Document:

exv10w4

Exhibit 10.4

MEDICIS 2006 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE

     Medicis Pharmaceutical Corporation, a Delaware corporation (the “Company”), pursuant to the
its 2006 Incentive Award Plan attached hereto as Exhibit C (the “Plan”), hereby grants to
the individual listed below (the “Participant”), an option to purchase the number of shares of the
Company’s Class A common stock, par value $0.014 per share (“Stock”), set forth below (the
“Option”). This Option is subject to all of the terms and conditions set forth herein and in the
Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the
Plan, each of which are incorporated herein by reference. Unless otherwise defined herein or the
Stock Option Agreement, the terms defined in the Plan shall have the same defined meanings in this
Stock Option Grant Notice (the “Grant Notice”).

	 	 	 	 	 

	Participant:

	 	 

	 	 
	 
	 	 	 	 
	Grant Date:

	 	 

	 	 
	 
	 	 	 	 
	Exercise Price per Share:

	 	$  

	 	 
	 
	 	 	 	 
	Total Number of Shares Subject to the Option:

	 	 
	 	 
	 
	 	 	 	 
	Expiration Date:

	 	 
	 	 

	 	 	 

	Type of Option:

	 	o     Incentive Stock Option      o     Non-Qualified Stock Option
	 
	 	 
	Vesting Schedule:

	 	Subject to the terms and conditions of the Plan, this Grant Notice and the Stock Option Agreement, this Option shall vest and
become exercisable as to:

	 	(i)	 	10% of the total number of shares of Stock subject to the Option on ___________________, 20__,
	 
	 	(ii)	 	10% of the total number of shares of Stock subject to the Option on ___________________, 20__,
	 
	 	(iii)	 	20% of the total number of shares of Stock subject to the Option on ___________________, 20__,
	 
	 	(iv)	 	30% of the total number of shares of Stock subject to the Option on ___________________, 20__, and
	 
	 	(v)	 	30% of the total number of shares of Stock subject to the Option on ___________________, 20__.

Notwithstanding the foregoing, the Option shall become fully vested and exercisable immediately prior to the occurrence of a
Change in Control. Except as otherwise provided in a written agreement between the Participant and the Company or any
Subsidiary, in no event shall this Option vest and become exercisable for any additional shares of Stock following the
Participant’s Termination of Employment, Termination of Consultancy, or Termination of Directorship, as applicable.

Remainder of page intentionally left blank.

 

 

     By his or her signature below, the Participant agrees to be bound by the terms and conditions
of this Grant Notice, the Stock Option Agreement and the Plan. The Participant has reviewed this
Grant Notice, the Stock Option Agreement and the Plan in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Grant Notice and fully understands all
provisions of this Grant Notice, the Stock Option Agreement and the Plan. The Participant hereby
agrees to accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under or relating to this Grant Notice, the Stock Option
Agreement and the Plan.

	 	 	 	 	 	 	 

	MEDICIS PHARMACEUTICAL CORPORATION:	 	PARTICIPANT:	 	 
	 
	By:

	 	 

	 	By:
	 	 

	 
	Print Name:

	 	 

	 	Print Name:
	 	 

	 
	Title:
	 	 	 	 	 	 
	 
	Address:

	 	7720 N. Dobson Road 
Scottsdale, Arizona 85256
	 	Address:
	 	 

	 
	 

	 	
	 	 	 	 

	 	 	 

	Attachments:

	 	Stock Option Agreement (Exhibit A)
	 

	 	Form of Exercise Notice (Exhibit B)
	 

	 	Medicis 2006 Incentive Award Plan (Exhibit C)
	 

	 	Medicis 2006 Incentive Award Plan Prospectus (Exhibit D)

 

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

STOCK OPTION AGREEMENT

     Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option
Agreement (this “Agreement”) is attached, Medicis Pharmaceutical Corporation, a Delaware
corporation (the “Company”), has granted to the Participant an option under the Medicis 2006
Incentive Award Plan (the “Plan”) to purchase the number of shares of the Company’s Class A common
stock, par value $0.014 per share (“Stock”), indicated in the Grant Notice.

ARTICLE I

GENERAL

     1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall
have the meanings specified below, unless the context clearly indicates otherwise. Capitalized
terms not specifically defined herein shall have the meanings specified in the Grant Notice or, if
not defined therein, the Plan.

          “Misconduct” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by
Participant that adversely affects the Company or any Subsidiary, (ii) any unauthorized use or
disclosure by Participant of confidential information or trade secrets of the Company or any
Subsidiary that adversely affects the Company or any Subsidiary, (iii) any willful and continued
failure by Participant to substantially perform his or her duties with the Company or any
Subsidiary (other than any such failure resulting from Participant’s incapacity due to physical or
mental illness), after a written demand for substantial performance is delivered to Participant by
the Board, which demand specifically identifies the manner in which the Board believes that
Participant has not substantially performed such duties, or (iv) any willful and continued failure
by Participant to substantially follow and comply with the specific and lawful directives of the
Board, as reasonably determined by the Board (other than any such failure resulting from
Participant’s incapacity due to physical or mental illness), after a written demand for substantial
performance is delivered to Participant by the Board, which demand specifically identifies the
manner in which the Board believes that Participant has not substantially performed such
directives. The foregoing definition shall not in any way preclude or restrict the right of the
Company (or any Subsidiary) to discharge or dismiss Participant or any other person in the service
of the Company (or any Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of this Agreement, to constitute grounds for
termination for Misconduct.

     1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions
of the Plan, which are incorporated herein by reference.

ARTICLE II

GRANT OF OPTION

     2.1 Grant of Option. In consideration of the Participant’s past and/or continued
employment with or service to the Company or a Parent or Subsidiary and for other good and valuable
consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the
Company irrevocably grants to the Participant the Option to purchase any part or all of an
aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and
conditions set forth in the

 

 

Plan and this Agreement. If the Option is designated as an Incentive Stock Option in the
Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.

     2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option
shall be as set forth in the Grant Notice, without commission or other charge; provided, however,
that the exercise price per share of Stock subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the foregoing, if this
Option is designated as an Incentive Stock Option and the Participant owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of
the Company (each within the meaning of Section 424 of the Code), the exercise price per share of
Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of
Stock on the Grant Date.

     2.3 Consideration to the Company; No Employment Rights. In consideration of the grant
of the Option by the Company, the Participant agrees to render faithful and efficient services to
the Company or any Parent or Subsidiary. Nothing in the Plan or this Agreement shall confer upon
the Participant any right to continue in the employ or service of the Company or any Parent or
Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Parents
and Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the
employment or services of the Participant at any time for no reason or for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in a written agreement
between the Company, a Parent or a Subsidiary and the Participant.

ARTICLE III

PERIOD OF EXERCISABILITY

     3.1 Commencement of Exercisability.

          (a) Subject to Sections 3.2, 3.3, and 7.9, the Option shall become vested and exercisable in
such number of shares of Stock and at such times as are set forth in the Grant Notice.

          (b) No portion of the Option which has not become vested and exercisable at the date of the
Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy,
as applicable, shall thereafter become vested and exercisable, except as may be otherwise provided
by the Administrator or as set forth in a written agreement between the Company and the
Participant.

     3.2 Duration of Exercisability. The installments provided for in the vesting schedule
set forth in the Grant Notice are cumulative. Each such installment which becomes vested and
exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and
exercisable until it becomes unexercisable under Section 3.3.

     3.3 Expiration of Option. Subject to earlier termination pursuant to Section 5.1, the
Option may not be exercised to any extent by anyone after the first to occur of the following
events:

          (a) The expiration of ten years from the Grant Date;

          (b) If this Option is designated as an Incentive Stock Option and the Participant owned
(within the meaning of Section 424(d) of the Code), on the Grant Date, more than 10% of the total
combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the

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Company or any “parent corporation” of the Company (each within the meaning of Section 424 of
the Code), the expiration of five years from the Grant Date;

          (c) The expiration of 90 days following the date of the Participant’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, as applicable, unless such
Termination of Employment, Termination of Directorship or Termination of Consultancy occurs by
reason of the Participant’s death or Disability or the discharge of the Participant for Misconduct;

          (d) The expiration of twelve months following the date of the Participant’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, as applicable, by reason of
the Participant’s Disability;

          (e) The expiration of 180 days from the date of the Participant’s Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable, by reason of the
Participant’s death; or

          (f) The date of the Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy, as applicable, by the Company or any Parent or Subsidiary by reason of
the discharge of the Participant for Misconduct.

     3.4 Special Tax Consequences. In the event the Option is designated an Incentive
Stock Option, the Participant acknowledges that, to the extent that the aggregate Fair Market Value
(determined as of the Grant Date) of all shares of stock with respect to which incentive stock
options granted by the Company (or any “subsidiary corporation” or any “parent corporation” of the
Company), including the Option, are exercisable for the first time by the Participant in any
calendar year exceeds $100,000, the Option and such other options shall be non-qualified stock
options to the extent necessary to comply with the limitations imposed by Section 422(d) of the
Code. The Participant further acknowledges that the rule set forth in the preceding sentence shall
be applied by taking the Option and other “incentive stock options” into account in the order in
which they were granted, as determined under Section 422(d) of the Code and the Treasury
Regulations thereunder.

ARTICLE IV

EXERCISE OF OPTION

     4.1 Person Eligible to Exercise. Except as provided in Section 7.2, during the
lifetime of the Participant, only the Participant may exercise the Option or any portion thereof.
After the death of the Participant, any exercisable portion of the Option may, prior to the time
when the Option becomes unexercisable under Section 3.3, be exercised by the Participant’s personal
representative or by any person empowered to do so under the deceased the Participant’s will or
under then applicable laws of descent and distribution.

     4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof becomes unexercisable under Section 3.3.

     4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of
the following prior to the time when the Option or such portion thereof becomes unexercisable under
Section 3.3:

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          (a) An Exercise Notice in writing signed by the Participant or any other person then entitled
to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established by the Administrator. Such
notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or
such other form as is prescribed by the Administrator, which may include, without limitation,
electronic notice provided through a third-party administrator);

          (b) The receipt by the Company of full payment for the shares of Stock with respect to which
the Option or portion thereof is exercised, including payment of any applicable withholding tax,
which may be in one or more of the forms of consideration permitted under Section 4.4; and

          (c) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than the Participant, appropriate proof of the right of such person or
persons to exercise the Option.

     4.4 Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Participant:

          (a) cash;

          (b) check;

          (c) to the extent permitted under applicable laws, delivery of a notice that the Participant
has placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided,
that payment of such proceeds is then made to the Company upon settlement of such sale;

          (d) with the consent of the Administrator, through the delivery of shares of Stock which have
been owned by the Participant for at least six months, duly endorsed for transfer to the Company
with a Fair Market Value on the date of exercise equal to the aggregate exercise price of the
Option or exercised portion thereof;

          (e) through the surrender shares of Stock then issuable upon exercise of the Option with a
Fair Market Value on the date of exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; provided, however, that the Participant shall only be entitled to elect
this method of exercise during the six (6) month period ending on the date on which the Option
expires pursuant to Section 3.3(a) or, if applicable, Section 3.3(b); or

          (f) any combination of the consideration provided in the foregoing.

     4.5 Conditions to Issuance of Stock Certificates. The shares of Stock deliverable
upon the exercise of the Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges on which such Stock is then
listed;

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          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem
necessary or advisable;

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable;

          (d) The receipt by the Company (or the Parent or Subsidiary employing the Participant) of full
payment for such shares, including payment of any applicable withholding tax, which may be in one
or more of the forms of consideration permitted under Section 4.4; and

          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Administrator may from time to time establish for reasons of administrative convenience.

     4.6 Rights as Stockholder. The Participant (or other person entitled to exercise the
Option) shall not be, nor have any of the rights or privileges of, a stockholder of the Company in
respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and
until such shares shall have been issued by the Company to the Participant (or such other person)
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment will be made for a dividend or other right for which the
record date is prior to the date the shares of Stock are issued, except as provided in Section 11.3
of the Plan.

ARTICLE V

FORFEITURE FOR FRAUD,

DISHONESTY, UNLAWFUL COMPETITION

AND OTHER HARMFUL ACTS

     5.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 3.3 OR IN ANY EXHIBIT TO THIS
AGREEMENT, THE PARTICIPANT’S RIGHTS WITH RESPECT TO THE PORTION OF THE OPTION GRANTED HEREUNDER BUT
NOT YET EXERCISED SHALL IMMEDIATELY TERMINATE AND BE NULL AND VOID IF:

          (a) THE ADMINISTRATOR DETERMINES THAT THE PARTICIPANT ENGAGED IN ILLEGAL ACTS, FRAUD,
DISHONESTY, WILLFUL MISCONDUCT OR OTHER INTENTIONAL CONDUCT DETRIMENTAL TO THE COMPANY OR ANY
SUBSIDIARY, INCLUDING VIOLATION OF THE INSIDER TRADING POLICY OF THE COMPANY OR ANY SUBSIDIARY
(EACH AN “IMPROPER ACT”);

          (b) THE PARTICIPANT’S EMPLOYMENT BY THE COMPANY OR ANY SUBSIDIARY IS TERMINATED FOR CAUSE AND
THE PARTICIPANT HAS COMMITTED IMPROPER ACTS;

          (c) THE PARTICIPANT HAS AT ANY TIME DISCLOSED TO ANY PERSON, FIRM, CORPORATION OR OTHER ENTITY
ANY “PROPRIETARY INFORMATION” (AS DEFINED BELOW) OF THE COMPANY OR ANY SUBSIDIARY WITHOUT THE
EXPRESS WRITTEN CONSENT OF THE BOARD, OR EXCEPT AS SUCH DISCLOSURE MAY HAVE BEEN REQUIRED IN
CONNECTION WITH THE PARTICIPANT’S SERVICE AS AN EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY OR AS
OTHERWISE REQUIRED BY LAW;

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          (d) THE PARTICIPANT SOLICITS OR OTHERWISE INDUCES ANY EMPLOYEE OF THE COMPANY OR ANY
SUBSIDIARY TO TERMINATE HIS EMPLOYMENT;

          (e) THE PARTICIPANT SOLICITS BUSINESS FROM ANY OF THE COMPANY’S OR ANY SUBSIDIARY’S CUSTOMERS
WITH WHOM THE PARTICIPANT HAS A RELATIONSHIP OR THE IDENTITY OF WHOM BECAME KNOWN TO THE
PARTICIPANT BY REASON OF THE PARTICIPANT’S RELATIONSHIP WITH THE COMPANY OR ANY SUBSIDIARY, FOR AND
ON BEHALF OF ANY OF THE COMPANY’S COMPETITORS;

          (f) THE PARTICIPANT DISPARAGES THE COMPANY OR ANY SUBSIDIARY OR COMMITS ANY OTHER ACT OF
DISLOYALTY;

          (g) THE PARTICIPANT ENGAGES IN ANY CONDUCT IN VIOLATION OF THE PARTICIPANT’S CONTRACTUAL
OBLIGATIONS TO THE COMPANY OR ANY SUBSIDIARY, INCLUDING BUT NOT LIMITED TO A VIOLATION OF ANY VALID
NON-COMPETITION, NON-DISCLOSURE, NON-SOLICITATION OR OTHER AGREEMENT;

          (h) THE PARTICIPANT FAILS TO ASSIGN TO THE COMPANY OR ANY SUBSIDIARY ANY PATENT, COPYRIGHT,
TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT IN VIOLATION OF ANY OF THE POLICIES OF THE COMPANY
OR ANY SUBSIDIARY OR ANY AGREEMENT BETWEEN THE PARTICIPANT AND THE COMPANY OR ANY SUBSIDIARY; OR

          (i) THE PARTICIPANT REFUSES TO BE AVAILABLE FOR REASONABLE CONSULTATION WITH RESPECT TO THE
SUBJECT MATTER OF THE PARTICIPANT’S EMPLOYMENT OR ENGAGEMENT FOLLOWING TERMINATION OF SUCH
EMPLOYMENT.

THE ACTS OR CIRCUMSTANCES DESCRIBED IN THIS SECTION 5.1 SHALL BE REFERRED TO AS “EVENTS OF
FORFEITURE”.

     5.2 FOR PURPOSES OF THIS ARTICLE V, 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 COMPANY OR ANY SUBSIDIARY, AND ANY OTHER SECRET OR CONFIDENTIAL PROPRIETARY
MATTER RELATING TO OR PERTAINING TO THE PRODUCTS, SERVICES, SALES OR BUSINESS OF THE COMPANY OR ANY
SUBSIDIARY.

     5.3 IN ADDITION TO THE FOREGOING RIGHTS AND ANY AND ALL OTHER RIGHTS WHICH THE COMPANY (OR ANY
OF ITS SUBSIDIARIES OR AFFILIATES) MAY HAVE AGAINST THE PARTICIPANT AT LAW OR IN EQUITY, THE
PARTICIPANT FURTHER AGREES THAT UPON THE OCCURRENCE OF ANY OF THE EVENTS OF FORFEITURE DESCRIBED IN
SECTION 5.1, UPON THE DETERMINATION OF THE ADMINISTRATOR, THE PARTICIPANT SHALL OWE THE COMPANY THE
EXCESS OF THE FAIR MARKET VALUE OVER THE EXERCISE PRICE (MEASURED AS OF THE DATE OF EXERCISE) OF
ALL SHARES ACQUIRED THROUGH EXERCISE OF ANY OPTION WITHIN THE THREE YEARS PRECEDING THE
ADMINISTRATOR’S DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED. THE PARTICIPANT SHALL PAY
SUCH AMOUNT TO THE COMPANY WITHIN 30

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DAYS OF THE ADMINISTRATOR’S WRITTEN DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED,
WHICH DETERMINATION MAY BE MADE BY NOTICE TO THE PARTICIPANT WITHIN ANY TIME UP TO TWO YEARS
FOLLOWING THE PARTICIPANT’S TERMINATION OF EMPLOYMENT, TERMINATION OF DIRECTORSHIP OR TERMINATION
OF CONSULTANCY, AS APPLICABLE.

     5.4 BY ACCEPTING THIS AGREEMENT, THE PARTICIPANT CONSENTS TO DEDUCTION FROM ANY AMOUNTS THE
COMPANY MAY OWE TO THE PARTICIPANT FROM TIME TO TIME (INCLUDING AMOUNTS OWED TO THE PARTICIPANT AS
WAGES OR OTHER COMPENSATION, FRINGE BENEFITS, VACATION PAY OR COMMISSIONS) TO THE EXTENT OF ANY
AMOUNT WHICH THE PARTICIPANT OWES THE COMPANY PURSUANT TO THE PROVISIONS OF SECTION 5.3. WHETHER OR
NOT THE COMPANY ELECTS TO MAKE ANY SET-OFF IN WHOLE OR IN PART, IF THE COMPANY DOES NOT RECOVER BY
MEANS OF THE SET-OFF THE FULL AMOUNT OWED TO IT BY THE PARTICIPANT, THEN THE PARTICIPANT AGREES TO
PAY IMMEDIATELY THE UNPAID BALANCE TO THE COMPANY.

     5.5 THE PARTICIPANT MAY BE RELEASED FROM THE PARTICIPANT’S OBLIGATIONS UNDER THIS ARTICLE V
ONLY IF THE ADMINISTRATOR DETERMINES, IN ITS SOLE DISCRETION, THAT SUCH A RELEASE IS IN THE BEST
INTERESTS OF THE COMPANY. SO LONG AS THEY ARE MADE IN GOOD FAITH, ALL DETERMINATIONS BY THE
ADMINISTRATOR MADE PURSUANT TO THIS ARTICLE V SHALL BE FINAL, BINDING AND NON-APPEALABLE.

ARTICLE VI

MANDATORY ARBITRATION

     6.1 Mandatory Arbitration. In consideration of the terms and conditions set forth
herein, including the Company’s grant of the Option to the Participant, the Participant and the
Company 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. AAA’s Employment Dispute Rules shall
govern disputes concerning the term or termination of the Participant’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
Company, excluding the Company’s equity incentive plans; and claims for personal, emotional or
physical injury not otherwise governed by workers’ compensation. The Commercial Arbitration Rules
of AAA shall govern all other disputes relating to the Company’s equity incentive plans, including,
without limitation, disputes relating to this Agreement. 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 Participant, including the Participant’s heirs, successors, assigns, personal
representatives and bankruptcy trustees. The Participant and the Company further agree that binding
arbitration pursuant to this Agreement shall be the sole, exclusive, and final remedy for resolving
any such claims and disputes.

     6.2 Claims Covered By Mandatory Arbitration Agreement. With the exception of only
those claims specifically excluded in Section 6.3 below, the provisions of Section 6.1 cover all
legally

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actionable claims that the Participant may currently, or in the future, have against Company,
including without limitation, the following:

          (a) any and all claims arising under any alleged or actual contract, agreement, or covenant
(oral, written, or implied), including this Agreement, between the Participant and Company relating
to the Participant’s employment, the termination of the Participant’s employment, directorship
and/or consultancy or an equity incentive award provided to the Participant;

          (b) any and all claims arising under any policy, compensation, or benefit plan of the Company
or any Subsidiary, including the Company’s equity incentive plans, unless the decision at issue was
made by an entity other than the Company or a Subsidiary, in which case the agreement that
arbitration is the exclusive remedy applies only to the Participant’s claims against the Company or
any Subsidiary;

          (c) any and all claims arising under any federal, state, or local law, regulation, statute, or
policy 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;

          (d) any and all claims arising under any public policy;

          (e) any and all claims for personal, emotional, physical, or economic injury; and

          (f) any and all claims relating to 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 Company.

     6.3 Claims Excluded From Arbitration Agreement. The only claims not subject to
Section 6.1 are limited to:

          (a) any claim by the Participant for workers’ compensation benefits;

          (b) any claim by the Participant for benefits under a benefit plan of the Company which
provides its own arbitration procedure;

          (c) any claim by a party involving violation of rules, regulations, or laws governing insider
trading;

          (d) any claim prohibited from binding arbitration by applicable laws or public policy; and

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

     6.4 Procedures.

          (a) 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

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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 Company shall be served at its
principal place of business at such time, and Holder shall be served at the home address shown in
his/her personnel file at such time. 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.

          (b) 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 Company. 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
Company’s written agreement to lengthen the mediation. Mediation is not binding on either party.

          (c) If the dispute is not resolved by discussion or mediation within 30 days of the request
for mediation/arbitration, AAA shall administer the arbitration. AAA shall appoint an arbitrator
within 30 days of 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 equity compensation agreements and employment relationships
and disputes.

          (d) 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 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.

          (e) In arbitrations governed by the Commercial Arbitration Rules of AAA, not earlier than 30
nor more than 45 days after appointment, the arbitrator shall conduct a preliminary hearing in
accordance with AAA’s “Guidelines for Expediting Large, Complex Commercial Arbitrations.” Not less
than five 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.

          (f) 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 60 days after the appointment of the arbitrator.

A-9

 

          (g) In arbitrations governed by the Employment Dispute Rules, the arbitrator shall conduct an
Arbitration Management Conference with the parties not later than 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.

          (h) 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 7.7 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 Company, nor modify or disregard the standards
of professional conduct and performance set by the Company in good faith, but shall only determine
whether the law has been violated by the acts of either party as specifically alleged.

          (i) The arbitrator shall issue a final award not more than 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.

          (j) The arbitrator shall be entitled to receive reasonable compensation at an hourly rate to
be established by agreement between the arbitrator and 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 Participant 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 Company 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.

          (k) 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 Participant agrees that the
Participant will not initiate or prosecute any lawsuit in any way related to any claim covered by
this Agreement.

     6.5 Miscellaneous Provisions. For the purposes of the arbitration provisions of this
Article VI:

          (a) The term “Company” 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
Participant.

          (b) 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.

A-10

 

ARTICLE VII

OTHER PROVISIONS

     7.1 Administration. The Administrator shall have the power to interpret the Plan,
this Agreement and the Grant Notice and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret, amend or revoke any such
rules. All actions taken and all interpretations and determinations made by the Administrator in
good faith shall be binding, conclusive and final upon the Participant, the Company and all other
interested persons. No member of the Administrator shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan, this Agreement or the
Option. In its absolute discretion, the Board may at any time and from time to time exercise any
and all rights and duties of the Administrator under the Plan and this Agreement.

     7.2 Option Not Transferable.

          (a) Subject to Section 7.2(b), the Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution. Neither the Option nor any
interest or right therein shall be liable for the debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect, except to the extent that such
disposition is permitted by the preceding sentence.

          (b) Notwithstanding any other provision in this Agreement, with the consent of the
Administrator and to the extent the Option is not designated as an Incentive Stock Option, the
Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions
set forth in Section 11.1(b) of the Plan.

          (c) Unless transferred to a Permitted Transferee in accordance with Section 7.2(b), during the
lifetime of the Participant, only the Participant may exercise the Option or any portion thereof.
Subject to such conditions and procedures as the Administrator may require, a Permitted Transferee
may exercise the Option or any portion thereof during the Participant’s lifetime. After the death
of the Participant, any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by the Participant’s personal representative
or by any person empowered to do so under the deceased the Participant’s will or under then
applicable laws of descent and distribution.

     7.3 Restrictive Legends and Stop-Transfer Orders.

          (a) The share certificate or certificates evidencing the shares of Stock purchased hereunder
shall be endorsed with any legends that may be required by any applicable federal or state
securities laws.

          (b) The Participant agrees that, in order to ensure compliance with the restrictions referred
to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

A-11

 

          (c) The Company shall not be required: (i) to transfer on its books any shares of Stock that
have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or
(ii) to treat as owner of such shares of Stock or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such shares shall have been so transferred.

     7.4 Shares to Be Reserved. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy
the requirements of this Agreement.

     7.5 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company at its principal place of business in care of the Secretary of
the Company, and any notice to be given to Holder shall be addressed to Holder at the most recent
address indicated in his or her personnel file at such time. By a notice given pursuant to this
Section 7.5, either party may hereafter designate a different address for notices to be given to
that party. Any notice which is required to be given to the Participant shall, if the Participant
is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section
4.1 by written notice under this Section 7.5. All notices and communications shall be deemed to
have been received unless otherwise set forth herein: (i) in the case of personal delivery, on the
date of such delivery; (ii) in the case of email, on the date of transmission; (iii) in the case of
facsimile transmission, on the date on which the sender receives electronic confirmation that such
notice was received by the addressee; (iv) in the case of overnight air courier, on the second
business day following the day sent, with receipt confirmed by the courier; and (v) in the case of
delivery by certified or registered mail (return receipt requested) on the fifth business day
following the date such mailing is deposited in a post office or branch post office regularly
maintained by the United States Postal Service.

     7.6 Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

     7.7 Governing Law; Severability; Choice of Forum. This Agreement shall be
administered, interpreted and enforced under the laws of the State of Delaware, without regard to
the conflicts of law principles thereof. Should any provision of this Agreement be determined by a
court of law to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable. To the extent that any provision of this Agreement is held
to be illegal 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. Any
arbitration, application for injunctive relief, or litigation relating to the Option shall be filed
and conducted in Maricopa County, Arizona.

     7.8 Non-Waiver of Rights. The Company’s failure to enforce at any time any of the
versions of this Agreement or to require at any time performance by the Participant 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 Company thereafter to
enforce each and every provision in accordance with the terms of this Agreement.

     7.9 Conformity to Securities Laws. The Participant acknowledges that the Plan is
intended to conform to the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein
to the contrary, the Plan shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations. To the extent permitted
by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

A-12

 

     7.10 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by the Participant or such other person as may be entitled to
exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company.

     7.11 Successors and Assigns. Subject to the terms and conditions of the Plan, this
Agreement shall inure to the benefit of and be binding on the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth in Section 7.2, this Agreement
shall be binding upon the Participant and his or her heirs, executors, administrators, successors
and assigns.

     7.12 Notification of Disposition. If this Option is designated as an Incentive Stock
Option, the Participant shall give prompt notice to the Company of any disposition or other
transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is
made (a) within two years from the Grant Date with respect to such shares or (b) within one year
after the transfer of such shares to the Participant. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Participant in such disposition or other transfer.

     7.13 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the
Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law, this Agreement
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

     7.14 Entire Agreement. The Plan, the Grant Notice (including all Exhibits thereto)
and this Agreement constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and the Participant with respect to the
subject matter hereof.

UPON ENTERING INTO THIS AGREEMENT, THE PARTICIPANT 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 COMPANY OTHER THAN AS SET FORTH IN THIS AGREEMENT.

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

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

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

THE PARTICIPANT RECOGNIZES THE PARTICIPANT’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 COMPANY AND BY YOU.

A-13

 

EXHIBIT B

TO STOCK OPTION GRANT NOTICE

FORM OF EXERCISE NOTICE

     Effective as of today, ________________ ___, 20___, the undersigned hereby elects to exercise
the option to purchase the number of shares of Class A common stock, par value $0.014 per share,
specified below (the “Shares”) of Medicis Pharmaceutical Corporation, a Delaware corporation (the
“Company”), granted pursuant to the Medicis 2006 Incentive Award Plan (the “Plan”), the Stock
Option Grant Notice dated as of _____________, 20___ and the Stock Option Agreement attached
thereto (the “Stock Option Agreement”). Capitalized terms used herein without definition shall
have the meanings given in the Plan and, if not defined in the Plan, the Option Agreement.

	 	 	 	 	 

	Participant:

	 	 

	 	 
	 
	 	 	 	 
	Grant Date:

	 	 

	 	 
	 
	 	 	 	 
	Number of Shares as to
which Option is Exercised:

	 	 
	 	 
	 
	 	 	 	 
	Exercise Price per Share:

	 	$ 
	 	 
	 
	 	 	 	 
	Total Exercise Price:

	 	$ 
	 	 
	 
	 	 	 	 
	Certificate to be issued
in name of:

	 	 
	 	 

	 	 	 

	Payment delivered herewith:

	 	$           
                
                
                
                
                
          (Representing the full exercise price for the Shares, as well as any
applicable withholding tax)

Form of Payment: 

	 

	 	 

	 

	 	(Please specify)
	 
	 	 
	Type of Option:

	 	o     Incentive Stock Option      o     Non-Qualified Stock Option

     The Participant acknowledges that the Participant has received, read and understood the Plan
and the Stock Option Agreement. The Participant agrees to abide by and be bound by their terms and
conditions. The Participant understands that the Participant may suffer adverse tax consequences
as a result of the Participant’s purchase or disposition of the Shares. The Participant represents
that the Participant has consulted with any tax consultants the Participant deems advisable in
connection with the purchase or disposition of the Shares and that the Participant is not relying
on the Company for any tax advice. The Plan and Option Agreement are incorporated herein by
reference.

Remainder of page intentionally left blank.

 

 

     This Exercise Notice, the Plan, the Stock Option Agreement and the Grant Notice constitute the
entire agreement of the parties and supersede in their entirety all prior undertakings and
agreements of the Company and the Participant with respect to the subject matter hereof.

	 	 	 

	ACCEPTED BY:

	 	SUBMITTED BY
	MEDICIS PHARMACEUTICAL CORPORATION

	 	PARTICIPANT:
	 
	 	 
	By:

	 	By:
	 

	 	 

	Print Name:

	 	Print Name:
	 

	 	 

	Title:
	 	 
	 

	 	Address:  

	 

	 	 

B-2

 

EXHIBIT C

TO STOCK OPTION GRANT NOTICE

MEDICIS 2006 INCENTIVE AWARD PLAN

 

 

EXHIBIT D

TO STOCK OPTION GRANT NOTICE

MEDICIS 2006 INCENTIVE AWARD PLAN PROSPECTUSexv10w5

Exhibit 10.5

FORM OF AMENDMENT TO STOCK OPTION AWARD AGREEMENT (THE

“AMENDMENT”)

     The stock option (the “Option”) is herby amended to permit the holder of the Option (the
“Holder”), in addition to the payment methods otherwise permitted to the Holder under the
applicable equity plan and stock option agreement, to elect to pay (i) the aggregate exercise price
of the Option and (ii) if the Holder is an employee of the Company, the minimum statutory federal,
state or local tax required to be withheld with respect to the exercise of the Option (together,
the “Exercise Payment”), by the surrender of shares of Company common stock then issuable upon
exercise of the Option having a fair market value on the date of exercise equal to the Exercise
Payment (“Net Share Exercise”); provided, however, that Net Share Exercise shall only be available
to the Holder with respect to the Option during the six (6) month period ending on the date on
which the maximum term of the Option expires.

     This Amendment shall also be deemed a part of the stock option agreement(s) evidencing such
Option and shall be incorporated by reference. Except as set forth herein, all of the remaining
terms of your Option, including but not limited to the vesting terms, will remain unchanged and in
full force and effect. Please keep a copy of this Amendment and the memorandum to which it is
attached with your stock option agreement(s) for your records and future reference.

     This Amendment is effective as of June 29, 2011, except as noted below.

     IF YOUR NONQUALIFIED STOCK OPTION WAS GRANTED UNDER THE AMENDED AND RESTATED 2006 INCENTIVE
AWARD PLAN (THE “2006 PLAN”), YOU MUST TIMELY ELECT TO OPT-OUT OF THE PROGRAM BY JULY 15, 2011 IF
YOU DO NOT WANT THE AMENDMENT TO APPLY TO YOUR NQSO. OTHERWISE, IF YOU DO NOT TIMELY OPT-OUT OF
THE PROGRAM, THE AMENDMENT WILL BECOME EFFECTIVE WITH RESPECT TO YOUR NONQUALIFIED STOCK OPTION
GRANTED AS OF JUNE 29, 2011. PLEASE SEE THE ATTACHED MEMORANDUM WITH INSTRUCTIONS ON HOW TO
OPT-OUT OF THE PROGRAM, AND THE OPT-OUT ELECTION FORM PROVIDED ON EXHIBIT B TO THE
MEMORANDUM.

     IF YOU HOLD INCENTIVE STOCK OPTIONS, YOU MUST AFFIRMATIVELY AND TIMELY CONSENT TO THE
AMENDMENT TO YOUR INCENTIVE STOCK OPTION AGREEMENT, AS PROVIDED ON EXHIBIT C. OTHERWISE,
THE AMENDMENT WILL NOT APPLY TO YOUR INCENTIVE STOCK OPTIONS.

 

 

EXHIBIT B

ELECTION TO OPT-OUT OF THE AMENDMENT TO YOUR 2006 PLAN NQSO

     You may elect to opt-out of the Amendment to your 2006 Plan NQSO. If you choose to
opt-out of the Amendment to your 2006 Plan NQSO, please complete the election form below and sign
where indicated. You must separately list each 2006 Plan NQSO for which you are opting out of the
Amendment.

     If you wish to elect to opt-out of the Amendment to your 2006 Plan NQSO, you must sign
and return the election form below no later than 11:59 p.m. (Eastern Time) on July 15,
2011. If you do not return the election form below by this deadline, all of your 2006 Plan
NQSOs will be amended pursuant to the Amendment. Once submitted, your election will be
irrevocable.

ELECTION TO OPT-OUT OF THE AMENDMENT TO YOUR 2006 PLAN NQSO

I have read and understood the above discussion of the Program and the Amendment and its potential
effect on me and my tax situation. I acknowledge that I have been given the opportunity to discuss
these matters and my election below with my own tax advisor and that I am solely responsible for my
election.

I HAVE CHOSEN TO OPT-OUT OF THE AMENDMENT TO MY 2006 PLAN NQSOs. I wish to opt-out
of the Amendment for the following 2006 NQSOs.

	o	 	I OPT-OUT OF THE AMENDMENT FOR ALL OF MY 2006 PLAN NQSOS

	 
	o	 	I OPT-OUT OF THE AMENDMENT FOR ONLY THE FOLLOWING 2006 PLAN NQSOS:

	 	List by Date of Grant:	 	            
            
              
               
               
            
               
               
          
	 
	 	 	 	             
              
              
                
               
        
               
             
            

	 	 	 	 	 
	 	 	 
	 	 	 	 	 
	Signature 	 	 	Date  	 
	 
	 	 	 	
 	 
	Print Name 	 	 
	 	 	 

You must return this form to the Stock Plan Administration Department at

stockplanadmin@medicis.com by 11:59 PM (Eastern Time) on July 15, 2011.

IF YOU DO NOT RETURN THIS ELECTION FORM BY THIS DEADLINE, ALL OF YOUR

2006 PLAN NQSOS WILL BE AMENDED UNDER THE PROGRAM.

 

 

EXHIBIT C

CONSENT TO AMEND INCENTIVE STOCK OPTION

     You must consent to the Amendment for your incentive stock option (ISO) in order for the
Amendment to apply to such ISO. If you do not provide this consent, the Amendment will not apply
to your ISO. You must complete a separate election form for each ISO. If you choose to consent to
the Amendment for your ISO, please complete the election form below and sign where indicated. Once
the Company receives your timely completed consent, the equity plan administrator or its delegate
will approve the Amendment to your ISO.

     If you wish to consent to the Amendment for your ISO, you must sign and return the election
form below no later than 21 days prior to the expiration of your ISOs. If you do not
return the election form below by this deadline, your ISO will NOT be amended pursuant to the
Amendment. Once submitted, your election will be irrevocable.

ELECTION TO AMEND YOUR ISO

I have read and understood the above discussion of the Program and the Amendment and their
potential effect on me and my tax situation. I acknowledge that I have been given the opportunity
to discuss these matters and my election below with my own tax advisor and that I am solely
responsible for my election.

I HAVE CHOSEN TO AMEND MY ISO. I wish the Amendment to apply to the following ISO:

      
                
                
               
                
            [list grant date]

	 	 	 	 	 
	 	 	 
	 	 	 	
 	 
	Signature  	 	 	Date 	 
	 	 	 
	 	 	 
	Print Name 	 	 
	 	 	 

You must return this form to Stock Plan Administration Department at

stockplanadmin@medicis.com no later than 21 days prior to the expiration of your ISO.

IF YOU DO NOT RETURN THIS ELECTION FORM BY THIS DEADLINE, YOUR ISO WILL

NOT BE AMENDED UNDER THE PROGRAM.

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