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, 1995
--------------------------
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, 1995 and 1994
and the related Statement of Changes in Net
Assets Available for Plan Benefits, with
Fund Information for the Year Ended December
31, 1995 - Allergan, Inc. Savings and
Investment Plan.
Statements of Net Assets Available for Plan
Benefits, with Fund Information as of
December 31, 1995 and 1994 - 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, 1995 - 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, 1995
- Allergan, Inc. Savings and Investment
Plan.
Item 27d - Schedule of Reportable
Transactions for the Year Ended December 31,
1995 - 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, 1995 and 1994
and the related Statement of Changes in Net
Assets Available for Plan Benefits, with
Fund Information for the Year Ended December
31, 1995 - Allergan, Inc. Puerto Rico
Savings and Investment Plan.
Statements of Net Assets Available for Plan
Benefits, with Fund Information as of
December 31, 1995 and 1994 - 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, 1995 - 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, 1995
- Allergan, Inc. Puerto Rico Savings and
Investment Plan.
Item 27d - Schedule of Reportable
Transactions for the Year Ended December 31,
1995 - 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 27, 1996 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, 1995 AND 1994
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, 1995............................. 2
Statement of Net Assets Available for Plan Benefits,
with Fund Information -- December 31, 1994.............................. 4
Statement of Changes in Net Assets Available for Plan
Benefits, with Fund Information -- Year ended
December 31, 1995....................................................... 5
Notes to Financial Statements............................................ 7
Supplementary Schedules Schedule
- ----------------------- --------
Item 27a - Schedule of Assets Held for Investment Purposes --
December 31, 1995....................................................... 1
Item 27d - Schedule of Reportable Transactions --
Year ended December 31, 1995............................................ 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, 1995 and 1994, and for the year
ended December 31, 1995, 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, 1995 and 1994, and the changes in net assets available for plan
benefits for the year ended December 31, 1995 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 plan benefits and the statement of
changes in net assets available for plan 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 18, 1996
1
7
ALLERGAN, INC.
Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Distribution
December 31, 1995
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth
Stock Fund Fund Fund Fund Fund Fund
---------- ---- ---- ---- ---- ----
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $15,423,150 $25,615,185 -- -- -- -- --
American Balanced Fund,
cost $20,349,044 -- 23,057,732 -- -- -- --
Common/collective trusts,
cost approximates market -- -- 21,843,305 -- -- --
Investment Company of
America Fund, cost
$18,400,798 -- -- -- 21,444,247 -- --
New Perspective Fund,
cost $2,080,885 -- -- -- -- 2,074,740 --
Ultra Investors Fund,
cost $3,175,654 -- -- -- -- -- 3,201,513
Participant loans -- -- -- -- -- --
------------ ---------- ---------- ---------- --------- ----------
Total Investments 25,615,185 23,057,732 21,843,305 21,444,247 2,074,740 3,201,513
Interest bearing cash and cash
equivalents 242,304 -- 80,228 124 -- --
Receivables:
Due to Plan -- -- -- -- -- --
Accrued interest and dividends 1,086 -- 83 27 -- --
Sales pending settlement -- -- 13,349 -- -- --
------------ ---------- ---------- ---------- --------- ----------
Total Receivables 1,086 -- 13,432 27 -- --
------------ ---------- ---------- ---------- --------- ----------
Total Assets 25,858,575 23,057,732 21,936,965 21,444,398 2,074,740 3,201,513
Participant
Loans Other Total
----- ----- -----
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $15,423,150 -- -- 25,615,185
American Balanced Fund,
cost $20,349,044 -- -- 23,057,732
Common/Collective Trusts,
cost approximates market -- -- 21,843,305
Investment Company of
America Fund, cost
$18,400,798 -- -- 21,444,247
New Perspective Fund,
cost $2,080,885 -- -- 2,074,740
Ultra Investors Fund,
cost $3,175,654 -- -- 3,201,513
Participant Loans 1,902,928 -- 1,902,928
---------- --------- ----------
Total Investments 1,902,928 -- 99,139,650
Interest bearing cash and cash
equivalents 36 55,730 378,422
Receivables:
Due to Plan -- 110,037 110,037
Accrued interest and dividends -- 31 1,227
Sales pending settlement -- -- 13,349
---------- --------- ----------
Total Receivables -- 110,068 124,613
---------- --------- ----------
Total Assets 1,902,964 165,798 99,642,685
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 Distribution
December 31, 1995
(continued)
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth
Stock Fund Fund Fund Fund Fund Fund
---------- ---- ---- ---- ---- ----
Payables:
Due from Plan (37,452) (12,389) (43,016) (17,180) -- --
Contribution refunds (23,644) (17,490) (29,082) (21,685) (987) (1,094)
Purchases pending settlement -- (4,028) -- (138,658) (1,239) (1,354)
Short-term fund investment fees (23) -- (2) (1) -- --
----------- ---------- ---------- ---------- --------- ----------
Total Payables (61,119) (33,907) (72,100) (177,524) (2,226) (2,448)
----------- ---------- ---------- ---------- --------- ---------
Net assets available for Plan benefits $25,797,456 23,023,825 21,864,865 21,266,874 2,072,514 3,199,065
=========== ========== ========== ========== ========= =========
Participant
Loans Other Total
----- ----- -----
Payables:
Due from Plan -- -- (110,037)
Contribution refunds -- -- (93,982)
Purchases pending settlement -- -- (145,279)
Short-term fund investment fees -- -- (26)
----------- ------- ----------
Total Payables -- -- (349,324)
----------- ------- ----------
Net assets available for Plan benefits 1,902,964 165,798 99,293,361
=========== ======= ==========
See accompanying notes to financial statements.
3
9
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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10
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, 1995
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans Other Total
---------- ---- ---- ---- ------- --------- ------- ----- -----
Additions to Plan assets attributed to:
Net appreciation
in fair value of investments $3,253,242 3,976,439 1,405,564 4,453,756 66,719 180,147 -- -- 13,335,867
Interest 15,616 99 1,446 351 -- -- 103,354 12,441 133,307
Dividends 372,510 857,925 -- 467,039 29,890 -- -- 19 1,727,383
---------- --------- --------- --------- -------- ------- ------- ------ ----------
Total investment income 3,641,368 4,834,463 1,407,010 4,921,146 96,609 180,147 103,354 12,460 15,196,557
Contributions:
Employer - Company match 2,532,588 3,164 21,411 9,142 610 3,573 -- -- 2,570,488
Employees:
Before tax 920,165 1,387,972 1,667,204 2,491,150 251,618 295,000 -- -- 7,013,109
After tax 475,016 482,359 718,015 773,509 156,635 213,849 -- -- 2,819,383
---------- --------- --------- --------- ------- ------- ------- ------ ----------
Total contributions 3,927,769 1,873,495 2,406,630 3,273,801 408,863 512,422 -- -- 12,402,980
--------- --------- --------- --------- ------- ------- ------- ------ ----------
Total additions 7,569,137 6,707,958 3,813,640 8,194,947 505,472 692,569 103,354 12,460 27,599,537
--------- --------- --------- --------- ------- ------- ------- ------ ----------
See accompanying notes to financial statements.
5
11
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, 1995
(continued)
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans
---------- ---- ---- ---- ---- ---- -----
Deductions from Plan assets attributed to:
Withdrawals and distributions (2,211,702)(1,998,550) (2,020,088) (2,015,581) (6,147) (11,931) --
Administrative expenses (314) (89) (26,098) (150) (10) (15) (1)
----------- ---------- ---------- ---------- --------- ------- ---------
Total deductions (2,212,016)(1,998,639) (2,046,186) (2,015,731) (6,157) (11,946) (1)
----------- ---------- ---------- ---------- --------- ------- ---------
Increase in net assets
available for Plan benefits 5,357,121 4,709,319 1,767,454 6,179,216 499,315 680,623 103,353
Net assets available for Plan
benefits, beginning of year 22,864,994 18,683,754 21,895,413 16,539,610 -- -- --
Net interfund transfers (2,424,659) (369,248) (1,798,002) (1,451,952) 1,573,199 2,518,442 1,799,611
----------- ---------- ---------- ---------- --------- --------- ---------
Net assets available for Plan
benefits, end of year $25,797,456 23,023,825 21,864,865 21,266,874 2,072,514 3,199,065 1,902,964
=========== ========== ========== ========== ========= ========= =========
Other Total
----- -----
Deductions from Plan assets attributed to:
Withdrawals and distributions -- (8,263,999)
Administrative expenses 729 (25,948)
------- ----------
Total deductions 729 (8,289,947)
------- ----------
Increase in net assets
available for Plan benefits 13,189 19,309,590
Net assets available for Plan
benefits, beginning of year -- 79,983,771
Net interfund transfers 152,609 --
------- ----------
Net assets available for Plan
benefits, end of year 165,798 99,293,361
======= ==========
See accompanying notes to financial statements.
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12
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(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 for the years ended
December 31, 1995 and 1994 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
Effective March 1, 1995, the Company contributes an amount
equal to 75% of each employee's contribution on the first 2%
of defined compensation, 50% of each employee's contribution
on the next 1% of defined compensation and 25% of each
employee's contribution on the next 2% of defined
compensation. Prior to March 1, 1995, the Company contributed
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, the Growth and Income Fund, the Global Equity Fund or
the Aggressive Growth Fund, or any combination of the six
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.
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13
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
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.
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 U.S. stocks,
bonds and U.S. government securities. 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 American Funds under the name "American Balanced 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.
Growth and Income Fund - The Growth and Income Fund is invested in a
portfolio of U.S. common stocks to meet the objective of long-term
growth of capital and income. The Fund is managed by American Funds
under the name "Investment Company of America Fund."
Global Equity Fund - The Global Equity Fund is invested in a portfolio
of U.S. and foreign company common stocks to meet the objective of
long-term growth of capital and income. The Fund is managed by American
Funds under the name "New Perspective Fund."
Aggressive Growth Fund - The Aggressive Growth Fund is invested
primarily in U.S. common stocks of small and intermediate companies.
The Fund is managed by Twentieth Century under the name "Ultra
Investors Fund."
The number of employees participating in these funds at December 31,
1995 and 1994 was as follows:
1995 1994
---- ----
(Unaudited) (Unaudited)
Allergan, Inc. Common Stock Fund 2,496 2,054
Balanced Fund 1,732 1,529
Interest Income Fund 1,580 1,385
Growth and Income Fund 1,809 1,508
Global Equity Fund 609 --
Aggressive Growth Fund 742 --
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 daily 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.
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14
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum equal to the lesser of $50,000 or 50%
of their vested account balance. Loan transactions are treated
as a transfer to (from) the investment fund from (to) the
participant loans fund. Loan terms range from 1-5 years or up
to 15 years for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and
bear interest at prime plus one percent as determined on the
date of the loan application. The interest rate is fixed for
the term of the loan. Principal and interest is paid through
monthly payroll deductions.
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. Forfeitures available for offset of
future contribution requirements totaled $26,597 at December
31, 1995.
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 employer
contributions 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. Hardship withdrawals
cause the employee to become ineligible to contribute to the
Plan for a period of twelve months following the withdrawal.
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 and the participant's
account value is $3,500 or more, participants may postpone
their withdrawal until as late as attaining age 70 1/2.
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. The
preparation of financial statement requires the use of Plan
Administrator's estimates.
9
15
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
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
American Balanced Fund, the Investment Company of America
Fund, Ultra Investors Fund, Interest Income Fund and the New
Perspective Fund are based upon the net asset value reported
by the funds. Participant loans are valued at cost which
approximates fair value.
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.
10
16
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(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.
1995
No. Shares,
Units or
Principal Fair
Amounts Cost Value
------------ ----------- -----------
Common Stock:
Allergan, Inc. 788,160 $15,423,150 $ 25,615,185
========== =========== ============
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.30% to 6.46% in 1995 13,097,616 13,097,616 13,097,616
J.P. Morgan
Contract #428, annual
effective returns varying
from 5.79%, 6.38% and 6.67%
in 1995, latest maturity 12/23/96 5,332,668 5,332,668 5,332,668
J.P. Morgan
Maaagic Fund #2045
effective return 6.04% in 1995,
maturity 2/15/98 3,413,021 3,413,021 3,413,021
---------- ------------ ------------
Total Common/Collective Trusts 21,843,305 $21,843,305 $ 21,843,305
========== =========== ============
Mutual Funds:
American Balanced Fund 1,629,522 20,349,044 23,057,732
Investment Company of America Fund 992,330 18,400,798 21,444,247
New Perspective Fund 126,663 2,080,885 2,074,740
Ultra Investors Fund 122,616 3,175,654 3,201,513
---------- ------------ ------------
Total Mutual Funds 2,871,131 $44,006,381 $ 49,778,232
========== =========== ============
Participant Loans
interest rates varying from 9.75%
to 10.0% in 1995, latest
maturity 4/11/10 1,902,928 $ 1,902,928 $ 1,902,928
========== ============ ============
Temporary Investment and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.86% 378,422 $ 378,422 $ 378,422
========== ============= ============
11
17
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(3) Investments (continued)
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
=========== =========== ============
18
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(4) Federal Income Taxes
The Plan obtained its latest determination letter on February 12, 1996,
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 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, 1995, the Plan had received requests for and has a
commitment to pay withdrawals and distributions to terminated and
withdrawing participants totaling $10,794. These amounts will be paid
subsequent to December 31, 1995 to the respective withdrawing and
terminated participants. At December 31, 1994 the Plan had a commitment
to pay withdrawals and distributions totaling $1,749,312. These amounts
were paid subsequent to December 31, 1994.
13
19
Schedule 1
----------
ALLERGAN, INC.
Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1995
No. Shares,
Units or
Principal Fair
Amounts Cost Value
------------ ------------ ------------
Common Stock:
*Allergan, Inc. 788,160 $ 15,423,150 $ 25,615,185
========== ============ ============
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.30% to 6.46% in 1995 13,097,616 13,097,616 13,097,616
J.P. Morgan
Contract #428, annual
effective returns varying
from 5.79%, 6.38% and 6.67%
in 1995, latest maturity 12/23/96 5,332,668 5,332,668 5,332,668
J.P. Morgan
Maaagic Fund #2045
effective return 6.04%
in 1995, maturity 2/15/98 3,413,021 3,413,021 3,413,021
---------- ------------ ------------
Total Common/Collective Trusts 21,843,305 $ 21,843,305 $ 21,843,305
========== ============ ============
Mutual Funds:
American Balanced Fund 1,629,522 20,349,044 23,057,732
Investment Company of America Fund 992,330 18,400,798 21,444,247
New Perspective Fund 126,663 2,080,885 2,074,740
Ultra Investors Fund 122,616 3,175,654 3,201,513
---------- ------------ ------------
Total Mutual Funds 2,871,131 $ 44,006,381 $ 49,778,232
========== ============ ============
Participant Loans
interest rates varying from 9.75%
to 10.0% in 1995, latest
maturity 4/11/10 1,902,928 $ 1,902,928 $ 1,902,928
========== ============ ============
Temporary Investments and Deposits:
*Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.86% 378,422 $ 378,422 $ 378,422
======= ============ ============
- ------------
* Party in interest.
See accompanying independent auditors' report.
14
20
Schedule 2
----------
ALLERGAN, INC.
Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1995
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 $ 11,733,075 - $11,733,075 $11,733,075 $ -0-
Not Applicable LaSalle National Trust
Income Plus Fund - $5,665,871 5,665,871 5,665,871 -0-
Mellon Bank N.A. EB Temporary
Investment Fund 11,877,461 - 11,877,461 11,877,461 -0-
Mellon Bank N.A. EB Temporary
Investment Fund - 12,380,423 12,380,423 12,380,423 -0-
Various Vanguard/Windsor 37,951 - 37,951 37,951 -0-
Various Vanguard/Windsor - 16,629,449 17,105,700 16,629,449 (476,251)
Various Vanguard/Wellington 16,977 - 16,977 16,977 -0-
Various Vanguard/Wellington - 18,897,575 17,999,304 18,897,575 898,271
Various Twentieth Century
Ultra Investors 3,096,666 - 3,096,666 3,096,666 -0-
Various Twentieth Century
Ultra Investors - 103,394 94,160 103,394 9,234
Various American Balanced Fund 20,073,811 - 20,073,811 20,073,811 -0-
21
Schedule 2
ALLERGAN, INC.
Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions (continued)
Year Ended December 31, 1995
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)
- -------------- -------- ----- ----- ----- -------- ---------
Various American Balanced Fund - $2,536,415 2,364,210 2,536,415 172,205
Various New Perspective Fund $ 2,048,563 - 2,048,563 2,048,563 -0-
Various New Perspective Fund - 52,902 51,219 52,902 1,683
Various Investment Company
of America 19,445,592 - 19,445,592 19,445,592 -0-
Various Investment Company
of America - 3,369,243 3,017,805 3,369,243 351,438
Various Allergan, Inc.
Common Stock 484,115 - 484,115 484,115 -
Various Allergan, Inc.
Common Stock - 1,779,637 1,146,274 1,779,637 633,363
See accompanying independent auditors' report.
22
ALLERGAN, INC.
PUERTO RICO
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
23
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, 1995............................................................. 2
Statement of Net Assets Available for Plan Benefits, with Fund Information --
December 31, 1994............................................................. 4
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information -- Year ended December 31, 1995......................... 5
Notes to Financial Statements................................................... 7
Supplementary Schedules Schedule
- ----------------------- --------
Item 27a - Schedule of Assets Held for Investment Purposes --
December 31, 1995............................................................. 1
Item 27d - Schedule of Reportable Transactions --
Year ended December 31, 1995.................................................. 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.
24
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, 1995 and 1994, and
for the year ended December 31, 1995, 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, 1995 and 1994, and the changes in net assets available for plan
benefits for the year ended December 31, 1995 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 plan
benefits and the statement of changes in net assets available for plan 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 18, 1996
1
25
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Distribution
December 31, 1995
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans Other Total
---------- ---- ---- ---- ---- ---- ----- ----- -----
Investments, at fair value:
Common stock of Allergan, Inc.,
cost $721,248 $1,197,867 1,197,867
American Balanced Fund,
cost $361,379 409,483 409,483
Common/collective trusts,
cost approximates market 735,390 735,390
Investment Company of
America Fund, cost
$514,545 599,649 599,649
New Perspective Fund,
cost $11,890 11,855 11,855
Ultra Investors Fund,
cost $13,191 13,299 13,299
Participant loans 242,719 242,719
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Total Investments 1,197,867 409,483 735,390 599,649 11,855 13,299 242,719 -- 3,210,262
Interest bearing cash and cash
equivalents 11,331 -- 2,701 3 -- -- 5 1,694 15,734
Receivables:
Accrued interest and dividends 50 -- 3 1 -- -- -- -- 54
Sales pending settlement -- -- 449 -- -- -- -- -- 449
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Total Receivables 50 -- 452 1 -- -- -- -- 503
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Total Assets 1,209,248 409,483 738,543 599,653 11,855 13,299 242,724 1,694 3,226,499
See accompanying notes to financial statements.
2
26
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Statement of Net Assets Available for Plan Benefits, with Fund Distribution
December 31, 1995
(continued)
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans Other Total
---------- ---- ---- ---- ---- ---- ----- ----- -----
Payables:
Purchases pending settlement -- (71) -- (3,877) (35) (38) -- -- (4,021)
Short-term fund investment fees $ (1) -- -- -- -- -- -- -- (1)
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Total Payables (1) (71) -- (3,877) (35) (38) -- -- (4,022)
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Net assets available for Plan
benefits $1,209,247 409,412 738,543 595,776 11,820 13,261 242,724 1,694 3,222,477
========== ======= ======= ======= ====== ====== ======= ===== =========
See accompanying notes to financial statements.
3
27
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.
4
28
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, 1995
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans Other Total
---------- ---- ---- ---- ---- ---- ----- ----- -----
Additions to Plan assets
attributed to:
Net appreciation in fair value
of investments $148,663 61,375 49,923 109,519 147 361 -- -- 369,988
Interest 714 2 51 9 -- -- 13,180 378 14,334
Dividends 17,023 13,242 -- 11,485 66 -- -- -- 41,816
-------- ------- ------- ------- ------ ------ ------- ----- ---------
Total investment income 166,400 74,619 49,974 121,013 213 361 13,180 378 426,138
Contributions:
Employer - Company match 242,551 -- -- -- -- -- -- -- 242,551
Employees:
Before tax 79,403 141,612 114,247 207,067 2,894 8,064 -- -- 553,287
After tax 4,333 11,285 8,700 14,707 -- 139 -- -- 39,164
-------- ------- ------- ------- ------ ------ ------- ----- ---------
Total contributions 326,287 152,897 122,947 221,774 2,894 8,203 -- -- 835,002
-------- ------- ------- ------- ------ ------ ------- ----- ---------
Total additions 492,687 227,516 172,921 342,787 3,107 8,564 13,180 378 1,261,140
See accompanying notes to financial statements.
5
29
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, 1995
(continued)
Allergan,
Inc. Interest Growth Global Aggressive
Common Balanced Income and Income Equity Growth Participant
Stock Fund Fund Fund Fund Fund Fund Loans Other Total
---------- ---- ---- ---- ---- ---- ----- ----- -----
Deductions from Plan assets
attributed to:
Withdrawals and distributions (120,251) (34,146) (221,011) (52,268) (565) (1,011) -- -- (429,252)
Administrative expenses (14) (1) (927) (4) -- -- -- 22 (924)
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Total deductions (120,265) (34,147) (221,938) (52,272) (565) (1,011) -- 22 (430,176)
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Increase (decrease) in net assets
available for Plan benefits 372,422 193,369 (49,017) 290,515 2,542 7,553 13,180 400 830,964
Net assets available for Plan
benefits, beginning of year 970,101 224,843 867,306 329,263 -- -- -- -- 2,391,513
Net interfund transfers (133,276) (8,800) (79,746) (24,002) 9,278 5,708 229,544 1,294 --
---------- ------- ------- ------- ------ ------ ------- ----- ---------
Net assets available for Plan
benefits, end of year $1,209,247 409,412 738,543 595,776 11,820 13,261 242,724 1,694 3,222,477
========== ======= ======= ======= ====== ====== ======= ===== =========
See accompanying notes to financial statements.
6
30
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(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 for the years ended December 31, 1995
and 1994 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 March 1, 1995, the Company contributes an amount equal to 75%
of each employee's contribution on the first 2% of defined
compensation, 50% of each employee's contribution on the next 2% of
defined compensation and 25% of each employee's contribution on the
next 2% of defined compensation. Prior to March 1, 1995, the Company
contributed an amount equal to 50% of each employee's contribution not
exceeding 6% 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.
Beginning July 1, 1993, employee contributions are invested in the
Allergan, Inc. Common Stock Fund, the Balanced Fund, the Interest
Income Fund, the Growth and Income Fund, the Global Equity Fund or the
Aggressive Growth Fund, or any combination of the six funds at the
employee's discretion. 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.
(continued)
7
31
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
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.
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 U.S. stocks,
bonds and U.S. government securities. 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
American Funds under the name "American Balanced 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.
Growth and Income Fund - The Growth and Income Fund is invested in a
portfolio of U.S. common stocks to meet the objective of long-term
growth of capital and income. The Fund is managed by American Funds
under the name "Investment Company of America Fund."
Global Equity Fund - The Global Equity Fund is invested in a portfolio
of U.S. and foreign company common stocks to meet the objective of
long-term growth of capital and income. The Fund is managed by American
Funds under the name "New Perspective Fund."
Aggressive Growth Fund - The Aggressive Growth Fund is invested
primarily in U.S. common stocks of small and intermediate companies.
The Fund is managed by Twentieth Century under the name "Ultra
Investors Fund."
The number of employees participating in these funds at December 31,
1995 and 1994 was as follows:
1995 1994
---- ----
(unaudited) (unaudited)
Allergan, Inc. Common Stock Fund 427 360
Balance Fund 268 228
Interest Income Fund 253 225
Growth and Income Fund 281 240
Global Equity Fund 40 --
Aggressive Growth Fund 60 --
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 daily 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.
(continued)
8
32
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of $500 up
to a maximum equal to the lesser of $50,000 or 50% of their vested
account balance. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the participant loans fund. Loan terms
range from 1-5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's
account and bear interest at prime plus one percent as determined on
the date of loan application. The interest rate is fixed for the term
of the loan. Principal and interest is paid through monthly payroll
deductions.
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 $4,657
at December 31, 1995.
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.
(continued)
9
33
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(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. The preparation of financial
statement requires the use of Plan Administrator's estimates.
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 American Balanced Fund, Investment
Company of America Fund, Ultra Investors Fund, Interest Income Fund
and the New Perspective 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.
(continued)
10
34
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(3) Assets Held for Investments
DECEMBER 31, 1995
No. Shares Fair
or Par Value Cost Value
------------ ---- -----
Common Stock:
Allergan, Inc. 36,857 $721,248 $1,197,867
======= ======== ==========
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.30% to 6.46% in 1995 440,952 440,952 440,952
J.P. Morgan
Contract #428
annual effective returns varying
from 5.79%, 6.38% and 6.67%
in 1995, latest maturity 12/23/96 179,533 179,533 179,533
J.P. Morgan
Maaagic Fund #2045
Effective return 6.04%
in 1995, maturity 2/15/98 114,905 114,905 114,905
------- -------- ----------
Total Common/Collective Trusts 735,390 $735,390 $ 735,390
======= ======== ==========
Mutual Funds:
American Balanced Fund 28,939 361,379 409,483
Investment Company of America 27,749 514,545 599,649
New Perspective Fund 724 11,890 11,855
Ultra Investors Fund 509 13,191 13,299
------- -------- ----------
Total Mutual Funds 57,921 $901,005 $1,034,286
======= ======== ==========
Participant Loans
interest rates varying from 9.75%
to 10.00% in 1995, latest
maturity 11/21/00 242,719 $242,719 $ 242,719
======= ======== ==========
Temporary Investments and Deposits:
Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.86% 15,734 $ 15,734 $ 15,734
======= ======== ==========
(continued)
11
35
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
DECEMBER 31, 1994
No. Shares Fair
or Par Value Cost Value
------------ ---- -----
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
======= ======== ========
(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 March 7, 1995, 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.
(continued)
12
36
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Notes to Financial Statements
December 31, 1995 and 1994
(5) Outstanding Commitments to Participants
At December 31, 1995, the Plan did not have a commitment to pay
withdrawals and distributions to terminated and withdrawing
participants. At December 31, 1994 the Plan had a commitment to pay
withdrawals and distributions totaling $37,011. These amounts were paid
subsequent to December 31, 1994.
13
37
Schedule 1
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1995
No. Shares Fair
or Par Value Cost Value
------------ ---- -----
Common Stock:
*Allergan, Inc. 36,857 $721,248 $1,197,867
======= ======== ==========
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.30% to 6.46% in 1995 440,952 440,952 440,952
J.P. Morgan
Contract #428
annual effective returns varying
from 5.79%, 6.38% and 6.67%
in 1995, latest maturity 12/23/96 179,533 179,533 179,533
J.P. Morgan
Maaagic Fund #2045
Effective return 6.04%
in 1995, maturity 2/15/98 114,905 114,905 114,905
------- -------- ----------
Total Common/Collective Trusts 735,390 $735,390 $ 735,390
======= ======== ==========
Mutual Funds:
American Balanced Fund 28,939 361,379 409,483
Investment Company of America 27,749 514,545 599,649
New Perspective Fund 724 11,890 11,855
Ultra Investors Fund 509 13,191 13,299
------- -------- ----------
Total Mutual Funds 57,921 $901,005 $1,034,286
======= ======== ==========
Participant Loans
interest rates varying from 9.75%
to 10.00% in 1995, latest maturity
11/21/00 242,719 $242,719 $ 242,719
======= ======== ==========
Temporary Investments and Deposits:
*Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.86% 15,734 $ 15,734 $ 15,734
======= ======== ==========
- ------------
* Party in interest.
See accompanying independent auditors' report.
14
38
Schedule 2
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1995
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 $ 428,482 -- $ 428,482 $ 428,482 $ -0-
Mellon Bank N.A. EB Temporary
Investment Fund -- $486,615 486,615 486,615 -0-
Not Applicable LaSalle National Trust
Income Plus Fund 617,530 -- 617,530 617,530 -0-
Not Applicable LaSalle National Trust
Income Plus Fund -- 201,242 201,242 201,242 -0-
Various Vanguard/Windsor 2,608 -- 2,608 2,608 -0-
Various Vanguard/Windsor -- 408,921 420,632 408,921 (11,711)
Various Vanguard/Wellington 1,390 -- 1,390 1,390 -0-
Various Vanguard/Wellington -- 291,677 277,812 291,677 13,865
Various Twentieth Century
Ultra Investors 41,741 -- 41,741 41,741 -0-
Various Twentieth Century
Ultra Investors -- 208 189 208 19
Various American Balanced Fund 1,644,041 -- 1,644,041 1,644,041 -0-
Various American Balanced Fund -- 39,149 36,491 39,149 2,658
39
Schedule 2
ALLERGAN, INC.
Puerto Rico Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions (continued)
Year Ended December 31, 1995
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)
- -------------- -------- ----- ----- ----- -------- ---------
Various New Perspective Fund $ 12,573 -- 12,573 12,573 -0-
Various New Perspective Fund -- $ 117 113 117 4
Various Investment Company of America 1,336,274 -- 1,336,274 1,336,274 -0-
Various Investment Company of America -- 82,850 74,208 82,850 8,642
Various Allergan, Inc. Common Stock 40,387 -- 40,387 40,387 -0-
Various Allergan, Inc. Common Stock -- 81,324 52,381 81,324 28,943
See accompanying independent auditors' report.