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This excerpt taken from the EYE 10-K filed Mar 14, 2006. VITRAX viscoelastics from the date of the June 29,
2002 spin-off. The Company purchased these products from Allergan at a price
equal to Allergan’s fully allocated costs plus 10%. During 2005, 2004 and 2003,
the Company purchased $41.9 million, $89.3 million and $77.0 million,
respectively, of product from Allergan. On an annual basis, a pricing “true up”
calculation was performed during the first calendar quarter. This “true up”
calculation was based upon the actual volume of products shipped by Allergan to
AMO during the preceding year versus the forecasted volume submitted by AMO
that was used to calculate the invoiced prices. During the year, the Company
periodically reviewed the volume of purchases and accrued for estimated
shortfalls, if any. The Company received $0.8 million from Allergan in October 2005
as the final “true-up” amount for the six months ended June 29, 2005.
The following table summarizes the charges from Allergan for the above-mentioned transitional services for 2005, 2004 and 2003 (in thousands):
70
As of December 31, 2005, an interest-free relocation loan of $0.5 million, collateralized by real property, was outstanding from the chief executive officer. The principal amount of the loan is payable upon the earlier to occur of (a) 60 days following the chief executive officer’s termination of employment; (b) the date of the sale or other transfer of the property or (c) July 3, 2007. This relocation loan is evidenced by a promissory note dated July 3, 2002, prior to the adoption of the Sarbanes-Oxley Act of 2002.
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