Exhibit
10.45


 


BIOVAIL CORPORATION EXECUTIVE

EMPLOYMENT AGREEMENT


 


THIS
AGREEMENT is made by and between Biovail Pharmaceuticals, Inc.
(hereinafter “BPI”) and CHRISTINE MAYER (hereinafter the “Executive”).


 


ARTICLE ONE - GENERAL DUTIES AND
TERM


 


Scope of Employment I Duties


 


1.01
BPI will employ the Executive as Senior Vice President,
Business Development Services. The Executive will serve as an
officer of BPI. During the Employment Term, the Executive will devote
substantially all of the Executive’s business efforts and time to BPI. 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 (the “CEO”)
of BPI’s parent company, Biovail Corporation (the “Corporation”); 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; or (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 BPI.


 


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


 


1.03
While Executive has reported to the CEO of the Corporation, effective June 18,
2007 Executive shall report to the Executive Vice President, Chief Operating
Officer of the Corporation.


 


Term of Agreement


 


1.04
BPI hereby agrees to employ the Executive and the Executive hereby accepts
employment, in accordance with the terms and conditions of this Agreement,
commencing on January 1, 2007 (the “Employment Commencement Date”). The
period of the Executive’s employment under this Agreement will be referred to
as the “Employment Term.” Subject to BPI’s obligation to provide severance
benefits and the parties’ obligation to provide a Notice of Termination (as
defined below), the Executive


 

















 


and
BPI 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 BPI.


 


ARTICLE TWO - COMPENSATION


 


Base Salary


 


2.01
As of the Employment Commencement Date, the Executive’s annualized base salary
will be $350,000(USD), payable in accordance with BPI’s normal payroll
practices for employees generally, and will be subject to annual review in accordance
with BPI’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 annual
incentive compensation plan in accordance with the terms of such plan;
provided, however, that the Executive’s annual incentive compensation, if any,
will be paid between January 1 and March 15 of the calendar year
following the calendar year for which the annual incentive compensation is
earned. For 2007, the Executive’s target level of annual incentive compensation
will be fifty percent (50%) of the Executive’s annual base salary.


 


Equity Compensation


 


2.03
The Executive will be eligible to participate in the Corporation’s equity
compensation plan, as 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


 


2.05
During the Employment Term, the Executive will be eligible to participate in
employee benefit plans and programs that are offered to the Corporation’s other
similarly-situated senior executives in accordance with the terms of such plans
as they may change from time to time. Nothing in this Agreement shall preclude
the Corporation or any affiliate of the Corporation from terminating or
amending any employee benefit plan or program from time to time after the
Employment Commencement Date.


 


Expenses


 


2.06
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


 


2

















 


furnishing
to BPI reasonable supporting statements and vouchers; provided, however, that
in any financial year in which the Corporation has provided to the Executive an
approved budget, such expenses must not exceed the amount so budgeted without
the prior written approval from the Corporation.


 


Vacation


 


2.07
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.


 


ARTICLE THREE -
TERMINATION AND RESIGNATION


 


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


 


3.01
If the Executive incurs an involuntary termination from employment with BPI on
account of a termination by BPI 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 BPI
or the Executive, as applicable, as the last day of the Executive’s employment
or term of office with BPI (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
paid a pro-rated portion of the Executive’s annual target level of incentive
compensation under the Short Term Incentive Plan for the year in which the
Executive’s Termination Date occurs, between January 1 and March 15
after the calendar year to which the bonus relates, 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 in
accordance with the terms of the Corporation’s Short Term Incentive Plan; and


 


3

















 


(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”),
BPI will pay to the Executive a monthly payment on the first payroll date of
each month equal to the COBRA cost of continued medial and dental coverage for
the Executive and the Executive’s covered dependents under the medical and
dental plans of the Corporation pursuant to section 4980B of the Internal
Revenue Code, less the amount that the Executive would be required to
contribute for medical and dental coverage if the Executive were an active
employee. These payments will commence on BPI’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 BPI For Cause Or Voluntary
Resignation Without Good Reason


 


3.02
If the Executive is involuntarily terminated by BPI 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


 


The
Executive’s employment will terminate automatically upon the Executive’s death.
BPI 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 BPI on a daily basis for a
period of twelve (12) consecutive months and within such twelve (12) months,
the Executive fails to produce to BPI 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:


 


4

















 


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


 


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


 


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


 


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


 


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


 


Good Reason


 


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


 


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


 


(c) BPI 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 BPI’s opportunity to
remedy the situation has expired.


 


5














 


Change in Control


 


3.06
(a) BPI 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).


 


3.06
(b) Upon a Change in Control (as defined below), and an involuntary
termination of the Executive’s employment either by BPI without Cause or by the
Executive for Good Reason, which termination occurs within a period of twelve
(12) months following the Change in Control, BPI shall provide to the
Executive, in addition to any benefits or compensation accrued, earned and due
to the Executive but not yet paid as of the Executive’s Termination Date, but
in lieu of any payments or benefits to which the Executive may be entitled
under Section 3.01 above, (a) a lump sum severance payment of two (2) times
the Executive’s base salary (calculated using the Executive’s highest annual
base salary in the three years prior to the Executive’s Termination Date) plus
two (2) times the Executive’s target level of incentive compensation for
the year prior to the year in which the Executive’s Termination Date occurs,
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.


 


3.06
(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;


 


6

















 


(ii)             the lease, exchange, license, sale or
other similar disposition of all or substantially all of the Corporation’s
assets in one transaction or a series of related transactions to a person, or
any Associate or Related Entity of such person (other than an Associate or
Related Entity of the Corporation, any trustee or other fiduciary holding
securities under any employee benefit plan of the Corporation or a Related
Entity, or any company owned, directly or indirectly, by the shareholders of
the Corporation in substantially the same proportions as their ownership of
common shares of the Corporation);


 


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


 


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


 


(v)                                 a merger, amalgamation,
arrangement or consolidation of the Corporation with any other corporation
other than a merger, amalgamation, arrangement or consolidation that would
result in the voting securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50%
of the combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger, amalgamation,
arrangement or consolidation; provided, however, that a merger, amalgamation,
arrangement or consolidation effected to implement a recapitalization of the
Corporation (or similar


 


7

















 


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


 


Release


 


3.09
The Release identified in Sections 3.01 and 3.06 will not require the Executive
to release any right the Executive may have to indemnification as an officer,
director or employee of BPI (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


 


8

















 


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 BPI currently conducts Business activities in
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 BPI 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,


 


which
actively competes directly with the Corporation’s business objects or, could be
judged to be causing or potentially be causing through competitive acts,
material harm to the Corporation.


 


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., Elan Corporation, Ethypharm S.A., Flamel Technologies, S.A.,
Forest Laboratories Inc., Johnson & Johnson, King Pharmaceuticals, Inc.,
Pfizer Inc., 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 has a product(s) licensing agreement, any entity in which the
Corporation has a minority equity interest and any entity with which the
Corporation 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,


 


9

















 


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 on the Executive’s own behalf, or on behalf of any entity, by
which the Executive is hired or retained. “Customers” means customers of the
Corporation with which the Executive had personal contact or had supervision
over the efforts of those who had direct personal contact with such customers
during the last two (2) years of the 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
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 any of its employees, and shall not for a period of 12 months from
the end of the term of this Agreement hire any of the foregoing on the
Executive’s own behalf or on behalf of any entity for which the Executive is
hired or retained. Notwithstanding the foregoing, the Executive shall not be
considered in breach of this section should the Executive solicit for hiring
such Executive’s administrative assistant.


 


Injunctive Relief


 


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


 


10

















 


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


 


11

















 


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 BPI that:


 


(a) the performance of the
Executive’s duties as an employee of BPI 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 BPI.


 


ARTICLE FIVE -
INTERPRETATION AND ENFORCEMENT


 


Section 409A


 


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


 


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


 


12

















 


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


 


Independent Legal Advice


 


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


 


Severability


 


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


 


Sections and Headings


 


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


 


Number and Gender


 


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


 


Entire Agreement


 


5.06
This Agreement and all the Schedules hereto constitute the entire Agreement
between the parties with respect to the subject matter hereof and cancels and


 


13

















 


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 the State of New Jersey and all legal proceedings
contemplated in this Agreement shall be brought in, and be governed by, the
laws of the State of New Jersey, without regard to principles of conflicts of
law.


 


Notices


 


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


 


To
the Executive:


 


Christine C. Mayer


xxx


 


To
BPI:


 


700 Route 202/206
North


Bridgewater, NJ 
08807 Attn:


President


 


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.


 


14

















 


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 BPI which consent may be
unreasonably withheld. BPI 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 BPI.


 


 


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


 


	
  BIOVAIL
  PHARMACEUTICALS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ DOUGLAS JP SQUIRES

  	
   

  	
  /s/
  CHRISTINE C. MAYER

  
	
   

  	
  Dr. Douglas JP Squires

  	
   

  	
  CHRISTINE
  C. MAYER

  
	
  Title: 

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  12 – 18 - 07

  	
   

  	
  Date:
  

  	
  12 / 12 / 07

  



 


15














 


“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 for a period
of time 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”.


 


For
a period commencing on the date I commenced my employment with the Corporation
and ending ten (10) years from the date of the termination of my
employment with the Corporation, 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.


 


I
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 I hereby attorn to the exclusive jurisdiction of the courts of the
Province of Ontario.


 


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


 


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


 


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


 


I acknowledge and agree to
the foregoing.


 


 


	
  Employee Signature: 

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness Signature: 

  	
   

  	
   

  	
  Date:

  	
   

  



 


17

















 


SCHEDULE B





BIOVAIL CORPORATION

(and its Subsidiaries, Divisions, and Affiliates)


STANDARDS OF BUSINESS CONDUCT


 


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


 


1.             CONFLICTS OF INTEREST


 


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


 


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


 


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


 


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


 


A.                                    Trading in Biovail Securities
and Use of Inside Information


 


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


 


i.                                          Any employee, officer,
director or other insider or anyone (family member, etc.) who knows of any
material information (as defined below) about Biovail that has not been
disclosed to the public (commonly known as “insider information”) may not
engage in 


 


18

















 


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 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.


 


19

















 


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 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 


 


20

















 


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 manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any other unfair-dealing practice,


 


21

















 


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.


 


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:


 


22

















 


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.


 


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;


 


23

















 


(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 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.


 


24














 


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.


 


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;


 


25

















 


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.


 


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.


 


26

















 


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.


 


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.


 


27

















 


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.


 


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 


 


28

















 


identity
of the employees, officers or directors involved will be kept strictly
confidential, and will not be revealed by Biovail’s management without the
employee’s permission. The alleged harassment will be thoroughly investigated
by Biovail and appropriate action will be taken. Biovail has an appropriate
policy to protect employees against discrimination or retaliation as a result
of such a complaint.


 


12.          INTEGRITY OF RECORDS
AND FINANCIAL REPORTS


 


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


 


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


 


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


 


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


 


14.          INTERNATIONAL
OPERATIONS


 


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


 


15.          STANDARDS OF BUSINESS
CONDUCT


 


A.                                    Initial Distribution


 


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


 


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.


 


29

















 


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


 


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


 


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


 


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


 


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


 


C.                                    Maintaining Compliance


 


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


 


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


 


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


 


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.


 


30

















 


D.                                    Audits of Compliance


 


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


 


16.          VIOLATIONS OF STANDARDS


 


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


 


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


 


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


 


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


 


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


 


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


 


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 


 


31

















 


applicable
rules of the Toronto Stock Exchange/New York Stock Exchange. Employees,
officers and directors will be fully informed of any revisions to the Standards
of Business Conduct.


 


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


 


32

















 


VERIFICATION AND RECEIPT OF UNDERSTANDING


 


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


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


Employee’s Copy


 


33

















 


VERIFICATION AND RECEIPT OF UNDERSTANDING


 


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


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


HR File Copy


 


34