SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
November 29, 1999
Date of Report (Date of earliest event reported)
WARNER-LAMBERT COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-3608 22-1598912
(Commission File Number) (IRS Employer Identification No.)
201 Tabor Road, Morris Plains, New Jersey 07950-2693
(Address of principal executive offices) (Zip Code)
(973) 385-2000
(Registrant's telephone number, including area code)
Item 5. Other Events.
On November 29, 1999, Warner-Lambert Company filed an answer and
counterclaim in the Delaware Court of Chancery in response to a complaint
filed by Pfizer Inc. on November 23, 1999. A copy of the answer and
counterclaim, dated November 29, 1999, is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
A copy of Warner-Lambert Company's press release, dated November
29, 1999, announcing the filing of the answer and counterclaim is attached
hereto as Exhibit 99.2 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(99.1) Counterclaims and Answer, dated November 29, 1999.
(99.2) Press Release, dated November 29, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
WARNER-LAMBERT COMPANY
By: /s/ Rae G. Paltiel
---------------------------------
Name: Rae G. Paltiel
Title: Secretary
Dated: November 29, 1999
EXHIBIT INDEX
(99.1) Counterclaims and Answer, dated November 29, 1999.
(99.2) Press Release, dated November 29, 1999.
EXHIBIT 99.1
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
PFIZER INC., )
)
Plaintiff, )
)
v. )
)
WARNER-LAMBERT COMPANY and )
AMERICAN HOME PRODUCTS CORP., )
)
Defendants. )
) Civil Action No. 17603-NC
___________________________________ )
)
WARNER-LAMBERT COMPANY, )
)
Counterclaim Plaintiff, )
)
v. )
)
PFIZER INC., )
)
Counterclaim Defendant. )
)
COUNTERCLAIMS AND ANSWER OF
WARNER-LAMBERT COMPANY
Warner-Lambert Company ("Warner-Lambert"), by its undersigned
attorneys, for its counterclaims and answer against Pfizer Inc. ("Pfizer"),
alleges, upon knowledge with respect to itself and its own acts, and upon
information and belief as to all other matters, as follows:
COUNTERCLAIMS
1. Pfizer in its Complaint in this action, as well as in public
statements and prior representations to this Court in C.A. No. 17524-NC,
has repeatedly asserted that the standstill provisions (referred to as the
"Standstill Agreement" in the Complaint) are at an end if "Warner and a
third-party reach an agreement with respect to a business combination."
2. This is simply not the case. The standstill provisions in
no way so provide. To the contrary, these provisions (Paragraph 4,
"Termination," of the Standstill Agreement) are explicit that Pfizer's
standstill obligations are at an end only if such business combination
involves Warner-Lambert's being acquired only if "such third party is the
acquiring party." (See paragraph 4: "Termination. If . . . (b) Warner-
Lambert enters into an agreement with a third party with respect to an
Acquisition Proposal or a Business Combination, and such third party is the
acquiring party, then Warner-Lambert shall be deemed to have relinquished
its right to enforce the [standstill] restrictions . . . ." (Emphasis
added.))
3. It is understood in the business and legal communities that
in a stock-for-stock merger of equals, neither party can be said to be
acquiring the other. It was so understood at the time that the parties
entered into the Standstill Agreement. Both by its express terms and the
intent of the parties, Pfizer's obligations to abide by the Standstill
Agreement are in no way terminated or modified in any respect,
notwithstanding that Warner-Lambert may receive or solicit proposals for,
or enter into, a stock-for-stock merger-of-equals transaction with some
other corporation.
4. The proposed combination of Warner-Lambert and American Home
Products Corporation ("AHP") is, and at all times has been contemplated to
be, a stock-for-stock merger of equals. The stock of each corporation is
publicly traded and widely held, with no stockholder holding any control
bloc. This will continue to be the case with respect to the combined
entity. The stockholders of Warner-Lambert at the time of the merger will
end up holding approximately 50% of the stock of the combined entity. The
membership of the combined company's board will be drawn equally from the
constituent corporations. Each of Warner-Lambert's chief executive
officer, chief financial officer, and the head of its pharmaceutical
business will serve in those respective positions in the combined entity.
The company's senior officers will report to the chief executive officer,
who will in turn report to the board. Neither Warner-Lambert nor AHP is
acquiring the other. Neither the merger agreement between Warner-Lambert
and AHP, nor any of the negotiations between those corporations leading up
to that merger agreement, operated in any way to relieve Pfizer of any of
its obligations under the Standstill Agreement.
5. On November 4, 1999, Pfizer addressed a "bear hug" letter to
the chief executive officer and the board of directors of Warner-Lambert.
That same day, Pfizer publicly announced a proposal for a merger with
Warner-Lambert. Soon thereafter, and continuing to the present, Pfizer has
publicly announced that it intends, among other things, to begin the
process of soliciting consents to remove and replace Warner-Lambert's board
of directors.
6. Pfizer's conduct set forth in paragraph 5 hereof constitutes
a massive and intentional breach of its obligations under the Standstill
Agreement. Pfizer has sought to conceal this breach by repeatedly
misrepresenting the actual terms of the Standstill Agreement.
7. Moreover, the contracts between the parties -- the
Collaboration Agreement, the International Co-Promotion Agreement, and the
International License Agreement (collectively referred to herein, together
with the International Collaboration Agreement, as the "Co-Promotion
Agreements," and, together with the Standstill Agreement, as the "Lipitor
Agreements") contain confidentiality provisions whereby Pfizer is barred
from using confidential information "for any purpose other than the
performance of" the parties' agreement. (See, e.g., Collaboration
Agreement, Section 10.01.) Pfizer has wrongfully and in breach of the
Lipitor Agreements used and relied upon such confidential information in
determining to bid for Warner-Lambert and in determining the terms of that
bid.
8. The Lipitor Agreements constitute a single, integrated
agreement between Pfizer and Warner-Lambert. The Co-Promotion Agreements
explicitly specify that the Standstill Agreement continues in full force
and effect, and further specify, by way of an integration clause, that the
Co-Promotion Agreements and the Standstill Agreement constitute the entire
agreement of the parties.
9. By their terms, both the Standstill Agreement and the Co-
Promotion Agreements state that they "shall be governed by and construed in
accordance with the law of the State of New York other than those
provisions governing conflicts of law." New York law, in determining the
nature of a corporate transaction, looks to the substance, rather than the
form, of such transaction.
10. The standstill and confidentiality provisions of the Lipitor
Agreements are critical, integral and material terms of such agreements.
Pfizer was and is a much larger corporation than Warner-Lambert. Without
these provisions, Warner-Lambert would not have entered into the Lipitor
Agreements, because it would have exposed itself to the potentiality of
Pfizer's at some future date should exploitation of the product prove
successful attempting to appropriate all benefits to itself.
11. Warner-Lambert has performed all obligations under the
Lipitor Agreements on its part to be performed.
12. Pfizer's massive and intentional breaches of the Lipitor
Agreements entitle Warner-Lambert to elect to terminate the Co-Promotion
Agreements. The Lipitor Agreements provide that the standstill and
confidentiality restrictions on Pfizer survive for five years after the
termination of the Co-Promotion Agreements.
13. Pfizer is not entitled to continue to receive the fruits of
the Lipitor Agreements after having acted in flagrant breach of its
obligations thereunder. Termination of the Co-Promotion Agreements at this
time would confer a significant economic benefit upon the shareholders of
Warner-Lambert.
14. Warner-Lambert agrees with Pfizer that a real and
substantial controversy exists between the parties, and that a declaratory
judgment is appropriate here to declare the parties' rights and obligations
and would be of practical utility. Warner-Lambert does not wish to be in
the position of electing to terminate the Co-Promotion Agreements if it is
later judicially determined that it was not entitled to do so.
15. Warner-Lambert is entitled to a declaratory judgment
adjudicating that Pfizer has materially breached the standstill and
confidentiality provisions of the Lipitor Agreements, as well as its
obligations of good faith and fair dealing, and that these breaches entitle
Warner-Lambert to elect to terminate the Co-Promotion Agreements.
FIRST COUNTERCLAIM
16. Warner-Lambert repeats and realleges the allegations of
paragraphs 1 through 15, and incorporates paragraphs 1 through 69 below of
Warner-Lambert's Answer, as if set forth fully herein.
17. Warner-Lambert is entitled to a declaration that Pfizer has
materially breached its standstill obligations under the Lipitor
Agreements, and that Warner-Lambert is entitled to terminate the Co-
Promotion Agreements.
SECOND COUNTERCLAIM
18. Warner-Lambert repeats and realleges the allegations of
paragraphs 1 through 17, and incorporates paragraphs 1 through 69 below of
Warner-Lambert's Answer, as if set forth fully herein.
19. Warner-Lambert is entitled to a declaration that Pfizer by
its conduct complained of above has materially breached its obligation
under the Lipitor Agreements not to use confidential information obtained
through its collaboration with Warner-Lambert, including information
concerning Lipitor(R) and Warner-Lambert, for any purpose
other than performance under the Lipitor Agreements, and that Warner-
Lambert is entitled to terminate the Co-Promotion Agreements.
THIRD COUNTERCLAIM
20. Warner-Lambert repeats and realleges the allegations of
paragraphs 1 through 19, and incorporates paragraphs 1 through 69 below of
Warner-Lambert's Answer, as if set forth fully herein.
21. In entering into the Lipitor Agreements, Pfizer assumed a
duty of good faith and fair dealing in performing those Agreements.
22. Pfizer has breached that duty, and in doing so has
materially breached the Lipitor Agreements.
23. Accordingly, Warner-Lambert is entitled to a declaration
that Pfizer owes contractual duties of good faith and fair dealing to
Warner-Lambert, that it has materially breached such duties of good faith
and fair dealing, and that Warner-Lambert is entitled to terminate the Co-
Promotion Agreements.
ANSWER
RESPONSES TO INDIVIDUAL PARAGRAPHS
OF THE COMPLAINT
Warner-Lambert responds to the numbered paragraphs of the
Complaint as follows:
1. States that paragraph 1 of the Complaint sets forth legal
conclusions as to which no response is required. To the extent a response
is required, Warner-Lambert denies each and every allegation of paragraph 1
of the Complaint, except admits that Warner-Lambert and AHP had discussions
prior to November 4, 1999 that resulted in an Agreement and Plan of Merger
(the "Merger Agreement") as of November 3, 1999.
2. Denies each and every allegation of paragraph 2 of the
Complaint, except admits and avers that discussions between Warner-Lambert
and AHP resulted in the Merger Agreement, that the Merger Agreement
provides for a stock-for-stock merger of equals, and respectfully refers
the Court to that Agreement for the true and accurate contents thereof.
3. Denies each and every allegation of paragraph 3 of the
Complaint.
4. Admits, upon information and belief, the allegations of
paragraph 4 of the Complaint.
5. Admits the allegations of paragraph 5 of the Complaint.
6. Admits, upon information and belief, the allegations in
paragraph 6 of the Complaint.
7. Denies the allegations of paragraph 7 of the Complaint,
except admits that Lipitor(R) is Warner-Lambert's trade name for the drug
atorvastatin, respectfully refers the Court to the FDA- approved labeling
for a description of the drug's mechanism of action and indications, avers
that Lipitor(R) was developed by Warner-Lambert over many years at
substantial cost, avers that Lipitor(R) has become an immensely successful
drug whose sales are expected to pass $3.6 billion this year and to reach
double or even triple that figure in future years, and avers that
Lipitorregistered trademark is an extremely valuable Warner-Lambert asset.
8. Denies each and every allegation of paragraph 8 of the
Complaint, except admits that, in the mid-1990's, Parke-Davis, a division
of Warner-Lambert, was developing and testing Lipitor(R) and was in the
process of obtaining the appropriate government approvals necessary to
distribute the drug, that, in or about 1996, Warner-Lambert desired to
look for a partner with whom it could collaborate to promote and to
distribute Lipitor(R) and other products, and that, in or about the Spring
of 1996, Warner-Lambert began discussions with Pfizer concerning potential
co-promotion agreements.
9. Denies each and every allegation of paragraph 9 of the
Complaint, except admits that Pfizer and Warner-Lambert entered into a
Confidential Disclosure Agreement (the "CDA") dated as of March 4, 1996,
avers that the CDA was intended to facilitate the parties' exploration of
the possibility of engaging in a collaboration to promote and to
distribute Lipitor(R) and other products, and respectfully refers the
Court to the CDA for the true and accurate contents thereof.
10. Denies each and every allegation of paragraph 10 of the
Complaint, except admits that the CDA contains an Attachment A (the
"Standstill Agreement"), admits that the Standstill Agreement was
incorporated by reference into the CDA, and admits and avers that the
Standstill Agreement provides that
o Pfizer is not permitted to acquire, agree to purchase, or
make a proposal to acquire, voting shares of Warner-Lambert
stock, unless (and then only to the extent that) Warner-
Lambert expressly consents to such conduct in writing;
o Pfizer is not permitted to solicit proxies to vote, or seek
to advise or influence any person with respect to the voting
of, Warner-Lambert stock, unless (and then only to the
extent that) Warner-Lambert expressly consents to such
conduct in writing;
o Pfizer is not permitted to seek to have Warner-Lambert
"waive, amend or modify any of the restrictions contained
in" the CDA, or Warner-Lambert's Certificate of
Incorporation or By-Laws;
o Pfizer is not permitted to make any "Acquisition Proposal,"
or a proposal with respect to a "Business Combination."
Each of these terms is given a broad definition by the
Standstill Agreement, consistent with Warner-Lambert's
desire to protect itself fully from a much larger and
potentially predatory co-promotion partner. "Acquisition
Proposal" essentially means a tender offer, exchange offer,
or other proposal to Warner-Lambert for a Business
Combination or the purchase of more than 20% of Warner-
Lambert's outstanding voting securities. "Business
Combination" is defined, with certain exceptions, as a
merger, acquisition, or other arrangement involving Warner-
Lambert; and
o Pfizer is not permitted "otherwise [to] seek to control or
influence Warner-Lambert or its management or Board of
Directors";
and respectfully refers the Court to the Standstill Agreement for the true
and accurate contents thereof.
11. Denies each and every allegation of paragraph 11 of the
Complaint, except avers that the Standstill Agreement explicitly provides,
among other things, that Pfizer's standstill obligations are ended only if
Warner-Lambert receives or solicits a proposal with respect to a business
combination with a third party in which "such third party is the acquiring
party," and respectfully refers the Court to the Standstill Agreement for
the true and accurate contents thereof.
12. Denies each and every allegation of paragraph 12 of the
Complaint, except admits that, after execution of the CDA, Pfizer and
Warner-Lambert each engaged in various due diligence procedures and began
negotiating the terms of the Co-Promotion Agreements, and that, thereafter,
Warner-Lambert and Pfizer entered into the Co-Promotion Agreements, and
admits and avers that the Co-Promotion Agreements explicitly specify that
the Standstill Agreement continues in full force and effect, and further
specify, by way of an integration clause, that the Co-Promotion Agreements
along with the Standstill Agreement constitute the entire agreement of the
parties.
13. Denies each and every allegation of paragraph 13 of the
Complaint, except respectfully refers the Court to the Co-Promotion
Agreements for the true and accurate contents thereof.
14. Denies each and every allegation of paragraph 14 of the
Complaint.
15. Denies each and every allegation of paragraph 15 of the
Complaint, except respectfully refers the Court to the Co-Promotion
Agreements for the true and accurate contents thereof.
16. Denies each and every allegation of paragraph 16 of the
Complaint, except admits and avers that a news-service item on November 6,
1999 included the following quotation: "De Vink says he is especially
irritated about the attitude of Pfizer 'because we have been working
together as partners in the marketing of Lipitor. A merger between AHP and
Warner-Lambert would not change the contract to cooperate in that field.'";
admits and avers that prior hereto, no notice of breach has been given by
Warner-Lambert, and avers that Pfizer has committed massive and intentional
breaches of the Lipitor Agreements, giving rise to Warner-Lambert's right
to elect to terminate the Co-Promotion Agreements.
17. Admits, upon information and belief, the allegations of
paragraph 17 of the Complaint.
18. Denies each and every allegation of paragraph 18 of the
Complaint.
19. Denies knowledge or information sufficient to form a belief
as to the truth of the allegations set forth in paragraph 19 of the
Complaint.
20. Denies each and every allegation of paragraph 20 of the
Complaint, except avers, upon information and belief, that Pfizer's
Chairman is William C. Steere, Jr., not Robert C. Steere, Jr., admits that
on Monday, October 25, 1999 Mr. William C. Steere, Jr. sent a letter to Mr.
de Vink; admits that paragraph 20 accurately quotes selected excerpts from
that letter, and respectfully refers the Court to the letter for the true
and accurate contents thereof.
21. Denies each and every allegation of paragraph 21 of the
Complaint, except admits and avers that Warner-Lambert responded to the
October 25, 1999 letter, after deliberation of its board of directors, on
October 27, 1999, and avers that Warner-Lambert had no obligation to inform
Pfizer of the status of its confidential merger discussions with AHP and
did not do so.
22. Denies each and every allegation of paragraph 22 of the
Complaint, except admits that Mr. de Vink and Mr. Steere had two telephone
conversations on October 27, 1999, and that Messrs. de Vink and Steere
agreed to meet later that day at Pfizer's New York headquarters.
23. Denies each and every allegation of paragraph 23 of the
Complaint, except admits that Mr. de Vink and Mr. Steere had a meeting on
October 27, 1999 and that Mr. de Vink did not mention the existence of an
AHP/Warner-Lambert merger proposal or state that Warner-Lambert was
involved in negotiations with AHP, avers that Pfizer's letter of October
25, 1999 stated that Pfizer had become aware of "rumors on the street"
about a potential "business combination" involving Warner-Lambert, avers
that Mr. Steere did not ask Mr. de Vink for details concerning that
subject, and avers that Warner-Lambert had no obligation to inform Pfizer
of the status of its confidential merger discussions with AHP in any event.
24. Denies each and every allegation of paragraph 24 of the
Complaint, except admits that Mr. de Vink called Mr. Steere on October 28,
1999 and that Mr. de Vink did not mention the existence of an AHP/Warner-
Lambert merger proposal or state that Warner-Lambert was involved with AHP,
avers that, in the October 28, 1999 telephone call, Mr. de Vink indicated
to Mr. Steere that Warner-Lambert was considering a strategic combination,
but did not provide specifics, avers that Mr. Steere did not ask for
specifics, and avers that Pfizer's letter of October 25, 1999, stated that
Pfizer had become aware of "rumors on the street" about a potential
"business combination" involving Warner-Lambert, and avers that Warner-
Lambert had no obligation to inform Pfizer of the status of its
confidential merger discussions with AHP in any event.
25. Admits the allegations of paragraph 25 of the Complaint,
except respectfully refers the Court to the press release for the true and
accurate contents thereof.
26. Denies each and every allegation of paragraph 26 of the
Complaint, except admits that Dr. McKinnell asked Dr. Wild about a
potential transaction between Warner-Lambert and another company, that Dr.
Wild acknowledged that discussions for such a transaction were taking
place, that the parties thereto were still working out details, and that
such a transaction, were it to take place, would not affect Warner-
Lambert's relationship with Pfizer, that at the time of the meeting Warner-
Lambert had already conducted negotiations with AHP regarding a potential
merger of equals, and that the Merger Agreement was announced two days
later, and avers that Warner-Lambert had no obligation to inform Pfizer of
the status of its confidential merger discussions with AHP.
27. Denies each and every allegation of paragraph 27 of the
Complaint, except admits that an article regarding a potential merger
between Warner-Lambert and AHP appeared in The Wall Street Journal on
November 3, 1999 and that Mr. Steere sent a letter to Mr. de Vink on that
date; and respectfully refers the Court to that letter for the true and
accurate contents thereof.
28. Denies each and every allegation of paragraph 28 of the
Complaint, except admits that Warner-Lambert did not respond in writing to
Pfizer's letter of November 3, 1999, that Warner-Lambert did not release
Pfizer from the standstill provisions of the Lipitor Agreements in response
to Pfizer's letter of November 3, 1999, and that Warner-Lambert did not
tell Pfizer that Pfizer was free under those provisions to make its own
merger proposal with respect to Warner-Lambert.
29. Admits the allegations of paragraph 29 of the Complaint,
except denies knowledge or information sufficient to form a belief as to
the truth of the allegation that Pfizer lacked prior notice of the
announcement of the Merger Agreement.
30. In response to the allegations of paragraph 30 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 29 of this Answer as if fully set forth herein.
31. Denies each and every allegation of paragraph 31 of the
Complaint.
32. Denies each and every allegation of paragraph 32 of the
Complaint.
33. Denies each and every allegation of paragraph 33 of the
Complaint.
34. Denies each and every allegation of paragraph 34 of the
Complaint.
35. In response to the allegations of paragraph 35 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 34 of this Answer as if fully set forth herein.
36. Denies knowledge or information sufficient to form a belief
as to the truth of the allegations of paragraph 36 of the Complaint, and
further states that paragraph 36 of the Complaint states legal conclusions
to which no response is required.
37. Denies knowledge or information sufficient to form a belief
as to the truth of the allegations in paragraph 37 of the Complaint.
38. Denies each and every allegation of paragraph 38 of the
Complaint.
39. Denies each and every allegation of paragraph 39 of the
Complaint.
40. Denies each and every allegation of paragraph 40 of the
Complaint.
41. In response to the allegations of paragraph 41 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 40 of this Answer as if fully set forth herein.
42. Denies each and every allegation of paragraph 42 of the
Complaint, except admits that, prior to November 4, 1999, Warner-Lambert
and AHP had been negotiating a definitive merger agreement.
43. Denies each and every allegation of paragraph 43 of the
Complaint.
44. Denies each and every allegation of paragraph 44 of the
Complaint.
45. Denies each and every allegation of paragraph 45 of the
Complaint.
46. Denies each and every allegation of paragraph 46 of the
Complaint.
47. In response to the allegations of paragraph 47 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 46 of this Answer as if fully set forth herein.
48. Denies each and every allegation of paragraph 48 of the
Complaint.
49. Denies each and every allegation of paragraph 49 of the
Complaint.
50. Denies each and every allegation of paragraph 50 of the
Complaint.
51. Denies each and every allegation of paragraph 51 of the
Complaint.
52. In response to the allegations of paragraph 52 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 51 of this Answer as if fully set forth herein.
53. Admits the allegations of paragraph 53 of the Complaint.
54. Denies each and every allegation of paragraph 54 of the
Complaint, and respectfully refers the Court to the Standstill Agreement
for the true and accurate contents thereof.
55. In response to paragraph 55 of the Complaint, admits that on
November 4, 1999, Warner-Lambert and AHP announced that they had reached an
agreement to enter into a merger of equals.
56. Denies each and every allegation of paragraph 56 of the
Complaint.
57. Admits the allegations of paragraph 57 of the Complaint.
58. Admits the allegations of paragraph 58 of the Complaint.
59. Admits the allegations of paragraph 59 of the Complaint.
60. Denies each and every allegation of paragraph 60 of the
Complaint.
61. In response to the allegations of paragraph 61 of the
Complaint, repeats and realleges the responses set forth in paragraphs 1
through 61 of this Answer as if fully set forth herein.
62. Denies each and every allegation of paragraph 62 of the
Complaint, except admits that Pfizer and Warner-Lambert are parties to the
Co-Promotion Agreements, and avers that the Co-Promotion Agreements
explicitly specify that the Standstill Agreement continues in full force
and effect, and further specify, by way of an integration clause, that the
Co-Promotion Agreements along with the Standstill Agreement constitute the
entire agreement of the parties.
63. Denies each and every allegation of paragraph 63 of the
Complaint, except respectfully refers the Court to the Co-Promotion
Agreements for their true and accurate content.
64. Denies each and every allegation of paragraph 64 of the
Complaint, except admits that, prior hereto, no notice of breach has been
given by Warner-Lambert.
65. Admits the allegations of the first two sentences of
paragraph 65 of the Complaint; and otherwise denies the allegations of
paragraph 65 of the Complaint.
66. Admits the allegations of paragraph 66 of the Complaint.
67. Admits the allegations of paragraph 67 of the Complaint.
68. Denies each and every allegation of paragraph 68 of the
Complaint.
69. Denies that Pfizer is entitled to any of the relief
requested, and denies each and every allegation of the Complaint that is
not specifically admitted herein.
FIRST AFFIRMATIVE DEFENSE
70. Pfizer has failed to state a claim upon which relief can be
granted.
SECOND AFFIRMATIVE DEFENSE
71. Pfizer has failed to plead fraud with particularity as
required by Court of Chancery Rule 9(b).
THIRD AFFIRMATIVE DEFENSE
72. Warner-Lambert has not breached any contractual provision,
express or implied, in dealing with Pfizer.
FOURTH AFFIRMATIVE DEFENSE
73. Pfizer's claims are barred by the doctrine of unclean hands.
FIFTH AFFIRMATIVE DEFENSE
74. Pfizer has sustained no legally cognizable damage by virtue
of any matter alleged in the Complaint, and no damage alleged by Pfizer was
proximately caused by any conduct of Warner-Lambert.
SIXTH AFFIRMATIVE DEFENSE
75. Warner-Lambert at all times acted honestly and in complete
good faith in its dealings with Pfizer and at no time made any material
misrepresentation or omission of material fact to Pfizer.
SEVENTH AFFIRMATIVE DEFENSE
76. Warner-Lambert had no duty or obligation to disclose to
Pfizer information about Warner-Lambert's merger discussions with AHP.
EIGHTH AFFIRMATIVE DEFENSE
77. Pfizer did not rely upon any alleged misrepresentations made
by Warner-Lambert, and in the event Pfizer claims or is shown to have
relied on any alleged misrepresentations, such reliance would not have been
justified.
WHEREFORE, Warner-Lambert requests that this Court enter judgment
in its favor against Pfizer:
A. Dismissing the Complaint with prejudice;
B. Declaring that Pfizer has materially breached the Lipitor
Agreements, including, without limitation, the standstill provisions and
confidentiality restrictions thereof;
C. Declaring that Pfizer has materially breached its duty of
good faith and fair dealing to Warner-Lambert in connection with the
conduct complained of herein;
D. Declaring that Warner-Lambert is entitled to elect to
terminate the Co-Promotion Agreements;
E. Awarding Warner-Lambert its costs of suit, including
reasonable attorneys' fees; and
F. Granting Warner-Lambert such other, further and different
relief as the Court may deem just and proper.
Potter Anderson & Corroon LLP
By /s/ Michael D. Goldman
---------------------------
Michael D. Goldman
Donald J. Wolfe, Jr.
Stephen C. Norman
1313 N. Market Street
P.O. Box 951
Wilmington, Delaware 19801
(302) 984-6000
Attorneys for Defendant-Counterclaim Plaintiff
Warner-Lambert Company
Of Counsel:
Herbert M. Wachtell
Michael W. Schwartz
Paul K. Rowe
George T. Conway III
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
Dated: November 29, 1999
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Media Contact:
Carol Goodrich, (973) 540-3620 Investor Relations Contacts:
George Shields, (973) 540-6916
John Howarth, (973) 540-4874
WARNER-LAMBERT FILES CLAIM AGAINST PFIZER
TO END LIPITOR(R) AGREEMENTS
SEEKS TO RECLAIM FULL VALUE OF LIPITOR(R) FOR SHAREHOLDERS
MASSIVE AND INTENTIONAL BREACHES ALLEGED
MORRIS PLAINS, N.J., November. 29, 1999 -- Warner-Lambert Company (NYSE:
WLA) today announced that, as a result of massive and intentional breaches
by Pfizer Inc. of Warner-Lambert's agreements with Pfizer relating to
Lipitor(R), Warner-Lambert has filed a counterclaim against Pfizer seeking
a declaratory judgment that Warner-Lambert is entitled to terminate the
Lipitor(R) agreements.
"We are asking the court to confirm that Pfizer's intentional disregard of
its contractual obligations has given us the right to bring this
relationship to an end and reclaim all rights to Lipitor(R) for
Warner-Lambert and our shareholders. Sales of Lipitor(R) are expected to
surpass $3.6 billion in 1999. Pfizer cannot commit flagrant breaches of
contract, as it has, and expect to continue to receive the fruits of this
relationship," said Lodewijk J.R. de Vink, chairman, president and chief
executive officer of Warner-Lambert.
The counterclaim sets forth that Pfizer has repeatedly misstated the terms
of the standstill restrictions to which it agreed in the Lipitor(R)
agreements. The actual language of the standstill makes clear, and the
counterclaim sets forth, that Pfizer breached its agreement when it made
its November 4, 1999 proposal for Warner-Lambert and in its subsequent
actions.
Pfizer has asserted that the standstill provisions terminated when
Warner-Lambert entered into its merger-of-equals transaction with American
Home Products. Pfizer is wrong. The standstill provisions expressly
provide that they terminate if Warner-Lambert enters into a transaction
with a third party ONLY "IF SUCH THIRD PARTY IS THE ACQUIRING PARTY".
These are the precise words of the contract that Pfizer signed and is now
disregarding.
In Warner-Lambert's merger of equals with AHP, Warner-Lambert shareholders
will own approximately 50% of the combined company, Warner-Lambert
directors will be 50% of the combined company's board, and Warner-Lambert's
senior management will hold key positions within the new management team
including the position of Chief Executive Officer. The combined company's
Chief Executive Officer will report to the combined company's Board, and
the combined company's other senior officers will report to the combined
company's Chief Executive Officer. This is not an acquisition of
Warner-Lambert, and AHP is not an "acquiring party".
The counterclaim also sets forth that Pfizer breached the Lipitor(R)
agreements by using confidential information for the purpose of deciding to
make, and pricing, its bid. Under the agreements, Pfizer cannot use
confidential information "FOR ANY PURPOSE OTHER THAN IN PERFORMANCE OF [THE
LIPITOR(R)] AGREEMENT[S]". This misuse of confidential information is
another independent ground entitling Warner-Lambert to terminate the
Lipitor(R) agreements, the Company said. Under the agreements, the
restriction on the use of confidential information would not end with a
termination of the standstill.
Mr. de Vink said, "If the court upholds our position that Warner-Lambert is
entitled to terminate the Lipitor(R) relationship as a result of these
breaches, there is no doubt that very substantial value will accrue to
Warner-Lambert shareholders. In that regard, before asserting this
counterclaim, we satisfied ourselves that the marketing of Lipitor(R) would
not suffer. Internally, and together with consultants and agencies,
Warner-Lambert has already started detailed planning to be prepared to take
over sole promotion of Lipitor(R), including all field-, office- and
R&D-based programs. These activities have already begun with respect to
all major territories of the world."
Pending a determination by the court, the Lipitor(R) agreements continue in
effect. However, if the court rules in Warner-Lambert's favor, upon
termination, Warner-Lambert would have no obligation to make payments to,
or share revenues with, Pfizer with respect to Lipitor(R). A termination
would not terminate the standstill agreements.
Warner-Lambert said that the objective of its counterclaim is to create
value for the Warner-Lambert shareholders. It added that it has not sought
an injunction against Pfizer making any offers.
Warner-Lambert is a global company devoted to discovering, developing,
manufacturing and marketing quality pharmaceutical, consumer health care,
and confectionery products. Its central research focus is on heart
disease, diabetes, disorders of the central nervous system and women's
health care. In 1999, its revenues are expected to exceed $12 billion and
the company will invest more than $1.2 billion in research and development.
It employs more than 43,000 people worldwide.
Statements made in this press release that state "we will," "we expect," or
otherwise state Warner-Lambert's predictions for the future are
forward-looking statements. Actual results might differ materially from
those projected in the forward-looking statements. Additional information
concerning factors that could cause actual results to materially differ
from those in the forward-looking statements is contained in
Warner-Lambert's annual report on Form 10K-A for the year ended December
31, 1998 filed with the U.S. Securities and Exchange Commission.
