Exhibit 10.41


 


BIOVAIL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT


 


THIS AGREEMENT is made by and between Biovail
Corporation (hereinafter the “Corporation”) and Gilbert Godin (hereinafter the “Executive”).


 


ARTICLE ONE — GENERAL
DUTIES AND TERM


 


Scope of Employment
/ Duties


 


1.01                           The Corporation will employ the Executive
as Executive VP & Chief Operating
Officer.  The Executive will serve
as an officer of the Corporation.  During
the Employment Term (as defined below), the Executive will devote substantially
all of the Executive’s business efforts and time to the Corporation.  The Executive agrees, during the Employment
Term, not to actively engage in any other employment, occupation or consulting
activity for any direct or indirect compensation without the prior approval of
the Chief Executive Officer of the Corporation (the “CEO”); provided, however,
that the Executive may (a) serve on the boards of directors of other
companies (subject to reasonable approval of the CEO) and boards of trade
associations or charitable organizations; (b) engage in charitable
activities and community affairs; and (c) manage the Executive’s personal
investments and affairs, as long as such activities do not violate Section 4.02
and do not materially interfere with the Executive’s duties and
responsibilities for the Corporation.


 


1.02                           The Corporation reserves the right to
establish the employment relationship with the Executive directly with the
Corporation or with any of its affiliates or subsidiaries, or to change such
employment relationship over time, as it deems necessary or appropriate to
comply with legal requirements or for ease of administration of employee
benefits programs or other matters.


 


1.03                           Notwithstanding 1.02, the Corporation
acknowledges and agrees that the Executive’s principal residence is and shall
remain in the United States of America.


 


Term of Agreement


 


1.04                           The Executive has been employed by the
Corporation since May 2, 2006 (the “Employment Commencement Date”).  The Corporation hereby agrees to continue to
employ the Executive and the Executive hereby accepts such continued
employment, in accordance with the terms and conditions of this Agreement,
commencing on July 3, 2009.  The period
of the Executive’s employment under this Agreement will be referred to as the
“Employment Term.”  Subject to the
Corporation’s obligation to provide severance benefits and the parties’
obligation to provide a Notice of Termination (as defined below), the Executive
and the Corporation acknowledge that this employment relationship may be
terminated at any time and for any or no cause or reason at the option of
either the Executive or the Corporation.


 

















 


ARTICLE TWO — COMPENSATION


 


Base Salary


 


2.01                           As of the Employment Commencement Date,
the Executive’s annualized base salary will be $500,000.02
USD, payable in accordance with the Corporation’s normal payroll
practices for employees generally, and will be subject to annual review in
accordance with the Corporation’s normal review process for other similarly
situated senior executives.


 


Incentive
Compensation


 


2.02                           The Executive will be eligible to
participate in the Corporation’s short term annual incentive compensation plan
as such plan may be amended from time to time (the “Short Term Incentive Plan”)
in accordance with the terms of the Short Term Incentive Plan.  As of the date of this Agreement, the
Executive’s target will be 60% of the
Executive’s annual base salary.


 


Equity
Compensation


 


2.03                           Eligibility and Terms.


 


The Executive will be eligible to participate in the
Corporation’s equity compensation plan, as such plan may be amended from time
to time (the “Equity Compensation Plan”), in accordance with the terms of the
Equity Compensation Plan, except as may be otherwise indicated in this
Agreement.  The Executive’s annual target
under the Equity Compensation Plan shall be 90,000
stock options and 7,500 Restricted Share
Units (“RSUs”), or a substantially equivalent award.  Subject to the approval of the Board of
Directors, the Executive will be eligible in 2009 for a special one-time grant
of 75,000 RSUs subject to performance goals.


 


Employee Benefits


 


2.04                           During the Employment Term, the Executive
will be eligible to participate in employee benefit plans and programs that are
offered to the Corporation’s other similarly-situated senior executives in
accordance with the terms of such plans as they may change from time to
time.  Nothing in this Agreement
shall preclude the Corporation or any affiliate of the Corporation from
terminating or amending any employee benefit plan or program from time to time
after the Employment Commencement Date.


 


Expenses


 


2.05                           The Executive shall be reimbursed for
reasonable out of pocket business expenses, including travel and entertainment
expenses, actually and properly incurred by the Executive in the course of
performing the Executive’s services hereunder, upon furnishing to the
Corporation reasonable supporting statements and vouchers; provided, however,
that in any financial year in which the Corporation has provided to the
Executive an approved budget, such expenses must not exceed the amount so
budgeted without the prior written approval from the CEO.


 


Vacation


 


2.06                           The Executive will be eligible for 5
weeks of vacation annually, to be taken in accordance with the terms of the
Corporation’s Vacation Policy, without regard to any lesser


 

















 


amount of vacation time set forth therein.  Notwithstanding the foregoing, the Executive’s
eligibility for vacation in the year of hire will be pro-rated in the manner
specified in the Corporation’s Vacation Policy.


 


ARTICLE THREE —
TERMINATION AND RESIGNATION


 


Involuntary
Termination - Either By The Corporation Without Cause or By The Executive For
Good Reason


 


3.01                           If the Executive incurs an involuntary
termination from employment with the Corporation on account of a termination by
the Corporation without Cause or by the Executive for Good Reason, then, in
addition to any benefits or compensation accrued, earned and due to the
Executive but not yet paid as of the date that is designated by the Corporation
or the Executive, as applicable, as the last day of the Executive’s employment
or term of office with the Corporation (the “Termination Date”), the Executive
will be eligible for the severance payments and benefits as described in this Section 3.01;
provided that (i) the Executive continues to comply with the Restrictive
Covenants (as defined below); and (ii) the Executive executes, and does
not revoke, a written waiver and release of all claims, demands and causes of
action against the Corporation and related parties in a form prescribed by the
Corporation, as limited by Section 3.09 (“Release”):


 


(a)                                  The Executive will be paid a lump sum
severance payment within 60 days of the Executive’s Termination Date, equal to
one (1) times the Executive’s base salary (calculated using the Executive’s
highest annual base salary in the three years prior to the Executive’s
Termination Date) plus one (1) times
the Executive’s target level of annual incentive compensation for the year
prior to the year in which the Executive’s Termination Date occurs;


 


(b)                                 The Executive will be entitled to a
pro-rated portion of the Executive’s target level of annual incentive
compensation for the year in which the Executive’s Termination Date occurs,
based on the number of months (rounded to the next highest number for a partial
month) of the calendar year elapsed prior to the Executive’s Termination Date
and calculated and paid in accordance with the terms of the Corporation’s Short
Term Incentive Plan; and


 


(c)                                  Until the earlier of (i) the end of
the one (1) year period following the Executive’s Termination Date, or (ii) the
date, or dates, the Executive is eligible to receive benefits under the same
type of plan of a subsequent employer (the “Benefit Period”), the Corporation
will pay to the Executive a monthly payment on the first payroll date of each
month equal to the COBRA cost of continued medial and dental coverage for the
Executive and the Executive’s covered dependents under the medical and dental
plans of the Corporation pursuant to section 4980B of the Internal Revenue
Code, less the amount that the Executive would be required to contribute for
medical and dental coverage if the Executive were an active employee.  These payments will commence on the
Corporation’s first payroll date after the Executive’s Termination Date and
will continue until the end of the Benefit Period (but not longer than the
Benefit Period).


 

















 


Involuntary
Termination By The Corporation For Cause Or Voluntary Resignation Without Good
Reason


 


3.02                           If the Executive is involuntarily
terminated by the Corporation for Cause or the Executive voluntarily resigns
from employment without Good Reason, then the Executive will forfeit the
Executive’s right to receive any salary, Short Term Incentive Plan
compensation, Equity Compensation Plan compensation or other compensation that
has not been fully accrued at the time the Executive’s employment terminates;
provided, however, that the Executive will be entitled to receive any benefits
or compensation accrued, earned and due to the Executive but not yet paid as of
the Executive’s Termination Date.


 


Death or
Disability


 


3.03                           The Executive’s employment will terminate
automatically upon the Executive’s death. 
The Corporation may terminate the Executive’s employment if illness,
disease, or physical or mental incapacity render the Executive generally
incapable of performing the Executive’s duties or unfit to advance or represent
the Corporation on a daily basis for a period of twelve (12) consecutive months
and within such twelve (12) months, the Executive fails to produce to the
Corporation a medical opinion indicating a reasonable time for the return of
the Executive to the full-time assumption of the Executive’s past duties and
responsibilities.  Nothing herein is
intended to circumvent or abridge the Corporation’s short-term disability
policy or long-term disability plan.  In
the event of termination pursuant to the terms of this Section 3.03, the
Executive or the Executive’s estate, as applicable, will be entitled to receive
any salary, benefits or other amounts accrued, earned and due to the Executive
but not yet paid as of the Executive’s Termination Date.


 

















 


Cause


 


3.04                           For purposes of this Agreement, Cause
includes:


 


(a)                                  conviction of the Executive, or entering
of a guilty plea or a plea of no contest by the Executive, with respect to, a
felony, any crime involving fraud, larceny or embezzlement or any other crime
involving moral turpitude which subjects, or if generally known, would damage
the business interests or reputation of the Corporation or any of its
affiliates;


 


(b)                                 any act of fraud, misappropriation,
material dishonesty, embezzlement or similar conduct involving the Corporation
or any affiliates;


 


(c)                                  a material breach by the Executive of the
Executive’s duties hereunder (other than as a result of incapacity due to
physical or mental impairment) which is demonstrably willful and deliberate on
the part of the Executive or which is committed in bad faith or without
reasonable belief that such breach is in the best interests of the Corporation;


 


(d)                                 a material breach by the Executive of the
Executive’s duties hereunder (other than as a result of incapacity due to
physical or mental impairment), except as identified in Section 3.04(c) above,
which breach is not remedied by the Executive within 30 days after receipt of
written notice from the Corporation specifying such breach; or


 


(e)                                  the Executive’s failure to comply in any
material way with any of the provisions of this Agreement.


 


Good Reason


 


3.05                           For purposes of this Agreement, a
voluntary resignation by the Executive will be deemed to be a termination for
Good Reason if:


 


(a)                                  The Corporation makes:  (i) any assignment to the Executive of
any duties which are materially inconsistent with the Executive’s position; (ii) any
material reduction in the Executive’s authority, responsibilities or status; or
(iii) a material reduction to the Executive’s base salary;


 


(b)                                 The Executive notifies the Corporation in
writing of the Executive’s belief that the Corporation has taken an action
identified in Section 3.05(a) within thirty (30) days of the event at
issue;


 


(c)                                  The Corporation has not remedied the
situation within thirty (30) days after receipt of written notice from the
Executive; and


 


(d)                                 The Executive provides a Notice of
Termination within thirty (30) days after the Corporation’s opportunity to
remedy the situation has expired.


 

















 


Change in Control


 


3.06                           (a)                                  The Corporation shall provide the payments and
benefits described in Section 3.06(b) below only if:  (i) the Executive continues to comply
with the Restrictive Covenants (as such term is defined below); and (b) the
Executive executes, and does not revoke, a Release (as defined above).


 


(b)                                 Upon
a Change in Control (as defined below), and an involuntary termination of the
Executive’s employment either by the Corporation without Cause or by the
Executive for Good Reason, which termination occurs within a period of twelve
(12) months following the Change in Control, the Corporation shall provide to
the Executive, in addition to any benefits or compensation accrued, earned and
due to the Executive but not yet paid as of the Executive’s Termination Date,
but in lieu of any payments or benefits to which the Executive may be entitled
under Section 3.01 above, (a) a lump sum severance payment of two (2) times the Executive’s
base salary (calculated using the Executive’s highest annual base salary in the
three years prior to the Executive’s Termination Date) plus two (2) times the Executive’s
target level of annual incentive compensation under the Short Term Incentive
Plan for the year prior to the year in which the Executive’s Termination Date
occurs, payable within thirty (30) days of the Executive’s Termination Date
and, (b) any unvested equity compensation awards held by the Executive
shall automatically accelerate and become one hundred percent (100%) vested
and, as applicable, exercisable, as of the Executive’s Termination Date.


 


(c)                                  For
the purpose of this Section 3.06, “Change in Control” means the happening
of any of the following events:


 


(i)             the
completion of a transaction pursuant to which (A) the Corporation goes out
of existence or (B) any person, or any Associate (as such terms defined in
National Instrument 45-106 - Prospectus and
Registration Exemptions, as amended from time to time, or such other
successor rules, instruments or policies from time to time of Canadian
provincial securities regulatory authorities which may govern trades of
securities to employees, officers, directors or consultants (“NI45-106”)) or
Related Entity (as such term is defined in NI45-106) of such person (other than
the Corporation, any trustee or other fiduciary holding securities under any
employee benefit plan of the Corporation or a Related Entity, or any company
owned, directly or indirectly, by the shareholders of the Corporation in
substantially the same proportions as their ownership of common shares of the
Corporation) hereafter acquires the direct or indirect “beneficial ownership”
(as defined by the Canada Business Corporations
Act) of securities of the Corporation representing 50% or more of
the aggregate voting power of all of the Corporation’s then issued and
outstanding securities;


 


(ii)          the
lease, exchange, license, sale or other similar disposition of all or
substantially all of the Corporation’s assets in one transaction or a series of
related transactions to a person, or any Associate or Related Entity of such
person (other than an Associate or Related Entity of the Corporation, any
trustee or other fiduciary holding securities under any employee


 

















 


benefit plan of
the Corporation or a Related Entity, or any company owned, directly or
indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of common shares of the Corporation);


 


(iii)       the
dissolution or liquidation of the Corporation except in connection with the
distribution of assets of the Corporation to one or more persons which were
Related Entities prior to such event;


 


(iv)      during
any period of 24 consecutive months beginning on or after the date of the
Equity Compensation Plan, the persons who were members of the Board immediately
before the beginning of such period (the “Incumbent Directors”) cease (for any
reason other than death) to constitute at least a majority of the Board or the
board of directors of any successor to the Corporation, provided that any
director who was not a director as of the date of the Equity Compensation Plan
shall be deemed to be an Incumbent Director if such director is elected to the Board
by, or on the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors either actually or by
prior operation of the foregoing unless such election, recommendation or
approval occurs as a result of an actual or threatened election contest or
other actual or threatened solicitation of proxies or contests by or on behalf
of a person other than a member of the Board; or


 


(v)         a
merger, amalgamation, arrangement or consolidation of the Corporation with any
other corporation other than a merger, amalgamation, arrangement or
consolidation that would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger, amalgamation, arrangement or consolidation; provided,
however, that a merger, amalgamation, arrangement or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no person (other than those covered by the exceptions in (i) above)
acquires more than 50% of the combined voting power of the Corporation’s then
outstanding securities shall not constitute a Change in Control.


 


(d)                                 In the event any
payments or benefits made to the Executive upon a Change of Control are deemed “excess
parachute payments” within the meaning of Section 280G of the U.S.
Internal Revenue Code, and the Executive is subject to excise tax under Section 4999
of the U.S. Internal Revenue Code (the “Excise Tax”) with respect to such
payments, the Executive shall receive, in addition to any other payments and
benefits to which the Executive is entitled under the Agreement, an amount
which, after imposition of any income, employment, excise or other taxes on
such amount (including any income, employment, excise or other taxes


 

















 


paid on any amount due under this
Section), equals the difference between the amount the Executive actually
receives after payment of all taxes including all Excise Tax and the after-tax
amount the Executive would receive if no Excise Tax were imposed on him. Any
additional payment received under this Section 2.06(d) shall be
called the Gross-Up Payment. Notwithstanding any provisions of this Section 2.06(d) to
the contrary, in accordance with the requirements of section 409A of the Code,
any Gross-Up Payment payable hereunder shall be paid not later than the end of
the Executive’s taxable year next following the Executive’s taxable year in
which the Executive or the Company, as the case may be, remits the taxes for
which the Gross-Up Payment is being paid.


 


Notice of
Termination


 


3.07                           Any
termination of employment by the Corporation or by the Executive shall be
communicated by notice of termination to the other party hereto given in
accordance with Section 5.09 (a “Notice of Termination”).  For purposes of this Agreement, Notice of
Termination means a written notice which (a) identifies the specific
termination provision in the Agreement relied upon, and (b) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision identified, and (c)(i) in the case of a termination by the
Corporation, specifies the Executive’s Termination Date which shall not be less
than fifteen (15) nor more than sixty (60) days after the giving of such
notice; or (ii) in the case of a termination by the Executive without Good
Reason, shall not be less than ninety (90) days after the giving of such
notice.


 


Payments After
Termination of Employment


 


3.08                           Payments made by the Corporation to the
Executive pursuant to this Agreement after the Executive’s Termination Date
will be made by courier delivery service to the last address provided for
notices to the Executive pursuant to Section 5.09 of this Agreement.


 


Release


 


3.09                           The Release identified in Sections 3.01
and 3.06 will not require the Executive to release any right the Executive may
have to indemnification as an officer, director or employee of the Corporation
(or any affiliate thereof) pursuant to the articles of incorporation or bylaws
(or other governing instruments) of the Corporation (or any affiliate thereof)
or any vested benefits to which the Executive may be entitled under any
employee benefit plan.


 


ARTICLE FOUR — EXECUTIVE’S
OBLIGATIONS


 


Confidentiality


 


4.01                           The Executive agrees to be bound by the
terms of the confidentiality agreement (the “Confidentiality Agreement”) dated
the date hereof, which Confidentiality Agreement has been read, understood and
executed by the Executive and is attached hereto as Schedule A and which


 

















 


is incorporated by reference into this Agreement.  In the event of a conflict between the terms
of this Agreement and the terms of the Confidentiality Agreement, the terms of
this Agreement shall govern.


 


Non-Competition


 


4.02                           The Executive acknowledges that the
Corporation currently conducts business activities in North America and
Barbados (the “Territory”).  The
Executive further acknowledges that, in the future, the business activities are
expected to substantially expand territorially. 
Accordingly, the Executive hereby agrees and covenants that he shall not
during the term of this Agreement and for a period of one (1) year following the Executive’s
Termination Date for involuntary termination by the Corporation for Cause,
voluntary termination by the Executive, or termination following a Change in
Control, directly or in any manner whatsoever, including without limitation,
either individually, in partnership, jointly or in conjunction with any other
individual, partnership, corporation, unincorporated organization, trust, joint
venture, the Crown or any agency or instrumentality thereof of any juridical
entity, in the Territory (excluding, as applicable, any portions of the
Territory in which the Corporation is no longer carrying on business at the
relevant time) or in any other regions or countries where the Corporation may
be carrying on business at the relevant time:


 


(a)                                  carry on, be engaged in, take part in or
be a party to any Competitive Activity, directly or indirectly; or


 


(b)                                 consult, advise, render services to lend
money, guarantee the debts or obligations of or permit the use of his name or
any part thereof for any Competitive Activity.


 


For the purposes of this Section 4.02, a
Competitive Activity shall be defined as any business: (i) that competes
with or plans to actively compete with the business activities of the
Corporation through, but not limited to, the formulation, clinical testing,
registration, manufacturing or marketing of specialty pharmaceuticals and/or
drug delivery technologies in the therapeutic categories on which the
Corporation is focused, which include central nervous system disorders, pain
management, cardiovascular disease, type II diabetes, and any other category in
which the Corporation is focused in the future and excludes areas in which the
Corporation is not actively engaged at the relevant time, (ii) with which
the Corporation has a product(s) licensing agreement, (iii) in which
the Corporation has a minority equity interest, and (iv) with which the
Corporation is at the time actively negotiating a commercial relationship.


 


During the continuance of his employment, the
Executive shall not (other than solely as a holder of not more than three per
cent (3%) of the issued and outstanding voting shares of any public corporation
or as a shareholder of the Corporation, without the written approval of the
board of directors of the Corporation, directly or indirectly, either
individually or in partnership or in conjunction with any person or persons, firm,
association, syndicate, company or corporation as principal, agent, director,
manager, servant, shareholder or in any other manner whatsoever) carry on or be
engaged in or be concerned with or interested in any business or vocation
whatsoever which would be reasonably judged to be a Competitive Activity or
would impede the Executive in performing his duties as outlined herein.


 














 


The
Executive may at any time, or from time to time, request the Corporation to
advise the Executive in writing whether or not the Corporation considers a
specified business to be Competitive Activity. 
Any such request shall be made by written notice to the Corporation that
includes: (i) the name of the specific business unit which the Executive
proposes to provide services; (ii) the name or names of any parent
companies of such business unit; (iii) a description of the specific
services which the Executive proposes to perform for such business unit; (iv) a
statements as to why the Executive believes that the performance of such
services will not adversely affect the Corporation’s legitimate interests.


 


Non-Solicitation


 


4.03                           The Executive hereby covenants and agrees
that the Executive shall not, during the term of this Agreement and for a
period of twelve (12) months thereafter, solicit or contact, either directly or
indirectly, any of the Customers, Prospective Customers or any suppliers of the
pharmaceutical compounds used by the Corporation on the Executive’s own behalf,
or on behalf of any entity, by which the Executive is hired or retained. “Customers”
means customers of the Corporation with which the Executive had personal
contact or had supervision over the efforts of those who had direct personal
contact with such customers during the last two (2) years of the Executive’s
employment with the Corporation.  “Prospective
Customer” means any organizations or entities which had been actively contacted
and solicited for their business by representatives of the Corporation, and
with whom the Executive had contact, both during the last two (2) years of
the Executive’s employment with the Corporation.


 


Non-Hiring


 


4.04                           The Executive hereby covenants and agrees
that the Executive shall not, during the term of this Agreement and for a
period of twelve (12) months thereafter,
either directly or indirectly, solicit or endeavour to solicit from the
Corporation any of its employees, and shall not for a period twelve (12) months from the end of the
term of this Agreement hire any of the foregoing on the Executive’s own behalf
or on behalf of any entity for which the Executive is hired or retained.  Notwithstanding the foregoing, the Executive
shall not be considered in breach of this section should the Executive solicit
for hiring such Executive’s Administrative Assistant.


 


Injunctive Relief


 


4.05                           The Executive acknowledges and agrees
that the agreements and covenants in this Article Four are essential to
protect the business and goodwill of the Corporation and that a breach by the
Executive of the covenants in Sections 4.01, 4.02, 4.03 and 4.04 hereof could
result in irreparable harm to the Corporation for which the Corporation could
not be adequately compensated in damages and that, accordingly, the Corporation
may have no adequate remedy at law if the Executive breaches such
provisions.  Consequently, if the
Executive breaches any of such provisions, the Corporation shall have, in
addition to and not in lieu of, any other rights and remedies available to it
under any law or in equity, the right to obtain injunctive relief to restrain
any breach or threatened breach thereof and to have such provisions
specifically enforced by any court of competent jurisdiction.


 

















 


Severability of
Covenants in Full or in Part


 


4.06                           The parties acknowledge that the
provisions of Article Four hereof (the “Restrictive Covenants”) are
reasonable and valid in geographic and temporal scope and in all other
respects.  If any court of competent jurisdiction
determines that any of the Restrictive Covenants or any part thereof, is or are
invalid or unenforceable, the Executive and the Corporation agree that the
remainder of the Restrictive Covenants shall not be affected by the deemed
invalid portions.


 


Assignment of IP


 


4.07                           The Executive shall disclose to the
Corporation any and all Intellectual Property (as defined in the
Confidentiality Agreement) which the Executive may make solely, jointly, or in
common with other employees during the term of the Executive’s employment
within the Corporation and which relates to the business.  Any Intellectual Property coming within the
scope of the business made and/or developed by the Executive while in the
employ of the Corporation, whether or not conceived or made during regular
working hours, and whether or not the Executive is specifically instructed to
make or develop same, shall be for the benefit of the Corporation and shall be
regarded as work made in the course of employment for the purposes of the Copyright Act (Canada).  The Executive shall assign, set over and
transfer to the Corporation the Executive’s entire right, title and interest in
and to any and all of the Intellectual Property and to all letters patent and
applications for letters patent which may be, or may have been filed and/or
issued by or to the Executive or on the Executive’s behalf and the Executive
agrees to execute and deliver to the Corporation any and all instruments
necessary or desirable to accomplish the foregoing and, in addition, to do all
lawful acts which may be necessary or desirable to assist the Corporation to
obtain and enforce protection of the Intellectual Property.  To the extent of any rights the Executive may
have with respect to the Intellectual Property which are not assignable,
including but not limited to moral rights, the Executive hereby waives
same.  The Executive will execute and
deliver to the Corporation or its successors and assigns, such other and
further assignments, instruments and documents as the Corporation from time to
time reasonably may request for the purpose of establishing, evidencing, and
enforcing or defending its complete, exclusive, perpetual, and world-wide
ownership of all rights, titles, and copyrights, in and to the Intellectual
Property, and the Executive constitutes and appoints the Corporation as agent
and attorney-in-fact, with full power of substitution, to execute and deliver
such assignments, instruments, documents as the Executive may fail to or refuse
to execute and deliver, this power and agency being coupled with an interest
and being irrevocable.


 


Standards of
Business Conduct


 


4.08                           The Executive acknowledges and agrees
that the Executive has read and understood and agrees to be bound by the
Corporation’s Standards of Business Conduct, which is attached hereto as
Schedule B.


 


No Conflicting
Obligations


 


4.09                           The Executive warrants to the Corporation
that:


 

















 


(a)                                  the performance of the Executive’s duties
as an employee of the Corporation will not breach any agreement or other obligation
to keep confidential the Confidential Information of any third party; and


 


(b)                                 the Executive is not bound by any
agreement with or obligation to any third party that conflicts with the
Executive’s obligations as an employee of the Corporation.


 


ARTICLE FIVE -
INTERPRETATION AND ENFORCEMENT


 


Section 409A


 


5.01                           This Agreement shall be interpreted to
avoid any penalty sanctions under Internal Revenue Code section 409A.  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under section
409A, then such benefit or payment shall be provided in full at the earliest
time thereafter when such sanctions will not be imposed.


 


Notwithstanding any provision of this Agreement to the
contrary, if the Executive is a key employee of a publicly traded corporation
under section 409A at the time of the Executive’s separation from service and
if payment of any amount under this Agreement is required to be delayed for a
period of six (6) months after separation from service pursuant to section
409A, payment of such amount shall be delayed as required by section 409A, and
the accumulated postponed amount shall be paid in a lump sum payment within ten
(10) days after the end of the six-month period.  If the Executive dies during the postponement
period prior to the payment of postponed amount, the amounts withheld on
account of section 409A shall be paid to the personal representative of the
Executive’s estate within 60 days after the date of the Executive’s death.  A “key employee” shall mean an employee who,
at any time during the twelve (12) month period ending on the identification
date, is a “specified employee” under section 409A of the Internal Revenue
Code, as determined by the Board.  The
determination of key employees, including the number and identity of persons
considered key employees and the identification date, shall be made by the
Board in accordance with the provisions of sections 416(i) and 409A and
the regulations issued thereunder.


 


For purposes of section 409A, the right to any series
of installment payments under this Agreement shall be treated as a right to a
series of separate payments.  All
reimbursements and in kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of section 409A, including,
where applicable, the requirement that (i) any reimbursement shall be for
expenses incurred during the Executive’s lifetime (or during a shorter period
of time specified in this Agreement), (ii) the amount of expenses eligible
for reimbursement, or in kind benefits, provided during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year
following the year in which the expense is incurred, and (iv) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit.


 

















 


Independent Legal
Advice


 


5.02                           The Executive agrees to the terms and
conditions of this Agreement having had the opportunity to receive independent
legal advice, for which the Executive has been reimbursed by the Corporation.


 


Severability


 


5.03                           The parties further acknowledge that if
any provision contained in this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.


 


Sections and
Headings


 


5.04                           The division of this Agreement into
Articles and Sections and the insertion of headings are for the convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.


 


Number and Gender


 


5.05                           In this Agreement words importing the
singular number only shall include the plural and vice versa and words
importing the masculine gender shall include the feminine and neuter genders and
vice versa.


 


Entire Agreement


 


5.06                           This Agreement and all the Schedules
hereto constitute the entire Agreement between the parties with respect to the
subject matter hereof and cancels and supersedes any prior understandings and
agreements between the parties with respect thereto (including, but not limited
to, the Executive’s employment agreement dated December 23, 2008).  There are no representations, warranties,
forms, conditions, undertakings or collateral Agreements, express, implied or
statutory between the parties other than as expressly set forth in this
Agreement.


 


Amendments and
Waivers


 


5.07                           No amendment to this Agreement shall be
valid or binding unless set forth in writing and duly executed by both
parties.  No waiver of any breach of any
term or provision of this Agreement shall be effective or binding unless made
in writing and signed by the party purporting to give the same and, unless
otherwise provided in written waiver, shall be limited to the specific breach
waived.


 


Governing Law


 


5.08                           This Agreement shall be deemed to have
been made in and shall be construed in accordance with the laws of the State of
New Jersey and all legal proceedings contemplated in this Agreement shall be
brought in, and be governed by, the laws of the State of New Jersey, without
regard to principles of conflicts of law.


 

















 


Notices


 


5.09                           Any demand, notice or other communication
(hereinafter in this Section 5.09 referred to as a “Communication”) to be
made or given in connection with this Agreement shall be made or given in
writing and may be made or given by personal delivery addressed respectively to
the recipients:


 

















 


To the Executive:


 


Gilbert Godin

xxx


 


To the Corporation:


 


7150 Mississauga Road

Mississauga, ON L5N 8M5

Attn: Chief Executive Officer


 


or such other address or individual as may be
designated by notice by either party to the other.  Any communication made or given by personal
delivery shall be conclusively deemed to have been given on the day of the
actual delivery thereof.


 


Benefit of
Agreement


 


5.10                           This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
executors, legal personal representatives, successors and assigns.


 


Assignment


 


5.11                           The Executive may not assign the
Executive’s rights or obligations under this Agreement without the prior
written consent of the Corporation which consent may be unreasonably
withheld.  The Corporation may
unilaterally assign this agreement to an affiliate without consent but on
notice to the Executive.


 


Execution of
Agreement


 


5.12                           The Executive acknowledges that the
Executive has executed this Agreement freely; that the Executive has reviewed
this Agreement thoroughly; that the Executive agrees with its contents; and
that the terms herein are reasonable for the fair protection of both the
Executive and the Corporation.


 

















 


IN WITNESS WHEREOF, the parties have executed this Agreement
on the dates identified below at Bridgewater,
New Jersey:


 


	
  BIOVAIL CORPORATION

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ W. WELLS

  	
   

  	
  /s/ GILBERT GODIN

  
	
  Name:

  	
  William Wells

  	
   

  	
  Gilbert Godin

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Executive VP & COO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  8/04/09

  	
   

  	
  Date:

  	
  8 . 04 . 09

  



 














 


SCHEDULE A


 


BIOVAIL CORPORATION

(and its Subsidiaries, Divisions, and Affiliates)


 


CONFIDENTIALITY AGREEMENT


 


As an employee of Biovail Corporation (the “Corporation”),
I acknowledge that I may acquire or have disclosed to me by the Corporation or
by any affiliate, associate, or technology partner of the Corporation, either
directly or indirectly, in writing, conversation, or through observation,
various information about the business of the Corporation which is not in the
public domain and which the Corporation does not wish to be divulged to other
persons, companies, or third parties. I further understand that the Corporation’s
Confidential Information (as defined below) is essential to its competitive
advantage and to its ability to be financially viable. I further understand
that the unauthorized disclosure of such Confidential information may cause the
Corporation irreparable injury that may not be rectified in the future.


 


Therefore, as a condition and in consideration of my
employment with the Corporation, I understand and agree that while employed
with the Corporation and thereafter (as more particularly described below). I
am required to hold confidential and not to disclose to anyone without the
written authority from the Corporation any knowledge, information, or facts
concerning the Corporation’s:


 


·                                                                                          research and development activities


·                                                                                          technological plans, advances, applications and inventions


·                                                                                          technical specifications, designs and plans


·                                                                                          materials and sources of supply


·                                                                                          discoveries, inventions, trade secrets, patents


·                                                                                          financial affairs. contracts, licensing agreements, customer
lists, pricing practices, marketing strategies


·                                                                                          any other information regarding the Corporation, its
products and their development which is not in the public domain


 


All of the foregoing shall hereinafter collectively be
referred to as the “Confidential Information”.


 


I shall keep confidential any and all Confidential
Information which has been disclosed to me in writing or through oral
communications and shall not divulge in any manner whatsoever any such
information to any person, firm, corporation, partnership or similar entities
without the Corporation’s written authority.


 


Should I breach or threaten to breach this Agreement,
I shall be liable to the Corporation in equity and/or in law for damages that
may be suffered by the Corporation as a result of the breach or threatened
breach. I understand that a breach of this Agreement may result in irreparable
harm to the Corporation such as to warrant the entitlement by the


 

















 


Corporation to an interlocutory and/or permanent
injunction or other equitable relief against me, and an award of damages
including punitive, exemplary and aggravated damages, together with legal costs
and expense and I specifically agree that I will not argue the adequacy of
damages or the Corporation’s ability to seek equitable relief in any such
proceeding.


 


All Confidential Information supplied by the
Corporation to me during the course of my employment and any rights related
thereto, including but not limited to rights of know how, patent, trademark and
copyright, with respect to existing products or those that are developed during
or after my employment, are and remain the exclusive and absolute property of
the Corporation.


 


I shall not, except as and to the extent required to
enable me to carry out my duties with the Corporation, make any copies or
reproduce the Confidential Information nor shall I remove or cause to have
removed from the premises of the Corporation during my employment any
Confidential Information unless required to do so in order to fulfill my duties
with the Corporation. Such copies or reproductions shall be strictly subject to
the terms and conditions of this Agreement. I shall take such steps as are
necessary to restrict access to and protect the confidentiality of such copies
or reproductions of the Confidential Information. Any such copies or
reproductions made shall become the exclusive and absolute property of the
Corporation.


 


Upon request of the Corporation, I agree to
immediately surrender to the Corporation all documentation and information -
notes, drawings, recordings, manuals, letters, correspondence, computer data
and programs, records, books or any other materials relating to the
Confidential Information which is in my possession without my retaining any
copies or duplicates thereof.


 


1 agree that this Agreement shall be construed in
accordance with the laws of the Province of Ontario and I agree that the
applicable courts of the Province of Ontario shall have exclusive jurisdiction
with respect to any dispute or breach herein and 1 hereby attorn to the
exclusive jurisdiction of the courts of the Province of Ontario.


 


This Agreement shall enure to the benefit of and shall
be binding upon my successors, heirs and attorneys.


 


The disclosure or divulging of any Confidential
Information contrary to this Agreement, or the violation of this Agreement in
any way shall result in my immediate termination of employment, in addition to
which I may be subject to criminal prosecution and civil liability.


 


I acknowledge and agree that I have executed this
Agreement freely and with the benefit of independent legal advice and the terms
herein are fair and reasonable.


 

















 


I acknowledge and agree to the foregoing.


 


 


	
  Employée Signature:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness Signature:

  	
   

  	
   

  	
  Date:

  	
   

  



 














 


SCHEDULE
B


 





 


BIOVAIL
CORPORATION

(and its Subsidiaries, Divisions, and Affiliates)


 


STANDARDS
OF BUSINESS CONDUCT


 


Biovail
Corporation (“Biovail”), together with its subsidiaries, divisions and
affiliates, places great importance on conducting its business activities in an
ethical and appropriate manner. Each employee, officer and director is a
reflection of Biovail, and as such, the activities and actions of every
individual within Biovail must be undertaken in accordance with a high standard
of ethics and integrity. As such, Biovail expects each employee, officer and
director to comply with, and adhere to, these Standards of Business Conduct
(the “Standards”).


 


1.                                      CONFLICTS
OF INTEREST


 


Employees,
officers and directors of Biovail must avoid situations where their private
interests could conflict with, or even appear to conflict with, the interests
of Biovail and its stockholders.


 


Conflicts of
interest arise when an individual’s position or responsibilities with Biovail
present an opportunity for personal gain apart from the normal rewards of
employment. They also arise when the private interests of an employee, officer
or director are inconsistent with those of Biovail or create conflicting
loyalties. Such conflicting loyalties can cause an employee, officer or
director to give preference to private interests in situations where corporate
responsibilities should come first. Employees, officers and directors must
perform the responsibilities of their positions on the basis of what is in the
best interests of Biovail and free from the influence of personal
considerations and relationships.


 


In the event that
any potential conflict of interest arises, the individual involved must
immediately notify his or her immediate supervisor. If such individual is an officer
or director of Biovail, the Executive Chairman (“Chairman”), Chief Executive
Officer (“CEO”) and the General Counsel, or in the absence of a General Counsel
the Vice President, Associate General Counsel (“SLO”) of Biovail must also be
immediately notified and no further action may be taken unless authorized in
writing by the Chairman and/or the CEO.


 


While it is not
possible to detail every situation where conflicts of interest may arise, the
following policies cover the areas that have the greatest potential for
conflict:


 

















 


A.                                    Trading in Biovail Securities
and Use of Inside Information


 


There are numerous
laws in Canada and the United States (federal, provincial and state laws), to
regulate transactions in corporate securities (stocks and bonds) and the
securities industry. Violation of these laws may lead to civil and criminal
actions against the individual and Biovail.


 


i.                                          Any employee, officer,
director or other insider or anyone (family member, etc.) who knows of any
material information (as defined below) about Biovail that has not been
disclosed to the public (commonly known as “insider information”) may not
engage in any transaction in Biovail’s securities until such information is
disclosed to the public (whether or not there is a formal trading “black out”
in place). This rule applies equally to transactions in securities of
other companies. In addition, employees, officers and directors must not
provide insider information to others (“tippees”) who may trade in either the
securities of Biovail or the securities of other companies.


 


“Material
information” is any information relating to the business and affairs of Biovail
that would reasonably be expected to result in a change in the market price or
value of Biovail’s securities. Generally speaking, material information is a
matter to which an average prudent investor should be reasonably informed
before a decision is made to buy or sell the security involved. Examples of
such information would include annual or quarterly financial results; significant
changes in management; significant shifts in operating or financial
circumstances, such as major write-offs and changes in earnings projections;
borrowing of a significant amount of funds; acquisitions of, or mergers with,
other companies; significant new contracts or loss of business; and major new
products, services or patents. This list provides examples only; many other
matters may be considered material information.


 


Employees,
officers, directors and other insiders who have questions that relate to the
sale or purchase of a security under circumstances where these laws and
regulations might apply should consult with the SLO, who may refer them to
outside legal counsel.


 


ii.                                       In addition to the prohibition
against the use of “insider” information which applies to all employees,
officers and directors, the various securities laws that apply in the
jurisdiction and countries in which Biovail does business place definite
restrictions on the manners in which employees, officers and directors of Biovail,
and their family members, their associates, etc., may


 


21

















 


engage in transactions involving the
securities of Biovail. Employees, officers and directors shall comply with all
laws, rules and regulations that prohibit or restrict insider trading.


 


Whenever there
is any doubt as to whether any transactions involving Biovail’s securities
would violate securities laws, employees, officers and directors should
consult the SLO of Biovail. Within the framework of the foregoing policies and
laws, the final decision of each employee, officer or director, with respect to
securities transactions, must be his or her own.


 


iii.                                    Employees, officers, directors
and other insiders shall maintain the confidentiality of information entrusted
to them by Biovail or its customers (except where disclosure is authorized or
legally mandated) and shall not, without proper authority, give or release to
anyone not employed by Biovail, data or information of a confidential nature concerning
Biovail. Disclosure of confidential information can be harmful to Biovail and
could be the basis for legal action against Biovail and the individual
disclosing the information. Confidential information includes all non-public
information that might be of use to competitors, or harmful to Biovail or its
customers, if disclosed.


 


iv.                                   Employees, officers, directors
and other insiders shall not acquire any property, security or any business
interest that they know Biovail has an interest in acquiring. Moreover, based
on such advance information, employees, officers and directors shall not
acquire any property, security or business interest for speculation or
investment.


 


v.                                      Employees, officers, directors
and other insiders must follow Biovail policies regarding “Blackout Periods”
when Biovail’s stock may not be traded. Such policies will be communicated by
the SLO from time to time and must be adhered to by all employees, officers and
directors.


 


B.                                    Personal Financial Interest


 


Employees,
officers and directors should avoid any outside financial interests that might
influence decisions or actions they have been empowered to make on behalf of
Biovail. An employee, officer or director performing duties in conformity with
this policy shall not have a financial interest in, indebtedness to, or a
personal contract or understanding with any concern with which he or she does
business on behalf of Biovail.


 


i.                                          Employees, officers or
directors whose corporate duties bring them into business dealings with an
organization in which they, or a member of their family, have a financial
interest or to which they, or a


 


22

















 


member of their family, have any
indebtedness, or a business employing a relative or close friend, must immediately
notify their immediate supervisor. The employee, officer or director, in turn,
cannot complete a transaction on behalf of Biovail with this organization
unless properly authorized in writing from their supervisor after full
disclosure of the relationship.


 


ii.                                       An employee, officer or
director may not perform work or services, outside the course of their normal
employment by Biovail, for an organization doing or seeking to do business with
Biovail without appropriate prior written approval of their supervisor or the
Board of Directors. An employee, officer or director may rot be a director,
officer, partner or consultant of an organization doing or seeking to do
business with Biovail, nor may any of them permit their names to be used in any
way indicating a business connection with such an organization, without
appropriate prior written approval of their supervisor or the Board.


 


iii.                                    An employee, officer or
director shall not accept for himself or herself, or for the benefit of any
relative or friend, any payments, loans, services, favors involving more than
ordinary social amenity, or gifts of more than nominal value from any
organization doing or seeking to do business with Biovail.


 


iv.                                   The requirement of freedom
from conflict of interest applies with equal force to the spouse, children and
other close relatives of each employee, officer and director. This policy
applies to all employees, officers and directors of Biovail with respect to all
of the affairs of Biovail.


 


v.                                      Employees, officers and directors
shall not (a) take for themselves personally opportunities that are
discovered through the use of corporate property, information or position; (b) use
corporate property information, or position for personal gain; (c) compete
with Biovail. Employees, officers and directors owe a duty to Biovail to
advance its legitimate interests when the opportunity to do so arises.


 


vi.                                   Biovail may not make loans to
any employee, officer or director.


 


C.                                    Outside Activities


 


Employees,
officers and directors should avoid outside employment or activities which
would impair the effective performances of their responsibilities to Biovail,
either


 


23

















 


because of
excessive demands on their time, or because the outside commitments can be
contrary to their obligations to Biovail


 


D.                                    Protection and Proper Use of
Biovail’s Assets


 


All employees,
officers and directors should protect Biovail’s assets and ensure their
efficient use. Theft, carelessness and waste have a direct impact on Biovail’s
profitability. All of Biovail’s assets should be used only for legitimate
business purposes.


 


E.                                      Fair Dealing


 


Each employee,
officer and director shall endeavor to deal fairly with Biovail’s customers,
suppliers, competitors and employers. None should take unfair advantage of
anyone through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any other unfair-dealing practice,


 


2.                                      COMPETITIVE
PRACTICES


 


The management of
Biovail firmly believes that fair competition is fundamental to continuation of
the free-enterprise system. Biovail complies with, and supports, laws of all
countries that prohibit restraints of trade, unfair practices, or abuse of
economic power.


 


Biovail will not
enter into arrangements that unlawfully restrict its ability to compete with
other businesses, or the ability of any other business organization to compete
freely with Biovail. Biovail policy also prohibits employees, officers and
directors from entering into, or even discussing, any unlawful arrangement or
understanding which may affect its pricing policies, terms upon which its
products and services are sold, or which might be construed as dividing
customers or sales territories with a competitor.


 


These principles
of fair competition are basic to all Biovail operations. They are integral
parts of the following sections that cover Biovail’s dealings with suppliers,
customers and public officials.


 


3.                                      DEALING
WITH SUPPLIERS


 


Biovail is a
valuable customer for many suppliers of goods, services and facilities. People
who want to do business, or to continue to do business, with Biovail must
understand that all purchases by Biovail will be made in accordance with its
purchasing policy and exclusively on the basis of price, quality, service and
suitability to Biovail’s needs.


 


A.                                    Reciprocity


 


Biovail considers
reciprocity a harmful practice and a hindrance to assuring purchase of the best
available materials or services at the lowest possible prices. It will not be
practiced or allowed.


 


24

















 


Suppliers of goods
and services to Biovail will not be asked to buy goods and services from
Biovail in order to become or continue as a supplier.


 


Biovail will not
attempt to influence its suppliers to purchase from customers of Biovail. When
Biovail makes purchases it will not favor firms who are customers of Biovail or
any of its affiliates.


 


B.                                    “Kickbacks” and Rebates


 


Purchases or sales
of goods and services by Biovail must not lead to employees, officers or
directors, or their families, receiving any type of personal kickbacks or
rebates. Employees, officers, directors, and their families, must not accept
any form of “under-the-table” payment.


 


C.                                    Receipt of Gifts and
Entertainment


 


Even when gifts
and entertainment are exchanged out of the purest motives of personal
friendship, they can be misunderstood. They can appear to be attempts to bribe
Biovail’s employees, officers or directors into directing business of Biovail
to a particular supplier. To avoid both the reality and the appearance of
improper relations with suppliers or potential suppliers, the following
standards will apply to the receipt of gifts and entertainment by employees,
officers and directors of Biovail:


 


Gifts


 


i)                                         Employees, officers and
directors arc prohibited from soliciting gifts, gratuities, or any other
personal benefit or favor of any kind from suppliers or potential suppliers.
Gifts include not only merchandise and products but also personal services, and
tickets to theatrical and sports events. Employees, officers and directors
should exercise good judgment when accepting unsolicited gifts. Employees,
officers and directors are prohibited from accepting gifts of money.


 


ii)                                      Employees, officers and
directors may accept unsolicited non-money gifts provided:


 


(1)                                  They are items of nominal
intrinsic value; or


 


(2)                                  They are advertising and
promotional materials, clearly marked with Biovail or brand names of the giver.


 


iii)                                   Any gift of more than nominal
intrinsic value must be reported to the SLO to determine whether it can be
accepted. Some gifts may be perishable so as to make their return impractical.
Supervisors can permit acceptance of such gifts, but should require employees,
officers and directors to tactfully inform givers that such gifts are
discouraged.


 


25

















 


iv)                                  In the transaction of some
international business, it is lawful and customary for business leaders in some
countries to give unsolicited gifts to employees, officers or directors of
Biovail. These gifts can be of more than nominal value. Moreover, under the
circumstances, returning the gifts or payment for them may constitute an
affront to the giver. In such cases, the gift must be reported to the SLO who may
permit the retaining of the gifts.


 


v)                                     In all other instances where
gifts cannot be returned or may adversely affect Biovail’s continuing business
relationships, the SLO must be notified. They can require employees, officers
and directors to transfer ownership of such gifts to Biovail.


 


Entertainment


 


i)                                         Employees, officers and
directors shall not encourage or solicit entertainment from any individual or
company with whom Biovail does business. Entertainment includes, but is not
limited to, activities such as dinner parties, theater parties, and sporting
events.


 


ii)                                      From time to time employees,
officers and directors may accept unsolicited entertainment, but only under the
following conditions:


 


(1)                                  The entertainment occurs
infrequently;


 


(2)                                  It arises out of the ordinary
course of business;


 


(3)                                  It involves reasonable, not
lavish expenditures (the amounts involved should be ones employees, officers
and directors are accustomed to normally spending for their own business or
personal entertainment); and


 


(4)                                  The entertainment takes place
in settings that also are reasonable, appropriate, and fitting to employees,
officers and directors, their hosts, and their business at hand.


 


4.                                      DEALINGS
WITH CUSTOMERS AND POTENTIAL CUSTOMERS


 


Employees,
officers and directors must keep all dealings with customers and potential
customers fair and above board. Biovail gets business and keeps it because of
the quality of its goods and services. Biovail does not give unethical or
illegal rebates, kickbacks, under-the-table payments, or other similar improper
favors to customers or their representatives.


 


The boundary line
between ethical and unethical competition, or legal and illegal conduct, is not
always well defined, particularly in international activities where differing


 


26

















 


local laws,
custom; and practices come into play. Therefore, the following standards will
serve as guides:


 


a)                                      All employees, officers and
directors should make themselves aware of and fully comply with all laws, rules and
regulations, whether federal, state, local or foreign, including laws governing
relations with customers as well as competitors.


 


b)                                     All employees, officers and
directors engaged in negotiations and contracts with foreign governments, the
United States or any political subdivision thereof must also know and abide by
the specific rules and regulations covering relations with such
governments and their agencies.


 


c)                                      Employees, officers and
directors may not give gifts to customers except items of nominal value, which
fit the legal, normal, and customary pattern of Biovail’s sales efforts for a
particular market. Exceptions to this policy can occur in international trades
where it can be legal, customary, and appropriate business practice to exchange
gifts with customers. Only the CEO can authorize the giving, receiving, or
exchanging of such gifts. Any gifts received by employees, officers or
directors in such an exchange must be reported to the CEO for determination as
to the disposition of the gifts.


 


d)                                     Entertainment for any customer
must fit regular business practices. The place and type of entertainment and
the money spent must be reasonable and appropriate.


 


5.                                      DEALING
WITH PUBLIC OFFICIALS


 


Domestic and
foreign laws and regulations require Biovail to be in contact with public
officials on a wide variety of matters. Employees, officers and directors who
regularly make these contacts have special responsibilities for upholding
Biovail’s good name. The following standards relate to these special
responsibilities:


 


a)                                      All employees, officers and
directors who contact public officials must be familiar with lobbying laws and
public disclosure requirements, particularly those that apply to registrations
and filings.


 


b)                                     No employee shall make any
form of payment, direct or indirect, to any public official as an inducement to
procuring or keeping business or having a law or regulation enacted, defeated,
or violated. This is bribery, pure and simple. It will not be tolerated.


 


It should be
acknowledged that inherent in the current health-care regulatory environment,
the definition of “form of payment” may include seemingly trivial gifts and/or
favors (e.g. buying lunches, coffee, etc.).


 


27

















 


c)                                      When not prohibited by law,
employees, officers and directors are allowed to give to public officials gifts
where the presentation and acceptance of gifts is an established custom and a
normal business practice. All such gifts shall be of reasonable value and the
presentation approved in advance by the CEO. Moreover, such gifts must be
presented in a manner that clearly identifies Biovail and the occasion that
warrants the presentation.


 


d)                                     Employees, officers and
directors are also allowed to give public officials gifts in the form of
product models and pictures provided the models and pictures are part of
Biovail’s general marketing and public relations programs (except as noted in
clause (b) above).


 


e)                                      On special ceremonial
occasions, officers of Biovail may publicly give gifts of more than nominal
value to public institutions and public bodies. Such gifts can commemorate
special events or milestones in Biovail’s history.


 


These may be
transmitted through public officials but the gifts are given to the public institutions
and public groups they represent, not to the officials personally.


 


f)                                        From time to time employees,
officers and directors may entertain public officials, but only under the
following conditions:


 


i.                                          It is legal and permitted by
the entity represented by the official;


 


ii.                                       The entertainment is not
solicited by the public official;


 


iii.                                    The entertainment occurs
infrequently;


 


iv.                                   It arises out of the ordinary
course of business;


 


v.                                      It does not involve lavish
expenditures, considering the circumstances;


 


vi.                                   The settings and types of
entertainment are reasonable, appropriate and fitting to our employees,
officers or directors, their guests, and the business at hand.


 


6.                                      POLITICAL
ACTIVITIES AND CONTRIBUTIONS


 


A.                                    Canada and the United States


 


Employees,
officers and directors who participate in partisan political activities must
make every effort to ensure that they do not leave the impression that they
speak or act for Biovail.


 


28

















 


Biovail encourages
its employees, officers and directors to participate in political activities in
their own time and at their sole expense. No corporate action, direct or
indirect, will be allowed that infringes on the right of any employee
individually to decide whether, to whom, and in what amount, they will make
personal political contributions. The same is true of volunteer political
donations of personal service time, so long as it does not interfere with the
working status of employees, officers or directors.


 


B.                                    Outside Canada and the United
States


 


No employees,
officers and directors are permitted to use Biovail’s funds, facilities, or
other assets, to support either directly or indirectly any political candidates
or political parties, without advance authorization in writing from their
immediate supervisor and the General Counsel. The policy of Biovail is that
employees, officers and directors and employees should not participate in
political activities in countries of which they are not nationals. However,
such persons, of course, are free to participate in political activities in
countries of which they are nationals in their own time and at their own
expense.


 


7.                                      DISCLOSURE


 


Biovail has formed
a Disclosure Committee to promote consistent practices aimed at informative,
timely and broadly disseminated disclosure of Material Information to the
market. external stakeholder groups and employees in accordance with all
applicable legal, regulatory and stock-exchange requirements.


 


It is essential
that the Disclosure Committee be fully apprised of all material corporate
developments to be able to determine whether there is information that should
be publicly disclosed, and what the appropriate timing is for release of that
information. In some cases, the Disclosure Committee may determine that the
information should remain confidential. If that is the case, the Disclosure
Committee will determine how that information will be controlled so that it is
not inadvertently released. Therefore any employee who becomes aware of information
that he/she believes might be material to Biovail and/or any of its affiliates
and subsidiaries he/she should advise their manager or supervisor or a member
of the Disclosure Committee. Current membership of the Disclosure Committee is
posted on the Biovail.com website.


 


This applies
throughout the year, but is particularly critical when annual or quarterly
financial statements and Management Discussion and Analysis (MD&A) or
regulatory filings are being prepared (e.g. regulatory filings, such as the
U.S. Securities and Exchange Commission, Form 20-F).


 


8.                                      PUBLIC
COMMUNICATIONS


 


Given the
importance placed on confidentiality and the appropriate disclosures of
information regarding Biovail, it is important for employees, officers and
directors to ensure that care be taken with any communication regarding Biovail
or its activities outside of Biovail.


 


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A.                                    Designated Spokespersons


 


Biovail has
designated official spokespersons who are authorized to speak on behalf of
Biovail, and answer questions from the news media and the investment community,
about Biovail and its activities. Employees, officers and directors who have
not been designated as spokespersons for Biovail are not permitted to speak on
behalf of the Company to the news media or to the investment community.


 


B.                                    Media or Analyst Inquiries


 


Any employee who
is approached by any person asking for comment on the activities of Biovail
must direct any and all such inquiries to a member of the Disclosure Committee
or to a member of the Company’s Stakeholder Relations team (Corporate
Communications, Investor Relations) so that an appropriate spokesperson can
respond to the inquiry on behalf of Biovail.


 


C.                                    Conferences


 


The Disclosure
Committee should be advised of any request to present at any conference or
public meeting. Certain materials prepared for any such presentation may be
required to be reviewed by the Company’s Stakeholder Relations group.


 


D.                                    Electronic Communications


 


Care must be taken
in all instances in the use of e-mail, and other devices (e.g., Blackberry’s)
in communications relating to Biovail’s business. While users tend to resort to
shorthand communication using these kinds of tools, those communications do
form a record of those communications that may be subject to later review and
disclosure. A more fulsome policy regarding electronic communications is in
place (found in the Human Resources Management System Policy Binder) and should
be adhered to by all employees, officers and directors.


 


E.                                      The Internet


 


Biovail has
instituted policies regarding the use of, and access to the Internet by
employees, officers and directors. These policies include a prohibition against
anyone participating in any chat rooms dedicated to Biovail or its operations
or the industry at large. If any employee, officer or director becomes aware
that any such chat room exists, they are asked to report the address of such
site to the SLO so that it may be monitored and appropriate action may be
taken.


 


9.                                      EQUAL
OPPORTUNITY


 


Biovail supports
the principle that every individual must be accorded an equal opportunity to
participate in the free-enterprise system and to develop their ability to
achieve their full potential within that system.


 


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There shall be no
discrimination against any employee or applicant because of race, religion,
color, sex, age, sexual orientation, national or ethnic origin, or disability
(as required by law) or any other consideration prohibited by local law. All
employees, officers and directors will be treated with equality during their
employment without regard to their race, religion, color, sex, age, national or
ethnic origin, or physical handicap, in all matters, including employment,
upgrading, promotion, transfer, layoff, termination, rates of pay, selection
for training and recruitment. Biovail will maintain a work environment free of
discriminatory practice of any kind.


 


No employee shall
have any authority to engage in any action or course of conduct or to condone
any action or course of conduct by any other person which shall in any manner,
directly or indirectly, discriminate or result in discrimination in the course
of one’s employment, termination of employment, or any related matter where
such discrimination is, directly or indirectly, based upon race, religion,
color, sex, age, sexual orientation, national or ethnic origin, disability, or
any other consideration prohibited by law.


 


10.                               HEALTH,
SAFETY, AND ENVIRONMENTAL PROTECTION


 


It is Biovail’s
policy to pay due regard to the health and safety of its employees, officers,
directors and others, and to the state of the environment. There are federal,
provincial, state and local workplace safety and environmental laws which
through various governmental agencies regulate both physical safety of
employees, officers and directors and their exposure to conditions in the
workplace. Should you be faced with an environmental health issue or have a
concern about workplace safety, you should contact your Health and Safety
Committee representative or notify Biovail management immediately.


 


Many countries and
their regional and local governments now have complex legislation to protect
the health and safety of employees, or the general public, and to prevent
pollution and protect the environment. In case of violation, these laws often
provide penalties for both the company involved and its executive personnel.
Biovail’s SLO should always be consulted when necessary to understand or comply
with such laws.


 


11.                               WORK
ENVIRONMENT


 


Employees,
officers and directors must treat each other with professional courtesy and
respect at all times. Employees, officers and directors shall not subject any
other employee to unwelcome sexual advances, requests for sexual favors or
other verbal or physical conduct which might be construed as sexual in nature,
or harass others on the basis of race, disability, gender, sexual orientation
or any other consideration prohibited by law. Such conduct may constitute
sexual harassment or harassment under federal, provincial and state law and may
be the basis for legal action against the offending employee and/or Biovail. 


 


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Employees are
encouraged to report all conduct that they believe in good faith to be
violations of local anti-harassment policies. To the extent permissible under
local law the identity of the employees, officers or directors involved will be
kept strictly confidential, and will not be revealed by Biovail’s management
without the employee’s permission. The alleged harassment will be thoroughly
investigated by Biovail and appropriate action will be taken. Biovail has an
appropriate policy to protect employees against discrimination or retaliation
as a result of such a complaint.


 


12.                               INTEGRITY
OF RECORDS AND FINANCIAL REPORTS


 


It is of critical
importance that Biovail’s filings with the appropriate regulatory authorities
(e.g. U.S. Securities and Exchange Commission) be accurate and timely.
Depending on their position with Biovail, an employee, officer or director may
be called upon to provide necessary information to ensure that Biovail’s public
reports are complete, fair and understandable. Biovail expects employees,
officers and directors to take this responsibility very seriously and to
provide prompt accurate answers to inquiries related to Biovail’s public
disclosure requirements.


 


The integrity of
Biovail’s record keeping systems will be respected at all times. Employees,
officers and directors are forbidden to use, authorize, or condone the use of “off-the-books”
bookkeeping, secret accounts, unrecorded bank accounts, “slush” funds,
falsified books, or any other devices that could be utilized to distort records
or reports of Biovail’s true operating results and financial conditions or
could otherwise result in the improper recordation of funds or transactions.


 


13.                               USE OLD
AGENTS AND NON-EMPLOYEES, OFFICERS AND DIRECTORS


 


Agents or other
non-employees cannot be used to circumvent the law. Employees, officers and
directors will not retain agents or other representatives to engage in
practices that run contrary to the Standards of Business Conduct or applicable
laws.


 


14.                               INTERNATIONAL
OPERATIONS


 


Employees,
officers and directors operating outside of Canada and the United States have a
special responsibility to know and obey the laws and regulations of countries
where they act for Biovail. Customs vary throughout the world, but all
employees, officers and directors must uphold the integrity of Biovail in other
nations diligently.


 


15.                               STANDARDS
OF BUSINESS CONDUCT


 


A.                                    Initial Distribution


 


i.                                          Employees, officers and
directors designated to receive these Standards will receive their copies
immediately alter publication.


 


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ii.                                       Future employees, officers and
directors designated to receive these Standards will receive their copies at
the time they are hired.


 


B.                                    Initial Verification


 


Upon receiving
their copy of the Standards, employees, officers and directors current and
future will:


 


i.                                          Become thoroughly familiar
with the Standards.


 


ii.                                       Resolve any doubts or
questions about the Standards with their supervisors.


 


iii.                                    Inform their supervisors of
any existing holdings or activities that might be, or appear to be,
inconsistent with, or in violation of, the Standards.


 


iv.                                   Prepare written disclosures of
such information, if requested, by supervisors.


 


v.                                      Take steps to correct existing
situations and bring holdings and activities into full compliance with the
Standards. Such steps will be approved in writing by supervisors and will be
based on the written disclosure submitted by employees, officers or directors.


 


vi.                                   Sign the verification and
return it to their supervisors who will make it part of employee’s permanent
corporate records.


 


C.                                    Maintaining Compliance


 


i.                                          Employees, officers and
directors have the responsibility to maintain their understanding of the Standards
of Business Conduct and for following them.


 


ii.                                       Supervisors have the
responsibility to maintain an awareness on the part of their employees,
officers and directors of the importance of their adhering to the Standards of
Business Conduct and for reporting deviations to Management.


 


iii.                                    As requested by the Board of
Directors or senior management, employees, officers and directors will be asked
to re-verify their understanding of the Standards of Business Conduct and their
compliance with them every year as a part of Biovail’s annual reporting.


 


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iv.                                   Employees, officers and
directors must inform their supervisors of any changes in their holdings or
activities that might be, or appear to be in non-compliance with the Standards
of Business Conduct.


 


v.                                      Employees, officers and
directors must prepare written disclosure of such information, if requested, by
supervisors.


 


vi.                                   Employees, officers and
directors must take steps to correct any such changes, if necessary, to bring
holdings and activities into full compliance. Such steps will be approved in
writing by supervisors and Management and will be based on the written
disclosures submitted by employees, officers and directors.


 


D.                                    Audits of Compliance


 


Regular audits of
Biovail will include procedures to test compliance with the Standards of
Business Conduct.


 


16.                               VIOLATIONS
OF STANDARDS


 


Employees,
officers and directors must immediately report any violations of the Standards
or any violation of any applicable law, rule or regulation. Failure to do
so can have serious consequences for the employees, officers or directors and
for Biovail.


 


Employees,
officers and directors, should report violations to their supervisors and/or to
the Human Resources department and to the SLO or to any secure reporting
hotline the company may have contracted with. When in doubt, employees should
talk to their supervisors or other appropriate personnel to determine the best
course of action in a particular situation.


 


Supervisors and
the Human Resources group have the responsibility to promptly and thoroughly
investigate all reports, and to report violations to the SLO.


 


After a violation
is investigated, appropriate action will be taken promptly. Management has the
right to determine the appropriate disciplinary action for a violation up to
and including termination of employment. All proposed disciplinary action is
subject to review by senior Management, Human Resources and the SLO.


 


Employees,
officers and directors should be aware that, in addition to any disciplinary
action taken by Biovail, violations of certain Standards may require
restitution and may lead to civil or criminal action against individual
employees, officers and directors and any corporation involved.


 


Supervisors have
the responsibility of taking remedial steps to correct any operating procedures
that may contribute to violations of Standards.


 


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Retaliation in any
form against an individual who reports a violation of these Standards of
Business Conduct or of any law, rule or regulation in good faith, or who
assists in the investigation of a reported violation, is itself a serious
violation of this policy. Acts of retaliation will be disciplined appropriately
and should be reported immediately to your supervisor or Human Resources.


 


17.                               CONTINUANCE
OF EXISTING PERSONNEL POLICIES, RULES AND PERFORMANCE STANDARDS


 


Biovail has
codified numerous personnel policies, rules and standards of employee
performance, which continue in force. These Standards of Business Conduct are
intended to supplement and amplify those established personnel policies, rules and
standards.


 


It continues to be
the responsibility of all employees to comply with all such policies, rules and
performance standards. Additionally, all members of management are to continue
making certain that employees reporting to them are made aware of established
policies, rules and performance standards and comply with them.


 


18.                               AMENDMENT,
MODIFICATION AND WAIVER


 


Biovail will
periodically review these Standards of Business Conduct. These Standards may be
amended, modified or waived by the Board of Directors and waivers may also be
granted by the Nominating & Governance Committee, subject to the
disclosure and other provisions of the Securities Exchange Act of 1934, and the
rules there under and the applicable rules of the Toronto Stock
Exchange/New York Stock Exchange. Employees, officers and directors will be
fully informed of any revisions to the Standards of Business Conduct.


 


Any waiver of
these Standards for any employee other than a director or an executive officer,
may only be made by the Executive Chairman or the CEO. Any waiver of these
Standards for director or an executive officer may he made only the Board of
Directors or the Compensation, Nominating and Corporate Governance Committee
and will be promptly disclosed to Biovail’s stockholders.


 


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VERIFICATION
AND RECEIPT OF UNDERSTANDING


 


I have received a
copy of Standards of Business Conduct for BIOVAIL CORPORATION and its
subsidiaries, divisions and affiliates. I understand how the Standards apply to
me. I acknowledge that my receiving the Standards obligates me to follow them
and I agree to abide by their conditions.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


 


Employee’s Copy


 


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VERIFICATION
AND RECEIPT OF UNDERSTANDING


 


I have received a
copy of Standards of Business Conduct for BIOVAIL CORPORATION and its
subsidiaries, divisions and affiliates. I understand how the Standards apply to
me. I acknowledge that my receiving the Standards obligates me to follow them
and I agree to abide by their conditions.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


 


HR File Copy


 


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