<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
ICN PHARMACEUTICALS, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
448924100
(CUSIP Number)
Jilaine Hummel Bauer
Senior Vice President and General Counsel
Heartland Advisors, Inc.
789 N. Water Street
Milwaukee, WI 53202
414-977-8727
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 29, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box [ X ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See (S)240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP NO. 448924100 13D
------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
HEARTLAND ADVISORS, INC. #39-1078128
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
2. (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
3.
------------------------------------------------------------------------------
SOURCE OF FUNDS (See Instructions)
4.
00 - Funds of investment advisory clients
------------------------------------------------------------------------------
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5.
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6.
STATE OF WISCONSIN, USA
------------------------------------------------------------------------------
SOLE VOTING POWER
7.
NUMBER OF
1,319,448
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8.
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9.
REPORTING
4,035,191
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10.
None
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11.
4,035,191
------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12.
(See Instructions)
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.
5.1 % (rounded up to nearest tenth)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON (See Instructions)
14.
IA
------------------------------------------------------------------------------
2
<PAGE>
CUSIP NO. 448924100 13D
------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WILLIAM J. NASGOVITZ ###-##-####
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
2. (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
3.
------------------------------------------------------------------------------
SOURCE OF FUNDS (See Instructions)
4.
Pf - Personal funds of reporting person and family members
------------------------------------------------------------------------------
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5.
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6.
USA
------------------------------------------------------------------------------
SOLE VOTING POWER
7.
NUMBER OF
2,626,400
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8.
OWNED BY None
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9.
REPORTING
61,600
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10.
1,709
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11.
2,628,109
------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
12. The aggregate amount reported in Row 11 does not include 30,000 Shares
held by a limited partnership with respect to which Mr. Nasgovitz acts as
general partner, but has neither voting nor dispositive powers.
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.
3.3% (rounded up to nearest tenth)
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON (See Instructions)
14.
IN
------------------------------------------------------------------------------
3
<PAGE>
Item 1. Security and Issuer.
-------------------
This statement relates to shares of the common stock, $.01 par value per share,
(the "Shares") of ICN Pharmaceuticals, Inc.(the "Company"). The principal
executive offices of the Company are located at 3300 Hyland Avenue, Costa Mesa,
CA 92626.
Item 2. Identity and Background.
-----------------------
(a) Name of Person Filing:
---------------------
(1) Heartland Advisors, Inc. (2) William J. Nasgovitz
(b) Address of Principal Business Office:
------------------------------------
(1) 789 North Water Street (2) 789 North Water Street
Milwaukee, WI 53202 Milwaukee, WI 53202
(c) Citizenship: Heartland Advisors is a Wisconsin corporation.
William J. Nasgovitz - U.S.A
(d) Title of Class of Securities: Common Stock
(e) CUSIP Number: 448924100
This statement is being filed by Heartland Advisors, Inc., a Wisconsin
corporation ("HAI"), and William J. Nasgovitz, the principal shareholder of HAI.
HAI is a federally registered investment adviser that provides investment
advisory services to Heartland Group, Inc., a registered investment company
("Heartland Group"), as well as private investment advisory clients (the
"Accounts"). Mr. Nasgovitz joins in this filing pursuant to SEC staff positions
authorizing certain individuals in similar situations to join in a filing with a
controlled entity. The reporting persons do not admit that they constitute a
group. Information concerning Mr. Nasgovitz and the name, business address,
principal occupation and citizenship of each of the executive officers and
directors of HAI is set forth in Exhibit C hereto.
During the last five years, neither HAI nor Mr. Nasgovitz has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction that caused either of them, as a result of such
proceeding, to be subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
The Heartland Value Fund and the Heartland Value Plus Fund (the "Heartland
Funds"), both series of Heartland Group, hold an aggregate of 2,564,800
Shares, which were purchased for cash in the amount of $27,549,382, including
brokerage commissions. The assets of the Heartland Funds were used to purchase
such Shares, and no part of the purchase price was represented by borrowed
funds.
The Accounts own an aggregate of 1,470,391 Shares, which were purchased for
cash, or on margin in accordance with margin agreements on industry standard
terms, in the amount of $29,476,809.75, including brokerage commissions. Except
for margin purchases, the assets of the Accounts were used in making such
purchases and no part of the purchase price was represented by borrowed funds.
William J. Nasgovitz, as a result of his position with and stock ownership of
HAI, could be deemed to have voting and/or investment power over the 4,035,191
shares HAI beneficially owns. Of these 4,035,191 shares, 2,564,800 Shares also
may be deemed beneficially owned within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934 by Mr. Nasgovitz as a result of his position as
an officer and director of Heartland Group, which could be deemed to confer upon
him voting power over the shares Heartland Group beneficially owns. In addition,
30,000 Shares of the 4,035,191 Shares are held by a limited
4
<PAGE>
partnership with respect to which Mr. Nasgovitz acts as general partner, but
which are excluded from the Shares reported as beneficially owned by him (other
than as a result of his position with and stock ownership in HAI) because he has
neither voting nor dispositive power with respect to such Shares. Mr. Nasgovitz
and members of his family hold an aggregate of 63,309 shares, which were
purchased for cash, or on margin in accordance with margin agreements on
industry standard terms, in the amount of $866,036.93, including brokerage
commissions.
Item 4. Purpose of Transaction.
----------------------
All of the shares of the Company owned by the Reporting Persons were, at the
time of their purchase, acquired for investment purposes in the ordinary course
of business. The Reporting Persons are regularly engaged in providing
investment advisory services and investing in equity and fixed income securities
that they deem to be undervalued.
In the ordinary course of their business activities, the Reporting Persons
analyze the operations, capital structure and markets for products and services
of the companies in whose securities they invest (including those of the
Company) on a continuous basis through, among other things, analysis of
documentation and discussions with knowledgeable industry and market observers
and with representatives of such companies. In the course of their business
activities, the Reporting Persons may participate in interviews or hold
discussions with third parties, including other holders of securities of subject
companies, or with management of subject companies in which the Reporting
Persons may suggest or take a position with respect to potential changes in the
operations, management or capital structure of such companies as a means of
enhancing shareholder value. Such suggestions or positions may relate to one or
more of the transactions specified in clauses (a) through (j) of Item 4 of the
Schedule D filing form, including, without limitation, such matters as disposing
of one or more businesses, selling the company or acquiring another company or
business, changing operating or marketing strategies and restructuring the
company's capitalization or dividend policy.
Based on the Company's performance and depending upon further evaluation of the
Company's business and prospects, and upon future developments (including,
without limitation, performance of the Company's stock in the market, the
attitude of, actions taken and information provided by the Company's Board of
Directors and management, availability of funds, alternative investments, and
monetary, stock market and general economic conditions), the Reporting Persons
may from time to time purchase additional Shares of the Company's stock or
dispose of all or a portion of the Shares.
On June 29, 2000, HAI sent a letter addressed to Mr. Milan Panic, Chairman of
the Board of the Company (a copy of which is attached hereto as Exhibit B1 and
incorporated herein by reference), and letters to each other member of the Board
of Directors of the Company that were substantially the same. In its letter, HAI
expressed its objections with respect to the Company's proposal to restructure
itself announced on or about June 15, 2000. Under the proposal, the Company
would be restructured into three separate publicly-traded companies: a research
company and two operating companies with the Company's respective drug
businesses in Europe and in North and South America. The proposal has been
approved by the Company's Board of Directors, but at present there is no plan
for the proposal to be considered by shareholders. On June 30, 2000, HAI also
issued a press release summarizing its objections to the proposal (a copy of
which is attached hereto as Exhibit B2 and incorporated herein by reference).
A shareholder in the Company since 1994, HAI believes it is currently the
Company's largest shareholder. HAI has informed the Company's Board of
Directors that it objects to the proposed restructuring because it leaves in
place a management team that has repeatedly failed to act in the best interests
of shareholders and it retains a Board of Directors that has demonstrated a lack
of independence necessary to instill confidence in investors that their
interests will be represented. It has requested that the Company proceed with
the proposal only if (i) a new chief executive who has a demonstrated track
record of successfully bringing biotech products to market and established
credibility with Wall Street is hired to run the research company, and (ii) the
Boards of the research company and the company that will operate the North and
South American businesses are reconfigured to include representatives that are
truly independent of management. HAI has requested an opportunity to discuss
its concerns with the Company's Board of
5
<PAGE>
Directors and has informed them that it intends to communicate its views and
concerns to other shareholders and members of the press.
Except as set forth in this Item 4, the Reporting Persons have no present plan
or proposal that relates to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D, but will continue to review
their position based upon further developments.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) As investment adviser to the Heartland Funds and the Accounts, HAI
may be deemed the beneficial owner of 4,035,191 Shares or 5.08% of the
Company. To the best knowledge of HAI, none of the persons named in
Exhibit C attached hereto other than Mr. Nasgovitz, beneficially owns
any other Shares of the Company. Mr. Nasgovitz is or may be deemed the
beneficial owner of 2,628,109 Shares or 3.3% of the Company.
(b) HAI, as investment adviser to the Heartland Funds and the Accounts,
has sole power to dispose of all 4,035,191 Shares held by the Heartland
Funds and the Accounts. HAI, as investment adviser to the Accounts, has
sole power to vote or direct the voting of 1,319,448 Shares held by the
Accounts, and no power to vote or to direct the voting of 150,943
Shares, owned by the Accounts. HAI has no power to vote the 2,564,800
Shares held by the Heartland Funds. To the best knowledge of HAI, other
than in connection with their respective positions and relationships
with HAI, none of the persons named in Exhibit C hereto, other than Mr.
Nasgovitz, has sole or shared power to dispose of or to vote Shares of
the Company. Of the 63,309 Shares with respect to which Mr. Nasgovitz
is or may be deemed to be beneficial owner, he has sole dispositive and
sole voting power with respect to 61,600 Shares and shared dispositive
power, but no voting power with respect to 1,709 Shares.
(c) See Exhibit D
(d) Since the Shares are held by the Heartland Funds, the Accounts and
by Mr. Nasgovitz and members of his family, various persons have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, such Shares. However, to the best
knowledge of the Reporting Persons, no such person holds more than five
percent of the outstanding Shares on the date hereof.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to Securities of the Issuer.
---------------------------
HAI is the investment adviser of the Heartland Funds and the Accounts pursuant
to separate investment management agreements which provide HAI with the
authority, among other things, to invest the funds of the Heartland Funds and
the Accounts in securities (including shares of the Company), to hold, vote, and
dispose of those shares, and to file this Statement. Neither Reporting Person
nor, to the best knowledge of either Reporting Person, any of the persons named
in Exhibit C hereto has any contract, arrangement, understanding or relationship
on behalf of the Heartland Funds or the Accounts with any person with respect
to any securities of the Company.
Item 7. Material to Be Filed as Exhibits.
--------------------------------
Exhibit A Joint Filing Agreement
Exhibit B1 Letter Dated June 29, 2000 from William J. Nasgovitz, President and
Chief Executive Officer of Heartland Advisors, Inc., to Milan Panic,
Chairman, Chief Executive Officer of ICN Pharmaceuticals, Inc.
6
<PAGE>
Exhibit B2 Press Release dated June 30, 2000
Exhibit C Executive Officers and Directors of the Heartland Advisors, Inc.
Exhibit D Purchase and sale data
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATE: July 6, 2000
WILLIAM J. NASGOVITZ HEARTLAND ADVISORS, INC.
By: /s/ PAUL T. BESTE By: /s/ PAUL T. BESTE
---------------------- -------------
Paul T. Beste Paul T. Beste
As Attorney in Fact for Chief Operating Officer
William J. Nasgovitz
7
<PAGE>
EXHIBIT A
Joint Filing Agreement
The undersigned persons agree and consent to the joint filing on their behalf of
this Schedule 13D in connection with their beneficial ownership of ICN
Pharmaceuticals, Inc. at June 28, 2000.
WILLIAM J. NASGOVITZ
By: /s/ PAUL T. BESTE
---------------
Paul T. Beste
As Attorney in Fact for William J. Nasgovitz
HEARTLAND ADVISORS, INC.
By: /s/ PAUL T. BESTE
-------------
Paul T. Beste
Chief Operating Officer
8
<PAGE>
EXHIBIT B1
June 29, 2000
Mr. Milan Panic
Chairman of the Board
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, CA 92626
Dear Mr. Panic:
Heartland Advisors, Inc. (HAI) has been a long-term shareholder of ICN
Pharmaceuticals, Inc. (ICN) and currently holds 4,040,000 shares in our mutual
funds and advisory accounts. We have reviewed the restructuring proposed by
ICN, which involves reorganizing the company into three publicly traded
companies: a research company and two operating companies with ICN's respective
drug businesses in Europe and in North and South America. The research company
and the company with the American businesses would be based in the U.S., while
the company with the European businesses would be based in Europe.
This plan is of particular interest to us since we became shareholders back in
1994 prior to ICN initiating a restructuring plan that combined four companies,
ICN Pharmaceuticals, SPI Pharmaceuticals, Viratek, Inc., and ICN Biomedicals
into one entity. Ostensibly, the 1994 rollup of these companies was supposed to
result in a more streamlined, efficient organization in which Research and
Development activities could be leveraged. As we look at ICN, it appears to us
that the benefits of that restructuring were not achieved and we question the
benefits of the proposed restructuring, absent additional changes in management
and the Boards of the three companies.
As a significant shareholder in ICN, we believe the current share price fails to
reflect the intrinsic value of the company. On a valuation basis, ICN stock
offers compelling value, especially when compared to other specialty
pharmaceutical companies. Yet this under valuation relative to ICN's peer group
is a situation that has plagued ICN shareholders for years.
We believe that a splitting up of ICN into distinct operating units is a step in
the proper direction that could alleviate several current shortcomings. First,
the improved transparency of segregated business units should compel management
to be more disciplined in their decision making. Second, a restructuring and
subsequent capital raising activities should result in some de-leveraging of the
company's capital structure. Finally, the separation of business units as
outlined under ICN's proposed restructuring plan should make the distinctive
operating features of each unit more visible, which we believe could make the
undervalued nature of ICN more apparent to investors. This should ultimately
increase the firm's strategic options.
Notwithstanding these potential benefits of the proposed restructuring, we
believe these benefits will not be realized unless (i) a chief executive is
hired to run the research company who has a track record of successfully
bringing biotech products to market and established credibility with Wall
Street; and, (ii) the Boards of the U.S. companies are reconfigured to include
members that are perceived as truly independent of management. Under the
proposed plan, the parent company, ICN Pharmaceuticals will own approximately
80% of Ribapharm, Inc. and 90% of ICN International. Thus, despite having
separate Board of Directors, the two newly created U.S. entities will still
effectively be controlled by the existing board of ICN.
9
<PAGE>
We believe changes in the Boards of the new U.S. subsidiaries are essential
because ICN's current Board has repeatedly failed to act in the best interests
of shareholders. Many of their actions have contributed to the lack of
credibility that ICN suffers in the marketplace. The current Board has failed
to adequately address the many litigation issues that surround ICN's management
and this has resulted in a lack of trust between ICN shareholders and the Board.
ICN's Board has failed to address the many problems resulting from management
missteps. In short, the Board lacks the independence necessary to instill
confidence in the investment community.
In particular, we believe the following past actions by the Board raise serious
conflict of interest questions and suggest they have failed to exercise their
fiduciary duties to shareholders:
(1) A lack of share ownership. There have been only three purchases by
directors and officers over the last two years for a grand total of
5,600 shares. Conversely, there have been 27 either outright, or
option related, sales over this time frame (see attached). The ongoing
selling of stock by insiders is one of the reasons that investors have
little confidence in the current leadership.
(2) Various members of the Board receive significant consulting fees from
ICN. In fact, three of the five members of the compensation Committee
received in aggregate $236,000 in consulting fees in 1998. This brings
into question issues of Board independence.
(3) The Board has granted what we believe to be excessive employment
agreements to management. Mr. Panic will receive five years of salary
for termination due to a change of control. Additionally, five other
executives will receive three years of salary in event of a change of
control.
(4) The Board of 16 is too large. A Board of this size often results in
inaction. Also, each non-employee Director receives 22,500 options
each year (an amount we deem excessive). Thus, shareholders can expect
almost 300,000 shares in potential dilution per year.
(5) In September 1998, the Compensation Committee of the company's Board
of Directors extended by one year the term of options to purchase
304,000 shares of the company's common stock held by four officers and
a director. It should be noted that the Director involved is also a
member of the Compensation Committee.
(6) Lastly, the Directors have attempted to insulate themselves from
shareholder pressure by adopting a poison pill and staggering the
terms of service of the members of the Board. We believe these actions
should be reversed.
Notwithstanding these egregious shortcomings, we believe the most serious
concern to investors and the primary reason the proposed restructuring will fail
is that Mr. Panic will remain in charge of all three companies. It is our
belief that one of the major reasons for the ongoing undervaluation of ICN is
the market's skepticism of Mr. Panic's leadership. This skepticism comes from,
among other things, the multitude of legal actions undertaken against him.
Also, under Mr. Panic's stewardship, the company has experienced uneven
financial performance. We certainly recognize the volatility caused by ICN's
European operations, but ultimately the earnings stream should be evened out.
Despite Mr. Panic's difficulties in the U.S., we believe Mr. Panic still can add
value to ICN by leveraging his relationships in Eastern Europe to further
develop the European operations. Despite the losses and write-offs that ICN has
experienced in Europe over the last several years, we believe these operations
have significant value that is not reflected in the current stock price. We
think that Mr. Panic should concentrate his efforts in continuing the turn
around of the European operations.
We also are concerned with the competencies and reputation of current
management. As stated earlier, one of the anticipated benefits of the 1994
reorganization was to streamline operations and improve profitability. Yet
Selling, General, and Administrative costs have increased from 32.6% in 1994 to
35.2%
10
<PAGE>
in 1999 despite the fact that sales have more than doubled. Additionally,
Research and Development expenses have failed to produce any quantifiable and
tangible benefits. The R&D pipeline is at an early stage. While drugs such as
Levoririn and Viramidine could be potential successors to Ribavirin, they are
still years away from commercialization.
Because of these concerns, we doubt the desired benefits from the proposed
restructuring will be realized, and fear that, without changes in management and
the Boards of the new companies, the stock price of ICN and its subsidiaries
will not reflect the intrinsic value of the companies.
In our view, as part of a restructuring plan, ICN should bring in two high
quality CEO's to head up the North American operations as well as Ribapharm.
The Ribapharm unit should be headed by an individual who has a successful track
record in bringing new drugs to market. The North American operations should be
headed by an individual who has a demonstrated track record in running an
efficient pharmaceutical operation that consistently achieves stated goals. We
would see Mr. Panic's role, if any, primarily focused on building value in
Europe.
We intend to share our views and concerns with other shareholders and with
interested members of the press. We also would welcome an opportunity to
discuss with the Board of Directors the restructuring plan and management
responsibilities at the earliest possible time.
We look forward to continuing our dialogue with you in the future.
Sincerely,
BILL NASGOVITZ
William J. Nasgovitz
President
Enclosure
11
<PAGE>
EXHIBIT B2
CONTACT: Heartland Advisors:
Doug Lucas
414-977-8792
[email protected]
-------------------------
For Immediate Release
---------------------
Heartland Advisors Announces Intent to File 13-D on ICN Pharmaceuticals
. Company believes proposed restructuring plan fails to
address all changes necessary to increase shareholder value
. Concerns about conflicts of interest on board of directors
raised
. Panic's role under restructuring questioned
(Milwaukee, WI, June 30, 2000) Heartland Advisors, Inc., intends to file a 13-D
with the Securities Exchange Commission (SEC) summarizing its objections to ICN
Pharmaceutical's recently announced reorganization plan. Heartland has mailed a
letter to each of ICN's Board of Directors on June 29, 2000 stating the firm's
concerns regarding ICN's proposed reorganization plan which was announced on
June 15, 2000.
A shareholder since 1994, Heartland is currently ICN's largest shareholder
and now owns approximately 5.2 percent, or Sellightly more than four million
shares, of ICN stock in its mutual fund and advisory accounts. Among the
changes that ICN proposed in its reorganization plan were dividing the company
into three separate publicly-traded companies with the existing company
retaining a majority interest in two newly formed companies--Ribapharm, Inc., a
U.S. based biotech company, and a yet-to-be-named international pharmaceutical
company headquartered in Moscow.
"While we believe there are some potential benefits to the proposed
restructuring, we feel that overall, the plan will fall short of expectations
without new leadership to run the U.S. companies and a change in the composition
of the Boards of those companies that ensures true independence from current
management," says William J. Nasgovitz, President and founder of Heartland
Advisors. "In
--More--
1994, ICN initiated a reorganization that was supposed to result in a more
streamlined and efficient organization that would leverage its research and
development activities. Given the expressed
12
<PAGE>
objectives of that reorganization have gone unrealized, we are skeptical about
current management being able to accomplish the stated objectives of this latest
proposal and believe the legal controversies that ICN's chairman remains
embroiled in are a further hindrance."
Among Heartland's concerns are:
. The absence of any substantive changes in the leadership and
management of the three companies.
. The seeming inability of ICN's chairman, Milan Panic, to put behind
him the legal issues that have plagued him for years which Heartland
believes has created reservations on Wall Street about the company's
current management.
. A lack of investor confidence in the present Board which Heartland
believes is due to its demonstrated inability to act independent of
company management and several past Board actions that raise serious
conflict of interest concerns.
"It is our belief that one of the major reasons for the undervaluation of
ICN is the market's skepticism of Mr. Panic's leadership," Nasgovitz said.
"This skepticism comes from, among other things, the multitude of legal actions
undertaken against him. Also, under Mr. Panic's stewardship, the company has
experienced uneven financial performance. We certainly recognize the volatility
caused by ICN's European operations, but ultimately the earnings stream should
reflect some stability."
Heartland recommends that ICN hire new CEO's to run the U.S. companies and
that Mr. Panic devote his time to operations in Europe where his personal
relationships and contacts can lead to further expansion and grow value.
--More--
13
<PAGE>
"The Ribapharm unit should be headed by an individual who has a successful
track record in bringing new drugs to market," Nasgovitz said. "The rest of the
North and South American operations should be headed by an individual who has a
demonstrated track record in running an efficient pharmaceutical operation that
consistently achieves stated goals. Finally, we believe Mr. Panic can still add
value to ICN by leveraging his relationships and contacts in Eastern Europe to
further develop ICN's European operations."
Founded in 1982 by William Nasgovitz, Heartland Advisors, Inc. has
established its position as America's Value Investor, both through its family of
equity and fixed income funds, and through separately managed accounts for
institutions and individuals.
# # #
Note: Members of the media requesting a copy of Heartland's letter to the ICN
Pharmaceutical's Board of Directors should contact Laura Shama at 414-977-8779.
Heartland Advisors, Inc., distributor. Member SIPC.
14
<PAGE>
EXHIBIT C
EXECUTIVE OFFICERS AND DIRECTORS
OF
HEARTLAND ADVISORS, INC.
(As of June 8, 2000)
Name Office
---- ------
William J. Nasgovitz President and Chief Executive Officer
Jilaine Hummel Bauer Senior Vice President, Secretary and
General Counsel
Paul T. Beste Chief Operating Officer
Kevin D. Clark Senior Vice President - Trading
Kenneth J. Della Senior Vice President and Treasurer
John R. Merrell Senior Vice President
Eric J. Miller Senior Vice President
Scott R. Powell Senior Vice President
Gerard M. Sandel Senior Vice President
The business address of each of the persons listed above is Heartland Advisors,
Inc., 789 North Water Street, Milwaukee, Wisconsin 53202. To the best knowledge
of Heartland Advisors, Inc., each of the persons listed above is a citizen of
the United States and, during the last five years, no person listed above (i)
has been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or (ii) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
15
<PAGE>
EXHIBIT D
Heartland Funds
---------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Fund Transaction Type Shares Price Per Share Trade Date
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heartland Value Plus Sale 50,000.00 $34.0129 6/13/00
Fund
----------------------------------------------------------------------------------------------
Heartland Value Plus Sale 10,000.00 34.0129 6/13/00
Fund
----------------------------------------------------------------------------------------------
Heartland Value Plus Sale 40,000.00 34.5326 6/14/00
Fund
----------------------------------------------------------------------------------------------
Heartland Value Plus Purchase 50,000.00 26.6913 6/16/00
Fund
----------------------------------------------------------------------------------------------
Heartland Value Plus Purchase 50,000.00 26.4975 6/16/00
Fund
----------------------------------------------------------------------------------------------
</TABLE>
Heartland Private Accounts
--------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Trade Date Activity Quantity Price
--------------------------------------------------------------------------------------
<C> <S> <C> <C>
--------------------------------------------------------------------------------------
5/2/00 BUY 15500 26.1074
--------------------------------------------------------------------------------------
5/2/00 BUY 500 26.1074
--------------------------------------------------------------------------------------
5/18/00 BUY 400 26.7363
--------------------------------------------------------------------------------------
5/18/00 BUY 700 26.7363
--------------------------------------------------------------------------------------
5/18/00 SELL 1000 26.25
--------------------------------------------------------------------------------------
5/18/00 BUY 7600 26.7363
--------------------------------------------------------------------------------------
5/18/00 BUY 300 26.7363
--------------------------------------------------------------------------------------
5/18/00 BUY 2500 26.7363
--------------------------------------------------------------------------------------
5/18/00 BUY 1400 26.7363
--------------------------------------------------------------------------------------
5/18/00 BUY 1200 26.7363
--------------------------------------------------------------------------------------
5/26/00 SELL 6550 29.771
--------------------------------------------------------------------------------------
5/31/00 SELL 4800 33.3727
--------------------------------------------------------------------------------------
5/31/00 SELL 625 33.3727
--------------------------------------------------------------------------------------
5/31/00 SELL 500 34.3125
--------------------------------------------------------------------------------------
5/31/00 SELL 500 34.1875
--------------------------------------------------------------------------------------
5/31/00 SELL 10000 34.75
--------------------------------------------------------------------------------------
5/31/00 SELL 5000 34.375
--------------------------------------------------------------------------------------
5/31/00 SELL 10000 33.5938
--------------------------------------------------------------------------------------
6/1/00 SELL 20000 34.5625
--------------------------------------------------------------------------------------
6/1/00 SELL 20000 34.875
--------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Trade Date Activity Quantity Price
--------------------------------------------------------------------------------------
<C> <S> <C> <C>
6/2/00 SELL 15000 33.905
--------------------------------------------------------------------------------------
6/13/00 SELL 100 34.125
--------------------------------------------------------------------------------------
6/13/00 SELL 100 34.125
--------------------------------------------------------------------------------------
6/13/00 SELL 500 34.4375
--------------------------------------------------------------------------------------
6/13/00 SELL 500 34.4375
--------------------------------------------------------------------------------------
6/13/00 SELL 500 34.125
--------------------------------------------------------------------------------------
6/13/00 SELL 300 34.125
--------------------------------------------------------------------------------------
6/14/00 SELL 200 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 2200 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 700 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 900 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 300 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 100 34.7597
--------------------------------------------------------------------------------------
6/14/00 SELL 2000 34.7597
--------------------------------------------------------------------------------------
6/15/00 BUY 8200 28.9375
--------------------------------------------------------------------------------------
6/15/00 BUY 1400 28.9375
--------------------------------------------------------------------------------------
6/16/00 BUY 2500 27.625
--------------------------------------------------------------------------------------
6/16/00 BUY 700 26.4375
--------------------------------------------------------------------------------------
6/16/00 BUY 3500 26.4375
--------------------------------------------------------------------------------------
6/20/00 BUY 1300 26.5727
--------------------------------------------------------------------------------------
6/20/00 BUY 4050 26.5727
--------------------------------------------------------------------------------------
6/20/00 BUY 4000 26.5727
--------------------------------------------------------------------------------------
6/20/00 BUY 2000 26.5727
--------------------------------------------------------------------------------------
5/30/00 SELL 8800 30.6108
--------------------------------------------------------------------------------------
5/26/00 SELL 6550 29.771
--------------------------------------------------------------------------------------
</TABLE>
17
