Document:

Exhibit 10.49

 

 

 

2007 Equity Compensation Plan

 

 

 

May 16, 2007

(as amended May 28, 2009)

 

 

BIOVAIL CORPORATION

 

2007 EQUITY COMPENSATION PLAN

 

ARTICLE 1 

PURPOSE

 

1.1                                                                               Purpose

 

The purpose of this Plan is to assist the
Company in attracting, retaining and motivating key employees, officers and
directors by granting to them, and to others providing services to the Company, its subsidiaries
and affiliates, equity-based compensation of the Company.

 

1.2                                                                               2006 Stock Option Plan

 

This Plan includes the 2006 Stock Option Plan
of the Company, as amended and restated herein, and any outstanding options
granted under the 2006 Stock Option Plan prior to the Effective Date shall be
governed by the provisions of this Plan as if such options had been granted
hereunder.

 

ARTICLE 2 

INTERPRETATION

 

2.1                                                                               Definitions

 

When used herein, unless the context
otherwise requires, the following terms have the following meanings,
respectively:

 

“Acquiror”
has the meaning set forth in Subsection 6.1(e) of this Plan;

 

“Associate”
has the meaning given to it in NI 45-106;

 

“Blackout
Period” means a period when the Participant is prohibited from
trading in the Company’s securities pursuant to securities regulatory
requirements or the Company’s written policies then applicable;

 

“Board”
means the board of directors of the Company;

 

“Business
Day” means any day, other than a Saturday, Sunday or statutory or
civic holiday, on which banks in Toronto, Ontario are open for business;

 

“Canadian
Option” means an Option for which the Exercise Price is stated and
payable in Canadian dollars;

 

“Canadian Unit”
means a Unit for which the cash payment payable under Section 5.3(c) (if
elected by the Company) is stated and payable in Canadian dollars;

 

 

“CBCA”
means the Canada Business Corporations Act
and the regulations promulgated thereunder, both as amended from time to time;

 

“Change in
Control” has the meaning set forth in Section 6.1  of this Plan;

 

“Code”
means the U.S. Internal Revenue Code of 1986, as amended;

 

“Committee”
has the meaning set forth in Section 3.2 of this Plan;

 

“Common
Shares” means the common shares in the capital of the Company;

 

“Company”
means Biovail Corporation, a corporation existing under the laws of Canada, and
its successors;

 

“Compensation Committee”
means the compensation, nominating and corporate governance committee of the
Board;

 

“Consultant
Participant” means an individual, other than an Employee Participant
or an Executive Participant, who is a “consultant” (as defined in NI 45-106)
and includes a Consultant Participant’s Permitted Assigns;

 

“Date of
Grant” means, for any Option or Unit, the date specified by the
Board at the time it grants the Option or the Unit, as the case may be (which
cannot be earlier than the date of grant) or, if no such date is specified, the
date upon which the Option or the Unit (as the case may be) was granted;

 

“Detrimental
Activity” means:  (a) the
disclosure to anyone outside the Company or its Related Entities, or the use in
any manner other than in the furtherance of the Company’s or a Related Entity’s
business, without written authorization from the Company, of any confidential
information or proprietary information relating to the business of the Company
or its Related Entities that is acquired by a Participant prior to the Participant’s
Termination Date; (b) activity by the Participant while employed or
performing services that results, or if known could result, in the Participant’s
termination of service that is classified by the Company as a termination for
cause; (c) any attempt, directly or indirectly, to solicit, induce or hire
(or the identification for solicitation, inducement or hiring of) any
non-clerical employee of the Company or its Related Entities to be employed by,
or to perform services for, the Participant or any Person with which the
Participant is associated (including, but not limited to, due to the
Participant’s employment by, consultancy for, equity interest in, or creditor
relationship with such Person) or any Person from which the Participant
receives direct or indirect compensation or fees as a result of such
solicitation, inducement or hire (or the identification for solicitation,
inducement or hire) without, in all cases, written authorization from the
Company; (d) any attempt, directly or indirectly, to solicit in a
competitive manner any current or prospective customer of the Company or its
Related Entities without written authorization from the Company; (e) the
Participant’s Disparagement, or inducement of others to engage in
Disparagement, of the Company or its Related Entities or their past and present
officers, directors, employees or products; (f) without written
authorization from the Company, the direct or indirect engaging in any business
or organization 

 

2

 

competitive with the Company or its Related
Entities or the rendering of services to any such organization or business if
such organization or business is otherwise prejudicial to, or in conflict with,
the interests of the Company or its Related Entities; provided, however, that
competitive activities shall be only those competitive with any business unit
or Related Entity of the Company with regard to which the Participant performed
services at any time within the year prior to the Participant’s Termination
Date; or (g) material breach of any agreement between the Participant and
the Company or a Related Entity (including, without limitation, any employment
agreement or non-competition or non-solicitation agreement).  For purposes of sub-sections (a), (c), (d) and
(f) above, the Chairman of the Board or the Chief Executive Officer of the
Company shall have authority to provide the Participant with written
authorization to engage in the activities contemplated thereby and no other
person shall have authority to provide the Participant with such authorization;

 

“Director”
means a member of the board of directors of the Company or of a Related Entity;

 

“Disabled”
or “Disability” means the
permanent and total incapacity of an Optionholder or a Unitholder as determined
in accordance with procedures established by the Board for purposes of this
Plan;

 

“Disparagement”
means making comments or statements to (x) the press, (y) the Company’s
or a Related Entity’s employees or consultants, or (z) any individual or
entity with whom the Company or its Related Entities has a business
relationship, in each case that could reasonably be expected to adversely
affect in any manner:  (a) the
conduct of the business of the Company or its Related Entities (including, without
limitation, any products or business plans or prospects); or (b) the
business prospects or reputation of the Company or its Related Entities, any of
their products, or their past or present officers, directors or employees;

 

“Effective
Date” has the meaning set forth in Section 8.10 of this Plan;

 

“Employee
Participant” means a full-time or part-time employee or contract
employee (other than an Executive Participant or Consultant Participant) of the
Company or of a Related Entity and includes an Employee Participant’s Permitted
Assigns;

 

“Executive
Participant” means an officer of the Company or of a Related Entity
and includes any officer of the Company or of a Related Entity who is also a
Director, and Executive Participant also refers to an Executive Participant’s
Permitted Assigns;

 

“Exercise
Notice” means a notice in writing, in the form set out in Schedule B
or such successor form as the Board may adopt from time to time, signed by an
Optionholder and stating the Optionholder’s intention to exercise a particular
Option;

 

“Exercise
Period” means the period of time during which an Option granted
under this Plan may be exercised (provided however that the Exercise Period may
not exceed 10 years from the relevant Date of Grant);

 

3

 

“Exercise
Price” means the price at which a Common Share may be purchased
pursuant to the exercise of an Option;

 

“Individual
Optionholder” means an Optionholder who is an individual or the
individual of which the Optionholder is a Permitted Assign, as the case may be;

 

“Individual Unitholder”
means a Unitholder who is an individual or the individual of which the
Unitholder is a Permitted Assign, as the case may be;

 

“Insider”
has the meaning set forth in the TSX Company Manual;

 

“Market
Price” of a Common Share means:

 

(a)                                  in the case of determining the exercise price of an Option, the VWAP
on the TSX, or the NYSE or other stock exchange where the majority of the
trading volume and value of the Common Shares occurs, for the five trading days
immediately preceding the Date of Grant, except that with respect to
Participants subject to U.S. taxation, to the extent required by Section 409A
of the Code, “Market Price” of a Common 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 Common Shares occurs, for the single trading day immediately preceding the
Date of Grant.  The Market Price so
determined may be in Canadian dollars or U.S. dollars.  As a result, the Market Price of a Common
Share covered by a Canadian Option 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 U.S. Option
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
Date of Grant there is not a closing rate of exchange of the Bank of Canada,
then the Market Price of a Common Share covered by a Canadian Option and the
Market Price of a Common Share covered by a U.S. Option shall be determined as
provided above on the first day immediately preceding the Date of Grant for
which there was such a closing rate of exchange.  The Market Price of a Common Share shall be
rounded up to the nearest whole cent; or

 

(b)                                 in the case of determining the cash payment payable to a Unitholder,
the average market price of the Common Shares on the Vesting Date on the TSX,
the NYSE or other stock exchange where the majority of the trading volume and
value of the Common Shares occurs.  If
the Vesting Date is not a trading day for the applicable stock exchange, the
Market Price shall be the average market price of the Common Shares for the
trading day immediately preceding the Vesting Date.  The Market Price so determined may be in
Canadian dollars or U.S. dollars.  As a
result, the Market Price of a Common Share covered by a Canadian Unit 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 Vesting
Date, if in U.S. dollars.  Similarly, the
Market Price of a U.S. Unit shall be either (a) such Market Price as
determined above, if in U.S. dollars, or (b)

 

4

 

such
Market Price as determined above converted into U.S. dollars at the closing
rate of exchange of the Bank of Canada on the Vesting Date, if in Canadian
dollars.  If on the Vesting Date there is
not a closing rate of exchange of the Bank of Canada, then the Market Price of
a Common Share covered by a Canadian Unit and the Market Price of a Common
Share covered by a U.S. Unit shall be determined as provided above on the first
day immediately preceding the Vesting Date for which there was such a closing
rate of exchange.  The Market Price of a
Common Share shall be rounded up to the nearest whole cent.

 

“NI 45-106”
means 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;

 

“NYSE”
means the New York Stock Exchange;

 

“Offer”
has the meaning set forth in Section 6.1 of this Plan;

 

“Option”
means a right to purchase Common Shares under this Plan; except that, to the
extent required by Section 409A of the Code, Participants who are subject
to U.S. taxation and who are employed by a Related Entity may receive an Option
under this Plan provided that the Common Shares subject to the Option
constitute “service recipient stock” for purposes of Section 409A of the
Code in order to avoid application of Section 409A of the Code to the
Option;

 

“Option
Agreement” means a signed, written agreement between an Optionholder
and the Company, in the form attached as Schedule A, subject to any amendments
or additions thereto as may, in the discretion of the Board, be necessary or
advisable, evidencing the terms and conditions on which an Option has been
granted under this Plan;

 

“Optionholder”
means an Employee Participant, Executive Participant or Consultant Participant
who has been granted one or more Options;

 

“Participant”
means an Employee Participant, Executive Participant or Consultant Participant;

 

“Performance Criteria”
has the meaning set forth in Schedule D;

 

“Performance Goal”
means the objective performance goals established by the Compensation Committee
and, if desirable for purposes of Section 162(m) of the Code, based
on one or more Performance Criteria;

 

5

 

“Performance Period”
means three consecutive fiscal years of the Company, or such shorter period as
determined by the Compensation Committee in its discretion;

 

“Permitted
Assigns” has the meaning given to it in NI 45-106;

 

“Person”
includes an individual, sole proprietorship, partnership, unincorporated
association, unincorporated syndicate, unincorporated organization, trust, body
corporate, and a natural person in his or her capacity as trustee, executor,
administrator or other legal representative;

 

“Plan”
means this 2007 Equity Compensation Plan, as the same may be amended, modified,
revised, supplemented, restated or replaced from time to time;

 

“Related
Entity” means a “related entity” (as defined in NI 45-106) of the
Company;

 

“Retirement”
means retirement from active employment with the Company or a Related Entity at
or after age 65 or, with the consent for purposes of this Plan of such officer
of the Company as may be designated by the Board, at or after such earlier age
and upon the completion of such years of service as the Board may specify,
provided that with respect to Participants subject to U.S. taxation, the
exercise of such discretion by the Board shall not subject an Option to Section 409A
of the Code;

 

“Section 162(m) of the Code” means the exception for performance-based compensation under Section 162(m) of
the Code and any U.S. Treasury regulations thereunder;

 

“Termination
Date” means:

 

(i)             in
the case of an Employee Participant or Executive Participant whose employment
or term of office with the Company or a Related Entity terminates in the
circumstances set out in Subsections 4.7(b), 4.7(c), 5.8(a) or 5.8(b) the
date that is designated by the Company or a Related Entity, as the case may be,
as the last day of the Optionholder’s or the Unitholder’s (as the case may be)
employment or term of office with the Company or the Related Entity, as the
case may be; provided that “Termination Date” specifically does not mean the
date on which any period in respect of which any pay in lieu of notice, that
the Company or the Related Entity (as the case may be) may be required by law
or may voluntarily elect to provide to the Optionholder or the Unitholder (as
the case may be), expires; and

 

(ii)          in the
case of a Consultant Participant whose consulting agreement or arrangement with
the Company or a Related Entity, as the case may be, terminates in the
circumstances set out in Subsection 4.7(d), 4.7(e), 5.8(a) or 5.8(b) the
date that is designated by the Company or the Related Entity, as the case may
be, as the date on which the Optionholder’s or the Unitholder’s (as the case
may be) consulting agreement or arrangement is terminated; provided that “Termination
Date” specifically does not mean the date on which any period of notice of
termination that the Company or

 

6

 

the Related Entity (as the case may be) may
be required to provide to the Optionholder or the Unitholder (as the case may
be) under the terms of the consulting agreement for which the Company has
elected to provide compensation in lieu of notice;

 

“TSX”
means the Toronto Stock Exchange;

 

“TSX
Company Manual” means the Company Manual of the TSX, as amended from
time to time, including such Staff Notices of the TSX from time to time which
may supplement the same;

 

“Unit” means a
restricted share unit granted to a Unitholder pursuant to Section 5.1 and
in accordance with the terms and provisions of the Plan;

 

“Unit Account”
has the meaning given to it under Section 5.4;

 

“Unit Agreement”
means a signed, written agreement between a Unitholder and the Company, in the
form attached as Schedule C, subject to any amendments or additions thereto as
may, in the discretion of the Board, be necessary or advisable, evidencing the
terms and conditions on which a Unit has been granted under this Plan;

 

“Unitholder”
means an Employee Participant, Executive Participant or Consultant Participant
who has been granted one or more Units;

 

“U.S.
Option” means an Option for which the Exercise Price is stated and
payable in U.S. dollars;

 

“U.S. Unit”
means a Unit for which the cash payment payable under Section 5.3(c) (if
elected by the Company) is stated and payable in U.S. dollars;

 

“Vesting Date”
means the date on which Units granted to a Unitholder under the Plan vest
pursuant to the provisions of the Plan; and

 

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

 

2.2                                                                               Interpretation

 

(a)           Whenever
the Board or, where applicable, the Committee is to exercise discretion in the
administration of the terms and conditions of this Plan, the term “discretion”
means the sole and absolute discretion of the Board or the Committee, as the
case may be.

 

(b)           As used
herein, the terms “Article”, “Section”, “Subsection” and “clause” mean and
refer to the specified Article, Section, Subsection and clause of this Plan,
respectively.

 

(c)           Words
importing the singular include the plural and vice versa and words importing
any gender include any other gender.

 

7

 

(d)           Unless
otherwise specified, all references to money amounts are to U.S. currency.

 

(e)           Wherever
in this Plan reference is made to generally accepted accounting principles (“GAAP”),
such reference shall be deemed to be to accounting principles generally
accepted for financial reporting in the United States of America, as recognized
in the opinions, statements or other pronouncements of the American Institute
of Certified Public Accountants and/or the Financial Accounting Standards
Board, applied on a basis consistent with preceding periods.

 

ARTICLE 3

ADMINISTRATION

 

3.1                                                                               Administration

 

Subject to Sections 3.2 and 5.2(a), this Plan
will be administered by the Board and the Board has sole and complete
authority, in its discretion, to:

 

(a)                                  determine the individuals (from among the Participants) to whom
Options or Units may be granted;

 

(b)                                 grant Options or Units in such amounts and, subject to the
provisions of this Plan, on such terms and conditions as it determines
including:

 

(i)             the
time or times at which Options or Units may be granted;

 

(ii)          the
Exercise Price, in the case of Options, subject to Section 4.2;

 

(iii)       the time
or times when each Option becomes exercisable and, subject to Section 4.3,
the duration of the Exercise Period;

 

(iv)      the time or
times when each Unit will vest and whether a grant or vest of Unit is subject
to the attainment of Performance Goals;

 

(v)         the form
of payment to a Unitholder in satisfaction of a vested Unit as contemplated in Section 5.3(a);

 

(vi)      whether
restrictions or limitations are to be imposed on the Common Shares and the
nature of such restrictions or limitations, if any; and

 

(vii)   any
acceleration of exercisability or vesting (as the case may be) or waiver of
termination regarding any Option or Unit, based on such factors as the Board
may determine;

 

(c)                                  interpret this Plan and adopt, amend and rescind administrative
guidelines and other rules and regulations relating to this Plan; and

 

(d)                                 make all other determinations and take all other actions necessary
or advisable for the implementation and administration of this Plan.

 

8

 

The Board’s determinations and actions within
its authority under this Plan are conclusive and binding on the Company and all
other persons.  The day-to-day
administration of this Plan may be delegated to such officers and employees of
the Company or of a Related Entity as the Board determines.

 

3.2                                                                               Delegation to Committee

 

To the extent permitted by applicable law,
the Board may, from time to time, delegate to a committee (the “Committee”) of
the Board all or any of the powers conferred on the Board under this Plan.  In such event, the Committee will exercise
the powers delegated to it by the Board in the manner and on the terms
authorized by the Board.  Any decision
made or action taken by the Committee arising out of or in connection with the
administration or interpretation of this Plan in this context is final and
conclusive.  Notwithstanding anything to
the contrary contained herein, each Option or Unit intended to comply with Section 162(m) of
the Code shall be granted by the Compensation Committee comprised solely of two
or more “outside directors” (within the meaning of Section 162(m) of
the Code) and such committee shall have all of the powers of the Board
hereunder with respect to grants of Options or Units intended to comply with Section 162(m) of
the Code; provided, however, that
failure of an Option or Unit to be approved in a manner that satisfies the
requirements of Section 162(m) of the Code shall not cause the Option
or the Unit to be void.

 

3.3                                                                               Eligibility

 

All Employee Participants, Executive
Participants and Consultant Participants are eligible to participate in this
Plan, subject to Subsections 4.6(b) and 4.7(f), 5.7(d) and 5.8(c).  Eligibility to participate does not confer
upon any Participant any right to be granted Options or Units pursuant to this
Plan.  Subject to Sections 3.2 and 5.2(a),
the extent to which any Participant is entitled to be granted Options or Units
pursuant to this Plan will be determined in the discretion of the Board,
provided however that the following restrictions shall also apply to this Plan:

 

(a)                                  the number of Common Shares reserved for Insiders issuable from
treasury, at any time, under this Plan and under any other security based
compensation arrangements, will not exceed 10% of issued and outstanding Common
Shares of the Company;

 

(b)                                 the number of Common Shares issued from treasury to Insiders, within
any one year period, under this Plan and under any other security based
compensation arrangements, will not exceed 10% of issued and outstanding Common
Shares of the Company;

 

(c)                                  the total number of Options and Units in aggregate granted pursuant
to this Plan to any one Participant  during
any calendar year must not exceed 20% of the total number of Options and Units
in aggregate granted pursuant to this Plan during such calendar year;

 

(d)                                 the number of Common Shares to be issued from treasury under this
Plan to any one Participant during each calendar year during the term of the
Plan shall not

 

9

 

exceed the lesser of (i) 5% of the issued and outstanding Common
Shares or (ii) 7,987,450 Common Shares of the Company;

 

(e)                                  the
number of Common Shares reserved for issuance and issued from treasury pursuant
to this Plan to any one Participant at any time must not exceed 25% of the
total number of Common Shares that may be issued from treasury under this Plan;
and

 

(f)                                    the
maximum number of Common Shares issuable from treasury in respect of Units that
are subject to Performance Goals, during any calendar year, to any one
Participant, shall be 90,000 Common Shares (subject to any decrease pursuant to
Sections 7.2 and 7.3); provided, however, that if the Performance Period is
less than three consecutive fiscal years, the maximum number of Common Shares
above shall be determined by multiplying 90,000 by a fraction, the numerator of
which is the number of days in the Performance Period and the denominator of
which is 1095.

 

For purposes of this Section, the term “security based compensation
arrangements” has the meaning set forth in the TSX Company Manual.

 

3.4                                                                               Total Common Shares Subject to Options and Units

 

(a)           The aggregate number of Common
Shares that may be issued from treasury pursuant to the exercise of Options and
vesting of Units must not exceed 12,000,000
Common Shares.  No Option or Unit may be
granted if such grant would have the effect of causing the total number of
Common Shares subject to Options and Units that may be issued from treasury to
exceed the above-noted total number of Common Shares reserved for issuance
pursuant to the exercise of Options and vesting of Units.

 

(b)           Notwithstanding Section 3.4(a),
the aggregate number of Common Shares that may be issued from treasury pursuant
to the vesting of Units must not exceed 40% of Common Shares reserved for
issuance under the Plan as set out in Section 3.4(a).  No Unit may be granted if such grant would
have the effect of causing the total number of Common Shares subject to Units
that may be issued from treasury to exceed such limit.

 

(c)           To the extent Options or Units
terminate for any reason prior to exercise or vesting in full (as the case may
be) or are surrendered for cancellation or otherwise, and to the extent Units
are settled in Common Shares provided by the Company through market purchases
or in a cash amount paid to the Unitholder (as contemplated in Section 5.3),
the Common Shares subject to such Options or Units that may be issued from
treasury shall, to the extent such Common Shares have been deducted, be added
back to the number of Common Shares reserved for issuance under this Plan as
set out in Sections 3.4(a) and 3.4(b) and such Common Shares will
again become available for issuance from treasury under this Plan.

 

3.5                                                                               Option Agreements and Unit Agreements

 

All grants of Options and Units under Section 4.1 and Section 5.1
of this Plan, respectively, will be evidenced by Option Agreements or Unit
Agreements (as the case may be).

 

10

 

Such
Option Agreements and Unit Agreements will be subject to the applicable
provisions of this Plan and will contain such provisions as are required by
this Plan and any other provisions that the Board may direct.  Any one officer of the Company is authorized
and empowered to execute and deliver, for and on behalf of the Company, an
Option Agreement to each Optionholder and a Unit Agreement to each Unitholder.

 

3.6                                                                               Transferability

 

(a)           Subject to Sections 3.6(b),
3.6(c), 4.6 and 5.7 and, in the case of Options, the rules and policies of
any stock exchange on which the Common Shares are listed, Options or Units
granted under this Plan may only be exercised or may only vest (as the case may
be) during the lifetime of the Individual Optionholder or the Individual
Unitholder (as the case may be) by such Individual Optionholder or Individual
Unitholder personally.  Except to the
extent permitted herein and, in the case of Options, by such rules and
applicable law, no assignment or transfer of Options or Units, whether
voluntary, involuntary, by operation of law or otherwise, vests any interest or
right in such Options or Units whatsoever in any assignee or transferee and
immediately upon any assignment or transfer, or any attempt to make the same,
such Options or Units will terminate and be of no further force or effect.  If any Individual Optionholder (the “Original
Optionholder”) has transferred Options to a corporation pursuant to this Section 3.6
when such transfer is permitted herein and by applicable rules or law,
such Options will terminate and be of no further force or effect if at any time
the Original Optionholder should cease to own all of the issued shares of such
corporation.

 

(b)           Notwithstanding Section 3.6(a) and
subject to Section 3.6(c), the Board will consider in good faith any
request by an Optionholder for consent to assign or transfer any Options of the
Optionholder and, in making a determination as to whether to consent to such
assignment or transfer, the Board will consider whether such assignment or
transfer is consistent with the purposes of this Plan, including without
limitation to assist the Company in attracting, retaining and motivating key
employees, officers and directors, and may attach such terms and conditions to
such consent as the Board determines in good faith.

 

(c)           Notwithstanding Sections 3.6(a) and
3.6(b), no assignment or transfer as would otherwise be permitted pursuant to
such sections may occur where such assignment or transfer is to be made for
consideration.

 

ARTICLE 4 

GRANT OF OPTIONS

 

4.1                                                                               Grant of Options

 

The Board may, from time to time, subject to the provisions of this Plan
and such other terms and conditions as the Board may determine, grant Options
to any Participant.  In determining
whether to make such a grant the Board or its Committee, will consider the
Participant’s achievement of performance objectives under the Company’s long
term incentive program, the achievement by the Company of its strategic goals
and objectives and the contribution that Participant has made, or in the case
of a new Participant, the contribution that Participant is expected to make in
furtherance of the Company’s overall goals.

 

11

 

4.2                                                                               Exercise Price

 

(a)           The purchase price of Common
Shares purchasable under any Option will be as determined by the Board but in
any event will be no less than the Market Price of the Common Shares.

 

(b)           Except pursuant to Sections
7.2 or 7.3, no Option may be amended to reduce the Exercise Price of the Option
below the Exercise Price as of the Date of Grant, nor will any options be
cancelled and replaced with new options with a lower Exercise Price, without
shareholder approval.

 

4.3                                                                               Term of Options

 

(a)           Subject to any accelerated
termination as set forth in this Plan, each Option expires on the fifth
anniversary of the Date of Grant.

 

(b)           If the term of an Option held
by an Optionholder expires during a Blackout Period, then the term of such
Option or unexercised portion thereof shall be extended and shall expire on the
tenth Business Day following the end of the Blackout Period.

 

4.4                                                                               Exercise Period

 

(a)           Options will vest and be
exercisable in the manner determined by the Board and specified in the
applicable Option Agreement.

 

Once an Option becomes exercisable, it remains exercisable until
expiration or termination of the Option, unless otherwise specified by the
Board in connection with the grant of such Option or pursuant to Section 6.1.  Each Option or instalment may be exercised at
any time or from time to time, in whole or in part, for up to the total number
of Common Shares with respect to which it is then exercisable.  The Board has the right to accelerate the
date upon which any instalment of any Option becomes exercisable.

 

(b)           Provided that an Optionholder
has been employed by the Company or a Related Entity for at least ten (10) consecutive
years, provided that the sum of the Optionholder’s age and the Optionholder’s
years of service with the Company or a Related Entity equals or exceeds “70”,
upon the Retirement, death, Disability or termination (other than in the case
of termination for cause, in which case, for greater certainty, the provisions
of this Section 4.4(b) shall not apply), all of the unvested Options
held by such Optionholder shall immediately vest and become exercisable
pursuant to the terms of this Plan. 
Notwithstanding Sections 4.6 and 4.7, all such vested Options shall
expire on the earlier of (a) the expiration of the term of such options,
and (b) one year following the date of Retirement, death or Disability or
the Termination Date, as applicable.  For
the purposes of this section, an Optionholder’s employment with the Company or
a Related Entity ends on the Termination Date.

 

(c)           Unless otherwise determined by
the Board at grant, the Option Agreement shall provide that (i) in the event
the Participant engages in a Detrimental Activity prior to any exercise of the
Option, all Options held by the Participant shall thereupon terminate and
expire, (ii) as a condition of the exercise of a Option, the Participant
shall be deemed to have certified at

 

12

 

the
time of exercise that the Participant is in compliance with the terms and
conditions of the Plan and that the Participant has not engaged in, and does
not intend to engage in, any Detrimental Activity, and (iii) in the event
the Participant engages in a Detrimental Activity during the one-year period
commencing on the date the Option is exercised, the Company shall be entitled
to recover from the Participant at any time within one year after such
exercise, and the Participant shall pay over to the Company, an amount equal to
any gain realized as a result of the exercise of the Option (whether at the
time of exercise or thereafter).  The
Company’s rights in subsection (iii) shall also apply if it is determined
that the Participant’s deemed certification pursuant to subsection (ii) was
untrue.  This Section 4.4(c) shall
cease to apply upon a Change in Control.

 

4.5                                                                               Payment of Exercise Price

 

The Exercise Notice must be accompanied by payment in full of the
purchase price for the Common Shares to be purchased.  The Exercise Price must be fully paid in
cash, or by certified cheque, bank draft or money order payable to the Company
or by such other means as might be specified from time to time by the
Board.  No Common Shares will be issued
or transferred until full payment therefor has been received by the
Company.  As soon as practicable after
receipt of any Exercise Notice and full payment, the Company will deliver to
the Optionholder a certificate or certificates representing the acquired Common
Shares.

 

4.6                                                                               Retirement, Death or Disability of Optionholder

 

If an Individual Optionholder dies or becomes Disabled while an
employee, director or officer of the Company or a Related Entity or if the
employment or term of office of the Individual Optionholder with the Company or
a Related Entity terminates due to Retirement:

 

(a)                                  the
executor or administrator of the Individual Optionholder’s estate or the
Individual Optionholder, as the case may be, may exercise any Options of the
Optionholder to the extent that the Options were exercisable at the date of
such death, Disability or Retirement and the right to exercise such Options
terminates on the earlier of:  (i) the
date that is 180 days from the date of the Individual Optionholder’s death,
Disability or Retirement; and (ii) the date on which the Exercise Period
of the particular Option expires.  Any
Options held by the Optionholder that were not exercisable at the date of
death, Disability or Retirement immediately expire and are cancelled on such
date; and

 

(b)                                 such
Optionholder’s eligibility to receive further grants of Options under the Plan
ceases as of the date of the Individual Optionholder’s death, Disability or
Retirement, as the case may be.

 

4.7                                                                               Termination of Employment or Services

 

(a)           Where, in the case of an
Employee Participant or Executive Participant, an Individual Optionholder’s
employment or term of office with the Company or a Related Entity ceases by
reason of the Individual Optionholder’s death, Disability or Retirement, then
the provisions of Section 4.6 will apply.

 

13

 

(b)           Where, in the case of an
Employee Participant or Executive Participant, an Individual Optionholder’s
employment or term of office terminates by reason of:  (i) termination by the Company or a
Related Entity without cause; or (ii) voluntarily resignation by the
Optionholder, then any Options held by the Optionholder that are exercisable at
the Termination Date continue to be exercisable by the Optionholder until the
earlier of:  (A) the date that is 60
days after the Termination Date; and (B) the date on which the Exercise
Period of the particular Option expires. 
Any Options held by the Optionholder that are not exercisable at the
Termination Date immediately expire and are cancelled on the Termination Date.

 

(c)           Where, in the case of an
Employee Participant or Executive Participant, an Individual Optionholder’s
employment or term of office is terminated by the Company or a Related Entity
for cause, then any Options held by the Optionholder, whether or not
exercisable at the Termination Date, immediately expire and are cancelled on
such date at a time determined by the Board, in its sole discretion.

 

(d)           Where, in the case of a
Consultant Participant, an Optionholder’s consulting agreement or arrangement
terminates by reason of:  (i) termination
by the Company or a Related Entity for any reason whatsoever other than for
breach of the consulting agreement or arrangement (whether or not such
termination is effected in compliance with any termination provisions contained
in the Optionholder’s consulting agreement or arrangement); or (ii) voluntarily
termination by the Individual Optionholder; or (iii) the death or
Disability of the Individual Optionholder, then any Options held by the
Optionholder that are exercisable at the Termination Date, or at the date of
the death or Disability of the Individual Optionholder, as the case may be,
continue to be exercisable by the Optionholder until the earlier of:  (A) the date that is 60 days from the
Termination Date, or from the date of the death or Disability of the Individual
Optionholder, as the case may be; and (B) the date on which the Exercise
Period of the particular Option expires. 
Any Options held by the Optionholder that are not exercisable at the
Termination Date, or at the date of the death or Disability of the Individual
Optionholder, as the case may be, immediately expire and are cancelled on such
date.

 

(e)           Where, in the case of a
Consultant Participant, an Optionholder’s consulting agreement or arrangement
is terminated by the Company or a Related Entity for breach of the consulting
agreement or arrangement (whether or not such termination is effected in
compliance with any termination provisions contained in Optionholder’s
consulting agreement or arrangement), then any Options held by the
Optionholder, whether or not such Options are exercisable at the Termination
Date, immediately expire and are cancelled on the Termination Date at a time
determined by the Board, in its discretion.

 

(f)            An Optionholder’s eligibility
to receive further grants of Options under the Plan ceases as of the date that
the Company or a Related Entity, as the case may be, provides the Optionholder
with written notification that the Individual Optionholder’s employment, term
of office, consulting agreement or arrangement, as the case may be, is
terminated, notwithstanding that such date may be prior to the Termination
Date.

 

(g)           Notwithstanding Subsections
4.7(b) and 4.7(d), unless the Board, in its discretion, otherwise
determines, at any time and from time to time, Options are not affected by a
change of employment or consulting arrangement within or among the Company or
one or more Related

 

14

 

Entities
for so long as the Participant continues to be any of an Employee Participant,
a Consultant Participant or an Executive Participant.

 

4.8                                                                               Discretion to Permit Exercise

 

Notwithstanding the provisions of Sections 4.6 and 4.7, the Board may,
in its discretion, at any time prior to or following the events contemplated in
such sections, permit the exercise of any or all Options held by the
Optionholder in the manner and on the terms authorized by the Board, provided
that the Board will not, in any case, authorize the exercise of an Option
pursuant to this section beyond the expiration of the Exercise Period of the
particular Option.

 

ARTICLE 5 

GRANT OF UNITS

 

5.1                                                                               Grant and Vest of Units

 

(a)           Subject to Sections
3.2 and 5.2(a), the Board may, from time to time, subject to the provisions of
this Plan and such other terms and conditions as the Board may determine, grant
Units to any Participant.  Units may be granted as
Canadian Units or as U.S. Units.  A
Unitholder shall be notified in writing by the Company in respect of each grant
and such grant shall be evidenced by a Unit Agreement between the Company and
the Unitholder.

 

(b)           Subject to Sections
5.1(c), 5.1(d), 5.2(a), 6.1(c) and 7.4 and the applicable termination and
any other acceleration provisions set forth in this Plan and unless provided
otherwise in the applicable Unit Agreement, each Unit granted to a Unitholder
shall vest on the third anniversary date of the Date of Grant.

 

(c)           If a Unit held by a
Unitholder vests during a Blackout Period, then the Vesting Date of such Unit
shall be extended to the first Business Day following the end of the Blackout
Period.

 

(d)           Provided that a
Unitholder has been employed by the Company or a Related Entity for at least
ten (10) consecutive years, provided that the sum of the Unitholder’s age
and the Unitholder’s years of service with the Company or a Related Entity
equals or exceeds “70”, upon the Retirement, death, Disability or termination
(other than in the case of termination for cause, in which case, for greater
certainty, the provisions of this Subsection 5.1(d) shall not apply), all
of the unvested Units held by such Unitholder shall immediately vest.  For the purposes of this section, a
Unitholder’s employment with the Company or a Related Entity ends on the
Termination Date.

 

5.2                                                                               Performance Goals

 

(a)           The Board may condition the
granting or vesting of Units upon the attainment of specified performance goals
including, without limitation, the Performance Goals, or such other factors as
the Board may determine in its sole discretion. 
If the Unit is intended to comply with

 

15

 

Section 162(m) of
the Code, the grant of Units and the Performance Goals shall be set by the
Compensation Committee in its sole discretion.

 

(b)           In connection with the
granting of any Unit intended to comply with Section 162(m) of the
Code, the Compensation Committee shall establish the Performance Goals in
writing prior to the beginning of the applicable Performance Period.  Such Performance Goals may incorporate
provisions for disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances while the outcome
of the Performance Goals is substantially uncertain.  To the extent any Unit is intended to comply
with the provisions of Section 162(m) of the Code, if any provision
would create impermissible discretion under Section 162(m) of the
Code or otherwise violate Section 162(m) of the Code, such provision
shall be of no force or effect.

 

(c)           As applicable, if a
Unit is designed to vest upon the achievement of Performance Goals during a
Performance Period, at the expiration of the Performance Period, the
Compensation Committee shall determine and certify in writing the extent to
which the Performance Goals have been achieved.

 

(d)           Upon a
determination by the Board or the Compensation Committee that a Unitholder has
failed to attain specified performance goals, any unvested Units whose vesting
is contingent upon the attainment of such goals including, without limitation,
the Performance Goals, shall be forfeited immediately upon such determination
and thereafter be of no further force and effect.

 

(e)           To the extent any
Unit is intended to comply with Section 162(m) of the Code and in the
event that any objective Performance Goals are used, if any measurements
require deviation from GAAP, such deviation shall be at the discretion of the
Compensation Committee at the time the Performance Goals are set or at such
later time to the extent permitted under Section 162(m) of the Code.

 

5.3                                                                               Unit Rights

 

(a)           The Board shall have the sole
discretion to make the determination concerning the form of payment to a
Unitholder as contemplated in paragraphs (b) and (c) below.

 

(b)           Each vested Unit pursuant to
the provisions of the Plan shall represent the right to receive one Common
Share to be delivered on the Vesting Date or as soon as practicable thereafter
(provided that the Vesting Date does not occur during the Blackout Period), to
be issued from treasury or provided by the Company through market
purchases.  Such market purchases, if
any, shall be effected in such manner as is determined by the Board in its sole
discretion and the costs in connection therewith shall be borne by the Company.

 

(c)           Unless otherwise specified in
the Unit Agreement, the Company may, in lieu of all or a portion of the Common
Shares which would otherwise be issued or provided to a Unitholder, elect to
pay a cash amount to a Unitholder equivalent to the Market Price of one Common
Share for each vested Unit, to be paid on the Vesting Date or as soon as
practicable thereafter, provided that the Vesting Date does not occur during
the Blackout Period.

 

16

 

(d)           Unless otherwise determined by
the Board at the Date of Grant, the Unit Agreement shall provide that (i) in
the event the Participant engages in a Detrimental Activity prior to any
vesting of a Unit, all Units held by the Participant shall thereupon terminate
and be cancelled, (ii) as a condition of the vesting and payment of a
Unit, the Participant shall be deemed to have certified at the time of vesting
that the Participant is in compliance with the terms and conditions of the Plan
and that the Participant has not engaged in, and does not intend to engage in,
any Detrimental Activity, and (iii) in the event the Participant engages
in a Detrimental Activity during the one-year period commencing on the date the
Unit vests, the Company shall be entitled to recover from the Participant at
any time within one year after such vesting, and the Participant shall pay over
to the Company, an amount equal to the Market Price of the Common Shares and/or
the cash amount paid to the Unitholder, together with any other gain realized
as a result of the vesting of the Unit, issuance of the Common Shares and/or
payment of the cash amount (whether at the time of vesting or thereafter).  The Company’s rights in subsection (iii) shall
also apply if it is determined that the Participant’s deemed certification
pursuant to subsection (ii) was untrue. 
This Subsection 5.3(d) shall cease to apply upon a Change in
Control.

 

5.4                                                                               Unit Account

 

A separate account, to be
known as a “Unit Account”, shall be maintained on the books of the Company for
each Unitholder, recording the number of Units standing to the credit of a
Unitholder from time to time.

 

5.5                                                                               Dividends

 

Except as otherwise determined by the Board  on the Date of Grant, a Unitholder’s Unit Account shall,
until the Vesting Date or termination and cancellation or forfeiture of the
Units pursuant to the terms of the Plan, be allocated additional Units on the
payment date of dividends on the Company’s Common Shares, the number of which
shall be the quotient determined by dividing: (a)  the total amount of the
dividends (excluding stock dividends but including dividends which may be paid
in cash or Common Shares at the option of the shareholder) declared and that
would have been paid to the Unitholder if the Units in his or her Unit Account
on the relevant record date for dividends on the Common Shares had been Common
Shares by (b)  the closing price of the Common Shares on the TSX, NYSE or
other exchange where the majority of the trading volume and value of the Common
Shares occurs on the payment date of such dividends.  Fractional Units shall not be granted
pursuant to this Section 5.5.  Any
such additional Units shall have the same Vesting Dates and vest in accordance
with the same terms as the Units in respect of which such additional Units are
credited.

 

5.6                                                                               Voting Rights

 

Subject to Section 8.5, a Unitholder shall not have the right or be
entitled to exercise any voting rights or be entitled to any other rights as a
shareholder of the Company in respect of any Units.

 

17

 

5.7                                                                               Retirement, Death and Disability of Unitholder

 

(a)           In the case of an Employee
Participant or Executive Participant, provided that the Individual Unitholder
has been continuously employed by the Company or a Related Entity for a
12-month period following the Date of Grant of Units, if the employment or term
of the office of the Individual Unitholder with the Company or a Related Entity
terminates prior to the vesting of such Units due to Retirement, then such
Units shall vest on the Vesting Date (subject to the attainment of performance
goals and any other factors, if any, as determined by the Compensation
Committee in its sole discretion), provided that the number of Units which
shall vest on the Vesting Date shall be prorated by multiplying the number of
unvested Units by the number of days from but excluding the Date of Grant to
and including the Vesting Date during which the Individual Unitholder has been
providing active service to the Company or a Related Entity, divided by the
total number of days from but excluding the Date of Grant to and including the
Vesting Date.  Any remaining unvested
Units shall be cancelled on the date of Retirement.  If the Individual Unitholder has not been so
continuously employed by the Company or a Related Entity for such 12-month
period, then all unvested Units shall be cancelled on the date of Retirement.

 

(b)           In the case of an Employee Participant,
Executive Participant or Consultant Participant, if an Individual Unitholder
dies while an employee, director or officer of, or while a consultant to, the
Company or a Related Entity, as applicable, and prior to the vesting of Units,
then such Units shall vest on the date of death (subject to the attainment of
performance goals and any other factors, if any, as determined by the
Compensation Committee in its sole discretion), provided that the number of
Units which shall vest on such date shall be prorated by multiplying the number
of unvested Units by the number of days from but excluding the Date of Grant to
and including the date of death during which the Individual Unitholder had
provided active service to the Company or a Related Entity, divided by the
total number of days from but excluding the Date of Grant to and including the
Vesting Date.  The payment in respect of
the vested Units, whether in form of Common Shares, cash or both, shall be made
by the Company to the Unitholder’s designated beneficiary specified in the Unit
Agreement as soon as practicable after the date of death.  Any remaining unvested Units shall be
cancelled on the date of death.

 

(c)           In the case of an Employee
Participant, Executive Participant or Consultant Participant, if an Individual
Unitholder becomes Disabled while an employee, director or officer of, or while
a consultant to, the Company or a Related Entity, as applicable, and prior to
the vesting of Units, then such Units shall vest on the date of Disability (subject
to the attainment of performance goals and any other factors, if any, as
determined by the Compensation Committee in its sole discretion), provided that
the number of Units which shall vest on such date shall be prorated by
multiplying the number of unvested Units by the number of days from but
excluding the Date of Grant to and including the date of Disability during
which the Individual Unitholder had provided active service to the Company or a
Related Entity, divided by the total number of days from but excluding the Date
of Grant to and including the Vesting Date. 
Any remaining unvested Units shall be cancelled on the date of
Disability.

 

(d)           A Unitholder’s eligibility to
receive further grants of Units under the Plan ceases as of the date of the Individual
Unitholder’s death, Disability or Retirement, as the case may be, except that a
Unitholder whose eligibility ceases as a result of Disability shall be eligible
to

 

18

 

participate in the Plan upon his or her
resumption of active employment with, or as an active consultant to, the
Company or a Related Entity, as applicable.

 

5.8                                                                               Termination of Employment or Services and Voluntary
Resignations or Terminations

 

(a)           Where (i) in the case of
an Employee Participant or Executive Participant, an Individual Unitholder’s
employment or term of office is terminated by the Company or a Related Entity
without cause, or (ii) in the case of a Consultant Participant, a
Unitholder’s consulting agreement or arrangement is terminated by the Company
or a Related Entity for any reason whatsoever other than for breach of the
consulting agreement or arrangement (whether or not such termination is
effected in compliance with any termination provisions contained in the
Unitholder’s consulting agreement or arrangement), and in the case of clauses (i) or
(ii), such termination is prior to the vesting of Units, then such Units shall
vest on the Termination Date (subject to the attainment of performance goals
and any other factors, if any, as determined by the Compensation Committee in
its sole discretion), provided that the number of Units which shall vest on
such date shall be prorated by multiplying the number of unvested Units by the
number of days from but excluding the Date of Grant to and including the
Termination Date during which the Individual Unitholder had provided active
service to the Company or a Related Entity, divided by the total number of days
from but excluding the Date of Grant to and including the Vesting Date.  Any remaining unvested Units shall be
cancelled and forfeited on the Termination Date.

 

(b)           Where (i) in the case of
an Employee Participant or Executive Participant, an Individual Unitholder’s
employment or term of office is terminated (A) by reason of the Individual
Unitholder’s voluntary resignation or (B) by the Company or a Related
Entity for cause, or (ii) in the case of a Consultant Participant, a
Unitholder’s consulting agreement or arrangement is terminated (A) by reason
of the Individual Unitholder’s voluntary termination or (B) by the Company
or a Related Entity for breach of the consulting agreement or arrangement
(whether or not such termination is effected in compliance with any termination
provisions contained in the Unitholder’s consulting agreement or arrangement),
then any Units that are unvested on the date of such termination or resignation
shall be forfeited and cancelled on the Termination Date.

 

(c)           An Individual Unitholder’s
eligibility to receive further grants of Units under the Plan ceases as of the
date that the Company or a Related Entity, as the case may be, provides the
Individual Unitholder with written notification that the Individual Unitholder’s
employment, term of office, consulting agreement or arrangement, as the case
may be, is terminated, notwithstanding that such date may be prior to the
Termination Date.

 

(d)           Notwithstanding Sections 5.8(a) and
(b), unless the Board, in its discretion, otherwise determines, at any time and
from time to time, Units are not affected by a change of employment or
consulting arrangement within or among the Company or one or more Related
Entities for so long as the Participant continues to be any of an Employee
Participant, a Consultant Participant or an Executive Participant.

 

19

 

5.9                                                                               Leave of Absence

 

(a)           In the case of an Employee
Participant or Executive Participant, where an Individual Unitholder’s
employment or term of office is suspended by reason of a leave of absence
required under applicable law (including employment law), any unvested Units on
the date of such suspension shall vest on the Vesting Date (subject to the
attainment of performance goals and any other factors, if any, as determined by
the Compensation Committee in its sole discretion) as if such leave of absence
had not occurred.

 

(b)           In the case of an Employee
Participant or Executive Participant, provided that the Individual Unitholder
has been continuously employed by the Company or a Related Entity for a
12-month period following the Date of Grant of Units, where an Individual
Unitholder’s employment or term of office is suspended by reason of a personal
leave of absence approved by the Company, any unvested Units on the date of
such suspension shall vest on the Vesting Date (subject to the attainment of
performance goals and any other factors, if any, as determined by the
Compensation Committee in its sole discretion) as if such leave of absence had
not occurred.  If the Individual Unitholder
had not been so continuously employed by the Company or a Related Entity for
such 12-month period, then all unvested Units as at the day prior to the
commencement of the leave of absence shall be cancelled on that date.  Such Individual Unitholder shall be eligible
to participate in the Plan upon his or her resumption of active employment with
the Company or a Related Entity.

 

5.10                                                                        Discretion to Permit Vesting

 

Notwithstanding the provisions of Sections 5.7 to 5.9, the Board may, in
its discretion, at any time prior to or following the events contemplated in
such sections, provide for the vesting of any or all Units held by the
Unitholder in the manner and on the terms authorized by the Board.

 

ARTICLE 6 

CHANGE IN CONTROL

 

6.1                                                                               Change in Control

 

Subject to the terms of any employment or consulting agreement with any
Participant entered into by the Company or a Related Entity:

 

(a)           Notwithstanding anything else
in this Plan or any Option Agreement or Unit Agreement, the Board may, without
the consent of any Optionholder or Unitholder, take such steps as are necessary
or desirable to cause the conversion or exchange of any outstanding Options or
Units into or for cash or options, units, rights or other securities of
substantially equivalent value (or greater value), as determined by the Board
in its discretion, in any entity participating in or resulting from a “Change
in Control” (as defined below).

 

(b)           Upon the Company entering into
an agreement relating to, or otherwise becoming aware of, a transaction which,
if completed, would result in a Change in Control, the Company shall give
written notice of the proposed transaction to the Optionholders and the
Unitholders,

 

20

 

together
with a description of the effect of such Change in Control on outstanding
Options and Units, not less than ten (10) Business Days prior to the
closing of the transaction resulting in the Change of Control.

 

(c)           The Board may, in its sole
discretion, accelerate the vesting of any or all outstanding Options or Units
to provide that, notwithstanding Sections 4.4, 5.1, 5.2 or any Option Agreement
or Unit Agreement, such outstanding Options or Units shall be fully vested and,
in the case of Options, exercisable conditional upon (or prior to) the
completion of the transaction resulting in the Change in Control provided that
the Board shall not, in any case, authorize the exercise of Options pursuant to
this section beyond the Expiry Date of the Options.  If the Board elects to accelerate the vesting
of the Options, then if any of the Options are not exercised on or prior to
completion of the transaction resulting in the Change in Control, such
unexercised Options shall terminate and expire upon the completion of the
transaction resulting in the Change in Control. 
If, for any reason, the transaction which would result in the Change in
Control is not completed, the acceleration of the vesting of the Options and
Units shall be retracted and vesting shall instead revert to the manner
provided in Sections 4.4, 5.1 and 5.2.

 

(d)           To the extent that the
transaction resulting in a Change in Control is a capital reorganization,
arrangement, amalgamation or reclassification of the share capital of the
Company and the Board does not accelerate the vesting of Options or Units
pursuant to Subsection 6.1(c) or take action pursuant to 6.1(a), the
Company shall make reasonable efforts to ensure that, upon completion of the
proposed transaction resulting in the Change in Control, the number and kind of
shares subject to outstanding Options and Units and/or the Exercise Price per
share of Options shall be appropriately adjusted in such manner as the Board
considers equitable to prevent substantial dilution or enlargement of the
rights granted to Optionholders and Unitholders.  The Board may make changes to the terms of
the Options, the Units or this Plan to the extent necessary or desirable to
comply with any rules, regulations or policies of any stock exchange on which
the Common Shares are listed, provided that the value of previously granted
Options and Units, as determined by the Board in its discretion, and the rights
of Optionholders and Unitholders are not materially adversely affected by any
such changes.

 

(e)           If any individual, corporation
or other entity (an “Acquiror”) makes an offer to purchase all of the Common
Shares (an “Offer”) and the Offer is accepted by all of the holders of Common
Shares (or by a sufficient number of holders such that the Acquiror may
statutorily acquire the balance of the outstanding Common Shares), each
Optionholder shall be required to either (i) exercise all vested Options
held and sell the Common Shares which they acquire pursuant to such exercise of
Options then owned by them to the Acquiror on the same terms and conditions as
set out in the Offer; or (ii) have such vested Options cancelled.  In the event that the Board does not elect to
accelerate Options or Units pursuant to Subsection 6.1(c) any unvested
Options or Units then held by any Optionholder or Unitholder (as the case may
be) shall terminate and expire on the date that the Acquiror completes its
acquisition of Common Shares.

 

(f)            For purposes of this Section 6.1,
a “Change in Control” means the happening of any of the following events:

 

21

 

(i)             the completion of a
transaction pursuant to which (A) the Company goes out of existence or (B) any
Person, or any Associate or Related Entity of such Person (other than the
Company, any trustee or other fiduciary holding securities under any employee
benefit plan of the Company or a Related Entity, or any company owned, directly
or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of Common Shares of the Company) hereafter acquires
the direct or indirect “beneficial ownership” (as defined by the CBCA) of
securities of the Company representing 50% or more of the aggregate voting
power of all of the Company’s then issued and outstanding securities following
which the Chairman of the Board of the Company prior to the transaction taking
place is not the Chairman of the board of directors of the resulting company;

 

(ii)          the lease,
exchange, license, sale or other similar disposition of all or substantially
all of the Company’s assets in one transaction or a series of related
transactions to an entity following which the Chairman of the Board of the
Company prior to the transaction taking place is not the Chairman of the board
of directors of such entity, or if such entity is not a corporation, the
Chairman of the Board of the Company prior to the transaction taking place does
not hold a position with such entity entitling him to perform functions similar
to those performed by the chairman of a board of directors of a corporation;

 

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

 

(iv)      during any period
of 30 consecutive months beginning on or after the date of this 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 Company, provided that any director who was not a director as
of the date of this 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 Company with any other
corporation following which the Chairman of the Board of the Company prior to
the transaction taking place is no longer chairman of the Board of the Company,
other than a merger, amalgamation, arrangement or consolidation that would
result in the voting securities of

 

22

 

the Company 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 Company 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 Company (or similar
transaction) in which no Person (other than those covered by the exceptions in (i) above)
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities shall not constitute a Change in Control.

 

(g)           If the Board elects to
accelerate the vesting of any or all outstanding Options and Units immediately
prior to the completion of a transaction resulting in a Change in Control, it
may also determine that all such outstanding Options or Units will be purchased
by the Company or a Related Entity at the “Change in Control Price” (as defined
below), and, in the case of Options, less the applicable Exercise Price for
such Options, as of the date such Change in Control is determined to have
occurred or as of such other date prior to the Change in Control as the Board
may determine.  However, outstanding
Options may only be purchased by the Company or a Related Entity, as described
above, if the Change in Control Price is higher than the Exercise Price for
such outstanding Options.

 

For purposes of this Subsection 6.1(g), “Change in Control Price” means
the highest price per Common Share paid in any transaction reported on a stock
exchange or paid or offered in any bona fide transaction related to a potential
or actual Change in Control at any time during the five trading days (or if the
Common Shares are not listed on any stock exchange, during the three month
period) preceding the Change in Control, as determined by the Board.

 

ARTICLE 7 

SHARE CAPITAL ADJUSTMENTS

 

7.1                                                                               General

 

The existence of any Options or Units does not affect in any way the
right or power of the Company or its shareholders to make, authorize or
determine any adjustment, recapitalization, reorganization or any other change
in the Company’s capital structure or its business, or any amalgamation,
combination, merger or consolidation involving the Company, to create or issue
any bonds, debentures, Common Shares or other securities of the Company or to
determine the rights and conditions attaching thereto, to effect the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or to effect any other corporate act or
proceeding, whether of a similar character or otherwise, whether or not any
such action referred to in this section would have an adverse effect on this
Plan or any Option or Unit granted hereunder.

 

23

 

7.2                                                                               Reorganization of Company’s Capital

 

Should the Company effect a subdivision or consolidation of Common
Shares or any similar capital reorganization or a payment of a stock dividend
(other than a stock dividend that is in lieu of a cash dividend), or should any
other change be made in the capitalization of the Company that, in the opinion
of the Board, would warrant the replacement or amendment of any existing
Options or Units in order to adjust:  (a) the
number of Common Shares that may be acquired on the exercise of any outstanding
Options or vesting of any outstanding Units; and/or (b) the Exercise Price
of any outstanding Options in order to preserve proportionately the rights and
obligations of the Optionholders, the Board will authorize such steps to be
taken as may be equitable and appropriate to that end.

 

7.3                                                                               Other Events Affecting the Company

 

In the event of an amalgamation, combination, merger or other
reorganization involving the Company by exchange of Common Shares, by sale or
lease of assets or otherwise, that, in the opinion of the Board, warrants the
replacement or amendment of any existing Options or Units in order to
adjust:  (a) the number of Common
Shares that may be acquired on the exercise of any outstanding Options or the
vesting of any outstanding Units; or (b) the Exercise Price of any
outstanding Options in order to preserve proportionately the rights and
obligations of the Optionholders, the Board will authorize such steps to be
taken as may be equitable and appropriate to that end.

 

7.4                                                                               Immediate Exercise of Options or Vesting of Units

 

Where the Board determines that the steps provided in Sections 7.2 and
7.3 would not preserve proportionately the rights and obligations of the
Optionholders or the Unitholders in the circumstances or otherwise determines
that it is appropriate, the Board may permit the immediate exercise of any
outstanding Options or vesting of any outstanding Units that are not otherwise
exercisable or vested (as the case may be).

 

7.5                                                                               Issue by Company of Additional Shares

 

Except as expressly provided in this Article 7, neither the issue
by the Company of shares of any class or securities convertible into or
exchangeable for shares of any class, nor the conversion or exchange of such
shares or securities, affects, and no adjustment by reason thereof is to be
made with respect to: (a) the number of Common Shares that may be acquired
on the exercise of any outstanding Options or the vesting of outstanding Units;
or (b) the Exercise Price of any outstanding Options.

 

7.6                                                                               Fractions

 

No fractional Common Shares will be issued on the exercise of an Option
or the vesting of a Unit.  Accordingly,
if, as a result of any adjustment under Sections 7.2 to 7.4 inclusive, an
Optionholder or Unitholder would become entitled to a fractional Common Share,
the Optionholder or Unitholder has the right to acquire only the adjusted
number of full Common Shares and no payment or other adjustment will be made
with respect to the fractional Common Shares so disregarded.

 

24

 

7.7                                                                               Conditions of Exercise or Vesting

 

This Plan and each Option and Unit are subject to the requirement that
if at any time the Board determines that the listing, registration or
qualification of the Common Shares subject to such Option or Unit upon any
stock exchange or under any provincial, state or federal law, or the consent or
approval of any governmental body, stock exchange or of the holders of the
Common Shares generally, is necessary or desirable, as a condition of, or in
connection with, the granting of such Option or Unit or the issue or purchase of
Common Shares thereunder, no such Option or Unit may be granted, exercised or
vested in whole or in part unless such listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions not
acceptable to the Board.  The
Optionholders and the Unitholders shall, to the extent applicable, cooperate
with the Company in relation to such listing, registration, qualification,
consent or other approval and shall have no claim or cause of action against
the Company or any of its officers or directors as a result of any failure by
the Company to obtain or to take any steps to obtain any such registration,
qualification or approval.

 

ARTICLE 8 

MISCELLANEOUS PROVISIONS

 

8.1                                                                               Legal Requirement

 

The Company is not obligated to grant any Options or Units, issue any
Common Shares or other securities, make any payments or take any other action
if, in the opinion of the Board, in its sole discretion, such action would
constitute a violation by an Optionholder, a Unitholder or the Company of any
provision of any applicable statutory or regulatory enactment of any government
or government agency.

 

8.2                                                                               Conditions of Exercise or Vest

 

Each Optionholder and Unitholder will, when requested by the Company,
sign and deliver all such documents relating to the granting or exercise of
Options or vesting of Units which the Company deems necessary or
desirable.  Subject to the provisions of
this Plan and any Option Agreement, Options shall be exercised by means of a
fully completed Exercise Notice  delivered
to the Company.

 

8.3                                                                               Optionholder’s and Unitholder’s Entitlement

 

Except as otherwise provided in this Plan, Options and Units previously
granted under this Plan, whether or not then exercisable or capable of vesting,
are not affected by any change in the relationship between, or ownership of,
the Company and a Related Entity.  For
greater certainty, all Options and Units remain valid and exercisable or
capable of vesting in accordance with the terms and conditions of this Plan and
are not affected by reason only that, at any time, a Related Entity ceases to
be a Related Entity.

 

25

 

8.4                                                                               Withholding Taxes

 

(a)           The exercise of each Option
granted under this Plan is subject to the condition that if at any time the
Company determines, in its discretion, that the satisfaction of withholding tax
or withholding liabilities is required under applicable law in respect of such
exercise, such exercise is not effective unless such withholding has been
effected to the satisfaction of the Company. 
In such circumstances, the Company may require that an Optionholder pay
to the Company, in addition to and in the same manner as the Exercise Price for
the Common Shares, such amount as the Company is obliged to remit to the
relevant taxing authority in respect of the exercise of the Option.

 

(b)           Any and all payments to be
made to the Unitholder, or to the Unitholder’s designated beneficiary in
accordance with Section 5.7, whether in the form of Common Shares, cash or
both, shall be made subject to the deduction of any and all applicable taxes or
withholdings.

 

8.5                                                                               Rights of Participant/Optionholder/Unitholder

 

No Participant has any claim or right to be granted an Option or Unit
(including, without limitation, an Option granted in substitution for any
Option that has expired pursuant to the terms of this Plan), and the granting
of any Option or Unit is not to be construed as giving an Optionholder or
Unitholder (as the case may be) a right to remain in the employ of the Company
or a Related Entity.  No Optionholder or
Unitholder has any rights as a shareholder of the Company in respect of Common
Shares issuable on the exercise of rights or on the vesting of Units to acquire
Common Shares under any Option or Unit until the allotment and issuance to the
Optionholder or Unitholder (as the case may be) of certificates representing
such Common Shares.

 

8.6                                                                               Termination; Amendment

 

(a)           This Plan will terminate and,
for greater certainty, all unexercised Options and unvested Units shall
terminate and expire on the earliest of:

 

(i)             the date upon which
no further Common Shares remain available for issuance pursuant to Options and
Units which may be granted under this Plan and no Options and Units remain
outstanding; and

 

(ii)          upon the occurrence
of a Change in Control provided that the Board accelerates the vesting of
Options and Units pursuant to Section 6.1,

 

unless this Plan is renewed
for such further period and upon such terms and conditions as the Board may
determine.

 

(b)           Subject to Section 8.6(c),
the Board may, without notice, at any time or from time to time for any purpose
whatsoever, and whether in whole or in part, amend, suspend, discontinue or
terminate this Plan or any provisions hereof or amend an Option or Unit granted
to a Participant or a related Option Agreement or Unit Agreement, as
applicable, in such respects as it, in its sole discretion, determines
appropriate.  No such amendment,
suspension,

 

26

 

discontinuance
or termination may, without the consent of any Optionholder, Unitholder or the
representatives of his or her estate, as applicable, alter or impair any rights
or obligation arising from any Option or Unit previously granted to an
Optionholder or Unitholder, as applicable, under this Plan unless the Board
determines that the action would not materially and adversely affect the rights
of such Participant.  In addition, no
such action shall be undertaken that would cause a previously granted Option or
Unit intended to qualify for favourable treatment under Section 162(m) of
the Code to cease to so qualify.

 

(c)           Notwithstanding anything
contained herein to the contrary, no such action as is contemplated by Section 8.6(b) is
effective until shareholder approval is obtained where such shareholder
approval is required under Section 162(m) of the Code or the rules of
the TSX and/or NYSE or the rules of any other exchange or system on which
the Company’s securities are listed or traded at the request of the
Company.  In addition, in order to become
effective, shareholder approval shall be required for:

 

(i)             any amendment to
increase the number of Common Shares reserved for issuance from treasury under
the Plan;

 

(ii)          any amendment that
would reduce the Exercise Price of an outstanding Option (including a
cancellation and reissue of an Option constituting a reduction of the Exercise
Price);

 

(iii)       any amendment to
extend the term of an outstanding Option beyond the originally scheduled expiry
date for that Option;

 

(iv)      any amendment to
the eligible participants under the Plan that would permit the introduction or
reintroduction of non-employee directors to participate under the Plan on a
discretionary basis;

 

(v)         any amendment that
would alter the transferability or assignability of Options or Units under the
Plan; and

 

(vi)      any amendment to
the Plan to provide for other types of compensation through equity issuance,

 

unless the change results from
the application of Article 7 of the Plan.

 

(d)           The shareholders’ approval of
an action as contemplated by Section 8.6(c), if required pursuant to the
terms thereof, shall be given by approval of the holders of a majority of the
Common Shares present and voting in person or by proxy at a duly called meeting
of the shareholders.  If required by the rules of
the TSX and/or NYSE or the rules of any other exchange or system on which
the Company’s securities are listed or traded at the request of the Company,
the votes of Common Shares held directly or indirectly by Insiders benefiting
from the action shall be excluded. 
Options and Units may be granted under the Plan prior to the approval of
the action, provided that no Common Shares may be issued pursuant to the
revised terms until the shareholders’ approval of the action has been obtained.

 

27

 

8.7                                                                               Indemnification

 

Every Director will at all times be indemnified and saved harmless by
the Company from and against all costs, charges and expenses whatsoever
including any income tax liability arising from any such indemnification, that
such Director may sustain or incur by reason of any action, suit or proceeding,
taken or threatened against the Director, otherwise than by the Company, for or
in respect of any act done or omitted by the Director in respect of this Plan,
such costs, charges and expenses to include any amount paid to settle such
action, suit or proceeding or in satisfaction of any judgement rendered
therein.

 

8.8                                                                               Quebec Stock Savings Plan

 

If the Common Shares qualify in any period for purposes of a stock
savings plan under the Taxation Act
(Quebec) (the “Act”), the Company shall so notify all Quebec resident Employee
Participants and Executive Participants who are officers of the Company or of a
Related Entity, whereupon any such Participant who wishes to deposit pursuant
to the Act some or all of the Common Shares to be issued to them under this
Plan in such period shall so indicate in the Exercise Notice.

 

8.9                                                                               Participation in the Plan

 

The participation of any Participant in this Plan is entirely voluntary
and not obligatory and shall not be interpreted as conferring upon such
Participant any rights or privileges other than those rights and privileges
expressly provided in this Plan.  In
particular, participation in this Plan does not constitute a condition of
employment or service nor a commitment on the part of the Company to ensure the
continued employment or service of such Participant.  This Plan does not provide any guarantee
against any loss which may result from fluctuations in the market value of the
Common Shares.  The Company does not
assume responsibility for the personal income or other tax consequences for the
Participants and they are advised to consult with their own tax advisors.

 

8.10                                                                        Effective Date

 

The Plan shall be effective May 16, 2007 (the “Effective Date”),
subject, solely to the extent required by any applicable law (including,
without limitation, approval required under Section 162(m) of the
Code or Section 422 of the Code) or registration, stock exchange, quotation
system, listing or similar rule or regulation, to approval by the
shareholders of the Company in the manner set forth in such law, regulation or
rule.

 

8.11                                                                        Governing Law

 

This Plan is created under and is to be governed, construed and
administered in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein.

 

8.12                                                                        Unfunded Status of Plan

 

This Plan is an “unfunded” plan for incentive and deferred
compensation.  With respect to any
payments as to which a Participant has a fixed and vested interest but that are
not

 

28

 

yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general unsecured
creditor of the Company.

 

8.13                                                                        Other Benefits

 

No Option or Unit granted or amount paid with respect to any Option or
Unit under this Plan shall be deemed compensation for purposes of computing
benefits under any retirement plan of the Company or its Related Entities nor
affect any benefits under any other benefit plan now or subsequently in effect
under which the availability or amount of benefits is related to the level of
compensation, except as may be specifically provided for in any such retirement
or benefit plan.

 

8.14                                                                        Section 409A of the Code

 

Options granted under this Plan are intended to be exempt under, and not
subject to, Section 409A of the Code and shall be limited, construed and
interpreted in accordance with such intent. 
Notwithstanding anything herein to the contrary, any provision in the
Plan that is inconsistent with Section 409A of the Code shall be deemed to
be amended to comply with Section 409A of the Code and to the extent such
provision cannot be amended to comply therewith, such provision shall be null
and void.  References to “Participants
subject to U.S. taxation” throughout this Plan shall include only those
Participants employed in the U.S. or Participants who have advised the company
in writing that they are subject to U.S. income tax.

 

8.15                                                                        Amendments to Stock Options under the 1993 and 2004 Stock
Option Plans

 

(a)           Reference is made to the 1993
Stock Option Plan, as amended, and the 2004 Stock Option Plan of the Company
(collectively, the “Prior Plans”), as such Prior Plans may be further amended,
modified, supplemented, revised, restated or replaced from time to time.  The terms of the outstanding options (“Prior
Plan Options”) granted prior to the effective date of the 2006 Stock Option
Plan to Optionholders under the Prior Plans (“Prior Plan Optionholders”) were
amended to provide for the benefit of the following provisions of the 2006
Stock Option Plan (and accordingly this Plan), which provisions apply for the
benefit of Optionholders under the 2006 Stock Option Plan and hereunder and
which, absent such amendments, would not have applied for the benefit of Prior
Plan Optionholders, and which provisions would not adversely affect the rights
under Prior Plan Options of such Prior Plan Optionholders:

 

(i)             to provide for the
benefit of the obligation on the part of the Board to consider any request for
consent by a Prior Plan Optionholder to assign or transfer any Prior Plan
Options of such Optionholder as provided for in Section 3.6(b) (subject
to the limitations set out in Section 3.6(c));

 

(ii)          except with respect
to Participants subject to U.S. taxation, to the extent required by Section 409A
of the Code, to provide for the benefit of the ten Business Day extension of
the expiration of any such Prior Plan Option should such expiration occur
during a Blackout Period as provided for in Section 4.3(b);

 

29

 

(iii)       to provide that
where the maximum period for exercise of vested Prior Plan Options following
termination of an option holder is 30 days, that such period will be extended
to 60 days; and

 

(iv)      in the case of
Prior Plan Options granted under the 1993 Stock Option Plan, to provide that
unless the Board, in its discretion, otherwise determines, at any time and from
time to time, such options are not affected by a change of employment or
consulting arrangement within or among the Company or one or more Related
Entities for so long as the Prior Plan Optionholder continues to be any of an
eligible Employee Participant, a Consultant Participant or an Executive
Participant under the Plan;

 

and the terms of each of the
option agreements governing such Prior Plan Options were amended to provide
that, notwithstanding any other provision contained in such option agreement or
in the applicable Prior Plan, the relevant Prior Plan Optionholder will have
the benefit of Sections 3.6(b), 4.3(b) and 4.7(g) of the 2006 Stock
Option Plan (and accordingly this Plan) as contemplated above, such provisions
to apply to the terms of such Prior Plan Options mutatis mutandis.

 

(b)           It is the intention of the
Company that the terms of the options granted under all of its stock option
plans shall be consistent, to the extent permitted under applicable law and the
terms of such plans.  Accordingly, the
Board will consider, in good faith, any request by a Prior Plan Optionholder to
amend the terms of any Prior Plan Options of such Optionholder which would
provide such Optionholder with the benefit of any provisions of this Plan which
provisions apply for the benefit of Optionholders hereunder and which
provisions do not apply for the benefit of such Prior Plan Optionholder under
the applicable Prior Plan, provided, however, that any such amendment shall not
extend any Prior Plan Options or modify any Prior Plan Options in a manner that
subjects any Prior Plan Option to Section 409A of the Code.

 

(c)           Any interpretation of this Section 8.15
will be decided by the Board or, if applicable in accordance with Section 3.2,
the Committee, in either case, acting in good faith.  The decision reached in respect of any such
interpretation shall be final and conclusive.

 

30

 

SCHEDULE A

OPTION
AGREEMENT

 

Biovail Corporation (the “Company”) hereby grants to the Optionholder
named below (the “Optionholder”), an option (the “Option”) to purchase, in
accordance with and subject to the terms, conditions and restrictions of this
Agreement, together with the provisions of the 2007 Equity Compensation Plan
(the “Plan”) of the Company dated May 16, 2007, as such plan may be
amended, modified, supplemented, revised, restated or replaced from time to
time, the number of common shares in the capital of the Company (“Common Shares”)
at the price per share set forth below:

 

Name of Optionholder:

 

Type of Participant:  [Employee
Participant, Executive Participant, or Consultant Participant]

 

Date of Grant:

 

Total Number of Common Shares Subject to Option:

 

Exercise Price:

 

Vesting:

 

1.                                       The
terms and conditions of the Plan are hereby incorporated by reference as terms
and conditions of this Option Agreement and all capitalized terms used herein,
unless expressly defined in a different manner, have the meanings ascribed
thereto in the Plan.

 

2.                                       Subject
to Sections 6.1 and 7.4 of the Plan, each Option is exercisable in the
instalments and subject to the conditions set forth above.

 

3.                                       The
provisions in the Plan regarding Detrimental Activity shall apply to this
Option.  In the event that the
Optionholder engages in Detrimental Activity prior to the exercise of the
Option, the Option shall terminate and expire as of the date the Optionholder
engaged in such Detrimental Activity.  As
a condition of the exercise of the Option, the Optionholder shall be deemed to
have certified at the time of exercise in the Exercise Notice that the
Optionholder is in compliance with the terms and conditions of the Plan and
that the Optionholder has not engaged in, and does not intend to engage in, any
Detrimental Activity.  In the event the
Optionholder engages in Detrimental Activity, the Company shall be entitled to
enforce its rights under the Plan and all other rights available to it at law
or equity.

 

4.                                       In no
event is the Option granted hereunder exercisable after the expiration of the
relevant Exercise Period.

 

5.                                       No
fractional Common Shares will be issued on the exercise of the Option granted
hereunder.  If, as a result of any
adjustment to the number of Common Shares issuable on the exercise of the
Option granted hereunder pursuant to the Plan, the Optionholder would be
entitled to receive a fractional Common Share, the Optionholder has the right
to

 

 

acquire only the adjusted number of full Common Shares and no payment or
other adjustment will be made with respect to the fractional Common Shares so
disregarded.

 

6.                                       Nothing
in the Plan or in this Option Agreement will affect the Company’s right, or
that of a Related Entity, to terminate the employment of, term of office of, or
consulting agreement or arrangement with an Optionholder at any time for any
reason whatsoever.  Upon such
termination, an Optionholder’s rights to exercise Options will be subject to
restrictions and time limits for the exercise of Options.  Complete details of such restrictions are set
out in the Plan, and in particular in Sections 4.6 and 4.7 thereof.

 

7.                                       Each
notice relating to the Option, including the exercise thereof, must be in
writing.  All notices to the Company must
be delivered personally or by prepaid registered mail and must be addressed to
the Manager, Benefits Administration. 
All notices to the Optionholder will be addressed to the principal
address of the Optionholder on file with the Company.  Either the Company or the Optionholder may
designate a different address by written notice to the other.  Such notices are deemed to be received, if
delivered personally, on the date of delivery, and if sent by prepaid,
registered mail, on the fifth business day following the date of mailing.  Any notice given by either the Optionholder
or the Company is not binding on the recipient thereof until received.

 

8.                                       When
the issuance of Common Shares on the exercise of the Option may, in the opinion
of the Company, conflict or be inconsistent with any applicable law or
regulation of any governmental agency having jurisdiction, the Company reserves
the right to refuse to issue such Common Shares for so long as such conflict or
inconsistency remains outstanding.

 

9.                                       Subject
to Section 4.6 of the Plan, the Option granted pursuant to this Option
Agreement may only be exercised during the lifetime of the Optionholder by the
Optionholder personally and, subject to Section 3.6 of the Plan, no
assignment or transfer of the Option, whether voluntary, involuntary, by
operation of law or otherwise, vests any interest or right in such Option
whatsoever in any assignee or transferee, and immediately upon any assignment
or transfer or any attempt to make such assignment or transfer, the Option
granted hereunder terminates and is of no further force or effect.  Complete details of this restriction are set
out in the Plan.

 

10.                                 The
Optionholder hereby agrees that:

 

(a)                                  any
rule, regulation or determination, including the interpretation by the Board of
the Plan, the Option granted hereunder and the exercise thereof, is final and
conclusive for all purposes and binding on all persons including the Company
and the Optionholder; and

 

(b)                                 the
grant of the Option does not affect in any way the right of the Company or any
Related Entity to terminate the employment or service of the Optionholder.

 

2

 

11.                                 This
Option Agreement has been made in and is to be construed under and in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.

 

 

	
   

  	
   

  	
  BIOVAIL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  

 

 

I have read the foregoing Option Agreement and hereby accept the Option
to purchase Common Shares in accordance with and subject to the terms and
conditions of such Agreement and the Plan. 
I understand that I may review the complete text of the Plan by
contacting the Manager, Benefits Administration of the Company.  I agree to be bound by the terms and
conditions of the Plan governing the Option.

 

 

	
   

  	
   

  	
   

  
	
  Date Accepted

  	
   

  	
  Optionholder’s Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optionholder’s Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PLEASE PRINT)

  

 

3

 

SCHEDULE
B

EXERCISE
NOTICE FORM - OPTIONS

 

1.                                       The
terms and conditions of the Plan are hereby incorporated by reference as terms
and conditions of this Exercise Notice and all capitalized terms used herein,
unless expressly defined in a different manner, have the meanings ascribed
thereto in the Biovail Corporation 2007 Equity Compensation Plan (the “Plan”).

 

2.                                       I,                                                                                                                ,
hereby certify that:

(PRINT NAME)

 

(a)                                  I am
in compliance with the terms and conditions of the Plan and I have not engaged
in, and do not intend to engage in, any Detrimental Activity; and

 

(b)                                 I,
hereby exercise the option to purchase
                    
Common Shares at a purchase price of [Cdn]$                    
per Common Share.  This Exercise Notice
is delivered in respect of the option to purchase
                    
Common Shares that was granted to me on
                    
pursuant to the Option Agreement entered into between the Company and me.  In connection with the foregoing, I enclose
cash, a certified cheque, bank draft or money order payable to the Company in
the amount of [Cdn]$                    
as full payment for the Common Shares to be received upon exercise of the
Option.

 

 

	
   

  	
   

  	
   

  
	
  Date Accepted

  	
   

  	
  Optionholder’s Signature

  

 

 

SCHEDULE
C

RESTRICTED
SHARE UNIT AGREEMENT

 

Biovail Corporation (the “Company”) hereby grants to the Unitholder
named below (the “Unitholder”), the number of restricted share units (the “Units”)
of the Company set forth below, in accordance with and subject to the terms,
conditions and restrictions of this Unit Agreement, together with the
provisions of the 2007 Equity Compensation Plan (the “Plan”) of the Company
dated May 16, 2007, as such plan may be amended, modified, supplemented,
revised, restated or replaced from time to time.

 

Name of Unitholder:

 

Type of Participant:  [Employee
Participant, Executive Participant, or Consultant Participant]

 

Date of Grant:

 

Number of Units Granted:

 

Total Number of Common Shares Subject to Units

 

Vesting:

 

Name of Designated Beneficiary in the Event of Death of Unitholder:

 

1.                                       The
terms and conditions of the Plan are hereby incorporated by reference as terms
and conditions of this Unit Agreement and all capitalized terms used herein,
unless expressly defined in a different manner, have the meanings ascribed
thereto in the Plan.

 

2.                                       The
provisions in the Plan regarding Detrimental Activity shall apply to this
Unit.  In the event that the Unitholder
engages in Detrimental Activity prior to the vesting of the Unit, the Unit
shall terminate as of the date the Unitholder engaged in such Detrimental
Activity.  As a condition of the vesting
of the Unit, the Unitholder shall be deemed to have certified at the time of
vesting that the Unitholder is in compliance with the terms and conditions of
the Plan and that the Unitholder has not engaged in, and does not intend to
engage in, any Detrimental Activity.  In
the event the Unitholder engages in Detrimental Activity, the Company shall be
entitled to enforce its rights under the Plan and all other rights available to
it at law or equity.

 

3.                                       No
fractional Common Shares will be issued or provided on the vesting of the Unit
granted hereunder.  If, as a result of
any adjustment to the number of Common Shares issuable or to be provided on the
vesting of the Unit granted hereunder pursuant to the Plan, the Unitholder
would be entitled to receive a fractional Common Share, the Unitholder has the
right to acquire only the adjusted number of full Common Shares and no payment
or other adjustment will be made with respect to the fractional Common Shares
so disregarded.

 

4.                                       Nothing
in the Plan or in this Unit Agreement will affect the Company’s right, or that
of a Related Entity, to terminate the employment of, term of office of, or
consulting

 

 

agreement or arrangement with a Unitholder at any time for any reason
whatsoever.  Upon such termination, a
Unitholder’s rights to vesting of Units will be subject to restrictions for the
vesting of Units.  Complete details of
such restrictions are set out in the Plan, and in particular in Sections 5.7
and 5.8 hereof.

 

5.                                       Each
notice relating to the Unit must be in writing. 
All notices to the Company must be delivered personally or by prepaid
registered mail and must be addressed to the Manager, Benefits Administration.  All notices to the Unitholder will be
addressed to the principal address of the Unitholder on file with the
Company.  Either the Company or the
Unitholder may designate a different address by written notice to the other.  Such notices are deemed to be received, if delivered
personally, on the date of delivery, and if sent by prepaid, registered mail,
on the fifth business day following the date of mailing.  Any notice given by either the Unitholder or
the Company is not binding on the recipient thereof until received.

 

6.                                       When
the issuance or the providing of Common Shares or the payment of cash amount on
the vesting of the Unit (if any) may, in the opinion of the Company, conflict
or be inconsistent with any applicable law or regulation of any governmental
agency having jurisdiction, the Company reserves the right to refuse to issue
or provide such Common Shares or pay such cash amount for so long as such
conflict or inconsistency remains outstanding.

 

7.                                       The
Unit granted pursuant to this Unit Agreement may only vest during the lifetime
of the Unit by the Unitholder personally and no assignment or transfer of the
Unit, whether voluntary, involuntary, by operation of law or otherwise, vests
any interest or right in such Unit whatsoever in any assignee or transferee, and
immediately upon any assignment or transfer or any attempt to make such
assignment or transfer, the Unit granted hereunder terminates and is of no
further force or effect.  Complete
details of this restriction are set out in the Plan.

 

8.                                       The
Unitholder hereby agrees that:

 

(a)                                  any
rule, regulation or determination, including the interpretation by the Board of
the Plan, the Unit granted hereunder and the vesting thereof, is final and
conclusive for all purposes and binding on all persons including the Company
and the Unitholder; and

 

(b)                                 the
grant of the Unit does not affect in any way the right of the Company or any
Related Entity to terminate the employment or service of the Unitholder.

 

2

 

9.                                       This
Unit Agreement has been made in and is to be construed under and in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.

 

 

	
   

  	
   

  	
  BIOVAIL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  

 

 

I have read the foregoing Unit Agreement and hereby accept the Unit in
accordance with and subject to the terms and conditions of such Unit Agreement
and the Plan.  I understand that I may
review the complete text of the Plan by contacting the Manager, Benefits
Administration of the Company.  I agree
to be bound by the terms and conditions of the Plan governing the Units.

 

 

	
   

  	
   

  	
   

  
	
  Date Accepted

  	
   

  	
  Unitholder’s Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unitholder’s Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PLEASE PRINT)

  

 

3

 

SCHEDULE
D

PERFORMANCE CRITERIA

 

1.                                       Performance
Goals established for purposes of a grant of Units intended to comply with Section 162(m) of
the Code shall be based on one or more of the following performance criteria (“Performance
Criteria”):

 

(a)                                  the
attainment of certain target levels of, or a specified increase in, revenues,
income before taxes and extraordinary items, net income, operating income,
earnings before income tax, earnings before interest, taxes, depreciation and
amortization or a combination of any or all of the foregoing;

 

(b)                                 the
attainment of certain target levels of, or a specified increase in, after-tax
or pre-tax profits including, without limitation, that attributable to
continuing and/or other operations;

 

(c)                                  the
attainment of certain target levels of, or a specified increase in, operational
cash flow;

 

(d)                                 the
achievement of a certain level of, reduction of, or other specified objectives
with regard to limiting the level of increase in, all or a portion of, the
Company’s bank debt or other long-term or short-term public or private debt or
other similar financial obligations of the Company, which may be calculated net
of such cash balances and/or other offsets and adjustments as may be
established by the Committee;

 

(e)                                  earnings
per share or the attainment of a specified increase in earnings per share or
earnings per share from continuing operations;

 

(f)                                    the
attainment of certain target levels of, or a specified increase in return on
capital employed or return on invested capital;

 

(g)                                 the
attainment of certain target levels of, or a percentage increase in, after-tax
or pre-tax return on stockholders’ equity;

 

(h)                                 the
attainment of certain target levels of, or a specified increase in, economic
value added targets based on a cash flow return on investment formula;

 

(i)                                     the
attainment of certain target levels, or a specified increase in, the fair
market value of the Common Shares;

 

(j)                                     the
growth in the value of an investment in the Common Shares assuming the
reinvestment of dividends;

 

(k)                                  the
filing of one or more new drug application(s) (“NDA”) or one or more new
drug submission(s) (“NDS”) or the approval of one or more NDA(s) or one or

 

 

more NDS(s) by the U.S. Food and Drug Administration or the
Canadian Therapeutic Products Directorate, as applicable;

 

(l)                                     the
achievement of a launch of one or more new drug(s);

 

(m)                               the
achievement of research and development milestones;

 

(n)                                 the
successful completion of clinical trial phases; or

 

(o)                                 the
attainment of a certain level of, reduction of, or other specified objectives
with regard to limiting the level in or increase in, all or a portion of
controllable expenses or costs or other expenses or costs.

 

2.                                       For
purposes of item (1) above, “extraordinary items” shall mean all items of
gain, loss or expense for the fiscal year determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to a corporate
transaction (including, without limitation, a disposition or acquisition) or
related to a change in accounting principle, all as determined in accordance
with standards established by Opinion No. 30 of the Accounting Principles
Board.

 

3.                                       In
addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations.  To the extent permitted under Section 162(m) of
the Code, but only to the extent permitted under Section 162(m) of
the Code (including, without limitation, compliance with any requirements for
shareholder approval), the Committee may: (i) designate additional
business criteria on which the Performance Criteria may be based or (ii) adjust,
modify or amend the aforementioned business criteria.

 

2QuickLinks
 -- Click here to rapidly navigate through this document

 

 
 

  Exhibit 10.50    
    

 
 

  AMENDMENT NO. 1    
    

 TO THE  

 
    BIOVAIL CORPORATION 2007 EQUITY COMPENSATION PLAN    
    

        This Amendment No. 1 (the "Amendment") to that certain 2007 Equity Compensation Plan (the "Plan") of Biovail
Corporation (the "Company") is made as of December 18, 2008. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Plan. 

        WHEREAS, the Board of Directors of the Company (the "Board") desires to amend the Plan to comply with the applicable requirements
of section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the "Code"); and 

        WHEREAS, Section 8.6 of the Plan provides that the Board is authorized to amend the terms of the Plan. 

        NOW, THEREFORE, the Plan is amended in the following respects: 

	1.
	Article 1
of the Plan is amended by adding the following Section 1.3:

	1.3
	Special
Rules for Participants subject to U.S. taxation. 

        There
are special rules for Participants subject to U.S. taxation that are necessary to comply with the final regulations under section 409A of the Code issued by the
Treasury Department on April 10, 2007 and effective January 1, 2009. These special rules are set forth in the Plan where noted and in the attached Addendum to the Biovail Corporation
2007 Equity Compensation Plan ("Addendum") on Exhibit A.  

	2.
	Section 6.1(f)
is hereby amended so that the introduction shall read as follows: 

        (f)    For
purposes of this Section 6.1, a "Change in Control" means the happening of any of the following events, except as the Compensation Committee may modify the
definition of Change in Control for a particular grant of Options or Units as the Committee deems appropriate to comply with section 409A of the Code
or otherwise: 

	3.
	Section 8.14
is hereby amended and replaced with the following Section 8.14:

	8.14
	Section 409A
of the Code. 

        Options
granted under this Plan are intended to be exempt under, and not subject to, section 409A of the Code and shall be limited, construed and interpreted in accordance with
such intent. Options or Units granted under the Plan shall be structured in a manner consistent with the requirements of section 409A of the Code and payment or distributions with respect
thereto shall only be made in a manner and upon an event permitted under section 409A of the Code and, to the extent required under section 409A of the Code, payments or distributions to
a Participant subject to U.S. taxation who is a "specified employee" (within the meaning of such term under Section 409A of the Code) upon his or her separation from service shall be
postponed and subject to a 6 month delay and shall be paid within 15 days after the end of the 6 month period following separation from service, or if such Participant dies during
the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of such Participant's
estate within 60 days after the date of such Participant's death. All payments to Participant's subject to U.S. taxation, made upon a termination of employment or service, shall only be
made upon a "separation from service" under section 409A of the Code. In no event shall a Participant subject to U.S. taxation, directly or indirectly designate the calendar year in
which payment or distribution is made. References to "Participants subject to U.S. taxation" throughout this Plan shall include only those Participants employed in the U.S. or Participants who
have advised the company in writing that they are subject to U.S. income tax. 

 

        IN WITNESS WHEREOF, the Company has caused the execution of this Amendment on this 18th day of December, 2008. 

					
	 
	 	 
	 	 

	 	 	BIOVAIL CORPORATION
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	/s/ MARK DURHAM

  Name: Mark Durham

Title: Senior Vice President of Human Resources and Shared Services

2

 
 
 

  EXHIBIT A
  
    ADDENDUM    
    

3

 
 
 

  ADDENDUM TO THE BIOVAIL CORPORATION
  2007 EQUITY COMPENSATION PLAN    
    

        This Addendum to the Biovail Corporation 2007 Equity Compensation Plan ("Addendum") applies to all Participants subject to
U.S. taxation. The Section references set forth below match the Section references in the Plan. This Addendum shall have no other effect on any other terms and provisions set forth in the Plan
except as set forth below. Capitalized terms not otherwise defined herein shall have the same meaning ascribed to such terms under the Plan. 

5.1   Grant and Vest of Units  

        (d)   Provided
that a Unitholder has been employed by the Company or a Related Entity for at least ten (10) consecutive years, provided that the sum of the Unitholder's
age and the Unitholder's years of service with the Company or a Related Entity equals or exceeds "70", all of the unvested Units held by such Unitholder shall immediately vest on the date on which
such Unitholder has been employed by the Company or a Related Entity for at least ten (10) consecutive years, provided that the sum of the Unitholder's age and the Unitholder's years of service
with the Company or a Related Entity equals or exceeds "70". Payment with respect of such vested Units, whether in the form of Common Shares, cash or both, shall be made by the Company to the
Unitholder (or the Unitholder's designated beneficiary if applicable) within 60 days following the earliest to occur of the following events: the third anniversary of the Date of Grant
(or such date as provided in the Unit Agreement in accordance with Section 5.1(b)), death, Disability (within the meaning of such term under section 409A) or the
Termination Date (other than in the case of termination for cause). For the purposes of this Section, a Unitholder's employment with the Company or a Related Entity ends on the
Termination Date. 

5.3   Unit Rights  

        (c)   Unless
otherwise specified in the Unit Agreement, the Company may, in lieu of all or a portion of the Common Shares which would otherwise be issued or provided to a
Unitholder, elect to pay a cash amount to a Unitholder equivalent to the Market Price of one Common Share for each vested Unit, to be paid within 60 days following the Vesting Date, provided
that the Vesting Date does not occur during the Blackout Period. 

5.5   Dividends  

        Except as otherwise determined by the Board on the Date of Grant, a Unitholder's Unit Account shall, until the earlier of the Vesting Date or termination and
cancellation or forfeiture of the Units pursuant to the terms of the Plan, be allocated additional Units on the payment date of dividends on the Company's Common Shares, the number of which shall be
the quotient determined by dividing: (a) the total amount of the dividends (excluding stock dividends but including dividends which may be paid in cash or Common Shares at the option of the
shareholder) declared and that would have been paid to the Unitholder if the Units in his or her Unit Account on the relevant record date for dividends on the Common Shares had been Common Shares by
(b) the closing price of the Common Shares on the TSX, NYSE or other exchange where the majority of the trading volume and value of the Common Shares occurs on the payment date of such
dividends. Fractional Units shall not be granted pursuant to this Section 5.5. Any such additional Units shall have the same Vesting Dates and vest in accordance with the same terms as the
Units in respect of which such additional Units are credited. 

5.7   Retirement, Death and Disability of Unitholder  

        (a)   In
the case of an Employee Participant or Executive Participant, provided that the Individual Unitholder has been continuously employed by the Company or a Related
Entity for a 12-month period following the Date of Grant of Units, if the employment or term of the office of the Individual Unitholder with the Company or a Related Entity terminates
prior to the vesting of such Units on or after the Individual Unitholder's attainment of Retirement Age,, then such Individual Unitholder shall vest in the right to receive a number of Units following
the Unitholder's Termination Date (subject to the attainment of performance goals and any other factors, if any, as determined by the Compensation Committee in its sole discretion), provided that the
number of Units in which the Individual Unitholder shall be vest in the right to receive as of the Termination Date shall be prorated by multiplying the number of unvested Units by the number of days
from but 

4

 

excluding
the Date of Grant to and including the Termination Date during which the Individual Unitholder has been providing active service to the Company or a Related Entity, divided by the total
number of days from but excluding the Date of Grant to and including the third anniversary of the Date of Grant (or such date as provided in the Unit Agreement in accordance with
Section 5.1(b)). Any remaining unvested Units shall be cancelled on the Termination Date. Payment with respect of the vested Units, whether in form of Common Shares, cash or both, shall be made
by the Company to the Unitholder within 60 days following the third anniversary date of the Date of Grant (or such date as provided in the Unit Agreement in accordance with
Section 5.1(b)). If the Individual Unitholder has not been so continuously employed by the Company or a Related Entity for such 12-month period, then all unvested Units shall be
cancelled on the Termination Date. 

        (b)   In
the case of an Employee Participant, Executive Participant or Consultant Participant, if an Individual Unitholder dies while an employee, director or officer of, or
while a consultant to, the Company or a Related Entity, as applicable, and prior to the vesting of Units, then such Units shall vest on the date of death (subject to the attainment of performance
goals and any other factors, if any, as determined by the Compensation Committee in its sole discretion), provided that the number of Units which shall vest on such date shall be prorated by
multiplying the number of unvested Units by the number of days from but excluding the Date of Grant to and including the date of death during which the Individual Unitholder had provided active
service to the Company or a Related Entity, divided by the total number of days from but excluding the Date of Grant to and including the third anniversary of the Date of Grant (or such date as
provided in the Unit Agreement in accordance with Section 5.1(b)). The payment with respect of the vested Units, whether in form of Common Shares, cash or both, shall be made by the Company to
the Unitholder's designated beneficiary specified in the Unit Agreement with 60 days after the date of death. Any remaining unvested Units shall be cancelled on the date of death. 

        (c)   In
the case of an Employee Participant, Executive Participant or Consultant Participant, if an Individual Unitholder becomes Disabled while an employee, director or
officer of, or while a consultant to, the Company or a Related Entity, as applicable, and prior to the vesting of Units, then such Units shall vest on the date of Disability (subject to the attainment
of performance goals and any other factors, if any, as determined by the Compensation Committee in its sole discretion), provided that the number of Units which shall vest on such date shall be
prorated by multiplying the number of unvested Units by the number of days from but excluding the Date of Grant to and including the date of Disability during which the Individual Unitholder had
provided active service to the Company or a Related Entity, divided by the total number of days from but excluding the Date of Grant to and including the third anniversary of the Date of Grant
(or such date as provided in the Unit Agreement in accordance with Section 5.1(b)). The payment with respect of the vested Units, whether in form of Common Shares, cash or both, shall be
made by the Company to the Unitholder within 60 days following the Unitholder's Disability. Any remaining unvested Units shall be cancelled on the date of Disability. Notwithstanding the
foregoing, no payment shall be made to a Participant on account of Disability unless a Participant becomes disabled within the meaning of such term under section 409A(a)(2)(C) of
the Code. 

6.1   Change in Control  

        Notwithstanding any provision to the contrary in the Plan, in the event a Change in Control occurs as set forth in Section 6.1 of the Plan and Units
accelerate as described in Section 6.1 of the Plan, payment shall be made to the Unitholder within 60 days after the consummation of the Change in Control; provided, however, that Units
shall be paid in accordance with Section 6.1 only if the transaction constituting a Change in Control is also a "change in control event" for purposes of section 409A of the Code ("409A
Change in Control Event"). If the Change in Control does not constitute a 409A Change in Control Event then Units shall be paid on the earliest to occur of the following events: death, Disability, the
Termination Date or the third anniversary date of the Date of Grant (or such date as provided in the Unit Agreement in accordance with Section 5.1(b)). 

7.2   Reorganization of Company's Capital  

        Should the Company effect a subdivision or consolidation of Common Shares or any similar capital reorganization or a payment of a stock dividend (other than a
stock dividend that is in lieu of a cash dividend), or should any other change be made in the capitalization of the Company that, in the opinion of the Board, would warrant the replacement or
amendment of any existing Options or Units in order to adjust: (a) the 

5

 

number
of Common Shares that may be acquired on the exercise of any outstanding Options or vesting of any outstanding Units; and/or (b) the Exercise Price of any outstanding Options in order to
preserve proportionately the rights and obligations of the Optionholders, the Board will authorize such steps to be taken as may be equitable and appropriate to that end. Any adjustments to
outstanding Options or Units shall be consistent with the applicable requirements of section 409A. 

7.3   Other Events Affecting the Company  

        In the event of an amalgamation, combination, merger or other reorganization involving the Company by exchange of Common Shares, by sale or lease of assets or
otherwise, that, in the opinion of the Board, warrants the replacement or amendment of any existing Options or Units in order to adjust: (a) the number of Common Shares that may be acquired on
the exercise of any outstanding Options or the vesting of any outstanding Units; or (b) the Exercise Price of any outstanding Options in order to preserve proportionately the rights and
obligations of the Optionholders, the Board will authorize such steps to be taken as may be equitable and appropriate to that end. Any adjustments to outstanding Options or Units shall be consistent
with the applicable requirements of section 409A. 

7.4   Immediate Exercise of Options or Vesting of Units  

        Where the Board determines that the steps provided in Sections 7.2 and 7.3 would not preserve proportionately the rights and obligations of the
Optionholders or the Unitholders in the circumstances or otherwise determines that it is appropriate, the Board may permit the immediate exercise of any outstanding Options or vesting of any
outstanding Units that are not otherwise exercisable or vested (as the case may be). Notwithstanding the foregoing, payment with respect to any outstanding vested Units in accordance with
Section shall be made on the earliest to occur of the following events: death, Disability, the Termination Date or the third anniversary date of the Date of Grant (or such date as provided in
the Unit Agreement in accordance with Section 5.1(b)). 

8.7   Indemnification  

        Every Director will at all times be indemnified and saved harmless by the Company from and against all costs, charges and expenses whatsoever including any income
tax liability arising from any such indemnification, that such Director may sustain or incur by reason of any action, suit or proceeding, taken or threatened against the Director, otherwise than by
the Company, for or in respect of any act done or omitted by the Director in respect of this Plan, such costs, charges and expenses to include any amount paid to settle such action, suit or proceeding
or in satisfaction of any judgment rendered therein. All reimbursements provided pursuant to this Section 8.7, shall be made or provided in accordance with the requirements of
section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement shall be for expenses incurred during the Director's lifetime, (B) the amount of
expenses eligible for reimbursement, during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (C) 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 (D) the right to reimbursement is not subject to liquidation or exchange for
another benefit. 

 The following defined terms shall apply to the provisions set forth above:  

"Termination Date" means: 

	(i)
	in
the case of an Employee Participant or Executive Participant whose employment or term of office with the Company or a Related Entity terminates in the
circumstances set out in Subsections 4,7(b), 4.7(c), 5.8(a) or 5.8(b) the date that is designated by the Company or a Related Entity, as the case may be, as the last day of the
Optionholder's or the Unitholder's (as the case may be) employment or term of office with the Company or the Related Entity, as the case may be; provided that "Termination Date" specifically
does not mean the date on which any period in respect of which any pay in lieu of notice, that the Company or the Related Entity (as the case may be) may be required by law or may voluntarily
elect to provide to the Optionholder or the Unitholder (as the case may be), expires; and 

6

 

	(ii)
	in
the case of a Consultant Participant whose consulting agreement or arrangement with the Company or a Related Entity, as the case may be, terminates in
the circumstances set out in Subsection 4,7(b), 4.7(c), 5.8(a) or 5.8(b) the date that is designated by the Company or the Related Entity, as the case may be, as the date on which the
Optionholder's or the Unitholder's (as the case may be) consulting agreement or arrangement is terminated; provided that "Termination Date" specifically does not mean the date on which any
period of notice of termination that the Company or the Related Entity (as the case may be) may be required to provide to the Optionholder or the Unitholder (as the case may be) under
the terms of the consulting agreement for which the Company has elected to provide compensation in lieu of notice;

	(iii)
	in
the case of Participants subject to U.S. taxation, if any payment is to be made upon a "Termination Date", the "Termination Date" shall mean a
"separation from service" (within the meaning of such term under section 409A of the Code). 

"Retirement Age" means attainment of age 65. 

7

QuickLinks

Exhibit 10.50

AMENDMENT NO. 1

BIOVAIL CORPORATION 2007 EQUITY COMPENSATION PLAN

EXHIBIT A ADDENDUM

ADDENDUM TO THE BIOVAIL CORPORATION 2007 EQUITY COMPENSATION PLAN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]