<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED EFFECTIVE OCTOBER 7, 1996]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ___________________ TO ___________________
COMMISSION FILE NUMBER 1-10269
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
ALLERGAN, INC.
2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92612
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office.)
<PAGE> 2
4. ERISA Financial Statements and Schedules and Exhibits:
(a) Financial Statements and Schedules:
Independent Auditors' Report of KPMG LLP on the Statements of Net Assets
Available for Plan Benefits as of December 31, 1999 and 1998 and the
related Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1999 - Allergan, Inc. Savings and
Investment Plan.
Statements of Net Assets Available for Plan Benefits as of December 31,
1999 and 1998 - Allergan, Inc. Savings and Investment Plan.
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1999 - Allergan, Inc. Savings and Investment
Plan.
Notes to Financial Statements - Allergan, Inc. Savings and Investment
Plan.
Schedule of Assets Held for Investment Purposes - At End of Year -
Allergan, Inc. Savings and Investment Plan.
(b) Exhibits
Exhibit 23 - Consent of KPMG LLP
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the Plan) have duly
caused this annual report to be signed by the undersigned thereunto duly
authorized.
ALLERGAN, INC. SAVINGS
AND INVESTMENT PLAN
Date: June 28, 2000 By: /s/ Francis R. Tunney, Jr.
---------------------------------
Francis R. Tunney, Jr.
Allergan, Inc. Corporate Benefits
Committee (formerly known as
Management Plan Committee)
2
<PAGE> 3
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE> 4
ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
Index to Financial Statements and Supplementary Schedules
Page
----
Financial Statements
Independent Auditors' Report ........................................... 1
Statements of Net Assets Available for Plan Benefits --
December 31, 1999 and 1998............................................ 2
Statement of Changes in Net Assets Available for Plan Benefits --
Year ended December 31, 1999.......................................... 3
Notes to Financial Statements........................................... 4
Schedule
--------
Supplementary Schedule
Schedule of Assets Held for Investment Purposes -- At End of Year....... 1
Other schedules are omitted because they are not required or are not applicable
based on disclosure requirements of the Employee Retirement Income Security Act
of 1974 and regulations issued by the Department of Labor.
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
The Corporate Benefits Committee
Allergan, Inc.:
We have audited the financial statements of the Allergan, Inc. Savings and
Investment Plan (the "Plan") as of December 31, 1999 and 1998, and for the year
ended December 31, 1999, as listed in the accompanying index. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for plan
benefits for the year ended December 31, 1999 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of the
Allergan, Inc. Savings and Investment Plan as listed in the accompanying index
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements but is supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG LLP
Orange County, California
June 15, 2000
1
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ALLERGAN, INC.
Savings and Investment Plan
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
Investments, at fair value:
Common Stock, Common/Collective
Trusts, Mutual funds, and
Participant Loans $ 242,387,868 $ 179,878,502
Interest bearing cash and cash
equivalents 311,285 400,535
Receivables:
Accrued interest and dividends 4,228 1,490
Sales pending settlement 437,701 12,666
------------- -------------
Total Receivables 441,929 14,156
------------- -------------
Total Assets 243,141,082 180,293,193
------------- -------------
LIABILITIES
Payables:
Purchases pending settlement (39) (8)
Short-term fund investment fees (21,044) (86,528)
------------- -------------
Total Payables (21,083) (86,536)
------------- -------------
Net assets available for Plan benefits $ 243,119,999 $ 180,206,657
============= =============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 7
ALLERGAN, INC.
Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
1999
--------------
<S> <C>
Additions to Plan assets attributed to:
Transfer from Puerto Rico
Savings & Investment Plan $ 6,865,298
-------------
Net appreciation in fair value
of investments 50,256,976
Interest 1,865,025
Dividends 542,159
-------------
Total investment income 52,664,160
Contributions:
Employer - Company match 3,506,509
Rollover contributions 2,475,091
Employees:
Before tax 10,470,590
After tax 1,560,996
-------------
Total contributions 18,013,186
-------------
Total additions 77,542,644
-------------
Deductions from Plan assets attributed to:
Withdrawals and distributions (14,278,438)
Administrative expenses (350,864)
-------------
Total deductions (14,629,302)
-------------
Increase in net assets
available for Plan benefits 62,913,342
Net assets available for Plan
benefits, beginning of year 180,206,657
-------------
Net assets available for Plan
benefits, end of year $ 243,119,999
=============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 8
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
(1) Description of the Plan
The following description of the Allergan, Inc. Savings and Investment Plan
("the Plan") provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan sponsored by Allergan, Inc. (the
"Company"). The Plan was established on July 27, 1989. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan is qualified under Sections 401(a) and (k) of the
Internal Revenue Code (Code) of 1986.
Effective January 1, 1999, the Company amended and combined the Plan with
the Puerto Rico Savings and Investment Plan.
Under terms of the Plan, eligible United States employees may voluntarily
elect to contribute:
(1) "After-tax" dollars up to 20% of their defined compensation under
sections 401(a) and 401 (m) of the Code or,
(2) "Before-tax" dollars up to the lesser of 20% of their defined
compensation or $10,000 for the year ended December 31, 1999, under
sections 401(k) and 402 (g) of the Code or,
(3) Any combination of the above two elections; however, the total
contribution cannot exceed the lesser of 20% of their defined
compensation or $30,000 under section 415 (c) of the Code.
Under terms of the Plan, eligible Puerto Rico employees may voluntarily
elect to contribute:
(1) "After-tax" dollars up to 20% of their defined compensation under
sections 401(a)and 401 (m) of the Code or the counterpart Puerto Rican
Code sections 165 (e) and 1023 (n) or,
(2) "Before-tax" dollars up to 20% of their defined compensation not to
exceed the lesser of $8,000 or 10% of their defined compensation for
the year ended December 31, 1999, under sections 401(k) and 402 (g) of
the Code or the counterpart Puerto Rican Code sections,
(3) Any combination of the above two elections; however, the total
contribution cannot exceed the lesser of 20% of their defined
compensation or $30,000 under section 415 (c) of the Code or the
counterpart Puerto Rican code sections.
Contributions
For domestic employees, the Company contributes an amount equal to 75% of
each employee's contribution on the first 2% of defined compensation, 50%
of each employee's contribution on the next 1% of defined compensation and
25% of each employee's contribution on the next 2% of defined compensation.
For Puerto Rico employees, the Company contributes an amount equal to 75%
of each employee's contribution on the first 2% of defined compensation,
50% of each employee's contribution on the next 2% of defined compensation
and 25% of each employee's contribution on the next 2% of defined
compensation.
4
<PAGE> 9
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
Certain limitations imposed by the Internal Revenue Code may have the
effect of reducing the level of contributions initially selected by
participants who come within the classification of "highly compensated
employees" as defined in the Code.
Participant contributions are invested in the Allergan, Inc. Common Stock
Fund, the Balanced Fund, the Interest Income Fund, the Growth and Income
Fund, the Global Equity Fund or the Aggressive Growth Fund, or any
combination of the six funds at the employee's discretion. Company
contributions consist of Allergan, Inc. common stock which is invested in
the Allergan, Inc. Common Stock Fund except for participants at least age
55, who may elect to have Company contributions, both past and current,
invested in any of the funds.
Investment Options
Participants have the right to elect investment options upon enrollment or
re-enrollment into the Plan. Additionally, participants may elect to change
their investment options and transfer their account balances among the
different investment funds.
A description of each investment fund follows:
Allergan, Inc. Common Stock Fund - The Allergan, Inc. Common Stock Fund is
invested in Allergan, Inc. common stock.
Balanced Fund - The Balanced Fund is invested primarily in U.S. stocks,
bonds and U.S. government securities. The stock portfolio consists of
large, intermediate and small companies. The bond portfolio consists of
U.S. Treasury, U.S. Agency and corporate issues. The Fund is managed by
American Funds under the name "American Balanced Fund."
Interest Income Fund - The Interest Income Fund is invested in a portfolio
of short term money market funds. The Fund is managed by LaSalle National
Trust under the name "LaSalle Income Plus Fund."
Growth and Income Fund - The Growth and Income Fund is invested in a
portfolio of U.S. common stocks to meet the objective of long-term growth
of capital and income. The Fund is managed by American Funds under the name
"Investment Company of America Fund."
Global Equity Fund - The Global Equity Fund is invested in a portfolio of
U.S. and foreign company common stocks to meet the objective of long-term
growth of capital and income. The Fund is managed by American Funds under
the name "New Perspective Fund."
Aggressive Growth Fund - The Aggressive Growth Fund is invested primarily
in U.S. common stocks of small and intermediate companies. The Fund is
managed by American Century under the name "Twentieth Century Ultra Fund."
5
<PAGE> 10
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
The number of employees participating in these funds at December 31, 1999
and 1998 was as follows:
1999 1998
----------- -----------
(Unaudited) (Unaudited)
Allergan, Inc. Common Stock Fund 3,156 2,554
Balanced Fund 2,063 1,727
Interest Income Fund 1,279 1,286
Growth and Income Fund 2,263 2,032
Global Equity Fund 1,417 1,209
Aggressive Growth Fund 1,725 1,478
Participant Accounts
Each participant's account is charged for the participant's withdrawals and
credited for the participant's contributions, employer contributions and an
allocation of fund earnings. The earnings of each of the funds are
allocated daily to the individual accounts of participants based on their
relative interest in the fair value of the assets held in each fund, except
for dividends and unrealized appreciation (depreciation) on the common
stock of Allergan, Inc. which is allocated based upon the number of shares
held in the individual accounts of participants.
Participant Loan Fund
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 reduced by the highest outstanding
loan balance during the preceding twelve months or 50% of their vested
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the participant loan fund. Loan terms range from
1-5 years or up to 30 years for the purchase of a primary residence. The
loans are secured by the balance in the participant's account and bear
interest at prime plus one percent as determined on the date of the loan
application. The interest rate is fixed for the term of the loan. Principal
and interest is paid through payroll deductions each pay period.
Vesting and Forfeitures
Employee contributions are fully vested at all times. Participants forfeit
their share of employer contributions if they withdraw their employee
contributions after having completed less than three years of service with
the Company. Forfeitures are used by the Company to offset future
contribution requirements. In 1999, forfeitures totaled $859,776.
Withdrawals
Participants may withdraw employee "after-tax" contributions during
employment. However, except for financial hardship or emergency (as defined
in the Plan), even participants who are fully vested are not eligible to
withdraw any portion of employer contributions credited to them within the
prior two-year period, although such contributions may be withdrawn at a
later date. Withdrawals of employee "after-tax" contributions and employer
contributions during employment may cause the employee to become ineligible
to receive Company matching contributions in the Plan for a period of six
months following the withdrawal.
6
<PAGE> 11
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
Prior to age 59 1/2, employee "before-tax" contributions may be withdrawn
in the event of financial hardship, and after the withdrawal of the value
of employee "after-tax" contributions and employer contributions. Hardship
withdrawals cause the employee to become ineligible to contribute to the
Plan for a period of twelve months following the withdrawal.
Participants become entitled to payment of the total value of their
accounts at the time of termination (if fully vested), attainment of age
62, permanent and total disability, or death. Payment is in the form of a
lump sum (in cash or in cash and common stock of Allergan, Inc.). If the
participant's account value is $5,000 or more, participants may postpone
their withdrawal until as late as attaining age 70 1/2.
Continuation of the Plan
The Company anticipates and believes the Plan will continue without
interruption but reserves the right to discontinue the Plan. If the Plan is
terminated by the Company, the accounts of all affected participants shall
become 100% vested and nonforfeitable without regard to the years of
service of such participants.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on an accrual
basis of accounting. The net assets of the Plan are allocated entirely to
individual participant accounts. The preparation of financial statements
requires the use of Plan Administrator estimates.
Investments
Investments are stated at fair value. The fair value of Allergan, Inc.
common stock is based upon quotations obtained from the New York Stock
Exchange. The fair values of the American Balanced Fund, Investment Company
of America Fund, Twentieth Century Ultra Fund, Interest Income Fund and New
Perspective Fund are based upon the net asset value reported by the funds.
Participant loans are valued at their outstanding balance, which
approximates fair value.
Purchases and sales of investments are reflected on the trade-date basis.
Dividend income is recorded on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Interest Bearing Cash and Cash Equivalents
Interest bearing cash and cash equivalents represent amounts invested in
Mellon Bank's EB Temporary Investment Fund which consists of highly liquid
short-term investments.
7
<PAGE> 12
ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
Administrative Expenses
Certain administrative expenses of the Plan are paid by the Company.
New Accounting Pronouncement
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3 (SOP 99-3), Accounting for and Reporting
of Certain Defined Contribution Plan Investments and Other Disclosure
Matters. SOP 99-3 simplifies the disclosure of certain investments and is
effective for plan years ending December 31, 1999. Accordingly, information
previously required to be disclosed about participant-directed fund
investment programs is not presented in the Plan's 1999 financial
statements. The Plan's 1998 financial statements have been reclassified to
the current year's presentation.
(3) Investments
The following tables present the fair values of investments representing 5%
or more of the Plan's net assets.
<TABLE>
<CAPTION>
1999
---------------------------------------------------
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ----------- ------------
<S> <C> <C> <C>
Common Stock:
Allergan, Inc. 1,844,796 $ 32,462,058 $ 91,778,601
=========== ============ ============
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.16% to 6.29% in 1999 25,209,901 $ 25,209,901 $ 25,209,901
=========== ============ ============
Mutual Funds:
American Balanced Fund 2,166,410 $ 30,500,498 $31,239,629
Investment Company of America Fund 1,453,380 36,220,666 47,176,699
New Perspective Fund 565,263 12,496,881 16,641,354
Twentieth Century Ultra Fund 558,313 18,350,692 25,559,591
=========== ------------ ------------
Total Mutual Funds $ 97,568,737 $120,617,273
============ ============
</TABLE>
(Continued)
8
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1998
---------------------------------------------------
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ----------- -----------
<S> <C> <C> <C>
Common Stock:
Allergan, Inc. 847,610 $23,167,929 $54,882,764
========== =========== ===========
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.16% to 6.29% in 1999 24,271,867 $24,271,867 $24,271,867
========== =========== ===========
Mutual Funds:
American Balanced Fund 1,937,060 $26,695,256 $30,528,059
Investment Company of America Fund 1,370,134 31,905,163 42,570,069
New Perspective Fund 407,882 7,976,783 9,360,890
Twentieth Century Ultra Fund 441,816 13,105,574 14,761,084
========== ----------- -----------
Total Mutual Funds $79,682,776 $97,220,102
=========== ===========
</TABLE>
(4) Federal Income Taxes
The Plan obtained its latest determination letter on September 24, 1999, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable
9
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 1999 and 1998
requirements of the Internal Revenue Code. The Plan administrator and the
Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue Code.
Employer contributions and dividends, interest, capital gains, or other
distributions with respect to assets held by the trustee are not taxable to
the employee until withdrawn from the Plan.
(5) Outstanding Commitments to Participants
At December 31, 1999 and 1998, the Plan had not been requested to pay
withdrawals and distributions to terminated and withdrawing participants.
10
<PAGE> 15
SCHEDULE 1
ALLERGAN, INC.
Savings and Investment Plan
Schedule of Assets Held for Investment Purposes -
At End of Year
<TABLE>
<CAPTION>
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ----------- ------------
<S> <C> <C> <C>
Common Stock:
* Allergan, Inc. 1,844,796 $32,462,058 $ 91,778,601
=========== =========== ============
Common/Collective Trusts:
LaSalle National Trust
annual effective returns varying
from 6.16% to 6.29% in 1999 25,209,901 $25,209,901 $ 25,209,901
=========== =========== ============
Mutual Funds:
American Balanced Fund 2,166,410 30,500,498 31,239,629
Investment Company of America Fund 1,453,380 36,220,666 47,176,699
New Perspective Fund 565,263 12,496,881 16,641,354
Twentieth Century Ultra Fund 558,313 18,350,692 25,559,591
=========== ----------- ------------
Total Mutual Funds $97,568,737 $120,617,273
=========== ============
Participant Loans
interest rates varying from 9.00%
to 9.50% in 1999, latest maturity 2014 4,782,093 $ 0 $ 4,782,093
=========== =========== ===========
Temporary Investments and Deposits:
* Mellon Bank
EB Temporary Investment Fund,
annual effective rate 5.5% 311,285 $ 311,285 $ 311,285
=========== =========== ===========
</TABLE>
--------------
* Party in interest
See accompanying independent auditors' report.
11
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
23 Consent of KPMG LLP
