Exhibit 10.59


 


BIOVAIL LABORATORIES INTERNATIONAL SRL


 


 


DEFERRED SHARE UNIT PLAN


 


 


Effective: 
May 3, 2005


Amended: 
March 14, 2007


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE
  1

  
	
  PREAMBLE
  AND DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Title

  	
  3

  
	
  1.2

  	
  Purpose of the Plan

  	
  3

  
	
  1.3

  	
  Definitions

  	
  3

  
	
  1.4

  	
  Schedules

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  
	
  INTERPRETATION

  
	
   

  
	
  2.1

  	
  Governing Law

  	
  4

  
	
  2.2

  	
  Severability

  	
  5

  
	
  2.3

  	
  References

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  
	
  ELIGIBILITY

  
	
   

  
	
  3.1

  	
  Establishment

  	
  5

  
	
  3.2

  	
  Participation

  	
  5

  
	
  3.3

  	
  No Additional Rights

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  
	
  DEFERRED
  SHARE UNIT GRANTS AND ACCOUNTS

  
	
   

  
	
  4.1

  	
  Grants

  	
  5

  
	
  4.2

  	
  Election to Participate

  	
  5

  
	
  4.3

  	
  Effect of Notice

  	
  6

  
	
  4.4

  	
  Termination or Change to Election

  	
  6

  
	
  4.5

  	
  Timing and Recording of Credits

  	
  6

  
	
  4.6

  	
  [Intentionally Left Blank]

  	
  6

  
	
  4.7

  	
  Deferred Share Unit Account

  	
  6

  
	
  4.8

  	
  Dividends

  	
  6

  
	
  4.9

  	
  Adjustments

  	
  7

  
	
  4.10

  	
  No Price Adjustment

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  
	
  REDEMPTION
  ON RETIREMENT OR DEATH

  
	
   

  
	
  5.1

  	
  Redemption

  	
  7

  
	
  5.2

  	
  Payment of Redeemed Amount

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  
	
  SHAREHOLDER
  RIGHTS

  
	
   

  
	
  6.1

  	
  No Shareholder Rights

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  
	
  ADMINISTRATION

  
	
   

  
	
  7.1

  	
  Unfunded Obligation

  	
  8

  
	
  7.2

  	
  [Intentionally left blank]

  	
  8

  



 

















 


	
  7.3

  	
  Amendment and Termination

  	
  8

  
	
  7.4

  	
  Costs of Administration

  	
  8

  



 

















 


BIOVAIL LABORATORIES INTERNATIONAL SRL


 


DIRECTORS’ DEFERRED SHARE UNIT
PLAN


 


ARTICLE 1


PREAMBLE AND DEFINITIONS


 


1.1                                                                               Title.


 


The
Plan herein described shall be called the “Deferred Share Unit Plan”, and is
referred to herein as the “Plan”.


 


1.2                                                                               Purpose of the Plan.


 


The
purpose of the Plan is to align the compensation incentives available to the
employees, officers and directors of the Corporation and the interests of the
Corporation’s parent company.


 


1.3                                                                               Definitions.


 


“Board” means the board of directors of the
Corporation.


 


“Corporation” means Biovail Laboratories
International SRL and any successor corporation whether by amalgamation, merger
or otherwise.


 


“Deferred Share Unit” means a bookkeeping
entry, the value of which on any particular date shall be equal to the Market
Price.


 


“Deferred Share Unit Account” has the
meaning ascribed thereto in Section 4.7.


 


DSU Allocation” means such amount as may from time to
time be determined by resolution of the Board;


 


“Election Notice” has the meaning ascribed
thereto in Section 4.2.


 


“Market Price” means the market price of a Share and shall be
the VWAP on the TSX, or the NYSE or other stock exchange where the majority of
the trading volume and value of the Shares occurs, for the five trading days
immediately preceding such date, except that with respect to Members subject to
U.S. taxation, to the extent required by Section 409A of the Code, “Market Price”
of a Share means the greater of (i) the Market Price as calculated above or (ii)
the VWAP on the TSX, or the NYSE or other stock exchange where the majority of
the trading volume and value of the Shares occurs, for the single trading day
immediately preceding such date.  The
Market Price so determined may be in Canadian dollars or U.S. dollars.  As a result, the Market Price of a Share in
respect of a Deferred Share Unit that will be paid in Canadian dollars shall be
either (a) such Market


 














 


Price
as determined above, if in Canadian dollars, or (b) such Market Price as
determined above converted into Canadian dollars at the closing rate of
exchange of the Bank of Canada on the Date of Grant, if in U.S. dollars.  Similarly, the Market Price of a of a Share
in respect of a Deferred Share Unit that will be paid in U.S. dollars shall be
either (a) such Market Price as determined above, if in U.S. dollars, or (b) such
Market Price as determined above converted into U.S. dollars at the closing
rate of exchange of the Bank of Canada on the Date of Grant, if in Canadian
dollars.  If on the such date there is
not a closing rate of exchange of the Bank of Canada, then the Market Price of
a Share shall be determined as provided above on the first day immediately
preceding such date for which there was such a closing rate of exchange.  The Market Price of a Share shall be rounded
up to the nearest whole cent.


 


“Member” means an employee, officer or
director of the Corporation who becomes a participant in the Plan in accordance
with Article 4.


 


“Member’s Termination Date” has the meaning
ascribed thereto in Section 5.1.


 


“NYSE” means the New York Stock Exchange.


 


“Payment Date” has the meaning ascribed
thereto in Section 4.1.


 


“Shares” means the common shares of Biovail
Corporation and such other shares as may be substituted therefor as a result of
amendments to the articles of Biovail Corporation, a reorganization of Biovail
Corporation or otherwise.


 


“Trading Day” means any date on which the
TSX is open for the trading of the Shares.


 


“TSX” means the Toronto Stock Exchange.


 


“VWAP” means the volume weighted average trading price of the
Shares, calculated by dividing the total value by the total volume of Shares
traded for the relevant period.


 


1.4                                                                               Schedules.


 


Schedule
A — Election Notice


Schedule
B — Redemption Notice


 


ARTICLE 2


INTERPRETATION


 


2.1                                                                               Governing Law.


 


The
Plan shall be governed and interpreted in accordance with the laws of Barbados.


 


4

















 


2.2                                                                               Severability.


 


If any
provision of the Plan or part hereof is determined to be void or unenforceable
in whole or in part, such determination shall not affect the validity or
enforcement of any other provision or part thereof.


 


2.3                                                                               References.


 


Headings
wherever used herein are for reference purposes only and do not limit or extend
the meaning of the provisions herein. In the Plan, references to the singular
shall include the plural and vice versa, as the context shall require.


 


ARTICLE 3


ELIGIBILITY


 


3.1                                                                               Establishment.


 


Subject
to obtaining Board approval, the Plan shall be effective as at May 4,
2005.


 


3.2                                                                               Participation.


 


Each
employee, officer or director of the Corporation shall become a Member in the
Plan if so designated by resolution of the Board.


 


3.3                                                                               No Additional Rights.


 


Nothing
herein contained shall be deemed to give any person the right to be retained as
an employee, director or officer of the Corporation.


 


ARTICLE 4


DEFERRED SHARE UNIT GRANTS AND
ACCOUNTS


 


4.1                                                                               Grants.


 


From
time to time, as the Board may consider appropriate, a Member may be credited,
without further or other formality, with the respective number of Deferred
Share Units as may be determined by dividing the DSU Allocation by the Market
Price at the date of payment determined by the Board (a “Payment Date”).


 


4.2                                                                               Election to Participate.


 


Each
Member shall have, subject to the conditions stated herein, the right to elect
at any time and from time to time in accordance with this Section 4.2, to
be credited with Deferred Share Units in lieu of all or any part of any cash
compensation payable to such Member.  No
such election shall be effective unless and until the Member in question shall
have filed a notice of election in the form of Schedule A hereto (the “Election
Notice”) with the Corporation’s Secretary, which notice, subject as hereinafter
provided, may be filed at any time.


 


5

















 


4.3                                                                               Effect of Notice.


 


A duly
filed Election Notice shall be binding upon the Member who filed it, and upon
the Corporation, unless and until such Member has filed a subsequent Election
Notice to terminate or change his or her election and such subsequent Election
Notice has become effective in accordance with the Plan.


 


4.4                                                                               Termination or Change to Election.


 


(a)                                  Each Member is
entitled to terminate or change his or her election specified in any Election
Notice filed with the Corporation by filing with the Secretary of the
Corporation a subsequent Election Notice, provided that no Member shall be
entitled to file more than one Election Notice in any calendar year unless
specifically authorized by resolution of the Directors.


 


(b)                                 For greater
certainty, subject to the foregoing limitation, a Member who has filed a
subsequent Election Notice to terminate an earlier election by the Member may
thereafter again elect in accordance with Section 4.2.


 


4.5                                                                               Timing and Recording of Credits.


 


(a)                                  Each Member who
has filed an Election Notice in accordance with Section 4.2 shall be
credited with Deferred Share Units as hereinafter provided in respect of the
cash payment in respect of which such election is made, immediately upon the
later to occur of:  (i) the filing
of such Election Notice or (ii) the date on which the cash payment would
otherwise be payable (such later date being the “Effective Date”), while such
Election Notice remains in effect.


 


(b)                                 The number of
Deferred Share Units to be received by the Member will be calculated by
dividing (i) the cash payment to which the Member would otherwise be
entitled, by (ii) the Market Price at the Effective Date.


 


(c)                                  Deferred Share
Units credited to a Member in accordance with any provision of this agreement
shall be recorded by the Corporation in the Member’s Deferred Share Unit
Account (as defined below) as soon as reasonably practicable thereafter.


 


4.6                                                                               [Intentionally Left Blank]


 


4.7                                                                               Deferred Share Unit Account.


 


An
account, to be known as a “Deferred Share Unit Account”, shall be maintained by
the Corporation for each Member, in which shall be recorded all Deferred Share
Units credited to a Member from time to time.


 


4.8                                                                               Dividends.


 


Whenever
cash dividends are paid on the Shares, additional Deferred Share Units will be
credited to the Member’s Deferred Share Unit Account.  The number of such additional Deferred Share
Units will be calculated by dividing (i) the dividends that would have
been paid


 


6

















 


to such Member if the Deferred Share Units in the
Member’s Deferred Share Unit Account on the relevant dividend record date had
been Shares, by (ii) the closing price of the Shares on the TSX, the NYSE
or other stock exchange where the majority of the trading volume and value of
the Shares occurs on the date of payment of such dividend.  If on such date of payment there is not a
closing price of the Shares on any such exchange, then the opening price of the
Shares on the TSX, the NYSE or other stock exchange where the majority of the
trading volume and value of the Shares occurs on the first available date
thereafter will be used for purposes of (ii) above.


 


4.9                                                                               Adjustments.


 


In the
event of any stock dividend, stock split, combination or exchange of Shares,
merger, consolidation, spin-off or other distribution (other than normal cash
dividends) of the Corporation’s assets to shareholders, or any other changes
affecting the Shares, such proportionate adjustments shall be made with respect
to the number of Deferred Share Units outstanding under the Plan to reflect
such change or changes.


 


4.10                                                                        No Price Adjustment.


 


For
greater certainty, no additional Deferred Share Units will be granted to such
Member to compensate for a downward fluctuation in the price of the Shares, nor
will any other form of benefit be conferred upon, or in respect of, a Member
for such purpose.


 


ARTICLE 5


REDEMPTION ON RETIREMENT OR
DEATH


 


5.1                                                                               Redemption.


 


Subject
to Section 5.2, the value (determined in accordance with Section 5.2)
of the Deferred Share Units credited to a Member’s Deferred Share Unit Account
shall be redeemable by the Member (or, where the Member has died, his or her
estate) at the Member’s option (or after the Member’s death, at the option of
his legal representative) following the event, including death, causing the
Member to no longer be an employee, officer or director of the Corporation (the
“Member’s Termination Date”).  The value
of the Deferred Share Units shall be redeemed by filing a written notice of
redemption in the form of Schedule B hereto with the Secretary of the
Corporation, specifying: (i) either one or two redemption dates; and (ii) the
percentage of Deferred Share Units held by the Member to be redeemed on each
such redemption date (which when added together shall equal 100%).  Each redemption date specified in the notice
of redemption shall occur during the period commencing at least five (5) business
days following the date on which such notice is filed with the Secretary of the
Corporation and ending not later than December 15 of the first calendar
year commencing after the Member’s Termination Date.  If no notice of redemption has been filed by December 15
of the first calendar year after the Member’s Termination Date, December 15
of the first calendar year after the Member’s Termination Date will be deemed
to be the redemption date for all of the Member’s Deferred Share Units.


 


7














 


5.2                                                                               Payment of Redeemed Amount.


 


Subject
to applicable income tax and other withholdings as required by law, the value
of the Deferred Share Units redeemed by or in respect of a Member shall be paid
to the Member (or if the Member has died, to his or her estate, as the case may
be) in the form of one or two lump sum cash payments, as applicable in
accordance with the Member’s notice of redemption, less the amounts required to
be withheld by applicable law, as soon as practicable after the applicable
redemption date, provided that in any event such payment date shall be no later
than December 31 of the first calendar year commencing after the Member’s
Termination Date.  The amount of the cash
payment (or payments, as the case may be) to be paid to the Member on the
redemption date (or redemption dates, as the case may be), before such
withholdings, shall be determined by multiplying the number of Deferred Share
Units to be redeemed on a redemption date by the Market Price on such
redemption date.


 


ARTICLE 6


SHAREHOLDER RIGHTS


 


6.1                                                                               No Shareholder Rights.


 


Deferred
Share Units are not Shares and will not entitle a Member to any shareholder
rights, including, without limitation, voting rights, dividend entitlement or
rights on liquidation.


 


ARTICLE 7


ADMINISTRATION


 


7.1                                                                               Unfunded Obligation.


 


Unless
otherwise determined by the Board, the Plan shall remain an unfunded obligation
of the Corporation.


 


7.2                                                                               [Intentionally left blank]


 


7.3                                                                               Amendment and Termination.


 


The
Plan may be amended or terminated at any time by the Board, except as to rights
already accrued hereunder by the Members.


 


7.4                                                                               Costs of Administration.


 


The
Corporation will be responsible for all costs relating to the administration of
the Plan.


 


8

















 


Schedule A to
Deferred Share Unit Plan


(the “Plan”)


 


ELECTION NOTICE


 


Please
complete one of Section 1 (Election Notice), Section 2
(Election to Change Participation) or Section 3 (Election to Terminate an
Earlier Election), and return a signed and dated copy of this Schedule A to the
Secretary of Biovail Laboratories International SRL (the “Corporation”).


 


1.                                                                                      ELECTION NOTICE


 


I
hereby elect to participate in the Plan on the following basis, commencing
immediately, unless and until the election is terminated or changed in
accordance with a subsequently filed Election Notice, namely, to receive in
Deferred Stock Units,
$                
of the amount otherwise payable to me in cash by the Corporation.


 


2.                                                                                      ELECTION TO CHANGE PARTICIPATION


 


I
hereby elect, notwithstanding any previous election in the form of this
Election Notice, to change my election with respect to my participation in the
Plan, commencing immediately, unless and until the election is terminated or
changed in accordance with a subsequently filed Election Notice, namely, to
receive in Deferred Stock Units,
$                
of the amount otherwise payable to me in cash by the Corporation.


 


3.                                                                                      ELECTION TO TERMINATE AN ELECTION


 


I
hereby elect, by marking the box below this paragraph with an “X”, to terminate
my election under Section 4.2 of the Plan to receive the cash referred to
in that election as cash.


 


o  YES, I WISH TO
TERMINATE MY MOST RECENT ELECTION UNDER SECTION 4.2 OF THE PLAN.


 


I confirm that:


 


1.                                                                                       I
have received and reviewed a copy of the terms of the Plan and agreed to be
bound by such terms.


 


2.                                                                                       I
understand that I will not be able to cause the Corporation to redeem Deferred
Share Units granted under the Plan (“DSUs”) until I am no longer a director,
officer or employee of the Corporation.


 


3.                                                                                       I
recognize that when DSUs credited pursuant to an election made under Section 1
or 2 of this Election Notice are redeemed in accordance with the terms of the
Plan after I am no longer a director, officer or employee of the Corporation,
income tax and other withholdings as required will arise at that time that will
be my obligations (and not the Corporation’s, except as required by law).  Upon redemption of the DSUs, the Corporation
will make all appropriate withholdings as required by law at that time.


 

















 


4.                                                                                      The
value of DSUs are based on the value of the common shares of the Biovail
Corporation and therefore are not guaranteed.


 


5.                                                                                      No
funds will be set aside to guarantee the payment of DSUs.  Future payment of DSUs will remain an
unfunded liability recorded on the books of the Corporation.


 


The
foregoing is only a brief outline of certain key provisions of the Plan.  For more complete information, reference
should be made to the Plan in its entirety.


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
     Date

  	
   

  	
  (Signature of
  Member)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Name of
  Member)

  



 


2

















 


Schedule B to
Deferred Share Unit Plan


(the “Plan”)


 


REDEMPTION NOTICE


 


I
hereby advise Biovail Laboratories International SRL (the “Corporation”) that I
wish to redeem all the Deferred Share Units credited to my account under the
Plan on the following redemption date or dates, which in each case shall be at
least five (5) business days following the date on which this notice is
filed with the Corporation but no later than December 15 of the first
calendar year commencing after the year in which I ceased to be a director,
officer or an employee of the Corporation:


 


	
  Amount of Deferred Share Units

  (expressed as a percentage

  totalling 100%)

  	
   

  	
  Redemption Date

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  



 


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
     Date

  	
   

  	
  (Signature of
  Member)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Name of
  Member)

  



 


If this Redemption Notice is signed by a beneficiary or legal
representative, documents providing the authority of such signature must
accompany this Redemption Notice.