SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
Forest Laboratories, Inc.
(Name of Registrant as Specified In Its Charter)
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.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
On August 7, 2011, Icahn Capital LP received a letter (the "Conflicts Letter")
from Arnold & Porter LLP, its antitrust counsel, regarding its antitrust
analysis of the service on the Forest Labs' board of directors by Dr. Denner and
Dr. Mulligan. In the Conflicts Letter, Arnold & Porter concludes that the
contention by Forest Labs that the current or likely competition between Biogen
and/or Amylin and Forest precludes simultaneous service on these boards is
"without merit."
The foregoing description of the Conflicts Letter is qualified in its entirety
by the copy of the Conflicts Letter which is filed herewith.
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
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING D.F. KING & CO.,
INC. BY TELEPHONE AT THE FOLLOWING NUMBERS: STOCKHOLDERS CALL TOLLFREE: (800)
697-6975 AND BANKS AND BROKERAGE FIRMS CALL: (212) 269-5550.
[LETTERHEAD]
ARNOLD & PORTER LLP
WILLIAM J. BAER
William.Baer@aporter.com
+1 202.942.5936
+1 202.942.5999 Fax
555 Twelfth Street, NW
Washington, DC 20004-1206
August 7, 2011
VIA E-MAIL
----------
Icahn Capital LP
767 Fifth Avenue
New York, New York 10153
Proposed Board Members for Forest Laboratories
To Whom it May Concern:
You have asked for our views regarding an issue that has been raised with
respect to the eligibility of two individuals - Dr. Alexander J. Denner and Dr.
Richard Mulligan - to serve as board members for Forest Laboratories, Inc.
("Forest"). Specifically, both Dr. Denner and Dr. Mulligan currently sit as
board members for Biogen Idec ("Biogen"), and Dr. Denner is also a board member
for Amylin Pharmaceuticals ("Amylin"). Forest contends that there is current or
likely future competition between Biogen and/or Amylin and Forest that would
preclude these individuals' simultaneous service on the boards of both Forest
and Biogen and/or Amylin. Based on the facts that you have provided to us, we
believe that Forest's contention is without merit. Because Forest is not a
current competitor of either Biogen or Amylin, we do not believe that either Dr.
Mulligan or Dr. Denner would be disqualified from serving as a board member for
Forest under applicable U.S. antitrust law, including Section 8 of the Clayton
Act. Any speculative issue of future competition is easily addressed through
appropriate corporate conflict of interest policies.
BACKGROUND
----------
For purposes of the conclusions in this letter, we understand from our
discussions with you and our review of available information:
- Forest does not currently market any products that compete with
products currently marketed by either Biogen or Amylin.
- There are no competitive sales between Forest on the one hand and
either Amylin or Biogen on the other.
Icahn Capital LP
August 7, 2011
Page 2
- Forest has no late stage pipeline drugs that are anticipated to
compete with Amylin or Biogen products.
- Although Forest has a Phase I diabetes drug that could at some future
point several years from now potentially compete with an Amylin
diabetes drug, it is not clear that - even if approved - it would
actually compete with the Amylin drug. Moreover, there are already
many other competitors for the Amylin diabetes drug on the market.
ANALYSIS
--------
Forest appears to contend that the conflict issue with Drs. Denner and
Mulligan involves the potential for future competition between Forest, on the
one hand, and Biogen and/or Amylin on the other. Based on the facts provided,
future competition between these companies is extremely speculative at best.
Though Forest has raised the spectre of potential future competition for
business development opportunities, Forest has not identified any specific
history of such competition nor any concrete suggestion of such competition in
the future. As noted above, the only potential future competition that might
conceivably arise relates to a Phase I diabetes drug that is in development at
Forest. If approved at some distant future point, this drug could potentially
compete with an existing Amylin diabetes drug. It is our understanding, however,
that there are "many" competitors to the Amylin diabetes drug already on the
market.
The U.S. antitrust laws expressly address the concern Forest raises
regarding directors serving simultaneously on multiple boards. Section 8 of the
Clayton Act forbids interlocking directorates between two corporations, but only
as to those that are currently "competitors" -- where "the elimination of
competition by agreement between them would constitute a violation of any of the
antitrust laws." 15 U.S.C. 19(a)(a)(1)(B). The purpose of Section 8 is to "nip
in the bud incipient violations of the antitrust laws by removing the
opportunity or temptation to such violations through interlocking directorates."
United States v. Sears, Roebuck & Co., 111 F. Supp. 614, 616 (S.D.N.Y. 1953).
However, the statute applies only in situations in which there currently exist
competitive sales between the corporations in question. Even where there is some
present day competition, the statute provides an exception for competition that
does not exceed certain specified levels. For example, the ban on interlocking
directorates does not apply in cases where the competitive sales of either
corporation are less than $2.7 million. Id. at 19(a)(2). Section 8 similarly
Icahn Capital LP
August 7, 2011
Page 3
does not apply where the competitive sales of either corporation are less than
2% of that corporation's total sales, or where the competitive sales of both
corporations are less than 4% of total sales. Id.
Our understanding is that Forest does not sell any products that are in
competition with products sold by either Amylin or Biogen. If Forest does not
have any competitive sales with Amylin or Biogen, then Section 8 of the Clayton
Act does not prohibit interlocking directorates between Forest and either Amylin
or Biogen. Even if Amylin and Biogen could be viewed as "potential" competitors
of Forest (e.g., based on products under development that might theoretically be
sold in competition in the future), the statutory exception described above (for
de minimis competitive sales) still applies.
Accordingly, we do not believe that the relevant legal precedent would support
an argument by Forest that the theoretical potential for future sales from a
Phase I pipeline drug could trigger the application of Section 8 to an overlap
in board membership between the companies at the present time. Based on the
existing precedent, Section 8 does not apply where there is no current
competition between the corporations at issue. See Paramount Pictures Corp. v.
Baldwin-Montrose Chemical Co., 1966 U.S. Dist. LEXIS 10596, *26 (S.D.N.Y. Jan.
24, 1966) ("Section 8 has no application to corporations which are not or have
not been competitors, but may be competitors in the future.").(1)
Finally, Forest also appears to be concerned with the potential for
information-sharing that could arise where the same board member sits on the
_________________________
(1) See also In the Matter of TRW, Inc., et al., 93 F.T.C. 325, 379 (1979)
("If [complaint counsel] mean that any competitive relationship may be
reached by the statute - whether horizontal, vertical or potential - it
seems fairly well settled that Section 8 applies only to firms which are
horizontal competitors."). In an opinion generally affirming the FTC's
decision in TRW, the Ninth Circuit declined to address the issue. TRW, Inc.
v. FTC, 647 F.2d 942 (9th Cir. 1981) (expressing "no opinion about whether
section 8 encompasses inter-locking directorates between corporations that
are merely potential competitors."). In a 2009 speech, Commission J. Thomas
Rosch of the Federal Trade Commission clearly explained that the Act does
not cover "interlocks between potential competitors." Terra Incognita:
Vertical and Conglomerate merger and Interlocking Directorate Law
Enforcement in the United States at 18 (Sept. 11, 2009). While Commissioner
Rosch and the Federal Trade Commission have, on occasion, raised the theory
that Section 5 of the FTC Act could be used to reach interlocking
directorates that are not otherwise prohibited by Section 8, no court has
adopted that view.
Icahn Capital LP
August 7, 2011
Page 4
boards of Company A and Company B, where Company A is in the early stages of
development for a product that could eventually compete with a Company B
product. This kind of speculative potential conflict, however exists for board
members at many corporations. Our understanding is that Delaware corporate
counsel has advised you that any potential conflicts or concerns of this nature
can be addressed by the implementation of standard conflicts and recusal
policies. We agree that an appropriate conflicts and recusal policy similarly
could ameliorate any information-sharing concerns that might theoretically arise
from interlocking board members here.
Sincerely,
/s/ William J. Baer
-------------------
William J. Baer