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, 2000
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.)
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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, 2000 and
1999 and the related Statement of Changes in Net Assets Available
for Plan Benefits for the Year Ended December 31, 2000 -
Allergan, Inc. Savings and Investment Plan.
Statements of Net Assets Available for Plan Benefits as of
December 31, 2000 and 1999 - Allergan, Inc. Savings and
Investment Plan.
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2000 - 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, 2001 BY: /s/ ERIC K. BRANDT
------------- -------------------------------------
Eric K. Brandt
Allergan, Inc. Corporate Benefits
Committee (formerly known as
Management Plan Committee)
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ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN
Index to Financial Statements and Supplementary Schedules
Financial Statements Page
-------------------- ----
Independent Auditors' Report ................................................... 1
Statements of Net Assets Available for Plan Benefits --
December 31, 2000 and 1999.................................................... 2
Statement of Changes in Net Assets Available for Plan Benefits -
Year ended December 31, 2000.................................................. 3
Notes to Financial Statements................................................... 4
Supplementary Schedules 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.
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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, 2000 and 1999, and for the year
ended December 31, 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000 and 1999, and the changes in net assets available for plan
benefits for the year ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.
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 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.
/s/ KPMG LLP
Orange County, California
June 21, 2001
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ALLERGAN, INC.
Savings and Investment Plan
Statements of Net Assets Available for Plan Benefits
December 31, 2000 and 1999
2000 1999
------------- -------------
ASSETS
Investments, at fair value:
Common Stock, Common/Collective
Trusts, Mutual funds, and Participant
Loans $ 319,235,720 $ 242,387,868
Interest bearing cash and cash
equivalents 294,440 311,285
Receivables:
Accrued interest and dividends 143,789 4,228
Sales pending settlement 368,908 437,701
------------- -------------
Total Receivables 512,697 441,929
------------- -------------
Total Assets 320,042,857 243,141,082
------------- -------------
LIABILITIES
Payables:
Purchases pending settlement (834,116) (39)
Short-term fund investment fees -- (21,044)
------------- -------------
Total Payables (834,116) (193,769)
------------- -------------
Net assets available for Plan benefits $ 319,208,741 $ 243,119,999
============= =============
See accompanying notes to financial statements.
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ALLERGAN, INC.
Savings and Investment Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 2000
2000
-------------
Additions to Plan assets attributed to:
Net appreciation
in fair value of investments 70,494,144
Interest 1,223,985
Dividends 1,278,948
-------------
Total investment income 72,997,077
Contributions:
Employer - Company match 3,816,766
Rollover contributions 2,759,008
Employees:
Before tax 12,319,090
After tax 1,189,547
-------------
Total contributions 20,084,411
Transfers from the Allergan Employee
Stock Ownership Plan 510,356
-------------
Total additions 93,591,844
-------------
Deductions from Plan assets attributed to:
Withdrawals and distributions (17,488,271)
Administrative expenses (14,831)
-------------
Total deductions (17,503,102)
-------------
Increase in net assets
available for Plan benefits 76,088,742
Net assets available for Plan
benefits, beginning of year 243,119,999
-------------
Net assets available for Plan
benefits, end of year $ 319,208,741
=============
See accompanying notes to financial statements.
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
(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 document for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan sponsored by Allergan, Inc. (the
"Company"). The Plan was established on July 27, 1989. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan is qualified under Section 401(a) and (k) of the Internal
Revenue Code (Code) of 1986.
Under terms of the Plan, eligible United States employees may voluntarily
elect to contribute:
1. Before-tax dollars up to the lesser of 20% of their defined
compensation or $10,500 for the year ended December 31, 2000 under the
provision 401(k) and 402(g) of the Code or,
2. After-tax dollars up to 20% of their defined compensation, when
aggregated with before-tax contributions, under provision 401(a) and
401(m) of the IRC or,
3. Any combination of the above two elections; however, the total annual
additions (participant contributions, company contributions, and
allocated forfeitures) cannot exceed the lesser of 25% of the
participant's 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. Before-tax dollars up to the lesser of 10% of their defined
compensation or $8,000 for the year ended December 31, 2000 under
provision 165(e) of the Puerto Rico Income Tax Act or,
2. After-tax dollars up to 15% of their defined compensation, when
aggregated with before-tax contributions, under Puerto Rico Code or,
3. Any combination of the above two elections; however, the total annual
additions (participant contributions, company contributions, and
allocated forfeitures) cannot exceed the lesser of 25% of the
participant's defined compensation or $30,000.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
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.
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, American Century Stable Asset Fund, INVESCO Balanced Fund, American
Century Income and Growth Fund, J.P. Morgan SmartIndex Fund, American
Century Ultra Fund, American Funds New Perspective Fund, American Century
International Growth Fund, and Franklin Small Cap Growth A Fund, or any
combination of the nine funds at the employee's discretion. Company
contributions consist of Allergan, Inc. Common Stock which is invested in
the Allergan, Inc. Common Stock Fund or sold with the proceeds re-invested
in other investment options, based on participant elections.
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:
American Century Stable Asset Fund
This is a stable value fund that seeks to protect principal from market
volatility and seeks yields higher than money market funds at a relatively
predictable annual return. The fund invests in a diversified portfolio of
high quality investments issued by major financial institutions.
INVESCO Balanced Fund
This is an asset allocation fund that seeks high total return through
capital appreciation and current income. The fund invests primarily in
equities, normally 50% to 70% of its assets, and fixed income securities,
normally 25% or more.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
American Century Income and Growth Fund
This is a domestic equity fund that seeks to provide dividend growth,
current income and capital appreciation by investing in common stocks.
J.P. Morgan SmartIndex Fund
This is a domestic equity fund that seeks a consistently high total return
from a diversified portfolio of stocks while maintaining risk
characteristics similar to the S&P 500 Index.
American Century Ultra Fund
This is a domestic equity fund that seeks capital growth by investing in
common stocks of companies with accelerating earnings and revenue growth.
The fund invests generally in larger companies with market capitalization
in excess of $5 billion.
American Funds New Perspective Fund
This is a global equity fund that seeds long term capital growth through
investing in stocks of companies located around the world, including the
U.S. The fund diversifies in blue chip companies in the U.S. and abroad.
Fund managers emphasize multi national or global companies and focus on
opportunities generated by changes in global trade patterns, including
economic and political relationships.
American Century International Growth Fund
This is an international fund that seeks capital growth. The fund's
managers target companies in their emerging growth phase, which they
believe have the potential to rapidly grow revenues, earnings, or cash
flow.
Allergan, Inc. Common Stock
This is an investment option allowing ownership in Allergan, Inc. Unlike
the other investment choices in the plan, this fund is invested in only one
company - Allergan, Inc. In general, a non diversified investment in only
one company is more volatile than a diversified investment in multiple
companies. The value of the common stock will be determined by the
company's performance, the overall status of the stock market and the value
the stock market assigns the stock.
Participant Accounts
Each participant's account is charged for the participant's withdrawals and
credited for the participant's contributions, employer contributions and an
allocation of fund earnings. The earnings of each of the funds are
allocated daily to the individual accounts of participants based on their
relative interest in the fair value of the assets held in each fund, except
for dividends and unrealized appreciation (depreciation) on the common
stock of Allergan, Inc. which is allocated based upon the number of shares
held in the individual accounts of participants.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan 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 2000, forfeitures totaled $478,953.
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 and be suspended from
contributing to the Plan for a period of six months following the
withdrawal.
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. After death, payment is in
the form of a lump sum; otherwise, under certain circumstances set forth in
the Plan, the participant may elect to receive the distribution in a lump
sum (in cash or in cash and common stock of Allergan, Inc.) or may elect
annuity payments. If an extended payment option is selected and the
participant's account value is $5,000 or more, participants may postpone
their withdrawal until as late as attaining age 70 1/2.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
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 INVESCO Balanced Fund, American Century
Income and Growth Fund, J.P. Morgan SmartIndex Fund, American Century Ultra
Fund, American Funds New Perspective Fund, American Century International
Growth Fund, and Franklin Small Cap Growth A Fund are based upon quotations
obtained from the National Association of Security Dealers Automated
Quotations (NASDAQ). The fair values of the American Century Stable Asset
Fund is based upon the net asset value reported by the fund. Participant
loans are valued at cost, 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
UMB Scout Prime R, which consists of highly liquid short-term investments.
Administrative Expenses
Expenses incurred in the administration and operation of the Plan are paid
by the Plan with forfeitures and dividends. Certain administrative expenses
of the Plan are paid by the Company.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
(3) Investments
The following tables present the fair values of investments.
2000
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ------------ ------------
Common Stock:
Allergan, Inc.* 1,725,663 $ 45,175,350 $167,066,612
========== ============ ============
Common/Collective Trusts:
American Century Stable Asset Fund*
annual effective returns varying
from 5.96% to 6.14% in 2000 28,571,299 $ 28,571,299 $ 28,571,299
========== ============ ============
Mutual Funds:
INVESCO Balanced Fund* 1,730,291 $ 30,226,230 $ 29,172,706
American Century Income and
Growth Fund* 1,313,759 43,468,751 39,662,375
J.P. Morgan SmartIndex Fund 65,667 1,123,569 1,026,376
American Century Ultra Fund* 772,455 32,809,630 25,004,353
American Funds New Perspective Fund* 716,011 21,398,700 17,220,060
American Century International
Growth Fund 167,062 2,173,797 1,825,987
Franklin Small Cap Growth A Fund 117,239 5,333,368 4,611,003
========== ------------ ------------
Total Mutual Funds $136,534,045 $118,522,860
============ ============
* Investments represent 5% or more of the Plan's net assets.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
1999
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ------------ ------------
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 $145,441,359 $120,617,273
============ ============
* Investments represent 5% or more of the Plan's net assets.
(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 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.
(Continued)
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ALLERGAN, INC.
Savings and Investment Plan
Notes to Financial Statements
December 31, 2000 and 1999
(5) Outstanding Commitments to Participants
At December 31, 2000 and 1999, the Plan had not been requested to pay
withdrawals and distributions to terminated and withdrawing participants.
(6) Employee Stock Ownership Plan Transfers
In accordance with the Internal Revenue Code Section 401(a)(28)(B),
participants in an Employee Stock Ownership Plan (ESOP) are eligible to
diversify a portion of their balance if they are 55 years of age or older
and have been a participant of the Plan for at least 10 years. During the
first five years of eligibility, participants may direct up to 25 percent
of their ESOP balance into the various investment options offered in the
Savings and Investment Plan. In the sixth year of eligibility, participants
may direct up to 50 percent of their ESOP balance into the various options
offered in the Savings and Investment Plan. In the current year, there were
$510,356 in transfers from the ESOP to the Savings and Investment Plan.
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Schedule 1
ALLERGAN, INC.
Savings and Investment Plan
Schedule of Assets Held for Investment Purposes
December 31, 2000
No. Shares,
Units or
Principal Fair
Amounts Cost Value
----------- ------------ ------------
Common Stock:
* Allergan, Inc. 1,725,663 $ 45,175,350 $167,066,612
========== ============ ============
Common/Collective Trusts:
* American Century Stable Asset
Fund, effective returns varying
from 5.96% to 6.14% 28,571,299 $ 28,571,299 $ 28,571,299
========== ============ ============
Mutual Funds:
INVESCO Balanced Fund 1,730,291 $ 30,226,230 $ 29,172,706
* American Century Income and
Growth Fund 1,313,759 43,468,751 39,662,375
* J.P. Morgan SmartIndex Fund 65,667 1,123,569 1,026,376
* American Century Ultra Fund 772,455 32,809,630 25,004,353
American Funds New Perspective Fund 716,011 21,398,700 17,220,060
* American Century International
Growth Fund 167,062 2,173,797 1,825,987
Franklin Small Cap Growth A Fund 117,239 5,333,368 4,611,003
========== ------------ ------------
Total Mutual Funds $136,534,045 $118,522,860
============ ============
Participant Loans
interest rates varying from 8.75%
to 10.50% in 2000, latest
maturity 2015 5,074,949 $ 5,074,949 $ 5,074,949
========== ============ ============
Temporary Investments and Deposits:
* UMB Bank
UMB Scout Prime R,
effective returns varying
from 4.2% to 5.3% 294,440 $ 294,440 $ 294,440
========== ============ ============
* Party in interest
See accompanying independent auditors' report.
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EXHIBIT INDEX
Exhibit
Number Description of Exhibits
------ -----------------------
23 Consent of KPMG LLP Independent Auditors