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Glass Lewis recommended a vote FOR two of the Concerned Shareholdersnominees, Joseph J. Krivulka and Laurence W. Zeifman. It recommendedwithholding votes from the other eight nominees on the Concerned Shareholders'slate.
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The Glass Lewis report took issue with several actions by the currentboard, particularly its executive appointments and compensation packages.
"While the board should be seeking to put its troubled history in thepast, it has instead appointed its former CEO as chairman and a former memberof an audit committee which oversaw significant restatements as its new CEO,"the report says. "We believe that shareholders could benefit from the additionof new independent voices on the board with appropriate subject matter andindustry expertise."
The Glass Lewis report called the appointment of Biovail's CEO, WilliamWells, "a curious choice at best," as well as "inappropriate from a corporategovernance perspective." It concludes: "At the very least such an appointmentcould only further serve to damage the Company's already bruised publicimage."
Glass Lewis also expressed disapproval of executive compensationarrangements made by the incumbent board. It notes that Mr. Wells chaired thecompensation and nominating committees, and that the retiring CEO, DouglasSquires, was awarded a package of $3.5 million, including a retroactive raise,even though the company's share price was falling.
"An outside observer would conclude that these potentially excessivecompensation awards for Messrs. Squires and Wells, especially at a time ofpoor financial performance, may be related to the appointment of Mr. Wells,"the report says. "Even if Mr. Wells' past position in overseeing the committeewhich determines executive pay and identified the new CEO did not affect hisappointment as CEO or the generous contracts for him and his predecessor, themere appearance of corruption could be damaging."
Bruce D. Brydon, CEO of Biovail during some of its most successful years,who will return as CEO if the Concerned Shareholders' slate is elected, saidhe wants to get the company back on the right track. Mr. Brydon said: "Webelieve that Biovail needs a complete change in its board, senior managementand direction to avoid even further declines in shareholder value."
Mr. Brydon noted that:
-- In the last year the price of Biovail stock has declined nearly 50%,far worse than the drug industry stock price index.
-- In the last four years, under current management, Biovail has obtainedregulatory approval for only one new drug, in sharp contrast to the 17 newdrugs that were approved during Mr. Brydon's tenure as CEO from 1995 to 2001.
-- A leading financial analyst who covers Biovail and other drug companieshas stated that the new strategic direction announced recently by Biovail'scurrent management, to focus intensive research and development on newchemical entities to treat central nervous system conditions such asAlzheimer's Disease, "is just baffling to us."
All shareholders are urged to vote the YELLOW proxy in favour of theConcerned Shareholders slate of nominees. Copies of the proxy circularprepared by the Concerned Shareholders can be obtained via SEDAR(www.sedar.com) and www.betterbiovail.com or by contacting in Canada,Kingsdale Shareholder Services Inc. toll-free at 1-800-775-1986 or collect at1-416-867-2272, or in the United States, Innisfree M&A Incorporated toll-freeat 1-877-717-3929.
Certain statements contained in this release constitute forward-lookingstatements. The words "may", "would", "could", "will", "intend", "plan","a
