NEW YORK, Aug. 10, 2012
/PRNewswire/ -- Carl Icahn today issued the following
statement:
Forest Labs (NYSE: FRX) publicly filed a major licensing
agreement that it entered into with Cypress Bioscience in
2004. That agreement contains a change of control provision
that allows the license to be voided by Cypress if there is a
change of control at Forest that is not approved in advance by the
Forest board, irrespective of whether or not that change of
control impairs Cypress. It seems to us that the only
purpose for a provision like this is entrenchment at Forest.
The provision affords no protections to Cypress, as the decision to
trigger this provision that can have significant adverse
consequences for Forest is solely based on a unilateral decision by
the Forest Labs board itself. Accordingly, we believe that
this provision was added at the insistence of Forest Labs, not
Cypress, in an attempt to surreptitiously implement an
anti-takeover measure.
Nearly two months ago, we requested documents from Forest Labs
to determine whether Forest Labs has inserted these provisions in
other licensing agreements in an effort to make itself "take-over
proof." Forest refused this request and we filed a complaint
in Delaware court. After
weeks of fighting, including a trial, we finally were given 7 more
agreements earlier this week. But under Delaware law in order to share this
information with shareholders we need to either get court approval
or the consent of Forest. Forest flatly refuses to let us
tell other shareholders what those agreements say about a change of
control.
As a result, we have gone back to the court to ask the court to
allow us to inform shareholders about the terms of any change of
control provisions in those agreements. Forest has been
stalling and because of that stalling we might not have a court
decision until just before the annual meeting on August 15, 2012. One thing is clear to
us: Forest does not want the stockholders to know this
information.
In addition, Forest is insisting that we may not tell you about
another issue relating to these license agreements. We think
this issue is a smoking gun, and have also asked the court to rule
that we should be allowed to disclose this information to
stockholders before the annual meeting. Of course, we will
share this information with you immediately if we receive the
court's permission.
To date, Forest has only produced a handful of the documents
that the court ordered Forest to give us two weeks ago, and already
we have found a series of significant issues, including the
corporate governance issues we described in our press release
issued yesterday. Forest is providing the documents as slowly
as it can. Nonetheless, we think we can win in court and that
we will find more smoking guns as we receive more documents.
It is our experience that the more you dig at Forest Labs, the more
problems you find.
In fact as you may recall, last year shareholders sued Forest
Labs for breach of fiduciary duties by the Forest Labs directors
asserting, among other things, that Forest Labs made false and
misleading statements about Forest's executive compensation
program, provided excessive compensation to Howard Solomon, and wrongly supported
Howard Solomon against exclusion by
the US Government. The actions also asserted that
Howard Solomon has been unjustly
enriched through his compensation arrangements with Forest
Labs. According to the Forest Labs' 10-Q filed yesterday, on
July 20, 2012, Forest Labs entered
into a memorandum of understanding with these shareholders that
provides for, among other things, the implementation by Forest Labs
of certain corporate governance measures, including measures
related to conflicts of interest regarding Board discussions,
compensation consultants, and executive compensation
policies. We can only wonder what will be the next shoe to
drop.
I urge shareholders to VOTE THE GOLD CARD for Ende,
Ninivaggi, Fromkin and Legault to deliver the necessary change
and bring a strong and independent voice to Forest Labs.
If you have already voted the white card, you can still change
your vote by NOW voting the GOLD card.
Sincerely,
/s/Carl Icahn
New York, New York,
August 10, 2012
ON JULY 23, 2012, 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. ERIC J. ENDE,
PIERRE LEGAULT, ANDREW J. FROMKIN, DANIEL A. NINIVAGGI, ICAHN PARTNERS LP, ICAHN
PARTNERS MASTER FUND LP, ICAHN PARTNERS MASTER FUND II L.P., ICAHN
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(COLLECTIVELY, THE "PARTICIPANTS") FROM THE STOCKHOLDERS OF FOREST
LABORATORIES, INC. FOR USE AT ITS 2012 ANNUAL MEETING OF
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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
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SOURCE Carl Icahn