Exhibit 10.2
      
    
    Title: President, Valeant Pharmaceuticals International. You will report to the
Chief Executive Officer.
    
    Base Salary: $41,666.67 per month ($500,000 annualized).
    
    Effective Date: March 10, 2009.
    
    Sign-On Bonus: You have received, or will receive, a sign-on bonus of $250,000
within 30 days of the Effective Date; provided, however, if you voluntarily terminate your
employment, other than for Good Reason, prior to the first anniversary of the Effective Date
(or you are terminated for Cause within such period), you will be required to repay to the
Company a pro rata portion of such bonus determined by multiplying $250,000 times the quotient
obtained by dividing (a) the difference obtained by subtracting the number of days employed
from 365; by (b) 365.
    
    Salary Adjustments: You will be eligible for participation in our Merit Increase
Program, based on performance, for the period beginning April 1, 2010. This policy is subject
to change as approved by the Compensation Committee of the Valeant Board of Directors.
    
    Annual Incentive: You will be eligible to participate in Valeants management
bonus plan beginning in the 2009 calendar year. Your target bonus will be 60% of your Base
Salary, with the potential of 120% of your Base Salary. This plan, and therefore your
participation, is subject to change at the discretion of the Board of Directors. Bonuses are
payable at the time the other management bonuses are paid. To be eligible for any bonus
payment, you must be employed by the Company on the day in which the applicable bonus is paid
to other members of Valeant management.
    
    Equity Awards: As indicated in the employment terms provided to by you by the
Companys Chief Executive Officer, subject to the approval of the Companys Board of
Directors, you will receive the following equity on the date of such approval (the Grant
Date):
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o
    
    Stock Options  You shall be granted options to acquire a whole number of
shares of the Company common stock with a Black-Scholes value equal to $1,500,000 as of the
Grant Date (the Options). 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
Grant Date. The exercise price of the Options will be priced at the fair market value at
the close of business on the Grant Date. The Options will vest over a four-year period
from the grant date of the Options (25% per year on the anniversary of the grant date) and
shall have a term of ten (10) years. If your employment is terminated by the Company
without Cause or by you for Good Reason, either in contemplation of a Change in Control or
at any time within twelve (12) months following a Change in Control, then any Option that
is not cancelled in connection with the Change in Control in exchange for cash payment will
vest on the termination date and shall remain exercisable for one year following the
termination date (but in no event beyond the 10-year term of the Option). If your
employment is terminated by the Company for Disability or by reason of your death, any
Option outstanding shall vest in full and remain exercisable following the termination date
(but in no event beyond the 10-year term of the Option).o
    
    Performance Restricted Share Units. You will also receive such number of
performance-based restricted stock units under the 2006 Plan (the Performance Share
Units) with a value equal to the quotient obtained by dividing $1,500,000 by the Per Share
Price on the Grant Date (such number of Performance Share Units, the 2009 Performance
Units), which shall vest as follows, provided that, in all events, you are continually
employed by the Company through and including the 3 year anniversary of Grant Date:
 1.
    
    If at the third anniversary of the Effective Date (the First Measurement
Date), the Adjusted Share Price (as defined below) equals the Single Vesting Share
Price (as defined below), you shall vest in 100% of the 2009 Performance Units (1 x the
2009 Performance Units).2.
    
    If at the First Measurement Date the Adjusted Share Price equals the Double
Vesting Share Price (as defined below), you shall vest in 200% of the 2009 Performance
Units (2 x the 2009 Performance Units).3.
    
    If at the First Measurement Date the Adjusted Share Price equals the Triple
Vesting Share Price (as defined below) you shall vest in 300% of the 2009 Performance
Units (3 x the 2009 Performance Units).4.
    
    Performance Share Units that could have been earned under any of subclauses 1,
2, or 3 above that are not earned on the First Measurement Date may be earned on the
fourth anniversary of the Effective Date (the Second Measurement Date), subject to
your continued employment through that date, based upon the Adjusted Share Price on
such Second Measurement Date.5.
    
    If the Adjusted Share Price on a measurement date is between the Single Vesting
Share Price and the Double Vesting Share Price or is between the Double Vesting Share
Price and the Triple Vesting Share Price, you 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 defined ends of the spectrum.
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6.
    
    The Company shall distribute to you a number of shares of its common stock
equal to the number of Performance Shares Units that become vested as soon as
practicable (but in any event no later than 45 days) following the vesting date of such
Performance Shares Units. You 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 Change in Control or until
you experience a termination of employment. For purposes of this letter, Net Shares
shall mean the net number of shares acquired by you 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.7.
    
    In the event of the occurrence of a Change in Control or termination of your
employment by death or Disability, the performance measures applicable to the
Performance Share Units will be applied as though the date of the Change in Control, or
employment termination date, as applicable, were the end of the measurement period,
with the number of units calculated in a manner consistent with the vesting schedule
described above (e.g., in the event of a Change in Control occurs or your employment is
terminated by death or Disability prior to the First Measurement Date, 100% will vest
at the date of such termination if the Adjusted Share Price is the Single Vesting Share
Price; 200% will vest if the Adjusted Share Price is the Double Vesting Share Price;
and 300% will vest if the Adjusted Share Price is the Triple Vesting Share Price; and
if the Adjusted Share Price on such measurement date is between the Single Vesting
Share Price and the Double Vesting Share Price or is between the Double Vesting Share
Price and the Triple Vesting Share Price, you 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 defined ends of the spectrum).
 Adjusted Share Price means the sum of (i) the average closing prices of a share for the twenty
trading days prior the applicable measurement date (the Per Share Price), and (ii) the value
that would be derived from the number of shares (including fractions thereof) that would have
been purchased had an amount equal to each dividend paid on a share of common stock after the
Grant Date and on or prior to the applicable measurement date been deemed invested on the
dividend payment date, based on the closing price of the common stock on such dividend payment
date.
 Single Vesting Share Price, Double Vesting Share Price, and Triple Vesting Share
Price mean the Adjusted Share Prices equal to a compound annual share price
appreciation (the Annual Compound TSR) of 15%, 30% and 45%, respectively, as
measured between the Per Share Price on the Grant Date and the applicable measurement
date.
 Grant Notices and Grant Agreements shall be prepared consistent with the terms set forth above
and providing such other terms and conditions as are in the Companys standard such agreements.
    
    Share Purchase Commitment: You also agree to purchase at least $500,000 worth of
shares of the Companys common stock on or before the first anniversary of the Effective Date
or such later date as determined by the Company (the Purchased Shares). You shall not be
permitted to sell any of the Purchased Shares until the earlier of one year after the Final
Purchase Date (as defined below) and your date of termination of employment for any reason.
As long as you remain employed by the Company, you shall retain ownership of at least (i)
seventy-five percent (75%) of the Purchased
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Shares until the second anniversary of the
Effective Date, (ii) fifty percent (50%) of the Purchase Shares until the third anniversary of the Effective Date, and (iii) twenty-five percent (25%) of
the Purchased Shares until the fourth anniversary of the Effective Date (the holding
requirements in this and the immediately preceding sentence shall be referred to as the
Purchase Obligations). Notwithstanding the foregoing, the Purchase Obligations shall be
waived upon the occurrence of a Change of Control. The Final Purchase Date shall mean the
date on which you have purchased shares that, together with other shares purchased by you on or
after the Effective Date, have an aggregate purchase price of $500,000.
 
    
    Matching Grants for Share Purchases: The Company shall make matching grants
with respect to the Purchased Shares and any additional shares of the Companys common
stock you purchase (up to an aggregate purchased amount of $1,000,000 inclusive of the
Purchased Shares) on or before the first anniversary of the Effective Date. Such matching
grants shall be credited to you as soon as practicable after the end of any month in which
you purchase Company shares, in a number of restricted share units equal to the number of
shares purchased in such month (the Matching Share Units). The Matching 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
on each of the second, third and fourth anniversaries of the Final Purchase Date, provided
you are employed on the relevant vesting date and you have not violated the Purchase
Obligations prior to such vesting date. If your employment is terminated by the Company
without Cause or by you for Good Reason, either in contemplation of a Change in Control or
at any time within twelve (12) months following a Change in Control, or if your employment
is terminated by the Company at any time for Disability or by reason of your death, then,
your Matching Share Units shall immediately vest and be settled in shares as soon as
practicable (but not more than 60 days) thereafter.
    
    Until the expiration of the two-year period following the date on which any portion of
the Matching Share Units are settled, you shall not be permitted to sell, assign, transfer,
or otherwise dispose of more than fifty percent (50%) of the net number of shares acquired
by you upon such settlement of such portion of the Matching Share Units after subtracting
any such shares withheld by the Company in payment of withholding obligations applicable to
such settlement acquired upon settlement of the Matching Share Units. This restriction
shall cease to apply upon a Change in Control or your earlier termination of employment.
 
    
    Good Reason. You may terminate your employment for Good Reason (as defined below)
by delivering to the Company a Notice of Termination (as defined below) not less than thirty
(30) days prior to the termination of your employment for Good Reason. The Company shall have
the option of terminating your 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
this letter, as may be applicable. For purposes of this letter, Good Reason shall mean the
occurrence of any of the events or conditions described in clauses (i) through (iii)
immediately below 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 you 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 you.
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(i)
    
    Diminution of Responsibility. (A) any material reduction in your duties or
responsibilities as in effect immediately prior thereto, or (B) removal of you from the
position of President, Valeant Pharmaceuticals International. For the avoidance of
doubt, the term Diminution of Responsibility shall not include any such removal
resulting from your death or disability, the termination of your employment for Cause,
or your termination of your employment other than for Good Reason. In addition,
notwithstanding anything herein to the contrary, the reduction or removal from you, in
part or in whole, from time to time, of any duties or responsibilities related to the
Companys business in Europe and/or Latin America shall not by itself be deemed to be a
Diminution of Responsibility;(ii)
    
    Compensation Reduction. Any material reduction in your base salary or target
bonus opportunity which is not comparable to reductions in the base salary or target
bonus opportunity of other similarly-situated senior executives at the Company; or(iii)
    
    Company Breach. Any other material breach by the Company of any material
provision of this letter.
 
    
    Change in Control. For purposes of this letter, a Change in Control shall mean
any of the following events:
 (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.
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Notwithstanding the foregoing, a Change in Control shall not be deemed to occur 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.Upon the occurrence of a Change in Control, at the election of the Company, either (i) the
unvested Options and Matching Share Units shall vest and all Options and Matching Share
Units shall be 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) all Options and Matching Share
Units shall be converted into options or units, as 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, reflecting and continuing
the same vesting schedule in place immediately prior to 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.
    
    Disability. The Company may terminate your employment, on written notice to you
after having established your Disability and while you remain Disabled, subject to the
payment by the Company to you of the applicable benefits provided pursuant to this letter.
For purposes of this letter, Disability shall mean your inability to substantially
perform your 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 you, as reasonably agreed upon by the Company and you. You
shall be entitled to the compensation and benefits provided for under this letter for any
period prior to your termination by reason of Disability during which you are unable to
work due to a physical or mental infirmity in accordance with the Companys policies for
similarly-situated executives.
    
    Cause. The Company may terminate your employment for Cause, subject to the
payment by the Company to you of the applicable benefits provided in this letter. Cause
shall mean, for purposes of this letter: (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 you to perform your duties after written
notice identifying the deficiencies and an opportunity for cure; and (5) a material
violation by you 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 you 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, you
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upon your 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.
 
    
    Employee and Executive Benefits: You will be eligible to participate in the
employee benefit plans and programs generally made available to employees (on the terms and
conditions applicable generally to all employees) and the Valeants Executive Benefit Program:
 1)
    
    Executive medical program2)
    
    Executive medical reimbursement program up to $10,000 per year3)
    
    Executive Vacation Program4)
    
    Executive Annual Physical Program
 
    
    Reimbursement of Certain Expenses: The Company shall fully reimburse the
reasonable fees of your counsel and financial advisor incurred in connection with the
development and implementation of the terms of your employment.
 
    
    Conditions to Reimbursement. The following provisions shall be in effect for any
reimbursements (and in-kind benefits) to which you otherwise become under this Agreement, in
order to assure that such reimbursements (and benefits) do not create a deferred compensation
arrangement subject to Section 409A of the Internal Revenue Code of 1986, as amended
(Section 409A):
 (i) The amount of reimbursements (or in-kind benefits) to which you may become entitled in
any one calendar year shall not affect the amount of expenses eligible for reimbursement (or
in-kind benefits) hereunder in any other calendar year.(ii) Each reimbursement to which you become entitled shall be made by the Company as soon as
administratively practicable following your submission of the supporting documentation, but
in no event later than the close of business of the calendar year following the calendar
year in which the reimbursable expense is incurred.(iii) Your right to reimbursement (or in-kind benefits) cannot be liquidated or exchanged
for any other benefit or payment.
 
    
    At-Will Employment. Your employment with Valeant is at will. This means that
you or Valeant have the option to terminate your employment at any time, with or without
advance notice, and with or without cause. Valeant also may change your position, title, pay,
benefits, and other terms and conditions of your employment (except for the at will nature of
your employment and the terms of the Mediation and Arbitration Agreement) at any time, for any
reason, with or without notice. This offer of
employment does not constitute an express or implied agreement of continuing or long term
employment. The at will nature of your employment can be altered only by a written
agreement specifying the altered status of your employment. Such written agreement must be
signed by both you and the Chief Executive Officer.
    
    Severance Benefits. Notwithstanding the immediately preceding bullet paragraph, if
your employment is terminated by the Company without Cause or by you for Good Reason, the
Company shall have the following obligations:
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
    
    The Company will pay you 150% of the sum of an amount equal to your annual salary as
of the date of your termination, plus an amount equal to your annual target bonus as of
the date of your termination, provided that, if your termination occurs either in
contemplation of a Change in Control or at any time within twelve (12) months following
a Change in Control, the Company shall pay you an amount which is 200% of the sum
otherwise determined under this bullet;
    
    The Company will pay you any accrued but unpaid salary or vacation pay and any
deferred compensation. In addition, the Company will pay you any bonus earned but
unpaid in respect of any fiscal year preceding the termination date, plus any pro-rata
bonus for the year of termination based on a target-level bonus.
    
    The Company will provide you with continued coverage under any health, medical,
dental or vision program or policy in which you were eligible to participate at the
time of your employment termination for 12 months following such termination on terms
no less favorable to you and your dependents (including with respect to payment for the
costs thereof) than those in effect immediately prior to such termination;
    
    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 above
(e.g., in the event of your termination prior to the First Measurement Date, 100% will
vest at the date of such termination if the Adjusted Share Price is the Single Vesting
Share Price; 200% will vest if the Adjusted Share Price is the Double Vesting Share
Price; and 300% will vest if the Adjusted Share Price is the Triple Vesting Share
Price; and if the Adjusted Share Price on such measurement date is between the Single
Vesting Share Price and the Double Vesting Share Price or is between the Double Vesting
Share Price and the Triple Vesting Share Price, you 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 defined ends of the
spectrum); provided, however, that in the event you are entitled to payment under this
bullet point, only a pro rata portion of such calculated units will vest upon your
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 your termination date, and all other Performance Share
Units will be forfeited.
    
    The Company shall provide outplacement services through one or more outside firms of
your choosing up to an aggregate of $20,000, which services shall extend until the
earlier of (i) 12 months following the termination of your employment or (ii) the date
that you secure full time employment.
    
    You shall have three months following the termination date to exercise vested
Options (but in no event beyond the expiration of the 10-year Option term). Any
unvested portion of the Option, any unvested Performance Share Units and any unvested
Matching Share Units shall be forfeited.
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
    
    Covenant Not to Solicit. To protect the confidential information and other trade
secrets of the Company and its affiliates, you agree, during your employment with the Company
or any of its affiliates and for a period of twenty-four (24) months after your cessation of
employment with the Company or any of its affiliates, not to solicit or participate in or
assist in any way in the solicitation of
any employees of the Company or any its affiliates. For purposes of this covenant, solicit or
solicitation means directly or indirectly influencing or attempting to influence employees of
the Company or any of its affiliates to become employed with any other person, partnership,
firm, corporation or other entity. You agree that the covenants contained in this paragraph are
reasonable and desirable to protect the confidential information and other trade secrets of the
Company and its affiliates, provided, that solicitation through general advertising or the
provision of references shall not constitute a breach of such obligations.
    
    It is the intent and desire of you and the Company (and its affiliates) that the
restrictive provisions in the preceding paragraph 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 the preceding paragraph 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. Your obligations
under the preceding paragraph shall survive the termination of your employment with or any
other employment arrangement with the Company or any of its affiliates.
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
    
    Remedies for Breach of Obligations Under the Covenant Not to Solicit above. You
acknowledge that the Company or its affiliates will suffer irreparable injury, not readily
susceptible of valuation in monetary damages, if you breach your obligations under the
paragraph captioned Covenant Not to Solicit above. Accordingly, you agree that the Company
and its affiliates will be entitled, in addition to any other available remedies, to obtain
injunctive relief against any breach or prospective breach by you of your obligations under
such paragraph in any Federal or state court sitting in the State of New Jersey, or, at the
Companys (or its affiliates) election, in any other state in which you maintain your
principal residence or your principal place of business. You agree that the Company or its
affiliates may seek the remedies described in the preceding sentence notwithstanding any
arbitration or mediation agreement that you may enter into with the Company or any of its
affiliates. You hereby submit to the non-exclusive jurisdiction of all those courts for the
purposes of any actions or proceedings instituted by the Company or its affiliates to obtain
that injunctive relief, and you agree that process in any or all of those actions or
proceedings may be served by registered mail, addressed to the last address provided by you to
the Company or its affiliates, or in any other manner authorized by law.
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original
  /s/  J. Michael PearsonJ. Michael Pearson
Chairman and Chief Executive Officer
  /s/  Bhaskar Chaudhuri
    
    
    
    Date:
    
    3/10/09Bhaskar Chaudhuri
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