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, 1994
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 LLP on the
Statements of Net Assets Available for Plan Benefits, with
Fund Information as of December 31, 1994 and 1993 and the
related Statement of Changes in Net Assets Available for Plan
Benefits, with Fund Information for the Year Ended December 31,
1994 - Allergan, Inc. Savings and Investment Plan.
Statements of Net Assets Available for Plan Benefits, with
Fund Information as of December 31, 1994 and 1993 - Allergan
Inc. Savings and Investment Plan.
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information for the Year Ended December 31, 1994 -
Allergan, Inc. Savings and Investment Plan.
Notes to Financial Statements - Allergan, Inc. Savings and
Investment Plan.
Item 27a - Schedule of Assets Held for Investment Purposes as
of December 31, 1994 - Allergan, Inc. Savings and Investment
Plan.
Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1994 - Allergan, Inc. Savings and
Investment Plan.
Independent Auditors' Report of KPMG Peat Marwick LLP on the
Statements of Net Assets Available for Plan Benefits, with
Fund Information as of December 31, 1994 and 1993 and the
related Statement of Changes in Net Assets Available for Plan
Benefits, with Fund Information for the Year Ended December 31,
1994 - Allergan, Inc. Puerto Rico Savings and Investment Plan.
Statements of Net Assets Available for Plan Benefits, with
Fund Information as of December 31, 1994 and 1993 - Allergan,
Inc. Puerto Rico Savings and Investment Plan.
Statement of Changes in Net Assets Available for Plan
Benefits, with Fund Information for the Year Ended December 31,
1994 - Allergan, Inc. Puerto Rico Savings and Investment Plan.
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3
Notes to Financial Statements - Allergan, Inc. Puerto Rico
Savings and Investment Plan.
Item 27a - Schedule of Assets Held for Investment Purposes as
of December 31, 1994 - Allergan, Inc. Puerto Rico Savings and
Investment Plan.
Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1994 - Allergan, Inc. Puerto Rico Savings
and Investment Plan.
(b) Exhibits
Exhibit 23 - Consent of KPMG Peat Marwick LLP
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, 1995 BY: FRANCIS R. TUNNEY, JR.
----------------- ----------------------
Francis R. Tunney, Jr.
Allergan, Inc. Management
Plan Committee
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4
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
5
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
Index to Financial Statements and Supplementary Schedules
Financial Statements Page
- -------------------- ----
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Net Assets Available for Plan Benefits, with Fund Information --
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Net Assets Available for Plan Benefits, with Fund Information --
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information -- Year ended December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Supplementary Schedules Schedule
- ----------------------- --------
Item 27a - Schedule of Assets Held for Investment Purposes -- December 31, 1994 . . . . . . . . . . 1
Item 27d - Schedule of Reportable Transactions -- Year ended December 31, 1994 . . . . . . . . . . 2
Other schedules are omitted because they are not required or are not applicable
based on disclosure requirements of the Employee Retirement Income Security Act
of 1974 and regulations issued by the Department of Labor.
6
INDEPENDENT AUDITORS' REPORT
The Management Plan Committee
Allergan, Inc.:
We have audited the financial statements of the Allergan, Inc. Savings and
Investment Plan (the "Plan") as of December 31, 1994 and 1993, and for the year
ended December 31, 1994, as listed in the accompanying index. 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, 1994 and 1993, and the changes in net assets available for
benefits for the year ended December 31, 1994 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 as listed in the accompanying index
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 Fund
Information in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information 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 LLP
Orange County, California
June 16, 1995
1
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ALLERGAN, INC.
Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1994
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
----------- ---------- ---------- ---------- ----------
ASSETS
-------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $14,182,912 $21,883,863 -- -- -- 21,883,863
Wellington Fund, cost $18,056,974 -- 18,600,891 -- -- 18,600,891
Group contracts with insurance
companies, cost approximates market -- -- 21,798,091 -- 21,798,091
Windsor Fund, cost $17,162,309 -- -- -- 16,361,761 16,361,761
----------- ---------- ---------- ---------- ----------
Total investments 21,883,863 18,600,891 21,798,091 16,361,761 78,644,606
Interest bearing cash and
cash equivalents 558,076 107,253 30 222,512 887,871
Receivables:
Employer contributions 318,775 126 (2,494) 654 317,061
Employee contributions 125,792 114,756 143,939 229,221 613,708
Accrued interest and dividends 612 107 6 209 934
Payables:
Contribution refunds (22,111) (32,148) (44,159) (52,280) (150,698)
Purchases pending settlement -- (107,229) -- (222,463) (329,692)
Short-term fund investment fees (13) (2) -- (4) (19)
----------- ---------- ---------- ---------- ----------
Subsequent event (note 4)
Net assets available
for Plan benefits (note 5) $22,864,994 18,683,754 21,895,413 16,539,610 79,983,771
=========== ========== ========== ========== ==========
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, with Fund Information
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 143,661 347 1,014 493 145,515
Employee contributions 81,298 82,906 139,390 157,070 460,664
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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9
ALLERGAN, INC.
Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information
For the Year Ended December 31, 1994
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 $ 4,340,741 (929,859) 948,746 (588,142) 3,771,486
Interest 5,914 1,980 508,192 4,196 520,282
Dividends 319,419 827,483 -- 503,999 1,650,901
----------- ---------- ---------- ---------- ----------
Total investment income (loss) 4,666,074 (100,396) 1,456,938 (79,947) 5,942,669
----------- ---------- ---------- ---------- ----------
Contributions:
Employer - Company match 2,190,732 10,540 17,294 8,730 2,227,296
Employees:
Before tax 815,129 1,189,789 1,501,720 2,379,857 5,886,495
After tax 222,156 374,459 682,248 679,212 1,958,075
----------- ---------- ---------- ---------- ----------
Total contributions 3,228,017 1,574,788 2,201,262 3,067,799 10,071,866
----------- ---------- ---------- ---------- ----------
Total additions 7,894,091 1,474,392 3,658,200 2,987,852 16,014,535
----------- ---------- ---------- ---------- ----------
Deductions from Plan assets attributed to:
Withdrawals and distributions (1,685,604) (1,843,724) (2,309,349) (1,229,293) (7,067,970)
Administrative expenses (166) (57) (7,860) (116) (8,199)
----------- ---------- ---------- ---------- ----------
Total deductions (1,685,770) (1,843,781) (2,317,209) (1,229,409) (7,076,169)
----------- ---------- ---------- ---------- ----------
Increase (decrease) in
net assets available
for Plan benefits 6,208,321 (369,389) 1,340,991 1,758,443 8,938,366
----------- ---------- ---------- ---------- ----------
Net assets available for Plan
benefits, beginning of year 17,092,948 19,059,369 21,209,301 13,683,787 71,045,405
Net interfund transfers (436,275) (6,226) (654,879) 1,097,380 --
----------- ---------- ---------- ---------- ----------
Net assets available for Plan
benefits, end of year $22,864,994 18,683,754 21,895,413 16,539,610 79,983,771
=========== ========== ========== ========== ==========
See accompanying notes to financial statements.
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
(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 $9,240 and $8,994 for the
years ended December 31, 1994 and 1993, 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
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
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, 1994 and 1993 was as follows:
1994 1993
------ ------
(Unaudited) (Unaudited)
Allergan, Inc. Common Stock Fund 2,054 1,858
Balanced Fund 1,529 1,397
Interest Income Fund 1,385 1,291
Equity Fund 1,508 1,262
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.
Forfeitures are used by the Company to offset future
contribution requirements. No forfeitures were available for
offset of future contribution requirements at December 31,
1994.
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.
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12
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
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.
Reclassifications
Certain reclassifications have been made to the 1993 financial
statements to conform to the 1994 presentation.
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
(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.
1994
No. Shares,
Units or
Principal Fair
Amounts Cost Value
---------- ----------- -----------
Common Stock:
Allergan, Inc. 774,650 $14,182,912 $21,883,863
========== =========== ===========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective return 9.53% in 1994,
latest maturity 12/31/94 5,198,353 5,198,353 5,198,353
LaSalle National Trust
annual effective returns varying
from 5.85% to 6.34% in 1994 6,052,144 6,052,144 6,052,144
J.P. Morgan
Contract #428, annual
effective returns varying from 5.79%,
6.38%, and 6.67% in 1994,
latest maturity 12/23/96 7,275,633 7,275,633 7,275,633
J.P. Morgan
Maaagic Fund #2045
effective return 6.04% in 1994,
maturity 2/15/98 3,271,961 3,271,961 3,271,961
---------- ----------- -----------
Total Group Insurance Contracts 21,798,091 $21,798,091 $21,798,091
========== =========== ===========
Mutual Funds:
Wellington Fund 959,303 18,056,974 18,600,891
Windsor Fund 1,299,584 17,162,309 16,361,761
---------- ----------- -----------
Total Mutual Funds 2,258,887 $35,219,283 $34,962,652
========== =========== ===========
Temporary Investment and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.74% 887,871 $887,871 $887,871
======= ======== ========
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
(3) Investments (continued)
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
Maaagic 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 1,912,862 $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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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
(4) Federal Income Taxes
The Plan obtained its latest determination letter on April 27, 1992,
in which the Internal Revenue Service stated that the plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The plan was amended on December 30, 1994, and
a request for a new determination letter was made on March 27, 1995.
The Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code.
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.
(5) Outstanding Commitments to Participants
At December 31, 1994, the Plan had received requests for and has a
commitment to pay withdrawals and distributions to terminated and
withdrawing participants totaling $1,749,312. These amounts will be
paid subsequent to December 31, 1994 to the respective withdrawing and
terminated participants. At December 31, 1993 the Plan had a
commitment to pay withdrawals and distributions totaling $747,982.
These amounts were paid subsequent to December 31, 1993.
10
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Schedule 1
ALLERGAN, INC.
Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
No. Shares,
Units or
Principal Fair
Amounts Cost Value
---------- ---- -----
Common Stock:
Allergan, Inc. 774,650 $14,182,912 $21,883,863
======= =========== ===========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective return 9.53% in 1994,
latest maturity 12/31/94 5,198,353 5,198,353 5,198,353
LaSalle National Trust
annual effective returns varying
from 5.85% to 6.34% in 1994 6,052,144 6,052,144 6,052,144
J.P. Morgan
Contract #428, annual
effective returns varying from 5.79%
to 6.67%, latest maturity 12/23/96 7,275,633 7,275,633 7,275,633
J.P. Morgan
Maaagic Fund #2045
effective return 6.04%
in 1994, maturity 2/15/98 3,271,961 3,271,961 3,271,961
---------- ----------- -----------
Total Group Insurance Contracts 21,798,091 $21,798,091 $21,798,091
========== =========== ===========
Mutual Funds:
Wellington Fund 959,303 18,056,974 18,600,891
Windsor Fund 1,299,584 17,162,309 16,361,761
---------- ----------- -----------
Total Mutual Funds 2,258,887 $35,219,283 $34,962,652
========== =========== ===========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.74% 887,871 $887,871 $887,871
======= ======== ========
See accompanying independent auditors' report.
11
17
Schedule 2
ALLERGAN, INC.
Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1994
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 LaSalle National Trust
Income Plus Fund $7,819,426 $7,819,426 $7,819,426 $-0-
Not Applicable LaSalle National Trust
Income Plus Fund $2,308,890 2,308,890 2,308,890 -0-
Mellon Bank N.A. EB Temporary
Investment Fund 13,745,037 13,745,037 13,745,037 -0-
Mellon Bank N.A. EB Temporary
Investment Fund 16,099,325 16,099,325 16,099,325 -0-
Mellon Bank N.A. Deposited at Interest
in Mellon Bank
(2.00%) 979,118 979,118 979,118 -0-
Mellon Bank N.A. Deposited at Interest
in Mellon Bank
(2.00%) 5,394,717 5,394,717 5,394,717 -0-
Various Vanguard/Windsor 4,101,655 4,101,655 4,101,655 -0-
Various Vanguard/Windsor 1,266,955 1,201,312 1,266,955 65,643
See accompanying independent auditors' report.
12
18
ALLERGAN, INC.
PUERTO RICO
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
19
ALLERGAN, INC.
PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Index to Financial Statements and Supplementary Schedules
Financial Statements Page
- -------------------- ----
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Net Assets Available for Plan Benefits, with Fund Information --
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Net Assets Available for Plan Benefits, with Fund Information --
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information -- Year ended December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Supplementary Schedules Schedule
- ----------------------- --------
Item 27a - Schedule of Assets Held for Investment Purposes --
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 27d - Schedule of Reportable Transactions --
Year ended December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Other schedules are omitted because they are not required or are not applicable
based on disclosure requirements of the Employee Retirement Income Security Act
of 1974 and regulations issued by the Department of Labor.
20
INDEPENDENT AUDITORS' REPORT
The Management Plan Committee
Allergan, Inc.:
We have audited the financial statements of the Allergan, Inc. Puerto Rico
Savings and Investment Plan (the "Plan") as of December 31, 1994 and 1993, and
for the year ended December 31, 1994, as listed in the accompanying index.
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, 1994 and 1993, and the changes in net assets available for
benefits for the year ended December 31, 1994 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 as listed in the
accompanying index 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 Fund Information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and Fund Information 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 LLP
Orange County, California
June 16, 1995
1
21
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1994
Allergan,
Inc. Interest
Common Balanced Income Equity
Stock Fund Fund Fund Fund Total
---------- ---- ---- ---- -----
ASSETS
------
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $610,242 $941,601 -- -- -- 941,601
Wellington Fund, cost $201,371 -- 207,437 -- -- 207,437
Group contracts with insurance
companies, cost approximates market -- -- 857,791 -- 857,791
Windsor Fund, cost $323,464 -- -- -- 308,375 308,375
-------- ------- ------- ------- ---------
Total investments 941,601 207,437 857,791 308,375 2,315,204
Interest bearing cash and cash equivalents 3,020 1,196 -- 4,194 8,410
Receivables:
Employer contributions 20,097 -- -- -- 20,097
Employee contributions 5,383 17,405 9,515 20,883 53,186
Accrued interest and dividends -- 1 -- 4 5
Payables:
Purchases pending settlement -- (1,196) -- (4,193) (5,389)
-------- ------- ------- ------- ---------
Subsequent event (note 4)
Net assets available for
Plan benefits (note 5) $970,101 224,843 867,306 329,263 2,391,513
======== ======= ======= ======= =========
See accompanying notes to financial statements.
2
22
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
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.
3
23
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information
For the Year Ended December 31, 1994
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 $168,651 (7,027) 19,813 (8,230) 173,207
Interest 230 15 19,964 59 20,268
Dividends 12,410 6,253 -- 7,053 25,716
-------- ------- -------- -------- ---------
Total investment income (loss) 181,291 (759) 39,777 (1,118) 219,191
-------- ------- -------- -------- ---------
Contributions:
Employer - Company match 208,505 -- -- -- 208,505
Employees:
Before tax 61,722 145,802 100,985 211,775 520,284
After tax 3,859 13,493 9,313 19,057 45,722
-------- ------- -------- -------- ---------
Total contributions 274,086 159,295 110,298 230,832 774,511
-------- ------- -------- -------- ---------
Total additions 455,377 158,536 150,075 229,714 993,702
-------- ------- -------- -------- ---------
Deductions from Plan assets attributed to:
Withdrawals and distributions (107,792) (21,409) (163,813) (27,965) (320,979)
Administrative expenses (6) -- (309) (2) (317)
-------- ------- -------- -------- ---------
Total deductions (107,798) (21,409) (164,122) (27,967) (321,296)
-------- ------- -------- -------- ---------
Net increase (decrease) in
net assets available
for Plan benefits 347,579 137,127 (14,047) 201,747 672,406
Net assets available for Plan
benefits, beginning of year 627,890 82,337 885,253 123,627 1,719,107
Net interfund transfers (5,368) 5,379 (3,900) 3,889 --
-------- ------- -------- -------- ---------
Net assets available for Plan
benefits, end of year $970,101 224,843 867,306 329,263 2,391,513
======== ======= ======== ======== =========
See accompanying notes to financial statements.
4
24
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
(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 $9,240 and $8,994 for the years ended December
31, 1994 and 1993, 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 and the
Puerto Rico Income Tax Act of 1954 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)
5
25
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
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,
1994 and 1993 was as follows:
1994 1993
---- ----
(unaudited) (unaudited)
Allergan, Inc. Common Stock Fund 360 393
Balance Fund 228 236
Interest Income Fund 225 250
Equity Fund 240 252
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 Forfeiture
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 $74
at December 31, 1994.
(continued)
6
26
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
Withdrawal
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.
Investment
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)
7
27
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
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, 1994
-----------------
No. Shares Fair
or Par Value Value Cost
------------ ----- ----
Common Stock:
Allergan, Inc. 33,331 $610,242 $941,601
====== ======== ========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04576, annual
effective return 9.53% in 1994,
latest maturity 12/31/94 700,024 700,024 700,024
LaSalle National Trust
annual effective returns varying
from 5.85% to 6.34% in 1994 102,404 102,404 102,404
J.P. Morgan
Maaagic Fund #2045
Effective return 6.04%
in 1994, maturity 2/15/98 55,363 55,363 55,363
--------- -------- --------
Total Group Insurance Contracts 857,791 $857,791 $857,791
======= ======== ========
Mutual Funds:
Wellington Fund 10,698 201,371 207,437
Windsor Fund 24,494 323,464 308,375
-------- -------- --------
Total Mutual Funds 35,192 $524,835 $515,812
======== ======== ========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.74% 8,410 $8,410 $8,410
===== ====== ======
(continued)
8
28
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1994 and 1993
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
Maaagic 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
======= ======== ========
(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).
The Plan obtained its latest determination letter on August 11, 1993,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. A new determination letter was obtained on
March 7, 1995 subject to the adoption of proposed amendments. On
April 27, 1995, the proposed amendments to the Plan were adopted.
(5) Outstanding Commitments to Participants
At December 31, 1994, the Plan had received requests for and has a
commitment to pay withdrawals and distributions to terminated and
withdrawing participants totaling $37,011. These amounts will be paid
subsequent to December 31, 1994 to the respective withdrawing and
terminated participants. At December 31, 1993 the Plan had a
commitment to pay withdrawals and distributions totaling $34,982.
These amounts were paid subsequent to December 31, 1993.
9
29
Schedule 1
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
No. Shares
Units or
Principal Fair
Amounts Cost Value
---------- -------- --------
Common Stock:
Allergan, Inc. 33,331 $610,242 $941.601
======= ======== ========
Group Insurance Contracts:
Provident National Assurance Co.
Contract #027-04575, annual
effective return 9.53% in 1994,
latest maturity 12/31/94 700,024 700,024 700,024
LaSalle National Trust
annual effective returns varying
from 5.85% to 6.34% in 1994 102,404 102,404 102,404
J.P. Morgan
Maaagic Fund #2045
effective return 6.04%
in 1994, maturity 2/15/98 55,363 55,363 55,363
------- -------- --------
Total Group Insurance Contracts 857,791 $857,791 $857,791
======= ======== ========
Mutual Funds:
Wellington Fund 10,698 201,371 207,437
Windsor Fund 24,494 323,464 308,375
------- -------- --------
Total Mutual Funds 35,192 $524,835 $515,812
======= ======== ========
Temporary Investment and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.74% 8,410 $8,410 $8,410
===== ====== ======
See accompanying independent auditors' report.
10
30
Schedule 2
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1994
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)
- -------------- -------- ----- ----- ----- -------- ---------
Mellon Bank N.A. EB Temporary
Investment Fund $984,035 $984,035 $984,035 $-0-
Mellon Bank N.A. EB Temporary
Investment Fund $448,819 448,819 448,819 -0-
Mellon Bank N.A. Deposited at Interest
in Mellon Bank 83,806 83,806 83,806 -0-
(2.00%)
Mellon Bank N.A. Deposited at Interest
in Mellon Bank
(2.00%) 200,283 200,283 200,283 -0-
Not Applicable LaSalle National Trust
Income Plus Fund 406,354 406,354 406,354 -0-
Not Applicable LaSalle National Trust
Income Plus Fund 90,705 90,705 90,705 -0-
Various Vanguard/Windsor 311,099 311,099 311,099 -0-
Various Vanguard/Windsor 17,729 16,810 17,729 919
See accompanying independent auditors' report.
11