<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
- --------------------------------------------------------------------------------
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
[X] EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994............................
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
- --------------------------------------------------------------------------------
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
MARCH 31, 1994 1-10269
ALLERGAN, INC.
A DELAWARE CORPORATION IRS EMPLOYER IDENTIFICATION
95-1622442
2525 DUPONT DRIVE, IRVINE, CALIFORNIA 92715
TELEPHONE NUMBER 714/752-4500
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1) X yes no
------ ------
(2) X yes no
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of April 29, 1994 there were 63,124,732 shares of common stock outstanding.
1
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ALLERGAN, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1994
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
(A) Consolidated Statements of Earnings - 3
Three Months Ended March 31, 1994 and 1993
(B) Consolidated Balance Sheets - 4
March 31, 1994 and December 31, 1993
(C) Consolidated Statements of Cash Flows - 5
Three Months Ended March 31, 1994 and 1993
(D) Notes to Consolidated Financial Statements 6-7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8-10
PART II - OTHER INFORMATION
ITEM 4 11
ITEM 6 12
Signature 13
Exhibits
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Allergan, Inc.
Consolidated Statements of Earnings
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Three months ended
March 31,
----------
1994 1993
------ ------
<S> <C> <C>
Net Sales $210.1 $202.8
Operating costs and expenses:
Cost of sales 63.5 57.6
Selling, general and
administrative 86.3 91.8
Research and development 26.9 22.7
------ ------
176.7 172.1
------ ------
Operating income 33.4 30.7
Nonoperating income (expense):
Interest income 1.7 1.1
Interest expense (2.3) (2.0)
Other, net (0.3) 0.7
------ ------
(0.9) (0.2)
------ ------
Earnings from continuing operations
before income taxes and
minority interest 32.5 30.5
Provision for income taxes 9.6 7.7
Minority interest 0.7 0.5
------ ------
Earnings from continuing operations 22.2 22.3
Earnings from discontinued operations,
net of income taxes -- 1.4
------ ------
Net Earnings $ 22.2 $ 23.7
====== ======
Net Earnings Per Common Share:
Continuing operations $ 0.35 $ 0.33
Discontinued operations -- 0.02
------ ------
$ 0.35 $ 0.35
====== ======
Weighted Average Common
Shares Outstanding 64.0 66.8
</TABLE>
See accompanying notes to consolidated financial statements.
3
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Allergan, Inc.
Consolidated Balance Sheets
(In millions, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $136.0 $141.8
Trade receivables, net 147.0 146.8
Inventories 93.2 90.2
Other current assets 68.8 65.1
------ ------
Total current assets 445.0 443.9
Investments and other assets 91.0 89.9
Property, plant and equipment, net 287.0 288.1
Goodwill and intangibles, net 113.2 117.9
------ ------
Total assets $936.2 $939.8
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 38.2 $ 38.0
Accounts payable 40.4 59.1
Accrued expenses 119.4 132.6
Income taxes 43.5 46.7
------ ------
Total current liabilities 241.5 276.4
Long-term debt 129.9 104.6
Other liabilities 31.1 29.6
Commitments and contingencies
Minority interest 15.4 14.7
Stockholders' equity:
Preferred stock, $.01 par value;
authorized 5,000,000 shares; none issued -- --
Common stock, $.01 par value; authorized
150,000,000 shares; issued 67,463,000
and 67,495,000 shares 0.7 0.7
Additional paid-in capital 195.2 194.5
Foreign currency translation
adjustment (3.4) (5.0)
Retained earnings 418.2 403.2
------ ------
610.7 593.4
Less - treasury stock, at cost
(4,104,000 and 3,512,000 shares) (92.4) (78.9)
------ ------
Total stockholders' equity 518.3 514.5
------ ------
Total liabilities and
stockholders' equity $936.2 $939.8
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
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Allergan, Inc.
Consolidated Statements of Cash Flows
(In millions)
<TABLE>
<CAPTION>
Three months
ended March 31,
----------------
1994 1993
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 22.2 $ 23.7
Non-cash items included in net earnings:
Depreciation and amortization 11.6 11.6
Deferred income taxes (0.1) (0.5)
Loss on sale of assets 0.8 1.5
Expense of compensation plans 1.1 2.2
Minority interest 0.6 0.5
Changes in assets and liabilities:
Trade receivables 0.9 2.4
Inventories (2.5) (3.6)
Accounts payable (18.5) (11.4)
Accrued liabilities (14.6) (13.7)
Income taxes (2.8) 0.9
Other (1.6) (0.7)
------ ------
Net cash provided by/(used in)
operating activities (2.9) 12.9
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (7.1) (8.4)
Disposals of property, plant and equipment 0.2 --
Other, net (2.4) (4.2)
------ ------
Net cash used in investing activities (9.3) (12.6)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders (6.4) (6.7)
Net borrowings under
commercial paper obligations 26.4 4.9
Increase/(decrease) in notes payable (0.5) 1.1
Sale of stock to employees 1.2 1.3
Decrease in long term debt (0.4) (0.5)
Payments to acquire treasury stock (16.2) (14.0)
------ ------
Net cash provided by/(used in)
financing activities 4.1 (13.9)
------ -------
Effect of exchange rates on cash and
equivalents 2.3 0.3
------ ------
Net decrease in cash and equivalents (5.8) (13.3)
Cash and equivalents at beginning of period 141.8 121.3
------ ------
Cash and equivalents at end of period $136.0 $108.0
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
5
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Allergan, Inc.
Notes to Consolidated Financial Statements
1. In the opinion of management, the accompanying consolidated
financial statements contain all adjustments necessary (consisting only of
normal recurring accruals) to present fairly the financial information
contained therein. These statements do not include all disclosures required by
generally accepted accounting principles and should be read in conjunction with
the audited financial statements of the Company for the year ended December 31,
1993. The results of operations for the three months ended March 31, 1994 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1994. Earnings per common and common equivalent share were
computed by dividing net earnings by the weighted average number of common and
common equivalent shares outstanding during the respective periods.
2. Components of inventory were:
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---------- ------------
(in millions)
<S> <C> <C>
Finished goods $ 60.4 $ 58.7
Work in process 14.7 13.8
Raw materials 18.1 17.7
------ ------
Total $ 93.2 $ 90.2
====== ======
</TABLE>
3. Income taxes are determined using an estimated annual effective
tax rate, which is less than the U.S. Federal statutory rate, primarily because
of lower tax rates in Puerto Rico and in certain non U.S. jurisdictions.
Withholding and U.S. taxes have not been provided for unremitted earnings of
certain non U.S. subsidiaries because the Company expects that such earnings
have been or will be reinvested in operations, or will be offset by appropriate
credits for foreign income taxes paid.
4. The Company is involved in various litigation and claims
arising in the normal course of business. The Company's management believes
that recovery or liability with respect to these matters would not have a
material adverse effect on the consolidated financial position and results of
operations of the Company.
On November 29, 1993, the United States District Court for the
Central District of California granted the Company's Motion for Summary
Judgment in the case captioned, "In Re Allergan Shareholders Litigation," SACV
89-643 AHS (RWRx), dismissing all of plaintiffs' claims pending against the
Company and the other defendants. Such case alleged, among other things, that
the Company (and its directors and certain officers) made untrue statements of,
or omitted to state, material facts about the Company's business and future
prospects from June 20, 1989 through January 26, 1990. The plaintiffs
subsequently filed a Notice of Appeal in the United States Court of Appeals for
the Ninth Circuit. During March 1994, the parties, and others, entered into an
agreement (the "Settlement"), which did not involve the payment of any sums by
the Company or any other of the defendants, as a result of which the
plaintiffs' appeal was dismissed with prejudice and the litigation brought to
an end.
6
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Allergan, Inc.
Notes to Consolidated Financial Statements (Continued)
5. On April 19, 1994 the Board of Directors declared a quarterly
cash dividend of $0.10 per share, payable June 16, 1994 to stockholders of
record on May 26, 1994.
6. In November 1992, the Company sold its contact lens business
in North and South America. In August 1993, the Company completed the
divestiture of its contact lens business outside of the Americas. Results of
operations of the contact lens business have been reported as a discontinued
operation, and the consolidated statements of earnings exclude sales and
expenses of this business from results of continuing operations for all periods
presented. Results of operations of the contact lens business for the three
months ended March 31, 1993 were as follows:
<TABLE>
<S> <C>
Net sales $10.2
Earnings from operations before
income taxes 2.3
Earnings from operations,
net of income taxes 1.4
</TABLE>
7
<PAGE> 8
ALLERGAN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1994
RESULTS OF OPERATIONS
The following table compares 1994 and 1993 net sales by Product Line for the
first quarter periods:
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------
Product Line Sales ($ millions): 1994 1993
---- ----
<S> <C> <C>
Specialty Pharmaceuticals
Eye Care $ 97.5 $ 93.2
Skin Care 7.7 6.7
------ ------
105.2 99.9
Surgical 27.3 24.6
Optical Lens Care 77.6 78.3
------ ------
Total Net Sales $210.1 $202.8
====== ======
</TABLE>
For the quarter ended March 31, 1994 total net sales increased 4% to $210.1
million as compared to the first quarter of 1993. The impact of foreign
currency fluctuations for the three month period ended March 31, 1994 was to
decrease net sales by $5.4 million over the prior comparable period. Sales
growth excluding the impact of foreign exchange between the comparable quarters
was 6%. These slower growth rates are, in part, a result of the highly
competitive and, in certain cases, also highly regulated markets worldwide in
which the company competes. The ability to increase prices has been limited
by, among other reasons, governmental actions, customer demands, the
introduction of competitors' innovative products and the introduction of lower
cost generic products. The impact to the Company for those affected product
lines is the partial loss of the ability to utilize price increases to offset
the effect of inflation on costs and expenses.
For the three months ended March 31, 1994, Eye Care Pharmaceuticals sales
increased 5% over the comparable 1993 period. This growth is primarily
attributable to growth in sales of Botox(R) (Botulinum Toxin Type A) purified
neurotoxin complex, particularly in the United States market. Growth in sales
has been negatively impacted by governmental pressure to restrict price
increases in the United States, and governmental actions to control or reduce
prices in many international markets. The largest sales volume products in
this product line are glaucoma therapy products, including Betagan(R) and
Propine(R) ophthalmic solutions. In 1994, a major competitor introduced a
generic version of levobunolol (Betagan(R)). The Company responded by offering
its own version of a generic Betagan(R) solution through a distribution
agreement with Schein Pharmaceutical. Future generic competition, including
a generic Propine(R) is anticipated. The impact of this form of competition
will be reduced sales.
Skin Care Pharmaceuticals first quarter 1994 sales were 15% higher than the
comparable quarter in 1993. Growth in demand for Elimite(R) cream and
antifungal products were the primary contributors to first quarter 1994 growth.
8
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Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1994 (Continued)
RESULTS OF OPERATIONS (Continued)
Surgical sales increased 11% in the first quarter of 1994 compared to the first
quarter of 1993. For the quarter, domestic sales were essentially flat while
international sales increased 29%. Increases in silicone intraocular lens
(IOL) sales were partially offset by a decrease in PMMA IOL sales. IOL selling
prices continue to decline in the United States and many international markets
as a result of competitive pressures and governmental actions reducing
reimbursement rates for cataract surgery.
Optical Lens Care net sales of $77.6 million for the three months ended March
31, 1994 decreased by 1% compared to the first quarter of 1993. A decrease in
domestic sales of 14% was largely offset by 5% sales growth in international
markets. The decrease in domestic sales was the result of continuing
competitive pressures within the U.S. contact lens care market including, among
other things, the introduction by Allergan's competitors of disposable contact
lenses and lens disinfection systems that are easier to use. In 1992 the
Company introduced a new contact lens disinfection system marketed in the
United States under the name UltraCare(R) (hydrogen peroxide based system),
which has slowed the overall decrease in U.S. sales. International lens care
product sales increased primarily as a result of increases in sales of
UltraCare(R). During 1993, the Company introduced in certain overseas markets
the Complete(R) one bottle disinfection system. The Company is currently
awaiting FDA approval to market Complete(R) in the United States.
Allergan's gross margin percentage for the first quarter of 1994 was 69.8% of
net sales, which represents a 1.8 percentage point decrease over the 71.6% rate
for the first quarter of 1993. This decrease is a result of, among other
things, the net unfavorable impact of pressures on certain unit average selling
prices, product mix shifts and declining margins on surgical sales. Gross
margin increased over the first quarter of 1993 by 1% as a result of the 4%
increase in net sales offset by the 1.8 percentage point decrease in gross
margin percentage.
Operating income was $33.4 million for the first quarter, an increase of $2.7
million or 9% from the prior comparable period. The increase was primarily the
result of the increase in gross margin discussed above and a $5.5 million
decrease in selling, general and administrative expenses, offset by a 19%
increase in research and development.
Net earnings decreased by $1.5 million in the first quarter of 1994 to $22.2
million compared to $23.7 million for the first quarter of 1993. Results for
1993 include $1.4 million in earnings from discontinued operations of the
contact lens business sold in 1993. Net earnings were decreased in 1994
compared to 1993 as a result of an increase in the effective tax rate from 25%
in 1993 to 30% in 1994. Such tax rate increase was the result of changes in
United States tax laws governing Puerto Rican operations enacted in 1993.
9
<PAGE> 10
Allergan, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1994 (Continued)
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1994, the Company had no borrowings against its bank credit
facilities. These facilities allow for borrowings of up to $150 million on a
revolving basis over five years and an additional $50 million over a period
ending December 1994. Borrowings under the credit facilities are subject to
certain financial and operating covenants, including a requirement that the
Company maintain certain financial ratios and other customary covenants for
credit facilities of similar kind. As of March 31, 1994, the Company had
commercial paper borrowings of $129 million including $99 million classified as
long-term debt.
The net cash used by operating activities for the three months ended March 31,
1994 was $2.9 million compared with cash provided by operating activities of
$12.9 million for the respective 1993 period. Operating cash flow in 1994 was
decreased by significant reductions in accounts payable and accrued
liabilities. Most of the Company's existing cash and equivalents are held by
its non- U.S. subsidiaries and will be reinvested in operations outside the
United States.
The Company invested $7.1 million in new facilities and equipment during the
three months ended March 31, 1994 compared to $8.4 million during the same
period in 1993.
Cash provided by financing activities was $4.1 million in the three months
ended March 31, 1994 compared to $13.9 million cash used in financing
activities in 1993. The 1994 amount is net of outflows of $6.4 million in
dividends and $16.2 million for purchases of treasury stock.
10
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Allergan, Inc.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of stockholders of the registrant was held on April
19, 1994 at which four directors, constituting all of the Class II directors,
were re-elected to serve on the Board of Directors for a three year term until
the annual meeting of stockholders to be held in 1997. The names of the
persons elected as directors are as follows:
Tamara J. Erickson
William R. Grant
Louis T. Rosso
William C. Shepherd
The terms of the following directors continued after the meeting:
Class III (term expires in 1995)
Handel E. Evans
Gavin S. Herbert
Leslie G. McCraw
Henry Wendt
Class I (term expires in 1996)
Howard E. Greene, Jr.
Richard M. Haugen
Kenneth N. Kermes
Leonard D. Schaeffer
Two other matters were voted on and approved, namely, approval and
continuation of the amended Stockholder Rights Plan and the 1989 Nonemployee
Director Stock Plan.
A summary of the voting follows:
<TABLE>
<CAPTION>
Broker
Directors For Withhold Non-votes
- --------- --- -------- ---------
<S> <C> <C>
Tamara J. Erickson 52,264,798 481,383
William R. Grant 52,376,357 369,824
Louis T. Rosso 52,378,243 367,938
William C. Shepherd 52,371,980 374,201
</TABLE>
<TABLE>
<CAPTION>
Broker
Other Matters For Against Abstain Non-Votes
- ------------- --- ------- ------- ---------
<S> <C> <C> <C> <C>
Amendment and Continuation
of the Stockholder
Rights Plan 46,411,262 3,702,564 307,820 2,324,535
Amendment of the 1989
Nonemployee Director
Stock Plan 44,646,566 7,838,694 260,921 0
</TABLE>
11
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Allergan, Inc.
PART II - OTHER INFORMATION (Continued)
Item 6. Exhibits and Reports on Form 8-K
- Exhibits
(numbered in accordance with Item 601 of Regulation S-K)
(3) Bylaws of the Company, as amended effective
April 1, 1994
(11) Statement re Computation of Per Share Earnings
- Reports on Form 8-K. A Current Report on Form 8-K was filed
on March 3, 1994 relating to the amendment of the Company's
Bylaws and the amendment of the Company's Rights Agreement.
12
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 11, 1994 ALLERGAN, INC.
/s/ Edgar J. Cummins
-----------------------------
Edgar J. Cummins
Vice President of Finance and
Chief Financial Officer
13
<PAGE> 1
EXHIBIT 3
ALLERGAN, INC.
A DELAWARE CORPORATION
BYLAWS
(as amended effective January 1, 1992)
ARTICLE I: Offices
SECTION 1. Registered Office. The registered office of Allergan,
Inc. (the "Corporation") shall be at Corporate Trust Center, 1209 Orange
Street, City of Wilmington, County of New Castle, State of Delaware 19801, and
the name of the registered agent in charge thereof shall be The Corporation
Trust Company.
SECTION 2. Principal Office. The principal office for the
transaction of the business of the Corporation shall be at such place as the
Board of Directors of the Corporation (the "Board") may determine. The Board
is hereby granted full power and authority to change said principal office from
one location to another.
SECTION 3. Other Offices. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of
the Corporation may require.
ARTICLE II: Meetings of Stockholders
SECTION 1. Place of Meetings. All annual meetings of stockholders
and all other meetings of stockholders shall be held either at the principal
office of the Corporation or at any other place within or without the State of
Delaware that may be designated by the Board pursuant to authority hereinafter
granted to the Board.
SECTION 2. Annual Meetings. Annual meetings of stockholders of the
Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings may be held at such
time and place and on such date as the Board shall determine by resolution.
SECTION 3. Special Meetings. Special meetings of stockholders of the
Corporation for any purpose or purposes may only be called in accordance with
the provisions of the Restated Certificate of Incorporation.
<PAGE> 2
SECTION 4. Notice of Meetings. Except as otherwise required by law,
notice of each meeting of stockholders, whether annual or special, shall be
given not less than 10 days nor more than 60 days before the date of the
meeting to each stockholder of record entitled to vote at such meeting by
delivering a typewritten or printed notice thereof to such stockholder
personally, or by depositing such notice in the United States mail, in a
postage prepaid envelope, directed to such stockholder at such stockholder's
post office address furnished by such stockholder to the Secretary of the
Corporation for such purpose, or, if such stockholder shall not have furnished
an address to the Secretary for such purpose, then at such stockholder's post
office address last known to the Secretary, or by transmitting a notice thereof
to such stockholder at such address by telegraph, cable or wireless. Except as
otherwise expressly required by law, no publication of any notice of a meeting
of stockholders shall be required. Every notice of a meeting of stockholders
shall state the place, date and hour of the meeting and, in the case of a
special meeting, shall also state the purpose for which the meeting is called.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder to whom notice may be omitted pursuant to applicable Delaware law
or who shall have waived such notice, and such notice shall be deemed waived by
any stockholder who shall attend such meeting in person or by proxy, except a
stockholder who shall attend such meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Except as otherwise expressly
required by law, notice of any adjourned meeting of stockholders need not be
given if the time and place thereof are announced at the meeting at which the
adjournment is taken.
SECTION 5. Quorum. Except as otherwise required by law, the holders
of record of a majority in voting interest of the shares of stock of the
Corporation entitled to be voted thereat, present in person or by proxy, shall
constitute a quorum for the transaction of business at any meeting of
stockholders of the Corporation or any adjournment thereof. Subject to the
requirement of a larger percentage vote contained in the Restated Certificate
of Incorporation, these Bylaws or by statute, the stockholders present at a
duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding any withdrawal of Stockholders that
may leave less than a quorum remaining, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum. In the absence of a quorum at any meeting or any
adjournment thereof, a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat or, in the absence therefrom
of all the stockholders, any officer entitled to preside at, or to act as
secretary of, such meeting may adjourn such meeting from time to time. At any
such adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted at the meeting as originally called.
2
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SECTION 6. Voting.
Each stockholder shall, at each meeting of stockholders, be entitled
to vote in person or by proxy each share of the stock of the Corporation that
has voting rights on the matter in question and that shall have been held by
such stockholder and registered in such stockholder's name on the books of the
Corporation:
(A) on the date fixed pursuant to Article VI, Section
5 of these Bylaws as the record date for the determination of
stockholders entitled to notice of and to vote at such meeting; or
(B) if no such record date shall have been so fixed,
then (i) at the close of business on the day next preceding the day
upon which notice of the meeting shall be given or (ii) if notice of
the meeting shall be waived, at the close of business on the day next
preceding the day upon which the meeting shall be held.
Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors in such other corporation is held, directly or indirectly, by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity
shall be entitled to vote such stock. Persons whose stock is pledged shall be
entitled to vote, unless in the transfer by the pledgor on the books of the
Corporation the pledgor shall have expressly empowered the pledgee to vote
thereon, in which case only the pledgee, or the pledgee's proxy, may represent
such stock and vote thereon. Stock having voting power standing of record in
the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the entirety or
otherwise, or with respect to which two or more persons have the same fiduciary
relationship, shall be voted in accordance with the provisions of the Delaware
General Corporation Law.
Any such voting rights may be exercised by the stockholder entitled
thereto in person or by such stockholder's proxy appointed by an instrument in
writing, subscribed by such stockholder or by such stockholder's attorney
thereunto authorized and delivered to the secretary of the meeting; provided,
however, that no proxy shall be voted or acted upon after three years from its
date unless said proxy shall provide for a longer period. The attendance at
any meeting of a stockholder who may theretofore have given a proxy shall not
have the effect of revoking the same unless such stockholder shall in writing
so notify the secretary of the meeting prior to the voting of the proxy. At
any meeting of stockholders, all matters, except as otherwise provided in the
Restated Certificate of Incorporation, in these Bylaws or by law, shall be
decided by
3
<PAGE> 4
the vote of a majority in voting interest of the stockholders present in person
or by proxy and entitled to vote thereat and thereon, a quorum being present.
The vote at any meeting of stockholders on any question need not be by ballot,
unless so directed by the chairman of the meeting. On a vote by ballot, each
ballot shall be signed by the stockholder voting, or by such stockholder's
proxy, if there be such proxy, and it shall state the number of shares voted.
SECTION 7. List of Stockholders. The Secretary of the Corporation
shall prepare and make, at least l0 days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting, arranged
in alphabetical order and showing the address of each stockholder and the
number of shares registered in the name of such stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
SECTION 8. Judges. If at any meeting of stockholders a vote by
written ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of
such judge's ability. Such judges shall decide upon the qualification of the
voters and shall report the number of shares represented at the meeting and
entitled to vote on such question, shall conduct and accept the votes, and,
when the voting is completed, shall ascertain and report the number of shares
voted respectively for and against the question. Reports of judges shall be in
writing and subscribed and delivered by them to the Secretary of the
Corporation. The judges need not be stockholders of the Corporation, and any
officer of the Corporation may be a judge on any question other than a vote for
or against a proposal in which such officer shall have a material interest.
ARTICLE III: Board of Directors
SECTION 1. General Powers. Subject to any requirements in the
Restated Certificate of Incorporation, these Bylaws, and of the Delaware
General Corporation Law as to action which must be authorized or approved by
the stockholders, any and all corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Corporation shall be
under the direction of, the Board to the fullest extent permitted by law.
Without limiting the generality of the foregoing, it is
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<PAGE> 5
hereby expressly declared that the Board shall have the following powers, to
wit:
(A) to select and remove all the officers, agents and
employees of the Corporation, prescribe such powers and duties for
them as may not be inconsistent with law, the Restated Certificate of
Incorporation or these Bylaws, fix their compensation, and require
from them security for faithful service;
(B) to conduct, manage and control the affairs and
business of the Corporation, and to make such rules and regulations
therefor not inconsistent with law, the Restated Certificate of
Incorporation or these Bylaws, as it may deem best;
(C) to change the location of the registered office
of the Corporation in Article I, Section 1 hereof; to change the
principal office for the transaction of the business of the
Corporation from one location to another as provided in Article I,
Section 2 hereof; to fix and locate from time to time one or more
subsidiary offices of the Corporation within or without the State of
Delaware as provided in Article I, Section 3 hereof; to designate any
place within or without the State of Delaware for the holding of any
meeting or meetings of stockholders; and to adopt, make and use a
corporate seal, and to prescribe the forms of certificates of stock,
and to alter the form of such seal and of such certificates from time
to time, and in its judgment as it may deem best, provided such seal
and such certificate shall at all times comply with the provisions of
law;
(D) to authorize the issue of shares of stock of the
Corporation from time to time, upon such terms and for such
considerations as may be lawful;
(E) to borrow money and incur indebtedness for the
purposes of the Corporation, and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds, debentures,
deeds of trust and securities therefor; and
(F) By resolution adopted by a majority of the
authorized number of directors, to designate an executive and other
committees, each consisting of one or more directors, to serve at the
pleasure of the Board, and to prescribe the manner in which
proceedings of such committee or committees shall be conducted.
SECTION 2. Number and Term of Office. The authorized number of
directors of the Corporation shall be not less than three (3) nor more than
fifteen (15) until this Section 2 is amended by a resolution duly adopted by
the Board or by the
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<PAGE> 6
stockholders of the Corporation. The exact number of directors shall be fixed
from time to time, within the limits specified, by resolution of the Board or
the stockholders. Directors need not be stockholders. Each of the directors
of the Corporation shall hold office until such director's successor shall have
been duly elected and shall qualify or until such director shall resign or
shall have been removed in the manner provided in the Restated Certificate of
Incorporation.
SECTION 3. Election of Directors. The directors shall be elected by
the stockholders of the Corporation, and at each election, the persons
receiving the greater number of votes, up to the number of directors then to be
elected, shall be the persons then elected. The election of directors is
subject to any provisions contained in the Restated Certificate of
Incorporation relating thereto, including any provisions for a classified
Board.
SECTION 4. Resignations. Any director of the Corporation may resign
at any time by giving written notice to the Board or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately
upon receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 5. Vacancies. Except as otherwise provided in the Restated
Certificate of Incorporation, any vacancy on the Board, whether because of
death, resignation, disqualification, an increase in the number of directors,
or any other cause, may be filled by vote of the majority of the remaining
directors, although less than a quorum. Each director so chosen to fill a
vacancy shall hold office until such director's successor shall have been
elected and shall qualify or until such director shall resign or shall have
been removed.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
SECTION 6. Place of Meeting. The Board or any committee thereof may
hold any of its meetings at such place or places within or without the State of
Delaware as the Board or such committee may from time to time by resolution
designate or as shall be designated by the person or persons calling the
meeting or in the notice or a waiver of notice of any such meeting. Directors
may participate in any regular or special meeting of the Board or any committee
thereof by means of conference telephone or similar communications equipment
pursuant to which all persons participating in the meeting of the Board or such
committee can hear each other, and such participation shall constitute presence
in person at such meeting.
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SECTION 7. First Meeting. The Board shall meet as soon as
practicable after each annual election of directors, and notice of such first
meeting shall not be required.
SECTION 8. Regular Meetings. Regular meetings of the Board may be
held at such times as the Board shall from time to time by resolution
determine. If any day fixed for a regular meeting shall be a legal holiday at
the place where the meeting is to be held, then the meeting shall be held at
the same hour and place on the next succeeding business day not a legal
holiday. Except as provided by law, notice of regular meetings need not be
given.
SECTION 9. Special Meetings. Special meetings of the Board for any
purpose or purposes shall be called at any time by the Chairman of the Board
or, if the Chairman of the Board is absent or unable or refuses to act, by the
President. Except as otherwise provided by law or by these Bylaws, special
meetings of the Board of Directors shall be held upon 4 days' written notice or
2 hours' notice given personally or by telephone, telecopier or other facsimile
transmission, telegraph, telex or other similar means of communication. Any
such notice shall be addressed or delivered to each director at such director's
address as is shown upon the records of the Corporation or as may have been
given to the Corporation by the director for purposes of notice or, if such
address is not shown on such records or is not readily ascertainable, at the
place in which the meetings of the directors are regularly held. Notice by
mail shall be deemed to have been given at the time such notice is deposited in
the United States mails, postage prepaid. Any other written notice shall be
deemed to have been given at the time it is personally delivered to the
recipient or is delivered to a common carrier for delivery or transmission.
Notice by telecopier or other facsimile, transmission, telegraph, telex or
other similar means of communication shall be deemed to have been given at the
time it is actually transmitted by the person giving the notice by electronic
means to the recipient. Oral notice shall be deemed to have been given at the
time it is communicated, in person or by telephone or wireless, to the
recipient or to a person at the office of the recipient who the person giving
the notice has reason to believe will promptly communicate it to the recipient.
Except where otherwise required by law or by these Bylaws, notice of the
purpose of a special meeting need not be given. Notice of any meeting of the
Board shall not be required to be given to any director who is present at such
meeting, except a director who shall attend such meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
SECTION 10. Quorum and Manner of Acting. Except as otherwise
provided in these Bylaws, the Restated Certificate of Incorporation or by
applicable law, the presence of a majority of the authorized number of
directors shall be required to constitute a quorum for the transaction of
business at any
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<PAGE> 8
meeting of the Board, and all matters shall be decided at any such meeting, a
quorum being present, by the affirmative vote of a majority of the directors
present. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, provided any
action taken is approved by at least a majority of the required quorum for such
meeting. In the absence of a quorum, a majority of directors present at any
meeting may adjourn the same from time to time until a quorum shall be present.
Notice of any adjourned meeting need not be given. The directors shall act
only as a Board, and the individual directors shall have no power as such.
SECTION 11. Action by Consent. Any action required or permitted to
be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if consent in writing is given thereto by all members of the
Board or of such committee, as the case may be, and such consent is filed with
the minutes of proceedings of the Board or of such committee.
SECTION 12. Compensation. Directors who are not employees of the
Corporation or any of its subsidiaries may receive an annual fee for their
services as directors in an amount fixed by resolution of the Board, and, in
addition, a fixed fee, with or without expenses of attendance, may be allowed
by resolution of the Board for attendance at each meeting, including each
meeting of a committee of the Board. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity as an officer, agent, employee, or otherwise, and receiving
compensation therefor.
SECTION 13. Committees. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of one or more of the directors of the Corporation. Any such
committee, to the extent provided in the resolution of the Board and subject to
any restrictions or limitations on the delegation of power and authority
imposed by applicable Delaware law, shall have and may exercise all the powers
and authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Any such committee shall keep written minutes of
its meetings and report the same to the Board at the next regular meeting of
the Board. Unless the Board or these Bylaws shall otherwise prescribe the
manner of proceedings of any such committee, meetings of such committee may be
regularly scheduled in advance and may be called at any time by the chairman of
the committee or by any two members thereof; otherwise, the provisions of these
Bylaws with respect to notice and conduct of meetings of the Board shall
govern.
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<PAGE> 9
ARTICLE IV: Officers
SECTION 1. Officers. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents (the number
thereof and their respective titles to be determined by the Board), a
Secretary, a Treasurer and such other officers as may be appointed at the
discretion of the Board in accordance with the provisions of Section 3 of this
Article IV. At the discretion of the Board of Directors, from time to time,
the Chairman of the Board may be a director of the Corporation who is not an
officer of the Corporation.
SECTION 2. Election. The officers of the Corporation, except such
officers as may be appointed or elected in accordance with the provisions of
Section 3 or Section 5 of this Article IV, shall be chosen annually by the
Board at the first meeting thereof, and each officer shall hold office until
such officer shall resign or shall be removed or otherwise disqualified to
serve, or until such officer's successor shall be elected and qualified.
SECTION 3. Other Officers. In addition to the officers chosen
annually by the Board at its first meeting, the Board also may appoint or elect
such other officers as the business of the Corporation may require, each of
whom shall have such authority and perform such duties as are provided in these
Bylaws or as the Board may from time to time specify, and shall hold office
until such officer shall resign or shall be removed or otherwise disqualified
to serve, or until such officer's successor shall be elected and qualified.
SECTION 4. Removal and Resignation. Any officer may be removed,
either with or without cause, by resolution of the Board passed by a majority
of the directors at the time in office, at any regular or special meeting of
the Board, or except in case of an officer chosen by the Board, by any officer
upon whom such power of removal may be conferred by the Board.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in
the manner prescribed in these Bylaws for regular appointments to such office.
SECTION 6. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of stockholders and at all meetings of the Board. The
Chairman of the Board shall be a member of such committees, if any, and shall
have such other powers and duties as may be prescribed by the Board or these
Bylaws.
SECTION 7. President. The President shall be the Chief Executive
Officer of the Corporation and shall, subject to the control of the Board, have
general supervision, direction and control of the business and affairs of the
Corporation.
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<PAGE> 10
SECTION 8. Vice President. Each Vice President shall have such
powers and perform such duties with respect to the administration of the
business and affairs of the Corporation as may from time to time be assigned to
such Vice President by the President or the Board, or as may be prescribed by
these Bylaws.
SECTION 9. Secretary. The Secretary shall keep, or cause to be kept,
at the principal office of the Corporation, or such other place as the Board
may order, a book of minutes of all meetings of directors and stockholders,
with the time and place of holding, whether regular or special, and if special,
how authorized and the notice thereof given, the names of those present at
meetings of directors, the number of shares present or represented at meetings
of stockholders, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office
of the Corporation's transfer agent, a share register, or a duplicate share
register, showing the name and address of each stockholder, the number of
shares of each class held by such stockholder, the number and date of
certificates issued for such shares, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings
of stockholders and of the Board required by these Bylaws or by law to be
given, and shall keep the seal of the Corporation in safe custody and shall
affix and attest the seal to all documents to be executed on behalf of the
Corporation under its seal, and shall have such other powers and perform such
other duties as may be prescribed by these Bylaws or assigned by the Board, the
Chairman of the Board or any officer of the Corporation to whom the Secretary
may report. If for any reason the Secretary shall fail to give notice of any
special meeting of the Board called by one or more of the persons identified in
Article III, Section 9 hereof, then any such person or persons may give notice
of any such special meeting.
SECTION 10. Treasurer. The Treasurer shall supervise, have custody
of and be responsible for all funds and securities of the Corporation. The
Treasurer shall deposit all moneys and other valuables in the name and to the
credit of the Corporation with such depositaries as may be designated by the
Board or in accordance with authority delegated by the Board. The Treasurer
shall disburse the funds of the Corporation as may be ordered or authorized by
the Board, shall render to the Board and the Chairman of the Board whenever
they request it, an account of all of the Treasurer's transactions, and shall
have such other powers and perform such other duties as may be prescribed by
these Bylaws or assigned by the Board, the Chairman of the Board or any officer
of the Corporation to whom the Treasurer may report.
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ARTICLE V: Contracts, Checks, Drafts, Bank Accounts, Etc.
SECTION l. Execution of Contracts. The Board, except as otherwise
provided in these Bylaws, may authorize any officer or officers, or agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the Corporation, and such authority may be general or confined to
specific instances; and unless so authorized by the Board or by these Bylaws,
no officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or in any amount.
SECTION 2. Checks, Drafts, Etc. All checks, drafts or other orders
for payment of money, notes or other evidence of indebtedness, issued in the
name of or payable to the Corporation, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Board. Each such officer, assistant, agent or attorney
shall give such bond, if any, as the Board may require.
SECTION 3. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select,
or as may be selected by any officer or officers, assistant or assistants,
agent or agents, or attorney or attorneys of the Corporation to whom such power
shall have been delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, the Chairman of the
Board, the President, any Vice President or the Treasurer (or any other officer
or officers, assistant or assistants, agent or agents, or attorney or attorneys
of the Corporation who shall from time to time be determined by the Board) may
endorse, assign and deliver checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation.
SECTION 4. General and Special Bank Accounts. The Board may from
time to time authorize the opening and keeping of general and special bank
accounts with such banks, trust companies or other depositories as the Board
may select or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation to
whom such power shall have been delegated by the Board. The Board may make
such special rules and regulations with respect to such bank accounts, not
inconsistent with the provisions of these Bylaws, as it may deem expedient.
ARTICLE VI: Shares and Their Transfer
SECTION 1. Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate
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or certificates, to be in such form as the Board shall prescribe, certifying
the number and class of shares of the stock of the Corporation owned by such
owner. The certificates representing shares of such stock shall be numbered in
the order in which they shall be issued and shall be signed in the name of the
Corporation by the Chairman of the Board, the President or any Vice President,
and by the Secretary or the Treasurer. Any or all of the signatures on the
certificates may be a facsimile. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon,
any such certificate, shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may nevertheless
be issued by the Corporation with the same effect as though the person who
signed such certificate, or whose facsimile signature shall have been placed
thereupon, were such officer, transfer agent or registrar at the date of issue.
A record shall be kept of the respective names and addresses of the persons,
firms or corporations owning the stock represented by such certificates, the
number and class of shares represented by such certificates, respectively, and
the respective dates thereof, and in case of cancellation, the respective dates
of cancellation. Every certificate surrendered to the Corporation for exchange
or transfer shall be cancelled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 4 of this
Article VI.
SECTION 2. Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by such holder's attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary, or with a
transfer clerk or a transfer agent appointed as provided in Section 3 of this
Article VI, and upon surrender of the certificate or certificates for such
shares properly endorsed and the payment of all taxes thereon. The person in
whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof for all purposes as regards the Corporation. Whenever
any transfer of shares shall be made for collateral security, and not
absolutely, such fact shall be so expressed in the entry of transfer if, when
the certificate or certificates shall be presented to the Corporation for
transfer, both the transferor and the transferee request the Corporation to do
so.
SECTION 3. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue, transfer and registration of certificates for shares of
the stock of the Corporation. It may appoint, or authorize any officer or
officers to appoint, one or more transfer clerks or one or more transfer agents
and one or more registrars, and may require all certificates for stock to bear
the signature or signatures of any of them.
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SECTION 4. Lost, Stolen, Destroyed, and Mutilated Certificates. In
any case of loss, theft, destruction, or mutilation of any certificate of
stock, another may be issued in its place upon proof of such loss, theft,
destruction, or mutilation and upon the giving of a bond of indemnity to the
Corporation in such form and in such sum as the Board may direct; provided,
however, that a new certificate may be issued without requiring any bond when,
in the judgment of the Board, it is proper so to do.
SECTION 5. Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any other
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other action. If in any case involving the determination of
stockholders for any purpose other than notice of or voting at a meeting of
stockholders the Board shall not fix such a record date, then the record date
for determining stockholders for such purpose shall be the close of business on
the day on which the Board shall adopt the resolution relating thereto. A
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of such meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting.
ARTICLE VII: Miscellaneous
SECTION 1. Seal. The Board shall adopt a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and words
showing that the Corporation was incorporated in the State of Delaware.
SECTION 2. Waiver of Notices. Whenever notice is required to be
given by these Bylaws or the Restated Certificate of Incorporation or by law,
the person entitled to said notice may waive such notice in writing, either
before or after the time stated therein, and such waiver shall be deemed
equivalent to notice.
SECTION 3. Amendments. Except as otherwise provided herein or in the
Restated Certificate of Incorporation, these Bylaws or any of them may be
altered, amended, repealed or rescinded and new Bylaws may be adopted by the
Board or by the stockholders at any annual or special meeting of stockholders,
provided that notice of such proposed alteration, amendment, repeal, recision
or adoption is given in the notice of such meeting.
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SECTION 4. Representation of Other Corporations. The Chairman of the
Board or the President or the Secretary or any Vice President of the
Corporation is authorized to vote, represent and exercise on behalf of the
Corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the Corporation. The authority herein
granted to said officers to vote or represent on behalf of the Corporation any
and all shares held by the Corporation in any other corporation or corporations
may be exercised either by such officers in person or by any person authorized
so to do by proxy or power of attorney duly executed by such officers.
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ALLERGAN, INC
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Earnings per share of common stock, including common stock equivalents,
have been computed based on the following weighted average number of
shares and net earnings:
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1994
---------------
<S> <C>
(000's, except per share amounts)
Weighted average number of common shares
outstanding during the period 63,812
Weighted average number of additional
shares issuable in connection with
dilutive stock options based upon
use of the treasury stock method
and average market prices 233
-------
Weighted average number of common shares
including common stock equivalents 64,045
=======
Net Earnings for the period $22,167
=======
Primary Earnings Per Common Share $ 0.35
=======
</TABLE>
