Forest Laboratories, Inc. (NYSE: FRX) (“Forest”) today sent the
following open letter to all Forest shareholders in connection with
the Company’s Annual Meeting on August 18, 2011.
August 11, 2011
Dear Fellow Shareholders,
Our 2011 Annual Meeting of Shareholders is just one week away.
We are writing to ask you to vote for our slate of ten talented,
experienced and extremely well qualified Board nominees, who are
all committed to delivering value for you, our shareholders.
Leading proxy advisory firms Institutional Shareholder Services
(ISS) and Egan-Jones agree with your Board’s unanimous
recommendation that you vote for our entire slate of ten highly
qualified, talented and experienced director nominees and reject
the alternative slate of hand-picked designees nominated by
shareholder Carl Icahn.
Your vote is important – no matter how many shares you own.
Please vote the WHITE proxy card today.
Forest Has Strong Track Record of Delivering
Value for Shareholders and One of the Strongest and Most
Diversified Pipelines in the Industry
The Forest Board and management team have a long track record of
delivering strong shareholder returns:
- Over the last 10 years, Forest’s
revenues and earnings have increased at compound annual growth
rates of 12.1% and 16.5%, respectively.
- Forest’s stock price has outperformed
the S&P 500 and the AMEX Pharmaceutical Index (DRG) – over both
the short term and the long term.
Forest’s Board and management team continue to drive positive
financial and operational results and have worked diligently to
diversify the Company’s product portfolio, pursuing new,
high-potential products in key therapeutic areas with significant
unmet medical needs.
Today, Forest is strong and performing well and has developed
one of the deepest and most promising product portfolios in the
industry, including a total of nine new products, five of which
have already been launched. We anticipate launching the other four
products by 2013 and have made good progress toward this goal,
having filed NDAs for both aclidinium and linaclotide as planned
for this year. As these “Next 9” products are expected to grow and
diversify Forest’s revenues in the years ahead, this is a time of
tremendous opportunity for Forest, and the Board and senior
management team are confident that we are on the right course to
deliver a highly attractive return and enduring value for our
shareholders.
Our “New 3” Nominees Will Help Maximize the
Potential of Our “Next 9”
In addition to our seven highly qualified incumbent directors,
we have nominated three outstanding new independent candidates with
strong executive experience, no prior relationships with the
Company, and no conflicts with Forest. These “New 3” candidates –
Christopher Coughlin, Gerald Lieberman and Brent Saunders – bring
fresh eyes and valuable operating experience and financial
expertise to the Forest Board.
Our slate represents an appropriate balance of new perspectives
– including five new independent directors in the last five years –
and incumbent Board members who have helped build value and execute
the Company’s strategy over the longer term. All ten Forest
candidates are committed to transparency and responsiveness to
shareholder concerns, will work on behalf of all investors and
ensure board-level focus on maximizing the potential of our robust
pipeline.
Leading Proxy Advisory Firms Recommend that
Shareholders
Support Forest’s Nominees
Three independent proxy advisory firms have announced their
strong support for Forest’s nominees:
- Institutional Shareholder Services
(ISS) said that Icahn “has not demonstrated a compelling case that
change at the Board level is needed”1 and recommended FOR ALL 10 of Forest’s nominees.
- Egan-Jones stated it was “not convinced
that the election of the dissidents’ slate of nominees…would work
to the benefit of shareholders”2 and recommended FOR ALL 10 of Forest’s nominees.
- Glass Lewis rejected all but one of
Icahn’s nominees, thereby effectively supporting 9 OUT OF 10 of Forest’s nominees.
We are gratified by these positive recommendations, which we
believe reflect our strong track record of developing new products,
the high caliber of our director candidates and the balance of
valuable experience and new perspectives we have assembled on our
slate.
However, we respectfully disagree with Glass Lewis’s
recommendation for Icahn nominee Richard Mulligan, who we believe
is clearly less qualified than Forest’s nominees and has an obvious
conflict of interest due to his service on the board of Biogen
Idec, which actively competes with Forest for new product licensing
and acquisition opportunities in the areas of cardiovascular
health, neurology, and infectious diseases.
The HHS-OIG Matter Has Been Finally, and
Rightfully, Resolved
Last Friday, the Office of the Inspector General of Health and
Human Services (HHS-OIG) informed Howard Solomon that it has
decided not to exclude him from participating in federal healthcare
programs and considers this matter “closed.”
We are happy that this issue has been finally, and rightfully,
resolved. As we put this matter behind us, we remain diligent in
our commitment to excellence and in upholding the highest standards
both in our pharmaceutical operations and in our corporate
governance.
Forest’s Nominees Deserve Your
Support
Vote the WHITE Proxy Card Today
Support your Board by voting the WHITE proxy card TODAY. You may
vote by telephone, internet or by signing, dating and returning the
enclosed WHITE proxy card in the postage-paid envelope. We
also urge you to DISCARD ANY GOLD PROXY CARD sent to you by
Mr. Icahn or his affiliates. If you have already returned a gold
proxy card, you can change your vote by signing, dating and
returning a WHITE proxy card. Only your latest dated proxy
card will be counted.
For information about Forest’s 2011 Annual Meeting of
Shareholders – including a new presentation to Forest shareholders
dated August 11, 2011 – please visit:
www.FRX2011annualmeeting.com.
Forest’s Board of Directors greatly appreciates the input we
have received from our shareholders. We thank you for your
continued support.
Sincerely, /s/ Howard Solomon Chairman of the
Board and Chief Executive Officer /s/ Kenneth
Goodman Presiding Independent Director
Forward Looking Information
Except for the historical information contained herein, this
document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks and uncertainties, including
the difficulty of predicting FDA approvals, the acceptance and
demand for new pharmaceutical products, the impact of competitive
products and pricing, the timely development and launch of new
products, changes in laws and regulations affecting the healthcare
industry and the risk factors listed from time to time in Forest
Laboratories’ Annual Reports on Form 10-K (including the Annual
Report on form 10-K for the fiscal year ended March 31, 2011),
Quarterly Reports on Form 10-Q, and any subsequent SEC filings.
Important Additional Information
Forest Laboratories, its directors, director nominees and
certain of its executive officers may be deemed to be participants
in the solicitation of proxies from Forest shareholders in
connection with the matters to be considered at Forest
Laboratories’ 2011 Annual Meeting. On July 18, 2011, Forest
Laboratories filed its definitive proxy statement (as it may be
amended, the “Proxy Statement”) with the U.S. Securities and
Exchange Commission (the “SEC”) in connection with such
solicitation of proxies from Forest shareholders. FOREST
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT
AND ACCOMPANYING PROXY CARD AS THEY CONTAIN IMPORTANT INFORMATION.
Detailed information regarding the identity of participants, and
their direct or indirect interests, by security holdings or
otherwise, is set forth in the Proxy Statement, including Appendix
B thereto. Shareholders can obtain the Proxy Statement, any
amendments or supplements to the Proxy Statement and other
documents filed by Forest Laboratories with the SEC for no charge
at the SEC’s website at www.sec.gov. Copies are also available at
no charge at Forest Laboratories’ website at www.frx.com or by
writing to Forest Laboratories at 909 Third Avenue, New York, New
York 10022.
This document contains quotes and excerpts from certain
previously published material. Consent of the author and
publication has not been obtained to use the material as proxy
soliciting material.
If you have any questions, require assistance with voting
your WHITE proxy card, or need additional copies of the proxy
materials, please contact:
MACKENZIE PARTNERS, INC.
105 Madison Avenue New York, NY 10016
frxproxy@mackenziepartners.com
(212) 929-5500 (Call Collect) Or TOLL-FREE (800) 322-2885
1 ISS Proxy Report, August 10, 2011, p. 24
2 Egan-Jones Proxy Report, July 28, 2011, p.6
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