Board Compliance Committee Charter

I. Name

There shall be a committee of the Board which shall be called the Board Compliance Committee (“BCC”).

II. Purpose

The BCC’s primary purpose is to provide review and oversight of matters relating to Forest Laboratories, Inc.’s (“FLI”) compliance with Federal health care program requirements, FDA requirements, and the obligations imposed by the Corporate Integrity Agreement (“CIA”) dated September 15, 2010 (“CIA”) entered into between FLI and the Office of Inspector General of the U.S. Department of Health and Human Services (“Compliance Program”). As part of its duties, the BCC is charged with appointing, compensating, retaining (or terminating), and overseeing the work of an independent Compliance Expert. The BCC also is meant to provide an additional avenue of communication among Compliance Department personnel, including the Chief Compliance Officer, the Compliance Committee (as distinct from the Board Compliance Committee), FLI management, and the Board of Directors.

III. Committee Membership and Procedure

The BCC shall consist of no fewer than three members. The Board shall appoint members of the BCC annually and designate a BCC Chairperson . Each member of the BCC shall serve until a successor is appointed. The BCC shall establish its own rules of procedure consistent with any such rules set forth in this Charter, FLI’s Corporate Governance Guidelines and by-laws, and the CIA.

IV. Committee Authority and Responsibilities

The BCC shall be responsible for the review and oversight of FLI’s Compliance Program. At a minimum, the BCC shall be responsible for fulfilling the following obligations:

1. Meetings: The BCC shall meet at least quarterly to review and oversee FLI’s Compliance Program, including but not limited to the performance of the Chief of Compliance and other Compliance personnel. Two members of the Committee shall constitute a quorum and an affirmation vote of the majority of members present shall be required for the transaction of business. The Company General Counsel shall be the Secretary to the Committee and will, at the direction of the Chairperson, prepare and circulate minutes of the meetings of the Committee.
    
2. Compliance Program Review: The BCC shall arrange for an independent review of the effectiveness of FLI’s Compliance Program (“Compliance Program Review”) for each of the five Reporting Periods under the CIA.¹ The BCC shall review the resulting annual Compliance Program Review Report (see below) as part of its review and assessment of FLI’s Compliance Program. A copy of the report shall be provided to all members of the Board and to OIG as part of FLI’s Annual Report submitted under the CIA.
    
3. Compliance Expert: The BCC shall retain an independent individual or entity with expertise in compliance with Federal health care program and FDA requirements (“Compliance Expert”) to perform the annual Compliance Program Review. The BCC shall direct the Compliance Expert to:
    
   1. create a work plan for the Compliance Program Review;
       
   2. oversee performance of the review; and
       
   3. prepare a written report describing the Compliance Program Review and the results of the review. The written report (“Compliance Program Review Report”) shall include a description of the review and shall include recommendations with respect to FLI’s Compliance Program, including with respect to the contents of the annual resolution. The Compliance Program Review Report shall also include a certification that the Compliance Expert has evaluated its professional independence and objectivity, as appropriate to the nature of the engagement with regard to the Compliance Program Review and concluded that it is, in fact, independent and objective.
4. Annual Resolution: For each Reporting Period under the CIA, the BCC shall adopt a resolution, signed by each individual member of the BCC, summarizing its review and oversight of FLI’s Compliance Program. The resolution shall include the following language, at a minimum:
   
   “The Compliance Committee of the Board of Directors has made a reasonable inquiry into the operations of Forest’s Compliance Program, including, but not limited to, evaluating its effectiveness and receiving updates about the performance of the Compliance Officer and other Compliance personnel for the time period [insert time period]. In addition, the Board Compliance Committee has retained a Compliance Expert with expertise in compliance with the Federal health care program and FDA requirements to support the Board’s responsibilities. The Board Compliance Committee also has arranged for the performance of, and reviewed the results of, the Compliance Program Review, including the Compliance Program Review Report. Based on all of these steps, the Board Compliance Committee has concluded that, to the best of its knowledge, Forest has implemented an effective Compliance Program to meet Federal health care program requirements, FDA requirements, and the obligations of the CIA.”
   
   If the BCC is unable to provide such a conclusion in the resolution, it shall include in the resolution a written explanation of why it is unable to provide the conclusion and the steps it is taking to implement an effective Compliance Program at FLI.

The BCC may form and delegate authority to subcommittees when appropriate.

V. Meetings and Reports

The BCC shall arrange for minutes to be kept of each meeting and for such minutes to be distributed to each member of the BCC and to members of the Board who are not members of the BCC. The BCC shall report to the Board of Directors at each regular meeting of the Board and whenever so requested by the Board or by way of circulating minutes.

¹ The CIA defines a Reporting Period as each one-year period beginning with the one-year period immediately following the September 15, 2010 Effective Date of the CIA.