s Restricted
Stock shall lapse, and all of the Participant’s Restricted Stock Units will
become vested and payable, as of the Participant’s last date of employment or,
if applicable, consultancy or directorship. In all other cases (other than a
Job Elimination), unless the Committee in its discretion determines otherwise,
upon a Participant’s termination of employment or, if applicable, termination
of consultancy or directorship, for any reason, (i) all of the Participant’s
Restricted Stock that are unvested at that time shall be repurchased by AMO at
the Purchase Price (if any) and (ii) all of the Participant’s Restricted
Stock Units that are unvested at that time shall expire.


 


6.6          Termination
of Employment Due to Job Elimination


 


Upon an Employee’s termination of employment due to
Job Elimination, the terminating Employee shall have the restrictions lapse on
each grant of Restricted Stock in an amount equal to the difference between (i) the
total number of shares of Restricted


 


16

















 


Stock granted multiplied by a fraction, the numerator of
which is the number of full calendar months from the date of grant until the
Employee’s last day of employment and the denominator of which is the total
number of months of the vesting schedule pursuant to the original award and (ii) any
shares of Restricted Stock that vested prior to the date of termination of
employment, and any remaining shares of unvested Restricted Stock shall be
repurchased by AMO at the Purchase Price (if any). With respect to Restricted
Stock Units, upon an Employee’s termination of employment due to Job
Elimination, the terminating Employee shall become vested in each award of
Restricted Stock Units in an amount equal to the difference between (y) the
number of units awarded multiplied by a fraction, the numerator of which is the
number of full calendar months from the date of grant until the Employee’s last
day of employment and the denominator of which is the total number of months of
the vesting schedule pursuant to the original award and (z) any Restricted
Stock Units that vested prior to the date of termination of employment, and any
remaining unvested Restricted Stock Units shall expire.


 


6.7          Payment
of Restricted Stock Units


 


Following the end of the vesting period for a
Restricted Stock Unit (or at such other time as the applicable Restricted Stock
Unit Agreement may provide), the holder of a Restricted Stock Unit shall be
entitled to receive one share of Common Stock for each Restricted Stock Unit,
unless the Participant has elected otherwise, provided however, any such
election is valid in accordance with Code Section 409A or any successor
regulation.


 


ARTICLE VII.

STOCK APPRECIATION RIGHTS


 


7.1          Granting
of Stock Appreciation Rights


 


The Committee may approve the grant to Employees or
Consultants of Stock Appreciation Rights related or unrelated to Options, at
any  time.


 


(a) A Stock Appreciation Right granted in
connection with an Option granted under this Plan will entitle the holder of
the related Option, upon exercise of the Stock Appreciation Right, to surrender
such Option, or any portion thereof to the extent unexercised, with respect to
the number of shares as to which such Stock Appreciation Right is exercised,
and to receive payment of an amount computed pursuant to Section 7.1(c).
Such Option will, to the extent surrendered, then cease to be exercisable.


 


(b) Subject to Section 7.1(g), a Stock
Appreciation Right granted in connection with an Option hereunder will be
exercisable at such time or times, and only to the extent that, the related
Option is exercisable, and will not be transferable except to the extent that
such related Option may be transferable.


 


(c) Upon the exercise of a Stock Appreciation
Right related to an Option, the holder will be entitled to receive payment of
an amount determined by multiplying: (i) the difference obtained by
subtracting the Option Exercise Price of a share of Common Stock specified in
the related Option from the Fair Market Value of a share of Common


 


17

















 


Stock on the date of exercise of such Stock Appreciation
Right (or as of such other date or as of the occurrence of such event as may
have been specified in the instrument evidencing the grant of the Stock
Appreciation Right), by (ii) the number of shares as to which such Stock
Appreciation Right is exercised.


 


(d) The Committee may grant Stock Appreciation
Rights unrelated to Options to eligible Employees or Consultants. Section 7.1(c) shall
be used to determine the amount payable at exercise under such Stock
Appreciation Right, except that in lieu of the Option Exercise Price specified
in the related Option the initial base amount specified in the Incentive Award
shall be used. Such a Stock Appreciation Right will be exercisable or payable
at such time or times as determined by the Committee, provided that the maximum
term of a Stock Appreciation Right shall be ten (10) years from the date
of grant. The base price of a Stock Appreciation Right shall be determined by
the Committee in its sole discretion; provided, however, that the
base price per share of any Stock Appreciation Right shall not be less than one
hundred percent (100%) of the Fair Market Value of the shares of Common Stock
on the date of grant.


 


(e) Notwithstanding the foregoing, the
Committee, in its discretion, may place a dollar limitation on the maximum
amount that will be payable upon the exercise of a Stock Appreciation Right
under the Plan.


 


(f) Payment of the amount
determined under the foregoing provisions of this Section 7.1 may be made
solely in whole shares of Common Stock valued at their Fair Market Value on the
date of exercise of the Stock Appreciation Right or, alternatively, at the sole
discretion of the Committee, in cash or in a combination of cash and shares of
Common Stock as the Committee deems advisable. The Committee is hereby vested
with full discretion to determine the form in which payment of a Stock
Appreciation Right will be made and to consent to or disapprove the election of
a Participant to receive cash in full or partial settlement of a Stock
Appreciation Right. If the Committee decides to make full payment in shares of
Common Stock and the amount payable results in a fractional share, payment for
the fractional share will be made in cash.


 


(g) The
Committee may, at the time a Stock Appreciation Right is granted, impose such
conditions on the exercise of the Stock Appreciation Right as may be required
to satisfy the requirements of Rule 16b-3 (or any other comparable
provisions in effect at the time or times in question).


 


7.2          Termination
of Employment or Consultancy


 


Sections 3.6 and 3.7 will govern
the treatment of Stock Appreciation Rights upon the termination of a
Participant’s employment or consultancy, as applicable, with the Company.


 


18
















 


ARTICLE VIII.

STOCK PAYMENTS


 


8.1          Stock
Payments


 


The
Committee may approve Stock Payments of Common Stock to any Employee or
Consultant for all or any portion of the compensation (other than base salary
with respect to an Employee) that would otherwise become payable to an Employee
or Consultant in cash.


 


ARTICLE IX.

OTHER PROVISIONS


 


9.1          Adjustment
Provisions


 


(a) Subject to Section 9.1(b) below, (i) if the
outstanding shares of Common Stock are increased, decreased or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed in respect of
such shares of Common Stock (or any stock or securities received with respect
to such Common Stock), through merger, consolidation, sale or exchange of all
or substantially all of the properties of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such Common Stock),
or (ii) if the value of the outstanding shares of Common Stock of the
Company is reduced by reason of an extraordinary cash dividend, an appropriate
and proportionate adjustment shall be made in (x) the maximum number and
kind of shares provided in Section 1.3 (including the maximum amounts
referred to in Section 1.3(d)), (y) the number and kind of shares or
other securities subject to then outstanding Incentive Awards, and (z) the
price for each share or other unit of any other securities subject to then
outstanding Incentive Awards. No fractional interests will be issued under the
Plan resulting from any such adjustments.


 


(b) In addition to the adjustments permitted by Section 9.1(a) above,
except as otherwise expressly provided in the statement evidencing the grant of
an Incentive Award, upon the occurrence of a Change in Control any outstanding
Incentive Awards not theretofore exercisable, payable or free from restrictions,
as the case may be, shall immediately become exercisable, payable or free from
restrictions (other than restrictions required by applicable law or any
national securities exchange upon which any securities of the Company are then
listed), as the case may be, in their entirety and any shares of Common Stock
acquired pursuant to an Incentive Award which are not fully vested shall
immediately become fully vested, notwithstanding any of the other provisions of
the Plan.


 


9.2          Continuation
of Employment


 


(a) Nothing
in the Plan or in any statement evidencing the grant of an Incentive Award
pursuant to the Plan shall be construed to create or imply any contract of
employment between any Employee and the Company, to confer upon any Employee
any


 


19

















 


right
to continue in the employ of the Company, or to confer upon the Company any
right to require any Employee’s continued employment. Except as expressly
provided in the Plan or in any statement evidencing the grant of an Incentive
Award pursuant to the Plan, the Company shall have the right to deal with each
Employee in the same manner as if the Plan and any such statement evidencing
the grant of an Incentive Award pursuant to the Plan did not exist, including,
without limitation, with respect to all matters related to the hiring,
discharge, compensation and conditions of the employment of the Employee.
Unless otherwise expressly set forth in a separate employment agreement between
the Company and such Employee, the Company may terminate the employment of any
Employee with the Company at any time for any reason, with or without cause.


 


(b) Any
question(s) as to whether and when there has been a termination of an
Employee’s employment, the reason (if any) for such termination, and/or the
consequences thereof under the terms of the Plan or any statement evidencing
the grant of an Incentive Award pursuant to the Plan shall be determined by the
Committee and the Committee’s determination thereof shall be final and binding.


 


9.3          Compliance
with Government Regulations


 


No
shares of Common Stock will be issued pursuant to an Incentive Award unless and
until all applicable requirements imposed by federal and state securities and
other laws, rules and regulations and by any regulatory agencies having
jurisdiction and by any stock exchanges upon which the Common Stock may be
listed have been fully met. As a condition precedent to the issuance of shares
of Common Stock pursuant to an Incentive Award, the Company or AMO may require
the Participant to take any reasonable action to comply with such requirements.


 


Nothing
in this restatement of the Plan is meant to constitute either a “material
revision” or a “material amendment” under the applicable exchange’s rules so
as to require additional shareholder approval. To the extent that any provision
of the restatement constitutes an amendment requiring shareholder approval, the
terms of that specific provision of the Plan prior to the restatement shall be
reinstated.


 


9.4          Additional
Conditions


 


The
award of any benefit under this Plan may also be subject to such other
provisions (whether or not applicable to the benefit award to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the purchase of
Common Stock through the exercise of Stock Options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of
Common Stock acquired under any form of benefit, provisions giving AMO the
right to repurchase shares of Common Stock acquired under any form of benefit
in the event the Participant elects to dispose of such shares, and provisions
to comply with federal and state securities laws and federal and state income
tax withholding requirements.


 


20

















 


9.5          Privileges
of Stock Ownership


 


No
Participant and no beneficiary or other person claiming under or through such
Participant will have any right, title or interest in or to any shares of
Common Stock allocated or reserved under the Plan or subject to any Incentive
Award, except as to such shares of Common Stock, if any, that have been issued
to such Participant in accordance with the terms and conditions of the
applicable Incentive Award; provided, however, that Participants
who have received Restricted Stock shall have only those rights with respect to
such stock as are set forth in this Plan and the statement evidencing the grant
or sale of such Restricted Stock. No adjustment will be made for any dividends
or other rights where the record date is prior to the date shares of Common
Stock are issued.


 


9.6          Repricings
Not Permitted.


 


Notwithstanding
anything herein to the contrary, the Committee shall not have the authority to
cause an adjustment to the Exercise Price of any outstanding Options or SARs (a
“Repricing”), unless such Repricing is approved by a majority of AMO’s
stockholders entitled to vote on such matter.


 


9.7          Amendment
and Termination of Plan, Amendment of Incentive Awards


 


(a) The Board may alter, amend, suspend or terminate the Plan at any
time. No such action of the Board, unless taken with the approval of the
stockholders of AMO, may increase the maximum number of shares that may be sold
or issued under the Plan or alter the class of Employees eligible to
participate in the Plan. With respect to any other amendments of the Plan, the
Board may in its discretion determine that such amendments shall only become
effective upon approval by the stockholders of AMO, if the Board determines
that such stockholder approval may be advisable, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under federal or
state securities law, federal or state tax law or any other laws or for the
purposes of satisfying applicable stock exchange listing requirements.


 


(b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Incentive Award as it deems
advisable; provided, however, that pursuant to Section 9.6,
the Committee may not reduce the exercise price of an outstanding Option by
amending the terms of such Option without first obtaining approval from the AMO
stockholders.


 


(c) Except as otherwise provided in this Plan or in the statement
evidencing the grant of the Incentive Award, no amendment, suspension or
termination of the Plan will, without the consent of the Participant, alter,
terminate, impair or adversely affect any right or obligation under any
Incentive Award previously granted under the Plan.


 


9.8          Not
Transferable


 


(a) No
Incentive Award under the Plan may be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or,
subject to the consent of the Committee, pursuant to a domestic relations
order, unless


 


21

















 


and
until such Award has been exercised, or the shares underlying such Incentive
Award have been issued, and all restrictions applicable to such shares have
lapsed. No Incentive Award or interest or right therein shall be liable for the
debts, contracts or engagements of the Participant or his or her successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence.


 


(b) During the lifetime of the Participant, only he or she may
exercise an Option or other Incentive Award (or any portion thereof) granted to
him or her under the Plan, unless it has been disposed of with the consent of
the Committee pursuant to a domestic relations order. After the death of the
Participant, any exercisable portion of an Option or other Incentive Award may,
prior to the time when such portion becomes unexercisable under the Plan or the
terms and conditions of such Incentive Award, be exercised by his or her
personal representative or by any person empowered to do so under the deceased
Participant’s will or under the then applicable laws of descent and
distribution.


 


(c) Notwithstanding the foregoing, the Committee, in its sole
discretion, may determine to permit a Participant to transfer an Incentive
Award to any one or more Permitted Transferees (as defined below), subject to
the following terms and conditions: (i) an Incentive Award transferred to
a Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (ii) any
Incentive Award which is transferred to a Permitted Transferee shall continue
to be subject to all the terms and conditions of the Incentive Award as
applicable to the Participant (other than the ability to further transfer the
Incentive Award); and (iii) the Participant and the Permitted Transferee
shall execute any and all documents requested by the Committee, including,
without limitation documents to (A) confirm the status of the transferee
as a Permitted Transferee, (B) satisfy any requirements for an exemption
for the transfer under applicable federal and state securities laws and (C) evidence
the transfer. For purposes of this Section 9.8, “Permitted Transferee”
shall mean, with respect to a Participant, any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Participant’s household (other than a tenant or employee), a trust in which
these persons (or the Participant) control the management of assets, and any
other entity in which these persons (or the Participant) own more than fifty
percent of the voting interests, or any other transferee specifically approved
by the Committee after taking into account any state or federal tax or
securities laws applicable to transferable Incentive Award. Nothing contained
in this Section 9.8(c) shall be deemed to require or obligate the
Committee to permit a Participant to transfer an Incentive Award in the manner
described herein.


 


22

















 


9.9          Other
Compensation Plans


 


The
adoption of the Plan shall not affect any other stock option, incentive or
other compensation plans in effect for the Company or AMO, nor shall the Plan
preclude the Company from establishing any other forms of incentive or other
compensation for Employees or Directors of the Company.


 


9.10        Plan Binding
on Successors


 


The
Plan shall be binding upon the successors and assigns of the Company.


 


9.11        Singular,
Plural; Gender


 


Whenever
used herein, nouns in the singular shall include the plural, and the masculine
pronoun shall include the feminine gender.


 


9.12        Headings,
Etc., No Part of Plan


 


Heading
of Articles and Sections hereof are inserted for convenience and reference;
they constitute no part of the Plan.  


 


9.13        Participation
By Foreign Employees


 


Notwithstanding
Section 9.7 of the Plan, the Committee may, in order to fulfill the
purposes of the Plan: (i) modify grants of Incentive Awards to
Participants who are foreign nationals or employed outside of the United States
to recognize differences in applicable law, tax policy or local custom and/or (ii) amend
the Plan from time to time by adopting or modifying appendices to the Plan,
which appendices shall contain such terms and conditions with respect to the
operation of the Plan in one or more foreign jurisdictions as are necessary to
bring the Plan into compliance with applicable law, tax policy or local custom.
Nothing contained in this Section 9.13 shall be deemed to grant the
Committee the authority to: (i) increase the maximum number of shares that
may be sold or issued under the Plan, (ii) alter the class of Employees
eligible to participate in the Plan, (iii) reduce the minimum exercise
price with respect to Options as set forth in Sections 3.2 and 4.2, or (iv) increase
the annual award limits set forth in Section 1.3(d).


 


9.14        Withholding


 


The
Company shall be entitled to require payment in cash or deduction from other
compensation payable to each Participant of any sums required by federal, state
or local tax law to be withheld with respect to the issuance, vesting, exercise
or payment of any Incentive Award. The Committee may in its discretion and in
satisfaction of the foregoing requirement allow such Participant to elect to
have the Company withhold shares of Common Stock otherwise issuable under such
Incentive Award (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld. Notwithstanding any
other provision of the Plan, the number of shares of Common Stock which may be
withheld with respect to the issuance, vesting, exercise or payment of any
Incentive Award (or which may be repurchased from the


 


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Participant
of such Incentive Award within six months after such shares of Common Stock
were acquired by the Participant from the Company) in order to satisfy the
Participant’s federal and state income and payroll tax liabilities with respect
to the issuance, vesting, exercise or payment of the Incentive Award shall be
limited to the number of shares which have a Fair Market Value on the date of
withholding or repurchase equal to the aggregate amount of such liabilities based
on the minimum statutory withholding rates for federal and state tax income and
payroll tax purposes that are applicable to such supplemental taxable income.


 


9.15        Miscellaneous


 


(a) At the request of a Participant, and as soon as practicable
after any proper exercise of an Option (or any portion thereof) in accordance
with the provisions of the Plan, the Company shall deliver to the Participant
at the main office of the Company, or such place as shall be mutually
acceptable, a certificate or certificates representing the shares of Common
Stock to which the Participant is entitled by reason of exercise of the Option
(or portion thereof).


 


(b) No shares of Common Stock shall be issued or delivered upon
exercise of an Option unless and until there shall have been compliance with
all applicable requirements of the Securities Act, all applicable listing
requirements of any market or securities exchange on which shares of Common
Stock are then listed and any other requirement of law or of any regulatory
body having jurisdiction over such issuance and delivery. The inability of AMO
to obtain any required permits, authorizations or approvals necessary for the
lawful issuance and sale of any shares of Common Stock hereunder on terms
deemed reasonable by the Committee shall relieve the Company, AMO, the Board
and the Committee of any liability in respect of the nonissuance or sale of
such shares of Common Stock as to which such requisite permits, authorizations
or approvals shall not have been obtained.


 


(c) Each certificate representing shares of Common Stock acquired
pursuant to the Plan shall be endorsed with all legends, if any, required by
applicable federal and state securities laws to be placed on the certificates.
The determination of which legends, if any, shall be placed upon the
certificates shall be made by the Committee in its sole discretion and such
decision shall be final and binding.


 


ARTICLE X.


EFFECTIVE DATE


 


10.1        Effective
Date and Duration of Plan


 


This
restatement of the Plan shall become effective May 29, 2008 if approved by
the stockholders of AMO. The Plan shall terminate on May 27, 2014, and no
Incentive Award may be granted under the Plan after the date of such
termination, but such termination shall not affect any Incentive Award
theretofore granted.


 


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