NEW YORK, Aug. 13, 2012 /PRNewswire/ -- Carl Icahn
today issued the following letter to the board of directors of
Forest Labs (NYSE: FRX):
To the Forest Labs Board of Directors:
I would like to take this opportunity to respond to the
statement you issued on Friday, August
10, 2012. I believe it crosses the line from
mischaracterization to blatant misstatements. Accordingly, I
find it imperative to set the record straight.
Corporate Governance Promises – An independent board
committee did not play an appropriate role in the corporate
governance commitments Forest made to shareholders during our last
proxy contest. Board members Lieberman and Goodman, who we,
along with ISS and Glass Lewis, do not view as independent, were
forced to pick an expert from a pool of candidates put together by
Forest Labs own legal and financial
advisors. No matter what you state it cannot be refuted that
the corporate governance expert was engaged and reported to the
full Board, chaired and controlled by Howard Solomon, not any independent committee,
as indeed Forest Labs promised to
do. It is inarguable that this promise was broken.
THE PROCESS UNDERTAKEN BY FOREST
IS AKIN TO HAVING THE FOX DETERMINE HOW THE HENHOUSE SHOULD
BE CLEANED UP AND SAFEGUARDED.
Anti-Change of Control Provision in Cypress License
Agreement – Contrary to statements you made in your
August 10 statement, this change of
control provision has nothing to do with concerns over any
"competing product" or the "possibility of disfavoring the joint
venture partner". It only serves to preserve the status quo
at Forest by giving the incumbent Board the power to unilaterally
say no to an unsolicited acquisition and thereby cause Forest to
potentially lose a licensed product. It offers absolutely no
protection to Cypress whatsoever. That is why this
provision is nothing more than a poison pill buried in a license
agreement. I have attached the exact language from that
provision to the end of this letter. It leaves no doubt that
we are telling the truth.
In the past my nominees, once elected, have worked
constructively with incumbent board members and helped produce
positive change at troubled companies. And as a result they
have been re-nominated to those boards, sometimes even after I no
longer have an interest in those companies or after the persons
nominated by me are no longer affiliated with my firm. My
nominees are extremely qualified, discerning professionals. I
am confident that, if elected, Dan
Ninivaggi and Pierre Legault,
my two nominees recommended by ISS, as well as my other nominees,
will bring much needed true corporate governance and perspectives
to the Forest Board and will act in a professional and constructive
manner with only the best interests of shareholders in mind and by
working together with the rest of you will greatly enhance
shareholder value.
As one of Forest's largest stockholders, I have nothing but the
best of intentions with respect to Forest
Labs. I am deeply concerned that the Board as
currently constructed is unwilling or unable to effectively oversee
Howard Solomon and his management
team. The power is just too greatly concentrated at the
top. Replacing Goldwasser and Goodman with Ninivaggi and
Legault on the Board will sway the balance of power back to the
independent board members and the interests of shareholders.
In that way we can move forward together with a reconstituted Board
in a positive and constructive manner and put the best interests of
shareholder first and foremost, as it should be.
Sincerely,
/s/Carl Icahn
ATTACHMENT – CYPRESS CHANGE OF
CONTROL PROVISION
"17.1 Change in Control Not Approved by the Board. In the
event of a Change in Control of Forest or Cypress that was not
approved by the applicable Board of Directors in place
immediately prior to the Change in Control, (i) with respect
to such a Change in Control of Forest, Cypress shall have the
option to elect to terminate this Agreement upon the payment to
Forest of the fair market value of the rights being terminated, as
determined based on an independent evaluation by a Third Party that
is experienced in the evaluation of pharmaceutical products and
(ii) with respect to such a Change in Control of Cypress (excluding
an such transaction in which Forest is a party), Forest shall have
the right to terminate Cypress' Promotion Rights and rights to
participate with Forest in the Joint Development Committee, the
Steering Committee and the Working Group, but shall continue to pay
Cypress the payments required under this Agreement."
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
PARTNERS MASTER FUND III L.P., HIGH RIVER LIMITED PARTNERSHIP,
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 2012 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
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING D.F.
KING & CO., INC. BY TELEPHONE AT THE FOLLOWING NUMBERS:
STOCKHOLDERS CALL TOLL−FREE: (800) 697−6975 AND BANKS AND BROKERAGE
FIRMS CALL: (212) 269−5550. CONSENT OF THE AUTHOR AND
PUBLICATION NEITHER SOUGHT NOR OBTAINED TO USE THE MATERIAL
REFERRED TO HEREIN AS PROXY SOLICITING MATERIAL.
SOURCE Carl Icahn