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As filed with the Securities and Exchange Commission on January 6, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALLERGAN, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 95-1622442
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92612
(714) 246-4500
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(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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Allergan, Inc.
Executive Deferred Compensation Plan
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(Full title of plan)
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FRANCIS R. TUNNEY, JR.
CORPORATE VICE PRESIDENT-ADMINISTRATION, GENERAL COUNSEL AND SECRETARY
ALLERGAN, INC.
2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92612
(714) 246-4500
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE PRICE(2) FEE
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<S> <C> <C> <C> <C>
DEFERRED COMPENSATION OBLIGATIONS $12,500,000 100% $12,500,000 $3,300
=====================================================================================================================
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(1) This Registration Statement is filed for up to $12,500,000 in Deferred
Compensation Obligations of the Registrant pursuant to its Executive
Deferred Compensation Plan, which by its terms includes unsecured
obligations of the Registrant to pay, in the future, deferred compensation
in accordance with the terms of the Allergan, Inc. Executive Deferred
Compensation Plan. In addition, pursuant to Rule 416(c) under the
Securities Act of 1933, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Executive Deferred Compensation Plan described herein.
(2) Estimated solely for purposes of calculating registration fees.
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INTRODUCTION
This Registration Statement on Form S-8 is filed by Allergan, Inc., a
Delaware corporation (the "Company"), and relates to $12,500,000 of unsecured
obligations of the Company to pay deferred compensation in the future (the
"Obligations") in accordance with the terms and provisions of the Company's
Executive Deferred Compensation Plan (the "Plan").
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part 1 of Form S-8 to be contained in the
Section 10(a) prospectus is omitted from this Registration Statement
in accordance with Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which previously have been filed by the Company
with the Securities and Exchange Commission (the "Commission"), are incorporated
herein by reference and made a part hereof:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998
(ii) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 26, June 25, and September 24, 1999; and
(iii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 (Registration No.
33-28855), including any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") subsequent to the date of this Registration Statement and prior
to the filing of a post-effective amendment hereto which indicates that all
securities offered hereunder have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
For purposes of this Registration Statement, any statement contained in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated herein by reference modifies or supersedes such statement in
such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
$12,500,000 of Obligations are being registered under this Registration
Statement to be offered to a select group of management and highly compensated
employees of the Company who have been selected by a committee (the "Committee")
which is appointed by the Corporate Benefits Committee of the Company which is
comprised of members of management appointed by the Board of Directors of the
Company (the "Board") to participate in the Plan and who have completed and
submitted to the Company a written agreement electing to participate in the Plan
(a "Participation Agreement"). The Obligations are general unsecured and
unfunded obligations of the Company to pay deferred compensation in the future
in accordance with the terms of the Plan.
The amount of compensation deferred by each participant in the Plan is
determined in accordance with the Plan based upon elections by each participant.
To participate in the Plan, during the calendar year, a participant must defer a
minimum of $5,000 (or other such amount as may be designated by the Committee)
from either base salary or bonuses or a combination of base salary and bonuses,
and may elect to defer up to a maximum of 100% of such participant's base salary
and bonuses earned during the calendar year ("Deferral Amount") by completing
and submitting to the Company a "Deferral Election Form."
Obligations will consist of an amount equal to each participant's
"Deferral Account" under the Plan, which includes (i) the sum of the
participant's Deferral Amounts plus (ii) amounts credited to the participant's
Deferral Account based on the participant's selection from measurement fund
alternatives in accordance with and subject to the rules and procedures
established from time to time by the Committee, plus (iii) any Plan Restoration
Credits (employer contributions to or allocations, other than trust income or
earnings, made under the Allergan, Inc. Savings and Investment Plan and the
Allergan, Inc. Employee Stock Ownership Plan, which would have been contributed
or allocated under those plans on behalf of the participant but that could not
be contributed or allocated due to Internal Revenue Code limitations), which
have been added to the participant's account; less (iv) all distributions made
to the participant or his or her beneficiary pursuant to the Plan that relate to
the participant's Deferral Account.
A participant may elect in his or her Participation Agreement to receive
distributions from his or her Deferral Account in one of several manners,
including lump sum or installment payments. The distribution choices provided to
a participant may differ depending on the circumstances under which that
participant terminates employment with the Company, for instance by retirement,
death or disability. The participant also may be eligible to receive
distributions or make unscheduled withdrawals from his or her Deferral Account
while still employed with the Company.
An irrevocable trust has been established to pay the Obligations. All
amounts of base salary or bonuses that are deferred under the Plan shall be
contributed to the trust. The Plan is administered by the Corporate Benefits
Committee, which has the power to make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan, to
construe and resolve all questions arising under the Plan, and otherwise to
carry out the terms of the Plan. The Company, by action of the Board, may
terminate the Plan at any time and may amend the Plan from time to time;
provided, however, that no such amendment or termination shall be effective,
without the participant's consent, to the extent it reduces or eliminates
(except to the extent that amounts are distributed under the Plan) the value of
a participant's Deferral Account balance in existence as of such amendment or
termination.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the General Corporation Law of the State of Delaware
(the "GCL") provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was
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serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise, against expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had
no cause to believe his conduct was unlawful.
Section 145(b) of the GCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards to
those set forth above, except that no indemnification may be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the GCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against such officer
or director and incurred by him or her in any such capacity or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liabilities under Section 145.
As permitted by Section 102(b)(7) of the GCL, the Company's Certificate
of Incorporation provides that a director shall not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director. However, such provision does not eliminate or limit the liability of a
director for acts or omissions not in good faith or for breaching his or her
duty of loyalty, engaging in intentional misconduct or knowingly violating the
law, paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. The Company's Certificate of
Incorporation requires that directors and officers be indemnified to the maximum
extent permitted by Delaware law.
The Company has entered into indemnity agreements with each of its
directors and officers. These indemnity agreements require that the Company pay
on behalf of each director and officer party thereto any amount that he or she
is or becomes legally obligated to pay because of any claim or claims made
against him or her because of any act or omission or neglect or breach of duty,
including any actual or alleged error or misstatement or misleading statement,
which he or she commits or suffers while acting in his or her capacity as a
director and/or officer of the Company and solely because of his or her being a
director and/or officer. Under the GCL, absent such an indemnity agreement,
indemnification of a director or officer is discretionary rather than mandatory
(except in the case of a proceeding in which a director or officer is successful
on the merits). Consistent with the Company's Bylaw provision on the subject,
the indemnity agreements require the Company to make prompt payment of defense
and investigation costs and expenses at the request of the director or officer
in advance of indemnification, provided that the recipient undertakes to repay
the amounts if it is ultimately determined that he or she is not entitled to
indemnification for such expense and provided further that such advance shall
not be made if it is determined that the director or officer acted in bad faith
or deliberately breached his or her duty to the Company or its stockholders and,
as a result, it is more likely than not that it will ultimately be determined
that he or she is not entitled to indemnification under the terms of the
indemnity agreement. The indemnity agreements make the advance of litigation
expenses mandatory absent a special determination to the contrary, whereas under
the GCL absent such an indemnity agreement, such advance would be discretionary.
Under the indemnity agreement, the Company would not be required to pay or
reimburse the director or officer for his or her expenses in seeking
indemnification recovery against the Company. By the terms of the indemnity
agreement, its benefits are not available if the director or officer has other
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indemnification or insurance coverage for the subject claim or, with respect to
the matters giving rise to the claim, (i) received a personal benefit, (ii)
violated Section 16(b) of the Exchange Act or analogous provisions of law, or
(iii) committed certain acts of dishonesty. Absent the indemnity agreement,
indemnification that might be made available to directors and officers could be
changed by amendments to the Company's Certificate of Incorporation or Bylaws.
The Company has a policy of directors' liability insurance which insures
the directors and officers against the cost of defense, settlement or payment of
a judgment under certain circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
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4 Allergan, Inc. Executive Deferred Compensation Plan, as
amended and restated, effective January 1, 2000.
5 Opinion of Counsel (relating to legality of securities being
registered).
23.1 Consent of KPMG LLP, independent auditors.
23.2 Consent of Counsel (contained in Exhibit 5 hereto).
24. Power of Attorney (contained on signature page hereto).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
value of securities offered would not exceed that which
was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
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registrant pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for a filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on January 3, 2000.
ALLERGAN, INC.
By: /s/ Francis R. Tunney, Jr.
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Francis R. Tunney, Jr.
Corporate Vice President-Administration,
General Counsel and Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Francis R. Tunney, Jr. his true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, each acting alone, with full powers and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming that all said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the date indicated.
<TABLE>
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SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ David E. I. Pyott President and Chief Executive Officer January 3, 2000
- ------------------------------------------ (Principal Executive Officer)
David E. I. Pyott
/s/ Herbert W. Boyer Chairman of the Board January 4, 2000
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Herbert W. Boyer, Ph.D.
/s/ Eric Brandt Corporate Vice President and Chief Financial January 3, 2000
- ------------------------------------------ Officer (Principal Financial Officer)
Eric K. Brandt
/s/ Dwight J. Yoder Senior Vice President and Controller January 4, 2000
- ------------------------------------------ (Principal Accounting Officer)
Dwight J. Yoder
/s/ Gavin Herbert Chairman Emeritus, Director January 3, 2000
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Gavin S. Herbert
/s/ William R. Grant Director January 4, 2000
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William R. Grant
/s/ Lester J. Kaplan Director January 3, 2000
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Lester J. Kaplan, Ph.D.
</TABLE>
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<TABLE>
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/s/ Michael Gallagher Director January 4, 2000
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Michael R. Gallagher
/s/ Karen R. Osar Director January 4, 2000
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Karen R. Osar
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EXHIBIT INDEX
Exhibit No. Description
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4 Allergan, Inc. Executive Deferred Compensation Plan, as
amended and restated, effective January 1, 2000.
5 Opinion of Counsel (relating to legality of securities being
registered).
23.1 Consent of KPMG LLP, independent auditors.
23.2 Consent of Counsel (contained in Exhibit 5 hereto).
24. Power of Attorney (contained on signature page hereto).
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EXHIBIT 4
ALLERGAN, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED
As of January 1, 2000
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ALLERGAN, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
INTRODUCTION
1.1 Purpose. The Allergan, Inc. Executive Deferred Compensation Plan is
hereby established by the Board of Directors of Allergan, Inc., a Delaware
corporation ("Allergan"), to provide deferred compensation benefits to selected
executive and management employees of the Company as more fully provided herein.
The benefits provided under this Plan are intended to be in addition to other
employee benefit programs offered by the Company, including but not limited to
tax-qualified employee benefit plans.
1.2 Effective Date and Term. This Plan was adopted effective as of
January 1, 1995, and has been amended and restated as of January 1, 2000, and
shall continue in effect until terminated by the Board of Directors. The
provisions of this Plan prior to its amendment and restatement as of January 1,
2000 shall apply to all individuals who terminated employment with the Company
prior to January 1, 2000.
1.3 Applicability of ERISA. This Plan is intended to be a "top-hat"
plan -- that is, an unfunded plan maintained primarily for the purpose of
providing deferred compensation to a select group of management or highly
compensated employees within the meaning of ERISA.
ARTICLE II
DEFINITIONS
2.1. Annual Deferral. "Annual Deferral" means the amount of Base Salary
and/or Bonuses which the Participant elects to defer in each Deferral Period
pursuant to Article 3.1 of the Plan.
2.2 Base Salary. "Base Salary" means the Participant's annual basic
rate of pay from the Company (excluding Bonuses, commissions, and other
non-regular forms of compensation) before reductions for deferrals under this
Plan, the Savings and Investment Plan, or "cafeteria plan" under Section 125 of
the Code.
2.3 Beneficiary. "Beneficiary" means the person or persons or entity
designated as such in accordance with Article XVI of the Plan.
2.4 Board; Board of Directors. "Board" and "Board of Directors" each
mean the Board of Directors of Allergan. The Organization and Compensation
Committee of the Board, or any successor thereto, shall exercise any and all
rights, duties and obligations that are retained by or assigned to the Board
under the Plan.
2.5 Bonuses. "Bonuses" means non-salary amounts earned by the
Participant that are designated as bonuses or commissions. Bonuses shall be
treated as earned in the Deferral Period
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designated by the Committee even though they may be paid in the subsequent
Deferral Period in accordance with Company policy or practice.
2.6 Code. "Code" means the Internal Revenue Code of 1986, as amended.
2.7 Committee. "Committee" means the committee authorized to administer
this Plan as set forth in Section 13.1 hereof.
2.8 Company. "Company" means Allergan, Inc., a Delaware corporation,
and each Affiliated Company (as defined in the Savings and Investment Plan)
designated by the Board of Directors.
2.9 Company Rate. "Company Rate" means one hundred twenty percent
(120%) of the ten-year Treasury Note one hundred twenty (120) month rolling
average to be determined on October 1 of each Plan Year and made applicable for
the next following Plan Year.
2.10 Credited Service. "Credited Service" means the amount of service
of a Participant determined by the Committee based on the human resources
records maintained by the Company.
2.11 Deferral Account. "Deferral Account" means the account established
for a Participant pursuant to Section 5.1 of the Plan.
2.12 Deferral Election. "Deferral Election" means the election made by
the Participant pursuant to the terms of Section 4.1 of the Plan.
2.13 Deferral Election Form. "Deferral Election Form" means the written
agreement to defer Salary or Bonuses made by the Participant. Such written
agreement shall be in a format designated by the Committee.
2.14 Deferral Period. "Deferral Period" means the Plan Year.
2.15 Disability. "Disability" means any injury, illness or condition
that constitutes a disability that qualifies for payment under the Company's
Long-Term Disability Plan.
2.16 Effective Date. "Effective Date" means January 1, 1995.
2.17 Eligible Employee. "Eligible Employee" means an employee of the
Company who is a U.S. local or U.S. based expatriate that is either exempt grade
8E and above or is employed in another executive or management position as
approved by the Committee. An employee shall be treated as an Eligible Employee
only upon selection and notification in writing of such status by the Committee
and only if (a) he or she is not classified or paid as an independent contractor
(regardless of his or her classification for federal tax or other legal
purposes) by the Company and (b) he or she does not perform services for the
Company pursuant to an agreement between the Company and any other person
including a leasing organization. An employee shall cease to be an Eligible
Employee if he or she is reclassified below exempt grade 8E or as an independent
contractor or a leased employee by the Company, except that, upon
reclassification below exempt grade 8E, any Deferral Election which has been
made (and deferrals having commenced) may be completed.
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2.18 Employee Stock Ownership Plan. "Employee Stock Ownership Plan"
means the Allergan, Inc. Employee Stock Ownership Plan, as amended.
2.19 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
2.20 Fund Rate. "Fund Rate" means, with respect to any portion of a
Deferral Account for which the Fund Rate is applicable, the rate of return based
on the income, gains, losses and expenses of the insurance funds or other
investment vehicles (collectively called "Fund Media") selected by the
Participant in accordance with Section 5.4.
2.21 Financial Hardship. "Financial Hardship" means an unexpected and
significant need for cash (which cannot be met reasonably and contemporaneously
from other sources) arising from an illness, casualty loss, sudden financial
reversal, or other such unforeseeable occurrence as determined by the Committee
in its sole discretion. Cash needs arising from foreseeable events or
discretionary expenditures such as the purchase of a residence or education
expenses for children shall not, alone, be considered a Financial Hardship.
2.22 In-Service Distribution. "In-Service Distribution" means a
distribution elected by the Participant pursuant to Article X of the Plan.
2.23 Investment Election Form. "Investment Election Form" means the
form prescribed by the Committee for the Participant to elect to have all or a
portion of his or her Deferral Account credited with a rate of return at the
Fund Rate or the Company Rate in accordance with Section 5.3 hereof, including
the selection of Fund Media.
2.24 Participant. "Participant" means any Eligible Employee who
commences participation in this Plan as provided under Section 3.1 hereof.
2.25 Participation Agreement. "Participation Agreement" means the
written agreement or form that an Eligible Employee must complete and submit in
order to commence participation in the Plan. Such written agreement shall be in
a format designated by the Committee.
2.26 Pension Plan. "Pension Plan" means the Allergan, Inc. Pension
Plan, as amended.
2.27 Plan. "Plan" means this Allergan, Inc. Executive Deferred
Compensation Plan adopted as of the Effective Date hereof and as it may be
amended from time to time.
2.28 Plan Year. "Plan Year" means the calendar year.
2.29 Retirement Date. "Retirement Date" means (a) the later of the
Participant's fifty-fifth (55th) birthday or completion of at least five (5)
years of Credited Service; or (b) in the case of a Participant who has elected
by August 31, 1998 (or such later date as approved by Allergan, Inc. but in no
event later than September 30, 1998) to participate in the Voluntary Early
Retirement Incentive program offered by Allergan, Inc., his or her retirement
date as set
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forth thereunder; or (c) the later of the last day of the calendar month in
which the Participant's sixty-fifth (65th) birthday occurs or completion of at
least one (1) year of Credited Service.
2.30 Savings and Investment Plan. "Savings and Investment Plan" means
the Allergan, Inc. Savings and Investment Plan, as amended.
2.31 Termination; Termination of Employment. "Termination" or
"Termination of Employment" means the termination of a Participant's employment
with the Company for any reason whatsoever, whether voluntary or involuntary.
2.32 Unscheduled Withdrawal. "Unscheduled Withdrawal" means a
distribution requested by the Participant and approved by the Committee pursuant
to Article XI of the Plan.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Participation - Eligibility and Initial Period. Participation in
this Plan is open only to Eligible Employees of the Company (as defined in
Section 2.17). Each Eligible Employee of the Company, as of the Effective Date
hereof, may become a Participant for the Deferral Period commencing on the
Effective Date if he or she submits a properly completed Participation Agreement
and Deferral Election Form to the Committee prior to January 1, 1995. Any
employee of the Company who becomes, subsequent to the Effective Date hereof, an
Eligible Employee, e.g,. newly hired or promoted employees in an eligible
category, may become a Participant for the Deferral Period commencing on or
after he or she becomes an Eligible Employee if he or she submits a properly
completed Participation Agreement, Deferral Election Form and Investment
Election Form prior to such Deferral Period.
3.2 Participation - Subsequent Entry into Plan. An Eligible Employee
who does not elect to become a Participant at the time of initial eligibility as
set forth in Section 3.1 shall remain eligible to become a Participant
subsequently as long as he or she continues his or her status as an Eligible
Employee. In such event, the Eligible Employee may become a Participant if he or
she submits a properly completed Participation Agreement, including a Deferral
Election Form prior to January 1 of the Deferral Period for which it is
effective.
ARTICLE IV
DEFERRAL ELECTIONS
4.1 Deferral Election. For each Deferral Period after initial
participation commences, a Participant may make a Deferral Election on a
voluntary basis by properly completing and submitting a Deferral Election Form
and Investment Election Form prior to the first day (January 1) of the Deferral
Period for which the Deferral Election is effective. A Participant shall not be
obligated to make a Deferral Election in each Deferral Period, and (subject to
the requirements set forth in Sections 4.2 and 4.3 below) a Participant may
change the amount of each future Deferral Election. Once a Deferral Period
commences for which a Deferral Election is made, such Deferral Election shall
continue for the entire Deferral Period except that it shall terminate on
Termination of Employment or as otherwise provided in Section 4.4 or Article XI.
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4.2 Maximum Deferral Election. A Participant may elect in the Deferral
Election Form to defer up to one hundred percent (100%) of Base Salary and/or
one hundred percent (100%) of Bonuses earned during the Deferral Period. In its
sole discretion, the Committee may also provide other Deferral Election options,
including that a Participant may elect to defer a specified dollar amount or a
percentage of Bonuses earned during the Deferral Period but limited to the
extent such Bonuses exceed a specified dollar amount. A Deferral Election shall
be automatically reduced or adjusted if the Committee determines that such
action is necessary or appropriate to meet Federal or State tax withholding
obligations or to pay for benefits or other obligations arising from the
Participant's relationship with the Company.
4.3 Minimum Deferral Election. In order for a Deferral Election Form to
be valid, the Participant must elect to defer at least five thousand dollars
($5,000) (or such other amount as may be designated by the Committee) in the
Deferral Period from either Base Salary or Bonuses or a combination of Base
Salary and Bonuses. Thus, Deferral Elections of Base Salary and Bonuses for the
same Deferral Period shall be aggregated for the purpose of determining whether
the Participant has elected at least the minimum Deferral Election.
In determining, whether the Participant has made the minimum Deferral
Election, if the amount is stated in the form of a percentage of Base Salary or
Bonuses, the adequacy of the deferral shall be based on the Base Salary and
Bonuses earned by the Participant in the Plan Year immediately preceding the
Deferral Period. The Committee may, in its sole discretion, permit Participants
to elect to defer amounts in the form of a percentage based on anticipated Base
Salary and Bonuses.
4.4 Termination of Deferral. If it is evident that a Participant has
not or will not actually defer the minimum Deferral Election required by Section
4.3 (whether due to Termination of Employment or otherwise), the Committee may,
in its sole discretion, terminate the Deferral Election and distribute the
portion of the Participant's Deferral Account attributable to such Deferral
Election in a single lump sum payment with investment earnings or interest
credited to the last day of the month preceding distribution at the Fund Rate or
Company Rate, as applicable.
ARTICLE V
DEFERRAL ACCOUNTS
5.1 Deferral Accounts. Solely for record keeping purposes, a Deferral
Account shall be maintained for each Participant. The Deferral Account shall be
credited with (i) the Annual Deferrals at the time such amounts would otherwise
have been paid to the Participant, and (ii) a Plan Restoration Credit. The "Plan
Restoration Credit" shall be equal to the dollar amount of the employer
contributions to, or allocations (other than trust income or earnings) made
under, the Savings and Investment Plan and the Employee Stock Ownership Plan, if
any, that would have been contributed or allocated on behalf of the Participant
but that are otherwise not contributed or allocated because of Deferral
Elections made, under this Plan. In applying the preceding sentence, (i) the
Committee shall make the Plan Restoration Credit contingent on vesting in such
amounts under the Savings and Investment Plan and the Employee Stock Ownership
Plan, and (ii) for the period of time that the Exempt Loan Suspense Subfund
under the Employee Stock
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Ownership Plan continues to hold Company Stock, the contribution or allocation
rate for purposes of the Employee Stock Ownership Plan shall be deemed to be one
and one-half percent (1 1/2%) of compensation taken into account in determining
contributions and/or allocations.
5.2 Interest and Investment Earnings on Deferral Accounts. The Deferral
Account of a Participant shall be credited with interest or investment earnings
at the Company Rate or Fund Rate as provided in Section 5.3. For any portion of
the Deferral Account to which the Company Rate is applicable, such portion of
the Deferral Account shall be credited each month with interest which shall be
compounded on an annual basis under rules determined by the Committee in its
sole discretion.
5.3 Participant Investment Elections.
(a) Deferrals On and After January 1, 2000. Any Deferral Election made
by a Participant on or after January 1, 2000 shall be credited with investment
earnings at the Fund Rate and shall not be eligible to be credited with interest
at the Company Rate. Notwithstanding the preceding sentence, any Eligible
Employee who was a Participant as of November 1, 1999 and who, prior to January
1, 2000 had attained the age of fifty-five (55) and had completed at least five
(5) years of Credited Service shall be entitled to elect the investment of all
or any portion of any Deferral Election made by such Participant on or after
January 1, 2000 at the Company Rate or the Fund Rate.
(b) Transfers from Company Rate to Fund Rate. Each Participant may
elect to change the investment of all or any portion of his or her Deferral
Account from the Company Rate to the Fund Rate, but may not change from the Fund
Rate to the Company Rate. The Participant shall make such election, including
the allocation to Fund Media, by submitting an Investment Election Form.
(c) Allocation to Fund Media. With respect to any portion of the
Deferral Account to which the Fund Rate applies, the Participant may
prospectively change the investment allocation to Fund Media on a monthly basis
in whole or part by submitting an Investment Election Form or by using such
electronic means and under such procedures as the Committee may permit.
5.4 Fund Media. The initial Fund Media under the Plan as of January 1,
2000 shall be as set forth on Appendix A, attached hereto. The Committee may add
or delete Fund Media in its sole discretion from time to time. Participants must
make an investment allocation to Fund Media in whole percentages equal to one
hundred percent (100%), in the aggregate, of the amount invested in Deferral
Accounts to which the Fund Rate applies.
5.5 Statement of Accounts. The Committee shall provide to each
Participant periodic statements setting forth the balance of the Deferral
Account maintained for such Participant. Notwithstanding anything contained in
such statements, the provisions of the Plan shall govern exclusively the actual
rate of interest or investment earnings to be credited and paid.
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ARTICLE VI
RETIREMENT BENEFITS
6.1 Entitlement to Deferral Accounts. Upon Termination of Employment on
or after Retirement Date, the Company shall pay to the Participant a retirement
benefit, in the form and manner provided in Section 6.2 below, equal to the
balance of the Participant's Deferral Account with interest or investment
earnings credited at the Company Rate or the Fund Rate, as applicable.
6.2 Form of Retirement Benefits. The retirement benefit shall be paid
in sixty (60) quarterly installments unless the Participant elects in the
Participation Agreement to have the retirement benefit paid in either a single
lump sum or in twenty (20) or forty (40) quarterly installments.
6.3 Time of Commencement. A Participant may elect in the Participation
Agreement to have payments begin within sixty (60) days following, the date of
Termination of Employment or, alternatively, (a), on the first business day of
January of the next following calendar year or (b) on the first business day of
January of a later year (not to exceed ten (10) years from, the date of
Termination of Employment or, if earlier, the year in which the Participant
attains age seventy (70)).
6.4 Change in Payout Timing. A Participant may change his or her
Participation Agreement at any time prior to Termination of Employment in order
to revise the timing of retirement benefits to another method (or over another
period) permitted under Sections 6.2 and 6.3 above. If such a change is made
within a period not greater than twelve (12) months prior to Termination of
Employment (unless Termination of Employment is on account of Disability), there
shall be a ten percent (10%) penalty charged at the time of change against the
Participant's Deferral Account.
ARTICLE VII
TERMINATION BENEFITS
7.1 Entitlement to Deferral Accounts. Upon Termination of Employment
prior to Retirement Date, the Company shall pay to the Participant a termination
benefit in the form and manner provided in Section 7.2 below, equal to the
balance of the Participant's Deferral Account with interest or investment
earnings credited at the Company Rate or the Fund Rate, as applicable.
7.2 Form of Termination Benefits. The termination benefit shall be paid
in a single lump sum payment within sixty (60) days following the date of
Termination of Employment or, if otherwise elected in the Participation
Agreement, either (a) on the first business day of January following Termination
of Employment or (b) if at least five (5) years of Credited Service has elapsed,
in five (5) annual installments. If installments are to be paid under this
Section 7.2, they shall commence within sixty (60) days following the date of
Termination of Employment. If (a) above is elected by the Participant, to the
extent that the Company Rate applies, the only interest to be credited after the
date of Termination of Employment shall be at eighty percent (80%) of
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the Company Rate (however a Participant who is eligible to elect (b) above shall
be credited with interest at the Company Rate, to the extent that the Company
Rate applies, regardless of whether he or she elects distribution under (a) or
(b)). Notwithstanding the foregoing, the Company may, in its sole discretion
(except following a Change in Control as defined in Section 14.2), elect to
revise the payment of a single lump sum and instead to pay the termination
benefits over a period of three (3) years in annual installments.
ARTICLE VIII
DEATH BENEFITS
8.1 Death of Employee Prior to Retirement Date. If a Participant dies
prior to Termination of Employment and before reaching Retirement Date (a) the
balance of the Participant's Deferral Election for the Deferral Period, if any,
will be credited to his or her Deferral Account and (b) the Participant's
Beneficiary will receive payment of the Participant's Deferral Account in a
single lump sum if the balance is less than fifty thousand dollars ($50,000),
and in either a single lump sum or in twenty (20) or forty (40) quarterly
installments (as elected by the Participant in his or her Participation
Agreement) if the balance is fifty thousand dollars ($50,000) or more. To the
extent that the Company Rate applies, interest on the Deferral Account not yet
paid at death shall be credited at the Company Rate. To the extent the Fund Rate
applies, investment earnings on the Deferral Account not yet paid at death shall
be credited at the Fund Rate.
8.2 Death of Employee on or After Retirement Date. If a Participant
dies prior to Termination of Employment and on or after reaching Retirement Date
(a) the balance of the Participant's Deferral Election for the Deferral Period,
if any, will be credited to his or her Deferral Account and (b) the
Participant's Beneficiary will receive payment of the Participant's Deferral
Account in a single lump sum payment or in twenty (20), forty (40) or sixty (60)
quarterly installments (as elected by the Participant for distribution of
retirement benefits in his or her Participation Agreement). The Beneficiary may
request that the Committee accelerate installment payments into a single lump
sum payment and the Committee shall decide, in its sole discretion, whether to
so accelerate based on factors, such as the Beneficiary's needs and Plan
liquidity, deemed appropriate under the circumstances by the Committee. To the
extent that the Company Rate applies, interest on the Deferral Account not yet
paid at death shall be credited at the Company Rate. To the extent the Fund Rate
applies, investment earnings on the Deferral Account not yet paid at death shall
be credited at the Fund Rate.
8.3 Death After Termination of Employment. If a Participant dies after
Termination of Employment, the Participant's Beneficiary will receive payment of
the Participant's Deferral Account (or remaining unpaid portion if distributions
have already begun) in the same manner and in all respects as the Participant
was entitled to receive (if the Participant continued to live) pursuant to the
terms of Article VI (Retirement Benefits) or Article VII (Termination Benefits)
whichever is applicable. Notwithstanding the foregoing, if, and only if, the
Participant dies after having reached Retirement Date at the time of Termination
of Employment, the Beneficiary may request that the Committee accelerate any
remaining installment payments into a single lump sum payment and the Committee
shall decide, in its sole discretion, whether to so accelerate
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based on factors, such as the Beneficiary's needs and Plan liquidity, deemed
appropriate under the circumstances by the Committee.
8.4 Investments After Death. Notwithstanding Sections 8.1 through 8.3,
to the extent that the Fund Rate applies, the Committee shall transfer the
remaining unpaid portions of a deceased Participant's Deferral Account into one
of the Fund Media which is a fixed income investment at the time which is six
(6) months from the death of the Participant unless the Committee receives other
investment directions from a duly appointed representative or executor of the
deceased Participant. The Committee shall have no liability or responsibility
with respect to the absolute or relative return of such Fund Media during the
period commencing on the date that the amount is so invested and ending on the
date of payment of all amounts on deposit in the Participant's Deferral Account
to the Participant's Beneficiary.
ARTICLE IX
DISABILITY
9.1 Continuation of Participation. If a Participant suffers a
Disability, the Participant shall be deemed not to incur a Termination of
Employment if, and only as long as, he or she continues on the payroll of the
Company for Base Salary or Bonuses. In such event, the Participant may continue
participation in the Plan on the same basis as other Participants, provided that
payments to the Participant made under programs of the Company for Short-Term
Disability, Long-Term Disability, or sick pay may not be treated as Base Salary
or Bonuses for purposes of a Deferral Election.
9.2 Availability of Financial Hardship Withdrawals. Consistent with
Section 9.1, in determining the availability of a Financial Hardship withdrawal,
a Participant who suffers a Disability shall not be deemed to incur a
Termination of Employment until the time that he or she ceases to receive Base
Salary or Bonuses on the payroll of the Company.
ARTICLE X
IN-SERVICE DISTRIBUTIONS
10.1 Election to Take In-Service Distributions. A Participant may elect
in each Deferral Election Form, for that particular Deferral Election, to
receive in the future an In-Service Distribution from his or her Deferral
Account.
10.2 Maximum In-Service Distribution. An In-Service Distribution must
be equal to one hundred percent (100%) of the amount of the particular Deferral
Election. Interest on any In-Service Distributions shall be credited, to the
extent that the Company Rate applies, at the Company Rate. Investment earnings
on any In-Service Distribution shall be credited, to the extent that the Fund
Rate applies, at the Fund Rate. Notwithstanding the election under this Article,
if benefit payments with respect to a Deferral Election are otherwise made at a
time earlier than elected under an In-Service Distribution, for example due to
an Unscheduled Withdrawal, the In-Service Distribution shall be superseded by
such earlier distribution event and shall be reduced or eliminated to such
extent.
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10.3 Timing of In-Service Distribution. The In-Service Distribution
shall be paid to the Participant in a single lump sum, or in two (2), three (3)
or four (4) annual installments as elected by the Participant in the Deferral
Election Form. However, in no event shall the In-Service Distribution be paid or
commence at the time before the second (2nd) year following the first business
day of the Deferral Period to which the In-Service Distribution relates. A
Participant may elect to change the date on which an In-Service Distribution is
to be paid or commence provided that no more than two such changes shall be
permitted and provided further that the election must be made with at least
twelve (12) months advance notice under procedures adopted by the Committee.
ARTICLE XI
UNSCHEDULED AND FINANCIAL HARDSHIP WITHDRAWALS
11.1 Unscheduled Withdrawals. A Participant may take Unscheduled
Withdrawals (but no more than one in any Plan Year) from his or her Deferral
Account. The amount of any Unscheduled Withdrawal shall be equal to the portion
of the Deferral Account attributable to one or more Deferral Elections that have
been previously completed and shall include (i) interest credited, to the extent
that the Company Rate applies, at the Company Rate, and (ii) investment
earnings, to the extent that the Fund Rate applies, at the Fund Rate. In any
case where an Unscheduled Withdrawal occurs, the Participant may select, if
applicable, whether such amounts will be from the portion of the Deferral
Account invested at the Company Rate, if any, or the Fund Rate.
11.2 Financial Hardship Withdrawal. A Participant may request that the
Committee permit him or her to take a withdrawal or withdrawals on account of
Financial Hardship (as defined in Section 2.21). In such event, the Committee
shall determine in its sole discretion whether a Financial Hardship exists and,
if it so determines, whether the Participant should be permitted to take such a
withdrawal. The Committee shall also determine the amount of the permitted
withdrawal, which shall not exceed the amount necessary to address the Financial
Hardship, and whether the Participant must reduce or cease a current Deferral
Election, if any, as a condition for a Financial Hardship withdrawal.
11.3 Penalty for Unscheduled Withdrawals. There shall be a penalty
charged against the Deferral Account of a Participant at the time of an
Unscheduled Withdrawal. The penalty shall be equal to ten percent (10%) of the
Unscheduled Withdrawal, except the penalty shall be five percent (5%) if the
Unscheduled Withdrawal is made within two (2) years following a Change in
Control (as defined in Section 14.2). In addition to the foregoing penalty, upon
taking an Unscheduled Withdrawal a Participant's current Deferral Election, if
any, shall automatically be deemed terminated and the Participant may not make a
new Deferral Election for the next following Deferral Period.
ARTICLE XII
ADDITIONAL BENEFIT PAYMENT RULES
12.1 Small Benefit Payments. Notwithstanding any other provision of the
Plan, in the event that the payment of a Deferral Account (or total remaining
installments under any method)
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to a Participant or Beneficiary is fifty thousand dollars ($50,000) or less, the
Company may, in its sole discretion, elect to make such payment(s) in a single
lump sum payment as soon as administratively practicable.
12.2 Constructive Receipt. The Committee may change any election or
option available under the Plan, or the form or timing of any benefit payment,
if the Committee determines, based on the advice of counsel or other consultants
to the Company, that such a change is necessary or advisable in order to avoid
or limit the risk of adverse tax consequences, to Participants or Beneficiaries
based on application of the doctrine of "constructive receipt" or a similar
Federal or State tax principle.
12.3 Postponement of Payment. If a distribution of all or part of a
Deferral Account would not be deductible to the Company because of the
restrictions imposed by Section 162(m) of the Code (or any successor provision),
such distribution shall be postponed (to the extent necessary) to the first
business day of the first Plan Year in which the limitation on deductibility
would not apply. Any postponed distribution under this Section shall be credited
with interest or investment earnings at the rate otherwise applicable to the
Deferral Account at the time when the distribution was originally scheduled for
payment.
12.4 Commencement Date and Investment and Interest Crediting for
Benefit Payments. Unless the Plan specifically provides otherwise, benefit
payments (whether a single lump sum payment or installments) shall commence to a
Participant or Beneficiary no later than sixty (60) days from the date of the
event, e.g., Termination of Employment or request for Unscheduled Withdrawal,
that gives rise to such payments. Installment payments shall be made on the same
day of each quarter or year (depending on whether quarterly or annual
installments apply) following the initial payment. With respect to amounts in a
Deferral Account subject to the Company Rate, interest on a single lump sum
payment or on a first installment payment shall be credited through the end of
the month in which the date of the event that gives rise to such payment occurs.
Interest on subsequent installment payments shall be credited through the end of
the month preceding payment. With respect to amounts in a Deferral Account
subject to the Fund Rate, investment earnings shall be credited to the date that
the Committee selects in its sole discretion for valuation for distribution
purposes and the Committee shall make appropriate adjustments to reflect
investment earnings where benefit payments are to be paid in installments.
ARTICLE XIII
ADMINISTRATION OF THE PLAN
13.1 Administration by Committee. This Plan shall be administered by a
committee (the "Committee") which is appointed by the Corporate Benefits
Committee of the Company, and which may, but need not be, some or all of the
members of the Corporate Benefits Committee itself. A member of the Committee
may be a Participant in this Plan; provided, however, that any action to be
taken by the Committee solely with respect to the particular interest in this
Plan of a Committee member shall be taken by the remaining members of the
Committee.
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13.2 Committee Authority; Rules and Regulations. The Committee shall
have discretionary authority to (a) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan, (b) decide
or resolve any and all questions, including interpretations of the Plan, as may
arise in connection with the Plan, and (c) take or approve all such other
actions relating to the Plan (other than amending or terminating the Plan or
making a final determination concerning, an application for Plan benefits as set
forth in Section 13.6 hereof); provided, however, that the Board may, by written
notice to the Committee, withdraw all or any part of the Committee's authority
at any time, in which case such withdrawn authority shall immediately revest in
the Board. Subject to Section 13.6 hereof, the decision or action of the
Committee in respect of any question arising out of or in connection with the
administration, interpretation and application of this Plan and the rules and
regulations promulgated hereunder shall be final, conclusive and binding upon
all persons having any interest in the Plan.
13.3 Appointment of Agents. In the administration or the Plan, the
Board and the Committee may from time to time employ agents (which may include
officers and employees or the Company) and delegate to them such administrative
duties as it sees fit and may from time to time consult with counsel who may be
counsel to the Company.
13.4 Application of Benefits. The Committee may require any person
claiming benefits under the Plan to submit an application therefor, together
with such documents and information as the Committee may require. In the case of
any person suffering from a disability or other condition which prevents such
person from making personal application for benefits, the Committee may, in its
discretion, permit application to be made by another person acting on his or her
behalf. Notwithstanding the foregoing, if the Committee shall have all
information necessary to determine the amount and form of Plan benefits payable
to a Participant or Beneficiary who is entitled to benefit payments under this
Plan (including, to the extent applicable and without limiting the generality of
the foregoing, the name, age, sex and proper mailing address of all parties
entitled to benefit payments), then the failure of a Participant or Beneficiary
to file an application for benefits shall not cause the Committee to defer the
commencement of benefit payments beyond the benefit commencement date required
under this Plan.
13.5 Action on Application. Within sixty (60) days following receipt of
an application for benefits and all necessary documents and information, the
Committee shall furnish the claimant with written notice of the decision
rendered with respect to such application. Should special circumstances require
an extension of time for processing the claim, written notice of the extension
shall be furnished to the claimant prior to the expiration of the initial sixty
(60) day period. The notice shall indicate the special circumstances requiring
an extension of time and the date by which a final decision is expected to be
rendered. In no event shall the period of the extension exceed ninety (90) days
from the end of the initial sixty (60) day period. In the case of a denial of
the claimant's application, the written notice thereof shall set forth specific
reasons for the denial, with references to the Plan provisions upon which the
denial is based, a description of any additional information or material
necessary to perfect the application (together with an explanation why such
material or information is necessary), and an explanation of the Plan's claim
review procedure.
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13.6 Appeal of Committee Decision.
(a) A claimant who does not agree with the decision rendered by
the Committee with respect to his application may appeal such decision to the
Corporate Benefits Committee. The appeal must be in writing and must be filed
with the Board within sixty-five (65) days alter the date of notice of the
Committee's decision with respect to the application, or, if the application has
neither been approved nor denied within the applicable period provided in
Section 13.5 hereof, then the appeal must be filed within sixty-five (65) days
after the expiration of such applicable period.
(b) The claimant may request that his or her application be given
full and fair review by the Board. The claimant may review all pertinent
documents and submit issues and comments to the Board in writing in connection
with the appeal. The decision of the Board shall be made promptly, and not later
than sixty (60) days after the Board's receipt of a request for review and all
supporting documentation and information to be submitted by the claimant, unless
special circumstances require an extension of time for processing, in which case
a decision shall be rendered as soon as possible, but not later than one hundred
twenty (120) days after receipt of a request for review and such supporting
documentation and information. The Board's decision on review shall be in
writing and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, with specific reference to the
pertinent Plan provisions upon which the decision is based.
ARTICLE XIV
CHANGE IN CONTROL
14.1 Effect of a Change in Control. Notwithstanding any other provision
of the Plan, in the event that a Change in Control (as defined in Section 14.2)
occurs on or after the Effective Date hereof, the Company may not amend or
terminate the Plan in any manner in order to (a) change downward the method of
determining the interest rate to be credited to the Deferral Accounts of
Participants thereafter without the written consent of such Participants or (b)
modify or eliminate any distribution method, selection of Fund Media, option or
election (including all such methods, options and elections set forth in
Articles V through XII of the Plan) available to Participants with respect to
Deferral Accounts and Deferral Elections that exist on the date such Change in
Control occurs.
14.2 Change in Control. As used in this Plan, "Change in Control" shall
mean the following and shall be deemed to occur if any of the following events
occur:
(a) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a
"Person"), is or becomes the "beneficial owner," as defined in Rule 13d-3 under
the Exchange Act (a "Beneficial Owner"), directly or indirectly, of securities
of Allergan representing (i) 20% or more of the combined voting power of
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Allergan's then outstanding voting securities, which acquisition is not approved
in advance of the acquisition or within 30 days after the acquisition by a
majority of the Incumbent Board (as hereinafter defined) or (ii) 33% or more of
the combined voting power of Allergan's then outstanding voting securities,
without regard to whether such acquisition is approved by the Incumbent Board;
(b) Individuals who, as of the Effective Date hereof, constitute
the Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors, provided that any
person becoming a director subsequent to the Effective Date hereof whose
election, or nomination for election by Allergan's stockholders, is approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of Allergan, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall,
for the purposes of this Plan, be considered as though such person were a member
of the Incumbent Board of Allergan;
(c) The consummation of a merger, consolidation or reorganization
involving Allergan, other than one which satisfies both of the following
conditions:
(1) a merger, consolidation or reorganization which would
result in the voting securities of Allergan outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of another entity) at
least 55% of the combined voting power of the voting securities of
Allergan or such other entity resulting from the merger, consolidation
or reorganization (the "Surviving Corporation") outstanding immediately
after such merger, consolidation or reorganization and being held in
substantially the same proportion as the ownership in Allergan's voting
securities immediately before such merger, consolidation or
reorganization, and
(2) a merger, consolidation or reorganization in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of Allergan representing 20% or more of the combined voting
power of Allergan's then outstanding voting securities; or
(d) The stockholders of Allergan approve a plan of complete
liquidation of Allergan or an agreement for the sale or other disposition by
Allergan of all or substantially all of Allergan's assets.
Notwithstanding the preceding provisions of this Section 14.2, a Change in
Control shall not be deemed to have occurred if the Person described in the
preceding provisions of this Section 14.2 is (1) an underwriter or underwriting
syndicate that has acquired the ownership of any of Allergan's then outstanding
voting securities solely in connection with a public offering of Allergan's
securities, (2) Allergan or any subsidiary of Allergan or (3) an employee stock
ownership plan or other employee benefit plan maintained by Allergan (or any of
its affiliated companies) that is qualified under the provisions of the Code. In
addition, notwithstanding the preceding provisions of this Section 14.2, a
Change in Control shall not be deemed to have occurred if the Person described
in the preceding provisions of this Section 14.2 becomes a Beneficial Owner of
more than the permitted amount of outstanding securities as a result of the
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acquisition of voting securities by Allergan which, by reducing the number of
voting securities outstanding, increases the proportional number of shares
beneficially owned by such Person, provided, that if a Change in Control would
occur but for the operation of this sentence and such Person becomes the
Beneficial Owner of any additional voting securities (other than through the
exercise of options granted under any stock option plan of the Company or
through a stock dividend or stock split), then a Change in Control shall occur.
ARTICLE XV
ESTABLISHMENT OF TRUST AND INSURANCE CONTRACTS
15.1 Establishment of Trust. Contemporaneous with the adoption of this
Plan, the Company has established the Trust Agreement for Allergan, Inc.
Executive Deferred Compensation Plan (the "Trust" or "Trust Agreement"). The
Trust created thereunder is a grantor trust within the meaning of subpart E,
part I, subchapter J, chapter 1, subtitle A of the Code. Mellon Bank, N.A. has
been named as Trustee under such Trust Agreement. The provisions of the Trust
Agreement are incorporated herein by reference.
15.2 Funding of Trust. All amounts of Base Salary or Bonuses that are
subject to Deferral Elections by Participants under this Plan shall be
contributed by the Company to the Trust (or directly to insurance contracts or
other investment vehicles to be held by the Trustee as part of the Trust's
assets) at or about the same time as such amounts are credited to the Deferral
Accounts of Participants.
15.3 Investment in Insurance Contracts. The Committee shall direct the
Trustee to invest the majority or all of the assets of the Trust in life
insurance contracts, to be selected by the Committee, on the lives of
Participants. In order for a Participant's Participation Agreement to be
effective, the Committee may require that each Participant cooperate in signing
an insurance application, submit to medical examination, and provide any
relevant information to third parties, including the insurance company(ies) or
outside consultants. Such information shall be held in confidence by those who
receive it and such information shall not be provided to the Committee or the
Company. Participation shall not be denied to an Eligible Employee because he or
she is not insurable or must be rated in order for insurance to be issued.
Notwithstanding any other provision in this Plan, if insurance is denied or
discontinued because a Participant fails to disclose (or makes a material
misrepresentation of) medical or other information, or if the Participant
commits suicide during the first two (2) years of participation in the Plan, any
amounts which are deferred by the Participant under a Deferral Election shall be
repaid to the Participant with interest credited at eighty percent (80%) of the
Company Rate to the extent the Company Rate applies, and with investment
earnings credited at the Fund Rate to the extent that the Fund Rate applies, and
no other benefits shall be due to the Participant.
15.4 Investment in Fund Media. With respect to assets of the Trust
attributable to Deferral Elections where the Fund Rate applies, the Committee
may provide, in its sole discretion, methods by electronic means or otherwise
for Participants (or the Committee where the Plan so provides) to make or change
investment decisions consistent with the terms of the Plan.
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.1 Designation of Beneficiary. A Participant shall be entitled to
designate one or more individuals or entities, in any combination, as his or her
"Beneficiary" or "Beneficiaries" to receive any Plan payments to which such
Participant is entitled as of, or by reason of, his or her death. Any such
designation may be made or changed at any time prior to the Participant's death
by written notice filed with the Committee, with such written notice to be in
such form and contain such information as the Committee may from time to time
determine. In the event that either (a) a Beneficiary designation is not on file
at the date of a Participant's death, (b) no Beneficiary survives the
Participant, or (c) no Beneficiary is living at the time any payment becomes
payable under this Plan, then, for purposes of making any further payment of any
unpaid benefits under this Plan, such Participant's Beneficiary or Beneficiaries
shall be deemed to be the estate of the Participant.
16.2 Payments During Incapacity. In the event a Participant (or
Beneficiary) is under mental or physical incapacity at the time of any payment
to be made to such Participant (or Beneficiary) pursuant to this Plan, any such
payment may be made to the conservator or other legally appointed personal
representative having authority over and responsibility for the person or estate
of such Participant (or Beneficiary), as the case may be, and for purposes of
such payment references in this Plan to the Participant (or Beneficiary) shall
mean and refer to such conservator or other personal representative, whichever
is applicable. In the absence or any lawfully appointed conservator or other
personal representative of the person or estate of the Participant (or
Beneficiary), any such payment may be made to any person or institution that has
apparent responsibility for the person and/or estate or the Participant (or
Beneficiary) as determined by the Committee. Any payment made in accordance with
the provisions of this Section 16.2 to a person or institution other than the
Participant (or Beneficiary) shall be deemed for all purposes of this Plan as
the equivalent of a payment to such Participant (or Beneficiary), and the
Company shall have no further obligation or responsibility with respect to such
payment.
16.3 Prohibition Against Assignment. Except as otherwise expressly
provided in Sections 16.1 and 16.2 hereof, the rights, interests and benefits of
a Participant under this Plan (a) may not be sold, assigned, transferred,
pledged, hypothecated, gifted, bequeathed or otherwise disposed of to any other
party by such Participant or any Beneficiary, executor, administrator, heir,
distributee or other person claiming under such Participant, and (b) shall not
be subject to execution, attachment or similar process. Any attempted sale,
assignment, transfer, pledge, hypothecation, gift, bequest or other disposition
of such rights, interests or benefits contrary to the foregoing provisions of
this Section 16.3 shall be null and void and without effect.
16.4 Binding Effect. The provisions of this Plan shall be binding upon
the Company, the Participants and any successor-in-interest to the Company or to
any Participant.
16.5 No Transfer of Interest. Other than as provided in Article XV and
in the Trust Agreement, benefits under this Plan shall be payable solely from
the general assets of the Company and no person shall be entitled to look to any
source for payment of such benefits other
16
<PAGE> 18
than the general assets of the Company. The Company shall have and possess all
title to, and beneficial interest in, any and all funds or reserves maintained
or held by the Company on account of any obligation to pay benefits as required
under this Plan, whether or not earmarked by the Company as a fund or reserve
for such purpose; any such funds or reserves shall be subject to the claims of
the creditors of the Company, and the provisions of this Plan are not intended
to create, and shall not be interpreted as vesting, in any Participant,
Beneficiary or other person, any right to or beneficial interest in any such
funds or reserves.
16.6 Amendment or Termination of the Plan. The Company, by action of
its Board of Directors, may amend this Plan from time to time in any respect
that it deems appropriate or desirable, and may terminate this Plan at any time;
provided, however, that any such Plan amendment or Plan termination shall not,
without a Participant's written consent, be given effect with respect to such
Participant to the extent such Plan amendment or Plan termination operates to
reduce or eliminate (except to the extent that amounts are distributed under the
Plan) such Participant's Deferral Account as of the date of such amendment or
termination. In addition, if the Board amends the Plan so as to make a change in
the formula for determining the interest rate to be credited under the Plan,
such amendment shall not become effective until thirty (30) days advance written
notice is given to Participants.
16.7 No Right to Employment. This Plan is voluntary on the part of the
Company, and the Plan shall not be deemed to constitute an employment contract
between the Company and any Participant, nor shall the adoption or existence of
the Plan or any provision contained in the Plan be deemed to be a required
condition of the employment of any Participant. Nothing contained in this Plan
shall be deemed to give any Participant the right to continued employment with
the Company, and the Company may terminate any Participant at any time, in which
case the Participant's rights arising under this Plan shall be only those
expressly provided under the terms of this Plan.
16.8 Notices. All notices, requests, or other communications
(hereinafter collectively referred to as "Notices") required or permitted to be
given hereunder or which are given with respect to this Plan shall be in writing
and may be personally delivered, or may be deposited in the United States mail,
postage prepaid and addressed as follows:
To the Company Allergan, Inc.
or the Committee at: Attention: Administrative Committee
(Executive Deferred Compensation Plan)
2525 Dupont Drive
Irvine, CA 92715-1599
cc: General Counsel
To Participant at: The Participant's residential mailing
address as reflected in the Company's
employment records
A Notice which is delivered personally shall be deemed given as of the date or
personal delivery, and a Notice mailed as provided herein shall be deemed given
on the second business day following the date so mailed. Any Participant may
change his or her address for purposes of Notices hereunder pursuant to a Notice
to the Committee, given as provided herein, advising the
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Committee of such change. The Company and/or the Committee may at any time
change its address for purposes of Notices hereunder pursuant to a Notice to all
Participants, given as provided herein, advising the Participants of such
change.
16.9 Governing Law. This Plan shall be governed by, interpreted under,
and construed and enforced in accordance with ERISA and, to the extent
applicable, the internal laws (and not the laws pertaining to conflicts or
choice of laws), of the State of California applicable to agreements made and to
be performed wholly within the State of California.
16.10 Titles and Headings; Gender of Terms. Article and Section
headings herein are for reference purposes only and shall not be deemed to be
part of the substance of this Plan or in any way to enlarge or limit the meaning
or interpretation of any provision in this Plan. Use in this Plan of the
masculine, feminine or neuter gender shall be deemed to include each of the
omitted genders if the context so requires.
16.11 Severability. In the event that any provision of this Plan is
found to be invalid or otherwise unenforceable by a court or other tribunal of
competent jurisdiction, such invalidity or unenforceability shall not be
construed as rendering any other provision contained herein invalid or
unenforceable, and all such other provisions shall be given full force and
effect to the same extent as though the invalid and unenforceable provision was
not contained herein.
16.12 Tax Effect of Plan. The Company does not warrant any tax benefit
nor any financial benefit under the Plan. Without limiting the foregoing,
directors, officers, and employees of the Company (other than in their capacity
as Participants) shall be held harmless by the Company from, and shall not be
subject to any liability on account of, any Federal or State tax consequences or
any consequences under ERISA of any determination as to the amount of Plan
benefits to be paid, the method by which Plan benefits are paid, the persons to
whom Plan benefits are paid, or the commencement or termination of the payment
of Plan benefits.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officer effective as of the Effective Date hereof.
ALLERGAN, INC.,
a Delaware corporation
By: /s/ Francis R. Tunney, Jr.
-----------------------------------------
Its: Corporate Vice President--Administration,
General Counsel and Secretary
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APPENDIX A
FUND MEDIA
The following are designated as the initial Fund Media as of January 1,
2000 subject to addition or deletion as set forth in Section 5.4 of the Plan:
Bankers Trust EAFE Equity Index Fund
Capital Appreciation Fund (Subadvisor: Janus)
Delaware Small Cap Value Series
Diversified Strategic Income Portfolio
Equity Index Portfolio
Fidelity VIP II Asset Manager Portfolio
OCC Accumulation Trust Equity Portfolio
Travelers Money Market Portfolio
1
<PAGE> 1
EXHIBIT 5
Aimee S. Weisner, Esq.
Corporate Counsel and Assistant Secretary
Allergan, Inc.
2525 Dupont Drive
Irvine, CA 92612
(714) 246-4500
January 6, 2000
Allergan, Inc.
2525 Dupont Drive
Irvine, CA 92612
Re: Registration Statement on Form S-8 for $12,500,000
in Deferred Compensation Obligations
Ladies and Gentlemen:
I am Corporate Counsel and Assistant Secretary of Allergan, Inc., a
Delaware corporation (the "Company"), and in such capacity have participated in
the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") to be filed by the Company with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended (the "Securities Act") of $12,500,000 in deferred compensation
obligations (the "Obligations"), which will represent unsecured obligations of
the Company to pay deferred compensation in the future, pursuant to the
Allergan, Inc. Executive Deferred Compensation Plan (the "Plan").
For purposes of rendering this opinion, I have made such legal and
factual examinations as I have deemed necessary under the circumstances and, as
part of such examination, I have examined, among other things, originals and
copies, certified or otherwise identified to my satisfaction, of such documents,
corporate records and other instruments as I have deemed necessary or
appropriate. For the purposes of such examination, I have assumed the
genuineness of all signatures on original documents and the conformity to
original documents of all copies submitted to me.
On the basis of and in reliance upon the foregoing examination and
assumptions, I am of the opinion that assuming the Registration Statement shall
have become effective pursuant to the provisions of the Securities Act, the
Obligations, if issued in accordance with the provisions of the Plan, are or,
when issued, will be binding obligations of the Company, subject, as to
enforcement, to (i) bankruptcy, reorganization, insolvency, moratorium and other
similar laws and court decisions of general application, including without
limitation, statutory or other laws regarding fraudulent or preferential
transfers, relating to, limiting or affecting the enforcement of creditors'
rights generally, and (ii) the effect of general principles of equity upon the
specific
<PAGE> 2
Allergan, Inc.
January 6, 2000
Page Two
enforceability of any of the remedies, covenants or other provisions of the Plan
and upon the availability of injunctive relief or other equitable remedies and
the application of principles or equity (regardless of whether enforcement is
considered in proceedings at law or in equity) as such principles relate to,
limit or affect the enforcement of creditors' rights generally.
Further on the basis of and in reliance upon the foregoing examination
and assumptions, I am of the opinion that the provisions of the Plan, solely as
written and not in operation, are in compliance with the requirements of the
Employee Retirement Income Security Act of 1974, as amended, as such
requirements may pertain to certain provisions of the Plan.
I am admitted to practice law in the State of California; however, I am
generally familiar with the Delaware General Corporation Law as presently in
effect, and have made such inquiries as I consider necessary to render the
opinions set forth herein relating to Delaware law. Except with respect to the
present general corporation laws of the State of Delaware, this opinion is
limited to the present laws of the United States of America and the State of
California and the present judicial interpretations thereof. No opinion is
expressed by me as to the effect of the laws of any other jurisdiction or as to
matters of conflict or choice of law. I undertake no obligation to advise you as
a result of developments occurring after the date hereof or as a result of facts
or circumstances brought to my attention after the date hereof.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not thereby admit that I am
in the category of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ Aimee S. Weisner
-----------------------------------------
Aimee S. Weisner
Corporate Counsel and Assistant Secretary
of Allergan, Inc.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Allergan, Inc.:
We consent to the use of our report dated January 27, 1999, incorporated herein
by reference in the Registration Statement on Form S-8 of Allergan, Inc.,
relating to the consolidated balance sheets of Allergan, Inc. and subsidiaries
as of December 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1998, and the related schedule.
/s/ KPMG LLP
Costa Mesa, California
January 6, 2000
