Document:

exv10w46xey

 

EXHIBIT 10.46 (E)

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:

	 	     /S/ Mark A. Prygocki, Sr.
	 	By:	 	 
	 

	 	 
	 	 	 	 
	Print Name:

	 	     Mark A. Prygocki, Sr.
	 	Print Name:	 	 
	 

	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	Address:

	 	8125 North Hayden Road
	 	Address:	 	 
	 

	 	 	 	 	 	 
	 
	 	Scottsdale, Arizona 85258-2463	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 		 	 	 	 
	 
	 	 	 	 	 	 
	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

A-2

 

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:

A-3

 

          (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; or

          (e) 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;

          (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;

A-4

 

          (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;

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

A-5

 

          (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 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

A-6

 

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

A-7

 

          (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 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

A-8

 

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.

          (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,

A-9

 

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: 

MEDICIS PHARMACEUTICAL CORPORATION	 	 	 	SUBMITTED BY
PARTICIPANT:
	 
	 	 	 	 	 	 	 	 
	By:

	 	      /S/ Mark A. Prygocki Sr.
	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Print Name:

	 	     Mark A. Prygocki Sr.
	 	 	 	Print Name:	 	 
	 

	 	 	 	 	 	 	 	 
	Title:

	 	      Chief Financial Officer	 	 	 	 	 	 
	 

	 	 	 	 	 	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 PROSPECTUSexv10w46xfy

 

EXHIBIT 10.46(F)

MEDICIS 2006 INCENTIVE AWARD PLAN

RESTRICTED STOCK AWARD GRANT NOTICE

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

	 	 	 	 	 
	Holder:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Grant Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Total Number of
	 	 	 	 
	Shares of Restricted Stock:
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Vesting Schedule:	 	Subject to the terms and conditions of the Plan, this Grant Notice
and the Restricted Stock Agreement, the Company’s Forfeiture
Restriction (as defined in the Restricted Stock Agreement) shall
lapse as to:
	 
	 

	 	     (i)
	 	10% of the Shares on                     , 20     ,
	 
	 

	 	     (ii)
	 	10% of the Shares on                     , 20     ,
	 
	 

	 	     (iii)
	 	20% of the Shares on                     , 20     ,
	 
	 

	 	     (iv)
	 	30% of the Shares on                     , 20     , and
	 
	 

	 	     (v)
	 	30% of the Shares on                     , 20     .
	 
	 	 	Notwithstanding the foregoing, the Company’s Forfeiture Restriction
(as defined in the Restricted Stock Agreement) shall lapse as to all
of the Shares immediately prior to the occurrence of a Change in
Control. Except as otherwise provided in a written agreement between
Holder and the Company or any Subsidiary, in no event shall the
Forfeiture Restriction (as defined in the Restricted Stock Agreement)
lapse as to any additional Shares following Holder’s Termination of
Employment, Termination of Consultancy, or Termination of
Directorship, as applicable.

     By his or her signature below, Holder agrees to be bound by the terms and conditions of the
Plan, the Restricted Stock Agreement and this Grant Notice. Holder has reviewed this Grant Notice,
the Restricted Stock 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 Restricted Stock Agreement and the Plan. Holder 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 Restricted Stock Agreement and the
Plan. If Holder is married, his or her spouse has signed the Consent of Spouse attached to this
Grant Notice as Exhibit B.

 

 

	 	 	 	 	 	 	 	 	 
	MEDICIS
PHARMACEUTICAL CORPORATION:	 	HOLDER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/S/ Mark A. Prygocki, Sr.
	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

									
	Print Name:

	 	Mark A. Prygocki, Sr.
	 	Print Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	Address:

	 	8125 North Hayden Road
	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Scottsdale, Arizona 85258-2463	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 
	Attachments:

	 	Restricted Stock Award Agreement (Exhibit A)
	 

	 	Consent of Spouse (Exhibit B)
	 

	 	Stock Assignment (Exhibit C)
	 

	 	Joint Escrow Instructions (Exhibit D)
	 
	 	Form of Internal Revenue Code Section 83(b) Election and Instructions (Exhibit E)
	 
	 	     -   Election under Internal Revenue Code Section 83(b) (Attachment 1 to Exhibit E)

	 

	 	     -   Sample Cover Letter to Internal Revenue Service (Attachment 2 to Exhibit E)

	 

	 	Medicis Pharmaceutical Corporation 2006 Incentive Award Plan (Exhibit F)
	 

	 	Medicis Pharmaceutical Corporation 2006 Incentive Award Plan Prospectus (Exhibit G)

-2-

 

EXHIBIT A

TO RESTRICTED STOCK AWARD GRANT NOTICE

RESTRICTED STOCK AWARD AGREEMENT

     Pursuant to the Restricted Stock Award Grant Notice (“Grant Notice”) to which this Restricted
Stock Award Agreement (this “Agreement”) is attached, Medicis Pharmaceutical Corporation, a
Delaware corporation (the “Company”), has granted to Holder the number of shares of the Company’s
Class A common stock, par value $0.014 per share (“Stock”), set forth in the Grant Notice (the
“Shares”), upon the terms and conditions set forth in the Company’s 2006 Incentive Award Plan (the
“Plan”), the Grant Notice and this Agreement.

ARTICLE I

GENERAL

     1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the
meanings specified in the Grant Notice or, if not defined therein, the Plan.

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

ARTICLE II

GRANT OF RESTRICTED STOCK

     2.1 Grant of Restricted Stock. In consideration of Holder’s past and/or continued
employment with or service to the Company or its Subsidiaries and for other good and valuable
consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the
Company hereby agrees to issue to Holder the Shares, upon the terms and conditions set forth in the
Plan, the Grant Notice and this Agreement.

     2.2 Issuance of Shares. The issuance of the Shares under this Agreement shall occur
at the principal office of the Company simultaneously with the execution of the Grant Notice by the
parties or on such other date as the Company and Holder shall agree (the “Issuance Date”). Subject
to the provisions of Article IV, the Company shall issue the Shares (which shall be issued in
Holder’s name) on the Issuance Date.

     2.3 Conditions to Issuance of Stock Certificates. The Shares, 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 prior to fulfillment of all of the following
conditions:

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

          (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 lapse of such reasonable period of time following the Issuance Date as the
Administrator may from time to time establish for reasons of administrative convenience; and

          (e) The receipt by the Company of full payment for all amounts which, under federal, state or
local tax law, the Company (or other employer corporation) is required to withhold upon issuance of
such Shares.

     2.4 Rights as Stockholder. Except as otherwise provided herein, upon delivery of the
Shares to the escrow agent pursuant to Article IV, Holder shall have all the rights of a
stockholder with respect to said Shares, subject to the restrictions herein, including the right to
vote the Shares and to receive all dividends or other distributions paid or made with respect to
the Shares; provided, however, that any and all extraordinary cash dividends paid on such Shares
and any and all shares of Stock, capital stock or other securities or property received by or
distributed to Holder with respect to the Shares as a result of any stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company shall also be subject to the Forfeiture Restriction (as defined in
Section 3.1) and the restrictions on transfer in Section 3.4 until such restrictions on the
underlying Shares lapse or are removed pursuant to this Agreement (or, if such Shares are no longer
outstanding, until such time as such Shares would have been released from the Forfeiture
Restriction pursuant to this Agreement). In addition, in the event of any merger, consolidation,
share exchange or reorganization affecting the Shares, then any new, substituted or additional
securities or other property (including money paid other than as a regular cash dividend) that is
by reason of any such transaction received with respect to, in exchange for or in substitution of
the Shares shall also be subject to the Forfeiture Restriction (as defined in Section 3.1) and the
restrictions on transfer in Section 3.4 until such restrictions on the underlying Shares lapse or
are removed pursuant to this Agreement (or, if such Shares are no longer outstanding, until such
time as such Shares would have been released from the Forfeiture Restriction pursuant to this
Agreement). Any such assets or other securities received by or distributed to Holder with respect
to, in exchange for or in substitution of any Unreleased Shares (as defined in Section 3.3) shall
be immediately delivered to the Company to be held in escrow pursuant to Section 4.1.

ARTICLE III

RESTRICTIONS ON SHARES

     3.1 Forfeiture Restriction. Subject to the provisions of Section 3.2, if Holder has a
Termination of Employment, Termination of Consultancy, or Termination of Directorship, as
applicable, for any or no reason, all of the Unreleased Shares (as defined in Section 3.3) shall
thereupon be forfeited immediately and without any further action by the Company (the “Forfeiture
Restriction”). Upon the occurrence of such a forfeiture, the Company shall become the legal and
beneficial owner of the Shares being forfeited and all rights and interests therein or relating
thereto, and the Company shall have the right to retain and transfer to its own name the number of
Shares being forfeited by Holder. In the event any of the Unreleased Shares are forfeited under
this Section 3.1, any cash, cash equivalents, assets or securities received by or distributed to
Holder with respect to, in exchange for or in substitution of such Shares and held by the escrow
agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be promptly transferred by
the escrow agent to the Company.

     3.2 Release of Shares from Forfeiture Restriction. The Shares shall be released from
the Forfeiture Restriction as indicated in the Grant Notice. Any of the Shares released from the
Forfeiture

A-2

 

Restriction shall thereupon be released from the restrictions on transfer under Section 3.4.
In the event any of the Shares are released from the Forfeiture Restriction, any dividends or other
distributions paid on such Shares and held by the escrow agent pursuant to Section 4.1 and the
Joint Escrow Instructions shall be promptly paid by the escrow agent to Holder.

     3.3 Unreleased Shares. Any of the Shares which, from time to time, have not yet been
released from the Forfeiture Restriction are referred to herein as “Unreleased Shares.”

     3.4 Restrictions on Transfer. Unless otherwise permitted by the Administrator
pursuant to the Plan, no Unreleased Shares or any dividends or other distributions thereon or any
interest or right therein or part thereof, shall be liable for the debts, contracts or engagements
of Holder or his or her successors in interest or shall be subject to sale or other disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
sale or other 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 sale or other disposition thereof shall be null and void and of no effect.

ARTICLE IV

ESCROW OF SHARES

     4.1 Escrow of Shares. To insure the availability for delivery of Holder’s Unreleased
Shares in the event of forfeiture of such Shares by Holder pursuant to Section 3.1, Holder hereby
appoints the Secretary of the Company, or any other person designated by the Company as escrow
agent, as his or her attorney-in-fact to assign and transfer unto the Company, such Unreleased
Shares, if any, forfeited by Holder pursuant to Section 3.1 and any dividends or other
distributions thereon, and shall, upon execution of this Agreement, deliver and deposit with the
Secretary of the Company, or such other person designated by the Company, any share certificates
representing the Unreleased Shares, together with the stock assignment duly endorsed in blank,
attached as Exhibit C to the Grant Notice. The Unreleased Shares and stock assignment
shall be held by the Secretary of the Company, or such other person designated by the Company, in
escrow, pursuant to the Joint Escrow Instructions of the Company and Holder attached as Exhibit
D to the Grant Notice, until the Unreleased Shares are forfeited by Holder as provided in
Section 3.1, until such Unreleased Shares are released from the Forfeiture Restriction, or until
such time as this Agreement no longer is in effect. Upon release of the Unreleased Shares from the
Forfeiture Restriction, the escrow agent shall deliver to Holder the certificate or certificates
representing such Shares in the escrow agent’s possession belonging to Holder in accordance with
the terms of the Joint Escrow Instructions attached as Exhibit D to the Grant Notice, and
the escrow agent shall be discharged of all further obligations hereunder; provided, however, that
the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so
required pursuant to other restrictions imposed pursuant to this Agreement. If the Shares are held
in book entry form, then such entry will reflect that the Shares are subject to the restrictions of
this Agreement. If any dividends or other distributions are paid on the Unreleased Shares held by
the escrow agent pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends or
other distributions shall also be subject to the restrictions set forth in this Agreement and held
in escrow pending release of the Unreleased Shares with respect to which such dividends or other
distributions were paid from the Forfeiture Restriction.

     4.2 Transfer of Forfeited Shares. Holder hereby authorizes and directs the Secretary
of the Company, or such other person designated by the Company, to transfer the Unreleased Shares
which have been forfeited by Holder to the Company.

A-3

 

     4.3 No Liability for Actions in Connection with Escrow. The Company, or its designee,
shall not be liable for any act it may do or omit to do with respect to holding the Shares in
escrow while acting in good faith and in the exercise of its judgment.

ARTICLE V

FORFEITURE FOR FRAUD,

DISHONESTY, UNLAWFUL COMPETITION

AND OTHER HARMFUL ACTS

     5.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND IN ADDITION TO THE
FORFEITURE RESTRICTIONS SET FORTH IN SECTION 3.1, ALL UNRELEASED SHARES SHALL BE IMMEDIATELY
FORFEITED IF:

          (a) THE ADMINISTRATOR DETERMINES THAT HOLDER 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) HOLDER’S EMPLOYMENT BY THE COMPANY OR ANY SUBSIDIARY IS TERMINATED FOR CAUSE AND HOLDER
HAS COMMITTED IMPROPER ACTS;

          (c) HOLDER 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 HOLDER’S SERVICE AS AN EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY OR AS OTHERWISE REQUIRED BY
LAW;

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

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

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

          (g) HOLDER ENGAGES IN ANY CONDUCT IN VIOLATION OF HOLDER’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) HOLDER 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 HOLDER AND THE COMPANY OR ANY SUBSIDIARY; OR

A-4

 

          (i) HOLDER REFUSES TO BE AVAILABLE FOR REASONABLE CONSULTATION WITH RESPECT TO THE SUBJECT
MATTER OF HOLDER’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 HOLDER AT LAW OR IN EQUITY, HOLDER FURTHER
AGREES THAT UPON THE OCCURRENCE OF ANY OF THE EVENTS OF FORFEITURE DESCRIBED IN SECTION 5.1, UPON
THE DETERMINATION OF THE ADMINISTRATOR, HOLDER SHALL OWE THE COMPANY THE FAIR MARKET VALUE OF THE
SHARES (MEASURED AS OF THE DATE THE FORFEITURE RESTRICTION THEREON LAPSED) OF ALL SHARES RELEASED
FROM THE FORFEITURE RESTRICTION WITHIN THE THREE YEARS PRECEDING THE ADMINISTRATOR’S DETERMINATION
THAT AN EVENT OF FORFEITURE HAS OCCURRED. HOLDER SHALL PAY SUCH AMOUNT TO THE COMPANY WITHIN 30
DAYS OF THE ADMINISTRATOR’S WRITTEN DETERMINATION THAT AN EVENT OF FORFEITURE HAS OCCURRED, WHICH
DETERMINATION MAY BE MADE BY NOTICE TO HOLDER WITHIN ANY TIME UP TO TWO YEARS FOLLOWING HOLDER’S
TERMINATION OF EMPLOYMENT, TERMINATION OF DIRECTORSHIP OR TERMINATION OF CONSULTANCY, AS
APPLICABLE.

     5.4 BY ACCEPTING THIS AGREEMENT, HOLDER CONSENTS TO DEDUCTION FROM ANY AMOUNTS THE COMPANY MAY
OWE TO HOLDER FROM TIME TO TIME (INCLUDING AMOUNTS OWED TO HOLDER AS WAGES OR OTHER COMPENSATION,
FRINGE BENEFITS, VACATION PAY OR COMMISSIONS) TO THE EXTENT OF ANY AMOUNT WHICH HOLDER 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 HOLDER, THEN HOLDER AGREES TO PAY IMMEDIATELY THE UNPAID BALANCE TO THE
COMPANY.

     5.5 HOLDER MAY BE RELEASED FROM HOLDER’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.

A-5

 

ARTICLE VI

MANDATORY ARBITRATION

     6.1 Mandatory Arbitration. In consideration of the terms and conditions set forth
herein, including the Company’s grant to Holder of the Shares, Holder 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 Holder’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 Holder, including Holder’s
heirs, successors, assigns, personal representatives and bankruptcy trustees. Holder 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 actionable claims that Holder 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 Holder and Company relating to
Holder’s employment, the termination of Holder’s employment, directorship and/or consultancy or an
equity incentive award provided to Holder;

          (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 Holder’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

A-6

 

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 Holder for workers’ compensation benefits;

          (b) any claim by Holder 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, Holder agrees that Holder’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 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

A-7

 

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.

          (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 7.9 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

A-8

 

arbitrations governed by the Employment Dispute Rules, the fees and expenses will be borne by
the parties as follows: Holder 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, Holder agrees that Holder 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
Holder.

          (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.

ARTICLE VII

OTHER PROVISIONS

     7.1 Adjustment for Stock Split. In the event of any stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, the Administrator shall make appropriate and equitable
adjustments in the Unreleased Shares subject to the Forfeiture Restriction and the number of
Shares, consistent with any adjustment under Section 11.3 of the Plan. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the Shares, to any and
all shares of capital stock or other securities, property or cash which may be issued in respect
of, in exchange for, or in substitution of the Shares, and shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.

     7.2 Taxes. Holder has reviewed with Holder’s own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions contemplated by the
Grant Notice and this Agreement. Holder is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Holder understands that Holder
(and not the Company) shall be responsible for Holder’s own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement. Holder understands
that Holder will recognize ordinary income for federal income tax purposes under Section 83 of the
Code as the restrictions applicable to the Unreleased Shares lapse. In this context, “restriction”
includes the Forfeiture Restriction. Holder understands that Holder may elect to be taxed for
federal income tax purposes at the time the Shares are issued rather than as and when the
Forfeiture Restriction lapses by filing an election under Section 83(b) of the Code with the
Internal Revenue Service no later than thirty days following the date of transfer. A form of
election under Section 83(b) of the Code is attached to the Grant Notice as Exhibit E.

A-9

 

     HOLDER ACKNOWLEDGES THAT IT IS HOLDER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY
FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HOLDER’S BEHALF.

     7.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision
of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan,
the Shares 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.

     7.4 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 Holder, 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 Shares. 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.

     7.5 Restrictive Legends and Stop-Transfer Orders.

          (a) Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the
following legend and any other legend(s) that may be required by any applicable federal or state
securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE
COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED
STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Holder 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.

          (c) The Company shall not be required: (i) to transfer on its books any Shares 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 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.

     7.6 Tax Withholding.

          (a) The Company shall be entitled to require payment of any sums required by federal, state or
local tax law to be withheld with respect to the transfer of the Shares or the lapse of the
Forfeiture Restriction with respect to the Shares, or any other taxable event related thereto. The
Company may permit Holder to make such payment in one or more of the forms specified below:

A-10

 

               (i) by cash or check made payable to the Company;

               (ii) by the deduction of such amount from other compensation payable to Holder;

               (iii) by tendering Shares which are not subject to the Forfeiture Restriction and which
have a then current Fair Market Value not greater than the amount necessary to satisfy the
Company’s withholding obligation based on the minimum statutory withholding rates for
federal, state and local income tax and payroll tax purposes; or

               (iv) in any combination of the foregoing.

          (b) In the event Holder fails to provide timely payment of all sums required by the Company
pursuant to Section 7.6(a), the Company shall have the right and option, but not obligation, to
treat such failure as an election by Holder to provide all or any portion of such required payment
by means of tendering Shares in accordance with Section 7.6(a)(iii).

     7.7 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 7.7, either party may hereafter designate a different address for notices to be given to
that party. 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.

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

     7.9 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 Shares shall be filed
and conducted in Maricopa County, Arizona.

     7.10 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 Holder 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.

     7.11 Conformity to Securities Laws. Holder 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

A-11

 

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 Shares are to be issued, 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.

     7.12 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by Holder and by a duly authorized representative of the Company.

     7.13 No Employment Rights. If Holder is an employee, nothing in the Plan or this
Agreement shall confer upon Holder any right to continue in the employ of the Company or any
Subsidiary or shall interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided otherwise in a written
agreement between the Company and Holder.

     7.14 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Agreement shall be binding upon Holder and his or her heirs, executors, administrators,
successors and assigns.

     7.15 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 Holder with respect to the subject matter
hereof.

UPON ENTERING INTO THIS AGREEMENT, HOLDER 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.

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

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

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

HOLDER RECOGNIZES HOLDER’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-12

 

EXHIBIT B

TO RESTRICTED STOCK AWARD GRANT NOTICE

CONSENT OF SPOUSE

     I,                     , spouse of                     , have read and approve the foregoing Agreement. In consideration of issuing
to my spouse the shares of the Class A common stock of Medicis Pharmaceutical Corporation, a
Delaware corporation (the “Company”), set forth in the Restricted Stock Award Grant Notice and
Restricted Stock Award Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to
the exercise of any rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares of the Class A common
stock of the Company issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement.

	 	 	 	 	 
	Dated:                     ,      

	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature of Spouse	 	 

 

 

EXHIBIT C

TO RESTRICTED STOCK AWARD GRANT NOTICE

STOCK ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned,                     , hereby sells, assigns and transfers unto MEDICIS
PHARMACEUTICAL CORPORATION, a Delaware corporation (the
“Company”),                      shares of the
Class A common stock of the Company, standing in its name of the books of said corporation
represented by Certificate No.       herewith and do hereby irrevocably constitute and appoint
                     to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises.

     This Stock Assignment may be used only in accordance with the Restricted Stock Award Grant
Notice between the Company and the undersigned dated                     , 20      and the
Restricted Stock Award Agreement attached thereto.

	 	 	 	 	 
	Dated:                     ,      

	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature of Holder	 	 

     INSTRUCTIONS: Please do not fill in the blanks other than the signature line. The purpose of
this assignment is to enable the Company to enforce the Forfeiture Restriction as set forth in the
Agreement, without requiring additional signatures on the part of Holder.

 

 

EXHIBIT D

TO RESTRICTED STOCK AWARD GRANT NOTICE

JOINT ESCROW INSTRUCTIONS

                    ,      

Secretary

Medicis Pharmaceutical Corporation

8125 North Hayden Road

Scottsdale, Arizona 85258-2463

Ladies and Gentlemen:

     As escrow agent (the “Escrow Agent”) for both Medicis Pharmaceutical Corporation, a Delaware
corporation (“Medicis”), and the undersigned recipient of stock of Medicis (the “Holder”), you are
hereby authorized and directed to hold in escrow the documents delivered to you pursuant to the
terms of that certain Restricted Stock Award Agreement (the “Agreement”) between Medicis and the
undersigned (the “Escrow”), including the stock certificate and the Stock Assignment, in accordance
with the following instructions:

     1. In the event of forfeiture by Holder of any of the shares owned by Holder pursuant to
Section 3.1 of the Agreement (the “Forfeiture Restriction”), Medicis and/or any assignee of Medicis
(referred to collectively for convenience herein as the “Company”) shall give to Holder and you a
written notice specifying the number of shares of stock forfeited and the date of forfeiture.
Holder and the Company hereby irrevocably authorize and direct you to effect the forfeiture
contemplated by such notice in accordance with the terms of said notice.

     2. As of the date of forfeiture indicated in such notice, you are directed (a) to date the
stock assignments necessary for the forfeiture and transfer in question, (b) to fill in the number
of shares being forfeited and transferred, and (c) to deliver the same, together with the
certificate evidencing the shares of stock to be forfeited and transferred, to the Company or its
assignee.

     3. Holder irrevocably authorizes the Company to deposit with you any certificates evidencing
shares of stock to be held by you hereunder and any additions and substitutions to said shares as
defined in the Agreement. Holder does hereby irrevocably constitute and appoint you as Holder’s
attorney-in-fact and agent for the term of this escrow to execute with respect to such securities
all documents necessary or appropriate to make such securities negotiable and to complete any
transaction herein contemplated, including but not limited to the filing with any applicable state
blue sky authority of any required applications for consent to, or notice of transfer of, the
securities. Subject to the provisions of this paragraph 3, Holder shall exercise all rights and
privileges of a stockholder of the Company while the stock is held by you.

     4. Upon written request of Holder, but no more than once per calendar year, unless the
Forfeiture Restriction has been enforced, you will deliver to Holder a certificate or certificates
representing so many shares of stock as are not then subject to the Forfeiture Restriction. Within
120 days after any voluntary or involuntary termination of Holder’s services to the Company for any
or no reason, you will deliver to Holder a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not forfeited pursuant to the
Forfeiture Restriction.

 

 

     5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Holder, you shall deliver all of the same to
Holder and shall be discharged of all further obligations hereunder.

     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed
by all of the parties hereto.

     7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Holder while acting in good faith, and any act
done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.

     8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you shall not be liable
to any of the parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

     9. You shall not be liable in any respect on account of the identity, authorities or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.

     10. You shall not be liable for the expiration of any rights under any applicable state,
federal or local statute of limitations or similar statute or regulation with respect to these
Joint Escrow Instructions or any documents deposited with you.

     11. You shall be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation therefor.

     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
an officer or agent of the Company or if you shall resign by written notice to each party. In the
event of any such termination, the Company shall appoint a successor Escrow Agent.

     13. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.

     14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities held by you hereunder, you are authorized
and directed to retain in your possession without liability to anyone all or any part of said
securities until such disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you shall be under no
duty whatsoever to institute or defend any such proceedings.

     15. Any notice or other communication required or permitted hereunder shall be in writing and
shall be delivered personally or sent by email, facsimile transmission, overnight air courier, or
first

D-2

 

class certified or registered mail, postage prepaid, and addressed to the parties at the
addresses of the parties set forth at the end of these Joint Escrow Instructions or such other
address as a party may designate by five days’ advance written notice to the other parties hereto.
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.

     16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.

     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns.

     18. These Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, excluding that body of law pertaining to
conflicts of law.

(Signature page follows.)

D-3

 

     IN WITNESS WHEREOF, the parties have executed these Joint Escrow Instructions as of the date
first written above.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	MEDICIS PHARMACEUTICAL CORPORATION:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Mark A. Prygocki, Sr.	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Mark A. Prygocki, Sr.	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

	 	 	 	 	 	 	 
	 

	 	Address:
	 	8125 North Hayden Road
	 	 
	 

	 	 	 	Scottsdale, Arizona 85258-2463	 	 
	 
	 	 	 	 	 	 
	 

	 	HOLDER:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	ESCROW AGENT:	 	 
	 
	 	 	 	 
	By:

	 	/S/ Jason D. Hanson	 	 
	 

	 	 	 	 
	 

	 	Secretary	 	 
	 

	 	Medicis Pharmaceutical Corporation	 	 

	 	 	 	 	 
	Address

	 	8125 North Hayden Road
	 	 
	 

	 	Scottsdale, Arizona 85258-2463	 	 

D-4

 

EXHIBIT E

TO RESTRICTED STOCK AWARD GRANT NOTICE

FORM OF 83(B) ELECTION AND INSTRUCTIONS

     These instructions are provided to assist you if you choose to make an election under Section
83(b) of the Internal Revenue Code, as amended, with respect to the shares of Class A common stock,
par value $0.014 per share, of Medicis Pharmaceutical Corporation transferred to you. Please
consult with your personal tax advisor as to whether an election of this nature will be in your
best interests in light of your personal tax situation.

     The executed original of the Section 83(b) election must be filed with the Internal Revenue
Service not later than 30 days after the date the shares were transferred to you. PLEASE NOTE:
There is no remedy for failure to file on time. The steps outlined below should be followed to
ensure the election is mailed and filed correctly and in a timely manner. ALSO, PLEASE NOTE: If
you make the Section 83(b) election, the election is irrevocable.

	1.	 	Complete Section 83(b) election form (attached as Attachment 1) and make four copies
of the signed election form. (Your spouse, if any, should sign the Section 83(b) election
form as well.)
	 
	2.	 	Prepare the cover letter to the Internal Revenue Service (sample letter attached as
Attachment 2).
	 
	3.	 	Send the cover letter with the originally executed Section 83(b) election form and one copy
via certified mail, return receipt requested to the Internal Revenue Service at the address of
the Internal Revenue Service where you file your personal tax returns. We suggest that you
have the package date-stamped at the post office. The post office will provide you with a
white certified receipt that includes a dated postmark. Enclose a self-addressed, stamped
envelope so that the Internal Revenue Service may return a date-stamped copy to you. However,
your postmarked receipt is your proof of having timely filed the Section 83(b) election if you
do not receive confirmation from the Internal Revenue Service.
	 
	4.	 	One copy must be sent to Medicis Pharmaceutical Corporation for its records and one copy must
be attached to your federal income tax return for the applicable calendar year.
	 
	5.	 	Retain the Internal Revenue Service file stamped copy (when returned) for your records.

         Please consult your personal tax advisor for the address of the office of the Internal Revenue
Service to which you should mail your election form.

 

 

ATTACHMENT 1 TO EXHIBIT E

TO RESTRICTED STOCK AWARD GRANT NOTICE

ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of
any compensation taxable to taxpayer in connection with taxpayer’s receipt of shares (the
“Shares”) of Class A common stock, par value $0.014 per share, of Medicis Pharmaceutical
Corporation, a Delaware corporation (the “Company”).

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

                                                            

                                                            

                                                            

SSN:                                                   

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

                                                            

                                                            

                                                            

SSN:                                                   

	2.	 	Description of the property with respect to which the election is being made:

                               shares of Class A common stock, par value $0.014 per share, of the Company.

	3.	 	The date on which the property was transferred was                     , 20     .
	 
	4.	 	The taxable year to which this election relates is calendar year 20     .
	 
	5.	 	Nature of restrictions to which the property is subject:
	 
	 	 	The Shares may not be transferred and are subject to forfeiture if taxpayer’s
employment or service with the Company and its subsidiaries terminates for any reason.
The forfeiture restriction applicable to the Shares will lapse in a series of five
cumulative annual installments of 10%, 10%, 20%, 30% and 30% on                     ,
20     ,                     , 20     ,                     , 20     ,                     , 20
      and
                    , 20     , respectively.
	 
	6.	 	The fair market value at the time of transfer (determined without regard to any lapse
restrictions, as defined in Treasury Regulation Section 1.83-3(a)) of the Shares was      
per Share.
	 
	7.	 	No amount was paid by the taxpayer for the Shares.
	 
	8.	 	A copy of this statement has been furnished to the Company.

	 	 	 	 	 	 	 
	Dated:                     , 20     

	 	Taxpayer Signature
	 	 	 	 
	 

	 	 	 	 	 	 

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

	 	 	 	 	 	 	 
	Dated:                     , 20     

	 	Spouse’s Signature
	 	 	 	 
	 

	 	 	 	 	 	 

 

 

ATTACHMENT 2 TO EXHIBIT E

TO RESTRICTED STOCK AWARD GRANT NOTICE

SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE

[Date]

VIA CERTIFIED MAIL

RETURN RECEIPT REQUESTED

Internal Revenue Service

[Address where taxpayer files returns]

	 	 	 	 	 	 	 
	 

	 	Re:
	 	Election under Section 83(b) of the Internal Revenue Code of 1986
	 	 
	 

	 	 	 	Taxpayer:  	 	 
	 

	 	 	 	Taxpayer’s Social Security Number:  	 	 
	 

	 	 	 	Taxpayer’s Spouse:  	 	 
	 

	 	 	 	Taxpayer’s Spouse’s Social Security Number:  	 	 

Ladies and Gentlemen:

     Enclosed please find an original and one copy of an Election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above. Please
acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and
returning it to me in the self-addressed stamped envelope provided herewith.

	 	 	 	 	 
	 

	 	Very truly yours,
	 	 
	 
	 	 	 	 
	 

	 	 	 	 

Enclosures

cc: Medicis Pharmaceutical Corporation

 

 

EXHIBIT F

TO RESTRICTED STOCK AWARD GRANT NOTICE

MEDICIS 2006 INCENTIVE AWARD PLAN

 

 

EXHIBIT G

TO RESTRICTED STOCK AWARD GRANT NOTICE

MEDICIS 2006 INCENTIVE AWARD PLAN PROSPECTUS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]