Biovail urges shareholders to reject former CEO's dissident slate

By Lisa Kerner

Charlotte, N.C., April 30 - Biovail Corp. asked its shareholders to vote in favor of the company's director nominees and resolutions at the annual meeting on May 28.

Shareholders were urged to reject the slate and resolutions put forth by Biovail's former chief executive officer, Eugene Melnyk.

Biovail, in an April 21 letter to shareholders made public on Thursday, said Melnyk is "once again attempting to exert undue influence" over the company.

"After his unsuccessful effort to install his own board at last year's annual meeting, Mr. Melnyk and a company he controls have requisitioned a 'special meeting' so he can nominate two individuals of his choosing to the board," the letter said.

"Creating a smokescreen of 'corporate governance' issues, he is also proposing eight separate resolutions to be voted on by shareholders," the letter said.

Biovail called Melnyk's resolutions "unnecessary, misguided and counterproductive."

As previously reported, Melnyk and EM Holdings BV will nominate Paul G. Haggis and Frank Potter as nominees for election to Biovail's board.

Haggis was president and CEO of Omers and is currently the chairman of Alberta Enterprise Corp., a new venture fund created by the government of Alberta, Canada.

Potter is chairman of Emerging Market Advisors, Inc. and chairman of Canadian Tire Bank.

Melnyk, the Toronto specialty pharmaceutical company's founder and largest shareholder, asked for the special meeting in order to approve corporate governance resolutions and elect his nominees.

Melnyk and EM Holdings announced they would focus their efforts on "certain key governance proposals" and not the full package of proposals set forth in its Feb. 25 requisition filed with Biovail.

As a result, the group will solicit proxies in respect to majority voting, individual director voting, proxy access and the treatment of severance arrangements under Biovail's employment agreements, according to Melnyk.

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