EXHIBIT 10.1
EXECUTION VERSION
VALEANT PHARMACEUTICALS INTERNATIONAL
EXECUTIVE EMPLOYMENT AGREEMENT
               THIS AGREEMENT (the “Agreement”) is hereby entered into as of the
1st day of February, 2008 (the “Effective Date”), by and between Valeant
Pharmaceuticals International (the “Company”) and Michael Pearson, an individual
(the “Executive”) (hereinafter collectively referred to as “the parties”).
               In consideration of the respective agreements of the parties
contained herein, it is agreed as follows:

1.   Term. The initial term of this Agreement shall be for the period commencing
on the Effective Date and ending on the third anniversary of the Effective Date
(the “Employment Term”). Not later than 120 days prior to the expiration of the
Employment Term, the parties to this Agreement shall either commence
negotiations in good faith regarding the terms of a new employment agreement to
take effect at the expiration of the Employment Term, or, if either party does
not intend to enter into a new agreement to be effective following the
Employment Term, notify the other party of such intent. For the avoidance of
doubt, Executive shall not be entitled to payments pursuant to Section 8 of this
Agreement by reason of the Company electing to not enter into a new agreement
with Executive following the Employment Term.   2.   Employment. During the
Employment Term:

  (a)   Executive shall be employed as Chief Executive Officer of the Company.
In addition, effective as of the Effective Date, Executive shall be elected by
the Board of Directors of the Company (the “Board”) as a director of the Company
and as Chairman of the Board. For as long as the Executive is employed by the
Company as the Chief Executive Officer, the Company shall nominate the Executive
for re-election to the Board. At the time of his termination of employment with
the Company for any reason, the Executive shall resign from the Board if
requested to do so by the Company. Executive shall not receive any compensation
in addition to the compensation described in Sections 3 and 4 of this Agreement
for serving as a director of the Company and Chairman of the Board.     (b)  
Executive shall report directly to the Board. Executive shall perform the
duties, undertake the responsibilities and exercise the authority customarily
performed, undertaken and exercised by persons situated in a similar executive
capacity.     (c)   Excluding periods of vacation and sick leave to which
Executive is entitled, Executive shall devote reasonable attention and time to
the business and affairs of

 

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      the Company to the extent necessary to discharge the responsibilities of
Executive hereunder. Prior to joining or agreeing to serve on corporate, civil
or charitable boards or committees, Executive shall obtain approval of the
Board. Executive may manage personal and family investments, participate in
industry organizations and deliver lectures at educational institutions, so long
as such activities do not interfere with the performance of Executive’s
responsibilities hereunder.     (d)   Executive shall be subject to and shall
abide by each of the Company’s personnel policies applicable and communicated in
writing to senior executives, including but not limited to any policy the
Company adopts restricting hedging investments in Company equity by Company
executives.

3.   Annual Compensation.

  (a)   Base Salary. The Company agrees to pay or cause to be paid to Executive
during the Employment Term a base salary at the rate of $1,000,000 per annum or
such increased amount as the Board may from time to time determine (hereinafter
referred to as the “Base Salary”). Such Base Salary shall be payable in
accordance with the Company’s customary practices applicable to its executives.
Such Base Salary shall be reviewed at least annually by the Board or by the
Compensation Committee of the Board (the “Committee”), and may be increased at
the discretion of the Committee, but not decreased.     (b)   Performance Bonus.

  (i)   For each fiscal year of the Company ending during the Employment Term,
beginning with the 2009 fiscal year, Executive shall be eligible to receive a
target annual cash bonus of 100% of the Base Salary (such target bonus, as may
hereafter be increased, the “Target Bonus”) with the opportunity to receive a
maximum annual cash bonus of 200% of the Base Salary, payable in accordance with
the Company’s customary practices applicable to bonuses paid to its executives.
    (ii)   Executive’s annual bonus for services performed during the 2008
fiscal year shall be delivered to Executive on the Effective Date in the form of
restricted share units under the Company’s 2006 Equity Incentive Plan (the “2006
Plan”) with a value equal to the quotient obtained by dividing $1,000,000 by the
Per Share Price (as defined below) on the Effective Date (the “Annual Bonus
Share Units”). For purposes of this Agreement, Per Share Price shall mean the
average of the closing prices of Shares during the 20 consecutive trading days
ending on the day prior to the specified valuation date. Except as otherwise
specifically provided in Section 8 of this Agreement, the Annual Bonus Share
Units (i) shall be forfeited if Executive is not employed by the Company on the
date that 2008 bonuses are paid to other executive officers of the Company (or
March 15, 2009 , if earlier) and (ii) unless forfeited in accordance with

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      subclause (i), shall be deliverable in shares of Company common stock
(“Shares”) on the fifth anniversary of the Effective Date. In addition to the
Annual Bonus Share Units, Executive shall be eligible for a cash bonus for
services performed during the 2008 fiscal year up to a maximum of 100% of Base
Salary. The Company shall enter into an award agreement with the Executive for
the above grant of restricted share units, incorporating the terms set forth in
this Agreement and otherwise on the terms and conditions set forth in the
Company’s standard form of restricted share unit award agreement.     (iii)  
Any annual cash bonus will be based on performance by Executive and the Company
based on performance targets to be established by the Board or the Committee on
or before March 31 of the applicable calendar year, except that any cash bonus
payable for 2008 shall be paid at the sole discretion of the Board or the
Committee.

4.   Long-Term Compensation

  (a)   2008 RSU Grant. In connection with the execution of this Agreement, on
the Effective Date, Executive shall be granted that whole number of restricted
share units under the 2006 Plan with a value equal to the quotient obtained by
dividing $2,000,000 by the Per Share Price on the Effective Date. (the “2008 RSU
Grant”). The 2008 Stock Grant shall vest on the first anniversary of the
Effective Date, provided that, except as specifically set forth in Section 8 of
this Agreement, Executive is employed by the Company on such vesting date.
Except as specifically set forth in Section 8 of this Agreement, the vested
portion of the 2008 Stock Grant shall be paid to Executive in Shares on the
fifth anniversary of the Effective Date. The Company shall enter into an award
agreement with the Executive for the above grant of restricted share units,
incorporating the terms set forth in this Agreement and otherwise on the terms
and conditions set forth in the Company’s standard form of restricted share unit
award agreement.     (b)   Time-Based Stock Option.

  (i)   In connection with the execution of this Agreement, on the Effective
Date, Executive shall be granted a ten-year time-vested non-qualified stock
option (the “Option”) under the 2006 Plan to acquire a whole number of Shares
with a Black-Scholes value equal to $5,000,000 as of the Effective Date. For
purposes of the preceding sentence, the Black-Scholes value shall be established
by the Company in accordance with its prior practices with respect to the
valuation of stock option grants for granting purposes; provided that the value
of the stock shall be determined for this purpose based on the Per Share Price
on the Effective Date.     (ii)   The Option shall become vested and exercisable
with respect to twenty-five percent (25%) of the total number of Shares
underlying the Option on each of the first four anniversaries of the Effective
Date, provided that,

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      except as specifically set forth in Section 8 of this Agreement, the
Executive remains employed by the Company through the applicable vesting dates.
    (iii)   Executive shall not be permitted to sell, assign, transfer, or
otherwise dispose of more than fifty percent (50%) of the Net Shares (as defined
below) acquired upon exercise of the Option until the expiration of the two-year
period following such exercise, or, if sooner, until a Change in Control (as
defined below) or until Executive experiences a termination of employment. For
purposes of this Section, Net Shares shall mean the net number of Shares
acquired by Executive upon exercise of the Option after subtracting any such
Shares surrendered to the Company as payment for the exercise price and any such
Shares withheld in payment of withholding obligations applicable to the exercise
of the Option.     (iv)   The Company shall enter into an award agreement with
the Executive for the above grant of Options, incorporating the terms set forth
in this Agreement and otherwise on the terms and conditions set forth in the
Company’s standard form of non-qualified stock option award agreement.

  (c)   Performance Share Units. In connection with the execution of this
Agreement, on the Effective Date, the Executive shall be granted that whole
number of performance-based restricted share units (the “Performance Share
Units”) under the 2006 Plan with a value equal to the quotient obtained by
dividing $5,000,000 by the Per Share Price on the Effective Date. The
Performance Share Units shall be subject to the following terms and conditions:

  (i)   If the Per Share Price of a Share as of the third anniversary of the
Effective Date ( the “Third Anniversary Average Price”) equals or exceeds a
value which produces a Compound Annual TSR (as defined below) of 15%, Executive
shall vest in and the Company shall deliver to Executive as soon as practicable
(but in any event no later than 45 days) following the third anniversary of the
Effective Date a number of Shares equal to the number of Performance Share Units
granted pursuant to this Section 4(c), provided that, except as otherwise
specifically set forth in Section 8 of this Agreement, Executive is employed by
the Company on such anniversary date. “Compound Annual TSR” shall mean the
compound annual Share price appreciation from the Effective Date to such third
anniversary, plus the value derived from the reinvestment of any dividends paid
on the Company’s common stock during such period, with reinvestment determined
based on the closing price of the common stock on the dividend payment date,
using the Per Share Price as of the Effective Date as the base value.     (ii)  
If the Third Anniversary Average Price equals or exceeds a value which produces
a Compound Annual TSR of 30%, Executive shall vest in and the Company shall
deliver to Executive as soon as practicable (but in any

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      event no later than 45 days) following the third anniversary of the
Effective Date, a number of Shares equal to two times the number of Performance
Share Units granted pursuant to this Section 4(c); provided that, except as
otherwise specifically set forth in Section 8 of this Agreement, Executive is
employed by the Company on such anniversary date.     (iii)   If the Third
Anniversary Average Price equals or exceeds a value which produces a Compound
Annual TSR of 45%, Executive shall vest in and the Company shall deliver to
Executive as soon as practicable (but in any event no later than 45 days)
following the third anniversary of the Effective Date, a number of Shares equal
to three times the number of Performance Share Units granted pursuant to this
Section 4(c); provided that, except as otherwise specifically set forth in
Section 8 of this Agreement, Executive is employed by the Company on such
anniversary date.     (iv)   If the Third Anniversary Average Price produces a
Compound Annual TSR between 15% and 30%, or between 30% and 45%, Executive shall
vest in and the Company shall deliver a number of Performance Share Units that
is the mathematical interpolation between the number of shares which would vest
at such two percentages; provided that, except as otherwise specifically set
forth in Section 8 of this Agreement, Executive is employed by the Company on
such anniversary date.     (v)   Performance Share Units that could have been
earned under any of subclauses (i), (ii), (iii) or (iv) that are not earned on
the third anniversary of the Effective Date may be earned on the fourth
anniversary of the Effective Date based on the Compound Annual TSR from the
Effective Date through the fourth anniversary of the Effective Date using the
same performance targets described in subsections (i) through (iv) above (net of
any Performance Share Units that were earned on the third anniversary of the
Effective Date based on performance to such date); provided that, except as
otherwise specifically set forth in Section 8 of this Agreement, Executive is
employed by the Company on the fourth anniversary date.     (vi)   Any
Performance Share Units that vest as of the third anniversary of the
Commencement Date will not be affected if the Compound Annual TSR on the fourth
anniversary is less than that generated by the Third Anniversary Average Price.
Any Performance Share Units that are not vested as of the fourth anniversary of
the Effective Date shall be immediately forfeited.     (vii)   Executive shall
not be permitted to sell, assign, transfer, or otherwise dispose of more than
fifty percent (50%) of the Net Shares (as defined below) acquired upon
settlement of the Performance Share Units until the expiration of the two-year
period following receipt, or, if sooner until a

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      Change in Control or until Executive experiences a termination of
employment. For purposes of this Section, Net Shares shall mean the net number
of Shares acquired by Executive upon settlement of the Performance Share Units
after subtracting any such Shares withheld by the Company in payment of
withholding obligations applicable to such settlement.     (viii)   The Company
shall enter into a restricted share unit award agreement with the Executive for
the above grant of Performance- Share Units, incorporating the terms set forth
in this Agreement and otherwise on the terms and conditions set forth in the
Company’s standard form of performance-based restricted share unit award
agreement.

  (d)   Share Purchase Requirement and Matching Share Units.

  (i)   Prior to the first anniversary of the Effective Date, Executive shall
purchase, on the market and during periods of open trading in accordance with
applicable law, Shares with an aggregate purchase price of not less than
$3,000,000 (the “Purchased Shares”); provided, however, if Executive is
precluded from completing such purchases in the marketplace due to being subject
to blackout periods or other restrictions on his ability to purchase such shares
due to his possession of material inside information, the Company shall either
extend the period of time to complete such market purchases such that Executive
shall have a reasonable opportunity to complete the purchase of the Purchased
Shares, or sell such shares directly to Executive on or prior to such first
anniversary of the Effective Date.     (ii)   Executive shall not be permitted
to sell the Purchased Shares for one year following the Final Purchase Date (as
defined below). In addition, as long as Executive remains employed by the
Company, Executive shall retain ownership of at least seventy-five percent (75%)
of the Purchased Shares until the second anniversary of the Effective Date,
fifty percent (50%) of the Purchase Shares until the third anniversary of the
Effective Date, and twenty-five percent (25%) of the Purchased Shares until the
fourth anniversary of the Effective Date (the “Purchase Obligations”). The
“Final Purchase Date” shall mean the date on which Executive purchases Shares
that, together with other Shares purchased by Executive on or after the
Effective Date, have an aggregate purchase price of $3,000,000.     (iii)   As
soon as practicable after the end of any month during which Executive makes a
purchase of all or any portion of the Purchased Shares, the Company shall grant
to the Executive a number of restricted share units equal to the number of
Purchased Shares so purchased in such month (up to a maximum aggregate number of
restricted share units equal to the number of Purchased Shares with an aggregate
purchase price of $5,000,000) (the “Matching Share Units”).

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  (iv)   The Matching Restricted Share Units shall vest and be settled in Shares
on the following schedule: Twenty-five percent (25%) of the Matching Share Units
shall vest and be settled on the first anniversary of the Final Purchase Date
and an additional 25% of the Matching Share Units shall vest and be settled each
of the second, third, and fourth anniversaries of the Effective Date, provided
Executive is employed on the relevant vesting date and Executive has not
violated the Purchase Obligations prior to such vesting date.     (v)  
Executive shall not be permitted to sell, assign, transfer, or otherwise dispose
of more than fifty percent (50%) of the Net Shares (as defined below) acquired
upon settlement of the Matching Share Units until the expiration of the two-year
period following such settlement, or, if sooner, until a Change in Control (as
defined below) or until Executive experiences a termination of employment. For
purposes of this Section, Net Shares shall mean the net number of Shares
acquired by Executive upon settlement of the Matching Share Units after
subtracting any such Shares withheld by the Company in payment of withholding
obligations applicable to such settlement.

  (e)   Ongoing Grants. Executive shall be eligible to receive, solely in the
discretion of the Board or the Committee, additional annual equity grants during
the Employment Term. For the avoidance of doubt, the Committee does not
contemplate that Executive shall receive equity grants other than the grants
outlined in this Section 4 of the Agreement during the Employment Term.

5.   Other Benefits.

  (a)   Employee Benefits. Executive shall be entitled to participate in all
employee benefit plans, practices and programs maintained by the Company and
made available to employees generally, including, without limitation, all
pension, retirement, profit sharing, savings, medical, hospitalization,
disability, dental, life or travel accident insurance benefit plans. Executive’s
participation in such plans, practices and programs shall be on the same basis
and terms as are applicable to employees of the Company generally.     (b)  
Executive Benefits. Executive shall be entitled to participate in all executive
benefit or incentive compensation plans now maintained or hereafter established
by the Company for the purpose of providing compensation and/or benefits to
comparable executive employees of the Company including, but not limited to, the
Company’s deferred compensation plans and any supplemental retirement, deferred
compensation, supplemental medical or life insurance or other bonus or incentive
compensation plans. Unless otherwise provided herein, Executive’s participation
in such plans shall be on the same basis and terms, as other senior executives
of the Company. No additional compensation provided under any of such plans
shall be deemed to modify or otherwise affect the terms of this Agreement or any
of Executive’s entitlements hereunder.

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  (c)   Fringe Benefits and Perquisites. Executive shall be entitled to all
fringe benefits and perquisites generally made available by the Company to its
senior executives. In addition, during the Employment Term, the Company shall
provide Executive with (or reimburse Executive for the cost of) life insurance
in the face amount of $10,000,000, subject to Executive’s insurability and
Executive taking steps reasonably requested by the Company to obtain such
insurance, if required.     (d)   Business Expenses. Upon submission of proper
invoices in accordance with the Company’s normal procedures, Executive shall be
entitled to receive prompt reimbursement of all reasonable out-of-pocket
business, entertainment and travel expenses (including travel in first-class)
incurred by him in connection with the performance of his duties hereunder. Such
reimbursement shall in no event occur later than March 15th of the year
following the year in which the expenses were incurred.     (e)   Office and
Facilities. Executive shall be provided with an appropriate office at the
Company’s headquarters, with such secretarial and other support facilities as
are commensurate with Executive’s status with the Company, which facilities
shall be adequate for the performance of his duties hereunder.     (f)  
Vacation and Sick Leave. Executive shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, pursuant to the following:

  (i)   Executive shall be entitled to annual vacation in accordance with the
policies as periodically established by the Board for senior executives of the
Company, which shall in no event be less than four weeks per year;     (ii)   in
addition to the aforesaid paid vacations, Executive shall be entitled, without
loss of pay, to absent himself voluntarily from the performance of his
employment for such additional periods of time and for such valid and legitimate
reasons as the Board in its discretion may determine. Further, the Board shall
be entitled to grant to Executive a leave or leaves of absence with or without
pay at such time or times and upon such terms and conditions as the Board in its
discretion may determine; and     (iii)   Executive shall be entitled to sick
leave (without loss of pay) in accordance with the Company’s policies as in
effect from time to time.

6.   Termination. Executive’s employment hereunder may be terminated under the
circumstances set forth below; provided, however, that notwithstanding anything
contained herein to the contrary, Executive shall not be considered to have
terminated employment with the Company for purposes of this Agreement unless he
would be considered to have incurred a “separation from service” from the
Company within the meaning of Section 409A of the Internal Revenue Code.

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  (a)   Death. Executive’s employment shall be terminated as of the date of
Executive’s death and Executive’s beneficiaries shall be entitled to the
benefits provided in Section 8(b) hereof.     (b)   Disability. The Company may
terminate Executive’s employment, on written notice to Executive after having
established Executive’s Disability and while Executive remains Disabled, subject
to the payment by the Company to Executive of the benefits provided in Section
8(b) hereof. For purposes of this Agreement, “Disability” shall mean Executive’s
inability to substantially perform his duties and responsibilities hereunder by
reason of any physical or mental incapacity for two or more periods of ninety
(90) consecutive days each in any three hundred and sixty (360) day period, as
determined by a physician with no history of prior dealings with the Company or
Executive, as reasonably agreed upon by the Company and Executive. Executive
shall be entitled to the compensation and benefits provided for under this
Agreement for any period prior to Executive’s termination by reason of
Disability during which Executive is unable to work due to a physical or mental
infirmity in accordance with the Company’s policies for similarly-situated
executives.     (c)   Cause. The Company may terminate Executive’s employment
for “Cause,” effective as of the date of the Notice of Termination (as defined
in Section 7 below) and as evidenced by a resolution adopted in good faith by a
majority of the independent members of the Board, subject to the payment by the
Company to Executive of the benefits provided in Section 8(a) hereof. “Cause”
shall mean, for purposes of this agreement: (1) conviction of any felony (other
than one related to a vehicular offense) or other criminal act involving fraud;
(2) willful misconduct that results in a material economic detriment to the
Company; (3) material violation of Company policies and directives, which is not
cured after written notice and an opportunity for cure, (4) continued refusal by
Executive to perform his duties after written notice identifying the
deficiencies and an opportunity for cure; and (5) a material violation by
Executive of any material covenants to the Company. No action or inaction shall
be deemed willful if not demonstrably willful and if taken or not taken by the
Executive in good faith and with the understanding that such action or inaction
was not adverse to the best interests of the Company. Reference in this
paragraph to the Company shall also include direct and indirect subsidiaries of
the Company, and materiality shall be measured based on the action or inaction
and the impact upon the Company taken as a whole. The Company may suspend, with
pay, the Executive upon Executive’s indictment for the commission of a felony as
described under clause (A) above. Such suspension may remain effective until
such time as the indictment is either dismissed or a verdict of not guilty has
been entered.     (d)   Without Cause. The Company may terminate Executive’s
employment without Cause. The Company shall deliver to Executive a Notice of
Termination (as defined in Section 7 below) not less than thirty (30) days prior
to the termination of Executive’s employment without Cause and the Company shall
have the option of terminating Executive’s duties and responsibilities prior to
the expiration of

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      such thirty-day notice period, subject to the payment by the Company of
the benefits provided in either Section 8(e) or Section 8(f) hereof, as may be
applicable.     (e)   Good Reason. Executive may terminate his employment for
Good Reason (as defined below) by delivering to the Company a Notice of
Termination (as defined in Section 7 below) not less than thirty (30) days prior
to the termination of Executive’s employment for Good Reason. The Company shall
have the option of terminating Executive’s duties and responsibilities prior to
the expiration of such thirty-day notice period, subject to the payment by the
Company of the benefits provided in either Section 8(c) or 8(d) hereof, as may
be applicable. For purposes of this Agreement, Good Reason shall mean the
occurrence of any of the events or conditions described in Subsections
(i) through (iii) hereof which are not cured by the Company (if susceptible to
cure by the Company) within thirty (30) days after the Company has received
written notice from Executive within ninety (90) days of the initial existence
of the event or condition constituting Good Reason specifying the particular
events or conditions which constitute Good Reason and the specific cure
requested by Executive.

  (i)   Diminution of Responsibility. (A) any material reduction in his duties
or responsibilities as in effect immediately prior thereto, or (B) removal of
Executive from the position of Chief Executive Officer or Chairman of the Board,
except in connection with the termination of his employment for Disability,
Cause, as a result of his death or by Executive other than for Good Reason;    
(ii)   Compensation Reduction. Any reduction in Executive’s base salary or
target bonus opportunity; or     (iii)   Company Breach. Any other material
breach by the Company of any material provision of this Agreement.

  (f)   Without Good Reason. Executive may voluntarily terminate his employment
without Good Reason by delivering to the Company a Notice of Termination not
less than thirty (30) days prior to the termination of Executive’s employment
and the Company shall have the option of terminating Executive’s duties and
responsibilities prior to the expiration of such thirty-day notice period,
subject to the payment by the Company to Executive of the benefits provided in
Section 8(a) hereof through the last day of such notice period.

7.   Notice of Termination. Any purported termination by the Company or by
Executive shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which indicates a termination date, the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of Executive’s employment

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    hereunder shall be effective without such Notice of Termination (unless
waived by the party entitled to receive such notice).   8.   Compensation Upon
Termination. Upon termination of Executive’s employment during the Employment
Term, Executive shall be entitled to the following benefits:

  (a)   Termination by the Company for Cause or by Executive Without Good
Reason. If Executive’s employment is terminated by the Company for Cause or by
Executive without Good Reason, the Company shall pay Executive all amounts
earned or accrued hereunder through the termination date, including:

  (i)   any accrued and unpaid Base Salary;     (ii)   reimbursement for any and
all monies advanced or expenses incurred in connection with Executive’s
employment for reasonable and necessary expenses incurred by Executive on behalf
of the Company for the period ending on the termination date;     (iii)   any
accrued and unpaid vacation pay;     (iv)   any previous compensation which
Executive has previously deferred (including any interest earned or credited
thereon), in accordance with the terms and conditions of the applicable deferred
compensation plans or arrangements then in effect, including the arrangements
provided for in Sections 3(b)(ii) and 4(a) of this Agreement to the extent
vested as of Executive’s termination date; and     (v)   any amount or benefit
as provided under any benefit plan or program (the foregoing items in
Sections 8(a)(i) through 8(a)(v) being collectively referred to as the “Accrued
Compensation”).

  (b)   Termination by the Company for Disability or By Reason of Death. If
Executive’s employment is terminated by the Company for Disability or by reason
of Executive’s death, the Company shall pay Executive (or his beneficiaries, as
applicable) the Accrued Compensation, and, Executive shall be entitled to the
following benefits:

  (i)   The Company shall pay to Executive within sixty (60) days following the
termination date, any bonus earned but unpaid in respect of any fiscal year
preceding the termination date;     (ii)   The Company shall deliver to
Executive, on the date that is six months and one day following Executive’s
termination date (or, if sooner, Executive’s death), Shares in respect of the
Annual Bonus Share Units and the 2008 RSU Grant;

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  (iii)   The Company shall deliver to Executive, as soon as practicable (but in
no event more than sixty (60) days) following Executive’s termination date,
Shares in respect of the Matching Share Units;     (iv)   The Option shall vest
in full and remain exercisable for one year following Executive’s termination
date (but in no event beyond the expiration of the Option term); and     (v)  
The performance measures applicable to the Performance Share Units will be
applied as though the termination date were the end of the measurement period
and the units so earned will vest and be payable in a manner consistent with the
vesting schedule described in Section 4(c) of this Agreement (e.g., 100% at a
Compound Annual TSR of 15%, 200% at a Compound Annual TSR of 30%), but based on
the Compound Annual TSR determined through the termination date. The Company
shall deliver Shares in respect of such vested Performance Share Units, if any,
as soon as practicable (but not later than sixty (60) days) following
Executive’s termination date and all other Performance Share Units will be
forfeited.

  (c)   Termination by the Company Without Cause or by the Executive for Good
Reason Other Than in Connection with a Change in Control. If Executive’s
employment by the Company shall be terminated by the Company without Cause or by
the Executive for Good Reason, either prior to a Change in Control or more than
twelve (12) months following a Change in Control, then, subject to Section 14(f)
of the Agreement, Executive shall be entitled to the benefits provided in this
Section 8(c).

  (i)   The Company shall pay to Executive any Accrued Compensation through the
end of the notice period provided for in Section 6(e) hereof.     (ii)   The
Company shall pay to Executive any bonus earned but unpaid in respect of any
fiscal year preceding the termination date within sixty (60) days following the
termination date.     (iii)   In the event that Executive’s termination of
employment occurs after the end of the Company’s 2008 fiscal year, the Company
shall pay to Executive an amount equal to the bonus or incentive award that
Executive would have been entitled to receive in respect of the fiscal year in
which Executive’s termination date occurs, had he continued in employment until
the end of such fiscal year, which amount shall be payable in a lump sum payment
within sixty (60) days following such termination (subject to Section 10),
calculated as if all performance targets and goals (if applicable) had been
fully met at the “target” level by the Company and by Executive, as applicable,
for such fiscal year, multiplied by a fraction (A) the numerator of which is the
number of days in such fiscal year through termination date and (B) the
denominator of which is 365 (a “Pro Rata Bonus”).

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  (iv)   The Company shall pay Executive as severance pay, in lieu of any
further compensation for the periods subsequent to the termination date, an
amount in cash, which amount shall be payable in a lump sum payment within sixty
(60) days following such termination (subject to Section 10), equal to two
(2) times the sum of (A) Executive’s Base Salary, and (B) the Target Bonus; and
    (v)   The Company shall provide Executive continued coverage under any
health, medical, dental or vision program or policy in which Executive was
eligible to participate as of the time of his employment termination for two
(2) years following such termination on terms no less favorable to Executive and
his dependents (including with respect to payment for the costs thereof) than
those in effect immediately prior to such termination.     (vi)   The Company
shall deliver to Executive, on the date that is six months and one day following
Executive’s termination date, Shares in respect of the Annual Bonus Share Units
and the 2008 RSU Grant, and Executive shall have three months following the
termination date to exercise vested Options (but in no event beyond the
expiration of the Option Term. Any unvested portion of the Option), any unvested
Performance Share Units, and any unvested Matching Share Units shall be
forfeited.     (vii)   The performance measures applicable to the Performance
Share Units will be applied as though the termination date were the end of the
measurement period, with the number of units calculated in a manner consistent
with the vesting schedule described in Section 4(c) of this Agreement (e.g.,
100% at a Compound Annual TSR of 15%, 200% at a Compound Annual TSR of 30%), but
based on the Compound Annual TSR determined through the termination date;
provided, however, that in the event Executive is entitled to benefits pursuant
to this Section, only a pro rata portion of such calculated units will vest upon
termination (based on the number of completed months elapsed from the date of
grant to the date of termination divided by 36 months). The Company shall
deliver Shares in respect of such vested Performance Share Units, if any, as
soon as practicable (but not later than sixty (60) days) following Executive’s
termination date and all other Performance Share Units will be forfeited.

  (d)   Termination by the Company Without Cause or by Executive for Good Reason
Following a Change in Control. If Executive’s employment by the Company shall be
terminated by the Company without Cause or by Executive for Good Reason within
twelve (12) months following a Change in Control (as defined in Section 9
below), then in lieu of the amounts due under Section 8(c) above and subject to
the requirements of Section 14(f) of the Agreement, Executive shall be entitled
to the benefits provided in this Section 8(d).

  (i)   The Company shall pay Executive any Accrued Compensation through the end
of the notice period provided for in Section 6(e) hereof.

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  (ii)   The Company shall pay Executive any bonus earned but unpaid in respect
of any fiscal year preceding the termination date within sixty (60) days
following the termination date;     (iii)   In the event such termination occurs
after the end of the Company’s 2008 fiscal year, the Company shall pay Executive
the Pro Rata Bonus;     (iv)   The Company shall pay Executive as severance pay
and in lieu of any further Base Salary for periods subsequent to the termination
date, an amount in cash, which amount shall be payable in a lump sum payment
within sixty (60) days following such termination (subject to Section 10), equal
to three (3) times the sum of (A) Executive’s Base Salary and (B) the Target
Bonus;     (v)   The Company shall provide Executive with continued coverage
under any health, medical, dental or vision program or policy in which Executive
was eligible to participate as of the time of his employment termination for two
(2) years following such termination on terms no less favorable to Executive and
his dependents (including with respect to payment for the costs thereof) than
those in effect immediately prior to such termination.     (vi)   Annual Bonus
Share Units and the 2008 RSU Grant shall be payable, in the Company’s
discretion, in either cash or in shares of the acquiring entity, on the on the
date that is six months and one day following Executive’s termination date.
Notwithstanding the above, the Annual Bonus Share Units and the 2008 RSU Grant
shall be payable in shares of the acquiring entity only if the common stock of
the acquiring entity is publicly traded on an established securities market on
the date on which such shares are payable.     (vii)   If the Option and the
Matching Share Units are not cancelled in connection with a Change in Control in
exchange for a cash payment (as set forth in Section 9), each outstanding Option
and Matching Share Unit will vest, the Option will remain exercisable for one
year following the termination date (but not beyond the Option term), and each
Matching Share Unit will be settled as soon as practicable (but in no event more
than sixty (60) days) following the termination date.

    Executive shall not be required to mitigate the amount of any payment
provided for under this Section 8 by seeking other employment or otherwise and
no such payment shall be offset or reduced by the amount of any compensation or
benefits provided to Executive in any subsequent employment.   9.   Change in
Control.

  (a)   For purposes of this Agreement, a “Change in Control” shall mean any of
the following events:

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  (i)   the acquisition (other than from the Company, by any person (as such
term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of thirty percent (30%) or more of
the combined voting power of the Company’s then outstanding voting securities;  
  (ii)   the individuals who, as of the date hereof, are members of the Board
(the “Incumbent Board”), cease for any reason to constitute at least a majority
of the Board, unless the election, or nomination for election by the Company’s
stockholders, of any new director was approved by a vote of at least a majority
of the Incumbent Board, and such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board; or     (iii)   the
closing of:

  (1)   a merger or consolidation involving the Company if the stockholders of
the Company, immediately before such merger or consolidation, do not, as a
result of such merger or consolidation, own, directly or indirectly, more than
fifty percent (50%) of the combined voting power of the then outstanding voting
securities of the corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the combined voting
power of the voting securities of the Company outstanding immediately before
such merger or consolidation; or     (2)   a complete liquidation or dissolution
of the Company or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.

      Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur pursuant to Section 9, solely because thirty percent (30%) or more of the
combined voting power of the Company’s then outstanding securities is acquired
by (i) a trustee or other fiduciary holding securities under one or more
employee benefit plans maintained by the Company or any of its subsidiaries or
(ii) any corporation which, immediately prior to such acquisition, is owned
directly or indirectly by the stockholders of the Company in the same proportion
as their ownership of stock in the Company immediately prior to such
acquisition.     (b)   Upon the occurrence of a Change in Control, at the
election of the Company, the Options and the Matching Share Units shall either
be (i) cancelled in exchange for a cash payment based in the case of any merger
transaction on the price received by shareholders in the transaction
constituting the Change in Control or in the case of any other event that
constitutes a Change in Control, the closing price of a Share on the date such
Change in Control occurs (minus, in the case of Options, the applicable exercise
price per share) or, (ii) converted into options or units, as

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      applicable, in respect of the common stock of the acquiring entity (in a
merger or otherwise) on the basis of the relative values of such stock and the
Shares at the time of the Change in Control; provided that subclause (ii) shall
only be applicable if the common stock of the acquiring entity is publicly
traded on an established securities market on the date on which such Change in
Control is effected.     (c)   Upon the occurrence of a Change in Control, the
performance measures applicable with respect to the Performance Share Units will
be applied as though the Change in Control were the end of the measurement
period and the units so earned will vest and be payable in a manner consistent
with the vesting schedule described in Section 4(c) (e.g., 100% at a Compound
Annual TSR of 15%, 200% at a Compound Annual TSR of 30%, 300% at a Compound
Annual TSR of 45%), but based on the Compound Annual TSR determined through the
date that the Change in Control occurs. Any Performance Shares Units deemed
earned in accordance with the immediately preceding sentence shall be payable,
in the Company’s discretion, in either cash or in shares of the acquiring entity
as soon as practicable (but not later than sixty (60) days) following the
occurrence of a Change of Control. Notwithstanding the above, the Performance
Share Units shall be payable in shares of the acquiring entity only if the
common stock of the acquiring entity is publicly traded on an established
securities market on the date on which such shares are payable.

10.   Section 409A. If any payments or benefits due to Executive hereunder would
cause the application of an accelerated or additional tax under Section 409A of
the Internal Revenue Code of 1986, as amended (“Section 409A”), such payments or
benefits shall be restructured in a manner which does not cause such an
accelerated or additional tax. Without limiting the foregoing and
notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under
Section 409A amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period
immediately following Executive’s separation from service shall instead be paid
on the first business day after the date that is six months following
Executive’s termination date (or death, if earlier), with interest from the date
such amounts would otherwise have been paid at the short-term applicable federal
rate, compounded semi-annually, as determined under Section 1274 of the Internal
Revenue Code of 1986, as amended, for the month in which .payment would have
been made but for the delay in payment required to avoid the imposition of an
additional rate of tax on Executive under Section 409A.   11.   Records and
Confidential Data.

  (a)   Executive acknowledges that in connection with the performance of his
duties during the Employment Term, the Company will make available to Executive,
or Executive will have access to, certain Confidential Information (as defined
below) of the Company and its affiliates. Executive acknowledges and agrees that
any and all Confidential Information learned or obtained by Executive during the
course of his employment by the Company or otherwise, whether developed by

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      Executive alone or in conjunction with others or otherwise, shall be and
is the property of the Company and its affiliates.     (b)   Except to the
extent required to be disclosed at law or pursuant to judicial process or
administrative subponea, the Confidential Information will be kept confidential
by Executive, will not be used in any manner which is detrimental to the
Company, will not be used other than in connection with Executive’s discharge of
his duties hereunder, and will be safeguarded by Executive from unauthorized
disclosure.     (c)   Following the termination of Executive’s employment
hereunder, as soon as possible after the Company’s written request, Executive
will return to the Company all written Confidential Information which has been
provided to Executive and Executive will destroy all copies of any analyses,
compilations, studies or other documents prepared by Executive or for
Executive’s use containing or reflecting any Confidential Information. Within
five (5) business days of the receipt of such request by Executive, he shall,
upon written request of the Company, deliver to the Company a document
certifying that such written Confidential Information has been returned or
destroyed in accordance with this Section 11(c).     (d)   For the purposes of
this Agreement, “Confidential Information” shall mean all confidential and
proprietary information of the Company and its affiliates, including, without
limitation, information derived from reports, investigations, experiments,
research, work in progress, drawing, designs, plans, proposals, codes, marketing
and sales programs, client lists, client mailing lists, supplier lists,
financial projections, cost summaries, pricing formula, marketing studies
relating to prospective business opportunities and all other concepts, ideas,
materials, or information prepared or performed for or by the Company or its
affiliates. For purposes of this Agreement, the Confidential Information shall
not include and Executive’s obligation’s shall not extend to (i) information
which is generally available to the public, (ii) information obtained by
Executive other than pursuant to or in connection with this employment and
(iii) information which is required to be disclosed by law or legal process.    
(e)   Executive’s obligations under this Section 11 shall survive the
termination of the Employment Term.

12.   Covenant Not to Solicit and Not to Compete.

  (a)   Covenant Not to Solicit. To protect the Confidential Information and
other trade secrets of the Company, Executive agrees, during the term of this
Agreement and for a period of twelve (12) months after Executive’s cessation of
employment with the Company, not to solicit or participate in or assist in any
way in the solicitation of any employees of the Company. For purposes of this
covenant, “solicit” or “solicitation” means directly or indirectly influencing
or attempting to influence employees of the Company to become employed with any
other person,

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      partnership, firm, corporation or other entity. Executive agrees that the
covenants contained in this Section 12(a) are reasonable and desirable to
protect the Confidential Information of the Company, provided, that solicitation
through general advertising or the provision of references shall not constitute
a breach of such obligations.     (b)   Covenant Not to Compete. To protect the
Confidential Information and other trade secrets of the Company, Executive
agrees, during the term of this Agreement and for a period of twelve (12) months
after Executive’s cessation of employment with the Company during the Employment
Term pursuant to Section 6(c) or 6(f) hereof, not to engage in Prohibited
Activities (as defined below). For the purposes of this Agreement, the term
“Prohibited Activities” means directly or indirectly engaging as an owner,
employee, consultant or agent of any entity that develops, manufactures, markets
and/or distributes (directly or indirectly) prescription or non-prescription
pharmaceuticals or medical devices for treatments in the fields of neurology,
dermatology, oncology or hepatology; provided, that Prohibited Activities shall
not mean Executive’s investment in securities of a publicly-traded company equal
to less than five (5%) percent of such company’s outstanding voting securities.
Executive agrees that the covenants contained in this Section 12(b) are
reasonable and desirable to protect the Confidential Information of the Company.
    (c)   It is the intent and desire of Executive and the Company that the
restrictive provisions of this Section 12 be enforced to the fullest extent
permissible under the laws and public policies as applied in each jurisdiction
in which enforcement is sought. If any particular provision of this Section 12
shall be determined to be invalid or unenforceable, such covenant shall be
amended, without any action on the part of either party hereto, to delete
therefrom the portion so determined to be invalid or unenforceable, such
deletion to apply only with respect to the operation of such covenant in the
particular jurisdiction in which such adjudication is made.     (d)  
Executive’s obligations under this Section 12 shall survive the termination of
the Employment Term.

13.   Remedies for Breach of Obligations under Sections 11 or 12 hereof.
Executive acknowledges that the Company will suffer irreparable injury, not
readily susceptible of valuation in monetary damages, if Executive breaches his
obligations under Sections 11 or 12 hereof. Accordingly, Executive agrees that
the Company will be entitled, in addition to any other available remedies, to
obtain injunctive relief against any breach or prospective breach by Executive
of his obligations under Sections 11 or 12 hereof in any Federal or state court
sitting in the State of New Jersey, or, at the Company’s election, in any other
state in which Executive maintains his principal residence or his principal
place of business as provided for in Section 14(h) below. Executive hereby
submits to the non-exclusive jurisdiction of all those courts for the purposes
of any actions or proceedings instituted by the Company to obtain that
injunctive relief, and Executive agrees that process in any or all of those
actions or proceedings may be served by registered mail,

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    addressed to the last address provided by Executive to the Company, or in
any other manner authorized by law.   14.   Miscellaneous.

  (a)   Successors and Assigns.

  (i)   This Agreement shall be binding upon and shall inure to the benefit of
the Company, its successors and permitted assigns and the Company shall require
any successor or assign to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform if no such succession or assignment had taken place. The Company may not
assign or delegate any rights or obligations hereunder except to a successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company. The term
“the Company” as used herein shall mean a corporation or other entity acquiring
all or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.     (ii)   Neither this
Agreement nor any right or interest hereunder shall be assignable or
transferable by Executive, his beneficiaries or legal representatives, except by
will or by the, laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive’s legal personal representatives.

  (b)   Fees and Expenses. The Company shall pay all reasonable legal and
financial advisory fees and related expenses, up to a maximum amount of $40,000,
incurred by Executive in connection with the negotiation of this Agreement and
related employment arrangements. Executive acknowledges that he has had the
opportunity to consult with legal counsel of his choice in connection with the
drafting, negotiation and execution of this Agreement and related employment
arrangements.     (c)   Notice. For the purposes of this Agreement, notices and
all other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by Certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the General Counsel of the Company with a copy to the Chairman of
the Compensation Committee of the Board. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
shall be effective only upon receipt.

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  (d)   Indemnity Agreement. Executive shall be indemnified by the Company as
provided in Company’s by-laws and Certificate of Incorporation. The obligations
under this paragraph shall survive any termination of the Employment Term.    
(e)   Withholding. The Company shall be entitled to withhold the amount, if any,
of all taxes of any applicable jurisdiction required to be withheld by an
employer with respect to any amount paid to Executive hereunder. The Company, in
its sole and absolute discretion, shall make all determinations as to whether it
is obligated to withhold any taxes hereunder and the amount hereof.     (f)  
Release of Claims. The termination benefits described in Sections 8(c) and 8(d)
of this Agreement shall be conditioned on Executive delivering to the Company,
and failing to revoke, a signed release of claims in the form of Exhibit A
hereto within twenty-one days following Executive’s termination date; provided,
however, that Executive shall not be required to release any rights Executive
may have to be indemnified by the Company under Section 14(d) of this Agreement.
    (g)   Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.     (h)   Arbitration. If any legally actionable dispute arises under
this Agreement or otherwise which cannot be resolved by mutual discussion
between the parties, then the Company and Executive each agree to resolve that
dispute by binding arbitration before an arbitrator experienced in employment
law. Said arbitration will be conducted in accordance with the rules applicable
to employment disputes of the Judicial Arbitration and Mediation Services
(“JAMS”) and the law applicable to the claim. The parties shall have 30 calendar
days after notice of such arbitration has been given to attempt to agree on the
selection of an arbitrator from JAMS. In the event the parties are unable to
agree in such time, JAMS will provide a list of five (5) available arbitrators
and an arbitrator will be selected from such five-member panel provided by JAMS
by the parties alternately striking out one name of a potential arbitrator until
only one name remains. The party entitled to strike an arbitrator first shall be
selected by a toss of a coin. The parties agree that this agreement to arbitrate
includes any such disputes that the Company may have against Executive, or
Executive may have against the Company and/or its related entities and/or
employees, arising out of or relating to this Agreement, or Executive’s
employment or Executive’s termination including, but not limited to, any claims
of discrimination or harassment in violation of applicable law and any other
aspect of Executive’s compensation, employment, or Executive’s termination. The
parties further agree that arbitration as provided for

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      in this Section 14(h) is the exclusive and binding remedy for any such
dispute and will be used instead of any court action, which is hereby expressly
waived, except for any request by either party for temporary or preliminary
injunctive relief pending arbitration in accordance with applicable law or for
breaches by Executive of Executive’s obligations under Sections 11 or 12 above
or an administrative claim with an administrative agency. The parties agree that
the arbitration provided herein shall be conducted in or around Morristown, New
Jersey unless otherwise mutually agreed or unless Executive’s primary place of
employment is a different location. The Company shall pay the cost of any
arbitration brought pursuant to this paragraph, excluding, however, the cost of
representation of Executive unless such cost is awarded in accordance with law
or otherwise awarded by the arbitrators. Except as otherwise provided above, the
arbitrator may award legal fees to the prevailing party in his sole discretion,
provided that the percentage of fees so awarded shall not exceed 1% of the net
worth of the paying party (i.e., the Company or Executive).     (i)   Effect of
Other Law. Anything herein to the contrary notwithstanding, the terms of this
Agreement shall be modified to the extent required to meet the provisions of the
Sarbanes-Oxley Act of 2002, Section 409A of the Code, or other federal law
applicable to the employment arrangements between the Executive and the Company.
Any delay in providing benefits or payments, any failure to provide a benefit or
payment, or any repayment of compensation that is required under the preceding
sentence shall not in and of itself constitute a breach of this Agreement,
provided, however, that the Company shall provide economically equivalent
payments or benefits to Executive to the extent permitted by law.     (j)  
Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New Jersey applicable to contracts
executed in and to be performed entirely within such State, without giving
effect to the conflict of law principles thereof.     (k)   No Conflicts.
Executive represents and warrants to the Company that he is not a party to or
otherwise bound by any agreement or arrangement (including, without limitation,
any license, covenant, or commitment of any nature), or subject to any judgment,
decree, or order of any court or administrative agency, that would conflict with
or will be in conflict with or in any way preclude, limit or inhibit Executive’s
ability to execute this Agreement or to carry out his duties and
responsibilities hereunder.     (l)   Severability. The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.     (m)   Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes all prior agreements,
if any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Executive has executed this Agreement as of the
day and year first above written.

            VALEANT PHARMACEUTICALS INTERNATIONAL.
      By:   /s/ Norma Provencio       Title: Chair — Compensation Committee
Board of Directors            

            EXECUTIVE
      By:   /s/ J. Michael Pearson       Name: J. Michael Pearson          

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EXHIBIT A
FORM OF RELEASE AGREEMENT
THIS RELEASE AGREEMENT (the “Release”) is made as of this ______day of
_________, _________, by and between [            ] (“Executive”) and Valeant
Pharmaceuticals International (the “Company”).
FOR AND IN CONSIDERATION of the payments and benefits provided in the Employment
Agreement between the Executive and the Company dated February 1, 2008 (the
“Employment Agreement”), Executive, for himself, his successors and assigns,
executors and administrators, now and forever hereby releases and discharges the
Company, together with all of its past and present parents, subsidiaries, and
affiliates, together with each of their officers, directors, stockholders,
partners, employees, agents, representatives and attorneys, and each of their
subsidiaries, affiliates, estates, predecessors, successors, and assigns
(hereinafter collectively referred to as the “Releasees”) from any and all
rights, claims, charges, actions, causes of action, complaints, sums of money,
suits, debts, covenants, contracts, agreements, promises, obligations, damages,
demands or liabilities of every kind whatsoever, in law or in equity, whether
known or unknown, suspected or unsuspected, which Executive or Executive’s
executors, administrators, successors or assigns ever had, now has or may
hereafter claim to have by reason of any matter, cause or thing whatsoever;
arising from the beginning of time up to the date of the Release: (i) relating
in any way to Executive’s employment relationship with the Company or any of the
Releasees, or the termination of Executive’s employment relationship with the
Company or any of the Releasees or relating to his status as a holder of the
Capital Interest; (ii) arising under or relating to the Employment Agreement;
(iii) arising under any federal, local or state statute or regulation,
including, without limitation, the Age Discrimination in Employment Act of 1967,
as amended by the Older Workers Benefit Protection Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974, and/or the New Jersey Law against
Discrimination, each as amended; (iv) relating to wrongful employment
termination or breach of contract; or (v) arising under or relating to any
policy, agreement, understanding or promise, written or oral, formal or
informal, between the Company and any of the Releasees and Executive; provided,
however, that notwithstanding the foregoing, nothing contained in the Release
shall in any way diminish or impair: (a) any rights Executive may have, from and
after the date the Release is executed, under the Section 8(c)[Section 8(d)] of
the Employment Agreement, (b) any rights to indemnification that may exist from
time to time under the Company’s certificate of incorporation or bylaws, or
Delaware law; (c) any rights Executive may have to vested benefits under
employee benefit plans or incentive compensation plans of the Company;
(d) Executive’s ability to bring appropriate proceedings to enforce the Release,
or (e) any rights or claims Executive may have that cannot be waived under
applicable law (collectively, the “Excluded Claims”). Executive further
acknowledges and agrees that, except with respect to Excluded Claims, the
Company and the Releasees have fully satisfied any and all obligations
whatsoever owed to Executive arising out of his employment with the Company or
any of the Releasees, and that no further payments or benefits are owed to
Executive by the Company or any of the Releasees.

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Executive understands and agrees that, except for the Excluded Claims, he has
knowingly relinquished, waived and forever released any and all rights to any
personal recovery in any action or proceeding that may be commenced on
Executive’s behalf arising out of the aforesaid employment relationship or the
termination thereof, including, without limitation, claims for backpay, front
pay, liquidated damages, compensatory damages, general damages, special damages,
punitive damages, exemplary damages, costs, expenses and attorneys’ fees.
Executive acknowledges and agrees that Executive has been advised to consult
with an attorney of Executive’s choosing prior to signing the Release. Executive
understands and agrees that Executive has the right and has been given the
opportunity to review the Release with an attorney of Executive’s choice should
Executive so desire. Executive also agrees that Executive has entered into the
Release freely and voluntarily. Executive further acknowledges and agrees that
Executive has had at least twenty-one (21) calendar days to consider the
Release, although Executive may sign it sooner if Executive wishes. In addition,
once Executive has signed the Release, Executive shall have seven (7) additional
days from the date of execution to revoke Executive’s consent and may do so by
writing to: ___. The Release shall not be effective, and no payments shall be
due hereunder, until the eighth (8th) day after Executive shall have executed
the Release and returned it to the Company, assuming that Executive had not
revoked Executive’s consent to the Release prior to such date.
Executive agrees never to seek reemployment or future employment with the
Company or any of the other Releasees.
It is understood and agreed by Executive that the payment made to him is not to
be construed as an admission of any liability whatsoever on the part of the
Company or any of the other Releasees, by whom liability is expressly denied.
The Release is executed by Executive voluntarily and is not based upon any
representations or statements of any kind made by the Company or any of the
other Releasees as to the merits, legal liabilities or value of his claims.
Executive further acknowledges that he has had a full and reasonable opportunity
to consider the Release and that he has not been pressured or in any way coerced
into executing the Release.
The exclusive venue for any disputes arising hereunder shall be the state or
federal courts located in the State of New Jersey, and each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each of the
parties hereto also agrees that any final and unappealable judgment against a
party hereto in connection with any action, suit or other proceeding may be
enforced in any court of competent jurisdiction, either within or outside of the
United States. A certified or exemplified copy of such award or judgment shall
be conclusive evidence of the fact and amount of such award or judgment.
The Release and the rights and obligations of the parties hereto shall be
governed and construed in accordance with the laws of the State of New Jersey.
If any provision hereof is unenforceable or is held to be unenforceable, such
provision shall be fully severable, and this document and its terms shall be
construed and enforced as if such unenforceable provision had never comprised a
part hereof, the remaining provisions hereof shall remain in full force and
effect, and the court

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construing the provisions shall add as a part hereof a provision as similar in
terms and effect to such unenforceable provision as may be enforceable, in lieu
of the unenforceable provision.
The Release shall inure to the benefit of and be binding upon the Company and
its successors and assigns.
IN WITNESS WHEREOF, Executive and the Company have executed the Release as of
the date and year first written above.

     

 
 
   
 
  VALEANT PHARMACEUTICALS INTERNATIONAL

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