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Forest Laboratories Adopts Stockholder Rights Plan And Declares Dividend Distribution Of Preferred Share Purchase Rights

If a person or group acquires 12% (or 20% in the case of a 13G Institutional Investor) or more of Forest Laboratories’ outstanding common stock, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right’s then-current exercise price, a number of Forest Laboratories’ common shares having a market value of twice such price. In addition, if Forest Laboratories is acquired in a merger or other business combination transaction after a person has acquired in excess of the applicable percentage thresholds the Company’s outstanding common stock, each Right will entitle its holder to purchase, at the Right’s then-current exercise price, a number of the acquiring company’s common shares having a market value of twice such price. The acquiring person will not be entitled to exercise these Rights.

Prior to the acquisition by a person or group of beneficial ownership of the Company’s common stock equal to or in excess of the applicable percentage thresholds, the Rights are redeemable for $.001 per Right at the option of the Board of Directors.

Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act — are treated as beneficial ownership of the number of shares of the company’s common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the company’s stock are directly or indirectly held by counterparties to the derivatives contracts.

The dividend distribution will be made on September 7, 2012, payable to stockholders of record on that date, and is not taxable to stockholders. The Rights will expire on August 27, 2015; provided that if our stockholders have not ratified the rights plan by August 26, 2013, the Rights will expire on such date. In addition, the Rights automatically expire concurrently with (but no earlier than 100 days after the commencement of such qualifying offer) the purchase of 50% of our outstanding common stock on a fully diluted basis pursuant to a tender or exchange offer for all of the outstanding shares of Company common stock at the same price and for the same consideration, provided that the offeror irrevocably commits to purchase all remaining untendered shares at the same price and the same consideration actually paid pursuant to the offer.

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