8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 7, 2011 (July 1, 2011)

Valeant Pharmaceuticals International, Inc.

(Exact name of registrant as specified in its charter)

Canada
(State or other jurisdiction of incorporation) 001-14956
(Commission File Number) Not Applicable
(IRS Employer Identification Number)

7150 Mississauga Road
Mississauga, Ontario
Canada
(Address of principal executive offices) L5N 8M5
(Zip Code)

Registrant’s telephone number, including area code: (905) 286-3000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

     On June 27, 2011, Valeant Pharmaceuticals International, Inc. (the “Company”) entered into an employment letter with Brian Stolz pursuant to which Mr. Stolz will serve as Executive Vice President of Administration and Chief Human Capital Officer. Effective July 1, 2011, Mr. Stolz replaced Mr. Mark Durham, who resigned, effective as of the same date, from his position as Senior Vice President, Human Resources, to pursue other interests. Mr. Durham’s last day of employment with the Company will be August 1, 2011.

     Durham Separation Agreement

     On July 7, 2011, the Company entered into a separation agreement with Mr. Durham. In connection with Mr. Durham’s termination of employment, and subject to him executing and not revoking a full release of claims, Mr. Durham will receive (i) a lump amount equal to $1,315,751 (representing Mr. Durham’s pro-rata 2011 annual bonus and all severance amounts payable to Mr. Durham) and (ii) continuation of health, medical, dental and vision care benefits for 12 months. In addition, any unvested equity compensation awards held by Mr. Durham, other than those equity awards granted to Mr. Durham pursuant to his 2010 employment letter, will vest pursuant to the terms of the awards.

     The foregoing description of the separation agreement is qualified in its entirety by reference to the separation agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.

     Stolz Employment Letter

     The employment letter entered into with Mr. Stolz sets forth Mr. Stolz’s base salary of $450,000 and target and potential annual incentive compensation opportunity between 60% and 120% of base salary. Mr. Stolz is entitled to an additional $50,000 sign-on bonus; provided, that, if prior to June 27, 2012, Mr. Stolz terminates his employment for any reason other than for good reason or the Company terminates Mr. Stolz’s employment for cause, Mr. Stolz will be required to reimburse the Company for the gross amount of such award.

     The employment letter also provides for the grant of (i) a stock option to acquire 85,000 shares of Company common stock vesting ratably over a period of four years subject to Mr. Stolz’s continued employment with the Company through the applicable vesting date, and (ii) 45,000 performance share units vesting on the dates that are on the three year anniversary of the grant date, and three months prior and three months following such anniversary provided that certain total shareholder return hurdles are satisfied (and subject to earlier vesting in the event that the Company’s stock price exceeds certain specified thresholds) and Mr. Stolz remains employed with the Company through the applicable vesting date. Each of the equity awards is subject to accelerated vesting, or an earlier assessment of the achievement of applicable performance targets, in the event of Mr. Stolz’s termination of employment under certain circumstances or the event of a change in control of the Company. Mr. Stolz is required to comply with any share ownership requirements adopted by the Company.

     In the event of the termination of Mr. Stolz’s employment by the Company without cause or by Mr. Stolz for good reason (which includes a diminution in responsibility, compensation reduction, or the Company’s material breach of a material provision of the letter agreement), Mr. Stolz would be entitled to a cash severance payment equal to 1.6 times his base salary (or, in the event of a termination without cause or for good reason within twelve months following a change in control of the Company, two times the sum of his base salary and target annual bonus), a pro-rata annual bonus based on the lesser of actual performance of the Company and target, continued health and welfare benefits for 12 months, and outplacement services up to $20,000. Mr. Stolz is subject to a covenant not to solicit employees during his employment and for a period of twelve months thereafter.

     The foregoing description of the employment letter is qualified in its entirety by reference to the employment letter, which is attached as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.

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Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

10.1 Separation Agreement between Valeant Pharmaceuticals International, Inc. and Mark Durham, dated July 7, 2011.

10.2 Employment Letter between Valeant Pharmaceuticals International, Inc. and Brian Stolz, dated June 27, 2011.

Signatures

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.,
by	/s/ Robert R. Chai-Onn
	Name:	Robert R. Chai-Onn
	Title:	Executive Vice President, General Counsel and Corporate Secretary

Date: July 7, 2011

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

     SEPARATION AGREEMENT dated the 7th day of July, 2011 (the “Effective Date”), between VALEANT PHARMACEUTICALS INTERNATIONAL, INC. (“Valeant”) and Mark Durham (“Mr. Durham”).

     WHEREAS Mr. Durham is serving as Valeant’s Senior Vice President, Human Resources, pursuant to an Agreement entered into on November 11, 2010 (the “2010 Agreement”);

     WHEREAS the parties have agreed that Mr. Durham’s employment with Valeant shall terminate, and he will cease to serve as Senior Vice President, Human Resources, effective as of the Termination Date;

     WHEREAS, concurrently with the execution of this Separation Agreement, Mr. Durham will be executing a resignation letter, resigning from his positions as an officer of Valeant and its subsidiaries;

     WHEREAS as a result of him ceasing to serve as Senior Vice President, Human Resources, Mr. Durham will be entitled to receive certain payments and benefits as agreed between the parties;

     WHEREAS Valeant and Mr. Durham desire to enter into this Separation Agreement (this “Agreement”) to set forth the parties’ agreement as to Mr. Durham’s entitlements and continuing obligations as a consequence of his termination of employment with Valeant.

     NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the parties hereto agree as follows:

1.	Capitalized Terms. Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the 2010 Agreement.
2.	Termination Date. The parties agree that the Termination Date shall be August 1, 2011; that Mr. Durham’s employment as Senior Vice President, Human Resources shall terminate as of the Termination Date; and that Mr. Durham shall cease to have any obligations under the 2010 Agreement as of the Termination Date.
3.	Remuneration Upon Termination. The parties acknowledge that as a result of Mr. Durham’s termination of employment with Valeant, he shall be entitled to the following:

(a)	any accrued but unpaid salary or vacation pay;
(b)	subject to Mr. Durham executing the general release of claims attached hereto as Annex A (the “Release”), and any applicable revocation period expiring, within 60 days following the date hereof, a lump amount equal to US$1,315,751 (representing Mr. Durham’s pro-rata 2011 annual bonus and all severance amounts payable to Mr. Durham), such amount to be payable within ten days following the expiration of the revocation period with respect to the executed Release;
(c)	subject to Mr. Durham executing the Release, and any applicable revocation period expiring, Mr. Durham’s health, medical, dental and vision care benefits will continue for 12 months following the Termination Date; and
(d)	any unvested equity compensation awards held by the Mr. Durham as of the Termination Date, other than those equity awards granted pursuant to the 2010 Agreement, shall automatically accelerate and become one hundred percent (100%) vested and, as applicable, exercisable, as of the Termination Date (subject to blackouts under the applicable Company policy).

4. Covenant Not to Solicit.

(a) To protect the confidential information and other trade secrets of Valeant and its affiliates as well as its goodwill, Mr. Durham hereby agrees, that for a period of twelve (12) months following the Termination

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Date, not to solicit, attempt to solicit, or participate in or assist in any way in the solicitation or attempted solicitation of any employees or independent contractors of Valeant or any its affiliates. For purposes of this covenant, “solicit” or “solicitation” means directly or indirectly influencing or attempting to influence employees of Valeant or any of its affiliates to become employed with any other person, partnership, firm, corporation or other entity regardless of which party first contacted the other. Mr. Durham agrees that the covenants contained in this paragraph are reasonable and necessary to protect the confidential information and other trade secrets of Valeant and its affiliates, provided, that solicitation through general advertising or the provision of references shall not constitute a breach of such obligations.

(b)

It is the intent and desire of Mr. Durham and Valeant (and its affiliates) that the restrictive provisions in this subsection be enforced to the fullest extent permissible under the laws and public policies as applied in each jurisdiction in which enforcement is sought. If any particular provision in this subsection shall be determined to be invalid or unenforceable, such covenant shall be amended, without any action on the part of either party hereto, to delete therefrom the portion so determined to be invalid or unenforceable, such deletion to apply only with respect to the operation of such covenant in the particular jurisdiction in which such adjudication is made. Mr. Durham acknowledges that Valeant or its affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if Mr. Durham breaches his obligations under this subsection. Accordingly, Mr. Durham agree that Valeant and its affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against any breach or prospective breach by Mr. Durham of his obligations under this subsection in any Federal or state court sitting in the State of New Jersey, or, at Valeant’s (or its affiliate’s) election, in any other state or jurisdiction in which Mr. Durham maintains his principal residence or his principal place of business. Mr. Durham agrees that Valeant or its affiliates may seek the remedies described in the preceding sentence notwithstanding any arbitration or mediation agreement that Mr. Durham may enter into with Valeant or any of its affiliates. Mr. Durham hereby submits to the non-exclusive jurisdiction of all those courts for the purposes of any actions or proceedings instituted by Valeant or its affiliates to obtain that injunctive relief, and Mr. Durham agrees that process in any or all of those actions or proceedings may be served by overnight courier (including Federal Express), addressed to the last address provided by Mr. Durham to Valeant, or in any other manner authorized by law.

5.	Other Company Policies. Mr. Durham agrees that he shall continue to be bound to the terms of the Confidentiality Agreement, the Standards of Business Conduct, and any other policies of Valeant and its affiliates that survive termination of employment.
6.	Indemnification and Tax Equalization. Mr. Durham shall be indemnified by Valeant as provided in its by-laws or, if applicable, pursuant to any indemnification agreement Mr. Durham may have with Valeant as of the date hereof. In addition, Mr. Durham shall be entitled to the benefits relating to tax equalization set forth in the 2010 Agreement with respect to his employment at Valeant from January 1, 2011 through the Termination Date.
7.	Section 409A. The parties intend for the payments and benefits under this Agreement to be exempt from Section 409A or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Agreement shall be construed and administered in accordance with such intention. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation.
8.	This Agreement sets forth the entire agreement between Mr. Durham and Valeant concerning the resignation of Mr. Durham’s employment, and supersedes any other written or oral promises concerning the subject matter of this Agreement. For the avoidance of doubt, all Company equity awards granted to Mr. Durham pursuant to the 2010 Agreement shall be forfeited, without consideration, on the Termination Date. No waiver or amendment of this Agreement will be effective unless it is in writing, refers to this Agreement, and is signed by the Chief Executive Officer of Valeant.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
By:	/s/ Robert R. Chai-Onn
	Robert R. Chai-Onn EVP, General Counsel and Corporate Secretary
/s/ Mark Durham
MARK DURHAM

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ANNEX A

General Waiver & Release

     This Legal Release (“Release”) dated as of the last date executed below (the “Release Date”) is between Valeant Pharmaceuticals International, Inc. (the “Company”) and Mark Durham (“Employee”).

     Employee Release. Employee, on behalf of himself, and Employee’s heirs, executors, administrators, and/or assigns, does hereby RELEASE AND FOREVER DISCHARGE the Company, together with its parents, subsidiaries, affiliates, predecessors, and successor corporations and business entities, past, present and future, and its and their agents, directors, officers, employees, shareholders, insurers and reinsurers, and employee benefit plans (and the trustees, administrators, fiduciaries, agents, insurers, and reinsurers of such plans) past, present and future, and their heirs, executors, administrators, predecessors, successors, and assigns (collectively, the “RELEASEES”), of and from any and all legally waivable claims, causes of actions, suits, lawsuits, debts, promises, agreements and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected, which Employee or which Employee’s heirs, executors administrators, or assigns hereafter ever had, now have, or may have, from the beginning of time to the date Employee executes this Release except as expressly set forth herein. This general waiver and release does not include any claims, causes of actions, suits, lawsuits, debts, and demands whatsoever in law or in equity, known or unknown, suspected or unsuspected which may come into existence post the date of this Release.

     The claims being waived and released include, without limitation:

     a. any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employee’s recruitment, hire, employment and termination of employment with the Company;

     b. any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and violation of public policy;

     c. all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work;

     d. any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination, harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and regulations (which includes, but is not limited to, the Age Discrimination in Employment Act, as amended (“ADEA”), Title VII of the Civil Rights Act of 1964, 42 U.S.C. 1981, the Employee Retirement Income Security Act (“ERISA”), the Family and Medical Leave Act of 1993, the Americans with Disabilities Act, the Rehabilitation Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New Jersey Law Against Discrimination and Conscientious Employee Protection Act, the California Fair Employment and Housing Act and the California Family Rights Act), the Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety and Insurance Act; and

     e. any and all claims for monetary damages and any other form of personal relief.

     In waiving and releasing any and all claims against the Releasees, whether or not now known to Employee, Employee understands that this means that, if Employee later discovers facts different from or in addition to those facts currently known by Employee, or believed by Employee to be true, the waivers and releases of this Release will remain effective in all respects — despite such different or additional facts and Employee’s later discovery of such facts, even if Employee would not have agreed to this Release if Employee had prior knowledge of such facts.

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     In order to waive and release any and all claims against the Releasees, whether or not now known, Employee expressly waives and releases all rights under California Civil Code section 1542 (or under any similar statute in any other jurisdiction) which states (language in parentheses added):

     A general release does not extend to claims which the creditor (e.g., Employee) does not know or suspect to exist in his favor at the time of executing the release, which, if known by him, must have materially affected his settlement with the debtor (e.g., the Company).

     The only claims that are not being waived and released by Employee hereunder are claims Employee may have for:

     a. unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law;

     b. continuation of existing participation in Company-sponsored group health benefit plans, at Employee’s full expense, under the United States federal law known as “COBRA” and/or under any applicable state counterpart law;

     c. any benefit entitlements that are vested as of the Separation Date pursuant to the terms of a Company-sponsored benefit plan governed by the United States federal law known as “ERISA;”

     d. stock and/or vested option shares pursuant to the written terms and conditions of Employee’s existing stock option or other equity award grants and agreements, existing as of the Termination Date;

     e. violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable;

     f. any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to the Employee’s right to enforce the terms of this Release and the Separation Agreement dated December 20, 2010; and

     g. any wrongful act or omission occurring after the date Employee signs this Release.

     Nothing in this Release, prevents or prohibits Employee from filing a claim with a government agency, such as the U.S. Equal Employment Opportunity Commission, that is responsible for enforcing a law. However, Employee understands that, because Employee is waiving and releasing all claims “for monetary damages and any other forms of personal relief” through the date upon which Employee signs this Release, Employee may not recover any monetary relief from such a claim and may only seek and receive non-personal forms of relief through any such claim.

     Confidentiality of this Release. Employee agrees, covenants and promises that Employee has not communicated or disclosed, and will not hereafter communicate or disclose, the terms of this Release, to any persons with the exception of: (1) members of Employee’s immediate family, Employee’s attorneys, accountants, tax, or financial advisors, each of whom shall be informed of this confidentiality obligation and shall agree to be bound by its terms; (2) to the Internal Revenue Service or state or local taxing authority; (3) as is expressly required or protected by law; or (4) in any action to challenge or enforce the terms of this Release provided that such disclosure is protected from public disclosure by an appropriate confidentiality order to the maximum extent permitted by applicable authority. Employee agrees to be liable for any breach of this Paragraph by the individuals identified in clause (1) above.

     Nondisparagement. Employee agrees not to make written or oral statements about the Company or the Releasees that are negative or disparaging. Notwithstanding the forgoing, nothing in this Agreement shall preclude Employee from communicating or testifying truthfully (i) to the extent required or protected by law, (ii) to any federal, state, provincial or local governmental agency, or (iii) in response to a subpoena to testify issued by a court of competent jurisdiction.

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     No Admission. Nothing about the fact or content of this Release shall considered to be or treated by Employee or the Company as an admission of any wrongdoing, liability or violation of law by Employee or by any Releasee.

     Consideration & Revocation Periods; Effective Date. Employee acknowledges that (a) the Company has advised him of his right to consult with an attorney prior to signing this Release; (b) he has carefully read and fully understands all of the provisions of this Release, and (c) he is entering into this Release, including the releases set forth herein, knowingly, freely and voluntarily in exchange for good and valuable consideration (including, but not limited to, the payments to be made under Sections 3(b)-(d) of the agreement between the Company and Employee, dated as of July [ ], 2011, to which he would not be entitled in the absence of signing this Release). Employee has thirty-five (35) calendar days to consider this Release, although he may sign it sooner, but not before August 1, 2011.

     In addition, for the period of seven (7) calendar days after the date Employee signs this Release (“7-day Revocation Period”), Employee may revoke it by delivering written notice of revocation to the Company by hand-delivery or by facsimile or e-mail transmission using the street, facsimile or e-mail address for the Company stated below.

     Because of this 7-day Revocation Period, this Release will not become effective and enforceable until the eighth calendar day after the date Employee signed it, provided that Employee has delivered Employee’s signed Release to the Company, and Employee did not revoke the Release.

     Delivery to the Company. Employee should return this Release, signed by Employee (and any notice of revocation, if applicable) to:

Valeant Pharmaceuticals International, Inc.
700 US Highway 202/206
Bridgewater, NJ 08807
Attn: General Counsel

     Judicial Interpretation/Modification; Severability. In the event that this Release shall be held to be void, voidable, unlawful or, for any reason, unenforceable, the Release shall be voidable at the sole discretion of the Company.

     Changes to Release. No changes to this Release can be effective except by another written agreement signed by Employee and by the Company’s Senior Vice President of Human Resources.

     Complete Agreement. Except for the Separation Agreement entered into with the Employee, this Release, assuming it is executed and not revoked during the 7-day Revocation Period, cancels, supersedes and replaces any and all prior agreements (written, oral or implied-in-fact or in-law) between Employee and the Company regarding all of the subjects covered by this Release. This Release is the full, complete and exclusive agreement between Employee and the Company regarding all of the subjects covered by this Release, and neither the Employee nor the Company is relying on any representation or promise that is not expressly stated in this Release.

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Dated: By:

I HAVE READ THIS RELEASE. I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS. I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY OWN CHOOSING DURING THE CONSIDERATION PERIOD, AND THAT THE COMPANY HAS ADVISED ME TO UNDERTAKE SUCH CONSULTATION BEFORE SIGNING THIS RELEASE. I SIGN THIS RELEASE FREELY AND VOLUNTARILY, WITHOUT DURESS OR COERCION.

Dated:
	Mark Durham

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EX-10.2

Exhibit 10.2

June 27, 2011

Dear Brian:

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

• Title: Executive Vice President of Administration and Chief Human Capital Officer; you will report to the Chief Executive Officer. Your principal place of employment will be in the Mid-Atlantic region of the United States.

• Base Salary: $37,500 per month ($450,000annualized).

• Sign-on Bonus. One-time payment of $50,000; provided, however, that such gross amount shall be repaid to the Company should you terminate your employment other than for Good Reason or should the Company terminate your employment for Cause, in either case within one year of the date of this letter agreement.

• Annual Incentive: You will be eligible to participate in the Company’s management bonus plan, including for the 2011 calendar year on a pro rata basis. Your target bonus will be 60%, with the potential of 120%, of your base salary. This plan, and therefore your participation, is subject to change at the discretion of the Board of Directors. Bonuses are payable at the time the other management bonuses are paid. To be eligible for any bonus payment, you must be employed by the Company, and you must not have given or received notice of the termination of your employment, on the day on which the applicable bonus is paid to other members of the Company management.

• Equity Awards: You will receive the equity awards set forth below, effective on the date (i) with respect to the Options (as defined below), that is the later of your employment start date or the date that the Compensation Committee approves such awards and (ii) with respect to Performance Share Units (as defined below), that is the latest of your employment start date, the date that the Compensation Committee approves such awards or the effective date of the registration statement on Form S-8 registering the Performance Share Units (as applicable, the “Grant Date”),:

Stock Options — On the Grant Date, you shall be granted options under the Company’s 2011 Omnibus Incentive Plan (the “Plan”) to acquire 85,000 shares of the Company common stock (“Shares”) (the “Options”). The Options will vest over a four-year period (25% per year on each anniversary of the Grant Date), provided that you are employed by the Company on the applicable vesting date, and shall have a term of ten (10) years. Except as set forth below, if your employment terminates for any reason prior to the vesting date, your unvested Options will be forfeited (and, in the case of a termination of your employment for Cause, your vested Options will also be forfeited).

June 27, 2011
Mr. Brian Stolz
Page 2 of 14

Notwithstanding anything to the contrary in the Plan, (i) if your employment is terminated by the Company without Cause or by you for Good Reason (each as defined below), at any time within the twelve (12) months following a Change in Control, then any Option that is not cancelled in connection with the Change in Control in exchange for cash payment will vest on the Termination Date (as defined below) and shall remain exercisable for one year following the Termination Date (but in no event beyond the 10-year term of the Option) and (ii) if your employment is terminated by reason of your death, any Option outstanding shall vest in full and remain exercisable for the remainder of the term of the Option. The “Termination Date” shall be the date specified as the effective date of the termination of your employment in any notice of termination of employment provided by the Company to you or accepted by the Company in the event of your giving notice of the termination of your employment.

The exercise price of the Options shall be equal to the Market Price (as defined in the Plan) on the Grant Date.

The Company shall enter into a stock option award agreement with you for the above grant of Options, incorporating the terms set forth in this letter agreement and otherwise on the terms and conditions set forth in the Company’s standard form of stock option award agreement.

Performance Restricted Share Units. On the Grant Date you will also receive 45,000 performance-based restricted stock units under the Plan (the “Performance Share Units”), which shall vest as follows, provided that, except as set forth herein, you are continually employed by the Company through the applicable vesting date:

(i)	Single Vesting Share Price.
	If at the date that is 3 months prior to the third anniversary of the Grant Date (the “First Primary Measurement Date”), the Adjusted Share Price (as defined below) equals or exceeds the Single Vesting Share Price (as defined below), you shall vest in 25% of the Performance Share Units.
	If at the date that is the third anniversary of the Grant Date (the “Second Primary Measurement Date”), the Adjusted Share Price equals or exceeds the Single Vesting Share Price, you shall vest in an additional 50% of the Performance Share Units.

June 27, 2011
Mr. Brian Stolz
Page 3 of 14

	If at the date that is 3 months following the third anniversary of the Grant Date (the “Third Primary Measurement Date”), the Adjusted Share Price equals or exceeds the Single Vesting Share Price, you shall vest in an additional 25% of the Performance Share Units.
(ii)	Double Vesting Share Price.
	If at the First Primary Measurement Date, the Adjusted Share Price equals or exceeds the Double Vesting Share Price (as defined below), you shall vest in 50% of the Performance Share Units.
	If at the Second Primary Measurement Date, the Adjusted Share Price equals or exceeds the Double Vesting Share Price, you shall vest in an additional 100% of the Performance Share Units.
	If at the Third Primary Measurement Date, the Adjusted Share Price equals or exceeds the Double Vesting Share Price, you shall vest in an additional 50% of the Performance Share Units.
(iii)	Triple Vesting Share Price.
	If at the First Primary Measurement Date, the Adjusted Share Price equals or exceeds the Triple Vesting Share Price (as defined below), you shall vest in 75% of the Performance Share Units.
	If at the Second Primary Measurement Date, the Adjusted Share Price equals or exceeds the Triple Vesting Share Price, you shall vest in an additional 150% of the Performance Share Units.
	If at the Third Primary Measurement Date, the Adjusted Share Price equals or exceeds the Triple Vesting Share Price, you shall vest in an additional 75% of the Performance Share Units.
(iv)	Performance Share Units that could have been vested under either of paragraphs (i), (ii), or (iii) that do not become vested on the First Primary Measurement Date, the Second Primary Measurement Date or the Third Primary Measurement Date, may become vested on each of the applicable dates that is one year following each such date,

June 27, 2011
Mr. Brian Stolz
Page 4 of 14

	respectively, based upon the Adjusted Share Price on the applicable measurement date, provided that you are employed by the Company on such applicable vesting date. Any Performance Share Units that are not vested as of the date that is three months following the fourth anniversary of the Grant Date shall be immediately forfeited.
(v)	If the Adjusted Share Price on a measurement date set forth in clauses (i), (ii) and (iii), as well as clause (iv), is between the Single Vesting Share Price and the Double Vesting Share Price or is between the Double Vesting Share Price and the Triple Vesting Share Price, you shall vest in a number of Performance Share Units that is the mathematical linear interpolation between the number of Performance Share Units which would vest at defined ends of the applicable spectrum.
(vi)	“Adjusted Share Price” means the sum of (i) the average of the closing prices of Shares during the 20 consecutive trading days starting on the specified measurement date (or if such measurement date does not fall on a trading day, the immediately following trading day) (“Average Share Price”), and (ii) the value that would be derived from the number of Shares (including fractions thereof) that would have been purchased had an amount equal to each dividend paid on a share of common stock after the Grant Date and on or prior to the applicable measurement date been deemed invested on the dividend payment date, based on the closing price of the common stock on such dividend payment date. The Adjusted Share Price and Average Share Price shall be subject to equitable adjustment to reflect stock splits, stock dividends and other capital adjustments.
(vii)	“Single Vesting Share Price,” “Double Vesting Share Price” and “Triple Vesting Share Price” means the Adjusted Share Prices equal to a compound annual share price appreciation (the “Annual Compound TSR”) of 15%, 30% and 45%, respectively, as measured from a base price equal to the average of the closing prices of Shares during 20 consecutive trading days immediately prior to the Grant Date over a measurement period from the Grant Date to the last trading day of the period used to calculate the Adjusted Share Price. Such base price shall be subject to equitable adjustment to reflect stock splits, stock dividends and other capital adjustments (such price, as adjusted, the “Base Price”).

June 27, 2011
Mr. Brian Stolz
Page 5 of 14

(viii)	Notwithstanding the foregoing vesting provisions of the Performance Share Units, if on any date between the date that is one year following the Grant Date and the Second Primary Measurement Date, the average of the closing prices of Shares during 20 consecutive trading days (“Per Share Price”) on such date:
	(A) exceeds a 30% Annual Compound TSR as measured through the Second Primary Measurement Date, then you will become vested in 45,000 of the Performance Share Units that could have been earned under clause (i) above;
	(B) exceeds a 45% Annual Compound TSR as measured through the Second Primary Measurement Date, then you will become vested in the additional 45,000 of the Performance Share Units that could have been earned under clause (ii) above; and
	(C) exceeds a 60% Annual Compound TSR as measured through the Second Primary Measurement Date, then you will become vested in the additional 45,000 of the Performance Share Units that could have been earned under clause (iii) above;
	provided, however, that the vesting that takes place pursuant to this clause (viii) if the Per Share Price target is achieved shall only take place the first time such Per Share Price target is achieved on such vesting date, there is no interpolation of vesting pursuant to this clause (viii), and to vest in any of the Performance Share Units pursuant to this clause (viii) you must remain employed by the Company through the applicable vesting date. The Per Share Price specified herein shall be subject to equitable adjustment to reflect stock splits, stock dividends and other capital adjustments.
(ix)	The Company shall distribute to you a number of shares of its common stock equal to the number of Performance Shares Units that become vested as soon as practicable (but in any event no later than 45 days) following the vesting date of such Performance Shares Units.
(x)	Notwithstanding anything to the contrary in the Plan, in the event of your death, the performance measures applicable to the Performance Share Units will be applied as though the date of death was the end of the 20 consecutive trading-day average measurement period, with the number of units calculated in a manner consistent with the vesting

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	schedule described above, but based on the Annual Compound TSR determined through the date of death. Notwithstanding the immediately preceding sentence, if death occurs prior to the date that is the one-year anniversary of the Grant Date, the measurement date will still be the date of death, but the Annual Compound TSR will be determined based on an assumed measurement period of one year. Any Performance Share Units that did not become vested prior to the date of death for a reason set forth in this clause (x) or that do not become vested as a result of this clause (x) shall be forfeited immediately following the date of death.
(xi)	Subject to clause (xii) below, and notwithstanding anything to the contrary in the Plan, in the event of an involuntary termination of your employment by the Company without Cause or by you with Good Reason, or in the event of your Disability (each as defined below), in each case, following the date that is the one-year anniversary of the Grant Date, the performance measures applicable to the Performance Share Units will be applied as though your employment Termination Date was the end of the 20 consecutive trading-day average measurement period, with the number of units calculated in a manner consistent with the vesting schedule described above, but based on the Annual Compound TSR determined through your Termination Date, provided, however, only a pro rata portion of such calculated Performance Share Units will vest upon termination. Any Performance Share Units that did not become vested prior to your termination of employment for a reason set forth in this clause (xi) or that do not become vested as a result of this clause (xi) shall be forfeited immediately following the date of your termination of employment. In the event of a termination of employment for a reason set forth in this clause (xi) that occurs prior to the date that is the one-year anniversary of the Grant Date, the award of Performance Share Units shall be forfeited.
(xii)	Notwithstanding anything to the contrary in the Plan, in the event of a Change in Control, the Performance Share Units will be converted into a number of time-based restricted stock units (the “Resulting RSUs”) determined by applying the performance measures applicable to the Performance Share Units as though the sum of (i) fair market value of the Company common stock on the date of the Change in Control and (ii) the value that would be derived from the number of Shares (including fractions thereof) that would have been purchased had an amount equal to each dividend paid on a share of common stock after the Grant Date and on or prior to the applicable measurement date been deemed invested on the dividend payment date, based on the

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closing price of the common stock on such dividend payment date was the Adjusted Share Price, with the number of Resulting RSUs equal to the number of Performance Share Units that would have vested based on the Annual Compound TSR determined through the Change in Control. Notwithstanding the immediately preceding sentence, if termination following a Change in Control occurs prior to the date that is the one-year anniversary of the Grant Date, the measurement date will still be the date of Change in Control, but the Annual Compound TSR will be determined based on an assumed measurement period of one year. The Resulting RSUs will vest on Second Primary Measurement Date, subject to your continued employment; provided that in the event of an involuntary termination of your employment by the Company without Cause or a voluntary termination of your employment by you with Good Reason within the twelve (12) months following a Change in Control, the vesting and payment of such Resulting RSUs will be accelerated to your Termination Date. Any Performance Share Units that did not become Resulting RSUs shall be forfeited on the Change in Control. Any Resulting RSUs that did not become vested prior to your termination of employment for a reason set forth in this clause (xii) or that do not become vested as a result of this clause (xii) shall be forfeited immediately following the date of your termination of employment.

(xiii)

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

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

Matching Grants for Share Purchases. In connection with such share ownership, you shall also be eligible to receive matching share units under the Company’s matching share unit program in accordance with its terms as applied for similarly situated executives of the Company.

• Good Reason. You may terminate your employment for Good Reason (as defined below) by delivering to the Company a Notice of Termination (as defined below) not less than thirty (30) days prior to the termination of your employment for Good Reason. The Company shall have the option of terminating your duties and responsibilities prior to the expiration of such thirty-day notice period, subject to the payment by the Company of the compensation and benefits provided in this letter, as may be applicable. For purposes of this letter, “Good Reason” shall mean the

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	occurrence of any of the events or conditions described in clauses (i) through (iii) immediately below which are not cured by the Company (if susceptible to cure by the Company) within thirty (30) days after the Company has received a “Notice of Termination,” which means a written notice provided by you within ninety (90) days of the initial existence of the event or condition constituting Good Reason specifying the particular events or conditions which constitute Good Reason and the specific cure requested by you.
(i)	Diminution of Responsibility. (A) any material reduction in your duties or responsibilities as in effect immediately prior thereto, or (B) removal of you from the position of Executive Vice President Administration and Chief Human Capital Officer. For the avoidance of doubt, the term “Diminution of Responsibility” shall not include any such removal resulting from a promotion, your death or Disability, the termination of your employment for Cause, or your termination of your employment other than for Good Reason;
(ii)	Compensation Reduction. Any reduction in your base salary or target bonus opportunity which is not comparable to reductions in the base salary or target bonus opportunity of other similarly-situated senior executives at the Company; or
(iii)	Company Breach. Any other material breach by the Company of any material provision of this letter.

• Change in Control. For purposes of this Agreement, a “Change in Control” shall mean any of the following events:

(i)	the acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities;
(ii)	the individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the Board, unless the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; or
(iii)	the closing of:

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1.

a merger or consolidation involving the Company if the stockholders of the Company, immediately before such merger or consolidation, do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the corporation resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation; or

2.

a complete liquidation or dissolution of the Company or an agreement for the sale or other disposition of all or substantially all of the assets of the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to this letter agreement, solely because fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of stock in the Company immediately prior to such acquisition.

• Disability. The Company may terminate your employment, on written notice to you after having established your Disability and while you remain Disabled, subject to the payment by the Company to you of the applicable compensation and benefits provided pursuant to this letter agreement. For purposes of this letter agreement, “Disability” shall have the meaning assigned to such term in the Plan.

• Cause. The Company may terminate your employment for “Cause”, subject to the payment by the Company to you of the applicable compensation and benefits provided in this letter agreement. “Cause” shall mean, for purposes of this letter, “cause” as defined by applicable common law and (1) conviction of any felony or indictable offense (other than one related to a vehicular offense) or other criminal act involving fraud; (2) willful misconduct that results in a material economic detriment to the Company; (3) material violation of Company policies and directives, which is not cured after written notice and a reasonable opportunity for cure; (4) continued refusal by you to perform your duties after written notice identifying the deficiencies and a reasonable opportunity for cure; or (5) a material violation by you of any material covenants to the Company. No action or inaction shall be, or be deemed to be, willful if not demonstrably willful and if taken or not taken by you in good faith and with the understanding that such action or inaction was not adverse to the best interests of the Company. Reference in this paragraph to the Company shall also include direct and indirect subsidiaries of the Company, and materiality shall be measured based on the action or inaction and the impact upon the Company taken as a whole. The Company may suspend you, with pay, upon your indictment for the commission of a felony or indictable offense as described under clause (1) above.

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	Such suspension may remain effective until such time as the indictment is either dismissed or a verdict of not guilty has been entered.
•	Employee and Executive Benefits. You will be eligible to participate in the employee benefit plans and programs generally made available to similarly situated employees of the Company on the terms and conditions applicable generally to all employees. In addition, the Company shall reimburse you for incremental taxes incurred by you outside of the United States because of any services you provide to the Company outside of the United States or any business that the Company conducts outside of the United States, if such incremental amount during any tax year exceeds 1% or more of your average base salary for such tax year. You shall be required to participate in any tax equalization program the Company may have in effect from time to time in order to qualify for the benefit described in the preceding sentence.
•	Reimbursement of Certain Expenses. The Company shall fully reimburse the reasonable fees of your counsel and financial advisor incurred in connection with the development and implementation of the terms of your employment.
•	Conditions to Reimbursement. The following provisions shall be in effect for any reimbursements (and in-kind benefits) to which you otherwise may become entitled under this letter, in order to assure that such reimbursements (and in-kind benefits) do not create a deferred compensation arrangement subject to Section 409A:

(i)	The amount of reimbursements (or in-kind benefits) to which you may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement (or in-kind benefits) hereunder in any other calendar year.
(ii)	Each reimbursement to which you become entitled shall be made by the Company as soon as administratively practicable following your submission of the supporting documentation, but in no event later than the close of business of the calendar year following the calendar year in which the reimbursable expense is incurred.
(iii)	Your right to reimbursement (or in-kind benefits) cannot be liquidated or exchanged for any other benefit or payment.

• At-Will Employment. Your employment with the Company is “at will”. This means that you or the Company have the option to terminate your employment at any time, with or without advance notice, and with or without Cause or with or without Good Reason. This offer of employment does not constitute an express or implied agreement of continuing or long term employment. The at will nature of your employment can be altered only by a written agreement specifying the altered status of your employment. Such written agreement must be signed by both you and the Chief Executive Officer.

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• Severance Benefits. Notwithstanding the immediately preceding bullet paragraph, if your employment is terminated by the Company without Cause or by you for Good Reason, the Company shall have the following obligations:

(i)	The Company will pay you an amount equal to 1.6 times your annual salary as of the date of your termination, provided that, if your termination occurs either in contemplation of a Change in Control or at any time within twelve (12) months following a Change in Control, the Company shall instead pay you an amount equal to two times the sum of (A) your annual salary as of the date of termination, plus (B) your annual target bonus as of the date of your termination.
(ii)	The Company will pay you any accrued but unpaid salary or vacation pay and any deferred compensation. In addition, the Company will pay you any bonus earned but unpaid in respect of any fiscal year preceding the Termination Date. The Company will also pay you a bonus in respect of the fiscal year in which the Termination Date occurs, as though you had continued in employment until the payment of bonuses by the Company to its executives for such fiscal year, in an amount equal to the product of (A) the lesser of (x) the bonus that you would have been entitled to receive based on actual achievement against the stated performance objectives or (y) the bonus that you would have been entitled to receive assuming that the applicable performance objectives for such fiscal year were achieved at “target”, and (B) a fraction (i) the numerator of which is the number of days in such fiscal year through Termination Date and (ii) the denominator of which is 365; provided that, if your termination occurs either in contemplation of a Change in Control or at any time within twelve (12) months following a Change in Control, then in the foregoing calculation the amount under (A) shall be equal to (y). Any bonus payable to you under this bullet shall be paid in no event later than March 15 of the calendar year following the calendar year in which the Termination Date occurs.
(iii)	The Company will provide you with continued coverage under any health, medical, dental or vision program or policy in which you were eligible to participate at the time of your employment termination for 12 months following such termination on terms no less favorable to you and your dependents (including with respect to payment for the costs thereof) than those in effect immediately prior to such termination.
(iv)	The Company shall provide outplacement services through one or more outside firms of your choosing up to an aggregate of $20,000, which services shall extend until the earlier of (i) 12 months following the termination of your employment or (ii) the date that you secure full time employment.
	Notwithstanding anything herein to the contrary, the Company shall have no obligation to pay or provide any of the severance benefits set forth in this letter and shall have no obligations to you in respect of the termination of your employment save and except for obligations that are expressly established by applicable employment

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	standards legislation unless you execute and deliver, within 60 days of the date of your termination, and do not revoke, a general release in form satisfactory to the Company and any revocation period set forth in the release has lapsed. The Company shall pay all cash severance benefits due within 10 business days following the satisfaction of all of the conditions set forth in the preceding sentence. You shall not be required to mitigate the amount of any severance payment provided for under this letter by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to you in any subsequent employment.
	Notwithstanding anything herein to the contrary, in no event shall the timing of your execution of the general release, directly or indirectly, result in you designating the calendar year of payment, and if a payment that is subject to execution of the general release could be made in more than one taxable year, payment shall be made in the later taxable year.
	It is understood that, during your employment by the Company, you will not engage in any activities that constitute a conflict of interest with the interests of the Company, as outlined in the Company’s conflict of interest policies for employees and executives in effect from time to time.
•	Covenant Not to Solicit. To protect the confidential information and other trade secrets of the Company and its affiliates, you agree, during your employment with the Company or any of its affiliates and for a period of twelve (12) months after your cessation of employment with the Company or any of its affiliates, not to solicit, attempt to solicit, or participate in or assist in any way in the solicitation or attempted solicitation of any employees or independent contractors of the Company or any of its affiliates. For purposes of this covenant, “solicit” or “solicitation” means directly or indirectly influencing or attempting to influence employees of the Company or any of its affiliates to become employed with any other person, partnership, firm, corporation or other entity. You agree that the covenants contained in this paragraph are reasonable and necessary to protect the confidential information and other trade secrets of the Company and its affiliates, provided, that solicitation through general advertising or the provision of references shall not constitute a breach of such obligations. For purposes of this paragraph, an “affiliate” shall mean any direct or indirect subsidiary of the Company or any joint venture or collaboration in which any such entity or the Company participates.
•	Remedies for Breach of Obligations Under the Covenants Not to Solicit Above. It is the intent and desire of you and the Company (and its affiliates) that the restrictive provisions in the paragraph captioned “Covenant Not to Solicit” above be enforced to the fullest extent permissible under the laws and public policies as applied in each

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	jurisdiction in which enforcement is sought. If any particular provision in such paragraph shall be determined to be invalid or unenforceable, such covenant shall be amended, without any action on the part of either party hereto, to delete therefrom the portion so determined to be invalid or unenforceable, such deletion to apply only with respect to the operation of such covenant in the particular jurisdiction in which such adjudication is made. Your obligations under the two preceding paragraphs shall survive the termination of your employment with or any other employment arrangement with the Company or any of its affiliates. You acknowledge that the Company or its affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if you breach your obligations under the paragraph captioned “Covenant Not to Solicit” above. Accordingly, you agree that the Company and its affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against any breach or prospective breach by you of your obligations under either such paragraph in any Federal or state court sitting in the State of New Jersey, or, at the Company’s (or its affiliate’s) election, in any other state or jurisdiction in which you maintain your principal residence or your principal place of business. You agree that the Company or its affiliates may seek the remedies described in the preceding sentence notwithstanding any arbitration or mediation agreement that you may enter into with the Company or any of its affiliates. You hereby submit to the non-exclusive jurisdiction of all those courts for the purposes of any actions or proceedings instituted by the Company or its affiliates to obtain that injunctive relief, and you agree that process in any or all of those actions or proceedings may be served by registered mail, addressed to the last address provided by you to the Company or its affiliates, or in any other manner authorized by law.
•	Indemnification. You shall be indemnified by the Company as provided in its by-laws or, if applicable, pursuant to an indemnification agreement with the Company if such agreements are provided to similarly situated executives.
•	Section 409A. The parties intend for the payments and benefits under this Agreement to be exempt from Section 409A or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Agreement shall be construed and administered in accordance with such intention. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this letter during the six-month period immediately following your separation from service shall instead be paid on the first business day after the date that is six months following your Termination Date (or death, if earlier), with interest from the date such amounts would otherwise have been paid at the short-term applicable federal rate, compounded semi-annually, as

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	determined under Section 1274 of the Internal Revenue Code of 1986, as amended, for the month in which payment would have been made but for the delay in payment required to avoid the imposition of an additional rate of tax on you under Section 409A.
•	Withholding Taxes. All payments to you or your beneficiary under this letter agreement shall be subject to withholding on account of federal, state and local taxes as required by law.

It is understood that you are required to read, review, agree, sign and return the Company’s customary on-boarding documentation.

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

Except as specifically described in the following sentence, the terms of this letter constitute the entire agreement between the Company and you with respect to the subject matter hereof, superseding all prior agreements and negotiations This letter is governed by the laws of the State of New Jersey. All currency amounts set forth in the letter agreement refer to U.S. dollars.

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

Sincerely, Valeant Pharmaceuticals International, Inc.
By:	/s/ J. Michael Pearson
	J. Michael Pearson
	Chief Executive Officer
	/s/ Brian Stolz
	Brian Stolz