Forest Laboratories Independent Directors Respond to Letter from Carl Icahn
July 12 2012 - 5:31PM
Business Wire
The independent directors of Forest Laboratories, Inc. (NYSE:
FRX) today sent the following letter to Carl C. Icahn:
July 12, 2012
Dear Mr. Icahn,
The independent directors of Forest Laboratories write to dispel
the misimpressions that you are trying to create in your July 12
letter.
We assure you that the rejection of your settlement offer, while
communicated by Mr. Solomon, was done with the full knowledge and
unanimous support of Forest’s entire Board of Directors. Since you
filed your 13-D on May 30 and threatened a “prolonged and
contentious proxy fight,” you and Howard Solomon had several
conversations concerning your perspectives on the Company and the
upcoming annual election. The Board of Directors was briefed on
each of these conversations, including the settlement proposal you
made, and discussed each at length. We understood that, as a
condition of settlement, you insisted that we add to our Board Eric
Ende, who was overwhelmingly rejected by our shareholders last
year, and Daniel Ninivaggi, a salaried Icahn employee with
absolutely no relevant experience. Avoiding a proxy contest by
adding these two individuals to the Board may have been expedient,
but we must consider the quality of the candidates, and they are
woefully inadequate to serve on Forest’s Board. As such, we
unanimously determined that it would not be in the best interests
of Forest’s shareholders to accept your proposal.
After you announced your slate of four nominees on June 19, our
Nominating and Governance Committee carefully reviewed the
qualifications of Messrs. Ende, Fromkin, Legault and Ninivaggi and
unanimously recommended to the full Board that they be rejected.
The Board discussed these candidates at length, including in
executive session; unanimously determined that your four nominees
are far less qualified than the Company’s nominees; and asked Mr.
Solomon to convey the Board’s position to you. Taken together, they
have significant conflicts of interest that compromise their
independence – including one nominee who you acknowledge is not
independent under NYSE standards – and lack experience in areas
critical to our business such as operational and management
experience and the understanding of what it takes to bring multiple
new drugs to the market.
Forest’s Board contains a mix of continuing leadership and new
perspectives, including three new independent directors who were
added last year and have been fully engaged in this process along
with the other independent directors. We are confident that our
Board possesses the skills and expertise to sustain the momentum we
have behind our late-stage pipeline and promising new products.
Forest has one of the strongest pipelines in pharma today, and we
believe most analysts and institutional investors share our view
that our new products and those in development will more than
offset the patent expirations of Lexapro and Namenda over time. In
sum, we remain confident in the Company’s prospects, and judging
from the size of your investment, we believe you share our
view.
We have said repeatedly that Forest welcomes open and
constructive dialogue with our shareholders, and it is
disappointing that you have chosen to engage with the company only
through another proxy contest, which does not serve our
shareholders’ interests. We do not believe that any shareholder is
entitled to seat unqualified and unsuitable candidates or that a
board should accept such candidates merely to avoid a fight. Our
view is that our directors must be responsible to all of our
shareholders, and cannot be dedicated to the interests of any
single shareholder, especially when that shareholder has a
self-serving agenda as clear as yours.
Sincerely,
/s/
Nesli Basgoz, M.D.
/s/
Christopher J. Coughlin
/s/
Dan L. Goldwasser
/s/
Kenneth E. Goodman
/s/
Gerald M. Lieberman
/s/
Lester B. Salans, M.D.
/s/
Brenton L. Saunders
/s/
Peter J. Zimetbaum, M.D.
About Forest Laboratories
Forest Laboratories' (NYSE: FRX) longstanding global
partnerships and track record developing and marketing
pharmaceutical products in the United States have yielded its
well-established central nervous system and cardiovascular
franchises and innovations in anti-infective, respiratory,
gastrointestinal and pain management medicine. Forest’s pipeline,
the most robust in its history, includes product candidates in all
stages of development across a wide range of therapeutic areas. The
Company is headquartered in New York, NY. To learn more, visit
www.FRX.com.
Forward-Looking Information
Except for the historical information contained herein, this
release 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, and the risk factors listed from time to time in Forest
Laboratories’ Annual Report on Form 10-K, 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’ 2012 Annual Meeting. Forest Laboratories has 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. Information regarding the ownership of
Forest's directors and executive officers in Forest stock,
restricted stock and options is included in their SEC filings on
Forms 3, 4 and 5, which can be found at the Company's website
(www.frx.com ) in the section "Investors." More detailed
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, is set forth in the Proxy Statement and other materials
to be filed with the SEC in connection with Forest Laboratories'
2012 Annual Meeting. Information can also be found in Forest's
Annual Report on Form 10-K for the year ended March 31, 2012, filed
with the SEC on May 25, 2012. 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.
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