1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE):
[x] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ___________ TO ____________
COMMISSION FILE NUMBERS 33-29528 AND 33-44770
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
ALLERGAN, INC.
PUERTO RICO SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
ALLERGAN, INC.
2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92715
(Name of issuer of the securities held
pursuant to the plan and the address of its
principal executive office.)
2
4. ERISA Financial Statements and Schedules and Exhibits:
(a) Financial Statements and Schedules:
Independent Auditors' Report, of KPMG Peat
Marwick on the Statements of Net Assets
Available for Plan Benefits as of December
31, 1993 and 1992 and the related Statement
of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993
- Allergan, Inc. Savings and Investment Plan.
Statements of Net Assets Available for Plan
Benefits as of December 31, 1993 and 1992 -
Allergan, Inc. Savings and Investment Plan.
Statement of Changes in Net Assets Available
for Plan Benefits for the Year Ended December
31, 1993 - Allergan, Inc. Savings and
Investment Plan.
Notes to Financial Statements - Allergan, Inc. Savings and
Investment Plan.
Schedule of Assets Held for Investment
Purposes as of December 31, 1993 - Allergan,
Inc. Savings and Investment Plan.
Schedule of Reportable Transactions for the
Year Ended December 31, 1993 - Allergan, Inc.
Savings and Investment Plan.
Independent Auditors' Report, of KPMG Peat
Marwick on the Statements of Net Assets
Available for Plan Benefits as of December
31, 1993 and 1992 and the related Statement
of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993
- Allergan, Inc. Puerto Rico Savings and
Investment Plan.
Statements of Net Assets Available for Plan
Benefits as of December 31, 1993 and 1992 -
Allergan, Inc. Puerto Rico Savings and
Investment Plan.
Statement of Changes in Net Assets Available
for Plan Benefits for the Year Ended December
31, 1993 - Allergan, Inc. Puerto Rico Savings
and Investment Plan.
3
Notes to Financial
Statements - Allergan, Inc. Puerto Rico
Savings and Investment Plan.
Schedule of Assets Held for Investment
Purposes as of December 31, 1993 - Allergan,
Inc. Puerto Rico Savings and Investment Plan.
Schedule of Reportable Transactions for the
Year Ended December 31, 1993 - Allergan, Inc.
Puerto Rico Savings and Investment Plan.
(b) Exhibits
Exhibit 23 - Consent of KPMG Peat Marwick
SIGNATURES
THE PLAN. Pursuant to the requirements of the
Securities Exchange Act of 1934, the trustees (or other persons who administer
the Plan) have duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
ALLERGAN, INC. SAVINGS
AND INVESTMENT PLAN
ALLERGAN, INC. PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Date: June 28, 1994 BY: FRANCIS R. TUNNEY, JR.
--------------------------
Francis R. Tunney, Jr.
Allergan, Inc. Management
Plan Committee
4
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
5
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
Index to Financial Statements and Supplementary Schedules
Financial Statements Page
- - - - - -------------------- ----
Independent Auditors' Report - KPMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Net Assets Available for Plan Benefits -- December 31, 1993 . . . . . . . . . . . . . 2
Statement of Net Assets Available for Plan Benefits -- December 31, 1992 . . . . . . . . . . . . . 3
Statement of Changes in Net Assets Available for Plan Benefits -- Year ended
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Supplementary Schedules
- - - - - -----------------------
Schedule of Assets Held for Investment Purposes -- December 31, 1993 Schedule 1
Schedule of Reportable Transactions -- For the year ended December 31, 1993 Schedule 2
6
INDEPENDENT AUDITORS' REPORT
The Management Plan Committee
Allergan, Inc.
We have audited the accompanying statements of net assets available for
benefits of the Allergan, Inc. Savings and Investment Plan (the "Plan") as of
December 31, 1993 and 1992, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1993. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1993 and 1992, and the changes in net assets available for
benefits for the year ended December 31, 1993 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Allergan, Inc. Savings and Investment Plan are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG PEAT MARWICK
Orange County, California
June 10, 1994
1
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ALLERGAN, INC.
Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits
December 31, 1993
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- --------- -------- ------- -----
ASSETS
------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $13,243,843 $16,732,296 -- -- -- 16,732,296
Wellington Fund, cost $17,415,788 -- 19,036,854 -- -- 19,036,854
Group contracts with insurance
companies, cost approximates market -- -- 15,031,390 -- 15,031,390
Windsor Fund, cost $12,743,053 -- -- -- 13,627,387 13,627,387
----------- ---------- ---------- ---------- ----------
Total investments 16,732,296 19,036,854 15,031,390 13,627,387 64,427,927
Interest bearing cash and cash equivalents 176,886 98,637 6,121,172 173,776 6,570,471
Receivables:
Employer contributions 224,959 83,253 140,404 157,563 606,179
Accrued interest and dividends 20 11 637 18 686
Payables:
Contribution refunds (41,213) (60,754) (84,281) (101,190) (287,438)
Purchases pending settlement -- (98,632) -- (173,767) (272,399)
Short-term investment fees -- -- (21) -- (21)
----------- ---------- ---------- ---------- ----------
Net assets available
for Plan benefits (note 5) $17,092,948 19,059,369 21,209,301 13,683,787 71,045,405
============ ========== ========== ========== ==========
See accompanying notes to financial statements
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8
ALLERGAN, INC.
Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits
December 31, 1992
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- ---- ---- ---- -----
ASSETS
------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $11,420,272 $17,389,698 -- -- -- 17,389,698
Wellington Fund, cost $16,154,174 -- 16,799,158 -- -- 16,799,158
Group contracts with insurance
companies, cost approximates market -- -- 15,344,026 -- 15,344,026
Windsor Fund, cost $9,065,089 -- -- -- 9,224,343 9,224,343
----------- ---------- ---------- --------- ----------
Total investments 17,389,698 16,799,158 15,344,026 9,224,343 58,757,225
Interest bearing cash and cash equivalents 112,994 6,309 5,174,475 2,131 5,295,909
Receivables:
Employer contributions 243,431 101,390 210,210 213,935 768,966
Accrued interest and dividends 37 -- 841 -- 878
Payables:
Contribution refunds (92,157) (101,925) (242,762) (194,424) (631,268)
Purchases pending settlement -- (6,308) -- (2,127) (8,435)
Short-term fund investment fees (1) -- (26) -- (27)
----------- ---------- ---------- --------- ----------
Net assets available
for Plan benefits (note 5) $17,654,002 16,798,624 20,486,764 9,243,858 64,183,248
=========== ========== ========== ========= ==========
See accompanying notes to financial statements.
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9
ALLERGAN, INC.
Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1993
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- ---- ---- ---- -----
Additions to Plan assets attributed to:
Net appreciation (depreciation)
in fair value of investments $(2,262,604) 1,451,928 551,323 1,616,216 1,356,863
Interest 3,621 1,546 834,755 2,620 842,542
Dividends 285,586 817,676 -- 316,455 1,419,717
----------- ---------- ---------- ---------- ----------
Total investment income (1,973,397) 2,271,150 1,386,078 1,935,291 3,619,122
----------- ---------- ---------- ---------- ----------
Contributions:
Employer - Company match 2,069,350 4,806 20,960 5,846 2,100,962
Employees:
Before tax 1,076,769 964,043 1,539,126 1,852,769 5,432,707
After tax 455,433 448,057 818,762 759,709 2,481,961
----------- ---------- ---------- ---------- ----------
Total contributions 3,601,552 1,416,906 2,378,848 2,618,324 10,015,630
----------- ---------- ---------- ---------- ----------
Total additions 1,628,155 3,688,056 3,764,926 4,553,615 13,634,752
----------- ---------- ---------- ---------- ----------
Deductions from Plan assets attributed to:
Withdrawals and distributions (1,779,649) (1,292,244) (2,646,571) (1,080,188) (6,798,652)
Administrative expenses (170) (34) 26,342 (81) 26,057
----------- ---------- ---------- ---------- ----------
Total deductions (1,779,819) (1,292,278) (2,620,229) (1,080,269) (6,772,595)
----------- ---------- ---------- ---------- ----------
Increase (decrease) in
net assets available
for Plan benefits (151,664) 2,395,778 1,144,697 3,473,346 6,862,157
Net assets available for Plan
benefits, beginning of year 17,654,002 16,798,624 20,486,764 9,243,858 64,183,248
Net interfund transfers (409,390) (135,033) (422,160) 966,583 --
----------- ---------- ---------- ---------- ----------
Net assets available for Plan
benefits, end of year $17,092,948 19,059,369 21,209,301 13,683,787 71,045,405
=========== ========== ========== ========== ==========
See accompanying notes to financial statements.
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
(1) Description of the Plan
The following description of the Allergan, Inc. Savings and Investment
Plan ("the Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of
the Plan's provisions.
General
The Plan was created on July 27, 1989 in connection with the
spin-off of Allergan, Inc. from SmithKline Beckman
Corporation. Upon spin-off, the Allergan employee balances
included within the SmithKline Beckman Savings and Investment
Plan (the "SmithKline Savings Plan") were transferred to the
Plan in accordance with the Plan agreement.
The Plan is a defined contribution plan sponsored by Allergan,
Inc. (the "Company"). Under terms of the Plan, eligible
employees may voluntarily elect to contribute:
(1) "After-tax" dollars up to 15% of their defined
compensation under provision 401(a) of the Internal
Revenue Code or,
(2) "Before-tax" dollars up to the lesser of 10% of their
defined compensation or $8,994 and $8,728 for the
years ended December 31, 1993 and 1992, respectively,
under provision 401(k) of the Internal Revenue Code
or,
(3) Any combination of the above two elections; however,
the total contribution cannot exceed the lesser of
15% of their defined compensation or $30,000.
The Plan is subject to the applicable provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
The Company contributes an amount equal to 50% of each
employee's contribution not exceeding 5% of defined
compensation.
Certain limitations imposed by the Internal Revenue Code may
have the effect of reducing the level of contributions
initially selected by participants who come within the
classification of "highly compensated employees" as defined in
the Code.
Participant contributions are invested in the Allergan, Inc.
Common Stock Fund, the Balanced Fund, the Interest Income Fund
or the Equity Fund or any combination of the four funds at the
employee's discretion. Company contributions consist of
common stock of Allergan, Inc. which are invested in the
Allergan, Inc. Common Stock Fund except, after participants
reach age 55, they may elect to have Company contributions
both past and current, invested in any of the funds.
Investment Options
Participants have the right to elect investment options upon
enrollment or re-enrollment into the Plan. Additionally,
participants may elect to change their investment options and
transfer their account balances among the different investment
funds.
Income on investment funds is allocated to participants'
accounts based on the participants' investment fund balance as
a percentage of the total investment fund balance.
5
11
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
A description of each investment fund follows:
Allergan, Inc. Common Stock Fund - The Allergan, Inc. Common
Stock Fund is invested in Allergan, Inc. common stock.
Balanced Fund - The Balanced Fund is invested primarily in
stocks, bonds and cash. The stock portfolio consists of
large, intermediate and small companies. The bond portfolio
consists of U.S. Treasury, U.S. Agency and corporate issues.
The Fund is managed by the Vanguard Group under the name
"Wellington Fund."
Interest Income Fund - The Interest Income Fund is invested in
a portfolio of group annuity contracts and short term money
market funds issued by major insurance companies and banks.
Equity Fund - The Equity Fund is invested in a portfolio of
common stocks to meet the objective of long-term growth of
capital and income. The Fund is managed by the Vanguard Group
under the name "Windsor Fund."
The number of employees participating in these funds at
December 31, 1993 and 1992 was as follows:
1993 1992
---- ----
(Unaudited) (Unaudited)
Allergan, Inc. Common Stock Fund 1,858 1,910
Balanced Fund 1,397 1,389
Interest Income Fund 1,291 1,310
Equity Fund 1,262 1,138
Participant Accounts
Each participant's account is charged for the participant's
withdrawals and credited for the participant's contributions,
employer contributions and an allocation of fund earnings.
The earnings of each of the funds are allocated monthly to the
individual accounts of participants based on their relative
interest in the fair value of the assets held in each fund,
except for dividends and unrealized appreciation
(depreciation) on the common stock of Allergan, Inc. which is
allocated based upon the number of shares held in the
individual accounts of participants.
Vesting and Forfeitures
Employee contributions are fully vested at all times.
Participants forfeit their share of employer contributions if
they withdraw their employee contributions after having
completed less than three years of service with the Company.
Notwithstanding the above, a Participant shall at all times be
100% vested in all amounts transferred from the SmithKline
Savings Plan. Forfeitures are used by the Company to offset
future contribution requirements. Forfeitures available for
offset of future contribution requirements totaled $15,207 at
December 31, 1993.
Withdrawals
Participants may withdraw employee "after-tax" contributions
during employment. However, except for financial hardship or
emergency (as defined in the Plan), even participants who are
fully vested are not eligible to withdraw any portion of
employer contributions credited to them within the prior
two-year period, although such contributions may be withdrawn
at a later date. Withdrawals of employee "after-tax"
contributions and employer contributions during employment may
cause the employee to become ineligible to participate in the
Plan for a period of six months following the withdrawal.
Prior to age 59 1/2, employee "before-tax" contributions may
only be withdrawn in the event of financial hardship and after
the withdrawal of the value of employee "after-tax"
contributions and employer contributions.
6
12
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
Participants become entitled to payment of the total value of
their accounts at the time of termination (if fully vested),
retirement, disability, or death. After death, payment is in
the form of a lump sum; otherwise, under certain circumstances
set forth in the Plan, the participant may elect to receive
the distribution in a lump sum (in cash or in cash and common
stock of Allergan, Inc.) or may elect annuity payments. If an
extended payment option is selected, participants may postpone
their withdrawal until as late as attaining age 70 1/2 and, in
the interim, all fund values are transferred to the Interest
Income Fund at the time of termination.
Continuation of the Plan
The Company anticipates and believes the Plan will continue
without interruption but reserves the right to discontinue the
Plan. If the Plan is terminated by the Company, the accounts
of all affected participants shall become 100% vested and
nonforfeitable without regard to the years of service of such
participants.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on an
accrual basis of accounting. The net assets of the Plan are
allocated entirely to individual participant accounts.
Investments
Investments are stated at fair value. The fair value of
Allergan, Inc. common stock is based upon quotations obtained
from the New York Stock Exchange. The fair values of the
Windsor Fund and the Wellington Fund are based upon the net
asset value reported by the funds.
Investments in group contracts with insurance companies are
stated at cost (contract value), which approximates market.
Contract value represents contributions, net of distributions
made under the Plan, plus interest at the contract rate.
Purchases and sales of investments are reflected on the
trade-date basis. Dividend income is recorded on the
ex-dividend date.
The plan presents in the statement of changes in net assets
available for plan benefits the net appreciation
(depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Interest Bearing Cash and Cash Equivalents
Interest bearing cash and cash equivalents represent amounts
invested in Mellon Bank's EB Temporary Investment Fund which
consists of highly liquid short-term investments.
Administrative Expenses
Certain administrative expenses of the Plan are paid by the
Company.
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13
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
(3) Investments
The following tables present the fair values of investments.
Investments that represent 5 percent or more of the Plan's net assets
are separately identified.
1993
----
No. Shares,
Units or
Principal Fair
Amounts Cost Value
------- ---- -----
Common Stock:
Allergan, Inc. 739,549 $13,243,843 $16,732,296
========== =========== ===========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective return 9.53% in 1993,
latest maturity 12/31/94 4,750,242 4,750,242 4,750,242
J.P. Morgan
Contract #428, annual
effective returns varying from 5.79%
to 6.67% in 1993,
latest maturity 12/23/96 7,274,403 7,274,403 7,274,403
J.P. Morgan
Maagic Fund #2045
effective return 6.036%
in 1993, maturity 2/15/98 3,006,745 3,006,745 3,006,745
---------- ----------- -----------
Total Group Insurance Contracts 15,031,390 $15,031,390 $15,031,390
========== =========== ===========
Mutual Funds:
Wellington Fund 933,179 17,415,788 19,036,854
Windsor Fund 979,683 12,743,053 13,627,387
----------- -----------
Total Mutual Funds $30,158,841 $32,664,241
=========== ===========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 3.4% 2,644,847 2,644,847 2,644,847
Deposited at Interest in Mellon Bank,
annual effective rate 2% 3,925,624 3,925,624 3,925,624
---------- ----------- -----------
6,570,471 $ 6,570,471 $ 6,570,471
========== =========== ===========
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14
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
(3) Investments (continued)
1992
----
No. Shares,
Units or
Principal Fair
Amounts Cost Value
--------- ---- -----
Common Stock:
Allergan, Inc. 668,835 $11,420,272 $17,389,698
========== =========== ===========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective returns varying from
9.53% in 1992,
latest maturity 12/31/94 7,997,397 $ 7,997,397 $ 7,997,397
J.P. Morgan
Contract #428, annual
effective returns varying from 5.79%,
6.38%, and 6.67% in 1992,
latest maturity 12/23/96 7,346,629 7,346,629 7,346,629
---------- ----------- -----------
Total Group Insurance Contracts 15,344,026 $15,344,026 $15,344,026
========== =========== ===========
Mutual Funds:
Wellington Fund 876,783 $16,154,174 $16,799,158
Windsor Fund 724,046 9,065,089 9,224,343
----------- -----------
Total Mutual Funds $25,219,263 $26,023,501
=========== ===========
Temporary Investment and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 3.95% 5,295,909 $ 5,295,909 $ 5,295,909
========== =========== ===========
(4) Federal Income Taxes
The Internal Revenue Service has ruled, in letters dated January 8,
1990 and April 27, 1992, that the Plan meets the requirements of
Section 401(a) of the Internal Revenue Code and is exempt from
taxation under Section 501(a).
Employer contributions and dividends, interest, capital gains, or
other distributions with respect to assets held by the trustee are not
taxable to the employee until withdrawn from the Plan.
9
15
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
(5) Outstanding Commitments to Participants
At December 31, 1993, the Plan had received requests for and has a
commitment to pay withdrawals and distributions to terminated and
withdrawing participants totaling $747,982. These amounts will be
paid subsequent to December 31, 1993 to the respective withdrawing and
terminated participants. At December 31, 1992 the Plan had a
commitment to pay withdrawals and distributions totaling $1,377,466.
These amounts were paid subsequent to December 31, 1992.
(6) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
December 31,
1992
----
Net assets available for benefits per the financial statements $64,183,248
Employee contribution refunds 631,268
------------
Net assets available for benefits per the Form 5500 $64,814,516
===========
Refundable contributions from employees are included in net assets on
the Form 5500 for excess contributions that were approved for refund
prior to December 31, 1992 but not yet paid as of that date.
10
16
Schedule 1
ALLERGAN, INC.
Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1993
No. Shares,
Units or
Principal Fair
Amounts Cost Value
---------- ---- -----
Common Stock:
Allergan, Inc. 739,549 $13,243,843 $16,732,296
========== =========== ===========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective return 9.53% in 1993,
latest maturity 12/31/94 4,750,242 4,750,242 4,750,242
J.P. Morgan
Contract #428, annual
effective returns varying from 5.79%
to 6.67%, latest maturity 12/23/96 7,274,403 7,274,403 7,274,403
J.P. Morgan
Maagic Fund #3045
effective return 6.036%
in 1993, maturity 2/15/98 3,006,745 3,006,745 3,006,745
---------- ----------- -----------
Total Group Insurance Contracts 15,031,390 $15,031,390 $15,031,390
========== =========== ===========
Mutual Funds:
Wellington Fund 933,179 $17,415,788 $19,036,854
Windsor Fund 979,683 12,743,053 13,627,387
----------- -----------
Total Mutual Funds $30,158,841 $32,664,241
=========== ===========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 3.4% 2,644,847 2,644,847 2,644,847
Deposited at Interest in Mellon Bank,
annual effective rate 2% 3,925,624 3,925,624 3,925,624
---------- ----------- -----------
6,570,471 $ 6,570,471 $ 6,570,471
========== =========== ===========
See accompanying Independent Auditors' Report.
11
17
Schedule 2
ALLERGAN, INC.
Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1993
Current Value
Cost of Asset on
Identity of Description Purchase Sales of Transaction Net Gain
Party Involved of Asset Price Price Asset Date or (Loss)
- - - - - -------------- -------- ----- ----- ----- ----------- --------
Not Applicable Provident National $3,940,854 $3,940,854 $3,940,854 $-0-
Mellon Bank N.A. EB Temporary
Investment Fund $9,588,985 9,588,985 9,588,985 -0-
Mellon Bank N.A. EB Temporary
Investment Fund 12,717,615 12,717,615 12,717,615 -0-
Mellon Bank N.A. Deposited at Interest
in Mellon Bank
(2.00%) 5,463,018 5,463,018 5,463,018 -0-
Mellon Bank N.A. Deposited at Interest
in Mellon Bank
(2.00%) 1,762,425 1,762,425 1,762,425 -0-
See accompanying Independent Auditors' Report.
12
18
ALLERGAN, INC.
PUERTO RICO
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
19
INDEPENDENT AUDITORS' REPORT
The Management Plan Committee
Allergan, Inc.
We have audited the accompanying statements of net assets available for
benefits of the Allergan, Inc. Puerto Rico Savings and Investment Plan (the
"Plan") as of December 31, 1993 and 1992, and the related statement of changes
in net assets available for benefits for the year ended December 31, 1993.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1993 and 1992, and the changes in net assets available for
benefits for the year ended December 31, 1993 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Allergan, Inc. Puerto Rico Savings and Investment Plan are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG PEAT MARWICK
Orange County, California
June 10, 1994
20
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits
December 31, 1993
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- ---- ---- ---- -----
ASSETS
-------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $455,293 $575,218 -- -- -- 575,218
Group contracts with insurance
companies, cost approximates market -- -- 771,989 -- 771,989
-------- ------ -------- ------- ---------
Total investments 575,218 -- 771,989 -- 1,347,207
Interest bearing cash and cash equivalents (26,213) -- 269,357 -- 243,144
Receivables:
Employer contributions 36,339 -- -- -- 36,339
Employee contributions -- -- 120,149 -- 120,149
Interfund 42,738 84,199 (253,185) 126,248 --
Accrued interest and dividends -- -- 27 -- 27
Payables:
Contribution refunds (192) (1,862) (23,084) (2,621) (27,759)
-------- ------ -------- ------- ---------
Net assets available for
Plan benefits (note 5) $627,890 82,337 885,253 123,627 1,719,107
======== ====== ======== ======= =========
See accompanying notes to financial statements.
21
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits
December 31, 1992
Allergan,
Inc. Interest
Common Income
Stock Fund Fund Total
---------- ---- -----
ASSETS
-------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $372,839 $567,566 -- 567,566
Group contract with insurance
company, cost approximates market -- 709,536 709,536
-------- ------- ---------
Total investments 567,566 709,536 1,277,102
Interest bearing cash and cash equivalents 5,689 237,272 242,961
Receivables:
Employer contributions 11,464 -- 11,464
Employee contributions -- 33,821 33,821
-------- ------- ---------
Net assets available for
Plan benefits (note 5) $584,719 980,629 1,565,348
======== ======= =========
See accompanying notes to financial statements.
22
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1993
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- ---- ---- ---- -----
Additions to Plan assets attributed to:
Net appreciation (depreciation)
in fair value of investments $ (76,247) 2,893 24,893 6,073 (42,388)
Interest 247 99 37,560 136 38,042
Dividends 9,624 744 -- 521 10,889
--------- ------ ------- ------- ---------
Total investment income (66,376) 3,736 62,453 6,730 6,543
--------- ------ ------- ------- ---------
Contributions:
Employer - Company match 184,989 -- -- -- 184,989
Employees:
Before tax 37,507 70,350 23,784 105,038 236,679
After tax 2,887 8,836 157,406 13,572 182,701
--------- ------ ------- ------- ---------
Total contributions 225,383 79,186 181,190 118,610 604,369
--------- ------ ------- ------- ---------
Total additions 159,007 82,922 243,643 125,340 610,912
--------- ------ ------- ------- ---------
Deductions from Plan assets attributed to:
Withdrawals and distributions (115,836) -- (337,265) (5,241) (458,342)
Administrative expenses -- -- 1,189 -- 1,189
--------- ------ ------- ------- ---------
Net increase (decrease) in
net assets available
for Plan benefits 43,171 82,922 (92,433) 120,099 153,759
Net assets available for Plan
benefits, beginning of year 584,719 -- 980,629 -- 1,565,348
Net interfund transfers -- (585) (2,943) 3,528 --
--------- ------ ------- ------- ---------
Net assets available for Plan
benefits, end of year $627,890 82,337 885,253 123,627 1,719,107
======== ====== ======= ======= =========
See accompanying notes to financial statements.
23
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
(1) Description of the Plan
The following description of the Allergan, Inc. Puerto Rico Savings
and Investment Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution plan sponsored by Allergan, Inc.
(the "Company"). The Plan was established on July 27, 1989. The Plan
is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Under terms of the Plan, eligible employees may, after six months of
service, voluntarily elect to contribute:
(1) "After-tax" dollars up to 15% of their defined compensation
under provision 401(a) of the Internal Revenue Code or,
(2) "Before-tax" dollars up to the lesser of 10% of their defined
compensation or $8,994 and $8,728 for the years ended December
31, 1993 and 1992, respectively, under provision 401(k) of the
Internal Revenue Code or,
(3) Any combination of the above two elections; however, the total
contribution cannot exceed the lesser of 15% of their defined
compensation or $30,000.
Contributions
Effective July 1, 1993, the Company contributes an amount equal to 50%
of each employee's contribution not exceeding 6% of defined
compensation. Prior to July 1, 1993, the Company contributed an
amount equal to 100% of each employee's contribution not exceeding 4%
of defined compensation.
Certain limitations imposed by the Internal Revenue Code may have the
effect of reducing the level of contributions initially selected by
participants who come within the classification of "highly compensated
employees" as defined in the Code.
Effective July 1, 1993, employee contributions are invested in the
Allergan, Inc. Common Stock Fund, the Balanced Fund, the Interest
Income Fund or the Equity Fund or any combination of the four funds at
the employee's discretion. Prior to July 1, 1993, employee
contributions were invested in the Interest Income Fund. Company
contributions consist of Allergan, Inc. Common Stock and are invested
in the Allergan, Inc. Common Stock Fund except, after employees reach
age 55, they may elect to have Company contributions, both past and
current, invested in any of the funds.
Investment Options
Participants have the right to elect investment options upon
enrollment or re-enrollment into the Plan. Additionally, participants
may elect to change their investment options and transfer their
account balances among the different investment funds.
Income on investment funds is allocated to participants' accounts
based on the participants' investment fund balance as a percentage of
the total investment fund balance.
(continued)
24
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
A description of each investment fund follows:
Allergan, Inc. Common Stock Fund - The Allergan, Inc. Common Stock Fund
is invested in Allergan, Inc. common stock.
Balanced Fund - The Balanced Fund is invested primarily in stocks,
bonds and cash. The stock portfolio consists of large, intermediate
and small companies. The bond portfolio consists of U.S. Treasury,
U.S. Agency and corporate issues. The Fund is managed by the Vanguard
Group under the name "Wellington Fund."
Interest Income Fund - The Interest Income Fund is invested in a
portfolio of group annuity contracts and short term money market funds
issued by major insurance companies and banks.
Equity Fund - The Equity Fund is invested in a portfolio of common
stocks to meet the objective of long-term growth of capital and
income. The Fund is managed by the Vanguard Group under the name
"Windsor Fund."
The number of employees participating in these funds at December 31,
1993 and 1992 was as follows:
1993 1992
---- ----
(unaudited) (unaudited)
Allergan, Inc. Common Stock Fund 393 209
Balance Fund 236 -
Interest Income Fund 250 209
Equity Fund 252 -
Participant Accounts
Each participant's account is charged for the participant's
withdrawals and credited for the participant's contributions, employer
contributions and an allocation of fund earnings. The earnings of
each of the funds are allocated monthly to the individual accounts of
participants based on their relative interest in the fair value of the
assets held in each fund, except for dividends and unrealized
appreciation (depreciation) on the common stock of Allergan, Inc.
which is allocated based upon the number of shares held in the
individual accounts of participants.
Vesting and Forfeitures
Employee contributions are fully vested at all times. Participants
forfeit their share of employer contributions if they withdraw their
employee contributions after having completed less than three years of
service with the Company. Notwithstanding the above, a Participant
shall at all times be 100% vested in all amounts transferred from the
SmithKline Puerto Rico Savings Plan. Forfeitures are used by the
Company to offset future contribution requirements. Forfeitures
available for offset of future contribution requirements totaled $565
at December 31, 1993.
(continued)
25
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
Withdrawals
Participants may withdraw employee "after-tax" contributions during
employment. However, except for financial hardship or emergency (as
defined in the Plan), even participants who are fully vested are not
eligible to withdraw any portion of employer contributions credited to
them within the prior two-year period, although such contributions may
be withdrawn at a later date. Withdrawals of employee "after-tax"
contributions and employer contributions during employment may cause
the employee to become ineligible to receive Company matching
contributions in the Plan for a period of six months following the
withdrawal.
Prior to age 59 1/2, employee "before tax" contributions may only be
withdrawn in the event of financial hardship, and after the withdrawal
of the value of employee "after tax" contributions and employer
contributions.
Participants become entitled to payment of the total value of their
accounts at the time of termination (if fully vested), retirement,
disability, or death. After death, payment is in the form of a lump
sum; otherwise, under certain circumstances set forth in the Plan, the
participant may elect to receive the distribution in a lump sum (in
cash or in cash and common stock of Allergan, Inc.) or may elect
annuity payments. If an extended payment option is selected,
participants may postpone their withdrawal until as late as attaining
age 70 1/2 and, in the interim, all fund values are transferred to the
Interest Income Fund at the time of termination.
Continuation of the Plan
The Company anticipates and believes the Plan will continue without
interruption but reserves the right to discontinue the Plan. If the
Plan is terminated by the Company, the accounts of all affected
participants shall become 100% vested and nonforfeitable without
regard to the years of service of such participants.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on the
accrual basis of accounting. The net assets of the Plan are allocated
entirely to individual participant accounts.
Investments
Investments are stated at fair value. The fair value of Allergan,
Inc. common stock is based upon quotations obtained from the New York
Stock Exchange.
Investments in group contracts with insurance companies are stated at
cost (contract value), which approximates market. Contract value
represents contributions, net of distributions made under the Plan,
plus interest at the contract rate.
Purchases and sales of investments are reflected on the trade-date
basis. Dividend income is recorded on the ex-dividend date.
(continued)
26
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
The plan presents in the statement of changes in net assets available
for plan benefits the net appreciation (depreciation) in the fair
value of its investments which consists of the realized gains or
losses and the unrealized appreciation (depreciation) on those
investments.
Interest Bearing Cash and Cash Equivalents
Interest bearing cash and cash equivalents represent amounts invested
in Mellon Bank's EB Temporary Investment Fund which consists of highly
liquid short-term investments.
Administrative Expenses
Certain administrative expenses of the Plan are paid by the Company.
(3) Assets Held for Investments
DECEMBER 31, 1993
-----------------
No. Shares Fair
or Par Value Cost Value
------------ ---- -----
Common Stock:
Allergan, Inc. 25,424 $455,293 $575,218
======= ======== ========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04576, annual
effective returns varying from 5.79%
to 6.67% in 1993,
latest maturity 12/31/94 639,680 639,680 639,680
J.P. Morgan
Maagic Fund #2045
Effective return 6.036%
in 1993, maturity 2/15/98 132,309 132,309 132,309
------- -------- --------
771,989 $771,989 $771,989
======= ======== ========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 3.4% 70,401 70,401 70,401
Deposited at Interest in
Mellon Bank effective rate 2% 172,743 $172,743 $172,743
------- -------- --------
243,144 $243,144 $243,144
======= ======== ========
(continued)
27
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1993 and 1992
DECEMBER 31, 1992
-----------------
No Shares Fair
or Par Value Cost Value
------------ ---- -----
Common Stock:
Allergan, Inc. 21,829 $372,839 $567,566
======= ========= ========
Group Insurance Contract:
Provident National Assurance Co.
Contract #027-04576, annual
effective returns varying from 8.4%
to 9.53% in 1992,
latest maturity 12/31/94 709,536 709,536 709,536
======= ======= =======
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
effective annual rate 3.95% 242,961 $242,961 $242,961
======== ======== ========
(4) Tax Status of the Plan
The Plan is intended to constitute a profit sharing plan qualified
under Section 165(a) of the Puerto Rico Income Tax Act of 1954 and
Section 401(a) of the Internal Revenue Code of 1986 and is exempt from
taxation under Section 501(a).
(5) Outstanding Commitments to Participants
At December 31, 1993, the Plan had received requests for and has a
commitment to pay withdrawals and distributions to terminated and
withdrawing participants totaling $34,982. These amounts will be paid
subsequent to December 31, 1993 to the respective withdrawing and
terminated participants. At December 31, 1992 the Plan had a
commitment to pay withdrawals and distributions totaling $33,456.
These amounts were paid subsequent to December 31, 1992.
28
Schedule 1
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1993
No. Shares,
Units or
Principal Fair
Amounts Cost Value
------- ---- -----
Common Stock:
Allergan, Inc. 25,424 $455,293 $575,218
====== ======== ========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective returns varying from 5.79%
to 6.67% in 1993,
latest maturity 12/31/94 639,680 639,680 639,680
J.P. Morgan
Maagic Fund #2045
effective return 6.036%
in 1993, maturity 2/15/98 132,309 132,309 132,309
-------- -------- --------
Total Group Insurance Contracts 771,989 $771,989 $771,989
======== ======== ========
Temporary Investment and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 3.4% 70,401 70,401 70,401
Deposited at Interest in Mellon Bank,
effective rate 2% 172,743 172,743 172,743
------- --------- --------
243,144 $243,144 $243,144
======= ========= ========
See accompanying Independent Auditors' Report.
29
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1993
Current Value
of Asset on
Identity of Description Purchase Sales Cost of Transaction Net Gain
Party Involved of Asset Price Price Asset Date or (Loss)
- - - - - -------------- ----------- -------- ----- ------- ------------- ---------
Mellon Bank N.A. EB Temporary $814,988 $814,988 $814,988 $-0-
Investment Fund
Mellon Bank N.A. EB Temporary -- $509,971 509,971 509,971 -0-
Investment Fund
Mellon Bank N.A. Deposited at Interest 476,982 -- 476,982 476,982 -0-
in Mellon Bank
(2.00%)
Mellon Bank N.A. Deposited at Interest -- 79,575 79,575 79,575 -0-
in Mellon Bank
(2.00%)
See accompanying Independent Auditors' Report.