Advanced Medical Optics (EYE)

TERMINATION BENEFIT DISTRIBUTIONS

7.1 Entitlement to Termination Benefits. Upon Termination of Employment prior to Retirement Date, the Company shall pay to the Participant his or her Deferral Accounts as Termination Benefits at such times and in such forms as provided in Sections 7.2 and 7.3 or as permitted in Section 7.4.

7.2 Time of Commencement. The payment of a Deferral Account payable as a Termination Benefit shall commence or shall be made within sixty (60) days following the date of Termination of Employment (the “default commencement election”). A Participant may elect during the applicable Open Enrollment Period that payment of such Deferral Account (other than a Deferral Account established for a Participant while he or she was an Eligible Salesperson) commence or be made on the first business day of January of the next following calendar year. Notwithstanding a default commencement election or a Participant election to the contrary, the time of payment of a Termination Benefit shall be subject to the following rules:

(a) Six-Month Delay. In the case of a Participant who is a Specified Employee, the payment of a Participant’s Termination Benefit shall (i) commence or shall be made no earlier than (1) the first business day after six (6) months following the Participant’s Termination of Employment or (2) the death of the Participant, whichever occurs first and (ii) any payments to which such Participant would have been entitled to during the six-month delay shall be paid on the first day of the seventh month.

(b) Limited Cash-Out. If the total sum of a Participant’s Deferral Accounts on the date of his or her Termination of Employment (as adjusted for amounts accrued as of that date but not yet credited) is less than the applicable dollar amount under Code Section 402(g)(1)(B) in effect for the Plan Year ($15,500 for the 2008 Plan Year), in which Termination of Employment occurs, the balance of such Participant’s Deferral Accounts shall be paid following the date of Termination of Employment subject to subsection (a) above. This subsection (b) shall be effective January 1, 2009.

(c) Administrative Delay of Payment. For purposes of this Section 7.2, the payment of a Termination Benefit shall be treated as made upon the date specified herein, if, in the sole discretion of the Company, payment commences or is made by (i) the last day of the calendar year which contains the scheduled payment date, (ii) the last day of the calendar year in which a six month delay (as described in subsection (a)) expires, or (iii) the 15^th day of the third calendar month following the scheduled payment date or delayed payment date, whichever is the latest to occur.

7.3 Form of Termination Benefits. A Deferral Account payable as a Termination Benefit shall be paid in the form of a single lump sum (the “default payment form election”). A Participant may elect during the applicable Open Enrollment Period that such Deferral Account (other than a Deferral Account established for a Participant while he or she was an Eligible Salesperson) be paid in the form of five (5) annual installments. Notwithstanding a default payment form election or a Participant election to the contrary, the form of payment of a Termination Benefit shall be subject to the following rules:

(a) Limited Cash-Out. If the total sum of a Participant’s Deferral Accounts on the date of his or her Termination of Employment (as adjusted for amounts accrued as of that date but not yet credited) is less than the applicable dollar amount under Code Section 402(g)(1)(B) in effect for the Plan Year ($15,500 for the 2008 Plan Year), in which Termination of Employment occurs, the balance of such Participant’s Deferrals Accounts shall be paid in a single lump sum. This subsection (a) shall be effective January 1, 2009.

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(b) Predetermined Cash-Out of $50,000. If the total sum of a Participant’s Deferral Accounts on the date of his or her Termination of Employment (as adjusted for amounts accrued as of that date but not yet credited) is more than the limited cash-out amount described in subsection (a) but $50,000 or less, his or her Termination Benefit(s) shall be paid in a single lump sum at such time or times as determined under Section 7.2.

7.4 Change in Time or Form of Payment. Effective January 1, 2009, all elections, including default commencement or payment form elections, as to the time and/or form of payment of a Deferral Account payable as a Termination Benefit shall be irrevocable. Prior to January 1, 2009, a change to the time or form of payment of a Deferral Account (other than a Deferral Account established for a Participant while he or she was an Eligible Salesperson) payable as a Termination Benefit may be made in accordance with Section 11.4.

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