SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Forest Laboratories, Inc.
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(Name of Registrant as Specified In Its Charter)
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Carl C. Icahn
Dr. Alexander J. Denner
Dr. Richard Mulligan
Professor Lucian A. Bebchuk
Dr. Eric J. Ende
Mayu Sris
Icahn Partners LP
Icahn Partners Master Fund LP
Icahn Partners Master Fund II
L.P.
Icahn Partners Master Fund III L.P.
High River Limited Partnership
Hopper Investments LLC
Barberry Corp.
Icahn Onshore LP
Icahn Offshore LP
Icahn Capital L.P.
IPH GP LLC
Icahn Enterprises Holdings L.P.
Icahn Enterprises G.P. Inc.
Beckton Corp.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
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Date Filed:
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ON JULY 19, 2011, THE PARTICIPANTS (AS DEFINED BELOW) FILED A DEFINITIVE PROXY STATEMENT WITH THE SECURITIES
AND EXCHANGE COMMISSION. SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY CARL C. ICAHN, DR. ALEXANDER J. DENNER, DR. RICHARD MULLIGAN, PROFESSOR LUCIAN A. BEBCHUK, DR.
ERIC J. ENDE, MAYU SRIS, ICAHN PARTNERS LP, ICAHN PARTNERS MASTER FUND LP, ICAHN PARTNERS MASTER FUND II L.P., ICAHN PARTNERS MASTER FUND III L.P., HIGH RIVER LIMITED PARTNERHIP, HOPPER INVESTMENTS LLC, BARBERRY CORP., ICAHN ENTERPRISES G.P. INC.,
ICAHN ENTERPRISES HOLDINGS L.P., IPH GP LLC, ICAHN CAPITAL L.P., ICAHN ONSHORE LP, ICAHN OFFSHORE LP, AND BECKTON CORP. (COLLECTIVELY, THE PARTICIPANTS) FROM THE STOCKHOLDERS OF FOREST LABORATORIES, INC. FOR USE AT ITS 2011 ANNUAL
MEETING OF STOCKHOLDERS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS. THE DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY IS AVAILABLE TO STOCKHOLDERS OF FOREST LABORATORIES, INC. FROM THE
PARTICIPANTS AT NO CHARGE AND IS ALSO AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSIONS WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING D.F. KING & CO., INC. BY TELEPHONE AT THE FOLLOWING NUMBERS: STOCKHOLDERS CALL
TOLLFREE: (800) 6976975 AND BANKS AND BROKERAGE FIRMS CALL: (212) 2695550.
Icahn Response to ISS
July 2011
Summary Overview
We enjoyed meeting with ISS to discuss the current situation at Forest Laboratories and our ability to help the
company navigate imminent challenges by electing Denner, Mulligan, Bebchuk and Ende to the board of directors
This presentation is in response to your request for additional material regarding Bebchuk and Endes relevant
experiences and abilities to contribute in distinct ways to the challenges Forest Labs faces
2
Bebchuks background and experiences make him uniquely qualified to contribute at
Forest
Issue at Forest Labs
Lack of adequate succession plan
Nomination
processes produced board lacking objectivity and independence
Lead director not independent by ISS standards
and lacks sufficient power Myriad legal and regulatory issues with multiple US government authorities
Flawed
pay arrangements, allowing the CEO and two other top executives to unwind equity incentives quickly and failing to tie bonus compensation to performance
Potential Solution
Place Bebchuk on Nominating
and Governance Committee (currently has vacancy) to help the adoption of a succession plan, improve nomination processes, and strengthen role for the lead director
Place Bebchuk on the Board Compliance Committee to help the boards oversight of the companys handling of the legal/regulatory issues and its development of a company-wide Risk
Management Program
Place Bebchuk on
Compensation Committee (currently has vacancy) to contribute to improved design of pay arrangements that would place adequate limits on unwinding equity incentives and tie pay to
performance
Relevant Experience
Heads the Harvard Law School Program on Corporate Governance
Renowned authority on governance provisions and processes, advised publicly traded firms and law firms
Member of Corporate Governance, Nomination and Remuneration Committee at Norilsk Nickel
Legal expertise as a Harvard Law School professor
Prepared a report for Pfizers independent directors evaluating the directors compliance-related choices during a six-year period
Bebchuk served as adviser to compensation czar Kenneth Feinberg in overseeing re-design of pay arrangements at
major US firms
A leading authority on compensation design, has done substantial work on how to tie pay
to performance and to provide executives with incentives to focus on long-term value creation (see, e.g., Paying for Long-Term Performance. University of Pennsylvania Law Review, 2010 (with Fried))
3
Ende will add value to Forest Labs, building upon highly relevant experience at Genzyme
Issue at Forest Labs
Entrenched board of directors
lacking
independence
Negative operating leverage
due to looming patent expirations
Myriad legal and regulatory issues with multiple US government authorities
Lack of focus in therapeutic areas
Unproven
business development efforts
Potential Solution Hold Forest Labs management and board accountable and push for
cultural change Evaluate Forest Labs for areas of potential cost reduction and/or reallocation of spending Initiation and proper execution of comprehensive company-wide Risk Management Program Evaluate each business unit for potential divestiture or
spin-off and re-allocation of resulting capital to retained units Independent analysis of all potential in-licensing and acquisition candidates to only move forward on deals with a strongly positive anticipated ROI
Relevant GENZ Experience
Board contained many long-standing directors (up to 27 years of service)
Ende worked constructively and objectively to gain trust, which enabled delivery of independent views incorporated into decision making
Helped re-focus Board on fiduciary responsibilities to shareholders
Audit Committee member Ende oversaw $350M of cost reduction initiatives including 1,000 person RIF
Risk Oversight Committee member Ende oversaw initiation and implementation of comprehensive risk management program
based on industry best practices
Ende helped evaluate each of 7 business units for potential
divestiture or spin-off, eventually divesting three business units with cash reallocated towards share buybacks
Ende evaluated ROIC of many product in-licensings and company acquisitions across multiple disease areas and
provided objective and independent views
4
Endes experience as a research analyst and medical doctor will also help him add
value
Ende worked as a senior biotechnology and specialty pharma research analyst at Merrill Lynch,
Bank of America and Lehman Brothers for 11 years
During that time, Ende analyzed hundreds of companies
on several dimensions:
- Financial statements - Corporate governance
- Operating leverage - Clinical data
- Drug markets - Competitive landscape
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Acquisitions and divestitures - Licensing opportunities
Ende understands what factors and decisions
drive shareholder returns
Endes experience as a medical doctor helps him understand the physician
decision-making process with implications for commercialization efforts
Endes experiences as a Genzyme
director, research analyst and medical doctor make him eminently qualified to serve on the Forest Labs board
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Forest Labs will benefit from all Icahn nominees serving as directors
Bebchuks experiences as a Harvard Law School Professor and Norilsk Nickel director qualify him to improve
Forest Labs corporate governance and remedy relationships with government and regulatory authorities
Endes experiences as a Genzyme director, research analyst and medical doctor will allow him to provide unique
insight into value creation as Forest Labs deals with significant challenges
We would greatly appreciate your
support of Denner, Mulligan, Bebchuk and Endes candidacies for the benefit of all Forest Labs shareholders
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