Exhibit 10.47


 


BIOVAIL
CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT


 


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


 


ARTICLE ONE —
GENERAL DUTIES AND TERM


 


Scope of
Employment / Duties


 


1.01                           The Corporation will cause Biovail
Laboratories International SRL (“SRL”) to employ the Executive as the Chief Operating Officer (“COO”) of SRL. The
Executive will also 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 his duties as COO of SRL and an officer of 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 SRL and 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. 
References in this Agreement to the Corporation shall include the
Corporation and the affiliates or subsidiaries of the Corporation by which the
Executive is employed from time to time under this Agreement.


 


Term of Agreement


 


1.03                           The Corporation hereby agrees to cause
SRL to employ the Executive and the Executive hereby accepts employment, in
accordance with the terms and conditions of this Agreement, commencing on June 16,
2008 (the “Employment Commencement Date”). 
The period of the Executive’s employment under this Agreement will be
referred to as the “Employment Term.” 
Subject to the 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 $123,585.00 (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.


 


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.


 


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.


 


Housing Allowance


 


2..05                        While on assignment in Barbados, the
Executive will receive a housing allowance in the amount of $5,000 USD per
month.


 


Travel Allowance


 


2.06                           While on assignment in Barbados, the
Executive will be provided with reimbursement of the cost of two return airline
tickets for travel home twice per year.


 


Expenses


 


2.07 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 


 


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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.


 


Company Vehicle


 


2.08  A company car will be provided to the
Executive and related expenses will be paid or reimbursed by the Corporation.


 


Vacation


 


2.09                           The Executive will be eligible for four (4) 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.  Eligibility for increases to vacation
entitlement will be in accordance with local regulations.


 


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 under the Short Term Incentive Plan 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


 


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(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 cost of continued medical and dental coverage for the
Executive and the Executive’s covered dependents under the medical and dental
plans of the Corporation, 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. 
Subject to the requirements of applicable law, 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;


 


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(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
and its affiliates;


 


(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.


 


(e)                                  After a period of 5 years from the
commencement of the assignment in Barbados, the Corporation is unable to
provide the Executive with a position deemed comparable by the Corporation in
another location other than the Barbados.


 


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,


 


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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 of Directors of
the Corporation (the “Board”) immediately before the beginning of such period
(the “Incumbent Directors”) cease (for any reason


 


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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.


 


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.


 


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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 and its affiliates currently
conducts Business activities in, among other jurisdictions, Canada and the
United States (the “Territory”). 
Accordingly, the Executive hereby agrees and covenants that the Executive
shall not, during the term of this Agreement, and for a period of twelve (12)
months following the Executive’s Termination Date for involuntary termination
by the Corporation for Cause, voluntary termination by the Executive, or a
termination following a Change in Control to which the provisions of Section 3.06
apply, 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 (a “Person”), in the Territory:


 


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


 


(b)                                 consult,
advise, render services to lend money, guarantee the debts or obligations of or
permit the use of the Executive’s name or any part thereof by any Person with
respect to a business carried on by that Person,


 


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which actively competes
directly with the business objects of the Corporation and its affiliates or
could be judged to be causing or potentially be causing through competitive
acts, material harm to the Corporation and its affiliates.


 


For the purposes of this Section 4.02,
as of the date of this Agreement, a Person shall include, but not be limited
to, Abbott Laboratories, Andrx Group, Apotex Inc., Bayer Inc., Elan
Corporation, Ethypharm S.A., Flamel Technologies, S.A., Forest Laboratories
Inc., Johnson & Johnson, King Pharmaceuticals, Inc., Lundbeck
Canada Inc., Pfizer Inc., Novopharm Limited, GlaxoSmithKline, Reliant
Pharmaceuticals, Inc., Teva Pharmaceutical Industries Ltd., Wyeth
Pharmaceuticals and any of their affiliates and subsidiaries which are in the
same or a competitive business and, in addition, shall include any
pharmaceutical entity with which the Corporation (or any of its affiliates) has
a product(s) licensing agreement, any entity in which the Corporation has
a minority equity interest and any entity with which the Corporation (or any of
its affiliates) is at the time actively negotiating a commercial relationship.


 


During the continuance of
the Executive’s 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 competitive to the Business or would impede the Executive in
performing the Executive’s duties as outlined herein.


 


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 and its affiliates 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 and its affiliates 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
Employment Term.  “Prospective Customer”
means any organizations or entities which had been actively contacted and
solicited for their business by representatives of the Corporation and its
affiliates, and with whom the Executive had contact, both during the last two (2) years
of the Employment Term.


 


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 or any of its affiliates 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


 


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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 and its
affiliates for which the Corporation and its affiliates could not be adequately
compensated in damages and that, accordingly, the Corporation and its
affiliates may have no adequate remedy at law if the Executive breaches such
provisions.  Consequently, if the
Executive breaches any of such provisions, the Corporation and its affiliates
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 its affiliates 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 and its
affiliates, 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 its affiliates 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 and its affiliates 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 and
its affiliates 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 and its affiliates to obtain and enforce
protection of the Intellectual Property. 
To the extent of any rights 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 and its
affiliates or their respective successors and assigns, such other and further
assignments, instruments and documents as the Corporation and its affiliates
from time to time reasonably may request for the purpose of establishing,
evidencing, and enforcing or defending its complete, exclusive,


 


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perpetual, and world-wide
ownership of all rights, titles, and copyrights, in and to the Intellectual
Property, and Executive constitutes and appoints the Corporation and its
affiliates as agent and attorney-in-fact, with full power of substitution, to
execute and deliver such assignments, instruments, documents as 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 and its
affiliates 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 and its affiliates.


 


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.  For purposes of section 409A of the Code, all
payments to be made upon a termination of employment under this Agreement may
only be made upon the Executive’s “separation from service” (within the meaning
of such term under section 409A of the Code), each payment made under this
Agreement shall be treated as a separate payment, and the right to a series of
installment payments under this Agreement shall be treated as a right to a
series of separate payments.  In no event
shall the Executive, directly or indirectly, designate the calendar year of
payment, except as permitted under section 409A of the Code.


 


Notwithstanding anything
herein to the contrary, if, at the time of the Executive’s termination of
employment with the Corporation, the Corporation or its affiliates has
securities which are publicly traded on an established securities market and
the Executive is a “specified employee” (as such term is defined in section
409A of the Code) and it is necessary to postpone the commencement of any
payments or benefits otherwise payable under this Agreement as a result of such
termination of employment to prevent any accelerated or additional tax under
section 409A of the Code, then the Corporation shall postpone the commencement
of the payment of any such payments or benefits hereunder (without any
reduction in such payments or benefits ultimately paid or provided to the


 


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Executive) that are not
otherwise paid within the ‘short-term deferral exception’ under Treas. Reg.
section 1.409A-1(b)(4) and/or the ‘separation pay exception’ under Treas.
Reg. section 1.409A-1(b)(9)(iii), until the first payroll date that occurs
after the date that is six months following the Executive’s “separation of
service” with the Corporation.  If any
payments are postponed due to such requirements, such postponed amounts shall
be paid in a lump sum to the Executive on the first payroll date that occurs
after the date that is six months following Executive’s “separation of service”
with the Corporation.  If the Executive
dies during the postponement period prior to the payment of postponed amount,
the amounts withheld on account of section 409A of the Code shall be paid to
the personal representative of the Executive’ s estate within 60 days after the
date of the Executive’s death. 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 of Directors of Biovail
Corporation in accordance with the provisions of sections 416(i) and 409A
and the regulations issued thereunder.


 


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.


 


12

















 


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.  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 Barbados and all legal proceedings contemplated in
this Agreement shall be brought in, and be governed by, the laws of the
Barbados, 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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Michel Chouinard

  	
   

  
	
   

  	
  xxx

  	
   

  
	
   

  	
   

  	
   

  
	
  To the Corporation:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7150 Mississauga Road

  	
   

  
	
   

  	
  Mississauga, ON L5N 8M5

  	
   

  
	
   

  	
  Attn: Chief Executive
  Officer

  	
   

  



 


13

















 


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.


 


[SIGNATURE PAGE FOLLOWS]


 


IN WITNESS WHEREOF, the
parties have executed this Agreement on the dates identified below at St. Michael, Barbados.


 


	
  BIOVAIL
  CORPORATION

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ W. WELLS

  	
   

  	
  /s/ MICHEL CHOUINARD

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  William Wells

  	
   

  	
  Michel Chouinard

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
      10-22-08

  	
   

  	
  Date:

  	
       August 13,
  2008

  
						



 


14














 


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.


 


16

















 


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 


 


18

















 


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 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 


 


19

















 


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 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 


 


20

















 


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 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 


 


21

















 


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.


 


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.


 


22

















 


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.


 


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.


 


23






 










 


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 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 


 


24

















 


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.).


 


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.


 


25

















 


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.


 


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.


 


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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.


 


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.


 


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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.


 


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.


 


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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.


 


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 


 


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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.


 


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.


 


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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.


 


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.


 


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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.


 


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 


 


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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.


 


 


	
   

  	
   

  	
   

  
	
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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.


 


 


	
   

  	
   

  	
   

  
	
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  Signature

  



 


HR
File Copy


 


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