Exhibit 10.1
SEPARATION AGREEMENT
               SEPARATION AGREEMENT dated the 20th day of December, 2010 (the
“Effective Date”), between VALEANT PHARMACEUTICALS INTERNATIONAL, INC. (the
“Corporation”), VALEANT PHARMACEUTICALS INTERNATIONAL, INC. (“Valeant”) and
Margaret Mulligan (“Ms. Mulligan”).
               WHEREAS Ms. Mulligan is serving as Executive Vice President,
Chief Financial Officer of Valeant, pursuant to an Agreement entered into on
November 11, 2010 (the “2010 Agreement”);
               WHEREAS the parties have agreed that Ms. Mulligan’ employment
with Valeant shall terminate, and she will cease to serve as Executive Vice
President, Chief Financial Officer of Valeant, effective as of the Termination
Date;
               WHEREAS, concurrently with the execution of this Separation
Agreement, Ms. Mulligan will be executing a resignation letter, resigning from
her positions as an officer of Valeant and its subsidiaries;
               WHEREAS as a result of her ceasing to serve as Executive Vice
President, Chief Financial Officer of Valeant, Ms. Mulligan will be entitled to
receive certain payments and benefits provided for in the 2010 Agreement;
               WHEREAS Valeant and Ms. Mulligan desire to enter into this
Separation Agreement (this “Agreement”) to set forth the parties’ agreement as
to Ms. Mulligan’ entitlements and continuing obligations as a consequence of 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:

1.   Capitalized Terms. Unless otherwise defined herein, capitalized terms shall
have the meaning set forth in the 2010 Agreement.   2.   Termination Date. The
parties agree that the Termination Date shall be December 20, 2010; that
Ms. Mulligan’ employment as Executive Vice President, Chief Executive Officer of
Valeant shall terminate as of the Termination Date; and that Ms. Mulligan shall
cease to have any obligations under the 2010 Agreement as of the Termination
Date.   3.   Renumeration Upon Termination. The parties acknowledge that as a
result of Ms. Mulligan’ termination of employment with Valeant, she shall be
entitled to the following:

  (a)   any accrued but unpaid salary or vacation pay;

 

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  (b)   subject to Ms. Mulligan executing the general release of claims attached
hereto as Annex A (the “Release”), and any applicable revocation period
expiring, within 60 days following the date hereof, a lump amount equal to
US$1,784,787 (representing Ms. Mulligan’s 2010 annual bonus and all severance
amounts payable to Ms. Mulligan), such amount to be payable within ten days
following the expiration of the revocation period with respect to the executed
Release;     (c)   subject to Ms. Mulligan executing the Release, and any
applicable revocation period expiring,(i) Ms. Mulligan’s medical, dental and
vision care benefits will continue until the earlier of (A) 24 months following
the Termination Date, and (B) such time as Ms. Mulligan is eligible to receive
medical, dental and vision benefits under a similar plan through a subsequent
employer; (ii) Ms. Mulligan’s group life insurance coverage will continue for
thirty (30) days following the Termination Date to provide the opportunity for
transfer to individual coverage, following which the group life insurance
coverage will expire; provided that, benefits coverage is subject to all
exclusions and eligibility requirements as set out in applicable plans and
policies and short-term and long-term disability coverage will cease on the
Termination Date;     (d)   subject to Ms. Mulligan executing the Release, and
any applicable revocation period expiring, within 60 days following the date
hereof, outplacement services through one or more outside firms of
Ms. Mulligan’s choosing up to an aggregate of $20,000, which services shall
extend until the earlier of (i) 12 months following the Termination Date or
(ii) the date that Ms. Mulligan secures full time employment; and     (e)   any
unvested equity compensation awards held by the Ms. Mulligan as of the
Termination Date, other than those equity awards granted pursuant to the 2010
Agreement, shall automatically accelerate and become one hundred percent (100%)
vested and, as applicable, exercisable, as of the Termination Date (subject to
blackouts under the applicable Company policy).

4.   Covenant Not to Solicit.

  (a)   To protect the confidential information and other trade secrets of
Valeant and its affiliates, Ms. Mulligan hereby agrees, that for a period of
twelve (12) months following the Termination Date, not to solicit, attempt to
solicit, or participate in or assist in any way in the solicitation or attempted
solicitation of any employees or independent contractors of Valeant or any its
affiliates. For purposes of this covenant, “solicit” or “solicitation” means
directly or indirectly influencing or attempting to influence employees of
Valeant or any of its affiliates to become employed with any other person,
partnership, firm, corporation or other entity. Ms. Mulligan agrees that the
covenants contained in this paragraph are reasonable and

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      necessary to protect the confidential information and other trade secrets
of Valeant and its affiliates, provided, that solicitation through general
advertising or the provision of references shall not constitute a breach of such
obligations.     (b)   It is the intent and desire of Ms. Mulligan and Valeant
(and its affiliates) that the restrictive provisions in this subsection 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 in this subsection 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.
Ms. Mulligan acknowledges that Valeant or its affiliates will suffer irreparable
injury, not readily susceptible of valuation in monetary damages, if
Ms. Mulligan breaches her obligations under this subsection. Accordingly,
Ms. Mulligan agree that Valeant and its affiliates will be entitled, in addition
to any other available remedies, to obtain injunctive relief against any breach
or prospective breach by Ms. Mulligan of her obligations under this subsection
in any Federal or state court sitting in the State of New Jersey, or, at
Valeant’s (or its affiliate’s) election, in any other state or jurisdiction in
which Ms. Mulligan maintains her principal residence or her principal place of
business. Ms. Mulligan agrees that Valeant or its affiliates may seek the
remedies described in the preceding sentence notwithstanding any arbitration or
mediation agreement that Ms. Mulligan may enter into with Valeant or any of its
affiliates. Ms. Mulligan hereby submits to the non-exclusive jurisdiction of all
those courts for the purposes of any actions or proceedings instituted by
Valeant or its affiliates to obtain that injunctive relief, and Ms. Mulligan
agrees that process in any or all of those actions or proceedings may be served
by registered mail, addressed to the last address provided by Ms. Mulligan to
Valeant, or in any other manner authorized by law.

5.   Other Company Policies. Ms. Mulligan agrees that she shall continue to be
bound to the terms of the Confidentiality Agreement and Schedule, the Standards
of Business Conduct, and any other policies of Valeant and its affiliates that
survive termination of employment.   6.   Indemnification. Ms. Mulligan shall be
indemnified by Valeant as provided in its by-laws or, if applicable, pursuant to
any indemnification agreement Ms. Mulligan may have with Valeant as of the date
hereof.   7.   Section 409A. 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

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    nonqualified deferred compensation under Section 409A, each payment of
compensation under this Agreement shall be treated as a separate payment of
compensation.

8.   This Agreement sets forth the entire agreement between Ms. Mulligan and
Valeant concerning the resignation of Ms. Mulligan’s employment, and supersedes
any other written or oral promises concerning the subject matter of this
Agreement. For the avoidance of doubt, all Company equity awards granted to
Ms. Mulligan pursuant to the 2010 Agreement shall be forfeited, without
consideration, on the Termination Date. No waiver or amendment of this Agreement
will be effective unless it is in writing, refers to this Agreement, and is
signed by the Chief Executive Officer of Valeant.

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

            VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
      By:   /s/ Mark Durham                                 /s/ Margaret
Mulligan         MARGARET MULLIGAN         

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ANNEX A
General Waiver & Release
This Legal Release (“Release”) dated as of the last date executed below (the
“Release Date”) is between Valeant Pharmaceuticals International, Inc. (the
“Company”) and Margaret Mulligan (“Employee”).
     Employee Release. Employee, on behalf of himself, and Employee’s heirs,
executors, administrators, and/or assigns, does hereby RELEASE AND FOREVER
DISCHARGE the Company, 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, 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, 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 except as expressly
set forth herein. 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 the Company;
          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 New Jersey Law Against
Discrimination and Conscientious Employee Protection Act, the California Fair
Employment and Housing Act and the California Family Rights Act), the

 

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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.
     In order to waive and release any and all claims against the Releasees,
whether or not now known, Employee expressly waives and releases all rights
under California Civil Code section 1542 (or under any similar statute in any
other jurisdiction) which states (language in parentheses added):
A general release does not extend to claims which the creditor (e.g., Employee)
does not know or suspect to exist in her favor at the time of executing the
release, which, if known by her, must have materially affected her settlement
with the debtor (e.g., the Company).
     The only claims that are not being waived and released by Employee
hereunder are 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 Company-sponsored group
health benefit plans, at Employee’s full expense, 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 Separation Date
pursuant to the terms of a Company-sponsored benefit plan governed by the United
States federal law known as “ERISA;”
          d. stock and/or vested option shares pursuant to the written terms and
conditions of Employee’s existing stock option or other equity award grants and
agreements, existing as of the Termination Date;
          e. 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;
          f. any claims, causes of actions, suits, lawsuits, debts, or demands
whatsoever arising out of or relating to the Employee’s right to enforce the
terms of this Release and the Separation Agreement dated December 20, 2010; and

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          g. any wrongful act or omission occurring after the date Employee
signs this Release.
     Nothing in this Release, prevents or prohibits Employee from filing a claim
with a government agency, such as the U.S. Equal Employment Opportunity
Commission, that is responsible for enforcing a law. However, Employee
understands that, because Employee is waiving and releasing all claims “for
monetary damages and any other forms of personal relief” through the date upon
which Employee signs this Release, Employee may not recover any monetary relief
from such a claim and may only seek and receive non-personal forms of relief
through any such claim.
     Confidentiality of this Release. Employee agrees, covenants and promises
that Employee has not communicated or disclosed, and will not hereafter
communicate or disclose, the terms of this Release, to any persons with the
exception of: (1) members of Employee’s immediate family, Employee’s attorneys,
accountants, tax, or financial advisors, each of whom shall be informed of this
confidentiality obligation and shall agree to be bound by its terms; (2) to the
Internal Revenue Service or state or local taxing authority; (3) as is expressly
required or protected by law; or (4) in any action to challenge or enforce the
terms of this Release provided that such disclosure is protected from public
disclosure by an appropriate confidentiality order to the maximum extent
permitted by applicable authority. Employee agrees to be liable for any breach
of this Paragraph by the individuals identified in clause (1) above.
     Nondisparagement. Employee agrees not to make written or oral statements
about the Company or the Releasees that are negative or disparaging.
Notwithstanding the forgoing, nothing in this Agreement shall preclude Employee
from communicating or testifying truthfully (i) to the extent required or
protected by law, (ii) to any federal, state, provincial or local governmental
agency, or (iii) in response to a subpoena to testify issued by a court of
competent jurisdiction.
     No Admission. Nothing about the fact or content of this Release shall
considered to be or treated by Employee or the Company as an admission of any
wrongdoing, liability or violation of law by Employee or by any Releasee.
     Consideration & Revocation Periods; Effective Date. Employee acknowledges
that (a) the Company has advised her 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 (including, but not
limited to, a general release and waiver by the Company and mutual
nondisparagement covenant, to which she would not be entitled in the absence of
signing this Release). Employee has sixty (60) calendar days to consider this
Release, although she may sign it sooner.
     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 the Company by hand-delivery or by
facsimile or e-mail transmission using the street, facsimile or e-mail address
for the Company stated below.

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     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 the
Company, and Employee did not revoke the Release (“Effective Date”).
     Delivery to the Company. Employee should return this Release, signed by
Employee (and any notice of revocation, if applicable) to:
Valeant Pharmaceuticals International, Inc.
7150 Mississauga Road
Mississauga, Ontario
L5N 8M5
Attn: Mark Durham, SVP, Human Resources
     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 the
Company.
     Changes to Release. No changes to this Release can be effective except by
another written agreement signed by Employee and by the Company’s Senior Vice
President of Human Resources.
     Complete Agreement. Except for the Separation Agreement entered into with
the Employee, this Release, as of the Effective Date, cancels, supersedes and
replaces any and all prior agreements (written, oral or implied-in-fact or
in-law) between Employee and the Company regarding all of the subjects covered
by this Release. This Release is the full, complete and exclusive agreement
between Employee and the Company regarding all of the subjects covered by this
Release, and neither the Employee nor the Company is relying on any
representation or promise that is not expressly stated in this Release.

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Dated:
  December 20, 2010 By:  /s/ Mark Durham    
 
           
 
      Mark Durham, SVP, Human Resources    

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 THE COMPANY HAS ADVISED ME TO UNDERTAKE SUCH
CONSULTATION BEFORE SIGNING THIS RELEASE. I SIGN THIS RELEASE FREELY AND
VOLUNTARILY, WITHOUT DURESS OR COERCION.

             
Dated:
  December 20, 2010   /s/ Margaret Mulligan    
 
           
 
      Margaret Mulligan    

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