exv4w6






Exhibit 4.6








	Special Dividend Reinvestment Plan





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	Summary
	 	 	1	 
	Questions And Answers
	 	 	2	 
	Special Dividend Reinvestment Plan
	 	 	7	 
	1. The Plan
	 	 	7	 
	2. Eligibility
	 	 	7	 
	3. How the Plan Works
	 	 	8	 
	4. How to Enroll
	 	 	8	 
	5. Enrollment Deadline
	 	 	10	 
	6. Certain Limitations
	 	 	10	 
	7. Delivery of Common Shares under the Plan
	 	 	10	 
	8. Revocation of Participation
	 	 	11	 
	9. Death or Incompetence of a Participant
	 	 	11	 
	10. Amendment, Suspension or Termination of the Plan
	 	 	11	 
	11. Notices
	 	 	12	 
	12. Income Tax Considerations Relating to the Plan
	 	 	13	 
	13. Administration
	 	 	19	 
	14. Liability of the Company and the Agent
	 	 	19	 
	15. Governing Law
	 	 	20	 
	16. Effective Date
	 	 	20	 






-i-









 










Valeant Pharmaceuticals International, Inc.



Special Dividend Reinvestment Plan



Summary


The following describes the Special Dividend Reinvestment Plan (the “Plan”) of Valeant
Pharmaceuticals International, Inc. (the “Company”) established in connection with the one-time
special dividend of US$1.00 per common share (the “Special Dividend”), declared on November 4,
2010, that shareholders of record as of the close of business on November 15, 2010 (the “Record
Date”) will be entitled to receive on December 22, 2010. The Plan, which became effective on
November 8, 2010, enables holders of the Company’s common shares (“Common Shares”) who are
residents of Canada or the United States to acquire additional Common Shares by reinvesting the
Special Dividend. The Plan has been created solely for use in connection with the Special Dividend
and will only be used for this one-time purpose. Following the payment of the Special Dividend,
the Plan will automatically terminate. For further details, please read the full text of the Plan,
as well as the “Questions and Answers”. Shareholders should consult their tax advisors about the
income tax consequences which will result from their participation in the Plan.



In connection with the Company’s recently declared Special Dividend, you have the option of either
receiving the Special Dividend in cash or automatically reinvesting all of your Special Dividend in
Common Shares, each net of any applicable withholding tax.



Electing to reinvest the Special Dividend in Common Shares under the Plan is a convenient and
cost-effective way to increase your investment in the Company, offering you the convenience of
having your Special Dividend automatically reinvested with no brokerage commissions or service
charges.







1









 













Valeant Pharmaceuticals International, Inc.



Special Dividend Reinvestment Plan



Questions And Answers



What is the Dividend Reinvestment Plan?



The Special Dividend Reinvestment Plan (the “Plan”) of Valeant Pharmaceuticals International, Inc.
(the “Company”) has been established in connection with the one-time special dividend of US$1.00
per common share (the “Special Dividend”), declared on November 4, 2010, that shareholders of
record as of the close of business on November 15, 2010 (the “Record Date”) will be entitled to
receive on December 22, 2010 (the “Special Dividend Payment Date”). The Plan, which became
effective on November 8, 2010, enables holders of the Company’s common shares (“Common Shares”) who
are residents of Canada or the United States to acquire additional Common Shares by reinvesting the
Special Dividend. Such eligible shareholders may receive the Special Dividend in cash or elect to
reinvest the Special Dividend in Common Shares by enrolling in the Plan, each net of any applicable
withholding tax.



The Plan has been created solely for use in connection with the Special Dividend and will only be
used for this one-time purpose. Following the payment of the Special Dividend, the Plan will
automatically terminate.




What are the advantages of the Plan?



Electing to reinvest the Special Dividend in Common Shares under the Plan is a convenient and
cost-effective way to increase your investment in the Company.



As Common Shares acquired under the Plan will be newly issued directly from the treasury of the
Company, by electing to reinvest the Special Dividend in Common Shares pursuant to the Plan,
participants in the Plan (“Participants”) will not pay any brokerage commissions or service charges. All administrative costs of the Plan will be borne by the Company.




Who is eligible to participate?



Any registered or beneficial holder of Common Shares as of the Record Date who is a resident of
Canada or the United States may participate in the Plan. Shareholders resident outside of Canada
and the United States are not eligible to participate in the Plan and will be entitled to receive
the Special Dividend in cash (net of any applicable withholding tax) on the Special Dividend
Payment Date.




How does an eligible shareholder elect to reinvest the Special Dividend in Common Shares under the Plan?



If an eligible registered shareholder elects to reinvest the Special Dividend in Common Shares, he,
she or it may enroll in the Plan by completing the enclosed enrollment form (the “Enrollment






2









 







Form”) and returning it to CIBC Mellon Trust Company, the administrator of the Plan (the “Agent”)
via facsimile or by mail in the manner provided for in Section 11 of the Plan by the Enrollment
Deadline (as defined below).



A shareholder who is an eligible beneficial owner of Common Shares should contact his, her or its
broker, investment dealer, financial institution or other nominee who holds his, her or its Common
Shares to provide instructions regarding an election to reinvest the Special Dividend in Common
Shares through participation in the Plan and to inquire about any applicable deadlines that the
nominee may impose or be subject to and to confirm what fees, if any, the nominee may charge to
enroll such shareholder’s Common Shares in the Plan on his, her or its behalf or whether the
nominee’s policies might result in any costs otherwise becoming payable by the shareholder. Such
fee or fees will not be paid for by the Company or the Agent.



An eligible beneficial owner whose Common Shares are registered in the name of CDS Clearing and
Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name other than the
eligible beneficial owner’s own name may participate in the Plan by: (i) prior to the Record Date,
having those Common Shares transferred into his, her or its name directly and then making the
election to reinvest the Special Dividend in our Common Shares by enrolling such Common Shares
under the Plan directly, or (ii) making appropriate arrangements with the broker, investment
dealer, financial institution or other nominee who holds the eligible beneficial owner’s Common
Shares to make the election to reinvest the Special Dividend in Common Shares by enrolling in the
Plan on the eligible beneficial owner’s behalf.




What is the deadline for enrollment in the Plan?



A completed Enrollment Form must be received by the Agent no later than 5:00 p.m. (Toronto time) on
December 8, 2010 (the “Enrollment Deadline”) in order for the Special Dividend to be reinvested
under the Plan. If the completed Enrollment Form is not received by the Agent by the Enrollment
Deadline, or the participation is properly revoked in accordance with Section 8 of the Plan, the
Special Dividend will be paid in cash (net of any applicable
withholding tax).



Both the Company and the Agent shall have the right to reject any request regarding enrollment in
or revocation of participation in the Plan if such request is not received in proper form. Any such
request will be deemed to be invalid until any irregularities have been resolved to the Company’s
satisfaction and/or the Agent’s satisfaction prior to the Enrollment Deadline. Neither the Company
nor the Agent is under any obligation to notify any shareholder of an invalid request.




Will it be possible for Participants to receive part of their Special Dividend in cash and have the remainder reinvested?



No. Shareholders may only elect to reinvest 100% of the Special Dividend payable on all Common
Shares registered in their name (net of any applicable withholding tax). Partial reinvestment of
the Special Dividend is not permitted under the Plan. An Enrollment Form requesting partial
reinvestment will be deemed invalid.







3









 








Where will the Common Shares under the Plan be acquired?



The Common Shares acquired by the Agent will be Common Shares newly issued directly by the Company
from treasury.




How will new Common Shares be acquired for Participants?



If a shareholder elects to reinvest the Special Dividend in Common Shares under the Plan, the
Company will pay to the Agent the Special Dividend on the Common Shares registered in the name of
such Participant. The Agent will apply these funds (net of any applicable withholding tax) to
acquire Common Shares newly issued directly from the treasury of the Company.




How will the number of Common Shares acquired by electing to reinvest the Special Dividend under
the Plan be determined?



The number of Common Shares acquired on behalf of a Participant will be equal to the Special
Dividend (net of any applicable withholding tax) payable on such Common Shares owned by such
Participant divided by the Market Price (as defined below). The price of the Common Shares acquired
from the treasury of the Company by the Agent with the reinvested Special Dividend under the Plan
will be the volume weighted average price at which board lots of Common Shares have traded on the
New York Stock Exchange during the five trading days immediately following the Enrollment Deadline
on which at least one board lot of Common Shares has traded, as reported by the NYSE (“Market
Price”).



Fractional Common Shares will not be issued and Participants will receive a cash payment in lieu of
any fractional Common Shares based on the Market Price of the Common Shares purchased under Plan.




Will certificates be issued for the new Common Shares?



On or about the Special Dividend Payment Date, Participants will receive from the Agent, a share
certificate for the number of whole Common Shares acquired under the Plan on the Special Dividend
Payment Date and a cash payment in lieu of any fractional Common Share based on the Market Price of
the Common Shares purchased under Plan.



Participants will also receive a statement setting out the amount of the Special Dividend
reinvested, the Market Price and the number of Common Shares acquired under the Plan on the Special
Dividend Payment Date with respect to the Special Dividend. In the case of CDS participants and DTC
participants, CDS or DTC, as applicable, will receive a statement on behalf of beneficial owners
participating in the Plan. This statement is a record of the cost of Common Shares acquired under
the Plan and should be retained for tax reporting purposes.




When will the Plan terminate?



The Plan was created solely for the purposes of the Special Dividend and will only be used for this
one-time purpose. The Plan will automatically terminate on December 22, 2010, immediately following
payment of the Special Dividend.







4









 








How does a Participant revoke participation in the Plan?



As indicated above, the Plan itself will automatically terminate following payment of the Special
Dividend.



If a shareholder has enrolled in the Plan but chooses to revoke participation in the Plan, they may
do so by giving written notice to the Agent (or, in the case of eligible beneficial owners, by
making arrangements to revoke participation through their nominee) prior to the Enrollment
Deadline. If participation in the Plan is properly revoked prior to the Enrollment Deadline, you
will receive the Special Dividend (net of any applicable withholding tax) in cash. If the notice of
revocation is received by the Agent after the Enrollment Deadline, the Special Dividend payable on
the Special Dividend Payment Date (net of any applicable withholding tax) will be reinvested in
Common Shares under the Plan. Notice of revocation must be received in writing (or, in the case of
eligible beneficial owners, by making arrangements to revoke participation through their nominee)
and be for 100% of the Special Dividend participating in the Plan. Partial revocation of
participation in the Plan will be deemed invalid. Each notice of revocation must be signed by the
shareholder in whose name such Common Shares are registered. Where the Common Shares are
registered in more than one name, the notice of revocation must be signed by all registered holders
of such Common Shares.




What are the income tax consequences of participation in the Plan?



Dividend reinvestment pursuant to the Plan does not relieve Participants of any liability for taxes
that may be payable on the Special Dividend. A summary explanation of the income tax implications
of participation in the Plan for Canadian and United States residents can be found in section 12 of
the Plan, under the heading “Income Tax Considerations Relating to the Plan.” All Participants
should consult with their own tax advisors to determine the particular income tax consequences that
may result from their participation in the Plan and the subsequent sale by them of Common Shares
acquired pursuant to the Plan.




Where should further inquiries be directed?



Inquiries should be addressed to the Agent as follows:




	 	 	 
	By telephone:

	 	CIBC Mellon Trust Company
	 

	 	416-643-5500
	 

	 	Toll-free throughout North America
	 

	 	1-800-387-0825
	 
	 	 
	By fax:

	 	416-643-5020
	 
	 	 
	By mail:

	 	CIBC Mellon Trust Company
	 

	 	P.O. Box 7010
	 

	 	Adelaide Street Postal Station
	 

	 	Toronto, ON M5C 2W9
	 

	 	Attention: Dividend Reinvestment Dept.
	 
	 	 
	By email:

	 	inquiries@cibcmellon.com






5









 





Inquiries can also be addressed to the Company’s head office as follows:




	 	 	 

	By telephone:

	 	Valeant Pharmaceuticals International, Inc.
	 

	 	905-286-3000
	 
	 	 
	By fax:

	 	Investor Relations
	 

	 	905-286-3034
	 
	 	 
	By mail:

	 	Valeant Pharmaceuticals International, Inc.
	 

	 	7150 Mississauga Road
	 

	 	Mississauga, Ontario
	 

	 	CANADA, L5N 8M5






6









 





 OFFERING CIRCULAR










Valeant Pharmaceuticals International, Inc.




Special Dividend Reinvestment Plan



1. The Plan



The Special Dividend Reinvestment Plan (the “Plan”) of Valeant Pharmaceuticals International, Inc.
(the “Company”) provides a convenient means for eligible holders of common shares of the Company
(“Common Shares”) to acquire additional Common Shares by reinvesting the one-time special dividend
of US$1.00 per common share (the “Special Dividend”), declared on November 4, 2010, that
shareholders of record as of the close of business on November 15, 2010 (the “Record Date”) will be
entitled to receive on December 22, 2010 (the “Special Dividend Payment Date”). The Plan has been
created solely for use in connection with the Special Dividend and will only be used for this
one-time purpose. As further described below, eligible holders of Common Shares who wish to
reinvest the Special Dividend in Common Shares can elect to do so by enrolling in the Plan. Holders
not participating in the Plan will be entitled to receive the Special Dividend in cash (net of any
applicable withholding tax) on the Special Dividend Payment Date.



Following the payment of the Special Dividend, the Plan will automatically terminate. After the
payment of the Special Dividend, the Company does not expect to pay dividends in the future.



Under the Plan, Common Shares acquired will be newly issued directly from the treasury of the
Company at 100% of their “Market Price” (as defined below). As Common Shares acquired under the
Plan are newly issued directly from the treasury of the Company, participants in the Plan
(“Participants”) do not pay any brokerage commissions or service charges. All
administrative costs of the Plan are borne by the Company.



2. Eligibility



Any beneficial or registered holder of Common Shares as of the Record Date who is a resident of
Canada or the United States is eligible to elect to reinvest the Special Dividend in Common Shares
by enrolling in the Plan. Shareholders resident outside of Canada and the United States are not
eligible to participate in the Plan and will be entitled to receive the Special Dividend in cash (net of any
applicable withholding tax) on the Special Dividend Payment Date.



An eligible shareholder may only elect to reinvest 100% of the Special Dividend paid on all Common
Shares owned by him, her or it (net of any applicable withholding tax) under the Plan. Partial
reinvestment of the Special Dividend is not permitted under the Plan. An Enrollment Form
requesting partial reinvestment will be deemed invalid.







7









 







3. How the Plan Works



On the Special Dividend Payment Date, the Company will pay to CIBC Mellon Trust Company, the
administrator of the Plan (the “Agent”) the Special Dividend otherwise payable to a Participant in
respect to the Common Shares registered in the name of such Participant. Pursuant to the terms of
the Plan, the Agent will acquire newly issued Common Shares directly from the treasury of the
Company (a “Treasury Purchase”).



A Participant electing to reinvest the Special Dividend under the Plan may only elect to reinvest
100% of the Special Dividend paid on all Common Shares owned by him, her or it (net of any
applicable withholding tax). Partial reinvestment of the Special Dividend is not permitted under
the Plan. The Special Dividend payable on the Common Shares owned by the Participant (net of any applicable withholding tax) will be
applied on the Special Dividend Payment Date to acquire
Common Shares under the Plan.



The price for a Treasury Purchase of Common Shares under the Plan on the Special Dividend Payment
Date (the “Market Price”) will be the volume weighted average price at which board lots of Common
Shares have traded on the New York Stock Exchange (the “NYSE”) during the five trading days
immediately following the Enrollment Deadline (as defined below) on which at least one board lot of
Common Shares has traded, as reported by the NYSE.



As described above, on the Special Dividend Payment Date, the Company will pay to the Agent the
Special Dividend otherwise payable to a Participant in respect of the Common Shares registered in
the name of such Participant. Any amount required under applicable income tax laws to be withheld
by the Company from the Special Dividend paid to any Participant and remitted to a taxing authority
will be withheld and remitted as required by the Agent on behalf of the Company, with the balance
being reinvested by the Agent on behalf of the Participant. The Special Dividend (net of any
withholding taxes) paid on the Common Shares registered in the name of such Participant will be
used by the Agent to acquire Common Shares from the treasury of the Company for such
Participant.



The number of Common Shares acquired on behalf of a Participant under the Plan will be equal to the
Special Dividend (net of any applicable withholding tax) paid on such Common Shares owned by such
Participant divided by the Market Price. Fractional Common Shares will not be issued and
Participants will receive a cash payment in lieu of any fractional Common Shares based on the
Market Price of the Common Shares purchased under the Plan.



4. How to Enroll




Registered Shareholders



Eligible registered shareholders may elect to reinvest the Special Dividend (net of any applicable
withholding tax) in Common Shares by enrolling in the Plan at any time prior to the Enrollment
Deadline (as defined below) by completing an enrollment form (“Enrollment Form”) and sending it to
the Agent via facsimile or by mail in the manner provided for in Section 11 of the Plan. Copies of
the Plan and Enrollment Form can be obtained from the Agent at any time. Shareholders should not
send share certificates or dividend cheques to the Agent or the Company.







8









 







If the Common Shares are registered in more than one name, then the Enrollment Form must be signed
by all such registered holders. Also, if a shareholder’s total holding is registered in different
names (e.g., full name on some share certificates and initials and surname on other share
certificates), a separate Enrollment Form must be completed for each different registered name. If
the Special Dividend from all shareholdings is to be reinvested under one account, registration
must be identical.




Beneficial Owners of Common Shares



If a shareholder is an eligible beneficial owner of Common Shares, he, she or it should contact
his, her or its broker, investment dealer, financial institution or other nominee who holds his,
her or its Common Shares to provide instructions regarding his, her or its election to reinvest the
Special Dividend in Common Shares through participation in the Plan and to inquire about any
applicable deadlines that the nominee may impose or be subject to and to confirm what fees, if any,
the nominee may charge to enroll such shareholder’s Common Shares in the Plan on his, her or its
behalf or whether the nominee’s policies might result in any costs otherwise becoming payable by
the shareholder. Such fee or fees will not be paid for by the Company or Agent.



If a shareholder is an eligible beneficial owner whose Common Shares are registered in the name of
CDS Clearing and Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name
other than the eligible beneficial owner’s own name, he, she or it may elect to reinvest the
Special Dividend in Common Shares through participation in the Plan by: (i) prior to the Record
Date, having those Common Shares transferred into his, her or its name directly and then making the
election to reinvest the Special Dividend in our Common Shares by enrolling such Common Shares
under the Plan directly, or (ii) making appropriate arrangements with the broker, investment
dealer, financial institution or other nominee who holds the eligible beneficial owner’s Common
Shares to elect to reinvest the Special Dividend in Common Shares by enrolling in the Plan on the
eligible beneficial owner’s behalf, either as a nominee that delivers a completed and executed
Enrollment Form to the Agent in the manner provided in the Plan, or, if applicable, as a CDS
participant or a DTC participant through enrollment by CDS or DTC, respectively.



If a shareholder is an eligible beneficial owner of Common Shares and wishes to elect to reinvest
the Special Dividend in Common Shares by enrolling in the Plan through a CDS participant or a DTC
participant in respect of his, her or its Common Shares registered through CDS or DTC, appropriate
instructions must be received by CDS or DTC, as applicable, from the CDS participant or DTC
participant not later than such deadline as may be established by CDS or DTC, as applicable, in
order for the instructions to take effect on the Special Dividend Payment Date. Instructions
received by CDS or DTC after their respective internal deadlines will not be effective.



CDS participants and DTC participants holding Common Shares on behalf of beneficial owners of
Common Shares registered through CDS or DTC must arrange for CDS or DTC, as applicable, to enroll
such Common Shares in the Plan on behalf of such eligible beneficial owners with respect to the
Special Dividend Payment Date.







9









 







CDS or DTC, as applicable, will provide instructions to the Agent regarding the extent of its
participation in the Plan, on behalf of eligible beneficial owners of Common Shares, with respect
to the Special Dividend Payment Date on which the Special Dividend otherwise payable to CDS or DTC,
as applicable, as shareholder of record, is to be reinvested under the Plan.



5. Enrollment Deadline



A completed Enrollment Form must be received by the Agent no later than 5:00 p.m. (Toronto time) on
December 8, 2010 (the “Enrollment Deadline”), in order for the Special Dividend (net of any
applicable withholding tax) to be reinvested under the Plan. If the completed Enrollment Form is
not received by the Agent by the Enrollment Deadline, or the participation is properly revoked in
accordance with Section 8 of the Plan, the Special Dividend will be paid in cash (net of any
applicable withholding tax).



Both the Company and the Agent shall have the right to reject any request regarding enrollment in
or revocation of participation in the Plan if such request is not received in proper form. Any such
request will be deemed to be invalid until any irregularities have been resolved to the Company’s
satisfaction and/or the Agent’s satisfaction prior to the Enrollment Deadline. Neither the Company
nor the Agent is under any obligation to notify any shareholder of an invalid request.



6. Certain Limitations



A Participant may not transfer the right to participate in the Plan to another person.



Without limitation, the Company reserves the right to refuse participation in the Plan to, or
terminate the participation of, any person who, in the Company’s sole opinion, is participating in
the Plan primarily with a view to arbitrage trading, whose participation in the Plan is part of a
scheme to avoid applicable legal requirements or engage in unlawful behavior or has been
artificially accumulating the Company’s securities, for the purpose of taking undue advantage of
the Plan to the Company’s detriment. The Company may also deny the right to participate in the Plan
to any person or terminate the participation of any Participant in the Plan if the Company deems it
advisable under any laws or regulations.



The Company may also make rules and regulations to facilitate the administration of the Plan and
reserves the right to regulate and interpret the Plan text as the Company deems necessary and
desirable. Any issues of interpretation arising in connection with the Plan or its application
shall be conclusively determined by the Company. The Company may adopt rules and regulations
concerning the establishment of internet-based or other electronic mechanisms with respect to the
communication of information concerning the Plan to the Participants and any other aspect of the
Plan.



7. Delivery of Common Shares under the Plan



On or about the Special Dividend Payment Date, Participants will receive from the Agent, a share
certificate for the number of whole Common Shares acquired under the Plan on the Special Dividend
Payment Date and a cash payment in lieu of any fractional Common Share based on the Market Price of
the Common Shares purchased under the Plan.







10









 







Participants will also receive a statement setting out the amount of the Special Dividend
reinvested, the Market Price and the number of Common Shares acquired under the Plan on the Special
Dividend Payment Date with respect to the Special Dividend. In the case of CDS participants and DTC
participants, CDS or DTC, as applicable, will receive a statement on behalf of eligible beneficial
owners participating in the Plan. This statement is a record of the cost of Common Shares acquired
under the Plan and should be retained for tax reporting purposes.



8. Revocation of Participation



As indicated above, the Plan was created solely for use in connection with the Special Dividend and
will only be used for this one-time purpose. The Plan will automatically terminate on December 22,
2010, immediately following payment of the Special Dividend.



If a shareholder has enrolled in the Plan but chooses to revoke participation in the Plan prior to
the payment of the Special Dividend, such shareholder may do so by giving written notice to the
Agent (or, in the case of beneficial owners, by making arrangements to revoke participation through
their nominee) prior to the Enrollment Deadline. If participation in the Plan is revoked prior to
the Enrollment Deadline, such shareholder will receive the Special Dividend (net of any applicable
withholding tax) in cash. If the notice of revocation is received by the Agent after the Enrollment
Deadline, the Special Dividend payable on the Special Dividend Payment Date (net of any applicable
withholding tax) will be reinvested in Common Shares under the Plan. Notice of revocation must be
received in writing (or, in the case of beneficial owners, by making arrangements to revoke
participation through their nominee) and be for 100% of the Special Dividend participating in the
Plan. Partial revocation of participation in the Plan will be deemed invalid. Each notice of
revocation must be signed by the shareholder in whose name such Common Shares are registered. Where
the Common Shares are registered in more than one name, the notice of revocation must be signed by
all registered holders of such Common Shares.



9. Death or Incompetence of a Participant



Participation in the Plan will not be affected by a Participant’s death or incompetence and
participation will remain effective until it is terminated in accordance with the provisions of the
Plan or the Plan itself is terminated.



10. Amendment, Suspension or Termination of the Plan



The Company reserves the right to amend, modify, suspend or terminate the Plan at any time, but
such actions shall have no retroactive effect that would prejudice a Participant’s interests. Any
amendments to the Plan are subject to prior approval by the Toronto Stock Exchange (the “TSX”) and
the NYSE. The Agent will notify Participants in writing of any modifications made to the Plan that
in the Company’s opinion may materially prejudice Participants. Generally, no notice will be given
to Participants regarding any amendments to the Plan intended to cure, correct or rectify any
ambiguities, defective or inconsistent provisions, errors, mistakes or omissions.



If the Plan is suspended or terminated by the Company prior to the Special Dividend Payment Date,
no reinvestment will be made under the Plan, and each Participant will be entitled to






11









 







receive the Special Dividend in cash (net of any applicable withholding tax) on the Special
Dividend Payment Date.



As indicated above, the Plan will automatically terminate on December 22, 2010, immediately
following payment of the Special Dividend.



11. Notices



All notices required to be given to a Participant will be mailed to the Participant at his, her or
its latest address shown on the records of the Agent.



All communications including notices, requests for forms or information regarding the Plan should
be directed to the Agent and the Company, as applicable, as follows:



To the Agent:




	 	 	 

	By telephone:

	 	CIBC Mellon Trust Company
	 

	 	416-643-5500
	 

	 	Toll-free throughout North America
	 

	 	1-800-387-0825
	 
	 	 
	By fax:

	 	416-643-5020
	 
	 	 
	By mail:

	 	CIBC Mellon Trust Company
	 

	 	P.O. Box 7010
	 

	 	Adelaide Street Postal Station
	 

	 	Toronto, ON M5C 2W9
	 

	 	Attention: Dividend Reinvestment Dept.
	 
	 	 
	By email:

	 	inquiries@cibcmellon.com





To the Company’s head office:




	 	 	 

	By telephone:

	 	Valeant Pharmaceuticals International, Inc.
	 

	 	905-286-3000
	 
	 	 
	By fax:

	 	Investor Relations
	 

	 	905-286-3034
	 
	 	 
	By mail:

	 	Valeant Pharmaceuticals International, Inc.
	 

	 	7150 Mississauga Road
	 

	 	Mississauga, Ontario
	 

	 	CANADA, L5N 8M5






12









 






12. Income Tax Considerations Relating to the Plan



THE FOLLOWING SUMMARY OF INCOME TAX CONSEQUENCES FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED
TO BE LEGAL OR TAX ADVICE TO ANY PARTICULAR PARTICIPANT. IT IS THE RESPONSIBILITY OF PARTICIPANTS
IN THE PLAN TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF PARTICIPATION
IN THE PLAN IN THEIR RESPECTIVE COUNTRIES OF RESIDENCE.




Canadian Federal Income Tax Considerations



The following is a summary of the principal Canadian federal income tax considerations generally
applicable to Participants under the Plan. This summary is based on the current provisions of the
Income Tax Act (Canada) (the “ITA”), the regulations thereunder, all specific proposals to amend
the ITA or the regulations publicly announced by the Minister of Finance (Canada) prior to the date
hereof (the “Tax Proposals”), and an understanding of the current published administrative policies
and assessing practices of the Canada Revenue Agency. No assurance can be provided that the Tax
Proposals will be enacted as currently proposed or at all. This summary does not, except for the
Tax Proposals, take into account or anticipate any changes in law, whether by legislative,
regulatory, administrative or judicial action. Further, this summary does not take into account
Canadian provincial or territorial income tax laws or those of any country other than Canada.




Participants Resident in Canada



This portion of the summary is applicable only to Participants who, for purposes of the ITA, and at
all relevant times, are resident in Canada, hold their Common Shares as capital property, deal at
arm’s length and are not affiliated with the Company and are not subject to “mark-to-market” rules
relating to securities held by certain “financial institutions” as defined for purposes of those
rules. This portion of the summary does not apply to a Participant an interest in which is a “tax
shelter investment” as defined in section 143.2 of the ITA or to a Participant that makes the
functional currency reporting election in accordance with the provisions of the ITA in that regard.



The Special Dividend reinvested on behalf of a Participant will be subject to the tax treatment
normally accorded to taxable dividends received by the Participant directly from the Company. For
example, in the case of a Participant who is an individual, the Special Dividend will be subject to
the gross-up and credit rules or, in the case of a Participant that is a private corporation or one
of certain other corporations, a refundable tax will apply to the amount of the Special Dividend.
Other taxes could apply depending on the circumstances of the Participant. The fact that the
Special Dividend is reinvested pursuant to the Plan does not affect the taxability of the Special
Dividend to the Participant or the status of the Special Dividend as an “eligible dividend” under
the ITA. It is expected that the Special Dividend will be designated as an “eligible dividend.”







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The right granted under the terms of the Plan to reinvest the Special Dividend paid on Common
Shares in Common Shares issued from the treasury of the Company at the Market Price and the
exercise of such right should not give rise to a taxable benefit under the ITA.



The cost to a Participant of Common Shares acquired under the Plan will be the amount paid for the
Common Shares by the Agent. For the purpose of computing the adjusted cost base of such Common
Shares to the Participant, the cost of the Common Shares acquired under the Plan will be averaged
with the adjusted cost base of all other Common Shares held by the Participant as capital property.
A Participant may realize a capital gain or loss on the disposition of Common Shares acquired
through the Plan.



A Participant who disposes of Common Shares will generally realize a capital gain (or capital loss)
equal to the amount by which the proceeds of disposition of the Common Shares exceed (or are
exceeded by) the aggregate of the adjusted cost base of the Common Shares disposed of by the
Participant and any reasonable costs of disposition.



In certain circumstances, a capital loss realized by a Participant that is a corporation may be
reduced by the amount of any taxable dividends received by such Participant from the Company on the
Common Shares. Analogous rules apply where the Participant is a trust or partnership of which a
corporation, partnership or trust is a beneficiary or member.



A Participant will not realize any taxable income on receipt of a certificate for whole Common
Shares in his, her or its name.



One-half of any capital gain (a “taxable capital gain”) is included in computing income and
one-half of a capital loss (an “allowable capital loss”) is generally deductible against taxable
capital gains in accordance with the provisions of the ITA. Any excess of allowable capital losses
over taxable capital gains in a taxation year may be deducted against taxable capital gains
realized by the Participant in any of the three preceding taxation years or any subsequent taxation
year in accordance with the detailed provisions of the ITA. A Participant that is a
Canadian-controlled private corporation will be subject to an additional refundable tax on
aggregate investment income, which includes an amount in respect of taxable capital gains.




Participants Resident in the United States



This portion of the summary is applicable only to Participants who, for purposes of the ITA and any
applicable income tax treaty or convention, and at all relevant times, are not resident or deemed
to be resident in Canada, do not use or hold and are not deemed to use or hold their Common Shares
in carrying on business in Canada and do not carry on an insurance business in Canada and
elsewhere. In addition, this portion of the summary does not apply to an authorized foreign bank
(as defined in the ITA).



Dividends paid or credited to a Participant resident in the United States on the Common Shares,
including the Special Dividend reinvested under the Plan, will be subject to Canadian withholding
tax at the rate of 25%, subject to the application of the Canada-U.S. Income Tax Convention (1980),
as amended (the “Treaty”). If the Participant is entitled to benefits under the Treaty, the
applicable rate of Canadian withholding tax is generally reduced to 15%. Under the Treaty,
dividends paid to certain religious, scientific, charitable and similar tax-exempt






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organizations and certain pension organizations that are resident in, and exempt from tax in, the
United States are exempt from Canadian withholding tax. The amount of the Special Dividend to be
reinvested under the Plan will be reduced by the amount of tax withheld.



The right granted under the terms of the Plan to reinvest the Special Dividend paid on Common
Shares in Common Shares issued from the treasury of the Company at the Market Price and the
exercise of such right should not give rise to a taxable benefit under the ITA.



Gains on the disposition of Common Shares by a Participant resident in the United States are
generally not subject to Canadian income tax unless such shares are or are deemed to be “taxable
Canadian property” within the meaning of the ITA and the Participant is not entitled to relief
under the Treaty. Provided the Common Shares are listed on a designated stock exchange (which
includes the TSX and the NYSE), such Common Shares will generally not be taxable Canadian property
to a Participant resident in the United States, unless either they are otherwise deemed to be
taxable Canadian property or, at any time during the five-year period immediately preceding a
disposition, both (1) the Participant, persons with whom the Participant did not deal at arm’s
length for the purposes of the ITA or the Participant and persons with whom the Participant did not
deal at arm’s length owned 25% or more of the issued shares of any class or series of shares of the
Company and (2) the Common Shares derived more than 50% of their fair market value from (i) real or
immoveable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource
properties, and (iv) options to acquire such property.




United States Federal Income Tax Considerations



The following is a summary of certain U.S. federal income tax considerations relating to
participation in the Plan by Participants that reinvest the Special Dividend in additional Common
Shares under the Plan, which Common Shares are held as capital assets. This summary is based on
the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations
promulgated thereunder, judicial decisions and administrative and judicial interpretations, all as
in effect on the date hereof and all of which are subject to change, possibly with retroactive
effect. This summary is for general information only and does not address all of the tax
considerations that may be relevant to specific Participants in light of their particular
circumstances, particularly if such Participants are subject to special treatment under the Code,
including: banks or financial institutions; insurance companies; dealers in securities or
currencies; tax-exempt entities; retirement plans or other tax-deferred accounts; regulated
investment companies; real estate investment trusts; certain former citizens or residents of the
United States; persons who hold Common Shares as part of a straddle, hedge, conversion transaction
or other integrated investment; persons that have a “functional currency” other than the U.S.
dollar; persons that beneficially own (or are deemed to own) 10% or more (by voting power or value)
of Common Shares; or persons that generally mark their securities to market for U.S. federal income
tax purposes. Furthermore, this summary does not address any U.S. state, local, or non-U.S. tax
considerations, nor does it address any U.S. federal estate, gift, or alternative minimum tax
considerations.



If an entity treated as a partnership for U.S. federal income tax purposes participates in the
Plan, the tax treatment of such partnership and each partner thereof generally will depend upon the
status and activities of the partnership and the partner. Any such partnership or partner thereof






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should consult its own tax advisor regarding the U.S. federal income tax considerations relating to
participation in the Plan.




ALL PROSPECTIVE PARTICIPANTS IN THE PLAN ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSIDERATIONS APPLICABLE TO THEM RELATING TO PARTICIPATION IN THE PLAN AND
OWNERSHIP OF THE COMPANY’S COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL,
STATE, AND LOCAL TAX LAWS AND NON-U.S. TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.




U.S. Participants



As used in this summary, the term “U.S. Participant” means a beneficial owner of Common Shares held
as capital assets and purchased pursuant to the Plan, if such beneficial owner is, for U.S. federal
income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a
corporation created or organized in or under the laws of the United States or any political
subdivision thereof; (iii) an estate the income of which is subject to U.S. federal income tax
regardless of its source; or (iv) a trust if (a) a United States court can exercise primary
jurisdiction over such trust’s administration and one or more U.S. persons have the authority to
control all substantial decisions of such trust or (b) such trust has made a valid election to be
treated as a U.S. person for U.S. federal income tax purposes.




Tax Consequences of Dividend Reinvestment



A U.S. Participant will be treated as receiving a distribution for U.S. federal income tax purposes
in an amount equal to the fair market value of the Common Shares acquired pursuant to the Plan plus
the amount of any income tax withheld. The fair market value of the Common Shares so acquired will
be equal to the average of the high and low sale prices of the Common Shares on the Special
Dividend Payment Date as reported on the principal securities exchange on which the shares are
traded, which amount may be higher or lower than the Market Price used to determine the number of
Common Shares acquired under the Plan. The distribution (without reduction for any Canadian taxes
withheld) will be includible in a U.S. Participant’s income as a taxable dividend to the extent of
the Company’s current and accumulated earnings and profits as determined for U.S. federal income
tax purposes. If a U.S. Participant is an individual, trust or estate, the dividend should be
treated as “qualified dividend income” taxed at a preferential rate of 15% (through 2010), provided
that certain holding period requirements and other conditions are met. The amount of the Special
Dividend will not be eligible for the dividends received deduction generally available to U.S.
corporate shareholders on dividends received from a U.S. corporation. Subject to certain
limitations under the Code, U.S. Participants may be entitled to a U.S. federal income tax credit
or deduction for Canadian income taxes withheld from the Special Dividend.



A U.S. Participant’s tax basis per share for Common Shares purchased pursuant to the Plan will
equal the fair market value per Common Share on the Special Dividend Payment Date. A U.S.
Participant’s holding period for such Common Shares will begin on the day following the Special
Dividend Payment Date. U.S. Participants are urged to consult their own tax advisors






16









 







about the application of the rules for calculating basis to their particular circumstances,
including with respect to any applicable elections or the transfer of such Participant’s shares.




Sale, Exchange or Other Disposition of Common Shares



Subject to the discussion below under “Passive Foreign Investment Company Considerations,” a U.S.
Participant generally will recognize a capital gain or loss for U.S. federal income tax purposes
when it sells, exchanges, or otherwise disposes of Common Shares and when it receives cash payments
in lieu of fractional shares in accordance with the Plan. The amount of such gain or loss will
equal the difference, if any, between the amount such U.S. Participant receives for such Common
Shares or fraction thereof and such U.S. Participant’s adjusted tax basis in such Common Shares or
fraction thereof. Such gain or loss generally will be a capital gain or loss and will be a
long-term capital gain or loss if the U.S. Participant’s holding period for such Common Shares or
fraction thereof exceeds one year. For taxable years beginning on or before December 31, 2010,
long-term capital gains of a non-corporate U.S. Participant generally are taxed at a maximum rate
of 15%. The deductibility of capital losses is subject to limitations. Such gain or loss
recognized generally will be treated as gain or loss from sources within the United States for
foreign tax credit limitation purposes.




Passive Foreign Investment Company Considerations



The tax considerations set forth above may differ materially if the Company is regarded as a
“passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. The Company
believes that it is not a PFIC in 2010, and it does not expect to become one in 2011. However,
because this determination is made annually at the end of each taxable year and is dependent upon a
number of factors (some of which are beyond the Company’s control), including the value of its
assets and the amount and type of its income, there can be no assurance that the Company will not
be treated as a PFIC in any taxable year or that the Internal Revenue Service will agree with the
Company’s conclusion regarding its PFIC status. If the Company is a PFIC in any taxable year, U.S.
Participants could suffer adverse consequences under the PFIC rules, including the possible
treatment of gain from the sale, exchange or other disposition of Common Shares as ordinary income
and the imposition of an interest charge on a portion of the resulting tax liability. U.S.
Participants are urged to consult their tax advisors about the application of the PFIC rules and
the potential impact of such rules to their particular circumstances.




Backup Withholding Tax and Information Reporting



In general, if you are a non-corporate U.S. Participant, dividend payments (or other taxable
distributions) made within the United States will be subject to information reporting requirements
and backup withholding tax if you:



(1) fail to provide the Company with an accurate taxpayer identification number;



(2) are notified by the U.S. Internal Revenue Service (the “IRS”) that you have failed to report
all interest or dividends required to be shown on your federal income tax returns; or



(3) in certain circumstances, fail to comply with applicable certification requirements.







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If you sell Common Shares to or through a U.S. office or broker, the payment of the sales proceeds
is subject to both U.S. backup withholding and information reporting unless you certify that you
are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you
sell Common Shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid
to you outside the United States, then information reporting and backup withholding generally will
not apply to that payment. However, U.S. information reporting requirements (but not backup
withholding) will apply to a payment of sales proceeds, even if that payment is made outside the
United States, if you sell Common Shares through a non-U.S. office of a broker that is a U.S.
person or has certain other connections with the United States.



Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any
amounts withheld under backup withholding rules that exceed your income tax liability by accurately
completing and timely filing a refund claim with the IRS.



Recently adopted legislation imposes, for taxable years beginning after March 18, 2010, new U.S.
return disclosure obligations (and related penalties for failure to disclose) on U.S. individuals
that hold certain specified foreign financial assets (which include stock in a foreign
corporation). Participants are encouraged to consult with their own tax advisors regarding the
possible implications of this legislation on their investment in Common Shares.




Canadian Participants



As used in this summary, the term “Canadian Participant” means a beneficial owner (other than a
partnership or other entity treated as a partnership for U.S. federal income tax purposes) of
Common Shares held as capital assets and purchased pursuant to the Plan that is not a U.S.
Participant and is a resident of Canada.




Tax Consequences of Dividend Reinvestment



A Canadian Participant generally will not be subject to U.S. federal income taxes on the
reinvestment of the Special Dividend, unless the Special Dividend is effectively connected with the
Canadian Participant’s conduct of a trade or business in the United States. If a Canadian
Participant is entitled to the benefits of the Treaty with respect to the Special Dividend, the
Special Dividend generally will be taxable in the United States only if it is attributable to a
permanent establishment maintained by the Canadian Participant in the United States.




Sale, Exchange or Other Disposition of Common Shares



A Canadian Participant generally will not be subject to U.S. federal income tax on any gain
realized upon the sale, exchange or other disposition of Common Shares, unless:




     (a) the gain is effectively connected with the Canadian Participant’s conduct of a trade or
business in the United States. If a Canadian Participant is entitled to the benefits of the Treaty
with respect to that gain, that gain generally will be taxable in the United States only if it is
attributable to a permanent establishment maintained by the Canadian Participant in the United
States; or



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     (b) the Canadian Participant is an individual who is present in the United States for 183 days
or more during the taxable year of disposition and certain other conditions are met.


Gain that is effectively connected with the conduct of a trade or business in the United States (or
so treated) generally will be subject to U.S. federal income tax, net of certain deductions, at
regular U.S. federal income tax rates. A corporate Canadian Participant’s earnings and profits
that are attributable to the effectively connected income (subject to certain adjustments) may be
subject to an additional U.S. branch profits tax at a rate of 30% (or 5%, if the corporate Canadian
Participant is entitled to the benefits of the Treaty).




Backup Withholding Tax and Information Reporting



A Canadian Participant may be required to establish its exemption from information reporting and
backup withholding by, among other things, certifying its status on IRS Form W-8BEN, W-8ECI or
W-8IMY, as applicable.



Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any
amounts withheld under backup withholding rules that exceed your income tax liability by accurately
completing and timely filing a refund claim with the IRS.




Notice Pursuant to U.S. Internal Revenue Service Circular 230



You are hereby advised that: (i) any discussion of U.S. federal tax issues set forth herein,
including attachments, is not intended or written to be used and cannot be relied upon by any
taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer under the Code;
(ii) such discussion is written to support the promotion or marketing of the transactions or
matters addressed herein and (iii) each taxpayer should seek advice based on the taxpayer’s
particular circumstances from an independent tax advisor.




13. Administration



The Agent will act as administrator of the Plan for the Company. The Agent will keep all records
necessary for the administration of the Plan.



The Company reserves the right to interpret and regulate the Plan as it deems necessary or
desirable.



Unless the context otherwise requires, words importing only the singular number shall include the
plural and vice versa, words importing the masculine gender shall include feminine and neuter
genders and vice versa, and words importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations.




14. Liability of the Company and the Agent



The Company and the Agent, in administering the Plan, are not liable for any act or omission to
act, including, without limitation, any claims of liability: (a) with respect to receipt or
non-receipt of any payment, form or other writing purported to have been sent to the Company or the
Agent; (b) actions taken as a result of inaccurate and incomplete information or instructions; (c)






19









 







in respect of any decision to amend, suspend, terminate or replace the Plan in accordance with the
terms hereof; (d) in respect of the involuntary termination of a Participant’s participation in the
Plan in the circumstances described herein; (e) with respect to the price at which Common Shares
are acquired for a Participant; or (f) in respect of income taxes or other liabilities
payable by any Participant or beneficial owner in connection with their participation in the Plan.
Nor shall the Company or the Agent have any duties, responsibilities or liabilities except such as
are expressly set forth in the Plan.




Participants should recognize that neither the Company nor the Agent can assure profit or protect
against a loss on Common Shares acquired under the Plan.



Given that Common Shares acquired under the Plan are to be a Treasury Purchase, the calculation of
the Market Price is the responsibility of and shall be performed by the Company.



Both the Company and the Agent shall have the right to reject any request regarding enrollment in
or revocation of participation in the Plan if such request is not received in proper form. Any such
request will be deemed to be invalid until any irregularities have been resolved to the Company’s
satisfaction and/or the Agent’s satisfaction prior to the Enrollment Deadline. Neither the Company
nor the Agent is under any obligation to notify any shareholder of an invalid request.




15. Governing Law



The Plan shall be governed and construed in accordance with the laws in force of the Province of
Ontario, Canada and the federal laws of Canada applicable therein.




16. Effective Date



The effective date of the Plan is November 8, 2010.





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