Document:

exv10w40

 

Exhibit 10.40

NON-QUALIFIED EMPLOYEE

STOCK OPTION CERTIFICATE AGREEMENT

     THIS AGREEMENT is made as of the Date of Grant, XXXXXXX and between
MEDICIS PHARMACEUTICAL CORPORATION, a Delaware corporation (the
“Corporation”), and XXXXXXX (the “Optionee”).

     WHEREAS, the Optionee is a valuable and trusted employee of the
Corporation and the Corporation considers it desirable and in its
best interests that the Optionee be given an added incentive to
advance the interests of the Corporation by possessing an option to
purchase shares of the Corporation, in accordance with the
Corporation’s stock option plans (the “Plans”);

     WHEREAS, Section 7.1 of the Plans states that options granted under
the Plans shall be evidenced by certificates incorporating such terms
and conditions as the Committee (as such term is defined in the Plan)
in its absolute discretion deems consistent with the terms of the
Plan;

     WHEREAS, the Committee took action on the Date of Grant XXXXXX to
authorize the issuance of new options to the Optionee; and

     WHEREAS, the Optionee and the Corporation, together, consider it
desirable and in their best interests to voluntarily promise and
agree to submit to binding arbitration any and all claims covered by
this Agreement, and to agree that binding arbitration pursuant to
this Agreement shall be the sole, exclusive, and final remedy for
resolving any such claims and disputes;

     NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:

     1. GRANT OF OPTION. Subject to the terms and conditions set
forth herein, the Corporation hereby grants to the Optionee the
right, privilege and option to purchase XXXX shares of its Class A
Common Stock (the “Common Stock”). The Option is intended to be Non
Qualified Stock Option’s within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended.

     2. PURCHASE PRICE. The purchase price per share under the
option granted to Optionee under Paragraph 1 above shall be $XX.XX,
subject to adjustment as provided herein and in the Plan.

     3. TIME OF EXERCISE OF OPTION. Subject to the terms and
conditions set forth herein, may be exercised by the Optionee
according to Exhibit A. Subject to the foregoing limitation, Optionee
may exercise the option to purchase all the shares granted by this
option at one time or the Optionee may exercise the option to
purchase the shares granted by the option from time to time, until
the termination thereof as provided in Paragraph 5 below. Options
shall not continue to vest after termination.

     4.  METHOD OF EXERCISE. The option shall be exercised by
accessing the Corporation’s approved stock option administrator’s
stock option center. Option exercise activity must correspond with
the payment of the option price for the number of shares exercised
plus any applicable payroll taxes, which shall be handled with the
Corporation directly by the Corporation’s approved stock option
administrator. The Committee may

 

 

approve or disapprove in its
absolute discretion a request for payment to be made in whole or in
part in stock of the Corporation. The Corporation shall make
immediate delivery of the shares purchased under the Option, provided
that if any law or regulation requires the Corporation to take any
such action with respect to the shares specified in such notice
before the issuance thereof, then the date of delivery of such shares
shall be extended for the period necessary to take such action.

     5. TERMINATION OF OPTION. Except as otherwise stated in Section 12 or elsewhere herein, the option, to the extent vested
prior to termination date or death of Optionee and not theretofore exercised, shall terminate upon the first to occur of the
following dates:

	 	(a)	 	upon the date which is ninety (90) days subsequent to the date on which the Optionee’s employment by the
Corporation is terminated (except if such termination be by reason of death or permanent and total disability or
for cause);
	 
	 	(b)	 	the expiration of twelve (12) months after the date on which the Optionee’s employment by the Corporation is
terminated, if such termination be by reason of Optionee’s permanent and total disability (as determined in the
absolute discretion of the Committee);
	 
	 	(c)	 	the expiration of one hundred eighty (180) days from the death of the Optionee while in the employ of the
Corporation, in which event the transferee of said option (or any unexercised portion thereof) pursuant to
Optionee’s Will or by laws of intestacy must exercise said option within one hundred eighty (180) days following
the date of the Optionee’s death; or
	 
	 	(d)	 	the date which is seven (7) years from the date of grant of the option.

     6. RECLASSIFICATION, CONSOLIDATION OR MERGER. If and to the extent that the number of issued shares of Common Stock of the
Corporation shall be increased or reduced by change in par value, split up, reclassification, distribution of a dividend payable in
stock, or the like, the number of shares subject to option and the option price per share shall be proportionately adjusted. If the
Corporation is reorganized or consolidated or merged with another company, the Optionee shall be entitled to receive options
covering shares of such reorganized, consolidated, or merged company in the same proportion, at an equivalent price, and subject to
the same conditions. For purposes of the preceding sentence, the excess of the aggregate fair market value of the shares subject to
the option immediately after the reorganization, consolidation or merger over the aggregate option price of such shares shall not be
more than the excess of the aggregate fair market value of all shares subject to the option immediately before such reorganization,
consolidation, or merger over the aggregate option price of such shares, and the new option price of such shares, and the new option
or assumption of the old option shall not give the Optionee additional benefits which the Optionee did not have under the old
option, or deprive the Optionee of benefits which the Optionee had under

 

 

the old option (except with respect to fractional shares).

     7. RIGHTS PRIOR TO EXERCISE OF OPTION. This option is not transferable by the Optionee, except in the event of death as
provided in Paragraph 5 above, and during the Optionee’s lifetime is exercisable only by the Optionee. The Optionee shall have no
rights as a stockholder with respect to the option shares until payment of the option price and delivery to him of certificates for
such shares as herein provided.

     8. SECURITIES, REGISTRATION AND RESTRICTIONS. Upon receipt of the shares of the Corporation as a result of the exercise in
whole or in part of the Option, the Optionee, if so requested by the Corporation, shall represent and warrant to the Corporation
that the Optionee is acquiring the shares of Common Stock for investment and not with a view toward resale or distribution to the
public and, if so requested by the Corporation, shall deliver to the Corporation a written statement to that effect satisfactory to
the Corporation. Additionally, if so requested by the Corporation, that the Optionee will execute and deliver to the Corporation a
written agreement that the Optionee will not sell or offer to sell any such shares of Common Stock unless a registration statement
shall be in effect with respect to such shares of Common Stock under the Securities Act (as defined in the Plan) and any applicable
state securities law or unless the Optionee shall have furnished to the Corporation an opinion, in form and substance satisfactory
to the Corporation, of legal counsel acceptable to the Corporation, that such registration is not required. Certificates
representing the shares transferred upon the exercise or surrender of the option granted hereby may, at the discretion of the
Corporation, bear a legend to the effect that such shares have not been registered under the Securities Act or any applicable state
securities law and that such shares may not be sold or offered for sale in the absence of (i) an effective registration statement as
to such shares under the Securities Act and any applicable state securities law, or (ii) an opinion, in form and substance
satisfactory to the Corporation, of legal counsel acceptable to the Corporation, that such registration is not required.
Furthermore, the Corporation shall have the right to require the Optionee to enter into such stockholder or other related agreements
as the Corporation deems necessary or appropriate under the circumstances as a condition to the issuance of any shares under this
option.

     9. PAYMENT OF WITHHOLDING TAX. In the event the Corporation determines that it is required to withhold state or Federal
income tax as a result of the exercise of an option, as a condition to the exercise thereof, the Optionee may be required to make
arrangements satisfactory to the Corporation to enable it to satisfy such withholding requirements. Payment of such withholding
requirements may be made, in the discretion of the Plan Committee, (i) in cash, (ii) by delivery of shares of Common Stock
registered in the name of the Optionee, or by the Corporation not issuing such number of shares of Common Stock subject to the
option, having a fair market value at the time of exercise equal to the amount to be withheld, or (iii) any combination of (i) and
(ii) above.

     10. MISCELLANEOUS.

(a) The Optionee shall not have any right as a stockholder of the Corporation solely as a result of the grant of this option.
The grant of this option does not constitute a contract of employment.

 

 

(b) This option shall be subject in all respects to the terms of the Plan including, without limitation, the following Change
of Control provision:

(a) the acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section
13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended from time to time) (the “Exchange Act”), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either (i)
the then outstanding shares of Stock (the “Outstanding Company Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Company
Voting Securities”), provided, however, that any acquisition by (x) the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (y) any
corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Stock and Company Voting Securities immediately prior to such acquisition in substantially the
same portion as their ownership, immediately prior to such acquisition of the Outstanding Company Stock and Company
Voting Securities, as the case may be, shall not constitute a Change of Control of the Company; or

(b) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the
Effective Date, whose election or nomination for election by the Company’s shareholders was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual
whose initial assumption of office is in connection with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or

(c) consummation of a reorganization, merger or consolidation (a “Business Combination”), in each case, with respect to
which all or substantially all of the individuals and entities who were the respective beneficial owners of the
Outstanding Company Stock and Company Voting Securities immediately prior to such Business

 

 

Combination do not, following
such Business Combination, beneficially own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the corporation resulting from such Business
Combination in substantially the same proportion as their ownership immediately prior to such Business Combination or
the Outstanding Company Stock and Company Voting Securities, as the case may be; or

(d) (i) a complete liquidation or dissolution of the Company or (ii) a sale or other disposition of all or
substantially all of the assets of the Company other than to a corporation with respect to which, following such sale or
disposition, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Stock and Company Voting Securities immediately prior to
such sale or disposition in substantially the same proportion as their ownership of the Outstanding Company Stock and
Company Voting Securities, as the case may be, immediately prior to such sale or disposition.

(e) Notwithstanding the foregoing and any other provision in the Plan, the transaction contemplated by the Agreement and
Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Inamed Corporation and
Masterpiece Acquisition Corp., as it may be amended from time to time, shall not constitute a Change of Control for
purposes of the Plan.

(c) The exercise of this option shall constitute the Optionee’s role and complete consent to whatever action the Committee
elects to satisfy the Federal and State tax withholding requirements, if any, which the Committee in its sole discretion deems
applicable to such exercise. This option shall be governed by the laws of the state applicable to the Plan.

     11. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

     12. FORFEITURE FOR FRAUD, DISHONESTY, UNLAWFUL COMPETITION AND OTHER HARMFUL ACTS.

          A. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 5 OR IN ANY EXHIBIT TO THIS AGREEMENT, ALL OPTION AND OTHER RIGHTS WITH
RESPECT

 

 

TO ALL OPTIONS GRANTED TO OPTIONEE HEREUNDER BUT NOT YET EXERCISED SHALL IMMEDIATELY TERMINATE AND BE NULL AND VOID IF: (i) THE
COMMITTEE OF THE CORPORATION’S BOARD OF DIRECTORS THEN ADMINISTERING THE CORPORATION’S STOCK OPTION PLANS (THE “COMMITTEE”) DETERMINES THAT THE
OPTIONEE ENGAGED IN ILLEGAL ACTS, FRAUD, DISHONESTY, WILLFUL MISCONDUCT OR OTHER INTENTIONAL CONDUCT DETRIMENTAL TO THE CORPORATION, INCLUDING
VIOLATION OF THE CORPORATION’S INSIDER TRADING POLICY (EACH AN “IMPROPER ACT”); (ii) OPTIONEE’S EMPLOYMENT BY THE CORPORATION IS TERMINATED FOR
CAUSE AND OPTIONEE HAS COMMITTED IMPROPER ACTS; (iii) OPTIONEE HAS AT ANY TIME DISCLOSED TO ANY PERSON, FIRM, CORPORATION OR OTHER ENTITY ANY
OF THE CORPORATION’S “PROPRIETARY INFORMATION” (AS DEFINED BELOW) WITHOUT THE EXPRESS WRITTEN CONSENT OF THE BOARD OF DIRECTORS, OR EXCEPT AS
SUCH DISCLOSURE MAY HAVE BEEN REQUIRED IN CONNECTION WITH THE OPTIONEE’S SERVICE AS AN EMPLOYEE OF THE CORPORATION OR BY LAW; (iv) OPTIONEE
SOLICITS OR OTHERWISE INDUCES ANY EMPLOYEE OF THE CORPORATION TO TERMINATE HIS EMPLOYMENT; (v) OPTIONEE SOLICITS BUSINESS FROM ANY OF THE
CORPORATION’S CUSTOMERS WITH WHOM OPTIONEE HAS A RELATIONSHIP OR THE IDENTITY OF WHOM BECAME KNOWN TO OPTIONEE BY REASON OF OPTIONEE’S
RELATIONSHIP WITH THE CORPORATION, FOR AND ON BEHALF OF ANY OF THE CORPORATION’S COMPETITORS; (vi) OPTIONEE DISPARAGES THE CORPORATION OR
COMMITS ANY OTHER ACT OF DISLOYALTY; (vii) OPTIONEE ENGAGES IN ANY CONDUCT IN VIOLATION OF OPTIONEE’S CONTRACTUAL OBLIGATIONS TO THE
CORPORATION, INCLUDING BUT NOT LIMITED TO A VIOLATION OF ANY VALID NON-COMPETITION, NON-DISCLOSURE, NON-SOLICITATION OR OTHER AGREEMENT; (viii)
OPTIONEE FAILS TO ASSIGN TO THE CORPORATION ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT IN VIOLATION OF ANY OF THE
CORPORATION’S POLICIES OR ANY AGREEMENT BETWEEN THE CORPORATION AND OPTIONEE; OR (ix) OPTIONEE REFUSES TO BE AVAILABLE FOR REASONABLE
CONSULTATION WITH RESPECT TO THE SUBJECT MATTER OF OPTIONEE’S EMPLOYMENT OR ENGAGEMENT FOLLOWING TERMINATION OF SUCH EMPLOYMENT. THE ACTS OR
CIRCUMSTANCES DESCRIBED IN THE PRECEDING SENTENCE SHALL BE REFERRED TO AS “EVENTS OF FORFEITURE”.

          B. FOR PURPOSES OF THIS SECTION, THE TERM “PROPRIETARY INFORMATION” SHALL MEAN ALL CONFIDENTIAL OR SECRET CUSTOMER LISTS,
PROSPECTIVE CUSTOMER LISTS, TRADE SECRETS, PROCESSES, PRODUCT FORMULATIONS, INVENTIONS, IMPROVEMENTS, MANUFACTURING FORMULATION OR SYSTEMS
TECHNIQUES, PRODUCT FORMULAS, DEVELOPMENT OR EXPERIMENTAL WORK, WORKS IN PROCESS, BUSINESS, MARKETING AND COMPETITIVE STRATEGIES, INFORMATION
RELATING TO ANY PATENT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT OF THE CORPORATION, AND ANY OTHER SECRET OR CONFIDENTIAL PROPRIETARY
MATTER RELATING TO OR PERTAINING TO THE CORPORATION OR ITS PRODUCTS, SERVICES, SALES OR BUSINESS.

          C. IN ADDITION TO THE FOREGOING RIGHTS AND ANY AND ALL OTHER RIGHTS WHICH THE CORPORATION (OR ANY OF ITS SUBSIDIARIES OR
AFFILIATES) MAY

 

 

HAVE AGAINST THE OPTIONEE AT LAW OR IN EQUITY, OPTIONEE FURTHER AGREES THAT UPON OCCURRENCE OF ANY OF THE EVENTS OF FORFEITURE
DESCRIBED IN SUBSECTION A, UPON THE DETERMINATION OF THE COMMITTEE, OPTIONEE SHALL OWE THE CORPORATION THE EXCESS OF THE FAIR MARKET VALUE OVER
THE OPTION PRICE (MEASURED AS OF THE DATE OF ACQUISITION) OF ALL SHARES ACQUIRED THROUGH EXERCISE OF ANY OPTION WITHIN THE THREE (3) YEARS
PRECEDING THE COMMITTEE’S DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED. OPTIONEE SHALL PAY SUCH AMOUNT TO THE CORPORATION WITHIN
THIRTY (30) DAYS OF THE COMMITTEE’S WRITTEN DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED, WHICH DETERMINATION MAY BE MADE BY NOTICE
TO THE OPTIONEE WITHIN ANY TIME UP TO TWO (2) YEARS FOLLOWING THE OPTIONEE’S TERMINATION OF EMPLOYMENT.

          D. BY ACCEPTING THIS AGREEMENT, OPTIONEE CONSENTS TO DEDUCTION FROM ANY AMOUNTS THE CORPORATION MAY OWE TO OPTIONEE FROM TIME TO
TIME (INCLUDING AMOUNTS OWED TO OPTIONEE AS WAGES OR OTHER COMPENSATION, FRINGE BENEFITS, VACATION PAY OR COMMISSIONS) TO THE EXTENT OF ANY
AMOUNT WHICH OPTIONEE OWES THE CORPORATION PURSUANT TO THE PROVISIONS OF SUBSECTION C. WHETHER OR NOT THE CORPORATION ELECTS TO MAKE ANY
SET-OFF IN WHOLE OR IN PART, IF THE CORPORATION DOES NOT RECOVER BY MEANS OF THE SET-OFF THE FULL AMOUNT OWED TO IT BY THE OPTIONEE, THEN
OPTIONEE AGREES TO PAY IMMEDIATELY THE UNPAID BALANCE TO THE CORPORATION.

          E. THE OPTIONEE MAY BE RELEASED FROM OPTIONEE’S OBLIGATIONS UNDER THIS SECTION 12 ONLY IF THE COMMITTEE DETERMINES, IN ITS SOLE
DISCRETION, THAT SUCH A RELEASE IS IN THE BEST INTERESTS OF THE CORPORATION. SO LONG AS THEY ARE MADE IN GOOD FAITH, ALL DETERMINATIONS BY THE
COMMITTEE MADE PURSUANT TO THIS SECTION 12 SHALL BE FINAL, BINDING AND NONAPPEALABLE.

     13. AGREEMENT REGARDING PRIOR OPTION GRANTS. OPTIONEE EXPRESSLY AGREES THAT, IN CONSIDERATION FOR THE GRANT OF THE OPTIONS
PROVIDED FOR IN THIS AGREEMENT, THE PROVISIONS OF SECTIONS 5 (a, b, & c), 12, 13 AND 14 OF THIS AGREEMENT SHALL BE DEEMED
INCORPORATED INTO ALL PRIOR OPTION AGREEMENTS ENTERED INTO BETWEEN THE CORPORATION AND THE OPTIONEE AND THAT THE FORFEITURE
PROVISIONS SET FORTH IN THIS AGREEMENT SHALL APPLY TO ALL OPTIONS PREVIOUSLY GRANTED TO OPTIONEE.

     14. MANDATORY ARBITRATION. In consideration of the terms and conditions set forth herein, including the Corporation’s grant to
the Optionee of the stock options described above, Optionee and the Corporation voluntarily promise and agree to arbitrate any and
all claims and disputes covered by this Agreement. The arbitration shall be binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) and the National Rules for the Resolution of Employment Disputes
(“Employment Dispute Rules”) in effect on the date the arbitration is commenced in accordance with this Agreement. The AAA’s
Employment Dispute Rules shall govern disputes concerning the term or termination of Optionee’s employment; all federal, state, or
local laws, regulations, statutes, or policies prohibiting

 

 

employment discrimination and/or harassment (including, without
limitation, discrimination or harassment based on race, sex, national origin, religion, age, or disability) and/or unlawful
retaliation in termination of employment in violation of any public policy; any policy, compensation, or benefit plan of the
Corporation, excluding the Corporation’s stock option plan; and claims for personal, emotional or physical injury not otherwise
governed by Workers’ Compensation. The Commercial Arbitration Rules of the AAA shall govern all other disputes covered by this
Agreement, including, without limitation, disputes relating to the corporation’s stock option plan. The provisions of this Agreement
shall govern the rights of all parties hereto, including but not limited to any party claiming for or on behalf of Optionee,
including Optionee’s heirs, successors, assigns, personal representatives and bankruptcy trustees. Optionee and the Corporation
further agree that binding arbitration pursuant to this Agreement shall be the sole, exclusive, and final remedy for resolving any
such claims and disputes.

          A. CLAIMS COVERED BY MANDATORY ARBITRATION AGREEMENT. With the exception of only those claims specifically excluded in
paragraph B, below, this Agreement includes all legally actionable claims that Optionee may currently, or in the future, have against
Corporation, including without limitation, claims arising under:

	 	1.	 	any alleged or actual contract, agreement, or covenant (oral, written,
or implied), including this Agreement, between Optionee and Corporation
relating to Optionee’s employment, the termination of Optionee’s
employment, directorship and/or consultancy or an option provided to
Optionee;
	 
	 	2.	 	any policy, compensation, or benefit plan of the Corporation, including
the Corporation’s stock option plan, unless the decision at issue was
made by an entity other than the Corporation, in which case the
agreement that arbitration is the exclusive remedy applies only to
Optionee’s claims against the Corporation;
	 
	 	3.	 	all federal, state, or local laws, regulations, statutes, or policies
prohibiting employment discrimination and/or harassment, (including,
without limitation, discrimination or harassment based on race, sex,
national origin, religion, age, or disability) and/or unlawful
retaliation;
	 
	 	4.	 	any public policy;
	 
	 	5.	 	any and all claims for personal, emotional, physical, or economic injury;
	 
	 	6.	 	any other rights, obligations, or duties arising out of constitutions,
statutes or common law, whether or not specifically referred to in this
Agreement, and whether similar to or dissimilar to rights, obligations,
or duties referred to in this Agreement, which are or may be granted to
any party to this Agreement by the laws of any state or country in which
either party resides or engages in the business of the Corporation.

          B. CLAIMS EXCLUDED FROM ARBITRATION AGREEMENT. The only claims not subject to Arbitration under this Agreement are limited to:

	 	1.	 	any claim by the Optionee for workers’ compensation benefits;
	 
	 	2.	 	any claim by the Optionee for benefits under a benefit plan of the
Corporation which provides its own arbitration procedure;

 

 

	 	3.	 	any claim by a party involving violation of rules, regulations, or laws
governing insider trading; and
	 
	 	4.	 	any claim prohibited from binding arbitration by applicable laws or
public policy; and.
	 
	 	5.	 	any claim brought before the Equal Employment Opportunity Commission,
however, notwithstanding the foregoing, Optionee agrees that Optionee’s
sole recovery for any damages shall be through the binding arbitration
process described herein.

          C. PROCEDURES.

	 	1.	 	A written request for mediation/arbitration which contains a specific
statement of the acts complained of and the statutory or other violation
alleged, must be served by mail on the other party, and in duplicate
(with a copy of this Agreement attached) on the AAA Office in Phoenix,
Arizona or the AAA regional office in which Phoenix is located. The
Corporation shall be served at its principal place of business, and the
Optionee shall be served at the last home address shown in his/her
personnel file. The request shall set forth the names, addresses, and
telephone numbers of the parties; the amount in controversy, if any; the
remedy sought; and that the hearing location agreed upon is Phoenix,
Arizona. The request must be filed within the time limit established by
the applicable statute of limitations necessary to perfect an
administrative claim or initiate a lawsuit, whichever is sooner, if the
dispute involves statutory rights, and when statutory rights are not at
issue, within one year of the day on which the act complained of
occurred, or notice thereof was given, whichever occurs first.
	 
	 	2.	 	The parties shall attempt in good faith to select one person by
agreement to mediate the dispute. The mediator, after consultation with
the parties, will determine the mediation procedures to be followed. The
fees and expenses of the mediator, if any, will be paid by the
Corporation. If no mutual agreement can be reached as to such person,
then the dispute will be settled by binding arbitration under the
procedures set forth below. No mediation shall exceed two hours without
the Corporation’s written agreement to lengthen the mediation. Mediation
is not binding on either party.
	 
	 	3.	 	If the dispute is not resolved by discussion or mediation within thirty
(30) days of the request for mediation/arbitration, the AAA shall
administer the arbitration. The AAA shall appoint an arbitrator within
thirty (30) days of the AAA’s receipt of notice that the matter was not,
or will not be, resolved through mediation. The arbitrator must be
licensed to practice law in the state in which the arbitration is
convened, and the arbitrator shall, by virtue of background and similar
experience, be knowledgeable in matters pertaining to stock option
agreements and employment relationships and disputes.
	 
	 	4.	 	The arbitrator may establish rules for the conduct of the arbitration
consistent with the terms of this agreement and the applicable AAA
rules. Each party shall have the presumptive right to take two (2)
depositions at their own expense. The arbitrator may order additional
depositions for good cause shown and such other discovery as the
arbitrator considers necessary. Each

 

 

	 	 	 	party shall be entitled to counsel
of its choice. All proceedings shall be deemed private and confidential
and shall not be disclosed to the public by either the arbitrator or the
parties to the arbitration, except as required by legal process or as
necessary to judicially challenge an arbitration award under the grounds
set forth below. The arbitrator shall have the authority to entertain
motions to dismiss and/or motions for summary judgment by any party and
shall apply the standards governing such motions under the Federal Rules
of Civil Procedure.
	 
	 	5.	 	In arbitrations governed by the Commercial Arbitration Rules of the AAA,
not earlier than thirty (30) nor more than forty-five (45) days after
appointment, the arbitrator shall conduct a preliminary hearing in
accordance with the AAA “Guidelines for Expediting Large, Complex
Commercial Arbitrations.” Not less than five (5) days prior to the
preliminary hearing, all parties to the arbitration shall serve upon all
other parties to the arbitration a written list of witnesses and
exhibits to be used in the arbitration hearing. Except for good cause
shown, no witness or exhibit may be utilized at the arbitration hearing
other than those set forth on such list. The arbitrator shall have the
power to compel production of documents at the hearing by subpoena. Each
party shall be entitled to counsel of its choice. All proceedings and
information provided at the hearings shall be deemed private and
confidential and shall not be disclosed to the public by either the
arbitrator or the parties to the arbitration. The arbitrator shall have
the authority to entertain motions to dismiss and/or motions for summary
judgment by any party and shall apply the standards governing such
motions under the Federal Rules of Civil Procedure.
	 
	 	6.	 	Also in arbitrations governed by the Commercial Arbitration Rules, the
arbitrator shall receive evidence in a single hearing which shall be
conducted in Phoenix, Arizona. The hearing shall be commenced not more
than sixty (60) days after the appointment of the arbitrator.
	 
	 	7.	 	In arbitrations governed by the Employment Dispute Rules, the arbitrator
shall conduct an Arbitration Management Conference with the parties not
later than sixty (60) days after appointment, and shall thereafter
conduct the Arbitration in Phoenix, Arizona at a time and date set after
consultation with the parties during the Management Conference.
	 
	 	8.	 	The arbitrator shall issue such award as is proper under the applicable
substantive law of Arizona or of the United States, as the case may be,
and the evidence. The arbitrator shall have no power or authority to add
to or, except as otherwise provided in Section D.4 hereof, to detract
from the Agreement of the parties. The arbitrator shall not have
authority to alter the terms or conditions of employment lawfully
established by the Corporation, nor modify or disregard the standards of
professional conduct and performance set by the Corporation in good
faith, but shall only determine whether the law has been violated by the
acts of either party as specifically alleged.
	 
	 	9.	 	The arbitrator shall issue a final award not more than twenty (20) days
following the conclusion of the hearing. The arbitrator shall have
authority to

 

 

	 	 	 	grant injunctive relief in a form substantially similar to
that which would otherwise be granted by a court of law. The arbitrator
shall issue a written opinion setting forth a statement of the grounds
for the award and the method of determining any damages, if any,
awarded. The award shall be final and binding on all parties and may be
entered as a judgment, under seal, and enforced, or injunctive relief
maybe sought, in any court of competent jurisdiction. Judicial
modification of the award shall be limited to situations in which the
arbitrator fails or refuses to apply controlling law or the valid and
enforceable terms of this Agreement.
	 
	 	10.	 	The arbitrator shall be entitled to receive reasonable compensation at
an hourly rate to be established by agreement between the arbitrator and
the AAA. All fees and expenses of the arbitration, including a
transcript if either party requests, will be borne by the parties
equally, except that in arbitrations governed by the Employment Dispute
Rules, the fees and expenses will be borne by the parties as follows:
Optionee shall pay an amount equivalent to the filing fee in Arizona
District Court, plus one-half of the expense of the transcript, and any
other amounts deemed fair and reasonable by the arbitrator; the
Corporation shall bear the remaining fees and expenses of the
arbitration. Each party will pay for the fees and expenses of its own
attorneys, experts, witnesses and the presentation of proof and
post-hearings briefs, unless the party prevails on a claim for which
attorneys’ fees are recoverable by statute or contract, and the
arbitrator awards such fees.
	 
	 	11.	 	Either party may bring an action in a court of competent jurisdiction to
compel arbitration under this agreement, to seek to vacate an
arbitration award, and to enforce an arbitration award. Except as
otherwise provided in this agreement, Optionee agrees that Optionee will
not initiate or prosecute any lawsuit in any way related to any claim
covered by this agreement.

          C. MISCELLANEOUS PROVISIONS.

For the purposes of the arbitration provisions of this agreement:

	 	1.	 	Notice will be effective on the fifth (5th) day after deposit with the
United States Postal Service by certified mail, return receipt
requested, properly addressed and with first class postage paid.
	 
	 	2.	 	The term “Corporation” includes all related entities, all directors,
officers, employees, agents, representatives, benefit plans, benefit
plan sponsors, fiduciaries, administrators, or affiliates of any of the
above, and all successors and assigns of any of the above excluding the
Optionee.
	 
	 	3.	 	If either party pursues a covered claim against the other by action,
method or legal proceeding other than arbitration as provided herein,
the responding party shall be entitled to dismissal or injunctive relief
regarding such action and shall be entitled to recover all costs,
losses, and attorneys’ fees related to such other action or proceeding.
	 
	 	4.	 	This is the complete agreement of the parties on the subject of
arbitration of disputes covered by this agreement and stock options.
This agreement supersedes any prior or contemporaneous oral, written or
implied

 

 

	 	 	 	understanding on the subject, shall survive the termination of
Optionee’s employment, and can only be revoked or modified by a writing
signed by the parties which specifically states an intent to revoke or
modify this Agreement. If any provision, or term in a provision, of this
Agreement is adjudged to be void or otherwise unenforceable in whole or
in part, such adjudication shall not affect the validity of the
remainder of the Agreement. To the extent that any provision of this
Agreement is held invalid or unenforceable because it is overbroad, that
provision shall not be void but shall be limited only to the extent
required by applicable law and enforced as so limited.
	 
	 	5.	 	This agreement is not, and shall not be construed to create, any
contract of employment, express or implied, nor does this agreement in
any way alter the “at will” status of Optionee’s employment.

          E. EMPLOYMENT AT WILL. Optionee acknowledges that Optionee is, and at all times will be, an employee-at-will of the
Corporation, and nothing contained herein shall be construed to alter or affect the Optionee’s at-will employment status. Optionee acknowledges
that the Optionee’s at-will status can be modified only by a written contract which (a) sets forth an express restriction on the Optionee’s
at-will status; (b) is signed by both the Optionee and the President of the Corporation; and (c) expresses the specific intent that it is a
contract of employment intended to modify the Optionee’s at-will status. Optionee’s employment is terminable by the Corporation or by the
Optionee, with or without cause, and with or without notice, at any time. In the event of the termination of Optionee’s employment under this
Agreement the Corporation shall have no liability to Optionee, other than to pay Optionee the compensation due through Optionee’s last day of
employment, and such termination shall not diminish or affect the enforceability of this Agreement.

          F. CHOICE OF FORUM AND GOVERNING LAW. In light of the Corporation’s substantial contacts with the State of Arizona, the parties’
interests in ensuring that disputes regarding the interpretation, validity and enforceability of this Agreement are resolved on a uniform
basis, and the Corporation’s execution of, and the making of, this Agreement in Arizona, the parties agree that: (1) the Agreement shall be
interpreted in accordance with and governed by the laws of the State of Delaware, without regard for any conflict of law principles; and (2)
any arbitration, application for injunctive relief, or litigation relating to the Agreement shall be filed and conducted in Maricopa County,
Arizona.

          G. NON-WAIVER OF RIGHTS. The Corporation’s failure to enforce at any time any of the versions of this Agreement or to require at
any time performance by the Optionee of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to
affect either the validity of this Agreement, or any part hereof, or the right of Corporation thereafter to enforce each and every provision in
accordance with the terms of this Agreement.

UPON ENTERING INTO THIS AGREEMENT, OPTIONEE WARRANTS THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT, UNDERSTANDS ITS TERMS, AND HAS VOLUNTARILY AGREED TO ENTER INTO
IT WITHOUT RELIANCE ON ANY REPRESENTATIONS OR PROMISES BY THE CORPORATION OTHER THAN AS SET FORTH IN THIS AGREEMENT.

 

 

OPTIONEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS OPTIONEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY ANSWERS TO
ALL SUCH QUESTIONS.

OPTIONEE UNDERSTANDS OPTIONEE’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND VOLUNTARILIY ENTERS INTO IT.

OPTIONEE ACKNOWLEDGES OPTIONEE’S “AT-WILL” EMPLOYMENT STATUS.

OPTIONEE RECOGNIZES OPTIONEE’S WAIVER OF RIGHT TO A JURY TRIAL BY AGREEING TO MANDATORY ARBITRATION.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION. THE ARBITRATION PROVISION MAY BE ENFORCED BY THE CORPORATION AND BY YOU.

Exhibit A

Five Year — Cliff Vesting

	 
	 

 

 

Vesting schedule for five (5) year vest period.

	 	 	 	 	 	 	 
	Shares

	 	Option price
	 	Fully Vested
	 	Expiration

	 
	 

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the day and year first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	  MEDICIS PHARMACEUTICAL CORPORATION	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	By:exv10w41

 

Exhibit 10.41

MEDICIS PHARMACEUTICAL CORPORATION

2004 STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     THIS AGREEMENT is made as of [insert date] (the “Date of Grant”) by and between MEDICIS
PHARMACEUTICAL CORPORATION, a Delaware corporation (the “Corporation”), and [insert name] (the
“Grantee”).

     WHEREAS, the Grantee is a valuable and trusted employee of the Corporation and the Corporation
considers it desirable and in its best interests to grant the Grantee an award of restricted Stock
(the “Restricted Stock”) under the Medicis Pharmaceutical Corporation 2004 Stock Incentive Plan
(the “Plan”);

     WHEREAS, Section 7 of the Plan states that Restricted Stock granted under the Plan shall be
evidenced by an agreement incorporating such terms and conditions as the Committee in its absolute
discretion deems desirable and consistent with the terms of the Plan;

     WHEREAS, the Committee took action on the Date of Grant to authorize the issuance of the
Restricted Stock to the Grantee; and

     WHEREAS, the Grantee and the Corporation, together, consider it desirable and in their best
interests to voluntarily promise and agree to submit to binding arbitration any and all claims
covered by this Agreement, and to agree that binding arbitration pursuant to this Agreement shall
be the sole, exclusive, and final remedy for resolving any such claims and disputes;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is
agreed by and between the parties as follows:

     1. GRANT OF RESTRICTED STOCK. Pursuant to Section 9 of the Plan, and subject to the
terms and conditions set forth herein and in the Plan, the Corporation hereby grants to the
Grantee, in the aggregate [insert number] shares of Restricted Stock, which shall be subject to the
restrictions and conditions set forth in this Agreement.

     2. RESTRICTIONS. Except as otherwise provided in this Agreement, the restrictions on
the Restricted Stock are that the Stock will be forfeited by the Grantee and all of the Grantee’s
rights to such Stock shall immediately terminate without any payment or consideration by the
Corporation, in the event of any sale, assignment, transfer, hypothecation, pledge or other
alienation of such Restricted Stock made or attempted, whether voluntary or involuntary, and if
involuntary whether by process of law in any civil or criminal suit, action or proceeding, whether
in the nature of an insolvency or bankruptcy proceeding or otherwise, without the written consent
of the Board of Directors of the Corporation (the “Board”), excluding the Grantee if he so serves
on the Board (the “Restrictions”).

     3. VESTING. Except as otherwise provided herein or in the Plan, the Restrictions
applicable to the Restricted Stock shall lapse (i.e., the Restricted Stock shall “vest”) as to:
(a) 10% of the shares of Restricted Stock on the first anniversary of the Date of Grant, (b) 10% of

 

 

the shares of Restricted Stock on the second anniversary of the Date of Grant, (c) 20% of the
shares of Restricted Stock on the third anniversary of the Date of Grant, (d) 30% of the shares of
Restricted Stock on the fourth anniversary of the Date of Grant, and (e) 30% of the shares of
Restricted Stock on the fifth anniversary of the Date of Grant (each such date, a “Vesting Date”).
In no event shall Grantee vest in any additional shares of Restricted Stock following the
termination of Grantee’s Continuous Service. All remaining unvested shares of Restricted Stock
shall automatically be forfeited upon Grantee’s cessation of Continuous Service.

     4. CHANGE OF CONTROL. In the event of a Change of Control (as defined below), the
Restrictions shall lapse with respect to 100% of the Restricted Stock. For purposes hereof,
“Change of Control” means:

          (a) the acquisition, other than from the Corporation, by any individual, entity or group
(within the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
from time to time) (the “Exchange Act”), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of either (i) the then outstanding shares of
Stock (the “Outstanding Company Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the election of directors (the
“Company Voting Securities”), provided, however, that any acquisition by (x) the
Corporation or any of its subsidiaries, or any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any of its subsidiaries or (y) any corporation with respect to
which, following such acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Company Stock and Company
Voting Securities immediately prior to such acquisition in substantially the same portion as their
ownership, immediately prior to such acquisition of the Outstanding Company Stock and Company
Voting Securities, as the case may be, shall not constitute a Change of Control of the Corporation;
or

          (b) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board, provided that any individual
becoming a director subsequent to the Effective Date, whose election or nomination for election by
the Corporation’s shareholders was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual whose initial
assumption of office is in connection with an actual or threatened election contest relating to the
election of the Directors of the Corporation (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or

          (c) consummation of a reorganization, merger or consolidation (a “Business Combination”), in
each case, with respect to which all or substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Company Stock and Company Voting Securities
immediately prior to such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the

2

 

case may be, of the corporation resulting from such Business Combination in substantially the
same proportion as their ownership immediately prior to such Business Combination or the
Outstanding Company Stock and Company Voting Securities, as the case may be; or

          (d) (i) a complete liquidation or dissolution of the Corporation or (ii) a sale or other
disposition of all or substantially all of the assets of the Corporation other than to a
corporation with respect to which, following such sale or disposition, more than 50% of,
respectively, the then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company Stock and Company Voting
Securities immediately prior to such sale or disposition in substantially the same proportion as
their ownership of the Outstanding Company Stock and Company Voting Securities, as the case may be,
immediately prior to such sale or disposition.

     5. CERTIFICATES. Certificates representing the shares of Restricted Stock shall be
issued and held by the Corporation in escrow until (i) their delivery to Grantee or Grantee’s
estate as set forth herein, subject to the delivery by Grantee or Grantee’s estate of any documents
which the Committee in its discretion may require as a condition to the issuance and delivery of
shares or (ii) their forfeiture and transfer to the Corporation. Certificates representing shares
of Restricted Stock in respect of which the restrictions have lapsed shall be delivered to Grantee
or Grantee’s estate as soon as practicable following each Vesting Date (less any shares used to
satisfy the Corporation’s withholding obligations, if applicable), provided that all applicable
withholding requirements have been met. Any certificates issued in respect of shares of Restricted
Stock, at the sole discretion of the Committee, shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in the following form:

“THE TRANSFERABILITY OF THIS CERTIFICATE AND THE COMMON STOCK REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS (INCLUDING FORFEITURE) CONTAINED IN THE RESTRICTED STOCK AWARD AGREEMENT DATED
AS OF [___], 2005, ENTERED INTO BETWEEN THE REGISTERED OWNER AND MEDICIS PHARMACEUTICAL
CORPORATION.”

At the expiration of the Restrictions, the Corporation shall redeliver to the Grantee (or his legal
representative, beneficiary or heir) share certificates for the Stock deposited with it without any
legend except as otherwise provided by the Plan, this Agreement or applicable law. During the
period that the Corporation holds the shares of Restricted Stock in escrow, the Grantee shall have
the right to receive dividends on and to vote the Restricted Stock while it is subject to
restriction, except as otherwise provided by the Plan. If the Award is forfeited in whole or in
part, the Grantee will assign, transfer, and deliver any evidence of the shares of Restricted Stock
to the Corporation and cooperate with the Corporation to reflect such forfeiture. By accepting the
Award, the Grantee acknowledges that the Corporation does not have an adequate remedy in damages
for the breach by the Grantee of the conditions and covenants set forth in this Agreement and
agrees that the Corporation is entitled to and may obtain an order or a decree of specific
performance against the Grantee issued by any court having jurisdiction.

3

 

     6. ADJUSTMENT. The Award may be adjusted as provided in the Plan including, without
limitation, Section 11 of the Plan.

     7. NONTRANSFERABILITY; BENEFICIARIES. This Award shall not be assignable or
transferable by the Grantee, otherwise than by will or the laws of descent and distribution or
pursuant to a beneficiary designation.

     8. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE.

          (a) Upon receipt of the shares of Stock of the Corporation as a result of the lapse of the
Restrictions of the Restricted Stock, the Grantee, if so requested by the Corporation, shall
represent and warrant to the Corporation that the Grantee is acquiring the shares of Stock for
investment and not with a view toward resale or distribution to the public and, if so requested by
the Corporation, shall deliver to the Corporation a written statement to that effect satisfactory
to the Corporation. Additionally, if so requested by the Corporation, the Grantee will execute and
deliver to the Corporation a written agreement that the Grantee will not sell or offer to sell any
such shares of Stock unless a registration statement shall be in effect with respect to such shares
of Stock under the Securities Act and any applicable state securities law or unless the Grantee
shall have furnished to the Corporation an opinion, in form and substance satisfactory to the
Corporation, of legal counsel acceptable to the Corporation, that such registration is not
required. Furthermore, the Corporation shall have the right to require the Grantee to enter into
such stockholder or other related agreements as the Corporation deems necessary or appropriate
under the circumstances as a condition to the issuance of any shares of Stock under this Award.

          (b) The Grantee acknowledges that there may be adverse tax consequences upon the vesting of
the Restricted Stock or disposition of the shares of Stock once vested, and that the Grantee should
consult a tax advisor prior to such time.

          (c) The issuance and transfer of shares of Stock shall be subject to compliance by the
Corporation and the Grantee with all applicable requirements of securities laws and with all
applicable requirements of any stock exchange on which the Stock may be listed at the time of such
issuance or transfer. The Grantee understands that the Corporation is under no obligation to
register or qualify the Stock with the Securities and Exchange Commission (“SEC”), any state
securities commissions or any stock exchange to effect such compliance.

     9. PAYMENT OF WITHHOLDING TAX.

          (a) Subject to clause 9(b), upon the vesting of the Grantee’s Award, the Grantee shall be
required to pay to the Corporation (in cash or cash equivalent) the amount of any federal, state or
local taxes of any kind which the Corporation shall be required to withhold with respect thereto.
In the event that either (i) Grantee fails to notify the Corporation at least five business days
prior to any Vesting Date that Grantee intends to pay to the Corporation the amount of any federal,
state or local taxes of any kind which the Corporation shall be required to withhold with respect
to the shares of Restricted Stock vesting on such Vesting Date or (ii) Grantee fails to provide
timely payment (in cash or cash equivalent) of all sums required by the Corporation pursuant to
this Section 9(a), the Corporation shall have the right and option, but not the obligation, to
treat such failure as an election by Grantee to provide all or any portion of such

4

 

required payment by means of tendering vested shares of Restricted Stock having a Fair Market
Value equal to the amount of the tax withholding obligation, as determined by the Corporation;
provided, however, that in no event shall Grantee be deemed to be tendering a
number of shares of Restricted Stock having a value exceeding the minimum amount of tax required to
be withheld by law.

          (b) If the Grantee properly elects, within thirty (30) days of the Date of Grant, to include
in gross income for federal income tax purposes an amount equal to the Fair Market Value as of the
Date of Grant of the shares of Restricted Stock granted hereunder pursuant to Section 83(b) of the
Code (a “Section 83(b) Election”), the Grantee shall pay to the Corporation in the year of such
grant, any federal, state or local taxes required to be withheld with respect to such shares. If
the Grantee fails to make such payments, the Corporation shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to the Grantee any federal,
state or local taxes of any kind required by law to be withheld with respect to such shares of
Stock. The Grantee agrees to provide a copy of such election to the Corporation within ten (10)
days after filing the election with the Internal Revenue Service. Exhibit A contains a
suggested form of Section 83(b) Election.

     10. FORFEITURE FOR FRAUD, DISHONESTY, UNLAWFUL COMPETITION AND OTHER HARMFUL ACTS.

          A. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND IN ADDITION TO THE
RESTRICTIONS CONTAINED IN SECTION 2 OF THIS AGREEMENT, ALL UNVESTED RESTRICTED STOCK SHALL BE
IMMEDIATELY FORFEITED IF: (i) THE COMMITTEE DETERMINES THAT THE GRANTEE ENGAGED IN ILLEGAL ACTS,
FRAUD, DISHONESTY, WILLFUL MISCONDUCT OR OTHER INTENTIONAL CONDUCT DETRIMENTAL TO THE CORPORATION,
INCLUDING VIOLATION OF THE CORPORATION’S INSIDER TRADING POLICY (EACH AN “IMPROPER ACT”); (ii) THE
GRANTEE’S EMPLOYMENT BY THE CORPORATION IS TERMINATED FOR CAUSE AND THE GRANTEE HAS COMMITTED
IMPROPER ACTS; (iii) THE GRANTEE HAS AT ANY TIME DISCLOSED TO ANY PERSON, FIRM, CORPORATION OR
OTHER ENTITY ANY OF THE CORPORATION’S PROPRIETARY INFORMATION (AS DEFINED BELOW) WITHOUT THE
EXPRESS WRITTEN CONSENT OF THE BOARD, OR EXCEPT AS SUCH DISCLOSURE MAY HAVE BEEN REQUIRED IN
CONNECTION WITH THE GRANTEE’S SERVICE AS AN EMPLOYEE OF THE CORPORATION OR BY LAW; (iv) THE GRANTEE
SOLICITS OR OTHERWISE INDUCES ANY EMPLOYEE OF THE CORPORATION TO TERMINATE HIS EMPLOYMENT; (v) THE
GRANTEE SOLICITS BUSINESS FROM ANY OF THE CORPORATION’S CUSTOMERS WITH WHOM THE GRANTEE HAS A
RELATIONSHIP OR THE IDENTITY OF WHOM BECAME KNOWN TO THE GRANTEE BY REASON OF THE GRANTEE’S
RELATIONSHIP WITH THE CORPORATION, FOR AND ON BEHALF OF ANY OF THE CORPORATION’S COMPETITORS; (vi)
THE GRANTEE DISPARAGES THE CORPORATION OR COMMITS ANY OTHER ACT OF DISLOYALTY; (vii) THE GRANTEE
ENGAGES IN ANY CONDUCT IN VIOLATION OF THE GRANTEE’S CONTRACTUAL OBLIGATIONS TO THE CORPORATION,
INCLUDING BUT NOT LIMITED TO A VIOLATION OF ANY VALID NON-COMPETITION, NON-DISCLOSURE,
NON-SOLICITATION OR OTHER AGREEMENT;

5

 

(viii) THE GRANTEE FAILS TO ASSIGN TO THE CORPORATION ANY PATENT, COPYRIGHT, TRADEMARK OR
OTHER INTELLECTUAL PROPERTY RIGHT IN VIOLATION OF ANY OF THE CORPORATION’S POLICIES OR ANY
AGREEMENT BETWEEN THE CORPORATION AND THE GRANTEE; OR (ix) THE GRANTEE REFUSES TO BE AVAILABLE FOR
REASONABLE CONSULTATION WITH RESPECT TO THE SUBJECT MATTER OF THE GRANTEE’S EMPLOYMENT OR
ENGAGEMENT FOLLOWING TERMINATION OF SUCH EMPLOYMENT. THE ACTS OR CIRCUMSTANCES DESCRIBED IN THE
PRECEDING SENTENCE SHALL BE REFERRED TO AS “EVENTS OF FORFEITURE”.

          B. FOR PURPOSES OF THIS SECTION, THE TERM “PROPRIETARY INFORMATION” SHALL MEAN ALL
CONFIDENTIAL OR SECRET CUSTOMER LISTS, PROSPECTIVE CUSTOMER LISTS, TRADE SECRETS, PROCESSES,
PRODUCT FORMULATIONS, INVENTIONS, IMPROVEMENTS, MANUFACTURING FORMULATION OR SYSTEMS TECHNIQUES,
PRODUCT FORMULAS, DEVELOPMENT OR EXPERIMENTAL WORK, WORKS IN PROCESS, BUSINESS, MARKETING AND
COMPETITIVE STRATEGIES, INFORMATION RELATING TO ANY PATENT, TRADEMARK OR OTHER INTELLECTUAL
PROPERTY RIGHT OF THE CORPORATION, AND ANY OTHER SECRET OR CONFIDENTIAL PROPRIETARY MATTER RELATING
TO OR PERTAINING TO THE CORPORATION OR ITS PRODUCTS, SERVICES, SALES OR BUSINESS.

          C. IN ADDITION TO THE FOREGOING RIGHTS AND ANY AND ALL OTHER RIGHTS WHICH THE CORPORATION (OR
ANY OF ITS SUBSIDIARIES OR AFFILIATES) MAY HAVE AGAINST THE GRANTEE AT LAW OR IN EQUITY, THE
GRANTEE FURTHER AGREES THAT UPON THE OCCURRENCE OF ANY OF THE EVENTS OF FORFEITURE DESCRIBED IN
SUBSECTION A, UPON THE DETERMINATION OF THE COMMITTEE, THE GRANTEE SHALL OWE THE CORPORATION THE
FAIR MARKET VALUE OF THE RESTRICTED STOCK (MEASURED AS OF THE DATE THE RESTRICTIONS THEREON LAPSED)
OF ALL SHARES VESTED WITHIN THE THREE (3) YEARS PRECEDING THE COMMITTEE’S DETERMINATION THAT AN
EVENT OF FORFEITURE HAS OCCURRED. THE GRANTEE SHALL PAY SUCH AMOUNT TO THE CORPORATION WITHIN
THIRTY (30) DAYS OF THE COMMITTEE’S WRITTEN DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED,
WHICH DETERMINATION MAY BE MADE BY NOTICE TO THE GRANTEE WITHIN ANY TIME UP TO TWO (2) YEARS
FOLLOWING THE GRANTEE’S TERMINATION OF CONTINUOUS SERVICE.

          D. BY ACCEPTING THIS AGREEMENT, THE GRANTEE CONSENTS TO DEDUCTION FROM ANY AMOUNTS THE
CORPORATION MAY OWE TO THE GRANTEE FROM TIME TO TIME (INCLUDING AMOUNTS OWED TO THE GRANTEE AS
WAGES OR OTHER COMPENSATION, FRINGE BENEFITS, VACATION PAY OR COMMISSIONS) TO THE EXTENT OF ANY
AMOUNT WHICH THE GRANTEE OWES THE CORPORATION PURSUANT TO THE PROVISIONS OF SUBSECTION C. WHETHER
OR NOT THE CORPORATION ELECTS TO MAKE ANY SET-OFF IN WHOLE OR IN PART, IF THE CORPORATION DOES NOT
RECOVER BY MEANS OF THE SET-

6

 

OFF THE FULL AMOUNT OWED TO IT BY THE GRANTEE, THEN THE GRANTEE AGREES TO PAY IMMEDIATELY THE
UNPAID BALANCE TO THE CORPORATION.

          E. THE GRANTEE MAY BE RELEASED FROM THE GRANTEE’S OBLIGATIONS UNDER THIS SECTION 10 ONLY IF
THE COMMITTEE DETERMINES, IN ITS SOLE DISCRETION, THAT SUCH A RELEASE IS IN THE BEST INTERESTS OF
THE CORPORATION. SO LONG AS THEY ARE MADE IN GOOD FAITH, ALL DETERMINATIONS BY THE COMMITTEE MADE
PURSUANT TO THIS SECTION 10 SHALL BE FINAL, BINDING AND NON-APPEALABLE.

     11. MANDATORY ARBITRATION. In consideration of the terms and conditions set forth
herein, including the Corporation’s grant to the Grantee of the Award described above, the Grantee
and the Corporation voluntarily promise and agree to arbitrate any and all claims and disputes
covered by this Agreement. The arbitration shall be binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”) and the National Rules
for the Resolution of Employment Disputes (“Employment Dispute Rules”) in effect on the date the
arbitration is commenced in accordance with this Agreement. The AAA’s Employment Dispute Rules
shall govern disputes concerning the term or termination of the Grantee’s employment; all federal,
state, or local laws, regulations, statutes, or policies prohibiting employment discrimination
and/or harassment (including, without limitation, discrimination or harassment based on race, sex,
national origin, religion, age, or disability) and/or unlawful retaliation in termination of
employment in violation of any public policy; any policy, compensation, or benefit plan of the
Corporation, excluding the Plan; and claims for personal, emotional or physical injury not
otherwise governed by Workers’ Compensation. The Commercial Arbitration Rules of the AAA shall
govern all other disputes covered by this Agreement, including, without limitation, disputes
relating to the Plan. The provisions of this Agreement shall govern the rights of all parties
hereto, including but not limited to any party claiming for or on behalf of the Grantee, including
the Grantee’s heirs, successors, assigns, personal representatives and bankruptcy trustees. The
Grantee and the Corporation further agree that binding arbitration pursuant to this Agreement shall
be the sole, exclusive, and final remedy for resolving any such claims and disputes.

          A. CLAIMS COVERED BY MANDATORY ARBITRATION AGREEMENT. With the exception of only
those claims specifically excluded in paragraph B, below, this Agreement includes all legally
actionable claims that the Grantee may currently, or in the future, have against the Corporation,
including without limitation, claims arising under:

          1. any alleged or actual contract, agreement, or covenant (oral, written, or implied),
including this Agreement, between the Grantee and the Corporation relating to the Grantee’s
employment, the termination of the Grantee’s employment, directorship and/or consultancy or an
Award provided to the Grantee;

          2. any policy, compensation, or benefit plan of the Corporation, including the Plan, unless
the decision at issue was made by an entity other than the Corporation, in which case the agreement
that arbitration is the exclusive remedy applies only to the Grantee’s claims against the
Corporation;

7

 

          3. all federal, state, or local laws, regulations, statutes, or policies prohibiting
employment discrimination and/or harassment, (including, without limitation, discrimination or
harassment based on race, sex, national origin, religion, age, or disability) and/or unlawful
retaliation;

          4. any public policy;

          5. any and all claims for personal, emotional, physical, or economic injury;

          6. any other rights, obligations, or duties arising out of constitutions, statutes or common
law, whether or not specifically referred to in this Agreement, and whether similar to or
dissimilar to rights, obligations, or duties referred to in this Agreement, which are or may be
granted to any party to this Agreement by the laws of any state or country in which either party
resides or engages in the business of the Corporation.

          B. CLAIMS EXCLUDED FROM ARBITRATION AGREEMENT. The only claims not subject to
Arbitration under this Agreement are limited to:

          1. any claim by the Grantee for workers’ compensation benefits;

          2. any claim by the Grantee for benefits under a benefit plan of the Corporation which
provides its own arbitration procedure;

          3. any claim by a party involving violation of rules, regulations, or laws governing insider
trading;

          4. any claim prohibited from binding arbitration by applicable laws or public policy; and

          5. any claim brought before the Equal Employment Opportunity Commission, however,
notwithstanding the foregoing, the Grantee agrees that the Grantee’s sole recovery for any damages
shall be through the binding arbitration process described herein.

          C. PROCEDURES.

          1. A written request for mediation/arbitration which contains a specific statement of the acts
complained of and the statutory or other violation alleged, must be served by mail on the other
party, and in duplicate (with a copy of this Agreement attached) on the AAA Office in Phoenix,
Arizona or the AAA regional office in which Phoenix is located. The Corporation shall be served at
its principal place of business, and the Grantee shall be served at the last home address shown in
his/her personnel file. The request shall set forth the names, addresses, and telephone numbers of
the parties; the amount in controversy, if any; the remedy sought; and that the hearing location
agreed upon is Phoenix, Arizona. The request must be filed within the time limit established by
the applicable statute of limitations necessary to perfect an administrative claim or initiate a
lawsuit, whichever is sooner, if the dispute involves statutory rights, and when statutory rights
are not at issue, within one year of the day on which the act complained of occurred, or notice
thereof was given, whichever occurs first.

8

 

          2. The parties shall attempt in good faith to select one person by agreement to mediate the
dispute. The mediator, after consultation with the parties, will determine the mediation
procedures to be followed. The fees and expenses of the mediator, if any, will be paid by the
Corporation. If no mutual agreement can be reached as to such person, then the dispute will be
settled by binding arbitration under the procedures set forth below. No mediation shall exceed two
hours without the Corporation’s written agreement to lengthen the mediation. Mediation is not
binding on either party.

          3. If the dispute is not resolved by discussion or mediation within thirty (30) days of the
request for mediation/arbitration, the AAA shall administer the arbitration. The AAA shall appoint
an arbitrator within thirty (30) days of the AAA’s receipt of notice that the matter was not, or
will not be, resolved through mediation. The arbitrator must be licensed to practice law in the
state in which the arbitration is convened, and the arbitrator shall, by virtue of background and
similar experience, be knowledgeable in matters pertaining to restricted stock award agreements and
employment relationships and disputes.

          4. The arbitrator may establish rules for the conduct of the arbitration consistent with the
terms of this agreement and the applicable AAA rules. Each party shall have the presumptive right
to take two (2) depositions at their own expense. The arbitrator may order additional depositions
for good cause shown and such other discovery as the arbitrator considers necessary. Each party
shall be entitled to counsel of its choice. All proceedings shall be deemed private and
confidential and shall not be disclosed to the public by either the arbitrator or the parties to
the arbitration, except as required by legal process or as necessary to judicially challenge an
arbitration award under the grounds set forth below. The arbitrator shall have the authority to
entertain motions to dismiss and/or motions for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.

          5. In arbitrations governed by the Commercial Arbitration Rules of the AAA, not earlier than
thirty (30) nor more than forty-five (45) days after appointment, the arbitrator shall conduct a
preliminary hearing in accordance with the AAA “Guidelines for Expediting Large, Complex Commercial
Arbitrations.” Not less than five (5) days prior to the preliminary hearing, all parties to the
arbitration shall serve upon all other parties to the arbitration a written list of witnesses and
exhibits to be used in the arbitration hearing. Except for good cause shown, no witness or exhibit
may be utilized at the arbitration hearing other than those set forth on such list. The arbitrator
shall have the power to compel production of documents at the hearing by subpoena. Each party
shall be entitled to counsel of its choice. All proceedings and information provided at the
hearings shall be deemed private and confidential and shall not be disclosed to the public by
either the arbitrator or the parties to the arbitration. The arbitrator shall have the authority
to entertain motions to dismiss and/or motions for summary judgment by any party and shall apply
the standards governing such motions under the Federal Rules of Civil Procedure.

          6. Also in arbitrations governed by the Commercial Arbitration Rules, the arbitrator shall
receive evidence in a single hearing which shall be conducted in Phoenix, Arizona. The hearing
shall commence not more than sixty (60) days after the appointment of the arbitrator.

9

 

          7. In arbitrations governed by the Employment Dispute Rules, the arbitrator shall conduct an
Arbitration Management Conference with the parties not later than sixty (60) days after
appointment, and shall thereafter conduct the Arbitration in Phoenix, Arizona at a time and date
set after consultation with the parties during the Management Conference.

          8. The arbitrator shall issue such award as is proper under the applicable substantive law of
Arizona or of the United States, as the case may be, and the evidence. The arbitrator shall have
no power or authority to add to or, except as otherwise provided in Section D.4 hereof, to detract
from the Agreement of the parties. The arbitrator shall not have authority to alter the terms or
conditions of employment lawfully established by the Corporation, nor modify or disregard the
standards of professional conduct and performance set by the Corporation in good faith, but shall
only determine whether the law has been violated by the acts of either party as specifically
alleged.

          9. The arbitrator shall issue a final award not more than twenty (20) days following the
conclusion of the hearing. The arbitrator shall have authority to grant injunctive relief in a
form substantially similar to that which would otherwise be granted by a court of law. The
arbitrator shall issue a written opinion setting forth a statement of the grounds for the award and
the method of determining damages, if any, awarded. The award shall be final and binding on all
parties and may be entered as a judgment, under seal, and enforced, or injunctive relief maybe
sought, in any court of competent jurisdiction. Judicial modification of the award shall be
limited to situations in which the arbitrator fails or refuses to apply controlling law or the
valid and enforceable terms of this Agreement.

          10. The arbitrator shall be entitled to receive reasonable compensation at an hourly rate to
be established by agreement between the arbitrator and the AAA. All fees and expenses of the
arbitration, including a transcript if either party requests, will be borne by the parties equally,
except that in arbitrations governed by the Employment Dispute Rules, the fees and expenses will be
borne by the parties as follows: The Grantee shall pay an amount equivalent to the filing fee in
Arizona District Court, plus one-half of the expense of the transcript, and any other amounts
deemed fair and reasonable by the arbitrator; the Corporation shall bear the remaining fees and
expenses of the arbitration. Each party will pay for the fees and expenses of its own attorneys,
experts, witnesses and the presentation of proof and post-hearings briefs, unless the party
prevails on a claim for which attorneys’ fees are recoverable by statute or contract, and the
arbitrator awards such fees.

          11. Either party may bring an action in a court of competent jurisdiction to compel
arbitration under this Agreement, to seek to vacate an arbitration award, and to enforce an
arbitration award. Except as otherwise provided in this Agreement, the Grantee agrees that the
Grantee will not initiate or prosecute any lawsuit in any way related to any claim covered by this
Agreement.

          D. MISCELLANEOUS PROVISIONS. For the purposes of the arbitration provisions of this
Agreement:

10

 

          1. Notice will be effective on the fifth (5th) day after deposit with the United States Postal
Service by certified mail, return receipt requested, properly addressed and with first class
postage paid.

          2. The term “Corporation” includes all related entities, all directors, officers, employees,
agents, representatives, benefit plans, benefit plan sponsors, fiduciaries, administrators, or
affiliates of any of the above, and all successors and assigns of any of the above excluding the
Grantee.

          3. If either party pursues a covered claim against the other by action, method or legal
proceeding other than arbitration as provided herein, the responding party shall be entitled to
dismissal or injunctive relief regarding such action and shall be entitled to recover all costs,
losses, and attorneys’ fees related to such other action or proceeding.

          4. This is the complete agreement of the parties on the subject of arbitration of disputes
covered by this Agreement. This Agreement supersedes any prior or contemporaneous oral, written or
implied understanding on the subject, shall survive the termination of the Grantee’s employment,
and can only be revoked or modified by a writing signed by the parties which specifically states an
intent to revoke or modify this Agreement. If any provision, or term in a provision, of this
Agreement is adjudged to be void or otherwise unenforceable in whole or in part, such adjudication
shall not affect the validity of the remainder of the Agreement. To the extent that any provision
of this Agreement is held invalid or unenforceable because it is overbroad, that provision shall
not be void but shall be limited only to the extent required by applicable law and enforced as so
limited.

          5. This Agreement is not, and shall not be construed to create, any contract of employment,
express or implied, nor does this Agreement in any way alter the “at will” status of the Grantee’s
employment.

     12. MISCELLANEOUS.

          (a) This Award shall be subject in all respects to the terms of the Plan which shall be
incorporated herein by reference, and the Award shall be interpreted in accordance with the Plan.
The Committee shall interpret and construe the Plan and this Agreement, and its interpretations and
determinations shall be conclusive and binding on the parties hereto and any other person claiming
an interest hereunder, with respect to any issue arising hereunder or thereunder. In the event of
a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this
Agreement, the Plan shall govern and control. All capitalized terms not defined herein shall have
the meanings ascribed to them in the Plan.

          (b) The masculine pronoun shall be deemed to include the feminine, and the singular number
shall be deemed to include the plural unless a different meaning is plainly required by the
context.

          (c) Every provision of this Agreement is intended to be severable, and any illegal or invalid
term shall not affect the validity or legality of the remaining terms.

11

 

          (d) This Agreement may be executed by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, but all such counterparts shall together
constitute the same instrument.

          (e) The Grantee acknowledges that the Grantee is, and at all times will be, an
employee-at-will of the Corporation, and nothing contained herein shall be construed to alter or
affect the Grantee’s at-will employment status. The Grantee acknowledges that the Grantee’s
at-will status can be modified only by a written contract which (a) sets forth an express
restriction on the Grantee’s at-will status; (b) is signed by both the Grantee and the President of
the Corporation; and (c) expresses the specific intent that it is a contract of employment intended
to modify the Grantee’s at-will status. The Grantee’s Continuous Service is terminable by the
Corporation or by the Grantee, with or without cause, and with or without notice, at any time. In
the event of the termination of the Grantee’s Continuous Service, the Corporation shall have no
liability to the Grantee, other than to pay the Grantee the compensation due through the Grantee’s
last day of employment or other service, and such termination shall not diminish or affect the
enforceability of this Agreement.

          (f) This Agreement shall be administered, interpreted and enforced under the internal laws of
the state of Delaware, without giving effect to the conflicts of law principles thereof. Any
arbitration, application for injunctive relief, or litigation relating to the Agreement shall be
filed and conducted in Maricopa County, Arizona.

          (g) The Corporation’s failure to enforce at any time any provision of this Agreement or to
require at any time performance by the Grantee of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of the Corporation thereafter to enforce each and every provision in
accordance with the terms of this Agreement.

     UPON ENTERING INTO THIS AGREEMENT, THE GRANTEE WARRANTS THAT HE HAS CAREFULLY READ THIS
AGREEMENT, UNDERSTANDS ITS TERMS, AND HAS VOLUNTARILY AGREED TO ENTER INTO IT WITHOUT RELIANCE ON
ANY REPRESENTATIONS OR PROMISES BY THE CORPORATION OTHER THAN AS SET FORTH IN THIS AGREEMENT.

     THE GRANTEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
THE GRANTEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS.

     THE GRANTEE UNDERSTANDS THE GRANTEE’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND
VOLUNTARILY ENTERS INTO IT.

     THE GRANTEE ACKNOWLEDGES THE GRANTEE’S “AT-WILL” EMPLOYMENT STATUS.

     THE GRANTEE RECOGNIZES THE GRANTEE’S WAIVER OF RIGHT TO A JURY TRIAL BY AGREEING TO MANDATORY
ARBITRATION.

12

 

     THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION. THE ARBITRATION PROVISION MAY BE
ENFORCED BY THE CORPORATION AND BY THE GRANTEE.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	MEDICIS PHARMACEUTICAL	 	 
	 	 	CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

13

 

MEDICIS PHARMACEUTICAL CORPORATION

2004 STOCK INCENTIVE PLAN

Exhibit A

Section 83(b) Election Form

Attached is an Internal Revenue Code Section 83(b) Election Form. IF YOU WISH TO MAKE A SECTION
83(B) ELECTION, YOU MUST DO SO WITHIN 30 DAYS AFTER THE DATE THE SHARES OF RESTRICTED STOCK COVERED
BY THE ELECTION WERE TRANSFERRED TO YOU. In order to make the election, you must completely fill
out the attached form and file one copy with the Internal Revenue Service office where you file
your tax return. In addition, one copy of the statement also must be submitted with your income
tax return for the taxable year in which you make this election. Finally, you also must submit a
copy of the election form to the Corporation within 10 days after filing that election with the
Internal Revenue Service. A Section 83(b) election normally cannot be revoked. 

A-1

 

MEDICIS PHARMACEUTICAL CORPORATION

2004 STOCK INCENTIVE PLAN

 

Election to Include Value of Restricted Stock in Gross Income

in Year of Transfer Under Internal Revenue Code Section 83(b)

 

     Pursuant to Section 83(b) of the Internal Revenue Code, I hereby elect within 30 days after
receiving the property described herein to be taxed immediately on its value specified in item 5
below.

1. The name, address and taxpayer identification number of the undersigned taxpayer are:

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	S.S.N. or T.I.N.:	 	 	 	 
	 

	 	 	 	 	 	 

     The name, address and taxpayer identification number of the taxpayer’s spouse are (complete if
applicable):

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	S.S.N. or T.I.N.:	 	 	 	 
	 

	 	 	 	 	 	 

2. Description of the property with respect to which I am making this election:

     __________
shares of common stock of Medicis Pharmaceutical Corporation (the
“Restricted Stock”).

3. The shares of Restricted Stock were transferred to me on ___________ ___, 200___.

4. This
election relates to the 200___ calendar taxable year.

5. The shares of Restricted Stock are subject to the following restrictions:

The shares of Restricted Stock may not be transferred and are subject to forfeiture
in the event of my termination of employment with Medicis Pharmaceutical Corporation
and its subsidiaries (the “Restrictions”). The Restrictions will lapse in a series
of annual installments over a five (5)-year period ending on ___,
20___.

6. Fair market value:

The fair market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of the

A-2

 

shares of Restricted Stock with respect to which I am making this election is $_____
per share.

7. Amount paid for Restricted Stock:

The amount I paid for the Restricted Stock is $ _____ per share.

8. Furnishing statement to employer:

A copy of this statement has been furnished to my employer, Medicis Pharmaceutical
Corporation. If the transferor of the Restricted Stock is not my employer, that
entity also has been furnished with a copy of this statement.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Taxpayer Signature	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

The undersigned spouse of taxpayer joins in this election. (Complete if applicable).

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Spouse’s Signature	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

A-3

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