Shareholders are Urged to Vote their YELLOW proxy, FOR the Election of
Two Highly Qualified and Independent Directors to the Biovail Board
TORONTO, May 15 /CNW/ - The Concerned Shareholders of Biovail today said
that Biovail Corporation (NYSE: BVF) (TSX:BVF) continues to mislead its
shareholders by making the focal point of this dispute Mr. Melnyk.
The requisition was simply about governance reform and has already been a
catalyst to governance improvements at Biovail (as evidenced by the reforms
recently announced by Biovail) and provides shareholders with an opportunity
to elect two highly qualified and independent directors (who have never met
Mr. Melnyk). Mr. Haggis and Mr. Potter were selected as a result of the
culmination of a professional search conducted entirely without Mr. Melnyk's
influence. Both nominees have records consisting of significant
accomplishments and whose "business experience and ethics" cannot be
questioned as noted by Biovail.
It should be evident to shareholders that, as opposed to Biovail's
surprisingly combative approach to the requisition, the requisition was not
intended to cause and should not have caused such a dramatic and costly
reaction by Biovail. The Concerned Shareholders have not attacked Biovail's
strategy, its management or members of the incumbent Board. The Concerned
Shareholders have remained silent regarding the dramatic dividend cut
announced by Biovail on May 6, 2009. As has been stated, this is not about Mr.
Melnyk or about a confrontation; this is about improving Biovail for all
Biovail shareholders on May 28, 2009 will have an opportunity to make a
difference with respect to the company that they have invested in.
Shareholders will have the opportunity to improve the governance of
Biovail by electing Mr. Paul G. Haggis and Mr. Frank Potter to the board of
directors of Biovail. Mr. Haggis and Mr. Potter are two highly qualified and
independent directors with strong financial and corporate governance
backgrounds who will provide Biovail's Board with a new vantage point and with
two directors unencumbered by the recent trials and tribulations at Biovail.
As has been previously stated by the Concerned Shareholders, the
overriding emphasis of the current requisition is an improved Biovail, which
includes a greater respect for corporate governance and an improved board of
directors better equipped and aligned to create value for all shareholders.
The Board and management of Biovail continue to miss the point with
respect to the purpose of the requisition which is exemplified by the
Mr. Haggis and Mr. Potter - Proven Experience, a Respect for Governance
and Independence from Management and Biovail's Largest Shareholder
The Concerned Shareholders are in agreement with one aspect of the recent
press release and letter to shareholders issued by Biovail: Mr. Haggis and Mr.
Potter have had notable careers and their business experience or ethics cannot
be questioned. However, the Concerned Shareholders strongly disagree with the
recent assertion that "neither of them fill a gap or satisfy a need in the
current Board." This could not be further from the truth.
- If elected, Mr. Haggis and Mr. Potter would be independent actors on
the Board who owe nothing to management or the Concerned Shareholders
and they would bring a fresh vantage point to Board deliberations.
- They would also be unencumbered by Biovail's history which has
included investigations by securities regulators, class action
lawsuits (relating to timeframes with which current members of the
Board were involved) and disputes with Biovail's founder.
- Their addition to the Board would logically assist with Biovail's new
direction and path forward.
Clearly these are needs and gaps on the Board that need to be addressed
and they would be addressed by the addition of Mr. Haggis and Mr. Potter.
With respect to corporate governance, the incumbent Board relies upon the
recent governance reforms, adopted in the face of a proxy fight, as
demonstrating that all is fine. However, the Concerned Shareholders point to
these recent reforms as validating their belief that improvements were and
continue to be necessary. If elected, Mr. Haggis and Mr. Potter would bring a
practical and genuine commitment to corporate governance and executive
compensation at Biovail, a need which also fundamentally needs to be
Regarding Mr. Haggis and Mr. Potter Biovail has recently stated "they
have no experience in the pharmaceutical industry, or with Biovail's New
Strategic Focus" and "they appear to have limited business experience in the
One must fairly point out that these issues do not seem to be a concern
for Biovail in nominating Sir Louis Tull for election to the Board at this
year's meeting. Sir Louis Tull apparently has no (or limited) experience in
the pharmaceutical industry and apparently has no business experience in the
With respect to Mr. Haggis' and Mr. Potter's experience in the United
States (i) Mr. Potter served for nine years at the The World Bank in
Washington and has a wealth of international business experience and (ii) Mr.
Haggis worked for both MetLife and Citibank where he travelled frequently to
the United States and from 1993 to 1995 he was part of MetLife's Strategic
Research Group ("SRG") where he worked out of MetLife's headquarters on
Madison Ave. in New York while living in New Jersey. The SRG was responsible
for MetLife's worldwide initiatives, although at the time it was primarily
focused on U.S. issues, including health care. This experience can hardly be
characterized, as Biovail would lead shareholders to believe, as limited
business experience in the United States.
With respect to Biovail's corporate governance standards, the Concerned
Shareholders believe that if elected Mr. Haggis and Mr. Potter would satisfy
these requirements relating to "interlock" board memberships as, if elected,
they would only serve on the Board of one other public company together.
Shareholder Democracy Concerns - Biovail's Position is Opposed to Proper
Biovail has recently and irresponsibly claimed that the Concerned
Shareholders have attempted to frustrate shareholder democracy at Biovail.
This is further evidence of the Board's and management's poor judgment and
misguided view of governance. Their claim flies in the face of governance
principles and is simply untrue.
- The Concerned Shareholders have, unlike Biovail, afforded
shareholders with the ultimate form of shareholder democracy with
respect to the election of directors - the ability to vote for the
eleven director nominees of their choice.
- There are thirteen individuals being nominated in total for eleven
places on the Board. The Concerned Shareholders are providing Biovail
shareholders with the ability to choose the eleven of the thirteen
nominees they feel are best suited to lead their company.
- By limiting the form of proxy to eleven director nominees, as Biovail
has done, the Concerned Shareholders would have frustrated a
shareholders ability to elect the directors of their choice. This
would have been patently unfair and against proper governance
Unfortunately, a technical difficulty beyond the control of the Concerned
Shareholders has caused the issue with respect to the unavailability of
telephone and internet voting which is a detriment to shareholders and applies
equally to both the Concerned Shareholders and Biovail.
This situation is not unprecedented in Canadian proxy contests and the
Concerned Shareholders had on several occasions asked Biovail how the election
of directors would be handled at the meeting but were rebuffed by Biovail on
each occasion. The Concerned Shareholders would have preferred to avoid a
proxy contest for the election of directors.
It should be noted that upon being advised of the technical shortcoming,
the Concerned Shareholders made a significant effort to have the issue
corrected and they explored other voting alternatives for shareholders to no
avail. The Concerned Shareholders hope that this technical shortcoming is
quickly addressed for future situations.
The Governance Resolutions
The Board and Management of Biovail have wasted countless pages and
costly hours attacking the resolutions set out in the February 25, 2009
- Biovail has implicitly acknowledged that indeed there were governance
shortcomings as evidenced by the adoption of, on the eve of
finalizing its proxy circular, key features of the reforms outlined
by the Concerned Shareholders in the resolutions, being (i) majority
voting, (ii) shareholder approval of dilutive transactions and (iii)
double-trigger employment agreements.
- Had Biovail intended to implement these reforms, why did they wait
until April 30, 2009 to make these announcements instead of
approaching the Concerned Shareholders to see if a compromise could
have been agreed upon?
- Upon the announcement of these reforms the Concerned Shareholders
were satisfied that those resolutions had served their purpose and
they announced they would no longer proceed forward with the
proposals - a compromise would have been likely had Biovail taken a
reasonable approach with respect to the requisition while considering
the interests of its shareholders.
Biovail's continued irrational attacks on the Concerned Shareholders and
the requisition should demonstrate that the current Board in unable to operate
constructively and is unable to embrace an opportunity to strengthen the Board
to better position Biovail for its path forward. A change is needed to, at a
minimum, correct this one of many concerns at Biovail. Biovail needs to shed
its past and focus on the real challenges of the future. Challenges that can
be best served by having positive relationships with its stakeholders and the
best possible Board representation. Both Biovail and the Concerned
Shareholders agree that Mr. Haggis and Mr. Potter's credentials and ethics are
unquestionable, the Concerned Shareholders therefore ask that shareholders
support the election of Mr. Haggis and Mr. Potter to the Board.
Please ensure you vote your YELLOW proxy today FOR the election of Mr.
Paul G. Haggis and Mr. Frank Potter as directors of Biovail at the annual and
special meeting of shareholders to be held on May 28, 2009. Copies of the
proxy circular prepared and filed by the Concerned Shareholders can be
obtained via SEDAR (www.sedar.com) or by contacting Laurel Hill Advisory Group
toll-free at 1-888-882-6742 or if outside North America at 416-637-4661
(collect calls accepted).
TIME IS SHORT: Biovail shareholders are encouraged to contact Laurel Hill
Advisory Group toll-free at 1-888-882-6742 or if outside North America at
416-637-4661 (collect calls accepted) with any questions or if they require
assistance voting their YELLOW form of proxy. If you support Mr. Haggis and
Mr. Potter you must act quickly to complete the appropriate documents. If you
support Mr. Haggis and Mr. Potter you should vote using only the YELLOW form
of proxy accompanying the proxy circular and disregard any other form of
YELLOW proxies must be received by Laurel Hill Advisory Group by no later
than 2:00 p.m. (Toronto time) on May 25, 2009 in order to be voted at the
meeting. Even if you have voted the management proxy and wish to change your
vote, simply vote again using the YELLOW proxy, a later dated proxy will
automatically revoke the previously submitted proxy.
Certain statements contained in this release constitute forward-looking
statements. The words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "expect" and similar expressions as they
relate to the Concerned Shareholders, the Nominees, the Company or its current
or future management, are intended to identify forward-looking statements.
Such statements reflect the Concerned Shareholders' or the Nominees' current
views with respect to future events and are subject to certain risks,
uncertainties and assumptions. The Concerned Shareholders and the Nominees
assume no responsibility for any such statements. Many factors could cause the
company's actual results, performance or achievements that may be expressed or
implied by such forward-looking statements to vary from those described herein
should one or more of these risks or uncertainties materialize. Such factors
include, but are not limited to, economic, business, technological,
competitive and regulatory factors. All such factors should be considered
carefully when making decisions with respect to Biovail, and undue reliance
should not be placed on the Concerned Shareholders' or the Nominees'
forward-looking statements. The Concerned Shareholders and the Nominees do not
undertake to update any forward-looking statements, whether written or oral,
that may be made from time to time by or on their behalf, except as required
under applicable securities legislation.
For further information:
For further information: Shareholders: Laurel Hill, Advisory Group, Toll
Free: 1-888-882-6742, Outside North America (collect): + 1-416-637-4661;
Canadian Media: Joanne Kearney, Fleishman-Hillard, (416) 645-8180,
firstname.lastname@example.org US Media: Michael Sitrick, Sitrick And Company,