BIOVAIL CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT

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Exhibit 4.5

BIOVAIL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 7th day of October, 2004.

BETWEEN:

Biovail Corporation
(hereinafter called the "Corporation")

OF THE FIRST PART

- and -

Douglas John Paul Squires
(hereinafter called the "Executive")

OF THE SECOND PART

         WHEREAS the Corporation, and the Executive wish to enter into this Employment Agreement which provides, among other things, that the Executive devote substantially all his time and attention during normal business hours to the performance of his duties hereunder upon the terms and conditions hereinafter set forth;

         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 ONE—GENERAL DUTIES AND TERM

Employment Services

1.01    The Corporation hereby engages the Executive to perform the services described in Schedule A attached hereto and the Executive agrees to provide such services on the terms and conditions as herein provided. Except as otherwise set forth herein, this Agreement supersedes all existing oral or written agreements between the Corporation and the Executive.

General Duties and Obligations of Executive

1.02    The Executive:

(a)

shall well and faithfully serve the Corporation to the best of his ability;

CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH "**".

AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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(b)

acknowledges that his employment by the Corporation shall, unless otherwise mutually agreed to in writing, be his only occupation and that he will devote substantially all his working time and attention during normal business hours to the performance of his duties and the observing of all reasonable instructions given to the Executive;

(c)

shall reasonably use his best efforts to promote the success of the business of the Corporation (the "Business") now or hereafter conducted by the Corporation; and

(d)

shall not engage in any activity during normal working hours that would impair his ability to perform his duties or that will put the Executive in conflict with respect to such duties.

Term of Agreement

1.03    This Agreement shall continue in full force and effect indefinitely and until terminated by either the Executive or the Corporation pursuant to the terms hereof.

ARTICLE TWO—TERMINATION AND RESIGNATION

I      Termination by the Corporation     

A      Without Just Cause     

2.01    a)    During the term of this Agreement, the Corporation may terminate the Executive's employment without just cause at any time upon the payment by the Corporation to the Executive of an amount (the "Severance Payment") equal to 24 months' (the "Severance Period") base salary, and including the vesting during the Severance Period of any unvested options or the payment of any other amounts or benefits. (For greater certainty and by way of example, if the Executive is terminated on January 1, the Executive would not be entitled to receive any further grant of options but would be entitled to have vested during the ensuing Severance Period any previously granted but unvested options which would have otherwise vested during the Severance Period.) The Executive shall be under no obligation to seek other employment or otherwise mitigate his lost employment during the Severance Period. In the event the Executive secures other employment during the Severance Period there shall be no adjustments in the payments hereunder. The Executive shall be entitled to be considered, in good faith, for a bonus for the period of his employment during the calendar year when he is terminated without just cause.

        During the period consisting of the earlier of the duration of the Severance Period and the Executive's commencing alternate employment, the Executive shall continue to remain on the Corporation's medical and dental plans (provided that such is allowed by the provider of such benefits; provided further that if the plan does not allow for such continuation, the Corporation will pay to the Executive the value thereof). Following the expiration of the Executive's benefits, the Executive shall have the right to apply for the COBRA benefits.

2.01    b)    The Executive may terminate his employment with the Corporation, which termination shall be deemed to be a termination by the Corporation without just cause, entitling Executive to receive the severance and other benefits set forth in Section 2.01 a) above, upon the occurrence of any of the following events:

(i)

any permanent assignment to the Executive of any duties which are materially inconsistent with the Executive's position as Chief Executive Officer in accordance with the duties and functions set out in Schedule "A" hereto and pursuant to the Limits of Authority to be determined by the Executive and the Corporation' Board of Directors. A period longer than three months shall be deemed to be permanent for the purpose of this subparagraph; or,

ii)

any material and permanent reduction by the Corporation in the Executive's authority, responsibilities (including reporting responsibilities) or status as set out in Schedule "A" hereto and as contained in the Limits of Authority to be determined by the Executive and the

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Corporation's Board of Directors. A period longer than three months shall be deemed to be permanent for the purpose of this subparagraph;

(iii)

any reduction by the Corporation of your salary, benefits or any other form of remuneration, taken as a whole, other than in the course of a general reduction to all members of the senior management (whose compensation is reviewed and determined by the Corporation's Compensation Committee) or any failure by the Company to increase your salary, benefits or any other form of remuneration payable by the Corporation, in a manner consistent (both as to frequency and percentage increase) with other members of senior management of the Corporation; or

(iv)

unless applied to other members of the senior management (whose compensation is reviewed and determined by the Corporation's Compensation Committee) any failure by the Corporation to continue in effect any benefit, bonus, profit sharing, incentive, remuneration or compensation plan, stock ownership, stock option or stock purchase plan, pension plan or retirement plan in which you are participating or entitled to participate in as of the date hereof or the Corporation taking any action or failing to take any action that would adversely and materially affect your participation in or reduce your rights or benefits under or pursuant to any such plan, without in any of the foregoing events providing alternative rights or benefits of reasonably equivalent value, or the Corporation failing to increase or improve such rights or benefits on a basis consistent with other members of senior management of the Corporation.

2.01 c)     Change of Control     

        (i)    Upon a Change of Control, the Corporation shall provide to the Executive, (A) the total Severance Payment of 24 months base and bonus within 30 days of the closing of such Change in control transaction and, (B) any unvested options held by Executive shall have their vesting accelerated in full so as to become one hundred percent (100%) vested and immediately exercisable in full as of the date of closing of such Change of Control transaction. In addition, the Executive shall be entitled to a full vesting of all options due to be granted to the Executive during the twelve (12) months following the public announcement of the Change of Control transaction, which options shall be deemed to have been priced at the same price as those in the immediately preceding year. The vesting of these latter options shall vest immediately upon the closing of the Change of Control transaction but shall be exercisable as to 33% on that date, 33% on the first anniversary of the closing of the Change of Control transaction and the remainder on the second anniversary of the closing of the Change of Control transaction. Notwithstanding the staggered schedule for the exercise of the options described in the immediately preceding sentence, in the event that the Executive's employment ceases prior to the second anniversary of the closing of the Change of Control transaction, all unexercised options shall be immediately exercisable by the Executive upon his cessation of employment. The surviving Corporation may decide in its sole discretion whether to continue the Executive's employment with the Corporation. However, it is agreed that the Executive's resignation or termination effected within six months from the closing of the Change of Control transaction shall be deemed to have been made as a result of the Change of Control. In the event that the Executive is terminated by, or resigns from, the surviving corporate entity six months after the Change in Control transaction the Executive shall not be entitled to any further compensation.

        (ii)   For the purposes of this Agreement, "Change of Control" means:

(A)

the lease, exchange, license, sale or other similar disposition of all or substantially all of the assets of the Corporation in one transaction or a series of related transactions; or

(B)

with the approval of the stockholders of the Corporation, a merger, amalgamation, reorganization, plan of arrangement, consolidation or other similar transaction (hereinafter collectively a "Merger"), in a single transaction or a series of related

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transactions, the result of which Merger is that the individuals or entities acquiring voting securities of the Corporation pursuant to such Merger hold, directly or indirectly, more than 50% of the outstanding shares of the resultant Corporation; or

(C)

the acquisition of more than 50% of the voting securities of the Corporation by any person(s) or entity (other than Eugene Melnyk or any of his affiliates), pursuant to a tender offer or similar transaction and Eugene Melnyk is no longer Chairman of the Corporation.

        In the event any payments or benefits made to the Executive upon a change of control are deemed "excess parachute payments" within the meaning of Section 280G of the U.S. Internal Revenue Code, and the Executive is subject to excise tax under Section 4999 of the U.S. lnternal Revenue Code (the "Excise Tax") with respect to such payments, the Executive shall receive, in addition to any other payments and benefits to which he is entitled under the 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.

B      With Just Cause     

2.02    The Corporation may terminate the Executive's employment without notice and without any severance or other remuneration save for salary actually earned to the date of such termination where the Executive's employment is terminated with just cause. Without limiting the generality of the foregoing, just cause shall be deemed to include the following:

(a)

where the Executive has been convicted of any criminal offence involving moral turpitude;

(b)

upon the Executive's commission of gross or continuing material negligence or serious or willful misconduct in the performance of his duties (other than acts of fraud or misappropriation addressed in subsection (c) below); provided that the Executive shall first be given 30 days written notice to cure or rectify such gross or continuing negligence;

(c)

upon the Executive's misappropriation of the Company's assets or funds or the commission by the Executive of an act of fraud upon the Company;

(d)

upon the Executive's failure to comply in any material way with any of the provisions of this Agreement; provided that the Executive shall first be given 30 days written notice to cure or rectify such material failure; or

(e)

upon a breach of a material term in the Executive's Confidentiality Agreement (as hereinafter defined); or

(f)

for any other reason that, at law, shall amount to just cause.

C.      Other Causes for Termination     

2.03    In addition to the above, the Executive's employment shall also be terminated without notice and without any severance or other remuneration upon:

(a)

the voluntary resignation or retirement of the Executive (other than pursuant to Article 2.01(b) above); or

(b)

illness, disease, physical or mental incapacity which render the Executive generally incapable of performing his duties or unfit to advance or represent the good business name of the Corporation on a daily basis for a period of twelve (12) consecutive months and within