Edgar Filing: FOREST LABORATORIES INC

SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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Check the appropriate box:
[ ] Preliminary proxy statement
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[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

Forest Laboratories, Inc.
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(Name of Registrant as Specified in its Charter)

Forest Laboratories, Inc.
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(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

[X] No fee required.
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previously. Identify the previous filing by registration statement number, or
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(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.

FOREST LABORATORIES, INC.

NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of the Stockholders of Forest Laboratories, Inc. (the
"Company") will be held on August 8, 2002 at 10:00 a.m., at JP Morgan Chase &
Co. Corporate Headquarters, 270 Park Avenue, New York, New York for the
following purposes:

1. To elect a Board of seven Directors to serve until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified (Proposal 1);

2. To ratify the appointment of BDO Seidman, LLP as the Company's
independent auditors for the fiscal year ending March 31, 2003 (Proposal
2); and

3. To transact such other business as may properly be brought before the
Meeting.

Stockholders of record at the close of business on June 21, 2002 shall be
entitled to notice of and to vote at the Meeting. A copy of the Annual Report
for the fiscal year ended March 31, 2002 is being mailed to stockholders
simultaneously herewith.

YOU ARE INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO BE
PRESENT, KINDLY FILL IN AND SIGN THE ENCLOSED PROXY EXACTLY AS YOUR NAME
APPEARS ON YOUR STOCK CERTIFICATES, AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE IN ORDER THAT YOUR VOTE CAN BE RECORDED. THIS MAY SAVE THE COMPANY THE
EXPENSE OF FURTHER PROXY SOLICITATION.

By Order of the Board of Directors

WILLIAM J. CANDEE, III,
Secretary

June 28, 2002
New York, New York

FOREST LABORATORIES, INC.
909 THIRD AVENUE
NEW YORK, NEW YORK 10022

PROXY STATEMENT

Your proxy is solicited by the Board of Directors of the Company for use
at the Annual Meeting (the "Meeting") of Stockholders to be held on Thursday,
August 8, 2002, or any adjournment or adjournments thereof, for the purposes
set forth in the attached Notice of Meeting. This Proxy Statement and form of
proxy are being mailed to stockholders on or about June 28, 2002.

Any stockholder giving a proxy may revoke it at any time prior to its use
at the Meeting by giving written notice of revocation to the Secretary of the
Company; mere attendance at the Meeting, without such notice, will not revoke
the proxy. Properly executed proxies will be voted in the manner directed by a
stockholder and, if no direction is made, will be voted for the election of
each of the seven nominees for election as directors and in favor of the
ratification of the appointment of BDO Seidman, LLP as the Company's
independent auditors for the fiscal year ending March 31, 2003.

The Board of Directors does not intend to present at the Meeting any
matters other than those set forth in this Proxy Statement, nor does the Board
of Directors know of any other matters which may come before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed proxy to vote it in accordance
with their judgment.

As of June 21, 2002, the record date fixed for the determination of
stockholders entitled to notice of and to vote at the Meeting, there
were outstanding 179,543,109 shares of the Company's common stock, par value
$.10 per share (the "Common Stock") which is the only outstanding class of
voting securities of the Company. Each outstanding share of Common Stock is
entitled to one vote on each matter to be voted upon.

The Company's bylaws provide that stockholders holding a majority of the
outstanding shares of Common Stock shall constitute a quorum at meetings of the
stockholders. Shares represented in person or by proxy as to any matter will be
counted toward the fulfillment of a quorum. The affirmative vote of a plurality
of the votes cast in person or by proxy is necessary for the election of
directors. The affirmative vote of a majority of the shares of Common Stock
present in person or by proxy is necessary for the approval of Proposal 2.

Votes at the Meeting will be tabulated by two independent inspectors of
election appointed by the Company or the Company's transfer agent. As the
affirmative vote of a plurality of votes cast is required for the election of
directors, abstentions and "broker non-votes" will have no effect on the outcome
of such election. As the affirmative vote of a majority of shares of Common
Stock present in person or represented by proxy is necessary for the approval of
Proposal 2, an abstention will have the same effect as a negative vote, but
"broker non-votes" will have no effect on the outcome of the vote.

Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may vote those shares in their
discretion, depending on the type of proposal involved. The Company believes
that, in accordance with New York Stock Exchange rules applicable to such
voting by brokers, brokers will have discretionary authority to vote with
respect to any shares as to which no instructions are received from beneficial
owners with respect to the election of directors and Proposal 2. Shares as to
which brokers have not exercised such discretionary authority or received
instructions from beneficial owners are considered "broker non-votes."

Only stockholders of record at the close of business on June 21, 2002 will
be entitled to vote at the Meeting or any adjournment or adjournments thereof.

IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS'
INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE
PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY
TO INSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT THE
MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON BY
GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. PLEASE RETURN YOUR
EXECUTED PROXY PROMPTLY.

PRINCIPAL STOCKHOLDERS

The following table sets forth as of June 17, 2002 the name, address and
holdings as to each person (including any "group" as defined in Section 13(d)
of the Securities Exchange Act of 1934) known by the Company to be the
beneficial owner of more than five percent of the Common Stock.

AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- ---------- --------

FMR Corp. 19,183,515(1) 10.68%
82 Devonshire Street
Boston, MA 02109

Citigroup Inc. 10,774,767(2) 6.00%
399 Park Avenue
New York, NY 10043

Capital Research and 10,397,600(3) 5.79%
Management Company
333 South Hope Street
Los Angeles, CA 90071

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(1) Based upon information set forth in an Information Statement on Schedule
13G filed by FMR Corp. with the SEC.

(2) Based upon information set forth in an Information Statement on Schedule
13G filed by Citigroup Inc. with the SEC.

(3) Based upon information set forth in an Information Statement on Schedule
13G filed by Capital Research and Management Company with the SEC.

PROPOSAL 1

ELECTION OF DIRECTORS

The by-laws of the Company provide that there shall be three to eleven
directors, with such number to be fixed by the Board of Directors. Effective at
the time and for the purposes of the Meeting, the number of directors of the
Company, as fixed by the Board of Directors pursuant to the bylaws of the
Company, is seven.

Unless otherwise specified, each proxy received will be voted for the
election as directors of the seven nominees named below (each of whom were
elected at the 2001 Annual Meeting of Stockholders) to serve until the 2003
Annual Meeting of Stockholders and until his successor shall be duly elected
and qualified. Each of the nominees has consented to be named a nominee in the
Proxy Statement and to serve as a director if elected. Should any nominee
become unable or unwilling to accept a nomination or election, the persons
named in the enclosed proxy will vote for the election of a nominee designated
by the Board of Directors or will vote for such lesser number of directors as
may be prescribed by the Board of Directors in accordance with the Company's
bylaws.

The following persons have been nominated as directors:

HAS BEEN
NAME AND PRINCIPAL A DIRECTOR
OCCUPATION OR POSITION AGE SINCE
--------------------------------------------------------------------------------- ----- -----------

Howard Solomon 74 1964
Chairman of the Board and Chief Executive Officer. Mr. Solomon has served
as Chief Executive Officer of the Company since 1977.

William J. Candee, III 75 1959
Of Counsel, Rivkin, Radler & Kremer, Attorneys at Law, where Mr. Candee
had been a partner since May 1989.

George S. Cohan 78 1977
President, The George Cohan Company, Inc. consultants, since June 1989.

Dan L. Goldwasser 62 1977
Partner, Vedder, Price, Kaufman & Kammholz, Attorneys at Law, since
May 1992.

Kenneth E. Goodman 54 1998
President and Chief Operating Officer of the Company since December 1998.
For eighteen years prior thereto, Mr. Goodman served as Vice
President-Finance and Chief Financial Officer of the Company and in
addition served as Executive Vice President-Operations since February 1998.

Lester B. Salans, M.D. 66 1998
Clinical Professor and member of the Clinical Attending Staff Internal
Medicine, Mount Sinai Medical School and member of the Adjunct faculty,
Rockefeller University. Dr. Salans was formerly Vice President-Academic and
Scientific Affairs and Vice President-Preclinical Research at Sandoz
Pharmaceutical Corporation.

Phillip M. Satow 61 1998
Independent Consultant. Prior to his resignation in December 1998, Mr.
Satow served as Executive Vice President of the Company since
February 1998. Prior thereto, Mr. Satow served as Executive Vice
President-Marketing since 1985. Mr. Satow also serves as a director of Crucell
N.V., a biotechnology company.

Certain information regarding the beneficial ownership of Common Stock by
each such director and nominee is set forth below at "Security Ownership of
Management."

EXECUTIVE OFFICERS OF THE COMPANY

NAME AGE POSITION WITH THE COMPANY
---------------------------------- ----- --------------------------------------------

Howard Solomon 74 Chairman of the Board and Chief Executive
Officer

Kenneth E. Goodman 54 President and Chief Operating Officer

Lawrence S. Olanoff, M.D., Ph.D. 50 Executive Vice President-Scientific Affairs

Elaine Hochberg 45 Senior Vice President-Marketing

John E. Eggers 40 Vice President-Finance and Chief Financial
Officer

See the table of nominees for election as directors for biographical data
with respect to Messrs. Solomon and Goodman.

Dr. Lawrence S. Olanoff was elected Executive Vice President-Scientific
Affairs of the Company in December 1998. From October 1995 through February
1998, Dr. Olanoff served as Vice President-Scientific Affairs and served as
Senior Vice President-Scientific Affairs from and after February 1998. From
1993 until he joined the Company in 1995, Dr. Olanoff was Senior Vice
President-Clinical Research and Development at Sandoz Pharmaceutical
Corporation. For nine years prior thereto, Dr. Olanoff was employed by The
Upjohn Company, where his last position was Corporate Vice President-Clinical
Development and Medical Affairs.

On December 17, 1999, Elaine Hochberg was elected Senior Vice
President-Marketing. From February 1998 through December 1999, Ms. Hochberg
served as Vice President-Marketing of the Company. From June 1997 through
February 1998, Ms. Hochberg served as Vice President-Marketing of Forest
Pharmaceuticals, Inc., a wholly-owned subsidiary of Forest. Prior to joining
Forest in 1997, Ms. Hochberg was Assistant Vice President-Marketing at
Wyeth-Lederle Laboratories.

John E. Eggers was elected Vice President-Finance and Chief Financial
Officer of the Company effective December 1998. From February 1998 until
December 1998, Mr. Eggers served as Vice President-Treasurer. For five years
prior thereto, Mr. Eggers was the Director of Finance at the Company.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth the beneficial ownership of shares of
Common Stock of the Company as of June 21, 2002 of (i) the Chief Executive
Officer and each of the Company's other executive officers at March 31, 2002,
(ii) each director and nominee to serve as a director and (iii) all directors
and executive officers of the Company as a group:

NAME OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------------------------------------- ---------------------- -----------

Howard Solomon 8,222,133(1) 4.58%

William J. Candee, III 33,916(2) *

George S. Cohan 62,000(3) *

Dan L. Goldwasser 81,640(4) *

Kenneth E. Goodman 2,311,530(5) 1.29%

Lester B. Salans, M.D. 70,000(6) *

Phillip M. Satow 81,536(7) *

Dr. Lawrence S. Olanoff 175,417(8) *

Elaine Hochberg 153,316(9) *

John E. Eggers 84,380(10) *

All directors and executive officers as a group 11,275,868(11) 6.28%

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* less than 1%

(1) Includes 4,200,000 shares subject to options exercisable within 60 days
of the date hereof.

(2) Includes 30,500 shares subject to options exercisable within 60 days of
the date hereof.

(3) Includes 46,000 shares subject to options exercisable within 60 days of
the date hereof.

(4) Includes 62,000 shares subject to options exercisable within 60 days of
the date hereof. Does not include 10,840 shares owned by Mr. Goldwasser's
wife as to which shares Mr. Goldwasser disclaims beneficial ownership.

(5) Includes 1,850,000 shares subject to options exercisable within 60 days
of the date hereof.

(6) Includes 70,000 shares subject to options exercisable within 60 days of
the date hereof. Does not include 1,600 shares owned by Dr. Salans' wife
as to which shares Dr. Salans disclaims beneficial ownership.

(7) Includes 10,000 shares subject to options exercisable within 60 days of
the date hereof. Also includes 15,015 shares held in trusts, of which Mr.
Satow is a trustee, for the benefit of Mr. Satow's children.

(8) Includes 127,500 shares subject to options exercisable within 60 days of
the date hereof.

(9) Includes 125,500 shares subject to options exercisable within 60 days of
the date hereof.

(10) Includes 72,380 shares subject to options exercisable within 60 days of
the date hereof.

(11) Includes 6,593,880 shares subject to options exercisable within 60 days
of the date hereof.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Federal securities laws require that the individuals and groups listed in
the preceding table must report to the SEC and the Company, within certain
periods, how many shares of the Company's equity securities they own and if they
conducted certain transactions in such securities. Based upon information
furnished by these stockholders, the Company believes that all required filings
for the most recent fiscal year and prior fiscal years have been made. In
addition, such information discloses that Mr. Cohan inadvertently filed one
required monthly report late and Mr. Goldwasser inadvertently filed two required
monthly reports late, in the case of Mr. Cohan reporting the exercise of a stock
option and in the case of Mr. Goldwasser reporting a gift and a sale of shares.

EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended March 31, 2002,
2001 and 2000, compensation paid by the Company to the Chief Executive Officer
and to each of the four most highly compensated executive officers of the
Company other than the Chief Executive Officer during fiscal year 2002 who were
serving at the end of such fiscal year, including salary, bonuses, stock
options and certain other compensation:

SUMMARY COMPENSATION TABLE

ANNUAL LONG-TERM COMPENSATION
COMPENSATION AWARDS(1)
------------------------------ ---------------------------
ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(2)
----------------------------- ------ --------- --------- ----------- -------------

Howard Solomon, 2002 880,000 425,000 300,000 24,134
Chairman and Chief 2001 823,765 400,000 1,000,000 22,167
Executive Officer 2000 731,271 200,000 600,000 23,499

Kenneth E. Goodman, 2002 588,000 275,000 200,000 20,102
President and Chief 2001 549,887 250,000 500,000 18,747
Operating Officer 2000 488,014 150,000 400,000 17,841

Dr. Lawrence S. Olanoff, 2002 530,000 240,000 100,000 18,308
Executive Vice President- 2001 493,750 200,000 100,000 18,334
Scientific Affairs 2000 451,247 100,000 200,000 15,345

Elaine Hochberg, 2002 382,500 175,000 75,000 19,085
Senior Vice President- 2001 356,250 150,000 70,000 17,847
Marketing 2000 291,500 70,000 150,000 17,792

John E. Eggers, 2002 278,750 75,000 15,000 18,760
Vice President-Finance 2001 232,501 70,000 50,000 17,995
and Chief Financial Officer 2000 186,253 25,000 50,000 16,783

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(1) The Company has no long-term incentive compensation plan other than its
several Employee Stock Option Plans described herein. The Company does
not award stock appreciation rights, restricted stock awards or long-term
incentive plan pay-outs.

(2) Consists of group term life insurance and compensation credited to such
executive officers pursuant to the Forest Laboratories, Inc. Savings and
Profit Sharing Plan (the "Plan"), which covers employees of the Company
and certain of its subsidiaries. Under the Plan, all regular employees of
the Company and certain subsidiaries who are employed for at least six
months prior to the Plan year end become participants of the Plan.
Contributions, which are made at the discretion of the Company's Board of
Directors, may not exceed 25 percent of the individual Plan participant's
gross salary (up to a maximum salary of $200,000), including allocated
forfeitures for the Plan year. Plan participants vest over a period of 1
to 5 years of credited service. The Company did not pay or provide other
forms of annual compensation (such as perquisites) to any of the named
executive officers having a value exceeding the lesser of $50,000 or 10%
of the total annual salary and bonus reported for such officers.

OPTIONS GRANTED IN FISCAL 2002

The following information is furnished for the fiscal year ended March 31,
2002 with respect to the Company's Chief Executive Officer and the other
executive officers of the Company named in the Compensation Table above, for
stock options granted during such fiscal year. Stock options were granted
without tandem stock appreciation rights.

POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF
STOCK PRICE APPRECIATION
% OF TOTAL FOR
OPTIONS OPTIONS GRANTED OPTION TERM($)(1)
GRANTED TO EMPLOYEES EXERCISE PRICE EXPIRATION ------------------------
NAME (#) DURING FISCAL YEAR PER SHARE ($/S) DATE 5% 10%
------------------------- --------- -------------------- ----------------- ----------- ------------ -----------

Howard Solomon 300,000 12.34 76.29 12/14/11 14,393,511 36,475,984

Kenneth E. Goodman 200,000 8.22 76.29 12/14/11 9,595,674 24,317,322

Dr. Lawrence S. Olanoff 100,000 4.11 76.29 12/14/11 4,797,837 12,158,661

Elaine Hochberg 75,000 3.08 76.29 12/14/11 3,598,378 9,118,996

John E. Eggers 15,000 .62 76.29 12/14/11 719,676 1,823,799

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(1) Represents the potential value of the options granted at assumed 5% and
10% rates of compounded annual stock price appreciation from the date of
grant of such options. The increase in shareholders' equity to all
shareholders of the Company measured over the same period at the same
assumed rates of appreciation and based upon the market price for the
Common Stock on the date such options were granted would be
$8,599,657,385 and $21,793,220,253, respectively.

AGGREGATED OPTION EXERCISES IN FISCAL 2002 AND FISCAL YEAR END OPTION VALUES

NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN THE
SHARES OPTIONS AT 3/31/02 (#) MONEY OPTIONS AT 3/31/02 ($)
ACQUIRED VALUE ------------------------------- ------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE NON-EXERCISABLE EXERCISABLE NON-EXERCISABLE
------------------------- ---------------- ------------ ------------- ----------------- ------------- ----------------

Howard Solomon - - 4,200,000 - 204,677,430 -

Kenneth E. Goodman 343,960 24,660,742 1,850,000 - 80,037,665 -

Dr. Lawrence S. Olanoff - - 127,500 439,500 7,488,105 16,205,372

Elaine Hochberg 60,000 3,976,593 61,500 325,500 2,943,827 12,644,061

John E. Eggers 42,820 3,172,370 65,480 106,700 4,120,880 4,107,399

BENEFITS AGREEMENTS

On December 1, 1989 the Board of Directors adopted a policy of granting
certain medical insurance benefits to senior corporate executive officers and
their spouses upon the completion of 10 years of service by such senior
officers. The benefit would be provided to such executives and their spouses
for their lifetimes following the termination of such executive's employment
with the Company, and would be equivalent to the medical insurance benefits
provided to such executives as of the date of their termination or as of
December 1, 1989, if more favorable. The benefit need not be provided to the
extent and for any time that the executive obtained comparable insurance from a
subsequent employer. The Company has entered into formal written benefits
agreements with each of Messrs. Solomon, Goodman and Satow (who retired in
December 1998) granting the 10 year service benefit.

Effective March 31, 1994, the Company entered into "split dollar" life
insurance benefit agreements with each of Messrs. Solomon, Satow and Goodman.
Each of these agreements provides that the Company will pay the premiums on a
life insurance policy owned by and for the benefit of the executive. Upon the
death of the executive (or other realization by the executive upon the
principal amount of the policy), proceeds of the life insurance policy will be
applied to repay the Company for all premiums paid on behalf of the executive.
The Company is obligated to continue to pay premiums under these agreements
until the covered life insurance policies are paid in full, notwithstanding the
termination of the executive's employment with the Company. The Company is
further obligated to pay all such premiums in a lump sum in the event the
Company undergoes a "change in control."

The Company has entered into employment agreements with several key
employees, including each of Messrs. Solomon, Goodman, Eggers, Dr. Olanoff and
Ms. Hochberg. Each of these agreements becomes effective only upon the
occurrence of a "change in control" and provides that the executive is entitled
to salary, bonus and benefits for a three year period following a "change in
control" of the Company if the executive's employment terminates during such
period without cause or for good reason. Subject to certain exceptions, a
"change in control" is (i) an acquisition of 20% or more of the Common Stock or
voting securities of the Company by a person or group not acquiring their
shares directly from the Company, (ii) a change in the majority of the current
Board of Directors or their designated successors not consented to by such
current Board of Directors or designated successors, and (iii) a liquidation or
dissolution of the Company or merger, consolidation or sale of all or
substantially all of the Company's assets which involves a greater than 50%
change in the shareholders of the Company or the replacement of a majority of
the current Board of Directors or their designated successors.

STOCK OPTIONS

The Company's 1994 Employee Stock Option Plan and the 1998 and 2000 Stock
Option Plans (the "Plans") provide that options may be granted to employees,
including executive officers, to purchase shares of Common Stock at a price per
share fixed by the Board of Directors, provided that, in the case of Incentive
Stock Options ("ISO's"), as defined by Section 422 of the Internal Revenue Code
of 1986 (the "Code"), such price may not be less than fair market value on the
date of the option grant. All employees of the Company and its subsidiaries are
eligible to receive options under the Plans.

The Plans provide that the Board of Directors may determine the employees
to whom options are to be granted and the number of shares subject to each
option. The purchase price for shares must be paid in cash or by the tender of
shares of Common Stock having a fair market value, as determined by the Board,
equal to the option exercise price.

The non-employee directors of the Company participate in the 1998 and, once
there are insufficient shares available for grant under that Plan, the 2000
Stock Option Plan (the "1998 and 2000 Plans"). Under the 1998 and 2000 Plans,
an initial grant of options covering 14,000 shares of Common Stock is
automatically granted to persons who become non-employee directors of the
Company. Twenty five percent of the foregoing options become exercisable on the
date of grant and on each anniversary of such date until all such options are
exercisable.

The 1998 and 2000 Plans further provide for the automatic annual grant to
each of the Company's non-employee directors of options to purchase 2,000 shares
of Common Stock on the date of their annual election or reelection by the
Company's stockholders. Each such option grant is at an exercise price equal to
the average price of the Common Stock on the New York Stock Exchange on the
date of grant and become exercisable six months after the date of option grant.
All options granted under the 1998 and 2000 Plans to non-employee directors
have a term of 10 years from the date of grant (but in no event more than three
months following the optionee's ceasing to serve as a member of the Company's
Board of Directors).

DIRECTORS' COMPENSATION

In addition to automatic annual option grants under the 1998 and 2000
Plans, each non-employee director of the Company received $30,000 for his
services as director during the fiscal year ended March 31, 2002, except for
Mr. Candee who received $35,000 for his services as director and the Company's
Secretary and Chairman of the Audit Committee.

COMMITTEES; BOARD MEETINGS

For the fiscal year ended March 31, 2002, the Audit Committee consisted of
William J. Candee, III (the Chairman), Dan L. Goldwasser and Phillip M. Satow.
Messrs. Candee and Goldwasser have been determined by the Board of Directors to
be independent (as independence is defined under the New York Stock Exchange
("NYSE") listing standards). Mr. Satow was appointed as a member of the Audit
Committee effective June 1, 2001. When he was appointed, Mr. Satow did not
qualify as independent under the NYSE listing rules because he had served as
Executive Vice President of the Company within three (3) years of the date of
his appointment. However, since December 2001, Mr. Satow has qualified as
independent in accordance with the NYSE standards.

The Audit Committee's primary responsibilities are to: (i) oversee the
Company's financial reporting principles and policies and internal control
systems, including review of the Company's quarterly and annual financial
statements; (ii) review and monitor the performance and independence of the
Company's independent auditors and the performance of the internal auditing
department; (iii) provide an open avenue of communication among the independent
auditors, financial and senior management, the internal auditing department and
the Board; and (iv) select (subject to shareholder ratification), evaluate, and
where appropriate, replace the Company's independent auditors. The Audit
Committee held seven meetings during fiscal 2002.

The Company has a Compensation and Stock Option Committee composed of
Messrs. Candee, Cohan, Goldwasser and Dr. Salans, each of whom is a
non-employee director of the Company. During the fiscal year ended March 31,
2002, the Compensation Committee met on one occasion to make recommendations
concerning salary and bonus for the Company's executive officers for the 2002
year and to make recommendations as to the grant of stock options to such
executive officers.

The Company does not have a nominating committee.

The Board of Directors of the Company held four meetings during the fiscal
year ended March 31, 2002 and no incumbent director attended fewer than 75% of
the aggregate of such meetings and the number of meetings of each Committee of
which he is a member.

AUDIT COMMITTEE REPORT

For the fiscal year ended March 31, 2002, the Audit Committee consisted of
William J. Candee, III (the Chairman), Dan L. Goldwasser and Phillip M. Satow.
Messrs. Candee and Goldwasser have been determined by the Board of Directors to
be independent (as independence is defined under the New York Stock Exchange
listing standards). Mr. Satow was appointed as a member of the Audit Committee
effective June 1, 2001 and as of December 2001, Mr. Satow has qualified as
independent in accordance with the NYSE standards. The Committee operates under
a written charter adopted by the Board of Directors, a copy of which was
attached as Appendix A to the Proxy Statement filed with the SEC on June 28,
2001 in connection with the 2001 Annual Meeting.

The Committee recommends to the Board of Directors, subject to shareholder
ratification, the selection of the Company's independent auditors. Management
is responsible for the Company's internal controls and the financial reporting
process. The independent auditors are responsible for performing an independent
audit of consolidated financial statements in accordance with auditing
standards generally accepted in the United States of America and for issuing a
report thereon. The Committee's responsibility is to monitor and oversee these
processes.

In this context, the Committee has met and held discussions with
management and BDO Seidman, LLP, the independent auditing firm for the Company.
Management represented that the consolidated financial statements were prepared
in accordance with accounting principles generally accepted in the United
States of America. The Committee reviewed and discussed the audited
consolidated financial statements with management and BDO Seidman, LLP. The
Committee discussed with BDO Seidman, LLP matters required to be discussed by
Statement of Auditing Standards No. 61 (Communication with Audit Committees).
BDO Seidman, LLP also provided the Committee with the written disclosures
required by Independence Standard Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Committee discussed with BDO
Seidman, LLP that firm's independence.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, which recommendation has been
adopted by the Board of Directors, that the audited financial statements be
included or incorporated by reference in the Annual Report on Form 10-K for the
fiscal year ended March 31, 2002 for filing with the Securities and Exchange
Commission.

THE AUDIT COMMITTEE
William J. Candee, III
Dan L. Goldwasser
Phillip M. Satow

REPORT ON EXECUTIVE COMPENSATION
BY THE BOARD OF DIRECTORS
AND THE COMPENSATION COMMITTEE

COMPENSATION POLICY

The Company's Board of Directors (the "Board") is responsible for setting
and administering the policies which govern annual executive salaries, raises
and bonuses and the award of stock options (in the case of options to be
granted under the Company's Employee Stock Option Plans, the Board's role is
limited to the recommendation of awards to the Company's Stock Option
Committee). The Board is currently composed of seven members, five of whom are
non-employee directors and two of whom, Messrs. Solomon and Goodman, are,
respectively, the Chairman and Chief Executive Officer, and President and Chief
Operating Officer, of the Company. In addition, four of the non-employee
directors, Messrs. Goldwasser, Candee, Cohan and Dr. Salans, serve as a
Compensation Committee and Stock Option Committee which recommends salary
increases and bonuses to the Board and administers the granting of options
under the Company's Stock Option Plans, including the award of options to the
Company's executive officers.

The policy of the Board is to provide compensation to the Chief Executive
Officer and the Company's other executive officers reflecting the contribution
of such executives to the Company's growth in sales and earnings, the
implementation of strategic plans consistent with the long-term growth
objectives of the Company and the enhancement of shareholder value as reflected
in the growth of the Company's market capitalization. Contributions to specific
Company objectives, including the development and acquisition of new product
opportunities, the progress of clinical and other studies and development
activities required to bring new ethical pharmaceutical products to market and
the successful marketing of the Company's principal products are evaluated in
setting compensation policy. Executive compensation decisions have
traditionally been made on a calendar year basis.

Long-term incentive compensation policy consists exclusively of the award
of stock options under the Company's Stock Option Plans and individual option
grants, which serve to identify the reward for executive performance with
increases in value created for shareholders.

COMPANY PERFORMANCE AND CEO COMPENSATION

Executive compensation for the fiscal year ended March 31, 2002 consisted
of base salary, an annual bonus and the award of stock options by the Stock
Option Committee as indicated at "Options Granted in Fiscal 2002." The Board
met in December 2001 to review executive compensation for the calendar year
commencing January 1, 2002. The Board reviewed data relating to the large
increase in revenues for the 2002 fiscal year, due primarily to the growth of
Celexa (Trade Mark) (citalopram HBr), the Company's selective serotonin
reuptake inhibitor for the treatment of depression, the continued expansion of
the Company's scientific and licensing functions to provide a platform for
future growth, the continued expansion of the Company's salesforces, including
the addition of 600 representatives and managers to handle the launch of
Lexapro (Trade Mark) (escitalopram oxalate), a single isomer of citalopram,
and Benicar (Trade Mark) , an angiotensin receptor blocker for the treatment of
hypertension being co-marketed with Sankyo Pharma, a survey of compensation of
biopharmaceutical executives prepared by an executive compensation consulting
firm, the recent history of compensation granted by the Board to the Company's
highest paid executive officers, the compensation policy of the Board and the
rules of the SEC with respect to disclosure of the compensation and
compensation policies applicable to executive officers of the Company.

The Compensation Committee and the Board specifically noted the following
achievements as being the key factors in determining executive compensation:
the large increase in revenues and earnings for the fiscal year attained by the
increase in sales of Celexa, the expansion of the Company's scientific and
licensing functions and the continued expansion of the Company's salesforces.

The Compensation Committee and the Board considered several key factors in
determining the executive compensation of the highest paid officers, including,
the accomplishment of strategic objectives during the past year described
above, and the fact that the compensation of the Company's executive

officers was below compensation paid to officers in other pharmaceutical
companies, based on a survey and report prepared by an executive compensation
consulting firm. Accordingly, the Board approved an increase in base
compensation and granted bonus and stock options for the Company's senior
executive officers, including the Chief Executive Officer.

During fiscal 2002, the Stock Option Committee awarded stock options to
Howard Solomon, Chairman and Chief Executive Officer, Kenneth E. Goodman,
President and Chief Operating Officer, Dr. Lawrence S. Olanoff, Executive Vice
President-Scientific Affairs, Elaine Hochberg, Senior Vice President-Marketing
and John E. Eggers, Vice President-Finance and Chief Financial Officer as set
forth in the table set forth at "Options Granted in Fiscal 2002" in the amount
set forth therein. The Stock Option Committee resolved to continue the
Company's long-standing policy of utilizing the award of stock options (which
provide value to the executive over time as growth in the market price of the
Company's shares reflects the successful achievement of the Company's business
objectives) to identify the success of the Company's executives with the growth
in equity value to the Company's shareholders. The size of the award made was
determined based upon such officer's contribution to the achievement of the
performance objectives described above and the Committee's view of an
appropriate equity position to be maintained by the Company's executive
officers in light of the Company's market capitalization. Each of these factors
was equally considered.

THE BOARD OF DIRECTORS
Howard Solomon
George S. Cohan(1)
William J. Candee, III(1)
Dan L. Goldwasser(1)
Kenneth E. Goodman
Dr. Lester B. Salans(1)
Phillip M. Satow

----------
(1) Compensation Committee and Stock Option Committee Member.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Howard Solomon, the Company's Chairman and Chief Executive Officer, and
Kenneth E. Goodman, the Company's President and Chief Operating Officer, are
members of the Board and participated in deliberations concerning executive
compensation. Each of such executive officers abstained from voting with
respect to his own compensation.

PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder return on the
Common Stock for the last five fiscal years with the cumulative total return
on the Standard & Poors Pharmaceuticals Index and the S&P 500 Index over the
same period (assuming the investment of $100 in the Common Stock, the S&P
Pharmaceuticals Index and the S&P 500 Index on March 31, 1997, and the
reinvestment of all dividends).

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG FOREST LABORATORIES, INC., THE S & P 500 INDEX
AND THE S & P PHARMACEUTICALS INDEX

[GRAPHIC OMITTED]

Research Data Group Total Return Worksheet

Begin: 3/31/1997
Period End: 3/31/2002
End: 3/31/2002
FOREST LABS INC

Beginning
Transaction Closing No. Of Dividend Dividend Shares Ending Cum. Tot.
Date* Type Price** Shares*** per Share Paid Reinvested Shares Return
----- ---- ------- --------- --------- ---- ---------- ------ ------

31-Mar-97 Begin 9.406 10.63 10.631 100.00

31-Mar-98 Year End 18.750 10.63 10.631 199.34

31-Mar-99 Year End 28.188 10.63 10.631 299.67

31-Mar-00 Year End 42.250 10.63 10.631 499.17

31-Mar-01 Year End 59.240 10.63 10.631 629.79

31-Mar-02 End 81.700 10.63 10.631 868.57

* Specified ending dates or ex-dividends dates.
** All Closing Prices and Dividends are adjusted for stock splits and stock
dividends.
*** Begin Shares' based on $100 investment.

* $100 invested on 3/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending March 31.

Research Data Group Peer Group Total Return Worksheet

Cumulative Total Return
---------------------------------------------------
3/97 3/98 3/99 3/00 3/01 3/02

FOREST LABORATORIES, INC. 100.00 199.34 299.67 449.17 629.79 868.57
S & P 500 100.00 148.00 175.32 206.78 161.95 162.35
S & P PHARMACEUTICALS 100.00 168.70 223.02 185.85 216.37 216.92

* $100 invested on 3/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending March 31.

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

The firm of BDO Seidman, LLP has audited the financial statements of the
Company for each of the three fiscal years ended March 31, 2002. In addition to
retaining BDO Seidman, LLP to audit our consolidated financial statements for
the fiscal year ended 2002, the Company and its affiliates retained BDO
Seidman, LLP, as well as other accounting and consulting firms, to provide
various consulting and other services in the fiscal year ended 2002, and expect
to continue to do so in the future. The aggregate fees billed for professional
services by BDO Seidman, LLP in the fiscal year ended 2002 were as follows:

o Audit Fees. The aggregate fees billed by BDO Seidman, LLP for
professional services rendered for the audit of the Company's
consolidated financial statements for the fiscal year ended March 31,
2002 and the reviews of its interim financial statements included in
the Company's Forms 10-Q were approximately $490,000.

o Financial Information Systems Design and Implementation Fee. There were
no fees billed by BDO Seidman, LLP for services rendered in connection
with the Company's financial information systems design and
implementation during the fiscal year ended March 31, 2002.

o All Other Fees. The aggregate amount of all fees billed for services
rendered to the Company by BDO Seidman, LLP for the fiscal year ended
March 31, 2002 (other than the audit fees described above) were
approximately $317,000, primarily for tax services, statutory and
pension plan audit work and other non-audit services. The Audit
Committee has determined that the provision of all non-audit services
performed for the Company by BDO Seidman, LLP is compatible with
maintaining that firm's independence.

The Board of Directors desires to continue the services of BDO Seidman,
LLP for the current fiscal year ending March 31, 2003. Accordingly, the Board
of Directors will recommend at the Meeting that the stockholders ratify the
appointment by the Board of Directors of the firm of BDO Seidman, LLP to audit
the financial statements of the Company for the current fiscal year.
Representatives of that firm are expected to be present at the Meeting, shall
have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE APPOINTMENT OF
BDO SEIDMAN, LLP.

MISCELLANEOUS

ANNUAL REPORT

The Company's 2002 Annual Report is being mailed to stockholders
contemporaneously with this Proxy Statement.

FORM 10-K

UPON THE WRITTEN REQUEST OF A RECORD HOLDER OR BENEFICIAL OWNER OF COMMON
STOCK ENTITLED TO VOTE AT THE MEETING, THE COMPANY WILL PROVIDE WITHOUT CHARGE
A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE YEAR ENDED MARCH 31, 2002. REQUESTS SHOULD BE MAILED TO
CORPORATE SECRETARY, FOREST LABORATORIES, INC., 909 THIRD AVENUE, NEW YORK, NEW
YORK 10022.

COST OF SOLICITATION

The cost of soliciting proxies in the accompanying form has been or will
be paid by the Company. In addition to solicitation by mail, arrangements will
be made with brokerage houses and other custodians, nominees and fiduciaries to
send proxy material to beneficial owners, and the Company will, upon request,
reimburse them for their reasonable expenses in doing so. To the extent
necessary in order to assure sufficient representation, officers and regular
employees of the Company and a commercial proxy solicitation firm may be
engaged to assist in the solicitation of proxies. Whether either measure will
be necessary depends entirely upon how promptly proxies are received. No
outside proxy solicitation firm has been selected or employed by the Company in
respect of the Meeting as of the date of this Proxy Statement, and the Company
is unable to estimate the costs to it of any such services.

PROPOSALS OF STOCKHOLDERS; STOCKHOLDER BUSINESS

Proposals of stockholders to be presented at the 2003 Annual Meeting must
be received by the Company for inclusion in the Company's proxy statement and
form of proxy relating to that meeting no later than March 1, 2003. In order to
comply with applicable provisions of the Company's By-Laws, stockholders
intending to present proposals at the 2003 Annual Meeting must give notice
thereof in writing to the Secretary of the Company not later than the close of
business on June 12, 2003 nor earlier than the close of business on May 15,
2003. In addition, in accordance with applicable rules of the Securities and
Exchange Commission, proxies submitted in connection with the 2003 Annual
Meeting may confer discretionary authority on individuals designated by the
Company to vote in respect of any matter to come before such meeting as to
which the Company has not received notice by June 24, 2003.

Stockholders are urged to send in their proxies without delay.

WILLIAM J. CANDEE, III,
Secretary

Dated: June 28, 2002

FOREST LABORATORIES, INC.

PROXY -- FOR THE ANNUAL MEETING OF STOCKHOLDERS -- AUGUST 8, 2002

The undersigned stockholder of FOREST LABORATORIES, INC., revoking any
previous proxy for such stock, hereby appoints Howard Solomon and Kenneth E.
Goodman, or either of them, the attorneys and proxies of the undersigned, with
full power of substitution, and hereby authorizes them to vote all shares of
Common Stock of FOREST LABORATORIES, INC. which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held on August 8, 2002 at
10:00 A.M. at JP Morgan Chase & Co. Corporate Headquarters, 270 Park Avenue,
New York, New York, and any adjournments thereof on all matters coming before
said meeting.

In the event no contrary instructions are indicated by the undersigned
stockholder, the proxies designated hereby are authorized to vote the shares as
to which this proxy is given FOR proposals 1 and 2, each of which are set forth
on this card.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The Board of Directors Recommends a Vote FOR proposals 1 and 2.

(CONTINUED ON
REVERSE SIDE)

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- FOLD AND DETACH HERE -

PLEASE MARK X X
YOUR CHOICES X
LIKE THIS X X

1. Election of seven Directors: Howard Solomon, William J. Candee, III, George
S. Cohan, Dan L. Goldwasser, Lester B. Salans, Kenneth E. Goodman, Phillip M.
Satow.

WITHHOLD
FOR ALL NOMINEES AUTHORITY

------------------------------------------------
+------+ +------+ (INSTRUCTION: To withhold authority to vote
| | | | for any individual nominee, write the nominee's
| | | | name on the line provided above.)
| | | |
+------+ +------+

2. Ratification of BDO Seidman, LLP as Accountants.

FOR AGAINST ABSTAIN
+------+ +------+ +------+
| | | | | |
| | | | | |
| | | | | |
+------+ +------+ +------+

SIGNATURE ------------------------ SIGNATURE ------------------------ DATED:

Please sign here exactly as your name(s) appear(s) on this proxy. If signing for an estate, trust or corporation, title or
capacity should be stated. If shares are held jointly, each holder should sign. If a partnership, sign in partnership name by
authorized person.

--------------------------------------------------------------------------------

- FOLD AND DETACH HERE -- IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL -

PLEASE MARK BOXES IN BLUE OR BLACK INK

PLEASE SIGN, DATE AND MAIL IN THE ENVELOPE PROVIDED