BIOVAIL CORPORATION NON-EXECUTIVE CHAIRMAN AND BIOVAIL LABORATORIES INTERNATIONAL SRL PRESIDENT AGREEMENT
Exhibit 10.4
EXECUTION COPY
BIOVAIL CORPORATION NON-EXECUTIVE CHAIRMAN AND
BIOVAIL LABORATORIES INTERNATIONAL SRL PRESIDENT
AGREEMENT
BETWEEN:
Biovail Corporation
(hereinafter called the “Corporation”)
(hereinafter called the “Corporation”)
OF THE FIRST PART
- and -
Biovail Laboratories International SRL
(hereinafter called “BLS”)
(hereinafter called “BLS”)
OF THE SECOND PART
- and -
Xxxxxxx X. Xxxxx
(hereinafter called “Xx. Xxxxx”)
(hereinafter called “Xx. Xxxxx”)
OF THE THIRD PART
WHEREAS Xx. Xxxxx is employed as Chief Executive Officer of the Corporation and President of
BLS;
WHEREAS Xx. Xxxxx previously entered into an Executive Employment Agreement with the
Corporation, dated May 1, 2008 (the “Employment Agreement”);
WHEREAS, on the date hereof, the Corporation, Valeant Pharmaceuticals International
(“Valeant”) and Beach Merger Corp. have entered into an Agreement and Plan of Merger (the “Merger
Agreement”) (the merger provided for in the Merger Agreement, the “Merger”, and the date of
consummation of the Merger, the “Effective Date”);
WHEREAS the Corporation desires to deem the Merger a Change in Control (as defined in the
Employment Agreement);
WHEREAS the Corporation desires to terminate Xx. Xxxxx’x employment without Cause (as defined
in the Employment Agreement), effective as of the Effective Date, immediately following the
consummation of the Merger;
WHEREAS, as a result of such termination from the Corporation, Xx. Xxxxx will be entitled to
receive certain severance payments and benefits provided for in the Employment Agreement;
WHEREAS the Corporation desires to appoint Xx. Xxxxx the Non-Executive Chairman (the
“Non-Executive Chairman”) of the Board of Directors of the Corporation (the “Board”), effective
upon Xx. Xxxxx’x termination of employment from the Corporation, and BLS desires to continue Xx.
Xxxxx’x employment;
WHEREAS the Corporation, BLS and Xx. Xxxxx desire to enter into this Non-Executive Chairman
and BLS President Agreement (this “Agreement”) to set forth the terms of Xx. Xxxxx’x role as
Non-Executive Chairman, both during a limited transition period on and following the Effective Date
during which Xx. Xxxxx will serve as President and chairman of BLS and thereafter;
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency whereof is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Term of Agreement
SECTION 1.01. Term of Agreement. This Agreement shall be effective as of the
Effective Date and shall continue in full force and effect indefinitely until terminated pursuant
to Article VII hereof. The period of Xx. Xxxxx’x services under this Agreement shall be referred
to as the “Term”. This Agreement shall be null and void ab initio and of no force
and effect if the Merger Agreement is terminated in accordance with its terms and the Merger is not
consummated.
ARTICLE II
Severance Payments and Benefits
SECTION 2.01. Change in Control. The Merger shall be deemed a Change in Control for
purposes of the Employment Agreement.
SECTION 2.02. Termination of Employment. Effective as of the Effective Date,
immediately following the consummation of the Merger, the Corporation shall terminate Xx. Xxxxx’x
employment without Cause.
SECTION 2.03. Severance Payments and Benefits. Pursuant to Sections 2.01 and 2.06(c)
of the Employment Agreement (as modified herein), in addition to any benefits or compensation
accrued, earned and due to Xx. Xxxxx but not yet paid as of the Effective Date, Xx. Xxxxx shall be
eligible to receive the severance payments and benefits described in this Section 2.03;
provided that (i) Xx. Xxxxx continues to comply with the provisions of Article VIII hereof
and (ii) Xx. Xxxxx executes, and does not revoke, a Release (as defined, and subject to the
conditions, in the Employment Agreement).
(a) Xx. Xxxxx shall be paid a lump sum severance payment within 60 days of the
Effective Date, equal to two (2) times Xx. Xxxxx’x base salary (calculated using Xx.
Xxxxx’x annual base salary in the year in which the Effective Date occurs) plus two (2)
times Xx. Xxxxx’x target level of annual incentive compensation under the Short Term
Incentive Plan (as defined in the Employment Agreement) for the fiscal year prior to the
fiscal year in which the Effective Date occurs;
(b) Xx. Xxxxx shall be entitled to a pro-rated portion of Xx. Xxxxx’x target level of
annual incentive compensation under the Short Term Incentive Plan for the fiscal year in
which the Effective Date occurs, based on the number of months (rounded to the next highest
number for a partial month) of the fiscal year elapsed prior to the Effective Date and
calculated in accordance with the terms of the Short Term Incentive Plan; provided that
within the 30 days immediately prior to the Effective Date, the Board (or a committee
thereof) shall review the Corporation’s and Xx. Xxxxx’x performance through the date of
such review that would otherwise be used to determine payouts under the Short Term
Incentive Plan for the fiscal year in which the Effective Date occurs, and the Board (or
such committee) shall consider in its absolute discretion whether to pay a larger amount of
incentive compensation to Xx. Xxxxx with respect to such plan than would otherwise be paid
pursuant this Section 2.03(b).
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(c) Until the earlier of (i) the end of the two (2) year period following the
Effective Date, and (ii) the date, or dates, Xx. Xxxxx is eligible to receive benefits
under the same type of plan of a subsequent employer (the “Benefit Period”), the
Corporation shall pay to Xx. Xxxxx a monthly payment on the first payroll date of each
month equal to the COBRA cost of continued medical and dental coverage for Xx. Xxxxx and
Xx. Xxxxx’x covered dependents under the medical and dental plans of the Corporation
pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”),
less the amount that Xx. Xxxxx would be required to contribute for medical and dental
coverage if Xx. Xxxxx were an active employee. These payments shall commence on the
Corporation’s first payroll date after the Effective Date and shall continue until the end
of the Benefit Period (but not longer than the Benefit Period);
(d) Except as otherwise provided in this Section 2.03(d), upon and following the
Effective Date, the equity compensation awards that Xx. Xxxxx holds as of the Effective
Date shall remain outstanding in accordance with their terms and the terms of the equity
compensation plans and award agreements pursuant to which such equity compensation awards
were granted. Notwithstanding the foregoing, (i) any unvested equity compensation awards
held by Xx. Xxxxx as of the Effective Date other than any restricted share unit awards with
performance goals (“Performance-based RSUs”) shall automatically accelerate and become one
hundred percent (100%) vested and, as applicable, exercisable, as of the Effective Date,
and (ii) (A) the performance period with respect to any Performance-based RSUs held by Xx.
Xxxxx as of the Effective Date shall terminate on the Effective Date, (B) the performance
multiplier used to determine the number of such performance-based RSUs that will be earned
and settled pursuant to the applicable equity compensation plan or award agreement shall be
determined based on performance during the applicable performance period through the
Effective Date; provided that the price per share in the capital of the Corporation
on the Effective Date used for purposes of determining such multiplier shall be increased
by the value of the Post-Merger Special Dividend, (C) within 10 business days following the
Effective Date, the Corporation shall provide Xx. Xxxxx with the shares in the capital of
the Corporation underlying the Performance-based RSUs that are earned pursuant to the
preceding clause (B), plus any dividends accrued and paid thereon from the Effective Date
to the date of delivery of the shares to Xx. Xxxxx, and (D) any Performance-based RSUs held
by Xx. Xxxxx as of the Effective Date that are not earned pursuant to clause (B) shall be
forfeited for no consideration as of the Effective Date.
(e) In the event any payments or benefits made to Xx. Xxxxx are deemed “excess
parachute payments” within the meaning of Section 280G of the Code, and Xx. Xxxxx is
subject to excise tax under Section 4999 of the Code (the “Excise Tax”) with respect to
such payments, Xx. Xxxxx shall receive, in addition to any other payments and benefits to
which he is entitled under this Agreement, an amount which, after imposition of any income,
employment, excise or other taxes on such amount (including any income, employment, excise
or other taxes paid on any amount due under this Section), equals the difference between
the amount he actually receives after payment of all taxes including all Excise Tax and the
after-tax amount he would receive if no Excise Tax were imposed on him. Notwithstanding
any provision of this Agreement to the contrary, in accordance with the requirements of
section 409A of the Code, any additional payment payable to Xx. Xxxxx hereunder shall be
paid not later than the end of the calendar year next following the calendar year in which
Xx. Xxxxx or the Corporation (as applicable) remits the taxes for which the additional
payment is being paid; and
(f) For purposes of the foregoing and for the avoidance of doubt, Xx. Xxxxx and the
Corporation acknowledge that (i) Xx. Xxxxx’x annual base salary in 2010 is $860,000 (ii)
Xx. Xxxxx’x target level of annual incentive compensation under the Short Term Incentive
Plan for the 2009 fiscal year was $860,000 and (iii) Xx. Xxxxx’x target level of annual
incentive compensation under the Short Term Incentive Plan for the 2010 fiscal year is
$860,000.
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ARTICLE III
Retention of Shares
SECTION 3.01. Retention of Shares. Xx. Xxxxx and the Corporation acknowledge that, as
of the date of this Agreement, Xx. Xxxxx holds the shares in the capital of the Corporation that
are listed on Schedule A (the “Shares”). During the Term, Xx. Xxxxx shall not assign,
alienate, pledge, attach, sell or otherwise transfer or encumber any of the Shares otherwise than
by will or by the laws of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the
Corporation.
ARTICLE IV
Services, Continued Employment and Residence
SECTION 4.01. Services During Term. Effective as of the Effective Date, upon the
termination of Xx. Xxxxx’x employment in accordance with Section 2.02, Xx. Xxxxx shall be appointed
as the Non-Executive Chairman and shall serve in such position during the remainder of the Term.
Xx. Xxxxx’x duties as Non-Executive Chairman shall include presiding over meetings of the Board,
calling special meetings of the Board, receiving Board and officer resignations, and such other
specific duties that are normal and customary to such position and as may reasonably be assigned to
the Non-Executive Chairman from time to time by the Board. The scope of Xx. Xxxxx’x activities and
his committee memberships shall be determined by the Board, acting in its sole discretion. Xx.
Xxxxx shall report to the Board and coordinate his activities with the Board and the Corporation.
The foregoing duties of Xx. Xxxxx shall be referred to for purposes of this Agreement as the
“General Services”.
SECTION 4.02. Continued BLS Employment and Additional Services During Transition
Period. The period from the Effective Date through the date that is 15 days following the date
on which the Board determines that the Corporation’s Chief Executive Officer (or another individual
designated by the Board) has become a resident of Barbados and President and chairman of BLS (the
date of such determination, the “Residence Date”) shall be referred to for purposes of this
Agreement as the “Transition Period”; provided that the Board (at the request of the
Corporation’s Chief Executive Officer) may extend the Transition Period by up to nine additional
months (but in no event beyond the 12-month anniversary of the Effective Date) upon written notice
to Xx. Xxxxx prior to the Residence Date; provided, however, that Xx. Xxxxx may
terminate any such extension of the Transition Period upon 30 days’ written notice to the
Corporation and BLS. During the Transition Period, in addition to the General Services, Xx. Xxxxx
shall (a) continue to serve as the President and chairman of BLS, continue to perform his customary
duties consistent with his positions as President and chairman of BLS, and continue to be based in
Barbados and maintain his residence and entitlement to work in Barbados and (b) as requested by the
Corporation’s Chief Executive Officer, (i) provide transition services in connection with the
Merger and the integration of the Corporation and Valeant, consistent with Xx. Xxxxx’x continuing
position as President of BLS and his prior position as Chief Executive Officer of the Corporation,
(ii) assist the Corporation and BLS in complying with Barbados and other tax processes and
procedures, (iii) assist the Corporation and BLS in maintaining research and development partner
relations and (iv) assist the Corporation in maintaining investor relations within the Canadian
investor community. The foregoing duties of Xx. Xxxxx shall be referred to for purposes of this
Agreement as the “Transition Services”.
ARTICLE V
Remuneration During Term
SECTION 5.01. Remuneration During Term. The Corporation shall pay to Xx. Xxxxx
$350,000 per year during the Term (both during and following the Transition Period) for the General
Services (the “General Services Fee”). The General Services Fee shall be paid in the form of
deferred share units. Such deferred share units shall be granted under, and subject to the terms
and conditions of, the applicable equity compensation plan of the Corporation. The General
Services Fee shall be paid in four
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equal annual installments, with each installment payable on the first business day of each
calendar quarter during the Term; provided that the first installment of the General
Services Fee shall be prorated based on the number of days on and following the Effective Date in
the calendar quarter that includes the Effective Date and shall be payable on or about the
Effective Date. Each such installment of deferred share units shall be valued based on the fair
market value of the underlying stock on the date of grant.
SECTION 5.02. Additional Remuneration During Transition Period. In addition to the
General Services Fee, BLS shall pay to Xx. Xxxxx a cash fee for the Transition Services (the
“Transition Services Fee”) in the amount of $40,000 for each month of the Term that ends during the
Transition Period, payable in cash in arrears on the last business day of each such month, subject
to Xx Xxxxx’x compliance with his obligations set forth in Section 4.02 through each such payment
date; provided that the first installment of the Transition Services Fee shall be prorated
based on the number of days on and following the Effective Date in the calendar month that includes
the Effective Date. Within five days following the end of the Transition Period (but in no event
later than 12 months following the Effective Date), BLS shall pay to Xx. Xxxxx a lump-sum cash fee
for the Transition Services in an amount equal to the excess, if any, of (i) $860,000 over (ii) the
aggregate amount of the Transition Services Fee paid to him prior to such earlier date, subject to
Xx. Xxxxx’x compliance with his obligations set forth in Section 4.02 during the Transition Period.
Xx. Xxxxx shall be entitled to no further remuneration as a consequence of the termination of the
Transition Period. If the Corporation, BLS and Xx. Xxxxx agree to extend the period during which
Xx. Xxxxx provides Transition Services by more than 12 months following the Effective Date, Xx.
Xxxxx’x remuneration during such extended period shall be reasonably determined by negotiations
among the Corporation, BLS and Xx. Xxxxx at the time of such extension.
SECTION 5.03. Perquisites and Expenses and Location of Services.
(a) During the Transition Period, BLS shall provide for the lease of appropriate
accommodation in Barbados for Xx. Xxxxx and associated expenses consistent with past
practice.
(b) During the Transition Period, BLS shall pay Xx. Xxxxx a monthly car allowance, in
an amount sufficient to cover the lease and insurance costs of an automobile selected and
leased in Barbados by Xx. Xxxxx.
(c) During the Transition Period Xx. Xxxxx shall be provided with an appropriate
permanent office and secretarial and other support facilities solely at BLS’s headquarters
in Barbados. At all times and without exception during the Transition Period, in Xx.
Xxxxx’x capacity as President of BLS, Xx. Xxxxx shall not perform any activities for or on
behalf of BLS from any Company facility outside of Barbados, or otherwise outside of
Barbados except, in the latter case, for occasional and customary visits to customers,
prospective business partners, advisors, and suppliers, or to attend conferences or similar
public functions relevant to Xx. Xxxxx’x role and responsibilities as President of BLS.
(d) During the Term, subject to the approval of the Corporation’s Chief Executive
Officer and in accordance with any applicable business travel policies of the Corporation,
Xx. Xxxxx shall have access to the Corporation’s owned or leased aircraft as needed in
performing his services hereunder and Xx. Xxxxx’x spouse shall be permitted to accompany
Xx. Xxxxx on trips as deemed appropriate, with the understanding that the foregoing may
result in taxable income to Xx. Xxxxx.
(e) BLS shall reimburse Xx. Xxxxx for costs incurred by Xx. Xxxxx in connection with
tax preparation with respect to any of his tax returns for his 2010 and 2011 taxable years,
to be furnished by such advisors as chosen by Xx. Xxxxx.
(f) During the Transition Period, BLS shall reimburse Xx. Xxxxx for all legal expenses
incurred by Xx. Xxxxx in connection with his immigration status and right to work in
Barbados, with such legal services to be furnished by such advisors as chosen by BLS.
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(g) During the Transition Period, BLS shall provide security personnel to Xx. Xxxxx in
Barbados, on terms to be mutually agreed by the parties.
(h) During the Term, Xx. Xxxxx shall be reimbursed for reasonable out-of-pocket
business expenses, including travel and entertainment expenses actually and properly
incurred by Xx. Xxxxx in the course of performing his services hereunder, upon furnishing
to the Corporation (or BLS if during the Transition Period) reasonable supporting
statements and vouchers; provided that where, in any financial year, Xx. Xxxxx has
been provided with an approved budget, such expenses must not exceed the amount so budgeted
without the prior written approval from the Corporation (or BLS if during the Transition
Period).
(i) During the Term, the Corporation (or BLS if during the Transition Period) shall
provide and pay reasonable expenses related to Xx. Xxxxx’x use of mobile technology,
consistent with his usage of such technology on the date of this Agreement, including fees
for use of a wireless email device (e.g., a “Blackberry”) and a laptop computer.
ARTICLE VI
Employee/Independent Contractor Status
SECTION 6.01. Employee/Independent Contractor Status. During the Transition Period,
Xx. Xxxxx shall continue to be an employee of BLS, but he shall, throughout the entire Term, be an
independent contractor with respect to the Corporation. Except (a) as otherwise provided herein
and (b) as provided in any benefit plans from time to time in effect for members of the Board
generally, Xx. Xxxxx is not entitled to any of the benefits that the Corporation provides to its
employees.
SECTION 6.02. Tax Reporting. Xx. Xxxxx shall be solely responsible for taxes and
other wage deductions incurred as a result of performing services under this Agreement. Unless
required to do so by applicable law, the Corporation shall not pay or withhold any Federal, state
or foreign governmental payroll taxes of any kind, including FICA and FUTA, with respect to its
payments to Xx. Xxxxx. BLS will continue to make the required withholdings in accordance with
Barbados law.
ARTICLE VII
Termination
SECTION 7.01. Termination. The Corporation (or BLS during the Transition Period) may
terminate the Term (a) for any reason upon 60 days’ prior written notice to Xx. Xxxxx or (b) for
Cause (defined as in the Employment Agreement, but with the references to the Employment Agreement
in such definition deemed to be replaced with references to this Agreement) with immediate effect
upon written notice to Xx. Xxxxx. Xx. Xxxxx may terminate the Term for any reason upon 60 days’
prior written notice to the Corporation (and BLS if during the Transition Period). In the event of
any termination of the Term, Xx. Xxxxx shall be entitled to receive any accrued but unpaid payments
(including any vested equity awards), and reimbursement for any incurred but unreimbursed expenses,
in each case subject to the terms set forth herein, but no other remuneration. Xx. Xxxxx shall
automatically cease to be Non-Executive Chairman on the date of any of the Corporation’s annual
general meetings of shareholders held following the date of this Agreement if Xx. Xxxxx is not
elected to the Board at such meeting, but if such event shall occur during the Transition Period,
this Agreement shall continue in full force and effect with respect to Xx. Xxxxx’x continued
employment as President of BLS until the end of the Transition Period, and, notwithstanding
anything to the contrary in Article V, he will be entitled to continue to receive his Transition
Services Fee for the remainder of the Transition Period but will cease receiving the General
Services Fee.
In addition, Xx. Xxxxx agrees to resign from the Board, effective upon the earlier of (1) the
date the Board determines the Board’s nominees for election as directors at the 2012 annual general
meeting of shareholders, if at that Board meeting, Xx. Xxxxx’x re-nomination as a director has not
been
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approved by at least 70% of the directors then in office excluding Xx. Xxxxx, and (2) the date of
the first meeting of the Board following the 2012 annual meeting of shareholders if at that Board
meeting, Xx. Xxxxx has not been elected to continue in his capacity as Non-Executive Chairman by
the affirmative vote of at least 70% of the directors then in office excluding Xx. Xxxxx, but if
such event shall occur during the Transition Period, this Agreement shall continue in full force
and effect with respect to Mr. Well’s continued employment as President of BLS until the end of the
Transition Period, and, notwithstanding anything to the contrary in Article V, he will be entitled
to continue to receive his Transition Services Fee for the remainder of the Transition Period but
will cease receiving the General Services Fee.
ARTICLE VIII
Obligations
SECTION 8.01. Confidentiality. Xx. Xxxxx acknowledges that he remains bound by the
terms of the confidentiality agreement, dated April 21, 2008 (the “Confidentiality Agreement”),
which Confidentiality Agreement has been read, understood and executed by Xx. Xxxxx and which is
hereby incorporated by reference. For a period commencing on the date hereof and ending ten (10)
years from the expiration of the Term, the Corporation and BLS shall use reasonable efforts to
ensure that their respective directors, executive officers and employees keep confidential any and
all information they have about Xx. Xxxxx that is not in the public domain and that they do not
divulge in any manner whatsoever any such information to any person, firm, corporation, partnership
or similar entities without Xx. Xxxxx’x written authority, provided that this provision
shall not restrict the ability of the Corporation’s and BLS’s respective directors, executive
officers or employees to make truthful statements in good faith in response to any governmental
inquiry or request for information or otherwise when required by law, including any securities
laws, or legal process to do so.
SECTION 8.02. Non-Competition; Non-Solicitation and Hiring. Xx. Xxxxx acknowledges
and agrees that he remains bound by the terms of Sections 4.02 and 4.03 of the Employment
Agreement, for the time periods set forth therein (treating the Effective Date as the expiration of
the term of the Employment Agreement for such purpose), subject to the terms and conditions set
forth in Article IV of the Employment Agreement.
SECTION 8.03. Standards of Business Conduct. Xx. Xxxxx acknowledges and agrees that
he has read and understood and agrees that he remains bound by the Corporation’s Standards of
Business Conduct, which is hereby incorporated by reference.
ARTICLE IX
Indemnification
SECTION 9.01. Indemnification. The Corporation agrees to indemnify and hold Xx. Xxxxx
harmless to the fullest extent permitted by applicable law, as in effect at the time of the subject
act or omission. In connection therewith, Xx. Xxxxx shall be entitled to the protection of any
insurance policies which the Corporation elects to maintain generally for the benefit of the
Corporation’s directors and officers, against all costs, charges and expenses whatsoever incurred
or sustained by Xx. Xxxxx in connection with any action, suit or proceeding to which he may be made
a party by reason of his being or having been a director, officer or employee of the Corporation
and BLS. This provision shall survive any termination of Xx. Xxxxx’x service hereunder.
ARTICLE X
Interpretation and Enforcement
SECTION 10.01. Section 409A. This Agreement shall be interpreted to avoid any penalty
sanctions under section 409A of the Code. If any payment or benefit cannot be provided or made at
the time specified herein without incurring sanctions under section 409A of the Code, then such
benefit
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or payment shall be provided in full (to extent not paid in part at an earlier date) at the
earliest time thereafter when such sanctions shall not be imposed. For purposes of section 409A of
the Code, all payments to be made upon a termination of Xx. Xxxxx’x services under this Agreement
may only be made upon Xx. Xxxxx’x “separation from service” (within the meaning of such term under
section 409A of the Code), each payment made under this Agreement shall be treated as a separate
payment, and the right to a series of installment payments under this Agreement shall be treated as
a right to a series of separate payments. In no event shall Xx. Xxxxx, directly or indirectly,
designate the calendar year of payment, except as permitted under section 409A of the Code.
Notwithstanding anything herein to the contrary, if, at the time of Xx. Xxxxx’x termination of
employment with the Corporation, the Corporation has securities which are publicly traded on an
established securities market and Xx. Xxxxx is a “specified employee” (as such term is defined in
section 409A of the Code) and it is necessary to postpone the commencement of any payments or
benefits otherwise payable under this Agreement as a result of such termination of employment to
prevent any accelerated or additional tax under section 409A of the Code, then the Corporation
shall postpone the commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to Xx. Xxxxx) that are not
otherwise paid within the ‘short-term deferral exception’ under Treas. Reg. section 1.409A-1(b)(4)
and/or the ‘separation pay exception’ under Treas. Reg. section 1.409A-1(b)(9)(iii), until the
first payroll date that occurs after the date that is six months following Xx. Xxxxx’x “separation
of service” with the Corporation. If any payments are postponed due to such requirements, such
postponed amounts shall be paid in a lump sum to Xx. Xxxxx on the first payroll date that occurs
after the date that is six months following Executive’s “separation of service” with the
Corporation. If Xx. Xxxxx dies during the postponement period prior to the payment of the
postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the
personal representative of Xx. Xxxxx’x estate within 60 days after the date of Xx. Xxxxx’x death.
All reimbursements and in-kind benefits provided under this Agreement shall be made or
provided in accordance with the requirements of section 409A of the Code, including, where
applicable, the requirement that (1) any reimbursement shall be for expenses incurred during Xx.
Xxxxx’x lifetime (or during a shorter period of time specified in this Agreement), (2) the amount
of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may
not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (3) the reimbursement of an eligible expense shall be made on or before the
last day of the calendar year following the year in which the expense is incurred and (4) the right
to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
SECTION 10.02. Independent Legal Advice. Xx. Xxxxx agrees to the terms and conditions
of this Agreement having had the opportunity to receive independent legal advice.
SECTION 10.03. Severability. The parties further acknowledge that if any provision
contained in this Agreement is determined to be invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall attach only to such provision or part thereof and the
remaining part of such provision and all other provisions hereof shall continue in full force and
effect.
SECTION 10.04. Sections and Headings. The division of this Agreement into Articles
and Sections and the insertion of headings are for the convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
SECTION 10.05. Number. In this Agreement words importing the singular number only
shall include the plural and vice versa and words importing the masculine gender shall
include the feminine and neuter genders and vice versa.
SECTION 10.06. Entire Agreement. This Agreement and the Schedules hereto constitute
the entire Agreement between the parties with respect to the subject matter hereof and cancel and
supersede any prior understandings and agreements between the parties with respect thereto,
including the Employment Agreement, except as expressly set forth herein. There are no
representations, warranties,
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forms, conditions, undertakings or collateral Agreements, express, implied or statutory
between the parties other than as expressly set forth in this Agreement.
SECTION 10.07. Amendments and Waivers. No amendment to this Agreement shall be valid
or binding unless set forth in writing and duly executed by both parties. No waiver of any breach
of any term or provision of this Agreement shall be effective or binding unless made in writing and
signed by the party purporting to give the same and, unless otherwise provided in written waiver,
shall be limited to the specific breach waived.
SECTION 10.08. Governing Law. This Agreement shall be deemed to have been made in and
shall be construed in accordance with the laws of the Province of Ontario and all legal proceedings
contemplated in this Agreement shall be brought in, and be governed by, the laws of the Province of
Ontario, without regard to principles of conflicts of law.
SECTION 10.09. Notices. Any demand, notice or other communication (hereinafter in
this section 10.09 referred to as a “Communication”) to be made or given in connection with this
Agreement shall be made or given in writing and may be made or given by personal delivery or by
registered mail addressed respectively to the recipients:
| To Xx. Xxxxx: | Xxxxxxx X. Xxxxx | |||
| At the most recent address on file with the Corporation | ||||
| To the Corporation: | 0000 Xxxxxxxxxxx Xxxx | |||
| Xxxxxxxxxxx, Xxxxxxx | ||||
| X0X 0X0 | ||||
| Attn: General Counsel |
or such other address or individual as may be designed by notice by either party to the other. Any
Communication made or given by personal delivery shall be conclusively deemed to have been given on
the day of the actual delivery thereof and, if made or given by registered mail, on the third
business day following the deposit thereof in the mail. If the party giving any Communication
knows or ought reasonably to know of any difficulties with the postal system which might affect the
delivery of the mail, any such Communication shall not be mailed but shall be made or given by
personal delivery.
SECTION 10.10. Benefit of Agreement. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors, legal personal
representatives, successors and assigns.
SECTION 10.11. Assignment. Xx. Xxxxx may not assign his rights or obligations under
this Agreement without the prior written consent of the Corporation and BLS, which consent may not
be unreasonably withheld. The Corporation and BLS may assign this agreement to an affiliate
without consent but on notice to Xx. Xxxxx. Neither the Corporation nor BLS may assign its rights
or obligations under this Agreement to any third party other than an affiliate without the prior
written consent of Xx. Xxxxx, which consent may not be unreasonably withheld.
SECTION 10.12. Execution of Agreement. Xx. Xxxxx acknowledges that he has executed
this Agreement freely; that he has reviewed his Agreement thoroughly; that he agrees with its
contents; that he has been given the opportunity to obtain the benefit of independent legal advice;
and that the terms herein are reasonable for the fair protection of Xx. Xxxxx, the Corporation and
BLS.
[SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF the Corporation has executed this Agreement on June 20, 2010.
| BIOVAIL CORPORATION |
||||
| by | /s/ XXXX XXXXXX | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Senior Vice President, Human Resources and Shared Services | |||
IN WITNESS WHEREOF BLS has executed this Agreement on June 20, 2010.
| BIOVAIL LABORATORIES INTERNATIONAL SRL |
||||
| by | /s/ Xxx Xxxxx Xxxx | |||
| Name: | Xxx Xxxxx Xxxx | |||
| Title: | Manager | |||
IN WITNESS WHEREOF Xx. Xxxxx has executed this Agreement on June 20, 2010.
| SIGNED, SEALED AND DELIVERED | ||
| in the presence of: | ||
/s/ XXXXXXX X. XXXXX |
/s/ Xxxxxxxxxxx Xxxx | |
Xxxxxxx X. Xxxxx
|
Witness |
10
EXECUTION COPY
SCHEDULE A
SHARES
75,000 shares held as of the date hereof in Xx. Xxxxx’x Xxxxxx Xxxxxxx brokerage account
