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Ex 99.1
LETTER
Exhibit 1
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
COLLEGE RETIREMENT EQUITIES FUND
PETER C. CLAPMAN
Senior Vice President and Chief
Counsel, Investments
730 Third Avenue/New York, NY 10017-3206
212 490-9000
June 15, 1999
Dear Fellow Mylan Laboratories Shareholder:
TIAA-CREF is a long-time holder of significant equity in Mylan
Laboratories. At Mylan's July 23 annual meeting, we intend to propose a
resolution (set forth in Mylan's proxy statement) that requests the Board of
Directors to redeem the company's "dead hand" poison pill unless shareholders
vote otherwise. We are asking for your support of our proposal.
A poison pill (or "shareholder rights plan") is a powerful takeover
defense that, if triggered by an unsolicited bid for the company, would
substantially dilute the would-be acquiror's holdings. In our view, companies
should seek shareholder approval for such plans, since they can affect the value
of the stock. Mylan's board did not do this, imposing the pill unilaterally. But
the main concern we are raising with our shareholder resolution is that MYLAN'S
POISON PILL INCLUDES A DEAD HAND (OR "CONTINUING DIRECTOR") PROVISION, NOT FOUND
IN MOST POISON PILLS, THAT IS PARTICULARLY OBJECTIONABLE.
MYLAN'S DEAD HAND PILL DISENFRANCHISES SHAREHOLDERS
Mylan's dead hand poison pill can be redeemed only with the consent of
Mylan's CURRENT directors (or future directors approved by them). Therefore, if
Mylan's directors were to reject an attractive third-party acquisition offer
that shareholders favored, the shareholders would have no ability to replace
Mylan's directors with directors who would have the power to redeem the pill and
allow shareholders to accept that offer. We cannot accept the premise that only
Mylan's current directors (and their nominees) - and not other directors elected
by you and other shareholders - can accept or reject an acquisition bid for the
company. We believe that MYLAN'S DIRECTORS HAVE APPROPRIATED TO THEMSELVES A
POWER CONTRARY TO INTERESTS OF THE SHAREHOLDERS, THE OWNERS OF THE COMPANY.
It is noteworthy that dead hand pills have been declared illegal in
Delaware, the state in which the majority of U.S. public companies are
incorporated. Mylan is incorporated in Pennsylvania, where it is a matter of
company discretion. Our resolution is directed to how that discretion is
exercised.
MYLAN'S BOARD LACKS AN INDEPENDENT MAJORITY
We are particularly concerned about Mylan's poison pill because,
unlike most major U.S. companies, Mylan lacks a board with a majority of
independent directors. Three of the seven Mylan directors are employees. A
fourth director just stepped down as an executive, and a fifth is a member of a
law firm that provides legal services to the company. STOCKHOLDERS SHOULD BE
CONCERNED THAT A BOARD LACKING INDEPENDENCE, SUCH AS THIS ONE, MAY USE A DEAD
HAND POISON PILL TO ENTRENCH ITSELF AND MANAGEMENT, TO THE DETRIMENT OF
SHAREHOLDERS.
MYLAN'S ARGUMENTS MISS THE POINT
In its proxy statement, Mylan Laboratories argues against the TIAA-CREF
resolution in part by presenting the logic behind poison pills in general. This
misses the point. Our resolution is focused on
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a particular feature of Mylan's pill - the dead hand provision - that is not
included in the poison pills adopted by most other companies.
Mylan says the dead hand provision does not limit the right of
shareholders, including any potential acquiror, to elect directors, but merely
requires that any transaction be approved by directors not affiliated with the
acquiror. Again, this attempts to obscure the point. Our concern is about the
possibility of entrenchment by the board and management should the company
receive an unsolicited takeover bid. The only practical way a potential acquiror
could gain control of sufficient voting power to replace the board - and thereby
redeem the pill in the face of opposition by current directors - is by
soliciting and winning our votes. THE DEAD HAND IGNORES THE WILL OF THE
SHAREHOLDERS BY SUBVERTING THE VOTING PROCESS. A potential acquiror acting alone
or through voting agreements cannot replace the current board unless Mylan's
other shareholders approve the election of new directors. Shareholders are
entitled to freely elect directors who are able to make the critical decisions
on the future of the company. This is how corporate governance is supposed to
work.
OTHER COMPANIES HAVE REMOVED DEAD HAND PROVISIONS
TIAA-CREF, the world's largest pension fund and a significant investor
in virtually all major U.S. companies, has asked a number of other companies to
drop their dead hand provisions. Most of the companies receiving our resolution
have voluntarily amended their pills to remove the dead hand provisions.
We are so concerned about Mylan's dead hand pill that we are bringing
this very important issue to our fellow shareholders. We would be happy to
discuss this matter with you in more detail. Please contact Ken Bertsch of
TIAA-CREF at (212) 916-4972 with any questions you might have.
Sincerely,
Peter C. Clapman
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PLEASE VOTE "FOR" THE SHAREHOLDER PROPOSAL ON MYLAN'S PROXY CARD
TIAA-CREF is requesting that you cast your votes FOR the shareholder proposal on
the proxy card sent out by Mylan Laboratories. Please note that if you leave the
proxy card blank and return it, the company will count your votes against our
proposal. TIAA-CREF, which will not be sending out a separate proxy card, is
taking no public position on any other item being considered at the annual
meeting.
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