Valeant Pharmaceuticals International
Performance Restricted Stock Unit Award
and Matching Restricted Stock Unit Award Grant Notice
(2006 Equity Incentive Plan)
 Company Plan Performance RSU Performance RSU Award Matching RSU Matching RSU Award Awards Award Agreement
 Performance RSU AwardParticipant:
    
    Peter BlottGrant Date
    
    July 28, 2008Number of Shares Subject to Award:
    
    47,600Consideration:
    
    Participants ServicesMatching RSU AwardPurchase Dates
    
    September 15, 2008; December 16, 2008, March 16, 2009Share Purchase Limit:
    
    $400,000Maximum Matching RSU Award:
    
    $400,000Consideration:
    
    Participants Services
 Performance RSU Awards:
Vesting of Performance RSU Awards.




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(a)
    
    Vesting of Performance RSU Award Based Upon Meeting Strategic Initiatives:
 (i)
    
    If all six (6) of the following strategic initiatives are met,
the Participant shall vest and the Company shall deliver to Participant as soon
as practicable (but in any event no later than 45 days) following certification
by the Companys Board of Directors (the Board)that all of the strategic
initiatives have been achieved, a number of Shares of the Companys Common
Stock (Shares) equal to the number of Performance RSUs granted pursuant to
the Performance RSU Award; provided that Participant is employed by the Company
on the later of the date the last initiative is met or April 1, 2010.
 (1)
    
    Approval of the retigabine NDA;(2)
    
    Partnering retigabine;(3)
    
    Sell part or all of Europe;(4)
    
    20% EBIT margin for 2 consecutive quarters,
excluding royalties;(5)
    
    Mexico pro forma run rate of $140 million
annual sales ($35 million per quarter) at 2008 plan rate and 40% EBIT
margin for 2 consecutive quarters; and(6)
    
    Retire senior debt, repurchase an additional
$200 million of shares and draw down inventory to competitive levels.
 (b)
    
    TSR Vesting:
 (i)
    
    If the Per Share Price (defined below) of a Share on the
Measurement Date ( the Measurement Date Average Price), equals or exceeds a
value which produces a Compound Annual TSR (as defined below) of 15%,
Participant shall vest in and the Company shall deliver to Participant as soon
as practicable (but in any event no later than 45 days) following the
Measurement Date a number of Shares equal to one-third (1/3) of the number of
Performance RSUs granted pursuant to the Performance RSU Award, provided that
Participant is employed by the Company on the Measurement Date. Measurement
Datemeans February 1, 2011. Per Share Priceshall mean the average of the
closing prices of Shares during the twenty (20) consecutive trading days ending
on the day prior to the Measurement Date. Compound Annual TSRshall mean the
compound annual Share price appreciation from February 1, 2008 using the
specified base Share price of $12.27 (which was the Per Share Price on the
effective date of the Performance RSU Award granted to the Companys Chief
Executive Officer pursuant to his employment agreement), to the Per Share Price
on the applicable measurement date plus the value derived from the
reinvestment of any dividends paid on the Companys common
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stock during such period, with reinvestment determined based on the closing
price of the common stock on the dividend payment date; or(ii)
    
    if the Measurement Date Average Price equals or exceeds a value
which produces a Compound Annual TSR of 30%, Participant shall vest in and the
Company shall deliver to Participant as soon as practicable (but in any event
no later than 45 days) following the Measurement Date, a number of Shares equal
to two-thirds (2/3) of the number of Performance RSUs granted pursuant to the
Performance RSU Award, provided that Participant is employed by the Company on
the Measurement Date; or(iii)
    
    if the Measurement Date Average Price equals or exceeds a
value which produces a Compound Annual TSR of 45%, Participant shall vest in
and the Company shall deliver to Participant as soon as practicable (but in any
event no later than 45 days) following the Measurement Date, a number of Shares
equal to the number of Performance RSUs granted pursuant to the Performance RSU
Award, provided that Participant is employed by the Company on the Measurement
Date; or(iv)
    
    if the Measurement Date Average Price produces a Compound
Annual TSR between 15% and 30%, or between 30% and 45%, Participant shall vest
in and the Company shall deliver a number of Performance RSUs that is the
mathematical interpolation between the number of shares which would vest at
such two percentages; provided that Participant is employed by the Company on
the Measurement Date.
 Performance RSUs that could have been earned under any of subclauses (i), (ii),
(iii) or (iv) above, that are not earned on the Measurement Date may be earned on
February 1, 2012 (the Second Measurement Date) based on the Compound Annual TSR
from February 1, 2008 through the Second Measurement Date using the same performance
targets described in subclauses (i) through (iv) above (net of any Performance RSUs
that were earned on the Measurement Date based on performance to such date);
provided that Participant is employed by the Company on the Second Measurement Date.
Any Performance RSUs that vest as of the Measurement Date will not be affected if
the Compound Annual TSR on the Second Measurement Date is less than that generated
by the Measurement Date Average Price. Any Performance RSUs that are not vested as
of the Second Measurement shall be immediately forfeited. Exhibit A, attached
hereto, contains the share price targets to achieve the 15%, 30% and 45% Compound
Annual TSRs on the Measurement Date and the Second Measurement Date.
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Share Purchase and Matching RSU Award Provisions.
 (a)
    
    If, prior to September 15, 2008, December 16, 2008 or March 16, 2009 (the Purchase Dates),
Participant purchases, on the market through a third-party broker designated by the Company
and during periods of open trading in accordance with the Companys trading policy and
applicable law, Shares (the Purchased Shares); then, as soon as practicable following each
of the Purchase Dates (but no later than the end of the month following the month in which the
Purchase Date occurs), the Company shall grant to Participant a number of Matching RSUs equal
to the number of Purchased Shares so purchased on or prior to September 15, 2008, from
September 16, 2008 through December 16, 2008, and from December 17, 2008 through March 16,
2009, as applicable, up to a maximum aggregate number of restricted share units (taking into
account purchases prior to each of the Purchase Dates) equal to a number of Purchased Shares
with an aggregate purchase price of up to the greater of 100% of the Participants base salary
as of the date hereof or $100,000 (the Purchased Share Limit).(c)
    
    Matching RSUs shall vest and be settled in Shares on the following schedule: Twenty-five
percent (25%) of the Matching RSUs shall vest and be settled on the first anniversary of the
applicable Purchase Date and an additional 25% of the Matching RSUs shall vest and be settled
each of the second, third, and fourth anniversaries of the applicable Purchase Date, provided
Participant is employed on the relevant vesting date and Participant has not otherwise sold or
disposed of the corresponding Purchased Share prior to such vesting date. If Participant
sells (or otherwise disposes of) any Purchased Shares prior to the fourth anniversary of the
applicable Purchase Date, an equal number of unvested Matching RSUs (up to the maximum number
of Matching RSUs unvested as of the date of sale or disposition) shall be forfeited with the
Matching RSUs next scheduled to vest being forfeited first.
 Additional Terms/Acknowledgements:
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Valeant Pharmaceuticals International
    
    Participant:By:
    
    /s/ J. Michael Pearson
    
    /s/Peter J. BlottSignature
    
    SignatureTitle:
    
    Chairman and Chief Executive Officer
    
    Date:
    
    August 27, 2008Date:
    
    August 21, 2008
 Attachment
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Exhibit A to Grant Notice
 For Performance RSUs: Per Share Price targets
  
  
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Valeant Pharmaceuticals International
2006 Equity Incentive Plan
Performance Restricted Stock Unit and Matching RSU Award Agreement
 Grant Notice Agreement Company Performance RSU RSU Award Matching RSU Award Awards Plan Common
Stock
  1. Consideration.
 2. Vesting
 3. Dividend Equivalents.
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4. Distribution of Shares of Common Stock provided, provided, further  Original
Distribution Date  provided, however,
 5. Number of Shares.
 6. Compliance with Section 409A of the Internal Revenue Code.
 7. Securities Law Compliance
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8. Restrictive Legends.
 9. Transferability.
 10. Awards Not an Employment Contract
 11. Unsecured Obligation
 12. Withholding Obligations
 (a)
 (b)
 13. Notices
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14. Headings
 15. Amendment provided, however
 16. Miscellaneous
 (a)
 (b)
 (c)
 (d)
 (e)
 17. Governing Plan Document
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18. Effect on Other Benefit Plans
 19. Choice of Law
 20. Resolution of Disputes JAMS
 21. Severability
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Valeant Pharmaceuticals International
    
    Participant:By:
    
    /s/ J. Michael Pearson
    
    /s/Peter J. BlottSignature
    
    SignatureTitle:
    
    Chairman and Chief Executive Officer
    
    Date:
    
    August 27, 2008Date:
    
    August 21, 2008
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