2006 PERFORMANCE OBJECTIVE
Exhibit 10.8(e)
AMO BONUS PLAN |
|
2006 PERFORMANCE OBJECTIVE
2006 PERFORMANCE OBJECTIVE
The 2006 performance objective for the Bonus Plan is 75% based on Adjusted Operating Income and 25% based on Revenue 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 special charges associated with AMOs rationalization and repositioning program and the effect of stock option expense. Revenue is defined as the total dollar payment for goods and services that are credited to the income statement over the measurement period.
Each segment of the bonus is funded when AMO achieves the threshold levels of Adjusted Operating Income and Revenue performance, respectively, as indicated below. If the Adjusted Operating Income funding trigger threshold is not met, the 75% element of the plan is not funded. If the Revenue funding trigger threshold is not met, the 25% element of the plan is not funded. If neither funding trigger threshold is met, no bonuses will be paid out.
FUNDING TRIGGER ELEMENTS
75% - ADJUSTED OPERATING INCOME |
| ||||
PERFORMANCE |
| 2006 ADJ OP |
| BONUS |
|
Below Threshold |
| -38.26 mm |
| 0% |
|
Threshold |
| -38.25 mm |
| 40% |
|
|
| Target |
| 100% |
|
Maximum |
| +38.25 mm |
| 150% |
|
If actual Adjusted Operating Income results fall between the performance levels shown above, the portion of bonus will be prorated accordingly. |
|
25% - REVENUE |
| ||||
PERFORMANCE |
| 2006 |
| BONUS |
|
Below Threshold |
| -51.06 mm |
| 0% |
|
Threshold |
| -51.05 mm |
| 50% |
|
|
| Target |
| 100% |
|
Maximum |
| +157.15 mm |
| 150% |
|
If actual Revenue results fall between the performance levels shown above, the portion of bonus 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 region/function bonus pools:
CORPORATE & GLOBAL MARKETING
Corporate Adjusted Operating Income (60%)
Corporate Revenue (40%)
STRATEGIC BUSINESS UNITS
Business Unit Adjusted Operating Income (40%)
Business Unit Revenue (60%)
RESEARCH & DEVELOPMENT
Corporate Adjusted Operating Income (20%)
Corporate Revenue (20%)
Achievement of R & D and Business Development Milestones (60%)
WORLD WIDE MANUFACTURING
Corporate Adjusted Operating Income (20%)
Corporate Revenue (20%)
Achievement of World Wide Manufacturing Milestones (60%)
INDIVIDUAL BONUS AWARD CALCULATION
Target bonus awards are expressed as a percentage of the participants year-end annualized base salary. The target percentages for managers other than corporate officers vary by salary grade:
SALARY GRADE |
| TARGET BONUS |
6E * |
| 10% |
|
|
|
7E |
| 15% |
|
|
|
8E |
| 20% |
|
|
|
9E |
| 25% |
|
|
|
10E |
| 30% |
|
|
|
11E |
| 35% |
Target percentages for corporate officers are individually established by the Committee.
A participants actual bonus award may vary above or below the targeted level based on the supervisors 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. However, the total of all bonus awards given within each region/function must total no more than 100% of the total bonus pool dollars allocated to that region/function.
* U.S. and Puerto Rico employees only.