Exhibit 10.38

EXECUTION VERSION

SEPARATION AGREEMENT

SEPARATION AGREEMENT, dated February 7, 2017, between Valeant Pharmaceuticals
International, Inc. (“Valeant”) and Anne C. Whitaker (“Employee” and together
with Valeant, the “Parties”).

WHEREAS, Employee served as Valeant’s Executive Vice President, Group Company
Chairman, pursuant to a letter agreement entered into on April 25, 2015 (the
“Employment Agreement”);

WHEREAS, Employee’s employment with Valeant terminated by Employee with Good
Reason (as defined in the Employment Agreement), effective as of the Termination
Date (as defined below); and

WHEREAS, Valeant and Employee desire to enter into this Separation Agreement
(this “Agreement”) to set forth the Parties’ agreement as to Employee’s
entitlements and obligations in connection with her termination of employment
with Valeant.

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:

Section 1. Termination Date. The Parties agree that Employee’s employment with
Valeant will terminate on January 13, 2017 (the “Termination Date”). Effective
as of the Termination Date, Employee resigned from all positions she held in any
capacity as an officer, director, benefit plan trustee or otherwise with respect
to Valeant and its subsidiaries. If any such resignation is required to be
memorialized by a separate instrument or other writing, Employee agrees to
execute such separate writing.

Section 2. Remuneration Upon Termination. The Parties acknowledge that, in
connection with Employee’s termination of employment with Valeant on the
Termination Date, and subject to Employee executing the general release of
claims attached hereto as Annex B (the “Release”) and the applicable seven
(7) calendar-day revocation period expiring (the date upon which such revocation
expires being referred to hereinafter as the “Release Effective Date”) within
sixty (60) days following the Termination Date, Employee shall receive, in full
satisfaction of all amounts payable by Valeant to Employee under any agreement,
plan or policy to which Employee is a party or under which payment is due in
respect of Employee’s employment or termination of employment (except those
claims and benefits specified in Paragraph 2(a) through (h) of the Release
attached as Annex B):

(a) a lump sum cash payment of Two Million Seven Hundred Thousand Dollars
($2,700,000), which is equal to two (2) times the sum of Employee’s (A) annual
base salary of $750,000 plus (B) target bonus of $600,000, in each case as of
the Termination Date (less applicable withholding amounts), payable within ten
(10) business days following the Release Effective Date;

(b) an amount equal to the product of (A) the lesser of (i) the bonus that

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Employee would have been entitled to receive based on actual achievement against
the stated performance objectives or (ii) the bonus Employee would have been
entitled to receive assuming that the applicable performance objectives for 2017
were achieved at “target,” and (B) a fraction (i) the numerator of which is 13,
and (ii) the denominator of which is 365, payable at the time determined by
Valeant that is no later than March 15, 2018;

(c) for a period of two (2) years following the Termination Date, continued
coverage for Employee and her dependents under any health, medical, dental or
vision program or policy on the same basis as active executive employees, at the
rates applicable to active executive employees (it being understood that such
programs or policies shall remain subject to change from time to time) and for
any period during which the provision of such a benefit would be discriminatory
under the Internal Revenue Code, Valeant will provide the extended coverage
period and lower active executive employee rate as a taxable benefit to Employee
such that the health insurance benefit will not be discriminatory; provided that
such coverage may be reduced by Valeant to the extent that Employee obtains
replacement coverage following the Termination Date;

(d) at the request of Employee, until the earlier of (A) twelve (12) months
following the Termination Date and (B) the date Employee secures full-time
employment, outplacement services through one or more firms of Employee’s
choosing, up to an aggregate of $20,000; and

(e) any outstanding equity compensation awards held by Employee as of the
Termination Date shall be treated in accordance with the applicable terms of the
Employment Agreement, the retention letter agreement, dated May 6, 2016, between
Employee and Valeant (the “Retention Letter Agreement”), and individual award
agreements. All outstanding equity awards in which Executive has vested are
listed on Annex A.

Section 3. Employee Protection. Nothing in this Agreement or otherwise limits
Employee’s ability to communicate directly with and provide information,
including documents, not otherwise protected from disclosure by any applicable
law or privilege to the Securities and Exchange Commission (the “SEC”) or any
other federal, state or local governmental agency or commission (“Government
Agency”) regarding possible legal violations, without disclosure to Valeant.
Valeant may not retaliate against Employee for any of these activities, and
nothing in this Agreement or otherwise requires Employee to waive any monetary
award or other payment that Employee might become entitled to from the SEC or
any other Government Agency.

Section 4. Confidentiality. Employee confirms that she will comply with any
existing confidentiality agreement or arrangement between Employee and Valeant
or any of its affiliates, pursuant to the terms of any such agreement or
arrangement, except as provided in Section 3.

Section 5. Defend Trade Secrets Act. Pursuant to Section 7 of the Defend Trade
Secrets Act of 2016 (which added 18 U.S.C. § 1833(b)), Employee acknowledges
that Employee shall not have criminal or civil liability under any federal or
state trade secret

 

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law for the disclosure of a trade secret that (A) is made (i) in confidence to a
federal, state, or local government official, either directly or indirectly, or
to an attorney and (ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (B) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal. In
addition, and without limiting the preceding sentence, if Employee files a
lawsuit for retaliation by Valeant for reporting a suspected violation of law,
Employee may disclose the trade secret to Employee’s attorney and may use the
trade secret information in the court proceeding, if Employee (X) files any
document containing the trade secret under seal and (Y) does not disclose the
trade secret, except pursuant to court order. Nothing in this Agreement is
intended to conflict with 18 U.S.C. § 1833(b) or create liability for
disclosures of trade secrets that are expressly allowed by such section.

Section 6. Non-Disparagement. Employee agrees not to make written or oral
statements about Valeant, its subsidiaries or affiliates, or its directors,
executive officers or non-executive officer employees that are negative or
disparaging, except as provided in Section 3. Valeant shall direct its directors
and executive officers to not make written or oral statements about Employee
that are negative or disparaging. For the avoidance of doubt, nothing in this
Agreement or otherwise shall preclude Employee, Valeant, its subsidiaries and
affiliates, and Valeant’s directors and executive officers from communicating
directly with the SEC and any other Governmental Agency or testifying truthfully
to the extent required by law in response to a subpoena to testify issued by a
court of competent jurisdiction.

Section 7. Covenant Not to Solicit. Employee agrees to continue to be bound by
the paragraph of the Employment Agreement entitled “Covenant Not to Solicit,”
pursuant to the terms thereof.

Section 8. Covenant Not to Compete. To protect the confidential information,
intellectual property and other trade secrets of Valeant and its affiliates,
Employee agrees, during the period through the twelve (12)-month anniversary of
the Termination Date, not to engage in Prohibited Activities (as defined below)
in any country in which Valeant or any of its affiliates conducts business, or
plans to conduct business, as of the Termination Date. For the purposes of this
Agreement, the term “Prohibited Activities” means directly or indirectly
engaging as an owner, employee, partner, member, consultant or agent of any
entity that derives more than 10% of its consolidated revenue from the
development, manufacturing, marketing and/or distribution (directly or
indirectly) of branded or generic prescription or non-prescription
pharmaceuticals or medical devices for treatments in the fields of neurology,
dermatology, oncology, gastroenterology or ophthalmology; provided that
Prohibited Activities shall not mean Employee’s investment in securities of a
publicly-traded company equal to less than five (5%) percent of such company’s
outstanding voting securities; and provided, further, that, for the avoidance of
doubt, Employee complies with the obligations set forth in Sections 4, 6 and 7.
Employee agrees that the covenants contained in this Section 8 are reasonable
and desirable to protect the confidential information, intellectual property and
other trade secrets of Valeant and its affiliates.

Section 9. Other Valeant Policies. Employee agrees that she shall continue to be
bound by and comply with the terms of the Standards of Business Conduct, the
compensation recoupment policy and any other policies of Valeant and its
affiliates, in

 

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each case to the extent that any such policies survive termination of
employment.

Section 10. Indemnification. To the extent legally permitted, Employee shall be
entitled to indemnification and advancement of expenses to the same extent as
provided in Valeant’s articles, and, if applicable, pursuant to any
indemnification agreement between Employee and Valeant, in each case as in
effect on the Termination Date, or if more favorable to Employee, as in effect
on May 5, 2016.

Section 11. Section 409A; Other Tax Matters. The Parties intend for the payments
and benefits under this Agreement to be exempt from Section 409A or, if not so
exempt, to be paid or provided in a manner which complies with the requirements
of such section, and intend that this Agreement shall be construed and
administered in accordance with such intention. Any payments that qualify for
the “short-term deferral” exception or another exception under Section 409A
shall be paid under the applicable exception. For purposes of the limitations on
nonqualified deferred compensation under Section 409A, each payment of
compensation under this Agreement shall be treated as a separate payment of
compensation. To the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A, (i) amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to this Agreement
during the six (6)-month period immediately following Employee’s separation from
service shall instead be paid on the first business day after the date that is
six (6) months following her termination of employment (or upon her death, if
earlier) and (ii) in no event shall the timing of Employee’s execution of the
Release, directly or indirectly, result in Employee designating the calendar
year of payment, and if a payment that is subject to execution of the Release
could be made in more than one taxable year, based on timing of the execution of
the Release, payment shall be made in the later taxable year. To the extent
required to avoid an accelerated or additional tax under Section 409A of the
Internal Revenue Code, amounts reimbursable to Employee shall be paid to
Employee on or before the last day of the calendar year following the calendar
year in which the expense was incurred and the amount of expenses eligible for
reimbursement (and in-kind benefits provided to Employee) during one calendar
year may not affect amounts reimbursable or provided in any subsequent calendar
year. Notwithstanding any other provision of this Agreement, Valeant may
withhold from amounts payable under this Agreement all amounts that are required
or authorized to be withheld, including, but not limited to, federal, state,
local and foreign taxes required to be withheld by applicable laws or
regulations.

Section 12. Legal Fees. Valeant shall pay Employee for all legal fees and
expenses Employee incurs in disputing in good faith any issue under the
Retention Letter Agreement or in seeking in good faith to obtain or enforce any
benefit or right provided by this Agreement that was previously provided by the
Retention Letter Agreement. Such payments shall be made within five (5) business
days after delivery of Employee’s written requests for payment accompanied with
such evidence of fees and expenses incurred as Valeant reasonably may require
and shall be made in compliance with Section 11 of this Agreement.

Section 13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Jersey, without regard to the
application of any choice-of-law rules that would result in the application of
another state’s laws.

 

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Section 14. Entire Agreement. This Agreement sets forth the entire agreement
between Employee and Valeant concerning the termination of Employee’ s
employment and supersedes any other written or oral promises concerning the
subject matter of this Agreement, including, without limitation, those set forth
in the Employment Agreement and the Retention Letter Agreement. No waiver or
amendment of this Agreement will be effective unless it is in writing, refers to
this Agreement, and is signed by Employee and Valeant’s Chief Executive Officer.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

VALEANT

PHARMACEUTICALS

INTERNATIONAL, INC.

By:   /s/ Kelly Webber   Name:   Kelly Webber   Title:   Sr. Vice President,
Human Resources By:   /s/ Anne C. Whitaker   Name:   Anne C. Whitaker

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ANNEX A

 

Equity Grant
Name    Grant Date     

QTY -

Granted

    

QTY -

Distributed

    

QTY -

Unvested

     Termination Treatment 05122016 EMT RETENTION      5/12/2016        37,935  
     12,645        25,290     

• 6,322 units will vest upon termination based on the formula below, provided
receipt/non-revocation of a general release of claims is delivered within 45
days following termination

 

• Formula: [# of units granted X (greater of # of months from date of grant to
date of termination or 6 months) ÷ 18 months] - # of units previously vested;

(37,935 units granted X 9 months ÷ 18 months) - 12,645 units previously vested =
6,322

 

• Remaining unvested units (18,968) will be forfeited

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ANNEX B

General Waiver & Release

This Legal Release (“Release”) dated as of the date executed below (the “Release
Date”) is between Valeant Pharmaceuticals International, Inc. (“Valeant”) and
Anne C. Whitaker (“Employee”).

1. Employee Release. Employee, on behalf of herself, and Employee’s heirs,
executors, administrators, and/or assigns, does hereby RELEASE AND FOREVER
DISCHARGE Valeant, together with its parents, subsidiaries, affiliates,
predecessors, and successor corporations and business entities, past, present
and future, and its and their agents, directors, officers, employees,
shareholders, insurers and reinsurers, representatives and employee benefit
plans (and the trustees, administrators, fiduciaries, agents, insurers and
reinsurers of such plans) past, present and future, and their heirs, executors,
administrators, predecessors, successors and assigns (collectively, the
“RELEASEES”), of and from any and all legally waivable claims, causes of
actions, suits, lawsuits, debts, promises, agreements and demands whatsoever in
law or in equity, known or unknown, suspected or unsuspected, which Employee or
which Employee’s heirs, executors administrators, or assigns hereafter ever had,
now have, or may have, from the beginning of time to the date Employee executes
this Release arising out of or attributable to Employee’ s employment,
consultancy, directorship or other service relationship with Valeant or any
Releasees or the termination of such relationship or service. This general
waiver and release does not include any claims, causes of actions, suits,
lawsuits, debts and demands whatsoever in law or in equity, known or unknown,
suspected or unsuspected which may come into existence post the date of this
Release.

The claims being waived and released include, without limitation:

(a) any and all claims of violation of any foreign or United States federal,
state, provincial and local law arising from or relating to Employee’s
recruitment, hire, employment and termination of employment with Valeant;

(b) any and all claims of wrongful discharge, emotional distress, defamation,
misrepresentation, fraud, detrimental reliance, breach of contractual
obligations, promissory estoppel, negligence, assault and battery, and violation
of public policy;

(c) all claims to disputed wages, compensation, and benefits, including any
claims for violation of applicable state laws relating to wages and hours of
work;

(d) any and all claims for violation of any state or federal statute or
regulation relating to termination of employment, unlawful discrimination,
harassment or retaliation under applicable federal, state and local
constitutions, statutes, laws, and regulations (which includes, but is not
limited to, the Age Discrimination in Employment Act, as amended (“ADEA”), Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, the Employee Retirement
Income Security Act (“ERISA”), the Family and Medical Leave Act of 1993, the
Americans with Disabilities Act, the Rehabilitation Act, the Equal Pay Act, the
Worker Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act of

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2002, 18 U.S.C. § 1514; Sections 748(h)(i), 922(h)(i) and 1057 of the Dodd-Frank
Wall Street and Consumer Protection Act (the “Dodd-Frank Act”), 7 U.S.C. §
26(h), 15 U.S.C. § 78u-6(h)(i) and 12 U.S.C. § 5567(a) but excluding from this
Release any right Employee may have to receive a monetary award from the SEC as
an SEC Whistleblower, pursuant to the bounty provision under
Section 922(a)-(g) of the Dodd-Frank Act, 7 U.S.C. § 26(a)-(g), or directly from
any other governmental agency pursuant to a similar program, the New Jersey Law
Against Discrimination and Conscientious Employee Protection Act, the California
Fair Employment and Housing Act and the California Family Rights Act), the
Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety
and Insurance Act); and

(e) any and all claims for monetary damages and any other form of personal
relief.

In waiving and releasing any and all claims against the Releasees, whether or
not now known to Employee, Employee understands that this means that, if
Employee later discovers facts different from or in addition to those facts
currently known by Employee, or believed by Employee to be true, the waivers and
releases of this Release will remain effective in all respects—despite such
different or additional facts and Employee’s later discovery of such facts, even
if Employee would not have agreed to this Release if Employee had prior
knowledge of such facts.

2. Notwithstanding any provision of this Release to the contrary, by executing
this Release, Employee is not waiving and releasing any and all claims Employee
may have for:

(a) unemployment, state disability and/or paid family leave insurance benefits
pursuant to the terms of applicable state law;

(b) continuation of existing participation in Valeant-sponsored group health
benefit plans under the United States federal law known as “COBRA” and/or under
any applicable state counterpart law;

(c) any benefit entitlements that are vested as of the date of termination
pursuant to the terms of a Valeant-sponsored benefit plan, policy or other
arrangement, whether or not governed by the United States federal law known as
“ERISA”;

(d) violation of any foreign or United States federal, state or local statutory
and/or public policy right or entitlement that, by applicable law, is not
waivable;

(e) any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever
arising out of or relating to Employee’s right to enforce the terms of this
Release or the Separation Agreement between Employee and Valeant dated as of
February 7, 2017 (the “Separation Agreement”);

(f) any rights or claims for indemnification under any written agreements with
any of the Releasees, the charter, articles, by-laws or operating agreements of
Valeant or any of its subsidiaries, or under applicable law or any rights as an
insured, or to coverage,

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under any director’s and officer’s liability insurance policy;

(g) any wrongful act or omission occurring after the date Employee signs this
Release.

(h) Nothing in this Release shall prevent Employee from filing a charge with the
Equal Employment Opportunity Commission (or similar state or local agency) or
participating in any investigation conducted by the Equal Employment Opportunity
Commission (or similar state or local agency); provided, however, that Employee
acknowledges and agrees that Employee shall not be entitled to any personal
monetary recovery in connection with such a charge or investigation.

3. No Admission. Nothing about the fact or content of this Release shall
considered to be or treated by Employee or Valeant as an admission of any
wrongdoing, liability or violation of law by Employee or by any Releasee.

4. Consideration & Revocation Periods; Effective Date. Employee acknowledges
that (a) Valeant has advised her in this writing of her right to consult with an
attorney prior to signing this Release;(b) she has carefully read and fully
understands all of the provisions of this Release, and (c) she is entering into
this Release, including the releases set forth herein, knowingly, freely and
voluntarily in exchange for good and valuable consideration to which she would
not be entitled in the absence of signing this Release. Employee has twenty-one
(21) calendar days to consider this Release, although Employee may sign it
sooner, but not before the Termination Date (as defined in the Separation
Agreement).

In addition, for the period of seven (7) calendar days after the date Employee
signs this Release (“7-day Revocation Period”), Employee may revoke it by
delivering written notice of revocation to Valeant by hand-delivery or by
facsimile or e-mail transmission using the street, facsimile or e-mail address
for Valeant stated below.

Because of this 7-day Revocation Period, this Release will not become effective
and enforceable until the eighth calendar day after the date Employee signed it,
provided that Employee has delivered Employee’s signed Release to Valeant, and
Employee did not revoke the Release.

5. Employee Protections. Nothing in this Release or otherwise limits Employee’s
ability to communicate directly with and provide information, including
documents, not otherwise protected from disclosure by any applicable law or
privilege to the Securities and Exchange Commission (the “SEC”) or any other
federal, state or local governmental agency or commission (“Government Agency”)
regarding possible legal violations, without disclosure to Valeant. Valeant may
not retaliate against Employee for any of these activities, and nothing in this
Release or otherwise requires Employee to waive any monetary award or other
payment that Employee might become entitled to from the SEC or any other
Government Agency.

6. Delivery to Valeant. Employee should return this Release, signed by Employee
(and any notice of revocation, if applicable) to:

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Valeant Pharmaceuticals International, Inc.

400 Somerset Corporate Boulevard

Bridgewater, NJ 08807

Attn: Kelly Webber, Senior Vice President, Human Resources

7. Judicial Interpretation/Modification; Severability. In the event that this
Release shall be held to be void, voidable, unlawful or, for any reason,
unenforceable, the Release shall be voidable at the sole discretion of Valeant.

8. Changes to Release. No changes to this Release can be effective except by
another written agreement signed by Employee and by Valeant’s Chief Executive
Officer.

9. Complete Agreement. Except for the Separation Agreement and any equity or
other employee benefit plans, programs or policies referenced herein or therein
as surviving this Release, this Release, assuming it is executed and not revoked
during the 7-day Revocation Period, cancels, supersedes and replaces any and all
prior agreements (written, oral or implied• in-fact or in-law) between Employee
and Valeant regarding all of the subjects covered by this Release. This Release
together with the Separation Agreement and any equity or other employee benefit
plans, programs or policies referenced herein or therein as surviving this
Release, is the full, complete and exclusive agreement between Employee and
Valeant regarding all of the subjects covered by this Release, and neither
Employee nor Valeant is relying on any representation or promise that is not
expressly stated in this Release.

I HAVE READ THIS RELEASE. I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS. I
AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY OWN CHOOSING DURING THE
CONSIDERATION PERIOD, AND THAT VALEANT HAS ADVISED ME TO UNDERTAKE SUCH
CONSULTATION BEFORE SIGNING THIS RELEASE. I SIGN THIS RELEASE FREELY AND
VOLUNTARILY, WITHOUT DURESS OR COERCION.

 

    Date: February 8, 2017         /s/ Anne C. Whitaker     Anne C. Whitaker