exv10w2








Exhibit 10.2









November 11, 2010




Dear Margaret:




This letter outlines the details of your employment with Valeant Pharmaceuticals International,
Inc. (the “Company”), and your Company assignment.





	 	•	 	Title: Executive Vice President, Chief Financial Officer; you will report to
the Chief Executive Officer.






	 	•	 	Base Salary: $45,833 per month ($550,000 annualized), effective as of
November 1, 2010.






	 	•	 	Annual Incentive: You will be eligible to participate in the Company’s
management bonus plan for the period from September 28, 2010 through December 31, 2010,
with a target bonus of 60%, with the potential of 120% of your base pay. You will be
eligible to participate in the Company’s management bonus plan beginning in the 2011
calendar year. Your target bonus will be 60%, with the potential of 120% of your base
pay. 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, and not have given or received notice of the termination of your
employment, on the day on which the applicable bonus is paid to other members of the
Company management.






	 	•	 	Equity Awards: Subject to you entering into this agreement prior to the
Equity Grant Date, as defined below, you will receive the following equity:






	 	 	 	Stock Options — On the Equity Grant Date, you shall be granted options
under the Company’s 2007 Equity Compensation Plan (the “Plan”) to acquire
175,000 shares of the Company common stock (“Shares”) (the “Options”). The
Options will vest over a four-year period beginning October 8, 2011 (25% per
year on each of October 8, 2011, 2012, 2013 and 2014), provided that you are
employed by the Company on the vesting date, and shall have a term of five (5)
years. Except as set forth below, if your employment terminates for any reason
prior to the vesting date, your unvested Options will be forfeited (and, in the
case of a termination of your employment for Cause, your vested Options will
also be forfeited). Notwithstanding anything to the contrary in the Plan, (i)
if your employment is terminated by the Company without Cause or by you for Good
Reason (each as defined below), at any time within the 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 (as defined below) and shall remain exercisable for one
year following the Termination Date (but in no event beyond the 5-year term of
the Option) and (ii) if your




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	employment is terminated by reason of your death, any Option outstanding shall
vest in full and remain exercisable for the remainder of the term of the Option.
The “Termination Date” shall be the date specified as the effective date of the
termination of your employment in any notice of termination of employment
provided by the Company to you or accepted by the Company in the event of your
giving notice of the termination of your employment.
	 
	 	 	 	The Equity Grant Date shall be the earliest date that is five clear trading days
following the trading date on which there is no undisclosed material
information. The exercise price of the Options shall be based on the volume
weighted average pricing (“VWAP”) on the Toronto Stock Exchange (“TSX”) or the
New York Stock Exchange (“NYSE”) or other stock exchange where the majority of
the trading volume and value of the Shares occurs, for the five trading days
immediately preceding such grant date, except that to the extent required by
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”),
the exercise price shall be based on the greater of (i) VWAP as calculated above
or (ii) the VWAP on the TSX or NYSE or other stock exchange where the majority
of the trading volume and value of the Shares occurs, for the single trading day
immediately preceding such grant date.
	 
	 	 	 	The Company shall enter into a stock option award agreement with you for the
above grant of Options, incorporating the terms set forth in this Agreement and
otherwise on the terms and conditions set forth in the Company’s standard form
of stock option award agreement.
	 
	 	 	 	Performance Restricted Share Units. Subject to shareholder approval of
an increase in the number of performance awards that may be paid to an
individual in any single year under the Plan, on the Equity Grant Date you will
also receive 75,000 performance-based restricted stock units under the Plan (the
“Performance Share Units”), which shall vest as follows, provided that, except
as set forth herein, you are continually employed by the Company through the
applicable vesting date:






	 	(i)	 	Single Vesting Share Price.
	 
	 	 	 	If at June 28, 2013, the Adjusted Share Price (as defined below) equals the
Single Vesting Share Price (as defined below), you shall vest in 25% of the
Performance Share Units.
	 
	 	 	 	If at September 28, 2013, the Adjusted Share Price equals the Single Vesting
Share Price, you shall vest in an additional 50% of the Performance Share
Units.




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	If at December 28, 2013, the Adjusted Share Price equals the Single Vesting
Share Price, you shall vest in an additional 25% of the Performance Share
Units.






	 	(ii)	 	Double Vesting Share Price.






	 	 	 	If at June 28, 2013, the Adjusted Share Price equals the Double Vesting
Share Price (as defined below), you shall vest in 50% of the Performance
Share Units.






	 	 	 	If at September 28, 2013, the Adjusted Share Price equals the Double Vesting
Share Price, you shall vest in an additional 100% of the Performance Share
Units.






	 	 	 	If at December 28, 2013, the Adjusted Share Price equals the Double Vesting
Share Price, you shall vest in an additional 50% of the Performance Share
Units.






	 	(iii)	 	Triple Vesting Share Price.






	 	 	 	If at June 28, 2013, the Adjusted Share Price equals the Triple Vesting
Share Price (as defined below), you shall vest in 75% of the Performance
Share Units.






	 	 	 	If at September 28, 2013, the Adjusted Share Price equals the Triple Vesting
Share Price, you shall vest in an additional 150% of the Performance Share
Units.






	 	 	 	If at December 28, 2013, the Adjusted Share Price equals the Triple Vesting
Share Price, you shall vest in an additional 75% of the Performance Share
Units.






	 	(iv)	 	Performance Share Units that could have been
vested under either of paragraphs (i), (ii), or (iii) that do not
become vested on June 28, 2013, September 28, 2013, or December 28,
2013, may become vested on June 28, 2014, September 28, 2014, or
December 28, 2014, respectively, based upon the Adjusted Share Price on
the applicable measurement date, provided that you are employed by the
Company





 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	on such applicable vesting date. Any Performance Share Units that are not
vested as of December 28, 2014 shall be immediately forfeited.






	 	(v)	 	If the Adjusted Share Price on a measurement
date set forth in clauses (i), (ii) and (iii) 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 a number of Performance Share Units that is the
mathematical linear interpolation between the number of Performance
Share Units which would vest at defined ends of the applicable
spectrum.






	 	(vi)	 	“Adjusted Share Price” means the sum of (i) the
average of the closing prices of Shares during the 20 consecutive
trading days starting on the specified measurement date (or if such
measurement date does not fall on a trading day, the immediately
following trading day) (“Average 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 Equity 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. The Adjusted Share Price and
Average Share Price shall be subject to equitable adjustment to reflect
stock splits, stock dividends and other capital adjustments.






	 	(vii)	 	“Single Vesting Share Price,” “Double Vesting
Share Price” and “Triple Vesting Share Price” means the Adjusted Share
Prices equal to a compound annual share price appreciation (the “Annual
Compound TSR”) of 15%, 30% and 45%, respectively, as measured from a
base price of $26.51 over a measurement period from October 25, 2010 to
the last trading day of the period used to calculate the Adjusted Share
Price. Such base price shall be subject to equitable adjustment to
reflect stock splits, stock dividends and other capital adjustments
(such price, as adjusted, the “Base Price”).






	 	(viii)	 	Notwithstanding the foregoing vesting provisions of the Performance
Share Units, if on any date between the Equity Grant Date and October
25, 2013, the average of the closing prices of Shares during 20
consecutive trading days (“Per Share Price”) on such date




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	(A) exceeds $58.24, then you will become vested in 75,000 of the
Performance Share Units that could have been earned under clause (i)
above;






	 	 	 	(B) exceeds $80.82, then you will become vested in the additional 75,000
of the Performance Share Units that could have been earned under clause
(ii) above; and






	 	 	 	(C) exceeds $108.58, then you will become vested in the additional
75,000 of the Performance Share Units that could have been earned under
clause (iii) above;






	 	 	 	provided, however, that the vesting that takes place pursuant to this
clause (viii) if the Per Share Price target is achieved shall only take
place the first time such Per Share Price target is achieved on such
vesting date, there is no interpolation of vesting pursuant to this
clause (viii), and to vest in any of the Performance Share Units
pursuant to this clause (viii) you must remain employed by the Company
through the applicable vesting date. The Per Share Price specified
herein shall be subject to equitable adjustment to reflect stock splits,
stock dividends and other capital adjustments.






	 	(ix)	 	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.






	 	(x)	 	Notwithstanding anything to the contrary in the
Plan, in the event of your death, the performance measures applicable
to the Performance Share Units will be applied as though the date of
death was the end of the 20 consecutive trading-day average measurement
period, with the number of units calculated in a manner consistent with
the vesting schedule described above, but based on the Annual Compound
TSR determined through the date of death. Notwithstanding the
immediately preceding sentence, if death occurs prior to October 25,
2011, the measurement date will still be the date of death, but the
Annual Compound TSR will be determined based on an assumed measurement
period of one year. Any Performance Share Units that did not become
vested prior to the date of death for a reason set forth in this clause
(x) or that do not become vested as a result of this clause (x) shall
be forfeited immediately following the date of death.




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	(xi)	 	Subject to clause (xii) below, and
notwithstanding anything to the contrary in the Plan, in the event of
an involuntary termination of your employment by the Company without
Cause or by you with Good Reason, or in the event of your Disability
(each as defined below), in each case, following October 25, 2011, the
performance measures applicable to the Performance Share Units will be
applied as though your employment Termination Date was the end of the
20 consecutive trading-day average measurement period, with the number
of units calculated in a manner consistent with the vesting schedule
described above, but based on the Annual Compound TSR determined
through your Termination Date, provided, however, only a pro rata
portion of such calculated Performance Share Units will vest upon
termination. Any Performance Share Units that did not become vested
prior to your termination of employment for a reason set forth in this
clause (xi) or that do not become vested as a result of this clause
(xi) shall be forfeited immediately following the date of your
termination of employment. In the event of a termination of employment
for a reason set forth in this clause (xi) that occurs prior to October
25, 2011, the award of Performance Share Units shall be forfeited.






	 	(xii)	 	Notwithstanding anything to the contrary in
the Plan, in the event of a Change in Control, the Performance Share
Units will be converted into a number of time-based restricted stock
units (the “Resulting RSUs”) determined by applying the performance
measures applicable to the Performance Share Units as though the sum of
(i) fair market value of the Company common stock on the date of the
Change in Control 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 Equity 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 was the Adjusted Share Price, with the number of
Resulting RSUs equal to the number of Performance Share Units that
would have vested based on the Annual Compound TSR determined through
the Change in Control. Notwithstanding the immediately preceding
sentence, if termination following a Change in Control occurs prior to
October 25, 2011, the measurement date will still be the date of Change
in Control, but the Annual Compound TSR will be determined based on an
assumed measurement period of one year. The Resulting RSUs will vest
on October 25, 2013, subject to your continued employment; provided
that in the event of an involuntary termination of your employment by
the Company without Cause or by you with Good Reason within the twelve
(12) months following a Change in Control,





 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	the vesting and payment of such Resulting RSUs will be accelerated to
your Termination Date. Any Performance Share Units that did not become
Resulting RSUs shall be forfeited on the Change in Control. Any
Resulting RSUs that did not become vested prior to your termination of
employment for a reason set forth in this clause (xii) or that do not
become vested as a result of this clause (xii) shall be forfeited
immediately following the date of your termination of employment.






	 	(xiii)	 	The Company shall enter into a restricted share unit award agreement
with you for the above grant of Performance Share Units, incorporating
the terms set forth in this Agreement and otherwise on the terms and
conditions set forth in the Company’s standard form of
performance-based restricted share unit award agreement.






	 	 	 	Share Ownership Commitment. You also agree to comply with any share
ownership requirements adopted by the Company applicable to you, which shall be
on the same terms as similarly situated executives of the Company.






	 	 	 	Matching Grants for Share Purchases. In connection with such share
ownership, you shall also be eligible to receive matching share units to the
extent such a program is established by the Company for similarly situated
executives of the Company.






	 	•	 	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 which notice must be provided by 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.






	 	(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 Executive Vice President, Chief Financial Officer. For the avoidance of doubt,
the term “Diminution of Responsibility” shall not include any such removal resulting from
a promotion, your death or Disability, the termination of your





 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	employment for Cause, or your termination of your employment other than for Good
Reason;






	 	(ii)	 	Compensation Reduction. Any 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 Agreement, 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 fifty percent (50%) 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.




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to
this letter, solely because fifty percent (50%) 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.






	 	•	 	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 have the meaning assigned to
such term in the Plan.






	 	•	 	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, “cause” as defined by applicable
common law, and (1) conviction of any felony or indictable offense (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 you, with pay, upon your indictment
for the commission of a felony or indictable offense as described under clause (1)
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 similarly situated
employees of the Company on the terms and conditions applicable generally to all
employees. In addition, the Company shall reimburse you for incremental taxes incurred
by you outside of Canada because of any services you provide to the Company outside of
Canada or any business that the Company conducts outside of Canada, if such incremental
amount during any tax year exceeds 1% or more of your average base salary for such tax
year. You shall be required to participate in any tax equalization program the Company
may have in effect from time to time in order to qualify for the benefit described in
the preceding sentence.




 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	•	 	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 may become entitled
under this letter, in order to assure that such reimbursements (and in-kind benefits)
do not create a deferred compensation arrangement subject to 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 the Company is “at will”. This
means that you or the Company have the option to terminate your employment at any time,
with or without advance notice, and with or without cause. 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:





	 	(i)	 	The Company will pay you an amount equal to 1.6 times your annual salary 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 instead pay you an amount equal to two times the
sum of (A) your annual salary as of the date of termination, plus (B) your annual
target bonus as of the date of your termination.
	 
	 	(ii)	 	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. The Company will
also pay you a bonus in respect of the fiscal year in which the Termination Date
occurs, as though you had continued in employment until the payment of bonuses by the
Company to its executives for such fiscal year, in an amount equal to the product





 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	of (A) the lesser of (x) the bonus that you would have been entitled to receive based on
actual achievement against the stated performance objectives or (y) the bonus that you
would have been entitled to receive assuming that the applicable performance objectives
for such fiscal year were achieved at “target”, and (B) a fraction (i) the numerator of
which is the number of days in such fiscal year through Termination Date and (ii) the
denominator of which is 365; 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, then in the foregoing calculation the amount under (A) shall be
equal to (y). Any bonus payable to you under this bullet shall be paid in no event later
than March 15 of the calendar year following the calendar year in which the Termination
Date occurs.
	 
	 	(iii)	 	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.
	 
	 	(iv)	 	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.
	 
	 	 	 	Notwithstanding anything herein to the contrary, the Company shall have no obligation to
pay or provide any of the severance benefits set forth in this letter and shall have no
obligations to you in respect of the termination of your employment save and except for
obligations that are expressly established by applicable employment standards legislation
unless you execute and deliver, within 60 days of the date of your termination, and do
not revoke, a general release in form satisfactory to the Company and any revocation
period set forth in the release has lapsed. The Company shall pay all cash severance
benefits due within 10 business days following the satisfaction of all of the conditions
set forth in the preceding sentence. You shall not be required to mitigate the amount of
any severance payment provided for under this letter by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to you in any subsequent employment.
	 
	 	 	 	Notwithstanding anything herein to the contrary, in no event shall the timing of your
execution of the general release, directly or indirectly, result in you designating the
calendar year of payment, and if a payment that is subject to execution of the general
release could be made in more than one taxable year, payment shall be made in the later
taxable year.




 









 




November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	It is understood that, during your employment by the Company, you will not engage in any
activities that constitute a conflict of interest with the interests of the Company, as
outlined in the Company’s conflict of interest policies for employees and executives in
effect from time to time.






	 	•	 	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 twelve (12) months after your
cessation of employment with the Company or any of its affiliates, not to solicit,
attempt to solicit, or participate in or assist in any way in the solicitation or
attempted solicitation of any employees or independent contractors of 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 necessary 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.






	 	•	 	Remedies for Breach of Obligations Under the Covenants Not to Solicit Above.
It is the intent and desire of you and the Company (and its affiliates) that the
restrictive provisions in the paragraph captioned “Covenant Not to Solicit” above 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 such 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 two
preceding paragraphs shall survive the termination of your employment with or any other
employment arrangement with the Company or any of its affiliates. 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 either 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 or
jurisdiction 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





 









 





November 11, 2010

Ms. Margaret Mulligan

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	 	 	 	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.






	 	•	 	Indemnification. You shall be indemnified by the Company as provided in its
by-laws or, if applicable, pursuant to an indemnification agreement with the Company if
such agreement are provided to similarly situated executives.






	 	•	 	Section 409A. The parties intend for the payments and benefits under this
Agreement to be exempt from Section 409A or, if not so exempt, to be paid or provided
in a manner which complies with the requirements of such section, and intend that this
Agreement shall be construed and administered in accordance with such intention. Any
payments that qualify for the “short-term deferral” exception or another exception
under Section 409A shall be paid under the applicable exception. For purposes of the
limitations on nonqualified deferred compensation under Section 409A, each payment of
compensation under this Agreement shall be treated as a separate payment of
compensation. Notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under Section
409A, amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this letter during the six-month period immediately following your
separation from service shall instead be paid on the first business day after the date
that is six months following your Termination Date (or death, if earlier), with
interest from the date such amounts would otherwise have been paid at the short-term
applicable federal rate, compounded semi-annually, as determined under Section 1274 of
the Internal Revenue Code of 1986, as amended, for the month in which payment would
have been made but for the delay in payment required to avoid the imposition of an
additional rate of tax on you under Section 409A.





It is understood that you are required to read, review, agree, sign and return the following
documents included with this letter: 1) the Confidentiality Agreement and Schedule, and 2) the
Standards of Business Conduct.




Policies of the Company will govern any other matter not specifically covered by this letter.




Except as specifically described in the following sentence, the terms of this letter constitute the
entire agreement between the Company and you with respect to the subject matter hereof, superseding
all prior agreements and negotiations, including, without limitation, the terms of the Executive
Employment Agreement, dated September 3, 2008, between Biovail Corporation and you. For the
avoidance of doubt, the terms of any prior equity awards previously granted to you shall not be
deemed to apply to the Options and Performance Share Units granted hereunder and any such prior
equity awards shall remain subject to the terms in effect in accordance with the




 









 




November 11, 2010

Ms. Margaret Mulligan

Page 14 of 14







terms of such awards. This letter is governed by the laws of the State of New Jersey. All
currency amounts set forth in the letter agreement refer to U.S. dollars.




As confirmation of acceptance of this employment offer, please sign this letter indicating your
agreement and acceptance of the terms and conditions of employment. In addition, please mail the
original signed offer letter in the envelope provided. A duplicate copy of this offer
letter is included for your records.




	 	 	 	 	 
	 	Sincerely,



Valeant Pharmaceuticals International, Inc.
 	 
	 
	 	By:  	/s/      J. Michael Pearson
 	 
	 	 	J. Michael Pearson 	 
	 	 	Chief Executive Officer 	 
	 
	 	 	/s/ Margaret Mulligan
 	 
	 	 	Margaret Mulligan