10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 1-10269

ALLERGAN, INC.

(Exact name of Registrant as Specified in its Charter)

DELAWARE	95-1622442
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2525 DUPONT DRIVE, IRVINE, CALIFORNIA	92612
(Address of Principal Executive Offices)	(Zip Code)

(714) 246-4500
(Registrant’s Telephone Number,
including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer þ Accelerated filer o Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o     No þ

As of May 7, 2007, there were 153,755,944 shares of common stock outstanding (including 1,218,191 shares held in treasury).

ALLERGAN, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 30, 2007

INDEX

			Page
PART I — FINANCIAL INFORMATION
	ITEM 1 — FINANCIAL STATEMENTS
	(A)	Unaudited Condensed Consolidated Statements of Operations — Three Months Ended March 30, 2007 and March 31, 2006		3
	(B)	Unaudited Condensed Consolidated Balance Sheets — March 30, 2007 and December 31, 2006		4
	(C)	Unaudited Condensed Consolidated Statements of Cash Flows — Three Months Ended March 30, 2007 and March 31, 2006		5
	(D)	Notes to Unaudited Condensed Consolidated Financial Statements		6-25
	ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			26-42
	ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			43-46
	ITEM 4 — CONTROLS AND PROCEDURES			47
PART II — OTHER INFORMATION
	ITEM 1 — LEGAL PROCEEDINGS			48
	ITEM 1A — RISK FACTORS			48
	ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			49
	ITEM 3 — DEFAULTS UPON SENIOR SECURITIES			49
	ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS			49
	ITEM 5 — OTHER INFORMATION			49
	ITEM 6 — EXHIBITS			50
SIGNATURE				52

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Allergan, Inc.

Unaudited Condensed Consolidated Statements of Operations
(in millions, except per share amounts)

	Three months ended
	March 30,			March 31,
	2007			2006
Revenues
Product net sales	$	872.4		$	615.2
Other revenues		14.1			10.5
Total revenues		886.5			625.7
Operating costs and expenses
Cost of sales (excludes amortization of acquired intangible assets)		159.4			97.3
Selling, general and administrative		389.4			273.9
Research and development		210.7			669.4
Amortization of acquired intangible assets		28.4			5.1
Restructuring charges		3.2			2.8
Operating income (loss)		95.4			(422.8	)
Non-operating income (expense)
Interest income		15.4			9.2
Interest expense		(18.5	)		(7.8	)
Unrealized loss on derivative instruments, net		(1.3	)		(1.0	)
Gain on investments		—			0.2
Other, net		(1.1	)		(0.9	)
		(5.5	)		(0.3	)
Earnings (loss) before income taxes and minority interest		89.9			(423.1	)
Provision for income taxes		46.2			21.9
Minority interest income		(0.1	)		(0.2	)
Net earnings (loss)	$	43.8		$	(444.8	)
Earnings (loss) per share:
Basic	$	0.29		$	(3.29	)
Diluted	$	0.28		$	(3.29	)

See accompanying notes to unaudited condensed consolidated financial statements.

3

Allergan, Inc.

Unaudited Condensed Consolidated Balance Sheets
(in millions, except share data)

	March 30,			December 31,
	2007			2006
ASSETS
Current assets:
Cash and equivalents	$	1,043.1		$	1,369.4
Trade receivables, net		464.4			386.9
Inventories		193.8			168.5
Other current assets		221.2			205.5
Total current assets		1,922.5			2,130.3
Investments and other assets		169.6			148.2
Property, plant and equipment, net		631.7			611.4
Goodwill		1,951.0			1,833.6
Intangibles, net		1,154.7			1,043.6
Total assets	$	5,829.5		$	5,767.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	68.3		$	102.0
Accounts payable		163.7			142.4
Accrued compensation		80.8			124.8
Other accrued expenses		258.5			235.2
Income taxes		14.2			53.7
Total current liabilities		585.5			658.1
Long-term debt		861.7			856.4
Long-term convertible notes		750.0			750.0
Deferred tax liabilities		144.6			84.8
Other liabilities		319.5			273.2
Commitments and contingencies		—			—
Minority interest		1.1			1.5
Stockholders’ equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued		—			—
Common stock, $.01 par value; authorized 500,000,000 shares; issued 153,756,000 shares as of March 30, 2007 and December 31, 2006		1.5			1.5
Additional paid-in capital		2,374.1			2,359.6
Accumulated other comprehensive loss		(114.4	)		(127.4	)
Retained earnings		1,081.3			1,065.7
		3,342.5			3,299.4
Less — treasury stock, at cost (1,620,000 shares as of March 30, 2007 and 1,487,000 shares as of December 31, 2006, respectively)		(175.4	)		(156.3	)
Total stockholders’ equity		3,167.1			3,143.1
Total liabilities and stockholders’ equity	$	5,829.5		$	5,767.1

See accompanying notes to unaudited condensed consolidated financial statements.

4

Allergan, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)

	Three months ended
	March 30,			March 31,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)	$	43.8		$	(444.8	)
Non-cash items included in net earnings (loss):
In-process research and development charge		72.0			562.8
Depreciation and amortization		49.9			19.9
Settlement of a pre-existing distribution agreement in a business combination		2.3			—
Amortization of original issue discount and debt issuance costs		1.1			3.0
Amortization of net realized gain on interest rate swap		(0.2	)		—
Deferred income tax (benefit) provision		(12.5	)		16.5
Loss on investments and disposal of fixed assets		—			2.4
Unrealized loss on derivative instruments		1.3			1.0
Expense of share-based compensation plans		21.3			15.4
Minority interest income		(0.1	)		(0.2	)
Restructuring charge		3.2			2.8
Changes in assets and liabilities:
Trade receivables		(54.3	)		(44.4	)
Inventories		(5.9	)		(3.4	)
Other current assets		(1.2	)		17.8
Other non-current assets		(6.2	)		(15.5	)
Accounts payable		11.0			(9.5	)
Accrued expenses		(15.6	)		(12.6	)
Income taxes		(11.9	)		0.5
Other liabilities		7.7			5.0
Net cash provided by operating activities		105.7			116.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired		(312.8	)		(1,215.2	)
Additions to property, plant and equipment		(22.2	)		(32.7	)
Additions to capitalized software		(5.0	)		(2.9	)
Additions to intangible assets		(5.0	)		—
Proceeds from sale of investments		—			0.3
Proceeds from sale of property, plant and equipment		8.9			0.1
Net cash used in investing activities		(336.1	)		(1,250.4	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders		(15.1	)		(13.3	)
Bridge credit facility borrowings		—			825.0
Repayments of convertible borrowings		—			(94.1	)
Payments to acquire treasury stock		(61.7	)		—
Net repayments of notes payable		(46.0	)		(42.6	)
Sale of stock to employees		24.5			27.1
Excess tax benefits from share-based compensation		4.0			10.2
Net cash (used in) provided by financing activities		(94.3	)		712.3
Effect of exchange rate changes on cash and equivalents		(1.6	)		1.3
Net decrease in cash and equivalents		(326.3	)		(420.1	)
Cash and equivalents at beginning of period		1,369.4			1,296.3
Cash and equivalents at end of period	$	1,043.1		$	876.2
Supplemental disclosure of cash flow information
Cash paid for:
Interest (net of capitalization)	$	1.6		$	3.0
Income taxes, net of refunds	$	64.4		$	21.4

     On February 22, 2007, the Company completed the acquisition of EndoArt SA for $97.1 million, net of cash acquired. In connection with the EndoArt SA acquisition, the Company acquired assets with a fair value of $101.7 million and assumed liabilities of $4.6 million.

     On January 2, 2007, the Company completed the acquisition of Groupe Cornéal Laboratoires for $215.7 million in cash, net of cash acquired. In connection with the Groupe Cornéal Laboratoires acquisition, the Company acquired assets with a fair value of $288.9 million and assumed liabilities of $79.9 million.

     On March 23, 2006, the Company completed the acquisition of Inamed Corporation. In exchange for the common stock of Inamed Corporation, the Company issued common stock with a fair value of $1,859.3 million and paid $1,328.7 million in cash, net of cash acquired. In connection with the Inamed acquisition, the Company acquired assets with a fair value of $3,813.4 million and assumed liabilities of $522.7 million, based on a final measurement of the purchase price as of December 31, 2006.

See accompanying notes to unaudited condensed consolidated financial statements.

5

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1:  Basis of Presentation

        In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (consisting only of normal recurring accruals) to present fairly the financial information contained therein. These statements do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP) for annual periods and should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2006. The Company prepared the condensed consolidated financial statements following the requirements of the Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. The results of operations for the three month period ended March 30, 2007 are not necessarily indicative of the results to be expected for the year ending December 31, 2007 or any other period(s).

  Reclassifications

        Certain reclassifications of prior year amounts have been made to conform with the current year presentation. Beginning with the second fiscal quarter of 2006, the Company reports amortization of acquired intangible assets on a separate line in its statements of operations. Previously, amortization of intangible assets was reported in cost of sales, selling, general and administrative expenses, and research and development (R&D) expenses. For the three month period ended March 31, 2006, a total of $5.1 million of intangible asset amortization was reclassified, consisting of $4.3 million previously classified in cost of sales, $0.1 million previously classified in selling, general and administrative expenses, and $0.7 million previously classified in research and development expenses.

  Share-Based Awards

        On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised), Share-Based Payment (SFAS No. 123R), which requires measurement and recognition of compensation expense for all share-based awards made to employees and directors. Under SFAS No. 123R, the fair value of share-based awards is estimated at grant date using an option pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period.

        Since share-based compensation under SFAS No. 123R is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs.

        The Company uses the Black-Scholes option-pricing model to estimate the fair value of share-based awards. The determination of fair value using the Black-Scholes option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.

6

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

        For the three month periods ended March 30, 2007 and March 31, 2006, share-based compensation expense was as follows:

	March 30,		March 31,
	2007		2006
	(in millions)
Cost of sales	$	1.4	$	1.1
Selling, general and administrative		14.1		10.3
Research and development		5.8		4.0
Pre-tax share-based compensation expense		21.3		15.4
Income tax benefit		7.7		5.6
Net share-based compensation expense	$	13.6	$	9.8

        As of March 30, 2007, total compensation cost related to non-vested stock options and restricted stock not yet recognized was $155.4 million, which is expected to be recognized over the next 48 months (36 months on a weighted-average basis). The Company has not capitalized as part of inventory any share-based compensation costs because such costs were negligible as of March 30, 2007.

  Recently Adopted Accounting Standards

        In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158). SFAS No. 158 requires the recognition of the over-funded or under-funded status of a defined benefit pension and other postretirement plan as an asset or liability in its balance sheet, the recognition of changes in that funded status through other comprehensive income in the year in which the changes occur, and the measurement of a plan’s assets and obligations that determine its funded status as of the end of the employer’s fiscal year. The Company adopted the balance sheet recognition and reporting provisions of SFAS No. 158 during the fourth fiscal quarter of 2006. The Company currently expects to adopt in the fourth fiscal quarter of 2008 the provisions of SFAS No. 158 relating to the change in measurement date, which is not expected to have a material impact on the Company’s consolidated financial statements.

        In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109 (FIN 48), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Historically, the company’s policy has been to account for uncertainty in income taxes in accordance with the provisions of Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, which considered whether the tax benefit from an uncertain tax position was probable of being sustained. Under FIN 48, the tax benefit from uncertain tax positions may be recognized only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. After initial adoption of FIN 48, deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities along with net operating loss and tax credit carryovers are recognized only for tax positions that meet the more likely than not recognition criteria. Additionally, recognition and derecognition of tax benefits from uncertain tax positions are recorded as discrete tax adjustments in the first interim period that the more likely than not threshold is met. The Company adopted FIN 48 as of the beginning of the first quarter of 2007, which resulted in an increase to total income taxes payable of $2.8 million and interest payable of $0.5 million and a decrease to total deferred tax assets of $1.0 million and beginning retained earnings of $4.3 million. In addition, the Company reclassified $27.0 million of net unrecognized tax benefit liabilities from current to non-current liabilities.

        In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, Accounting for Certain Hybrid Financial Instruments — an amendment of FASB Statements No. 133 and 140 (SFAS No. 155). SFAS No. 155 permits an entity to measure at fair value any financial instrument that contains an embedded derivative that otherwise would require bifurcation. This statement is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after an entity’s first fiscal year that begins after

7

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

September 15, 2006. The Company adopted the provisions of SFAS No. 155 in the first fiscal quarter of 2007. The adoption did not have a material effect on the Company’s consolidated financial statements.

  New Accounting Standards Not Yet Adopted

        In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159), which allows an entity to voluntarily choose to measure certain financial assets and liabilities at fair value. SFAS No. 159 will be effective for fiscal years beginning after November 15, 2007, which is the Company’s fiscal year 2008. The Company has not yet evaluated the potential impact of adopting SFAS No. 159 on its consolidated financial statements.

        In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. SFAS No. 157 will be effective for fiscal years beginning after November 15, 2007, which is the Company’s fiscal year 2008. The Company has not yet evaluated the potential impact of adopting SFAS No. 157 on its consolidated financial statements.

Note 2:  Acquisitions

  Cornéal Acquisition

        On January 2, 2007, the Company purchased all of the outstanding common stock of Groupe Cornéal Laboratoires (Cornéal), a privately held healthcare company that develops, manufactures and markets dermal fillers, viscoelastics and a range of ophthalmic products, for an aggregate purchase price of approximately $209.0 million, net of $2.3 million effectively paid in connection with the settlement of a pre-existing unfavorable distribution agreement. The Company recorded the $2.3 million charge at the acquisition date to effectively settle a pre-existing unfavorable distribution agreement between Cornéal and one of the Company’s subsidiaries primarily related to distribution rights for Juvéderm™ in the United States. Prior to the acquisition, the Company also had a $4.4 million payable to Cornéal for products purchased under the distribution agreement, which was effectively settled upon the acquisition. As a result of the acquisition, the Company obtained the technology, manufacturing process and worldwide distribution rights for Juvéderm™, Surgiderm^® and certain other hyaluronic acid dermal fillers. The acquisition was funded from the Company’s cash and equivalents balances and committed long-term credit facility.

        The following table summarizes the components of the Cornéal purchase price:

	(in millions)
Cash consideration, net of cash acquired	$	212.0
Transaction costs		3.7
Cash paid		215.7
Less relief from a previously existing third-party payable		(4.4	)
Less settlement of a pre-existing distribution agreement		(2.3	)
	$	209.0

  Purchase Price Allocation

        The Cornéal purchase price was allocated on a preliminary basis to tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date. The Company is in the process of completing its valuations of tangible and intangible assets acquired and liabilities assumed and, as a result, the estimated fair values are subject to adjustment in future periods. The excess of the purchase price over the preliminary fair value of net assets acquired was allocated to goodwill. The goodwill acquired in the Cornéal acquisition is not deductible for tax purposes.

        The Company believes the preliminary fair values assigned to the Cornéal assets acquired and liabilities assumed were based upon reasonable assumptions. The following table summarizes the preliminary estimated fair values of the net assets acquired:

8

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

	(in millions)
Current assets	$	41.9
Property, plant and equipment		19.8
Identifiable intangible assets		115.2
Goodwill		110.5
Other non-current assets		1.5
Accounts payable and accrued liabilities		( 19.3	)
Current portion of long-term debt		( 11.6	)
Deferred tax liabilities — non-current		(46.4	)
Other non-current liabilities		(2.6	)
	$	209.0

        The Company’s preliminary fair value estimates for the Cornéal purchase price allocation may change during the allowable allocation period, which is up to one year from the acquisition date, as additional information becomes available.

  In-process Research and Development

        In conjunction with the Cornéal acquisition, the Company determined that the research and development efforts related to Cornéal products did not give rise to identifiable in-process research and development assets with anticipated future economic value that could be reasonably estimated.

  Identifiable Intangible Assets

        Acquired identified intangible assets include product rights for approved indications of currently marketed products, core technology and trademarks. The amount assigned to each class of intangible assets and the related weighted-average amortization periods are summarized in the following table:

	Value of
	intangible assets		Weighted-average
	acquired		amortization period
	(in millions)
Developed technology	$	72.0	8.3 years
Core technology		39.3	13.0 years
Trademarks		3.9	9.5 years
	$	115.2

        Acquired developed technology assets primarily consist of the following currently marketed Cornéal products:

	(in millions)
Juvéderm™ — worldwide	$	55.8
Surgiderm® — worldwide		13.0
Other		3.2
	$	72.0

        Impairment evaluations in the future for acquired developed technology will occur at a consolidated cash flow level within the Company’s medical devices segment, with valuation analysis and related potential impairment actions segregated among the United States, the European Union, Canada and Australia, and the rest of the world, which were the markets used to originally value the intangible assets.

        The Company determined that the Cornéal assets acquired included proprietary technology which has alternative future use in the development of aesthetics products. These assets were separately valued and capitalized as core technology. Trademarks acquired are primarily related to Juvéderm™ and Surgiderm^®.

9

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

  Goodwill

        Goodwill represents the excess of the Cornéal purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. The Company believes that the Cornéal acquisition will produce the following significant benefits:

• Control over the Manufacturing Process and Future Development. The acquisition will allow the Company to control product quality and availability and to gain additional expertise and intellectual property to further develop the next generation of dermal fillers.

• Expanded Distribution Rights. The Company has expanded its exclusive distribution rights for Juvéderm™ from the United States, Canada and Australia to all countries worldwide.

• Enhanced Product Mix. The complementary nature of the Company’s facial aesthetics products with those of Cornéal should benefit current customers of both companies.

• Operating Efficiencies. The combination of the Company and Cornéal provides the opportunity for product cost savings due to manufacturing efficiencies.

        The Company believes that these primary factors support the amount of goodwill recognized as a result of the purchase price paid for Cornéal in relation to other acquired tangible and intangible assets.

  EndoArt SA Acquisition

        On February 22, 2007, the Company completed the acquisition of EndoArt SA (EndoArt), a provider of telemetrically-controlled (or remote-controlled) implants used in the treatment of morbid obesity and other conditions. Under the terms of the purchase agreement, the Company acquired all of the outstanding capital stock of EndoArt for an aggregate purchase price of approximately $97.1 million, net of cash acquired. The acquisition consideration was all cash, funded from the Company’s cash and equivalents balances.

        The following table summarizes the components of the EndoArt purchase price:

	(in millions)
Cash consideration, net of cash acquired	$	96.6
Transaction costs		0.5
	$	97.1

  Purchase Price Allocation

        The EndoArt purchase price was allocated on a preliminary basis to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill. The goodwill acquired in the EndoArt acquisition is not deductible for tax purposes.

        The Company believes the fair values assigned to the EndoArt assets acquired and liabilities assumed were based on reasonable assumptions. The following table summarizes the estimated fair values of net assets acquired:

	(in millions)
Current assets	$	1.0
Property, plant and equipment		0.7
Identifiable intangible assets		17.6
In-process research and development		72.0
Goodwill		10.4
Accounts payable and accrued liabilities		(0.6	)
Deferred tax liabilities		(4.0	)
	$	97.1

10

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

        The Company’s fair value estimates for the EndoArt purchase price allocation may change during the allowable allocation period, which is up to one year from the acquisition date, if additional information becomes available.

  In-process Research and Development

        In conjunction with the EndoArt acquisition, the Company recorded an in-process research and development expense of $72.0 million related to EndoArt’s EASYBAND^® Remote Adjustable Gastric Band System in the United States, which had not received approval by the U.S. Food and Drug Administration (FDA) as of the EndoArt acquisition date of February 22, 2007 and had no alternative future use.

        As of the EndoArt acquisition date, the EASYBAND^® Remote Adjustable Gastric Band System was expected to be approved by the FDA in 2011. Additional research and development expenses needed prior to expected FDA approval are expected to range from $20 million to $25 million. This range represents management’s best estimate as to the additional R&D expenses required to obtain FDA approval to market the product in the United States. Remaining efforts will be focused on completing discussions with the FDA regarding study design and performing a future clinical trial to pursue a premarket approval in the United States.

        The estimated fair value of the in-process research and development assets was determined based on the use of a discounted cash flow model using an income approach for the acquired technologies. Estimated revenues were probability adjusted to take into account the stage of completion and the risks surrounding successful development and commercialization. The estimated after-tax cash flows were then discounted to a present value using a discount rate of 28%. At the time of the EndoArt acquisition, material net cash inflows were estimated to begin in 2011.

        The major risks and uncertainties associated with the timely and successful completion of the acquired in-process projects consist of the ability to confirm the safety and efficacy of the technology based on the data from clinical trials and obtaining necessary regulatory approvals. The major risks and uncertainties associated with the core technology consist of the Company’s ability to successfully utilize the technology in future research projects. No assurance can be given that the underlying assumptions used to forecast the cash flows or the timely and successful completion of the projects will materialize as estimated. For these reasons, among others, actual results may vary significantly from estimated results.

  Identifiable Intangible Assets

        Acquired identifiable intangible assets include product rights for approved indications of currently marketed products and core technology. The amounts assigned to each class of intangible assets and the related weighted average amortization periods are summarized in the following table:

	Value of
	intangible assets		Weighted-average
	acquired		amortization period
	(in millions)
Developed technology	$	12.3	11.8 years
Core technology		5.3	15.8 years
Total	$	17.6

        The acquired developed technology asset represents the EASYBAND^® Remote Adjustable Gastric Band System, which has been approved in Europe and is pending approval in Australia. The Company determined that there are no substantive risks remaining in order to obtain approval in Australia.

        Impairment evaluations in the future for acquired developed technology will occur at a consolidated cash flow level within the Company’s medical devices segment, with valuation analysis and related potential impairment actions segregated between two markets, Europe and Australia, which were used to originally value the intangible assets.

11

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

  Goodwill

        Goodwill represents the excess of the EndoArt purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. The Company believes that the acquisition of EndoArt will produce the following significant benefits:

• Increased Market Presence and Opportunities. The acquisition of EndoArt should increase the Company’s market presence and opportunities for growth in sales, earnings and stockholder returns.

• Enhanced Product Mix. The complementary nature of the Company’s obesity intervention products with those of EndoArt should benefit the Company’s current target group of patients and customers and provide the Company with the ability to access new patients and physician customers.

        The Company believes that these primary factors support the amount of goodwill recognized as a result of the purchase price paid for EndoArt, in relation to other acquired tangible and intangible assets, including in-process research and development.

        The Company does not consider the acquisitions of Cornéal or EndoArt to be material business combinations, either individually or in the aggregate. Accordingly, the Company has not provided any supplemental pro forma operating results, which would not be materially different from historical financial statements.

  Inamed Acquisition

        On March 23, 2006, the Company completed the acquisition of Inamed Corporation, a global healthcare company that develops, manufactures and markets a diverse line of products, including breast implants, a range of facial aesthetics and obesity intervention products, for approximately $3.3 billion, consisting of approximately $1.4 billion in cash and 17,441,693 shares of the Company’s common stock.

        In connection with the Inamed acquisition, the Company recorded a total in-process research and development expense of $579.3 million in 2006 for acquired in-process research and development assets that the Company determined were not yet complete and had no alternative future uses in their current state. The Company recorded a $562.8 million expense for in-process research and development during the first fiscal quarter of 2006 and an additional charge of $16.5 million during the second fiscal quarter of 2006. The acquired in-process research and development assets are composed of Inamed’s silicone breast implant technology for use in the United States, Inamed’s Juvéderm™ dermal filler technology for use in the United States, and Inamed’s BIB^TM BioEnterics^® Intragastric Balloon technology for use in the United States, which were valued at $405.8 million, $41.2 million and $132.3 million, respectively. All of these assets had not received approval by the FDA as of the Inamed acquisition date of March 23, 2006. Because the in-process research and development assets had no alternative future use, they were charged to expense on the Inamed acquisition date.

        Unaudited pro forma operating results for the Company, assuming the Inamed acquisition occurred on January 1, 2006 and excluding any pro forma charges for in-process research and development, inventory fair value adjustments and Inamed share-based compensation expense in 2006 and transaction costs are as follows:

	Three months ended
	March 31,
(in millions, except per share amounts)	2006
Product net sales	$	714.6
Total revenues	$	725.1
Net earnings	$	103.3
Basic earnings per share	$	0.69
Diluted earnings per share	$	0.67

        The pro forma information is not necessarily indicative of the actual results that would have been achieved had the acquisition occurred as of January 1, 2006, or the results that may be achieved in the future.

12

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Note 3:  Restructuring Charges, Integration Costs, and Transition and Duplicate Operating Expenses

  Integration of Cornéal Operations

        In connection with the January 2007 Cornéal acquisition, the Company initiated an integration plan to merge the Cornéal facial aesthetics business operations with the Company’s operations. Specifically, the integration activities involve moving key business functions to Company locations and integrating Cornéal’s information systems with the Company’s information systems. The Company currently estimates that the total pre-tax charges resulting from the integration of the Cornéal facial aesthetics business operations will be between $3.5 million and $7.0 million, consisting primarily of salaries, travel and consulting costs, all of which are expected to be cash expenditures. The Company also currently intends to separate Cornéal’s facial aesthetics and ophthalmic surgical businesses and to divest the ophthalmic surgical business. The Company is currently in the process of evaluating the financial impact of separating and divesting the ophthalmic surgical business. Any potential restructuring and integration and transition costs associated with the separation and ultimate divestiture of the ophthalmic surgical business have not been included in the Company’s estimates. The Company began to record costs associated with the integration of the Cornéal facial aesthetics business in the first quarter of 2007 and expects to continue to incur costs up through and including the second quarter of 2008. During the first quarter of 2007, the Company recorded pre-tax integration and transition costs of $3.5 million as selling, general and administrative expenses.

  Restructuring and Integration of Inamed Operations

        In connection with the March 2006 Inamed acquisition, the Company initiated a global restructuring and integration plan to merge Inamed’s operations with the Company’s operations and to capture synergies through the centralization of certain general and administrative and commercial functions. Specifically, the restructuring and integration activities involve eliminating certain general and administrative positions, moving key commercial Inamed business functions to the Company’s locations around the world, integrating Inamed’s distributor operations with the Company’s existing distribution network and integrating Inamed’s information systems with the Company’s information systems.

        The Company has incurred, and anticipates that it will continue to incur, charges relating to severance, relocation and one-time termination benefits, payments to public employment and training programs, integration and transition costs, and contract termination costs in connection with the Inamed restructuring. The Company currently estimates that the total pre-tax charges resulting from the restructuring, including integration and transition costs, will be between $61.0 million and $75.0 million, all of which are expected to be cash expenditures. In addition to the pre-tax charges, the Company expects to incur capital expenditures of approximately $20.0 million to $25.0 million, primarily related to the integration of information systems. The Company also expects to pay an additional amount of approximately $1.5 million to $2.0 million for taxes related to intercompany transfers of trade businesses and net assets.

        The foregoing estimates are based on assumptions relating to, among other things, a reduction of approximately 59 positions, principally general and administrative positions at Inamed locations. These workforce reduction activities began in the second quarter of 2006 and are expected to be substantially completed by the end of 2007. Charges associated with the workforce reduction, including severance, relocation and one-time termination benefits, and payments to public employment and training programs, are currently expected to total approximately $7.0 million to $9.0 million. Estimated charges include estimates for contract and lease termination costs, including the termination of duplicative distribution arrangements. Contract and lease termination costs are expected to total approximately $29.0 million to $36.0 million. The Company began to record these costs in the second quarter of 2006 and expects to continue to incur them up through and including the fourth quarter of 2007.

        On January 30, 2007, the Company’s Board of Directors approved an additional plan to restructure and eventually sell or close the collagen manufacturing facility in Fremont, California that the Company acquired in the Inamed acquisition. This plan is the result of a reduction in anticipated future market demand for human and bovine collagen products. In connection with the restructuring and eventual sale or closure of the facility, the Company

13

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

estimates that total pre-tax charges for severance, lease termination and contract settlement costs will be between $6.0 million and $8.0 million, all of which are expected to be cash expenditures. The foregoing estimates are based on assumptions relating to, among other things, a reduction of approximately 69 positions, consisting principally of manufacturing positions at the facility, that are expected to result in estimated total employee severance costs of approximately $1.5 million to $2.0 million. Estimated charges for contract and lease termination costs are expected to total approximately $4.5 million to $6.0 million. The Company began to record these costs in the first quarter of 2007 and expects to continue to incur them up through and including the fourth quarter of 2008. Prior to any closure or sale of the facility, the Company intends to manufacture a sufficient quantity of inventories of collagen products to meet estimated market demand through 2010.

        As of March 30, 2007, the Company has recorded cumulative pre-tax restructuring charges of $16.6 million, cumulative pre-tax integration and transition costs of $22.6 million, and $1.6 million for income tax costs related to intercompany transfers of trade businesses and net assets. The restructuring charges primarily consist of employee severance, one-time termination benefits, employee relocation, termination of duplicative distributor agreements and other costs related to the restructuring of the Inamed operations. The integration and transition costs primarily consist of salaries, travel, communications, recruitment and consulting costs. During the first quarter of 2007, the Company recorded $3.1 million of restructuring charges. The Company did not incur restructuring charges related to the restructuring and integration of the Inamed operations in the first quarter of 2006. Integration and transition costs included in selling, general and administrative expenses were $1.9 million and $5.0 million for the first quarters of 2007 and 2006, respectively.

        The following table presents the cumulative restructuring activities related to the Inamed operations through March 30, 2007:

	Employee			Contract and Lease
	Severance			Termination Costs			Total
	(in millions)
Net charge during 2006	$	6.1		$	7.4		$	13.5
Spending		(2.1	)		(2.5	)		(4.6	)
Balance at December 31, 2006		4.0			4.9			8.9
Net charge during the first quarter of 2007		2.7			0.4			3.1
Spending		(0.9	)		(4.9	)		(5.8	)
Balance at March 30, 2007 (included in “Other accrued expenses”)	$	5.8		$	0.4		$	6.2

  Restructuring and Streamlining of European Operations

        Effective January 2005, the Company’s Board of Directors approved the initiation and implementation of a restructuring of certain activities related to the Company’s European operations to optimize operations, improve resource allocation and create a scalable, lower cost and more efficient operating model for the Company’s European research and development and commercial activities. Specifically, the restructuring involved moving key European research and development and select commercial functions from the Company’s Mougins, France and other European locations to the Company’s Irvine, California, Marlow, United Kingdom and Dublin, Ireland facilities and streamlining functions in the Company’s European management services group. The workforce reduction began in the first quarter of 2005 and was substantially completed by the close of the second quarter of 2006.

        As of December 31, 2006, the Company substantially completed all activities related to the restructuring and streamlining of its European operations. As of December 31, 2006, the Company has recorded cumulative pre-tax restructuring charges of $37.5 million, primarily related to severance, relocation and one-time termination benefits, payments to public employment and training programs, contract termination costs and capital and other asset-related expenses. During the first quarter of 2006, the Company recorded $2.9 million of restructuring charges related to its European operations. There were no restructuring charges recorded in the first quarter of 2007 related to the restructuring and streamlining of European operations. As of March 30, 2007, remaining accrued expenses of $6.7 million for restructuring charges related to the restructuring and streamlining of the Company’s European operations

14

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

are included in “Other accrued expenses” and “Other liabilities.”

        Additionally, as of December 31, 2006, the Company has incurred cumulative transition and duplicate operating expenses of $11.8 million relating primarily to legal, consulting, recruiting, information system implementation costs and taxes in connection with the European restructuring activities. During the first quarter of 2006, the Company recorded $4.5 million of transition and duplicate operating expenses, including a $2.6 million loss related to the sale of its Mougins, France facility, consisting of $0.1 million in cost of sales, $4.2 million in selling, general and administrative expenses and $0.2 million in research and development expenses related to this restructuring. There were no transition and duplicate operating expenses related to the restructuring and streamlining of the Company’s European operations recorded in the first quarter of 2007.

  Other Restructuring Activities

        Included in the first quarter of 2007 are $0.1 million in restructuring charges related to the EndoArt acquisition. Included in the first quarter of 2006 are $0.3 million of restructuring charges related to the scheduled June 2005 termination of the Company’s manufacturing and supply agreement with Advanced Medical Optics, which the Company spun-off in June 2002, and a $0.4 million restructuring charge reversal related to the streamlining of the Company’s operations in Japan.

Note 4:  Intangibles and Goodwill

        At March 30, 2007 and December 31, 2006, the components of amortizable and unamortizable intangibles and goodwill and certain other related information were as follows:

  Intangibles

	March 30, 2007							December 31, 2006
						Weighted							Weighted
						Average							Average
	Gross		Accumulated			Amortization		Gross		Accumulated			Amortization
	Amount		Amortization			Period		Amount		Amortization			Period
	(in millions)					(in years)		(in millions)					(in years)
Amortizable Intangible Assets:
Developed technology	$	881.7	$	(55.9	)		14.8	$	796.4	$	(39.9	)		15.4
Customer relationships		42.3		(13.8	)		3.1		42.3		(10.3	)		3.1
Licensing		154.4		(48.9	)		8.0		149.4		(44.2	)		8.0
Trademarks		27.5		(6.9	)		7.0		23.5		(5.7	)		6.5
Core technology		187.8		(14.4	)		15.2		142.6		(11.4	)		15.8
		1,293.7		(139.9	)		13.5		1,154.2		(111.5	)		13.9
Unamortizable Intangible Assets:
Business licenses		0.9		—					0.9		—
	$	1,294.6	$	(139.9	)			$	1,155.1	$	(111.5	)

        Developed technology consists primarily of current product offerings, primarily saline and silicone breast implants, obesity intervention products and dermal fillers acquired in connection with the Inamed, Cornéal and EndoArt acquisitions. Customer relationship assets consist of the estimated value of relationships with customers acquired in connection with the Inamed acquisition, primarily in the breast implant market in the United States. Licensing assets consist primarily of capitalized payments to third party licensors related to the achievement of regulatory approvals to commercialize products in specified markets and up-front payments associated with royalty obligations for products that have achieved regulatory approval for marketing. Core technology consists of proprietary technology associated with silicone breast implants and intragastric balloon systems acquired in connection with the Inamed acquisition, dermal filler technology acquired in connection with the Cornéal acquisition, gastric band technology acquired in connection with the EndoArt acquisition, and a drug delivery technology acquired in connection with the Company’s 2003 acquisition of Oculex Pharmaceuticals, Inc. The increase in developed technology, trademarks and core technology at March 30, 2007 compared to December 31, 2006 is primarily due to the Cornéal and EndoArt acquisitions. The increase in licensing assets is primarily due to a

15

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

milestone payment incurred in 2007 related to expected annual Restasis^® net sales.

        The following table provides amortization expense by major categories of acquired amortizable intangible assets for the three month periods ended March 30, 2007 and March 31, 2006, respectively:

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
Developed technology	$	16.0	$	—
Customer relationships		3.4		—
Licensing		4.8		4.5
Trademarks		1.2		0.1
Core technology		3.0		0.5
	$	28.4	$	5.1

        Amortization expense related to acquired intangible assets generally benefits multiple business functions within the Company, such as the Company’s ability to sell, manufacture, research, market and distribute products, compounds and intellectual property. The amount of amortization expense excluded from cost of sales consists primarily of amounts amortized with respect to developed technology and licensing intangible assets.

        Estimated amortization expense is $114.4 million for 2007, $112.9 million for 2008, $102.9 million for 2009, $98.5 million for 2010 and $92.1 million for 2011.

  Goodwill

	March 30,		December 31,
	2007		2006
	(in millions)
Specialty Pharmaceuticals	$	9.6	$	9.4
Medical Devices		1,941.4		1,824.2
	$	1,951.0	$	1,833.6

        Goodwill related to the Inamed, Cornéal and EndoArt acquisitions are reflected in the Medical Devices balance above.

Note 5:  Inventories

        Components of inventories were:

	March 30,		December 31,
	2007		2006
	(in millions)
Finished products	$	118.6	$	107.1
Work in process		30.6		31.2
Raw materials		44.6		30.2
Total	$	193.8	$	168.5

        At March 30, 2007, approximately $8.2 million of Allergan’s finished goods medical device inventories, primarily breast implants, were held on consignment at a large number of doctors’ offices, clinics, and hospitals worldwide. The value and quantity at any one location is not significant.

Note 6:  Income Taxes

        The provision for income taxes is determined using an estimated annual effective tax rate, which is generally less than the U.S. federal statutory rate, primarily because of lower tax rates in certain non-U.S. jurisdictions and research and development tax credits available in the United States and other jurisdictions. The Company’s effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions management uses to estimate the annual effective tax rate, including factors such as the Company’s mix of pre-tax earnings in the various tax jurisdictions in which it operates, valuation allowances against deferred tax

16

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

assets, the recognition or derecognition of tax benefits related to uncertain tax positions, utilization of research and development tax credits and changes in or the interpretation of tax laws in jurisdictions where the Company conducts operations. The Company recognizes interest on income taxes payable as interest expense and penalties related to income taxes payable as income tax expense in its consolidated statements of operations. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities along with net operating loss and credit carryforwards. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.

        Valuation allowances against deferred tax assets were $26.4 million and $20.8 million at March 30, 2007 and December 31, 2006, respectively. Changes in the valuation allowances are generally a component of the estimated annual effective tax rate. The increase in the amount of valuation allowances at March 30, 2007 compared to December 31, 2006 is primarily due to the EndoArt acquisition.

        In the first fiscal quarter of 2007, the Company adopted FIN48, which resulted in an increase in total income taxes payable of $2.8 million and interest payable of $0.5 million and a decrease in total deferred tax assets of $1.0 million and beginning retained earnings of $4.3 million. In addition, the Company reclassified $27.0 million of net unrecognized tax benefit liabilities from current to non-current liabilities. The Company’s total unrecognized tax benefit liabilities recorded under FIN 48 as of the date of adoption were $61.7 million, including $37.1 million of uncertain tax positions that were previously recognized as income tax expense and $18.7 million relating to uncertain tax positions of acquired subsidiaries that existed at the time of acquisition. Total interest accrued on income taxes payable was $7.6 million as of the date of adoption and no income tax penalties were recorded.

        The Company expects that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities related to research credits, AMT credits and transfer pricing will decrease by approximately $25.9 million due to the settlement of a U.S. Internal Revenue Service (IRS) tax audit.

        The following tax years remain subject to examination:

Major Jurisdictions	Open Years
U.S. Federal	2003 – 2005
California	2000 – 2005
Brazil	2001 – 2005
Canada	2000 – 2005
France	2004 – 2005
Germany	2002 – 2005
Italy	2002 – 2005
Ireland	2002 – 2005
Spain	2002 – 2005
United Kingdom	2004 – 2005

        The Company has not provided for withholding and U.S. taxes for the unremitted earnings of certain non-U.S. subsidiaries because it has currently reinvested these earnings indefinitely in such operations, or such earnings will be offset by appropriate credits for foreign income taxes paid. At December 31, 2006, the Company had approximately $725.5 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Such earnings would become taxable upon the sale or liquidation of these non-U.S. subsidiaries or upon the remittance of dividends. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Company’s U.S. tax liability, if any. The Company

17

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

annually updates its estimate of unremitted earnings outside the United States after the completion of each fiscal year.

Note 7:  Employee Retirement and Other Benefit Plans

        The Company sponsors various qualified defined benefit pension plans covering a substantial portion of its employees. In addition, the Company sponsors two supplemental nonqualified plans covering certain management employees and officers and one retiree health plan covering U.S. retirees and dependents.

        Components of net periodic benefit cost for the three month periods ended March 30, 2007 and March 31, 2006, respectively, were as follows:

	Three months ended
							Other
							Postretirement
	Pension Benefits						Benefits
	March 30,			March 31,			March 30,			March 31,
	2007			2006			2007			2006
	(in millions)						(in millions)
Service cost	$	6.3		$	5.7		$	0.7		$	0.8
Interest cost		7.8			6.8			0.5			0.5
Expected return on plan assets		(9.3	)		(8.1	)		—			—
Amortization of prior service cost		—			—			(0.2	)		(0.2	)
Plans acquired in business combination		1.4			—			—			—
Recognized net actuarial loss		2.9			3.2			—			—
Net periodic benefit cost	$	9.1		$	7.6		$	1.0		$	1.1

        In the first quarter of 2007, the Company recorded $1.4 million in pension expense to recognize the pension liability of two non-U.S. defined benefit pension plans acquired in connection with the Inamed acquisition that were determined to be material during the quarter. In 2007, the Company expects to contribute between $17.0 million and $18.0 million to its U.S. and non-U.S. pension plans and between $0.8 million and $0.9 million to its other postretirement plan.

Note 8:  Litigation

        The following supplements and amends the discussion set forth under Part I, Item 3, “Legal Proceedings” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

        In June 2001, after receiving paragraph 4 invalidity and noninfringement Hatch-Waxman Act certifications from Apotex, Inc. (“Apotex”) indicating that Apotex had filed an Abbreviated New Drug Application with the FDA for a generic form of Acular^®, the Company and Roche Palo Alto, LLC, formerly known as Syntex (U.S.A.) LLC, the holder of the Acular^® patent, filed a lawsuit entitled “Syntex (U.S.A.) LLC and Allergan, Inc. v. Apotex, Inc., et al.” in the United States District Court for the Northern District of California. Following a trial, the court entered final judgment in the Company’s favor in January 2004, holding that the patent at issue is valid, enforceable and infringed by Apotex’s proposed generic drug. Following an appeal by Apotex, the United States Court of Appeals for the Federal Circuit issued an opinion in May 2005, affirming the lower court’s ruling on inequitable conduct and claim construction and reversing and remanding the issue of obviousness. On remand, in June 2006, the District Court ruled that the defendants’ ANDA infringes U.S. Patent No. 5,110,493, which is owned by Syntex and licensed by Allergan, and that the patent is valid and enforceable. The District Court further ruled that the effective date of any approval of the defendants’ ANDA may not occur before the patent expires in 2009 and that the defendants, and all persons and entities acting in concert with them, are enjoined from making any preparations to make, sell, or offer for sale ketorolac tromethamine ophthalmic solution 0.5% in the United States. On April 9, 2007, the United States Court of Appeals for the Federal Circuit affirmed the District Court’s ruling in all respects and on April 17, 2007 entered a Judgment Per Curiam. In June 2001, the Company filed a separate lawsuit in Canada against Apotex similarly relating to a generic version of Acular^®. A mediation in the Canadian lawsuit was held in January 2005 and

18

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

a settlement conference previously scheduled for July 21, 2006 was taken off calendar by the court and has not yet been rescheduled.

        In June 2003, a complaint entitled “Klein-Becker usa, LLC v. Allergan, Inc.” was filed in the United States District Court for the District of Utah — Central Division. The complaint, as later amended, contained claims against the Company for intentional interference with contractual and economic relations and unfair competition under federal and Utah law. The complaint sought declaratory and injunctive relief, based on allegations that the Company interfered with Klein-Becker’s contractual and economic relations by dissuading certain magazines from running Klein-Becker’s advertisements for its anti-wrinkle cream. In July 2003, the Company filed a reply and counterclaims against Klein-Becker, asserting, as later amended, claims for false advertising, unfair competition under federal and Utah law, trade libel, trademark infringement and dilution, and seeking declaratory relief in connection with Klein-Becker’s advertisements for its anti-wrinkle cream that use the heading “Better than BOTOX^®?” On December 8, 2006, Allergan and Klein-Becker entered into a confidential binding settlement agreement. On April 3, 2007, the court entered an order of dismissal of the entire action with prejudice.

        In August 2004, a complaint entitled “Clayworth v. Allergan, Inc., et al.” was filed in the Superior Court of the State of California for the County of Alameda. The complaint, as amended, named the Company and 12 other defendants and alleged unfair business practices based upon a price fixing conspiracy in connection with the reimportation of pharmaceuticals from Canada. The complaint sought damages, equitable relief, attorney’s fees and costs. On January 4, 2007, the court filed a judgment of dismissal in favor of the pharmaceutical defendants and against the plaintiffs. The court entered a notice of entry of judgment of dismissal on January 8, 2007. On the same date, the plaintiffs filed a notice of appeal with the Court of Appeal of the State of California, First Appellate District. On April 14, 2007, the plaintiffs filed an opening brief with the Court of Appeal of the State of California.

      In February 2007, the Company received a Paragraph 4 Hatch-Waxman Act certification from Exela PharmSci, Inc. indicating that Exela had filed an Abbreviated New Drug Application with the FDA for a generic form of Alphagan^® P. In the certification, Exela contends that U.S. Patent Nos. 5,424,078, 6,562,873, 6,627,210, 6,641,834 and 6,673,337, all of which are assigned to the Company and are listed in the Orange Book under Alphagan^® P, are invalid and/or not infringed by the proposed Exela product. In March 2007, the Company filed a complaint against Exela in the United States District Court for the Central District of California entitled “Allergan, Inc. v. Exela PharmSci, Inc., et al.” In its complaint, the Company alleges that Exela’s proposed product infringes U.S. Patent No. 6,641,834. In April 2007, the Company filed an amended complaint adding Paddock Laboratories, Inc. and PharmaForce, Inc. as defendants. In April 2007, Exela filed a complaint for declaratory judgment in the United States District Court for the Eastern District of Virginia, Alexandria Division, entitled “Exela PharmSci, Inc. v. Allergan, Inc.” Exela’s complaint seeks a declaration of noninfringement, unenforceability, and/or invalidity of U.S. Patent Nos. 5,424,078, 6,562,873, 6,627,210, 6,641,834 and 6,673,337.

  Inamed Related Litigation Matters Assumed in the Company’s Acquisition of Inamed

        In connection with its purchase of Collagen Aesthetics, Inc. (Collagen) in September 1999, the Company’s subsidiary Inamed assumed certain liabilities relating to the Trilucent breast implant, a soybean oil-filled breast implant, which had been manufactured and distributed by various subsidiaries of Collagen between 1995 and November 1998. In November 1998, Collagen announced the sale of its LipoMatrix, Inc. subsidiary, manufacturer of the Trilucent implant to Sierra Medical Technologies, Inc. Collagen retained certain liabilities for Trilucent implants sold prior to November 1998.

        In March 1999, the United Kingdom Medical Devices Agency, or MDA, announced the voluntary suspension of marketing and withdrawal of the Trilucent implant in the United Kingdom as a precautionary measure. The MDA did not identify any immediate hazard associated with the use of the product but stated that it sought the withdrawal because it had received “reports of local complications in a small number of women” who had received those implants, involving localized swelling. The same notice stated that there “has been no evidence of permanent injury or harm to general health” as a result of these implants. In March 1999, Collagen agreed with the U.K. National Health Service that, for a period of time, it would perform certain product surveillance with respect to U.K. patients implanted with the Trilucent implant and pay for explants for any U.K. women with confirmed Trilucent implant ruptures.

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Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Subsequently, LipoMatrix’s notified body in Europe suspended the product’s CE Mark pending further assessment of the long-term safety of the product. Sierra Medical has since stopped sales of the product. Subsequent to acquiring Collagen, Inamed elected to continue the voluntary program.

        In June 2000, the MDA issued a hazard notice recommending that surgeons and their patients consider explanting the Trilucent implants even if the patient is asymptomatic. The MDA also recommended that women avoid pregnancy and breast-feeding until the explantation as a precautionary measure stating that “although there have been reports of breast swelling and discomfort in some women with these implants, there has been no clinical evidence of any serious health problems, so far.”

        Concurrently with the June 2000 MDA announcement, Inamed announced that, through its AEI, Inc. subsidiary, it had undertaken a comprehensive program of support and assistance for women who have received Trilucent breast implants, under which it was covering medical expenses associated with the removal and replacement of those implants for women in the European Community, the United States and other countries. After consulting with competent authorities in each affected country, Inamed terminated this support program in March 2005 in all countries other than the United States and Canada. Notwithstanding the termination of the general program, Inamed continued to pay for explantations and related expenses in certain cases if a patient justified her delay in having her Trilucent implants removed on medical grounds or owing to lack of notice. Under this program, Inamed may pay a fee to any surgeon who conducts an initial consultation with any Trilucent implantee. Inamed also pays for the explantation procedure and related costs, and for replacement (non-Trilucent) implants for women who are candidates for and who desire them. To date, virtually all of the U.K. residents and more than 95% of the non-U.K. residents who have requested explantations as a result of an initial consultation have had them performed. However, there may be other U.K. residents and non-U.K. residents who have not come forth that may request explantation.

        A Spanish consumer union has commenced a single action in the Madrid district court in which the consumer union, Avinesa, alleges that it represents 41 Spanish Trilucent explantees. To date, approximately 65 women in Spain have commenced individual legal proceedings in court against Inamed, of which approximately 15 were still pending as of March 30, 2007. Prior to the issuance of a decision by an Appellate Court sitting in Madrid in the second quarter of 2005, Inamed won approximately one-third, and lost approximately two-thirds of its Trilucent cases in the lower courts. The average damages awarded in cases the Company lost were approximately $18,000. In the second quarter of 2005, in a case called Gomez Martin v. AEI, for the first time an appellate court in Spain issued a decision holding that Trilucent breast implants were not “defective” within the meaning of applicable Spanish product liability law and dismissed a €60,000 (approximately $78,000) award issued by the lower court. While this ruling is a positive development for Inamed, it may not be followed by other Spanish appellate courts or could be modified or found inapplicable to other cases filed in the Madrid district. Since the ruling in Gomez Martin v. AEI, Inamed has had greater success in winning the Spanish cases than before the ruling. In 2006, the Company settled nine Spanish litigated matters; the average compensation paid per case was under €12,000 (approximately $16,000).

        As of March 30, 2007, the Company had an accrual for future Trilucent claims, costs, and expenses of $3.3 million.

        In May 2002, Ernest Manders filed a lawsuit against Inamed and other defendants entitled “Ernest K. Manders, M.D. v. McGhan Medical Corporation, et al.”, in the United States District Court for the Western District of Pennsylvania, Case No. 02-CV-1341. Manders’ amended complaint seeks damages for alleged infringement of a patent allegedly held by Manders in the field of tissue expanders. In February 2003, Inamed answered the complaint, denying its material allegations and counterclaiming against Manders for declarations of invalidly as well as noninfringement. Following fact discovery and expert discovery, Manders elected to limit his claim for infringement to twelve of the forty-six claims in his patent. In September 2004 and October 2004, the court held a Markman hearing on claim construction under the patent and in February 2006, the court issued its Memorandum Opinion on claim construction. In June 2006, the parties participated in mediation but were unable to reach a settlement. At an April 19, 2007 status conference, the court dealt with various procedural issues and did not set a date for a further status conference.

20

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

        The Company is involved in various other lawsuits and claims arising in the ordinary course of business. These other matters are, in the opinion of management, immaterial both individually and in the aggregate with respect to the Company’s consolidated financial position, liquidity or results of operations.

        Because of the uncertainties related to the incurrence, amount and range of loss on any pending litigation, investigation or claim, management is currently unable to predict the ultimate outcome of any litigation, investigation or claim, determine whether a liability has been incurred or make an estimate of the reasonably possible liability that could result from an unfavorable outcome. The Company believes, however, that the liability, if any, resulting from the aggregate amount of uninsured damages for any outstanding litigation, investigation or claim will not have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations. However, an adverse ruling in a patent infringement lawsuit involving the Company could materially affect its ability to sell one or more of its products or could result in additional competition. In view of the unpredictable nature of such matters, the Company cannot provide any assurances regarding the outcome of any litigation, investigation or claim to which the Company is a party or the impact on the Company of an adverse ruling in such matters. As additional information becomes available, the Company will assess its potential liability and revise its estimates.

Note 9:  Guarantees

        The Company’s Certificate of Incorporation, as amended, provides that the Company will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each person that is involved in or is, or is threatened to be, made a party to any action, suit or proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. The Company has also entered into contractual indemnity agreements with each of its directors and executive officers pursuant to which, among other things, the Company has agreed to indemnify such directors and executive officers against any payments they are required to make as a result of a claim brought against such executive officer or director in such capacity, excluding claims (i) relating to the action or inaction of a director or executive officer that resulted in such director or executive officer gaining personal profit or advantage, (ii) for an accounting of profits made from the purchase or sale of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934 or similar provisions of any state law or (iii) that are based upon or arise out of such director’s or executive officer’s knowingly fraudulent, deliberately dishonest or willful misconduct. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies intended to reduce the Company’s monetary exposure and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal.

        The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trials investigators in its drug development programs, in sponsored research agreements with academic and not-for-profit institutions, in various comparable agreements involving parties performing services for the Company in the ordinary course of business, and in its real estate leases. The Company also customarily agrees to certain indemnification provisions in its drug discovery and development collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s compounds or drug candidates. With respect to real estate lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar, but in addition provide some limited indemnification for the collaborator in the event of third party claims alleging infringement of intellectual property rights. In each of the above cases, the term of these indemnification provisions generally survives the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions

21

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability intended to reduce the Company’s exposure for indemnification and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal.

Note 10:  Product Warranties

        The Company provides warranty programs for breast implant sales primarily in the United States, Europe, and certain other countries. Management estimates the amount of potential future claims from these warranty programs based on actuarial analyses. Expected future obligations are determined based on the history of product shipments and claims and are discounted to a current value. The liability is included in both current and long-term liabilities on the Company’s consolidated balance sheet. The U.S. programs include the ConfidencePlus^tm and ConfidencePlus^tm Premier warranty programs. The ConfidencePlus^tm program currently provides lifetime product replacement and $1,200 of financial assistance for surgical procedures within ten years of implantation. The ConfidencePlus^tm Premier program, which requires a low additional enrollment fee, currently provides lifetime product replacement, $2,400 of financial assistance for surgical procedures within ten years of implantation and contralateral implant replacement. The enrollment fee is deferred and recognized as income over the ten year warranty period for financial assistance. The warranty programs in non-U.S. markets have similar terms and conditions to the U.S. programs. The Company does not warrant any level of aesthetic result and, as required by government regulation, makes extensive disclosures concerning the risks of the use of its products and implantation surgery. Changes to actual warranty claims incurred and interest rates could have a material impact on the actuarial analysis and the Company’s estimated liabilities. Substantially all of the product warranty liability arises from the U.S. warranty programs. The Company does not currently offer any similar warranty program on any other product.

        The following table provides a reconciliation of the change in estimated product warranty liabilities through March 30, 2007:

	(in millions)
Balance at December 31, 2006	$	24.8
Provision for warranties issued during the period		1.4
Settlements made during the period		(1.1	)
Balance at March 30, 2007	$	25.1
Current portion	$	6.1
Non-current portion		19.0
Total	$	25.1

Note 11:  Earnings Per Share

        The table below presents the computation of basic and diluted earnings (loss) per share:

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions, except per share amounts)
Net earnings (loss)	$	43.8	$	( 444.8	)
Weighted average number of shares issued		152.0		135.1
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price		1.7		—
Diluted shares		153.7		135.1
Earnings (loss) per share:
Basic	$	0.29	$	(3.29	)
Diluted	$	0.28	$	(3.29	)

22

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

        For the three month period ended March 30, 2007, options to purchase 4.4 million shares of common stock at exercise prices ranging from $94.65 to $127.51 per share were outstanding, but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. Stock options outstanding during the three month period ended March 31, 2006 were not included in the computation of diluted earnings per share because the Company incurred a loss from continuing operations and, as a result, the impact would be antidilutive. Options to purchase approximately 11.7 million shares of common stock at exercise prices ranging from $12.75 to $127.51 per share were outstanding as of March 31, 2006. Additionally, for the three month period ended March 31, 2006, the effect of approximately 2.5 million common shares related to the Company’s convertible subordinated notes was not included in the computation of diluted earnings per share because the Company incurred a loss from continuing operations and, as a result, the impact would be antidilutive.

Note 12:  Comprehensive Income (Loss)

        The following table summarizes the components of comprehensive income (loss) for the three month periods ended March 30, 2007 and March 31, 2006:

	Three months ended
(in millions)	March 30, 2007									March 31, 2006
				Tax								Tax
	Before-tax			(expense)			Net-of-tax			Before-tax		(expense)			Net-of-tax
	Amount			or benefit			amount			amount		or benefit			amount
Foreign currency translation adjustments	$	11.3		$	—		$	11.3		$	3.5	$	—		$	3.5
Deferred holding gains on derivatives designated as cash flow hedges		—			—			—			12.6		(5.0	)		7.6
Amortization of deferred holding gains on derivatives designated as cash flow hedges		(0.3	)		0.1			(0.2	)		—		—			—
Unrealized holding gain on available-for-sale securities		3.1			(1.2	)		1.9			3.5		(1.4	)		2.1
Other comprehensive income	$	14.1		$	(1.1	)		13.0		$	19.6	$	(6.4	)		13.2
Net earnings (loss)								43.8								(444.8	)
Total comprehensive income (loss)							$	56.8							$	(431.6	)

Note 13:  Business Segment Information

        Through the first fiscal quarter of 2006, the Company operated its business on the basis of a single reportable segment — specialty pharmaceuticals. Due to the Inamed acquisition, beginning with the second fiscal quarter of 2006, the Company operates its business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for glaucoma therapy, ocular inflammation, infection, allergy and dry eye; skin care products for acne, psoriasis and other prescription and over-the-counter dermatological products; and Botox^® for certain therapeutic and cosmetic indications. The medical devices segment produces breast implants for aesthetic augmentation and reconstructive surgery; facial aesthetics products; the LAP-BAND^® System designed to treat severe and morbid obesity and the BIB^tm System for the treatment of obesity; and ophthalmic surgical devices. The Company provides global marketing strategy teams to ensure development and execution of a consistent marketing strategy for its products in all geographic regions that share similar distribution channels and customers.

        The Company evaluates segment performance on a revenue and operating income (loss) basis exclusive of general and administrative expenses and other indirect costs, restructuring charges, in-process research and development expenses, amortization of identifiable intangible assets related to the Inamed, Cornéal and EndoArt acquisitions and certain other adjustments, which are not allocated to the Company’s segments for performance assessment by the Company’s chief operating decision maker. Other adjustments excluded from the Company’s segments for performance assessment represent income or expenses that do not reflect, according to established Company-defined criteria, operating income or expenses associated with the Company’s core business activities. Because operating segments are generally defined by the products they design and sell, they do not make sales to each other. The Company does not discretely allocate assets to its operating segments, nor does the Company’s

23

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

chief operating decision maker evaluate operating segments using discrete asset information.

Operating Segments

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
Product net sales:
Specialty pharmaceuticals	$	697.4	$	615.2
Medical devices		175.0		—
Total product net sales		872.4		615.2
Other corporate and indirect revenues		14.1		10.5
Total revenues	$	886.5	$	625.7

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
Operating income (loss):
Specialty pharmaceuticals	$	222.6	$	198.1
Medical devices		54.6		—
Total segments		277.2		198.1
General and administrative expenses, other indirect costs and other adjustments		83.6		55.3
In-process research and development		72.0		562.8
Amortization of acquired intangible assets (a)		23.0		—
Restructuring charges		3.2		2.8
Total operating income (loss)	$	95.4	$	(422.8	)

(a) Represents amortization of identifiable intangible assets related to the Inamed, Cornéal and EndoArt acquisitions.

        Product net sales for the Company’s various global product portfolios are presented below. The Company’s principal markets are the United States, Europe, Latin America and Asia Pacific. The U.S. information is presented separately as it is the Company’s headquarters country. U.S. sales, including manufacturing operations, represented 65.6% and 67.4% of the Company’s total consolidated product net sales for the three month periods ended March 30, 2007 and March 31, 2006, respectively.

        Sales to two customers in the Company’s specialty pharmaceuticals segment generated over 10% of the Company’s total consolidated product net sales. Sales to McKesson Drug Company for the three month periods ended March 30, 2007 and March 31, 2006 were 11.5% and 16.2% of the Company’s total consolidated product net sales, respectively. Sales to Cardinal Healthcare for the three month periods ended March 30, 2007 and March 31, 2006 were 12.4% and 14.7% of the Company’s total consolidated product net sales, respectively. No other country or single customer generates over 10% of total product net sales. Net sales for the Europe region also include sales to customers in Africa and the Middle East, and net sales in the Asia Pacific region include sales to customers in Australia and New Zealand.

24

Allergan, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

        Long-lived assets are assigned to geographic regions based upon management responsibility for such items.

Net Sales by Product Line

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
Specialty Pharmaceuticals:
Eye Care Pharmaceuticals	$	403.0	$	361.9
Botox®/Neuromodulators		267.9		223.0
Skin Care		26.5		30.3
Total Specialty Pharmaceuticals		697.4		615.2
Medical Devices:
Breast Aesthetics		69.2		—
Obesity Intervention		53.0		—
Facial Aesthetics		43.0		—
Core Medical Devices		165.2		—
Ophthalmic Surgical Devices		9.8		—
Total Medical Devices		175.0		—
Total product net sales	$	872.4	$	615.2

Geographic Information

Product Net Sales

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
United States	$	564.2	$	414.5
Europe		183.2		112.3
Latin America		45.8		36.3
Asia Pacific		40.3		28.0
Other		37.6		23.9
		871.1		615.0
Manufacturing operations		1.3		0.2
Total product net sales	$	872.4	$	615.2

Long-Lived Assets

	March 30,		December 31,
	2007		2006
	(in millions)
United States	$	2,961.0	$	2,986.4
Europe		291.7		16.0
Latin America		19.2		18.7
Asia Pacific		6.5		6.6
Other		0.2		0.2
		3,278.6		3,027.9
Manufacturing operations		286.7		279.8
General corporate		213.7		215.3
Total	$	3,779.0	$	3,523.0

        The increase in long-lived assets at March 30, 2007 compared to December 31, 2006 was primarily due to the Cornéal and EndoArt acquisitions. Long-lived assets related to the Cornéal and EndoArt acquisitions, including goodwill and intangible assets, are reflected in the Europe balance above. Goodwill and intangible assets related to the Inamed acquisition are reflected in the United States balance above.

25

ALLERGAN, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

        This financial review presents our operating results for the three month periods ended March 30, 2007 and March 31, 2006, and our financial condition at March 30, 2007. Except for the historical information contained herein, the following discussion contains forward-looking statements which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties and other factors throughout this report and specifically under the caption “Risk Factors” in Item 1A of Part II below. The following review should be read in connection with the information presented in our unaudited condensed consolidated financial statements and related notes for the three month period ended March 30, 2007 and our audited consolidated financial statements and related notes for the year ended December 31, 2006.

Critical Accounting Policies

        The preparation and presentation of financial statements in conformity with U.S. generally accepted accounting principles requires us to establish policies and to make estimates and assumptions that affect the amounts reported in our consolidated financial statements. In our judgment, the accounting policies, estimates and assumptions described below have the greatest potential impact on our consolidated financial statements. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates.

  Revenue Recognition

        We recognize revenue from product sales when goods are shipped and title and risk of loss transfer to our customers. A substantial portion of our revenue is generated by the sale of specialty pharmaceutical products (primarily eye care pharmaceuticals and skin care products) to wholesalers within the United States, and we have a policy to attempt to maintain average U.S. wholesaler inventory levels at an amount less than eight weeks of our net sales. A portion of our revenue is generated from consigned inventory of breast implants maintained at physician, hospital and clinic locations. These customers are contractually obligated to maintain a specific level of inventory and to notify us upon the use of consigned inventory. Revenue for consigned inventory is recognized at the time we are notified by the customer that the product has been used. Notification is usually through the replenishing of the inventory, and we periodically review consignment inventories to confirm the accuracy of customer reporting.

        We generally offer cash discounts to customers for the early payment of receivables. Those discounts are recorded as a reduction of revenue and accounts receivable in the same period that the related sale is recorded. The amounts reserved for cash discounts were $2.7 million and $2.3 million at March 30, 2007 and December 31, 2006, respectively. Provisions for cash discounts deducted from consolidated sales in the first quarter of 2007 and the first quarter of 2006 were $8.2 million and $7.4 million, respectively. We permit returns of product from most product lines by any class of customer if such product is returned in a timely manner, in good condition and from normal distribution channels. Return policies in certain international markets and for certain medical device products, primarily breast implants, provide for more stringent guidelines in accordance with the terms of contractual agreements with customers. Our estimates for sales returns are based upon the historical patterns of products returned matched against the sales from which they originated, and management’s evaluation of specific factors that may increase the risk of product returns. The amount of allowances for sales returns recognized in our consolidated balance sheets at March 30, 2007 and December 31, 2006 were $22.7 million and $20.1 million, respectively. Provisions for sales returns deducted from consolidated sales were $71.1 million and $7.7 million in the first quarter of 2007 and the first quarter of 2006, respectively. The increase in the allowance for sales returns at March 30, 2007 compared to December 31, 2006 and the increase in the provision for sales returns in the first quarter of 2007 compared to the first quarter of 2006 were primarily due to the acquired Inamed medical device products, primarily breast implants, which generally have a significantly higher rate of return than specialty pharmaceutical products. Historical allowances for cash discounts and product returns have been within the amounts reserved or accrued.

        We participate in various managed care sales rebate and other incentive programs, the largest of which relates to Medicaid and Medicare. Sales rebate and other incentive programs also include chargebacks, which are contractual discounts given primarily to federal government agencies, health maintenance organizations, pharmacy benefits

26

managers and group purchasing organizations. Sales rebates and incentive accruals reduce revenue in the same period that the related sale is recorded and are included in “Other accrued expenses” in our consolidated balance sheets. The amounts accrued for sales rebates and other incentive programs at March 30, 2007 and December 31, 2006 were $76.8 million and $71.2 million, respectively. Provisions for sales rebates and other incentive programs deducted from consolidated sales were $55.5 million and $53.2 million in the first quarter of 2007 and the first quarter of 2006, respectively. The $5.6 million increase in the amounts accrued for sales rebates and other incentive programs at March 30, 2007 compared to December 31, 2006 is primarily due to a difference in the timing of when payments were made against accrued amounts at March 30, 2007 compared to December 31, 2006, and an increase in the ratio of U.S. specialty pharmaceutical sales, principally eye care pharmaceutical products, which are subject to such rebate and incentive programs. In addition, an increase in our published list prices in the United States for pharmaceutical products, which occurred for several of our products early in each of 2007 and 2006, generally results in higher provisions for sales rebates and other incentive programs deducted from consolidated sales.

        Our procedures for estimating amounts accrued for sales rebates and other incentive programs at the end of any period are based on available quantitative data and are supplemented by management’s judgment with respect to many factors, including but not limited to, current market dynamics, changes in contract terms, changes in sales trends, an evaluation of current laws and regulations and product pricing. Quantitatively, we use historical sales, product utilization and rebate data and apply forecasting techniques in order to estimate our liability amounts. Qualitatively, management’s judgment is applied to these items to modify, if appropriate, the estimated liability amounts. There are inherent risks in this process. For example, customers may not achieve assumed utilization levels; customers may misreport their utilization to us; and actual movements of the U.S. Consumer Price Index — Urban (CPI-U), which affect our rebate programs with U.S. federal and state government agencies, may differ from those estimated. On a quarterly basis, adjustments to our estimated liabilities for sales rebates and other incentive programs related to sales made in prior periods have not been material and have generally been less than 0.5% of consolidated product net sales. An adjustment to our estimated liabilities of 0.5% of consolidated product net sales on a quarterly basis would result in an increase or decrease to net sales and earnings before income taxes of approximately $4.0 million to $5.0 million. The sensitivity of our estimates can vary by program and type of customer. Additionally, there is a significant time lag between the date we determine the estimated liability and when we actually pay the liability. Due to this time lag, we record adjustments to our estimated liabilities over several periods, which can result in a net increase to earnings or a net decrease to earnings in those periods. Material differences may result in the amount of revenue we recognize from product sales if the actual amount of rebates and incentives differ materially from the amounts estimated by management.

        We recognize license fees, royalties and reimbursement income for services provided as other revenues based on the facts and circumstances of each contractual agreement. In general, we recognize income upon the signing of a contractual agreement that grants rights to products or technology to a third party if we have no further obligation to provide products or services to the third party after entering into the contract. We defer income under contractual agreements when we have further obligations indicating that a separate earnings process has not been completed.

  Pensions

        We sponsor various pension plans in the United States and abroad in accordance with local laws and regulations. Our U.S. pension plans account for a large majority of our aggregate pension plans’ net periodic benefit costs and projected benefit obligations. In connection with these plans, we use certain actuarial assumptions to determine the plans’ net periodic benefit costs and projected benefit obligations, the most significant of which are the expected long-term rate of return on assets and the discount rate.

        Our assumption for the weighted average expected long-term rate of return on assets in our U.S. pension plans for determining the net periodic benefit cost is 8.25% for 2007, which is the same rate used for 2006. Our assumptions for the weighted average expected long-term rate of return on assets in our non-U.S. pension plans were 6.43% and 6.19% for 2007 and 2006, respectively. We determine, based upon recommendations from our pension plans’ investment advisors, the expected rate of return using a building block approach that considers diversification and rebalancing for a long-term portfolio of invested assets. Our investment advisors study historical market returns and preserve long-term historical relationships between equities and fixed income in a manner consistent with the widely-accepted capital market principle that assets with higher volatility generate a greater return over the long run. They also evaluate market factors such as inflation and interest rates before long-term capital market assumptions are determined. The expected rate of return is applied to the market-related value of plan assets. Market conditions

27

and other factors can vary over time and could significantly affect our estimates of the weighted average expected long-term rate of return on our plan assets. As a sensitivity measure, the effect of a 0.25% decline in our rate of return on assets assumptions for our U.S. and non-U.S. pension plans would increase our expected 2007 pre-tax pension benefit cost by approximately $1.2 million.

        The weighted average discount rates used to calculate our U.S. and non-U.S. pension benefit obligations at December 31, 2006 and our net periodic benefit costs for 2007 were 5.90% and 4.65%, respectively. The discount rates used to calculate our U.S. and non-U.S. net periodic benefit costs for 2006 were 5.60% and 4.24%, respectively. We determine the discount rate largely based upon an index of high-quality fixed income investments (for our U.S. plans, we use the U.S. Moody’s Aa Corporate Long Bond Index and for our non-U.S. plans, we use the iBoxx € Corporate AA 10+ Year Index and the iBoxx £ Corporate AA 15+ Year Index) and, for our U.S. plans, a constructed hypothetical portfolio of high quality fixed income investments with maturities that mirror the pension benefit obligations at the plans’ measurement date. Market conditions and other factors can vary over time and could significantly affect our estimates for the discount rates used to calculate our pension benefit obligations and net periodic pension benefit costs for future years. As a sensitivity measure, the effect of a 0.25% decline in the discount rate assumption for our U.S and non-U.S. pension plans would increase our expected 2007 pre-tax pension benefit costs by approximately $3.7 million and increase our pension plans’ projected benefit obligations at December 31, 2006 by approximately $27.0 million.

  Share-Based Awards

        We recognize compensation expense for all share-based awards made to employees and directors. The fair value of share-based awards is estimated at the grant date using the Black-Scholes option-pricing model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period using the straight-line single option method. The determination of fair value using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. We currently estimate stock price volatility based upon an equal weighting of our five year historical average and the average implied volatility of at-the-money options traded in the open market. We estimate employee stock option exercise behavior based on actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. Share-based compensation expense is recognized only for those awards that are ultimately expected to vest and we have applied an estimated forfeiture rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs.

  Income Taxes

        The provision for income taxes is determined using an estimated annual effective tax rate, which is generally less than the U.S. federal statutory rate, primarily because of lower tax rates in certain non-U.S. jurisdictions and research and development (R&D) tax credits available in the United States. Our effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions we use to estimate our annual effective tax rate, including factors such as our mix of pre-tax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or derecognition of tax benefits related to uncertain tax positions, utilization of R&D tax credits and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers. We record a valuation allowance against our deferred tax assets to reduce the net carrying value to an amount that we believe is more likely than not to be realized. When we establish or reduce the valuation allowance against our deferred tax assets, our provision for income taxes will increase or decrease, respectively, in the period such determination is made.

        Valuation allowances against our deferred tax assets were $26.4 million and $20.8 million at March 30, 2007 and December 31, 2006, respectively. Changes in the valuation allowances are recognized in the provision for income taxes as incurred and are generally included as a component of the estimated annual effective tax rate. The increase in the amount of valuation allowances at March 30, 2007 compared to December 31, 2006 is primarily due to our

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February 2007 acquisition of EndoArt SA, or EndoArt. Material differences in the estimated amount of valuation allowances may result in an increase or decrease in the provision for income taxes if the actual amounts for valuation allowances required against deferred tax assets differ from the amounts we estimate.

        We have not provided for withholding and U.S. taxes for the unremitted earnings of certain non-U.S. subsidiaries because we have currently reinvested these earnings indefinitely in these foreign operations. At December 31, 2006, we had approximately $725.5 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Income tax expense would be incurred if these funds were remitted to the United States. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against our U.S. tax liability, if any. We annually update our estimate of unremitted earnings outside the United States after the completion of each fiscal year.

        In the first quarter of 2007, we adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109 (FIN 48), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Historically, our policy has been to account for uncertainty in income taxes in accordance with the provisions of Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, which considered whether the tax benefit from an uncertain tax position was probable of being sustained. Under FIN 48, the tax benefit from uncertain tax positions may be recognized only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. After initial adoption of FIN 48, deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers are recognized only for tax positions that meet the more likely than not recognition criteria. Additionally, recognition and derecognition of tax benefits from uncertain tax positions are recorded as discrete tax adjustments in the first interim period that the more likely than not threshold is met. Due to the inherit risks in the estimates and assumptions used in determining the sustainability of our tax positions and in the measurement of the related tax, our provision for income taxes and our effective tax rate may vary significantly from our estimates and from amounts reported in future or prior periods. We discuss this change in accounting principle and the effect on our consolidated financial statements in Note 6, Income Taxes, in the financial statements under Item 1(D) of Part I of this report.

  Purchase Price Allocation

        The purchase price allocation for acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired, including in-process research and development, and liabilities assumed based on their respective fair values. Additionally, we must determine whether an acquired entity is considered to be a business or a set of net assets, because a portion of the purchase price can only be allocated to goodwill in a business combination.

        On January 2, 2007, we acquired Groupe Cornéal Laboratoires, or Cornéal, for an aggregate purchase price of approximately $209.0 million, net of cash acquired. On February 22, 2007, we acquired EndoArt for an aggregate purchase price of approximately $97.1 million, net of cash acquired. The purchase prices for the acquisitions were allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. We engaged an independent third-party valuation firm to assist us in determining the estimated fair values of in-process research and development, identifiable intangible assets and certain tangible assets. Such a valuation requires significant estimates and assumptions, including but not limited to, determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, estimating future cash flows, and developing appropriate discount rates. We believe the estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions. However, the fair value estimates for the purchase price allocations may change during the allowable allocation period, which is up to one year from the acquisition dates, if additional information becomes available.

Operations

        Headquartered in Irvine, California, we are a technology-driven, global health care company that discovers,

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develops and commercializes specialty pharmaceutical and medical device products for the ophthalmic, neurological, facial aesthetics, medical dermatological, breast aesthetics, obesity intervention and other specialty markets. We are a pioneer in specialty pharmaceutical research, targeting products and technologies related to specific disease areas such as glaucoma, retinal disease, dry eye, psoriasis, acne and movement disorders. Additionally, we discover, develop and market medical devices, aesthetic-related pharmaceuticals, and over-the-counter products. Within these areas, we are an innovative leader in saline and silicone gel-filled breast implants, dermal facial fillers and obesity intervention products, therapeutic and other prescription products, and to a limited degree, over-the-counter products that are sold in more than 100 countries around the world. We employ approximately 7,330 persons around the world. Our principal markets are the United States, Europe, Latin America and Asia Pacific.

Results of Operations

        Through the first fiscal quarter of 2006, we operated our business on the basis of a single reportable segment — specialty pharmaceuticals. Due to the Inamed acquisition, beginning in the second fiscal quarter of 2006, we operate our business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for glaucoma therapy, ocular inflammation, infection, allergy and dry eye; skin care products for acne, psoriasis and other prescription and over-the-counter dermatological products; and Botox^® for certain therapeutic and aesthetic indications. The medical devices segment produces breast implants for aesthetic augmentation and reconstructive surgery; facial aesthetics products; the LAP-BAND^® System designed to treat severe and morbid obesity and the BIB^tm System for the treatment of obesity; and ophthalmic surgical devices. We provide global marketing strategy teams to coordinate the development and execution of a consistent marketing strategy for our products in all geographic regions that share similar distribution channels and customers.

        Management evaluates our business segments and various global product portfolios on a revenue basis, which is presented below. We also report sales performance using the non-GAAP financial measure of constant currency sales. Constant currency sales represent current period reported sales, adjusted for the translation effect of changes in average foreign exchange rates between the current period and the corresponding period in the prior year. We calculate the currency effect by comparing adjusted current period reported sales, calculated using the monthly average foreign exchange rates for the corresponding period in the prior year, to the actual current period reported sales. We routinely evaluate our net sales performance at constant currency so that sales results can be viewed without the impact of changing foreign currency exchange rates, thereby facilitating period-to-period comparisons of our sales. Generally, when the U.S. dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower, respectively, than growth reported at actual exchange rates.

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        The following table compares net sales by product line within each reportable segment and certain selected pharmaceutical products for the three month periods ended March 30, 2007 and March 31, 2006:

	Three months ended
	March 30,			March 31,			Change in Product Net Sales								Percent Change in Product Net Sales
(in millions)	2007			2006			Total			Performance			Currency		Total			Performance			Currency
Net Sales by Product Line:
Specialty pharmaceuticals:
Eye Care Pharmaceuticals	$	403.0		$	361.9		$	41.1		$	33.9		$	7.2		11.4	%		9.4	%		2.0	%
Botox/Neuromodulator		267.9			223.0			44.9			41.1			3.8		20.1	%		18.4	%		1.7	%
Skin Care		26.5			30.3			(3.8	)		(3.8	)		—		(12.5	)%		(12.5	)%		—	%
Total Specialty Pharmaceuticals		697.4			615.2			82.2			71.2			11.0		13.4	%		11.6	%		1.8	%
Medical Devices:
Breast Aesthetics		69.2			—			69.2			69.2			—		—	%		—	%		—	%
Obesity Intervention		53.0			—			53.0			53.0			—		—	%		—	%		—	%
Facial Aesthetics		43.0			—			43.0			43.0			—		—	%		—	%		—	%
Core Medical Devices		165.2			—			165.2			165.2			—		—	%		—	%		—	%
Ophthalmic Surgical Devices		9.8			—			9.8			9.8			—		—	%		—	%		—	%
Total Medical Devices		175.0			—			175.0			175.0			—		—	%		—	%		—	%
Total product net sales	$	872.4		$	615.2		$	257.2		$	246.2		$	11.0		41.8	%		40.0	%		1.8	%
Domestic product net sales		65.6	%		67.4	%
International product net sales		34.4	%		32.6	%
Selected Product Sales (a):
Alphagan P, Alphagan and Combigan	$	77.5		$	71.0		$	6.5		$	4.7		$	1.8		9.2	%		6.7	%		2.5	%
Lumigan and Ganfort		89.0			72.9			16.1			13.9			2.2		22.1	%		19.1	%		3.0	%
Other Glaucoma		3.6			4.4			(0.8	)		(1.0	)		0.2		(19.4	)%		(23.5	)%		4.1	%
Restasis		78.4			66.1			12.3			12.3			—		18.7	%		18.7	%		—	%

(a) Percentage change in selected product net sales is calculated on amounts reported to the nearest whole dollar.

  Product Net Sales

        The $257.2 million increase in product net sales in the first quarter of 2007 compared to the first quarter of 2006 primarily resulted from $165.2 million of core medical device product net sales in the first quarter of 2007 related to the Inamed and Cornéal acquisitions and an increase of $82.2 million in our specialty pharmaceuticals product net sales. The increase in specialty pharmaceuticals product net sales is due primarily to increases in sales of our eye care pharmaceuticals and Botox^® product lines.

        Eye care pharmaceuticals sales increased in the first quarter of 2007 compared to first quarter of 2006 primarily because of strong growth in sales of Restasis^®, our therapeutic treatment for chronic dry eye disease, an increase in sales of our glaucoma drug Lumigan^®, including strong sales growth from Ganfort^®, our Lumigan^® and timolol combination, which we launched in 2006 in certain European markets, an increase in sales of Combigan^tm in Canada, Europe and Latin America, an increase in product net sales of Alphagan^® P 0.1%, our most recent generation of Alphagan^® for the treatment of glaucoma that we launched in the United States in the first quarter of 2006, an increase in sales of Acular LS^®, our more recent non-steriodal anti-inflammatory, an increase in sales of Elestat^®, our topical antihistamine used for the prevention of itching associated with allergic conjunctivitis, growth in sales of eye drop products, primarily Refresh^® and Optive™, our recently launched artificial tear, and an increase in sales of Zymar^®, a newer anti-infective. This increase in eye care pharmaceuticals sales was partially offset by lower sales of Alphagan^® P 0.15% due to a general decline in U.S. wholesaler demand resulting from a decrease in promotion efforts. We continue to believe that generic formulations of Alphagan^® may have a negative effect on future net sales of our Alphagan^® franchise. We estimate the majority of the increase in our eye care pharmaceuticals sales was due to a shift in sales mix to a greater percentage of higher priced products, and an overall net increase in the volume of product sold. We increased the published list prices for certain eye care pharmaceutical products in the United States, ranging from seven percent to nine percent, effective February 3, 2007. We increased the published U.S. list price for Restasis^® by seven percent, Lumigan^® by seven percent, Alphagan^® P 0.15% and Alphagan^® P 0.1% by eight percent, Acular LS^® by nine percent, Elestat^® by seven percent, and Zymar^® by seven percent. This increase in prices had a positive net effect on our U.S. sales for the first quarter of 2007, but the actual net effect is difficult to determine due to the various managed care sales rebate and other incentive programs in which we participate. Wholesaler buying patterns and the change in dollar value of prescription product mix also affected our reported net sales dollars,

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although we are unable to determine the impact of these effects. We have a policy to attempt to maintain average U.S. wholesaler inventory levels of our specialty pharmaceutical products at an amount less than eight weeks of our net sales. At March 30, 2007, based on available external and internal information, we believe the amount of average U.S. wholesaler inventories of our specialty pharmaceutical products was near the lower end of our stated policy levels.

        Botox^® sales increased in the first quarter of 2007 compared to the first quarter of 2006 primarily due to strong growth in demand in the United States and in international markets for both cosmetic and therapeutic use. Effective January 1, 2007, we increased the published price for Botox^® and Botox^® Cosmetic in the United States by approximately four percent, which we believe had a positive effect on our U.S. sales growth in the first quarter of 2007, primarily related to sales of Botox^® Cosmetic. In the United States, the actual net effect from the increase in price for sales of Botox^® for therapeutic use is difficult to determine, primarily due to rebate programs with U.S. federal and state government agencies. International Botox^® sales benefited from strong sales growth for both cosmetic and therapeutic use in Europe and cosmetic use in Latin America, partially offset by slower growth in Botox^® sales for aesthetic and therapeutic uses in Asia Pacific, due to the timing of shipments to distributors. We believe our worldwide market share for neuromodulators, including Botox^®, is currently over 85%.

        Skin care sales decreased in the first quarter of 2007 compared to the first quarter of 2006 primarily due to lower sales of Tazorac^® and physician dispensed creams, including M.D. Forte^® and Prevage™ MD, in the United States. Net sales of Tazorac^®, Zorac^® and Avage^® decreased $2.8 million, or 13.0%, to $18.8 million in the first quarter of 2007, compared to $21.6 million in the first quarter of 2006. The decrease in sales of Tazorac^®, Zorac^® and Avage^® resulted primarily from lower U.S. wholesaler demand, partially offset by an increase in the published U.S. list price for these products of nine percent effective February 3, 2007.

        Net sales from our core medical device products were $165.2 million in the first quarter of 2007. Product net sales consisted of $69.2 million related to breast aesthetics, $53.0 million for obesity intervention, and $43.0 million for facial aesthetics, related to the March 2006 Inamed and January 2007 Cornéal acquisitions. Breast aesthetics net sales primarily consist of saline-filled and silicone gel-filled breast implants and tissue expanders for use in breast reconstruction, augmentation and revisions. Obesity intervention net sales primarily consist of devices used for minimally invasive long-term treatments of obesity such as our LAP-BAND^® System and BIB^tm System. Facial aesthetics net sales primarily consist of dermal filler products used to correct facial wrinkles, which include hyaluronic acid-based and collagen injectable products.

        Net sales of ophthalmic surgical devices were $9.8 million in the first quarter of 2007 and consist of product net sales related to the Cornéal acquisition. We are currently exploring opportunities to divest the ophthalmic surgical business acquired in connection with the Cornéal acquisition.

        Foreign currency changes increased product net sales by $11.0 million in the first quarter of 2007 compared to the first quarter of 2006, primarily due to the strengthening of the euro, British pound, Australian dollar, and the Brazilian real, partially offset by the weakening of the Canadian dollar and the Mexican peso compared to the U.S. dollar.

        U.S. sales as a percentage of total product net sales decreased by 1.8 percentage points to 65.6% in the first quarter of 2007 compared to U.S. sales of 67.4% in the first quarter of 2006, due primarily to the impact of sales of medical device products, which have a lower amount of U.S. sales as a percentage of total product net sales compared to our pharmaceutical products, partially offset by an increase in U.S. Botox^® sales as a percentage of total pharmaceutical product net sales in the first quarter of 2007 compared to the first quarter of 2006.

  Other Revenues

        Other revenues increased $3.6 million to $14.1 million in the first quarter of 2007 compared to $10.5 million in the first quarter of 2006. The increase in other revenues is primarily related to an increase of approximately $4.3 million in royalty income earned, principally from sales of Botox^® in Japan by GlaxoSmithKline, or GSK, under a license agreement, partially offset by a decrease in reimbursement income, primarily related to services provided in connection with a contractual agreement for the development of Posurdex^® for the ophthalmic specialty pharmaceutical market in Japan.

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  Cost of Sales

        Cost of sales increased $62.1 million, or 63.8%, in the first quarter of 2007 to $159.4 million, or 18.3% of product net sales, compared to $97.3 million, or 15.8% of product net sales, in the first quarter of 2006. Cost of sales in dollars increased in the first quarter of 2007 compared to the first quarter of 2006 primarily as a result of the 41.8% increase in product net sales and the increase in the mix of medical device product net sales relative to total product net sales. Medical device product net sales generally have a higher cost of sales percentage compared to our specialty pharmaceutical products. Our cost of sales as a percentage of product net sales for the first quarter 2007 increased 2.5 percentage points from our cost of sales percentage in the first quarter of 2006, primarily as a result of the increase in the mix of medical device product net sales relative to total product net sales. Cost of sales in the first quarter of 2007 also includes a charge of $0.9 million associated with the purchase accounting fair-market value inventory adjustment rollout related to the Cornéal acquisition.

  Selling, General and Administrative

        Selling, general and administrative, or SG&A, expenses increased $115.5 million, or 42.2%, to $389.4 million, or 44.6% of product net sales, in the first quarter of 2007 compared to $273.9 million, or 44.5% of product net sales, in the first quarter of 2006. The increase in SG&A expenses in dollars primarily relates to increased SG&A expenses associated with the Inamed acquisition, an increase in selling and marketing expenses, principally personnel and related incentive compensation costs driven by the expansion of our U.S. facial aesthetics, neuroscience and ophthalmology sales forces and our European glaucoma sales force to promote growth in product sales, especially for Restasis^®, Lumigan^®, Combigan^tm, Ganfort^®, Botox^® and Botox^® Cosmetic, and to support our agreement with GSK to promote GSK’s Imitrex Statdose System^® and Amerge^® products in the United States. SG&A expenses also increased in the first quarter of 2007 compared to the first quarter of 2006 due to an increase in promotion and general and administrative expenses. Promotion expense increased due to additional costs to promote our medical device product lines that we obtained in the Inamed acquisition, including direct-to-consumer advertising for our LAP-BAND^® System and advertising and other promotional costs associated with the January 2007 launch of Juvéderm^tm Ultra and Juvéderm^tm Ultra Plus in the United States. General and administrative expenses primarily increased due to the Inamed acquisition, an increase in incentive compensation costs, and an increase in corporate legal, finance and information systems costs. In the first quarter of 2007, SG&A expenses included $5.4 million of integration and transition costs related to the Inamed and Cornéal acquisitions and $2.3 million of expenses associated with the settlement of a preexisting unfavorable distribution agreement with Cornéal. In the first quarter of 2006, SG&A expenses included $5.0 million of integration and transition costs related to the acquisition of Inamed and $4.2 million of transition and duplicate operating expenses primarily related to the restructuring and streamlining of our European operations.

  Research and Development

        Research and development, or R&D, expenses decreased $458.7 million, or 68.5%, to $210.7 million in the first quarter of 2007, or 24.2% of product net sales, compared to $669.4 million, or 108.8% of product net sales, in the first quarter of 2006. R&D expenses for the first quarter of 2007 include a charge of $72.0 million for in-process research and development assets acquired in the EndoArt acquisition, and the first quarter of 2006 includes a charge of $562.8 million for in-process research and development assets acquired in the Inamed acquisition. In-process research and development represents an estimate of the fair value of purchased in-process technology as of the date of acquisition that had not reached technical feasibility and had no alternative future uses in its current state. Excluding the effect of the in-process research and development charges, R&D expenses increased by $32.1 million, or 30.1%, to $138.7 million in the first quarter of 2007, or 15.9% of product net sales, compared to $106.6 million, or 17.3% of product net sales in first quarter of 2006. The increase in R&D expenses, excluding the in-process research and development charges, was primarily a result of higher rates of investment in our eye care pharmaceuticals and Botox^® product lines, increased spending for new pharmaceutical technologies, and the addition of development expenses associated with our medical device products acquired in the Inamed acquisition. R&D spending increases in the first quarter of 2007 compared to the first quarter of 2006 were primarily driven by an increase in clinical trial costs associated with Posurdex^®, memantine and certain Botox^® indications for overactive bladder and migraine headache. The decrease in R&D expenses, excluding the in-process research and development

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charges, as a percentage of product net sales in the first quarter of 2007 compared to the first quarter of 2006 was primarily due to an increase in mix of R&D expenses for our medical device products, which have a lower level of R&D expense as a percentage of product net sales relative to our specialty pharmaceutical products.

  Amortization of Acquired Intangible Assets

        Amortization of acquired intangible assets increased $23.3 million to $28.4 million in the first quarter of 2007, or 3.3% of product net sales, compared to $5.1 million, or 0.8% of product net sales, in the first quarter of 2006. This increase in amortization expense in dollars and as a percentage of product net sales is primarily due to an increase in amortization of acquired intangible assets related to the Inamed, Cornéal and EndoArt acquisitions.

Restructuring Charges, Integration Costs, and Transition and Duplicate Operating Expenses

        Restructuring charges in the first quarter of 2007 were $3.2 million compared to $2.8 million in the first quarter of 2006. The $0.4 million increase in restructuring charges is due primarily to an increase in restructuring costs associated with the integration of the Inamed operations, partially offset by a decrease in restructuring costs associated with the streamlining of our European operations.

  Integration of Cornéal Operations

        In connection with our January 2007 Cornéal acquisition, we initiated an integration plan to merge the Cornéal facial aesthetics business operations with our operations. Specifically, the integration activities involve moving key business functions to our locations and integrating Cornéal’s information systems with our information systems. We currently estimate that the total pre-tax charges resulting from the integration of Cornéal’s facial aesthetics business operations will be between approximately $3.5 million and $7.0 million, consisting primarily of salaries, travel and consulting costs, all of which are expected to be cash expenditures. We also currently intend to separate Cornéal’s facial aesthetics and ophthalmic surgical businesses and to divest the ophthalmic surgical business. We are currently in the process of evaluating the financial impact of separating and divesting the ophthalmic surgical business. Any potential restructuring and integration and transition costs associated with the separation and ultimate divestiture of the ophthalmic surgical business have not been included in our estimates. We began to record costs associated with the integration of the Cornéal facial aesthetics business in the first quarter of 2007 and expect to continue to incur costs up through and including the second quarter of 2008. During the first quarter of 2007 we recorded pre-tax integration and transition costs of $3.5 million, all of which were SG&A expenses.

  Restructuring and Integration of Inamed Operations

        In connection with our March 2006 Inamed acquisition, we initiated a global restructuring and integration plan to merge Inamed’s operations with our operations and to capture synergies through the centralization of certain general and administrative and commercial functions. Specifically, the restructuring and integration activities involve eliminating certain general and administrative positions, moving key commercial Inamed business functions to our locations around the world, integrating Inamed’s distributor operations with our existing distribution network and integrating Inamed’s information systems with our information systems.

        We have incurred, and anticipate that we will continue to incur, charges relating to severance, relocation and one-time termination benefits, payments to public employment and training programs, integration and transition costs, and contract termination costs in connection with the restructuring and integration of our Inamed operations. We currently estimate that the total pre-tax charges resulting from the restructuring plan, including integration and transition costs, will be between $61.0 million and $75.0 million, all of which are expected to be cash expenditures. In addition to the pre-tax charges, we expect to incur capital expenditures of approximately $20.0 million to $25.0 million, primarily related to the integration of information systems. We also expect to pay approximately $1.5 million to $2.0 million for taxes related to intercompany transfers of trade businesses and net assets.

        The foregoing estimates are based on assumptions relating to, among other things, a reduction of approximately 59 positions, principally general and administrative positions at Inamed locations. These workforce reduction activities began in the second quarter of 2006 and are expected to be substantially completed by the end of 2007.

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        Charges associated with the workforce reduction, including severance, relocation and one-time termination benefits, and payments to public employment and training programs, are currently expected to total approximately $7.0 million to $9.0 million. Estimated charges for contract and lease termination costs, including the termination of duplicative distributor arrangements are expected to total approximately $29.0 million to $36.0 million. We began to record these costs in the second quarter of 2006 and expect to continue to incur them up through and including the fourth quarter of 2007.

        On January 30, 2007, our Board of Directors approved an additional plan to restructure and eventually sell or close our collagen manufacturing facility in Fremont, California that we acquired in connection with the Inamed acquisition. This plan is the result of a reduction in anticipated future market demand for human and bovine collagen products. In connection with the restructuring and eventual sale or closure of the facility, we estimate that total pre-tax charges for severance, lease termination and contract settlement costs will be between $6.0 million and $8.0 million, all of which are expected to be cash expenditures. The foregoing estimates are based on assumptions relating to, among other things, a reduction of approximately 69 positions, consisting principally of manufacturing positions at our facility, that are expected to result in estimated total employee severance cost of approximately $1.5 million to $2.0 million. Estimated charges for contract and lease termination costs are expected to total approximately $4.5 million to $6.0 million. We began to record these costs in the first quarter of 2007 and expect to continue to incur them up through and including the fourth quarter of 2008. Prior to any closure or sale of our facility, we intend to manufacture a sufficient quantity of inventories of our collagen products to meet estimated market demand through 2010.

        As of March 30, 2007, we have recorded cumulative pre-tax restructuring charges of $16.6 million, cumulative pre-tax integration and transition costs of $22.6 million, and $1.6 million for income tax costs related to intercompany transfers of trade businesses and net assets. The restructuring charges primarily consisted of employee severance, one-time termination benefits, employee relocation, termination of duplicative distributor agreements and other costs related to the restructuring of the Inamed operations. The integration and transition costs primarily consisted of salaries, travel, communications, recruitment and consulting costs. During the first quarter of 2007, we recorded $3.1 million of restructuring charges. We did not incur restructuring charges related to the restructuring and integration of the Inamed operations in the first quarter of 2006. We incurred integration and transition costs of $1.9 million and $5.0 million, all of which were SG&A expenses, in the first quarters of 2007 and 2006, respectively.

        The following table presents the cumulative restructuring activities related to the Inamed operations through March 30, 2007:

	Employee			Contract and Lease
	Severance			Termination Costs			Total
	(in millions)
Net charge during 2006	$	6.1		$	7.4		$	13.5
Spending		(2.1	)		(2.5	)		(4.6	)
Balance at December 31, 2006		4.0			4.9			8.9
Net charge during the first quarter of 2007		2.7			0.4			3.1
Spending		(0.9	)		(4.9	)		(5.8	)
Balance at March 30, 2007 (included in “Other accrued expenses”)	$	5.8		$	0.4		$	6.2

  Restructuring and Streamlining of European Operations

        Effective January 2005, our Board of Directors approved the initiation and implementation of a restructuring of certain activities related to our European operations to optimize operations, improve resource allocation and create a scalable, lower cost and more efficient operating model for our European research and development and commercial activities. Specifically, the restructuring involved moving key European research and development and select commercial functions from our Mougins, France and other European locations to our Irvine, California, Marlow, United Kingdom and Dublin, Ireland facilities and streamlining functions in our European management services group. The workforce reduction began in the first quarter of 2005 and was substantially completed by the close of the second quarter of 2006.

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        As of December 31, 2006, we substantially completed all activities related to the restructuring and streamlining of our European operations. As of December 31, 2006, we have recorded cumulative pre-tax restructuring charges of $37.5 million, primarily related to severance, relocation and one-time termination benefits, payments to public employment and training programs, contract termination costs and capital and other asset-related expenses. During the first quarter of 2006, we recorded $2.9 million of restructuring charges related to our European operations. There were no restructuring charges recorded in the first quarter of 2007 related to the restructuring and streamlining of European operations. As of March 30, 2007, remaining accrued expenses for restructuring charges related to the restructuring and streamlining of our European operations totaled $6.7 million and are included in “Other accrued expenses” and “Other liabilities” in our unaudited condensed consolidated balance sheet.

        Additionally, as of December 31, 2006, we have incurred cumulative transition and duplicate operating expenses of $11.8 million relating primarily to legal, consulting, recruiting, information system implementation costs and taxes related to the European restructuring activities. Duplicate operating expenses are costs incurred during the transition period to ensure that job knowledge and skills are properly transferred to new employees. For the first quarter of 2006, we recorded $4.5 million of transition and duplicate operating expenses, including a $2.6 million loss related to the sale of our Mougins, France facility, consisting of $0.1 million in cost of sales, $4.2 million in SG&A expenses and $0.2 million in R&D expenses. There were no transition and duplicate operating expenses related to the restructuring and streamlining of our European operations recorded in the first quarter of 2007.

  Other Restructuring Activities

        Included in the first quarter of 2007 are $0.1 million in restructuring charges related to the EndoArt acquisition. Included in the first quarter of 2006 are $0.3 million of restructuring charges related to the scheduled June 2005 termination of our manufacturing and supply agreement with Advanced Medical Optics, which was spun-off in June 2002, and a $0.4 million restructuring charge reversal related to the streamlining of our operations in Japan.

  Operating Income (Loss)

        Management evaluates business segment performance on an operating income (loss) basis exclusive of general and administrative expenses and other indirect costs, restructuring charges, in-process research and development expenses, amortization of identifiable intangible assets related to business acquisitions and certain other adjustments, which are not allocated to our business segments for performance assessment by our chief operating decision maker. Other adjustments excluded from our business segments for purposes of performance assessment represent income or expenses that do not reflect, according to established company-defined criteria, operating income or expenses associated with our core business activities.

        General and administrative expenses, other indirect costs and other adjustments not allocated to our business segments for purposes of performance assessment consisted of the following items: for the first quarter of 2007, general and administrative expenses of $71.5 million, integration and transition costs related to the acquisitions of Inamed and Cornéal of $5.4 million, $2.3 million of expenses associated with the settlement of a preexisting unfavorable distribution agreement with Cornéal, a purchase accounting fair-market value inventory adjustment related to the Cornéal acquisition of $0.9 million, and other net indirect costs of $3.5 million; and for the first quarter of 2006, general and administrative expenses of $45.9 million, integration and transition costs related to the Inamed operations of $5.0 million, and other net indirect costs of $4.4 million.

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        The following table presents operating income for each reportable segment for the three months ended March 30, 2007 and March 31, 2006 and a reconciliation of our segments operating income to consolidated operating income (loss):

	Three months ended
	March 30,		March 31,
	2007		2006
	(in millions)
Operating income (loss):
Specialty pharmaceuticals	$	222.6	$	198.1
Medical devices		54.6		—
Total segments		277.2		198.1
General and administrative expenses, other indirect costs and other adjustments		83.6		55.3
In-process research and development		72.0		562.8
Amortization of acquired intangible assets (a)		23.0		—
Restructuring charges		3.2		2.8
Total operating income (loss)	$	95.4	$	(422.8	)

(a)  Represents amortization of identifiable intangible assets related to the Inamed, Cornéal and EndoArt acquisitions.

        Our consolidated operating income for the first quarter of 2007 was $95.4 million, or 10.9% of product net sales, compared to a consolidated operating loss of $422.8 million, or (68.7)% of product net sales in the first quarter of 2006. The $518.2 million increase in consolidated operating income was due to a $257.2 million increase in product net sales, a $3.6 million increase in other revenues, and a $458.7 million decrease in R&D expenses, partially offset by a $62.1 million increase in cost of sales, a $115.5 million increase in SG&A expenses, a $23.3 million increase in amortization of acquired intangible assets, and a $0.4 million increase in restructuring charges.

        Our specialty pharmaceuticals segment operating income in the first quarter of 2007 was $222.6 million, compared to operating income of $198.1 million in the first quarter of 2006. The $24.5 million increase in specialty pharmaceuticals segment operating income was due primarily to an increase in product net sales of our eye care pharmaceuticals and Botox^® product lines, partially offset by an increase in cost of sales, an increase in promotion, selling and marketing expenses, primarily due to increased sales personnel costs and additional promotion and marketing expenses to support our expanded selling efforts, and an increase in research and development expenses.

        The increase in our medical devices segment operating income of $54.6 million in the first quarter of 2007 was due to the combined operating results of the Inamed, Cornéal and EndoArt acquisitions.

  Non-Operating Income and Expenses

        Total net non-operating expenses for the first quarter of 2007 were $5.5 million compared to $0.3 million in the first quarter of 2006. Interest income in the first quarter of 2007 was $15.4 million compared to interest income of $9.2 million in the first quarter of 2006. The increase in interest income was primarily due to a $4.9 million reversal of previously recognized estimated statutory interest income included in the first quarter of 2006 related to a matter involving the expected recovery of previously paid state income taxes. Additionally, higher average cash equivalent balances earning interest of approximately $86 million and an increase in average interest rates earned on all cash equivalent balances earning interest of approximately 0.7% in the first quarter of 2007 compared to the first quarter of 2006 contributed to the increase in interest income in the first quarter of 2007 compared to the first quarter of 2006. Interest expense increased $10.7 million to $18.5 million in the first quarter of 2007 compared to $7.8 million in the first quarter of 2006, primarily due to an increase in average outstanding borrowings for the first quarter of 2007 compared to the first quarter of 2006. We incurred a substantial increase in borrowings to fund the Inamed acquisition on March 23, 2006. During the first quarter of 2007, we recorded a net unrealized loss on derivative instruments of $1.3 million compared to a net unrealized loss of $1.0 million in the first quarter of 2006. Other, net expense was $1.1 million in the first quarter of 2007, consisting primarily of $1.3 million in net realized losses from

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foreign currency transactions. Other, net expense was $0.9 million in the first quarter of 2006, consisting primarily of $1.1 million in net realized losses from foreign currency transactions.

  Income Taxes

        Our effective tax rate for the first quarter of 2007 was 51.4%. Included in our operating income for the first quarter of 2007 are pre-tax charges of $72.0 million for in-process research and development acquired in the EndoArt acquisition, $2.3 million of expenses associated with the settlement of a preexisting unfavorable distribution agreement with Cornéal, total integration and transition costs of $5.4 million related to the Inamed and Cornéal acquisitions, and total restructuring charges of $3.2 million. In the first quarter of 2007, we recorded income tax benefits of $1.0 million related to the total integration and transition costs and $1.2 million related to the total restructuring charges. We did not record any income tax benefit for the in-process research and development charges or the expenses associated with the settlement of the preexisting unfavorable distribution agreement with Cornéal. Excluding the impact of the total pre-tax charges of $82.9 million and the total net income tax benefit of $2.2 million for the items discussed above, our adjusted effective tax rate for the first quarter of 2007 was 28.0%. We believe the use of an adjusted effective tax rate provides a more meaningful measure of the impact of income taxes on our results of operations because it excludes the effect of certain discrete items that are not included as part of our core business activities. This allows stockholders to better determine the effective tax rate associated with our core business activities.

        The calculation of our adjusted effective tax rate for the first quarter of 2007 is summarized below:

	2007
	(in millions)
Earnings before income taxes and minority interest, as reported	$	89.9
In-process research and development expense		72.0
Total integration and transition costs		5.4
Settlement of preexisting unfavorable distribution agreement with Cornéal		2.3
Total restructure charges		3.2
	$	172.8
Provision for income taxes, as reported	$	46.2
Income tax benefit for:
Total integration and transition costs		1.0
Total restructure charges		1.2
	$	48.4
Adjusted effective tax rate		28.0	%

        Our effective tax rate in the first quarter of 2006 was 5.2%, our effective tax rate for the year ended December 31, 2006 was 551.3%, and our adjusted effective tax rate for the year ended December 31, 2006 was 25.9%. Included in our operating loss for the year ended December 31, 2006 are pre-tax charges of $579.3 million for in-process research and development acquired in the Inamed acquisition, a $47.9 million charge to cost of sales associated with the Inamed purchase accounting fair-market value inventory adjustment rollout, total integration, transition and duplicate operating expenses of $26.9 million related to the Inamed acquisition and restructuring and streamlining of our European operations, a $28.5 million contribution to The Allergan Foundation and total restructuring charges of $22.3 million. In 2006, we recorded income tax benefits of $15.7 million related to the Inamed purchase accounting fair-market value inventory adjustment rollout, $9.1 million related to total integration, transition and duplicate operating expenses, $11.3 million related to the contribution to The Allergan Foundation, and $3.5 million related to total restructuring charges. Also included in the provision for income taxes in 2006 is a $17.2 million reduction in the provision for income taxes due to the reversal of the valuation allowance against a deferred tax asset that we have determined is now realizable, a reduction of $14.5 million in estimated income taxes payable primarily due to the resolution of several significant previously uncertain income tax audit issues associated with the completion of an audit by the U.S. Internal Revenue Service for tax years 2000 to 2002, a $2.8 million reduction in income taxes payable previously estimated for the 2005 repatriation of foreign earnings that had been permanently re-invested outside the United States, a beneficial change of $1.2 million for the expected income tax benefit for previously paid state income taxes, which became recoverable due to a favorable state court decision concluded in 2004, an

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unfavorable adjustment of $3.9 million for a previously filed income tax return currently under examination and a provision for income taxes of $1.6 million related to intercompany transfers of trade businesses and net assets associated with the Inamed acquisition. Excluding the impact of the total pre-tax charges of $704.9 million and the total net income tax benefits of $69.8 million for the items discussed above, our adjusted effective tax rate for 2006 was 25.9%.

        The calculation of our 2006 adjusted effective tax rate is summarized below:

	2006
	(in millions)
Earnings before income taxes and minority interest, as reported	$	(19.5	)
In-process research and development expense		579.3
Inamed fair-market value inventory rollout		47.9
Total integration, transition and duplicate operating expenses		26.9
Contribution to The Allergan Foundation		28.5
Total restructure charges		22.3
	$	685.4
Provision for income taxes, as reported	$	107.5
Income tax (provision) benefit for:
Inamed fair-market value inventory rollout		15.7
Total integration, transition and duplicate operating expenses		9.1
Contribution to The Allergan Foundation		11.3
Total restructure charges		3.5
Reduction in valuation allowance associated with a refund claim		17.2
Resolution of uncertain income tax audit issues		14.5
Adjustment to estimated taxes on 2005 repatriation of foreign earnings		2.8
Recovery of previously paid state income taxes		1.2
Unfavorable adjustment for previously filed tax return currently under examination		(3.9	)
Intercompany transfers of trade businesses and net assets		(1.6	)
	$	177.3
Adjusted effective tax rate		25.9	%

        The increase in the adjusted effective tax rate to 28.0% in the first quarter of 2007 compared to the adjusted effective tax rate for the year ended December 31, 2006 of 25.9% is primarily due to an increase in the mix of earnings in higher tax rate jurisdictions, partially offset by the beneficial tax rate effect from increased U.S. deductions for interest expense for the full fiscal year 2007 compared to approximately nine months of such beneficial tax rate effect in fiscal year 2006.

  Net Earnings (Loss)

        Our net earnings for the first quarter of 2007 were $43.8 million compared to a net loss of $444.8 million in the first quarter of 2006. The $488.6 million increase in net earnings was primarily the result of the increase in operating income of $518.2 million, partially offset by an increase in net non-operating expense of $5.2 million, an increase in the provision for income taxes of $24.3 million, and a decrease in minority interest income of $0.1 million.

LIQUIDITY AND CAPITAL RESOURCES

        We assess our liquidity by our ability to generate cash to fund our operations. Significant factors in the management of liquidity are: funds generated by operations; levels of accounts receivable, inventories, accounts payable and capital expenditures; the extent of our stock repurchase program; funds required for acquisitions; adequate credit facilities; and financial flexibility to attract long-term capital on satisfactory terms.

        Historically, we have generated cash from operations in excess of working capital requirements. The net cash provided by operating activities for the first quarter of 2007 was $105.7 million compared to cash provided of $116.7 million for the first quarter of 2006. The decrease in net cash provided by operating activities of $11.0 million

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was primarily due to a net increase in cash required to fund growth in net operating assets and liabilities and an increase in income taxes paid, partially offset by an increase in earnings, including the effect of adjusting for non-cash items. In the first three months of 2007 and 2006, we paid pension contributions of $2.0 million and $2.5 million, respectively, to our U.S. defined benefit pension plan. In 2007, we expect to pay pension contributions of between approximately $17.0 million and $18.0 million for our U.S. and non-U.S. pension plans.

        At December 31, 2006, we had consolidated unrecognized net actuarial losses of $162.1 million which were included in our accrued pension benefit liabilities. The unrecognized net actuarial losses resulted primarily from lower than expected investment returns on pension plan assets in 2002 and 2001 and decreases in the discount rates used to measure projected benefit obligations that occurred from 2001 to 2005. Assuming constant actuarial assumptions estimated as of our pension plans’ measurement date of September 30, 2006, we expect the amortization of these unrecognized net actuarial losses, which is a component of our annual pension cost, to be approximately $11.3 million in 2007 compared to $13.0 million in 2006. The future amortization of the unrecognized net actuarial losses is not expected to materially affect future pension contribution requirements.

        Net cash used in investing activities in the first quarter of 2007 was $336.1 million. Net cash used in investing activities in the first quarter of 2006 was $1,250.4 million. In the first quarter of 2007, we paid $312.8 million, net of cash acquired, for the acquisitions of Cornéal and EndoArt. In the first quarter of 2006, we paid $1,215.2 million, net of cash acquired, for the cash portion of the Inamed acquisition. Additionally, in the first quarter of 2007 we capitalized as intangible assets total milestone payments of $5.0 million related to Restasis^® and collected $8.9 million on a receivable related to the 2006 sale of our Mougins, France facility. We invested $22.2 million in new facilities and equipment during the first quarter of 2007 compared to $32.7 million during the same period in 2006. During the first quarter of 2006, we purchased additional real property for approximately $20.0 million, composed of two office buildings, contiguous to our main facility in Irvine, California. Net cash used in investing activities also includes $5.0 million and $2.9 million to acquire software during the first quarters of 2007 and 2006, respectively. We currently expect to invest between $130 million and $140 million in capital expenditures for administrative and manufacturing facilities and other property, plant and equipment during 2007.

        Net cash used in financing activities was $94.3 million in the first quarter of 2007 compared to net cash provided by financing activities of $712.3 million in the first quarter of 2006. In the first quarter of 2007, we repurchased 539,100 shares of our common stock for $61.7 million, had net repayments of notes payable of $46.0 million and paid $15.1 million in dividends. This use of cash was partially offset by $24.5 million received from the sale of stock to employees and $4.0 million in excess tax benefits from share-based compensation. In the first quarter of 2006, in order to fund part of the cash portion of the Inamed purchase price, we borrowed $825.0 million under a bridge credit facility entered into in connection with the transaction. Additionally, in the first quarter of 2006 we received $27.1 million from the sale of stock to employees and $10.2 million in excess tax benefits from share-based compensation. These amounts were partially offset by net repayments of notes payable of $42.6 million, cash paid on the conversion of our zero coupon convertible senior notes due 2022 of $94.1 million and $13.3 million in dividends paid to stockholders. Effective May 1, 2007, our Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on June 8, 2007 to stockholders of record on May 18, 2007. We maintain an evergreen stock repurchase program. Our evergreen stock repurchase program authorizes us to repurchase our common stock for the primary purpose of funding our stock-based benefit plans. Under the stock repurchase program, we may maintain up to 9.2 million repurchased shares in our treasury account at any one time. As of March 30, 2007, we held approximately 1.6 million treasury shares under this program. We are uncertain as to the level of stock repurchases, if any, to be made in the future.

     On May 2, 2007, we announced that our Board of Directors declared a two-for-one stock split, to be effected in the form of a stock dividend, payable on June 22, 2007 to stockholders of record on June 11, 2007.

        Our 1.50% Convertible Senior Notes due 2026, or 2026 Convertible Notes, pay interest semi-annually at a rate of 1.50% per annum and are convertible, at the holder’s option, at an initial conversion rate of 7.8952 shares per $1,000 principal amount of notes. In certain circumstances the 2026 Convertible Notes may be convertible into cash in an amount equal to the lesser of their principal amount or their conversion value. If the conversion value of the 2026 Convertible Notes exceeds their principal amount at the time of conversion, we will also deliver common stock or, at our election, a combination of cash and common stock for the conversion value in excess of the principal amount. We will not be permitted to redeem the 2026 Convertible Notes prior to April 5, 2009, will be permitted to redeem the 2026 Convertible Notes from and after April 5, 2009 to April 4, 2011 if the closing price of our common stock reaches a specified threshold, and will be permitted to redeem the 2026 Convertible Notes at any time on or after

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April 5, 2011. Holders of the 2026 Convertible Notes will also be able to require us to redeem the 2026 Convertible Notes on April 1, 2011, April 1, 2016 and April 1, 2021 or upon a change in control of us. The 2026 Convertible Notes mature on April 1, 2026, unless previously redeemed by us or earlier converted by the note holders.

        Our 5.75% Senior Notes due 2016, or 2016 Notes, were sold at 99.717% of par value with an effective interest rate of 5.79%, will pay interest semi-annually at a rate of 5.75% per annum, and are redeemable at any time at our option, subject to a make-whole provision based on the present value of remaining interest payments at the time of the redemption. The aggregate outstanding principal amount of the 2016 Notes will be due and payable on April 1, 2016, unless earlier redeemed by us.

        On January 31, 2007, we entered into a nine-year, two-month interest rate swap with a $300.0 million notional amount with semi-annual settlements and quarterly interest rate reset dates. The swap receives interest at a fixed rate of 5.75% and pays interest at a variable interest rate equal to LIBOR plus 0.368%, and effectively converts $300.0 million of our 2016 Notes to a variable interest rate. Based on the structure of the hedging relationship, the hedge meets the criteria for using the short-cut method for a fair value hedge under the provisions of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). Under the provisions of SFAS 133, the investment in the derivative and the related long-term debt are recorded at fair-value. As a result, we have recognized an asset associated with the fair-value of the derivative of $5.0 million reported in “Investments and other assets” and a corresponding increase in “Long-term debt” of $5.0 million reported in our unaudited condensed consolidated balance sheet as of March 30, 2007. As the hedge meets the criteria for using the short-cut method under the provisions of SFAS 133, the change in the fair-value of the derivative is assumed to exactly equal the related change in the fair-value of the 2016 Notes, so there is no gain or loss reported in our unaudited condensed consolidated statement of operations related to the interest rate hedge.

        At March 30, 2007, we had a committed long-term credit facility, a commercial paper program, a medium term note program, an unused debt shelf registration statement that we may use for a new medium term note program and other issuances of debt securities, and various foreign bank facilities. The committed long-term credit facility allows for borrowings of up to $800 million through March 2011. The commercial paper program also provides for up to $600 million in borrowings. The current medium term note program allows us to issue up to an additional $6.2 million in registered notes on a non-revolving basis. The debt shelf registration statement provides for up to $350 million in additional debt securities. Borrowings under the committed long-term credit facility and medium-term note program are subject to certain financial and operating covenants that include, among other provisions, maintaining maximum leverage ratios and minimum interest coverage ratios. Certain covenants also limit subsidiary debt. We believe we were in compliance with these covenants at March 30, 2007. As of March 30, 2007, we had $55.0 million in borrowings under our committed long-term credit facility, $58.8 million in borrowings outstanding under the medium term note program, $13.3 million borrowings outstanding under various foreign bank facilities and no borrowings under our commercial paper program.

        A significant amount of our existing cash and equivalents are held by non-U.S. subsidiaries. We currently plan to use these funds in our operations outside the United States. Withholding and U.S. taxes have not been provided for unremitted earnings of certain non-U.S. subsidiaries because we have reinvested these earnings indefinitely in such operations. As of December 31, 2006, we had approximately $725.5 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Tax costs would be incurred if these funds were remitted to the United States.

        In connection with our March 2006 Inamed acquisition, we initiated a global restructuring and integration plan to merge the Inamed operations with our operations and to capture synergies through the centralization of certain general and administrative functions. In addition, in January 2007, we initiated an additional plan to restructure and eventually sell or close our collagen manufacturing facility in Fremont, California that we acquired in connection with the Inamed acquisition. As of March 30, 2007, we recorded cumulative pre-tax restructuring and integration charges of $39.2 million and $1.6 million of income tax costs related to intercompany transfers of trade businesses and net assets. We currently estimate that the total pre-tax charges resulting from the restructurings, including integration and transition costs, will be between $67.0 million and $83.0 million, all of which are expected to be cash expenditures. In addition to the pre-tax charges, we expect to incur capital expenditures of approximately $20.0 million to $25.0 million, primarily related to the integration of information systems, and to pay an additional

41

amount of approximately $1.5 million to $2.0 million for taxes related to intercompany transfers of trade businesses and net assets.

        In connection with our January 2007 Cornéal acquisition, we initiated an integration plan to merge the Cornéal facial aesthetics business operations with our operations. As of March 30, 2007, we have recorded pre-tax integration costs of $3.5 million. We expect to record up to an additional $3.5 million in total pretax integration and transition charges related to the integration of Cornéal’s facial aesthetics business operations up through and including the second quarter of 2008.

        We believe that the net cash provided by operating activities, supplemented as necessary with borrowings available under our existing credit facilities and existing cash and equivalents, will provide us with sufficient resources to meet our current expected obligations, working capital requirements, debt service and other cash needs over the next year.

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ALLERGAN, INC.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

        In the normal course of business, our operations are exposed to risks associated with fluctuations in foreign currency exchange rates and interest rates. We address these risks through controlled risk management that includes the use of derivative financial instruments to economically hedge or reduce these exposures. We do not enter into financial instruments for trading or speculative purposes.

        To ensure the adequacy and effectiveness of our interest rate and foreign exchange hedge positions, we continually monitor our interest rate swap positions and foreign exchange forward and option positions both on a stand-alone basis and in conjunction with our underlying interest rate and foreign currency exposures, from an accounting and economic perspective.

        However, given the inherent limitations of forecasting and the anticipatory nature of the exposures intended to be hedged, we cannot assure you that such programs will offset more than a portion of the adverse financial impact resulting from unfavorable movements in either interest or foreign exchange rates. In addition, the timing of the accounting for recognition of gains and losses related to mark-to-market instruments for any given period may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect our consolidated operating results and financial position.

  Interest Rate Risk

        Our interest income and expense is more sensitive to fluctuations in the general level of U.S. interest rates than to changes in rates in other markets. Changes in U.S. interest rates affect the interest earned on our cash and equivalents, interest expense on our debt as well as costs associated with foreign currency contracts.

        In February 2006, we entered into interest rate swap contracts based on the 3-month LIBOR with an aggregate notional amount of $800 million, a swap period of 10 years and a starting swap rate of 5.198%. We entered into these swap contracts as a cash flow hedge to effectively fix the future interest rate for our $800 million aggregate principal amount 2016 Notes issued in April 2006. In April 2006, we terminated the interest rate swap contracts and received approximately $13.0 million. The total gain is being amortized as a reduction to interest expense over a 10 year period to match the term of the 2016 Notes. As of March 30, 2007, the remaining unrecognized gain, net of tax, of $7.1 million is recorded as a component of accumulated other comprehensive loss.

        On January 31, 2007, we entered into a nine-year, two-month interest rate swap with a $300.0 million notional amount with semi-annual settlements and quarterly interest rate reset dates. The swap receives interest at a fixed rate of 5.75% and pays interest at a variable interest rate equal to LIBOR plus 0.368%, and effectively converts $300.0 million of our 2016 Notes to a variable interest rate. Based on the structure of the hedging relationship, the hedge meets the criteria for using the short-cut method for a fair value hedge under the provisions of SFAS No. 133. Under the provisions of SFAS No. 133, the investment in the derivative and the related long-term debt are recorded at fair value. At March 30, 2007, the fair value of $5.0 million of the interest rate swap is included in “Investments and other assets” and an offsetting $5.0 million credit is included in “Long-term debt” as a fair value adjustment in the accompanying unaudited condensed consolidated balance sheet. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment of interest expense related to the 2016 Notes. The adjustment of interest expense in the three month period ended March 30, 2007 is immaterial.

        At March 30, 2007, we had approximately $59.5 million of variable rate debt compared to $102.0 million of variable rate debt at December 31, 2006. If interest rates were to increase or decrease by 1% for the year, annual interest expense, including the effect of the $300.0 million notional amount of our interest rate swap entered into on January 31, 2007, would increase or decrease by approximately $3.6 million.

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     The tables below present information about certain of our investment portfolio and our debt obligations at March 30, 2007 and December 31, 2006.

	March 30, 2007
																				Fair
	Maturing in																			Market
	2007			2008			2009		2010		2011			Thereafter			Total			Value
	(in millions, except interest rates)
ASSETS
Cash Equivalents:
Repurchase Agreements	$	140.0		$	—		$	—	$	—	$	—		$	—		$	140.0		$	140.0
Weighted Average Interest Rate		5.37	%		—			—		—		—			—			5.37	%
Commercial Paper		676.2			—			—		—		—			—			676.2			676.2
Weighted Average Interest Rate		5.28	%		—			—		—		—			—			5.28	%
Foreign Time Deposits		73.6			—			—		—		—			—			73.6			73.6
Weighted Average Interest Rate		3.89	%		—			—		—		—			—			3.89	%
Other Cash Equivalents		90.6			—			—		—		—			—			90.6			90.6
Weighted Average Interest Rate		5.37	%		—			—		—		—			—			5.37	%
Total Cash Equivalents	$	980.4		$	—		$	—	$	—	$	—		$	—		$	980.4		$	980.4
Weighted Average Interest Rate		5.20	%		—			—		—		—			—			5.20	%
LIABILITIES
Debt Obligations:
Fixed Rate (US$)	$	—		$	33.8		$	—	$	—	$	750.0		$	822.9		$	1,606.7		$	1,659.3
Weighted Average Interest Rate		—			6.91	%		—		—		1.50	%		5.84	%		3.84	%
Fixed Rate (non-US$)		8.8			—			—		—		—			—			8.8			8.8
Weighted Average Interest Rate		4.11	%		—			—		—		—			—			4.11	%
Other Variable Rate (non-US$)		59.5			—			—		—		—			—			59.5			59.5
Weighted Average Interest Rate		5.41	%		—			—		—		—			—			5.41	%
Total Debt Obligations (a)	$	68.3		$	33.8		$	—	$	—	$	750.0		$	822.9		$	1,675.0		$	1,727.6
Weighted Average Interest Rate		5.25	%		6.91	%		—		—		1.50	%		5.84	%		3.90	%
INTEREST RATE DERIVATIVES
Interest Rate Swaps:
Fixed to Variable (US$)	$	—		$	—		$	—	$	—	$	—		$	300.0		$	300.0		$	5.0
Average Pay Rate		—			—			—		—		—			5.73	%		5.73	%
Average Receive Rate		—			—			—		—		—			5.75	%		5.75	%

(a) Total debt obligations in the unaudited condensed consolidated balance sheet at March 30, 2007 include debt obligations of $1,675.0 million and the interest rate swap fair value adjustment of $5.0 million.

	December 31, 2006
																				Fair
	Maturing in																			Market
	2007			2008			2009		2010		2011			Thereafter			Total			Value
	(in millions, except interest rates)
ASSETS
Cash Equivalents:
Repurchase Agreements	$	130.0		$	—		$	—	$	—	$	—		$	—		$	130.0		$	130.0
Weighted Average Interest Rate		5.35	%		—			—		—		—			—			5.35	%
Commercial Paper		771.0			—			—		—		—			—			771.0			771.0
Weighted Average Interest Rate		5.29	%		—			—		—		—			—			5.29	%
Foreign Time Deposits		288.6			—			—		—		—			—			288.6			288.6
Weighted Average Interest Rate		3.75	%		—			—		—		—			—			3.75	%
Other Cash Equivalents		138.7			—			—		—		—			—			138.7			138.7
Weighted Average Interest Rate		5.91	%		—			—		—		—			—			5.91	%
Total Cash Equivalents	$	1,328.3		$	—		$	—	$	—	$	—		$	—		$	1,328.3		$	1,328.3
Weighted Average Interest Rate		5.03	%		—			—		—		—			—			5.03	%
LIABILITIES
Debt Obligations:
Fixed Rate (US$)	$	—		$	33.5		$	—	$	—	$	750.0		$	822.9		$	1,606.4		$	1,686.7
Weighted Average Interest Rate		—			6.91	%		—		—		1.50	%		5.84	%		3.84	%
Other Variable Rate (non-US$)		102.0			—			—		—		—			—			102.0			102.0
Weighted Average Interest Rate		5.46	%		—			—		—		—			—			5.46	%
Total Debt Obligations	$	102.0		$	33.5		$	—	$	—	$	750.0		$	822.9		$	1,708.4		$	1,788.7
Weighted Average Interest Rate		5.46	%		6.91	%		—		—		1.50	%		5.84	%		3.93	%

44

  Foreign Currency Risk

        Overall, we are a net recipient of currencies other than the U.S. dollar and, as such, benefit from a weaker dollar and are adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may negatively affect our consolidated revenues or operating costs and expenses as expressed in U.S. dollars.

        From time to time, we enter into foreign currency option and forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow our management to focus its attention on our core business issues. Accordingly, we enter into various contracts which change in value as foreign exchange rates change to economically offset the effect of changes in the value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. We enter into foreign currency option and forward contracts in amounts between minimum and maximum anticipated foreign exchange exposures, generally for periods not to exceed one year.

        We use foreign currency option contracts, which provide for the purchase or sale of foreign currencies to offset foreign currency exposures expected to arise in the normal course of our business. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures.

        All of our outstanding foreign currency option contracts are entered into to reduce the volatility of earnings generated in currencies other than the U.S. dollar, primarily earnings denominated in the Canadian dollar, Mexican peso, Australian dollar, Brazilian real, euro, Japanese yen, Swedish krona, Swiss franc and U.K. pound. Current changes in the fair value of open foreign currency option contracts are recorded through earnings as “Unrealized gain (loss) on derivative instruments, net” while any realized gains (losses) on settled contracts are recorded through earnings as “Other, net” in the accompanying unaudited condensed consolidated statements of operations. The premium costs of purchased foreign exchange option contracts are recorded in “Other current assets” and amortized to “Other, net” over the life of the options.

        All of our outstanding foreign exchange forward contracts are entered into to protect the value of intercompany receivables denominated in currencies other than the lender’s functional currency. The realized and unrealized gains and losses from foreign currency forward contracts and the revaluation of the foreign denominated intercompany receivables are recorded through “Other, net” in the accompanying unaudited condensed consolidated statements of operations.

45

        The following table provides information about our foreign currency derivative financial instruments outstanding as of March 30, 2007 and December 31, 2006. The information is provided in U.S. dollars, as presented in our unaudited condensed consolidated financial statements.

	March 30, 2007					December 31, 2006
				Average Contract					Average Contract
	Notional			Rate or Strike		Notional			Rate or Strike
	Amount			Amount		Amount			Amount
	(in millions)					(in millions)
Foreign currency forward contracts:
(Receive U.S. dollar/pay foreign currency)
Euro	$	158.9			1.32	$	142.3			1.32
Canadian dollar		3.0			1.17		1.8			1.15
Australian dollar		11.9			0.78		9.1			0.78
	$	173.8				$	153.2
Estimated fair value	$	(2.6	)			$	(0.7	)
Foreign currency sold — put options:
Canadian dollar	$	28.5			1.14	$	35.0			1.14
Mexican peso		11.1			11.03		14.3			11.00
Australian dollar		17.2			0.78		20.6			0.78
Brazilian real		9.1			2.26		11.7			2.24
Euro		58.3			1.34		73.0			1.34
Japanese yen		7.3			112.46		9.6			113.06
Swedish krona		5.9			6.77		7.7			6.79
Swiss franc		4.8			1.18		6.1			1.18
	$	142.2				$	178.0
Estimated fair value	$	2.2				$	3.8
Foreign currency purchased — call options:
U.K. pound	$	9.4			1.96	$	15.3			1.96
Estimated fair value	$	0.1				$	0.2

46

ALLERGAN, INC.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our management, including our Principal Executive Officer and our Principal Financial Officer, does not expect that our disclosure controls or procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Allergan have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, we have investments in certain unconsolidated entities. As we do not control or manage these entities, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

     We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 30, 2007, the end of the quarterly period covered by this report. Based on the foregoing, our Principal Executive Officer and our Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at the reasonable assurance level.

     Further, management determined that, as of March 30, 2007, there were no changes in our internal control over financial reporting that occurred during the first fiscal quarter of 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for the potential impact from reporting the Inamed and Cornéal acquisitions, as more fully disclosed in Note 2, Acquisitions, to the unaudited condensed consolidated financial statements under Item 1(D) of Part I of this report. We are currently in the process of assessing and integrating Inamed’s and Cornéal’s internal controls over financial reporting into our financial reporting systems and expect to complete our integration activities by December 31, 2007.

47

ALLERGAN, INC.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

        The information required by this Item is incorporated herein by reference to Note 8, Litigation, to the unaudited condensed consolidated financial statements under Item 1(D) of Part I of this report.

Item 1A. Risk Factors

     The risk factors presented below update, and should be considered in addition to, the risk factors previously disclosed by us in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

We operate in a highly competitive business.

     The pharmaceutical and medical device industries are highly competitive and they require an ongoing, extensive search for technological innovation. They also require, among other things, the ability to effectively discover, develop, test and obtain regulatory approvals for products, as well as the ability to effectively commercialize, market and promote approved products, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical professionals.

     Many of our competitors have greater resources than we have. This enables them, among other things, to make greater research and development investments and spread their research and development costs, as well as their marketing and promotion costs, over a broader revenue base. Our competitors may also have more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities. In addition to product development, testing, approval and promotion, other competitive factors in the pharmaceutical and medical device industries include industry consolidation, product quality and price, product technology, reputation, customer service and access to technical information.

     It is possible that developments by our competitors could make our products or technologies less competitive or obsolete. Our future growth depends, in part, on our ability to develop products which are more effective. For instance, for our eye care products to be successful, we must be able to manufacture and effectively market those products and persuade a sufficient number of eye care professionals to use or continue to use our current products and the new products we may introduce. Glaucoma must be treated over an extended period and doctors may be reluctant to switch a patient to a new treatment if the patient’s current treatment for glaucoma remains effective. Sales of our existing products may decline rapidly if a new product is introduced by one of our competitors or if we announce a new product that, in either case, represents a substantial improvement over our existing products. Similarly, if we fail to make sufficient investments in research and development programs, our current and planned products could be surpassed by more effective or advanced products developed by our competitors.

     Until December 2000, Botox^® was the only neuromodulator approved by the FDA. At that time, the FDA approved Myobloc^®, a neuromodulator formerly marketed by Elan Pharmaceuticals and now marketed by Solstice Neurosciences, Inc. Beaufour Ipsen Ltd. is seeking FDA approval of its Dysport^® neuromodulator for certain therapeutic indications, and Medicis, its licensee for the United States, Canada and Japan, is seeking approval of Reloxin^® for cosmetic indications. Beaufour Ipsen has marketed Dysport^® in Europe since 1991, prior to our European commercialization of Botox^® in 1992. In June 2006, Beaufour Ipsen received the marketing authorization for a cosmetic indication for Dysport^® in Germany. In 2007, Beaufour Ipsen granted an exclusive development and marketing license for Dysport^® to Galderma in the European Union, Russia, Eastern Europe and the Middle East, and first rights of negotiation for other countries around the world, except the United States, Canada and Japan. Reloxin^® is also currently under review for use in aesthetic medicine indications by the French regulatory authorities as part of an application for a license across the European Union.

     Mentor Corporation is conducting clinical trials for a competing neuromodulator in the United States. In addition, we are aware of competing neuromodulators currently being developed and commercialized in Asia, Europe, South America and other markets. A Chinese entity received approval to market a botulinum toxin in China in 1997, and we believe that it has launched or is planning to launch its botulinum toxin product in other lightly regulated markets in Asia, South America and Central America. These lightly regulated markets may not require adherence to the FDA’s current Good Manufacturing Practice, or cGMP, regulations, or the regulatory requirements of the European Medical Evaluation Agency or other regulatory agencies in countries that are members of the Organization for Economic Cooperation and Development. Therefore, companies operating in these markets may be able to produce products at a lower cost than we can. In addition, Merz received approval from German authorities for Xeomin^® and launched its product in July 2005, and a Korean botulinum toxin, Neuronox^®, was approved for sale in Korea in June 2006. The company, Medy-Tox Inc., received exportation approval from Korean authorities in early 2005. In February 2007, Q-Med announced a worldwide license for Neuronox^®, with the exception of certain countries in Asia where Medy-Tox may retain the marketing rights. Our sales of Botox^® could be materially and negatively impacted by this competition or competition from other companies that might obtain FDA approval or approval from other regulatory authorities to market a neuromodulator.

48

     Mentor Corporation is our principal competitor in the United States for breast implants. Mentor announced that, like us, it received FDA approval in November 2006 to sell its silicone breast implants. The conditions under which Mentor is allowed to market its silicone breast implants in the United States are similar to ours, including indications for use and the requirement to conduct post-marketing studies. If patients or physicians prefer Mentor’s breast implant products to ours or perceive that Mentor’s breast implant products are safer than ours, our sales of breast implants could materially suffer. We are aware of several companies conducting clinical studies of breast implant products in the United States. Internationally, we compete with several manufacturers, including Mentor Corporation, Silimed, Medicor Corporation, Poly Implant Prostheses, Nagor, Laboratories Sebbin, and LPI.

     Medicis Pharmaceutical Corporation began marketing Restylane^®, a dermal filler, in January 2004. Through our purchase of Inamed, we acquired the rights to sell a competing dermal filler, Juvéderm™, in the United States, Canada and Australia and Hydrafill™ in certain European countries. Juvéderm™ was approved by the FDA for sale in the United States in June 2006, and we announced nationwide availability of Juvéderm™ in January 2007. We cannot assure you that Juvéderm™ will offer equivalent or greater facial aesthetic benefits to competitive dermal filler products, that it will be competitive in price or gain acceptance in the marketplace.

     Ethicon Endo-Surgery, Inc., a Johnson & Johnson company, announced an early 2007 premarket filing target for FDA approval of its gastric band product, SAGB Quick Close (Swedish Adjustable Gastric Band), which will compete against our LAP-BAND^® System upon entry to the U.S. market. The LAP-BAND^® System also competes with surgical obesity procedures, including gastric bypass, vertical banded gastroplasty, sleeve gastrectomy, and biliopancreatic diversion.

     We also face competition from generic drug manufacturers in the United States and internationally. For instance, Falcon Pharmaceuticals, Ltd., an affiliate of Alcon Laboratories, Inc., attempted to obtain FDA approval for a brimonidine product to compete with our Alphagan^® P product. However, pursuant to our March 2006 settlement with Alcon, Alcon agreed not to sell, offer for sale or distribute its brimonidine product until September 30, 2009, or earlier if specified market conditions occur. The primary market condition will have occurred if the extent to which prescriptions of Alphagan^® P have been converted to other brimonidine-containing products we market has increased to a specified threshold. In April 2007, we received a paragraph 4 Hatch-Waxman Act certification from Apotex Inc. in which it purports to have sought FDA approval to market generic brimonidine 0.10% and 0.15% ophthalmic solutions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

        The following table discloses the purchases of our equity securities during the first fiscal quarter of 2007.

					Total Number
					of Shares		Maximum Number
					Purchased as		(or Approximate
					Part of		Dollar Value) of
					Publicly		Shares that May
	Total Number		Average		Announced		Yet Be Purchased
	of Shares		Price Paid		Plans		Under the Plans
Period	Purchased(1)		per Share		or Programs		or Programs(2)
January 1, 2007 to January 31, 2007		0		N/A		0		7,765,124
February 1, 2007 to February 28, 2007		539,100	$	114.47		539,100		7,524,656
March 1, 2007 to March 30, 2007		0		N/A		0		7,579,712
Total		539,100	$	114.47		539,100		N/A

(1)	We maintain an evergreen stock repurchase program, which we first announced on September 28, 1993. Under the stock repurchase program, we may maintain up to 9.2 million repurchased shares in our treasury account at any one time. As of March 30, 2007, we held approximately 1.6 million treasury shares under this program.
(2)	The following share numbers reflect the maximum number of shares that may be purchased under our stock repurchase program and are as of the end of each of the respective periods.

Item 3. Defaults Upon Senior Securities

        None.

Item 4. Submission of Matters to a Vote of Security Holders

        None.

Item 5. Other Information

        None.

49

Item 6. Exhibits

         Exhibits (numbered in accordance with Item 601 of Regulation S-K)

3.1	Restated Certificate of Incorporation of Allergan, Inc., as filed with the State of Delaware on May 22, 1989 (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Registration Statement on Form S-1 No. 33-28855, filed on May 24, 1989)
3.2	Certificate of Amendment of Certificate of Incorporation of Allergan, Inc. (incorporated by reference to Exhibit 3 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended June 30, 2000)
3.3	Certificate of Amendment of Restated Certificate of Incorporation of Allergan, Inc. (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Current Report on Form 8-K filed on September 20, 2006)
3.4	Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended June 30, 1995)
3.5	First Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended September 24, 1999)
3.6	Second Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.5 to Allergan, Inc.’s Report on Form 10-K for the Fiscal Year ended December 31, 2002)
3.7	Third Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.6 to Allergan, Inc.’s Report on Form 10-K for the Fiscal Year ended December 31, 2003)
4.1	Indenture, dated as of April 12, 2006, between Allergan, Inc. and Wells Fargo, National Association relating to the $750,000,000 1.50% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.2	Indenture, dated as of April 12, 2006, between Allergan, Inc. and Wells Fargo, National Association relating to the $800,000,000 5.75% Senior Notes due 2016 (incorporated by reference to Exhibit 4.2 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.3	Form of 1.50% Convertible Senior Note due 2026 (incorporated by reference to (and included in) the Indenture dated as of April 12, 2006 between Allergan, Inc. and Wells Fargo, National Association at Exhibit 4.1 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.4	Form of 5.75% Senior Note due 2016 (incorporated by reference to (and included in) the Indenture dated as of April 12, 2006 between Allergan, Inc. and Wells Fargo, National Association at Exhibit 4.2 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.5	Registration Rights Agreement, dated as of April 12, 2006, among Allergan, Inc. and Banc of America Securities LLC and Citigroup Global Markets Inc., as representatives of the Initial Purchasers named therein, relating to the $750,000,000 1.50% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.3 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.6	Registration Rights Agreement, dated as of April 12, 2006, among Allergan, Inc. and Morgan Stanley & Co., Incorporated, as representative of the Initial Purchasers named therein, relating to the $800,000,000 5.75% Senior Notes due 2016 (incorporated by reference to Exhibit 4.4 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
10.1	Severance and General Release Agreement between Allergan, Inc. and Roy J. Wilson, dated as of October 6, 2006 (incorporated by reference to Exhibit 10.1 to Allergan, Inc.’s Current Report on Form 8-K filed on October 10, 2006)
10.2	Stock Sale and Purchase Agreement, dated as of October 31, 2006, by and among Allergan, Inc., Allergan Holdings France, SAS, Waldemar Kita, the European Pre-Floatation Fund II and the other minority stockholders of Groupe Cornéal Laboratories and its subsidiaries (incorporated by reference to Exhibit 10.1 to Allergan, Inc.’s Current Report on Form 8-K filed on November 2, 2006)
10.3	First Amendment to Stock Sale and Purchase Agreement, dated as of February 19, 2007, by and among Allergan, Inc. , Allergan Holdings France, SAS, Waldemar Kita, the European Pre-Floatation Fund II and the other minority stockholders of Groupe Corneal Laboratories and its subsidiaries

50

10.4	Allergan, Inc. Employee Stock Ownership Plan (Restated 2005)
10.5	Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.6	First Amendment to Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.7	Second Amendment to Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.8	Allergan, Inc. Pension Plan (Restated 2005)
10.9	First Amendment to Allergan, Inc. Pension Plan (Restated 2005)
10.10	Second Amendment to Allergan, Inc. Pension Plan (Restated 2005)
10.11	Second Amendment to Allergan, Inc. Executive Deferred Compensation Plan (Amended and Restated effective January 1, 2003)
10.12	Third Amendment to Allergan, Inc. Executive Deferred Compensation Plan (Amended and Restated Effective January 1, 2003)
10.13	First Amendment to Amended and Restated Credit Agreement, dated as of March 16, 2007, among Allergan, Inc., as Borrower and Guarantor, the Banks listed therein, JPMorgan Chase Bank, as Administrative Agent, Citicorp USA Inc., as Syndication Agent and Bank of America, N.A., as Document Agent
10.14	Second Amendment to Allergan, Inc. 2003 Nonemployee Director Equity Incentive Plan
10.15	Amended Form of Restricted Stock Award Agreement under Allergan, Inc.’s 2003 Nonemployee Director Equity Incentive Plan, as amended
10.16	Amended Form of Non-Qualified Stock Option Award Agreement under Allergan, Inc.’s Nonemployee Director Equity Incentive Plan, as amended
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
32	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350

51

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 8, 2007	ALLERGAN, INC.
	/s/ Jeffrey L. Edwards
	Jeffrey L. Edwards Executive Vice President, Finance and Business Development, Chief Financial Officer (Principal Financial Officer)

52

INDEX OF EXHIBITS

3.1	Restated Certificate of Incorporation of Allergan, Inc., as filed with the State of Delaware on May 22, 1989 (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Registration Statement on Form S-1 No. 33-28855, filed on May 24, 1989)
3.2	Certificate of Amendment of Certificate of Incorporation of Allergan, Inc. (incorporated by reference to Exhibit 3 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended June 30, 2000)
3.3	Certificate of Amendment of Restated Certificate of Incorporation of Allergan, Inc. (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Current Report on Form 8-K filed on September 20, 2006)
3.4	Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended June 30, 1995)
3.5	First Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.1 to Allergan, Inc.’s Report on Form 10-Q for the Quarter ended September 24, 1999)
3.6	Second Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.5 to Allergan, Inc.’s Report on Form 10-K for the Fiscal Year ended December 31, 2002)
3.7	Third Amendment to Allergan, Inc. Bylaws (incorporated by reference to Exhibit 3.6 to Allergan, Inc.’s Report on Form 10-K for the Fiscal Year ended December 31, 2003)
4.1	Indenture, dated as of April 12, 2006, between Allergan, Inc. and Wells Fargo, National Association relating to the $750,000,000 1.50% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.2	Indenture, dated as of April 12, 2006, between Allergan, Inc. and Wells Fargo, National Association relating to the $800,000,000 5.75% Senior Notes due 2016 (incorporated by reference to Exhibit 4.2 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.3	Form of 1.50% Convertible Senior Note due 2026 (incorporated by reference to (and included in) the Indenture dated as of April 12, 2006 between Allergan, Inc. and Wells Fargo, National Association at Exhibit 4.1 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.4	Form of 5.75% Senior Note due 2016 (incorporated by reference to (and included in) the Indenture dated as of April 12, 2006 between Allergan, Inc. and Wells Fargo, National Association at Exhibit 4.2 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.5	Registration Rights Agreement, dated as of April 12, 2006, among Allergan, Inc. and Banc of America Securities LLC and Citigroup Global Markets Inc., as representatives of the Initial Purchasers named therein, relating to the $750,000,000 1.50% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.3 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
4.6	Registration Rights Agreement, dated as of April 12, 2006, among Allergan, Inc. and Morgan Stanley & Co., Incorporated, as representative of the Initial Purchasers named therein, relating to the $800,000,000 5.75% Senior Notes due 2016 (incorporated by reference to Exhibit 4.4 to Allergan, Inc.’s Current Report on Form 8-K filed on April 12, 2006)
10.1	Severance and General Release Agreement between Allergan, Inc. and Roy J. Wilson, dated as of October 6, 2006 (incorporated by reference to Exhibit 10.1 to Allergan, Inc.’s Current Report on Form 8-K filed on October 10, 2006)
10.2	Stock Sale and Purchase Agreement, dated as of October 31, 2006, by and among Allergan, Inc., Allergan Holdings France, SAS, Waldemar Kita, the European Pre-Floatation Fund II and the other minority stockholders of Groupe Cornéal Laboratories and its subsidiaries (incorporated by reference to Exhibit 10.1 to Allergan, Inc.’s Current Report on Form 8-K filed on November 2, 2006)
10.3	First Amendment to Stock Sale and Purchase Agreement, dated as of February 19, 2007, by and among Allergan, Inc. , Allergan Holdings France, SAS, Waldemar Kita, the European Pre-Floatation Fund II and the other minority stockholders of Groupe Corneal Laboratories and its subsidiaries
10.4	Allergan, Inc. Employee Stock Ownership Plan (Restated 2005)

10.5	Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.6	First Amendment to Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.7	Second Amendment to Allergan, Inc. Employee Savings and Investment Plan (Restated 2005)
10.8	Allergan, Inc. Pension Plan (Restated 2005)
10.9	First Amendment to Allergan, Inc. Pension Plan (Restated 2005)
10.10	Second Amendment to Allergan, Inc. Pension Plan (Restated 2005)
10.11	Second Amendment to Allergan, Inc. Executive Deferred Compensation Plan (Amended and Restated effective January 1, 2003)
10.12	Third Amendment to Allergan, Inc. Executive Deferred Compensation Plan (Amended and Restated Effective January 1, 2003)
10.13	First Amendment to Amended and Restated Credit Agreement, dated as of March 16, 2007, among Allergan, Inc., as Borrower and Guarantor, the Banks listed therein, JPMorgan Chase Bank, as Administrative Agent, Citicorp USA Inc., as Syndication Agent and Bank of America, N.A., as Document Agent
10.14	Second Amendment to Allergan, Inc. 2003 Nonemployee Director Equity Incentive Plan
10.15	Amended Form of Restricted Stock Award Agreement under Allergan, Inc.’s 2003 Nonemployee Director Equity Incentive Plan, as amended
10.16	Amended Form of Non-Qualified Stock Option Award Agreement under Allergan, Inc.’s Nonemployee Director Equity Incentive Plan, as amended
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
32	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350

EX-10.3

                                                                    EXHIBIT 10.3

                        STOCK SALE AND PURCHASE AGREEMENT

                           DATED 31ST OF OCTOBER 2006

                                     BETWEEN

                  ALLERGAN HOLDINGS FRANCE, SAS; ALLERGAN, INC.

                                       AND

                 THE SHAREHOLDERS OF GROUPE CORNEAL LABORATOIRES

                                 FIRST AMENDMENT

                             DATED 19 FEBRUARY 2007

Reference is made to the Stock Sale and Purchase Agreement dated 31 October 2006
between Allergan Holdings France, SAS and Allergan, Inc., on the one hand, and
the shareholders of Groupe Corneal Laboratoires, on the other hand (the "SPA").
Capitalized terms used herein and not otherwise defined have the respective
meanings assigned to them in the SPA.

The Parties wish to amend Section 2.3(b) and Section 5.23(b) of the SPA.

1.   Amendment of Section 2.3(b)

Section 2.3(b) of the SPA is hereby amended to read as follows:

          (b)  Final Adjustment.

               (i) No later than 20 February 2007, Ernst & Young shall provide
     to the the Buyer and the Sellers a report stating the amounts of the Cash
     Adjustment and the Indebtedness Adjustment. The amounts of the Cash
     Adjustment and the Indebtedness Adjustment as so determined by Ernst &
     Young shall be final and binding on the Parties, and shall be used to
     determine the amount of the Final Adjustment (if any), unless, no later
     than one (1) month after the receipt of such



                                           AMENDMENT TO STOCK PURCHASE AGREEMENT
                                                                          Page 2


     report or, if such report is not timely received, no later than 14 March
     2007, either of the Buyer or the Controlling Shareholder notifies the other
     that it objects to the Indebtedness Adjustment and to the Cash Adjustment
     as so determined (stating in reasonable detail the reasons for such
     objection).

               (ii) If no such notice of objection is given within the time
     period set forth in Section 2.3(b)(i), the Indebtedness Adjustment and the
     Cash Adjustment as determined by Ernst & Young shall be deemed to be final
     and binding for the purposes of this Section 2.3.

               (iii) If such a notice of objection is given within the time
     period set forth in Section 2.3(b)(i), the Controlling Shareholder and the
     Buyer shall meet and negotiate in good faith in order to reach agreement
     with respect to the amount of the Final Adjustment.

               (iv) If no agreement can be reached with respect to the amount of
     the Final Adjustment within fifteen (15) days as from the date of such
     notice of objection, the Parties agree to the appointment of BDO (the
     "REVIEW ACCOUNTANTS"), said Review Accountants acting as experts and not as
     arbitrators, to prepare a final and conclusive determination of the
     Indebtedness Adjustment and the Cash Adjustment and of the adjustment of
     the Purchase Price required as a result thereof. The Review Accountants
     shall render their report within one (1) month of such retention, which
     report shall be, one (1) week after it is issued, a final and binding
     determination of the amount of the Indebtedness Adjustment, the Cash
     Adjustment and the Purchase Price for the purposes of this Section 2.3,
     absent gross error or gross negligence on the part of the Review
     Accountants.

2.   Amendment of Section. 5.23(b)

The date on which the Controlling Shareholder shall provide the Buyer with a
list of the accounts receivable as of 31 December 2006 and reserves made with
respect thereto, certified by Ernst & Young to be accurate, complete and
consistent with past practices (to the extent consistent with applicable GAAP)
shall be 7 March 2007.

3.   No Other Amendments

Except as expressly provided herein, the SPA shall remain in full force and
effect, without modification.



                                           AMENDMENT TO STOCK PURCHASE AGREEMENT
                                                                          Page 3


Dated: Paris, 19 February 2007

ALLERGAN HOLDINGS FRANCE, SAS


By: /s/ Paul Boland
    -------------------------------------
    Mr. Paul Boland, Duly Authorized


ALLERGAN, INC.


By: /s/ David Endicott
    -------------------------------------
    Mr. David Endicott, Duly Authorized


Mr. Waldemar Kita, in his name and as the duly authorized representative of the
Minority Shareholders:

/s/ Waldemar Kita
- -----------------------------------------
EUROPEAN PRE-FLOTATION FUND II


By: /s/ Christian d'Argoubet
    -------------------------------------
    Christian d'Argoubet, Duly Authorized

EX-10.4

                                                                    EXHIBIT 10.4

                                 ALLERGAN, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

RESTATED
2005


                                                                               .
                                                                               .
                                                                               .

                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE I
INTRODUCTION.............................................................     1
1.1   Plan Name..........................................................     1
1.2   Plan Purpose.......................................................     1
1.3   Effective Date of 2005 Restated Plan...............................     1
1.4   Amendments to Plan.................................................     1
1.5   Plan Qualification.................................................     2

ARTICLE II
DEFINITIONS..............................................................     3
2.1   Affiliated Company.................................................     3
2.2   Beneficiary........................................................     3
2.3   Board of Directors.................................................     3
2.4   Break in Service...................................................     3
2.5   Code...............................................................     3
2.6   Committee..........................................................     3
2.7   Company............................................................     3
2.8   Company Stock......................................................     3
2.9   Compensation.......................................................     3
2.10  Credited Service...................................................     5
2.11  Disability.........................................................     6
2.12  Effective Date.....................................................     6
2.13  Eligible Employee..................................................     6
2.14  Eligible Retirement Plan...........................................     7
2.15  Eligible Rollover Distribution.....................................     7
2.16  Employee...........................................................     7
2.17  Employment Commencement Date.......................................     8
2.18  ERISA..............................................................     8
2.19  ESOP Account.......................................................     8
2.20  Exempt Loan........................................................     8
2.21  Exempt Loan Suspense Subfund.......................................     8
2.22  415 Suspense Account...............................................     9
2.23  Highly Compensated Employee........................................     9
2.24  Hour of Service....................................................    10
2.25  Investment Manager.................................................    10
2.26  Leased Employee....................................................    10
2.27  Leave of Absence...................................................    10
2.28  Normal Retirement Age..............................................    11
2.29  Participant........................................................    11
2.30  Period of Severance................................................    11
2.31  Plan...............................................................    11
2.32  Plan Administrator.................................................    11




                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
2.33  Plan Year..........................................................    11
2.34  Reemployment Commencement Date.....................................    12
2.35  Severance..........................................................    12
2.36  Severance Date.....................................................    12
2.37  Sponsor............................................................    13
2.38  Trust..............................................................    13
2.39  Trust Agreement....................................................    13
2.40  Trustee............................................................    13
2.41  Valuation Date.....................................................    13

ARTICLE III
ELIGIBILITY AND PARTICIPATION............................................    14
3.1   Participation......................................................    14
3.2   Duration of Participation..........................................    14
3.3   Participation after Reemployment...................................    14
3.4   Participation After Normal Retirement Age..........................    14

ARTICLE IV
CONTRIBUTIONS AND ALLOCATION TO ACCOUNTS.................................    15
4.1   Contributions to the Trust Fund....................................    15
4.2   Allocation of Contributions to Trust Fund..........................    15
4.3   Forfeitures........................................................    17
4.4   Employee Contributions and Rollovers...............................    17

ARTICLE V
VESTING AND DISTRIBUTIONS................................................    18
5.1   No Vested Rights Except as Herein Specified........................    18
5.2   Vesting............................................................    18
5.3   Severance When Less Than Fully Vested..............................    18
5.4   Distribution upon Severance........................................    19
5.5   Distribution upon Death............................................    19
5.6   Distribution upon Disability.......................................    20
5.7   Withdrawal upon Age 59-1/2.........................................    20
5.8   Designation of Beneficiary.........................................    20
5.9   Form of Distribution...............................................    21
5.10  Distribution Rules.................................................    22
5.11  Put Option for Company Stock Allocated to ESOP Accounts............    25
5.12  Diversification Rule...............................................    28
5.13  Lapsed Benefits....................................................    30



                                       ii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE VI
TRUST FUND AND INVESTMENTS...............................................    32
6.1   General............................................................    32
6.2   Single Trust.......................................................    32
6.3   Investment of the Trust............................................    32
6.4   Certain Offers for Company Stock...................................    34
6.5   Securities Law Limitation..........................................    38
6.6   Accounting and Valuations..........................................    39
6.7   Dividends..........................................................    40
6.8   Non-Diversion of Trust Fund........................................    42
6.9   Company, Committee and Trustee Not Responsible for Adequacy of
      Trust Fund.........................................................    42
6.10  Distributions......................................................    42
6.11  Taxes..............................................................    43
6.12  Trustee Records to be Maintained...................................    43
6.13  Annual Report of Trustee...........................................    43
6.14  Appointment of Investment Manager..................................    44

ARTICLE VII
OPERATION AND ADMINISTRATION.............................................    45
7.1   Appointment of Committee...........................................    45
7.2   Appointment of Investment Subcommittee.............................    45
7.3   Transaction of Business............................................    45
7.4   Voting.............................................................    46
7.5   Responsibility of Committees.......................................    46
7.6   Committee Powers...................................................    48
7.7   Additional Powers of Committee.....................................    48
7.8   Investment Subcommittee Powers.....................................    48
7.9   Periodic Review of Funding Policy..................................    49
7.10  Claims Procedures..................................................    49
7.11  Appeals Procedures.................................................    50
7.12  Limitation on Liability............................................    51
7.13  Indemnification and Insurance......................................    51
7.14  Compensation of Committees and Plan Expenses.......................    51
7.15  Resignation........................................................    51
7.16  Voting of Company Stock............................................    52
7.17  Reliance Upon Documents and Opinions...............................    54

ARTICLE VIII
AMENDMENT AND ADOPTION OF PLAN...........................................    55
8.1   Right to Amend Plan................................................    55
8.2   Adoption of Plan by Affiliated Companies...........................    55



                                       iii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE IX
DISCONTINUANCE OF CONTRIBUTIONS..........................................    56

ARTICLE X
TERMINATION AND MERGER...................................................    57
10.1  Right to Terminate Plan............................................    57
10.2  Effect on Trustee and Committee....................................    57
10.3  Merger Restriction.................................................    57
10.4  Effect of Reorganization, Transfer of Assets or Change in Control..    57

ARTICLE XI
LIMITATION ON ALLOCATIONS................................................    61
11.1  General Rule.......................................................    61
11.2  Annual Additions...................................................    61
11.3  Other Defined Contribution Plans...................................    62
11.4  Adjustments for Excess Annual Additions............................    62
11.5  Compensation.......................................................    62
11.6  Treatment of 415 Suspense Account Upon Termination.................    63

ARTICLE XII
TOP-HEAVY RULES..........................................................    65
12.1  Applicability......................................................    65
12.2  Definitions........................................................    65
12.3  Top-Heavy Status...................................................    66
12.4  Minimum Contributions..............................................    67
12.5  Minimum Vesting Rules..............................................    68
12.6  Non-Eligible Employees.............................................    68

ARTICLE XIII
RESTRICTION ON ASSIGNMENT OR OTHER ALIENATION OF PLAN BENEFITS...........    69
13.1  General Restrictions Against Alienation............................    69
13.2  Qualified Domestic Relations Orders................................    69

ARTICLE XIV
MISCELLANEOUS PROVISIONS.................................................    72
14.1  No Right of Employment Hereunder...................................    72
14.2  Limitation on Company Liability....................................    72
14.3  Effect of Article Headings.........................................    72
14.4  Gender.............................................................    72



                                       iv



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
14.5  Interpretation.....................................................    72
14.6  Withholding For Taxes..............................................    72
14.7  California Law Controlling.........................................    72
14.8  Plan and Trust as One Instrument...................................    72
14.9  Invalid Provisions.................................................    73
14.10 Counterparts.......................................................    73



                                        v


                                 ALLERGAN, INC.
                          EMPLOYEE STOCK OWNERSHIP PLAN

                                    ARTICLE I
                                  INTRODUCTION

     1.1 Plan Name. This document, made and entered into by Allergan, Inc., a
Delaware corporation ("Allergan"), amends and restates in its entirety the
Allergan, Inc. Employee Stock Ownership Plan (Restated 2003) and shall be known
hereafter as the "Allergan, Inc. Employee Stock Ownership Plan (Restated 2005)."

     1.2 Plan Purpose. The purpose of the Allergan, Inc. Employee Stock
Ownership Plan (Restated 2005), hereinafter referred to as the "Plan," is to
offer Participants a systematic program for accumulation of beneficial ownership
interests in Company Stock and to encourage and develop employee interest and
involvement in the Company. Through the beneficial ownership of Company Stock,
enhanced by means of possible debt financed acquisition of Company Stock,
Allergan intends to provide Participants with a meaningful voice in matters
affecting both it and Participants as shareholders. In order to accomplish these
objectives, the Plan is expressly authorized and directed to acquire and hold
Company Stock as its primary investment. All assets acquired under the Plan
shall be administered, distributed, forfeited and otherwise governed by the
provisions of the Plan, which is to be administered by the Committee for the
exclusive benefit of Participants in the Plan and their Beneficiaries.

     1.3 Effective Date of 2005 Restated Plan. The Effective Date of this
amended and restated Plan shall be January 1, 2005 unless otherwise specified in
the Plan. The provisions of this Plan document apply generally only to Employees
who have completed at least one (1) Hour of Service for Allergan or any
Affiliated Companies on or after January 1, 2005 and the rights and benefits, if
any, of Employees or Participants whose employment with Allergan or any
Affiliated Companies terminated prior to January 1, 2005 shall be determined in
accordance with the provisions of the Plan then in effect unless otherwise
provided herein and subject to any modification provided herein that may affect
the holding or distribution of Participants' Accounts.

     1.4 Amendments to Plan. The Plan has been amended from time to time since
its Original Effective Date of July 26, 1989 to reflect changes in the Plan's
operations and applicable law including, but not limited to, the following:

          (a) Effective March 28, 2005, the Plan's mandatory distribution rule
     shall apply to Accounts, the vested portions of which, do not exceed
     $1,000. The Plan document also incorporates the amendments made under the
     First, Second, and Third Amendments to the Plan (Restated 2003).

          (b) Effective January 1, 2003, participation in the Plan was limited
     to those Employees who were Participants in the Plan as of December 31,
     2002. The Plan was also amended as necessary to comply with applicable law
     and to incorporate the amendments made under the First and Second
     Amendments to the Plan (Restated 2001).



          (c) Effective June 29, 2002, in connection with the distribution of
     the stock of Advanced Medical Optics, Inc. ("AMO") by Allergan to its
     stockholders (i) AMO Employees (as defined in Section 2.16) ceased to be
     "Eligible Participants" (as defined in Section 4.2(d)) and shall not be
     eligible to receive allocations of Company contributions or forfeitures
     pursuant to Section 4.2 and Section 4.3, respectively or any allocations of
     unallocated assets pursuant to Section 10.1 upon termination of the Plan,
     (ii) the assets and liabilities attributable to the Accounts of "AMO
     Employees" shall be transferred to the Advanced Medical Optics, Inc. 401(k)
     Plan, a qualified profit sharing plan with a qualified cash or deferred
     arrangement, in accordance with Code Section 414(l), Regulation Section
     1.414(1)-1, and Section 208 of ERISA, (iii) the AMO stock received with
     respect to Company Stock allocated to Participants' ESOP Accounts shall be
     held in a separate investment fund established by the Committee pursuant to
     Section 6.3(c) and Participants shall have subaccounts under the Plan
     corresponding to their interest in such investment fund, and (iv) the AMO
     stock received with respect to Company Stock held in the Exempt Loan
     Suspense Subfund or Company Stock not yet allocated to Participants' ESOP
     Accounts shall be applied or retained as determined by the Committee in
     accordance with Section 6.7(b).

     1.5 Plan Qualification. The Plan is an employee benefit plan that is
intended to qualify under Code Section 401(a) as a qualified stock bonus plan
and under Code Section 4975(e)(7) as an employee stock ownership plan. The
Plan's last determination letter was issued by the Internal Revenue Service on
March 7, 2003 with respect to the Allergan, Inc. Employee Stock Ownership Plan
(Restated 2003) and its compliance with the changes to the qualification
requirements made by the Uruguay Round Agreements Act (GATT), the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal Revenue
Service Restructuring and Reform Act of 1998, and the Community Renewal Tax
Relief Act of 2000. It is intended that the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA") provisions of the Plan are to be regarded
as good faith compliance with the requirements of EGTRRA and are to be construed
in accordance with EGTRRA and guidance issued thereunder.


                                        2



                                   ARTICLE II
                                   DEFINITIONS

     2.1. Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). An
entity shall be an Affiliated Company pursuant to this Section only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
Original Effective Date of the Plan.

     2.2. Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the person or
persons last designated by a Participant as set forth in Section 5.8 or, if
there is no designated Beneficiary or surviving Beneficiary, the person or
persons designated pursuant to Section 5.8 to receive the interest of a deceased
Participant in such event.

     2.3. Board of Directors. "Board of Directors" shall mean the Board of
Directors of the Sponsor (or its delegate) as it may from time to time be
constituted.

     2.4. Break in Service. "Break in Service" shall mean, with respect to an
Employee, each period of 12 consecutive months during a Period of Severance that
commences on the Employee's Severance Date or on any anniversary of such
Severance Date.

     2.5. Code. "Code" shall mean the Internal Revenue Code of 1986 and the
regulations thereunder. Reference to a specific Code Section shall be deemed
also to refer to any applicable regulations under that Section, and shall also
include any comparable provisions of future legislation that amend, supplement
or supersede that specific Section.

     2.6. Committee. "Committee" shall mean the committee appointed under the
provisions of Section 7.1.

     2.7. Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts the Plan in accordance with Section 8.2.

     2.8. Company Stock. "Company Stock" shall mean any class of stock of the
Sponsor which both constitutes "qualifying employer securities" as defined in
Section 407(d)(5) of ERISA and "employer securities" as defined in Code Section
409(1).

     2.9. Compensation. "Compensation" shall mean the following:

          (a) Compensation shall include amounts paid during a Plan Year to a
     Participant by the Company for services rendered, including base earnings,
     commissions


                                        3



     and similar incentive compensation, cost of living allowances earned within
     the United States of America, holiday pay, overtime earnings, pay received
     for election board duty, pay received for jury and witness duty, pay
     received for military service (annual training), pay received for being
     available for work, if required (call-in premium), shift differential and
     premium, sickness/accident related pay, vacation pay (other than as
     excluded in paragraph (c) below), vacation shift premium, and bonus amounts
     paid under the (i) Sales Bonus Program, (ii) Management Bonus Plan or
     Executive Bonus Plan, either in cash or in restricted stock, and (iii)
     group performance sharing payments, such as the "Partners for Success."

          (b) Compensation shall include amounts of salary reduction elected by
     a Participant under a Code Section 401(k) cash or deferred arrangement or a
     Code Section 125 cafeteria plan.

          (c) Compensation shall not include business expense reimbursements;
     Company gifts or the value of Company gifts; Company stock related options
     and payments; employee referral awards; flexible compensation credits paid
     in cash; special overseas payments, allowances and adjustments including,
     but not limited to, pay for cost of living adjustments and differentials
     paid for service outside of the United States, expatriate reimbursement
     payments, and tax equalization payments; forms of imputed income; long-term
     disability pay; payment for loss of Company car; Company car allowance;
     payments for patents or for writing articles; relocation and moving
     expenses; retention and employment incentive payments; severance pay;
     long-term incentive awards, bonuses or payments; "Impact Award" payments;
     "Employee of the Year" payments; "Awards for Excellence" payments; "Hidden
     Gem Award" payments; special group incentive payments and individual
     recognition payments which are nonrecurring in nature; tuition
     reimbursement; lump sum amounts paid to Employees under the Company's
     vacation buy-back policy on or after October 1, 2004; and contributions by
     the Company under the Plan or distributions hereunder, any contributions or
     distributions pursuant to any other plan sponsored by the Company and
     qualified under Code Section 401(a) (other than contributions constituting
     salary reduction amounts elected by the Participant under a Code Section
     401(k) cash or deferred arrangement), any payments under a health or
     welfare plan sponsored by the Company, or premiums paid by the Company
     under any insurance plan for the benefit of Employees.

          (d) Compensation for any Plan Year shall not include amounts in excess
     of $210,000, as adjusted for cost-of-living increases in accordance with
     Code Section 401(a)(17)(B) for purposes of determining all benefits
     provided under the Plan for any Plan Year. Any cost-of-living adjustments
     in effect for a calendar year shall apply to the Plan Year beginning with
     or within such calendar year.

          (e) Notwithstanding the foregoing, for purposes of applying the
     provisions of Articles XI and XII, a Participant's Compensation shall be
     determined pursuant to the definition of "Compensation" as set forth in
     Section 11.5 or 12.2(i), as the case may be.


                                        4



     2.10. Credited Service. "Credited Service" shall mean, with respect to each
Employee, his or her years and months of Credited Service determined in
accordance with the following rules:

          (a) In the case of any Employee who was employed by the Company on the
     Original Effective Date, for the period prior to such Effective Date such
     Employee shall be credited with Credited Service under the Plan equal to
     the period (if any) of uninterrupted employment of such Employee with the
     Company up to and including the day before the Original Effective Date. For
     purposes of this paragraph (a), such a period of pre-Effective Date
     employment shall not be deemed to have been interrupted by reason of (i)
     any break in or interruption of employment which continued for less than
     one year, or (ii) any Leave of Absence granted to such Employee under
     applicable Company policies regarding Leaves of Absence.

          (b) On and after the Effective Date, an Employee shall receive
     Credited Service credit for the elapsed period of time between each
     Employment Commencement Date (or Reemployment Commencement Date) of the
     Employee and the Severance Date which immediately follows that Employment
     Commencement Date (or Reemployment Commencement Date). Solely for the
     purpose of determining an Employee's Credited Service under this paragraph
     (b), in the case of an Employee who is employed on the Effective Date, that
     date shall be deemed to be an Employment Commencement Date of the Employee
     (with service credit for periods prior to the Effective Date to be
     determined under paragraph (a) above). An Employee who is absent from work
     on an authorized Leave of Absence shall be deemed to have incurred a
     Severance (if any) in accordance with the rules of Section 2.35.

          (c) An Employee shall receive Credited Service credit for periods
     between a Severance and his or her subsequent Reemployment Commencement
     Date in accordance with the following rules:

               (i) If an Employee incurs a Severance by reason of a quit,
          discharge or retirement (other than such a Severance occurring during
          an approved Leave of Absence, which situation is covered under the
          provisions of subparagraph (ii) below), and the Employee is later
          reemployed by the Company prior to his or her incurring a Break in
          Service, he or she shall receive Credited Service for the period
          commencing with his or her Severance Date and ending with his or her
          subsequent Reemployment Commencement Date.

               (ii) If an Employee is on an approved Leave of Absence and then
          incurs a Severance by reason of a quit, discharge or retirement during
          the Leave of Absence, or a failure to return to work as scheduled
          following such Leave, and such Employee is later reemployed by the
          Company within 12 months of the date on which he or she discontinued
          active employment and commenced such Leave, he or she shall receive
          Credited Service for the period commencing with his or her Severance
          Date and ending with his or her subsequent Reemployment


                                        5



          Commencement Date. For such purposes an Employee shall be deemed to
          have incurred a Severance (if any) in accordance with the rules of
          Section 2.35.

               (iii) Other than as expressly set forth above in this paragraph
          (c), an Employee shall receive no Credited Service with respect to
          periods between a Severance and a subsequent Reemployment Commencement
          Date.

          (d) For all purposes of the Plan, an Employee's total Credited Service
     shall be determined by aggregating any separate periods of Credited Service
     separated by any Breaks in Service.

          (e) An Employee shall be credited with Credited Service with respect
     to a period of employment with an Affiliated Company, but only to the
     extent that such period of employment would be so credited under the
     foregoing rules set forth in this Section had such Employee been employed
     during such period by the Company.

          (f) Notwithstanding the foregoing, unless the Sponsor shall so provide
     by resolution of its Board of Directors, or unless otherwise expressly
     stated in the Plan, an Employee shall not receive such Credited Service
     credit for any period of employment with an Affiliated Company prior to
     such entity becoming an Affiliated Company, except that Employees of
     Allergan Optical, Inc., Allergan Humphrey, and Allergan Medical Optics
     shall receive Credited Service credit for any period of employment with
     such companies prior to the time such companies became Affiliated
     Companies.

          (g) Notwithstanding any provision of the Plan to the contrary,
     contributions, benefits and service credit with respect to qualified
     military service shall be provided in accordance with Code Section 414(u).

     2.11. Disability. "Disability" shall mean any mental or physical condition
which, in the judgment of the Committee, based on such competent medical
evidence as the Committee may require, renders an individual unable to engage in
any substantial gainful activity for the Company for which he or she is
reasonably fitted by education, training, or experience and which condition can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of at least 12 months. The determination by the
Committee, upon opinion of a physician selected by the Committee, as to whether
a Participant has incurred a Disability shall be final and binding on all
persons.

     2.12. Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 2005 unless otherwise specified in the Plan. The "Original Effective
Date" of the Plan shall mean July 26, 1989.

     2.13. Eligible Employee. "Eligible Employee" shall mean any Employee who
was a Participant in the Plan on December 31, 2002 and who has not incurred a
Severance on or after January 1, 2003.


                                        6



     2.14. Eligible Retirement Plan. "Eligible Retirement Plan" shall mean (i)
an individual retirement account or annuity described in Code Section 408(a) or
408(b), (ii) a qualified retirement plan described in Code Section 401(a) or
403(a) that accepts Eligible Rollover Distributions, (iii) an annuity contract
described in Code Section 403(b) that accepts Eligible Rollover Distributions,
and (iv) an eligible plan described in Code Section 457(b) which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan. The definition of
Eligible Retirement Plan shall also apply in the case of an Eligible Rollover
Distribution to a surviving spouse or to a spouse or former spouse who is an
Alternate Payee under a Qualified Domestic Relations Order (as defined in
Article XIII).

     2.15. Eligible Rollover Distribution. "Eligible Rollover Distribution"
shall mean any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution does not
include:

          (a) any distribution that is one of a series of substantially equal
     periodic payments (not less frequently than annually) made for the life (or
     life expectancy) of the Distributee or the joint lives (or joint life
     expectancies) of the Distributee and the Distributee's designated
     beneficiary, or for a specified period of ten years or more;

          (b) any distribution to the extent such distribution is required under
     Code Section 401(a)(9); and

          (c) the portion of any distribution that is not includible in gross
     income (determined without regard to the exclusion for net unrealized
     appreciation with respect to employer securities).

          (d) any other distribution that is reasonably expected to total less
     than $200 during the year.

     For purposes of this Section, "Distributee" shall mean any Employee or
former Employee receiving a distribution from the Plan. A Distributee also
includes the Employee or former Employee's surviving spouse and the Employee or
former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order (as defined in Article XIII) with regard to
the interest of the spouse or former spouse.

     2.16. Employee. "Employee" shall mean, for purposes of the Plan, any
individual who is employed by the Sponsor or an Affiliated Company in any
capacity, any portion of whose income is subject to withholding of income tax
and/or for whom Social Security contributions are made by the Sponsor or an
Affiliated Company; provided, however, that such term shall not include:

          (a) Any individual who performs services for the Sponsor or an
     Affiliated Company and who is classified or paid as an independent
     contractor as determined by the payroll records of the Sponsor or an
     Affiliated Company even if a court or administrative


                                        7



     agency determines that such individual is a common-law employee and not an
     independent contractor;

          (b) Any individual who performs services for the Sponsor or an
     Affiliated Company pursuant to an agreement between the Sponsor or an
     Affiliated Company and any other person including a leasing organization
     except to the extent such individual is a Leased Employee; and

          (c) Any individual whose employment is transferred from the Sponsor or
     an Affiliated Company to Advanced Medical Optics, Inc. ("AMO") in
     connection with the distribution of the stock of AMO by the Sponsor to its
     stockholders, effective as of the day following such transfer, hereinafter
     referred to as an "AMO Employee." An individual is an AMO Employee if
     classified or identified as such in the payroll records of the Sponsor or
     an Affiliated Company or in the Employee Matters Agreement entered into
     between the Sponsor and AMO.

     2.17. Employment Commencement Date. "Employment Commencement Date" shall
mean the date on which an Employee is first credited with an Hour of Service for
the Sponsor or an Affiliated Company. An Employee shall not, for the purpose of
determining his or her Employment Commencement Date, be deemed to have commenced
employment with an Affiliated Company prior to the effective date on which the
entity became an Affiliated Company unless the Sponsor expressly determines
otherwise, and except as is expressly provided otherwise in the Plan or in
resolutions of the Board of Directors.

     2.18. ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974 and the regulations thereunder. Reference to a specific ERISA Section
shall be deemed also to refer to any applicable regulations under that Section,
and shall also include any comparable provisions of future legislation that
amend, supplement or supersede that specific Section.

     2.19. ESOP Account. "ESOP Account" shall mean, with respect to each
Participant, the account established and maintained for purposes of holding and
accounting for the Participant's allocated share of assets of the Plan,
including any subaccounts established thereunder from time to time (including
his or her Stock Subaccount and Non-Stock Subaccount established pursuant to
Section 6.6).

     2.20. Exempt Loan. "Exempt Loan" shall mean any loan to the Plan or Trust
not prohibited by Code Section 4975(c), including a loan which meets the
requirements set forth in Code Section 4975(d)(3) and the regulations
promulgated thereunder, the proceeds of which are used to finance the
acquisition of Company Stock or to refinance such a loan.

     2.21. Exempt Loan Suspense Subfund. "Exempt Loan Suspense Subfund" shall
mean the subfund established under Section 4.1 hereof as part of the Trust Fund
to hold Company Stock purchased with the proceeds of an Exempt Loan pending the
allocation of such Company Stock to individual ESOP Accounts.


                                        8



     2.22. 415 Suspense Account. "415 Suspense Account" shall mean the account
(if any) established and maintained in accordance with the provisions of Article
XI for the purpose of holding and accounting for allocations of excess Annual
Additions (as defined in Article XI).

     2.23. Highly Compensated Employee. "Highly Compensated Employee" shall
mean:

          (a) An Employee who performed services for the Employer during the
     Plan Year or preceding Plan Year and is a member of one or more of the
     following groups:

               (i) Employees who at any time during the Plan Year or preceding
          Plan Year were Five Percent Owners (as defined in Section 12.2).

               (ii) Employees who received Compensation during the preceding
          Plan Year from the Employer in excess of $80,000 (as adjusted in such
          manner as permitted under Code Section 414(q)(1)).

          (b) For the purpose of this Section, the term "Compensation" means
     compensation as defined in Code Section 415(c)(3), as set forth in Section
     11.5.

          (c) The term "Highly Compensated Employee" includes a Former Highly
     Compensated Employee. A Former Highly Compensated Employee is any Employee
     who was (i) a Highly Compensated Employee when he or she terminated
     employment with the Employer or (ii) a Highly Compensated Employee at any
     time after attaining age 55. Notwithstanding the foregoing, an Employee who
     separated from service prior to 1987 shall be treated as a Former Highly
     Compensated Former Employee only if during the separation year (or year
     preceding the separation year) or any year after the Employee attains age
     55 (or the last year ending before the Employee's 55th birthday), the
     Employee either received Compensation in excess of $50,000 or was a Five
     Percent Owner.

          (d) For the purpose of this Section, the term "Employer" shall mean
     the Sponsor and any Affiliated Company.

          (e) The determination of who is a Highly Compensated Employee,
     including the determination of the Compensation that is considered, shall
     be made in accordance with Code Section 414(q) and the regulations
     thereunder.

     2.24. Hour of Service. "Hour of Service" shall mean an hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Sponsor and any Affiliated Company.

     2.25. Investment Manager. "Investment Manager" shall mean the one or more
investment managers, if any, appointed pursuant to Section 6.14 and who
constitute investment managers under Section 3(38) of ERISA.


                                        9



     2.26. Leased Employee. "Leased Employee" shall mean any person (other than
an Employee of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in accordance
with Code Section 414(n)(6)) on a substantially full time basis for a period of
at least one (1) year, and such services are performed under the primary
direction or control by recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated employer
contribution rate of at least ten (10) percent of compensation as defined under
Code Section 415(c)(3); (ii) immediate participation; and (iii) full and
immediate vesting.

     2.27. Leave of Absence.

          (a) "Leave of Absence" shall mean any personal leave from active
     employment (whether with or without pay) duly authorized by the Company
     under the Company's standard personnel practices. All persons under similar
     circumstances shall be treated alike in the granting of such Leaves of
     Absence. Leaves of Absence may be granted by the Company for reasons of
     health (including temporary sickness or short term disability) or public
     service or for any other reason determined by the Company to be in its best
     interests.

          (b) In addition to Leaves of Absence as defined in paragraph (a)
     above, the term Leave of Absence shall also mean a Maternity or Paternity
     Leave, as defined herein, but only to the extent and for the purposes
     required under paragraph (c) below. As used herein, "Maternity or Paternity
     Leave" shall mean an absence from work for any period (i) by reason of the
     pregnancy of the Employee, (ii) by reason of the birth of a child of the
     Employee, (iii) by reason of the placement of a child with the Employee in
     connection with the adoption of the child by the Employee, or (iv) for
     purposes of caring for the child for a period beginning immediately
     following the birth or placement referred to in clauses (ii) or (iii)
     above.

          (c) Subject to the provisions of paragraph (d) below, a Maternity or
     Paternity Leave described in paragraph (b) above shall be deemed to
     constitute an authorized Leave of Absence for purposes of the Plan only to
     the extent consistent with the following rules:

               (i) For purposes of determining whether a Break in Service has
          occurred, the Severance Date of a Participant who is absent by reason
          of a Maternity or Paternity Leave shall not be deemed to occur any
          earlier than the second anniversary of the date upon which such
          Maternity or Paternity Leave commences.


                                       10



               (ii) The Maternity or Paternity Leave shall be treated as a Leave
          of Absence solely for purposes of determining whether or not an
          Employee has incurred a Break in Service. Accordingly, such a
          Maternity or Paternity Leave shall not result in an accrual of
          Credited Service for purposes of the vesting provisions of the Plan or
          for purposes of determining eligibility to participate in the Plan
          (except only in determining whether a Break in Service has occurred).

               (iii) A Maternity or Paternity Leave shall not be treated as a
          Leave of Absence unless the Employee provides such timely information
          as the Committee may reasonably require to establish that the absence
          is for the reasons listed in paragraph (b) above and to determine the
          number of days for which there was such an absence.

          (d) Notwithstanding the limitations provided in paragraph (c) above, a
     Maternity or Paternity Leave described in paragraph (b) above shall be
     treated as an authorized Leave of Absence, as described in paragraph (a),
     for all purposes of the Plan to the extent the period of absence is one
     authorized as a Leave of Absence under the Company's standard personnel
     practices and thus is covered by the provisions of paragraph (a) above
     without reference to the provisions of paragraph (b) above, provided,
     however, that the special rule provided under this paragraph (d) shall not
     apply if it would result in a Participant who is absent on a Maternity or
     Paternity Leave being deemed to have incurred a Break in Service sooner
     than under the rules set forth in paragraph (c).

     2.28. Normal Retirement Age. "Normal Retirement Age" shall mean a
Participant's sixty-fifth (65th) birthday.

     2.29. Participant. "Participant" shall mean any Eligible Employee or former
Eligible Employee who has commenced participation in the Plan pursuant to
Section 3.1 and who retains rights under the Plan.

     2.30. Period of Severance. "Period of Severance" shall mean the period of
time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

     2.31. Plan. "Plan" shall mean the Allergan, Inc. Employee Stock Ownership
Plan described herein and as amended from time to time.

     2.32. Plan Administrator. "Plan Administrator" shall mean the administrator
of the Plan within the meaning of Section 3(16)(A) of ERISA. The Plan
Administrator shall be the Allergan Corporate Benefits Committee whose members
are appointed by the Board of Directors pursuant to the provisions of Section
7.1 to administer the Plan.

     2.33. Plan Year. "Plan Year" shall mean the calendar year.


                                       11



     2.34. Reemployment Commencement Date. "Reemployment Commencement Date"
shall mean, in the case of an Employee who incurs a Severance and who is
subsequently reemployed by the Sponsor or an Affiliated Company, the first day
following the Severance on which the Employee is credited with an Hour of
Service for the Sponsor or an Affiliated Company with respect to which he or she
is compensated or entitled to compensation by the Sponsor or an Affiliated
Company. An Employee shall not, for the purpose of determining his or her
Reemployment Commencement Date, be deemed to have commenced employment with an
Affiliated Company prior to the effective date on which such entity becomes an
Affiliated Company unless the Sponsor shall expressly determine otherwise, and
except as is expressly provided otherwise in the Plan or in resolutions of the
Board of Directors.

     2.35. Severance. "Severance" shall mean the termination of an Employee's
employment with the Sponsor or an Affiliated Company by reason of such
Employee's quit, discharge, Disability, death, retirement, or otherwise. For
purposes of determining whether an Employee has incurred a Severance, the
following rules shall apply:

          (a) An Employee shall not be deemed to have incurred a Severance (i)
     because of his or her absence from employment with the Sponsor or an
     Affiliated Company by reason of any paid vacation or holiday period, or
     (ii) by reason of any Leave of Absence, subject to the provisions of
     paragraph (b) below.

          (b) For purposes of the Plan, an Employee shall be deemed to have
     incurred a Severance on the earlier of (i) the date on which he or she
     dies, resigns, is discharged, or otherwise terminates his or her employment
     with the Sponsor or an Affiliated Company; or (ii) the date on which he or
     she is scheduled to return to work after the expiration of an approved
     Leave of Absence, if he or she does not in fact return to work on the
     scheduled expiration date of such Leave; or (iii) in the case of a Leave of
     Absence for longer than one year, the first anniversary of the commencement
     of such Leave, provided such Employee does not actually return to work on
     or before said first anniversary date. In no event shall an Employee's
     Severance be deemed to have occurred before the last day on which such
     Employee performs any services for the Sponsor or an Affiliated Company in
     the capacity of an Employee with respect to which he or she is compensated
     or entitled to compensation by the Sponsor or an Affiliated Company.

          (c) Notwithstanding the foregoing, in the case of a Participant who is
     absent by reason of a Maternity or Paternity Leave, the provisions of
     Section 2.27(c)-(d) shall apply for purposes of determining whether such a
     Participant has incurred a Break in Service by reason of such Leave.

     2.36. Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred said Severance as determined in accordance with the provisions of
Section 2.35, provided, however, that the special rule set forth under Section
2.27(c)-(d) shall apply with respect to determining whether a Participant on a
Maternity or Paternity Leave has incurred a Break in Service. In the case of any
Employee who incurs a Severance as provided under Section 2.35 and who is
entitled to a subsequent payment of compensation for reasons other than future
services (e.g., as back pay for


                                       12



past services rendered or as payments in the nature of severance pay), the
Severance Date of such Employee shall be as of the effective date of the
Severance event (e.g., the date of his or her death, effective date of a
resignation or discharge, etc.), and the subsequent payment of the
aforementioned type of post-Severance compensation shall not operate to postpone
the timing of the Severance Date for purposes of the Plan.

     2.37. Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware corporation,
and any successor corporation or entity.

     2.38. Trust. "Trust" or "Trust Fund" shall mean the trust maintained
pursuant to the Trust Agreement and as described in Section 6.1 hereof, which
shall hold all cash and securities and all other assets of whatsoever nature
deposited with or acquired by the Trustee in its capacity as Trustee hereunder,
together with accumulated net earnings.

     2.39. Trust Agreement. "Trust Agreement" shall mean the agreement between
the Trustee and the Sponsor pursuant to which the Trust is maintained.

     2.40. Trustee. "Trustee" shall mean the one or more trustees of the Trust
established pursuant to Section 6.1 hereof.

     2.41. Valuation Date. "Valuation Date" shall mean the last day of each Plan
Year and any other date which the Committee may designate from time to time.


                                       13



                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

     3.1. Participation. Each Employee or former Employee who was a Participant
in the Plan as of December 31, 2002 shall continue as a Participant. Any other
Employee shall not be eligible to participate in the Plan.

     3.2. Duration of Participation. A Participant shall remain an active
Participant until he or she incurs a Severance, at which time he or she shall
become an inactive Participant until he or she receives a distribution of the
entire vested portion of his or her ESOP Account. Once such a distribution is
made, such Participant shall no longer be considered a Participant in the Plan.
Any Participant who (i) transfers out of employment with the Company but who
remains an Employee of an Affiliated Company that has not adopted the Plan
pursuant to Section 8.2, or (ii) remains an Employee of the Company but is no
longer an Eligible Employee, shall become an inactive Participant.

     3.3. Participation after Reemployment. A Participant who incurs a Severance
after he or she is fully vested in his or her ESOP Account and who is
subsequently reemployed prior to receiving a distribution of his or her entire
ESOP Account shall continue as an inactive Participant (but shall not be
reinstated as an Eligible Participant as defined in Section 4.2(d)). A
Participant who incurs a Severance before he or she is fully vested in his or
her ESOP Account and who is subsequently reemployed shall be reinstated as an
inactive Participant (but shall not be reinstated as an Eligible Participant as
defined in Section 4.2(d)) as of his or her Reemployment Commencement Date;
provided, that such Participant has a right to reinstatement of his or her
forfeited ESOP Account upon his or her Reemployment Commencement Date pursuant
to Section 5.3. Any other Participant who incurs a Severance and who is
subsequently reemployed, including a Participant who incurs a Severance after he
or she is fully vested in his or her ESOP Account and who receives a
distribution of his or her entire ESOP Account, shall not be eligible to
participate in the Plan.

     3.4. Participation After Normal Retirement Age. An Eligible Employee may
continue as a Participant after reaching his or her Normal Retirement Age in the
same manner as an Eligible Employee who has not reached his or her Normal
Retirement Age.


                                       14



                                   ARTICLE IV
                    CONTRIBUTIONS AND ALLOCATION TO ACCOUNTS

     4.1. Contributions to the Trust Fund. The Company may contribute to the
Trust Fund for each Plan Year an amount to be determined by the Board of
Directors solely in its discretion. Such amount shall be contributed in cash or
Company Stock and paid over to the Trustee for allocation to the Trust Fund not
later than the date prescribed for filing the Sponsor's federal income tax
return (including all extensions thereto) for its fiscal year corresponding to
such Plan Year. Contributions shall first be applied, if necessary, to reinstate
the ESOP Accounts of applicable reemployed Participants who had previously
forfeited their ESOP Accounts pursuant to Section 5.3 of the Plan, but only
after all forfeitures for the Plan Year have been so applied pursuant to Section
4.3. Some or all of the remaining contributions under this Section 4.1 may be
applied to repay any principal and/or interest outstanding on any Exempt Loan or
to pay Plan expenses as provided in Section 7.14. The determination of the
extent to which such contributions shall be used to repay such Exempt Loans or
pay Plan expenses shall be made at the sole discretion of the Committee. Company
Stock acquired by the Trust Fund through an Exempt Loan shall be added to and
maintained in the Exempt Loan Suspense Subfund and shall thereafter be released
from the Exempt Loan Suspense Subfund and allocated to Participants' ESOP
Accounts as provided in Section 4.2. Contributions in excess of amounts used for
other purposes described in this Section 4.1 shall be allocated to the ESOP
Accounts of Participants as provided in Section 4.2.

     4.2. Allocation of Contributions to Trust Fund.

          (a) As of a date not later than the last day of each Plan Year, an
     allocation shall be made to the ESOP Account of the allocable share of each
     "Eligible Participant" as defined in paragraph (d) below for such Plan Year
     of (i) Company contributions of Company Stock contributed in kind to the
     Trust Fund and (ii) Company contributions in other than Company Stock,
     which are not used for other purposes described in Section 4.1. Such
     allocations shall be made in the same proportion that the Compensation for
     the Plan Year for such Eligible Participant bears to the total Compensation
     of all Eligible Participants for such Plan Year.

          (b) Company Stock acquired for the Trust Fund through an Exempt Loan
     shall be released from the Exempt Loan Suspense Subfund as the Exempt Loan
     is repaid, in accordance with the provisions of this Section 4.2(b).

               (i) For each Plan Year until the Exempt Loan is fully repaid, the
          number of shares of Company Stock released from the Exempt Loan
          Suspense Subfund shall equal the number of unreleased shares
          immediately before such release for the current Plan Year multiplied
          by the "Release Fraction." As used herein, the Release Fraction shall
          be a fraction, the numerator of which is the amount of principal and
          interest paid on the Exempt Loan for such current Plan Year, and the
          denominator of which is the sum of the numerator plus the principal
          and interest to be paid on such Exempt Loan for all future years
          during the duration of the term of such Loan (determined without
          reference to any possible


                                       15



          extensions or renewals thereof). Notwithstanding the foregoing, in the
          event such Loan shall be repaid with the proceeds of a subsequent
          Exempt Loan (the "Substitute Loan"), such repayment shall not operate
          to release all such Company Stock in the Exempt Loan Suspense Subfund,
          but, rather, such release shall be effected pursuant to the foregoing
          provisions of this Section 4.2(b) on the basis of payments of
          principal and interest on such Substitute Loan.

               (ii) If the Committee so determines in its discretion, then in
          lieu of applying the provisions of Section 4.2(b)(i) hereof with
          respect to such Exempt Loan or Substitute Loan, shares shall be
          released from the Exempt Loan Suspense Subfund as the principal amount
          of an Exempt Loan is repaid (and without regard to interest payments),
          provided the following three conditions are satisfied:

                    (A) The Exempt Loan must provide for annual payments of
               principal and interest at a cumulative rate that is not less
               rapid at any time than level annual payments of such amounts for
               ten years.

                    (B) The interest portion of any payment is disregarded only
               to the extent it would be treated as interest under standard loan
               amortization tables.

                    (C) If the Exempt Loan is renewed, extended or refinanced,
               the sum of the expired duration of the Exempt Loan and the
               renewal, extension or new Exempt Loan period must not exceed ten
               years.

               (iii) It is intended that the provisions of this Section 4.2(b)
          shall be applied and construed in a manner consistent with the
          requirements and provisions of Treasury Regulation Section
          54.4975-7(b)(8), and any successor regulation thereto. All Company
          Stock released from the Exempt Loan Suspense Subfund during any Plan
          Year shall be allocated among Participants as prescribed by Section
          4.2(c) hereof, except to the extent provided in Section 6.7.

          (c) Shares of Company Stock released from the Exempt Loan Suspense
     Subfund for a Plan Year in accordance with Section 4.2(b) hereof and
     Section 6.7(b)(i) shall be held in the Trust Fund on an unallocated basis
     until allocated by the Committee as of not later than the last day of that
     Plan Year. The allocation of such shares shall be made among the ESOP
     Accounts of Eligible Participants (as that term is defined in paragraph (d)
     below). The number of shares allocable to each such Eligible Participant's
     ESOP Account shall be the number of shares which bears the same ratio to
     the total shares released for such Plan Year as the Compensation for the
     Plan Year for such Eligible Participant bears to the total Compensation of
     all Eligible Participants for such Plan Year.

          (d) For purposes of Section 4.2, an "Eligible Participant" shall mean
     any Participant who is an Eligible Employee on the last business day of
     such Plan Year or who ceased to be an Eligible Employee during such Plan
     Year due to death, Disability, or


                                       16



     retirement at or after age 55 (as such retirement is determined under the
     Allergan, Inc. Pension Plan). Any Eligible Participant who, on or after
     January 1, 2003, (i) incurs a Severance and is subsequently reemployed or
     (ii) transfers out of employment with the Company to employment with an
     Affiliated Company that has not adopted the Plan pursuant to Section 8.2
     and is subsequently transferred back to employment with Company, shall not
     be an Eligible Participant following his or her Reemployment Commencement
     Date or transfer date.

     4.3. Forfeitures. Any amount which is forfeited pursuant to Section 5.3 or
5.13 during a Plan Year shall be segregated from other amounts held under the
Plan and shall first be used to reinstate the ESOP Accounts of reemployed
Participants (or Beneficiaries, if applicable) who had previously forfeited such
ESOP Accounts and who have a right to reinstatement of their forfeited ESOP
Accounts pursuant to Section 5.3 or 5.13. Should any forfeitures then remain,
they may next be used to pay Plan expenses as provided under Section 7.14.
Should any forfeitures then remain, they shall be allocated as of the last day
of the Plan Year to the ESOP Accounts of Eligible Participants (as that term is
defined in Section 4.2(d)) based on Compensation in the same manner as
allocations under Section 4.2(a) and (c).

     4.4. Employee Contributions and Rollovers. No Employee contributions are
permitted under the Plan. No rollover contributions to the Plan are permitted
whether or not any such contributions would satisfy the applicable requirements
of Code Sections 402, 403, 408 or 409.


                                       17



                                    ARTICLE V
                            VESTING AND DISTRIBUTIONS

     5.1. No Vested Rights Except as Herein Specified. No Employee shall have
any vested right or interest in any assets of the Trust, except as provided in
this Article V. Neither the making of any allocations nor the credit to any ESOP
Account of a Participant in the Trust shall vest in any Participant any right,
title, or interest in or to any assets of the Trust except as provided in this
Article V.

     5.2. Vesting.

          (a) The interest of a Participant in amounts allocated to his or her
     ESOP Account, including cash dividends on shares of Company Stock allocated
     to such Participant's ESOP Account, shall vest in accordance with the
     following schedule:



Year of Credited Service   Vested Percentage
- ------------------------   -----------------
                        
    Less than 1                     0%
    1 but less than 2              20%
    2 but less then 3              40%
    3 but less than 4              60%
    4 but less than 5              80%
    5 or more                     100%


          (b) Notwithstanding the above, a Participant shall become fully vested
     in his or her ESOP Account upon the occurrence of the death, Disability, or
     attainment of age 62 of such Participant while an Employee, or upon the
     occurrence of a Change in Control pursuant to Section 10.4(b).

     5.3. Severance When Less Than Fully Vested. Subject to Section 5.10(b), a
Participant who incurs a Severance and who is not or does not become 100% vested
pursuant to Section 5.2, may elect to receive a distribution of the vested
portion of his or her ESOP Account in a single lump sum payment in the form
prescribed by Section 5.9 hereof, as soon as practicable following the
Participant's Severance Date. The non-vested portion of such Participant's ESOP
Account shall be forfeited in accordance with the following rules:

          (a) In the event a distribution of the entire vested portion of such
     Participant's ESOP Account is made pursuant to this Section 5.3, the
     non-vested portion shall be forfeited as of such Participant's distribution
     date. A Participant who incurs a Severance when no portion of his or her
     ESOP Account is vested shall be deemed to have received a distribution
     pursuant to this paragraph (a) as of his or her Severance Date and his or
     her ESOP Account shall be forfeited as of the Participant's Severance Date.
     If the Participant is rehired by the Company prior to the date such
     Participant incurs five consecutive Breaks in Service, the amount forfeited
     under this paragraph (a) shall be reinstated to the Participant's ESOP
     Account as of the Participant's Reemployment Commencement Date (without
     regard to any interest or investment earnings on such amount).


                                       18



          (b) In the event a distribution of the entire vested portion of such
     Participant's ESOP Account is not made pursuant to this Section 5.3, the
     non-vested portion shall be forfeited as of such Participant's Severance
     Date. If the Participant is rehired by the Company prior to the date such
     Participant incurs five consecutive Breaks in Service, the amount so
     forfeited plus an amount equal to the rate of return that the amount
     forfeited would have received but for forfeiture pursuant to this paragraph
     (b) shall be reinstated to the Participant's ESOP Account as of the
     Participant's Reemployment Commencement Date. The Company shall be
     obligated to contribute to the Trust Fund any amounts necessary after
     application of Section 4.3 to reinstate a Participant's ESOP Account if
     reinstatement is required under the provisions of this paragraph.

          (c) At any relevant time after Severance pursuant to paragraphs (a)
     and (b) above, the Participant's vested portion of his or her ESOP Account
     shall be equal to an amount ("X") determined by the following formula:

                               X = P*(AB + D) - D

     For the purposes of applying the formula:

          P = the vested percentage at any relevant time determined pursuant to
              Section 5.2

          AB = the ESOP Account balance at the relevant time

          D = the total amount of any distributions from the ESOP Account since
              such Severance

     5.4. Distribution upon Severance. Subject to Section 5.10(b), a Participant
who incurs a Severance on or after becoming 100% vested pursuant to Section 5.2,
may elect to receive a distribution of his or her ESOP Account, in a single
lump-sum payment in the form prescribed by Section 5.9 hereof, as soon as
practicable following the Participant's Severance Date. Notwithstanding anything
to the contrary, upon receipt of a Qualified Domestic Relations Order on or
after a Participant is 100% vested pursuant to Section 5.2, the amount payable
to an Alternate Payee (as such terms are described in Section 13.2) shall be
distributed to the Alternate Payee as soon as administratively feasible
regardless of whether the Participant incurs a Severance.

     5.5. Distribution upon Death.

          (a) Upon the death of a Participant while still an Employee, the
     Committee shall give such directions as may be necessary to cause a
     distribution of his or her ESOP Account to be made in a single lump-sum
     payment to the Beneficiary designated by the deceased Participant in the
     form prescribed in Section 5.9 hereof, as soon as practicable


                                       19



     following the Participant's death, but in no event later than the last day
     of the Plan Year following the Plan Year in which the Participant died.

          (b) Upon the death of a Participant after he or she ceases to be an
     Employee but before he or she receives his or her entire vested interest in
     the Trust, the Committee shall give such directions as may be necessary to
     cause a distribution, in the manner and time provided in Section 5.5(a)
     hereof, of any vested balance remaining in the Participant's ESOP Account
     to the Beneficiary designated by the Participant.

          (c) The Committee may require the execution and delivery of such
     documents, papers and receipts as the Committee may determine necessary or
     appropriate in order to establish the fact of death of the deceased
     Participant and of the right and identity of any Beneficiary or other
     person or persons claiming any benefits under this Section 5.5.

     5.6. Distribution upon Disability. Subject to Section 5.10(b), in the event
the Committee shall determine that a Participant has suffered a Disability while
an Employee, the Committee shall proceed to cause a distribution to be made of
such Participant's ESOP Account in a single lump-sum payment in the form
prescribed in Section 5.9 hereof as soon as practicable following the
Committee's determination that the Participant has incurred a Disability.

     5.7. Withdrawal upon Age 59-1/2. After attaining age 59-1/2, a Participant
who is still an Employee may, following such reasonable advance notice as may be
required by the Committee, withdraw the entire vested amount credited to his or
her ESOP Account. Such a withdrawal shall be in the same form and using the same
valuation methods as provided for distributions pursuant to Section 5.9.

     5.8. Designation of Beneficiary.

          (a) At any time, and from time to time, each Participant shall have
     the unrestricted right to designate the Beneficiary to receive the portion
     of his or her death benefit and to revoke any such designation. Each such
     designation shall be evidenced by a written instrument signed by the
     Participant and filed with the Committee.

          (b) If the Participant is married and designates a Beneficiary other
     than his or her spouse, said designation shall not be honored by the
     Committee unless accompanied by the written consent of said spouse to said
     designation. Such consent (i) must designate a Beneficiary which may not be
     changed without the consent of the spouse (or the consent of the spouse
     expressly permits designation by the Participant without any further
     consent by the spouse), (ii) must acknowledge the effect of the
     designation, and (iii) must be witnessed by a Plan representative or a
     notary public. No consent of such spouse shall be necessary if it is
     established to the satisfaction of a Plan representative that the consent
     required under this paragraph (b) cannot or need not be obtained because
     (i) there is no spouse, (ii) the spouse cannot be located, or (iii) there
     exist such other circumstances which, pursuant to regulations under Code
     Section 417, permit a distribution to another Beneficiary. Any consent of a
     spouse obtained pursuant to this


                                       20



     paragraph (b) or any determination that the consent of the spouse cannot
     (or need not) be obtained, shall be effective only with respect to that
     spouse. If a Participant becomes married following his or her designation
     of a Beneficiary other than his or her spouse, such designation shall be
     ineffective unless the spousal consent requirements of this paragraph are
     satisfied with respect to such spouse (subject, however, to the provisions
     of Article XIII regarding Qualified Domestic Relations Orders).

          (c) If the Participant is married and does not designate a
     Beneficiary, the Participant's spouse shall be his or her Beneficiary for
     purposes of this Section. If the deceased Participant is not married and
     shall have failed to designate a Beneficiary, or if the Committee shall be
     unable to locate the designated Beneficiary after reasonable efforts have
     been made, or if such Beneficiary shall be deceased, distribution of the
     Participant's death benefit shall be made by payment of the deceased
     Participant's entire interest in the Trust to his or her personal
     representative in a single lump-sum payment. In the event the deceased
     Participant is not a resident of California at the date of his or her
     death, the Committee, in its discretion, may require the establishment of
     ancillary administration in California. If the Committee cannot locate a
     qualified personal representative of the deceased Participant, or if
     administration of the deceased Participant's estate is not otherwise
     required, the Committee, in its discretion, may pay the deceased
     Participant's interest in the Trust to his or her heirs at law (determined
     in accordance with the laws of the State of California as they existed at
     the date of the Participant's death).

     5.9. Form of Distribution.

          (a) All shares of Company Stock or Advanced Medical Optics, Inc.
     allocated to a Participant's ESOP Account shall be distributed in the form
     of cash, unless the Participant elects under paragraph (b) below to receive
     the distribution in the form of Company Stock or Advanced Medical Optics,
     Inc. stock, with cash in lieu of fractional shares. To the extent that
     Company Stock or Advanced Medical Optics, Inc. stock must be valued to
     effect such a distribution, such valuation shall be equal to the fair
     market value of such stock determined as of the last Valuation Date prior
     to the date of distribution.

          (b) A Participant may elect that all shares of Company Stock or
     Advanced Medical Optics, Inc. allocated to his or her ESOP Account be
     distributed in the form of Company Stock or in the form of Advanced Medical
     Optics, Inc. stock, with cash in lieu of fractional shares. Notwithstanding
     the foregoing, if applicable corporate charter or bylaw provisions restrict
     ownership of substantially all outstanding Company Stock to Employees or to
     a plan or trust described in Code Section 401(a), then any distribution of
     a Participant's ESOP Account shall only be in cash.

          (c) Notwithstanding the foregoing, in the case of an Eligible Rollover
     Distribution, a Participant may elect that an Eligible Rollover
     Distribution be paid directly by the Trustee to the trustee of an Eligible
     Retirement Plan.


                                       21


     5.10. Distribution Rules. Notwithstanding the provisions of Sections 5.3,
5.4, 5.5, 5.6, 5.7, and 5.9 of the Plan regarding distributions of Participants'
ESOP Accounts, the following additional rules shall apply to all such
distributions.

          (a) In no event shall any benefits under the Plan, including benefits
     upon retirement, termination of employment, or Disability, be paid to a
     Participant prior to the "Consent Date" (as defined herein) unless the
     Participant consents in writing to the payment of such benefits prior to
     said Consent Date. As used herein, the term "Consent Date" shall mean the
     later of (i) the Participant's 62nd birthday, or (ii) the Participant's
     Normal Retirement Age. Notwithstanding the foregoing, the provisions of
     this paragraph shall not apply (i) following the Participant's death, or
     (ii) to the extent paragraph (b) below applies.

          (b) Notwithstanding anything to the contrary in the Plan, if the total
     amount of the vested portion of a Participant's ESOP Account does not
     exceed $1,000 ($5,000, prior to March 28, 2005), the vested portion of such
     Participant's ESOP Account shall be distributed, in a single lump-sum
     payment in the form prescribed by Section 5.9 hereof, as soon as
     practicable following the Participant's Severance Date.

          (c) Unless the Participant elects otherwise pursuant to paragraph (a)
     above, distributions of the vested portion of a Participant's ESOP Accounts
     shall commence no later than the 60th day after the close of the Plan Year
     in which the latest of the following events occurs: (i) the Participant's
     Normal Retirement Age; (ii) the tenth anniversary of the year in which the
     Participant commenced participation in the Plan; or (iii) the Participant's
     Severance.

          (d) Minimum Required Distributions during Participant's Lifetime.
     Notwithstanding anything to the contrary in the Plan, unless the entire
     vested portion of a Participant's Accounts is distributed in a single sum
     on or before the Required Beginning Date, distributions shall be made in
     accordance with this paragraph (d) as of the first Distribution Calendar
     Year and the entire vested portion of a Participant's Accounts shall be
     distributed, or begin to be distributed, to the Participant no later than
     the Participant's Required Beginning Date as set forth below:

               (i) Amount of Minimum Required Distribution for each Distribution
          Calendar Year. During the Participant's lifetime, the minimum amount
          that shall be distributed for each Distribution Calendar Year is the
          lesser of:

                    (A) the quotient obtained by dividing the Participant's
               Account Balance by the distribution period in the Uniform
               Lifetime Table set forth in Regulation Section 1.401(a)(9)-9,
               using the Participant's age as of the Participant's birthday in
               the Distribution Calendar Year; or

                    (B) if the Participant's sole Designated Beneficiary for the
               Distribution Calendar Year is the Participant's spouse, the
               quotient


                                       22



               obtained by dividing the Participant's Account Balance by the
               number in the Joint and Last Survivor Table set forth in
               Regulation Section 1.401(a)(9)-9, using the Participant's and
               spouse's attained ages as of the Participant's and spouse's
               birthdays in the Distribution Calendar Year.

               (ii) Lifetime Minimum Required Distributions continue through
          Year of Participant's Death. Minimum required distributions shall be
          determined under this paragraph (d) beginning with the first
          Distribution Calendar Year and up to and including the Distribution
          Calendar Year that includes the Participant's date of death.

               (iii) For purposes of this paragraph, the following definitions
          shall apply:

                    (A) "Account Balance" shall mean the account balance of a
               Participant's Account as of the last valuation date in the
               calendar year immediately preceding the Distribution Calendar
               Year (valuation calendar year) increased by the amount of any
               contributions made and allocated or forfeitures allocated to a
               Participant's Accounts as of dates in the valuation calendar year
               after the valuation date and decreased by distributions made in
               the valuation calendar year after the valuation date. The Account
               Balance for the valuation calendar year includes any amounts
               rolled over or transferred to the plan either in the valuation
               calendar year or in the Distribution Calendar Year if distributed
               or transferred in the valuation calendar year.

                    (B) "Designated Beneficiary" shall mean the individual who
               is designated as the Beneficiary under Section 5.8 and is the
               Designated Beneficiary under Code Section 401(a)(9) and
               Regulation Section 1.401(a)(9)-1, Q&A-4.

                    (C) "Distribution Calendar Year" shall mean a calendar year
               for which a minimum distribution is required. For distributions
               beginning before the Participant's death, the first Distribution
               Calendar Year is the calendar year immediately preceding the
               calendar year which contains the Participant's Required Beginning
               Date. The minimum required distribution for the Participant's
               first Distribution Calendar Year shall be made on or before the
               Participant's Required Beginning Date. The minimum required
               distribution for other Distribution Calendar Years, including the
               minimum required distribution for the Distribution Calendar Year
               in which the Participant's Required Beginning Date occurs, shall
               be made on or before December 31 of that Distribution Calendar
               Year.


                                       23



                    (D) "Life expectancy" shall mean as computed by use of the
               Single Life Table in Regulation Section 1.401(a)(9)-9.

                    (E) "Required Beginning Date" shall mean April 1 of the
               calendar year immediately following the later of the calendar
               year in which the Participant attains age 70-1/2 or incurs a
               Severance; provided, however, if such Participant is a Five
               Percent Owner (as defined in Code Section 416(i) and applicable
               regulations) with respect to the Plan Year ending in the calendar
               year in which such Participant attains age 70-1/2, the Required
               Beginning Date shall be April 1 of the calendar year immediately
               following the year in which such Participant attains age 70-1/2.

               (iv) Treasury Regulations Incorporated by Reference. All
          distributions required under this subsection shall be determined and
          made in accordance with the Treasury Regulations under Code Section
          401(a)(9).

          (e) Minimum Required Distributions following Participant's Death. If a
     Participant dies before the entire vested portion of his or her ESOP
     Account is distributed, the entire vested portion of the Participant's ESOP
     Account shall be distributed as provided in Section 5.5.

          (f) If it is not administratively practical to calculate and commence
     payments by the latest date specified in the rules of paragraphs (b), (c),
     (d) and (e) above because the amount of the Participant's benefit cannot be
     calculated, or because the Committee is unable to locate the Participant
     after making reasonable efforts to do so, the payment shall be made as soon
     as is administratively possible (but not more than 60 days) after the
     Participant can be located and the amount of the distributable benefit can
     be ascertained.

          (g) If any payee under the Plan is a minor or if the Committee
     reasonably believes that any payee is legally incapable of giving a valid
     receipt and discharge for any payment due him, the Committee may have such
     payment, or any part thereof, made to the person (or persons or
     institution) whom it reasonably believes is caring for or supporting such
     payee, or, if applicable, to any duly appointed guardian or committee or
     other authorized representative of such payee. Any such payment shall be a
     payment for the account of such payee and shall, to the extent thereof, be
     a complete discharge of any liability under the Plan to such payee.


                                       24



     5.11. Put Option for Company Stock Allocated to ESOP Accounts.

          (a) Solely in the event that a Participant receives a distribution
     consisting in whole or in part of Company Stock that at the time of
     distribution thereof is not readily tradable stock within the meaning of
     Code Section 409(h) then such distributed Company Stock shall be made
     subject to a put option in the hands of a Qualified Holder (as defined
     herein below), with such put option to be subject to the following
     provisions:

               (i) As used herein, the term "Qualified Holder" shall mean the
          Participant or Beneficiary receiving the distribution of such Company
          Stock, any other party to whom such stock is transferred by gift or by
          reason of death, and also any trustee of an Individual Retirement
          Account (as defined under Code Section 408) to which all or any
          portion of such distributed Company Stock is transferred pursuant to a
          tax-free "rollover" transaction satisfying the requirements of Code
          Section 402.

               (ii) During the sixty (60) day period following any distribution
          of such Company Stock, a Qualified Holder shall have the right to
          require the Company to purchase all or any portion of said distributed
          Company Stock held by said Qualified Holder. A Qualified Holder shall
          exercise such right by giving written notice to the Company within the
          aforesaid sixty (60) day period of the number of shares of distributed
          Company Stock that such Qualified Holder intends to sell to the
          Company. The purchase price to be paid for any such Company Stock
          shall be its fair market value determined as of the Valuation Date
          coincident with or immediately preceding the date of the distribution.

               (iii) If a Qualified Holder shall fail to exercise his or her put
          option right under subparagraph (ii) above, such option right shall
          temporarily lapse upon the expiration of the sixty (60) day period
          thereof. As soon as is reasonably practicable following the last day
          of the Plan Year in which said sixty (60) day option period expires,
          the Company shall notify each such non-electing Qualified Holder who
          is then a shareholder of record of the valuation of such Company Stock
          as of the most recent Valuation Date. During the sixty (60) day period
          following receipt of such valuation notice, any such Qualified Holder
          shall have the right to require the Company to purchase all or any
          portion of such distributed Company Stock. The purchase price to be
          paid therefor shall be based on the valuation of such Company Stock as
          of the Valuation Date coinciding with or next preceding the exercise
          of the option under this Section 5.11(c). If a Qualified Holder fails
          to exercise his or her option right under this subparagraph (iii) with
          respect to any portion of such distributed Company Stock, no further
          options shall be applicable under the Plan and the Company shall have
          no further purchase obligations hereunder.

               (iv) In the event that a Qualified Holder shall exercise a put
          option under this Section, then the Company shall have the option of
          paying the purchase price of the Company Stock which is subject to
          such put option (hereafter the "Option Stock") under either of the
          following methods:

                    (A) A lump sum payment of the purchase price within ninety
               (90) days after the date upon which such put option is exercised
               (the "Exercise Date") or


                                       25



                    (B) A series of six equal installment payments, with the
               first such payment to be made within thirty (30) days after the
               Exercise Date and the five remaining payments to be made on the
               five anniversary dates of the Exercise Date, so that the full
               amount shall be paid as of the fifth anniversary of such Exercise
               Date. If the Company elects to pay the purchase price of the
               Option Stock under the installment method provided in this clause
               (2), then the Company shall, within thirty (30) days after the
               Exercise Date, give the Qualified Holder who is exercising the
               put option the Company's promissory note for the full unpaid
               balance of the option price. Such note shall, at a minimum,
               provide adequate security (if required under applicable
               regulations), state a rate of interest reasonable under the
               circumstances (but at least equal to the imputed compound rate in
               effect as of the Exercise Date pursuant to the regulations
               promulgated under Code Sections 483 or 1274, whichever shall be
               applicable) and provide that the full amount of such note shall
               accelerate and become due immediately in the event that the
               Company defaults in the payment of a scheduled installment
               payment.

               (v) The put options under subparagraphs (ii)and (iii) above shall
          be effective solely against the Company and shall not obligate the
          Plan in any manner; provided, however, with the Company's consent, the
          Plan may elect to purchase any Company Stock that otherwise must be
          purchased by the Company pursuant to a Qualified Holder's exercise of
          any such option.

               (vi) If at the time of any distribution of said Company Stock it
          is known that any applicable Federal or State law would be violated by
          the Company's honoring of such a put option as provided under this
          Section, the Company shall designate another entity that will honor
          such put option. Such other entity shall be one having a substantial
          net worth at the time such loan is made and whose net worth is
          reasonably expected to remain substantial.

               (vii) In the event that a Qualified Holder is unable to exercise
          the put option provided hereunder because the Company (or other entity
          bound by such put option) is prohibited from honoring it by reason of
          any applicable Federal or State law, then the sixty (60) day option
          periods during which such put option is exercisable under
          subparagraphs (ii) and (iii) shall not include any such time during
          which said put option may not be exercised due to such reason.

               (viii) Except as is expressly provided herein above with respect
          to any distributed Company Stock that is readily tradeable stock
          within the meaning of Code Section 409(h), no Participant shall have
          any put option rights with respect to Company Stock distributed under
          the Plan, and neither the Company nor the Plan shall have any
          obligation whatsoever to purchase any such distributed Company Stock
          from any Participant or other Qualified Holder.

               (ix) At the time of distribution of Company Stock that is not
          readily tradable stock within the meaning of Code Section 409(h), to a
          Participant or Beneficiary, the Company shall furnish to such
          Participant or Beneficiary the


                                       26



          most recent annual certificate of value prepared by the Company with
          respect to such Stock. In addition, the Company shall furnish to such
          Participant or Beneficiary a copy of each subsequent annual
          certificate of value until the put options provided for in this
          Section with respect to such distributed Company Stock shall expire.

          (b) Notwithstanding any other provisions of the Plan regarding a
     Participant's right to exercise a put option, the put option described in
     paragraph (a) above shall be subject to the following additional
     provisions:

               (i) If the distribution constitutes a Total Distribution (as
          defined below), in the event that a Qualified Holder exercises a put
          option under this Section, then the Company shall have the right to
          pay the purchase price of the Option Stock under either of the
          following methods:

                    (A) A lump sum payment of the purchase price within thirty
               (30) days after the Exercise Date; or

                    (B) A series of five substantially equal annual payments
               with the first such payment to be made within thirty (30) days
               after the Exercise Date. If the Company elects to pay the
               purchase price of the Option Stock under the installment method
               provided in this clause (2), then the Company shall, within 30
               days after the Exercise Date, give the Qualified Holder who is
               exercising the put option the Company's promissory note for the
               full unpaid balance of the option price. Such note shall, at a
               minimum, provide adequate security, state a rate of interest
               reasonable under the circumstances (but at least equal to the
               imputed compound rate in effect as of the Exercise Date pursuant
               to the regulations promulgated under Code Sections 483 or 1274,
               whichever shall be applicable) and provide that the full amount
               of such note shall accelerate and become due immediately in the
               event that the Company defaults in the payment of a scheduled
               installment payment.

               (ii) If the distribution does not constitute a Total Distribution
          (as defined below), in the event that a Qualified Holder exercises a
          put option under this Section, then the Company shall pay the purchase
          price of the Option Stock in a lump sum within thirty (30) days after
          the Exercise Date.

          For purposes of this Section, "Total Distribution" shall mean a
     distribution to a Participant (or his or her Beneficiary, if applicable)
     within one taxable year of such recipient of the entire balance to the
     credit of the Participant.

          (c) This Section shall be applied to any securities of the Company
     held by the Plan to the extent required under Code Section 401(a)(23) and
     the regulations issued thereunder and its provisions shall be interpreted
     and applied in accordance with all applicable requirements of Code Section
     409(h) and the regulations issued thereunder.


                                       27



     5.12. Diversification Rule.

          (a) For the purpose of Section 5.12 only, the following definitions
     shall apply:

               (i) "Qualified Participant" shall mean a Participant who is fully
          vested in his or her ESOP Account as determined under Section 5.2.

               (ii) "Insider" shall mean any Participant who is directly or
          indirectly the beneficial owner of more than 10% of any class of any
          equity security (other than an exempted security) of the Sponsor (or
          the Company) which is registered pursuant to Section 12 of the
          Securities Exchange Act of 1934, or who is a "director" or an
          "officer" of the sponsor or the Company as those terms are interpreted
          under the Securities Exchange Act of 1934 for the purpose of
          determining persons subject to Section 16 of such Act.

          (b) Effective as of September 1, 2002 or as soon as administratively
     practicable thereafter, a Participant may elect to diversify his or her
     ESOP Account as follows:

               (i) Any Participant who is a Qualified Participant may elect to
          diversify up to 50% of the Company Stock allocated to his or her ESOP
          Account.

               (ii) The number of shares of Company Stock that may be
          diversified shall be determined by applying the diversification
          percentage of 50% to the total number of shares allocated to a
          Participant's ESOP Account and reducing such number by the number of
          shares of Company Stock previously diversified under this Section.

          (c) Notwithstanding the foregoing, effective as of January 1, 2002 and
     ending on the effective date of the diversification rules set forth in
     subsection (b) above, a Participant may elect to diversify his or her ESOP
     Account as follows:

               (i) Any Participant who is a Qualified Participant as of December
          31, 2001 may elect to diversify up to 50% of the Company Stock
          allocated to his or her ESOP Account in accordance with the following
          schedule that increases the Diversification Percentage over the
          following three Plan Years:



     Plan Year        Diversification Percentage
     ---------        --------------------------
                   
2002                           up to 25%
2003                           up to 40%
2004 and thereafter            up to 50%



                                       28



               (ii) Any Participant who becomes a Qualified Participant on or
          after January 1, 2002 may elect to diversify up to 50% of the Company
          Stock allocated to his or her ESOP Account in accordance with the
          following schedule that increases the Diversification Percentage over
          the following three Plan Years:



                    Plan Year                      Diversification Percentage
                    ---------                      --------------------------
                                                
Plan Year after becoming a Qualified Participant           up to 25%
Next succeeding Plan Year                                  up to 40%
Next succeeding Plan Year and thereafter                   up to 50%


               (iii) The number of shares of Company Stock that may be
          diversified in any given Plan Year shall be determined by applying the
          Diversification Percentage in the above schedules to the total number
          of shares allocated to a Participant's ESOP Account as of the
          beginning of the Plan Year and reducing such number by the number of
          shares of Company Stock previously diversified under this Section.

          (d) For Plan Years prior to the 2002 Plan Year, each Qualified
     Participant shall be permitted to direct the Plan as to the diversification
     of 25 percent of the value of the vested portion of the Participant's ESOP
     Account within 90 days after the last day of each Plan Year during the
     Participant's Qualified Election Period. For the purpose of this paragraph
     (d), the term "Qualified Participant" means a Participant who has attained
     age 55 and who has completed at least 10 years of participation in the Plan
     and the term "Qualified Election Period" shall mean the six Plan Year
     period beginning with the Plan Year in which the Participant first becomes
     a Qualified Participant. Within 90 days after the close of the last Plan
     Year in the Participant's Qualified Election Period, a Qualified
     Participant may direct the Plan as to the diversification of 50 percent of
     the value of the vested portion of such ESOP Account. Upon such direction
     by a Qualified Participant, the Plan shall transfer to the Allergan, Inc.
     Savings and Investment Plan (the "SIP") that portion of the Participant's
     ESOP Account that is covered by the election within 90 days after the last
     day of the period during which the election can be made which shall be
     allocated to a rollover account maintained on behalf of the Qualified
     Participant. Under the SIP, the Qualified Participant may invest the amount
     so transferred under any of the investment options available under the SIP
     or may direct that the amount so transferred be distributed to him or her.

          (e) A Qualified Participant who elects to diversify his or her ESOP
     Account as provided under this Section shall do so by transferring
     diversified amounts to any of the investment funds currently offered and
     currently available to Participants as determined by the Committee pursuant
     to Section 6.3(c); provided, however, that any allocations among the
     investment funds shall be made in 1% increments. Any election to diversify
     shall be effective as soon as administratively feasible and subject to
     paragraph (f) below. A Qualified Participant shall effect a diversification
     election under procedures established by the Committee for this purpose.

          (f) For purposes of this Section and consistent with the requirements
     of Code Section 401(a)(28) if applicable, a Qualified Participant who is an
     Insider may only elect


                                       29



     to diversify his or her ESOP Account if within six (6) months before the
     Participant's election, he or she has not made an election under the
     Allergan, Inc. Savings and Investment Plan or the provision of any company
     plan covered by Rule 16b-3 (promulgated pursuant to the Securities Exchange
     Act of 1934) then in existence that would result in the transfer into a
     Company equity securities fund.

     5.13. Lapsed Benefits.

          (a) In the event that a Participant's ESOP Account is payable under
     the Plan and after reasonable efforts the Participant cannot be located for
     the purpose of paying his or her ESOP Account during a period of three
     consecutive years, the Participant shall be presumed dead and his or her
     ESOP Account shall, upon the expiration of that three year period, be paid
     to the Participant's Beneficiary. If the Participant's Beneficiary cannot
     be located for the purpose of paying the Participant's ESOP Account for the
     following two years, then the Participant's ESOP Account shall, upon
     expiration of such two-year period, be forfeited and reallocated to the
     ESOP Accounts of other Participants as provided in Section 4.3.

          (b) If a Participant dies prior to receiving a distribution of the
     entire vested portion of his or her ESOP Account (other than a Participant
     presumed to have died as provided above) and if after reasonable efforts
     the Beneficiary of the Participant cannot be located for the purpose of
     paying the Participant's ESOP Account during a period of five consecutive
     years, the benefit shall, upon expiration of such five-year period, be
     forfeited and reallocated to the ESOP Accounts of the other Participants as
     provided in Section 4.3.

          (c) For purposes of this Section, the term "Beneficiary" shall include
     any person entitled under Section 5.8 to receive the vested interest of a
     deceased Participant or deceased designated Beneficiary. It is the
     intention of this Section that during the relevant waiting period (two
     years or five years) the vested portion of a Participant's ESOP Account
     shall be distributed to a Beneficiary in a lower priority category under
     Section 5.8 if no Beneficiary in a higher priority category can be located
     by the Committee after reasonable efforts have been made.

          (d) Notwithstanding the foregoing rules, if after such a forfeiture
     the Participant or a Beneficiary claims the forfeited ESOP Account, the
     amount forfeited shall be reinstated (without regard to any interest or
     investment earnings on such amount) and paid to the Participant or
     Beneficiary as soon as practical following the production of reasonable
     proof of the identity of the Participant or Beneficiary and his or her
     entitlement to the amounts forfeited (determined pursuant to the Plan's
     normal claim procedures under Section 7.10).


                                       30



          (e) The Committee shall direct the Trustee with respect to the
     procedures to be followed concerning a missing Participant (or
     Beneficiary), and the Company shall be obligated to contribute to the Trust
     Fund any amounts necessary after the application of Section 4.3 to pay any
     reinstated benefit after it has been forfeited pursuant to the provisions
     of this Section.


                                       31



                                   ARTICLE VI
                           TRUST FUND AND INVESTMENTS

     6.1. General. All contributions made under the Plan and investments made
and property of any kind or character acquired with any such funds or otherwise
contributed, and all income, profits, and proceeds derived therefrom, shall be
held in Trust and shall be held and administered by the Trustee in accordance
with the provisions of the Plan and Trust Agreement.

     6.2. Single Trust. Assets of the Trust shall be held in a separate fund
which shall consist of the Trust Fund. Individual Participant interests in the
Trust Fund shall be reflected in the ESOP Accounts maintained for the
Participants. Notwithstanding the foregoing, the Trust Fund shall be treated as
a single trust for purposes of investment and administration, and nothing
contained herein shall require a physical segregation of assets for any fund or
for any Account maintained under the Plan.

     6.3. Investment of the Trust.

          (a) Subject to paragraph (c) below and Sections 6.4 and 5.12 hereof,
     the Trust Fund shall be invested primarily in Company Stock and neither the
     Company nor the Committee nor the Trustee shall have any responsibility or
     duty to time any transaction involving Company Stock, in order to
     anticipate market conditions or changes in stock value, nor shall any such
     person have any responsibility or duty to sell Company Stock held in the
     Trust Fund (or otherwise to provide investment management for Company Stock
     held in the Trust Fund) in order to maximize return or minimize loss. The
     Committee may direct the Trustee to have the Plan enter into one or more
     Exempt Loans to finance the acquisition of Company Stock for the Trust
     Fund. Company contributions in cash, and other cash received or held by the
     Trustee, may be used to acquire shares of Company Stock from the Company,
     Company shareholders, from the ESOP Accounts of Participants about to
     receive distributions under the Plan, or on the open market.

          (b) Notwithstanding anything contained herein to the contrary,
     proceeds of an Exempt Loan shall be used, within a reasonable time after
     receipt by the Trust, only for the following purposes:

               (i) to acquire Company Stock;

               (ii) to repay the same Exempt Loan; or

               (iii) to repay any previous Exempt Loan.

          An Exempt Loan shall be repaid only from amounts loaned to the Trust
     and the proceeds of such loans, from Company contributions in cash and
     earnings attributable thereto, from any collateral given for the loan
     (including, in the case where the Exempt Loan is a refinancing of a prior
     Exempt Loan, unallocated Company Stock acquired with the proceeds of the
     prior Exempt Loan), and from dividends paid on Company Stock


                                       32



     acquired with proceeds of the Exempt Loan. Except as provided in Section
     5.11 or as otherwise required by applicable law, no Company Stock acquired
     with the proceeds of an Exempt Loan may be subject to a put, call, or other
     option or buy-sell or similar arrangement while held by and when
     distributed from the Plan.

          (c) Notwithstanding paragraph (a) above, the Committee may establish
     separate investment funds under the Plan, with each fund representing an
     investment alternative available to Participants for the investment of
     their ESOP Accounts as provided in paragraph (d) below and Section 5.12.
     Each Participant shall have a subaccount under the Plan corresponding to
     the Participant's interest which is allocated to each investment fund. Each
     such subaccount may be valued separately. The manner in which assets of the
     Trust shall be invested in such investment funds, including the
     establishment of alternative investment funds, the elimination of any
     previously established funds, or the placement of limitations on the
     availability of an investment fund to Participants, shall be chosen by the
     Committee at its discretion. Amounts invested in any one of the investment
     funds shall not share in gains and losses experienced by any other fund.
     Notwithstanding the establishment of separate investment funds within the
     Trust, the Trust shall at all times constitute a single trust.

          (d) A Participant may elect at any time to transfer any cash or other
     property, including shares of Advanced Medical Optics, Inc. ("non-Company
     Stock assets") or amounts previously diversified under Section 5.12,
     accumulated in his or her ESOP Account among any of the investment funds
     currently offered and currently available to Participants as determined by
     the Committee pursuant to paragraph (c) above; provided, however, the total
     amount transferred shall be made in 1% increments of the amount accumulated
     in such funds. Any transfer among investment funds shall be effective as
     soon as administratively feasible. A Participant shall effect a transfer
     election under procedures established by the Committee for this purpose.

          (e) Notwithstanding anything in the Plan to the contrary, the
     following additional transfer restrictions shall apply to all Participants
     who are Insiders as defined in Section 5.12.

               (i) Any Insider who transfers amounts invested in Company Stock
          and into another fund or withdraws cash in a transaction that results
          in the liquidation of Company Stock (pursuant to Sections 5.7 or to
          the extent applicable under Section 5.12), may not for a period of six
          months following the Participant's election to so transfer funds or
          withdraw cash, as the case may be, make an election to transfer
          amounts from another fund and invest in Company Stock.

               (ii) Any Insider who transfers amounts invested in a non-Company
          Stock fund to invest in Company Stock, may not for a period of six
          months following the Participant's election to so transfer funds make
          an election to (1) sell Company Stock and transfer the proceeds to
          another fund, (2) withdraw cash that results in the liquidation of
          Company Stock or (3) make a diversification


                                       33



          election under Section 5.12 subject to the requirements of Code
          Section 401(a)(28), if applicable or (4) utilize the Allergan Inc.
          Savings and Investment Plan or the provision of any Company plan
          covered by Rule 16b-3 (promulgated pursuant to the Exchange Act) then
          in existence that would result in the transfer out of a Company equity
          securities fund.

          (f) It is intended that to the extent a Participant may diversify or
     direct the investment of his or her ESOP Account under the Plan that the
     Plan constitute a plan described in Section 404(c) of ERISA and the
     regulations thereunder, and neither the Company, Committee, nor any
     fiduciary with respect to the Plan who is employed by the Company shall be
     liable for investment losses sustained by any Participant or Beneficiary as
     a direct and necessary result of the investment instructions given by such
     Participant or Beneficiary. Such fiduciaries set forth in the preceding
     sentence shall be under no duty to question the investment direction of the
     Participant or Beneficiary or to advise a Participant or Beneficiary as to
     the manner in which his or her ESOP Account is to be invested. The fact
     that an investment option is offered shall not be construed to be a
     recommendation of investment.

          (g) On June 29, 2002, Allergan spun-off AMO and distributed the stock
     of AMO (referred to in the Plan as "AMO Stock") to its shareholders. The
     following provisions of the Plan shall apply to AMO Stock as if the term
     "AMO Stock" was substituted for the term "Company Stock": Section 6.4
     (Certain Offers for Company Stock); Section 6.5 (Securities Law
     Limitation); Section 6.7 (Dividends); Section 6.14 (Appointment of
     Investment Manager); Section 7.1 (Appointment of Committee); Section 7.2
     (Appointment of Investment Subcommittee); Section 7.7 (Additional Powers of
     Committee); Section 7.8 (Investment Subcommittee Powers); Section 7.14
     (Compensation of Committees and Plan Expenses); and Section 7.16 (Voting of
     Company Stock), as applicable.

     6.4. Certain Offers for Company Stock. Notwithstanding any other provision
of the Plan to the contrary, in the event an offer shall be received by the
Trustee (including but not limited to a tender offer or exchange offer within
the meaning of the Securities Exchange Act of 1934, as from time to time amended
and in effect) to acquire any or all shares of Company Stock held by the Trust
(an "Offer"), whether or not such Company Stock is allocated to Participants'
ESOP Accounts, the discretion or authority to sell, exchange or transfer any of
such shares of Company Stock shall be determined in accordance with the
following rules:

          (a) The Trustee shall have no discretion or authority to sell,
     exchange or transfer any Company Stock pursuant to an Offer except to the
     extent, and only to the extent that the Trustee is timely directed to do so
     in writing (i) with respect to any Company Stock held by the Trustee
     subject to such Offer and allocated to any Participant's ESOP Account, by
     each Participant to whose ESOP Account any of such Company Stock is
     allocated and (ii) with respect to any Company Stock held by the Trustee
     subject to such Offer and not allocated to any Participant's ESOP Account,
     by each Participant who is an Eligible Employee with respect to a number of
     shares (including fractional shares) of such unallocated Company Stock
     equal to the total


                                       34



     number of shares of such unallocated Company Stock multiplied by a fraction
     the numerator of which is the annualized Compensation of such Participant
     for the calendar year in which such Offer is made and the denominator of
     which is the total annualized Compensation for the calendar year in which
     such Offer is made of all such Participants who are Eligible Employees.

          (b) To the extent there remains any residual fiduciary responsibility
     with respect to Company Stock pursuant to an Offer after application of
     paragraph (a) above, the Trustee shall sell, exchange or transfer such
     Company Stock as directed by the Committee or as directed by an independent
     fiduciary if duly appointed by the Sponsor. To the extent the Committee or
     an independent fiduciary is required to exercise any residual fiduciary
     responsibility with respect to an Offer, the Committee or independent
     fiduciary shall take into account in exercising its fiduciary judgment,
     unless it is clearly imprudent to do so, directions timely received from
     Participants, as such directions are most indicative of what action is in
     the best interests of Participants. Further, the Committee or independent
     fiduciary, in addition to taking into consideration any relevant financial
     factors bearing on any such decision, shall take into consideration any
     relevant non-financial factors, including, but not limited to, the
     continuing job security of Participants as employees of the Sponsor or any
     Affiliated Company, conditions of employment, employment opportunities and
     other similar matters, and the prospect of the Participants and prospective
     Participants for future benefits under the Plan (including any subsequent
     release and allocation of Company Stock held in the Exempt Loan Suspense
     Subfund).

          (c) Upon timely receipt of such instructions, the Trustee shall,
     subject to the provisions of paragraphs (e) and (o) of this Section, sell,
     exchange or transfer pursuant to such Offer, only such shares as to which
     such instructions were given. The Committee shall use its best efforts to
     communicate or cause to be communicated to each Participant the
     consequences of any failure to provide timely instructions to the Trustee.

          (d) In the event, under the terms of an Offer or otherwise, any shares
     of Company Stock tendered for sale, exchange or transfer pursuant to such
     Offer may be withdrawn from such Offer, the Trustee shall follow such
     instructions respecting the withdrawal of such shares from such Offer in
     the same manner and the same proportion as shall be timely received by the
     Trustee from the Participants entitled under this Section to give
     instructions as to the sale, exchange or transfer of shares pursuant to
     such Offer.

          (e) In the event that an Offer for fewer than all of the shares of
     Company Stock held by the Trustee in the Trust shall be received by the
     Trustee, each Participant shall be entitled to direct the Trustee as to the
     acceptance or rejection of such Offer (as set forth herein) with respect to
     the largest portion of such Company Stock as may be possible given the
     total number or amount of shares of Company Stock the Plan may sell,
     exchange or transfer pursuant to the Offer based upon the instructions
     received by the Trustee from all other Participants who shall timely
     instruct the Trustee pursuant to this paragraph to sell, exchange or
     transfer such shares pursuant to such Offer, each on a pro rata basis in
     accordance with the maximum number of shares each such Participant would


                                       35



     have been permitted to direct under paragraph (a) had the Offer been for
     all shares of Company Stock held in the Trust.

          (f) In the event an Offer is received by the Trustee and instructions
     have been solicited from Participants regarding such Offer, and prior to
     termination of such Offer, another Offer is received by the Trustee for the
     Company Stock subject to the first Offer, the Trustee shall inform the
     Committee of such other Offer and the Committee shall use its best efforts
     under the circumstances to solicit instructions from the Participants (i)
     with respect to securities tendered for sale, exchange or transfer pursuant
     to the first Offer, whether to withdraw such tender, if possible, and, if
     withdrawn, whether to tender any Company Stock so withdrawn for sale,
     exchange or transfer pursuant to the second Offer and (ii) with respect to
     Company Stock not tendered for sale, exchange or transfer pursuant to the
     first Offer, whether to tender or not to tender such Company Stock for
     sale, exchange or transfer pursuant to the second Offer. The Trustee shall
     follow all such instructions received in a timely manner from Participants
     in the same manner and in the same proportion as provided in paragraph (a)
     of this Section. With respect to any further Offer for any Company Stock
     received by the Trustee and subject to any earlier Offer (including
     successive Offers from one or more existing offers), the Trustee shall act
     in the same manner as described above.

          (g) With respect to any Offer received by the Trustee, the Trustee
     shall inform the Sponsor of such Offer and the Sponsor shall distribute, at
     its expense, copies of all relevant material including but not limited to
     material filed with the Securities and Exchange Commission with such Offer
     or regarding such Offer, which shall seek confidential written instructions
     from each Participant who is entitled to respond to such Offer pursuant to
     paragraph (a). The identities of Participants, the amount of Company Stock
     allocated to their ESOP Accounts, and the Compensation of each Participant
     shall be determined from the list of Participants delivered to the Sponsor
     by the Committee which shall take all reasonable steps necessary to provide
     the Sponsor with the latest possible information.

          (h) The Sponsor shall distribute and/or make available to each
     Participant who is entitled to respond to an Offer pursuant to paragraphs
     (a), an instruction form to be used by each such Participant who wishes to
     instruct the Trustee. The instruction form shall state that (i) if the
     Participant fails to return an instruction form to the Trustee by the
     indicated deadline, the Company Stock with respect to which he or she is
     entitled to give instructions shall not be sold, exchanged or transferred
     pursuant to such Offer unless the Trustee is directed otherwise as provided
     in paragraph (b) above, (ii) the Participant shall be a named fiduciary (as
     described in paragraph (m) below) with respect to all shares of Company
     Stock for which he or she is entitled to give instructions, and (iii) the
     Company acknowledges and agrees to honor the confidentiality of the
     Participant's instructions to the Trustee.

          (i) Each Participant may choose to instruct the Trustee in one of the
     following two ways: (i) not to sell, exchange or transfer any shares of
     Company Stock for which he or she is entitled to give instructions, or (ii)
     to sell, exchange or transfer all


                                       36



     Company Stock for which he or she is entitled to give instructions. The
     Sponsor shall follow up with additional mailings and postings of bulletins,
     as reasonable under the time constraints then prevailing, to obtain
     instructions from Participants not otherwise responding to such requests
     for instructions. Subject to paragraph (e), the Trustee shall then sell,
     exchange or transfer shares according to instructions from Participants,
     except that shares for which no instructions are received shall not be
     sold, exchanged or transferred unless directed otherwise as provided in
     paragraph (b) above.

          (j) The Sponsor shall furnish former Participants who have received
     distributions of Company Stock so recently as to not be shareholders of
     record with the information given to Participants pursuant to paragraphs
     (g), (h) and (i) of this Section. The Trustee shall then sell, exchange or
     transfer shares according to instructions from such former Participants,
     except that shares for which no instructions are received shall not be
     sold, exchanged or transferred.

          (k) Neither the Company, the Committee nor the Trustee shall express
     any opinion or give any advice or recommendation to any Participant
     concerning the Offer, nor shall they have any authority or responsibility
     to do so.

          (l) The Trustee shall not reveal or release a Participant's
     instructions to the Company, its officers, directors, employees, or
     representatives. If some but not all Company Stock held by the Trust is
     sold, exchanged, or transferred pursuant to an Offer, the Company, with the
     Trustee's cooperation, shall take such action as is necessary to maintain
     the confidentiality of Participant's records including, without limitation,
     establishment of a security system and procedures which restrict access to
     Participant records and retention of an independent agent to maintain such
     records. If an independent record keeping agent is retained, such agent
     must agree, as a condition of its retention by the Sponsor, not to disclose
     the composition of any Participant ESOP Accounts to the Company, its
     officers, directors, employees, or representatives. The Company
     acknowledges and agrees to honor the confidentiality of Participants'
     instructions to the Trustee.

          (m) Each Participant shall be a named fiduciary (as that term is
     defined in Section 402(a)(2) of ERISA) with respect to Company Stock
     allocated to his or her ESOP Account under the Plan and with respect to his
     or her pro-rata portion of the unallocated Company Stock for which he or
     she is entitled to issue instructions in accordance with paragraph (a) of
     this Section solely for purposes of exercising the rights of a shareholder
     with respect to an Offer pursuant to this Section 6.4 and voting rights
     pursuant to Section 7.16.

          (n) To the extent that an Offer results in the sale of Company Stock
     in the Trust and allocated to the ESOP Accounts of Participants, the
     Committee shall instruct the Trustee as to the investment of the proceeds
     of such sale. To the extent that an Offer results in the sale of Company
     Stock in the Trust and not allocated to the ESOP Accounts of any
     Participant, the proceeds from such sale shall first be applied to repay
     the fullest extent possible, all Exempt Loans then outstanding. To effect
     such repayment, the


                                       37



     Trustee shall seek such consents and approvals from lenders under any
     Exempt Loans as may be necessary or convenient to permit the tender of
     shares of Company Stock held in the Exempt Loan Suspense Subfund. To the
     extent that proceeds from the sale of shares held in the Exempt Loan
     Suspense Subfund exceed the outstanding principal and interest of all
     Exempt Loans, such excess proceeds shall be allocated to each Eligible
     Participant's (as defined in Section 4.2(d)) Non-Stock Subaccount in the
     same manner as allocations under Section 4.2(a); provided, however, that
     only an Eligible Participant who is employed on the date of the closing of
     the sale pursuant to the Offer shall be deemed an Eligible Participant
     entitled to an allocation of excess sale proceeds for purposes of this
     Section 6.4(n) only. To the extent that less than all of the shares of
     Company Stock held in the Exempt Loan Suspense Subfund are tendered in an
     Offer and repayment of an Exempt Loan results in a release of shares of
     Company Stock from the Exempt Loan Suspense Subfund in excess of those
     tendered in such Offer, the excess released shares of Company Stock shall
     be allocated to each Eligible Participant's ESOP Account in the same manner
     as allocations under Section 4.2(c); provided, however, that only an
     Eligible Participant who is employed on the date of the closing of the sale
     pursuant to the Offer shall be deemed an Eligible Participant entitled to
     an allocation of Company Stock for purposes of this Section 6.4(n) only. To
     the extent that allocations to Eligible Participants under this Section
     6.4(n) constitute Annual Additions, all such allocations shall be subject
     to the limitations set forth in Article XI hereof. Any allocations to which
     Eligible Participants would be entitled under this Section 6.4(n) but for
     the limitations of Article XI, shall be held in the 415 Suspense Account
     and allocated to Eligible Participants in accordance with Article XI.

          (o) In the event a court of competent jurisdiction shall issue to the
     Plan, the Committee, the Sponsor or the Trustee an opinion or order, which
     shall, in the opinion of counsel to the Committee, the Sponsor or the
     Trustee, invalidate, in all circumstances or in any particular
     circumstances, any provision or provisions of this Section regarding the
     determination to be made as to whether or not Company Stock held by the
     Trustee shall be sold, exchanged or transferred pursuant to an Offer or
     cause any such provision or provisions to conflict with securities laws,
     then, upon notice thereof to the Committee, the Sponsor or the Trustee, as
     the case may be, such invalid or conflicting provisions of this Section
     shall be given no further force or effect. In such circumstances, the
     Trustee shall continue to follow instructions received from Participants,
     to the extent such instructions have not been invalidated by such order or
     opinion. To the extent the Trustee is required by such opinion or order to
     exercise any residual fiduciary responsibility with respect to such Offer,
     the Sponsor shall appoint an independent fiduciary who shall exercise such
     residual fiduciary responsibility as provided in paragraph (b) above and
     shall direct the Trustee as to whether or not Company Stock held by the
     Trustee shall be sold, exchanged or transferred pursuant to such Offer.

     6.5. Securities Law Limitation. Neither the Committee nor the Trustee shall
be required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock, which either determines in its
sole discretion might tend to subject itself, its members, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal or state
securities laws.


                                       38


     6.6. Accounting and Valuations.

          (a) The following special accounting rules shall apply to the Trust
     Fund.

               (i) Each Participant's ESOP Account shall consist of (1) a
          portion comprised of cash and all other assets except for Company
          Stock and AMO Stock (the "Non-Stock Subaccount"); (2) a portion
          comprised solely of AMO Stock (the "AMO Subaccount"); and (3) a
          portion comprised solely of Company Stock (the "Stock Subaccount").

               (ii) Gains or losses on Non-Stock Subaccounts shall be credited
          in accordance with this Section as if the Non-Stock Subaccounts
          collectively constituted a separate pooled investment fund.

               (iii) Stock Subaccounts shall be credited with a specific number
          of shares of Company Stock rather than an individual interest in a
          pool of Company Stock.

               (iv) AMO Subaccounts shall be credited with a specific number of
          shares of AMO Stock rather than an individual interest in a pool of
          AMO Stock.

          (b) Non-Stock Subaccounts may be invested in Company Stock from time
     to time, and Company Stock so acquired shall be allocated among Stock
     Subaccounts in proportion to the amount debited to the corresponding
     Non-Stock Subaccounts.

          (c) As of each Valuation Date each Participant's Non-Stock Subaccount
     shall be credited (debited) with the "allocable share" of the net income
     (loss) of the non-Company Stock portion of the Trust Fund valued as of such
     Valuation Date in proportion to Non-Stock Subaccount balances. For this
     purpose, except as provided in Section 6.7, the net income (loss) of the
     Trust Fund shall not include any income with respect to securities in the
     Exempt Loan Suspense Subfund acquired with the proceeds of an Exempt Loan.

          (d) In making valuations required by the Plan, the Trustee shall value
     all assets of the Trust at fair market value. Such fair market value shall
     be determined from facts reasonably available to the Trustee. In making
     said determination, the Trustee may, but need not, select and rely upon the
     advice and opinions of appraisers, brokers, investment counsel, or any
     other persons believed by the Trustee to be competent. Any determination of
     value so made shall, for all purposes of the Plan, conclusively establish
     such value.

          (e) If Company Stock is readily tradeable stock (as that term is used
     under Code Section 409(h)), valuation of each Participant's Stock
     Subaccount shall, at any relevant times, be worth the fair market value on
     that date of the shares of Company Stock credited to it. Valuations of any
     Company Stock held by the Trust which is not readily tradable stock shall
     be performed by an independent appraiser or valuation consultant.


                                       39



          (f) The Committee shall establish accounting procedures for the
     purpose of making the allocations, valuations and adjustments to
     Participants' ESOP Accounts provided for in Article VI hereof. Such
     accounting procedures shall include adequate records of the cost basis of
     Company Stock allocated to ESOP Accounts and the identity of shares
     acquired with the proceeds of an Exempt Loan. From time to time, the
     Committee may modify its accounting procedures for the purpose of achieving
     equitable and nondiscriminatory allocations among the ESOP Accounts of
     Participants in accordance with the provisions of the Plan.

          (g) In the event any rights, warrants, or options are issued with
     respect to Company Stock held in Stock Subaccounts, the Committee shall
     direct the Trustee as to whether such rights, warrants, or options shall be
     exercised for such Subaccounts using cash as may be available in
     corresponding Non-Stock Subaccounts. Company Stock so acquired shall be
     credited to corresponding Stock Subaccounts in proportion to the amount of
     cash withdrawn from the corresponding Non-Stock Subaccounts. A Participant
     shall have no right to request, direct, or demand that the Trust exercise
     on his or her behalf rights to purchase Company Stock.

          (h) The Participants and their Beneficiaries shall assume all risks in
     connection with any decrease in the value of any assets invested in the
     Trust Fund which are allocated to their ESOP Accounts.

          (i) Paragraphs (e) and (g) of this Section 6.6 shall apply to AMO
     Stock as if the term "AMO Stock" was substituted for the term "Company
     Stock" and the term "AMO Subaccount" was substituted for the term "Stock
     Subaccount," as applicable.

     6.7. Dividends.

          (a) As determined by the Committee, dividends on shares of Company
     Stock allocated to ESOP Accounts shall be either (i) applied to repay an
     Exempt Loan then outstanding; (ii) paid directly to Participants or
     Beneficiaries; or (iii) retained in the Trust and treated as net income of
     the Trust. Any resulting allocation shall be made according to the
     following rules:

               (i) If cash dividends are used to repay an Exempt Loan, the
          appropriate number of shares of Company Stock shall be released from
          the Exempt Loan Suspense Subfund pursuant to Section 4.2(b).
          Notwithstanding the foregoing, if the fair market value of the shares
          released pursuant to Section 4.2(b) from the application of cash
          dividends to repay an Exempt Loan under this Section 6.7(a)(i) is less
          than such cash dividends, additional shares shall be released from the
          Exempt Loan Suspense Subfund until the fair market value of such
          released shares equals the amount of such cash dividends. Such Company
          Stock shall be allocated to Participants' Stock Subaccounts in


                                       40



          proportion to the number of shares of Company Stock allocated to
          Participants' Stock Subaccounts for which such cash dividend was paid.

               (ii) If cash dividends are retained in the Trust and are not used
          to pay expenses of the Plan, such dividends shall be allocated as of
          the date specified by the Committee to Non-Stock Subaccounts in
          proportion to the shares of Company Stock held in corresponding Stock
          Subaccounts for which such dividends were distributed to the Trust.

               (iii) If stock dividends are retained in the Trust and are not
          used to pay expenses of the Plan, such dividends shall be credited on
          the date specified by the Committee to Stock Subaccounts in proportion
          to the shares of Company Stock held in such Subaccounts for which such
          dividends were distributed to the Trust.

               (iv) If the Committee determines that cash or stock dividends
          shall be distributed directly to Participants or Beneficiaries, such
          dividends shall be distributed on the date specified by the Committee
          in proportion to the shares of Company Stock held in such
          Participant's or Beneficiary's Stock Subaccount for which such
          dividends were distributed.

               (v) If cash dividends are received by the Trust on or after
          January 1, 2002, such dividends to the extent received on shares of
          Company Stock allocable to a Participant's ESOP Account shall be
          reinvested in Company Stock and held in such Participant's or
          Beneficiary's Stock Subaccounts, or to the extent such dividends are
          vested, shall be distributed to the Participant or Beneficiary not
          later than 90 days after the close of the Plan Year in which such
          dividends are paid if so elected by the Participant or Beneficiary.

          (b) As determined by the Committee, dividends on shares of Company
     Stock held in the Exempt Loan Suspense Subfund or on shares of Company
     Stock contributed to the Trust Fund but not yet allocated to Participant's
     ESOP Accounts shall be either (i) applied to repay an Exempt Loan then
     outstanding or (ii) retained in the Trust. Any resulting allocation shall
     be made according to the following rules:

               (i) If cash or stock dividends are used to repay an Exempt Loan,
          the appropriate number of shares of Company Stock shall be released
          from the Exempt Loan Suspense Subfund pursuant to Section 4.2(b). Such
          Company Stock shall be allocated to Participants Stock Subaccounts
          pursuant to Section 4.2(c).

               (ii) If cash dividends are not used to repay an Exempt Loan, they
          shall be considered income of the Trust and, if not used to pay
          expenses of the Plan, shall be allocated to Participants' ESOP
          Accounts in proportion to their respective ESOP Account balances.


                                       41



               (iii) If stock dividends are not used to repay an Exempt Loan or
          used to pay expenses of the Plan, they shall be retained in the Exempt
          Loan Suspense Subfund until released from such Subfund pursuant to
          Section 4.2(b) and allocated to Participants Stock Subaccounts
          pursuant to Section 4.2(c).

     6.8. Non-Diversion of Trust Fund. Except as hereinafter provided, all
assets of the Trust shall be held by the Trustee for the exclusive benefit of
Plan Participants and Beneficiaries. At no time shall any part of the Trust be
used for or diverted to purposes other than for the exclusive benefit of the
Participants and Beneficiaries under the Plan except as follows:

          (a) In the case of a contribution which is made by a mistake of fact,
     that contribution at the Sponsor's written request, shall be returned to
     the Company as directed by the Sponsor within one (1) year after it is
     made.

          (b) All contributions to the Trust are hereby conditioned upon the
     Plan satisfying all of the requirements of Code Section 401(a), as
     evidenced by the issuance by the Internal Revenue Service of a favorable
     determination letter with respect to the Plan. If the Plan does not
     qualify, the Plan may be revoked at the Sponsor's written election, and any
     or all such contributions with respect to the portion revoked may be
     returned to the Company within one year after the date of the Internal
     Revenue Service's denial of the qualification of the Plan or a portion
     thereof. Upon such a revocation the affairs of the Plan and Trust shall be
     terminated and wound up as the Sponsor shall direct.

          (c) Contributions to the Trust Fund are conditioned on deductibility
     under Code Section 404. To the extent a deduction is disallowed and at the
     Sponsor's written request, such contributions shall be returned to the
     Company as directed by the Sponsor within one year after the disallowance.

          (d) The residue of the 415 Suspense Account that cannot be allocated
     to Participants upon a Plan termination shall revert to the Company as
     directed by the Sponsor in accordance with the provisions of Section 11.6.

     6.9. Company, Committee and Trustee Not Responsible for Adequacy of Trust
Fund. Neither any member of the Committee, any Trustee nor the Company shall be
liable or responsible for the adequacy of the Trust to meet and discharge any or
all payments and liabilities hereunder. All Plan benefits will be paid only from
the Trust assets, and neither any member of the Committee, any Trustee, nor the
Company shall have any duty or liability to furnish the Trust with any funds,
securities or other assets except as expressly provided in the Plan. Except as
required under the Plan or Trust or under Part 4 of Subtitle B, Title I of
ERISA, the Company shall not be responsible for any decision, act, or omission
of a Trustee or a member of the Committee or any Investment Manager (if
applicable), or responsible for the application of any moneys, securities,
investments, or other property paid or delivered to the Trustee.

     6.10. Distributions. Money and property of the Trust shall be paid out,
disbursed, or applied by the Trustee for the benefit of Participants and
Beneficiaries under the Plan in


                                       42



accordance with directions received by the Trustee from the Committee. Upon
direction of the Committee, the Trustee may pay money or deliver property from
the Trust for any purpose authorized under the Plan. The Trustee shall be fully
protected in paying out money or delivering property from the Trust from time to
time upon written order of the Committee and shall not be liable for the
application of such money or property by the Committee.

     The Trustee shall not be required to determine or to make any investigation
to determine the identity or mailing address of any person entitled to benefits
hereunder and shall have discharged its obligation in that respect when it shall
have sent checks or other property by first-class mail to such persons at their
respective addresses as may be certified to it by the Committee.

     6.11. Taxes. If the whole or any part of the Trust, or the proceeds
thereof, shall become liable for the payment of any estate, inheritance, income
or other tax, charge, or assessment which the Trustee shall be required to pay,
the Trustee shall have full power and authority to pay such tax, charge, or
assessment out of any moneys or other property in its hands for the account of
the person whose interests hereunder are so liable, but at least ten (10) days
prior to making any such payment, the Trustee shall mail notice to the Committee
of its intention to make such payment. Prior to making any transfers or
distributions of any of the Trust, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem necessary.

     6.12. Trustee Records to be Maintained. The Trustee shall keep accurate and
detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all accounts, books, and records relating thereto
shall be open to inspection and audit at all reasonable times by any person
designated by the Company (subject to the provisions of Sections 6.4(1) and
7.13(c)).

     6.13. Annual Report of Trustee. Promptly following the close of each Plan
Year (or such other period as may be agreed upon between the Trustee and
Committee), or promptly after receipt of a written request from the Company, the
Trustee shall prepare for the Company a written account which will enable the
Company to satisfy the annual financial reporting requirements of ERISA, and
which will set forth among other things all investments, receipts,
disbursements, and other transactions effected by the Trustee during such Plan
Year or during the period from the close of the last Plan Year to the date of
such request. Such account shall also describe all securities and other
investments purchased and sold during the period to which it refers, the cost of
acquisition or net proceeds of sale, the securities and investments held as of
the date of such account, and the cost of each item thereof as carried on the
books of the Trustee. All accounts so filed shall be open to inspection during
business hours by the Company, the Committee, and by Participants and
Beneficiaries of the Plan (subject to the provisions of Sections 6.4(1) and
7.13(c)).


                                       43



     6.14. Appointment of Investment Manager. From time to time the Committee,
in accordance with Section 7.7 hereof, may appoint one or more Investment
Managers who shall have investment management and control over assets of the
Trust not invested or to be invested in Company Stock. The Committee shall
notify the Trustee of such assets of the appointment of the Investment Manager.
In the event more than one Investment Manager is appointed, the Committee shall
determine which assets shall be subject to management and control by each
Investment Manager and shall also determine the proportion in which funds
withdrawn or disbursed shall be charged against the assets subject to each
Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract
(except for Company Stock), and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the Committee.


                                       44



                                   ARTICLE VII
                          OPERATION AND ADMINISTRATION

     7.1. Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA; provided that solely for purposes of Section 6.4
hereof, Participants shall be Named Fiduciaries with respect to shares of
Company Stock for which they have the right to sell, transfer, or exchange
pursuant to Section 6.4 and solely for purposes of Section 7.16, Participants
shall be Named Fiduciaries with respect to shares of Company Stock on matters as
to which they are entitled to provide voting directions pursuant to Section
7.16.

     7.2. Appointment of Investment Subcommittee. There is hereby created an
investment subcommittee of the Committee (hereinafter referred to as the
"Investment Subcommittee" for purposes of this Article VII) which shall exercise
management and control over the assets of the Trust. The Board of Directors,
acting through its Organization and Compensation Committee, shall determine the
number of members of the Investment Subcommittee. The members of the Investment
Subcommittee shall be appointed by the Board of Directors, acting through its
Organization and Compensation Committee, and shall from time to time appoint
such members to or fill any vacancies in the Investment Subcommittee. The
members of the Investment Subcommittee shall constitute the Named Fiduciaries of
the Plan within the meaning of Section 402(a)(2) of ERISA with respect to the
management and control of the assets of the Trust; provided that solely for
purposes of Section 6.4 hereof, Participants shall be Named Fiduciaries with
respect to shares of Company Stock for which they have the right to sell,
transfer, or exchange pursuant to Section 6.4 and solely for purposes of Section
7.16, Participants shall be Named Fiduciaries with respect to shares of Company
Stock on matters as to which they are entitled to provide voting directions
pursuant to Section 7.16.

     7.3. Transaction of Business. The Committee and Investment Subcommittee
shall transact business as provided in paragraphs (a) and (b), respectively:

          (a) A majority of the Committee shall constitute a quorum for the
     transaction of business. Actions of the Committee may be taken either by
     vote at a meeting or in writing without a meeting. All action taken by the
     Committee at any meeting shall be by a vote of the majority of those
     present at such meeting. All action taken in writing without a meeting
     shall be by a vote of the majority of those responding in writing. All
     notices, advices, directions and instructions to be transmitted by the
     Committee shall be in writing and signed by or in the name of the
     Committee. In all its communications with the Trustee, the Committee may,
     by either of the majority actions specified above, authorize any one or
     more of its members to execute any document or documents on behalf of the
     Committee, in which event it shall notify the Trustee in writing of such
     action and the name or names of its members so designated and the Trustee
     shall


                                       45



     thereafter accept and rely upon any documents executed by such member or
     members as representing action by the Committee until the Committee shall
     file with the Trustee a written revocation of such designation.

          (b) A majority of the Investment Subcommittee shall constitute a
     quorum for the transaction of business. Actions of the Investment
     Subcommittee may be taken either by vote at a meeting or in writing without
     a meeting. All action taken by the Investment Subcommittee at any meeting
     shall be by a vote of the majority of those present at such meeting. All
     action taken in writing without a meeting shall be by a vote of the
     majority of those responding in writing. All notices, advices, directions
     and instructions to be transmitted by the Investment Subcommittee shall be
     in writing and signed by or in the name of the Investment Subcommittee. In
     all its communications with the Trustee, the Investment Subcommittee may,
     by action specified above, authorize any one or more of its members to
     execute any document or documents on behalf of the Investment Subcommittee,
     in which event it shall notify the Trustee in writing of such action and
     the name or names of its members so designated and the Trustee shall
     thereafter accept and rely upon any documents executed by such member or
     members as representing action by the Investment Subcommittee until the
     Investment Subcommittee shall file with the Trustee a written revocation of
     such designation.

     7.4. Voting. Any member of the Committee who is also a Participant
hereunder shall not be qualified to act or vote on any matter relating solely to
himself or herself, and upon such matter his or her presence at a meeting shall
not be counted for the purpose of determining a quorum. If, at any time a member
of the Committee is not so qualified to act or vote and the qualified members of
the Committee shall be reduced below two (2), the Board of Directors shall
promptly appoint one or more special members to the Committee so that there
shall be at least one qualified member to act upon the matter in question. Such
special Committee members shall have power to act only upon the matter for which
they were especially appointed and their tenure shall cease as soon as they have
acted upon the matter for which they were especially appointed.

     7.5. Responsibility of Committees. The responsibilities of the Committee
and Investment Subcommittee shall be as provided in paragraphs (a) and (b),
respectively:

          (a) The authority to manage and control the operation and
     administration of the Plan, the general administration of the Plan, the
     responsibility for carrying out the Plan, and to the extent provided in
     Section 7.7(f), the authority and responsibility to manage and control the
     assets of the Trust are hereby delegated by the Board of Directors to and
     vested in the Committee except to the extent reserved to the Board of
     Directors, the Sponsor, or the Company. Subject to the limitations of the
     Plan, the Committee shall, from time to time, establish rules for the
     performance of its functions and the administration of the Plan. In the
     performance of its functions, the Committee shall not discriminate in favor
     of Highly Compensated Employees.

          (b) The authority and responsibility to manage and control the assets
     of the Trust are hereby delegated by the Board of Directors, acting through
     its Organization and Compensation Committee, to and vested in the
     Investment Subcommittee except to the


                                       46



     extent reserved to the Board of Directors or the Board of Directors, acting
     through its Organization and Compensation Committee, or the Sponsor.
     Subject to the limitations of the Plan, the Investment Subcommittee shall,
     from time to time, establish rules for the performance of its functions.

     7.6. Committee Powers. The Committee shall have all discretionary powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law, the Committee shall have, but not
by way of limitation, the following discretionary powers and authority:

          (a) To designate agents to carry out responsibilities relating to the
     Plan, other than fiduciary responsibilities as provided in Section 7.7.

          (b) To employ such legal, actuarial, medical, accounting, clerical,
     and other assistance as it may deem appropriate in carrying out the
     provisions of the Plan, including one or more persons to render advice with
     regard to any responsibility any Named Fiduciary or any other fiduciary may
     have under the Plan.

          (c) To establish rules and regulations from time to time for the
     conduct of the Committee's business and the administration and effectuation
     of the Plan.

          (d) To administer, interpret, construe, and apply the Plan and to
     decide all questions which may arise or which may be raised under the Plan
     by any Employee, Participant, former Participant, Beneficiary or other
     person whatsoever, including but not limited to all questions relating to
     eligibility to participate in the Plan, the amount of Credited Service of
     any Participant, and the amount of benefits to which any Participant or his
     or her Beneficiary may be entitled.

          (e) To determine the manner in which the assets of the Plan, or any
     part thereof, shall be disbursed.

          (f) Subject to provisions (a) through (d) of Section 8.1, to make
     administrative amendments to the Plan that do not cause a substantial
     increase or decrease in benefit accruals to Participants and that do not
     cause a substantial increase in the cost of administering the Plan.

          (g) To perform or cause to be performed such further acts as it may
     deem to be necessary, appropriate or convenient in the efficient
     administration of the Plan.

     Any action taken in good faith by the Committee in the exercise of
discretionary power conferred upon it by the Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.


                                       47



     7.7. Additional Powers of Committee. In addition to any discretionary
powers or authority conferred on the Committee elsewhere in the Plan or by law,
such Committee shall have the following discretionary powers and authority:

          (a) To appoint one or more Investment Managers to manage and control
     any or all of the assets of the Trust not invested or to be invested in
     Company Stock.

          (b) To designate persons (other than the members of the Committee) to
     carry out fiduciary responsibilities, other than any responsibility to
     manage or control the assets of the Trust;

          (c) To allocate fiduciary responsibilities among the members of the
     Committee, other than any responsibility to manage or control the assets of
     the Trust;

          (d) To cancel any such designation or allocation at any time for any
     reason;

          (e) To direct the voting of any Company Stock or any other security
     held by the Trust subject to Section 7.16 hereof; and

          (f) To exercise management and control over the assets of the Trust to
     the extent provided in paragraph (a) above and in Section 7.9 (relating to
     review by the Committee of the long-run and short-run financial needs of
     the Plan and the determination of the funding policy for the Plan).

     Any action under this Section 7.7 shall be taken in writing, and no
designation or allocation under Subsection (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.

     7.8. Investment Subcommittee Powers. The Investment Subcommittee shall have
all discretionary powers necessary to manage and control the assets of the
Trust, including but not limited to, the following:

          (a) To exercise management and control over the assets of the Trust
     except to the extent the Committee appoints an Investment Manager pursuant
     to Section 7.7(a) and subject to the requirement that all action taken by
     the Investment Subcommittee shall be in accordance and consistent with the
     funding policy established by the Committee and shall be communicated to
     the Committee at periodic intervals.

          (b) To employ consulting, actuarial, and other assistance as it may
     deem appropriate in carrying out its responsibilities under the Plan,
     including one or more persons to render advice with regard to any fiduciary
     responsibility the Investment Subcommittee may have under the Plan.

          (c) To establish rules and regulations from time to time for the
     conduct of the Investment Subcommittee's business.


                                       48



          (d) To direct the Trustee, in writing, from time to time, to invest
     and reinvest the Trust Fund, or any part thereof, or to purchase, exchange,
     or lease any property, real or personal, which the Investment Subcommittee
     may designate. This shall include the right to direct the investment of all
     or any part of the Trust in any one security or any one type of securities
     permitted hereunder.

          (e) To direct the purchase and sale of Company Stock (and any other
     securities that are "qualifying employer securities" as defined in Code
     Section 4975(e)) for the Trust.

     Any action taken in good faith by the Investment Subcommittee in the
exercise of discretionary powers conferred upon it by the Plan shall be
conclusive and binding upon the Participants and their Beneficiaries.

     7.9. Periodic Review of Funding Policy. Notwithstanding the delegation of
authority and responsibility to manage and control the assets of the Trust to
the Investment Subcommittee, the Committee, at periodic intervals, shall review
the long-run and short-run financial needs of the Plan and shall determine a
funding policy for the Plan consistent with the objectives of the Plan and the
minimum funding standards of ERISA, if applicable. In determining such funding
policy the Committee shall take into account, at a minimum, not only the
long-term investment objectives of the Trust Fund consistent with the prudent
management of the assets thereof, but also the short-run needs of the Plan to
pay benefits. All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefor, shall be fully reflected in
the minutes of the Committee.

     7.10. Claims Procedures. If a Participant or his or her Beneficiary
believes that he or she is being denied any rights or benefits under the Plan,
the Participant, Beneficiary, or in either case, his or her authorized
representative (the "Claimant") shall follow the administrative procedures for
filing a claim for benefits as set forth in this Section. A claim for benefits
shall be in writing and shall be reviewed by the Committee or a claims official
designated by the Committee. The Committee or claims official shall review a
claim for benefits in accordance with the procedures established by the
Committee subject to the following administrative procedures set forth in this
Section.

          (a) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to a claim for
     benefits within 90 days following receipt by the Committee (or its
     delegate) of the claim unless the Committee determines that special
     circumstances require an extension of time for processing the claim. In the
     event an extension is necessary, written or electronic notice of the
     extension shall be furnished to the Claimant prior to the expiration of the
     initial 90 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 90 days from the end of the initial 90 day period.

          (b) In the case of a denial of the Claimant's claim, the written or
     electronic notice of such denial shall set forth (i) the specific reasons
     for the denial, (ii) references


                                       49



     to the Plan provisions upon which the denial is based, (iii) a description
     of any additional information or material necessary for perfection of the
     claim (together with an explanation why such material or information is
     necessary), (iv) an explanation of the Plan's appeals procedures, and (v) a
     statement of the Claimant's right to bring a civil action under Section
     502(a) of ERISA if his or her claim is denied upon appeal.

          (c) In the case of a denial of a claim, a Claimant who wishes to
     appeal the decision shall follow the administrative procedures for an
     appeal as set forth in Section 7.11 below.

     7.11. Appeals Procedures. A Claimant who wishes to appeal the denial of his
or her claim for benefits shall follow the administrative procedures for an
appeal as set forth in this Section and shall exhaust such administrative
procedures prior to seeking any other form of relief. Appeals shall be reviewed
in accordance with the procedures established by the Committee subject to the
following administrative procedures set forth in this Section.

          (a) In order to appeal a decision rendered with respect to his or her
     claim for benefits, a Claimant must file an appeal with the Committee in
     writing within 60 days following his or her receipt of the notice of denial
     with respect to the claim.

          (b) The Claimant's appeal may include written comments, documents,
     records and other information relating to his or her claim. The Claimant
     may review all pertinent documents and, upon request, shall have reasonable
     access to or be provided free of charge, copies of all documents, records,
     and other information relevant to his or her claim.

          (c) The Committee shall provide a full and fair review of the appeal
     and shall take into account all claim related comments, documents, records,
     and other information submitted by the Claimant without regard to whether
     such information was submitted or considered under the initial
     determination or review of the initial determination. Where appropriate,
     the Committee will overturn a notice of denial if it determines that an
     error was made in the interpretation of the controlling plan documents or
     if the Committee determines that an existing interpretation of the
     controlling plan documents should be changed on a prospective basis. In the
     event the Claimant is a subordinate, as determined by the Committee, to an
     individual conducting the review, such individual shall recuse himself or
     herself from the review of the appeal.

          (d) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to an appeal within
     60 days following receipt by the Committee of the appeal unless the
     Committee determines that special circumstances require an extension of
     time for processing the appeal. In the event an extension is necessary,
     written or electronic notice of the extension shall be furnished to the
     Claimant prior to the expiration of the initial 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 60 days from the end of the
     initial 60 day period.


                                       50



          (e) In the case of a denial of an appeal, the written or electronic
     notice of such denial shall set forth (i) the specific reasons for the
     denial, (ii) references to the Plan provisions upon which the denial is
     based, (iii) a statement that the Claimant is entitled to receive, upon
     request and free of charge, reasonable access to, and copies of, all
     documents, records, and other information relating to his or her claim for
     benefits, and (iv) a statement of the Claimant's right to bring a civil
     action under Section 502(a) of ERISA.

     7.12. Limitation on Liability. Each of the fiduciaries under the Plan shall
be solely responsible for its own acts and omissions and no fiduciary shall be
liable for any breach of fiduciary responsibility resulting from the act or
omission of any other fiduciary or person to whom fiduciary responsibilities
have been allocated or delegated pursuant to Section 7.2 or 7.7, except as
provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. Neither the
Committee nor the Investment Subcommittee shall have responsibility over assets
as to which management and control has been delegated to an Investment Manager
appointed pursuant to Section 6.14 hereof or as to which management and control
has been retained by the Trustee.

     7.13. Indemnification and Insurance. To the extent permitted by law, the
Company shall indemnify and hold harmless the Committee, the Investment
Subcommittee and each member thereof, the Board of Directors and each member
thereof, and such other persons as the Board of Directors may specify, from the
effects and consequences of his or her acts, omissions, and conduct in his or
her official capacity in connection with the Plan and Trust. To the extent
permitted by law, the Company may also purchase liability insurance for such
persons.

     7.14. Compensation of Committees and Plan Expenses. Members of the
Committee and the Investment Subcommittee shall serve as such without
compensation unless the Board of Directors shall otherwise determine, but in no
event shall any member of the Committee or Investment Subcommittee who is an
Employee receive compensation from the Plan for his or her services as a member
of the Committee or the Investment Subcommittee. All members shall be reimbursed
for any necessary expenditures incurred in the discharge of duties as members of
the Committee or the Investment Subcommittee. The compensation or fees, as the
case may be, of all officers, agents, counsel, the Trustee or other persons
retained or employed by the Committee or the Investment Subcommittee shall be
fixed by the Committee, subject to approval by the Board of Directors. The
expenses incurred in the administration and operation of the Plan, including but
not limited to the expenses incurred by the members of the Committee or the
Investment Subcommittee in exercising their duties, shall be paid by the Plan
from the Trust Fund, unless paid by the Company, provided, however, that the
Plan and not the Company shall bear the cost of interest and normal brokerage
charges which are included in the cost of securities purchased by the Trust Fund
(or charged to proceeds in the case of sales). If such expenses are to be paid
by the Plan from the Trust Fund, the Investment Subcommittee may direct the
Trustee to use forfeitures and dividends (and to sell the shares of Company
Stock that represent such forfeitures or dividends) to pay such expenses.

     7.15. Resignation. Any member of the Committee or Investment Subcommittee
may resign by giving fifteen (15) days notice to the Board of Directors, and any
member shall resign


                                       51



forthwith upon receipt of the written request of the Board of Directors, whether
or not said member is at that time the only member of the Committee or the
Investment Subcommittee.

     7.16. Voting of Company Stock. Notwithstanding any other provision of the
Plan to the contrary, the Trustee shall have no discretion or authority to vote
Company Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in accordance with timely directions received
by the Trustee either from the Committee or from Participants, depending on who
has the right to direct the voting of such Company Stock as provided in the
following provisions of this Section 7.16.

          (a) All Company Stock held in the Trust Fund shall be voted by the
     Trustee as the Committee directs in its absolute discretion, except as
     provided in this Section 7.16(a).

               (i) If the Sponsor has a registration-type class of securities
          (as defined in Code Section 409(e)(4)), then with respect to all
          corporate matters, (1) each Participant shall be entitled to direct
          the Trustee as to the voting of all Company Stock allocated and
          credited to his or her ESOP Account and (2) each Participant who is an
          Eligible Employee shall be entitled to direct the Trustee as to the
          voting of a portion of all Company Stock not allocated to the ESOP
          Accounts of Participants, with such portion equal to the total number
          of shares of such unallocated stock multiplied by a fraction the
          numerator of which is the number of shares of Company Stock allocated
          and credited to his or her ESOP account and the denominator of which
          is the total number of shares of Company Stock allocated and credited
          to all ESOP Accounts of Participants.

               (ii) If the Sponsor does not have a registration-type class of
          securities, then only with respect to such matters as the approval or
          disapproval of any corporate merger or consolidation,
          recapitalization, reclassification, liquidation, dissolution, sale of
          substantially all assets of trade or business, or such similar
          transactions as may be prescribed in Code Section 409(e)(4) and the
          regulations thereunder, (1) each Participant shall be entitled to
          direct the Trustee as to the voting of all Company Stock allocated and
          credited to his or her ESOP Account and (2) each Participant who is an
          Eligible Employee shall be entitled to direct the Trustee as to the
          voting of a portion of all Company Stock not allocated to the ESOP
          Accounts of Participants, with such portion determined in the same
          manner as under paragraph (a)(i) above.

          (b) To the extent there remains any residual fiduciary responsibility
     with respect to the voting of Company Stock after application of paragraph
     (a) above, the Trustee shall vote such Company Stock as directed by the
     Committee or as directed by an independent fiduciary if duly appointed by
     the Sponsor. To the extent the Committee or an independent fiduciary is
     required to exercise any residual fiduciary responsibility with respect to
     the voting of Company Stock, the Committee or independent fiduciary shall
     take into account in exercising its fiduciary judgment, unless it is
     clearly imprudent to do so, directions timely received from Participants,
     as such directions are most indicative of


                                       52



     what action is in the best interests of Participants. Further, the
     Committee or independent fiduciary, in addition to taking into
     consideration any relevant financial factors bearing on any such decision,
     shall take into consideration any relevant non-financial factors,
     including, but not limited to, the continuing job security of Participants
     as employees of the Sponsor or any Affiliated Company, conditions of
     employment, employment opportunities and other similar matters, and the
     prospect of the Participants and prospective Participants for future
     benefits under the Plan.

          (c) All Participants entitled to direct such voting shall be notified
     by the Sponsor, pursuant to its normal communications with shareholders, of
     each occasion for the exercise of such voting rights within a reasonable
     time before such rights are to be exercised. Such notification shall
     include all information distributed to shareholders either by the Sponsor
     or any other party regarding the exercise of such rights. Such Participants
     shall be so entitled to direct the voting of fractional shares (or
     fractional interests in shares); provided, however, that the Trustee may,
     to the extent possible, vote the combined fractional shares (or fractional
     interests in shares) so as to reflect the aggregate direction of all
     Participants giving directions with respect to fractional shares (or
     fractional interests in shares). To the extent that a Participant shall
     fail to direct the Trustee as to the exercise of voting rights arising
     under Company Stock credited to his or her ESOP Account, such Company Stock
     shall not be voted unless the Trustee is directed otherwise as provided in
     paragraph (b) above. The Trustee shall maintain confidentiality with
     respect to the voting directions of all Participants.

          (d) Each Participant shall be a named fiduciary (as that term is
     defined in Section 402(a)(2) of ERISA) with respect to Company Stock for
     which he or she has the right to direct the voting under the Plan but
     solely for the purpose of exercising voting rights pursuant to this Section
     7.16 or certain Offers pursuant to Section 6.4.

          (e) In the event a court of competent jurisdiction shall issue an
     opinion or order to the Plan, the Committee, the Sponsor or the Trustee,
     which shall, in the opinion of counsel to the Committee, the Sponsor or the
     Trustee, invalidate under ERISA, in all circumstances or in any particular
     circumstances, any provision or provisions of this paragraph regarding the
     manner in which Company Stock held in the Trust shall be voted or cause any
     such provision or provisions to conflict with ERISA, then, upon notice
     thereof to the Committee, the Sponsor or the Trustee, as the case may be,
     such invalid or conflicting provisions of this Section shall be given no
     further force or effect. In such circumstances the Trustee shall continue
     to follow instructions received from Participants, to the extent such
     instructions have not been invalidated by such order or opinion. To the
     extent the Trustee is required by such opinion or order to exercise any
     residual fiduciary responsibility with respect to voting, the Sponsor shall
     appoint an independent fiduciary who shall exercise such residual fiduciary
     responsibility as provided in paragraph (b) above and shall direct the
     Trustee as to the manner in which Company Stock held by the Trustee shall
     be voted.


                                       53



     7.17. Reliance Upon Documents and Opinions. The members of the Committee,
the Investment Subcommittee, the Board of Directors, the Company and any person
delegated to carry out any fiduciary responsibilities under the Plan
(hereinafter a "delegated fiduciary"), shall be entitled to rely upon any
tables, valuations, computations, estimates, certificates and reports furnished
by any consultant, or firm or corporation which employs one or more consultants,
upon any opinions furnished by legal counsel, and upon any reports furnished by
the Trustee or any Investment Manager. The members of the Committee, the
Investment Subcommittee, the Board of Directors, the Company and any delegated
fiduciary shall be fully protected and shall not be liable in any manner
whatsoever for anything done or action taken or suffered in reliance upon any
such consultant, or firm or corporation which employs one or more consultants,
Trustee, Investment Manager, or counsel. Any and all such things done or such
action taken or suffered by the Committee, the Investment Subcommittee, the
Board of Directors, the Company and any delegated fiduciary shall be conclusive
and binding on all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law. The Committee, the Investment
Subcommittee, and any delegated fiduciary may, but are not required to, rely
upon all records of the Company with respect to any matter or thing whatsoever,
and may likewise treat such records as conclusive with respect to all Employees,
Participants, Beneficiaries, and any other persons whomsoever, except as
otherwise provided by law.


                                       54



                                  ARTICLE VIII
                         AMENDMENT AND ADOPTION OF PLAN

     8.1. Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend the Plan and Trust Agreement at any
time and from time to time and in such manner and to such extent as it may deem
advisable, including retroactively, subject to the following provisions:

          (a) No amendment shall have the effect of reducing any Participant's
     vested interest in the Plan or eliminating an optional form of
     distribution.

          (b) No amendment shall have the effect of diverting any part of the
     assets of the Plan to persons or purposes other than the exclusive benefit
     of the Participants or their Beneficiaries.

          (c) No amendment shall have the effect of increasing the duties or
     responsibilities of a Trustee without its written consent.

          (d) No amendment shall result in discrimination in favor of officers,
     shareholders, or other highly compensated or key employees.

     The Committee shall have the right to amend the Plan, subject to paragraphs
(a) through (d), in accordance with the provisions of Section 7.6(f).

     8.2. Adoption of Plan by Affiliated Companies. Subject to approval by the
Board of Directors and consistent with the provisions of ERISA, an Affiliated
Company may adopt the Plan for all or any specified group of its Eligible
Employees by entering into an adoption agreement in the form and substance
prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.


                                       55



                                   ARTICLE IX
                         DISCONTINUANCE OF CONTRIBUTIONS

     In the event the Company decides it is impossible or inadvisable for
business reasons to continue to make contributions under the Plan, it may, by
resolution of the Board of Directors, discontinue contributions to the Plan.
Upon the permanent discontinuance of contributions to the Plan and
notwithstanding any other provisions of the Plan, the rights of Participants
shall become fully vested and nonforfeitable unless replaced by a comparable
plan. The permanent discontinuance of contributions on the part of the Company
shall not terminate the Plan as to the funds and assets then held in the Trust,
or operate to accelerate any payments of distributions to or for the benefit of
Participants or Beneficiaries, and the Trust shall continue to be administered
in accordance with the provisions hereof until the obligations hereunder shall
have been discharged and satisfied. If, at the time of discontinuance, there is
any amount outstanding on an Exempt Loan, any amount remaining in the Exempt
Loan Suspense Subfund shall be disposed of as provided in any applicable loan
agreement.


                                       56



                                    ARTICLE X
                             TERMINATION AND MERGER

     10.1. Right to Terminate Plan. In the event the Board of Directors decides
it is impossible or inadvisable for business reasons to continue the Plan, then
it may, by resolution, terminate the Plan. Upon and after the effective date of
such termination, the Company shall not make any further contributions under the
Plan. Upon the termination or partial termination of the Plan for any reason,
the interest in the Trust of each affected Participant shall automatically
become fully vested unless the Plan is continued after its termination by
conversion of the Plan into a comparable Plan through Plan amendment or through
merger. If, at the time of termination, there is any amount outstanding in an
Exempt Loan, any amount remaining in the Exempt Loan Suspense Subfund shall be
disposed of in a manner that provides for the repayment of amounts outstanding
in any such Exempt Loan. After the satisfaction of all outstanding liabilities
of the Plan to persons other than Participants and Beneficiaries, all
unallocated assets shall be allocated to the ESOP Accounts of Eligible
Participants as defined in Section 4.2(d) to the maximum extent permitted by
law. The Trust Fund may not be fully or finally liquidated until all assets are
allocated to ESOP Accounts; alternatively any unallocated assets may be
transferred to another defined contribution plan maintained by the Sponsor or an
Affiliated Company qualified under Code Section 401 where such assets shall be
allocated among the accounts of Participants herein who are participants in such
transferee plan. In no event, however, shall any part of the Plan revert to or
be recoverable by the Company, or be used for or diverted to purposes other than
for the exclusive benefit of the Participants or their Beneficiaries.
Notwithstanding the foregoing, amounts held in the 415 Suspense Account may
revert to the Company in accordance with Section 11.6.

     10.2. Effect on Trustee and Committee. The Trustee and the Committee shall
continue to function as such for such period of time as may be necessary for the
winding up of the Plan and for the making of distributions in the manner
prescribed by the Board of Directors at the time of termination of the Plan.

     10.3. Merger Restriction. Notwithstanding any other provision in the Plan,
the Plan shall not in whole or in part merge or consolidate with, or transfer
its assets or liabilities to, any other plan unless each affected Participant in
the Plan would (if such other plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

     10.4. Effect of Reorganization, Transfer of Assets or Change in Control.

          (a) In the event of a consolidation or merger of the Company, or in
     the event of a sale and/or any other transfer of the operating assets of
     the Company, any ultimate successor or successors to the business of the
     Company may continue the Plan in full force and effect by adopting the same
     by resolution of its board of directors and by executing a proper
     supplemental or transfer agreement with the Trustee.


                                       57



          (b) In the event of a Change in Control (as herein defined), all
     Participants who were Participants on the date of such Change in Control
     shall become 100% vested in any amounts allocated to their ESOP Accounts on
     the date of such Change in Control and in any amounts allocated to their
     ESOP Accounts subsequent to the date of the Change in Control.
     Notwithstanding the foregoing, the Board of Directors may, at its
     discretion, amend or delete this paragraph (b) in its entirety prior to the
     occurrence of any such Change in Control. For the purpose of this paragraph
     (b) and prior to January 1, 2000, a "Change in Control" shall be as defined
     in the Plan prior to this restatement. On or after January 1, 2000, a
     "Change in Control" shall mean the following and shall be deemed to occur
     if any of the following events occur:

               (i) 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 the Sponsor representing (1)
          20% or more of the combined voting power of the Sponsor'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 (2) 33%
          or more of the combined voting power of the Sponsor's then outstanding
          voting securities, without regard to whether such acquisition is
          approved by the Incumbent Board;

               (ii) Individuals who, as of the 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 date hereof
          whose election, or nomination for election by the Sponsor'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 the Sponsor, as such terms are
          used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
          Act) shall, for the purposes of THE Plan, be considered as though such
          person were a member of the Incumbent Board of the Sponsor;

               (iii) The consummation of a merger, consolidation or
          reorganization involving the Sponsor, other than one which satisfies
          both of the following conditions:

                    (A) a merger, consolidation or reorganization which would
               result in the voting securities of the Sponsor 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


                                       58



               voting securities of the Sponsor 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 the Sponsor's voting
               securities immediately before such merger, consolidation or
               reorganization, and

                    (B) a merger, consolidation or reorganization in which no
               Person is or becomes the Beneficial Owner, directly or
               indirectly, of securities of the Sponsor representing 20% or more
               of the combined voting power of the Sponsor's then outstanding
               voting securities; or

               (iv) The stockholders of the Sponsor approve a plan of complete
          liquidation of the Sponsor or an agreement for the sale or other
          disposition by the Sponsor of all or substantially all of the
          Sponsor's assets.

          Notwithstanding the preceding provisions of this paragraph (b), a
     Change in Control shall not be deemed to have occurred if the Person
     described in the preceding provisions of this paragraph (b) is (i) an
     underwriter or underwriting syndicate that has acquired any of the
     Sponsor's then outstanding voting securities solely in connection with a
     public offering of the Sponsor's securities, (ii) the Sponsor or any
     subsidiary of the Sponsor or (iii) an employee stock ownership plan or
     other employee benefit plan maintained by the Company or an Affiliated
     Company that is qualified under the provisions of the Code. In addition,
     notwithstanding the preceding provisions of this paragraph (b), a Change in
     Control shall not be deemed to have occurred if the Person described in the
     preceding provisions of this paragraph (b) becomes a Beneficial Owner of
     more than the permitted amount of outstanding securities as a result of the
     acquisition of voting securities by the Company or an Affiliated Company
     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 Sponsor or through a stock
     dividend or stock split), then a Change in Control shall occur.

          (c) In the event of a Change in Control (as defined in Section 10.4(b)
     above), the Company shall be required to repay in full, solely from its own
     funds and within thirty (30) days following the date of such Change in
     Control, all Exempt Loans and Substitute Loans outstanding on the date of
     the Change in Control. Notwithstanding any other provision of the Plan to
     the contrary, all assets (including Company Stock) and funds that released
     from the Exempt Loan Suspense Subfund on account of repayment by the
     Company under this Section 10.4(c) shall be allocated, for the Plan Year in
     which the Change in Control occurs, in accordance with the formula set
     forth herein (consistent


                                       59



     with the requirements imposed under Article XI and other requirements of
     the Code). Under the formula for allocation set forth herein, assets and
     funds that are released shall be allocated to Employees who are Eligible
     Participants (as defined in Section 4.2(d)) as of the date of the Change in
     Control (or who would have been Eligible Participants but for their death,
     Disability or retirement at or after age 55 during the Plan Year) in the
     same ratio that each such Participant's Compensation for the Plan Year
     through the last pay period ending on or before the date of such Change in
     Control bears to the total Compensation of all such Participants for the
     Plan Year through their last pay periods ending on or before the date of
     such Change in Control.

          (d) For purposes of this Section 10.4, a Change of Control shall not
     be deemed to have occurred upon the distribution of the stock of Advanced
     Medical Optics, Inc. on June 29, 2002 by the Sponsor to its stockholders.


                                       60


                                   ARTICLE XI
                            LIMITATION ON ALLOCATIONS

     11.1. General Rule.

          (a) The total Annual Additions under the Plan to a Participant's ESOP
     Account shall not exceed the lesser of:

               (i) Forty Thousand Dollars ($40,000), as adjusted for increases
          in the cost-of-living under Code Section 415(d); or

               (ii) One Hundred Percent (100%) of the Participant's Compensation
          (as defined in Section 11.5), from the Company for the Limitation
          Year.

     Notwithstanding the foregoing sentence, the compensation limit set forth in
     subparagraph (ii) shall not apply to any contribution for medical benefits
     after separation from service (within the meaning of Code Section 401(h) or
     Code Section 419A(f)(2)) which is otherwise treated as an Annual Addition.

          (b) For the purpose of this Article XI, the term "Company" shall mean
     the Sponsor and any Affiliated Company (determined by reference to Code
     Section 415(h)) whether or not such Affiliated Company has adopted the Plan
     pursuant to Section 8.2 and the term "Limitation Year" shall mean the Plan
     Year.

     11.2. Annual Additions. For purposes of Section 11.1, the term "Annual
Additions" shall mean with respect to a Participant, for any Limitation Year
with respect to the Plan, the sum of the amounts described below:

          (a) All amounts contributed or deemed contributed by the Company,
     except that the Annual Addition shall exclude the portion of the Company
     contribution representing interest on an Exempt Loan, provided that no more
     than one-third of the Company's contributions to the Trust Fund deductible
     under Code Section 404(a)(9) for a Limitation Year are allocated to Highly
     Compensated Employees.

          (b) All amounts contributed by the Participant.

          (c) Forfeitures allocated to such Participant. For purposes of this
     Section 11.2, forfeitures shall not include forfeitures of Company Stock
     acquired through the Trust Fund with the proceeds of an Exempt Loan,
     provided that no more than one-third of the Company's contributions to the
     Trust Fund deductible under Code Section 404(a)(9) for a Limitation Year
     are allocated to Highly Compensated Employees.

          (d) Any amounts allocated, after March 31, 1984, to an individual
     medical account as defined in Code Section 415(l)(2) established under a
     pension or annuity plan maintained by the Company.


                                       61



          (e) Any amounts allocated for such Plan Year which amounts are derived
     from contributions paid or accrued after December 31, 1985, in taxable
     years ending after such date, which are attributable to post retirement
     medical benefits allocated to the separate account of a key employee (as
     defined in Code Section 419A(d)(3)) under a welfare benefit fund (as
     defined in Code Section 419(e)) maintained by the Company.

     11.3. Other Defined Contribution Plans. If the Company maintains any other
defined contribution plan, then each Participant's Annual Additions under such
defined contribution plan shall be aggregated with the Participant's Annual
Additions under the Plan for the purposes of applying the limitations of Section
11.1.

     11.4. Adjustment for Excess Annual Additions. If as a result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
Compensation, or under other limited facts and circumstances that the
Commissioner of Internal Revenue finds justify the availability of the rules set
forth in Regulation Section 1.415-6(b)(6), the Annual Additions on behalf of any
Participant in a Limitation Year to the Plan and all other defined contribution
plans maintained by the Company exceed the limitations set forth in Section
11.1, then excess Annual Additions shall be eliminated in accordance with the
following rules and in the following order:

          (a) Excess Annual Additions shall be eliminated by reducing the
     allocation to the Participant's ESOP Account by the amount of the excess
     and treating such amount as a forfeiture under Section 5.3 hereof and
     reallocating such amount proportionately to the ESOP Accounts of other
     Participants receiving allocations for the Limitation Year up to the limits
     set forth in Section 11.1.

          (b) After each Participant's ESOP Account has been credited under
     paragraph (a) with an amount bringing his or her ESOP Account up to his or
     her maximum Annual Addition (determined under the provisions of this
     Article XI), any remaining excess Annual Addition shall be transferred and
     credited to a 415 Suspense Account established for the purpose of this
     Section 11.4.

          (c) Any amounts held in the 415 Suspense Account shall be treated as
     Company contributions and allocated to the ESOP Accounts of Eligible
     Participants (as defined in Section 4.2(d)) as of the last day of the next
     succeeding Plan Year in accordance with the allocation formula applicable
     to Company contributions provided in Section 4.2. The 415 Suspense Account
     shall be exhausted before any Company contributions shall be allocated to
     the ESOP Accounts of Participants subsequent to the date upon which any
     residue excess Annual Addition as described in paragraph (c) is credited to
     the 415 Suspense Account.

     11.5. Compensation. For the purpose of this Article XIII, Compensation
shall mean a Participant's earned income, wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment with the Company maintaining the Plan and shall be determined as
described below:


                                       62



          (a) Compensation shall include to the extent that the amounts are
     includible in gross income (including, but not limited to, commissions paid
     salespeople, compensation for services on the basis of a percentage of
     profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
     and reimbursements or other expense allowances under a nonaccountable plan
     as described in Regulation 1.62-2(c)).

          (b) Compensation shall include any elective deferral as defined in
     Code Section 402(g)(3), any amount which is contributed or deferred by the
     Company at the election of the Employee that is excludable from an
     Employee's gross income under Code Sections 125 or 457 and, for Plan Years
     beginning on or after January 1, 1998, any elective amount that is
     excludable from an Employee's gross income under Code Section 132(f)(4).

          (d) Compensation shall not include (i) any employer contributions to a
     plan of deferred compensation which are not included in the Employee's
     gross income for the taxable year in which contributed, (ii) any
     distributions from a plan of deferred compensation, (iii) any amounts
     realized from the exercise of a non-qualified stock option or when
     restricted stock or property held by the Employee becomes either freely
     transferable or is no longer subject to a substantial risk of forfeiture
     under Code Section 83 if such option, stock, or property was granted to the
     Employee by the Company, (iv) any amounts realized from the sale, exchange,
     or other disposition of stock acquired under a qualified stock option, (v)
     any contribution for medical benefits (within the meaning of Code Section
     419(f)(2) after termination of employment which is otherwise treated as an
     Annual Addition, and (vi) any amount otherwise treated as an Annual
     Addition under Code Section 415(l)(1).

          (d) Notwithstanding anything in the Plan to the contrary, Compensation
     shall be determined in accordance with Code Section 415(c)(3) as in effect
     for Plan Years beginning prior to January 1, 1998 where required by
     applicable law.

     11.6. Treatment of 415 Suspense Account Upon Termination. In the event the
Plan shall terminate at a time when all amounts in the 415 Suspense Account have
not been allocated to the ESOP Accounts of the Participants, the 415 Suspense
Account amounts shall be applied as follows:

          (a) The amount in the 415 Suspense Account shall first be allocated,
     as of the Plan termination date, to Participants in accordance with the
     allocation formula applicable to Company contributions provided under
     Section 4.2(a).

          (b) If, after those allocations have been made, any further residue
     funds remain in the 415 Suspense Account, the residue may revert to the
     Company in accordance with applicable provisions of the Code, ERISA, and
     the regulations thereunder.


                                       63



          (c) Notwithstanding paragraphs (a) and (b) above, in the event that
     termination of the plan occurs after a Change in Control, all amounts in
     the 415 Suspense Account shall be allocated to Participants only in
     accordance with Section 10.4 hereof, and no part of the 415 Suspense
     Account shall revert to or be recoverable by the Company, or be used for or
     diverted to purposes other than for the exclusive benefit of the
     Participants or their Beneficiaries.


                                       64



                                   ARTICLE XII
                                 TOP-HEAVY RULES

     12.1. Applicability. Notwithstanding any provision in the Plan to the
contrary, and subject to the limitations set forth in Section 12.6, the
requirements of Sections 12.4 and 12.5 shall apply under the Plan in the case of
any Plan Year in which the Plan is determined to be a Top-Heavy Plan under the
rules of Section 12.3. For the purpose of this Article XII, the term "Company"
shall mean the Sponsor and any Affiliated Company whether or not such Affiliated
Company has adopted the Plan.

     12.2. Definitions. For purposes of this Article XII, the following special
definitions and rules shall apply:

          (a) The term "Key Employee" means any Employee or former Employee
     (including any deceased Employee) who, at any time during the Plan Year
     that includes the Determination Date, was an officer of the Company having
     annual Compensation greater than $130,000 (as adjusted under Code Section
     416(i)(1) for Plan Years beginning after December 31, 2002), a Five Percent
     Owner of the Company, or an One Percent Owner of the Company having annual
     Compensation of more than $150,000.

          (b) The term "Five Percent Owner" means any person who owns (or is
     considered as owning within the meaning of Code Section 318) more than 5%
     of the outstanding stock of the Company or stock possessing more than 5% of
     the total combined voting power of all stock of the Company.

          (c) The term "One Percent Owner" means any person who would be
     described in paragraph (b) if "1%" were substituted for "5%" each place
     where it appears therein.

          (d) The term "Non-Key Employee" means any Employee who is not a Key
     Employee.

          (e) The term "Determination Date" means, with respect to any plan
     year, the last day of the preceding plan year. In the case of the first
     plan year of any plan, the term "Determination Date" shall mean the last
     day of that plan year.

          (f) The term "Aggregation Group" means (i) each qualified plan of the
     Company in which at least one Key Employee participates or participated at
     any time during the determination period (regardless of whether the plan
     has terminated), and (ii) any other qualified plan of the Company which
     enables a plan described in clause (i) to meet the requirements of Code
     Sections 401(a)(4) or 410. Any plan not required to be included in an
     Aggregation Group under the preceding rules may be treated as being part of
     such group if the group would continue to meet the requirements of Code
     Sections 401(a)(4) and 410 with the plan being taken into account.


                                       65



          (g) For purposes of determining ownership under paragraphs (a), (b)
     and (c) above, the following special rules shall apply: (i) Code Section
     318(a)(2)(C) shall be applied by substituting "5%" for "50%", and (ii) the
     aggregation rules of Code Sections 414(b), (c) and (m) shall not apply,
     with the result that the ownership tests of this Section 12.2 shall apply
     separately with respect to each Affiliated Company.

          (h) The terms "Key Employee" and "Non-Key Employee" shall include
     their Beneficiaries, and the definitions provided under this Section 12.2
     shall be interpreted and applied in a manner consistent with the provisions
     of Code Section 416(i) and the regulations thereunder.

          (i) For purposes of this Article XII, an Employee's Compensation shall
     be determined in accordance with the rules of Section 11.5.

     12.3. Top-Heavy Status

          (a) The term "Top-Heavy Plan" means, with respect to any Plan Year:

               (i) Any defined benefit plan if, as of the Determination Date,
          the present value of the cumulative accrued benefits under the plan
          for Key Employees exceeds 60% of the present value of the

               (ii) cumulative accrued benefits under the plan for all
          Employees; and

               (iii) Any defined contribution plan if, as of the Determination
          Date, the aggregate of the account balances of Key Employees under the
          plan exceeds 60% of the aggregate of the account balances of all
          Employees under the plan.

          In applying the foregoing provisions of this paragraph (a), the
     valuation date to be used in valuing Plan assets shall be (i) in the case
     of a defined benefit plan, the same date which is used for computing costs
     for minimum funding purposes, and (ii) in the case of a defined
     contribution plan, the most recent valuation date within a 12-month period
     ending on the applicable Determination Date.

          (b) Each plan maintained by the Company required to be included in an
     Aggregation Group shall be treated as a Top-Heavy Plan if the Aggregation
     Group is a Top-Heavy Group.

          (c) The term "Top-Heavy Group" means any Aggregation Group if the sum
     (as of the Determination Date) of (i) the present value of the cumulative
     accrued benefits for Key Employees under all defined benefit plans included
     in the group, and (ii) the aggregate of the account balances of Key
     Employees under all defined contribution plans included in the group
     exceeds 60% of a similar sum determined for all Employees. For purposes of
     determining the present value of the cumulative accrued benefit of any
     Employee, or the amount of the account balance of any Employee, such
     present value or amount shall be increased by the aggregate distributions
     made with respect to the


                                       66



     Employee under the plan (including a terminated plan which, had it not been
     terminated, would have been aggregated with the plan under Code Section
     416(g)(2)(A)(i))during the one year period ending on the Determination
     Date. In the case of distributions made for a reason other than separation
     from service, death, or disability, the preceding sentence shall be applied
     by substituting "5-year period" for "l -year period." Any rollover
     contribution or similar transfer initiated by the Employee and made after
     December 31, 1983, to a plan shall not be taken into account with respect
     to the transferee plan for purposes of determining whether such plan is a
     Top-Heavy Plan (or whether any Aggregation Group which includes such plan
     is a Top-Heavy Group).

          (d) If any individual is a Non-Key Employee with respect to any plan
     for any plan year, but the individual was a Key Employee with respect to
     the plan for any prior plan year, any accrued benefit for the individual
     (and the account balance of the individual) shall not be taken into account
     for purposes of this Section 12.3.

          (e) If any individual has not performed services for the Company at
     any time during the one year period ending on the Determination Date, any
     accrued benefit for such individual (and the account balance of the
     individual) shall not be taken into account for purposes of this Section
     12.3.

          (f) In applying the foregoing provisions of this Section, the accrued
     benefit of a Non-Key Employee shall be determined (i) under the method, if
     any, which is used for accrual purposes under all plans of the Company and
     any Affiliated Companies, or (ii) if there is no such uniform method, as if
     such benefit accrued not more rapidly than the slowest accrual rate
     permitted under Code Section 411(b)(1)(C).

          (g) For all purposes of this Article XII, the definitions provided
     under this Section 12.3 shall be applied and interpreted in a manner
     consistent with the provisions of Code Section 416(g) and the regulations
     thereunder.

     12.4. Minimum Contributions. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the minimum Company Contributions for that
year shall be determined in accordance with the rules of this Section 12.4.

          (a) Except as provided below, the minimum contribution for each
     Non-Key Employee shall be not less than 3% of his or her compensation.

          (b) Subject to the following rules of this paragraph (b), the
     percentage set forth in paragraph (a) above shall not be required to exceed
     the percentage at which contributions are made (or are required to be made)
     under the Plan for the year for the Key Employee for whom the percentage is
     the highest for the year. This determination shall be made by dividing the
     contributions for each Key Employee by so much of his or her total
     compensation for the Plan Year as does not exceed the applicable
     Compensation limit. For purposes of this paragraph (b), all defined
     contribution plans required to be included in an Aggregation Group shall be
     treated as one plan. Notwithstanding the foregoing, the exceptions to
     paragraph (a) as provided under this paragraph (b) shall not


                                       67



     apply to any plan required to be included in an Aggregation Group if the
     plan enables a defined benefit plan to meet the requirements of Code
     Sections 401(a)(4) or 410.

          (c) The Participant's minimum contribution determined under this
     Section 12.4 shall be calculated without regard to any Social Security
     benefits payable to the Participant.

          (d) In the event a Participant is covered by both a defined
     contribution and a defined benefit plan maintained by the Company, both of
     which are determined to be Top-Heavy Plans, the Company shall satisfy the
     minimum benefit requirements of Code Section 416 by providing (in lieu of
     the minimum contribution described in paragraph (a) above) a minimum
     benefit under the defined benefit plan so as to prevent the duplication of
     required minimum benefits hereunder.

     12.5. Minimum Vesting Rules. For any Plan Year in which it is determined
that the Plan is a Top-Heavy Plan, the vesting schedule shall be the vesting
schedule set forth in Section 5.2.

     12.6. Non-Eligible Employees. The rules of this Article XII shall not apply
to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.


                                       68



                                  ARTICLE XIII
                       RESTRICTION ON ASSIGNMENT OR OTHER
                           ALIENATION OF PLAN BENEFITS

     13.1. General Restrictions Against Alienation.

          (a) The interest of any Participant or his or her Beneficiary in the
     income, benefits, payments, claims or rights hereunder, or in the Trust
     Fund, shall not in any event be subject to sale, assignment, hypothecation,
     or transfer. Each Participant and Beneficiary is prohibited from
     anticipating, encumbering, assigning, or in any manner alienating his or
     her interest under the Trust Fund, and is without power to do so, except as
     may be permitted in connection with providing security for a loan from the
     Plan to the Participant pursuant to the provisions of the Plan as it may be
     amended from time to time. The interest of any Participant or Beneficiary
     shall not be liable or subject to his or her debts, liabilities, or
     obligations, now contracted, or which may hereafter be contracted, and such
     interest shall be free from all claims, liabilities, or other legal process
     now or hereafter incurred or arising. Neither the interest of a Participant
     or Beneficiary, nor any part thereof, shall be subject to any judgment
     rendered against any such Participant or Beneficiary. Notwithstanding the
     foregoing, a Participant's or Beneficiary's interest in the Plan may be
     subject to the enforcement of a Federal tax levy made pursuant to Code
     Section 6331 or the collection by the United States on a judgment resulting
     from an unpaid tax assessment.

          (b) In the event any person attempts to take any action contrary to
     this Article XIII, such action shall be null and void and of no effect, and
     the Company, the Committee, the Trustee and all Participants and their
     Beneficiaries, may disregard such action and are not in any manner bound
     thereby, and they, and each of them, shall suffer no liability for any such
     disregard thereof, and shall be reimbursed on demand out of the Trust Fund
     for the amount of any loss, cost or expense incurred as a result of
     disregarding or of acting in disregard of such action.

          (c) The foregoing provisions of this Section shall be interpreted and
     applied by the Committee in accordance with the requirements of Code
     Section 401(a)(13) and Section 206(d) of ERISA as construed and interpreted
     by authoritative judicial and administrative rulings and regulations.

     13.2. Qualified Domestic Relations Orders. The rules set forth in Section
13.1 above shall not apply with respect to a "Qualified Domestic Relations
Order" as described below.

          (a) A "Qualified Domestic Relations Order" is a judgment, decree, or
     order (including approval of a property settlement agreement) that:

               (i) Creates or recognizes the existence of an Alternate Payee's
          right to, or assigns to an Alternate Payee the right to, receive all
          or a portion of the benefits payable under the Plan with respect to a
          Participant,


                                       69



               (ii) Relates to the provision of child support, alimony payments,
          or marital property rights to a spouse, former spouse, child or other
          dependent of a Participant,

               (iii) Is made pursuant to a State domestic relations law
          (including a community property law), and

               (iv) Clearly specifies: (1) the name and last known mailing
          address (if any) of the Participant and the name and mailing address
          of each Alternate Payee covered by the order (if the Committee does
          not have reason to know that address independently of the order); (2)
          the amount or percentage of the Participant's benefits to be paid to
          each Alternate Payee, or the manner in which the amount or percentage
          is to be determined; (3) the number of payments or period to which the
          order applies; and (4) each plan to which the order applies.

          For purposes of this Section 13.2, "Alternate Payee" means any spouse,
     former spouse, child or other dependent of a Participant who is recognized
     by a domestic relations order as having a right to receive all, or a
     portion of, the benefits payable with respect to the Participant.

          (b) A domestic relations order is not a Qualified Domestic Relations
     Order if it requires:

               (i) The Plan to provide any type or form of benefit, or any
          option, not otherwise provided under the Plan;

               (ii) The Plan to provide increased benefits; or

               (iii) The payment of benefits to an Alternate Payee that are
          required to be paid to another Alternate Payee under a previous
          Qualified Domestic Relations Order.

          (c) A domestic relations order shall not be considered to fail to
     satisfy the requirements of paragraph (b)(i) above with respect to any
     payment made before a Participant has separated from service solely because
     the order requires that payment of benefits be made to an Alternate Payee:

               (i) On or after the date on which the Participant attains (or
          would have first attained) his or her earliest retirement age (as
          defined in Code Section 414(p)(4)(B));

               (ii) As if the Participant had retired on the date on which such
          payment is to begin under such order (but taking into account only the
          present value of accrued benefits and not taking into account the
          present value of any subsidy for early retirement benefits); and


                                       70



               (iii) In any form in which such benefits may be paid under the
          Plan to the Participant (other than in the form of a joint and
          survivor annuity with respect to the Alternate Payee and his or her
          subsequent spouse).

          Notwithstanding the foregoing, if the Participant dies before his or
     her earliest retirement age (as defined in Section 414(p)(4)(B)), the
     Alternate Payee is entitled to benefits only if the Qualified Domestic
     Relations Order requires survivor benefits to be paid to the Alternate
     Payee.

          (d) To the extent provided in any Qualified Domestic Relations Order,
     the former spouse of a Participant shall be treated as a surviving Spouse
     of the Participant for purposes of applying the rules (relating to minimum
     survivor annuity requirements) of Code Sections 401(a)(11) and 417, and any
     current spouse of the Participant shall not be treated as a spouse of the
     Participant for such purposes.

          (e) In the case of any domestic relations order received by the Plan,
     the Committee shall promptly notify the Participant and any Alternate Payee
     named in the order that an order has been received and shall provide a copy
     of the Plan's procedures for determining the qualified status of domestic
     relations orders. An Alternate Payee may designate a representative for
     receipt of copies of notices and plan information that are sent to the
     Alternate Payee with respect to domestic relations order. Within a
     reasonable period after the receipt of the order, the Committee shall
     determine whether the order is a Qualified Domestic Relations Order and
     shall notify the Participant and each Alternate Payee of such
     determination.

          (f) The Committee shall establish reasonable procedures to determine
     the qualified status of domestic relations orders and to administer
     distributions under Qualified Domestic Relations Orders. During any period
     in which the issue of whether a domestic relations order is a Qualified
     Domestic Relations Order is being determined (by the Committee, by a court
     of competent jurisdiction, or otherwise), the Committee shall direct the
     Trustee to segregate in a separate account in the Plan (or in an escrow
     account) the amounts which would have been payable to the Alternate Payee
     during the period if the order had been determined to be a Qualified
     Domestic Relations Order. If within the 18 Month Period (as defined below),
     the order (or modification thereof) is determined to be a Qualified
     Domestic Relations Order, the Committee shall direct the Trustee to pay the
     segregated amounts (plus any interest thereon) to the person or persons
     entitled thereto. However, if within the 18 Month Period (i) it is
     determined that the order is not a Qualified Domestic Relations Order, or
     (ii) the issue as to whether the order is a Qualified Domestic Relations
     Order is not resolved, then the Committee shall direct the Trustee to pay
     the segregated amounts (plus any interest thereon) to the person or persons
     who would have been entitled to the amounts if there had been no order
     (assuming such benefits were otherwise payable). Any determination that an
     order is a Qualified Domestic Relations Order that is made after the close
     of the 18 Month Period shall be applied prospectively only. For purposes of
     this Section 13.2, the "18 Month Period" shall mean the 18 month period
     beginning with the date on which the first payment would be required to be
     made under the domestic relations order.


                                       71



                                   ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

     14.1. No Right of Employment Hereunder. The adoption and maintenance of the
Plan and Trust shall not be deemed to constitute a contract of employment or
otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

     14.2. Limitation on Company Liability. Any benefits payable under the Plan
shall be paid or provided for solely from the Plan and the Company assumes no
liability or responsibility therefor.

     14.3. Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

     14.4. Gender. Masculine gender shall include the feminine and the singular
shall include the plural unless the context clearly indicates otherwise.

     14.5. Interpretation. The provisions of the Plan shall in all cases be
interpreted in a manner that is consistent with the Plan satisfying (a) the
requirements of Code Section 401(a) and related statutes for qualification as a
stock bonus plan and (b) the requirements of Code Section 4975(e)(7) and related
statutes for qualification as an employee stock ownership plan and eligibility
for the prohibited transaction exemption provided under Code Section 4975(d)(3)
and its related statutes under ERISA.

     14.6. Withholding For Taxes. Any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal or
state law.

     14.7. California Law Controlling. All legal questions pertaining to the
Plan which are not controlled by ERISA shall be determined in accordance with
the laws of the State of California and all contributions made hereunder shall
be deemed to have been made in that State.

     14.8. Plan and Trust as One Instrument. The Plan and the Trust Agreement
shall be construed together as one instrument. In the event that any conflict
arises between the terms and/or conditions of the Trust Agreement and the Plan,
the provisions of the Plan shall control, except that with respect to the duties
and responsibilities of the Trustee, the Trust Agreement shall control.


                                       72



     14.9. Invalid Provisions. If any paragraph, section, sentence, clause or
phrase contained in the Plan shall become illegal, null or void or against
public policy, for any reason, or shall be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null or void
or against public policy, the remaining paragraphs, sections, sentences, clauses
or phrases contained in the Plan shall not be affected thereby.

     14.10. Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.


                                       73



     IN WITNESS WHEREOF, Allergan, Inc. hereby executes this instrument,
evidencing the terms of the Allergan, Inc. Employee Stock Ownership Plan as
restated this 14th day of June, 2005.

ALLERGAN, INC.


By /s/ Roy J. Wilson
   ----------------------------------
   Roy J. Wilson
   Executive Vice President,
   Human Resources


                                       74

EX-10.5

                                                                    EXHIBIT 10.5

                                 ALLERGAN, INC.

                           SAVINGS AND INVESTMENT PLAN

RESTATED
2005


                                                                               .
                                                                               .
                                                                               .

                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE I
INTRODUCTION.............................................................     1
1.1   Plan Name..........................................................     1
1.2   Plan Purpose.......................................................     1
1.3   Effective Date of 2005 Restated Plan...............................     1
1.4   Amendments to Plan.................................................     1
1.5   Plan Qualification.................................................     2

ARTICLE II
DEFINITIONS..............................................................     3
2.1   Accounts...........................................................     3
2.2   Affiliated Company.................................................     3
2.3   After Tax Deposits.................................................     3
2.4   After Tax Deposits Account.........................................     3
2.5   Anniversary Date...................................................     3
2.6   Before Tax Deposits................................................     3
2.7   Before Tax Deposits Account........................................     3
2.8   Beneficiary........................................................     3
2.9   Board of Directors.................................................     3
2.10  Break in Service...................................................     4
2.11  Code...............................................................     4
2.12  Committee..........................................................     4
2.13  Company............................................................     4
2.14  Company Contributions..............................................     4
2.15  Company Contributions Accounts.....................................     4
2.16  Company Stock......................................................     4
2.17  Compensation.......................................................     4
2.18  Credited Service...................................................     6
2.19  Disability.........................................................     7
2.20  Effective Date.....................................................     7
2.21  Eligible Employee..................................................     7
2.22  Eligible Retirement Plan...........................................     7
2.23  Eligible Rollover Distribution.....................................     8
2.24  Employee...........................................................     8
2.25  Employment Commencement Date.......................................     9
2.26  ERISA..............................................................     9
2.27  Forfeitures........................................................     9
2.28  415 Suspense Account...............................................     9
2.29  Highly Compensated Employee........................................    10
2.30  Hour of Service....................................................    10
2.31  Investment Manager.................................................    10
2.32  Leased Employee....................................................    10




                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
2.33  Leave of Absence...................................................    11
2.34  Matched Deposits...................................................    12
2.35  Matching Contributions.............................................    12
2.36  Matching Contributions Account.....................................    12
2.37  Normal Retirement Age..............................................    12
2.38  Participant........................................................    12
2.39  Participant Deposits...............................................    13
2.40  Period of Severance................................................    13
2.41  Plan...............................................................    13
2.42  Plan Administrator.................................................    13
2.43  Plan Year..........................................................    13
2.44  Reemployment Commencement Date.....................................    13
2.45  Retirement Account Participant.....................................    13
2.46  Retirement Contributions...........................................    13
2.47  Retirement Contributions Account...................................    13
2.48  Rollover Contributions.............................................    13
2.49  Rollover Contributions Account.....................................    14
2.50  Severance..........................................................    14
2.51  Severance Date.....................................................    14
2.52  Sponsor............................................................    14
2.53  Trust..............................................................    15
2.54  Trust Agreement....................................................    15
2.55  Trustee............................................................    15
2.56  Valuation Date.....................................................    15

ARTICLE III
ELIGIBILITY AND PARTICIPATION............................................    16
3.1   General Eligibility and Participation..............................    16
3.2   Eligibility for Retirement Contributions...........................    16
3.3   Duration of Participation..........................................    17
3.4   Eligibility and Participation After Normal Retirement Age..........    17

ARTICLE IV
PARTICIPANT DEPOSITS.....................................................    18
4.1   Election...........................................................    18
4.2   Amount Subject to Election.........................................    19
4.3   Limitation on Compensation Deferrals...............................    20
4.4   Provisions for Return of Excess Before Tax Deposits................    23
4.5   Provision for Recharacterization or Return of Excess Deferrals
         by Highly Compensated Participants..............................    25
4.6   Termination, Change in Rate, or Resumption
         of Before Tax Deposits or After Tax Deposits....................    27
4.7   Character of Deposits..............................................    27



                                       ii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
4.8   Rollover Contributions.............................................    27

ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS.....................................    29
5.1   General............................................................    29
5.2   Single Trust.......................................................    29
5.3   Matching Contributions.............................................    29
5.4   Retirement Contributions...........................................    30
5.5   Form of Company Contributions......................................    30
5.6   Investment of Trust Assets.........................................    30
5.7   Irrevocability.....................................................    33
5.8   Company, Committee and Trustee Not Responsible for Adequacy of
         Trust Fund......................................................    34
5.9   Certain Offers for Company Stock...................................    34
5.10  Voting of Company Stock............................................    37
5.11  Securities Law Limitation..........................................    39
5.12  Distributions......................................................    39
5.13  Taxes..............................................................    39
5.14  Trustee Records to be Maintained...................................    40
5.15  Annual Report of Trustee...........................................    40
5.16  Appointment of Investment Manager..................................    40

ARTICLE VI
ACCOUNTS AND ALLOCATIONS.................................................    41
6.1   Participants' Accounts.............................................    41
6.2   Allocation of Participant Deposits.................................    41
6.3   Allocation of Company Contributions and Forfeitures................    41
6.4   Valuation of Participants' Accounts................................    42
6.5   Valuation of Company Stock.........................................    42
6.6   Dividends, Splits, Recapitalizations, Etc..........................    42
6.7   Stock Rights, Warrants or Options..................................    42
6.8   Treatment of Accounts Upon Severance...............................    43
6.9   Cash Dividends.....................................................    43
6.10  Miscellaneous Allocation Rules.....................................    43
6.11  Limitations on After Tax Deposits and Matching Contributions.......    44
6.12  Provision for Disposition of Excess After Tax Deposits or Matching
         Contributions on Behalf of Highly Compensated Participants......    48

ARTICLE VII
VESTING IN PLAN ACCOUNTS.................................................    51
7.1   No Vested Rights Except as Herein Provided.........................    51
7.2   Vesting of Participant Deposits....................................    51
7.3   Vesting of Company Contributions...................................    51



                                       iii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE VIII
PAYMENT OF PLAN BENEFITS.................................................    53
8.1   Withdrawals During Employment......................................    53
8.2   Distributions Upon Termination of Employment or Disability.........    54
8.3   Distribution Upon Death of Participant.............................    55
8.4   Designation of Beneficiary.........................................    55
8.5   Hardship Withdrawal Rules..........................................    56
8.6   Distribution Rules.................................................    57
8.7   Forfeitures........................................................    63
8.8   Valuation of Accounts Upon Distribution............................    64
8.9   Lapsed Benefits....................................................    64
8.10  Persons Under Legal Disability.....................................    65
8.11  Additional Documents...............................................    65
8.12  Trustee-to-Trustee Transfers.......................................    66
8.13  Loans to Participants..............................................    66

ARTICLE IX
OPERATION AND ADMINISTRATION.............................................    69
9.1   Appointment of Committee...........................................    69
9.2   Appointment of Investment Subcommittee.............................    69
9.3   Transaction of Business............................................    69
9.4   Voting.............................................................    70
9.5   Responsibility of Committees.......................................    70
9.6   Committee Powers...................................................    71
9.7   Additional Powers of Committee.....................................    72
9.8   Investment Subcommittee Powers.....................................    72
9.9   Periodic Review of Funding Policy..................................    73
9.10  Claims Procedures..................................................    73
9.11  Appeals Procedures.................................................    74
9.12  Limitation on Liability............................................    75
9.13  Indemnification and Insurance......................................    75
9.14  Compensation of Committees and Plan Expenses.......................    75
9.15  Resignation........................................................    76
9.16  Reliance Upon Documents and Opinions...............................    76

ARTICLE X
AMENDMENT AND ADOPTION OF PLAN...........................................    77
10.1  Right to Amend Plan................................................    77
10.2  Adoption of Plan by Affiliated Companies...........................    77

ARTICLE XI DISCONTINUANCE OF CONTRIBUTIONS...............................    78



                                       iv



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE XII
TERMINATION AND MERGER...................................................    79
12.1  Right to Terminate Plan............................................    79
12.2  Merger Restriction.................................................    79
12.3  Effect on Trustee and Committee....................................    79
12.4  Effect of Reorganization, Transfer of Assets or Change in Control..    79

ARTICLE XIII
LIMITATION ON ALLOCATIONS................................................    82
13.1  General Rule.......................................................    82
13.2  Annual Additions...................................................    82
13.3  Other Defined Contribution Plans...................................    83
13.4  Adjustments for Excess Annual Additions............................    83
13.5  Compensation.......................................................    83
13.6  Treatment of 415 Suspense Account Upon Termination.................    84

ARTICLE XIV
TOP-HEAVY RULES..........................................................    85
14.1  Applicability......................................................    85
14.2  Definitions........................................................    85
14.3  Top-Heavy Status...................................................    86
14.4  Minimum Contributions..............................................    87
14.5  Minimum Vesting Rules..............................................    88
14.6  Noneligible Employees..............................................    88

ARTICLE XV
RESTRICTION ON ASSIGNMENT OR OTHER ALIENATION OF PLAN BENEFITS...........    89
15.1  General Restrictions Against Alienation............................    89
15.2  Qualified Domestic Relations Orders................................    89

ARTICLE XVI
MISCELLANEOUS PROVISIONS.................................................    93
16.1  No Right of Employment Hereunder...................................    93
16.2  Effect of Article Headings.........................................    93
16.3  Limitation on Company Liability....................................    93
16.4  Gender.............................................................    93
16.5  Interpretation.....................................................    93
16.6  Withholding For Taxes..............................................    93
16.7  California Law Controlling.........................................    93
16.8  Plan and Trust as One Instrument...................................    93



                                        v



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
16.9  Invalid Provisions.................................................    93
16.10 Counterparts.......................................................    94


APPENDIX A


                                       vi


                                 ALLERGAN, INC.
                           SAVINGS AND INVESTMENT PLAN

                                    ARTICLE I
                                  INTRODUCTION

     1.1 Plan Name. This document, made and entered into by Allergan, Inc., a
Delaware corporation ("Allergan"), amends and restates in its entirety the
"Allergan, Inc. Savings and Investment Plan (Restated 2003)" and shall be known
hereafter as the "Allergan, Inc. Savings and Investment Plan (Restated 2005)."

     1.2 Plan Purpose. The purpose of the Allergan, Inc. Savings and Investment
Plan (Restated 2005), hereinafter referred to as the "Plan," is to enable
Eligible Employees of Allergan, and any Affiliated Companies that are authorized
by the Board of Directors to participate in the Plan, to share in the growth and
prosperity of the Company and to provide Participants with an opportunity to
accumulate capital for their future economic security. All assets acquired under
the Plan as a result of Participant Deposits and Company Contributions, income,
and other additions to the Fund under the Plan shall be administered,
distributed, forfeited and otherwise governed by the provisions of the Plan,
which is to be administered by the Committee for the exclusive benefit of
Participants in the Plan and their Beneficiaries.

     1.3 Effective Date of 2005 Restated Plan. The Effective Date of this
amended and restated Plan shall be January 1, 2005 unless otherwise specified in
the Plan. The provisions of this Plan document apply generally to Employees who
have completed at least one (1) Hour of Service for Allergan or any Affiliated
Companies on or after January 1, 2005 and the rights and benefits, if any, of
Employees or Participants whose employment with Allergan or any Affiliated
Companies terminated prior to January 1, 2005 shall be determined in accordance
with the provisions of the Plan then in effect unless otherwise provided herein
and subject to any modification provided herein that may affect the holding or
distribution of Participants' Accounts.

     1.4 Amendments to Plan. The Plan has been amended from time to time since
its Original Effective Date of July 26, 1989 to reflect changes in the Plan's
operations and applicable law including, but not limited to, the following:

          (a) Effective March 28, 2005, the Plan's mandatory distribution rule
     shall apply to Accounts, the vested portions of which, do not exceed
     $1,000. The Plan document also incorporates the amendments made under the
     First, Second, and Third Amendments to the Plan (Restated 2003).

          (b) Effective January 1, 2003, Company Contributions made to the Plan
     were enhanced by (i) increasing the Company's Matching Contributions from
     an average 50% match on certain Participant Deposits not to exceed 5% of
     Compensation to a 100% match on certain Participant Deposits not to exceed
     4% of Compensation and (ii) adding a Retirement Contributions feature under
     which Allergan will make contributions equal to 5% of Compensation for
     certain Eligible Employees hired on or after October 1, 2002



     and for other Eligible Employees who make a one-time irrevocable election
     to cease active participation in the Allergan, Inc. Pension Plan.

          (c) Effective June 29, 2002, in connection with the distribution of
     the stock of Advanced Medical Optics, Inc. ("AMO") by Allergan to its
     stockholders (i) AMO Employees (as defined in Section 2.24) ceased to be
     eligible to make Participant Deposits or to receive allocations of Company
     Contributions, (ii) the assets and liabilities attributable to the Accounts
     of AMO Employees shall be transferred to the Advanced Medical Optics, Inc.
     401(k) Plan, a qualified profit sharing plan with a qualified cash or
     deferred arrangement, in accordance with Code Section 414(l), Regulation
     Section 1.414(1)-1, and Section 208 of ERISA, and (iii) the AMO stock
     received with respect to Company Stock allocated to Participants' Accounts
     shall be held in a separate investment fund established by the Committee
     pursuant to Section 5.6 and Participants shall have subaccounts under the
     Plan corresponding to their interests in such investment fund.

          (d) Effective as of January 1, 1999, the Allergan, Inc. Puerto Rico
     Savings and Investment Plan was merged with and into the Plan. All account
     balances of the Allergan, Inc. Puerto Rico Savings and Investment Plan were
     transferred to the Plan and all account balances transferred to the Plan as
     a result of the merger are to be administered, distributed, forfeited and
     otherwise governed by the provisions of the Plan and Appendix A, which is
     attached hereto and made a part hereof.

     1.5 Plan Qualification. The Plan is an employee benefit plan that is
intended to qualify under Code Section 401(a) as a qualified profit sharing plan
and under Code Section 401(k) as a qualified cash or deferred arrangement. The
Plan's last determination letter was issued by the Internal Revenue Service on
July 22, 2002 with respect to the Allergan, Inc. Savings and Investment Plan
(Restated 2001) and its compliance with the changes to the qualification
requirements made by the Uruguay Round Agreements Act (GATT), the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal Revenue
Service Restructuring and Reform Act of 1998, and the Community Renewal Tax
Relief Act of 2000. It is intended that the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA") provisions of the Plan are to be regarded
as good faith compliance with the requirements of EGTRRA and are to be construed
in accordance with EGTRRA and guidance issued thereunder.


                                       2



                                   ARTICLE II
                                   DEFINITIONS

     2.1. Accounts. "Accounts" or "Participant's Accounts" shall mean the After
Tax Deposits Accounts, Before Tax Deposits Accounts, Matching Contributions
Accounts, Retirement Contributions Accounts, and Rollover Contributions Accounts
maintained for the various Participants.

     2.2. Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). An
entity shall be an Affiliated Company pursuant to this Section only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
Original Effective Date of the Plan.

     2.3. After Tax Deposits. "After Tax Deposits" shall mean those
contributions made by a Participant which represent after-tax contributions.

     2.4. After Tax Deposits Account. "After Tax Deposits Account" shall mean a
Participant's individual account in the Trust Fund in which are held his or her
After Tax Deposits and the earnings thereon.

     2.5. Anniversary Date. "Anniversary Date" shall mean the last day of each
Plan Year.

     2.6. Before Tax Deposits. "Before Tax Deposits" shall mean those
contributions made by a Participant which represent pre-tax contributions.

     2.7. Before Tax Deposits Account. "Before Tax Deposits Account" shall mean
a Participant's individual account in the Trust Fund in which are held his or
her Before Tax Deposits and the earnings thereon.

     2.8. Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the person or
persons last designated by a Participant as set forth in Section 8.4 or, if
there is no designated Beneficiary or surviving Beneficiary, the person or
persons designated pursuant to Section 8.4 to receive the interest of a deceased
Participant in such event.

     2.9. Board of Directors. "Board of Directors" shall mean the Board of
Directors of the Sponsor (or its delegate) as it may from time to time be
constituted.


                                       3



     2.10. Break in Service. "Break in Service" shall mean, with respect to an
Employee, each period of 12 consecutive months during a Period of Severance that
commences on the Employee's Severance Date or on any anniversary of such
Severance Date.

     2.11. Code. "Code" shall mean the Internal Revenue Code of 1986 and the
regulations thereunder. Reference to a specific Code Section shall be deemed
also to refer to any applicable regulations under that Section, and shall also
include any comparable provisions of future legislation that amend, supplement
or supersede that specific Section.

     2.12. Committee. "Committee" shall mean the committee to be appointed under
the provisions of Section 9.1 to administer the Plan.

     2.13. Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts the Plan in accordance with Section 10.2.

     2.14. Company Contributions. "Company Contributions" shall mean Matching
Contributions and Retirement Contributions (whether in cash or other property,
including Company Stock), paid by the Company pursuant to Sections 5.3 and 5.4
into the Trust Fund established and maintained under the provisions of the Plan
for the purpose of providing benefits for Participants and their Beneficiaries.
Unless expressly stated otherwise in the Plan, Company Contributions shall not
include Before Tax Deposits, After Tax Deposits, or Rollover Contributions.

     2.15. Company Contributions Accounts. "Company Contributions Accounts"
shall mean a Participant's Matching Contributions Account and Retirement
Contributions Account.

     2.16. Company Stock. "Company Stock" shall mean any class of stock of the
Sponsor which both constitutes "qualifying employer securities" as defined in
Section 407(d)(5) of ERISA and "employer securities" as defined in Code Section
409(l).

     2.17. Compensation. "Compensation" shall mean the following:

          (a) Compensation shall include amounts paid during a Plan Year to a
     Participant by the Company for services rendered, including base earnings,
     commissions and similar incentive compensation, cost of living allowances
     earned within the United States of America, holiday pay, overtime earnings,
     pay received for election board duty, pay received for jury and witness
     duty, pay received for military service (annual training), pay received for
     being available for work, if required (call-in premium), shift differential
     and premium, sickness/accident related pay, vacation pay (other than as
     excluded in paragraph (c) below), vacation shift premium, and bonus amounts
     paid under the (i) Sales Bonus Program, (ii) Management Bonus Plan or
     Executive Bonus Plan, either in cash or in restricted stock, and (iii)
     group performance sharing payments, such as the "Partners for Success."

          (b) Compensation shall include amounts of salary reduction elected by
     a Participant under a Code Section 401(k) cash or deferred arrangement, a
     Code


                                       4



     Section 125 cafeteria plan and, solely for purposes of determining
     Retirement Contributions under Section 5.4, amounts deferred under the
     Executive Deferred Compensation Plan.

          (c) Compensation shall not include business expense reimbursements;
     Company gifts or the value of Company gifts; Company stock related options
     and payments; employee referral awards; flexible compensation credits paid
     in cash; special overseas payments, allowances and adjustments including,
     but not limited to, pay for cost of living adjustments and differentials
     paid for service outside of the United States, expatriate reimbursement
     payments, and tax equalization payments; forms of imputed income; long-term
     disability pay; payment for loss of Company car; Company car allowance;
     payments for patents or for writing articles; relocation and moving
     expenses; retention and employment incentive payments; severance pay;
     long-term incentive awards, bonuses or payments; "Impact Award" payments;
     "Employee of the Year" payments; "Awards for Excellence" payments; "Hidden
     Gem Award" payments; special group incentive payments and individual
     recognition payments which are nonrecurring in nature; tuition
     reimbursement; lump sum amounts paid to Employees under the Company's
     vacation buy-back policy; and contributions by the Company under the Plan
     or distributions hereunder, any contributions or distributions pursuant to
     any other plan sponsored by the Company and qualified under Code Section
     401(a) (other than contributions constituting salary reduction amounts
     elected by the Participant under a Code Section 401(k) cash or deferred
     arrangement), any payments under a health or welfare plan sponsored by the
     Company, or premiums paid by the Company under any insurance plan for the
     benefit of Employees.

          (d) Solely for purposes of determining Retirement Contributions under
     Section 5.4, Compensation shall include compensation paid by Oculex
     Pharmaceuticals, Inc. to an Eligible Employee prior to Oculex
     Pharmaceuticals, Inc. becoming an Affiliated Company but only to the extent
     provided in paragraphs (a), (b), and (c) above and only to the extent of
     compensation paid by Oculex Pharmaceuticals, Inc. in 2003.

          (e) Compensation for any Plan Year shall not include amounts in excess
     of $210,000, as adjusted for cost-of-living increases in accordance with
     Code Section 401(a)(17)(B) for purposes of determining all benefits
     provided under the Plan for any Plan Year. Any cost-of-living adjustments
     in effect for a calendar year shall apply to the Plan Year beginning with
     or within such calendar year.

          (f) Notwithstanding the foregoing, for purposes of applying the
     provisions of Articles XIII and XIV, a Participant's Compensation shall be
     determined pursuant to the definition of "Compensation" as set forth in
     Section 13.5 or 14.2(i), as the case may be.


                                       5



     2.18. Credited Service. "Credited Service" shall mean, with respect to each
Employee, his or her years and months of Credited Service determined in
accordance with the following rules:

          (a) In the case of any Employee who was employed by the Company at any
     time prior to the Original Effective Date, for the period prior to January
     1, 1989 such Employee shall be credited with Credited Service under the
     Plan equal to the period (if any) of service credited to such Employee
     under the SmithKline Beckman Savings and Investment Plan.

          (b) In the case of any Employee who is employed by the Company on or
     after the Original Effective Date, an Employee shall receive Credited
     Service for the elapsed period of time between each Employment Commencement
     Date (or Reemployment Commencement Date) of the Employee and the Severance
     Date which immediately follows that Employment Commencement Date (or
     Reemployment Commencement Date). Solely for the purpose of determining an
     Employee's Credited Service under this paragraph (b), in the case of an
     Employee who is employed on January 1, 1989, that date shall be deemed to
     be an Employment Commencement Date of the Employee (with service credit for
     periods prior to January 1, 1989 to be determined under paragraph (a)
     above). An Employee who is absent from work on an authorized Leave of
     Absence shall be deemed to have incurred a Severance (if any) in accordance
     with the rules of Section 2.50.

          (c) An Employee shall receive Credited Service credit for periods
     between a Severance and his or her subsequent Reemployment Commencement
     Date in accordance with the following rules:

               (i) If an Employee incurs a Severance by reason of a quit,
          discharge, Disability, or retirement whether or not such a Severance
          occurs during an approved Leave of Absence and the Employee is later
          reemployed by the Company prior to his or her incurring a Break in
          Service, he or she shall receive Credited Service for the period
          commencing with his or her Severance Date and ending with his or her
          subsequent Reemployment Commencement Date.

               (ii) Other than as expressly set forth above in this paragraph
          (c), an Employee shall receive no Credited Service with respect to
          periods between a Severance and a subsequent Reemployment Commencement
          Date.

          (d) For all purposes of the Plan, an Employee's total Credited Service
     shall be determined by aggregating any separate periods of Credited Service
     separated by any Breaks in Service.

          (e) An Employee shall be credited with Credited Service with respect
     to a period of employment with an Affiliated Company, but only to the
     extent that such period of employment would be so credited under the
     foregoing rules set forth in this Section had such Employee been employed
     during such period by the Company.

          (f) Notwithstanding the foregoing, unless the Sponsor shall so provide
     by resolution of its Board of Directors, or unless otherwise expressly
     stated in the Plan, an


                                       6



     Employee shall not receive such Credited Service credit for any period of
     employment with an Affiliated Company prior to such entity becoming an
     Affiliated Company.

          (g) In accordance with paragraph (f) above, an Eligible Employee shall
     receive Credited Service for any period of employment with Allergan Medical
     Optics - Lenoir facility or Oculex Pharmaceuticals, Inc. prior to each
     becoming an Affiliated Company but only to the extent provided in paragraph
     (e) above. Notwithstanding anything therein to the contrary and for
     purposes of this Plan only, the Employment Commencement Date for an
     Eligible Employee under paragraph (b) shall mean the date the Employee was
     first credited with an Hour of Service with Allergan Medical Optics -
     Lenoir facility or Oculex Pharmaceuticals, Inc., including any date prior
     to Allergan Medical Optics - Lenoir facility or Oculex Pharmaceuticals,
     Inc. becoming an Affiliated Company.

          (h) Notwithstanding any provision of the Plan to the contrary,
     contributions, benefits and service credit with respect to qualified
     military service shall be provided in accordance with Code Section 414(u).

     2.19. Disability. "Disability" shall mean any mental or physical condition
which, in the judgment of the Committee, based on such competent medical
evidence as the Committee may require, renders an individual unable to engage in
any substantial gainful activity for the Company for which he or she is
reasonably fitted by education, training, or experience and which condition can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of at least 12 months. The determination by the
Committee, upon opinion of a physician selected by the Committee, as to whether
a Participant has incurred a Disability shall be final and binding on all
persons.

     2.20. Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 2005 unless otherwise specified in the Plan. The "Original Effective
Date" of the Plan shall mean July 26, 1989.

     2.21. Eligible Employee. "Eligible Employee" shall mean any United
States-based payroll Employee and any Puerto Rico-based payroll Employee of the
Company and any expatriate Employee of the Company who is a United States
citizen or permanent resident, but excluding any non-resident alien of the
United States and Puerto Rico, any non-regular manufacturing site transition
Employee, any Leased Employee, and any Employee covered by a collective
bargaining agreement.

     2.22. Eligible Retirement Plan. "Eligible Retirement Plan" shall mean (i)
an individual retirement account or annuity described in Code Section 408(a) or
408(b), (ii) a qualified retirement plan described in Code Section 401(a) or
403(a) that accepts Eligible Rollover Distributions, (iii) an annuity contract
described in Code Section 403(b) that accepts Eligible Rollover Distributions,
and (iv) an eligible plan described in Code Section 457(b) which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan. The definition of
Eligible Retirement Plan shall also apply in the


                                       7



case of an Eligible Rollover Distribution to a surviving spouse or to a spouse
or former spouse who is an Alternate Payee under a Qualified Domestic Relations
Order (as defined in Article XV).

     2.23. Eligible Rollover Distribution. "Eligible Rollover Distribution"
shall mean any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution shall not
include:

          (a) any distribution that is one of a series of substantially equal
     periodic payments (not less frequently than annually) made for the life (or
     life expectancy) of the Distributee of the joint lives (or joint life
     expectancies) of the Distributee and the Distributee's designated
     beneficiary, or for a specified period of ten years or more;

          (b) any distribution to the extent such distribution is required under
     Code Section 401(a)(9);

          (c) the portion of any distribution that is not includable in gross
     income (determined without regard to the exclusion for net unrealized
     appreciation with respect to employer securities);

          (d) any hardship withdrawal made pursuant to Section 8.1(e); and

          (e) any other distribution that is reasonably expected to total less
     than $200 during the year.

     A portion of a distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of After Tax Deposits or the
portion consists of rollover after tax employee contributions made pursuant to
Section 4.8.which are not includible in gross income. However, such portion(s)
may be transferred only to an individual retirement account or annuity described
in Code Section 408(a) or 408(b) or to a qualified defined contribution plan
described in Code Section 401(a) or 403(a) that agrees to separately account for
amounts so transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not so includible. For purposes of this Section,
"Distributee" shall mean any Employee or former Employee receiving a
distribution from the Plan. A Distributee also includes the Employee or former
Employee's surviving spouse and the Employee or former Employee's spouse or
former spouse who is the Alternate Payee under a Qualified Domestic Relations
Order (as defined in Article XV) with regard to the interest of the spouse or
former spouse.

     2.24. Employee. "Employee" shall mean, for purposes of the Plan, any
individual who is employed by the Sponsor or an Affiliated Company in any
capacity, any portion of whose income is subject to withholding of income tax
and/or for whom Social Security contributions are made by the Sponsor or an
Affiliated Company, including any Puerto Rico-based payroll Employee of the
Sponsor or an Affiliated Company; provided, however, that such term shall not
include:

          (a) Any individual who performs services for the Sponsor or an
     Affiliated Company and who is classified or paid as an independent
     contractor as determined by the payroll records of the Sponsor or an
     Affiliated Company even if a court or administrative agency determines that
     such individual is a common-law employee and not an independent contractor;


                                       8



          (b) Any individual who performs services for the Sponsor or an
     Affiliated Company pursuant to an agreement between the Sponsor or an
     Affiliated Company and any other person including a leasing organization
     except to the extent such individual is a Leased Employee; and

          (c) Any individual whose employment is transferred from the Sponsor or
     an Affiliated Company to Advanced Medical Optics, Inc. ("AMO") in
     connection with the distribution of the stock of AMO by the Sponsor to its
     stockholders, effective as of the day following such transfer, hereinafter
     referred to as an "AMO Employee." An individual is an AMO Employee if
     classified or identified as such in the payroll records of the Sponsor or
     an Affiliated Company or in the Employee Matters Agreement entered into
     between the Sponsor and AMO.

     2.25. Employment Commencement Date. "Employment Commencement Date" shall
mean the date on which an Employee is first credited with an Hour of Service for
the Sponsor or an Affiliated Company. An Employee shall not, for the purpose of
determining his or her Employment Commencement Date, be deemed to have commenced
employment with an Affiliated Company prior to the effective date on which the
entity became an Affiliated Company unless the Sponsor expressly determines
otherwise, and except as is expressly provided otherwise in the Plan or in
resolutions of the Board of Directors.

     2.26. ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974 and the regulations thereunder. Reference to a specific ERISA Section
shall be deemed also to refer to any applicable regulations under that Section,
and shall also include any comparable provisions of future legislation that
amend, supplement or supersede that specific Section.

     2.27. Forfeitures. "Forfeitures" shall mean the nonvested portion of a
Participant's Matching Contributions Account or Retirement Contributions
Account, whichever the case may be, that is forfeited in accordance with the
provisions of Article VIII.

     2.28. 415 Suspense Account. "415 Suspense Account" shall mean the account
(if any) established and maintained in accordance with the provisions of Article
XIII for the purpose of holding and accounting for allocations of excess Annual
Additions (as defined in Article XIII).


                                       9



     2.29. Highly Compensated Employee. "Highly Compensated Employee" shall
mean:

          (a) An Employee who performed services for the Employer during the
     Plan Year or preceding Plan Year and is a member of one or more of the
     following groups:

               (i) Employees who at any time during the Plan Year or preceding
          Plan Year were Five Percent Owners (as defined in Section 14.2).

               (ii) Employees who received Compensation during the preceding
          Plan Year from the Employer in excess of $80,000 (as adjusted in such
          manner as permitted under Code Section 414(q)(1)).

          (b) For the purpose of this Section, the term "Compensation" means
     compensation as defined in Code Section 415(c)(3), as set forth in Section
     13.5.

          (c) The term "Highly Compensated Employee" includes a Former Highly
     Compensated Employee. A Former Highly Compensated Employee is any Employee
     who was (i) a Highly Compensated Employee when he or she terminated
     employment with the Employer or (ii) a Highly Compensated Employee at any
     time after attaining age 55. Notwithstanding the foregoing, an Employee who
     separated from service prior to 1987 shall be treated as a Former Highly
     Compensated Former Employee only if during the separation year (or year
     preceding the separation year) or any year after the Employee attains age
     55 (or the last year ending before the Employee's 55th birthday), the
     Employee either received Compensation in excess of $50,000 or was a Five
     Percent Owner.

          (d) For the purpose of this Section, the term "Employer" shall mean
     the Sponsor and any Affiliated Company.

          (e) The determination of who is a Highly Compensated Employee,
     including the determination of the Compensation that is considered, shall
     be made in accordance with Code Section 414(q) and applicable regulations
     to the extent permitted thereunder. The Committee, for administrative
     convenience, may establish rules and procedures for purposes of identifying
     Highly Compensated Employees, which rules and procedures may result in an
     Eligible Employee being deemed to be a Highly Compensated Employee for
     purposes of the limitations of Article IV and Article VI, whether or not
     such Eligible Employee is a Highly Compensated Employee described in Code
     Section 414(q).

     2.30. Hour of Service. "Hour of Service" shall mean an hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Sponsor and any Affiliated Company.

     2.31. Investment Manager. "Investment Manager" shall mean the one or more
Investment Managers, if any, that are appointed pursuant to Section 5.16 and who
constitute investment managers under Section 3(38) of ERISA.

     2.32. Leased Employee. "Leased Employee" shall mean any person (other than
an Employee of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in accordance
with Code Section 414(n)(6)) on a substantially full time basis for a period of
at least one (1) year, and such services are performed under the primary


                                       10



direction or control by recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated employer
contribution rate of at least ten (10) percent of compensation as defined under
Code Section 415(c)(3); (ii) immediate participation; and (iii) full and
immediate vesting.

     2.33. Leave of Absence.

          (a) "Leave of Absence" shall mean any personal leave from active
     employment (whether with or without pay) duly authorized by the Company
     under the Company's standard personnel practices. All persons under similar
     circumstances shall be treated alike in the granting of such Leaves of
     Absence. Leaves of Absence may be granted by the Company for reasons of
     health (including temporary sickness or short term disability) or public
     service or for any other reason determined by the Company to be in its best
     interests.

          (b) In addition to Leaves of Absence as defined in paragraph (a)
     above, the term Leave of Absence shall also mean a Maternity or Paternity
     Leave, as defined herein, but only to the extent and for the purposes
     required under paragraph (c) below. As used herein, "Maternity or Paternity
     Leave" shall mean an absence from work for any period (i) by reason of the
     pregnancy of the Employee, (ii) by reason of the birth of a child of the
     Employee, (iii) by reason of the placement of a child with the Employee in
     connection with the adoption of the child by the Employee, or (iv) for
     purposes of caring for the child for a period beginning immediately
     following the birth or placement referred to in clauses (ii) or (iii)
     above.

          (c) Subject to the provisions of paragraph (d) below, a Maternity or
     Paternity Leave described in paragraph (b) above shall be deemed to
     constitute an authorized Leave of Absence for purposes of the Plan only to
     the extent consistent with the following rules:

               (i) For purposes of determining whether a Break in Service has
          occurred, the Severance Date of a Participant who is absent by reason
          of a Maternity or Paternity Leave shall not be deemed to occur any
          earlier than the second anniversary of the date upon which such
          Maternity or Paternity Leave commences.

               (ii) The Maternity or Paternity Leave shall be treated as a Leave
          of Absence solely for purposes of determining whether or not an
          Employee has incurred a Break in Service. Accordingly, such a
          Maternity or Paternity Leave shall not result in an accrual of
          Credited Service for purposes of the vesting provisions of the Plan or
          for purposes of the eligibility and participation


                                       11



          provisions of Article III (except only in determining whether a Break
          in Service has occurred).

               (iii) A Maternity or Paternity Leave shall not be treated as a
          Leave of Absence unless the Employee provides such timely information
          as the Committee may reasonably require to establish that the absence
          is for the reasons listed in paragraph (b) above and to determine the
          number of days for which there was such an absence.

          (d) Notwithstanding the limitations provided in paragraph (c) above, a
     Maternity or Paternity Leave described in paragraph (b) above shall be
     treated as an authorized Leave of Absence, as described in paragraph (a),
     for all purposes of the Plan to the extent the period of absence is one
     authorized as a Leave of Absence under the Company's standard personnel
     practices and thus is covered by the provisions of paragraph (a) above
     without reference to the provisions of paragraph (b) above, provided,
     however, that the special rule provided under this paragraph (d) shall not
     apply if it would result in a Participant who is absent on a Maternity or
     Paternity Leave being deemed to have incurred a Break in Service sooner
     than under the rules set forth in paragraph (c).

     2.34. Matched Deposits. "Matched Deposits" of a Participant shall mean his
or her Participant Deposits (whether Before Tax or After Tax but excluding
Rollover Contributions) not in excess of four percent (4%) of Compensation;
except, however, that Matched Deposits shall not include "catch-up" Before Tax
Deposits as described in Section 4.2(e). Matched Deposits shall participate in
allocations of Matching Contributions and Matching Contribution Forfeitures.

     2.35. Matching Contributions. "Matching Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock) paid by the
Company pursuant to Sections 5.3(a) and 5.3(b) into the Trust Fund established
and maintained under the provisions of the Plan for the purpose of providing
benefits for Participants and their Beneficiaries.

     2.36. Matching Contributions Account. "Matching Contributions Account"
shall mean a Participant's individual account in the Trust Fund in which are
held Matching Contributions, any amounts transferred from the Participant's
account in the SmithKline Beckman Savings and Investment Plan to the Plan, and
the earnings thereon. Any amounts transferred from the Participant's account in
the SmithKline Beckman Savings and Investment Plan to the Plan shall be fully
vested.

     2.37. Normal Retirement Age. "Normal Retirement Age" shall mean a
Participant's sixty-fifth (65th) birthday.

     2.38. Participant. "Participant" shall mean any Eligible Employee or former
Eligible Employee who has commenced participation in the Plan pursuant to
Section 3.1 and who retains rights under the Plan.


                                       12



     2.39. Participant Deposits. "Participant Deposits" shall mean all of a
Participant's deposits to the Plan, including After Tax Deposits, Before Tax
Deposits, and Rollover Contributions.

     2.40. Period of Severance. "Period of Severance" shall mean the period of
time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

     2.41. Plan. "Plan" shall mean the Allergan, Inc. Savings and Investment
Plan described herein and as amended from time to time.

     2.42. Plan Administrator. Plan Administrator" shall mean the administrator
of the Plan within the meaning of Section 3(16)(A) of ERISA. The Plan
Administrator shall be the Allergan Corporate Benefits Committee whose members
are appointed by the Board of Directors pursuant to the provisions of Section
9.1 to administer the Plan.

     2.43. Plan Year. "Plan Year" shall mean the calendar year.

     2.44. Reemployment Commencement Date. "Reemployment Commencement Date"
shall mean, in the case of an Employee who incurs a Severance and who is
subsequently reemployed by the Sponsor or an Affiliated Company, the first day
following the Severance on which the Employee is credited with an Hour of
Service for the Sponsor or an Affiliated Company with respect to which he or she
is compensated or entitled to compensation by the Sponsor or an Affiliated
Company. An Employee shall not, for the purpose of determining his or her
Reemployment Commencement Date, be deemed to have commenced employment with an
Affiliated Company prior to the effective date on which such entity becomes an
Affiliated Company unless the Sponsor shall expressly determine otherwise, and
except as is expressly provided otherwise in the Plan or in resolutions of the
Board of Directors.

     2.45. Retirement Account Participant. "Retirement Account Participant"
shall mean any Eligible Employee who has met the eligibility requirements of
Section 3.2 but excluding any Eligible Employee who is an "Active Participant"
in the Allergan, Inc. Pension Plan as such term is defined therein.

     2.46. Retirement Contributions. "Retirement Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock) paid by the
Company pursuant to Section 5.4 into the Trust Fund established and maintained
under the provisions of the Plan for the purpose of providing benefits for
Participants and their Beneficiaries.

     2.47. Retirement Contributions Account. "Retirement Contributions Account"
shall mean a Participant's individual account in the Trust Fund in which are
held Retirement Contributions and the earnings thereon.

     2.48. Rollover Contributions. "Rollover Contributions" shall mean those
contributions made by a Participant pursuant to Section 4.8.


                                       13



     2.49. Rollover Contributions Account. "Rollover Contributions Account"
shall mean a Participant's individual account in the Trust Fund in which are
held Rollover Contributions made pursuant to Section 4.8.

     2.50. Severance. "Severance" shall mean the termination of an Employee's
employment with the Sponsor or an Affiliated Company by reason of such
Employee's quit, discharge, Disability, death, retirement, or otherwise. For
purposes of determining whether an Employee has incurred a Severance, the
following rules shall apply:

          (a) An Employee shall not be deemed to have incurred a Severance (i)
     because of his or her absence from employment with the Sponsor or an
     Affiliated Company by reason of any paid vacation or holiday period, or
     (ii) by reason of any Leave of Absence, subject to the provisions of
     paragraph (b) below.

          (b) For purposes of the Plan, an Employee shall be deemed to have
     incurred a Severance on the earlier of (i) the date on which he or she
     dies, resigns, is discharged, or otherwise terminates his or her employment
     with the Sponsor or an Affiliated Company; or (ii) the date on which he or
     she is scheduled to return to work after the expiration of an approved
     Leave of Absence, if he or she does not in fact return to work on the
     scheduled expiration date of such Leave. In no event shall an Employee's
     Severance be deemed to have occurred before the last day on which such
     Employee performs any services for the Sponsor or an Affiliated Company in
     the capacity of an Employee with respect to which he or she is compensated
     or entitled to compensation by the Sponsor or an Affiliated Company.

          (c) Notwithstanding the foregoing, in the case of a Participant who is
     absent by reason of a Maternity or Paternity Leave, the provisions of
     Section 2.33(c)-(d) shall apply for purposes of determining whether such a
     Participant has incurred a Break in Service by reason of such Leave.

     2.51. Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred said Severance as determined in accordance with the provisions of
Section 2.50, provided, however, that the special rules set forth under Section
2.33(c)-(d) shall apply with respect to determining whether a Participant on a
Maternity or Paternity Leave has incurred a Break in Service. In the case of any
Employee who incurs a Severance as provided under Section 2.50 and who is
entitled to a subsequent payment of compensation for reasons other than future
services (e.g., as back pay for past services rendered or as payments in the
nature of severance pay), the Severance Date of such Employee shall be as of the
effective date of the Severance event (e.g., the date of his or her death,
effective date of a resignation or discharge, etc.), and the subsequent payment
of the aforementioned type of post-Severance compensation shall not operate to
postpone the timing of the Severance Date for purposes of the Plan.

     2.52. Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware corporation,
and any successor corporation or entity.


                                       14



     2.53. Trust. "Trust" or "Trust Fund" shall mean the trust maintained
pursuant to the Trust Agreement and as described in Section 5.1 hereof, which
shall hold all cash and securities and all other assets of whatsoever nature
deposited with or acquired by the Trustee in its capacity as Trustee hereunder,
together with accumulated net earnings.

     2.54. Trust Agreement. "Trust Agreement" shall mean the agreement between
the Trustee and the Sponsor pursuant to which the Trust is maintained.

     2.55. Trustee. "Trustee" shall mean the individual or entity acting as a
trustee of the Trust Fund.

     2.56. Valuation Date. "Valuation Date" shall mean the date as of which the
Trustee shall determine the value of the assets in the Trust Fund for purposes
of determining the value of each Account, which shall be each business day in
accordance with rules applied in a consistent and uniform basis.


                                       15


                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

     3.1 General Eligibility and Participation. An Eligible Employee shall
participate in the Plan on the later of: (i) his or her Employment Commencement
Date or (ii) the date he or she becomes an Eligible Employee. A Participant who
incurs a Severance shall participate in the Plan immediately upon his or her
Reemployment Commencement Date so long as he or she is reemployed as an Eligible
Employee.

     3.2 Eligibility for Retirement Contributions. An Eligible Employee shall be
eligible to receive allocations of Retirement Contributions as provided in
Section 5.4 only if he or she is a Retirement Account Participant as described
below:

          (a) An Eligible Employee shall become a Retirement Account Participant
     on the date that immediately follows the later of:

               (i) The date such Eligible Employee performs an Hour of Service
          as an Eligible Employee;

               (ii) The date such Eligible Employee completes six (6) months of
          Credited Service with the Sponsor or an Affiliated Company as an
          Employee; or

               (iii) The date such Eligible Employee ceases to be an "Active
          Participant" in the Allergan, Inc. Pension Plan as such term is
          defined therein.

          (b) A Participant who becomes a Retirement Account Participant shall
     remain an active Retirement Account Participant until he or she: (i) incurs
     a Severance, (ii) transfers employment to an Affiliated Company that has
     not adopted the Plan pursuant to Section 10.2, or (iii) is no longer an
     Eligible Employee even though he or she remains an Employee of the Company,
     at which time such Retirement Account Participant shall become an inactive
     Retirement Account Participant and shall no longer be eligible to receive
     allocations of Retirement Contributions as provided in Section 5.4.

          (c) A Retirement Account Participant or an Employee who is not a
     Retirement Account Participant but who has completed the service
     requirement specified in paragraph (a)(i) above shall, if he or she incurs
     a Severance and is subsequently reemployed as an Eligible Employee, become
     a Retirement Account Participant immediately upon his or her Reemployment
     Commencement Date. A Retirement Account Participant who becomes an inactive
     Retirement Account Participant shall become a Retirement Account
     Participant upon the date he or she resumes Eligible Employee status. An
     Employee who has not completed the service requirement specified in
     paragraph (a)(i) above shall, if he or she incurs a Severance and is
     subsequently reemployed, become a Retirement Account Participant on the
     date determined under paragraph (a) above.


                                       16



     3.3 Duration of Participation. An Eligible Employee who becomes a
Participant shall remain an active Participant until he or she incurs a
Severance, at which time he or she shall become an inactive Participant until he
or she receives a distribution of the entire vested portion of his or her
Accounts. Once such a distribution is made, such Participant shall no longer be
considered a Participant in the Plan. A Participant who (i) transfers out of
employment with the Company but who remains an Employee of an Affiliated Company
that has not adopted the Plan pursuant to Section 10.2, or (ii) remains an
Employee of the Company but is no longer an Eligible Employee, shall become an
inactive Participant.

     3.4 Eligibility and Participation After Normal Retirement Age. An Eligible
Employee may become, or continue as, a Participant or a Retirement Account
Participant after reaching his or her Normal Retirement Age in the same manner
as an Eligible Employee who has not reached his or her Normal Retirement Age.


                                       17



                                   ARTICLE IV
                              PARTICIPANT DEPOSITS

     4.1 Election.

          (a) Each Eligible Employee may elect to defer the receipt of a portion
     of his or her Compensation and to have the deferred amount contributed
     directly by the Company to the Plan as Before Tax Deposits. Before Tax
     Deposits may be made only by means of payroll deduction.

          (b) Each Eligible Employee may elect to contribute to the Plan a
     portion of his or her Compensation as After Tax Deposits. After Tax
     Deposits may be made only by means of payroll deduction.

          (c) The Committee shall prescribe procedures to implement automatic
     enrollment elections, pursuant to which an Eligible Employee or, if limited
     to newly hired Eligible Employees as determined by the Committee, shall be
     deemed to have elected to defer the receipt of three percent (3%) of his or
     her Compensation and to have such deferred amount contributed directly by
     the Company to the Plan as Before Tax Deposits if such Eligible Employee
     fails to change or terminate the automatic election for any Plan Year
     within the time period prescribed by the Committee (or, in the case of
     newly hired Eligible Employee, he or she fails to change or terminate the
     automatic election within 30 days of his or her hire date). Such procedures
     shall require that an Eligible Employee receive a written notice of
     explanation of the automatic election informing the Eligible Employee of
     the effective date of the automatic election, the automatic deferral
     percentage and his or her right to terminate the automatic election or to
     change the amount of his or her Before Tax Deposits made to the Plan as
     well as the procedures for exercising such rights and the timing for
     implementing a different election. An automatic election under this
     paragraph (c) shall be effective as of the first pay period of the Plan
     Year (or, in the case of newly hired Eligible Employee, the first pay
     period following the 30-day period beginning on his or her date of hire)
     and shall remain in effect until superseded by a subsequent election by the
     Eligible Employee. Amounts contributed directly by the Company to the Plan
     under this paragraph (c) shall be invested in the Balanced Fund described
     in Section 5.6(b) until superseded by a subsequent election by the Eligible
     Employee.

          (d) Notwithstanding anything in this Section to the contrary, a
     Participant who makes a withdrawal of After Tax Deposits (whether Matched
     Deposits or non-Matched Deposits) pursuant to Section 8.1(a) or a hardship
     withdrawal pursuant to Section 8.1(e) shall not be permitted to make Before
     Tax Deposits or After Tax Deposits to the Plan during the 6-month period
     beginning as soon as administratively feasible following the date of the
     hardship withdrawal. The foregoing sentence shall not apply to a withdrawal
     of After Tax Deposits if the After Tax Deposits can also be withdrawn under
     Section 8.1(d) or the withdrawal is comprised solely of After Tax Deposits
     which are not Matched Deposits and which were contributed prior to July 1,
     2000.


                                       18



          (e) The Committee shall prescribe such procedures, either in writing
     or in practice, and provide such forms as are necessary or appropriate for
     each Participant and each Eligible Employee who will become a Participant
     to make Deposits pursuant to this Article IV subject, however to the
     requirement that an election by a Participant shall not be adopted
     retroactively.

     4.2 Amount Subject to Election.

          (a) Each Participant may elect to contribute a whole percentage of his
     or her Compensation to the Plan as Before Tax Deposits not to exceed the
     lesser of one hundred percent (100%) when aggregated with the After Tax
     Deposits contributed by such Participant pursuant to paragraph (b) below.
     Notwithstanding the foregoing except to the extent permitted under the
     catch-up provisions of paragraph (e) below and Code Section 414(v), no
     Participant shall be permitted to make Before Tax Deposits to the Plan
     during any taxable year in excess of: (i) $12,000 (or such larger amount as
     may be determined by the Secretary of the Treasury pursuant to Code Section
     402(g), hereinafter referred to as the "Before Tax Deposit Limit", (ii) the
     Actual Deferral Percentage test limitation set forth in Section 4.3, or
     (iii) the Annual Addition limitation set forth in Section 13.1. For
     purposes of the Before Tax Deposit Limit described in preceding clause (i),
     the Before Tax Deposits of a Participant for any taxable year is the sum of
     all Before Tax Deposits under the Plan and all salary reduction amounts
     under any other qualified cash or deferred arrangement (as defined in Code
     Section 401(k)), a simplified employee pension (as defined in Code Section
     408(k) and Code Section 402(h)(1)(B)), a deferred compensation plan under
     Code Section 457, a trust described in Code Section 501(c)(18) and any
     salary reduction amount used to purchase an annuity contract under Code
     Section 403(b) whether or not sponsored by the Company but shall not
     include any amounts properly distributed as excess annual additions.

          (b) Each Participant may elect to contribute a whole percentage of his
     or her Compensation to the Plan as After Tax Deposits not to exceed one
     hundred percent (100%) when aggregated with the Before Tax Deposits
     contributed by such Participant pursuant to paragraph (a) above.
     Notwithstanding the foregoing, no Participant shall be permitted to make
     After Tax Deposits to the Plan during any Plan Year in excess of the Actual
     Contribution Percentage test limitation set forth in Section 6.11 or the
     Annual Addition limitation set forth in Section 13.1 and the Committee may,
     in its discretion, establish an "After Tax Deposit Limit" for a Plan Year.

          (c) Notwithstanding paragraphs (a) and (b), a Participant's combined
     Before Tax Deposits and After Tax Deposits shall not exceed a Participant's
     Compensation net of his or her salary deductions or reductions (including
     but not limited to, federal withholding taxes and "FICA" taxes deducted
     pursuant Code Sections 3102 and 3402, respectively, withholding of state
     taxes, and amounts contributed by the Company pursuant to a salary
     reduction agreement which are excludable from an Employee's gross income
     under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B) and 403(b)) as
     determined by the payroll records of the Sponsor or an Affiliated Company.


                                       19



          (d) Notwithstanding paragraphs (a) and (b), a Participant who makes a
     hardship withdrawal pursuant to Section 8.1(e) or a withdrawal of After Tax
     Deposits (whether Matched Deposits or non-Matched Deposits) pursuant to
     Section 8.1(a) shall not be permitted to make Before Tax Deposits or After
     Tax Deposits to the Plan during the 6-month period beginning as soon as
     administratively feasible following the date of the withdrawal. The
     preceding sentence shall not apply to a withdrawal of After Tax Deposits if
     such Deposits can also be withdrawn under Section 8.1(d) or the withdrawal
     is comprised solely of After Tax Deposits which are not Matched Deposits
     and which were contributed prior to July 1, 2000.

          (e) Each Participant who has attained age 50 before the close of the
     Plan Year may elect to contribute a percentage of his or her Compensation
     to the Plan as "catch-up" Before Tax Deposits in accordance with, and
     subject to the limitations of, Code Section 414(v). Such catch-up Before
     Tax Deposits shall not be taken into account under subparagraph (a) above
     or Section 13.1 or any other provision of the Plan implementing the
     contribution limitations of Code Sections 402(g) and 415. Moreover, the
     Plan shall not be treated as failing to satisfy the provisions of the plan
     implementing the requirements of Code Section 401(k)(3), 401(k)(11),
     401(k)(12), 410(b), or 416, as applicable, by reason of a Participant
     electing to contribute catch-up Before Tax Deposits to the Plan pursuant to
     this paragraph.

          (f) The Committee shall prescribe such procedures, either in writing
     or in practice, as it deems necessary or appropriate regarding the maximum
     amount that a Participant may elect to defer and the timing of such an
     election. These procedures shall apply to all individuals eligible to make
     an election described in Section 4.1. The Committee may, at any time during
     a Plan Year, require the suspension, reduction, or recharacterization of
     Before Tax Deposits or the suspension or reduction of After Tax Deposits of
     any Highly Compensated Employee such that the limitations of Section 4.2(a)
     and (b) are satisfied.

     4.3 Limitation on Compensation Deferrals. With respect to each Plan Year,
Compensation Deferral Contributions by a Participant for the Plan Year shall not
exceed the limitation on contributions by or on behalf of Highly Compensated
Participants under Code Section 401(k), as provided in this Section. In the
event that Compensation Deferral Contributions under the Plan by or on behalf of
Highly Compensated Participants exceed the limitations of this Section for any
reason, either such excess contributions shall be recharacterized as After Tax
Deposits or such excess contributions, adjusted for any income or loss allocable
thereto, shall be returned to the Participant, as provided in Section 4.5.


                                       20



          (a) The Compensation Deferral Contributions by Participants for a Plan
     Year shall satisfy the Actual Deferral Percentage Test set forth in (i)
     below, or, to the extent not precluded by applicable regulations, the
     alternative Actual Deferral Percentage test set forth in (ii) below:

               (i) The average Actual Deferral Percentage of Highly Compensated
          Participants for the Plan Year shall not be more than the prior Plan
          Year's average Actual Deferral Percentage of Participants who were not
          Highly Compensated Employees for the prior Plan Year multiplied by
          1.25, or

               (ii) The average Actual Deferral Percentage of Highly Compensated
          Participants for the Plan Year shall not be more than the prior Plan
          Year's Actual Deferral Percentage of Participants who were not Highly
          Compensated Employees for the prior Plan Year multiplied by 2.0,
          provided that the average Actual Deferral Percentage of Highly
          Compensated Participants does not exceed the average Actual Deferral
          Percentage of Participants who were not Highly Compensated Employees
          for the prior Plan Year by more than two (2) percentage points.

          (b) Notwithstanding any other provisions of the Plan, for the purposes
     of the limitations of this Section 4.3 and Section 4.5 only, the following
     definitions shall apply:

               (i) "Actual Deferral Percentage" shall mean, with respect to the
          group of Highly Compensated Participants and the group of all other
          Participants for a Plan Year, the ratios calculated separately and to
          the nearest one-hundredth of one percent for each Participant in such
          group, as follows:

                    (A) For a Highly Compensated Participant, the ratio of such
               Participant's Compensation Deferral Contributions for the current
               Plan Year to such Participant's Compensation for the current Plan
               Year; provided, however, that the Actual Deferral Percentage of a
               Highly Compensated Participant with no Compensation Deferral
               Contributions made on his or her behalf shall be zero.

                    (B) For any other Participant, the ratio of such
               Participant's Compensation Deferral Contributions for the
               preceding Plan Year to such Participant's Compensation for the
               preceding Plan Year; provided, however, that the Actual Deferral
               Percentage of a Participant with no Compensation Deferral
               Contributions made on his or her behalf shall be zero.

               To the extent determined by the Committee and in accordance with
          regulations issued by the Secretary of the Treasury, qualified
          nonelective contributions on behalf of a Participant that satisfy the
          requirements of Code Section 401(k)(3)(c)(ii) may also be taken into
          account for the purpose of determining the Actual Deferral Percentage
          of a Participant.

               (ii) "Highly Compensated Participant" shall mean for any Plan
          Year any Participant who is a Highly Compensated Employee. A
          Participant is a Highly Compensated Employee for a particular Plan
          Year if he or she meets the definition of a Highly Compensated
          Employee in effect for that Plan Year.


                                       21



          Similarly, a Participant is not a Highly Compensated Employee for a
          particular Plan Year if he or she does not meet the definition of a
          Highly Compensated Employee in effect for that Plan Year.

               (iii) "Participant" shall mean any Eligible Employee who
          satisfied the requirements of Section 3.1 during the Plan Year,
          whether or not such Eligible Employee has elected to contribute to the
          Plan for such Plan Year.

               (iv) "Compensation Deferral Contributions" shall mean amounts
          contributed to the Plan by a Participant as Before Tax Deposits
          pursuant to Section 4.2(a), including excess Before Tax Deposits (as
          defined in Section 4.4(a)) of Highly Compensated Participants but
          excluding (1) excess Before Tax Deposits of all other Participants
          that arise solely from Before Tax Deposits made under the Plan or
          plans of the Company, (2) Before Tax Deposits that are taken into
          account in the Actual Contribution Percentage test (as defined in
          Section 6.11) provided that the Actual Deferral Percentage test is
          satisfied both with and without exclusions of these Before Tax
          Deposits, and (3) any deferrals properly distributed as excess Annual
          Additions. Compensation Deferral Contributions may include, at the
          election of the Company, any Company Contributions that meet the
          requirements for such inclusion under Code Section 401(k)(3)(C).

               (v) "Compensation" shall mean compensation as described below:

                    (A) Compensation means compensation determined by the
               Company in accordance with the requirements of Code Section
               414(s) and the regulations thereunder.

                    (B) For purposes of this Section 4.3, Compensation may, at
               the Company's election, exclude amounts which are excludable from
               a Participant's gross income under Code Section 125 (pertaining
               to cafeteria plans) and Code Section 402(e)(3) (pertaining to
               401(k) salary reductions). The Company may change its election
               provided such change does not discriminate in favor of Highly
               Compensated Employees.

                    (C) Compensation taken into account for any Plan Year shall
               not exceed $210,000, as adjusted for cost-of-living increases in
               accordance with Code Section 401(a)(17)(B). Any cost-of-living
               adjustments in effect for a calendar year shall apply to the Plan
               Year beginning with or within such calendar year.

          (c) In the event the Plan satisfies the requirements of Code Sections
     401(k), 401(a)(4) or 410(b) only if aggregated with one or more other plans
     which include arrangements under Code Section 401(k), then this Section 4.3
     shall be applied by determining the Actual Deferral Percentages of
     Participants as if all such plans were a single plan, in accordance with
     regulations prescribed by the Secretary of the



                                       22



     Treasury under Code Section 401(k). Any adjustments to the Actual Deferral
     Percentage of Participants who are not Highly Compensated Employees for the
     prior year shall be made in accordance with Notice 98-1 and any superseding
     guidance. Plans may be aggregated in order to satisfy Code Sections 401(k)
     only if they have the same Plan Year and use the same Actual Deferral
     Percentage testing method.

          (d) For the purposes of this Section 4.3, the "Actual Deferral
     Percentage" for any Highly Compensated Participant who is a Participant
     under two or more Code Section 401(k) arrangements of the Company shall be
     determined by taking into account the Highly Compensated Participant's
     compensation under each such arrangement and contributions under each such
     arrangement which qualify for treatment under Code Section 401(k), in
     accordance with regulations prescribed by the Secretary of the Treasury
     under Code Section 401(k). If the arrangements have different Plan Years,
     this paragraph shall be applied by treating all such arrangements ending
     with or within the same calendar year as a single arrangement.
     Notwithstanding the foregoing, certain plans shall be treated as separate
     plans if mandatorily disaggregated pursuant to regulations under Code
     Section 401(k).

          (e) For purposes of the Actual Deferral Percentage test, Compensation
     Deferral Contributions must be made before the last day of the twelve-month
     period immediately following the Plan Year to which such contributions
     relate.

          (f) The determination and treatment of Compensation Deferral
     Contributions and the Actual Deferral Percentage of any Participant shall
     satisfy such other requirements as may be prescribed by the Secretary of
     the Treasury.

          (g) The Committee shall keep or cause to have kept such records as are
     necessary to demonstrate that the Plan satisfies the requirements of Code
     Section 401(k) and (m) and the regulations thereunder, in accordance with
     regulations prescribed by the Secretary of the Treasury.

     4.4 Provisions for Return of Excess Before Tax Deposits.

          (a) In the event that due to error or otherwise, an amount of a
     Participant's Compensation in excess of the Before Tax Deposit Limit (after
     application of any necessary adjustment) described in Section 4.2(a) is
     deferred under the Plan in any calendar year pursuant to such Participant's
     Compensation deferral agreement (but without regard to amounts deferred
     under any other plan) the excess Before Tax Deposits, if any, together with
     income allocable to such amount shall be returned to the Participant (after
     withholding applicable federal, state and local taxes due on such amounts)
     on or before the first April 15 following the close of the calendar year in
     which such excess contribution is made; provided, however, if there is a
     loss allocable to the excess Before Tax Deposits, the amount distributed
     shall be the amount of the excess as adjusted to reflect such loss. Any
     Matching Contributions allocated to the Participant's Matched Deposits
     pursuant to Section 6.3(b) which are attributable to any excess Before Tax
     Deposits by a Participant, and any income or loss allocable to such
     Matching


                                       23



     Contributions, shall either be returned to the Company or applied to reduce
     any future Matching Contributions by the Company.

          (b) The amount of income or loss attributable to any excess Before Tax
     Deposits described in paragraph (a) above shall be equal to the sum of the
     following:

               (i) The income or loss allocable to the Participant's Before Tax
          Deposits Account for the Plan Year multiplied by a fraction, the
          numerator of which is the excess Before Tax Deposits as determined
          under paragraph (a) above, and the denominator of which is the balance
          of the Participant's Before Tax Deposits Account as of the last day of
          the Plan Year, without regard to any income or loss allocable to such
          Account during the Plan Year; and

               (ii) The amount of allocable income or loss for the Gap Period
          using the "safe harbor" method set forth in regulations prescribed by
          the Secretary of the Treasury under Code Section 402(g). Under the
          "safe harbor" method, such allocable income or loss is equal to 10% of
          the amount calculated under Section 4.4(b)(i) above, multiplied by the
          number of calendar months from the last day of the Plan Year until the
          date of distribution of the Participant's excess Before Tax Deposits.
          A distribution on or before the 15th of the month is treated as made
          on the last day of the preceding month, a distribution after the 15th
          of the month is treated as made on the first day of the next month.

          (c) For the purpose of this Section 4.4, "Gap Period" shall mean the
     period between the last day of the Plan Year and the date of distribution
     of any excess Before Tax Deposits.

          (d) In accordance with procedures as may be established, either in
     writing or in practice, by the Committee, not later than March 1 of a
     calendar year a Participant may submit a claim to the Committee in which he
     or she certifies in writing the specific amount of his or her Before Tax
     Deposits for the preceding calendar year which, when added to amounts
     deferred for such calendar year under other plans or arrangements described
     in Code Sections 401(k), 408(k) or 403(b), shall cause the Participant to
     exceed the Before Tax Deposit Limit (after application of any necessary
     adjustment) described in Section 4.2(a) for such preceding calendar year.
     Notwithstanding the amount of the Participant's Before Tax Deposits under
     the Plan for such preceding calendar year, the Committee shall treat the
     amount specified by the Participant in his or her claim as a Before Tax
     Deposit in excess of the Before Tax Deposit Limit (after application of any
     necessary adjustment) for such calendar year and return it to the
     Participant in accordance with Section 4.4(a) above. A Participant is
     deemed to notify the Committee of any excess Before Tax Deposits that arise
     by taking into account only those Before Tax Deposits made to the Plan and
     other plans of the Company.

          (e) Any Before Tax Deposits in excess of the Before Tax Deposit Limit
     (after application of any necessary adjustment) described in Section 4.2(a)
     which are distributed to a Participant in accordance with this Section,
     shall to the extent required by regulations


                                       24



     issued by the Secretary of the Treasury be treated as Annual Additions
     under Article XIII for the Plan Year for which the excess Before Tax
     Deposits were made, unless such amounts are distributed no later than the
     first April 15th following the close of the Participant's taxable year.

          (f) The Committee shall not be liable to any Participant (or his or
     her Beneficiary, if applicable) for any losses caused by a mistake in
     calculating the amount of any Participant's excess Before Tax Deposits or
     the income or losses attributable thereto.

     4.5 Provision for Recharacterization or Return of Excess Deferrals by
Highly Compensated Participants. The provisions of this Section 4.5 shall be
applied after implementation of the provisions of Section 4.4.

          (a) The Committee shall determine in accordance with the procedures
     set forth in Section 4.3, as soon as is reasonably possible following the
     close of each Plan Year, the extent (if any) to which deferral treatment
     under Code Section 401(k) may not be available for Compensation Deferral
     Contributions on behalf of any Highly Compensated Participants. If,
     pursuant to these determinations by the Committee, a Highly Compensated
     Participant's Compensation Deferral Contributions are not eligible for
     tax-deferral treatment then, as determined by the Committee, either (i) any
     excess Compensation Deferral Contributions shall be recharacterized as
     After Tax Deposits in accordance with regulations issued under Code Section
     401(k), or (ii) any excess Compensation Deferral Contributions together
     with any income or loss allocable thereto shall be returned to the Highly
     Compensated Participant (after withholding applicable federal, state, and
     local taxes due on such amounts). Such return or recharacterization shall
     be made within the first two and one-half (2-1/2) months following the
     close of the Plan Year for which such excess deferrals were made, provided
     however, that if any excess deferrals and income or loss allocable thereto
     are, due to error or otherwise, not returned by such date, such amounts as
     are required to be returned shall be returned not later than the end of the
     first Plan Year following the Plan Year for which such excess deferrals
     were made.

          (b) For purposes of satisfying the Actual Deferral Percentage test of
     Section 4.3(a), the amount of any excess Compensation Deferral
     Contributions by a Highly Compensated Participant shall be determined by
     the Committee by application of a leveling method under which the
     Compensation Deferral Contributions of the Highly Compensated Participant
     who has the highest dollar amount of Compensation Deferral Contributions
     for such Plan Year is reduced to the extent required to cause such Highly
     Compensated Participant's Compensation Deferral Contributions to equal the
     Compensation Deferral Contributions of the Highly Compensated Participant
     with the next highest Compensation Deferral Contributions; provided,
     however, if a lesser amount, when added to the total dollar amount already
     returned under this paragraph (b), equals the total excess Compensation
     Deferral Contributions that are required to be returned to enable the Plan
     to satisfy the Actual Deferral Percentage test, the lesser amount shall be
     returned. This process shall be repeated until the Plan satisfies the
     Actual Deferral Percentage test.


                                       25



          (c) The amount of income or loss attributable to any excess
     Compensation Deferral Contributions by a Highly Compensated Participant for
     a Plan Year shall be equal to the sum of the following:

               (i) The income or loss allocable to the Highly Compensated
          Participant's Compensation Deferral Contribution Accounts for the Plan
          Year multiplied by a fraction, the numerator of which is the excess
          Compensation Deferral Contribution as determined under Section 4.3,
          and the denominator of which is the balance of the Highly Compensated
          Participant's Compensation Deferral Contribution Accounts as of the
          last day of the Plan Year without regard to any income or loss
          allocable to such Accounts during the Plan Year; and

               (ii) The amount of allocable income or loss for the Gap Period
          using the "safe harbor" method set forth in the regulations prescribed
          by the Secretary of the Treasury under Code Section 401(k). Under the
          "safe harbor" method, such allocable income or loss is equal to 10% of
          the amount calculated under Section 4.5(c)(i) above, multiplied by the
          number of calendar months from the last day of the Plan Year until the
          date of distribution of the Participant's excess Compensation Deferral
          Contribution. A distribution on or before the 15th of the month is
          treated as made on the last day of the preceding month, a distribution
          after the 15th of the month is treated as made on the first day of the
          next month.

          (d) For the purpose of this Section 4.5 the following shall apply:

               (i) "Compensation Deferral Contribution Accounts" shall mean the
          Participant's Before Tax Deposits Account and shall mean any other
          accounts of the Participant to which Company Contributions has been
          allocated where such Company Contributions has been included as
          Compensation Deferral Contributions pursuant to Section 4.3(b)(iv).

               (ii) "Gap Period" shall mean the period beginning with the last
          day of the Plan Year and the date of distribution of any excess
          Compensation Deferral Contributions.

          (e) For purposes of this Section, the amount of Compensation Deferral
     Contributions by a Participant who is not a Highly Compensated Participant
     for a Plan Year shall be reduced by any Before Tax Deposits which have been
     distributed to the Participant under Section 4.4, in accordance with
     regulations prescribed by the Secretary of the Treasury under Code Section
     401(k).

          (f) In the event that the Committee determines that an amount to be
     deferred pursuant to the Compensation deferral agreement provided in
     Section 4.1 would cause Company Contributions under this and any other
     tax-qualified retirement plan maintained by the Company to exceed the
     applicable deduction limitations contained in Code Section 404, or to
     exceed the maximum Annual Addition determined in accordance with


                                       26



     Article XIII, the Committee may treat such amount in accordance with the
     rules set forth above in Section 4.5(a).

          (g) The Committee shall not be liable to any Participant (or his or
     her Beneficiary, if applicable) for any losses caused by a mistake in
     calculating the amount of any Participant's excess Compensation Deferral
     Contribution or the income or losses attributable thereto.

          (h) To the extent required by regulations under Code Sections 401(k)
     or 415, any excess Compensation Deferral Contributions with respect to a
     Highly Compensated Participant shall be treated as Annual Additions under
     Article XIII for the Plan Year for which the excess Compensation Deferral
     Contributions were made, notwithstanding the distribution of such excess in
     accordance with the provisions of this Section.

     4.6 Termination, Change in Rate, or Resumption of Before Tax Deposits or
After Tax Deposits.

          (a) A Participant may, at any time, terminate, change the rate, or
     resume Before Tax Deposits or After Tax Deposits in 1% increments.

          (b) The right of a Participant to make Before Tax Deposits or After
     Tax Deposits shall cease during any Period of Severance.

          (c) Any termination, change in rate or resumption of Before Tax
     Deposits or After Tax Deposits made by a Participant pursuant to paragraph
     (a) above shall be effective as of the following pay period or, if later,
     as soon as administratively feasible.

     4.7 Character of Deposits. Before Tax Deposits shall be treated as Company
Contributions for purposes of Code Sections 401(k) and 414(h). After Tax
Deposits shall not constitute "qualified voluntary employee contributions" under
Code Section 219 (relating to the deductibility of those amounts).

     4.8 Rollover Contributions.

          (a) Pursuant to procedures as the Committee may prescribe (either in
     writing or practice), an Eligible Employee may make a Direct Rollover
     Contribution, a Participant Rollover Contribution, or an IRA Rollover
     Contribution to the Plan.

          (b) A "Direct Rollover Contribution" shall mean a contribution by an
     Eligible Employee which is a direct rollover of an Eligible Rollover
     Distribution from:

               (i) A qualified plan described in Code Section 401(a) or 403(a)
          including any portion attributable to after-tax employee contributions
          which shall be separately accounted for under the Plan;


                                       27



               (ii) An annuity contract described in Code Section 403(b) but
          excluding any portion attributable to after-tax employee
          contributions; or

               (iii) An eligible plan under Code Section 457(b) which is
          maintained by a state, political subdivision of a state, or any agency
          or instrumentality of a state or political subdivision of a state.

          (c) A "Participant Rollover Contribution" shall mean a contribution by
     an Eligible Employee which is an Eligible Rollover Distribution (excluding
     any portion attributable to after-tax employee contributions) received by
     the Trustee not later than 60 days after such distribution was received by
     the Eligible Employee; provided, such Eligible Rollover Distribution is
     from:

               (i) A qualified plan described in Code Section 401(a) or 403(a);

               (ii) An annuity contract described in Code Section 403(b); or

               (iii) An eligible plan under Code Section 457(b) which is
          maintained by a state, political subdivision of a state, or any agency
          or instrumentality of a state or political subdivision of a state.

          (d) An "IRA Rollover Contribution" shall mean a contribution by an
     Eligible Employee which is a distribution (excluding any portion
     attributable to after-tax employee contributions) from an individual
     retirement account or annuity described in Code Section 408(a) or 408(b)
     received by the Trustee not later than 60 days after such distribution was
     received by the Eligible Employee or received by the Plan through a direct
     trustee-to-trustee transfer from such individual retirement arrangement or
     annuity.

          (e) Pursuant to procedures as the Committee may prescribe (either in
     writing or practice), a former Eligible Employee who commenced
     participation in the Plan pursuant to Section 3.1 may make Rollover
     Contributions to the Plan from his or her account in the Allergan, Inc.
     Employee Stock Ownership Plan so long as he or she retains rights under the
     Plan.

          (f) An Eligible Employee's Rollover Contributions made pursuant the
     rules of this Section 4.8 shall be held in a separate Rollover
     Contributions Account for the Eligible Employee. A Rollover Contributions
     Account shall not share in any allocations of Company Contributions or
     Forfeitures under Section 6.3.


                                       28



                                    ARTICLE V
                      TRUST FUND AND COMPANY CONTRIBUTIONS

     5.1 General. All contributions made under the Plan and investments made and
property of any kind or character acquired with any such funds or otherwise
contributed, and all income, profits, and proceeds derived therefrom, shall be
held in Trust and shall be held and administered by the Trustee in accordance
with the provisions of the Plan and Trust Agreement.

     5.2 Single Trust. Assets of the Trust shall be held in a separate fund
which shall consist of the Trust Fund. Individual Participant interests in the
Trust Fund shall be reflected in the Accounts maintained for the Participants.
Notwithstanding the foregoing, the Trust Fund shall be treated as a single trust
for purposes of investment and administration, and nothing contained herein
shall require a physical segregation of assets for any fund or for any Account
maintained under the Plan.

     5.3 Matching Contributions. Subject to the limitations of Article XIII, the
suspension provisions of Section 8.1 and to the extent that the Company has
current or accumulated profits, the Company shall make Matching Contributions to
the Plan on behalf of Participants in accordance with the following rules:

          (a) The Company shall contribute and allocate Matching Contributions
     on a pay period basis which, when added to Matching Contribution
     Forfeitures available after application of Section 6.3, is equal to 100% of
     each Participant's Matched Deposits for the pay period. The Board of
     Directors, acting upon the advice and direction of the Committee, may
     authorize and direct that Matching Contributions (expressed as a percentage
     of Participants' Matched Deposits as set forth above) be changed from time
     to time from a minimum of 0% to a maximum of 100%.

          (b) As of a date not later than the last day of each Plan Year, the
     Company shall contribute and allocate on behalf of each Eligible
     Participant, additional Matching Contributions which, when added to
     Matching Contribution Forfeitures available after application of Section
     6.3, is equal to the difference, if any, between the amount of each
     Eligible Participant's Matching Contributions determined under paragraph
     (a) and the amount of such Eligible Participant's Matching Contributions if
     paragraph (a) was applied on a Plan Year basis instead of a pay period
     basis. For the purpose of this paragraph (b), the term "Eligible
     Participant" shall include only those Participants who are Eligible
     Employees on the first and last business day of the Plan Year and who did
     not incur a Severance during the Plan Year.

          (c) The Company shall contribute amounts sufficient to satisfy the
     Matching Contributions reinstatement requirements of Section 8.7 to the
     extent Matching Contribution Forfeitures are insufficient to satisfy the
     reinstatement requirement of Section 8.7 if so directed and at such times
     as may be determined by the Committee.


                                       29



     5.4 Retirement Contributions. Subject to the limitations of Article XIII
and to the extent that the Company has current or accumulated profits, the
Company shall make Retirement Contributions to the Plan on behalf of Retirement
Account Participants in accordance with the following rules:

          (a) The Company shall contribute and allocate Retirement Contributions
     on a Plan Year basis for each Retirement Account Participant who is
     employed by the Company or an Affiliated Company on the last day of such
     Plan Year or who incurred a Severance during the Plan Year by reason of
     Disability, death, or retirement on or after age 55; the amount of which,
     when added to Retirement Contribution Forfeitures available after the
     application of Section 6.3, shall be equal to five percent (5%) of the
     Retirement Account Participant's Compensation (as adjusted pursuant to
     paragraph (c) below) for such Plan Year. A Retirement Account Participant's
     Compensation received while such Retirement Account Participant is an
     inactive Participant as defined in Section 3.2(b) or an "Active
     Participant" in the Allergan, Inc. Pension Plan as such term is defined
     therein or while he or she is not an Eligible Employee shall not be taken
     into account in determining such Participant's Retirement Contributions.

          (b) Retirement Contributions contributed on behalf of Retirement
     Account Participants shall be allocated to the Retirement Contributions
     Account of such Retirement Account Participants as of the last day of each
     Plan Year and shall be paid to the Trust at such times as determined by the
     Sponsor.

          (c) Solely for the purpose of determining Retirement Contributions
     pursuant to this Section 5.4, a Retirement Account Participant's
     Compensation shall include his or her "Annual Deferrals" (as defined in the
     Allergan, Inc. Executive Deferred Compensation Plan) for the Plan Year.

          (d) The Company shall contribute amounts sufficient to satisfy the
     Retirement Contributions reinstatement requirements of Section 8.7 to the
     extent Retirement Contribution Forfeitures are insufficient to satisfy the
     reinstatement requirement of Section 8.7 if so directed and at such times
     as may be determined by the Committee.

     5.5 Form of Company Contributions. Company Contributions to the Trust Fund
shall be paid in cash, property, or Company Stock as the Sponsor may from time
to time determine.

     5.6 Investment of Trust Assets.

          (a) The manner in which assets of the Trust will be invested shall be
     chosen by the Committee at its discretion, although the Committee may
     delegate the management to one or more Investment Managers appointed
     pursuant to Section 5.16. Notwithstanding the foregoing, Matching
     Contributions shall be invested in Company Stock except to the extent
     invested pursuant to Section 5.6(e).

          (b) The Committee may establish separate investment funds under the
     Plan, with each fund representing an investment alternative available to
     Participants for the


                                       30



     investment of their Accounts as provided in Section 5.6(c) and (d) below.
     Each Participant shall have a subaccount under the Plan corresponding to
     the Participant's interest which is allocated to each investment fund. Each
     such subaccount may be valued separately. The Committee may, at its
     discretion, establish alternative investment funds or eliminate any
     previously established funds, including but not limited to the following
     types of investment funds:

               (i) The Interest Income Fund investing in group annuity contracts
          with major insurance companies.

               (ii) The Balanced Fund investing in common stocks, bonds,
          government securities and similar types of investments.

               (iii) The Equity Fund investing in a mutual fund which may invest
          in equity securities, bonds, preferred stocks, and interest-bearing
          cash investments.

               (iv) The Company Stock Fund consisting exclusively of Company
          Stock.

               (v) The AMO Stock Fund consisting exclusively of AMO Stock.

          Notwithstanding the establishment of separate investment funds, up to
     one hundred percent (100%) of the assets of the Plan may be invested in
     Company Stock.

          (c) A Participant may elect the investment fund to which his or her
     Participant Deposits or Retirement Contributions are invested under the
     Plan or may change such elections at any time; provided, however, that any
     allocations among the investment funds shall be made in 1% increments. Any
     change in investment funds shall be effective as soon as administratively
     feasible. Any investment elections shall be limited to the investment funds
     currently offered and currently available to Participants as determined by
     the Committee pursuant to paragraphs (a) and (b) above. A Participant shall
     effect an investment election by properly completing and submitting the
     form authorized by the Committee for this purpose.

          (d) A Participant may elect at any time to transfer amounts
     accumulated in his or her Accounts among any of the investment funds
     currently offered and currently available to Participants as determined by
     the Committee pursuant to paragraphs (a) and (b) above; provided, however,
     the total amount transferred shall be made in 1% increments of the amount
     accumulated in the investment fund. Any transfer among investment funds
     shall be effective as soon as administratively feasible. A Participant
     shall effect a transfer election by properly completing and submitting the
     form authorized by the Committee for this purpose.

          (e) Notwithstanding the requirement of paragraph (a) above that
     Matching Contributions be invested in the Company Stock Fund, (i) any
     Participant may elect that amounts accumulated in his or her Matching
     Contributions Account which are held in the


                                       31



     Company Stock Fund be reinvested and (ii) any Participant on or after the
     date he or she attains age 55 may elect that any future Matching
     Contributions be invested, in any of the investment funds currently offered
     and currently available to Participants as determined by the Committee
     pursuant to paragraphs (a) and (b) above. An election made under this
     paragraph (e) shall be effective as soon as administratively feasible. A
     Participant shall make any election, and may change any election, at such
     times and in accordance with the requirements imposed by paragraphs (c) and
     (d) above.

          (f) Amounts invested in any one of the investment funds shall not
     share in gains and losses experienced by any other fund.

          (g) Notwithstanding the establishment of separate investment funds
     within the Trust, the Trust shall at all times constitute a single trust.

          (h) Notwithstanding anything to the contrary in this Section 5.6 or
     Section 4.1 or Section 8.1, the following additional transfer and
     withdrawal restrictions shall apply to all Participants who are Insiders.
     For the purpose of this Section 5.6, the term "Insider" shall mean any
     Participant who is directly or indirectly the beneficial owner of more than
     10% of any class of any equity security (other than an exempted security)
     of the Sponsor (or the Company) which is registered pursuant to Section 12
     of the Securities Exchange Act of 1934 (the "Exchange Act") or who is a
     "director" or an "officer" of the Sponsor or the Company as those terms are
     interpreted for the purpose of determining persons subject to Section 16 of
     the Exchange Act.

               (i) Any Insider who transfers amounts invested in the Company
          Stock Fund out of such fund and into another fund or withdraws cash in
          a transaction that results in the liquidation of amounts in the
          Company Stock Fund (pursuant to Sections 8.1 or 8.13), may not for a
          period of six months following the Participant's election to so
          transfer funds, withdraw cash or take a loan, as the case may be, make
          an election to transfer amounts from another fund into the Company
          Stock Fund.

               (ii) Any Insider who transfers amounts invested in a fund other
          than the Company Stock Fund into the Company Stock Fund, may not for a
          period of six months following the Participant's election to so
          transfer funds make an election to (1) transfer amounts from the
          Company Stock Fund into another fund, (2) withdraw cash or take a loan
          in a transaction that results in the liquidation of amounts in the
          Company Stock Fund or (3) utilize the diversification rule of Section
          5.12 of the Allergan Inc. Employee Stock Ownership Plan or the
          provision of any Company plan covered by Rule 16b-3 (promulgated
          pursuant to the Exchange Act) then in existence that would result in
          the transfer out of a Company equity securities fund.

          (i) It is intended that to the extent a Participant may direct the
     investment of his or her Accounts under the Plan that the Plan constitute a
     plan described in Section 404(c) of ERISA and the regulations thereunder,
     and neither the Company,


                                       32



     Committee, nor any fiduciary with respect to the Plan who is employed by
     the Company shall be liable for investment losses sustained by any
     Participant or Beneficiary as a direct and necessary result of the
     investment instructions given by such Participant or Beneficiary. Such
     fiduciaries set forth in the preceding sentence shall be under no duty to
     question the investment direction of the Participant or Beneficiary or to
     advise a Participant or Beneficiary as to the manner in which his or her
     Accounts is to be invested. The fact that an investment option is offered
     shall not be construed to be a recommendation of investment.

          (j) On June 29, 2002, Allergan spun-off AMO and distributed the stock
     of AMO (referred to in the Plan as "AMO Stock") to its shareholders. The
     following provisions of the Plan shall apply to AMO Stock as if the term
     "AMO Stock" was substituted for the term "Company Stock": Section 5.9
     (Certain Offers for Company Stock); Section 5.10 (Voting of Company Stock);
     Section 5.11 (Securities Law Limitation); Section 5.16 (Appointment of
     Investment Manager); Section 6.4 (Valuation of Participants' Accounts);
     Section 6.5 (Valuation of Company Stock); Section 6.6 (Dividends, Splits,
     Recapitalizations, Etc.); Section 6.7 (Stock Rights, Warrants or Options);
     Section 6.9 (Cash Dividends); Section 6.10 (Miscellaneous Allocation
     Rules); Section 9.1 (Appointment of Committee); Section 9.2 (Appointment of
     Investment Subcommittee); Section 9.7 (Additional Powers of Committee); and
     Section 9.14 (Compensation of Committees and Plan Expenses), as applicable.

     5.7 Irrevocability. The Company shall have no right or title to, nor
interest in, the contributions made to the Trust Fund, and no part of the Trust
Fund shall revert to the Company except that on or after the Original Effective
Date funds may be returned to the Company as follows:

          (a) In the case of Company Contributions which are made by a mistake
     of fact and at the Sponsor's written request, such contributions shall be
     returned to the Company as directed by the Sponsor within one (1) year
     after it is made.

          (b) All Company Contributions contributed to the Trust are hereby
     conditioned upon the Plan satisfying all of the requirements of Code
     Section 401(a). If the Plan does not qualify, the Plan may be revoked at
     the Sponsor's written election and all such contributions shall be returned
     to the Company as directed by the Sponsor within one year after the date of
     Internal Revenue Service denial of the qualification of the Plan. Upon such
     a revocation the affairs of the Plan and Trust shall be terminated and
     wound up as the Sponsor shall direct.

          (c) All Company Contributions to the Plan are conditioned upon the
     deductibility of those contributions under Code Section 404. To the extent
     a deduction is disallowed and at the Sponsor's written request, such
     contributions shall be returned to the Company as directed by the Sponsor
     within one year after the disallowance.

          (d) In the event that the Plan is terminated when there are amounts
     remaining in the Suspense Account, the excess funds shall revert to the
     Company as directed by the Sponsor to the extent provided in Section 13.6.


                                       33


     5.8 Company, Committee and Trustee Not Responsible for Adequacy of Trust
Fund.

          (a) The Company, Committee, and the Trustee shall not be liable or
     responsible for the adequacy of the Trust Fund to meet and discharge any or
     all payments and liabilities hereunder. All Plan benefits will be paid only
     from the Trust assets, and neither the Company, the Committee nor the
     Trustee shall have any duty or liability to furnish the Trust with any
     funds, securities or other assets except as expressly provided in the Plan.

          (b) Except as required under the Plan or Trust or under Part 4 of
     Subtitle B of Title I of ERISA, the Company shall not be responsible for
     any decision, act or omission of the Trustee, the Committee, or the
     Investment Manager (if applicable), and shall not be responsible for the
     application of any moneys, securities, investments or other property paid
     or delivered to the Trustee.

     5.9 Certain Offers for Company Stock. Notwithstanding any other provision
of the Plan to the contrary, in the event an offer shall be received by the
Trustee (including but not limited to a tender offer or exchange offer within
the meaning of the Securities Exchange Act of 1934, as from time to time amended
and in effect) to acquire any or all shares of Company Stock held by the Trust
(an "Offer"), the discretion or authority to sell, exchange or transfer any of
such shares of Company Stock shall be determined in accordance with the
following rules:

          (a) The Trustee shall have no discretion or authority to sell,
     exchange or transfer any Company Stock pursuant to an Offer except to the
     extent, and only to the extent, that the Trustee is timely directed to do
     so in writing by each Participant with respect to shares of Company Stock
     that are allocated to such Participant's Accounts.

          (b) To the extent there remains any residual fiduciary responsibility
     with respect to Company Stock pursuant to an Offer after application of
     paragraph (a) above, the Trustee shall sell, exchange or transfer such
     Company Stock as directed by the Committee or as directed by an independent
     fiduciary if duly appointed by the Sponsor. To the extent the Committee or
     an independent fiduciary is required to exercise any residual fiduciary
     responsibility with respect to an Offer, the Committee or independent
     fiduciary shall take into account in exercising its fiduciary judgment,
     unless it is clearly imprudent to do so, directions timely received from
     Participants, as such directions are most indicative of what action is in
     the best interests of Participants. Further, the Committee or independent
     fiduciary, in addition to taking into consideration any relevant financial
     factors bearing on any such decision, shall take into consideration any
     relevant non-financial factors, including, but not limited to, the
     continuing job security of Participants as employees of the Sponsor or any
     Affiliated Company, conditions of employment, employment opportunities and
     other similar matters, and the prospect of the Participants and prospective
     Participants for future benefits under the Plan.

          (c) Upon timely receipt of such instructions, the Trustee shall,
     subject to the provisions of paragraphs (e) and (o) of this Section, sell,
     exchange or transfer pursuant to


                                       34



     such Offer, only such shares as to which such instructions were given. The
     Committee shall use its best efforts to communicate or cause to be
     communicated to each Participant the consequences of any failure to provide
     timely instructions to the Trustee.

          (d) In the event, under the terms of an Offer or otherwise, any shares
     of Company Stock tendered for sale, exchange or transfer pursuant to such
     Offer may be withdrawn from such Offer, the Trustee shall follow such
     instructions respecting the withdrawal of such shares from such Offer in
     the same manner and the same proportion as shall be timely received by the
     Trustee from the Participants entitled under this paragraph (a) to give
     instructions as to the sale, exchange or transfer of shares pursuant to
     such Offer.

          (e) In the event that an Offer for fewer than all of the shares of
     Company Stock held by the Trustee in the Trust shall be received by the
     Trustee, each Participant shall be entitled to direct the Trustee as to the
     acceptance or rejection of such Offer (as set forth herein) with respect to
     the largest portion of such Company Stock as may be possible given the
     total number or amount of shares of Company Stock the Plan may sell,
     exchange or transfer pursuant to the Offer based upon the instructions
     received by the Trustee from all other Participants who shall timely
     instruct the Trustee pursuant to this paragraph to sell, exchange or
     transfer such shares pursuant to such Offer, each on a pro rata basis in
     accordance with the maximum number of shares each such Participant would
     have been permitted to direct under paragraph (a) had the Offer been for
     all shares of Company Stock held in the Trust.

          (f) In the event an Offer is received by the Trustee and instructions
     have been solicited from Participants regarding such Offer, and prior to
     termination of such Offer, another Offer is received by the Trustee for the
     Company Stock subject to the first Offer, the Trustee shall inform the
     Committee of such other Offer and the Committee shall use its best efforts
     under the circumstances to solicit instructions from the Participants (i)
     with respect to securities tendered for sale, exchange or transfer pursuant
     to the first Offer, whether to withdraw such tender, if possible, and, if
     withdrawn, whether to tender any Company Stock so withdrawn for sale,
     exchange or transfer pursuant to the second Offer and (ii) with respect to
     Company Stock not tendered for sale, exchange or transfer pursuant to the
     first Offer, whether to tender or not to tender such Company Stock for
     sale, exchange or transfer pursuant to the second Offer. The Trustee shall
     follow all such instructions received in a timely manner from Participants
     in the same manner and in the same proportion as provided in paragraph (a)
     of this Section. With respect to any further Offer for any Company Stock
     received by the Trustee and subject to any earlier Offer (including
     successive Offers from one or more existing offers), the Trustee shall act
     in the same manner as described above.

          (g) With respect to any Offer received by the Trustee, the Trustee
     shall inform the Sponsor of such Offer and the Sponsor shall distribute, at
     its expense, copies of all relevant material including but not limited to
     material filed with the Securities and Exchange Commission with such Offer
     or regarding such Offer, which shall seek confidential written instructions
     from each Participant who is entitled to respond to such


                                       35



     Offer pursuant to paragraph (a). The identities of Participants, the amount
     of Company Stock allocated to their Accounts, and the Compensation of each
     Participant shall be determined from the list of Participants delivered to
     the Sponsor by the Committee which shall take all reasonable steps
     necessary to provide the Sponsor with the latest possible information.

          (h) The Sponsor shall distribute and/or make available to each
     Participant who is entitled to respond to an Offer pursuant to paragraph
     (a), an instruction form to be used by each such Participant who wishes to
     instruct the Trustee. The instruction form shall state that (i) if the
     Participant fails to return an instruction form to the Trustee by the
     indicated deadline, the Company Stock with respect to which he or she is
     entitled to give instructions shall not be sold, exchanged or transferred
     pursuant to such Offer, (ii) the Participant shall be a named fiduciary (as
     described in paragraph (m) below) with respect to all shares of Company
     Stock for which he or she is entitled to give instructions, and (iii) the
     Company acknowledges and agrees to honor the confidentiality of the
     Participant's instructions to the Trustee.

          (i) Each Participant may choose to instruct the Trustee in one of the
     following two ways: (i) not to sell, exchange or transfer any shares of
     Company Stock for which he or she is entitled to give instructions, or (ii)
     to sell, exchange or transfer all Company Stock for which he or she is
     entitled to give instructions. The Sponsor shall follow up with additional
     mailings and postings of bulletins, as reasonable under the time
     constraints then prevailing, to obtain instructions from Participants not
     otherwise responding to such requests for instructions. Subject to
     paragraph (e), the Trustee shall then sell, exchange or transfer shares
     according to instructions from Participants, except that shares for which
     no instructions are received shall not be sold, exchanged or transferred
     unless directed otherwise as provided in paragraph (b) above.

          (j) The Sponsor shall furnish former Participants who have received
     distributions of Company Stock so recently as to not be shareholders of
     record with the information given to Participants pursuant to paragraphs
     (g), (h) and (i) of this Section. The Trustee shall then sell, exchange or
     transfer shares according to instructions from such former Participants,
     except that shares for which no instructions are received shall not be
     sold, exchanged or transferred.

          (k) Neither the Company, the Committee nor the Trustee shall express
     any opinion or give any advice or recommendation to any Participant
     concerning the Offer, nor shall they have any authority or responsibility
     to do so.

          (l) The Trustee shall not reveal or release a Participant's
     instructions to the Company, its officers, directors, employees, or
     representatives. If some but not all Company Stock held by the Trust is
     sold, exchanged, or transferred pursuant to an Offer, the Company, with the
     Trustee's cooperation, shall take such action as is necessary to maintain
     the confidentiality of Participant's records including, without limitation,
     establishment of a security system and procedures which restrict access to
     Participant records and retention of an independent agent to maintain such
     records. If an


                                       36



     independent record keeping agent is retained, such agent must agree, as a
     condition of its retention by the Sponsor, not to disclose the composition
     of any Participant Accounts to the Company, its officers, directors,
     employees, or representatives. The Company acknowledges and agrees to honor
     the confidentiality of Participants' instructions to the Trustee.

          (m) Each Participant shall be a named fiduciary (as that term is
     defined in Section 402(a)(2) of ERISA) with respect to Company Stock
     allocated to his or her Accounts under the Plan solely for purposes of
     exercising the rights of a shareholder with respect to an Offer pursuant to
     this Section 5.9 and voting rights pursuant to Section 5.10.

          (n) To the extent that an Offer results in the sale of Company Stock
     in the Trust, the Committee or the Participants, if so permitted under the
     terms of the Plan, shall instruct the Trustee as to the investment of the
     proceeds of such sale.

          (o) In the event a court of competent jurisdiction shall issue to the
     Plan, the Committee, the Sponsor or the Trustee an opinion or order, which
     shall, in the opinion of counsel to the Committee, the Sponsor or the
     Trustee, invalidate, in all circumstances or in any particular
     circumstances, any provision or provisions of this Section regarding the
     determination to be made as to whether or not Company Stock held by the
     Trustee shall be sold, exchanged or transferred pursuant to an Offer or
     cause any such provision or provisions to conflict with securities laws,
     then, upon notice thereof to the Committee, the Sponsor or the Trustee, as
     the case may be, such invalid or conflicting provisions of this Section
     shall be given no further force or effect. In such circumstances, the
     Trustee shall continue to follow instructions received from Participants,
     to the extent such instructions have not been invalidated by such order or
     opinion. To the extent the Trustee is required by such opinion or order to
     exercise any residual fiduciary responsibility with respect to such Offer,
     the Sponsor shall appoint an independent fiduciary who shall exercise such
     residual fiduciary responsibility as provided in paragraph (b) above and
     shall direct the Trustee as to whether or not Company Stock held by the
     Trustee shall be sold, exchanged or transferred pursuant to such Offer.

     5.10 Voting of Company Stock. Notwithstanding any other provision of the
Plan to the contrary, the Trustee shall have no discretion or authority to vote
Company Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in accordance with timely directions received
by the Trustee from either the Committee or Participants, depending on who has
the right to direct the voting of such Company Stock as provided in the
following provisions of this Section 5.10.

          (a) All Company Stock held in the Trust Fund shall be voted by the
     Trustee as the Committee directs in its absolute discretion, except as
     provided in this Section 5.10(a).

               (i) If the Sponsor has a registration-type class of securities
          (as defined in Code Section 409(e)(4)), then with respect to all
          corporate matters, each


                                       37



          Participant shall be entitled to direct the Trustee as to the voting
          of all Company Stock allocated and credited to his or her Accounts.

               (ii) If the Sponsor does not have a registration-type class of
          securities, then only with respect to such matters as the approval or
          disapproval of any corporate merger or consolidation,
          recapitalization, reclassification, liquidation, dissolution, sale of
          substantially all assets of trade or business, or such similar
          transactions as may be prescribed in Code Section 409(e)(4) and the
          regulations thereunder, each Participant shall be entitled to direct
          the Trustee as to the voting of all Company Stock allocated and
          credited to his or her Accounts.

          (b) To the extent there remains any residual fiduciary responsibility
     with respect to the voting of Company Stock after application of paragraph
     (a) above, the Trustee shall vote such Company Stock as directed by the
     Committee or as directed by an independent fiduciary if duly appointed by
     the Sponsor. To the extent the Committee or an independent fiduciary is
     required to exercise any residual fiduciary responsibility with respect to
     the voting of Company Stock, the Committee or independent fiduciary shall
     take into account in exercising its fiduciary judgment, unless it is
     clearly imprudent to do so, directions timely received from Participants,
     as such directions are most indicative of what action is in the best
     interests of Participants. Further, the Committee or independent fiduciary,
     in addition to taking into consideration any relevant financial factors
     bearing on any such decision, shall take into consideration any relevant
     non-financial factors, including, but not limited to, the continuing job
     security of Participants as employees of the Sponsor or any Affiliated
     Company, conditions of employment, employment opportunities and other
     similar matters, and the prospect of the Participants and prospective
     Participants for future benefits under the Plan.

          (c) All Participants entitled to direct such voting shall be notified
     by the Sponsor, pursuant to its normal communications with shareholders, of
     each occasion for the exercise of such voting rights within a reasonable
     time before such rights are to be exercised. Such notification shall
     include all information distributed to shareholders either by the Sponsor
     or any other party regarding the exercise of such rights. Such Participants
     shall be so entitled to direct the voting of fractional shares (or
     fractional interests in shares), provided, however, that the Trustee may,
     to the extent possible, vote the combined fractional shares (or fractional
     interests in shares) so as to reflect the aggregate direction of all
     Participants giving directions with respect to fractional shares (or
     fractional interests in shares). To the extent that a Participant shall
     fail to direct the Trustee as to the exercise of voting rights arising
     under any Company Stock credited to his or her Accounts, such Company Stock
     shall not be voted unless the Trustee is directed otherwise as provided in
     paragraph (b) above. The Trustee shall maintain confidentiality with
     respect to the voting directions of all Participants.

          (d) Each Participant shall be a named fiduciary (as that term is
     defined in Section 402(a)(2) of ERISA) with respect to Company Stock for
     which he or she has the right to direct the voting under the Plan but
     solely for the purpose of exercising voting rights pursuant to this Section
     5.10 or certain Offers pursuant to Section 5.9.


                                       38



          (e) In the event a court of competent jurisdiction shall issue an
     opinion or order to the Plan, the Committee, the Sponsor or the Trustee,
     which shall, in the opinion of counsel to the Committee, the Sponsor or the
     Trustee, invalidate under ERISA, in all circumstances or in any particular
     circumstances, any provision or provisions of this Section regarding the
     manner in which Company Stock held in the Trust shall be voted or cause any
     such provision or provisions to conflict with ERISA, then, upon notice
     thereof to the Committee, the Sponsor or the Trustee, as the case may be,
     such invalid or conflicting provisions of this Section shall be given no
     further force or effect. In such circumstances the Trustee shall continue
     to follow instructions received from Participants, to the extent such
     instructions have not been invalidated by such order or opinion. To the
     extent the Trustee is required by such opinion or order to exercise any
     residual fiduciary responsibility with respect to voting, the Sponsor shall
     appoint an independent fiduciary who shall exercise such residual fiduciary
     responsibility as provided in paragraph (b) above and shall direct the
     Trustee as to the manner in which Company Stock held by the Trustee shall
     be voted.

     5.11 Securities Law Limitation. Neither the Committee nor the Trustee shall
be required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock, which either determines in its
sole discretion might tend to subject itself, its members, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal or state
securities laws.

     5.12 Distributions. Money and property of the Trust shall be paid out,
disbursed, or applied by the Trustee for the benefit of Participants and
Beneficiaries under the Plan in accordance with directions received by the
Trustee from the Committee. Upon direction of the Committee, the Trustee may pay
money or deliver property from the Trust for any purpose authorized under the
Plan. The Trustee shall be fully protected in paying out money or delivering
property from the Trust from time to time upon written order of the Committee
and shall not be liable for the application of such money or property by the
Committee. The Trustee shall not be required to determine or to make any
investigation to determine the identity or mailing address of any person
entitled to benefits hereunder and shall have discharged its obligation in that
respect when it shall have sent checks or other property by first-class mail to
such persons at their respective addresses as may be certified to it by the
Committee.

     5.13 Taxes. If the whole or any part of the Trust, or the proceeds thereof,
shall become liable for the payment of any estate, inheritance, income or other
tax, charge, or assessment which the Trustee shall be required to pay, the
Trustee shall have full power and authority to pay such tax, charge, or
assessment out of any moneys or other property in its hands for the account of
the person whose interests hereunder are so liable, but at least ten (10) days
prior to making any such payment, the Trustee shall mail notice to the Committee
of its intention to make such payment. Prior to making any transfers or
distributions of any of the Trust, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem necessary.


                                       39



     5.14 Trustee Records to be Maintained. The Trustee shall keep accurate and
detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all accounts, books, and records relating thereto
shall be open to inspection and audit at all reasonable times by any person
designated by the Company (subject to the provisions of Sections 5.9(l) and
5.10(c)).

     5.15 Annual Report of Trustee. Promptly following the close of each Plan
Year (or such other period as may be agreed upon between the Trustee and
Committee), or promptly after receipt of a written request from the Company, the
Trustee shall prepare for the Company a written account which will enable the
Company to satisfy the annual financial reporting requirements of ERISA, and
which will set forth among other things all investments, receipts,
disbursements, and other transactions effected by the Trustee during such Plan
Year or during the period from the close of the last Plan Year to the date of
such request. Such account shall also describe all securities and other
investments purchased and sold during the period to which it refers, the cost of
acquisition or net proceeds of sale, the securities and investments held as of
the date of such account, and the cost of each item thereof as carried on the
books of the Trustee. All accounts so filed shall be open to inspection during
business hours by the Company, the Committee, and by Participants and
Beneficiaries of the Plan (subject to the provisions of Sections 5.9(l) and
5.10(c)).

     5.16 Appointment of Investment Manager. From time to time the Committee, in
accordance with Section 9.7 hereof, may appoint one or more Investment Managers
who shall have investment management and control over assets of the Trust not
invested or to be invested in Company Stock. The Committee shall notify the
Trustee of such assets of the appointment of the Investment Manager. In the
event more than one Investment Manager is appointed, the Committee shall
determine which assets shall be subject to management and control by each
Investment Manager and shall also determine the proportion in which funds
withdrawn or disbursed shall be charged against the assets subject to each
Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract
(except for Company Stock), and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the Committee.


                                       40



                                   ARTICLE VI
                            ACCOUNTS AND ALLOCATIONS

     6.1 Participants' Accounts. In order to account for the allocated interest
of each Participant in the Trust Fund, there shall be established and maintained
for each Participant (making such form of contribution) a Before Tax Deposits
Account, an After Tax Deposits Account, a Matching Contributions Account, a
Retirement Contributions Account, and a Rollover Contributions Account.

     6.2 Allocation of Participant Deposits. All Participant Deposits shall be
allocated to the separate Accounts established and maintained for that
Participant. Participant Deposits shall be paid by the Company to the Trustee as
soon as the amount can reasonably be identified and separated from the Company's
other assets, but in any event no later than the 15th business day of the month
following the month in which such amounts would otherwise be payable to the
Participant, or such other time provided in applicable regulations under the
Code or ERISA.

     6.3 Allocation of Company Contributions and Forfeitures. Company
Contributions and Forfeitures shall be allocated as follows:

          (a) Matching Contributions shall be allocated to the Matching
     Contributions Accounts of all Participants who made Matched Deposits in
     such amounts and at such times as provided in Sections 5.3(a) and 5.3(b).

          (b) Retirement Contributions shall be allocated to the Retirement
     Contributions Accounts of all Retirement Account Participants in such
     amounts and at such times as provided in Sections 5.4(a) and 5.4(b).

          (c) Matching Contribution Forfeitures and Retirement Contribution
     Forfeitures shall first be used to restore the Matching Contributions
     Accounts of rehired Participants and the Retirement Contributions Accounts
     of rehired Retirement Account Participants, respectively, if so required
     under Section 8.7 and shall then be allocated to the Matching Contributions
     Accounts of Participants and Retirement Contributions Accounts of
     Retirement Account Participants, respectively, to the extent necessary to
     correct insufficient allocations made to such Accounts in prior months
     discovered during the Plan Year to which such Forfeitures are attributable.

          (d) After application of paragraph (c) above, any remaining Matching
     Contribution Forfeitures and Retirement Contribution Forfeitures shall be
     used to reduce Matching Contributions and Retirement Contributions,
     respectively, made by the Company pursuant to Sections 5.3 and 5.4 unless
     applied towards plan expenses consistent with the allocation described
     under Section 9.14.

          (e) Any other Company Contributions shall be used to restore the
     Accounts of rehired Participants if so required under Section 8.7 and to
     the extent Forfeitures are


                                       41



     unavailable. Any amounts remaining may be used to pay Plan expenses to the
     extent described in Section 9.14.

     The allocations of Company Contributions under this Section 6.3 shall be
made only after any allocations required by Sections 6.10 and 13.4 have been
made.

     6.4 Valuation of Participants' Accounts. Within sixty (60) days after each
Valuation Date the Trustee shall value the assets of the Trust on the basis of
fair market values. Company Stock held by the Trust shall be valued in
accordance with Section 6.5. If separate investment funds are maintained under
the Trust pursuant to Section 5.6(b) then each such fund shall be valued
separately so that gains or losses of the various funds shall not be commingled.
Upon receipt of these valuations from the Trustee, the Committee shall revalue
the Accounts and subaccounts (as established pursuant to Section 5.6(b)), if
any, of each Participant as of the applicable Valuation Date so as to reflect,
among other things, a proportionate share in any increase or decrease in the
fair market value of the assets in the Trust Fund, determined by the Trustee as
of that date as compared with the value of the assets in the Trust Fund as of
the immediately preceding Valuation Date.

     6.5 Valuation of Company Stock. Company Stock held by the Trust shall be
valued according to the following rules:

          (a) In the case of Company Stock that is publicly traded on a national
     securities exchange, such stock shall be valued by reference to the closing
     price of such stock on such exchange on the last trading day of the month
     for which such stock is being valued.

          (b) In the case of Company Stock that is not publicly traded on a
     national securities exchange, such stock shall be valued as of the first
     day of each Plan Year, or such other time as established by the Committee,
     by determining the fair market value of such stock through the use of an
     independent appraiser. Such fair market valuation shall be used to
     determine the valuation of each Participant's Company Stock Account on each
     Valuation Date in such Plan Year pursuant to Section 6.4.

     6.6 Dividends, Splits, Recapitalizations, Etc. Any Company Stock received
by the Trustee as a stock split, dividend, or as a result of a reorganization or
other recapitalization of the Company shall be allocated in the same manner as
the Company Stock to which it is attributable is then allocated.

     6.7 Stock Rights, Warrants or Options.

          (a) In the event any rights, warrants, or options are issued on
     Company Stock held in the Trust Fund, the Trustee shall exercise them for
     the acquisition of additional Company Stock as directed by the Committee to
     the extent that cash is then available in the Trust Fund.


                                       42



          (b) Any Company Stock acquired in this fashion shall be treated as
     Company Stock purchased by the Trustee for the net price paid and shall be
     allocated in the same manner as the funds used to purchase the Company
     Stock were or would be allocated under the provisions of the Plan. Thus, if
     the funds used to purchase the stock consisted of unallocated Company
     Contributions, the stock would be allocated under the terms of Section 6.3;
     if the funds used consisted of the unallocated net income of the Trust, the
     stock would be allocated as provided in Section 6.4; and if the funds used
     consisted of funds previously allocated to the Accounts, the stock would be
     allocated in the manner in which the Accounts or subaccounts are debited
     and credited.

          (c) Any rights, warrants, or options on Company Stock which cannot be
     exercised for lack of cash may, as directed by the Committee, be sold by
     the Trustee and the proceeds allocated in accordance with the source of the
     Company Stock with respect to which the rights, warrants, or options were
     issued in accordance with rules of paragraph (b) above.

     6.8 Treatment of Accounts Upon Severance. Upon a Participant's Severance,
pending distribution of the Participant's benefit pursuant to the provisions of
Article VIII, the Participant's Accounts shall continue to be maintained and
accounted for in accordance with all applicable provisions of the Plan,
including but not limited to the allocation of Company Contributions and net
income or loss to which the Accounts are entitled under the applicable
provisions of Sections 6.3 and 6.4 as of any Valuation Date or other date
preceding the distribution of the Participant's entire benefit under the Plan.

     6.9 Cash Dividends.

          (a) All cash dividends paid to the Trustee with respect to Company
     Stock that has been allocated to a Participant's Account as of the
     quarterly date on which the dividend is received by the Trustee shall be
     allocated to the Participant's Account.

          (b) If a Participant (or Beneficiary) has a current right to a
     distribution in Company Stock pursuant to Article VIII and such stock has
     not yet been re-registered in the name of the Participant (or Beneficiary)
     as of the record date of any dividend on such stock, such dividend shall be
     distributed to the Participant (or Beneficiary).

          (c) Notwithstanding the provisions of paragraphs (a) and (b) above,
     the Committee may determine, in its discretion, that cash dividends on such
     shares may be used to purchase additional shares of Company Stock, or in
     whatever other manner it deems appropriate.

     6.10 Miscellaneous Allocation Rules.

          (a) In the event that there is more than one class of Company Stock to
     be allocated to Participants' Accounts, there shall be allocated to the
     Account of each Participant (entitled to share in allocations of Company
     Stock as of any applicable date) the portion of each class of Company Stock
     (to be allocated as of that date) which the


                                       43



     amount to be allocated to the Account of the Participant bears to the total
     amount to be allocated to the Accounts of all Participants entitled to
     share in such allocation.

          (b) Allocations of all assets other than Company Stock shall be made
     on the basis of, and expressed in terms of dollar value. Allocations of
     Company Stock shall be on the basis of the number of shares of Company
     Stock (including fractional shares) and valuations, as of each Valuation
     Date, shall be expressed in terms of number of shares and dollar value.

          (c) The Committee and the Trustee shall establish such additional
     accounting procedures as may be necessary for the purpose of making the
     allocations, valuations, withdrawals, and adjustments to Participants'
     Accounts provided for in this Article VI. From time to time the Committee
     and Trustee may modify such additional accounting procedures for the
     purpose of achieving equitable, nondiscriminatory, and administratively
     feasible allocations among the Accounts of Participants in accordance with
     the general concepts of the Plan and the provisions of this Article VI.

          (d) The Company, the Committee and Trustee do not in any manner or to
     any extent whatsoever warrant, guarantee or represent that the value of a
     Participant's Account shall at any time equal or exceed the amount
     previously contributed thereto.

     6.11 Limitations on After Tax Deposits and Matching Contributions. With
respect to each Plan Year, After Tax Deposits and Matching Contributions under
the Plan for the Plan Year shall not exceed the limitations by or on behalf of
Highly Compensated Participants under Code Section 401(m), as provided in this
Section. In the event that After Tax Deposits and Matching Contributions under
the Plan by or on behalf of Highly Compensated Participants for any Plan Year
exceed the limitations of this Section for any reason, such excess After Tax
Deposits and Matching Contributions and any income or loss allocable thereto
shall be disposed of in accordance with Section 6.12.

          (a) The After Tax Deposits by Participants and Matching Contributions
     on behalf of Participants for a Plan Year shall satisfy the Actual
     Contribution Percentage test set forth in (i) below, or, to the extent not
     precluded by applicable regulations, the alternative Actual Contribution
     Percentage test set forth in (ii) below:

               (i) The Actual Contribution Percentage of Highly Compensated
          Participants for the Plan Year shall not be more than the prior Plan
          Year's Actual Contribution Percentage of Participants who were not
          Highly Compensated Employees for the prior Plan Year multiplied by
          1.25, or

               (ii) The Actual Contribution Percentage of Highly Compensated
          Participants for the Plan Year shall not be more than the prior Plan
          Year's Actual Contribution Percentage of Participants who were not
          Highly Compensated Employees for the prior Plan Year multiplied by
          2.0, provided that the Actual Contribution Percentage of Highly
          Compensated Participants does not exceed the Actual Contribution
          Percentage of Participants who were not Highly Compensated Employees
          for the prior Plan Year by more than two (2) percentage points.


                                       44



               (iii) If one or more Highly Compensated Employees participate in
          both a cash or deferred arrangement and a plan subject to the Actual
          Contribution Percentage test maintained by the Sponsor or an
          Affiliated Company and the sum of the Actual Deferral Percentage and
          Contribution Percentage of those Highly Compensated Employees subject
          to either or both test exceeds the Aggregate Limit, then the
          Contribution Percentages of those Highly Compensated Employees who
          also participate in the cash or deferred arrangement shall be reduced
          (beginning with such Highly Compensated Employee whose Actual
          Contribution Percentage is the highest) so that the limit is not
          exceeded. The amount by which each Highly Compensated Employee's
          Contribution Percentage is reduced shall be treated as an Excess
          Aggregate Contribution. The Actual Deferral Percentage and
          Contribution Percentage of the Highly Compensated Employee are
          determined after any corrections required to meet the Actual Deferral
          Percentage and Actual Contribution Percentage tests and are deemed to
          be the maximum permitted under such tests for the Plan Year.

          (b) For purposes of this Section 6.11 and Section 6.12 the following
     definitions shall apply:

               (i) "Actual Contribution Percentage" shall mean the average of
          the Contribution Percentages, with respect to the group of Highly
          Compensated Participants and the group of all other Participants for a
          Plan Year. The "Contribution Percentage" for any Participant shall
          mean the ratio, calculated separately and to the nearest one-hundredth
          of one percent for each Participant in such group, determined as
          follows:

                    (A) For a Highly Compensated Participant, the ratio of such
               Participant's After Tax Deposits and Matching Contributions for
               the current Plan Year to such Participant's Compensation for the
               current Plan Year; provided, however, that the Contribution
               Percentage of a Highly Compensated Participant with no After Tax
               Deposits and Matching Contributions made on his or her behalf
               shall be zero.

                    (B) For any other Participant, the ratio of such
               Participant's After Tax Deposits and Matching Contributions for
               the preceding Plan Year to such Participant's Compensation for
               the preceding Plan Year; provided, however, that the Contribution
               Percentage of a Participant with no After Tax Deposits and
               Matching Contributions made on his or her behalf shall be zero.

               The Contribution Percentage, in each case, however, shall not
          include Matching Contributions that are forfeited either to correct
          Excess Aggregate Contributions or because the contribution to which
          they relate are excess Before


                                       45



          Tax Deposits, excess After Tax Deposits, or Excess Aggregate
          Contributions. To the extent determined by the Committee and in
          accordance with regulations issued by the Secretary of the Treasury
          under Code Section 401(m)(3), Before Tax Deposits and any qualified
          nonelective contributions, within the meaning of Code Section
          401(m)(4)(C) on behalf of a Participant may also be taken into account
          for purposes of calculating the Contribution Percentage of a
          Participant. However, if any Before Tax Deposits are taken into
          account for purposes of determining Actual Deferral Percentages under
          Section 4.3 then such Before Tax Deposits shall not be taken into
          account under this Section 6.11.

               (ii) "Highly Compensated Participant" shall mean for any Plan
          Year any Participant who is a Highly Compensated Employee. A
          Participant is a Highly Compensated Employee for a particular Plan
          Year if he or she meets the definition of a Highly Compensated
          Employee in effect for that Plan Year. Similarly, a Participant is not
          a Highly Compensated Employee for a particular Plan Year if he or she
          does not meet the definition of a Highly Compensated Employee in
          effect for that Plan Year.

               (iii) "Participant" shall mean any Eligible Employee who
          satisfied the requirements of Section 3.1 during the Plan Year whether
          or not such Eligible Employee has elected to contribute to the Plan
          for such Plan Year.

               (iv) "Compensation" shall mean compensation as described below:

                    (A) Compensation means compensation determined by the
               Company in accordance with the requirements of Code Section
               414(s) and the regulations thereunder.

                    (B) For purposes of this Section 6.11, Compensation may, at
               the Company's election, exclude amounts which are excludable from
               a Participant's gross income under Code Section 125 (pertaining
               to cafeteria plans) and Code Section 402(e)(3) (pertaining to
               401(k) salary reductions). The Company may change its election
               provided such change does not discriminate in favor of Highly
               Compensated Employees.

                    (C) Compensation taken into account for any Plan Year shall
               not exceed $210,000, as adjusted for cost-of-living increases in
               accordance with Code Section 401(a)(17)(B). Any cost-of-living
               adjustments in effect for a calendar year shall apply to the Plan
               Year beginning with or within such calendar year.

               (v) "Aggregate Limit" shall mean the sum of (1) 125 percent of
          the greater of the average Actual Deferral Percentage of all
          Non-Highly Compensated Participants for the Plan Year or the Actual
          Contribution Percentage of Non-Highly Compensated Participants under
          the Plan subject to Code Section 401(m) for the Plan Year beginning
          with or within the Plan Year of the cash or deferred


                                       46



          arrangement and (2) the lesser of 200% or two plus the lesser of such
          average Actual Deferral Percentage or Actual Contribution Percentage.
          "Lesser" is substituted for "greater" in (1) above, and "greater" is
          substituted for "lesser" after "two plus the" in (2) above if it would
          result in a larger Aggregate Limit.

               (vi) "Excess Aggregate Contributions" shall mean, with respect to
          any Plan Year, the excess of:

                    (A) The aggregate After Tax Deposits and Matching
               Contributions taken into account in computing the numerator of
               the Contribution Percentage actually made on behalf of Highly
               Compensated Employees for such Plan year, over

                    (B) The maximum After Tax Deposits and Matching
               Contributions permitted under the Actual Contribution Percentage
               test as determined by reducing such Matching Contributions made
               on behalf of Highly Compensated Employees in order of their
               Contribution Percentages, beginning with the highest of such
               percentages.

               Such determination shall be made after first determining excess
          Before Tax Deposits pursuant to Sections 4.2(a) and 4.3.

          (c) In the event the Plan satisfies the requirements of Code Sections
     401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans
     which include arrangements under Code Section 401(k), then this Section
     6.11 shall be applied by determining the Contribution Percentages of
     Participants as if all such plans were a single plan. Any adjustments to
     the Contribution Percentages of Participants who are not Highly Compensated
     Employees for the prior year shall be made in accordance with Notice 98-1
     and any superseding guidance. Plans may be aggregated in order to satisfy
     Code Section 401(m) only if they have the same Plan Year and use the same
     Actual Contribution Percentage testing method.

          (d) For purposes of this Section 6.11, the Contribution Percentage for
     any Highly Compensated Participants who is eligible to have After Tax
     Deposits or Matching Contributions allocated to his or her account under
     two or more plans maintained by the Sponsor or an Affiliated Company shall
     be determined as if the total of such After Tax Deposits or Matching
     Contributions was made under each plan. If a Highly Compensated Employee
     participates in two or more cash or deferred arrangements that have
     different plan years, all cash or deferred arrangements that have different
     plan years, all cash or deferred arrangements ending with or within the
     same calendar year shall be treated as a single arrangement.
     Notwithstanding the foregoing, certain plans shall be treated as separate
     plans if mandatorily disaggregated pursuant to regulations under Code
     Section 401(m).

          (e) For purposes of the Actual Contribution Percentage test, After Tax
     Deposits shall be considered to have been made in the Plan Year in which
     contributed to


                                       47


     the Trust. Matching Contributions shall be considered made for a Plan Year
     if made no later than the end of the twelve-month period beginning on the
     day after the close of the Plan Year.

          (f) The determination and treatment of the Contribution Percentage of
     any Participant shall satisfy such other requirements as may be prescribed
     by the Secretary of the Treasury.

          (g) The Committee shall keep or cause to have kept such records as are
     necessary to demonstrate that the Plan satisfies the requirements of Code
     Section 401(m) and the regulations thereunder, in accordance with
     regulations prescribed by the Secretary of the Treasury.

     6.12 Provision for Disposition of Excess After Tax Deposits or Matching
Contributions on Behalf of Highly Compensated Participants. After application of
the provisions of Section 4.4 and 4.5, the following provisions shall be
implemented:

          (a) The Committee shall determine, as soon as is reasonably possible
     following the close of each Plan Year, the extent (if any) to which
     contributions by or on behalf of Highly Compensated Participants may cause
     the Plan to exceed the limitations of Section 6.11 for such Plan Year. If,
     pursuant to the determination by the Committee and as required by the
     leveling method described in paragraph (b) below, contributions by or on
     behalf of a Highly Compensated Participant may cause the Plan to exceed
     such limitations, then the Committee shall take the following steps:

               (i) First, any excess After Tax Deposits that were not matched by
          Matching Contributions, together with income or loss allocable to such
          amount (determined in accordance with paragraph (c) below) shall be
          returned to the Highly Compensated Participant.

               (ii) Second, if any excess remains after the provisions of (i)
          above are applied, to the extent necessary to eliminate the excess,
          Matching Contributions with respect to the Highly Compensated
          Participant, any corresponding matched After Tax Deposits, and any
          income or loss allocable thereto, shall either be distributed (if
          non-forfeitable) to the Highly Compensated Participant or forfeited
          (to the extent forfeitable under the Plan) on a pro-rata basis.
          Amounts of excess Matching Contributions forfeited by Highly
          Compensated Participants under this Section 6.12, including any income
          or loss allocable thereto, shall be applied to reduce Matching
          Contributions by the Company or the Affiliated Company that made the
          Matching Contribution on behalf of the Highly Compensated Participant
          for the Plan Year for which the excess contribution was made.

               (iii) If administratively feasible, any amounts distributed
          pursuant to subparagraphs (i) or (ii) above shall be returned within
          two and one-half (2-1/2) months following the close of the Plan Year
          for which such excess After Tax Deposits or Matching Contributions
          were made, but in any event no later than the


                                       48



          end of the first Plan Year following the Plan Year for which the
          excess After Tax Deposits or Matching Contributions were made. After
          Tax Deposits and Matching Contributions for any Plan Year shall be
          made on the basis of the respective portions of such excess After Tax
          Deposits and Matching Contributions attributable to each Highly
          Compensated Participant.

          (b) For purposes of satisfying the Actual Contribution Percentage
     test, the amount of any excess After Tax Deposits or Matching Contributions
     by or on behalf of Highly Compensated Participants for a Plan Year under
     Section 6.11 shall be determined by application of a leveling method under
     which the After Tax Deposits or Matching Contributions of the Highly
     Compensated Participant who has the highest dollar amount of After Tax
     Deposits or Matching Contributions for such Plan Year is reduced to the
     extent required to cause such Highly Compensated Participant's After Tax
     Deposits and Matching Contributions to equal the After Tax Deposits and
     Matching Contributions of the Highly Compensated Participant with the next
     highest After Tax Deposits and Matching Contributions; provided, however,
     if a lesser amount, when added to the total dollar amount already
     distributed under this paragraph (b), equals the total excess After Tax
     Deposits and Matching Contributions that are required to be distributed to
     enable the Plan to satisfy the Actual Contribution Percentage test, the
     lesser amount shall be distributed. This process shall be repeated until
     the Plan satisfies the Actual Contribution Percentage test.

          (c) The amount of income or loss attributable to any excess After Tax
     Deposits or Matching Contributions, as determined under this Section 6.12
     (the "Excess Aggregate Contribution") by a Highly Compensated Participant
     for a Plan Year shall be equal to the sum of the following:

               (i) The income or loss allocable to the Highly Compensated
          Participant's Excess Aggregate Contribution Accounts for the Plan Year
          multiplied by a fraction, the numerator of which is the Excess
          Aggregate Contribution and the denominator of which is the sum of the
          balance of the Highly Compensated Participant's Excess Aggregate
          Contribution Accounts without regard to any income or loss allocable
          to such Accounts during the Plan Year; and

               (ii) The amount of allocable income or loss for the Gap Period
          using the "safe harbor" method set forth in regulations prescribed by
          the Secretary of the Treasury under Code Section 401(m). Under the
          "safe harbor" method, such allocable income or loss is equal to 10% of
          the amount calculated under Section 6.12(c)(i) above, multiplied by
          the number of calendar months from the last day of the Plan Year until
          the date of distribution of the Participant's excess After Tax
          Deposits or Matching Contributions. A distribution on or before the
          15th of the month is treated as made on the last day of the preceding
          month, a distribution after the 15th of the month is treated as made
          on the first day of the next month.


                                       49



          (d) For the purpose of this Section 6.12, the following shall apply:

               (i) "Excess Aggregate Contribution Accounts" shall mean the
          Participant's After Tax Deposits Account and Matching Contributions
          Account.

               (ii) "Gap Period" shall mean the period between last day of the
          Plan Year and the date of distribution of any Excess Aggregate
          Contributions.

          (e) Any excess After Tax Deposits and/or Matching Contributions
     distributed to a Highly Compensated Participant or forfeited by a Highly
     Compensated Participant in accordance with this Section 6.12, shall be
     treated as Annual Additions under Article XIII for the Plan Year for which
     the excess contribution was made.

          (f) Neither the Committee nor the Company shall be liable to any
     Participant (or his or her Beneficiary, if applicable) for any losses
     caused by a mistake in calculating the amount of any Excess Aggregate
     Contributions by or on behalf of a Highly Compensated Participant and the
     income or loss allocable thereto.


                                       50



                                  ARTICLE VII
                            VESTING IN PLAN ACCOUNTS

     7.1 No Vested Rights Except as Herein Provided. No Participant shall have
any vested right or interest to, or any right of payment of, any assets of the
Trust Fund, except as expressly provided in the Plan. Neither the making of any
allocations nor the credit to any Account of a Participant shall vest in any
Participant any right, title, or interest in or to any assets of the Trust Fund.

     7.2 Vesting of Participant Deposits. A Participant shall be fully vested at
all times in the amounts allocated to his or her Before Tax Deposits Account,
After Tax Deposits Account, and Rollover Contributions Account.

     7.3 Vesting of Company Contributions.

          (a) A Participant's interest in his or her Matching Contributions
     Account shall vest in accordance with the following schedule:



Years of Credited Service   Vested Percentage
- -------------------------   -----------------
                         
Less than 3                          0%
3 or more                          100%


          (b) A Participant's interest in his or her Retirement Contributions
     Account shall vest in accordance with the following schedule:



Years of Credited Service   Vested Percentage
- -------------------------   -----------------
                         
Less than 1                          0%
1 but less than 2                   20%
2 but less than 3                   40%
3 but less than 4                   60%
4 but less than 5                   80%
5 or more                          100%


          (c) A Participant shall at all times be 100% vested in all amounts
     transferred from the SmithKline Beckman Corporation Savings and Investment
     Plan to the Plan.


                                       51



          (d) Notwithstanding paragraphs (a) and (b) above, a Participant shall
     become fully vested in his or her Matching Contributions Account and
     Retirement Contributions Account upon the occurrence of any of the
     following events, if such Participant is then still an Employee:

               (i) Attainment of age sixty-two (62);

               (ii) Death;

               (iii) Severance due to a Disability; or

               (iv) Occurrence of a Change in Control pursuant to Section 12.4.


                                       52


                                  ARTICLE VIII
                            PAYMENT OF PLAN BENEFITS

     8.1 Withdrawals During Employment. A Participant may withdraw, once in any
calendar quarter, amounts of at least $500 from his or her Accounts while an
Employee in accordance with the following rules:

          (a) A Participant may, for any reason, withdraw any portion of the
     amount allocated to his or her After Tax Deposits Account (excluding any
     After Tax Deposits recharacterized as such under Section 4.5). A
     Participant who makes a withdrawal of After Tax Deposits (whether Matched
     Deposits or non-Matched Deposits) shall not be permitted to make any After
     Tax or and Before Tax Deposits during the six (6) month period beginning as
     soon as administratively feasible following the date of the withdrawal
     unless the After Tax Deposits can also be withdrawn under paragraph (d)
     below or the withdrawal is comprised solely of After Tax Deposits which are
     not Matched Deposits and which were contributed prior to July 1, 2000.

          (b) A Participant may, for any reason, withdraw any portion of the
     amount allocated to his or her Rollover Contributions Account.

          (c) After withdrawing all After Tax Deposits pursuant to paragraph (a)
     and all amounts allocated to his or her Rollover Contributions Account
     under paragraph (b) above, a Participant with 3 or more years of Credited
     Service may, for any reason, withdraw any portion of the amount allocated
     to his or her Matching Contributions Account that was so allocated 2 or
     more years prior to the date of such a withdrawal.

          (d) On or after the attainment of age 59-1/2, a Participant may
     withdraw any vested portion of the amounts allocated to any of his or her
     Accounts.

          (e) After withdrawing all amounts permitted pursuant to paragraphs
     (a), (b) (c), and (d) above, a Participant may withdraw amounts from his or
     her Before Tax Deposits Account (excluding any earnings attributable to
     such Account after December 31, 1988), the vested portion of his or her
     Matching Contributions Account, and any remaining amount in his or her
     After Tax Deposits (amounts which were recharacterized as After Tax
     Deposits under Section 4.5 but excluding any earnings attributable to
     recharacterized After Tax Deposits after December 31, 1988) but excluding
     amounts from his or her Retirement Contributions Account upon incurring a
     hardship as defined in Section 8.5.

          (f) Except as provided in paragraphs (a) through (e) above,
     Participants may not receive a distribution of their benefits under the
     Plan prior to termination of employment.

          (g) Except as provided in Section 8.5(c), all withdrawals shall be
     made in cash, except to the extent any of the vested portion of a
     Participant's Account to be


                                       53



     withdrawn is invested in the Company Stock Fund or in the stock of Advanced
     Medical Optics, Inc., then such withdrawal may be made in Company Stock or
     in the stock of Advanced Medical Optics, Inc. at the election of the
     Participant to the extent so invested.

          (h) Except as provided in Section 8.5(c), all withdrawals shall be
     made to Participants as soon as reasonably practicable following the
     Valuation Date in the month for which a properly completed withdrawal
     request is deemed perfected. All withdrawals shall be based on the Account
     balances of a Participant as of such Valuation Date. If a properly
     completed withdrawal request is received by the Company during any month
     and on or before the fifteenth day of such month, the withdrawal request
     shall be deemed perfected in such month, otherwise such withdrawal request
     shall be deemed perfected in the immediately following month.

          (i) Notwithstanding anything to the contrary in this Section 8.1 or
     Section 4.1, the additional withdrawal restrictions stated in Section
     5.6(h) shall apply to all Participants who are Insiders, as that term is
     defined Section 5.6(h).

     8.2 Distributions Upon Termination of Employment or Disability.

          (a) Subject to the provisions of Section 8.6, if a Participant incurs
     a Severance for any reason (including Disability) other than death, all or
     a portion of such Participant's entire vested portion of his or her
     Accounts under the Plan shall be (i) distributed directly to such
     Participant or (ii) at the election of the Participant, distributed as an
     Eligible Rollover Distribution and paid directly by the Trustee to the
     trustee of an Eligible Retirement Plan.

          (b) Any distribution made pursuant to paragraph (a) shall be paid no
     more than once in any calendar quarter in amounts of at least $500 (or the
     Participant's entire vested portion of his or her Accounts under the Plan
     if lesser) and shall be made in cash except to the extent any of the vested
     portion of such Participant's Accounts is invested in the Company Stock
     Fund or in the stock of Advanced Medical Optics, Inc. then, to the extent
     so invested, such distribution may be made in Company Stock or in the stock
     of Advanced Medical Optics, Inc. at the election of the Participant.

          (c) Notwithstanding the provisions contained in the foregoing
     paragraphs of this Section 8.2 or Section 8.1, any provision which
     restricts or would deny a Participant through the withholding of consent or
     the exercise of discretion by some person or persons other than the
     Participant (and where relevant, other than the Participant's spouse) of an
     alternative form of benefit, in violation of Code Section 411(d)(6) and the
     regulation promulgated thereunder, is hereby amended by the deletion of the
     consent and/or discretion requirement.

          (d) Notwithstanding the provisions contained in the foregoing
     paragraphs of this Section 8.2 or Section 8.1, upon receipt of a Qualified
     Domestic Relations Order, the amount payable to an Alternate Payee (as such
     terms are described in Section 15.2) may be distributed to the Alternate
     Payee as soon as administratively feasible.


                                       54



     8.3 Distribution Upon Death of Participant. Subject to the provisions of
Section 8.6, in the event of the death of a Participant, the entire vested
portion of the Participant's Accounts shall be distributed to the surviving
spouse as Beneficiary (if still alive) unless the Participant designated another
Beneficiary pursuant to Section 8.4. If the Beneficiary is the surviving spouse
of the Participant, he or she may elect to have an Eligible Rollover
Distribution paid directly by the Trustee to the trustee of an Eligible
Retirement Plan. Distributions to the Beneficiary pursuant to this Section 8.3
shall be in the same form as specified in Section 8.2(b) above, as elected by
the Beneficiary. All such distributions shall be made as soon as practicable
after the death of the Participant. A Beneficiary may not elect to defer such a
distribution.

     8.4 Designation of Beneficiary. At any time, and from time to time, each
Participant shall have the unrestricted right to designate the Beneficiary or
Beneficiaries to receive the entire vested portion of his or her Accounts upon
his or her death and to revoke any such designation subject to paragraphs (a)
and (b) below. Each such designation shall be evidenced by a written instrument
signed by the Participant and filed with the Committee.

          (a) If the Participant is married and designates a Beneficiary other
     than his or her spouse, said designation shall not be honored by the
     Committee unless accompanied by the written consent of said spouse to said
     designation. Such consent (i) must designate a Beneficiary which may not be
     changed without the consent of the spouse (or the consent of the spouse
     expressly permits designation by the Participant without any further
     consent by the spouse), (ii) must acknowledge the effect of the
     designation, and (iii) must be witnessed by a Plan representative or a
     notary public. No consent of such spouse shall be necessary if it is
     established to the satisfaction of a Plan representative that the consent
     required under this paragraph (b) cannot or need not be obtained because
     (i) there is no spouse, (ii) the spouse cannot be located, or (iii) there
     exist such other circumstances which, pursuant to regulations under Code
     Section 417, permit a distribution to another Beneficiary. Any consent of a
     spouse obtained pursuant to this paragraph (b) or any determination that
     the consent of the spouse cannot (or need not) be obtained, shall be
     effective only with respect to that spouse. If a Participant becomes
     married following his or her designation of a Beneficiary other than his or
     her spouse, such designation shall be ineffective unless the spousal
     consent requirements of this paragraph are satisfied with respect to such
     spouse (subject, however, to the provisions of Article XV regarding
     Qualified Domestic Relations Orders).

          (b) If the Participant is married and does not designate a
     Beneficiary, the Participant's spouse shall be his or her Beneficiary for
     purposes of this Section. If the deceased Participant is not married and
     shall have failed to designate a Beneficiary, or if the Committee shall be
     unable to locate the designated Beneficiary after reasonable efforts have
     been made, or if such Beneficiary shall be deceased, distribution of the
     Participant's death benefit shall be made by payment of the deceased
     Participant's entire interest in the Trust to his or her personal
     representative in a single lump-sum payment. In the event the deceased
     Participant is not a resident of California at the date of his or her
     death, the Committee, in its discretion, may require the establishment of
     ancillary administration in California. If the Committee cannot locate a
     qualified personal


                                       55



     representative of the deceased Participant, or if administration of the
     deceased Participant's estate is not otherwise required, the Committee, in
     its discretion, may pay the deceased Participant's interest in the Trust to
     his or her heirs at law (determined in accordance with the laws of the
     State of California as they existed at the date of the Participant's
     death).

     8.5 Hardship Withdrawal Rules. A hardship withdrawal shall be made to a
Participant only if the Committee (or its representative) determines that the
Participant has an immediate and heavy financial need and that a withdrawal from
the Plan is necessary to satisfy such need as set forth in paragraphs (a) and
(b) below.

          (a) A hardship withdrawal shall be authorized by the Committee only if
     the Committee, based upon the Participant's representation and such other
     facts as are known to the Committee, determines that the requested
     withdrawal is on the account of:

               (i) Medical expenses described in Code Section 213(d) incurred by
          the Participant, the Participant's spouse, or any dependents of the
          Participant (as defined in Code Section 152);

               (ii) The purchase (excluding mortgage payments) of a principal
          residence for the Participant only;

               (iii) The payment of tuition and related educational fees for the
          next twelve (12) months of post-secondary education for the
          Participant, his or her spouse, children, or dependents;

               (iv) The need to prevent the eviction of the Participant from his
          or her principal residence or foreclosure on the mortgage of the
          Participant's principal residence; and

               (v) Any other situation deemed as immediate and heavy financial
          needs by the Internal Revenue Service through the publication of
          revenue rulings, notices, and other documents of general
          applicability.

          (b) A hardship withdrawal shall be authorized by the Committee only if
     the Committee, based upon the Participant's representation and such other
     facts as are known to the Committee, determines that all of the following
     conditions are or will be satisfied:

               (i) The amount of the withdrawal is not in excess of the amount
          required to relieve the financial need (including amounts necessary to
          pay any federal, state, or local income taxes or penalties reasonably
          anticipated to result from the withdrawal).

               (ii) The Participant has obtained all distributions, other than
          hardship withdrawals, and all nontaxable (at the time of the loan)
          loans from the Plan or any other plan maintained by the Company.


                                       56



               (iii) The Participant shall not be permitted to make Before Tax
          Deposits or After Tax Deposits during the 6-month period beginning as
          soon as administratively feasible following the date of the hardship
          withdrawal from the Plan or any other plan maintained by the Company.

               (iv) The Participant shall not be permitted to make Before Tax
          Deposits during the Participant's taxable year immediately following
          the taxable year of the hardship withdrawal that is in excess of the
          applicable limit under Code Section 402(g) for such immediately
          following taxable year less the amount of such Participant's Before
          Tax Deposits for the taxable year in which such Participant made the
          hardship withdrawal.

          (c) Notwithstanding the provisions of Section 8.1(g), all hardship
     withdrawals shall be made in cash regardless of the fund from which such
     withdrawal is made. The Committee may, at its discretion, establish written
     procedures whereby Participants may receive an estimated prepayment of a
     hardship withdrawal based on the last available valuation of such
     Participant's Accounts with a reconciling adjustment made to such
     Participant's Accounts after current valuation data is available.

     8.6 Distribution Rules. Notwithstanding any other provisions of this
Article VIII of the Plan regarding distributions of Participant's Accounts, the
following additional rules shall apply to all such distributions.

          (a) In no event shall any benefits under the Plan, including benefits
     upon retirement, Severance, or Disability, be paid (or commence to be paid)
     to a Participant prior to the "Consent Date" (as defined herein) unless the
     Participant consents in writing to the payment (or commencement of payment)
     of such benefits prior to said Consent Date. As used herein, the term
     "Consent Date" shall mean the later of (i) the Participant's 62nd birthday,
     or (ii) the Participant's Normal Retirement Age. Notwithstanding the
     foregoing, the provisions of this paragraph shall not apply (i) following
     the Participant's death, or (ii) to the extent paragraph (b) below applies.

          (b) Notwithstanding anything to the contrary in the Plan, if the total
     amount of the vested portion of a Participant's Accounts does not exceed
     $1,000 ($5,000, prior to March 28, 2005), the vested portion of such
     Participant's Accounts shall be distributed, in a single lump-sum payment,
     as soon as practicable following the Participant's Severance Date. For
     purposes of this paragraph (b), Rollover Contributions and the earnings
     thereon, shall be included in determining the value of the vested portion
     of a Participant's Accounts for distributions made after December 31, 2001
     with respect to Participants who incur a Severance after December 31, 2001.

          (c) Unless a Participant elects otherwise pursuant to paragraph (a)
     above, distributions of the vested portion of a Participant's Accounts
     shall commence no later than the 60th day after the close of the Plan Year
     in which the latest of the following events occurs: (i) the Participant's
     Normal Retirement Age; (ii) the tenth anniversary of


                                       57



     the year in which the Participant commenced participation in the Plan; or
     (iii) the termination of the Participant's employment with the Company.

          (d) Minimum Required Distributions during Participant's Lifetime.
     Notwithstanding anything to the contrary in the Plan unless the entire
     vested portion of a Participant's Accounts is distributed in a single sum
     on or before the Required Beginning Date, distributions shall be made in
     accordance with this paragraph (d) as of the first Distribution Calendar
     Year and the entire vested portion of a Participant's Accounts shall be
     distributed, or begin to be distributed, to the Participant no later than
     the Participant's Required Beginning Date as set forth below:

               (i) Amount of Minimum Required Distribution for each Distribution
          Calendar Year. During the Participant's lifetime, the minimum amount
          that shall be distributed for each Distribution Calendar Year is the
          lesser of:

                    (A) the quotient obtained by dividing the Participant's
               Account Balance by the distribution period in the Uniform
               Lifetime Table set forth in Regulation Section 1.401(a)(9)-9,
               using the Participant's age as of the Participant's birthday in
               the Distribution Calendar Year; or

                    (B) if the Participant's sole Designated Beneficiary for the
               Distribution Calendar Year is the Participant's spouse, the
               quotient obtained by dividing the Participant's Account Balance
               by the number in the Joint and Last Survivor Table set forth in
               Regulation Section 1.401(a)(9)-9, using the Participant's and
               spouse's attained ages as of the Participant's and spouse's
               birthdays in the Distribution Calendar Year.

               (ii) Lifetime Minimum Required Distributions continue through
          Year of Participant's Death. Minimum required distributions shall be
          determined under this paragraph (d) beginning with the first
          Distribution Calendar Year and up to and including the Distribution
          Calendar Year that includes the Participant's date of death.

               (iii) Minimum Required Distributions for the 2002 Distribution
          Calendar Year. Notwithstanding the foregoing, with respect to
          distributions made for the 2002 Distribution Calendar Year, the Plan
          will apply the minimum distribution requirements of Code Section
          401(a)(9) in accordance with the regulations under Code Section
          401(a)(9) that were proposed on January 17, 2001, notwithstanding any
          provision of the Plan to the contrary.

               (iv) Treasury Regulations Incorporated by Reference. All
          distributions required under this paragraph shall be determined and
          made in accordance with the Treasury Regulations under Code Section
          401(a)(9).


                                       58



          (e) Minimum Required Distributions following Participant's Death.
     Notwithstanding anything to the contrary in the Plan if a Participant dies
     before the entire vested portion of his or her Accounts is distributed, the
     following rules shall apply:

               (i) Required Distribution Dates. If a Participant dies before the
          entire vested portion of his or her Accounts is distributed,
          distributions shall be made, or begin to be made, no later than as
          follows:

                    (A) If the Participant's surviving spouse is the
               Participant's sole Designated Beneficiary, then, except as
               provided in subparagraph (iv) below, distributions to the
               surviving spouse shall begin by December 31 of the calendar year
               immediately following the calendar year in which the Participant
               died, or by December 31 of the calendar year in which the
               Participant would have attained age 70-1/2, if later.

                    (B) If the Participant's surviving spouse is not the
               Participant's sole Designated Beneficiary, then, except as
               provided in subparagraph (iv) below, distributions to the
               Designated Beneficiary shall begin by December 31 of the calendar
               year immediately following the calendar year in which the
               Participant died.

                    (C) If there is no Designated Beneficiary as of September 30
               of the year following the year of the Participant's death, the
               Participant's entire interest shall be distributed by December 31
               of the calendar year containing the fifth anniversary of the
               Participant's death.

                    (D) If the Participant's surviving spouse is the
               Participant's sole Designated Beneficiary and the surviving
               spouse dies after the Participant but before distributions to the
               surviving spouse begin, this subparagraph (i), other than clause
               (A), shall apply as if the surviving spouse were the Participant.

               For purposes of this subparagraph (i) and subparagraphs (ii) and
          (iii) below, unless clause (D) above applies, distributions are
          considered to begin on the Participant's Required Beginning Date. If
          clause (D) applies, distributions are considered to begin on the date
          distributions are required to begin to the surviving spouse under
          clause (A).


                                       59



               (ii) Forms of Distribution if Participant Dies On or After
          Distributions Begin. Unless the entire vested portion of a
          Participant's Accounts is distributed in a single sum on or before the
          dates set forth in subparagraph (i) above, the entire vested portion
          of a Participant's Accounts shall be distributed, or begin to be
          distributed, as set forth below:

                    (A) Participant Survived by Designated Beneficiary. If the
               Participant dies on or after the date distributions begin and
               there is a Designated Beneficiary, the minimum amount that shall
               be distributed for each Distribution Calendar Year after the year
               of the Participant's death is the quotient obtained by dividing
               the Participant's Account Balance by the longer of the remaining
               life expectancy of the Participant or the remaining life
               expectancy of the Participant's Designated Beneficiary,
               determined as follows:

                         (1) The Participant's remaining life expectancy is
                    calculated using the age of the Participant in the year of
                    death, reduced by one for each subsequent year.

                         (2) If the Participant's surviving spouse is the
                    Participant's sole Designated Beneficiary, the remaining
                    life expectancy of the surviving spouse is calculated for
                    each Distribution Calendar Year after the year of the
                    Participant's death using the surviving spouse's age as of
                    the spouse's birthday in that year. For Distribution
                    Calendar Years after the year of the surviving spouse's
                    death, the remaining life expectancy of the surviving spouse
                    is calculated using the age of the surviving spouse as of
                    the spouse's birthday in the calendar year of the spouse's
                    death, reduced by one for each subsequent calendar year.

                         (3) If the Participant's surviving spouse is not the
                    Participant's sole Designated Beneficiary, the Designated
                    Beneficiary's remaining life expectancy is calculated using
                    the age of the beneficiary in the year following the year of
                    the Participant's death, reduced by one for each subsequent
                    year.

                    (B) No Designated Beneficiary. If the Participant dies on or
               after the date distributions begin and there is no Designated
               Beneficiary as of September 30 of the year after the year of the
               Participant's death, the minimum amount that shall be distributed
               for each Distribution Calendar Year after the year of the
               Participant's death is the quotient obtained by dividing the
               Participant's Account Balance by the Participant's remaining life
               expectancy calculated using the age of the Participant in the
               year of death, reduced by one for each subsequent year.


                                       60



               (iii) Forms of Distribution if Participant Dies Before
          Distributions Begin. Unless the entire vested portion of a
          Participant's Accounts is distributed in a single sum on or before the
          dates set forth in subparagraph (i) above, the entire vested portion
          of a Participant's Accounts shall be distributed, or begin to be
          distributed, as set forth below:

                    (A) Participant Survived by Designated Beneficiary. Except
               as provided in subparagraph (iv) below, if the Participant dies
               before the date distributions begin and there is a Designated
               Beneficiary, the minimum amount that shall be distributed for
               each Distribution Calendar Year after the year of the
               Participant's death is the quotient obtained by dividing the
               Participant's Account Balance by the remaining life expectancy of
               the Participant's Designated Beneficiary, determined as provided
               in subparagraph (ii)(A) above.

                    (B) No Designated Beneficiary. If the Participant dies
               before the date distributions begin and there is no Designated
               Beneficiary as of September 30 of the year following the year of
               the Participant's death, distribution of the Participant's entire
               interest shall be completed by December 31 of the calendar year
               containing the fifth anniversary of the Participant's death.

                    (C) Death of Surviving Spouse Before Distributions to
               Surviving Spouse Are Required to Begin. If the Participant dies
               before the date distributions begin, the Participant's surviving
               spouse is the Participant's sole Designated Beneficiary, and the
               surviving spouse dies before distributions are required to begin
               to the surviving spouse under subparagraph (i)(A) above, this
               subparagraph (iii) shall apply as if the surviving spouse were
               the Participant.

               (iv) Election to Apply 5-Year Rule to Distributions to Designated
          Beneficiaries. If the Participant dies before the entire vested
          portion of his or her Accounts is distributed and there is a
          Designated Beneficiary, distribution to the Designated Beneficiary is
          not required to begin by the date specified in subparagraph (i) if the
          Participant or Designated Beneficiary elects that the entire vested
          portion of the Participant's Accounts be distributed to the Designated
          Beneficiary by December 31 of the calendar year containing the fifth
          anniversary of the Participant's death. If the Participant's surviving
          spouse is the Participant's sole Designated Beneficiary and the
          surviving spouse dies after the Participant but before distributions
          to either the Participant or the surviving spouse begin, an election
          under this subparagraph shall apply as if the surviving spouse were
          the Participant. The election must be made no later than the earlier
          of September 30 of the calendar year in which distribution would be
          required to begin under subparagraph (i), or by September 30 of the
          calendar year which contains the fifth anniversary of the
          Participant's (or, if applicable, surviving spouse's) death. If
          neither the Participant nor Designated Beneficiary makes an election
          under this subparagraph, distributions shall be made in accordance
          with subparagraphs (i) and (iii).

               (v) Election to Allow Designated Beneficiary Receiving
          Distributions under 5-Year Rule to Elect Life Expectancy
          Distributions. A Designated


                                       61



          Beneficiary who is receiving payments under the 5-year rule described
          in subparagraph (iv) above, may make a new election to receive
          payments under the life expectancy rule until December 31, 2003,
          provided that all amounts that would have been required to be
          distributed under the life expectancy rule for all Distribution
          Calendar Years before 2004 are distributed by the earlier of December
          31, 2003 or the end of the 5-year period.

               (vi) Minimum Required Distributions for the 2002 Distribution
          Calendar Year. Notwithstanding the foregoing, with respect to
          distributions made for the 2002 Distribution Calendar Year, the Plan
          shall apply the minimum distribution requirements of Code Section
          401(a)(9) in accordance with the regulations under Code Section
          401(a)(9) that were proposed on January 17, 2001, notwithstanding any
          provision of the Plan to the contrary.

               (vii) Treasury Regulations Incorporated by Reference. All
          distributions required under this paragraph shall be determined and
          made in accordance with the Treasury Regulations under Code Section
          401(a)(9).

          (f) Definitions for Minimum Required Distribution Rules. For purposes
     of paragraphs (d) and (e) above, the following definitions shall apply:

               (i) "Account Balance" shall mean the account balance of a
          Participant's Account as of the last valuation date in the calendar
          year immediately preceding the Distribution Calendar Year (valuation
          calendar year) increased by the amount of any contributions made and
          allocated or forfeitures allocated to a Participant's Accounts as of
          dates in the valuation calendar year after the valuation date and
          decreased by distributions made in the valuation calendar year after
          the valuation date. The Account Balance for the valuation calendar
          year includes any amounts rolled over or transferred to the plan
          either in the valuation calendar year or in the Distribution Calendar
          Year if distributed or transferred in the valuation calendar year.

               (ii) "Designated Beneficiary" shall mean the individual who is
          designated as the Beneficiary under Section 8.4 and is the Designated
          Beneficiary under Code Section 401(a)(9) and Regulation Section
          1.401(a)(9)-1, Q&A-4.

               (iii) "Distribution Calendar Year" shall mean a calendar year for
          which a minimum distribution is required. For distributions beginning
          before the Participant's death, the first Distribution Calendar Year
          is the calendar year immediately preceding the calendar year which
          contains the Participant's Required Beginning Date. For distributions
          beginning after the Participant's death, the first Distribution
          Calendar Year is the calendar year in which distributions are required
          to begin under paragraph (e). The minimum required distribution for
          the Participant's first Distribution Calendar Year shall be made on or
          before the Participant's Required Beginning Date. The minimum required
          distribution for other Distribution Calendar Years, including the
          minimum


                                       62



          required distribution for the Distribution Calendar Year in which the
          Participant's Required Beginning Date occurs, shall be made on or
          before December 31 of that Distribution Calendar Year.

               (iv) "Life expectancy" shall mean as computed by use of the
          Single Life Table in Regulation Section 1.401(a)(9)-9.

               (v) "Required Beginning Date" shall mean the April 1 of the
          calendar year immediately following the later of the calendar year in
          which the Participant attains age 70-1/2 or incurs a Severance;
          provided, however, if such Participant is a Five Percent Owner (as
          defined in Code Section 416(i) and applicable regulations) with
          respect to the Plan Year ending in the calendar year in which such
          Participant attains age 70-1/2, the Required Beginning Date shall be
          April 1 of the calendar year immediately following the year in which
          such Participant attains age 70-1/2.

          (g) If it is not administratively practical to calculate and commence
     payments by the latest date specified in the rules of paragraphs (b), (c),
     (d) and (e) above because the amount of the Participant's benefit cannot be
     calculated, or because the Committee is unable to locate the Participant
     (or eligible Beneficiary) after making reasonable efforts to do so, the
     payment shall be made as soon as is administratively possible (but not more
     than 60 days) after the amount of the benefit can be ascertained or the
     Participant (or Beneficiary) can be located.

     8.7 Forfeitures. The non-vested portion of a Participant's Accounts shall
be forfeited in accordance with the following rules:

          (a) In the event a Participant who incurs a Severance receives a
     distribution of the entire vested portion of his or her Accounts when he or
     she is not fully vested in such Accounts, the non-vested portion of the
     Participant's Accounts shall be forfeited as of the Participant's
     distribution date. A Participant who incurs a Severance when no portion of
     his or her Accounts are vested shall be deemed to have received a
     distribution pursuant to this paragraph (a) as of his or her Severance Date
     and his or her Accounts shall be forfeited as of the Participant's
     Severance Date. If the Participant is rehired by the Company prior to the
     date he or she incurs five consecutive Breaks in Service, the amounts
     forfeited shall be reinstated to the Participant's Accounts as of the
     Participant's Reemployment Commencement Date (without regard to any
     interest or investment earnings on such amount).

          (b) In the event a Participant who incurs a Severance does not receive
     a distribution of the entire vested portion of his or her Accounts when he
     or she is not fully vested in such Accounts, the Participant's Accounts
     shall be held by the Trustee as provided in Section 6.8 for 90 days at
     which time, the nonvested portion of the Participant's Accounts shall be
     forfeited as of the last day of the month in which the 90-day period ends.
     If the Participant is rehired by the Company prior to the date he or she
     incurs five consecutive Breaks in Service, the amount so forfeited plus an
     amount


                                       63



     equal to the rate of return that the amount forfeited would have received
     but for forfeiture pursuant to this paragraph (b) shall be reinstated to
     the Participant's Accounts as of the Participant's Reemployment
     Commencement Date. The Company shall be obligated to contribute to the
     Trust Fund any amounts necessary after application of Section 6.3 to
     reinstate a Participant's Accounts if reinstatement is required under the
     provisions of this paragraph.

          (c) At any relevant time after application of paragraphs (a) and (b)
     above, a Participant's vested portion of his or her Accounts shall be equal
     to an amount ("X") determined by the following formula:

                               X = P*(AB + D) - D

     For the purposes of applying the formula:

          P  = the vested percentage at any relevant time determined pursuant to
               Section 7.2

          AB = the Account balance at the relevant time

          D  = the total amount of any distributions from the Accounts since
               such Severance

          (d) Forfeitures shall be allocated in the manner provided in Section
     6.3 at such times as determined by the Committee and to the extent
     available shall be used to reduce contributions made by the Company
     pursuant to Sections 5.3 and 5.4.

     8.8 Valuation of Accounts Upon Distribution. For the purpose of any
distribution of Accounts under this Article VIII, the amount of such
distribution shall be based on the value of a Participant's Accounts as of the
Valuation Date in the month in which the application for such distribution is
deemed perfected. If a properly completed distribution application is received
by the Committee during any month and on or before the fifteenth day of such
month, the distribution application shall be deemed perfected in such month,
otherwise such distribution application shall be deemed perfected in the
immediately following month.

     8.9 Lapsed Benefits.

          (a) In the event that a Participant's Accounts is payable under the
     Plan and after reasonable efforts the Participant cannot be located for the
     purpose of paying his or her Accounts during a period of three consecutive
     years, the Participant shall be presumed dead and his or her Accounts
     shall, upon the expiration of that three year period, be paid to the
     Participant's Beneficiary. If the Participant's Beneficiary cannot be
     located for the purpose of paying the Participant's Accounts for the
     following two years, then the Participant's Accounts shall, upon expiration
     of such two-year period, be forfeited and reallocated to the Accounts of
     other Participants in accordance with Section 6.3.


                                       64



          (b) If a Participant dies prior to receiving a distribution of the
     entire vested portion of his or her Accounts (other than a Participant
     presumed to have died as provided above) and if after reasonable efforts
     the Beneficiary of the Participant cannot be located for the purpose of
     paying the Participant's Accounts during a period of five consecutive
     years, the benefit shall, upon expiration of such five-year period, be
     forfeited and reallocated to the Accounts of the other Participants in
     accordance with Section 6.3.

          (c) For purposes of this Section, the term "Beneficiary" shall include
     any person entitled under Section 8.4 to receive the vested interest of a
     deceased Participant or deceased designated Beneficiary. It is the
     intention of this Section that during the relevant waiting period (two
     years or five years) the vested portion of a Participant's Accounts shall
     be distributed to a Beneficiary in a lower priority category under Section
     8.4 if no Beneficiary in a higher priority category can be located by the
     Committee after reasonable efforts have been made.

          (d) Notwithstanding the foregoing rules, if after such a forfeiture
     the Participant or a Beneficiary claims the forfeited Accounts, the amount
     forfeited shall be reinstated (without regard to any interest or investment
     earnings on such amount) and paid to the Participant or Beneficiary as soon
     as practical following the production of reasonable proof of the identity
     of the Participant or Beneficiary and his or her entitlement to the amounts
     forfeited (determined pursuant to the Plan's normal claim procedures under
     Section 9.10).

          (e) The Committee shall direct the Trustee with respect to the
     procedures to be followed concerning a missing Participant (or
     Beneficiary), and the Company shall be obligated to contribute to the Trust
     Fund any amounts necessary after the application of Section 6.3 to pay any
     reinstated benefit after it has been forfeited pursuant to the provisions
     of this Section.

     8.10 Persons Under Legal Disability.

          (a) If any payee under the Plan is a minor or if the Committee
     reasonably believes that any payee is legally incapable of giving a valid
     receipt and discharge for any payment due him/her, the Committee may have
     the payment, or any part thereof, made to the person (or persons or
     institution) whom it reasonably believes is caring for or supporting the
     payee, unless it has received due notice of claim therefor from a duly
     appointed guardian or committee of the payee.

          (b) Any such payment shall be a payment from the Accounts of the payee
     and shall, to the extent thereof, be a complete discharge of any liability
     under the Plan to the payee.

     8.11 Additional Documents.

          (a) The Committee or the Company may require satisfactory proof of any
     matter under the Plan from or with respect to any Employee, Participant, or
     Beneficiary,


                                       65



     and no person shall be entitled to receive any benefits under the Plan
     until the required proof shall be furnished.

          (b) The Committee or Trustee, or both, may require the execution and
     delivery of such documents, papers and receipts as the Committee or Trustee
     may determine necessary or appropriate in order to establish the fact of
     death of the deceased Participant and of the right and identity of any
     Beneficiary or other person or persons claiming any benefits under this
     Article VIII.

          (c) The Committee or the Trustee, or both, may, as a condition
     precedent to the payment of death benefits hereunder, require an
     inheritance tax release and/or such security as the Committee or Trustee,
     or both, may deem appropriate as protection against possible liability for
     State or Federal death taxes attributable to any death benefits.

     8.12 Trustee-to-Trustee Transfers. In the case of any Participant or
Participants who have terminated employment with the Company and all Affiliated
Companies and subsequently become employed by an unrelated successor employer,
the Committee, shall at the request of such Participant or Participants, direct
the Trustee to transfer the assets in the Accounts of such Participant or
Participants directly to the trustee of any retirement plan maintained by such
successor employer or employers in lieu of any distribution described in the
preceding provisions of this Article VIII but only if (i) the retirement plan
maintained by such successor employer is determined to the satisfaction of the
Committee to be qualified under Code Section 401, (ii) the sponsor and trustee
of such plan consent to the transfer, and (iii) such transfer satisfies the
conditions of Section 12.2 hereof.

     8.13 Loans to Participants. A Participant may borrow from his or her
Accounts except from his or her Retirement Contributions Account while an
Employee in accordance with the following rules:

          (a) Subject to minimum and maximum loan requirements, a Participant
     may borrow up to 50% of his or her After Tax Deposits Account, Before Tax
     Deposits Account, Rollover Contributions Account, and the vested portion of
     his or her Matching Contributions Account. Only one loan may be outstanding
     to a Participant any time. The minimum loan amount shall be $1,000 and the
     maximum loan amount shall be $50,000. The $50,000 maximum loan amount shall
     be reduced by the excess, if any, of the highest outstanding balance of
     loans from the Plan to the Participant during the one-year period ending on
     the day before the loan is made over the outstanding balance of loans on
     the date the loan is made.

          (b) A loan to a Participant shall be made solely from his or her
     Account(s) and shall be considered an investment directed by the
     Participant. Loan amounts shall be funded from the Participant's Accounts
     as determined under procedures established by the Committee; provided,
     however, that principal repayments shall be credited to the Participant's
     Accounts in the inverse of the order used to fund the loan and interest


                                       66



     payments shall be credited to the Participant's Accounts in direct
     proportion to the principal repayments.

          (c) A loan to a Participant shall bear an interest rate equal to the
     prime rate reported in the Wall Street Journal on first business day of the
     month in which the loan is granted (the last business day of the previous
     month for loans made prior to July 1, 2000) plus one percent (1%) and shall
     remain fixed throughout the term of the loan. Notwithstanding the preceding
     sentence, if the Committee determines that such rate is not reasonable or
     otherwise not in accordance with applicable requirements under the Code or
     ERISA, the Committee shall set an alternate interest rate at the time that
     the loan is taken.

          (d) A loan to a Participant shall have a definite maturity date.
     Loans, other than loans made for the purpose of acquiring the principal
     residence of the Participant, shall be made for a period not to exceed five
     (5) years. Loans made for the purpose of acquiring the principal residence
     of the Participant shall be made for a period not to exceed fifteen (15)
     years.

          (e) A loan to a Participant shall have a definite repayment schedule
     and shall be amortized on a substantially level basis with repayments
     occurring not less frequently than quarterly. Notwithstanding the
     foregoing, the loan repayments shall be suspended during an unpaid Leave of
     Absence not to exceed one year at which time loan repayments shall resume.
     In the case of a Leave of Absence due to qualified military service, loan
     repayments shall be suspended as permitted under Code Section 414(u)(4).

          (f) A loan to a Participant shall be secured by the vested portion of
     the Participant's Account(s). No more than 50% of the Participant's vested
     Account(s) as determined on the date the loan is issued shall be considered
     by the Plan as security for a loan. A Participant who borrows from the Plan
     hereby agrees that, unless expressly provided otherwise in loan documents,
     any such loan is automatically secured by 50% of his or her vested
     Account(s).

          (g) A loan to a Participant shall be evidenced by a promissory note
     and/or such other documentation as required by the Committee.

          (h) A loan to a Participant shall be treated as a distribution unless
     the entire principal amount and any interest accrued thereon is repaid
     within ninety (90) days after the occurrence of a Participant's Severance.
     Absent repayment by the Participant, the Committee shall instruct the
     Trustee to distribute the note to the Participant as part of his or her
     distribution and the Participant's vested Account(s) shall be reduced to
     the extent of such distribution.


                                       67



          (i) The Committee shall establish the participant loan program and
     have the duty to manage and administer the participant loan program in
     accordance with the terms and provisions of this Section. The Committee
     shall have, but not by way of limitation, the following discretionary
     powers and authority:

               (i) To determine the manner in which loan repayments shall occur
          whether it be through automatic payroll deductions or otherwise.

               (ii) To determine the amount of loan repayments following
          suspension due to an unpaid Leave of Absence subject to the
          requirement that the loan must be repaid by the latest date permitted
          under paragraph (d).

               (iii) To establish any fees, including but not limited to
          application fees and maintenance fees, and the manner in which such
          fees are collected from the Participant.

               (iv) To consider only those factors which would be considered in
          a normal commercial setting by persons in the business of making
          similar types of loans in establishing the participant loan program.
          Such factors may include the applicant's credit worthiness and
          financial need, but may not include any factor which would
          discriminate against Participants who are not Highly Compensated
          Employees. Loans shall be made available to all Participants without
          regard to a Participant's race, color, religion, sex, age or national
          origin and shall not be made available to Participants who are Highly
          Compensated Employees in an amount greater than the amount made
          available to Participants who are not Highly Compensated Employees.


                                       68



                                   ARTICLE IX
                          OPERATION AND ADMINISTRATION

     9.1 Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA; provided that solely for purposes of Section 5.9
hereof, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts and solely for purposes of
Section 5.10, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts on matters as to which they
are entitled to provide voting directions.

     9.2 Appointment of Investment Subcommittee. There is hereby created an
investment subcommittee of the Committee (hereinafter referred to as the
"Investment Subcommittee" for purposes of this Article IX) which shall exercise
management and control over the assets of the Trust. The Board of Directors,
acting through its Organization and Compensation Committee, shall determine the
number of members of the Investment Subcommittee. The members of the Investment
Subcommittee shall be appointed by the Board of Directors, acting through its
Organization and Compensation Committee, and shall from time to time appoint
such members to or fill any vacancies in the Investment Subcommittee. The
members of the Investment Subcommittee shall constitute the Named Fiduciaries of
the Plan within the meaning of Section 402(a)(2) of ERISA with respect to the
management and control of the assets of the Trust; provided that solely for
purposes of Section 5.9 hereof, Participants shall be Named Fiduciaries with
respect to shares of Company Stock allocated to their respective Accounts and
solely for purposes of Section 5.10, Participants shall be Named Fiduciaries
with respect to shares of Company Stock allocated to their respective Accounts
on matters as to which they are entitled to provide voting directions.

     9.3 Transaction of Business. The Committee and Investment Subcommittee
shall transact business as provided in paragraphs (a) and (b), respectively:

          (a) A majority of the Committee shall constitute a quorum for the
     transaction of business. Actions of the Committee may be taken either by
     vote at a meeting or in writing without a meeting. All action taken by the
     Committee at any meeting shall be by a vote of the majority of those
     present at such meeting. All action taken in writing without a meeting
     shall be by a vote of the majority of those responding in writing. All
     notices, advices, directions and instructions to be transmitted by the
     Committee shall be in writing and signed by or in the name of the
     Committee. In all its communications with the Trustee, the Committee may,
     by either of the majority actions specified above, authorize any one or
     more of its members to execute any document or documents on behalf of the
     Committee, in which event it shall notify the Trustee in writing of such
     action and the name or names of its members so designated and the Trustee
     shall


                                       69



     thereafter accept and rely upon any documents executed by such member or
     members as representing action by the Committee until the Committee shall
     file with the Trustee a written revocation of such designation.

          (b) A majority of the Investment Subcommittee shall constitute a
     quorum for the transaction of business. Actions of the Investment
     Subcommittee may be taken either by vote at a meeting or in writing without
     a meeting. All action taken by the Investment Subcommittee at any meeting
     shall be by a vote of the majority of those present at such meeting. All
     action taken in writing without a meeting shall be by a vote of the
     majority of those responding in writing. All notices, advices, directions
     and instructions to be transmitted by the Investment Subcommittee shall be
     in writing and signed by or in the name of the Investment Subcommittee. In
     all its communications with the Trustee, the Investment Subcommittee may,
     by action specified above, authorize any one or more of its members to
     execute any document or documents on behalf of the Investment Subcommittee,
     in which event it shall notify the Trustee in writing of such action and
     the name or names of its members so designated and the Trustee shall
     thereafter accept and rely upon any documents executed by such member or
     members as representing action by the Investment Subcommittee until the
     Investment Subcommittee shall file with the Trustee a written revocation of
     such designation.

     9.4 Voting. Any member of the Committee who is also a Participant hereunder
shall not be qualified to act or vote on any matter relating solely to himself
or herself, and upon such matter his or her presence at a meeting shall not be
counted for the purpose of determining a quorum. If, at any time a member of the
Committee is not so qualified to act or vote, the qualified members of the
Committee shall be reduced below two (2) and the Board of Directors shall
promptly appoint one or more special members to the Committee so that there
shall be at least one qualified member to act upon the matter in question. Such
special Committee members shall have power to act only upon the matter for which
they were especially appointed and their tenure shall cease as soon as they have
acted upon the matter for which they were especially appointed.

     9.5 Responsibility of Committees. The responsibilities of the Committee and
Investment Subcommittee shall be as provided in paragraphs (a) and (b),
respectively:

          (a) The authority to manage and control the operation and
     administration of the Plan, the general administration of the Plan, the
     responsibility for carrying out the Plan, and to the extent provided in
     Section 9.7(f), the authority and responsibility to manage and control the
     assets of the Trust are hereby delegated by the Board of Directors to and
     vested in the Committee except to the extent reserved to the Board of
     Directors, the Sponsor, or the Company. Subject to the limitations of the
     Plan, the Committee shall, from time to time, establish rules for the
     performance of its functions and the administration of the Plan. In the
     performance of its functions, the Committee shall not discriminate in favor
     of Highly Compensated Employees.

          (b) The authority and responsibility to manage and control the assets
     of the Trust are hereby delegated by the Board of Directors, acting through
     its Organization and


                                       70



     Compensation Committee, to and vested in the Investment Subcommittee except
     to the extent reserved to the Board of Directors or the Board of Directors,
     acting through its Organization and Compensation Committee, or the Sponsor.
     Subject to the limitations of the Plan, the Investment Subcommittee shall,
     from time to time, establish rules for the performance of its functions.

     9.6 Committee Powers. The Committee shall have all discretionary powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law, the Committee shall have, but not
by way of limitation, the following discretionary powers and authority:

          (a) To designate agents to carry out responsibilities relating to the
     Plan, other than fiduciary responsibilities as provided in Section 9.7.

          (b) To employ such legal, actuarial, medical, accounting, clerical,
     and other assistance as it may deem appropriate in carrying out the
     provisions of the Plan, including one or more persons to render advice with
     regard to any responsibility any Named Fiduciary or any other fiduciary may
     have under the Plan.

          (c) To establish rules and regulations from time to time for the
     conduct of the Committee's business and the administration and effectuation
     of the Plan.

          (d) To administer, interpret, construe, and apply the Plan and to
     decide all questions which may arise or which may be raised under the Plan
     by any Employee, Participant, former Participant, Beneficiary or other
     person whatsoever, including but not limited to all questions relating to
     eligibility to participate in the Plan, the amount of Credited Service of
     any Participant, and the amount of benefits to which any Participant or his
     or her Beneficiary may be entitled.

          (e) To determine the manner in which the assets of the Plan, or any
     part thereof, shall be disbursed.

          (f) Subject to provisions (a) through (d) of Section 10.1, to make
     administrative amendments to the Plan that do not cause a substantial
     increase or decrease in benefit accruals to Participants and that do not
     cause a substantial increase in the cost of administering the Plan.

          (g) To perform or cause to be performed such further acts as it may
     deem to be necessary, appropriate or convenient in the efficient
     administration of the Plan.

     Any action taken in good faith by the Committee in the exercise of
discretionary powers conferred upon it by the Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.


                                       71


     9.7 Additional Powers of Committee. In addition to any discretionary powers
or authority conferred on the Committee elsewhere in the Plan or by law, such
Committee shall have the following discretionary powers and authority:

          (a) To appoint one or more Investment Managers pursuant to Section
     5.16 to manage and control any or all of the assets of the Trust not
     invested or to be invested in Company Stock.

          (b) To designate persons (other than the members of the Committee) to
     carry out fiduciary responsibilities, other than any responsibility to
     manage or control the assets of the Trust;

          (c) To allocate fiduciary responsibilities among the members of the
     Committee, other than any responsibility to manage or control the assets of
     the Trust;

          (d) To cancel any such designation or allocation at any time for any
     reason;

          (e) To direct the voting of any Company Stock or any other security
     held by the Trust subject to Sections 5.10 and 9.16 hereof; and

          (f) To exercise management and control over the assets of the Trust to
     the extent provided in paragraph (a) above and in Section 9.9 (relating to
     review by the Committee of the long-run and short-run financial needs of
     the Plan and the determination of the funding policy for the Plan).

     Any action under this Section 9.7 shall be taken in writing, and no
designation or allocation under paragraphs (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.

     9.8 Investment Subcommittee Powers. The Investment Subcommittee shall have
all discretionary powers necessary to manage and control the assets of the
Trust, including but not limited to, the following:

          (a) To exercise management and control over the assets of the Trust
     except to the extent the Committee appoints an Investment Manager pursuant
     to Section 9.7(a) and subject to the requirement that all action taken by
     the Investment Subcommittee shall be in accordance and consistent with the
     funding policy established by the Committee and shall be communicated to
     the Committee at periodic intervals.

          (b) To employ consulting, actuarial, and other assistance as it may
     deem appropriate in carrying out its responsibilities under the Plan,
     including one or more persons to render advice with regard to any fiduciary
     responsibility the Investment Subcommittee may have under the Plan.


                                       72



          (c) To establish rules and regulations from time to time for the
     conduct of the Investment Subcommittee's business.

          (d) To direct the Trustee, in writing, from time to time, to invest
     and reinvest the Trust Fund, or any part thereof, or to purchase, exchange,
     or lease any property, real or personal, which the Investment Subcommittee
     may designate. This shall include the right to direct the investment of all
     or any part of the Trust in any one security or any one type of securities
     permitted hereunder.

          (e) To direct the purchase and sale of Company Stock (and any other
     securities that are "qualifying employer securities" as defined in Code
     Section 4975(e)) for the Trust.

     Any action taken in good faith by the Investment Subcommittee in the
exercise of discretionary powers conferred upon it by the Plan shall be
conclusive and binding upon the Participants and their Beneficiaries.

     9.9 Periodic Review of Funding Policy. Notwithstanding the delegation of
authority and responsibility to manage and control the assets of the Trust to
the Investment Subcommittee, the Committee, at periodic intervals, shall review
the long-run and short-run financial needs of the Plan and shall determine a
funding policy for the Plan consistent with the objectives of the Plan and the
minimum funding standards of ERISA, if applicable. In determining such funding
policy the Committee shall take into account, at a minimum, not only the
long-term investment objectives of the Trust Fund consistent with the prudent
management of the assets thereof, but also the short-run needs of the Plan to
pay benefits. All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefor, shall be fully reflected in
the minutes of the Committee.

     9.10 Claims Procedures. If a Participant or his or her Beneficiary believes
that he or she is being denied any rights or benefits under the Plan, the
Participant, Beneficiary, or in either case, his or her authorized
representative (the "Claimant") shall follow the administrative procedures for
filing a claim for benefits as set forth in this Section. A claim for benefits
shall be in writing and shall be reviewed by the Committee or a claims official
designated by the Committee. The Committee or claims official shall review a
claim for benefits in accordance with the procedures established by the
Committee subject to the following administrative procedures set forth in this
Section.

          (a) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to a claim for
     benefits within 90 days following receipt by the Committee (or its
     delegate) of the claim unless the Committee determines that special
     circumstances require an extension of time for processing the claim. In the
     event an extension is necessary, written or electronic notice of the
     extension shall be furnished to the Claimant prior to the expiration of the
     initial 90 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 90 days from the end of the initial 90 day period.


                                       73



          (b) In the case of a denial of the Claimant's claim, the written or
     electronic notice of such denial shall set forth (i) the specific reasons
     for the denial, (ii) references to the Plan provisions upon which the
     denial is based, (iii) a description of any additional information or
     material necessary for perfection of the claim (together with an
     explanation why such material or information is necessary), (iv) an
     explanation of the Plan's appeals procedures, and (v) a statement of the
     Claimant's right to bring a civil action under Section 502(a) of ERISA if
     his or her claim is denied upon appeal.

          (c) In the case of a denial of a claim, a Claimant who wishes to
     appeal the decision shall follow the administrative procedures for an
     appeal as set forth in Section 9.11 below.

     9.11 Appeals Procedures. A Claimant who wishes to appeal the denial of his
or her claim for benefits shall follow the administrative procedures for an
appeal as set forth in this Section and shall exhaust such administrative
procedures prior to seeking any other form of relief. Appeals shall be reviewed
in accordance with the procedures established by the Committee subject to the
following administrative procedures set forth in this Section.

          (a) In order to appeal a decision rendered with respect to his or her
     claim for benefits, a Claimant must file an appeal with the Committee in
     writing within 60 days following his or her receipt of the notice of denial
     with respect to the claim.

          (b) The Claimant's appeal may include written comments, documents,
     records and other information relating to his or her claim. The Claimant
     may review all pertinent documents and, upon request, shall have reasonable
     access to or be provided free of charge, copies of all documents, records,
     and other information relevant to his or her claim.

          (c) The Committee shall provide a full and fair review of the appeal
     and shall take into account all claim related comments, documents, records,
     and other information submitted by the Claimant without regard to whether
     such information was submitted or considered under the initial
     determination or review of the initial determination. Where appropriate,
     the Committee will overturn a notice of denial if it determines that an
     error was made in the interpretation of the controlling plan documents or
     if the Committee determines that an existing interpretation of the
     controlling plan documents should be changed on a prospective basis. In the
     event the Claimant is a subordinate, as determined by the Committee, to an
     individual conducting the review, such individual shall recuse himself or
     herself from the review of the appeal.

          (d) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to an appeal within
     60 days following receipt by the Committee of the appeal unless the
     Committee determines that special circumstances require an extension of
     time for processing the appeal. In the event an extension is necessary,
     written or electronic notice of the extension shall be furnished to the
     Claimant prior to the expiration of the initial 60 day period. The notice
     shall indicate the special circumstances requiring an extension of time and
     the date by which a final decision is


                                       74



     expected to be rendered. In no event shall the period of the extension
     exceed 60 days from the end of the initial 60 day period.

          (e) In the case of a denial of an appeal, the written or electronic
     notice of such denial shall set forth (i) the specific reasons for the
     denial, (ii) references to the Plan provisions upon which the denial is
     based, (iii) a statement that the Claimant is entitled to receive, upon
     request and free of charge, reasonable access to, and copies of, all
     documents, records, and other information relating to his or her claim for
     benefits, and (iv) a statement of the Claimant's right to bring a civil
     action under Section 502(a) of ERISA.

     9.12 Limitation on Liability Each of the fiduciaries under the Plan shall
be solely responsible for its own acts and omissions and no fiduciary shall be
liable for any breach of fiduciary responsibility resulting from the act or
omission of any other fiduciary or person to whom fiduciary responsibilities
have been allocated or delegated pursuant to Section 9.2 or 9.7, except as
provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. Neither the
Committee nor the Investment Subcommittee shall have responsibility over assets
as to which management and control has been delegated to an Investment Manager
appointed pursuant to Section 5.16 hereof or as to which management and control
has been retained by the Trustee.

     9.13 Indemnification and Insurance. To the extent permitted by law, the
Company shall indemnify and hold harmless the Committee, the Investment
Subcommittee and each member thereof, the Board of Directors and each member
thereof, and such other persons as the Board of Directors may specify, from the
effects and consequences of his or her acts, omissions, and conduct in his or
her official capacity in connection with the Plan and Trust. To the extent
permitted by law, the Company may also purchase liability insurance for such
persons.

     9.14 Compensation of Committees and Plan Expenses. Members of the Committee
and the Investment Subcommittee shall serve as such without compensation unless
the Board of Directors shall otherwise determine, but in no event shall any
member of the Committee or Investment Subcommittee who is an Employee receive
compensation from the Plan for his or her services as a member of the Committee
or the Investment Subcommittee. All members shall be reimbursed for any
necessary expenditures incurred in the discharge of duties as members of the
Committee or the Investment Subcommittee. The compensation or fees, as the case
may be, of all officers, agents, counsel, the Trustee or other persons retained
or employed by the Committee or the Investment Subcommittee shall be fixed by
the Committee, subject to approval by the Board of Directors. The expenses
incurred in the administration and operation of the Plan, including but not
limited to the expenses incurred by the members of the Committee or the
Investment Subcommittee in exercising their duties, shall be paid by the Plan
from the Trust Fund, unless paid by the Company, provided, however, that the
Plan and not the Company shall bear the cost of interest and normal brokerage
charges which are included in the cost of securities purchased by the Trust Fund
(or charged to proceeds in the case of sales). With respect to the expenses that
are paid by the Plan from the Trust Fund, such expenses shall be allocated among
Participants' Accounts in a manner determined by the Committee. Any Forfeitures
remaining after application of Section 6.3(c) shall share in such allocation to
the extent required under applicable law. The Investment Subcommittee shall
direct the Trustee to use Plan assets (and, if necessary, to sell the shares of
Company Stock that represent such Plan assets) to pay such expenses.


                                       75



     9.15 Resignation. Any member of the Committee or Investment Subcommittee
may resign by giving fifteen (15) days notice to the Board of Directors, and any
member shall resign forthwith upon receipt of the written request of the Board
of Directors, whether or not said member is at that time the only member of the
Committee or the Investment Subcommittee.

     9.16 Reliance Upon Documents and Opinions. The members of the Committee,
the Investment Subcommittee, the Board of Directors, the Company and any person
delegated to carry out any fiduciary responsibilities under the Plan
(hereinafter a "delegated fiduciary"), shall be entitled to rely upon any
tables, valuations, computations, estimates, certificates and reports furnished
by any consultant, or firm or corporation which employs one or more consultants,
upon any opinions furnished by legal counsel, and upon any reports furnished by
the Trustee or any Investment Manager. The members of the Committee, the
Investment Subcommittee, the Board of Directors, the Company and any delegated
fiduciary shall be fully protected and shall not be liable in any manner
whatsoever for anything done or action taken or suffered in reliance upon any
such consultant, or firm or corporation which employs one or more consultants,
Trustee, Investment Manager, or counsel. Any and all such things done or such
action taken or suffered by the Committee, the Investment Subcommittee, the
Board of Directors, the Company and any delegated fiduciary shall be conclusive
and binding on all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law. The Committee, the Investment
Subcommittee, and any delegated fiduciary may, but are not required to, rely
upon all records of the Company with respect to any matter or thing whatsoever,
and may likewise treat such records as conclusive with respect to all Employees,
Participants, Beneficiaries, and any other persons whomsoever, except as
otherwise provided by law.


                                       76



                                    ARTICLE X
                         AMENDMENT AND ADOPTION OF PLAN

     10.1 Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend the Plan and Trust Agreement at any
time and from time to time and in such manner and to such extent as it may deem
advisable, including retroactively, subject to the following provisions:

          (a) No amendment shall have the effect of reducing any Participant's
     vested interest in the Plan or eliminating an optional form of
     distribution.

          (b) No amendment shall have the effect of diverting any part of the
     assets of the Plan to persons or purposes other than the exclusive benefit
     of the Participants or their Beneficiaries.

          (c) No amendment shall have the effect of increasing the duties or
     responsibilities of a Trustee without its written consent.

          (d) No amendment shall result in discrimination in favor of officers,
     shareholders, or other highly compensated or key employees.

     The Committee shall have the right to amend the Plan, subject to paragraphs
(a) through (d), in accordance with the provisions of Section 9.6(f).

     10.2 Adoption of Plan by Affiliated Companies. Subject to approval by the
Board of Directors and consistent with the provisions of ERISA, an Affiliated
Company may adopt the Plan for all or any specified group of its Eligible
Employees by entering into an adoption agreement in the form and substance
prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.


                                       77



                                   ARTICLE XI
                         DISCONTINUANCE OF CONTRIBUTIONS

     In the event the Company decides it is impossible or inadvisable for
business reasons to continue to make contributions under the Plan, it may, by
resolution of the Board of Directors, discontinue contributions to the Plan.
Upon the permanent discontinuance of contributions to the Plan and
notwithstanding any other provisions of the Plan, the rights of Participants
shall become fully vested and nonforfeitable unless replaced by a comparable
plan. The permanent discontinuance of contributions on the part of the Company
shall not terminate the Plan as to the funds and assets then held in the Trust,
or operate to accelerate any payments of distributions to or for the benefit of
Participants or Beneficiaries, and the Trust shall continue to be administered
in accordance with the provisions hereof until the obligations hereunder shall
have been discharged and satisfied.


                                       78



                                   ARTICLE XII
                             TERMINATION AND MERGER

     12.1 Right to Terminate Plan. In the event the Board of Directors decides
it is impossible or inadvisable for business reasons to continue the Plan, then
it may, by resolution, terminate the Plan. Upon and after the effective date of
such termination, the Company shall not make any further contributions under the
Plan. Upon the termination or partial termination of the Plan for any reason,
the interest in the Trust of each affected Participant shall automatically
become fully vested unless the Plan is continued after its termination by
conversion of the Plan into a comparable Plan through Plan amendment or through
merger. After the satisfaction of all outstanding liabilities of the Plan to
persons other than Participants and Beneficiaries, all unallocated assets shall
be allocated to the Accounts of Participants to the maximum extent permitted by
law. The Trust Fund may not be fully or finally liquidated until all assets are
allocated to Accounts; alternatively any unallocated assets may be transferred
to another defined contribution plan maintained by the Sponsor or an Affiliated
Company qualified under Code Section 401 where such assets shall be allocated
among the accounts of Participants herein who are participants in such
transferee plan. In no event, however, shall any part of the Plan revert to or
be recoverable by the Company, or be used for or diverted to purposes other than
for the exclusive benefit of the Participants or their Beneficiaries.
Notwithstanding the foregoing, amounts held in the 415 Suspense Account may
revert to the Company in accordance with Section 13.6.

     12.2 Merger Restriction. Notwithstanding any other provision in the Plan,
the Plan shall not in whole or in part merge or consolidate with, or transfer
its assets or liabilities to, any other plan unless each affected Participant in
the Plan would (if such other plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

     12.3 Effect on Trustee and Committee. The Trustee and the Committee shall
continue to function as such for such period of time as may be necessary for the
winding up of the Plan and for the making of distributions in the manner
prescribed by the Board of Directors at the time of termination of the Plan.

     12.4 Effect of Reorganization, Transfer of Assets or Change in Control.

          (a) In the event of a consolidation or merger of the Company, or in
     the event of a sale and/or any other transfer of the operating assets of
     the Company, any ultimate successor or successors to the business of the
     Company may continue the Plan in full force and effect by adopting the same
     by resolution of its board of directors and by executing a proper
     supplemental or transfer agreement with the Trustee.

          (b) In the event of a Change in Control (as herein defined), all
     Participants who were Participants on the date of such Change in Control
     shall become 100% vested in any amounts allocated to their Company
     Contributions


                                       79



     Accounts on the date of such Change in Control and in any amounts allocated
     to their Company Contributions Accounts subsequent to the date of the
     Change in Control. Notwithstanding the foregoing, the Board of Directors
     may, at its discretion, amend or delete this paragraph (b) in its entirety
     prior to the occurrence of any such Change in Control. For the purpose of
     this paragraph (b), "Change in Control" shall mean the following and shall
     be deemed to occur if any of the following events occur:

               (i) 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 the Sponsor representing (1)
          20% or more of the combined voting power of the Sponsor'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 (2) 33%
          or more of the combined voting power of the Sponsor's then outstanding
          voting securities, without regard to whether such acquisition is
          approved by the Incumbent Board;

               (ii) Individuals who, as of the 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 date hereof
          whose election, or nomination for election by the Sponsor'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 the Sponsor, as such terms are
          used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
          Act) shall, for the purposes of the Plan, be considered as though such
          person were a member of the Incumbent Board of the Sponsor;

               (iii) The consummation of a merger, consolidation or
          reorganization involving the Sponsor, other than one which satisfies
          both of the following conditions:

                    (A) a merger, consolidation or reorganization which would
               result in the voting securities of the Sponsor 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 the Sponsor 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 the
               Sponsor's voting


                                       80



               securities immediately before such merger, consolidation or
               reorganization, and

                    (B) a merger, consolidation or reorganization in which no
               Person is or becomes the Beneficial Owner, directly or
               indirectly, of securities of the Sponsor representing 20% or more
               of the combined voting power of the Sponsor's then outstanding
               voting securities; or

               (iv) The stockholders of the Sponsor approve a plan of complete
          liquidation of the Sponsor or an agreement for the sale or other
          disposition by the Sponsor of all or substantially all of the
          Sponsor's assets.

     Notwithstanding the preceding provisions of this paragraph (b), a Change in
Control shall not be deemed to have occurred if the Person described in the
preceding provisions of this paragraph (b) is (i) an underwriter or underwriting
syndicate that has acquired any of the Sponsor's then outstanding voting
securities solely in connection with a public offering of the Sponsor's
securities, (ii) the Sponsor or any subsidiary of the Sponsor or (iii) an
employee stock ownership plan or other employee benefit plan maintained by the
Sponsor or an Affiliated Company that is qualified under the provisions of the
Code. In addition, notwithstanding the preceding provisions of this paragraph
(b), a Change in Control shall not be deemed to have occurred if the Person
described in the preceding provisions of this paragraph (b) becomes a Beneficial
Owner of more than the permitted amount of outstanding securities as a result of
the acquisition of voting securities by the Sponsor or an Affiliated Company
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 Sponsor or through a stock dividend or stock split), then a Change in
Control shall occur.

     (c) For purposes of this Section 12.4, a Change of Control shall not be
deemed to have occurred upon the distribution of the stock of Advanced Medical
Optics, Inc. on June 29, 2002 by the Sponsor to its stockholders.


                                       81



                                  ARTICLE XIII
                            LIMITATION ON ALLOCATIONS

     13.1 General Rule.

          (a) The total Annual Additions under the Plan to a Participant's
     Accounts shall not exceed the lesser of:

               (i) Forty Thousand Dollars ($40,000) as adjusted for increases in
          the cost-of-living under Code Section 415(d); or

               (ii) One Hundred Percent (100%) of the Participant's Compensation
          (as defined in Section 13.5), from the Company for the Limitation
          Year,

     except to the extent "catch-up" contributions are permitted under Section
     4.2(e) and Code Section 414(v). Notwithstanding the foregoing sentence, the
     compensation limit set forth in subparagraph (ii) shall not apply to any
     contribution for medical benefits after separation from service (within the
     meaning of Code Section 401(h) or Code Section 419A(f)(2)) which is
     otherwise treated as an Annual Addition.

          (b) For the purpose of this Article XIII, the term "Company" shall
     mean the Sponsor and any Affiliated Company (determined by reference to
     Code Section 415(h)) whether or not such Affiliated Company has adopted the
     Plan pursuant to Section 10.2 and the term "Limitation Year" shall mean the
     Plan Year.

     13.2 Annual Additions. For purposes of Section 13.1, the term "Annual
Additions" shall mean with respect to a Participant, for any Limitation Year
with respect to the Plan, the sum of the amounts described below:

          (a) All amounts contributed or deemed contributed by the Company.

          (b) All amounts contributed by the Participant.

          (c) Forfeitures allocated to such Participant.

          (d) Any amounts allocated, after March 31, 1984, to an individual
     medical account as defined in Code Section 415(l)(2) established under a
     pension or annuity plan maintained by the Company.

          (e) Any amounts allocated for such Plan Year which amounts are derived
     from contributions paid or accrued after December 31, 1985, in taxable
     years ending after such date, which are attributable to post retirement
     medical benefits allocated to the separate account of a key employee (as
     defined in Code Section 419A(d)(3)) under a welfare benefit fund (as
     defined in Code Section 419(e)) maintained by the Company.


                                       82



          (f) Excess deferral amounts determined pursuant to Sections 4.5 and
     6.12.

          (g) Excess deferral amounts determined pursuant to Section 4.4 to the
     extent such amounts are distributed after the first April 15th following
     the close of the Participant's taxable year.

     Notwithstanding the foregoing, a Participant's Rollover Contributions shall
not be considered an Annual Addition.

     13.3 Other Defined Contribution Plans. If the Company maintains any other
defined contribution plan, then each Participant's Annual Additions under such
defined contribution plan shall be aggregated with the Participant's Annual
Additions under the Plan for the purposes of applying the limitations of Section
13.1.

     13.4 Adjustments for Excess Annual Additions. If as a result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
Compensation, or under other limited facts and circumstances that the
Commissioner of Internal Revenue finds justify the availability of the rules set
forth in Regulation Section 1.415-6(b)(6), the Annual Additions on behalf of any
Participant in a Limitation Year to the Plan and all other defined contribution
plans maintained by the Company exceed the limitation set forth in Section 13.1,
such Participant's Annual Additions for the Plan shall be reduced in the
following order: (i) After Tax Deposits that are not Matched Deposits, (ii)
After Tax Deposits that are Matched Deposits, (iii) Before Tax Deposits that are
not Matched Deposits, (iv) Before Tax Deposits that are Matched Deposits, (v)
Matching Contributions, and (vi) Retirement Contributions. The portion of the
reduction attributable to After Tax Deposits and Before Tax Deposits shall be
refunded to the Participants and the balance attributable to Matching
Contributions, if any, shall be held unallocated in a 415 Suspense Account
established for the purpose of this Section 13.4 and shall be used to reduce
Company Contributions for the next limitation year (and succeeding limitation
year, as necessary) for all Participants in the Plan. The 415 Suspense Account
shall be exhausted before any Company contributions shall be allocated to the
Accounts of Participants.

     13.5 Compensation. For the purpose of this Article XIII, Compensation shall
mean a Participant's earned income, wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment with the Company maintaining the Plan and shall be determined as
described below:

          (a) Compensation shall include to the extent that the amounts are
     includible in gross income (including, but not limited to, commissions paid
     salespeople, compensation for services on the basis of a percentage of
     profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
     and reimbursements or other expense allowances under a nonaccountable plan
     as described in Regulation 1.62-2(c)).

          (b) Compensation shall include any elective deferral as defined in
     Code Section 402(g)(3), any amount which is contributed or deferred by the
     Company at the election of the Employee that is excludable from an
     Employee's gross income under


                                       83



     Code Sections 125 or 457 and, for Plan Years beginning on or after January
     1, 1998, any elective amount that is excludable from an Employee's gross
     income under Code Section 132(f)(4).

          (c) Compensation shall not include (i) any employer contributions to a
     plan of deferred compensation which are not included in the Employee's
     gross income for the taxable year in which contributed, (ii) any
     distributions from a plan of deferred compensation, (iii) any amounts
     realized from the exercise of a non-qualified stock option or when
     restricted stock or property held by the Employee becomes either freely
     transferable or is no longer subject to a substantial risk of forfeiture
     under Code Section 83 if such option, stock, or property was granted to the
     Employee by the Company, (iv) any amounts realized from the sale, exchange,
     or other disposition of stock acquired under a qualified stock option, (v)
     any contribution for medical benefits (within the meaning of Code Section
     419(f)(2) after termination of employment which is otherwise treated as an
     Annual Addition, and (vi) any amount otherwise treated as an Annual
     Addition under Code Section 415(l)(1).

     13.6 Treatment of 415 Suspense Account Upon Termination. In the event the
Plan shall terminate at a time when all amounts in the 415 Suspense Account have
not been allocated to the Accounts of the Participants, the 415 Suspense Account
amounts shall be applied as follows:

          (a) The amount in the 415 Suspense Account shall first be allocated,
     as of the Plan termination date, to Participants in accordance with the
     allocation formula applicable to Company Contributions provided under
     Section 6.3.

          (b) If, after those allocations have been made, any further residue
     funds remain in the 415 Suspense Account, the residue may revert to the
     Company in accordance with applicable provisions of the Code, ERISA, and
     the regulations thereunder.


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                                   ARTICLE XIV
                                 TOP-HEAVY RULES

     14.1 Applicability. Notwithstanding any provision in the Plan to the
contrary, and subject to the limitations set forth in Section 14.6, the
requirements of Sections 14.4 and 14.5 shall apply under the Plan in the case of
any Plan Year in which the Plan is determined to be a Top-Heavy Plan under the
rules of Section 14.3. For the purpose of this Article XIV, the term "Company"
shall mean the Sponsor and any Affiliated Company whether or not such Affiliated
Company has adopted the Plan.

     14.2 Definitions. For purposes of this Article XIV, the following special
definitions and rules shall apply:

          (a) The term "Key Employee" means any Employee or former Employee
     (including any deceased Employee) who, at any time during the Plan Year
     that includes the Determination Date, was an officer of the Company having
     annual Compensation greater than $130,000 (as adjusted under Code Section
     416(i)(1) for Plan Years beginning after December 31, 2002), a Five Percent
     Owner of the Company, or an One Percent Owner of the Company having annual
     Compensation of more than $150,000.

          (b) The term "Five Percent Owner" means any person who owns (or is
     considered as owning within the meaning of Code Section 318) more than 5%
     of the outstanding stock of the Company or stock possessing more than 5% of
     the total combined voting power of all stock of the Company.

          (c) The term "One Percent Owner" means any person who would be
     described in paragraph (b) if "1%" were substituted for "5%" each place
     where it appears therein.

          (d) The term "Non-Key Employee" means any Employee who is not a Key
     Employee.

          (e) The term "Determination Date" means, with respect to any plan
     year, the last day of the preceding plan year. In the case of the first
     plan year of any plan, the term "Determination Date" shall mean the last
     day of that plan year.

          (f) The term "Aggregation Group" means (i) each qualified plan of the
     Company in which at least one Key Employee participates or participated at
     any time during the determination period (regardless of whether the plan
     has terminated), and (ii) any other qualified plan of the Company which
     enables a plan described in clause (i) to meet the requirements of Code
     Sections 401(a)(4) or 410. Any plan not required to be included in an
     Aggregation Group under the preceding rules may be treated as being part of
     such group if the group would continue to meet the requirements of Code
     Sections 401(a)(4) and 410 with the plan being taken into account.


                                       85



          (g) For purposes of determining ownership under paragraphs (a), (b)
     and (c) above, the following special rules shall apply: (i) Code Section
     318(a)(2)(C) shall be applied by substituting "5%" for "50%", and (ii) the
     aggregation rules of Code Sections 414(b), (c) and (m) shall not apply,
     with the result that the ownership tests of this Section 14.2 shall apply
     separately with respect to each Affiliated Company.

          (h) The terms "Key Employee" and "Non-Key Employee" shall include
     their Beneficiaries, and the definitions provided under this Section 14.2
     shall be interpreted and applied in a manner consistent with the provisions
     of Code Section 416(i) and the regulations thereunder.

          (i) For purposes of this Article XIV, an Employee's Compensation shall
     be determined in accordance with the rules of Section 13.5.

     14.3 Top-Heavy Status.

          (a) The term "Top-Heavy Plan" means, with respect to any Plan Year:

               (i) Any defined benefit plan if, as of the Determination Date,
          the present value of the cumulative accrued benefits under the plan
          for Key Employees exceeds 60% of the present value of the cumulative
          accrued benefits under the plan for all Employees; and

               (ii) Any defined contribution plan if, as of the Determination
          Date, the aggregate of the account balances of Key Employees under the
          plan exceeds 60% of the aggregate of the account balances of all
          Employees under the plan.

          In applying the foregoing provisions of this paragraph (a), the
     valuation date to be used in valuing Plan assets shall be (i) in the case
     of a defined benefit plan, the same date which is used for computing costs
     for minimum funding purposes, and (ii) in the case of a defined
     contribution plan, the most recent valuation date within a 12-month period
     ending on the applicable Determination Date.

          (b) Each plan maintained by the Company required to be included in an
     Aggregation Group shall be treated as a Top-Heavy Plan if the Aggregation
     Group is a Top-Heavy Group.

          (c) The term "Top-Heavy Group" means any Aggregation Group if the sum
     (as of the Determination Date) of (i) the present value of the cumulative
     accrued benefits for Key Employees under all defined benefit plans included
     in the group, and (ii) the aggregate of the account balances of Key
     Employees under all defined contribution plans included in the group
     exceeds 60% of a similar sum determined for all Employees. For purposes of
     determining the present value of the cumulative accrued benefit of any
     Employee, or the amount of the account balance of any Employee, such
     present value or amount shall be increased by the aggregate distributions
     made with respect to the Employee under the plan (including a terminated
     plan which, had it not been terminated,


                                       86



     would have been aggregated with the plan under Code Section
     416(g)(2)(A)(i)) during the one year period ending on the Determination
     Date. In the case of distributions made for a reason other than separation
     from service, death, or disability, the preceding sentence shall be applied
     by substituting "five year period" for "one year period." Any rollover
     contribution or similar transfer initiated by the Employee and made after
     December 31, 1983, to a plan shall not be taken into account with respect
     to the transferee plan for purposes of determining whether such plan is a
     Top-Heavy Plan (or whether any Aggregation Group which includes such plan
     is a Top-Heavy Group).

          (d) If any individual is a Non-Key Employee with respect to any plan
     for any plan year, but the individual was a Key Employee with respect to
     the plan for any prior plan year, any accrued benefit for the individual
     (and the account balance of the individual) shall not be taken into account
     for purposes of this Section 14.3.

          (e) If any individual has not performed services for the Company at
     any time during the one year period ending on the Determination Date, any
     accrued benefit for such individual (and the account balance of the
     individual) shall not be taken into account for purposes of this Section
     14.3.

          (f) In applying the foregoing provisions of this Section, the accrued
     benefit of a Non-Key Employee shall be determined (i) under the method, if
     any, which is used for accrual purposes under all plans of the Company and
     any Affiliated Companies, or (ii) if there is no such uniform method, as if
     such benefit accrued not more rapidly than the slowest accrual rate
     permitted under Code Section 411(b)(1)(C).

          (g) For all purposes of this Article XIV, the definitions provided
     under this Section 14.3 shall be applied and interpreted in a manner
     consistent with the provisions of Code Section 416(g) and the regulations
     thereunder.

     14.4 Minimum Contributions. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the minimum employer contributions for that
year shall be determined in accordance with the rules of this Section 14.4.

          (a) Except as provided below, the minimum contribution for each
     Non-Key Employee shall be not less than 3% of his or her compensation.
     Before Tax Deposits shall not be taken into account but Matching
     Contributions as defined in Section 6.11 shall be taken into account for
     purposes of satisfying the minimum contribution requirement. Matching
     Contributions that are used to satisfy the minimum contribution requirement
     shall be treated as matching contributions for purposes of the actual
     contribution percentage test and other requirements of Code Section 401(m).

          (b) Subject to the following rules of this paragraph (b), the
     percentage set forth in paragraph (a) above shall not be required to exceed
     the percentage at which contributions (including amounts deferred under a
     cash or deferred arrangement under Code Section 401(k)) are made (or are
     required to be made) under the Plan for the year for the Key Employee for
     whom the percentage is the highest for the year. This


                                       87



     determination shall be made by dividing the contributions for each Key
     Employee by so much of his or her total compensation for the Plan Year as
     does not exceed the applicable Compensation limit. For purposes of this
     paragraph (b), all defined contribution plans required to be included in an
     Aggregation Group shall be treated as one plan. Notwithstanding the
     foregoing, the exceptions to paragraph (a) as provided under this paragraph
     (b) shall not apply to any plan required to be included in an Aggregation
     Group if the plan enables a defined benefit plan to meet the requirements
     of Code Sections 401(a)(4) or 410.

          (c) The Participant's minimum contribution determined under this
     Section 14.4 shall be calculated without regard to any Social Security
     benefits payable to the Participant.

          (d) In the event a Participant is covered by both a defined
     contribution and a defined benefit plan maintained by the Company, both of
     which are determined to be Top-Heavy Plans, the Company shall satisfy the
     minimum benefit requirements of Code Section 416 by providing (in lieu of
     the minimum contribution described in paragraph (a) above) a minimum
     benefit under the defined benefit plan so as to prevent the duplication of
     required minimum benefits hereunder.

     14.5 Minimum Vesting Rules.. For any Plan Year in which it is determined
that the Plan is a Top-Heavy Plan, the vesting schedule for Matching
Contributions shall be the vesting schedule set forth in Section 7.2(a) and the
vesting schedule for Retirement Contributions shall be the vesting schedule set
forth in Section 7.2(b).

     14.6 Noneligible Employees.. The rules of this Article XIV shall not apply
to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.


                                       88



                                   ARTICLE XV
                          RESTRICTION ON ASSIGNMENT OR
                        OTHER ALIENATION OF PLAN BENEFITS

     15.1 General Restrictions Against Alienation.

          (a) The interest of any Participant or his or her Beneficiary in the
     income, benefits, payments, claims or rights hereunder, or in the Trust
     Fund, shall not in any event be subject to sale, assignment, hypothecation,
     or transfer. Each Participant and Beneficiary is prohibited from
     anticipating, encumbering, assigning, or in any manner alienating his or
     her interest under the Trust Fund, and is without power to do so, except as
     may be permitted in connection with providing security for a loan from the
     Plan to the Participant pursuant to the provisions of the Plan as it may be
     amended from time to time. The interest of any Participant or Beneficiary
     shall not be liable or subject to his or her debts, liabilities, or
     obligations, now contracted, or which may hereafter be contracted, and such
     interest shall be free from all claims, liabilities, or other legal process
     now or hereafter incurred or arising. Neither the interest of a Participant
     or Beneficiary, nor any part thereof, shall be subject to any judgment
     rendered against any such Participant or Beneficiary. Notwithstanding the
     foregoing, a Participant's or Beneficiary's interest in the Plan may be
     subject to the enforcement of a Federal tax levy made pursuant to Code
     Section 6331 or the collection by the United States on a judgment resulting
     from an unpaid tax assessment.

          (b) In the event any person attempts to take any action contrary to
     this Article XV, such action shall be null and void and of no effect, and
     the Company, the Committee, the Trustee and all Participants and their
     Beneficiaries, may disregard such action and are not in any manner bound
     thereby, and they, and each of them, shall suffer no liability for any such
     disregard thereof, and shall be reimbursed on demand out of the Trust Fund
     for the amount of any loss, cost or expense incurred as a result of
     disregarding or of acting in disregard of such action.

          (c) The foregoing provisions of this Section shall be interpreted and
     applied by the Committee in accordance with the requirements of Code
     Section 401(a)(13) and Section 206(d) of ERISA as construed and interpreted
     by authoritative judicial and administrative rulings and regulations.

     15.2 Qualified Domestic Relations Orders. The rules set forth in Section
15.1 above shall not apply with respect to a "Qualified Domestic Relations
Order" as described below.

          (a) A "Qualified Domestic Relations Order" is a judgment, decree, or
     order (including approval of a property settlement agreement) that:

               (i) Creates or recognizes the existence of an Alternate Payee's
          right to, or assigns to an Alternate Payee the right to, receive all
          or a portion of the benefits payable under the Plan with respect to a
          Participant,


                                       89



               (ii) Relates to the provision of child support, alimony payments,
          or marital property rights to a spouse, former spouse, child or other
          dependent of a Participant,

               (iii) Is made pursuant to a State domestic relations law
          (including a community property law), and

               (iv) Clearly specifies: (A) the name and last known mailing
          address (if any) of the Participant and the name and mailing address
          of each Alternate Payee covered by the order (if the Committee does
          not have reason to know that address independently of the order); (B)
          the amount or percentage of the Participant's benefits to be paid to
          each Alternate Payee, or the manner in which the amount or percentage
          is to be determined; (C) the number of payments or period to which the
          order applies; and (D) each plan to which the order applies.

          For purposes of this Section 15.2, "Alternate Payee" means any spouse,
     former spouse, child or other dependent of a Participant who is recognized
     by a domestic relations order as having a right to receive all, or a
     portion of, the benefits payable with respect to the Participant.

          (b) A domestic relations order is not a Qualified Domestic Relations
     Order if it requires:

               (i) The Plan to provide any type or form of benefit, or any
          option, not otherwise provided under the Plan;

               (ii) The Plan to provide increased benefits; or

               (iii) The payment of benefits to an Alternate Payee that are
          required to be paid to another Alternate Payee under a previous
          Qualified Domestic Relations Order.

          (c) A domestic relations order shall not be considered to fail to
     satisfy the requirements of paragraph (b)(i) above with respect to any
     payment made before a Participant has separated from service solely because
     the order requires that payment of benefits be made to an Alternate Payee:

               (i) On or after the date on which the Participant attains (or
          would have first attained) his or her earliest retirement age (as
          defined in Code Section 414(p)(4)(B));


                                       90



               (ii) As if the Participant had retired on the date on which such
          payment is to begin under such order (but taking into account only the
          present value of accrued benefits and not taking into account the
          present value of any subsidy for early retirement benefits); and

               (iii) In any form in which such benefits may be paid under the
          Plan to the Participant (other than in the form of a joint and
          survivor annuity with respect to the Alternate Payee and his or her
          subsequent spouse).

          Notwithstanding the foregoing, if the Participant dies before his or
     her earliest retirement age (as defined in Code Section 414(p)(4)(B)), the
     Alternate Payee is entitled to benefits only if the Qualified Domestic
     Relations Order requires survivor benefits to be paid to the Alternate
     Payee.

          (d) To the extent provided in any Qualified Domestic Relations Order,
     the former spouse of a Participant shall be treated as a surviving Spouse
     of the Participant for purposes of applying the rules (relating to minimum
     survivor annuity requirements) of Code Sections 401(a)(11) and 417, and any
     current spouse of the Participant shall not be treated as a spouse of the
     Participant for such purposes.

          (e) In the case of any domestic relations order received by the Plan,
     the Committee shall promptly notify the Participant and any Alternate Payee
     named in the order that an order has been received and shall provide a copy
     of the Plan's procedures for determining the qualified status of domestic
     relations orders. An Alternate Payee may designate a representative for
     receipt of copies of notices and plan information that are sent to the
     Alternate Payee with respect to domestic relations order. Within a
     reasonable period after the receipt of the order, the Committee shall
     determine whether the order is a Qualified Domestic Relations Order and
     shall notify the Participant and each Alternate Payee of such
     determination.

          (f) The Committee shall establish reasonable procedures to determine
     the qualified status of domestic relations orders and to administer
     distributions under Qualified Domestic Relations Orders. During any period
     in which the issue of whether a domestic relations order is a Qualified
     Domestic Relations Order is being determined (by the Committee, by a court
     of competent jurisdiction, or otherwise), the Committee shall direct the
     Trustee to segregate in a separate account in the Plan (or in an escrow
     account) the amounts which would have been payable to the Alternate Payee
     during the period if the order had been determined to be a Qualified
     Domestic Relations Order. If within the 18 Month Period (as defined below),
     the order (or modification thereof) is determined to be a Qualified
     Domestic Relations Order, the Committee shall direct the Trustee to pay the
     segregated amounts (plus any interest thereon) to the person or persons
     entitled thereto. However, if within the 18 Month Period (i) it is
     determined that the order is not a Qualified Domestic Relations Order, or
     (ii) the issue as to whether the order is a Qualified Domestic Relations
     Order is not resolved, then the Committee shall direct the Trustee to pay
     the segregated amounts (plus any interest thereon) to the person or persons
     who would have been entitled to the amounts if there had been no order
     (assuming such


                                       91



     benefits were otherwise payable). Any determination that an order is a
     Qualified Domestic Relations Order that is made after the close of the 18
     Month Period shall be applied prospectively only. For purposes of this
     Section 15.2, the "18 Month Period" shall mean the 18 month period
     beginning with the date on which the first payment would be required to be
     made under the domestic relations order.


                                       92



                                   ARTICLE XVI
                            MISCELLANEOUS PROVISIONS

     16.1 No Right of Employment Hereunder. The adoption and maintenance of the
Plan and Trust shall not be deemed to constitute a contract of employment or
otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

     16.2 Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

     16.3 Limitation on Company Liability. Any benefits payable under the Plan
shall be paid or provided for solely from the Plan and the Company assumes no
liability or responsibility therefor.

     16.4 Gender. Masculine gender shall include the feminine and the singular
shall include the plural unless the context clearly indicates otherwise.

     16.5 Interpretation. The provisions of the Plan shall in all cases be
interpreted in a manner that is consistent with the Plan satisfying (i) the
requirements of Code Section 401(a) and related statutes for qualification as a
defined contribution plan and (ii) the requirements of Code Section 401(k) and
related statutes for qualification as a cash or deferred arrangement.

     16.6 Withholding For Taxes. Any payments from the Trust Fund may be subject
to withholding for taxes as may be required by any applicable federal or state
law.

     16.7 California Law Controlling. All legal questions pertaining to the Plan
which are not controlled by ERISA shall be determined in accordance with the
laws of the State of California and all contributions made hereunder shall be
deemed to have been made in that State.

     16.8 Plan and Trust as One Instrument. The Plan and the Trust Agreement
shall be construed together as one instrument. In the event that any conflict
arises between the terms and/or conditions of the Trust Agreement and the Plan,
the provisions of the Plan shall control, except that with respect to the duties
and responsibilities of the Trustee, the Trust Agreement shall control.

     16.9 Invalid Provisions. If any paragraph, section, sentence, clause or
phrase contained in the Plan shall become illegal, null or void or against
public policy, for any reason, or shall be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null


                                       93



or void or against public policy, the remaining paragraphs, sections, sentences,
clauses or phrases contained in the Plan shall not be affected thereby.

     16.10 Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.


                                       94



     IN WITNESS WHEREOF, Allergan, Inc. hereby executes this instrument,
evidencing the terms of the Allergan, Inc. Savings and Investment Plan as
restated this 14th day of June, 2005.

ALLERGAN, INC.


By: /s/ Roy J. Wilson
    ---------------------------------
    Roy J. Wilson
    Executive Vice President,
    Human Resources


                                       95



                                   APPENDIX A
           SPECIAL PROVISIONS FOR PUERTO RICO-BASED PAYROLL EMPLOYEES

                                     PART I
                                  INTRODUCTION

     1.1 Effective Date. The effective date of this Appendix A is January 1,
2005.

     1.2 Purpose of Appendix A. The provisions of the Plan shall apply to all
Puerto Rico-based payroll Employees except as specifically provided in this
Appendix A.

     1.3 Plan Qualification. The Plan is an employee benefit plan that is
intended to qualify under PR-Code Section 1165(a) as a qualified profit sharing
plan and under PR-Code Section 1165(e) as a qualified cash or deferred
arrangement.

                                     PART II
                                   DEFINITIONS

     The Definitions of Article II of the Plan shall apply to all Puerto
Rico-based Employees and shall have the same meaning for the purpose of this
Appendix A except as set forth below:

     2.1 Plan Section 2.17. "Compensation" shall have the same meaning as set
forth in Plan Section 2.17 except that in the case of a Puerto Rico-based
Employee, Compensation shall also include cost of living allowances earned
within Puerto Rico, amounts paid under the Christmas bonus program, and amounts
of salary reduction elected by a Puerto Rico-based Participant under a PR-Code
Section 1165(e) cash or deferred arrangement, but shall exclude contributions or
distributions pursuant to any other plan sponsored by the Company and qualified
under PR-Code Section 1165(a).

     2.2 Plan Section 2.18. "Credited Service" shall have the same meaning as
set forth in Plan Section 2.18 except that in the case of a Puerto Rico-based
Employee who was employed by the Company at any time prior to the Original
Effective Date, for the period prior to January 1, 1989, Credited Service shall
include service, if any, credited to such Employee under the Savings and
Investment Plan for Employees of Subsidiaries of SmithKline Beckman Corporation
Whose Principal Office is Located in Puerto Rico.

     2.3 Plan Section 2.21. For the purpose of this Appendix A only, the
definition of "Eligible Employee" as defined in Plan Section 2.21 shall not
apply and "Eligible Employee" or "Eligible Puerto Rico-based Employee" shall
mean any Puerto Rico-based Employee but shall exclude any non-regular
manufacturing site transition employee, any non-resident alien of Puerto Rico
and the United States, any Leased Employee, and any Employee covered by a
collective bargaining agreement.


                                       96



     2.4 Plan Section 2.24. For the purpose of this Appendix A only, the
definition of "Employee" as defined in Plan Section 2.24 shall not apply and
"Employee" or "Puerto Rico-based Employee" shall mean any person who is employed
in any capacity by the Sponsor or any Affiliated Company at its Puerto Rico
locations, any portion of whose income is subject to withholding of income tax
and/or for whom Social Security contribution are made by the Sponsor or an
Affiliated Company except that such term shall not include (i) any individual
who performs services for the Sponsor or an Affiliated Company and who is
classified or paid as an independent contractor as determined by the payroll
records of the Sponsor or an Affiliated Company even if a court or
administrative agency determines that such individual is a common-law employee
and not an independent contractor, (ii) any individual who performs services for
the Sponsor or an Affiliated Company pursuant to an agreement between the
Sponsor or an Affiliated Company and any other person including a leasing
organization except to the extent such individual is a Leased Employee, and
(iii) any individual whose employment is transferred from the Sponsor or an
Affiliated Company to Advanced Medical Optics, Inc. ("AMO") in connection with
the distribution of the stock of AMO by the Sponsor to its stockholders,
effective as of the day following such transfer, hereinafter referred to as an
"AMO Employee." An individual is an AMO Employee if classified or identified as
such in the payroll records of the Sponsor or an Affiliated Company or in the
Employee Matters Agreement entered into between the Sponsor and AMO.

     2.5 Plan Section 2.38. For the purpose of this Appendix A only,
"Participant" as defined in Plan Section 2.38 shall not apply and "Participant"
or "Puerto Rico-based Participant" shall mean a Puerto Rico-based Employee or
former Puerto Rico-based Employee who has commenced participation in the Plan
pursuant to Section 3.1 and who retains rights under the Plan.

     2.6 Additional Terms. Additional terms shall have the following meaning:

          (a) "PR-Code" shall mean the Puerto Rico Internal Revenue Code of
     1994, as amended. Where the context so requires a reference to a particular
     PR-Code Section shall also refer to any successor provision of the PR-Code
     to such PR-Code Section.

          (b) "Top One-Third Highly Compensated Employee" shall mean any
     Eligible Puerto Rico-based Employee who has Compensation for a Plan Year
     that is greater than the Compensation for such Plan Year of two-thirds
     (2/3) of all Eligible Puerto Rico-based Employees.

                                    PART III
                          ELIGIBILITY AND PARTICIPATION

     The provisions of Article III of the Plan shall apply to all Puerto
Rico-based Employees.


                                       A-2



                                     PART IV
                              PARTICIPANT DEPOSITS

     The provisions of Article IV of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

     4.1 Plan Section 4.1. The provisions of Plan Section 4.1(d) shall apply to
all Puerto Rico-based Participants except that Puerto Rico-based Participants
who make hardship withdrawals pursuant to Plan Section 8.1(e) shall not be
permitted to make Before Tax Deposits or After Tax Deposits to the Plan during
the 12-month period beginning as soon as administratively feasible following the
date of the hardship withdrawal. Also, to the extent permissible by ERISA and
the Code, each contribution made by the Company to the Plan under Plan Section
4.1 with respect to the Before Tax Deposits of a Puerto Rico-based Participant
shall be made only to the extent that the Company has current or accumulated
earnings and profits, as determined under the PR-Code, and is expressly
conditioned on the deductibility of such contribution under Section 1023(n) of
the PR-Code for the taxable year for which contributed. If the Puerto Rico
Secretary of the Treasury disallows the deduction, or if the contribution was
made by a mistake of fact, such contribution shall be returned to the Company
within one (1) year after the disallowance of the deduction (to the extent
disallowed), or after the payment of such contribution, respectively. Such
contributions to the Plan by the Company shall be paid to the Trustee not later
than the date for filing the Company's Puerto Rico income tax return for the
taxable year in which such payroll period falls, including any extensions
thereof.

     4.2 Plan Section 4.2. The provisions of Plan Section 4.2 shall apply to all
Puerto Rico-based Employees except as set forth below:

     (a) Notwithstanding the provisions of paragraph (a) of Plan Section 4.2, a
Puerto Rico-based Participant may elect to contribute a whole percentage of his
or her Compensation to the Plan as Before Tax Deposits; provided, however, that
no Puerto Rico-based Participant shall be permitted to make Before Tax Deposits
to the Plan during any taxable year in excess of: (i) ten percent (10%) of
Compensation up to a maximum of $8,000, or such larger amount as may be
determined by the Puerto Rico Secretary of the Treasury pursuant to the PR-Code;
provided that, if a Puerto Rico-based Participant contributes to a Puerto Rico
individual retirement account as described in PR-Code Section 1169, the maximum
amount of his or her Before Tax Deposits may not exceed the difference, if any,
between the amount available as a contribution up to the limit of $8,000 and the
contribution made to a Puerto Rico individual retirement account, or as
otherwise provided by the PR-Code, (ii) the Actual Deferral Percentage test
limitation set forth in Plan Section 4.3 and Section 4.3 of this Appendix, and
(iii) the Annual Addition limitation set forth in Plan Section 13.1.

     (b) The provisions of paragraph (e) of Plan Section 4.2 pertaining to
"catch-up" Before Tax Deposits shall not apply to Puerto Rico-based
Participants.

     4.3 Additional Contribution Deferral Limitation. In addition to the
limitations on Compensation Deferral Contributions set forth in Plan Section
4.3, Compensation Deferral Contributions by a Puerto Rico-based Participant
shall not exceed the limitation on contributions


                                       A-3



by or on behalf of the Top One-Third Highly Compensation Employees under PR-Code
Section 1165(e), as provided in this Section 4.3 with respect to each Plan Year.
In the event that Compensation Deferrals Contributions under the Plan by or on
behalf of the Top One-Third Highly Compensated Employees exceed the limitations
of this Section for any reason, such excess contributions shall be
recharacterized as After Tax Deposits or such excess contributions, adjusted for
any income or loss allocable thereto, shall be returned to such Participant, as
provided in Plan Section 4.5.

          (a) The Compensation Deferral Contributions by Participants for a Plan
     Year shall satisfy the Actual Deferral Percentage test under the PR-Code as
     set forth in subparagraph (i) below, or to the extent not precluded by
     applicable regulations, the alternate Actual Deferral Percentage test as
     set forth in (ii) below:

               (i) The average "Actual Deferral Percentage" for the Top
          One-Third Highly Compensated Employees shall not be more than the
          average Actual Deferral Percentage of all non-Top One-Third Highly
          Compensated Employees multiplied by 1.25, or

               (ii) The excess of the average Actual Deferral Percentage for the
          Top One-Third Highly Compensated Employees over the average Actual
          Deferral Percentage for all non-Top One-Third Highly Compensated
          Employees shall not be more than two (2) percentage points and the
          average Actual Deferral Percentage for the Top One-Third Highly
          Compensated Employee shall not be more than the average Actual
          Deferral Percentage of all non-Top One-Third Highly Compensated
          Employees multiplied by 2.0.

          (b) For the purpose of this Section 4.3 only, the following
     definitions shall apply:

               (i) "Actual Deferral Percentage" shall mean, with respect to the
          group of all Top One-Third Highly Compensated Employees and the group
          of all non-Top One-Third Highly Compensated Employees for a Plan Year,
          the ratio, calculated separately for each Participant in such group,
          of the amount of the Participant's Compensation Deferral Contribution
          for such Plan Year, to such Participant's Compensation for such Plan
          Year, in accordance with regulations prescribed by the Puerto Rico
          Secretary of the Treasury under PR-Code Section 1165(e). For purposes
          of computing the Actual Deferral Percentage, an Eligible Employee who
          would be a Participant but for the failure to make Before Tax Deposits
          shall be treated as a Participant on whose behalf no Before Tax
          Deposits are made.

               (ii) "Participant" shall mean any Eligible Puerto Rico-based
          Employee who satisfied the requirements under Plan Article III during
          the Plan Year, whether or not such Eligible Employee elected to
          contribute to the Plan for such Plan Year.


                                      A-4



               (iii) "Compensation Deferral Contributions" shall mean amounts
          contributed to the Plan by a Participant as Before Tax Deposits
          pursuant to Section 4.1 of this Appendix, including any other amounts
          prescribed under PR-Code Section 1165(e) and applicable regulations.
          To the extent determined by the Committee and in accordance with
          regulations issued by the Puerto Rico Secretary of the Treasury,
          matching contributions and qualified nonelective contributions on
          behalf of a Participant that satisfy the requirements of PR-Code
          Section 1165(e)(3)(D)(ii) may also be taken into account for the
          purpose of determining the Actual Deferral Percentage of such
          Participant.

               (iv) "Compensation" shall mean compensation as defined in PR-Code
          Section 1165(e) and applicable regulations.

          (c) In the event that as of the first day of Plan Year, the Plan
     satisfies the requirements of PR-Code Section 1165(a) only if aggregated
     with one or more other plans which include arrangements under PR-Code
     Section 1165(e), then this Section 4.3 shall be applied by determining the
     Actual Deferral Percentages of Participants as if all such plans were a
     single plan, in accordance with regulations prescribed by the Secretary of
     the Treasury under PR-Code Section 1165(e). Plans may be considered one
     plan for purposes of satisfying PR-Code Section 1165(e) only if they have
     the same Plan Year.

          (d) For the purpose of this Section 4.3, the "Actual Deferral
     Percentage" for any Top One-Third Highly Compensated Employee who is a
     Participant under two or more PR-Code Section 1165(e) arrangements of the
     Company shall be determined by taking into account the Top One-Third Highly
     Compensated Employee's Compensation under each such arrangement and
     contributions under each such arrangement which qualify for treatment under
     PR-Code Section 1165(e) in accordance with regulations prescribed by the
     Puerto Rico Secretary of the Treasury under PR-Code Section 1165(e). If the
     arrangements have different Plan Years, this paragraph shall be applied by
     treating all such arrangements ending with or within the same calendar year
     as a single arrangement. Notwithstanding the foregoing, certain plans shall
     be treated as separate plans if mandatorily disaggregated pursuant to
     regulations under Code Section 401(k).

          (e) For purposes of the Actual Deferral Percentage test under the
     PR-Code, Compensation Deferral Contributions must be made before the last
     day of the twelve-month period immediately following the Plan Year to which
     such contributions relate.

          (f) The determination and treatment of Compensation Deferral
     Contributions and the Actual Deferral Percentage of any Participant under
     this Section 4.3 shall satisfy such other requirements as may be prescribed
     by the Puerto Rico Secretary of the Treasury.

          (g) The Committee shall keep or cause to have kept such records as are
     necessary to demonstrate that the Plan satisfies the requirements of
     PR-Code Section 1165(e) and the regulations thereunder, in accordance with
     regulations prescribed by the Puerto Rico Secretary of the Treasury.


                                      A-5



          (h) Notwithstanding any provision of this Appendix A to the contrary,
     to the extent permitted by the PR-Code and its regulations, all Employees
     employed by the Sponsor and any Affiliated Company that participates in the
     Plan may be aggregated for purposes of determining compliance by the Plan
     with the Actual Deferral Percentage test under the PR-Code and the
     determination of Top One-Third Highly Compensated Employees.

     4.4 Plan Section 4.4. The provisions of Plan Section 4.4 entitled
"Provisions for Return of Excess Before Tax Deposits" shall be applied by
substituting the dollar limitation contained in Section 4.2 of this Appendix for
the "Before Tax Deposit Limit" in each place it appears.

     4.5 Plan Section 4.5. The provisions of Plan Section 4.5 entitled
"Provision for Recharacterization or Return of Excess Deferrals by Highly
Compensated Participants" shall be applied as follows:

          (a) "Highly Compensated Participant and Top One-Third Highly
     Compensated Employee" shall be substituted for "Highly Compensated
     Participant" in each place it appears.

          (b) For purposes of satisfying the Actual Deferral Percentage test
     under the PR-Code, the amount of any excess Compensation Deferral
     Contributions by a Top One-Third Highly Compensated Employee shall be
     determined by the Committee taking into account the leveling method applied
     under the PR-Code and its regulations that provide that the leveling method
     shall begin with the Top One-Third Highly Compensated Employee who has the
     highest deferral percentage.

          (c) Any reference to Code Sections shall include reference to the
     corresponding PR-Code Section unless the context clearly indicates
     otherwise. For example, references to "Code Section 401(k)" and "Code
     Section 404" shall include references to PR-Code Section 1165(e) and
     PR-Code Section 1023(n), respectively.

     4.6 Reserved for Future Modification.

     4.7 Plan Section 4.7. In addition to the provisions of Plan Section 4.7
entitled "Character of Deposits," Before Tax Deposits shall be treated as
employer contributions for purposes of PR-Code Section 1165(e).

     4.8 Plan Section 4.8. For purposes of Plan Section 4.8, a "Direct Rollover
Contribution" or a "Participant Rollover Contribution" from a retirement plan
qualified under PR-Code Section 1165(a) (unless such plan is also qualified
under Code Section 401(a)) or an "IRA Rollover Contribution" from a Puerto-Rico
individual retirement account or annuity shall not be permitted under the Plan.


                                      A-6



                                     PART V
                      TRUST FUND AND MATCHING CONTRIBUTIONS

     The provisions of Article V shall apply to all Puerto Rico-based Employees
except as set forth below:

     5.1 Plan Section 5.6. The provisions of Plan Section 5.6 entitled
"Irrevocability" shall be applied by including a corresponding reference to
"PR-Code Section 1165(a)" and "PR-Code Section 1023(n)" in each place "Code
Section 401(a)" and "Code Section 404" appears, respectively.

                                     PART VI
                            ACCOUNTS AND ALLOCATIONS

     The provisions of Article VI of the Plan shall apply to all Puerto
Rico-based Employees.

                                    PART VII
                            VESTING IN PLAN ACCOUNTS

     The provisions of Article VII of the Plan shall apply to all Puerto
Rico-based Employees.

                                    PART VIII
                            PAYMENT OF PLAN BENEFITS

     The provisions of Article VIII of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

     8.1 Plan Section 8.2(a). For purposes of Plan Section 8.2(a), a Puerto
Rico-based Participant may elect, at the time and in the manner prescribed by
the Committee, to have the entire portion of a lump-sum distribution from the
Plan paid directly to a qualified trust described in PR-Code Section 1165(a)
that accepts the Puerto Rico-based Participant's distribution or an individual
retirement account or annuity described in PR-Code Sections 1169(a) and (b),
respectively.

     8.2 Plan Section 8.4. In addition to the provisions of Plan Section 8.4
entitled "Designation of Beneficiary," the following rules shall apply to a
Participant, as defined in Section 2.6 of this Appendix:

          (a) In the event a deceased Participant is not a resident of Puerto
     Rico at the date of his or her death, the Committee, in its discretion, may
     require the establishment of ancillary administration in Puerto Rico.


                                      A-7



          (b) If the Committee cannot locate a qualified personal representative
     of the deceased Participant, or if administration of the deceased
     Participant's estate is not otherwise required, the Committee, in its
     discretion, may pay the deceased Participant's interest in the Trust Fund
     to his or her heirs at law (determined in accordance with the laws of the
     Commonwealth of Puerto Rico) as they existed at the date of the
     Participant's death.

     8.3 Plan Section 8.5. Notwithstanding the provisions of Plan Section 8.5, a
hardship withdrawal shall be made to a Puerto Rico-based Participant only if the
Committee (or its representative), based upon the Participant's representation
and such other facts as are known to the Committee, determines that the
requested withdrawal is on the account of:

          (a) A deductible medical expense (within the meaning of PR-Code
     Section 1023(aa)(2)(p)) incurred by the Participant, his or her spouse,
     children or dependents;

          (b) The purchase (excluding mortgage payments) of a principal
     residence for the Participant;

          (c) The payment of tuition for the next twelve (12) months of
     post-secondary education for the Participant, the Participant's spouse,
     children, or dependents;

          (d) The need to prevent the eviction of the Participant from his or
     her principal residence or foreclosure on the mortgage of the Participant's
     principal residence; and

          (e) Such other events as the PR-Code, regulations or the Puerto Rico
     Secretary of the Treasury may allow.

     Notwithstanding anything in the Plan to the contrary, Puerto Rico-based
Participants who make hardship withdrawals pursuant to Plan Section 8.1(e) shall
not be permitted to make Before Tax Deposits or After Tax Deposits to the Plan
during the 12-month period beginning as soon as administratively feasible
following the date of the hardship withdrawal.

     8.4 Plan Section 8.6(a). Notwithstanding the provisions of Plan Section
8.6(a) entitled "Distribution Rules," in the case of a Puerto Rico-based
Participant in no event shall any benefits under the Plan, including benefits
upon retirement, Severance, or Disability, be paid (or commence to be paid) to a
participant prior to the "Consent Date" (as defined herein) unless the
Participant consents in writing to the payment (or commencement of payment) of
such benefits prior to said Consent Date. As used herein, the term "Consent
Date" shall mean the later of (i) the Participant's 62nd birthday, or (ii) the
Participant's Normal Retirement Age. Notwithstanding the foregoing, the
provisions of this Paragraph shall not apply (i) following the Participant's
death, or (ii) with respect to a lump sum distribution of the vested portion of
a Participant's Account if the total amount of such vested portion does not
exceed $1,000 ($5,000 for lump sum distributions made prior to March 28, 2005).


                                      A-8



     8.5 Plan Section 8.11(c). The provisions of Plan Section 8.11(c) entitled
"Additional Documents" shall be applied by including reference to "Puerto Rico"
in each place "State or Federal" appears.

     8.6 Plan Section 8.12. The provisions of Plan Section 8.12 entitled
"Trustee-Trustee Transfers" shall be applied by including a corresponding
reference to "PR-Code Section 1165" in each place "Code Section 401" appears.

                                     PART IX
                           PLAN ARTICLES IX THROUGH XI

     The provisions of Articles IX through XI of the Plan shall apply to all
Puerto Rico-based Employees.

                                     PART X
                             TERMINATION AND MERGER

     The provisions of Articles XII of the Plan shall apply to all Puerto
Rico-based Employees except as follows:

     10.1 Plan Section 12.1. In addition to the provisions of Plan Section 12.1,
the Committee may determine that no distributions shall be made to a Puerto
Rico-based Participant in the event the Plan is terminated, until such time as
the Puerto Rico Department of the Treasury shall have determined in writing that
such termination will not adversely affected the prior qualification of the Plan
under the PR-Code.

     10.2 Plan Section 12.2. In addition to the provisions of Plan Section 12.2,
any merger or consolidation of the Plan with, or transfer in whole or in part of
the assets and liabilities of the Trust to, another trust fund as applied to a
Puerto Rico-based Participant will be limited to the extent such other plan and
trust are qualified under PR-Code Section 1165(a).

                                     PART XI
                          PLAN ARTICLES XIII THROUGH XV

     The provisions of Articles XIII through XV of the Plan shall apply to all
Puerto Rico-based Employees.


                                      A-9



                                    PART XII
                            MISCELLANEOUS PROVISIONS

     The provisions of Article XVI of the Plan shall apply to all Puerto
Rico-based Employees except as follows:

     12.1 Plan Section 16.5. In addition to the provisions of Plan Section 16.5
entitled "Interpretation," the provisions of the Plan shall be interpreted in a
manner consistent with the Plan satisfying (i) the requirements of PR-Code
Section 1165(a) and related statutes for qualification as a defined contribution
plan and (ii) the requirements of PR-Code Section 1165(e) and related statutes
for qualification as a cash or deferred arrangement to the extent such
interpretation would not violate (i) the requirements of Code Section 401(a) and
related statutes for qualification as a defined contribution plan and (ii) the
requirements of Code Section 401(k) and related statutes for qualification as a
cash or deferred arrangement.

     12.2 Plan Section 16.6. In addition to the provisions of Plan Section 16.6
entitled "Withholding for Taxes," any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable Puerto
Rico law.

     12.3 Plan Section 16.7. In addition to the provisions of Plan Section 16.7
entitled "California Law Controlling," the Committee shall determine whether all
legal questions pertaining to the Plan which are not controlled by ERISA shall
be determined in accordance with the laws of the Commonwealth of Puerto Rico or
the laws of the State of California in the case of a Puerto Rico-based Employee
or Participant.


                                      A-10

EX-10.6

                                                                    EXHIBIT 10.6

                                 FIRST AMENDMENT
                                       TO
                                 ALLERGAN, INC.
                           SAVINGS AND INVESTMENT PLAN
                                 (RESTATED 2005)

The ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN (the "Plan") is hereby amended as
follows:

I.      Section 2.18(g) of the Plan is amended as follows:

                        (g) In accordance with paragraph (f) above, an Eligible
                Employee shall receive Credited Service for any period of
                employment with Allergan Medical Optics - Lenoir facility,
                Oculex Pharmaceuticals, Inc., or Inamed Corporation and any
                subsidiary of Inamed Corporation prior to each becoming an
                Affiliated Company but only to the extent provided in paragraph
                (e) above. Notwithstanding anything in this Section to the
                contrary and for purposes of this Plan only, the Employment
                Commencement Date (or Reemployment Commencement Date) of an
                Eligible Employee described in this paragraph (g) shall mean,
                for purposes of paragraph (b), the date (or, in the case of a
                Reemployment Commencement Date, the date following a Severance)
                on which the Eligible Employee was first credited with an Hour
                of Service with Allergan Medical Optics - Lenoir facility,
                Oculex Pharmaceuticals, Inc., or Inamed Corporation and any
                subsidiary of Inamed Corporation including any date prior to
                Allergan Medical Optics - Lenoir facility, Oculex
                Pharmaceuticals, Inc., or Inamed Corporation and any subsidiary
                of Inamed Corporation becoming an Affiliated Company.

II.     Section 2.21 of the Plan is amended as follows:

                        2.21 Eligible Employee. "Eligible Employee" shall mean
                any United States-based payroll Employee and any Puerto
                Rico-based payroll Employee of the Company and any expatriate
                Employee of the Company who is a United States citizen or
                permanent resident, but excluding:

                                (a) any non-resident alien of the United States
                        and Puerto Rico, non-regular manufacturing site
                        transition Employee, Leased Employee, or Employee
                        covered by a collective bargaining agreement; and

                                (b) any Employee who is employed by (i) Inamed
                        Corporation and any of its subsidiaries (or any
                        Affiliated Company that is designated by the Sponsor as
                        a successor thereto) on or after the "Effective Time" as
                        defined in the Agreement and Plan of Merger dated as of
                        December 20, 2005 by and among Allergan, Inc., Banner
                        Acquisition, Inc., and Inamed Corporation or (ii) the
                        Company as of the date he or she becomes classified as
                        "Inamed-benefited" in the payroll records of the
                        Company.




III.    This First Amendment shall be effective as of the "Effective Time" as
        defined in the Agreement and Plan of Merger dated as of December 20,
        2005 by and among Allergan, Inc., Banner Acquisition, Inc., and Inamed
        Corporation.

        IN WITNESS WHEREOF, Allergan, Inc. hereby executes this First Amendment
to the Allergan, Inc. Savings and Investment Plan (Restated 2005) on this 6th
day of March, 2006.



ALLERGAN, INC.


BY:      /s/ Roy J. Wilson
        ----------------------------
        Roy J. Wilson
        Executive Vice President



                                       2

EX-10.7

                                                                    EXHIBIT 10.7


                                SECOND AMENDMENT
                                       TO
                                 ALLERGAN, INC.
                           SAVINGS AND INVESTMENT PLAN
                                 (RESTATED 2005)

The ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN (the "Plan") is hereby amended
effective December 31, 2006 as follows:

I.      Article I of the Plan is amended by adding the following Section 1.4 and
        renumbering the remaining Sections sequentially:

                        1.4 Merger of Inamed Corporation Retirement Savings
                Plan. The Inamed Corporation Retirement Savings Plan shall merge
                with and into the Plan effective as of December 31, 2006. The
                Plan shall be the plan surviving the merger. All account
                balances maintained under the Inamed Corporation Retirement
                Savings Plan shall be transferred to the Plan and all assets
                acquired under the Plan as a result of the merger shall be
                administered, distributed and otherwise governed by the
                provisions of the Plan; provided, that Participants (including
                those who terminated prior to December 31, 2006) who have
                account balances of greater than zero on December 31, 2006 shall
                be 100% vested in such account balances. Any amounts contributed
                following the effective date of the merger shall be vested in
                accordance with the provisions of the Plan.

II.     Section 2.21 of the Plan is amended and restated as follows:

                        2.21 Eligible Employee. "Eligible Employee" shall mean
                any United States-based payroll Employee and any Puerto
                Rico-based payroll Employee of the Company and any expatriate
                Employee of the Company who is a United States citizen or
                permanent resident, but excluding:

                                (a) any non-resident alien of the United States
                        and Puerto Rico, non-regular manufacturing site
                        transition Employee, Leased Employee, or Employee
                        covered by a collective bargaining agreement; and

                                (b) prior to January 1, 2007, any Employee who
                        is employed by (i) Inamed Corporation and any of its
                        subsidiaries (or any Affiliated Company that is
                        designated by the Sponsor as a successor thereto) on or
                        after the "Effective Time" as defined in that certain
                        Agreement and Plan of Merger, dated as of December 20,
                        2005, by and among Allergan, Inc., Banner Acquisition,
                        Inc. and Inamed Corporation or (ii) the Company as of
                        the date he or she becomes classified as
                        "Inamed-benefited" in the payroll records of the
                        Company.




III.    Section 7.3(c) of the Plan is amended and restated as follows:

                (c) A Participant shall at all times be 100% vested in all
        amounts transferred from the SmithKline Beckman Corporation Savings and
        Investment Plan to the Plan and, as provided in Section 1.4, shall at
        all times be 100% vested in all amounts transferred from the Inamed
        Corporation Retirement Savings Plan to the Plan.

                                      * * *

        IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Second Amendment
to the Allergan, Inc. Savings and Investment Plan (Restated 2005) on this 30th
day of March, 2007 to reflect the applicable provisions of that certain
Agreement and Plan of Merger, dated as of December 20, 2005, by and among
Allergan, Inc., Banner Acquisition, Inc. and Inamed Corporation.


ALLERGAN, INC.


BY:       /s/ Douglas S. Ingram
        ----------------------------
        Douglas S. Ingram
        Executive Vice President,
        Chief Administrative Officer,
        General Counsel and Secretary


                                       2

EX-10.8

                                                                    EXHIBIT 10.8

                                 ALLERGAN, INC.

                                  PENSION PLAN

RESTATED
2005


                                                                               .
                                                                               .
                                                                               .

                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE I
INTRODUCTION.............................................................      1
1.1   Plan Name..........................................................      1
1.2   Plan Purpose.......................................................      1
1.3   Effective Date of 2005 Restated Plan...............................      1
1.4   Amendments to Plan.................................................      1
1.5   Plan Qualification.................................................      2

ARTICLE II
DEFINITIONS..............................................................      3
2.1   Accrued Benefit....................................................      3
2.2   Active Participant.................................................      3
2.3   Actuarial Equivalent...............................................      3
2.4   Affiliated Company.................................................      3
2.5   Age................................................................      3
2.6   Annuity Starting Date..............................................      3
2.7   Average Earnings...................................................      3
2.8   Beneficiary........................................................      4
2.9   Benefit Year.......................................................      4
2.10  Board of Directors.................................................      4
2.11  Code...............................................................      4
2.12  Committee..........................................................      4
2.13  Company............................................................      4
2.14  Earnings...........................................................      4
2.15  Effective Date.....................................................      5
2.16  Eligibility Computation Period.....................................      5
2.17  Eligible Employee..................................................      6
2.18  Eligible Retirement Plan...........................................      6
2.19  Eligible Rollover Distribution.....................................      7
2.20  Employee...........................................................      7
2.21  Employment Commencement Date.......................................      8
2.22  ERISA..............................................................      8
2.23  Fund...............................................................      8
2.24  Highly Compensated Employee........................................      8
2.25  Hour of Service....................................................      9
2.26  Investment Manager.................................................      9
2.27  Leased Employee....................................................      9
2.28  Normal Retirement Date.............................................      9
2.29  Participant........................................................      9
2.30  Period of Severance................................................     10
2.31  Plan...............................................................     10




                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
2.32  Plan Administrator.................................................     10
2.33  Plan Year..........................................................     10
2.34  Primary Social Security Benefit....................................     10
2.35  Qualified Joint and Survivor Annuity...............................     10
2.36  Reemployment Commencement Date.....................................     11
2.37  Severance..........................................................     11
2.38  Severance Date.....................................................     11
2.39  Single Life Annuity................................................     12
2.40  SKB Plan...........................................................     12
2.41  Special Retirement Eligibility Date................................     12
2.42  Spin-Off Date......................................................     12
2.43  Sponsor............................................................     12
2.44  Trust..............................................................     12
2.45  Trustee............................................................     12
2.46  Vesting Year.......................................................     12

ARTICLE III
PARTICIPATION............................................................     14
3.1   Participation for the 2003 Plan Year and thereafter................     14
3.2   Participation for the 2002 Plan Year...............................     14
3.3   Participation prior to the 2002 Plan Year..........................     14

ARTICLE IV
ACCRUAL OF BENEFITS......................................................     15
4.1   Accrued Benefit Formula............................................     15
4.2   Minimum Accrued Benefit............................................     15
4.3   Accrued Benefit for Participants with Earningsin excess of
         $150,000 prior to January 1, 1994...............................     15
4.4   Accrued Benefit for Participants Participating in the Voluntary
         Early Retirement Incentive Program..............................     16
4.5   Temporary Supplemental Monthly Benefit for Participants
         Participating in the Voluntary Early Retirement Incentive
         Program.........................................................     17

ARTICLE V
BENEFITS.................................................................     18
5.1   Normal Retirement..................................................     18
5.2   Postponed Retirement...............................................     18
5.3   Early Retirement...................................................     18
5.4   Termination of Employment..........................................     20
5.5   Consent to Pension Payments........................................     21



                                       ii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
5.6   Maximum Pension....................................................     21
5.7   Defined Benefit Fraction and Defined Contribution Fraction.........     24
5.8   Mandatory Commencement of Benefits.................................     25
5.9   Reemployment.......................................................     26
5.10  Other Disabled Participants........................................     27
5.11  Nonforfeitable Interest............................................     27
5.12  Compensation for Maximum Pension...................................     27

ARTICLE VI
FORM OF PENSIONS.........................................................     29
6.1   Unmarried Participants.............................................     29
6.2   Married Participants...............................................     29
6.3   Election of Optional Form of Benefit...............................     29
6.4   Optional Forms of Benefit..........................................     30
6.5   Cash-Outs..........................................................     31

ARTICLE VII
PRE-RETIREMENT DEATH BENEFITS............................................     32
7.1   Eligibility........................................................     32
7.2   Spousal Benefit....................................................     32
7.3   Alternative Death Benefit..........................................     33
7.4   Children's Survivor Benefit........................................     33
7.5   Waiver of Spousal Benefit..........................................     34

ARTICLE VIII
CONTRIBUTIONS............................................................     35
8.1   Company Contributions..............................................     35
8.2   Source of Benefits.................................................     35
8.3   Irrevocability.....................................................     35

ARTICLE IX
ADMINISTRATION...........................................................     36
9.1   Appointment of Committee...........................................     36
9.2   Appointment of Investment Subcommittee.............................     36
9.3   Transaction of Business............................................     36
9.4   Voting.............................................................     37
9.5   Responsibility of Committees.......................................     37
9.6   Committee Powers...................................................     37
9.7   Additional Powers of Committee.....................................     38



                                       iii



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
9.8   Investment Subcommittee Powers.....................................     39
9.9   Periodic Review of Funding Policy..................................     40
9.10  Claims Procedures..................................................     40
9.11  Appeals Procedures.................................................     41
9.12  Limitation on Liability............................................     42
9.13  Indemnification and Insurance......................................     42
9.14  Compensation of Committee and Plan Expenses........................     42
9.15  Resignation........................................................     42
9.16  Reliance Upon Documents and Opinions...............................     42
9.17  Appointment of Investment Manager..................................     43

ARTICLE X
AMENDMENT AND ADOPTION OF PLAN...........................................     44
10.1  Right to Amend Plan................................................     44
10.2  Adoption of Plan by Affiliated Companies...........................     44

ARTICLE XI
TERMINATION AND MERGER...................................................     45
11.1  Right to Terminate Plan............................................     45
11.2  Merger Restriction.................................................     45
11.3  Effect on Trustee and Committee....................................     45
11.4  Effect of Reorganization, Transfer of Assets or Change in Control..     45
11.5  Termination Restrictions...........................................     47

ARTICLE XII
TOP-HEAVY RULES..........................................................     49
12.1  Applicability......................................................     49
12.2  Definitions........................................................     49
12.3  Top-Heavy Status...................................................     50
12.4  Minimum Benefit....................................................     51
12.5  Maximum Benefit....................................................     52
12.6  Minimum Vesting Rules..............................................     53
12.7  Noneligible Employees..............................................     53

ARTICLE XIII
RESTRICTION ON ASSIGNMENT OR OTHER ALIENATION OF PLAN BENEFITS...........     54
13.1  General Restrictions Against Alienation............................     54
13.2  Qualified Domestic Relations Orders................................     54



                                       iv



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE XIV
MISCELLANEOUS............................................................     57
14.1  No Right of Employment Hereunder...................................     57
14.2  Effect of Article Headings.........................................     57
14.3  Limitation on Company Liability....................................     57
14.4  Interpretation.....................................................     57
14.5  Withholding For Taxes..............................................     57
14.6  California Law Controlling.........................................     57
14.7  Plan and Trust as One Instrument...................................     57
14.8  Invalid Provisions.................................................     57
14.9  Counterparts.......................................................     57
14.10 Forfeitures........................................................     58
14.11 Facility of Payment................................................     58
14.12 Lapsed Benefits....................................................     58


APPENDIX A

APPENDIX B

APPENDIX C


                                        v


                                 ALLERGAN, INC.
                                  PENSION PLAN

                                    ARTICLE I
                                  INTRODUCTION

     1.1 Plan Name. This document, made and entered into by Allergan, Inc., a
Delaware corporation ("Allergan") amends and restates in its entirety the
"Allergan, Inc. Pension Plan (Restated 2003)" and shall be known hereafter as
the "Allergan, Inc. Pension Plan (Restated 2005)."

     1.2 Plan Purpose. The purpose of the Allergan, Inc. Pension Plan (Restated
2005), hereinafter referred to as the "Plan," is to provide additional
retirement income to Eligible Employees of Allergan, and any Affiliated
Companies that are authorized by the Board of Directors of Allergan to
participate in the Plan for their future economic security. The Plan is fully
funded through Company contributions and the assets of the Plan shall be
administered, distributed, forfeited and otherwise governed by the provisions of
the Plan, which is to be administered by the Committee for the exclusive benefit
of Participants in the Plan and their Beneficiaries.

     1.3 Effective Date of 2005 Restated Plan. The Effective Date of this
amended and restated Plan shall be January 1, 2005 unless otherwise specified in
the Plan. The provisions of this Plan document apply generally to Employees who
have completed at least one (1) Hour of Service for Allergan or any Affiliated
Companies on or after January 1, 2005 and the rights and benefits, if any, of
Employees or Participants whose employment with Allergan or any Affiliated
Companies terminated prior to January 1, 2005 shall be determined in accordance
with the provisions of the Plan then in effect unless otherwise provided herein
and subject to any modification provided herein that may affect the payment of
benefits under the Plan.

     1.4 Amendments to Plan. The Plan has been amended from time to time since
its Original Effective Date of July 26, 1989 to reflect changes in the Plan's
operations and applicable law including, but not limited to, the following:

          (a) This Plan document amends the Plan to eliminate the mandatory
     cash-out of Accrued Benefits that do not exceed $5,000 effective March 28,
     2005. The Plan document also incorporates the amendments made under the
     First and Second Amendments to the Plan (Restated 2003).

          (b) During the 2002 Plan Year, under election procedures established
     by Allergan, all Employees who are Eligible Employees (as defined in
     Section 2.17(b)) on September 30, 2002 shall be provided with the
     opportunity to make a one-time irrevocable election to either (i) continue
     active participation in the Plan for Plan Years beginning on and after
     January 1, 2003 until their participation is terminated under the terms of
     the Plan or (ii) cease active participation in the Plan for Plan Years
     beginning on and after January 1, 2003 and be eligible to receive an
     allocation equal to 5% of compensation under the Allergan, Inc. Savings and
     Investment Plan as provided under



     and subject to the terms of that plan. Eligible Employees who elect to
     cease active participation in the Plan: (i) shall not be credited with
     Benefit Years after December 31, 2002 but shall continue to be credited
     with Vesting Years as provided under the terms of the Plan and (ii) shall
     be entitled to a monthly pension upon completing five (5) Vesting Years or
     upon reaching the Special Retirement Eligibility Date and completing one
     (1) Vesting Year, the amount of which shall be equal to his or her Accrued
     Benefit determined as of December 31, 2002, at such times and in such forms
     as permitted under the Plan.

          (c) In connection with the distribution of the stock of Advanced
     Medical Optics, Inc. ("AMO") by Allergan to its stockholders on June 29,
     2002, (i) AMO Employees (as defined in Section 2.20) shall cease to be
     eligible to participate in the Plan and shall cease to be credited with
     Benefit Years and Vesting Years under the Plan, (ii) AMO Employees shall
     have a nonforfeitable interest in their Accrued Benefits notwithstanding
     Section 5.11, and (iii) the assets attributable to, and the liabilities
     relating to, arising out of, or resulting from the Accrued Benefits of AMO
     Employees shall remain with the Pension Plan and shall be payable from the
     Plan to AMO Employees at such times and in such forms as permitted under
     the Plan.

          (d) In connection with the closure of the Allergan, Inc. Medical
     Plastics facility in Santa Ana, California ("Medical Plastics"), (i)
     Participants whose employment is terminated as a result of the closure of
     Medical Plastics, as determined by the payroll records of the Sponsor or
     any Affiliated Company shall have a nonforfeitable interest in their
     Accrued Benefits notwithstanding Section 5.11 effective as of their
     termination dates, and (ii) the Accrued Benefits of such Participants shall
     be payable from the Plan to such Participants at such times and in such
     forms as permitted under the Plan.

     1.5 Plan Qualification. The Plan is an employee benefit plan that is
intended to qualify under Code Section 401(a) as a qualified pension plan so as
to assure that the trust created under the Plan is tax exempt pursuant to Code
Section 501(a). The Plan's last determination letter was issued by the Internal
Revenue Service on March 7, 2003 with respect to the Allergan, Inc. Pension Plan
(Restated 2003) and its compliance with the changes to the qualification
requirements made by the Uruguay Round Agreements Act (GATT), the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal Revenue
Service Restructuring and Reform Act of 1998, and the Community Renewal Tax
Relief Act of 2000. It is intended that the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA") provisions of the Plan are to be regarded
as good faith compliance with the requirements of EGTRRA and are to be construed
in accordance with EGTRRA and guidance issued thereunder.


                                        2



                                   ARTICLE II
                                  DEFINITIONS

     2.1 Accrued Benefit. "Accrued Benefit" shall mean, for each Participant,
the amount of pension accrued by him or her under Article IV as of the date of
reference. An Accrued Benefit shall only be payable in accordance with Articles
V and VII.

     2.2 Active Participant. "Active Participant" shall mean a Participant who
is an Eligible Employee.

     2.3 Actuarial Equivalent. "Actuarial Equivalent" shall mean a benefit of
equal actuarial value under the assumptions set forth in Appendix A.

     2.4 Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). An
entity shall be an Affiliated Company pursuant to this Section only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
Original Effective Date of the Plan.

     2.5 Age. "Age" shall mean a Participant's age at his or her most recent
birthday.

     2.6 Annuity Starting Date. "Annuity Starting Date" shall mean the first day
of the first period for which a Participant's pension is paid as an annuity or
as any other optional form of benefit.

     2.7 Average Earnings. "Average Earnings" shall mean, for each Participant,
12 times the monthly average of his or her Earnings for the 60 consecutive
months that yield the highest average. For purposes of this Section, (i)
nonconsecutive months interrupted only by months in which a Participant has no
Earnings shall be treated as consecutive and (ii) unless the Sponsor expressly
determines otherwise, and except as is expressly provided otherwise in the Plan
or in resolutions of the Board of Directors, amounts paid to a Participant by a
domestic Affiliated Company prior to the effective date on which it became an
Affiliated Company (that would have been Earnings if paid by the Company) before
he or she became a Participant shall be treated as Earnings but only to the
extent such Earnings when added to the Earnings actually paid by the Company do
not result in more than 60 consecutive months of Earnings. If a Participant does
not have Earnings for 60 consecutive months, his or her Average Earnings shall
be 12 times the monthly average of his or her Earnings. For periods beginning on
or after April 1, 2000, a partial month of employment shall be taken into
account only if doing so yields a higher monthly average.


                                        3



     2.8 Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the person or
persons last designated by the Participant to receive the interest of a deceased
Participant.

     2.9 Benefit Year. "Benefit Year" shall mean a credit used to measure a
Participant's service in calculating his or her Accrued Benefit. Each
Participant shall be credited with a number of Benefit Years equal to 1/365th of
(i) the aggregate number of days between his or her Employment Commencement Date
(or Reemployment Commencement Date) of the Employee and the Severance Date which
immediately follows that Employment Commencement Date (or Reemployment
Commencement Date) and (ii) the aggregate number of days during a Period of
Severance of less than 30 days, but in each case, disregarding any day such
Participant is not an Active Participant and, for periods beginning on or after
January 1, 2003, any day such Participant is on an "Extended Leave of Absence"
as such term is defined in the Allergan, Inc. Welfare Benefits Plan.

     2.10 Board of Directors. "Board of Directors" shall mean the Board of
Directors of the Sponsor (or its delegate) as it may from time to time be
constituted.

     2.11 Code. "Code" shall mean the Internal Revenue Code of 1986 and the
regulations thereunder. Reference to a specific Code Section shall be deemed
also to refer to any applicable regulations under that Section, and shall also
include any comparable provisions of future legislation that amend, supplement
or supersede that specific Section.

     2.12 Committee. "Committee" shall mean the committee to be appointed under
the provisions of Section 9.1 to administer the Plan.

     2.13 Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts the Plan in accordance with Section 10.2.

     2.14 Earnings. "Earnings" shall mean the following:

          (a) Earnings shall include amounts paid during a Plan Year to an
     Employee by the Company for services rendered, including base earnings,
     commissions and similar incentive compensation, cost of living allowances
     earned within the United States of America, holiday pay, overtime earnings,
     pay received for election board duty, pay received for jury and witness
     duty, pay received for military service (annual training), pay received for
     being available for work, if required (call-in premium), shift differential
     and premium, sickness/accident related pay, vacation pay, vacation shift
     premium, and bonus amounts paid under the (i) Sales Bonus Program, (ii)
     Management Bonus Plan or Executive Bonus Plan, either in cash or in
     restricted stock, and (iii) group performance sharing payments, such as the
     "Partners for Success."

          (b) Earnings shall include amounts of salary reduction elected by the
     Employee under a Code Section 401(k) cash or deferred arrangement or a Code
     Section 125 cafeteria plan, amounts deferred under the Executive Deferred
     Compensation Plan, and amounts paid to an Employee pursuant to a "split pay
     arrangement" between the Company and an Affiliated Company.


                                        4



          (c) Earnings shall not include business expense reimbursements;
     Company gifts or the value of Company gifts; Company stock related options
     and payments; employee referral awards; flexible compensation credits paid
     in cash; special overseas payments, allowances and adjustments including,
     but not limited to, pay for cost of living adjustments and differentials
     paid for service outside of the United States, expatriate reimbursement
     payments, and tax equalization payments; forms of imputed income; long-term
     disability pay; payment for loss of Company car; Company car allowance;
     payments for patents or for writing articles; relocation and moving
     expenses; retention and employment incentive payments; severance pay;
     long-term incentive awards, bonuses or payments; "Impact Award" payments;
     "Employee of the Year" payments; "Awards for Excellence" payments; special
     group incentive payments and individual recognition payments which are
     nonrecurring in nature; tuition reimbursement; and contributions by the
     Company under the Plan or distributions hereunder, any contributions or
     distributions pursuant to any other plan sponsored by the Company and
     qualified under Code Section 401(a) (other than contributions constituting
     salary reduction amounts elected by the Employee under a Code Section
     401(k) cash or deferred arrangement), any payments under a health or
     welfare plan sponsored by the Company, or premiums paid by the Company
     under any insurance plan for the benefit of Employees.

          (d) For purposes of this Section and notwithstanding paragraph (a)
     above, (i) for periods on or after January 1, 2005, Earnings shall not
     include lump sum amounts paid to Employees under the Company's vacation
     buy-back policy, (ii) for periods beginning on or after January 1, 2003, if
     a Participant is not an Active Participant at any time during the month, he
     or she shall be deemed to have no Earnings for that month, (iii) for the
     period beginning on April 1, 2001 and ending on December 31, 2002, if a
     Participant is an Employee at any time during a month, Earnings for that
     month shall be the Earnings actually paid to the Participant during such
     month, and (iv) for periods prior to April 1, 2001, if a Participant is not
     an Employee for the entire month, he or she shall be deemed to have no
     Earnings for that month.

          (e) Earnings shall not exceed $200,000, as adjusted for cost-of-living
     increases in accordance with Code Section 401(a)(17)(B), for purposes of
     determining all benefits provided under the Plan. Any cost-of-living
     adjustments in effect for a calendar year shall apply to the Plan Year
     beginning with or within such calendar year. For purposes of determining
     benefits provided under the Plan in a Plan Year beginning on or after
     January 1, 2002, Earnings for any prior Plan Year shall not exceed
     $200,000.

     2.15 Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 2005 except as provided herein or as otherwise required for the Plan
to continue to maintain its qualified status under Code Section 401(a). The
"Original Effective Date" of the Plan shall mean July 26, 1989.

     2.16 Eligibility Computation Period. "Eligibility Computation Period" shall
mean a 365 day period used for determining whether an Employee is eligible to
participate in the Plan.


                                        5



Each Employee shall be credited with (i) the aggregate number of days between
each Employment Commencement Date (or Reemployment Commencement Date) of the
Employee and the Severance Date which immediately follows that Employment
Commencement Date (or Reemployment Commencement Date) and (ii) the aggregate
number of days during a Period of Severance of less than twelve months.

     2.17 Eligible Employee. "Eligible Employee" shall mean:

          (a) For Plan Years beginning on or after January 1, 2003 and subject
     to paragraph (d) below, an Eligible Employee is any "Election Eligible
     Employee" who makes a one-time irrevocable election under procedures
     established by the Sponsor to continue as an Active Participant for Plan
     Years beginning on or after January 1, 2003 and who did not incur a
     Severance on or after October 1, 2002. An "Election Eligible Employee" is
     any Employee who is an Eligible Employee (as defined in paragraph (b)
     below) on September 30, 2002. The classification of an Employee as an
     Eligible Employee for Plan Years beginning on or after January 1, 2003
     shall be determined solely from the records obtained during the election
     period established by the Sponsor.

          (b) For the 2002 Plan Year only and subject to paragraph (d) below, an
     Eligible Employee is any Employee who is employed by the Company but not by
     a joint venture in which the Company is a joint venturer and whose
     Employment Commencement Date or most recent Reemployment Commencement Date
     is prior to October 1, 2002; provided, however, if a former Employee is
     rehired on or after October 1, 2002 but prior to January 1, 2003 and would
     be an Eligible Employee but for his or her Reemployment Commencement Date,
     he or she shall be an Eligible Employee commencing on his or her
     Reemployment Commencement Date but shall cease to be an Eligible Employee
     as of January 1, 2003. Notwithstanding the foregoing, a Leased Employee or
     an Employee of the Company who, as of October 1, 2002, is neither a United
     States citizen nor a United States resident shall not be an Eligible
     Employee.

          (c) For Plan Years beginning prior to January 1, 2002 and subject to
     paragraph (d) below, an Eligible Employee is any Employee who is employed
     by the Company but not by a joint venture in which the Company is a joint
     venturer; provided, however, a Leased Employee or an Employee of the
     Company who is neither a United States citizen nor a United States resident
     shall not be an Eligible Employee.

          (d) Notwithstanding paragraphs (a), (b), and (c) above, (i) an
     Employee with respect to whom retirement benefits have been the subject of
     good faith collective bargaining shall be an Eligible Employee to the
     extent a collective bargaining agreement relating to him or her so provides
     and (ii) a temporary employee classified as such by the Sponsor or an
     Affiliated Company shall not be an Eligible Employee for Plan Years
     beginning prior to January 1, 1996.

     2.18 Eligible Retirement Plan. "Eligible Retirement Plan" shall mean (i) an
individual retirement account or annuity described in Code Section 408(a) or
408(b), (ii) a qualified retirement plan described in Code Section 401(a) or
403(a) that accepts Eligible Rollover


                                        6



Distributions, (iii) an annuity contract described in Code Section 403(b) that
accepts Eligible Rollover Distributions, and (iv) an eligible plan described in
Code Section 457(b) which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred into such
plan from this Plan. The definition of Eligible Retirement Plan shall also apply
in the case of an Eligible Rollover Distribution to a surviving spouse, or to a
spouse or former spouse who is an Alternate Payee under a Qualified Domestic
Relations Order (as defined in Article XIII).

     2.19 Eligible Rollover Distribution. "Eligible Rollover Distribution" shall
mean any distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution shall not include:

          (a) any distribution that is one of a series of substantially equal
     periodic payments (not less frequently than annually) made for the life (or
     life expectancy) of the Distributee or the joint lives (or joint life
     expectancies) of the Distributee and the Distributee's designated
     beneficiary, or for a specified period of ten years or more;

          (b) any distribution to the extent such distribution is required under
     Code Section 401(a)(9);

          (c) the portion of any distribution that is not includible in gross
     income (determined without regard to the exclusion for net unrealized
     appreciation with respect to employer securities); and

          (d) any other distribution that is reasonably expected to total less
     than $200 during the year.

     For purposes of this Section, 'Distributee' shall mean any Employee or
former Employee receiving a distribution from the Plan. A Distributee also
includes the Employee or former Employee's surviving spouse and the Employee or
former Employee's spouse or former spouse who is an Alternate Payee under a
Qualified Domestic Relations Order (as defined in Article XIII) with regard to
the interest of the spouse or former spouse.

     2.20 Employee. "Employee" shall mean, for purposes of the Plan, any
individual who is employed by the Sponsor or an Affiliated Company, any portion
of whose income is subject to withholding of income tax and/or for whom Social
Security contributions are made by the Sponsor or an Affiliated Company;
provided, however, that such term shall not include:

          (a) Any individual who performs services for the Sponsor or an
     Affiliated Company and who is classified or paid as an independent
     contractor as determined by the payroll records of the Sponsor or an
     Affiliated Company even if a court or administrative agency determines that
     such individual is a common-law employee and not an independent contractor;


                                        7



          (b) Any individual who performs services for the Sponsor or an
     Affiliated Company pursuant to an agreement between the Sponsor or an
     Affiliated Company and any other person including a leasing organization
     except to the extent such individual is a Leased Employee; and

          (c) Any individual whose employment is transferred from the Sponsor or
     an Affiliated Company to Advanced Medical Optics, Inc. ("AMO") in
     connection with the distribution of the stock of AMO by the Sponsor to its
     stockholders, effective as of the day following such transfer, hereinafter
     referred to as an "AMO Employee." An individual is an AMO Employee if
     classified or identified as such in the payroll records of the Sponsor or
     an Affiliated Company or in the Employee Matters Agreement entered into
     between the Sponsor and AMO.

     2.21 Employment Commencement Date. "Employment Commencement Date" shall
mean the date on which an Employee is first credited with an Hour of Service for
the Sponsor or an Affiliated Company. An Employee shall not, for the purpose of
determining his or her Employment Commencement Date, be deemed to have commenced
employment with an Affiliated Company prior to the effective date on which the
entity became an Affiliated Company unless the Sponsor expressly determines
otherwise, and except as is expressly provided otherwise in the Plan, in
Appendix C to the Plan, or in resolutions of the Board of Directors.

     2.22 ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974 and the regulations thereunder. Reference to a specific ERISA Section
shall be deemed also to refer to any applicable regulations under that Section,
and shall also include any comparable provisions of future legislation that
amend, supplement or supersede that specific Section.

     2.23 Fund. "Fund" shall mean the assets accumulated for purposes of the
Plan.

     2.24 Highly Compensated Employee. "Highly Compensated Employee" shall mean:

          (a) An Employee who performed services for the Company during the Plan
     Year or preceding Plan Year and is a member of one or more of the following
     groups:

               (i) Employees who at any time during the Plan Year or preceding
          Plan Year are or were Five Percent Owners (as defined in Section
          12.2).

               (ii) Employees who received Compensation during the preceding
          Plan Year from the Company in excess of $80,000 (as adjusted in such
          manner as permitted under Code Section 414(q)(1)).

          (b) The term "Highly Compensated Employee" includes a Former Highly
     Compensated Employee. A Former Highly Compensated Employee is any Employee
     who was (i) a Highly Compensated Employee when he or she terminated
     employment with the Company or (ii) a Highly Compensated Employee at any
     time after attaining age


                                        8



     55. Notwithstanding the foregoing, an Employee who separated from service
     prior to 1987 shall be treated as a Former Highly Compensated Former
     Employee only if during the separation year (or year preceding the
     separation year) or any year after the Employee attains age 55 (or the last
     year ending before the Employee's 55th birthday), the Employee either
     received Compensation in excess of $50,000 or was a Five Percent Owner (as
     defined in Section 12.2).

          (c) For the purpose of this Section, the term "Compensation" means
     compensation as defined in Code Section 415(c)(3), as set forth in Section
     5.12.

          (d) For the purpose of this Section, the term "Company" shall mean the
     Sponsor and any Affiliated Company.

     The determination of who is a Highly Compensated Employee, including the
determination of the Compensation that is considered, shall be made in
accordance with Code Section 414(q) and applicable regulations to the extent
permitted thereunder.

     2.25 Hour of Service. "Hour of Service" shall mean an hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Sponsor and any Affiliated Company.

     2.26 Investment Manager. "Investment Manager" shall mean the one or more
Investment Managers, if any, that are appointed pursuant to the provisions of
Section 9.15 and who constitute investment managers under Section 3(38) of
ERISA.

     2.27 Leased Employee. "Leased Employee" shall mean any person (other than
an Employee of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in accordance
with Code Section 414(n)(6)) on a substantially full time basis for a period of
at least one (1) year, and such services are performed under the primary
direction or control by recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated employer
contribution rate of at least ten (10) percent of compensation as defined under
Code Section 415(c)(3); (ii) immediate participation; and (iii) full and
immediate vesting.

     2.28 Normal Retirement Date. "Normal Retirement Date" shall mean the date a
Participant attains age 65.

     2.29 Participant. "Participant" shall mean: (i) an Active Participant, or
(ii) a former Active Participant who is eligible for an immediate or deferred
benefit under Article V.


                                        9



     2.30 Period of Severance. "Period of Severance" shall mean the period of
time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

     2.31 Plan. "Plan" shall mean the Allergan, Inc. Pension Plan described
herein and as amended from time to time.

     2.32 Plan Administrator. "Plan Administrator" shall mean the administrator
of the Plan within the meaning of Section 3(16)(A) of ERISA. The Plan
Administrator shall be the Allergan Corporate Benefits Committee whose members
are appointed by the Board of Directors pursuant to the provisions of Section
9.1 to administer the Plan.

     2.33 Plan Year. "Plan Year" shall mean the calendar year. The Plan Year
shall be the limitation year for purposes of computing limitations on
contributions, benefits and allocations.

     2.34 Primary Social Security Benefit. "Primary Social Security Benefit"
shall mean for purposes of determining a Participant's Accrued Benefit:

          (a) for an Employee whose Severance occurs on or after the date he or
     she attains Age 62, the immediate benefit that is or would have been
     payable to him or her at Age 65 or his or her actual retirement, if
     earlier, under the Social Security Act (or foreign equivalent) as then in
     effect; or

          (b) for an Employee whose Severance occurs prior to Age 62, the
     benefit that would be payable to him or her at Age 62 under the Social
     Security Act (or foreign equivalent) as in effect when he or she incurs a
     Severance, without adjustments for cost of living, projected on the
     assumption that for each month before Age 60, he or she continues to
     receive wages for Social Security purposes equal to one-twelfth of his or
     her Earnings for the calendar year preceding the year in which his or her
     Severance occurs, and that he or she shall receive no further wages for
     Social Security purposes after the later of Age 60 or his or her actual
     Severance.

     2.35 Qualified Joint and Survivor Annuity. "Qualified Joint and Survivor
Annuity" shall mean the form of pension benefit described in this Section. Under
a Qualified Joint and Survivor Annuity, monthly payments to the Participant
shall begin on the date provided in Article V and continue until the last day of
the month in which the Participant's death occurs. On the first day of the
following month, monthly payments in an amount equal to 50% of the monthly
payment to the Participant which is attributable to his or her Accrued Benefit
shall begin to his or her surviving spouse but only if the spouse was married to
the Participant on the date as of which payments to the Participant began.
Payments to a surviving spouse under a Qualified Joint and Survivor Annuity
shall end on the last day of the month in which the spouse's death occurs. The
anticipated payments under a Qualified Joint and Survivor Annuity shall be the
actuarial equivalent of a pension in the form of a Single Life Annuity in the
amount set forth in Article V.


                                       10



     2.36 Reemployment Commencement Date. "Reemployment Commencement Date" shall
mean, in the case of an Employee who incurs a Severance and who is subsequently
reemployed by the Sponsor or an Affiliated Company, the first day following the
Severance on which the Employee is credited with an Hour of Service for the
Sponsor or an Affiliated Company with respect to which he or she is compensated
or entitled to compensation by the Sponsor or an Affiliated Company. An Employee
shall not, for the purpose of determining his or her Reemployment Commencement
Date, be deemed to have commenced employment with an Affiliated Company prior to
the effective date on which the entity became an Affiliated Company unless the
Sponsor shall expressly determine otherwise, and except as is expressly provided
otherwise in the Plan or in resolutions of the Board of Directors.

     2.37 Severance. "Severance" shall mean the termination of an Employee's
employment with the Sponsor or an Affiliated Company by reason of such
Employee's death, retirement, resignation or discharge, or otherwise. For
purposes of determining a Participant's Vesting Years and Benefit Years, such
Participant shall not incur a Severance by reason of the following:

          (a) absence due to service in the Armed Forces of the United States,
     if the Employee makes application to the Company for resumption of work
     with the Company, following discharge, within the time specified by then
     applicable law or absence due to qualified military service if so required
     by Code Section 414(u);

          (b) absence resulting from temporary disability on account of illness
     or accident;

          (c) absence while covered by a long term disability plan maintained by
     the Company that is prior to the earlier of (i) a Participant's Normal
     Retirement Date (or, if later, such date the Participant is no longer
     classified as an Eligible Employee as determined by the payroll records of
     the Sponsor or Affiliated Company or (ii) the date his or her pension under
     the Plan commences, provided that the Participant has at least five (5)
     Vesting Years as of the first date of such absence; or

          (d) such other types of absence as the Company may determine by
     uniform policy.

     2.38 Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred such Severance as determined in accordance with the provisions of
Section 2.37. In the case of any Employee who incurs a Severance as provided
under Section 2.37 and who is entitled to a subsequent payment of compensation
for reasons other than future services (e.g., as back pay for past services
rendered or as payments in the nature of severance pay), the Severance Date of
such Employee shall be as of the effective date of the Severance event (e.g.,
the date of his or her death, effective date of a resignation or discharge,
etc.), and the subsequent payment of the aforementioned type of post-Severance
compensation shall not operate to postpone the timing of the Severance Date for
purposes of the Plan except as provided in Section 2.37.


                                       11



     2.39 Single Life Annuity. "Single Life Annuity" shall mean the form of
pension benefit described in this Section. Under a Single Life Annuity, monthly
payments to the Participant shall begin on the date provided in Article V and
continue until the last day of the month in which the Participant's death
occurs.

     2.40 SKB Plan. "SKB Plan" shall mean the Retirement Plan for Employees of
SmithKline Beckman Corporation.

     2.41 Special Retirement Eligibility Date. "Special Retirement Eligibility
Date" shall mean the date a Participant attains age 62.

     2.42 Spin-Off Date. "Spin-Off Date" shall mean on or about July 26, 1989,
SmithKline Beckman Corporation distributed the stock of the Sponsor to its
shareholders, rendering Eligible Employees of the Company ineligible to
participate in the SKB Plan. The liability for the accrued benefits of Eligible
Employees under the SKB Plan and assets sufficient to satisfy applicable legal
requirements were transferred to the Plan in November of 1989. The benefits
which were previously provided by the SKB Plan for former employees of Company
who terminated prior to the Spin-Off Date shall be paid under the Plan.

     2.43 Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware corporation,
and any successor corporation or entity.

     2.44 Trust. "Trust" or" Trust Fund" shall mean the one or more trusts
created for funding purposes under the Plan.

     2.45 Trustee. "Trustee" shall mean the individual or entity acting as a
trustee of the Trust Fund.

     2.46 Vesting Year. "Vesting Year" shall mean a credit awarded as follows:

          (a) In the case of any Employee who was employed by the Sponsor or an
     Affiliated Company at any time prior to the Original Effective Date, for
     the period prior to the Original Effective Date, such Employee shall be
     credited with that number of Vesting Years under this Plan equal to the
     number of Vesting Years (as that term is defined in the SKB Plan) credited
     to such Employee under the SKB Plan as of the Original Effective Date.

          (b) In the case of any Employee who is employed by the Sponsor or an
     Affiliated Company on or after the Original Effective Date, an Employee
     shall be credited with a number of Vesting Years equal to 1/365th of (i)
     the aggregate number of days between each Employment Commencement Date (or
     Reemployment Commencement Date) of the Employee and the Severance Date
     which immediately follows that Employment Commencement Date (or
     Reemployment Commencement Date) and (ii) the aggregate number of days for
     any Period of Severance of less than twelve months. Solely for the purpose
     of determining an Employee's Vesting Years under this paragraph (b), in the
     case of an Employee who is employed by the Sponsor or


                                       12



     an Affiliated Company on the Original Effective Date, that date shall be
     deemed to be an Employment Commencement Date of the Employee (with Vesting
     Years for the period prior to the Original Effective Date determined under
     paragraph (a) above).

          (c) In the case of any Employee who is employed under Departments 120
     through 130 at the Allergan Medical Optics - Lenoir facility, such Employee
     shall be credited with a number of Vesting Years equal to 1/365th of (i)
     the aggregate number of days between each Employment Commencement Date (or
     Reemployment Commencement Date) of the Employee and the Severance Date
     which immediately follows that Employment Commencement Date (or
     Reemployment Commencement Date) and (ii) the aggregate number of days for
     any Period of Severance of less than twelve months. Solely for the purpose
     of determining an Employee's Vesting Years under this paragraph (c), an
     Employee's Employment Commencement Date or Reemployment Commencement Date
     shall include dates prior to Allergan Medical Optics - Lenoir facility
     becoming an Affiliated Company.


                                       13



                                   ARTICLE III
                                  PARTICIPATION

     3.1 Participation for the 2003 Plan Year and thereafter. For Plan Years
beginning on or after January 1, 2003, participation in the Plan shall be
determined as follows:

          (a) Each Employee or former Employee who is a Participant in the Plan
     as of December 31, 2002 shall continue as a Participant and each
     Participant who is an Active Participant in the Plan as of December 31,
     2002 shall continue as an Active Participant so long as he or she is an
     Eligible Employee (as defined in Section 2.17(a)). Any other Employee shall
     not be eligible to become a Participant in the Plan and any Participant who
     is not an Active Participant on January 1, 2003 shall not be eligible to
     become an Active Participant in the Plan.

          (b) If an Active Participant incurs a Severance after January 1, 2003
     and is subsequently reemployed, he or she shall not be reinstated as an
     Active Participant but shall continue to be credited with Vesting Service
     in accordance with Section 2.46 and shall be entitled to a monthly pension
     upon completing five (5) Vesting Years or reaching the Special Retirement
     Eligibility Date and completing one (1) Vesting Year, the amount of which
     shall be equal to his or her Accrued Benefit determined as of his or her
     first Severance Date following January 1, 2003, at such times and in such
     forms as permitted under Article V.

     3.2 Participation for the 2002 Plan Year. For the 2002 Plan Year, each
Employee or former Employee who is a Participant in the Plan as of December 31,
2001 shall continue as a Participant and each Participant who is an Active
Participant in the Plan as of December 31, 2001 shall continue as an Active
Participant so long as he or she is an Eligible Employee (as defined in Section
2.17(b)). Any other Eligible Employee (as defined in Section 2.17(b)) shall
become a Participant in the Plan on the later of: (i) the date the Eligible
Employee completes his or her Eligibility Computation Period, or December 31,
2002, if earlier, or (ii) the date the Employee becomes an Eligible Employee,
and shall continue as an Active Participant so long as he or she is an Eligible
Employee.

     3.3 Participation prior to the 2002 Plan Year. For Plan Years prior to
January 1, 2002, each Eligible Employee (as defined in Section 2.17(c)) became a
Participant in the Plan on the later of: (i) the date the Employee completed his
or her Eligibility Computation Period or (ii) the date the Employee became an
Eligible Employee, and continued as an Active Participant so long as he or she
was an Eligible Employee.


                                       14



                                   ARTICLE IV
                               ACCRUAL OF BENEFITS

     4.1 Accrued Benefit Formula. Each Participant shall have an Accrued Benefit
equal to one-twelfth (1/12) of the sum of:

          (a) 1.23% of his or her Average Earnings not in excess of Covered
     Compensation multiplied by the number of his or her Benefit Years to a
     maximum of 35 Benefit Years; plus

          (b) 1.73% of his or her Average Earnings in excess of Covered
     Compensation multiplied by the number of his or her Benefit Years to a
     maximum of 35 Benefit Years; plus

          (c) .50% of his or her Average Earnings multiplied by the number of
     his or her Benefit Years in excess of 35 Benefit Years.

     For purposes of this Section, "Covered Compensation" is the average
(without indexing) of the social security wage bases in effect for each calendar
year during the 35-year period ending with the calendar year in which the
Participant attains (or will attain) the social security retirement age as
defined in Code Section 415(b)(8). In determining a Participant's Covered
Compensation for a Plan Year, it is assumed that the social security wage base
in effect at the beginning of the Plan Year will remain the same for all future
calendar years."

     4.2 Minimum Accrued Benefit. Notwithstanding any other provision of the
Plan, under no circumstances shall any Participant's Accrued Benefit under the
Plan be less than the amount of his or her accrued benefit under the SKB Plan as
of the Spin-Off Date under the terms of the SKB Plan in effect as of that date,
including any amendments made to the SKB Plan which are effective on the
Spin-Off Date, notwithstanding the fact that they may have been adopted after
such date.

     4.3 Accrued Benefit for Participants with Earnings in excess of $150,000
prior to January 1, 1994. The Accrued Benefit of a "Section 401(a)(17) Employee"
shall be the greater of:

          (a) The Section 401(a)(17) Employee's Accrued Benefit determined under
     the benefit formula in effect on or after January 1, 1994 taking into
     account all Benefit Years of the Section 401(a)(17) Employee; or

          (b) the sum of:

               (i) the Section 401(a)(17) Employee's Accrued Benefit determined
          as of December 31, 1993 frozen in accordance with Section
          1.401(a)(4)-13 of the Treasury Regulations; and


                                       15



               (ii) the Section 401(a)(17) Employee's Accrued Benefit determined
          under the benefit formula applicable for Plan Years beginning on or
          after January 1, 1994 taking into account only those Benefit Years of
          the Section 401(a)(17) Employee credited on or after January 1, 1994;
          or

          (c) the sum of:

               (i) the Employee's Accrued Benefit determined as of December 31,
          1988 under the SKB Plan and frozen in accordance with Section
          1.401(a)(4)-13 of the Treasury Regulations; and

               (ii) the Section 401(a)(17) Employee's Accrued Benefit determined
          under the benefit formula applicable for Plan Years beginning on or
          after January 1, 1989 taking into account only those Benefit Years of
          the Section 401(a)(17) Employee credited on or after January 1, 1989
          and before January 1, 1994; and

               (iii) the Section 401(a)(17) Employee's Accrued Benefit
          determined under the benefit formula applicable for Plan Years
          beginning on or after January 1, 1994 taking into account only those
          Benefit Years of the Section 401(a)(17) Employee credited on or after
          January 1, 1994.

     For purposes of this Section, a "Section 401(a)(17) Employee" means a
Participant whose current Accrued Benefit as of January 1, 1994 is based on
Earnings in excess of $150,000.

     4.4 Accrued Benefit for Participants Participating in the Voluntary Early
Retirement Incentive Program ("VERI"). The Accrued Benefit of a "VERI Employee"
shall be determined as follows:

          (a) For the purpose of calculating the Accrued Benefit of a VERI
     Employee under Section 4.1, a VERI Employee shall be credited with five (5)
     Benefit Years in addition to the number of Benefit Years credited under
     Section 2.9.

          (b) The early retirement reduction factors of Sections 5.3(a) and
     5.3(b) shall not apply to reduce the monthly pension derived from the
     Accrued Benefit of a VERI Employee.

     For purposes of this Section 4.4 and Section 4.5 below, a "VERI Employee"
means a Participant who has elected by August 31, 1998 (or such later date as
approved by the Sponsor but in no event later than September 30, 1998) to
participate in the Voluntary Early Retirement Incentive program offered by the
Sponsor.


                                       16



     4.5 Temporary Supplemental Monthly Benefit for Participants Participating
in the Voluntary Early Retirement Incentive Program. In addition to his or her
Accrued Benefit, a VERI Employee shall receive a temporary supplemental monthly
pension determined as follows:

          (a) A VERI Employee who is unmarried when his or her monthly pension
     payments begin shall receive a temporary supplemental monthly pension
     following the month in which his or her retirement occurs and continuing
     until the earlier of (i) the month in which the VERI Employee attains age
     62 or (ii) the month in which the VERI Employee dies. The amount of the
     temporary supplemental monthly pension shall be determined in accordance
     with the following Table:



      Age at                  Amount of
December 31, 1998   Supplemental Monthly Pension
- -----------------   ----------------------------
                 
      60-61                   $500.00
      55-59                   $400.00
      50-54                   $300.00


          (b) A VERI Employee who is married when his or her monthly pension
     payments begin shall receive a temporary supplemental monthly pension
     following the month in which his or her retirement occurs and continuing
     until the earlier of (i) the month in which the VERI Employee attain age 62
     or (ii) the month in which the VERI Employee dies unless the VERI Employee
     elects to receive his or her monthly pension in the form of (i) a
     contingent beneficiary option, (ii) a guaranteed payment option, or (iii) a
     level income option as described in Section 6.4. In such case, if the
     married VERI Employee dies before reaching age 62, his or her temporary
     supplemental monthly pension shall be paid to his or her spouse, if living,
     and shall continue until the month in which the VERI Employee would have
     attained age 62. The amount of the temporary supplemental monthly pension
     shall be determined in accordance with the Table set forth in subsection
     (a) above.


                                       17


                                    ARTICLE V
                                    BENEFITS

     5.1 Normal Retirement. If a Participant incurs a Severance on account of
retirement on or between the Special Retirement Eligibility Date and the Normal
Retirement Date, he or she shall be entitled to a monthly pension that begins as
of the first day of the month coincident with or next following his or her
Severance Date which is equal to his or her Accrued Benefit.

     5.2 Postponed Retirement. If a Participant incurs a Severance on account of
retirement after attaining the Normal Retirement Date, he or she shall be
entitled to a monthly pension that begins as of the first day of the month
coincident with or next following his or her Severance Date which is equal to
his or her Accrued Benefit determined as of the Normal Retirement Date increased
by the greater of (i) any additional benefit accruals provided under Article IV
after the Normal Retirement Date, or (ii) an actuarial adjustment to take into
account a delay in the payment of the Participant's Accrued Benefit using the
actuarial assumptions set forth in Appendix A for determining actuarial
equivalence. The foregoing provisions of this Section 5.2 shall be interpreted
and applied in accordance with the provisions of Proposed Treasury Regulation
Section 1.411(b)-2(b)(4)(iii) or the corresponding provision of any subsequently
adopted final regulations.

     5.3 Early Retirement. A Participant shall be eligible for Early Retirement
as set forth below:

          (a) If a Participant who has at least five (5) Vesting Years and whose
     age is at least 55 incurs a Severance on account of retirement, he or she
     shall be eligible for Early Retirement as set forth in this paragraph (a):

               (i) Such Participant shall be entitled to a monthly pension that
          begins as of the first day of the month coincident with or next
          following his or her Severance Date or, at his or her election, a
          monthly pension that begins as of the first day of any subsequent
          month not later than the Normal Retirement Date.

               (ii) Such Participant's monthly pension shall be equal to his or
          her Accrued Benefit but reduced in accordance with the following
          Table, with the percentage for a fractional part of a year of age
          being prorated on the basis of a number of full months.



           % of Normal              % of Normal
             Pension                  Pension
Age When     Computed    Age When     Computed
Payments      Under      Payments      Under
 Begin      Article IV     Begin     Article IV
- --------   -----------   --------   -----------
                           
   61           94          57           70
   60           88          56           64
   59           82          55           58
   58           76



                                       18



               (iii) A Participant who is an AMO Employee (as defined in Section
          2.20) shall be treated as having not less than five (5) Vesting Years
          as of the day following his or her transfer to Advanced Medical
          Optics, Inc. for purposes of this paragraph (a).

          (b) If a Participant who was a Participant on June 26, 1990, and who
     has at least five (5) Vesting Years, and whose age plus Benefit Years sum
     to at least 55 incurs a Severance on account of retirement, he or she shall
     be eligible for Early Retirement as set forth in this paragraph (b):

               (i) Such Participant shall be entitled to a monthly pension that
          begins as of the first day of the month coincident with or next
          following his or her Severance Date or, at his or her election, a
          monthly pension that begins as of the first day of any subsequent
          month not later than the Normal Retirement Date.

               (ii) Such Participant's monthly pension shall be equal to his or
          her Accrued Benefit determined as of June 26, 1990, as set forth under
          the formula contained in Appendix B, but reduced in accordance with
          the following Table, with the percentage for a fractional part of a
          year of age being prorated on the basis of a number of full months.



           % of Normal              % of Normal
             Pension                  Pension
Age When     Computed    Age When     Computed
Payments      Under      Payments      Under
 Begin      Article IV     Begin     Article IV
- --------   -----------   --------   -----------
                           
   61           94          48           36
   60           88          47           34
   59           82          46           32
   58           76          45           30
   57           70          44           28
   56           64          43           27
   55           58          42           26
   54           52          41           25
   53           46          40           24
   52           44          39           23
   51           42          38           22
   50           40          37           21
   49           38


               Provided, that the above percentages shall be increased by 1% to
          a maximum of 10% for each of the Participant's Benefit Years in excess
          of 20, with the percentage for a fractional part of a Benefit Year
          being prorated on the basis of the number of full months. In no event,
          however, shall a percentage be increased above 100%.


                                       19



               (iii) Notwithstanding subparagraph (ii) above, (1) if the
          Participant is age 55 or older when payments begin, the Participant
          shall receive a total monthly pension which is the greater of the
          amount determined under paragraph (a)(ii) or paragraph (b)(ii) above,
          and (2) if the Participant is less than age 55 when benefit payments
          begin, the Participant shall receive a monthly pension which is
          determined under paragraph (b)(ii) plus an additional monthly pension
          commencing at age 55 which is actuarially equivalent to the excess, if
          any, of the actuarial equivalent value of the monthly pension under
          paragraph (a)(ii) determined at age 55 over the actuarial equivalent
          value of the monthly pension under paragraph (b)(ii) determined at age
          55.

          (c) A Participant who has elected by August 31, 1998 (or such later
     date as approved by the Sponsor but in no event later than September 30,
     1998) to participate in the Voluntary Early Retirement Incentive program
     offered by the Sponsor shall be entitled to a monthly pension that begins
     as of the first day of the month coincident with or next following his or
     her Severance Date or, at his or her election, a monthly pension that
     begins as of the first day of any subsequent month not later than the
     Normal Retirement Date.

          (d) If a Participant incurs a Severance and retires under this
     Section, and his or her monthly pension begins after the first day of the
     month coincident with or next following the Special Retirement Eligibility
     Date, such Participant shall be entitled to the monthly pension payments he
     or she would have received had his or her pension began as of the first day
     of the month following the Special Retirement Eligibility Date.

     5.4 Termination of Employment.

          (a) If a Participant who has at least five (5) Vesting Years incurs a
     Severance for any reason other than death and is not eligible to retire
     under Section 5.3, he or she shall be entitled to a monthly pension that
     begins on the first day of the month coincident with or next following the
     date he or she attains age 55, or at his or her election, a monthly pension
     that begins as of the first day of any subsequent month not later than the
     Normal Retirement Date. In the event a Participant elects that his or her
     monthly pension begin prior to the Special Retirement Eligibility Date, the
     amount of his or her monthly pension shall be determined as provided in
     Section 5.3(a).

          (b) If a Participant who has at least five (5) Vesting Years incurs a
     Severance for any reason other than death and is not eligible to retire
     under Section 5.3 but was a Participant on June 26, 1990, he or she shall
     be entitled to a monthly pension that begins on the first day of the month
     coincident with or next following the date his or her Age and Benefit Years
     total 55 years, or at his or her election, a monthly pension that begins as
     of the first day of any subsequent month not later than the Normal
     Retirement Date. In the event a Participant elects that his or her monthly
     pension begin prior to the Special Retirement Eligibility Date, the amount
     of his or her monthly pension shall be determined as provided in Section
     5.3(b).


                                       20



          (c) If a Participant incurs a Severance and is entitled to a monthly
     pension under this Section, and his or her monthly pension begins after the
     first day of the month coincident with or next following the Special
     Retirement Eligibility Date, such Participant shall be entitled to the
     monthly pension payments he or she would have received had his or her
     pension began as of the first day of the month following the Special
     Retirement Eligibility Date.

     5.5 Consent to Pension Payments. If the lump sum Actuarial Equivalent of a
Participant's pension exceeds $5,000, the Participant and, if applicable, the
Participant's spouse must consent to the payment or commencement of the
Participant's pension prior to the Normal Retirement Date in accordance with the
following rules:

          (a) The consent of the Participant shall be obtained in writing within
     the 90-day period ending on the Annuity Starting Date. No such consent
     shall be effective with respect to a married Participant unless the
     Participant's spouse consents thereto in writing. Spousal consent shall not
     be required if a married Participant elects a joint and survivor option
     providing for payment of at least 50% of his or her annuity to his or her
     surviving spouse or the Sponsor determines there is no spouse or the spouse
     cannot be located. Neither the consent of the Participant nor the
     Participant's spouse shall be required to the extent the payment or
     commencement of the Participant's pension is required to begin under
     Section 5.8.

          (b) Each Participant shall receive in written nontechnical language a
     notice which shall include a general description of the material features,
     and an explanation of the relative values of, the available optional forms
     of benefit. Such notice shall be furnished to the Participant no less than
     30 days and no more than 90 days prior to the Participant's Annuity
     Starting Date; provided, however, the Participant's pension may be paid or
     commence less than 30 days after such notice is furnished if the notice
     clearly informs the Participant that he or she has at least 30 days after
     receiving the notice to consider the decision of whether or not to elect
     the commencement of his or her pension (and, if applicable, an optional
     form of benefit), and the Participant, after receiving the notice,
     affirmatively elects to commence his or her pension.

     5.6 Maximum Pension. The largest aggregate annual pension that may be paid
to any Participant in any Plan Year under the Plan shall be determined as
follows:

          (a) Subject to paragraphs (b) through (d), the largest aggregate
     annual pension that may be paid to any Participant in any Plan Year, when
     added to the pension under any other qualified defined benefit plan
     maintained by the Sponsor or any Affiliated Company, shall not exceed the
     lesser of:

               (i) The Defined Benefit Dollar Limitation of $160,000 ($90,000
          for Plan Years prior to the 2002 Limitation Year), multiplied by a
          fraction the numerator of which is the number of the Participant's
          years of participation (or a part thereof) in the Plan or, up to the
          Spin-Off Date in the SKB Plan or in the Beckman Instruments, Inc.
          Pension Plan, not in excess of ten, and the denominator of which is
          ten; or


                                       21



               (ii) The Defined Benefit Compensation Limitation of 100% of the
          Participant's average annual total cash remuneration from the Company
          in the thirty-six consecutive months which yield the highest average,
          multiplied by a fraction the numerator of which is the number of the
          Participant's Vesting Years (or a part thereof) not in excess of ten
          and the denominator of which is ten.

          Benefit increases resulting from the increase in the Defined Benefit
     Dollar Limitation and the Defined Benefit Compensation Limitation under the
     Economic Growth and Tax Relief Reconciliation Act of 2001 shall apply to
     all Employees participating in the Plan who have one (1) Hour of Service on
     or after January 1, 2002.

          (b) The limitations set forth in this Section 5.6 shall be determined
     as provided below:

               (i) The Defined Benefit Dollar Limitation shall automatically be
          adjusted annually for increases in the cost of living as provided in
          Code Section 415(d). The adjusted limitation shall be effective as of
          January 1st of each calendar year and shall be applicable to
          Limitation Years ending with or within that calendar year. Such new
          limitation is incorporated herein by this reference and shall be
          substituted for the Defined Benefit Dollar Limitation set forth in
          paragraph (a) above.

               (ii) "Cash remuneration" shall mean "compensation" as defined in
          Section 5.12.

               (iii) For purposes of this Section, a Participant's pension shall
          be measured as a Single Life Annuity or Qualified Joint and Survivor
          Annuity. A pension benefit shall be treated as a Qualified Joint and
          Survivor Annuity if it meets all of the requirements as defined in
          Section 2.35 except that the periodic payments to the spouse may be
          equal to or greater than 50%, but not more than 100%, of those to the
          Participant.

               (iv) A benefit payable in a form other than a Single Life Annuity
          or Qualified Joint and Survivor Annuity described in subparagraph
          (iii) above shall be adjusted to the Actuarial Equivalent of a
          Straight Life Annuity before applying the limitations of this Section.
          Effective for Limitation Years commencing on or after January 1, 1995,
          Actuarial Equivalent for the form of benefit shall be determined using
          (1) the interest rate and mortality table specified in Appendix A or
          (2) 5% interest (or for lump sums or other benefits subject to Code
          Section 417(e)(3), the applicable interest rate under Code Section
          415(b)(2)(E)(ii) as determined as provided in Appendix A) and the
          applicable mortality table under Code Section 415(b)(2)(E)(v),
          whichever produces the greater Actuarial Equivalent value.

               (v) In addition to other limitations set forth in the Plan and
          notwithstanding any other provisions of the Plan, the accrued benefit,
          including the right to any optional benefits provided in the Plan (and
          all other defined benefit plans required to be aggregated with this
          Plan under the provisions of


                                       22



          Code Section 415) shall not increase to an amount in excess of the
          amount permitted under Code Section 415 at any time.

          (c) For Limitation Years beginning on or after January 1, 2002, the
     Defined Benefit Dollar Limitation for any Participant shall be adjusted as
     follows:

               (i) If a Participant's pension begins prior to age 62, the
          Defined Benefit Dollar Limitation applicable to the Participant at
          such earlier age is an annual benefit payable in the form of a
          straight life annuity beginning at the earlier age that is the
          actuarial equivalent of the Defined Benefit Dollar Limitation
          applicable to the Participant at age 62 (as adjusted under paragraph
          (a) above, if required). The Defined Benefit Dollar Limitation
          applicable at an age prior to age 62 is determined as the lesser of
          (1) the Actuarial Equivalent (at such age) of the Defined Benefit
          Dollar Limitation computed using the factors specified in Section 5.3
          or (2) the actuarial equivalent (at such age) of the Defined Benefit
          Dollar Limitation computed using a 5 percent interest rate and the
          applicable mortality table specified in Appendix A to the Plan. Any
          decrease in the Defined Benefit Dollar Limitation determined in
          accordance with this paragraph (c) shall not reflect a mortality
          decrement if benefits are not forfeited upon the death of the
          Participant. If any benefits are forfeited upon death, the full
          mortality decrement is taken into account.

               (ii) If a Participant's pension begins after age 65, the Defined
          Benefit Dollar Limitation applicable to the Participant at such later
          age is the annual benefit payable in the form of a straight life
          annuity beginning at the later age that is actuarially equivalent to
          the defined benefit dollar limitation applicable to the Participant at
          age 65 (as adjusted under paragraph (a) above, if required). The
          actuarial equivalent of the Defined Benefit Dollar Limitation
          applicable at an age after age 65 is determined as (1) the lesser of
          the Actuarial Equivalent (at such age) of the Defined Benefit Dollar
          Limitation computed using the interest rate and mortality table
          specified in Appendix A to the Plan or (2) the actuarial equivalent
          (at such age) of the Defined Benefit Dollar Limitation computed using
          a 5 percent interest rate assumption and the applicable mortality
          table specified in Appendix A to the Plan. For these purposes,
          mortality between age 65 and the age at which benefits commence shall
          be ignored.

          (d) For Limitation Years beginning prior to January 1, 2002, the
     Defined Benefit Dollar Limitation for any Participant shall be adjusted if
     a Participant's pension begins before or after he or she attains his or her
     Social Security Retirement Age. In such case, the Defined Benefit Dollar
     Limitation shall be adjusted to its Actuarial Equivalent beginning at the
     Participant's Social Security Retirement Age; except that if his or her
     pension begins before he or she attains his or her Social Security
     Retirement Age, but after he or she attains age 62, the Defined Benefit
     Dollar Limitation shall be reduced by 5/9 of 1% for each of the first 36
     months and 5/12 of 1% for each additional month by which the Participant's
     benefit commencement date precedes his or her Social Security Retirement
     Age. The Defined Benefit Dollar Limitation applicable at an age prior to
     age 62 is determined as the lesser of (1) the Actuarial Equivalent (at such
     age) of the Defined Benefit Dollar Limitation computed using the factors
     specified in Section 5.3 or (2) the actuarial equivalent (at such age) of
     the Defined Benefit Dollar Limitation


                                       23



     computed using a 5 percent interest rate and the applicable mortality table
     specified in Appendix A to the Plan. The interest rate used to determine
     the Actuarial Equivalent shall be the rate stated in the Plan, but shall be
     5% if the pension begins after the Social Security Retirement Age. For
     purposes of this Section and Section 5.7, "Social Security Retirement Age"
     means (i) for any Participant born before January 1, 1938, Age 65, (ii) for
     any Participant born after December 31, 1937 but before January 1, 1955,
     Age 66, or (iii) for any other Participant, Age 67. A Participant's pension
     shall be measured as a Single Life Annuity beginning at his or her Social
     Security Retirement Age.

     5.7 Defined Benefit Fraction and Defined Contribution Fraction. For Plan
Years beginning prior to the 2000 Plan Year, the largest aggregate annual
pension that may be paid to any Participant in any Plan Year under the Plan
shall not, when added to the pension under any other qualified defined benefit
plan maintained by the Sponsor or any Affiliated Company, exceed the lesser of
the dollar limitation described in Section 5.6 or the amount that would cause
the sum of a Participant's Defined Benefit Fraction and Defined Contribution
Fraction for the Plan Year in which the Participant's Severance occurs to equal
1.0. To the extent the sum of a Participant's Defined Benefit Fraction and
Defined Contribution Fraction exceeds 1.0, adjustments shall be made first by
reducing the Participant's benefit under any defined benefit plan maintained by
the Sponsor or an Affiliated Company.

          (a) A Participant's Defined Benefit Fraction for a given Plan Year is
     a fraction, the numerator of which is his or her projected annual benefit
     for the Plan Year and the denominator of which is the lesser of (i) 1.25
     multiplied by $90,000, adjusted to reflect commencement before or after
     Social Security Retirement Age, or (ii) 1.4 multiplied by 100% of his or
     her average annual total cash remuneration from the Sponsor or any
     Affiliated Company in the thirty-six consecutive months which yield the
     highest average.

          (b) A Participant's Defined Contribution Fraction for a given Plan
     Year is a fraction, the numerator of which is the sum of his or her annual
     additions for all calendar years and the denominator of which is the sum of
     his or her maximum aggregate amounts for all calendar years in which he or
     she is an Employee. A Participant's maximum aggregate amounts for any Plan
     Year shall equal the lesser of 1.25 multiplied by the dollar limitation for
     such Plan Year or 1.4 multiplied by the percentage limitation for such Plan
     Year.

          (c) The annual addition to a Participant's account for any year is the
     sum, determined with respect to all defined contribution plans maintained
     by the Sponsor or an Affiliated Company (including any voluntary
     contributions feature of any defined benefit plan thereof), of:

               (i) Company contributions and forfeitures allocated to the
          Participant's account;


                                       24



               (ii) For Plan Years beginning after December 31, 1986, the amount
          of the Participant's contributions; for Plan Years beginning before
          January 1, 1987, the lesser of:

                    (A) 50% of his or her contributions; or

                    (B) For each calendar year after 1975 the amount by which
               the Participant's contributions exceed 6% of his or her cash
               remuneration; for each calendar year before 1976 during which he
               or she was a Participant, the excess of the aggregate amount of
               his or her contributions for all such years over 10% of his or
               her aggregate cash remuneration from the Sponsor or an Affiliated
               Company for all such years, multiplied by a fraction the
               numerator of which is one and the denominator of which is the
               number of such years.

               (iii) Amounts allocated after March 31, 1984 to an individual
          medical account (as defined in Code Section 415(l)(2)) that is part of
          a pension or annuity plan maintained by the Sponsor or an Affiliated
          Company;

               (iv) Amounts derived from contributions paid or accrued after
          December 31, 1985, in taxable years ending after such date, that are
          attributable to post-retirement medical benefits allocated to the
          separate account of a key employee (as defined in Code Section
          419A(d)(3)) under a welfare benefit fund (as defined in Code Section
          419(e)) maintained by the Sponsor or an Affiliated Company; and

               (v) allocations under a simplified employee pension.

     5.8 Mandatory Commencement of Benefits.

          (a) A Participant's pension shall begin no later than sixty days after
     the close of the Plan Year in which falls the later of his or her
     attainment of the Normal Retirement Date or the date he or she incurs a
     Severance.

          (b) In the case of an Active Participant, payment shall begin no later
     than an Active Participant's required beginning date determined under the
     rules of subparagraphs (i) or (ii) below:

               (i) Active Participants attaining age 70-1/2 prior to 1999: The
          required beginning date of an Active Participant who attains age
          70-1/2 prior to 1999 shall be April 1 of the calendar year immediately
          following the year in which the Active Participant attains age 70-1/2;
          provided, however, that an Active Participant, other than an Active
          Participant who is a Five Percent Owner (as defined in Section 12.2),
          who attains age 70-1/2 in 1996, 1997, or 1998 may elect to defer the
          required beginning date until the first day of the month coincident
          with or next following his or her Severance Date.

               (ii) Active Participants attaining age 70-1/2 after 1998: The
          required beginning date of an Active Participant who attains age
          70-1/2 after 1998 shall be the first day of the month coincident with
          or next following his or her Severance


                                       25



          Date; provided, however, if such Active Participant is a Five Percent
          Owner (as defined in Section 12.2) with respect to the Plan Year
          ending in the calendar year in which such Participant attains age
          70-1/2, the required beginning date shall be April 1 of the calendar
          year immediately following the year in which such Active Participant
          attains age 70-1/2.

     5.9 Reemployment. If a Participant who is receiving benefits again becomes
an Employee, his or her pension shall be subject to the following rules:

          (a) A Participant's pension shall not be suspended if he or she is
     subsequently reemployed on or after October 1, 2002.

          (b) A Participant's pension shall be suspended if he or she was
     subsequently reemployed as an Eligible Employee prior to October 1, 2002 as
     follows:

               (i) The Participant's pension shall be suspended and recomputed
          upon his or her Severance Date if he or she has not reached the Normal
          Retirement Date.

               (ii) The Participant's pension shall be suspended for each
          calendar month or for each four or five week payroll period ending in
          a calendar month during which the Participant either completes 40 or
          more Hours of Service (counting each day of employment in a position
          designated by the Company as full time as five (5) Hours of Service),
          or receives payment for any such Hours of Service performed on each of
          eight or more days or separate work shifts in such month or payroll
          period if the Participant has reached the Normal Retirement Date. No
          adjustment to the Participant's pension shall be made on account of
          such non-payment. No payment shall be withheld pursuant to this
          subparagraph (ii) until the Participant is notified by personal
          delivery or first class mail during the first calendar month or
          payroll period in which payments are suspended that his benefits are
          suspended. Such notification shall contain a description of the
          specific reasons why benefit payments are being suspended, a general
          description of the Plan provisions relating to the suspension of
          payments, a copy of such provisions, and a statement to the effect
          that applicable Department of Labor regulations may be found in
          Section 2530.203-3 of the Code of Federal Regulations. In addition,
          the suspension notification shall inform the Participant of the Plan's
          procedures for affording a review of the suspension of benefits.

               (iii) A Participant described in subparagraphs (i) or (ii) above,
          shall be eligible to receive credit for additional Benefit Years for
          any period of reemployment (as an Eligible Employee). The pension of
          such Participant shall be reduced by the Actuarial Equivalent of any
          payment received by the Participant under the Plan prior to his or her
          attainment of the Special Retirement Eligibility Date, or, if earlier,
          the first day on which he or she would have been


                                       26



          entitled to 100% of his or her Accrued Benefit under Section 5.3(b)
          (if on his or her prior Severance Date he or she had deferred his or
          her benefit until that date).

     5.10 Other Disabled Participants. A former Active Participant who is
covered under a long term disability plan maintained by the Company, who has at
least five (5) Vesting Years, and who becomes eligible for benefits under such
plan, shall be eligible to accrue Benefit Years pursuant to this Section for the
duration of his or her disability until the earlier of (i) the later of his or
her Normal Retirement Date or Severance Date or (ii) the date he or she
commences to receive a pension under the Plan. The following rules shall apply
to benefit accruals under this Section:

          (a) The Employee's Average Earnings during his or her disability shall
     be deemed to be his or her Average Earnings calculated at the time his or
     her disability commenced.

          (b) The Employee's Primary Social Security Benefit shall be as defined
     in Article II and the Employee's Covered Compensation as defined in Section
     4.1 shall be determined as of the year for which he or she is credited with
     his or her final Benefit Year.

          (c) In addition, a former Active Participant described in this Section
     shall be treated as an Employee for purposes of the survivor income
     benefits described in Section 7.1 while he or she is eligible to accrue
     Benefit Years pursuant to this Section.

     5.11 Nonforfeitable Interest. Notwithstanding any other provision in the
Plan to the contrary, a Participant shall have a nonforfeitable interest in his
or her Accrued Benefit upon reaching the Normal Retirement Date, or if earlier,
upon being credited with five (5) or more Vesting Years. In addition, a
Participant shall have a nonforfeitable interest in his or her Accrued Benefit
upon reaching the Special Retirement Eligibility Date or if later, upon being
credited with one (1) Vesting Year.

     5.12 Compensation for Maximum Pension. For purposes of Sections 5.6 and
5.7, Compensation shall mean a Participant's earned income, wages, salaries,
fees for professional services, and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Company maintaining the Plan and
shall be determined as described below:

          (a) Compensation shall include to the extent that the amounts are
     includible in gross income (including, but not limited to, commissions paid
     salespeople, compensation for services on the basis of a percentage of
     profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
     and reimbursements or other expense allowances under a nonaccountable plan
     as described in Regulation 1.62-2(c)).

          (b) Compensation shall include any elective deferral as defined in
     Code Section 402(g)(3), any amount which is contributed or deferred by the
     Company at the election of the Employee that is excludable from an
     Employee's gross income under


                                       27



     Code Sections 125 or 457 and, for Plan Years beginning on or after January
     1, 1998, any elective amount that is excludable from an Employee's gross
     income under Code Section 132(f)(4).

          (c) Compensation shall not include (i) any employer contributions to a
     plan of deferred compensation which are not included in the Employee's
     gross income for the taxable year in which contributed, (ii) any
     distributions from a plan of deferred compensation, (iii) any amounts
     realized from the exercise of a non-qualified stock option or when
     restricted stock or property held by the Employee becomes either freely
     transferable or is no longer subject to a substantial risk of forfeiture
     under Code Section 83 if such option, stock, or property was granted to the
     Employee by the Company, (iv) any amounts realized from the sale, exchange,
     or other disposition of stock acquired under a qualified stock option, (v)
     any contribution for medical benefits (within the meaning of Code Section
     419(f)(2) after termination of employment which is otherwise treated as an
     annual addition, and (vi) any amount otherwise treated as an annual
     addition under Code Section 415(l)(1).

          (d) Notwithstanding anything in the Plan to the contrary, Compensation
     shall be determined in accordance with Code Section 415(c)(3) as in effect
     for Plan Years beginning prior to January 1, 1998 where required by
     applicable law.


                                       28



                                   ARTICLE VI
                                FORM OF PENSIONS

     6.1 Unmarried Participants. The pension of a Participant who is unmarried
when payments begin shall be paid as a Single Life Annuity unless he or she
elects an optional form of benefit under Section 6.3 or receives a lump sum
distribution under Section 6.5.

     6.2 Married Participants. The pension of a Participant who is married when
payments begin shall be paid as a Qualified Joint and Survivor Annuity, unless
he or she elects an optional form of benefit under Section 6.3 or receives a
lump sum distribution under Section 6.5.

     6.3 Election of Optional Form of Benefit. A Participant may waive the
Single Life Annuity or, in the case of a married Participant, the Qualified
Joint and Survivor Annuity and elect any optional form of benefit described in
Section 6.4 in accordance with the following rules:

          (a) The election shall be made in writing in a manner prescribed by
     the Committee on a form that clearly states that the Participant is
     electing to receive his or her pension other than as a Single Life Annuity
     or, in the case of a married Participant, his or her pension other than as
     a Qualified Joint and Survivor Annuity. No such election shall be effective
     with respect to a married Participant unless: (i) the Participant's spouse
     consents in writing to the election; (ii) such election designates the form
     of benefit and a specific beneficiary; (iii) the consent acknowledges the
     effect of the election; and (iv) the consent is witnessed by a notary
     public or by a Plan representative. Notwithstanding the foregoing, an
     election without spousal consent shall be effective if a married
     Participant elects a joint and survivor option providing for payment of at
     least 50% of his or her annuity to his or her surviving spouse, the Sponsor
     determines there is no spouse, or the spouse cannot be located.

          (b) The election may be made or revoked at any time during an election
     period established by the Committee. Such election period shall begin when
     the information described in paragraph (d) is furnished to the Participant
     and, subject to paragraphs (c) through (e), shall end, with no opportunity
     for a further election, on the Participant's Annuity Starting Date. For
     purposes of Article VII (pertaining to pre-retirement death benefits), if
     an optional form of benefit is elected in accordance with this Section 6.3
     within the 90 day period ending on the Participant's date of death, the
     Participant's pension shall be deemed to have commenced even if the
     Participant dies prior to the Annuity Starting Date.

          (c) Subject to paragraphs (d) and (e), in the case of a Participant
     who retires after attaining age 55, the election period described in
     paragraph (b) shall end on the date of the Participant's Severance, or on
     such later date as the Committee shall fix, but an election made during the
     election period may be revoked at any time before the later of the end of
     the election period or the Participant's Annuity Starting Date.


                                       29



          (d) Each Participant shall receive a written explanation of a Single
     Life Annuity or, in the case of a married Participant, a Qualified Joint
     and Survivor Annuity which shall include: (i) the terms and conditions of
     such annuity form of benefit; (ii) the Participant's right to make and the
     effect of waiving such annuity form of benefit; (iii) the rights of a
     spouse; (iv) the right to make, and the effect of, a revocation of a
     previous election to waive such annuity form of benefit; and (v) the
     relative values of the optional forms of benefit available under the Plan.
     Such explanation shall be furnished to the Participant no less than 30 days
     and no more than 90 days prior to the Participant's Annuity Starting Date
     except as provided in paragraph (e).

          (e) The written explanation described in paragraph (d) may be
     furnished to the Participant less than 30 days prior to the Participant's
     Annuity Starting Date; provided, that, the written explanation: (i) clearly
     indicates that the Participant has at least 30 days to consider whether to
     waive the Single Life Annuity or, in the case of a married Participant, the
     Qualified Joint and Survivor Annuity and to elect with spousal consent, if
     applicable, an optional form of benefit; (ii) the Participant is permitted
     to revoke any affirmative distribution election at least until the Annuity
     Starting Date or, if later, at any time prior to the expiration of the
     7-day period that begins the day after the written explanation is provided
     to the Participant; and (iii) the Annuity Starting Date is a date after the
     date that the written explanation was provided to the Participant.
     Notwithstanding the foregoing, the Annuity Starting Date may be a date
     prior to the date the written explanation is provided to the Participant;
     provided, that, the Participant's pension is not paid or does not commence
     until at least 30 days after such written explanation is furnished, subject
     to the waiver of the 30-day period as provided in the foregoing sentence.

     6.4 Optional Forms of Benefit. Subject to the provisions of Sections 6.3
and 6.5, a Participant may elect to receive the Actuarial Equivalent of his or
her pension in another form. The specific options shall be (i) a Single Life
Annuity which pays a benefit for the Participant's lifetime; (ii) a contingent
beneficiary option which pays a reduced benefit for the Participant's lifetime,
then continues 100%, 66 2/3%, or 50% of the reduced benefit for the lifetime of
one designated beneficiary; (iii) a guaranteed payment option which pays a
reduced benefit for the longer of the Participant's lifetime or a specified
number of months (60, 120, 180, or 240) with payments made to the Participant
and any remaining guaranteed payments on the Participant's death to a designated
beneficiary or beneficiaries (as more fully described in Appendix B); or (iv) a
level income option (as more fully described in Appendix B) which pays an
increased benefit to a Participant (if payments begin between the ages of 55 and
62) until age 62, and a reduced benefit beginning at age 62. Under each such
option the Actuarial Equivalent of the anticipated payments to the Participant
shall be greater than that of those to his or her beneficiary, except that if
the beneficiary is the Participant's spouse, the option may provide for a joint
and survivor annuity under which the periodic payments to the spouse are no
greater than those to the Participant.


                                       30



     6.5 Cash-Outs.

          (a) Notwithstanding anything in this Article to the contrary, if the
     lump sum Actuarial Equivalent of a Participant's nonforfeitable Accrued
     Benefit does not exceed or has never exceeded $5,000, the Participant, or
     the Participant's beneficiary in the event of the Participant's death, may
     only elect (i) to be paid the lump sum Actuarial Equivalent, or (ii) to
     have the lump sum Actuarial Equivalent paid directly by the Trustee to the
     trustee of an Eligible Retirement Plan.

          (b) If the lump sum Actuarial Equivalent of a Participant's
     nonforfeitable Accrued Benefit exceeds $5,000 but does not exceed $10,000,
     the Participant, or the Participant's beneficiary in the event of the
     Participant's death, may elect (i) to be paid the lump sum Actuarial
     Equivalent, or (ii) to have the lump sum Actuarial Equivalent paid directly
     by the Trustee to the trustee of an Eligible Retirement Plan. No
     distribution may be elected under this paragraph (b) unless the Participant
     has attained at least age 55 with five (5) or more Vesting Years. For
     purposes of this paragraph (b), a Participant who is an AMO Employee (as
     defined in Section 2.20) shall be treated as having not less than five (5)
     Vesting Years as of the day following his or her transfer to Advanced
     Medical Optics, Inc. In addition, the election may not be made after
     pension payments start, except that a Participant or a Participant's
     beneficiary whose payments started prior to September 1, 1993, and whose
     lump sum Actuarial Equivalent did not exceed $10,000 at the date payments
     started, may elect to be paid the remaining lump sum Actuarial Equivalent.
     A married Participant who elects a lump sum under this paragraph (b) must
     comply with the applicable requirements for spousal consent.

          (c) A Participant who has no nonforfeitable Accrued Benefit in the
     Plan at the time of his or her Severance shall be deemed to have been
     cashed out with a zero cash benefit upon such Severance Date.


                                       31



                                   ARTICLE VII
                          PRE-RETIREMENT DEATH BENEFITS

     7.1 Eligibility. A death benefit shall be payable under Section 7.2 with
respect to a Participant if, on the date of his or her death:

          (a) he or she is an Employee who has met the requirements for normal
     or early retirement under Sections 5.1 or 5.3;

          (b) he or she is an Employee not described in paragraph (a), above,
     who has a nonforfeitable interest in his or her Accrued Benefit; or

          (c) he or she is a former Employee who has a nonforfeitable interest
     in his or her Accrued Benefit and whose pension has not yet commenced to be
     paid.

     7.2 Spousal Benefit. Upon the death of a Participant described in Section
7.1, the Participant's surviving spouse, if living on the date set forth in this
Section, shall receive a pension or a lump sum distribution, if applicable under
Section 6.5, in accordance with the following rules:

          (a) If the Participant is an Employee who has met the requirements for
     normal or early retirement under Sections 5.1 or 5.3, the pension to the
     surviving spouse shall begin as of the first day of the month following the
     Participant's date of death, shall end on the last day of the month in
     which the spouse's death occurs, and shall be in a monthly amount equal to
     the amount the spouse would have received if the Participant had retired on
     the date of his or her death and had elected an immediate pension in the
     form of a Qualified Joint and Survivor Annuity beginning on the first day
     of the month following the day of his or her death with the spouse as joint
     annuitant.

          (b) If the Participant is an Employee who has not met the requirements
     for normal or early retirement under Sections 5.1 or 5.3 but at the time of
     death has a nonforfeitable interest in his or her Accrued Benefit, the
     pension to the surviving spouse shall begin on the first day of the month
     following the month in which the Participant would have first met the
     requirements for early retirement, shall end on the last day of the month
     in which the spouse's death occurs, and shall be in a monthly amount equal
     to the amount the spouse would have received if (i) the Participant's
     Severance had occurred on the date of his or her death, (ii) the
     Participant had survived to meet the requirements for early retirement,
     (iii) the Participant had elected an immediate pension in the form of a
     Qualified Joint and Survivor Annuity beginning on the first day of the
     month coincident with or next following his or her attainment of the
     earliest retirement age with the spouse as joint annuitant, and (iv) the
     Participant had died the day after the date his or her pension commenced.

          (c) If the Participant is a former Employee who retired under Section
     5.1, the pension to the surviving spouse shall begin as of the first day of
     the month coincident with or next following the Participant's date of
     death, shall end on the last day of the


                                       32



     month in which the spouse's death occurs, and shall be in a monthly amount
     equal to the amount the spouse would have received if the Participant had
     elected an immediate pension in the form of a Qualified Joint and Survivor
     Annuity beginning on the first day of the month coincident with or next
     following the date of his or her death with the spouse as joint annuitant.

          (d) If the Participant is a former Employee who retired under Section
     5.3, the pension to the surviving spouse shall begin as of the first day of
     the month coincident with or next following the Participant's date of
     death, shall end on the last day of the month in which the spouse's death
     occurs, and shall be in a monthly amount equal to the amount the spouse
     would have received if the Participant had elected an immediate pension in
     the form of a Qualified Joint and Survivor Annuity beginning on the first
     day of the month coincident with or next following the date of his or her
     death with the spouse as joint annuitant.

          (e) If the Participant is a former Employee who did not meet the
     requirements for normal or early retirement under Sections 5.1 or 5.3 but
     has a nonforfeitable interest in his or her Accrued Benefit, the pension to
     the surviving spouse shall begin on the first day of the month coincident
     with or next following the date the Participant would have first met the
     requirements for early retirement if he or she had not died but had lived,
     shall end on the last day of the month in which the spouse's death occurs,
     and shall be in a monthly amount equal to the amount the spouse would have
     received if (i) the Participant had survived to meet the requirements for
     early retirement, (ii) the Participant had elected an immediate pension in
     the form of a Qualified Joint and Survivor Annuity beginning on the first
     day of the month coincident with or next following his or her attainment of
     the earliest retirement age with the spouse as joint annuitant, and (iii)
     the Participant had died the day after the date his or her pension
     commenced.

     7.3 Alternate Death Benefit. In lieu of the benefit provided in Section
7.2, a Participant described in Section 7.1(a) may, at any time before his or
her pension commences, select a beneficiary or beneficiaries other than his or
her spouse for a survivor income benefit subject to Section 7.5. The monthly
payment to the beneficiary shall equal the payment the beneficiary would have
received and which would have been attributable to the Participant's Accrued
Benefit, if the Participant had retired on the day of his or her death with a
pension in the form of a 50% joint and survivor annuity beginning as of the
first day of the month following the day of his or her death with the
beneficiary as joint annuitant.

     7.4 Children's Survivor Benefit. In lieu of the benefit provided in Section
7.2, a Participant described in Section 7.1(a) may, at any time before his or
her pension commences, select his or her child or children as beneficiary or
beneficiaries for the survivor income benefit subject to Section 7.5. The
aggregate monthly payment to the child or children shall equal the monthly
payment a surviving spouse of an age equal to that of the Participant would have
received and which would have been attributable to the Participant's Accrued
Benefit, if the Participant had been covered by Section 7.2 and had left such a
surviving spouse. Payments to each child shall continue during such child's life
or until the end of the month in which the child attains age 19, whichever is
earlier except that if the child is enrolled as a full-time student in an


                                       33



academic institution, payments shall continue until the earlier of the end of
the month in which the child attains age 23 or the termination of the child's
education.

     7.5 Waiver of Spousal Benefit. An election under Section 7.3 or 7.4 shall
be effective with respect to a married Participant only if he or she waives the
benefit provided in Section 7.2 in accordance with the following rules:

          (a) A waiver shall be made in writing in a manner prescribed by the
     Committee on a form that clearly states that the Participant is waiving the
     benefit provided in Section 7.2. No such waiver shall be effective unless:
     (i) the Participant's spouse consents in writing to the waiver; (ii) the
     waiver election designates the form of benefit and a specific beneficiary;
     (iii) the spouse's consent to the waiver acknowledges the effect of the
     waiver; and (iv) the spouse's consent is witnessed by a notary public or by
     a Plan representative. A waiver without spousal consent shall be effective
     if the Sponsor determines there is no spouse or the spouse cannot be
     located.

          (b) Each Participant and his or her spouse shall receive a written
     explanation of the benefit provided in Section 7.2 which shall include: (i)
     the terms and conditions of the benefit; (ii) the Participant's right to
     make and the effect of waiving the benefit; (iii) the rights of a spouse;
     and (iv) the right to make, and the effect of, a revocation of a previous
     election to waive the benefit. Such explanation shall be furnished to the
     Participant within the applicable period. The term "applicable period"
     means, with respect to a Participant, whichever of the following periods
     ends earliest: (i) the period beginning with the first day of the Plan Year
     in which the Participant becomes a Participant described in Section 7.1(a)
     and ending on the date of the Participant's death or (ii) the period
     beginning with the first day of the Plan Year in which the Participant
     becomes a Participant described in Section 7.1(a) and ending on the date
     his or her pension commences.


                                       34


                                  ARTICLE VIII
                                  CONTRIBUTIONS

     8.1 Company Contributions. The Company shall contribute each year an amount
actuarially determined to be sufficient to provide the benefits under the Plan.
Notwithstanding the foregoing, Company contributions for any Plan Year shall be
conditioned upon the deductibility of such contributions by the Company under
Code Section 404. The Company reserves the right, however, to reduce, suspend or
discontinue its contributions under the Plan for any reason at any time. Except
as provided in Section 8.3, it shall be impossible for any part of the Company's
contributions to revert to the Company, or to be used for, or diverted to, any
purpose other than for the exclusive benefit of Participants and their
Beneficiaries.

     8.2 Source of Benefits. All benefits under the Plan shall be paid
exclusively from the Fund, and the Company shall have no duty to contribute
thereto except as provided in this Article.

     8.3 Irrevocability. The Company shall have no right or title to, nor
interest in, the Company contributions made to the Fund, and no part of the Fund
shall revert to the Company, except that on and after the Effective Date funds
may be returned to the Company as follows:

          (a) In the case of a contribution which is made by a mistake of fact,
     such contribution may be returned to the Company within one year after it
     is made.

          (b) In the case of a contribution conditioned on the initial
     qualification of the Plan under Code Section 401 (or any successor statute
     thereto), and the Plan does not initially qualify upon the filing of a
     timely determination letter request, such contribution may be returned to
     the Company within one year after the date of denial of the initial
     qualification of the Plan.

          (c) In the case of a contribution conditioned on the deductibility
     thereof under Code Section 404 (or any successor statute thereto), such
     contribution shall, to the extent such deduction is disallowed, be returned
     to the Company within one year after such disallowance.


                                       35



                                   ARTICLE IX
                                 ADMINISTRATION

     9.1 Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA.

     9.2 Appointment of Investment Subcommittee. There is hereby created an
investment subcommittee of the Committee (hereinafter referred to as the
"Investment Subcommittee" for purposes of this Article IX) which shall exercise
management and control over the assets of the Trust. The Board of Directors,
acting through its Organization and Compensation Committee, shall determine the
number of members of the Investment Subcommittee. The members of the Investment
Subcommittee shall be appointed by the Board of Directors, acting through its
Organization and Compensation Committee, and shall from time to time appoint
such members to or fill any vacancies in the Investment Subcommittee. The
members of the Investment Subcommittee shall constitute the Named Fiduciaries of
the Plan within the meaning of Section 402(a)(2) of ERISA with respect to the
management and control of the assets of the Trust.

     9.3 Transaction of Business. The Committee and Investment Subcommittee
shall transact business as provided in paragraphs (a) and (b), respectively:

          (a) A majority of the Committee shall constitute a quorum for the
     transaction of business. Actions of the Committee may be taken either by
     vote at a meeting or in writing without a meeting. All action taken by the
     Committee at any meeting shall be by a vote of the majority of those
     present at such meeting. All action taken in writing without a meeting
     shall be by a vote of the majority of those responding in writing. All
     notices, advices, directions and instructions to be transmitted by the
     Committee shall be in writing and signed by or in the name of the
     Committee. In all its communications with the Trustee, the Committee may,
     by either of the majority actions specified above, authorize any one or
     more of its members to execute any document or documents on behalf of the
     Committee, in which event it shall notify the Trustee in writing of such
     action and the name or names of its members so designated and the Trustee
     shall thereafter accept and rely upon any documents executed by such member
     or members as representing action by the Committee until the Committee
     shall file with the Trustee a written revocation of such designation.

          (b) A majority of the Investment Subcommittee shall constitute a
     quorum for the transaction of business. Actions of the Investment
     Subcommittee may be taken either by vote at a meeting or in writing without
     a meeting. All action taken by the Investment Subcommittee at any meeting
     shall be by a vote of the majority


                                       36



     of those present at such meeting. All action taken in writing without a
     meeting shall be by a vote of the majority of those responding in writing.
     All notices, advices, directions and instructions to be transmitted by the
     Investment Subcommittee shall be in writing and signed by or in the name of
     the Investment Subcommittee. In all its communications with the Trustee,
     the Investment Subcommittee may, by action specified above, authorize any
     one or more of its members to execute any document or documents on behalf
     of the Investment Subcommittee, in which event it shall notify the Trustee
     in writing of such action and the name or names of its members so
     designated and the Trustee shall thereafter accept and rely upon any
     documents executed by such member or members as representing action by the
     Investment Subcommittee until the Investment Subcommittee shall file with
     the Trustee a written revocation of such designation.

     9.4 Voting. Any member of the Committee who is also a Participant hereunder
shall not be qualified to act or vote on any matter relating solely to himself
or herself, and upon such matter his or her presence at a meeting shall not be
counted for the purpose of determining a quorum. If, at any time a member of the
Committee is not so qualified to act or vote, the qualified members of the
Committee shall be reduced below two (2) and the Board of Directors shall
promptly appoint one or more special members to the Committee so that there
shall be at least one qualified member to act upon the matter in question. Such
special Committee members shall have power to act only upon the matter for which
they were especially appointed and their tenure shall cease as soon as they have
acted upon the matter for which they were especially appointed.

     9.5 Responsibility of Committees. The responsibilities of the Committee and
Investment Subcommittee shall be as provided in paragraphs (a) and (b),
respectively:

          (a) The authority to manage and control the operation and
     administration of the Plan, the general administration of the Plan, the
     responsibility for carrying out the Plan, and to the extent provided in
     Section 9.7(e), the authority and responsibility to manage and control the
     assets of the Trust are hereby delegated by the Board of Directors to and
     vested in the Committee except to the extent reserved to the Board of
     Directors, the Sponsor, or the Company. Subject to the limitations of the
     Plan, the Committee shall, from time to time, establish rules for the
     performance of its functions and the administration of the Plan. In the
     performance of its functions, the Committee shall not discriminate in favor
     of Highly Compensated Employees.

          (b) The authority and responsibility to manage and control the assets
     of the Trust are hereby delegated by the Board of Directors, acting through
     its Organization and Compensation Committee, to and vested in the
     Investment Subcommittee except to the extent reserved to the Board of
     Directors or the Board of Directors, acting through its Organization and
     Compensation Committee, or the Sponsor. Subject to the limitations of the
     Plan, the Investment Subcommittee shall, from time to time, establish rules
     for the performance of its functions.

     9.6 Committee Powers. The Committee shall have all discretionary powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law,


                                       37



the Committee shall have, but not by way of limitation, the following
discretionary powers and authority:

          (a) To designate agents to carry out responsibilities relating to the
     Plan, other than fiduciary responsibilities as provided in Section 9.7.

          (b) To employ such legal, actuarial, medical, accounting, clerical,
     and other assistance as it may deem appropriate in carrying out the
     provisions of the Plan, including one or more persons to render advice with
     regard to any responsibility any Named Fiduciary or any other fiduciary may
     have under the Plan.

          (c) To establish rules and regulations from time to time for the
     conduct of the Committee's business and the administration and effectuation
     of the Plan.

          (d) To administer, interpret, construe, and apply the Plan and to
     decide all questions which may arise or which may be raised under the Plan
     by any Employee, Participant, former Participant, Beneficiary or other
     person whatsoever, including but not limited to all questions relating to
     eligibility to participate in the Plan, the amount of Benefit Years or
     Vesting Years of any Participant, and the amount of benefits to which any
     Participant or his or her Beneficiary may be entitled.

          (e) To determine the manner in which the assets of the Plan, or any
     part thereof, shall be disbursed.

          (f) Subject to provisions (a) through (d) of Section 10.1, to make
     administrative amendments to the Plan that do not cause a substantial
     increase or decrease in benefit accruals to Participants and that do not
     cause a substantial increase in the cost of administering the Plan.

          (g) To perform or cause to be performed such further acts as it may
     deem to be necessary, appropriate or convenient in the efficient
     administration of the Plan.

     Any action taken in good faith by the Committee in the exercise of
discretionary powers conferred upon it by the Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.

     9.7 Additional Powers of Committee. In addition to any discretionary powers
or authority conferred on the Committee elsewhere in the Plan or by law, such
Committee shall have the following discretionary powers and authority:

          (a) To appoint one or more Investment Managers pursuant to Section
     9.17 to manage and control any or all of the assets of the Trust.


                                       38



          (b) To designate persons (other than the members of the Committee) to
     carry out fiduciary responsibilities, other than any responsibility to
     manage or control the assets of the Trust;

          (c) To allocate fiduciary responsibilities among the members of the
     Committee, other than any responsibility to manage or control the assets of
     the Trust;

          (d) To cancel any such designation or allocation at any time for any
     reason;

          (e) To exercise management and control over the assets of the Trust to
     the extent provided in paragraph (a) above and in Section 9.9 (relating to
     review by the Committee of the long-run and short-run financial needs of
     the Plan and the determination of the funding policy for the Plan).

     Any action under this Section 9.7 shall be taken in writing, and no
designation or allocation under paragraphs (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.

     9.8 Investment Subcommittee Powers. The Investment Subcommittee shall have
all discretionary powers necessary to manage and control the assets of the
Trust, including but not limited to, the following:

          (a) To exercise management and control over the assets of the Trust
     except to the extent the Committee appoints an Investment Manager pursuant
     to Section 9.7(a) and subject to the requirement that all action taken by
     the Investment Subcommittee shall be in accordance and consistent with the
     funding policy established by the Committee and shall be communicated to
     the Committee at periodic intervals.

          (b) To employ consulting, actuarial, and other assistance as it may
     deem appropriate in carrying out its responsibilities under the Plan,
     including one or more persons to render advice with regard to any fiduciary
     responsibility the Investment Subcommittee may have under the Plan.

          (c) To establish rules and regulations from time to time for the
     conduct of the Investment Subcommittee's business.

          (d) To direct the Trustee, in writing, from time to time, to invest
     and reinvest the Trust Fund, or any part thereof, or to purchase, exchange,
     or lease any property, real or personal, which the Investment Subcommittee
     may designate. This shall include the right to direct the investment of all
     or any part of the Trust in any one security or any one type of securities
     permitted hereunder. Among the securities which the Investment Subcommittee
     may direct the Trustee to purchase are "qualifying employer securities" as
     defined in ERISA Section 407(d)(5).


                                       39



     Any action taken in good faith by the Investment Subcommittee in the
exercise of discretionary powers conferred upon it by the Plan shall be
conclusive and binding upon the Participants and their Beneficiaries.

     9.9 Periodic Review of Funding Policy. Notwithstanding the delegation of
authority and responsibility to manage and control the assets of the Trust to
the Investment Subcommittee, the Committee, at periodic intervals, shall review
the long-run and short-run financial needs of the Plan and shall determine a
funding policy for the Plan consistent with the objectives of the Plan and the
minimum funding standards of ERISA, if applicable. In determining such funding
policy the Committee shall take into account, at a minimum, not only the
long-term investment objectives of the Trust Fund consistent with the prudent
management of the assets thereof, but also the short-run needs of the Plan to
pay benefits. All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefor, shall be fully reflected in
the minutes of the Committee.

     9.10 Claims Procedures. If a Participant or his or her Beneficiary believes
that he or she is being denied any rights or benefits under the Plan, the
Participant, Beneficiary, or in either case, his or her authorized
representative (the "Claimant") shall follow the administrative procedures for
filing a claim for benefits as set forth in this Section. A claim for benefits
shall be in writing and shall be reviewed by the Committee or a claims official
designated by the Committee. The Committee or claims official shall review a
claim for benefits in accordance with the procedures established by the
Committee subject to the following administrative procedures set forth in this
Section.

          (a) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to a claim for
     benefits within 90 days following receipt by the Committee (or its
     delegate) of the claim unless the Committee determines that special
     circumstances require an extension of time for processing the claim. In the
     event an extension is necessary, written or electronic notice of the
     extension shall be furnished to the Claimant prior to the expiration of the
     initial 90 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 90 days from the end of the initial 90 day period.

          (b) In the case of a denial of the Claimant's claim, the written or
     electronic notice of such denial shall set forth (i) the specific reasons
     for the denial, (ii) references to the Plan provisions upon which the
     denial is based, (iii) a description of any additional information or
     material necessary for perfection of the claim (together with an
     explanation why such material or information is necessary), (iv) an
     explanation of the Plan's appeals procedures, and (v) a statement of the
     Claimant's right to bring a civil action under Section 502(a) of ERISA if
     his or her claim is denied upon appeal.

          (c) In the case of a denial of a claim, a Claimant who wishes to
     appeal the decision shall follow the administrative procedures for an
     appeal as set forth in Section 9.11 below.


                                       40



     9.11 Appeals Procedures. A Claimant who wishes to appeal the denial of his
or her claim for benefits shall follow the administrative procedures for an
appeal as set forth in this Section and shall exhaust such administrative
procedures prior to seeking any other form of relief. Appeals shall be reviewed
in accordance with the procedures established by the Committee subject to the
following administrative procedures set forth in this Section.

          (a) In order to appeal a decision rendered with respect to his or her
     claim for benefits, a Claimant must file an appeal with the Committee in
     writing within 60 days following his or her receipt of the notice of denial
     with respect to the claim.

          (b) The Claimant's appeal may include written comments, documents,
     records and other information relating to his or her claim. The Claimant
     may review all pertinent documents and, upon request, shall have reasonable
     access to or be provided free of charge, copies of all documents, records,
     and other information relevant to his or her claim.

          (c) The Committee shall provide a full and fair review of the appeal
     and shall take into account all claim related comments, documents, records,
     and other information submitted by the Claimant without regard to whether
     such information was submitted or considered under the initial
     determination or review of the initial determination. Where appropriate,
     the Committee will overturn a notice of denial if it determines that an
     error was made in the interpretation of the controlling plan documents or
     if the Committee determines that an existing interpretation of the
     controlling plan documents should be changed on a prospective basis. In the
     event the Claimant is a subordinate, as determined by the Committee, to an
     individual conducting the review, such individual shall recuse himself or
     herself from the review of the appeal.

          (d) The Committee shall furnish the Claimant with written or
     electronic notice of the decision rendered with respect to an appeal within
     60 days following receipt by the Committee of the appeal unless the
     Committee determines that special circumstances require an extension of
     time for processing the appeal. In the event an extension is necessary,
     written or electronic notice of the extension shall be furnished to the
     Claimant prior to the expiration of the initial 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 60 days from the end of the
     initial 60 day period.

          (e) In the case of a denial of an appeal, the written or electronic
     notice of such denial shall set forth (i) the specific reasons for the
     denial, (ii) references to the Plan provisions upon which the denial is
     based, (iii) a statement that the Claimant is entitled to receive, upon
     request and free of charge, reasonable access to, and copies of, all
     documents, records, and other information relating to his or her claim for
     benefits, and (iv) a statement of the Claimant's right to bring a civil
     action under Section 502(a) of ERISA.


                                       41



     9.12 Limitation on Liability. Each of the fiduciaries under the Plan shall
be solely responsible for its own acts and omissions and no fiduciary shall be
liable for any breach of fiduciary responsibility resulting from the act or
omission of any other fiduciary or person to whom fiduciary responsibilities
have been allocated or delegated pursuant to Section 9.2 or 9.7, except as
provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. Neither the
Committee nor the Investment Subcommittee shall have responsibility over assets
as to which management and control has been delegated to an Investment Manager
appointed pursuant to Section 9.17 hereof or as to which management and control
has been retained by the Trustee.

     9.13 Indemnification and Insurance. To the extent permitted by law, the
Company shall indemnify and hold harmless the Committee, the Investment
Subcommittee and each member thereof, the Board of Directors and each member
thereof, and such other persons as the Board of Directors may specify, from the
effects and consequences of his or her acts, omissions, and conduct in his or
her official capacity in connection with the Plan and Trust. To the extent
permitted by law, the Company may also purchase liability insurance for such
persons.

     9.14 Compensation of Committee and Plan Expenses. Members of the Committee
and the Investment Subcommittee shall serve as such without compensation unless
the Board of Directors shall otherwise determine, but in no event shall any
member of the Committee or Investment Subcommittee who is an Employee receive
compensation from the Plan for his or her services as a member of the Committee
or the Investment Subcommittee. All members shall be reimbursed for any
necessary expenditures incurred in the discharge of duties as members of the
Committee or the Investment Subcommittee. The compensation or fees, as the case
may be, of all officers, agents, counsel, the Trustee or other persons retained
or employed by the Committee or the Investment Subcommittee shall be fixed by
the Committee, subject to approval by the Board of Directors. The expenses
incurred in the administration and operation of the Plan, including but not
limited to the expenses incurred by the members of the Committee or the
Investment Subcommittee in exercising their duties, shall be paid by the Plan
from the Trust Fund, unless paid by the Company, provided, however, that the
Plan and not the Company shall bear the cost of interest and normal brokerage
charges which are included in the cost of securities purchased by the Trust Fund
(or charged to proceeds in the case of sales).

     9.15 Resignation. Any member of the Committee or Investment Subcommittee
may resign by giving fifteen (15) days notice to the Board of Directors, and any
member shall resign forthwith upon receipt of the written request of the Board
of Directors, whether or not said member is at that time the only member of the
Committee or the Investment Subcommittee.

     9.16 Reliance Upon Documents and Opinions. The members of the Committee,
the Investment Subcommittee, the Board of Directors, the Company and any person
delegated to carry out any fiduciary responsibilities under the Plan
(hereinafter a "delegated fiduciary"), shall be entitled to rely upon any
tables, valuations, computations, estimates, certificates and reports furnished
by any consultant, or firm or corporation which employs one or more consultants,
upon any opinions furnished by legal counsel, and upon any reports furnished by
the Trustee or any Investment Manager. The members of the Committee, the
Investment Subcommittee, the Board of Directors, the Company and any delegated
fiduciary shall be fully protected and shall not be liable in any manner
whatsoever for anything done or action taken or suffered in reliance


                                       42



upon any such consultant, or firm or corporation which employs one or more
consultants, Trustee, Investment Manager, or counsel. Any and all such things
done or such action taken or suffered by the Committee, the Investment
Subcommittee, the Board of Directors, the Company and any delegated fiduciary
shall be conclusive and binding on all Employees, Participants, Beneficiaries,
and any other persons whomsoever, except as otherwise provided by law. The
Committee, the Investment Subcommittee, and any delegated fiduciary may, but are
not required to, rely upon all records of the Company with respect to any matter
or thing whatsoever, and may likewise treat such records as conclusive with
respect to all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law.

     9.17 Appointment of Investment Manager. From time to time the Committee, in
accordance with Section 9.7 hereof, may appoint one or more Investment Managers
who shall have investment management and control over assets of the Trust. The
Committee shall notify the Trustee of such assets of the appointment of the
Investment Manager. In the event more than one Investment Manager is appointed,
the Committee shall determine which assets shall be subject to management and
control by each Investment Manager and shall also determine the proportion in
which funds withdrawn or disbursed shall be charged against the assets subject
to each Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract,
and such Investment Manager shall report the voting of all securities subject to
such proxy on an annual basis to the Committee.


                                       43



                                    ARTICLE X
                         AMENDMENT AND ADOPTION OF PLAN

     10.1 Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend the Plan and any trust agreement with
the Trustee at any time and from time to time and in such manner and to such
extent as it may deem advisable, including retroactively, subject to the
following provisions:

          (a) No amendment shall have the effect of reducing any Participant's
     vested interest in the Plan or eliminating an optional form of
     distribution.

          (b) No amendment shall have the effect of diverting any part of the
     assets of the Plan to persons or purposes other than the exclusive benefit
     of the Participants or their Beneficiaries.

          (c) No amendment shall have the effect of increasing the duties or
     responsibilities of a Trustee without its written consent.

          (d) No amendment shall result in discrimination in favor of officers,
     shareholders, or other highly compensated or key employees.

     The Committee shall have the right to amend the Plan, subject to paragraphs
(a) through (d) above, in accordance with the provisions of Section 9.5(g).

     10.2 Adoption of Plan by Affiliated Companies. Subject to approval by the
Board of Directors and consistent with the provisions of ERISA, an Affiliated
Company may adopt the Plan for all or any specified group of its Eligible
Employees by entering into an adoption agreement in the form and substance
prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.


                                       44



                                   ARTICLE XI
                             TERMINATION AND MERGER

     11.1 Right to Terminate Plan. The Sponsor, by resolution of the Board of
Directors, may terminate or partially terminate the Plan. If the Plan is
terminated or partially terminated, the assets of the Plan shall be allocated,
subject to Section 11.3, as provided in Section 4044 of the Employee Retirement
Income Security Act of 1974 (as it may be from time to time amended or construed
by any appropriate governmental agency or corporation), without subclasses.
Effective as of the first day of the sixth calendar year following the adoption
date of this amended and restated Plan, in the event of a termination of the
Plan (other than a partial termination), any amount remaining after all fixed
and contingent liabilities of the Plan have been satisfied shall revert to the
Company notwithstanding any provision in the Plan to the contrary. In the event
of a termination of the Plan (other than a partial termination) prior to the
first day of the sixth calendar year following the adoption date of this amended
and restated Plan, any amount remaining after all fixed and contingent
liabilities of the Plan have been satisfied shall be allocated to each
Participant in proportion to the present value of a benefit commencing at Normal
Retirement Date equal to such Participant's Average Earnings times Benefit
Years. Any allocations under this Section to Participants with respect to whom
the Plan is terminating shall be nonforfeitable. Except as otherwise required by
law, the time and manner of distribution of the assets or the time and manner of
any reversion of assets to the Company shall be determined by the Sponsor by
amendment to the Plan.

     11.2 Merger Restriction. No merger or consolidation with, or transfer of
any of the Plan's assets or liabilities to, any other plan shall occur at any
time unless each Participant would (if the Plan had then terminated) receive a
benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

     11.3 Effect on Trustee and Committee. The Trustee and the Committee shall
continue to function as such for such period of time as may be necessary for the
winding up of the Plan and for the making of distributions in the manner
prescribed by the Board of Directors at the time of termination of the Plan.

     11.4 Effect of Reorganization, Transfer of Assets or Change in Control.

          (a) In the event of a consolidation or merger of the Company, or in
     the event of a sale and/or any other transfer of the operating assets of
     the Company, any ultimate successor or successors to the business of the
     Company may continue the Plan in full force and effect by adopting the same
     by resolution of its board of directors and by executing a proper
     supplemental or transfer agreement with the Trustee.

          (b) In the event of a Change in Control (as herein defined), all
     Participants who were Participants on the date of such Change in Control
     shall become 100% vested in their Accrued Benefit on the date of such
     Change in Control and in any benefit accruals subsequent to the date of the
     Change in Control. Notwithstanding the foregoing, the Board of Directors
     may, at its discretion, amend or delete this paragraph (b) in its


                                       45



     entirety prior to the occurrence of any such Change in Control. For the
     purpose of this paragraph (b), "Change in Control" shall mean the following
     and shall be deemed to occur if any of the following events occur:

               (i) 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 the Sponsor representing (1)
          20% or more of the combined voting power of the Sponsor'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 (2) 33%
          or more of the combined voting power of the Sponsor's then outstanding
          voting securities, without regard to whether such acquisition is
          approved by the Incumbent Board;

               (ii) Individuals who, as of the 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 date hereof
          whose election, or nomination for election by the Sponsor'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 the Sponsor, as such terms are
          used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
          Act) shall, for the purposes of the Plan, be considered as though such
          person were a member of the Incumbent Board of the Sponsor;

               (iii) The consummation of a merger, consolidation or
          reorganization involving the Sponsor, other than one which satisfies
          both of the following conditions:

                    (A) a merger, consolidation or reorganization which would
               result in the voting securities of the Sponsor 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 the Sponsor 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 the
               Sponsor's voting securities immediately before such merger,
               consolidation or reorganization, and

                    (B) a merger, consolidation or reorganization in which no
               Person is or becomes the Beneficial Owner, directly or
               indirectly, of


                                       46



               securities of the Sponsor representing 20% or more of the
               combined voting power of the Sponsor's then outstanding voting
               securities; or

               (iv) The stockholders of the Sponsor approve a plan of complete
          liquidation of the Sponsor or an agreement for the sale or other
          disposition by the Sponsor of all or substantially all of the
          Sponsor's assets.

          Notwithstanding the preceding provisions of this paragraph (b), a
     Change in Control shall not be deemed to have occurred if the Person
     described in the preceding provisions of this paragraph (b) is (i) an
     underwriter or underwriting syndicate that has acquired any of the
     Sponsor's then outstanding voting securities solely in connection with a
     public offering of the Sponsor's securities, (ii) the Sponsor or any
     subsidiary of the Sponsor or (iii) an employee stock ownership plan or
     other employee benefit plan maintained by the Sponsor or an Affiliated
     Company that is qualified under the provisions of the Code. In addition,
     notwithstanding the preceding provisions of this paragraph (b), a Change in
     Control shall not be deemed to have occurred if the Person described in the
     preceding provisions of this paragraph (b) becomes a Beneficial Owner of
     more than the permitted amount of outstanding securities as a result of the
     acquisition of voting securities by the Sponsor or an Affiliated Company
     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 Sponsor or through a stock
     dividend or stock split), then a Change in Control shall occur.

          (c) For purposes of this Section 11.4, a Change of Control shall not
     be deemed to have occurred upon the distribution of the stock of Advanced
     Medical Optics, Inc. on June 29, 2002 by the Sponsor to its stockholders.

     11.5 Termination Restrictions. The following termination restrictions shall
apply:

          (a) In the event the Plan is terminated, the Accrued Benefit of any
     Highly Compensated Employee (active or former) shall be limited to an
     Accrued Benefit that is nondiscriminatory under Code Section 401(a)(4).

          (b) The Accrued Benefit distributed to any of the 25 most Highest
     Compensated Employees (active or former) with the greatest Earnings in the
     current or any prior year shall be restricted so that the annual payments
     to such Highest Compensated Employee are no greater than an amount equal to
     the payment that would be made on behalf of the Highly Compensated Employee
     under a straight life annuity that is the actuarial equivalent of the sum
     of the Highly Compensated Employee's Accrued Benefit, other benefits under
     the Plan (other than social security supplement, within the meaning of
     Section 1.411(a)-7(c)(4)(ii) of the Income Tax Regulations), and the amount
     that he is entitled to receive under a social security supplement.


                                       47



          (c) Paragraph (b) shall not apply if:

               (i) After payment of the Accrued Benefit to an Employee described
          in paragraph (a), the value of Plan assets equals or exceeds 110% of
          the value of current liabilities, as defined in Code Section
          412(1)(7),

               (ii) The value of the Accrued Benefit for an Employee described
          in paragraph (a) is less than 1% of the value of current liabilities
          before distribution, or

               (iii) The value of the Accrued Benefit payable under the Plan to
          an Employee described in paragraph (b) does not exceed $3,500.

          For purposes of this paragraph (c), the Accrued Benefit includes loans
     in excess of the amount set forth in Code Section 72(p)(2)(A), any periodic
     income, any withdrawal values payable to a living Employee, and any death
     benefits not provided for by insurance on the Employee's life.


                                       48



                                   ARTICLE XII
                                 TOP-HEAVY RULES

     12.1 Applicability. Notwithstanding any provision in the Plan to the
contrary, and subject to the limitations set forth in Section 12.7, the
requirements of Sections 12.4, 12.5, and 12.6 shall apply under the Plan in the
case of any Plan Year in which the Plan is determined to be a Top-Heavy Plan
under the rules of Section 12.3. For the purpose of this Article XII, the term
"Company" shall mean the Sponsor and any Affiliated Company whether or not such
Affiliated Company has adopted the Plan.

     12.2 Definitions. For purposes of this Article XII, the following special
definitions and rules shall apply:

          (a) The term "Key Employee" means any Employee or former Employee
     (including any deceased Employee) who, at any time during the Plan Year
     that includes the Determination Date, was an officer of the Company having
     annual Compensation greater than $130,000 (as adjusted under Code Section
     416(i)(1) for Plan Years beginning after December 31, 2002), a Five Percent
     Owner of the Company, or an One Percent Owner of the Company having annual
     Compensation of more than $150,000.

          (b) The term "Five Percent Owner" means any person who owns (or is
     considered as owning within the meaning of Code Section 318) more than 5%
     of the outstanding stock of the Company or stock possessing more than 5% of
     the total combined voting power of all stock of the Company.

          (c) The term "One Percent Owner" means any person who would be
     described in paragraph (b) if "1%" were substituted for "5%" each place
     where it appears therein.

          (d) The term "Non-Key Employee" means any Employee who is not a Key
     Employee.

          (e) The term "Determination Date" means, with respect to any plan
     year, the last day of the preceding plan year. In the case of the first
     plan year of any plan, the term "Determination Date" shall mean the last
     day of that plan year.

          (f) The term "Aggregation Group" means (i) each qualified plan of the
     Company in which at least one Key Employee participates or participated at
     any time during the determination period (regardless of whether the plan
     has terminated), and (ii) any other qualified plan of the Company which
     enables a plan described in clause (i) to meet the requirements of Code
     Sections 401(a)(4) or 410. Any plan not required to be included in an
     Aggregation Group under the preceding rules may be treated as being part of
     such group if the group would continue to meet the requirements of Code
     Sections 401(a)(4) and 410 with the plan being taken into account.


                                       49



          (g) For purposes of determining ownership under paragraphs (a), (b)
     and (c) above, the following special rules shall apply: (i) Code Section
     318(a)(2)(C) shall be applied by substituting "5%" for "50%", and (ii) the
     aggregation rules of Code Sections 414(b), (c) and (m) shall not apply,
     with the result that the ownership tests of this Section 12.2 shall apply
     separately with respect to each Affiliated Company.

          (h) The terms "Key Employee" and "Non-Key Employee" shall include
     their Beneficiaries, and the definitions provided under this Section 12.2
     shall be interpreted and applied in a manner consistent with the provisions
     of Code Section 416(i) and the regulations thereunder.

          (i) For purposes of this Article XII, an Employee's Compensation shall
     be determined in accordance with the rules of Code Section 415 and the
     regulations thereunder.

     12.3 Top-Heavy Status.

          (a) The term "Top-Heavy Plan" means, with respect to any Plan Year:

               (i) Any defined benefit plan if, as of the Determination Date,
          the present value of the cumulative accrued benefits under the plan
          for Key Employees exceeds 60% of the present value of the cumulative
          accrued benefits under the plan for all Employees; and

               (ii) Any defined contribution plan if, as of the Determination
          Date, the aggregate of the account balances of Key Employees under the
          plan exceeds 60% of the aggregate of the account balances of all
          Employees under the plan.

          In applying the foregoing provisions of this paragraph (a), the
     valuation date to be used in valuing Plan assets shall be (i) in the case
     of a defined benefit plan, the same date which is used for computing costs
     for minimum funding purposes, and (ii) in the case of a defined
     contribution plan, the most recent valuation date within a 12-month period
     ending on the applicable Determination Date.

          (b) Each plan maintained by the Company required to be included in an
     Aggregation Group shall be treated as a Top-Heavy Plan if the Aggregation
     Group is a Top-Heavy Group.

          (c) The term "Top-Heavy Group" means any Aggregation Group if the sum
     (as of the Determination Date) of (i) the present value of the cumulative
     accrued benefits for Key Employees under all defined benefit plans included
     in the group, and (ii) the aggregate of the account balances of Key
     Employees under all defined contribution plans included in the group
     exceeds 60% of a similar sum determined for all Employees. For purposes of
     determining the present value of the cumulative accrued benefit of any
     Employee, or the amount of the account balance of any Employee, such
     present value or amount shall be increased by the aggregate distributions
     made with respect to the


                                       50



     Employee under the plan (including a terminated plan which, had it not been
     terminated, would have been aggregated with the plan under Code Section
     416(g)(2)(A)(i))during the one year period ending on the Determination
     Date. In the case of distributions made for a reason other than separation
     from service, death, or disability, the preceding sentence shall be applied
     by substituting "5-year period" for "l -year period." Any rollover
     contribution or similar transfer initiated by the Employee and made after
     December 31, 1983, to a plan shall not be taken into account with respect
     to the transferee plan for purposes of determining whether such plan is a
     Top-Heavy Plan (or whether any Aggregation Group which includes such plan
     is a Top-Heavy Group).

          (d) If any individual is a Non-Key Employee with respect to any plan
     for any plan year, but the individual was a Key Employee with respect to
     the plan for any prior plan year, any accrued benefit for the individual
     (and the account balance of the individual) shall not be taken into account
     for purposes of this Section 12.3.

          (e) If any individual has not performed services for the Company at
     any time during the one year period ending on the Determination Date, any
     accrued benefit for such individual (and the account balance of the
     individual) shall not be taken into account for purposes of this Section
     12.3.

          (f) In applying the foregoing provisions of this Section, the accrued
     benefit of a Non-Key Employee shall be determined (i) under the method, if
     any, which is used for accrual purposes under all plans of the Company and
     any Affiliate, or (ii) if there is no such uniform method, as if such
     benefit accrued not more rapidly than the slowest accrual rate permitted
     under Code Section 411(b)(1)(C).

          (g) For all purposes of this Article XII, the definitions provided
     under this Section 12.3 shall be applied and interpreted in a manner
     consistent with the provisions of Code Section 416(g) and the Regulations
     thereunder.

     12.4 Minimum Benefit.

          (a) The Plan shall provide a minimum benefit for each Participant who
     is not classified as a "Key Employee." This minimum benefit, when expressed
     as an annual retirement benefit payable in the form of a single life
     annuity beginning when the Participant attains Age 65, shall not be less
     than the Participant's average annual compensation during the period of
     consecutive years (not exceeding five (5)) during which the Participant had
     the greatest aggregate compensation from the Company multiplied by the
     lesser of:

               (i) Two percent (2%) multiplied by the number of his or her
          Vesting Years; or

               (ii) Twenty percent (20%).


                                       51



          (b) For purposes of this Section 12.4, Vesting Years shall be
     determined under Code Sections 411(a)(4), (5), and (6), but excluding:

               (i) Any Vesting Year if the Plan was not a Top-Heavy Plan for the
          Plan Year ending during such Vesting Year;

               (ii) Any Vesting Year which was completed in a Plan Year
          beginning before January 1, 1984; and

               (iii) Any Vesting Year which was completed in a Plan Year
          beginning on or after January 1, 2002 during which the Plan benefits
          (within the meaning of Code Section 410(b)) no Key Employee or former
          Key Employee.

          (c) The Participant's minimum benefit determined under this Section
     12.4 shall be calculated without regard to any Social Security benefits
     payable to the Participant.

          (d) In the event a Participant is covered by both a defined
     contribution and a defined benefit plan maintained by the Company, both of
     which are determined to be Top-Heavy Plans, the Company shall satisfy the
     minimum benefit requirements of Code Section 416 by providing (in lieu of
     the minimum contribution described under the defined contribution plan) a
     minimum benefit under the Plan so as to prevent the duplication of required
     minimum benefits hereunder.

     12.5 Maximum Benefit.

          (a) Except as set forth below, in the case of any Top-Heavy Plan the
     rules of Sections 5.7(a)(i) and 5.7(b) shall be applied by substituting
     "1.0" for "1.25."

          (b) The rule set forth in paragraph (a) above shall not apply if the
     requirements of both subparagraphs (i) and (ii) are satisfied.

               (i) The requirements of this subparagraph (i) are satisfied if
          the rules of Section 12.4(a) above would be satisfied after
          substituting "three percent (3%)" for "two percent (2%)" where it
          appears therein and by increasing (but not by more than ten (10)
          percentage points) twenty percent (20%) by one (1) percentage point
          for each year for which the Plan is a Top Heavy Plan.

               (ii) The requirements of this subparagraph (ii) are satisfied if
          the Plan would not be a Top-Heavy Plan if "ninety percent (90%)" were
          substituted for "sixty percent (60%)" each place it appears in
          Sections 12.3(a) and 12.3(c).


                                       52



          (c) The rules of paragraph (a) shall not apply with respect to any
     Employee as long as there are no --

               (i) Company contributions, forfeitures, or voluntary
          nondeductible contributions allocated to the Employee under a defined
          contribution plan maintained by the Company, or

               (ii) Accruals by the Employee under a defined benefit plan
          maintained by the Company.

          (d) In the case where the Plan is subject to the rules of paragraph
     (a) above, the transition fraction rules of Code Section 415(e)(6) shall be
     applied by substituting "$41,500" for "$51,875."

     12.6 Minimum Vesting Rules.

          (a) For any Plan Year in which it is determined that the Plan is a
     Top-Heavy Plan, the vesting schedule of the Plan shall be changed to that
     set forth below (unless the Plan's vesting schedule otherwise provides for
     vesting at a rate at least as rapid as that set forth below):



Number of Vesting Years   Nonforfeitable Percentage
- -----------------------   -------------------------
                       
Less than 3 years                      0%
3 or more                            100%


          (b) If the Plan ceases to be a Top-Heavy Plan, the vesting schedule of
     the Plan shall (for such Plan Years as the Plan is not a Top-Heavy Plan)
     revert to that provided in Section 5.11 (the "Regular Vesting Schedule").
     If such reversion to the Regular Vesting Schedule is deemed to constitute a
     vesting schedule change that is attributable to a Plan amendment (within
     the meaning of Code Section 411(a)(10)), then such reversion to said
     Regular Vesting Schedule shall be subject to the requirements of Code
     Section 411(a)(10). For such purposes, the date of the adoption of such
     deemed amendment shall be the Determination Date as of which it is
     determined that the Plan has ceased to be a Top-Heavy Plan.

     12.7 Noneligible Employees. The rules of this Article XII shall not apply
to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.


                                       53



                                  ARTICLE XIII
                          RESTRICTION ON ASSIGNMENT OR
                        OTHER ALIENATION OF PLAN BENEFITS

     13.1 General Restrictions Against Alienation.

          (a) The interest of any Participant or his or her Beneficiary in the
     income, benefits, payments, claims or rights hereunder, or in the Trust
     Fund, shall not in any event be subject to sale, assignment, hypothecation,
     or transfer. Each Participant and Beneficiary is prohibited from
     anticipating, encumbering, assigning, or in any manner alienating his or
     her interest under the Trust Fund, and is without power to do so. The
     interest of any Participant or Beneficiary shall not be liable or subject
     to his or her debts, liabilities, or obligations, now contracted, or which
     may hereafter be contracted, and such interest shall be free from all
     claims, liabilities, or other legal process now or hereafter incurred or
     arising. Neither the interest of a Participant or Beneficiary, nor any part
     thereof, shall be subject to any judgment rendered against any such
     Participant or Beneficiary. Notwithstanding the foregoing, a Participant's
     or Beneficiary's interest in the Plan may be subject to the enforcement of
     a Federal tax levy made pursuant to Code Section 6331 or the collection by
     the United States on a judgment resulting from an unpaid tax assessment.

          (b) In the event any person attempts to take any action contrary to
     this Article XIII, such action shall be null and void and of no effect, and
     the Company, the Committee, the Trustee and all Participants and their
     Beneficiaries, may disregard such action and are not in any manner bound
     thereby, and they, and each of them, shall suffer no liability for any such
     disregard thereof, and shall be reimbursed on demand out of the Trust Fund
     for the amount of any loss, cost or expense incurred as a result of
     disregarding or of acting in disregard of such action.

          (c) The foregoing provisions of this Section shall be interpreted and
     applied by the Committee in accordance with the requirements of Code
     Section 401(a)(13) and Section 206(d) of ERISA as construed and interpreted
     by authoritative judicial and administrative rulings and regulations.

     13.2 Qualified Domestic Relations Orders. The rule set forth in Section
13.1 above shall not apply with respect to a "Qualified Domestic Relations
Order" as described below.

          (a) A "Qualified Domestic Relations Order" is a judgment, decree, or
     order (including approval of a property settlement agreement) that:

               (i) Creates or recognizes the existence of an Alternate Payee's
          right to, or assigns to an Alternate Payee the right to, receive all
          or a portion of the benefits payable under this Plan with respect to a
          Participant,


                                       54



               (ii) Relates to the provision of child support, alimony payments,
          or marital property rights to a spouse, former spouse, child or other
          dependent of a Participant,

               (iii) Is made pursuant to a State domestic relations law
          (including a community property law), and

               (iv) Clearly specifies: (1) the name and last known mailing
          address (if any) of the Participant and the name and mailing address
          of each Alternate Payee covered by the order (if the Committee does
          not have reason to know that address independently of the order); (2)
          the amount or percentage of the Participant's benefits to be paid to
          each Alternate Payee, or the manner in which the amount or percentage
          is to be determined; (3) the number of payments or period to which the
          order applies; and (4) each plan to which the order applies.

          For purposes of this Section 13.2, "Alternate Payee" means any spouse,
     former spouse, child or other dependent of a Participant who is recognized
     by a domestic relations order as having a right to receive all, or a
     portion of, the benefits payable with respect to the Participant.

          (b) A domestic relations order is not a Qualified Domestic Relations
     Order if it requires:

               (i) The Plan to provide any type or form of benefit, or any
          option, not otherwise provided under the Plan;

               (ii) The Plan to provide increased benefits; or

               (iii) The payment of benefits to an Alternate Payee that are
          required to be paid to another Alternate Payee under a previous
          Qualified Domestic Relations Order.

          (c) A domestic relations order shall not be considered to fail to
     satisfy the requirements of paragraph (b)(i) above with respect to any
     payment made before a Participant has separated from service solely because
     the order requires that payment of benefits be made to an Alternate Payee:

               (i) On or after the date on which the Participant attains (or
          would have first attained) his earliest retirement age (as defined in
          Code Section 414(p)(4)(B));

               (ii) As if the Participant had retired on the date on which such
          payment is to begin under such order (but taking into account only the
          present value of accrued benefits and not taking into account the
          present value of any subsidy for early retirement benefits); and


                                       55



               (iii) In any form in which such benefits may be paid under the
          Plan to the Participant (other than in the form of a joint and
          survivor annuity with respect to the Alternate Payee and his or her
          subsequent spouse).

          Notwithstanding the foregoing, if the Participant dies before his or
     her earliest retirement age (as defined in Code Section 414(p)(4)(B)), the
     Alternate Payee is entitled to benefits only if the Qualified Domestic
     Relations Order requires survivor benefits to be paid to the Alternate
     Payee.

          (d) To the extent provided in any Qualified Domestic Relations Order,
     the former spouse of a Participant shall be treated as a surviving spouse
     of the Participant for purposes of applying the rules (relating to minimum
     survivor annuity requirements) of Code Sections 401(a)(11) and 417, and any
     current spouse of the Participant shall not be treated as a spouse of the
     Participant for such purposes.

          (e) In the case of any domestic relations order received by the Plan,
     the Committee shall promptly notify the Participant and any Alternate Payee
     of the receipt of the order and the Plan's procedures for determining the
     qualified status of domestic relations orders. Within a reasonable period
     after the receipt of the order, the Committee shall determine whether the
     order is a Qualified Domestic Relations Order and shall notify the
     Participant and each Alternate Payee of such determination.

          (f) The Committee shall establish reasonable procedures to determine
     the qualified status of domestic relations orders and to administer
     distributions under Qualified Domestic Relations Orders. During any period
     in which the issue of whether a domestic relations order is a Qualified
     Domestic Relations Order is being determined (by the Committee, by a court
     of competent jurisdiction, or otherwise), the Committee shall segregate in
     a separate account in the Plan (or in an escrow account) the amounts which
     would have been payable to the Alternate Payee during the period if the
     order had been determined to be a Qualified Domestic Relations Order. If
     within the 18 Month Period (as defined below), the order (or modification
     thereof) is determined to be a Qualified Domestic Relations Order, the
     Committee shall pay the segregated amounts (plus any interest thereon) to
     the person or persons entitled thereto. However, if within the 18 Month
     Period (i) it is determined that the order to not a Qualified Domestic
     Relations Order, or (ii) the issue as to whether the order is a Qualified
     Domestic Relations Order is not resolved, then the Committee shall pay the
     segregated amounts (plus any interest thereon) to the person or persons who
     would have been entitled to the amounts if there had been no order
     (assuming such benefits were otherwise payable). Any determination that an
     order is a Qualified Domestic Relations Order that is made after the close
     of the 18 Month Period shall be applied prospectively only. For purposes of
     this Section 13.2, the "18 Month Period" shall mean the 18 month period
     beginning with the date on which the first payment would be required to be
     made under the domestic relations order.


                                       56



                                   ARTICLE XIV
                                  MISCELLANEOUS

     14.1 No Right of Employment Hereunder. The adoption and maintenance of the
Plan and Trust shall not be deemed to constitute a contract of employment or
otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

     14.2 Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

     14.3 Limitation on Company Liability. Any benefits payable under the Plan
shall be paid or provided for solely from the Plan and the Company assumes no
liability or responsibility therefor.

     14.4 Interpretation. The provisions of the Plan shall in all cases be
interpreted in a manner that is consistent with the Plan satisfying the
requirements of Code Section 401(a) and related statutes for qualification as a
defined benefit plan.

     14.5 Withholding For Taxes. Any payments from the Trust Fund may be subject
to withholding for taxes as may be required by any applicable federal or state
law.

     14.6 California Law Controlling. All legal questions pertaining to the Plan
which are not controlled by ERISA shall be determined in accordance with the
laws of the State of California and all contributions made hereunder shall be
deemed to have been made in that State.

     14.7 Plan and Trust as One Instrument. The Plan and any trust agreement
adopted hereunder shall be construed together as one instrument. In the event
that any conflict arises between the terms and/or conditions of any trust
agreement with the Trustee and the Plan, the provisions of the Plan shall
control, except that with respect to the duties and responsibilities of the
Trustee, the trust agreement shall control.

     14.8 Invalid Provisions. If any paragraph, section, sentence, clause or
phrase contained in the Plan shall become illegal, null or void or against
public policy, for any reason, or shall be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null or void
or against public policy, the remaining paragraphs, sections, sentences, clauses
or phrases contained in the Plan shall not be affected thereby.

     14.9 Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.


                                       57



     14.10 Forfeitures. All forfeitures arising under the Plan shall be used as
soon as possible to reduce the Company's contributions and shall not be applied
to increase the benefits any person would otherwise receive under the Plan.

     14.11 Facility of Payment. If the Committee deems any person incapable of
receiving benefits to which he is entitled by reason of minority, illness,
infirmity, or other incapacity, it may direct that payment be made directly for
the benefit of such person or to any person selected by the Committee to
disburse it, whose receipt shall be a complete acquittance therefor. Such
payments shall, to the extent thereof, discharge all liability of the Company
and the party making the payment.

     14.12 Lapsed Benefits.

          (a) In the event that a benefit is payable under the Plan to a
     Participant and after reasonable efforts the Participant cannot be located
     for the purpose of paying the benefit during a period of three consecutive
     years, the Participant shall be presumed dead and the benefit (if any)
     shall, upon the termination of that three year period, be paid to the
     Participant's Beneficiary.

          (b) If any eligible Beneficiary cannot be located for the purpose of
     paying the benefit for the following two years, then the benefit shall be
     forfeited and applied in accordance with the provisions of Section 14.10.

          (c) Notwithstanding the foregoing rules, if after such a forfeiture
     the Participant or an eligible Beneficiary shall claim the forfeited
     benefit, the amount forfeited shall be reinstated and paid to the claimant
     as soon as practical following the claimant's production of reasonable
     proof of his or her identity and entitlement to the benefit (determined
     pursuant to the Plan's normal claim review procedures under Sections 9.8
     and 9.9).

          (d) The Committee shall direct the Trustee with respect to the
     procedures to be followed concerning a missing Participant (or
     Beneficiary), and the Company shall be obligated to contribute to the Trust
     Fund any amounts necessary after the application of Section 14.10 to pay
     any reinstated benefit after it has been forfeited pursuant to the
     provisions of this Section.


                                       58



     IN WITNESS WHEREOF, Allergan, Inc. hereby executes this instrument,
evidencing the terms of the Allergan, Inc. Pension Plan as restated this 14th
day of June, 2005.

ALLERGAN, INC.


By: /s/ Roy J. Wilson
    ---------------------------------
    Roy J. Wilson
    Executive Vice President, Human
    Resources


                                       59


                                   APPENDIX A

     A.1 The Actuarial Equivalent of a benefit other than a lump sum shall be
determined as follows:

          (a) For Annuity Starting Dates on or after July 1, 2002, the Actuarial
     Equivalent of a benefit other than a lump sum shall be determined by
     applying a 7% interest rate and the 1994 Group Annuity Reserving Table;
     provided, however, the Actuarial Equivalent of a contingent benefit option
     which provides a benefit following a Participant's death to the
     Participant's surviving spouse shall be determined by the factors set forth
     in Table I under this Appendix A if greater.

          (b) For Annuity Starting Dates commencing as of the Plan's Original
     Effective Date and ending June 30, 2002, the Actuarial Equivalent of a
     benefit other than a lump sum shall be determined by applying a 7% interest
     rate and the 1971 GAM Mortality Table -- Males (age set-back 2 years);
     provided, however, the Actuarial Equivalent of a contingent benefit option
     which provides a benefit following a Participant's death to the
     Participant's surviving spouse shall be determined by the factors set forth
     in Table II under this Appendix A.

     A.2 The Actuarial Equivalent of a lump sum benefit shall, for purposes of
Section 6.5, be determined as follows:

          (a) The Actuarial Equivalent of a lump sum benefit with an Annuity
     Starting Date on or after July 1, 2002, shall mean an amount of equal
     actuarial value based on the Applicable Mortality Table and the Applicable
     Interest Rate where:

               (i) "Applicable Mortality Table" means the 1994 Group Annuity
          Reserving Table; and

               (ii) "Applicable Interest Rate" means the annual interest rate on
          30-year Treasury securities as specified by the Commissioner of
          Internal Revenue for the first full calendar month preceding the Plan
          Year that contains the annuity starting date.

          (b) The Actuarial Equivalent of a lump sum benefit with an Annuity
     Starting Date on or after January 1, 1995 and prior to July 1, 2002, shall
     mean an amount of equal actuarial value based on the Applicable Mortality
     Table and the Applicable Interest Rate where:

               (i) "Applicable Mortality Table" means the 1983 Group Annuity
          Mortality Table; and


                                      A-1



               (ii) "Applicable Interest Rate" means the annual interest rate on
          30-year Treasury securities as specified by the Commissioner of
          Internal Revenue for the first full calendar month preceding the Plan
          Year that contains the annuity starting date.

          (c) The Actuarial Equivalent of a lump sum benefit with an Annuity
     Starting Date prior to January 1, 1995, shall mean an amount of equal
     actuarial value based on the interest rate(s) which would be used (as of
     the first day of the Plan Year in which falls the annuity starting date) by
     the Pension Benefit Guaranty Corporation (PBGC) for a trusteed
     single-employer plan to value a benefit upon termination of an insufficient
     trusteed single-employer plan and the 1971 GAM Mortality Table -- Males
     (age set-back 2 years).


                                      A-2



                            ATTACHMENT TO APPENDIX A
                                     TABLE I
                          OPTIONAL BENEFIT FORM FACTORS
                    (TO BE APPLIED TO STRAIGHT LIFE ANNUITY)
                      7%/1994 Group Annuity Reserving Table



Retiree
  Age     50% J&S   66 2/3% J&S   100% J&S   5 Yr C&C   10 Yr C&C   15 Yr C&C   20 Yr C&C
- -------   -------   -----------   --------   --------   ---------   ---------   ---------
                                                           
35         0.984       0.979        0.969      1.000      0.998       0.997       0.994
36         0.984       0.978        0.968      1.000      0.998       0.996       0.994
37         0.983       0.977        0.966      1.000      0.998       0.996       0.994
38         0.982       0.976        0.964      1.000      0.998       0.996       0.993
39         0.981       0.974        0.962      0.999      0.998       0.995       0.992
40         0.980       0.973        0.960      0.999      0.998       0.995       0.992
41         0.979       0.972        0.958      0.999      0.998       0.995       0.991
42         0.977       0.970        0.956      0.999      0.997       0.994       0.990
43         0.976       0.968        0.953      0.999      0.997       0.994       0.989
44         0.975       0.967        0.951      0.999      0.997       0.993       0.987
45         0.973       0.965        0.948      0.999      0.996       0.992       0.986
46         0.972       0.963        0.946      0.999      0.996       0.991       0.984
47         0.970       0.961        0.943      0.999      0.996       0.990       0.982
48         0.969       0.959        0.939      0.999      0.995       0.989       0.980
49         0.967       0.957        0.936      0.999      0.995       0.988       0.977
50         0.965       0.954        0.933      0.998      0.994       0.986       0.974
51         0.963       0.952        0.929      0.998      0.993       0.984       0.971
52         0.961       0.949        0.925      0.998      0.992       0.982       0.967
53         0.959       0.946        0.921      0.998      0.991       0.979       0.963
54         0.957       0.943        0.917      0.997      0.990       0.976       0.958
55         0.954       0.940        0.913      0.997      0.988       0.973       0.953
56         0.952       0.937        0.908      0.997      0.986       0.969       0.947
57         0.949       0.934        0.904      0.996      0.984       0.965       0.941
58         0.947       0.930        0.899      0.995      0.982       0.960       0.934
59         0.944       0.927        0.894      0.995      0.979       0.955       0.926
60         0.941       0.923        0.889      0.994      0.976       0.949       0.918
61         0.939       0.920        0.884      0.993      0.973       0.943       0.909
62         0.936       0.916        0.879      0.992      0.969       0.937       0.899
63         0.933       0.912        0.874      0.991      0.965       0.929       0.888
64         0.930       0.909        0.869      0.989      0.961       0.921       0.877



                                      A-3



                            ATTACHMENT TO APPENDIX A
                                     TABLE I
                          OPTIONAL BENEFIT FORM FACTORS
                    (TO BE APPLIED TO STRAIGHT LIFE ANNUITY)
                      7%/1994 Group Annuity Reserving Table



Retiree
  Age     50% J&S   66 2/3% J&S   100% J&S   5 Yr C&C   10 Yr C&C   15 Yr C&C   20 Yr C&C
- -------   -------   -----------   --------   --------   ---------   ---------   ---------
                                                           
65         0.927       0.905        0.864      0.988      0.956       0.913       0.865
66         0.924       0.901        0.859      0.986      0.951       0.904       0.852
67         0.921       0.898        0.854      0.985      0.946       0.894       0.838
68         0.919       0.894        0.850      0.983      0.940       0.883       0.824
69         0.916       0.891        0.845      0.981      0.933       0.871       0.808
70         0.913       0.887        0.840      0.979      0.926       0.858       0.791
71         0.910       0.883        0.835      0.976      0.917       0.844       0.773
72         0.907       0.879        0.829      0.973      0.907       0.828       0.754
73         0.904       0.875        0.824      0.970      0.896       0.811       0.734
74         0.900       0.871        0.819      0.966      0.884       0.792       0.712
75         0.897       0.867        0.813      0.961      0.870       0.772       0.690
76         0.893       0.863        0.807      0.955      0.854       0.750       0.667
77         0.890       0.858        0.801      0.948      0.837       0.727       0.643
78         0.886       0.854        0.795      0.941      0.819       0.703       0.619
79         0.883       0.849        0.790      0.932      0.798       0.678       0.595
80         0.879       0.845        0.784      0.923      0.777       0.653       0.570



                                      A-4



                            ATTACHMENT TO APPENDIX A
                                    TABLE II
                          OPTIONAL BENEFIT FORM FACTORS
                    (TO BE APPLIED TO STRAIGHT LIFE ANNUITY)
          7%/ 1971 GAM Mortality Table -- Males (age set-back 2 years)



Retiree
  Age     50% J&S   66 2/3% J&S   100% J&S   5 Yr C&C   10 Yr C&C   15 Yr C&C   20 Yr C&C
- -------   -------   -----------   --------   --------   ---------   ---------   ---------
                                                           
40          .975        .960         .945       .999       .996        .990        .983
41          .973        .958         .942       .999       .995        .989        .981
42          .971        .956         .939       .999       .995        .988        .979
43          .969        .954         .936       .999       .994        .986        .976
44          .967        .952         .933       .998       .993        .984        .973
45          .965        .950         .930       .998       .992        .982        .970
46          .963        .948         .926       .998       .991        .980        .967
47          .961        .946         .922       .997       .990        .978        .963
48          .959        .944         .918       .997       .988        .975        .959
49          .957        .942         .914       .997       .987        .972        .954
50          .955        .940         .910       .996       .985        .969        .950
51          .953        .937         .906       .996       .984        .966        .945
52          .951        .934         .902       .995       .982        .962        .939
53          .949        .931         .898       .995       .980        .959        .933
54          .947        .928         .894       .994       .978        .954        .926
55          .945        .925         .890       .993       .975        .950        .919
56          .942        .921         .885       .993       .973        .945        .911
57          .939        .917         .880       .992       .970        .939        .902
58          .936        .913         .875       .991       .967        .933        .893
59          .933        .909         .870       .990       .963        .926        .883
60          .930        .905         .865       .989       .959        .918        .872
61          .927        .901         .860       .987       .954        .909        .860
62          .924        .897         .855       .986       .949        .899        .847
63          .921        .893         .850       .984       .943        .889        .833
64          .918        .889         .845       .982       .937        .877        .818
65          .915        .885         .840       .980       .929        .865        .802
66          .911        .881         .834       .977       .921        .851        .785
67          .907        .877         .828       .974       .911        .836        .768
68          .903        .873         .822       .971       .901        .821        .749
69          .899        .869         .816       .967       .890        .804        .730



                                      A-5



                            ATTACHMENT TO APPENDIX A
                                    TABLE II
                          OPTIONAL BENEFIT FORM FACTORS
                    (TO BE APPLIED TO STRAIGHT LIFE ANNUITY)
          7%/ 1971 GAM Mortality Table -- Males (age set-back 2 years)



Retiree
  Age     50% J&S   66 2/3% J&S   100% J&S   5 Yr C&C   10 Yr C&C   15 Yr C&C   20 Yr C&C
- -------   -------   -----------   --------   --------   ---------   ---------   ---------
                                                           
70          .895        .865         .810       .962       .878        .787        .711
71          .892        .862         .805       .957       .865        .769        .691
72          .889        .859         .800       .952       .851        .750        .671
73          .886        .856         .795       .946       .837        .731        .651
74          .883        .853         .790       .940       .822        .711        .631
75          .880        .850         .785       .934       .806        .691        .610
76          .877        .846         .781       .927       .789        .671        .590
77          .874        .842         .777              Left intentionally blank
78          .871        .838         .773              Left intentionally blank
79          .868        .834         .769              Left intentionally blank
80          .865        .830         .765              Left intentionally blank



                                      A-6



                                   APPENDIX B

     B.1 For purposes of Section 4.3(b) of the Plan, the Accrued Benefit of a
Participant shall be equal to one-twelfth (1/12) of the difference between:

          (a) the sum of:

               (i) 1.7% of his or her Average Earnings multiplied by the number
          of his or her Benefit Years to a maximum of 35 Benefit Years; plus

               (ii) 0.5% of his or her Average Earnings for each Benefit Year in
          excess of 35 Benefit Years; and

          (b) 1.43% of the Participant's Primary Social Security Benefit
     multiplied by the number of his or her Benefit Years to a maximum of 35
     Benefit Years.

     Notwithstanding the foregoing, the Accrued Benefit of a Participant who is
considered a highly compensated employee in 1989 within the meaning of Code
Section 414(q)(1)(A) or (B) is limited to the Participant's Accrued Benefit
under the SKB Plan as of the Spin-Off Date. The Accrued Benefit of a Participant
who is considered a highly compensated employee in 1990 within the meaning of
Code Section 414(q)(1)(A) or (B), and is not considered a highly compensated
employee in 1989 within the meaning of Code Section 414(q)(1)(A) or (B) is
limited to the Participant's Accrued Benefit as of December 31, 1989.

     B.2 The level income option offered as an optional form of benefit under
Section 6.4(b) of the Plan, provides a monthly pension payable as a Single Life
Annuity or under a contingent beneficiary option. For purposes of this
paragraph, the Single Life Annuity or, if a contingent beneficiary option is
elected, the monthly amount payable to a Participant as reduced for the
contingent beneficiary option shall be referred to as the Participant's Life
Pension. In order to recognize the increased benefits payable until age 62 (the
"Temporary Pension"), the Participant's Life Pension is reduced. The Temporary
Pension shall end on the earlier of the Participant's death or his or her
attainment of age 62. If a contingent beneficiary option is elected and the
Participant dies, then 100%, 66 2/3% or 50% (as previously elected by the
Participant) of the Participant's Life Pension as determined prior to the
adjustment for the Temporary Pension shall be payable for the lifetime of his or
her designated beneficiary.

     B.3 The guaranteed payment option offered as an optional form of benefit
under Section 6.4(b) of the Plan, provides a reduced benefit for the longer of
the Participant's lifetime or a specified number of months (60, 120, 180, or
240) with payments made to the Participant and any remaining guaranteed payments
on the Participant's death to a designated beneficiary or beneficiaries
(hereinafter referred to as the "designated beneficiary"). For purposes of the
guaranteed payment option, the following rules shall apply to beneficiary
designations:

          (a) A Participant may change his or her designated beneficiary at any
     time and may designate a secondary beneficiary or beneficiaries to receive
     any remaining


                                      B-1



     guaranteed payments on the Participant's death in the event his or her
     designated beneficiary predeceases the Participant or dies during the
     guaranteed payment period.

          (b) If the Participant fails to designate a secondary beneficiary and
     the Participant's designated beneficiary predeceases the Participant, any
     guaranteed payments on the Participant's death shall be paid in a lump sum
     to either the Participant's personal representative or heirs at law as
     determined under paragraph (d) below.

          (c) If the Participant fails to designate a secondary beneficiary and
     the Participant's designated beneficiary dies while receiving payments
     during the guaranteed payment period, the designated beneficiary's interest
     in the remaining guaranteed payments shall be paid in a lump sum to either
     the designated beneficiary's personal representative or heirs at law as
     determined under paragraph (d) below.

          (d) In the event the deceased Participant or deceased designated
     beneficiary under paragraphs (b) and (c) above, respectively, is not a
     resident of California at the date of his or her death, the Committee, in
     its discretion, may require the establishment of ancillary administration
     in California. If the Committee cannot locate a qualified personal
     representative of the deceased Participant or deceased designated
     beneficiary, or if administration of the deceased Participant's or deceased
     designated beneficiary's estate is not otherwise required, the Committee,
     in its discretion, may pay the remaining guaranteed payments (or interest
     therein) to the deceased Participant's or deceased designated beneficiary's
     heirs at law (determined in accordance with the laws of the State of
     California as they existed at the date of the Participant's or designated
     beneficiary's death).

     B.4 Notwithstanding anything in the Plan to the contrary, the reductions
applied to the Accrued Benefits of Participants whose last Severance Date was
prior to July 27, 1989 to reflect the value of coverage for pre-retirement death
benefits shall no longer apply to benefits with Annuity Starting Dates on or
after July 1, 2002.


                                      B-2



                                   APPENDIX C

Benefit Years and Vesting Years include service with the following Affiliated
Companies (or their predecessors) effective on the dates shown:



                                               Vesting     Benefit
                                               Service     Service
                                              Effective   Effective
                                                 Date        Date
                                              ---------   ---------
                                                    
Allergan America                              At hire     04/11/80
Allergan Corporate                            At hire     At hire*
Allergan Humphrey                             02/07/80    01/01/87
Allergan International                        At hire     At hire*
Allergan Medical Optics                       At hire     04/30/86
Allergan Medical Optics-Ioptex                At hire     09/08/94
Allergan Medical Optics-Lenoir                At hire     03/01/92
(Departments 120-130)
Allergan Medical Optics-Puerto Rico           At hire     04/30/86
Allergan Optical Inc.                         At hire     11/13/87
(formerly International Hydron Corporation)
Allergan Optical Puerto Rico, Inc.            At hire     11/13/87
Allergan Optical                              At hire     At hire*
Allergan Pharmaceuticals                      At hire     At hire*
Allergan Phoenix                              At hire     12/01/95
Allergan Puerto Rico, Inc.                    At hire     04/11/80
(formerly Allergan Caribbean)
Allergan Surgical                             At hire     At hire*
(formerly Innovative Surgical Products)
Herbert Labs                                  At hire     At hire*
Herald Pharmacal                              At hire     08/03/95
Oculinum, Inc.                                At hire     06/28/91
Optical Micro Systems, Inc.                   At hire     01/27/95


*    If employment terminated between April 11, 1980 and January 1, 1986,
     Benefit Years shall be credited from April 11, 1980 or date of hire,
     whichever is later.


                                       C-1

EX-10.9

                                                                    EXHIBIT 10.9

                                 FIRST AMENDMENT
                                       TO
                           ALLERGAN, INC. PENSION PLAN
                                 (RESTATED 2005)

The Allergan, Inc. Pension Plan (the "Plan") is hereby amended by adding the
following new Section 6.6 to Article VI to document that retroactive annuity
starting dates are permitted under the Plan.

          6.6 Retroactive Annuity Starting Dates. Notwithstanding anything in
     the Plan to the contrary, in the case of pensions paid to a Participant and
     spousal benefits (as described in Section 7.2) paid to a Participant's
     surviving spouse, a Participant or a surviving spouse may elect a
     Retroactive Annuity Starting Date under this Section; provided, that the
     requirements of this Section are met.

               (a) A Retroactive Annuity Starting Date shall be permitted under
          this Section only if the following requirements are met:

                    (i) The Retroactive Annuity Starting Date may not be earlier
               than the date on which benefit payments otherwise could have
               commenced under the terms of the Plan in effect as of the
               Retroactive Annuity Starting Date.

                    (ii) Any future periodic payments shall be the same as the
               future periodic payments (if any) that would have been paid had
               payment actually begun on the Retroactive Annuity Starting Date.

                    (iii) A make-up payment shall be made in an amount equal to
               any missed payment or payments for the period from the
               Retroactive Annuity Starting Date to the date of the actual
               make-up payment (with an appropriate interest adjustment for that
               period).

                    (iv) In determining whether any Retroactive Annuity Starting
               Date pension (including the required interest adjustment for the
               make-up payment described above) satisfies Code Section 415, the
               date that distribution commences shall be treated as the Annuity
               Starting Date for all purposes, including the determination of
               the applicable interest rate and the applicable mortality table;
               provided, that this requirement shall not apply to any form of
               payment if:

                         (A) The form of payment would not have been subject to
                    the present value requirements under Regulation Section
                    1.417(e)-1(d)(6) had payment commenced on the Retroactive
                    Annuity Starting Date; and

                         (B) The date payment commences in that form begins no
                    more than twelve (12) months after the Retroactive Annuity
                    Starting Date.



               (b) The election of a Retroactive Annuity Starting Date shall be
          made in writing in a manner prescribed by the Committee on a form that
          clearly states that the Participant is electing a Retroactive Annuity
          Starting Date. No such election shall be effective with respect to a
          married Participant unless his or her spouse consents to such election
          as provided in Section 6.3(a); provided that, this requirement shall
          not apply if the amount of the spouse's survivor annuity payments
          under the Retroactive Annuity Starting Date election is no less than
          the survivor benefit amount the spouse would have been entitled to
          receive under the Qualified Joint and Survivor Annuity with an Annuity
          Starting Date after the date that the required written explanation was
          provided to the Participant.

               (c) For any form of benefit that would have been subject to Code
          Section 417(e)(3) had distribution commenced as of the Retroactive
          Annuity Starting Date, the amount of the distribution must be no less
          than what the amount would have been as of the date the distribution
          actually begins, using the (i) applicable interest rate and the
          applicable mortality table in effect under the Plan on that date and
          (ii) same annuity form in determining present value.

               (d) If a Participant or a surviving spouse elects a Retroactive
          Annuity Starting Date, the date that benefit payments actually begin
          shall be treated as the Annuity Starting Date for purposes of
          satisfying the notice and other requirements for commencing benefit
          payments to the Participant or surviving spouse under this Article VI
          and Article VII.

               (e) For purposes of this Section, a Retroactive Annuity Starting
          Date means an annuity starting date affirmatively elected by a
          Participant or surviving spouse that (i) is on or before the date that
          the written explanation required under Section 6.3 is provided and
          (ii) otherwise meets the requirements of this Section and Treasury
          Regulations under Code Section 417.

     IN WITNESS WHEREOF, Allergan, Inc. hereby executes this First Amendment to
the Allergan, Inc. Pension Plan on this 23rd day of December, 2005.

ALLERGAN, INC.


BY: /s/ Roy J. Wilson
    ------------------------------------
    Roy J. Wilson
    Executive Vice President


                                       2

EX-10.10

                                                                   EXHIBIT 10.10

                                SECOND AMENDMENT
                                       TO
                           ALLERGAN, INC. PENSION PLAN
                                 (RESTATED 2005)

     The ALLERGAN, INC. PENSION PLAN (RESTATED 2005) (the "Plan") is hereby
amended as follows:

1.   Section 2.14 is amended to read in its entirety as follows:

          2.14 Earnings. "Earnings" shall mean the following:

          (a) Earnings shall include amounts paid during a Plan Year to an
     Employee by the Company for services rendered, including base earnings,
     commissions and similar incentive compensation, cost of living allowances
     earned within the United States of America, holiday pay, overtime earnings,
     pay received for election board duty, pay received for jury and witness
     duty, pay received for military service (annual training), pay received for
     being available for work, if required (call-in premium), shift differential
     and premium, sickness/accident related pay, vacation pay, vacation shift
     premium, and bonus amounts paid under the (i) Sales Bonus Program, (ii)
     Management Bonus Plan or Executive Bonus Plan, either in cash or in
     restricted stock, and (iii) group performance sharing payments, such as the
     "Partners for Success."

          (b) Earnings shall include amounts of salary reduction elected by the
     Employee under a Code Section 401(k) cash or deferred arrangement or a Code
     Section 125 cafeteria plan or a Puerto Rico Code Section 1165(e) cash or
     deferred arrangement, amounts deferred under the Executive Deferred
     Compensation Plan, and amounts paid to an Employee pursuant to a "split pay
     arrangement" between the Company and an Affiliated Company.

          (c) Earnings shall not include business expense reimbursements;
     Company gifts or the value of Company gifts; Company stock related options
     and payments; employee referral awards; flexible compensation credits paid
     in cash; special overseas payments, allowances and adjustments including,
     but not limited to, pay for cost of living adjustments and differentials
     paid for service outside of the United States (including Puerto Rico),
     expatriate reimbursement payments, and tax equalization payments; forms of
     imputed income; long-term disability pay; payment for loss of Company car;
     Company car allowance; payments for patents or for writing articles;
     relocation and moving expenses; retention and employment incentive
     payments; severance pay; long-term incentive awards, bonuses or payments;
     "Impact Award" payments; "Employee of the Year" payments; "Awards for
     Excellence" payments; special group incentive payments and individual
     recognition payments which are nonrecurring in nature; tuition
     reimbursement; and contributions by the Company under the Plan or
     distributions hereunder, any contributions or distributions pursuant to any
     other plan sponsored by the Company and qualified under Code Section 401(a)
     and/or Puerto Rico Code Section 1165 (other than contributions constituting
     salary reduction





     amounts elected by the Employee under a Code Section 401(k) cash or
     deferred arrangement or a Puerto Rico Code Section 1165(e) cash or deferred
     arrangement), any payments under a health or welfare plan sponsored by the
     Company, or premiums paid by the Company under any insurance plan for the
     benefit of Employees.

          (d) For purposes of this Section and notwithstanding paragraph (a)
     above, (i) for periods on or after January 1, 2005, Earnings shall not
     include lump sum amounts paid to Employees under the Company's vacation
     buy-back policy, (ii) for periods beginning on or after January 1, 2003, if
     a Participant is not an Active Participant at any time during the month, he
     or she shall be deemed to have no Earnings for that month, (iii) for the
     period beginning on April 1, 2001 and ending on December 31, 2002, if a
     Participant is an Employee at any time during a month, Earnings for that
     month shall be the Earnings actually paid to the Participant during such
     month, and (iv) for periods prior to April 1, 2001, if a Participant is not
     an Employee for the entire month, he or she shall be deemed to have no
     Earnings for that month.

          (e) Earnings shall not exceed $200,000, as adjusted for cost-of-living
     increases in accordance with Code Section 401(a)(17)(B), for purposes of
     determining all benefits provided under the Plan. Any cost-of-living
     adjustments in effect for a calendar year shall apply to the Plan Year
     beginning with or within such calendar year. For purposes of determining
     benefits provided under the Plan in a Plan Year beginning on or after
     January 1, 2002, Earnings for any prior Plan Year shall not exceed
     $200,000.

2.   Section 2.18 is amended to read in its entirety as follows:

          2.18 Eligible Retirement Plan. "Eligible Retirement Plan" shall mean
     (i) an individual retirement account or annuity described in Code Section
     408(a) or 408(b), (ii) a qualified retirement plan described in Code
     Section 401(a) or 403(a) that accepts Eligible Rollover Distributions,
     (iii) an annuity contract described in Code Section 403(b) that accepts
     Eligible Rollover Distributions, and (iv) an eligible plan described in
     Code Section 457(b) which is maintained by a state, political subdivision
     of a state, or any agency or instrumentality of a state or political
     subdivision of a state and which agrees to separately account for amounts
     transferred into such plan from this Plan. Notwithstanding the foregoing,
     with respect to a Participant who is a resident of Puerto Rico, "Eligible
     Retirement Plan" shall mean a qualified retirement plan described in Code
     Section 401(a) or 403(a) that accepts Eligible Rollover Distributions and
     that is also a qualified plan under Puerto Rico Code Section 1165. The
     definition of Eligible Retirement Plan shall also apply in the case of an
     Eligible Rollover Distribution to a surviving spouse, or to a spouse or
     former spouse who is an Alternate Payee under a Qualified Domestic
     Relations Order (as defined in Article XIII). For purposes of the Puerto
     Rico Code, the definition of Eligible Retirement Plan shall also apply to
     any Beneficiary who is a resident of Puerto Rico.


                                        2



3.   Section 2.19 is amended to read in its entirety as follows:

          2.19 Eligible Rollover Distribution. "Eligible Rollover Distribution"
     shall mean any distribution of all or any portion of the balance to the
     credit of the Distributee, except that an Eligible Rollover Distribution
     shall not include:

          (a) any distribution that is one of a series of substantially equal
     periodic payments (not less frequently than annually) made for the life (or
     life expectancy) of the Distributee or the joint lives (or joint life
     expectancies) of the Distributee and the Distributee's designated
     beneficiary, or for a specified period of ten years or more;

          (b) any distribution to the extent such distribution is required under
     Code Section 401(a)(9);

          (c) the portion of any distribution that is not includible in gross
     income (determined without regard to the exclusion for net unrealized
     appreciation with respect to employer securities); and

          (d) any other distribution that is reasonably expected to total less
     than $200 during the year.

          For purposes of this Section, `Distributee' shall mean any Employee or
     former Employee receiving a distribution from the Plan. A Distributee also
     includes the Employee or former Employee's surviving spouse and the
     Employee or former Employee's spouse or former spouse who is an Alternate
     Payee under a Qualified Domestic Relations Order (as defined in Article
     XIII) with regard to the interest of the spouse or former spouse.

          For purposes of the Puerto Rico Code, any distribution to a
     Distributee who is a resident of Puerto Rico shall be an Eligible Rollover
     Distribution. Also, for purposes of the Puerto Rico Code, a Distributee
     also includes any Beneficiary.

4.   Article II is hereby amended by adding the following new Section 2.35 and
     renumbering the remaining Sections sequentially:

          2.35 Puerto Rico Code. "Puerto Rico Code" shall mean the Puerto Rico
     Internal Revenue Code of 1994 and the regulations thereunder. Reference to
     a specific Puerto Rico Code Section shall be deemed also to refer to any
     applicable regulations under that Section, and shall also include any
     comparable provisions of future legislation that amend, supplement or
     supersede that specific Section.

5.   Section 5.12 is amended in its entirety to read as follows:

          5.12 Compensation for Maximum Pension. For purposes of Sections 5.6
     and 5.7, Compensation shall mean a Participant's earned income, wages,
     salaries, fees for professional services, and other amounts received
     (without regard to whether or not an amount is paid in cash) for personal
     services


                                        3



     actually rendered in the course of employment with the Company maintaining
     the Plan and shall be determined as described below:

          (a) Compensation shall include to the extent that the amounts are
     includible in gross income (including, but not limited to, commissions paid
     salespeople, compensation for services on the basis of a percentage of
     profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
     and reimbursements or other expense allowances under a nonaccountable plan
     as described in Regulation 1.62-2(c)).

          (b) Compensation shall include any elective deferral as defined in
     Code Section 402(g)(3) or Puerto Rico Code Section 1165(e), any amount
     which is contributed or deferred by the Company at the election of the
     Employee that is excludable from an Employee's gross income under Code
     Sections 125 or 457 and, for Plan Years beginning on or after January 1,
     1998, any elective amount that is excludable from an Employee's gross
     income under Code Section 132(f)(4).

          (c) Compensation shall not include (i) any employer contributions to a
     plan of deferred compensation which are not included in the Employee's
     gross income for the taxable year in which contributed, (ii) any
     distributions from a plan of deferred compensation, (iii) any amounts
     realized from the exercise of a non-qualified stock option or when
     restricted stock or property held by the Employee becomes either freely
     transferable or is no longer subject to a substantial risk of forfeiture
     under Code Section 83 if such option, stock, or property was granted to the
     Employee by the Company, (iv) any amounts realized from the sale, exchange,
     or other disposition of stock acquired under a qualified stock option, (v)
     any contribution for medical benefits (within the meaning of Code Section
     419(f)(2)) after termination of employment which is otherwise treated as an
     annual addition, and (vi) any amount otherwise treated as an annual
     addition under Code Section 415(l)(1).

          (d) Notwithstanding anything in the Plan to the contrary, Compensation
     shall be determined in accordance with Code Section 415(c)(3) as in effect
     for Plan Years beginning prior to January 1, 1998 where required by
     applicable law.

6.   Section 8.3 is amended to read in its entirety as follows:

          8.3 Irrevocability. The Company shall have no right or title to, nor
     interest in, the Company contributions made to the Fund, and no part of the
     Fund shall revert to the Company, except that on and after the Effective
     Date funds may be returned to the Company as follows:

          (a) In the case of a contribution which is made by a mistake of fact,
     such contribution may be returned to the Company within one year after it
     is made.


                                        4



          (b) In the case of a contribution conditioned on the initial
     qualification of the Plan under Code Section 401 (or any successor statute
     thereto), and the Plan does not initially qualify upon the filing of a
     timely determination letter request, such contribution may be returned to
     the Company within one year after the date of denial of the initial
     qualification of the Plan.

          (c) In the case of a contribution conditioned on the deductibility
     thereof under Code Section 404 (or any successor statute thereto), such
     contribution shall, to the extent such deduction is disallowed, be returned
     to the Company within one year after such disallowance.

          (d) In the case of a contribution conditioned on the initial
     qualification of the Plan under Puerto Rico Code Section 1165 (or any
     successor statute thereto), and the Plan does not initially qualify upon
     the filing of a timely determination letter request, such contribution may
     be returned to the Company within one year after the date of denial of the
     initial qualification of the Plan, provided, such return of such
     contribution does not cause the Plan to be disqualified under the Code.

          (e) In the case of a contribution conditioned on the deductibility
     thereof under Puerto Rico Code Section 1023(n) (or any successor statute
     thereto), such contribution shall, to the extent such deduction is
     disallowed, be returned to the Company within one year after such
     disallowance, provided, such return of such contribution does not cause the
     Plan to be disqualified under the Code.

     IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Second Amendment to
the Allergan, Inc. Pension Plan (Restated 2005) on this 6th day of March, 2006.

ALLERGAN, INC.


BY: /s/ Roy J. Wilson
    ------------------------------------
    Roy J. Wilson
    Executive Vice President


                                       5

EX-10.11

                                                                   EXHIBIT 10.11
                                SECOND AMENDMENT
                                       TO
                                 ALLERGAN, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN
                  (AMENDED AND RESTATED AS OF JANUARY 1, 2003)


        The ALLERGAN, INC. EXECUTIVE DEFERRED COMPENSATION PLAN (the "Plan") is
hereby amended as follows:

I.      Section 2.17 of the Plan is amended as follows:

                        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
                executive or management status by the Committee. An employee
                shall not be an Eligible Employee if (i) he or she is classified
                or paid as an independent contractor (regardless of his or her
                classification for federal tax or other legal purposes) by the
                Company, (ii) he or she performs services for the Company
                pursuant to an agreement between the Company and any other
                person including a leasing organization, (iii) he or she is an
                employee of Inamed Corporation and any of its subsidiaries (or
                any subsidiary of the Sponsor that is designated by the Sponsor
                as a successor thereto) on or after the "Effective Time" as
                defined in the Agreement and Plan of Merger dated as of December
                20, 2005 by and among Allergan, Inc., Banner Acquisition, Inc.,
                and Inamed Corporation, or (iv) he or she is classified as
                "Inamed-benefited" by the Company as determined from its payroll
                records. An employee shall cease to be an Eligible Employee if
                he or she is reclassified (i) below exempt grade 8E (unless
                employed in another executive or management position as approved
                by the Committee), (ii) as "Inamed-benefited," (iii) as an
                independent contractor, or (iv) as a leased employee by the
                Company, except that, upon reclassification below exempt grade
                8E or as "Inamed-benefited," any Deferral Election which has
                been made (and deferrals having commenced) may be completed.

II.     This Second Amendment shall be effective as of the "Effective Time" as
        defined in the Agreement and Plan of Merger dated as of December 20,
        2005 by and among Allergan, Inc., Banner Acquisition, Inc., and Inamed
        Corporation.

        IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Second Amendment
to the Allergan, Inc. Executive Deferred Compensation Plan on this 6th day of
March, 2006.

ALLERGAN, INC.



BY:      /s/ Roy J. Wilson
        ---------------------
        Roy J. Wilson
        Executive Vice President

EX-10.12

                                                                   EXHIBIT 10.12

                                 THIRD AMENDMENT
                                       TO
                                 ALLERGAN, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN
                  (AMENDED AND RESTATED AS OF JANUARY 1, 2003)


        The ALLERGAN, INC. EXECUTIVE DEFERRED COMPENSATION PLAN (the "Plan") is
hereby amended as follows:

I.      Article XVI of the Plan is amended by adding the following new Section
        16.3 and renumbering the remaining Sections sequentially:

                        16.3 Domestic Relations Orders. Notwithstanding any
                provision in the Plan to the contrary and subject to the
                approval of the Committee, in the event all or any portion of a
                Participant's vested benefit under the Plan is awarded to an
                individual (hereinafter referred to as the "alternate payee")
                pursuant to a domestic relations order entered by a court in
                settlement of marital property rights (hereinafter referred to
                as a "DRO"), the awarded benefit shall be distributed to the
                alternate payee in a single lump sum as soon as administratively
                practicable following receipt of the DRO by the Company. If the
                alternate payee is awarded an interest in both the vested and
                non-vested portions of a Participant's benefit under the Plan,
                the awarded benefit shall be distributed to the alternate payee
                in a single lump sum as soon as administratively practicable
                following the date the Participant is fully vested in his or her
                benefit or, if earlier, the date on which the Participant's
                entire vested benefit under the Plan can be determined. It is
                intended that a DRO shall be approved by the Committee only if
                it meets the applicable requirements of a "qualified domestic
                relations order" as defined in Code Section 414(p) and only to
                the extent the distribution provisions of this Section are
                permitted under Code Section 409A.

II.     Section 16.4 (formerly Section 16.3) of the Plan is hereby amended and
        restated as follows:

                        16.4 Prohibition Against Assignment. Except as otherwise
                expressly provided in Sections 16.1, 16.2 and 16.3 hereof, the
                rights, interests and benefits of a Participant under the Plan
                (i) 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 (ii) 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 16.4 shall be null and
                void and without effect.





                                                             SUBJECT TO APPROVAL
                                                      BY THE EXECUTIVE COMMITTEE


III.    This Third Amendment shall be effective as of the date of execution of
        this Third Amendment.

        IN WITNESS WHEREOF, Allergan, Inc. hereby executes this Third Amendment
to the Allergan, Inc. Executive Deferred Compensation Plan on this 20th day of
March, 2007.

ALLERGAN, INC.



BY:      /s/ Douglas S. Ingram
        ------------------------------------
        Douglas S. Ingram
        Executive Vice President,
        Chief Administrative Officer,
        General Counsel and Secretary


                                       2

EX-10.13

                                                                   EXHIBIT 10.13

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

          This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of March 16, 2007, and entered into by and among
ALLERGAN, INC. (the "Company"), the banks and other financial institutions
signatory hereto that are parties as Banks to the Credit Agreement referred to
below (the "Banks"), JPMORGAN CHASE BANK, N.A., as administrative agent (in such
capacity, the "Administrative Agent"), CITICORP USA INC., as syndication agent,
and BANK OF AMERICA, N.A., as documentation agent.

                                    Recitals

          A. The Company, the Banks, and the Agents have entered into that
certain Amended and Restated Credit Agreement dated as of March 31, 2006 (the
"Credit Agreement"), by and among the Company, the Eligible Subsidiaries
referred to therein, the Banks party thereto, the Administrative Agent, Citicorp
USA Inc., as syndication agent, and Bank of America, N.A., as documentation
agent. Capitalized terms used in this Amendment without definition shall have
the meanings given such terms in the Credit Agreement.

          B. The Company has requested certain modifications to the provisions
of the Credit Agreement.

          C. The Banks are willing to agree to the modifications requested by
the Company, on the terms and conditions set forth in this Amendment.

                                    Agreement

          NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the Company and the Banks agree as follows:

          1. Amendment to Section 1.01 of the Credit Agreement. Clause (1) of
the definition of Interest Period is amended by inserting the words "or such
other period of time to be not less than three weeks nor more than two months
thereafter," immediately following the phrase "ending one, two, three or six
months thereafter."

          2. Effectiveness. This Amendment shall be effective as of the date
hereof when the Administrative Agent shall have received from each of the
Company and the Required Banks a counterpart hereof signed by such party or
facsimile or other written confirmation (in form satisfactory to the
Administrative Agent) that such party has signed a counterpart hereof.

          3. Effect of Amendment; Ratification. From and after the date on which
this Amendment becomes effective, all references to the Credit Agreement shall
mean the Credit Agreement as amended hereby. Except as expressly amended hereby
or waived herein, the Credit Agreement and the Notes shall remain in full force
and effect, and all terms and provisions thereof are hereby ratified and
confirmed. The Company confirms that as amended hereby, each of the Amended
Credit Agreement and the Notes is in full force and effect.



          4. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

          5. Counterparts; Integration. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Amendment constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, related to the subject matter hereof.


                                        2



          IN WITNESS WHEREOF, each of the undersigned has duly executed this
Amendment as of the date set forth above.

                                        ALLERGAN, INC.


                                        By: /s/ Jeffrey L. Edwards
                                            ------------------------------------
                                        Name: Jeffrey L. Edwards
                                        Title: Exec. V.P., Finance and
                                               Business Dev. CFO


                                        By: /s/ James M. Hindman
                                            ------------------------------------
                                        Name: James M. Hindman
                                        Title: Sr. V.P. Treasury, Risk and
                                               Investor Relations


                                       S-1



                                        JPMORGAN CHASE BANK, N.A.,
                                        individually and as Administrative Agent


                                        By: /s/ Dawn LeeLum
                                            ------------------------------------
                                        Name: Dawn LeeLum
                                        Title: Executive Director



                                        CITICORP USA, INC.,
                                        individually and as Syndication Agent


                                        By: /s/ Carolyn Wendler
                                            ------------------------------------
                                        Name:  Carolyn Wendler
                                        Title: Managing Director and
                                               Vice President



                                        BANK OF AMERICA, N.A.,
                                        individually and as Documentation Agent


                                        By: /s/ Jill J. Hogan
                                            ------------------------------------
                                        Name: Jill J. Hogan
                                        Title: Vice President



                                        MORGAN STANLEY BANK


                                        By: /s/ Dawn M. Dawson
                                            ------------------------------------
                                        Name: Dawn M. Dawson
                                        Title: Authorized Signatory



                                        WILLIAM STREET COMMITMENT CORPORATION
                                        (Recourse only to assets of William
                                        Street Commitment Corporation)


                                        By: /s/ Mark Walton
                                            ------------------------------------
                                        Name: Mark Walton
                                        Title: Assistant Vice President



                                        WELLS FARGO BANK, N.A.


                                        By: /s/ Ling Li
                                            ------------------------------------
                                        Name: Ling Li
                                        Title: Vice President

EX-10.14

                                                                   Exhibit 10.14

                             SECOND AMENDMENT TO THE

                                 ALLERGAN, INC.

                2003 NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN

     This Second Amendment to the Allergan, Inc. 2003 Non-employee Director
Equity Incentive Plan (the "Amendment") is adopted by Allergan, Inc., a Delaware
corporation (the "Company), effective as of April 25th, 2007 (the "Effective
Date").

                                    RECITALS

     A. The Allergan, Inc. 2003 Non-employee Director Equity Incentive Plan (the
"Plan") was initially adopted by the Board of Directors of the Company (the
"Board") on January 30, 2003 and approved by the stockholders of the Company on
April 25, 2003. The First Amendment to the Plan was adopted by the Board on
January 30, 2006 and approved by the stockholders of the Company on May 2, 2006.

     B. The Board desires to amend the Plan to: (i) modify the vesting period of
Options granted under the Plan, (ii) increase the annual grant of Options from
4,500 to 5,700 and (iii) increase the number of shares of Restricted Stock to be
granted to a non-employee director upon election, reelection or appointment from
1,800 to 2,400 shares for each year which remains in the term of the person so
elected, reelected or appointed.

                                    AMENDMENT

     1. Capitalized terms used in this Amendment without definition shall have
the respective meanings ascribed thereto in the Plan.

     2. Effective as of the Effective Date, Section 2.1 of the Plan is hereby
amended and restated in its entirety to read as follows:

               "2.1 Grant of Restricted Stock. During the term of the Plan and
          so long as there are sufficient shares available for issuance or
          transfer pursuant to Awards under the Plan, upon election, reelection
          or appointment of a Nonemployee Director to the Board occurring at or
          after the 2003 Annual Meeting of Stockholders, such Nonemployee
          Director shall automatically be granted an Award consisting of 2,400
          shares of Restricted Stock (subject to adjustment as provided in
          Section 4.2) for each year which remains in the term of the person so
          elected, reelected or appointed. For purposes of such calculation, a
          year shall be the period between annual meetings of stockholders of
          the Company or any part of such period (exclusive of the sixty (60)
          days immediately preceding the first annual meeting to be held
          following such election, reelection or appointment giving rise to such
          Award). For example, if a Nonemployee Director is appointed to the
          Board in January of 2007 to serve a term which will



          expire at the 2009 Annual Meeting of Stockholders (and the 2007 Annual
          Meeting of Stockholders is held more than sixty (60) days after such
          appointment), the term of such person would be considered to be three
          (3) years for purposes of calculating the Award."

     3. Effective as of the Effective Date, Section 3.1 of the Plan is hereby
amended and restated in its entirety as follows:

               "3.1 Grant of Options. During the term of the Plan and so long as
          there are sufficient shares available for issuance or transfer
          pursuant to Awards under the Plan, each Non-employee Director shall
          automatically be granted an Option to purchase 5,700 shares of Common
          Stock (subject to adjustment as provided in Section 4.2) on the date
          of each regular annual meeting of stockholders of the Company at which
          directors are to be elected."

     4. Effective as of the Effective Date, Section 3.4 of the Plan is hereby
amended and restated in its entirety to read as follows and such amendment shall
be effective as to all unvested Options outstanding under the Plan as of the
Effective Date:

               "3.4 Vesting. Subject to Section 4.3, each Option shall become
          fully vested and exercisable as of the date of the regular annual
          meeting of stockholders of the Company at which directors are to be
          elected following the date of grant of the Option. No Option shall be
          exercisable prior to vesting. Notwithstanding the foregoing, each
          Option shall become immediately exercisable as to all shares covered
          by such Option in the event a Participant's service as a director of
          the Company terminates by reason of such Participant's death or total
          disability."

     5. Except as set forth herein, the Plan shall remain in full force and
effect.


                                       2



     I hereby certify that the foregoing Second Amendment to the Allergan, Inc.
2003 Non-employee Director Equity Incentive Plan was duly adopted by the Board
of the Company on April 25th, 2007.

     Executed this 25th day of April, 2007.


                                        By: /s/ Matthew J. Maletta
                                            ------------------------------------
                                        Name: Matthew J. Maletta
                                        Title: VP, Assistant General Counsel
                                               and Assistant Secretary


                                       3

EX-10.15

                                                                   Exhibit 10.15

May ___, 20__

DIRECTOR
[Address]

Re: ALLERGAN, INC. NONEMPLOYEE DIRECTOR
    RESTRICTED STOCK AGREEMENT

Dear Director:

     Pursuant to the terms of the Allergan, Inc. 2003 Nonemployee Director
Equity Incentive Plan (as the same may be amended from time to time, the "Plan")
and in consideration of the services rendered or to be rendered by you,
Allergan, Inc., a Delaware corporation (the "Company"), hereby offers to grant
to you the number of shares of its Common Stock set forth in Section 2(a) below,
on the terms and conditions and subject to the restrictions set forth in the
Plan and this Agreement.

     To accept this offer, you should complete and sign the enclosed copy of
this Agreement, and return it to the Company. This Agreement contains important
information and you should read it carefully before you sign it.

     1. Definitions. Capitalized terms used in this Agreement that are not
otherwise defined herein shall have the same meanings as in the Plan.

     2. Basic Terms.

          (a) The Stock. For good and valuable consideration, the Company hereby
     offers to grant to you 7,200 shares of its Common Stock, $0.01 par value
     per share (the "Stock") effective as of May ___, 20__ (the "Grant Date").

          (b) Price. So long as all shares of Stock received by you pursuant to
     this Agreement are from shares of Common Stock held by the Company as
     treasury shares, you are not required to pay any purchase price for the
     Stock.

          (c) Consideration to the Company. In consideration for the grant of
     the Stock by the Company, you agree to render faithful and efficient
     services to the Company or any subsidiary thereof for a period of at least
     one (1) year from the Grant Date. Nothing in the Plan or this Agreement
     shall confer upon you any right to continue as a member of the Board of
     Directors of the Company or



Page 2


     any subsidiary thereof or shall interfere with or restrict the right of the
     Company or its stockholders (or of a subsidiary or its stockholders, as the
     case may be) to terminate your service as a director any time for any
     reason whatsoever, with or without cause.

     3. Restrictions on the Stock. All shares of Stock received by you pursuant
to this Agreement (including any shares received with respect to shares of Stock
as a result of stock dividends, stock splits or any other form of
recapitalization) shall be subject to the following restrictions which are also
set forth in the Plan:

          (a) The shares of Stock may not be sold, assigned, transferred,
     pledged, hypothecated or otherwise disposed of or encumbered until the
     restrictions set forth in Section 3(b) lapse and are removed and the shares
     have vested as provided in Section 3(d), and any additional requirements or
     restrictions contained in this Agreement or in the Plan have been
     satisfied, terminated or expressly waived by the Company in writing.

          (b) If your service as a director of the Company is terminated for any
     reason other than your death or total disability, you shall forfeit to the
     Company all of the shares of Stock which are, at the date of such
     termination of service, still subject to the vesting restrictions set forth
     in the Plan and Section 3(d), and the Company shall pay to you the amount
     per share, if any, paid by you for such Stock.

          (c) If your service as a director of the Company is terminated because
     of death or total disability, all restrictions imposed upon the Stock shall
     lapse and be removed (and the Stock shall become fully vested) as to all
     shares of the Stock upon such termination of service.

          (d) The restrictions imposed under Section 3(b) shall lapse and be
     removed (and the Stock shall vest) in accordance with the following rules:

               (i) Subject to the provisions of Subparagraphs (ii) and (iii)
          below, as of the date of each of the next three regular annual
          meetings of stockholders of the Company at which directors are to be
          elected following the Grant Date, the restrictions imposed under
          Section 3(b) shall lapse and be removed with respect to 2,400 of the
          shares of the Stock.



Page 3


               (ii) If your service as a director of the Company is terminated
          because of death or total disability, the restrictions imposed under
          Section 3(b) upon the Stock shall lapse and be removed (and the Stock
          shall become fully vested) as to all shares of the Stock as of the
          date of such termination.

               (iii) In the event of a Change in Control, the restrictions
          imposed under Section 3(b) upon the Stock shall lapse and be removed
          (and the Stock shall become fully vested) as to all shares of the
          Stock as of the date of such Change in Control.

In order to enforce the foregoing restrictions, the Board may (i) require that
the certificates representing the shares of Stock remain in the physical custody
of the Company or in book entry until any or all of such restrictions expire or
have been removed, and (ii) may cause a legend or legends to be placed on the
certificates which make appropriate reference to the restrictions imposed under
the Plan. As used herein, the term "total disability" shall mean the inability,
by reason of mental or physical illness or accident, to perform the duties of a
director of the Company, which disability is expected to continue for a period
of at least twelve (12) months. Any determination as to the date and extent of
any disability shall be made by the Board upon the basis of such information as
the Board deems necessary or desirable.

     4. Voting and Other Rights. Excluding the right to transfer and subject to
the restrictions herein, during the period prior to the lapse and removal of the
restrictions set forth in Section 3 above, except as otherwise provided herein,
you shall have all of the rights of a stockholder with respect to all of the
Stock, including without limitation the right to vote such Stock and the rights
to receive all dividends or other distributions with respect to such Stock;
provided, however, that any shares received with respect to shares of Stock as a
result of stock dividends, stock splits or any other form of recapitalization
shall also be subject to the restrictions set forth in the Plan and this
Agreement. In connection with the payment of such dividends or other
distributions, you hereby authorize the Company to deduct any taxes or other
amounts required by any governmental authority to be withheld and paid over to
such authority for your account/accounting issue.

     5. Expiration of the Restricted Term. Except to the extent governed by
Section 6, upon the lapse and removal of the restrictions applicable to all or
any portion of the Stock as provided in Section 3 above: (a) you hereby agree,
with respect to such Stock, to pay to the Company, an amount sufficient to
satisfy any taxes or other amounts required by any governmental authority to be
withheld and paid over



Page 4


to such authority for your account, or to otherwise make arrangements
satisfactory to the Board for the payment of such amounts, and (b) you hereby
agree that if requested by the Board, you will make appropriate representations
in a form satisfactory to the Board that such Stock will not be sold other than
(i) pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Act"), or an applicable exemption from the registration
requirements of such Act and (ii) in compliance with all applicable state
securities laws and regulations.

     6. Section 83(b) Election. If you elect, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended (or any successor thereto), or
comparable provisions of any state tax law, to include any amount in your gross
income in connection with your receipt of the Stock, you hereby agree (a) to
promptly notify the Company of such election and (b) to pay to the Company, in
the form of cash or a certified or bank cashier's check, an amount sufficient to
satisfy any taxes or other amounts required by any governmental authority to be
withheld or paid over to such authority for your account, or to otherwise make
arrangements satisfactory to the Board for the payment of such amounts.

     7. Agreement Subject to Plan. This Agreement is made pursuant to all of the
provisions of the Plan, which is incorporated herein by this reference, and is
intended, and shall be interpreted in a manner, to comply therewith. Any
provisions hereof which is inconsistent with the Plan shall be superseded by and
governed by the Plan.

     8. Stock Split, Reorganization, Merger, etc. If the outstanding shares of
the Common Stock of the Company are increased, decreased or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed in respect of
such shares of Common Stock (or any stock or securities received with respect to
such Common Stock), through merger, consolidation, sale or exchange of all or
substantially all of the properties of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution in respect of such shares of Common Stock
(or any stock or securities received with respect to such Common Stock), an
appropriate and proportionate adjustment shall be made in (i) the number and
kind of shares of Common Stock (or other securities or property) with respect to
which awards may be granted or awarded, (ii) the number and kind of shares of
Common Stock (or other securities or property) subject to outstanding awards,
(iii) the grant or exercise price with respect to any award, and (iv) the
repurchase price, if any, with respect to any award. Any other consideration
that you receive as a result of any such transaction shall be free of all
restrictions set forth herein; provided, however, that any shares received with
respect to shares of Stock as a result of stock dividends, stock splits or any
other form of



Page 5


recapitalization shall also be subject to the restrictions set forth in the Plan
and this Agreement.

     9. Governing Law. This Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the internal laws, and not the
laws pertaining to conflicts or choices of laws, of the State of California
applicable to agreements made and to be performed wholly within the State of
California.

     10. Agreement Binding on Successors. The terms of this Agreement shall be
binding upon you and upon your heirs, executors, administrators, personal
representatives, transferees, assignees and successors in interest, and upon the
Company and its successors and assignees.

     11. No Assignment. Notwithstanding anything to the contrary in this
Agreement, neither this Agreement nor any rights granted herein shall be
assignable by you.

     12. Costs of Litigation. In any action at law or in equity to enforce any
of the provisions or rights under this Agreement or the Plan, the unsuccessful
party to such litigation, as determined by the court in a final judgment or
decree, shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees incurred by the successful party or parties
(including without limitation costs, expenses and fees on any appeals), and if
the successful party recovers judgment in any such action or proceeding such
costs, expenses and attorneys' fees shall be included as part of the judgment.

     13. Necessary Acts. You hereby agree to perform all acts, and to execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to all acts and
documents related to compliance with federal and/or state securities and/or tax
laws.

     14. Invalid Provisions. If any provision of this Agreement is found to be
invalid or otherwise unenforceable under any applicable laws such invalidity or
unenforceability shall not be construed as rendering any other provisions
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.

     15. Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficient in all respects only if
delivered in



Page 6


person or sent via certified mail, postage prepaid, or by expedited mail service
such as Federal Express or DHL, or facsimile, addressed as follows:

          If to you:           DIRECTOR
                               [Address]

          If to the Company:   Allergan, Inc.
                               2525 Dupont Drive
                               Irvine, California 92612
                               Attention: General Counsel

     16. Entire Agreement. This Agreement and the Plan contain the entire
agreement and understanding among the parties as to the subject matter hereof.

     17. Headings. Headings are used solely for the convenience of the parties
and shall not be deemed to be a limitation upon or descriptive of the contents
of any such Section

     18. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, and taken together shall constitute one
and the same document.

     19. Amendment. No amendment or modification hereof shall be valid unless it
shall be in writing and signed by all parties hereto.



     If you are in agreement with the foregoing, please fill in the information
below, sign this Agreement, and return it to the Company to the attention of the
General Counsel.

                                        ALLERGAN, INC.


                                        By:
                                            ------------------------------------
                                            David E.I. Pyott,
                                            Chairman of the Board and Chief
                                            Executive Officer

                                   ACCEPTANCE

     The undersigned hereby agrees to receive from ALLERGAN, INC. 7,200 shares
of the Common Stock of the Company, and agrees to be bound by, and to comply
with, the terms and provisions of the Plan and the foregoing Agreement.

Dated: ____________________, 20__.


                                        ________________________________________


                                        ________________________________________
                                        (Please print your name exactly as you
                                        wish it to appear on your Stock
                                        Certificate. If you want the transfer
                                        agent to use an address other than the
                                        one indicated on p. __, provide that
                                        address to the left.)

EX-10.16

                                                                   Exhibit 10.16

                                 ALLERGAN, INC.
                 2003 NONEMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN
                   NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

     This Non-qualified Stock Option Agreement ("Agreement") is entered into as
of May __, 200_, (the "Date of Grant") between Allergan, Inc., a Delaware
corporation (the "Company"), and [INSERT NAME OF DIRECTOR], a director of the
Company (the "Director").

     The Company has adopted and the stockholders of the Company have approved
the 2003 Nonemployee Director Equity Incentive Plan, as amended (the "Plan").
Pursuant to Section 3.1 of the Plan and in consideration of the services
rendered and to be rendered by the Director, the Company has granted an option
to the Director upon the terms and conditions set forth in the Plan and this
Agreement.

     1. NUMBER OF OPTION SHARES. This Agreement evidences the grant by the
Company to the Director of a non-qualified stock option (the "Option") to
purchase, from time to time, an aggregate of 5,700 shares (the "Option Shares")
of the Company's Common Stock, par value $0.01 per share (the "Common Stock"),
under Section 3.1 of the Plan, subject to the terms and conditions and to
adjustment as set forth herein or in the Plan.

     2. OPTION PURCHASE PRICE. Upon exercise of vested Option Shares, the
Director shall pay to the Company $______ per Option Share (the "Option Purchase
Price") being exercised.

     3. OPTION EXPIRATION DATE. Unless terminated sooner in accordance with the
provisions of the Plan or this Agreement, the right to exercise the Option shall
expire on the close of business on the business day immediately preceding the
tenth (10th) anniversary of the Date of Grant (the "Expiration Date").

     4. VESTING RESTRICTIONS. Subject to the provisions of Section 5 of this
Agreement and to adjustment pursuant to Section 4.2 of the Plan, the Option
shall become fully vested and exercisable as to all Option Shares on the date of
the regular annual meeting of stockholders of the Company at which directors are
to be elected following the Date of Grant.

     5. EFFECT OF CERTAIN EVENTS ON VESTING AND EXERCISE.

          a. TERMINATION OF SERVICE.

               (i) General. If the Director ceases to serve as a director of the
Company for any reason other than such Director's death or total disability, any
portion of the Option that has not vested as of such termination of service
shall be forfeited.

               (ii) Termination as a Result of Death or Disability. If the
Director ceases to serve as a director of the Company by reason of such
Director's death or total disability, the Option shall vest immediately as to
the entire number of Option Shares.

          b. CHANGE OF CONTROL. Upon the occurrence of a Change of Control (as
defined in Section 4.3 of the Plan), the Option shall vest immediately as to the
entire number of Option Shares.


                                       1



          c. EXERCISE PERIOD FOLLOWING TERMINATION OF SERVICE.

               (i) In the event the Director ceases to be a director by reason
of such Director's voluntary resignation or removal for cause, any unexercised
portion of the Option that is vested as of such termination of service may be
exercised by the Director at any time within three (3) months following such
termination of service, but in no event after the Expiration Date.

               (ii) In the event the Director ceases to be a director other than
by reason of such Director's voluntary resignation or removal for cause, any
unexercised portion of the Option that is vested as of such termination of
service may be exercised by the Director or by the Director's personal
representative or by the person or persons to whom the Option shall have been
transferred by will or the laws of descent and distribution at any time within
twelve (12) months following such termination of service, but in no event after
the Expiration Date.

     6. EXERCISE OF OPTION.

          a. All or a portion of the vested Option may be exercised in
accordance with procedures (including requisite holding periods) established
from time to time by the Board.

          b. Payment of the aggregate Option Purchase Price for the number of
vested Option Shares for which the Option is being exercised shall be made (i)
in cash or by check, (ii) by delivery of a notice that the Director has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and the broker pays a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the aggregate
Option Purchase Price, provided that the Company shall not deliver such shares
until payment of such proceeds is received by the Company, or (iii) by any
combination of the foregoing. However, the Board of Directors may, in its
discretion, (x) allow payment, in whole or in part, through the delivery of
shares of Common Stock which have been owned by the Director for at least six
(6) months, duly endorsed for transfer to the Company with a Fair Market Value
on the date of delivery equal to the aggregate Option Purchase Price of the
Option or exercised portion thereof, (y) allow payment, in whole or in part,
through the delivery of property of any kind which constitutes good and valuable
consideration, or (z) allow payment through any combination of the foregoing.

          c. The Director agrees, with respect to the Option, to pay to the
Company an amount sufficient to satisfy any taxes or other amounts required by
any governmental authority to be withheld and paid over to such authority for
his or her account, or to otherwise make arrangements satisfactory to the Board
for the payment of such amounts.

          d. Subject to adjustment pursuant to Section 4.2 of the Plan, a
minimum of six months shall elapse between the Date of Grant and the sale of any
of the Option Shares. No shares of Common Stock shall be issued or transferred
upon exercise of the Option unless and until all legal requirements applicable
to the issuance or transfer of such Common Stock have been complied with to the
satisfaction of the Board.

     7. NO ASSIGNABILITY. The Option is not assignable or transferable by the
Director, except by will or by the laws of descent and distribution and shall
not be subject to any encumbrance, pledge or charge of any nature. During the
lifetime of the Director, the Option may be exercised only by the Director or,
if the Director becomes disabled, by the Director's guardian or legal
representative. The restrictions on exercise and transfer shall not be deemed to
prohibit, to the extent permitted by the Board, transfers to any one or more
Permitted Transferees (as defined below), subject to the following terms and
conditions: (i) the Option shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent


                                       2



and distribution; (ii) the Option which is transferred to a Permitted Transferee
shall continue to be subject to all the terms and conditions of the Option as
applicable to the Director (other than the ability to further transfer the
Option); and (iii) the Director and the Permitted Transferee shall execute any
and all documents requested by the Board, including, without limitation
documents to (x) confirm the status of the transferee as a Permitted Transferee,
(y) satisfy any requirements for an exemption for the transfer under applicable
federal and state securities laws and (z) evidence the transfer. For purposes of
this Section 7, "Permitted Transferee" shall mean, with respect to a Director,
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Director's household (other than a tenant
or employee), a trust in which these persons (or the Director) control the
management of assets, and any other entity in which these persons (or the
Director) own more than fifty percent of the voting interests, or any other
transferee specifically approved by the Board after taking into account any
state or federal tax or securities laws applicable to transferable non-qualified
stock options.

     8. GENERAL TERMS. The Director acknowledges receipt of a copy of the Plan
and the Plan Prospectus. The Option and this Agreement are subject to, and the
Company and the Director agree to be bound by, the provisions of the Plan and
the Plan Prospectus that apply to the Option. Such provisions are incorporated
herein by this reference. In the event of a conflict between the terms of this
Agreement and the Plan, the Plan shall be the controlling document. Capitalized
terms used but not defined herein shall have the respective meanings ascribed to
them in the Plan.

     9. OTHER PROVISIONS.

          a. Neither the Director nor any other person entitled to exercise the
Option shall have any rights as a stockholder with respect to any Option Shares
until the date the Director or such other person becomes the holder of record of
such Option Shares following exercise of the Option.

          b. The Director acknowledges that the Company has the right to amend,
suspend or terminate the Plan in any respect whatsoever at any time (including,
but not limited to, the power to amend the number of shares subject to awards
granted thereunder) except to the extent prohibited by law and except that no
such amendment, suspension or termination may, without the Director's consent,
adversely affect the rights of the Director under the Option.

          c. In the event that any provision this Agreement is held to be
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Agreement.

          d. The rights and obligations under this Agreement shall inure to the
benefit of, and shall be binding upon, the Company and its successors and
assignees and the Director and the Director's heirs, executors, administrators,
personal representations, transferees, assignees and successors in interest.

          e. Any communication under this Agreement shall be in writing and
addressed to the Company at 2525 Dupont Drive, Irvine, California 92612,
Attention: General Counsel and to the Director at the address given beneath the
Director's signature, or at such other address as either party may hereafter
designate in writing to the other.

          f. The interpretation, performance and enforcement of the Option and
this Agreement shall be governed by the internal laws of the State of
California.


                                       3



          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                        THE COMPANY:

                                        ALLERGAN, INC.,
                                        a Delaware corporation


                                        By:
                                            ------------------------------------
                                            David E.I. Pyott,
                                            Chairman of the Board and
                                            Chief Executive Officer


                                        DIRECTOR:


                                        ----------------------------------------
                                        [INSERT NAME OF DIRECTOR]


                                       4

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, David E.I. Pyott, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Allergan, Inc.;

         2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

         3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

         4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

         5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ DAVID E.I. PYOTT
David E.I. Pyott
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

Date: May 8, 2007

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Jeffrey L. Edwards, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Allergan, Inc.;

         2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

         3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

         4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

         5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ JEFFREY L. EDWARDS
Jeffrey L. Edwards
Executive Vice President, Finance and Business Development,
Chief Financial Officer
(Principal Financial Officer)

Date: May 8, 2007

EX-32

EXHIBIT 32

         The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Certification of Principal Executive Officer

         Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Allergan, Inc., a Delaware corporation (the “Company”), hereby certifies, to his knowledge, that:

(i)	the accompanying Quarterly Report on Form 10-Q of the Company for the period ended March 30, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ DAVID E.I. PYOTT
	David E.I. Pyott Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
Dated: May 8, 2007

         A signed original of this written statement required by Section 906 has been provided to Allergan, Inc. and will be retained by Allergan, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Certification of Principal Financial Officer

         Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Allergan, Inc., a Delaware corporation (the “Company”), hereby certifies, to his knowledge, that:

(i)	the accompanying Quarterly Report on Form 10-Q of the Company for the period ended March 30, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ JEFFREY L. EDWARDS
	Jeffrey L. Edwards Executive Vice President, Finance and Business Development, Chief Financial Officer (Principal Financial Officer)
Dated: May 8, 2007

         A signed original of this written statement required by Section 906 has been provided to Allergan, Inc. and will be retained by Allergan, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.