Table of Contents

Delaware		2834		52-1574808
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Charles K. Ruck, Esq. R. Scott Shean, Esq. Latham & Watkins LLP 650 Town Center Drive Costa Mesa, California 92626-1925 (714) 540-1235		Joseph A. Newcomb, Esq. Executive Vice President, Secretary and General Counsel Inamed Corporation 5540 Ekwill Street Santa Barbara, California 93111-2936 (805) 683-6761		Scott M. Stanton, Esq. Kenji L. Funahashi, Esq. Morrison & Foerster LLP 12531 High Bluff Drive, Suite 100 San Diego, California 92130-2040 (858) 720-5100

Proposed Maximum

Proposed Maximum

Amount of

Title of Each Class of

Amount to be

Offering

Aggregate

Registration

Securities to be Registered

Registered

Price per Unit

Offering Price(2)

Fee(2)

Class A Common Stock, $0.014 par value per share

(1)

N/A

$2,658,850,834

$312,950

(1)	In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares is not set forth herein. Pursuant to Rule 457(o), the registration fee has been computed on the basis of the maximum aggregate offering price of shares of Registrant’s common stock expected to be issued upon completion of the merger of Inamed Corporation, a Delaware corporation, with and into Masterpiece Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Registrant.
(2)	Estimated solely for purposes of calculation of the registration fee in accordance with Rules 457 (c) and (f) of the Securities Act of 1933, as amended, based upon the product of: (A) 37,999,869, the maximum number of shares of Inamed common stock that may be exchanged in the merger (the sum of (i) 36,352,579 shares of Inamed common stock outstanding as of October 28, 2005 and (ii) 1,647,290 shares of Inamed common stock issuable upon the exercise of outstanding options as of October 28, 2005), multiplied by (B) $69.97, the average of the high and low sale prices for shares of Inamed common stock as reported on the NASDAQ National Market on October 27, 2005.

---

Table of Contents

The information in this joint proxy statement/ prospectus is not complete and may be changed. Medicis Pharmaceutical Corporation may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/ prospectus is not an offer to sell these securities and it is not soliciting an offer to buy nor shall there be any sale of these securities in any state where the offer, solicitation or sale is not permitted.

For Medicis stockholders:		For Inamed stockholders:
, 2005,    a.m., local time		, 2005,    a.m., local time

Jonah Shacknai Chairman of the Board and Chief Executive Officer Medicis Pharmaceutical Corporation		Nicholas L. Teti Chairman of the Board, President and Chief Executive Officer Inamed Corporation

---

Table of Contents

	1. To consider and vote upon a proposal to approve the issuance of shares of Medicis Class A common stock pursuant to the Agreement and Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Masterpiece Acquisition Corp., a wholly-owned subsidiary of Medicis, and Inamed Corporation.
	2. To consider and vote upon a proposal to approve an amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis Class A common stock from 150,000,000 to 300,000,000 and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis”.
	3. To consider and vote upon a proposal to adjourn the Medicis special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Medicis special meeting in favor of the foregoing.
	4. To transact any other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

	By Order of the Board of Directors,
	Mark A. Prygocki, Sr.
	Executive Vice President, Chief Financial Officer,
	Corporate Secretary and Treasurer
	Medicis Pharmaceutical Corporation

---

Table of Contents

	1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Masterpiece Acquisition Corp., a wholly-owned subsidiary of Medicis, and Inamed Corporation, and approve the merger contemplated by the merger agreement, pursuant to which Inamed would merge with and into Masterpiece Acquisition Corp., and each outstanding share of Inamed common stock would be converted into the right to receive 1.4205 shares of Medicis Class A common stock and $30.00 in cash.
	2. To consider and vote upon a proposal to adjourn the Inamed special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Inamed special meeting in favor of the foregoing.
	3. To transact any other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

	By Order of the Board of Directors,
	Joseph A. Newcomb
	Executive Vice President, Secretary and General
	Counsel
	Inamed Corporation

---

Table of Contents

Medicis Pharmaceutical Corporation 8125 North Hayden Road Scottsdale, Arizona 85258 Attn: Investor Relations (602) 808-8800		Inamed Corporation 5540 Ekwill Street Santa Barbara, California 93111 Attn: Investor Relations (805) 683-6761

---

Table of Contents

			Page
QUESTIONS AND ANSWERS ABOUT THE MERGER				iv
SUMMARY				1
	The Companies			1
	The Merger			2
	Recommendations of the Boards of Directors			3
	Stockholders Entitled to Vote; Vote Required			4
	Share Ownership of Directors and Executive Officers			5
	Opinions of Deutsche Bank, Thomas Weisel Partners and JPMorgan			5
	Ownership of Medicis After the Merger			6
	Interests of Medicis’ and Inamed’s Directors and Executive Officers			6
	Management of Medicis After the Merger			6
	Listing of Medicis Common Stock and Delisting of Inamed Common Stock			7
	Appraisal Rights			7
	Conditions to Completion of the Merger			7
	Regulatory Approvals			8
	Agreement to Obtain Clearance from Regulatory Authorities			8
	No Solicitation by Medicis or Inamed			9
	Termination of the Merger Agreement			9
	Termination Fees			10
	Material United States Federal Income Tax Consequences of the Merger			10
	Accounting Treatment			10
	Risk Factors			11
	Dividend Policies			11
	Material Differences in Rights of Medicis Stockholders and Inamed Stockholders			11
	Expenses			11
	Summary Selected Historical Financial Data			12
	Medicis Pharmaceutical Corporation			12
	Inamed Corporation			14
	Selected Unaudited Pro Forma Condensed Combined Financial Data			15
	Comparative Per Share Information			16
	Comparative Per Share Market Price Data			17
RISK FACTORS				19
	Risks Relating to the Merger			19
	Risks Relating to Medicis			25
	Risks Relating to Inamed			36
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS				46
THE MEDICIS SPECIAL MEETING				47
	General			47
	Date, Time, Place and Purpose of the Medicis Special Meeting			47
	Recommendation of the Medicis Board of Directors			47
	Record Date; Outstanding Shares; Shares Entitled to Vote			48
	Quorum and Vote Required			48

---

Table of Contents

			Page
	Voting by Medicis’ Directors and Executive Officers			49
	Voting; Proxies; Revocation			49
	Abstentions and Broker Non-Votes			50
	Proxy Solicitation			51
	Other Business; Adjournments			51
	Assistance			51
THE INAMED SPECIAL MEETING				51
	General			51
	Date, Time, Place and Purpose of the Inamed Special Meeting			52
	Recommendation of the Inamed Board of Directors			52
	Record Date; Outstanding Shares; Shares Entitled to Vote			52
	Quorum and Vote Required			52
	Voting by Inamed’s Directors and Executive Officers			53
	Voting; Proxies; Revocation			53
	Abstentions; Broker Non-Votes			54
	Proxy Solicitation			54
	Other Business; Adjournments			55
	Assistance			55
THE MERGER				55
	General			55
	Background of the Merger			55
	Recommendation of the Medicis Board of Directors and Its Reasons for the Merger			62
	Recommendation of the Inamed Board of Directors and Its Reasons for the Merger			66
	Opinions of Deutsche Bank and Thomas Weisel Partners			70
	Opinion of JPMorgan			84
	Regulatory Approvals Required for the Merger			91
	Material United States Federal Income Tax Consequences			92
	Accounting Treatment			94
	Listing of Medicis Common Stock			94
	Appraisal Rights			94
	Delisting and Deregistration of Inamed Common Stock			98
	Restrictions on Sales of Shares of Medicis Common Stock Received in the Merger			98
	Interests of Medicis’ and Inamed’s Directors and Executive Officers in the Merger			98
	Letter Agreement with Q-Med AB			106
	Senior Secured Financing Commitment Letter with Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc.			107
THE MERGER AGREEMENT				108
	Structure of the Merger			108
	Completion and Effectiveness of the Merger			108
	Merger Consideration			108
	Exchange of Inamed Stock Certificates for Medicis Stock Certificates			109
	Fractional Shares			110
	Termination of Exchange Fund			110
	No Liability			110

ii

---

Table of Contents

			Page
	Distributions with Respect to Unexchanged Shares			110
	Transfers of Ownership and Lost Stock Certificates			110
	Conditions to Completion of the Merger			111
	Representations and Warranties			112
	Medicis and Inamed Prohibited from Soliciting Other Offers			113
	Changes of Recommendation			114
	Stockholders’ Meetings			115
	Conduct of Business Before Completion of the Merger			115
	Access to Information; Confidentiality			120
	Antitrust Approval			121
	Notification			121
	Inamed Equity Awards and Benefit Plans			122
	Directors’ and Officers’ Indemnification			124
	Financing			125
	Termination of the Merger Agreement			126
	Termination Fees			127
	Effect of Termination			129
	Fees and Expenses			130
	Public Announcements			130
	Stock Exchange Listing			130
	Tax Treatment			130
	Stockholder Litigation			130
	Medicis Board of Directors			131
	Inamed Rights Agreement			131
	Medicis Rights Agreement			131
	Amendments, Extensions and Waivers			131
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS				133
COMPARISON OF STOCKHOLDER RIGHTS AND CORPORATE GOVERNANCE MATTERS				146
ADDITIONAL INFORMATION				158
	Stockholder Proposals			158
	Legal Matters			159
	Experts			159
	Where You Can Find More Information			159
PART II INFORMATION NOT REQUIRED IN PROSPECTUS				II-1
POWER OF ATTORNEY				II-3
Annexes
Annex A       Agreement and Plan of Merger
Annex B       Opinion of Deutsche Bank Securities Inc.
Annex C       Opinion of Thomas Weisel Partners LLC
Annex D       Opinion of JPMorgan Securities Inc.
Annex E       Form of Certificate of Amendment to the Certificate of Incorporation of Medicis Pharmaceutical Corporation
Annex F       Section 262 of the General Corporation Law of the State of Delaware
Exhibit 8.1
Exhibit 8.2
Exhibit 23.1
Exhibit 23.2
Exhibit 99.4
Exhibit 99.5
Exhibit 99.6
Exhibit 99.7
Exhibit 99.8
Exhibit 99.9
Exhibit 99.10
Exhibit 99.11

iii

---

Table of Contents

Q:		Why are Medicis and Inamed stockholders receiving this joint proxy statement/ prospectus?
A:		Medicis and Inamed have agreed to the merger of Medicis and Inamed under the terms of a merger agreement that is described in this joint proxy statement/ prospectus. A copy of the merger agreement is attached to this joint proxy statement/ prospectus as Annex A.

		In order to complete the merger, Medicis stockholders must vote to approve the issuance of shares of Medicis common stock in the merger and Inamed stockholders must adopt the merger agreement and approve the merger. Medicis and Inamed will hold separate special meetings of their respective stockholders to obtain these approvals.
		This joint proxy statement/ prospectus contains important information about the merger, the merger agreement and the special meetings of the respective stockholders of Medicis and Inamed, which you should read carefully. The enclosed voting materials allow you to vote your shares without attending your respective company’s special meeting.
		Your vote is very important. We encourage you to vote as soon as possible.

Q:		Why are Medicis and Inamed proposing the merger?
A:		Medicis and Inamed both believe that the merger will provide substantial strategic and financial benefits to the stockholders of both companies because the merger will allow stockholders of both companies the opportunity to participate in a larger, more diversified company. We both also believe that the combination will create a stronger and more competitive company that is capable of creating more stockholder value than either Medicis or Inamed could on its own. The combined company will be a leading specialty pharmaceutical, aesthetic and obesity intervention products company. To review the reasons for the merger in greater detail, see “Recommendation of the Medicis Board of Directors and Its Reasons for the Merger” on page 62 and “Recommendation of the Inamed Board of Directors and Its Reasons for the Merger” on page 66.
Q:		What will happen in the merger?
A:		Pursuant to the terms of the merger agreement, Inamed will merge with and into Masterpiece Acquisition Corp., a wholly owned subsidiary of Medicis, with Masterpiece Acquisition Corp. surviving and continuing as a wholly owned subsidiary of Medicis.
Q:		What consideration will Inamed stockholders receive in the merger?
A:		If the merger is completed, Inamed stockholders will have the right to receive 1.4205 shares of Medicis Class A common stock and $30 in cash for each share of Inamed common stock they own. Inamed stockholders will receive cash for any fractional share of Medicis common stock that they would otherwise be entitled to receive in the merger after aggregating all fractional shares to be received by them.
Q:		Should Inamed stockholders send in their Inamed stock certificates now?
A:		No. After the merger is completed, you will be sent written instructions for exchanging your share certificates for the merger consideration.

iv

---

Table of Contents

Q:		How will Medicis stockholders be affected by the merger and issuance of Medicis common stock in the merger?
A:		After the merger, Medicis stockholders will continue to own their existing shares of Medicis common stock. Accordingly, Medicis stockholders will hold the same number of shares of Medicis common stock that they held immediately prior to the merger. However, because Medicis will be issuing new shares of Medicis common stock to Inamed stockholders in the merger, each outstanding share of Medicis common stock immediately prior to the merger will represent a smaller percentage of the total number of shares of Medicis common stock outstanding after the merger.
Q:		When do Medicis and Inamed expect the merger to be completed?
A:		Medicis and Inamed are working to complete the merger as quickly as practicable and currently expect the merger to be completed by the end of calendar 2005. However, we cannot predict the exact timing of the completion of the merger because it is subject to regulatory approvals and other conditions. See “Summary — Conditions to Completion of the Merger” on page 7. There may be a substantial period of time between the approval of the proposals by stockholders at the special meetings of Medicis and Inamed stockholders and the effectiveness of the merger.
Q:		What are the United States federal income tax consequences of the merger?
A:		It is generally expected that for United States federal income tax purposes the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and the consummation of the merger is conditioned on the receipt by each of Medicis and Inamed of an opinion from its counsel to the effect that the merger will so qualify. Assuming that the merger qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, then, in general, an Inamed stockholder:

		• will recognize gain (but not loss) with respect to its Inamed common stock in an amount equal to the lesser of (i) any gain realized with respect to such stock or (ii) the amount of cash received with respect to such stock (other than any cash received instead of a fractional share of Medicis common stock); and
		• will recognize gain (or loss) to the extent any cash received instead of a fractional share of Medicis common stock exceeds (or is less than) the basis of such fractional share.
		No gain or loss will be recognized by Medicis, Inamed or the Medicis stockholders as a result of the merger.
		Tax matters are very complicated, and the tax consequences of the merger to an Inamed stockholder will depend on the facts of each stockholder’s own situation. For a description of the material federal income tax consequences of the merger, please see the information set forth in “Material United States Federal Income Tax Consequences” beginning on page 10. Inamed stockholders are also urged to consult their tax advisors for a full understanding of the tax consequences of the merger.

Q:		Are Medicis and Inamed stockholders entitled to appraisal rights?
A:		Under Delaware law, holders of Inamed common stock have the right to dissent from the merger and obtain payment in cash for the fair value of their shares of common stock, as determined by the Delaware Court of Chancery, rather than the merger consideration. To exercise appraisal rights, Inamed stockholders must strictly follow the procedures prescribed by Delaware law. These procedures are summarized under the section entitled “The Merger — Appraisal Rights” on page 94. In addition, the text of the applicable provision of Delaware law is included as Annex F to this joint proxy statement/ prospectus.

		Holders of Medicis common stock are not entitled to appraisal rights in connection with the issuance of Medicis common stock in the merger.

v

---

Table of Contents

Q:		What are Medicis stockholders voting on?
A:		Medicis stockholders are voting on a proposal to approve the issuance of shares of Medicis common stock pursuant to the merger agreement. The approval of this proposal by Medicis stockholders is a condition to the effectiveness of the merger.

		Medicis stockholders are also voting on a proposal to approve an amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis common stock and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis”. In addition, Medicis stockholders are voting on a proposal to adjourn the Medicis special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Medicis special meeting in favor of the foregoing. The approval of these proposals is not a condition to the effectiveness of the merger.
		Medicis stockholders are voting on each proposal separately. Your vote on one proposal has no bearing on any other proposal, or any other matter that may come before the Medicis special meeting.

Q:		What are Inamed stockholders voting on?
A:		Inamed stockholders are voting on a proposal to adopt the merger agreement and approve the merger. The approval of this proposal by Inamed stockholders is a condition to the effectiveness of the merger. Inamed stockholders are also voting on a proposal to adjourn the Inamed special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Inamed special meeting in favor of the foregoing.

		Inamed stockholders are voting on each proposal separately. Your vote on one proposal has no bearing on the other proposal, or any other matter that may come before the Inamed special meeting.

Q:		What vote of Medicis stockholders is required to approve the issuance of shares of Medicis common stock in the merger?
A:		Approval of the issuance of shares of Medicis common stock pursuant to the merger agreement requires the affirmative vote of the holders of a majority of shares of Medicis common stock present or represented by proxy and voted on such proposal, provided that the total votes cast on the proposal represents over 50% of the outstanding shares of Medicis common stock entitled to vote on the proposal.
Q:		What vote of Medicis stockholders is required to approve the amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis common stock and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis”?
A:		Approval of the amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis common stock and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis” requires the affirmative vote of the holders of a majority of the outstanding shares of Medicis common stock entitled to vote at the special meeting.
Q:		What vote of Inamed stockholders is required to adopt the merger agreement and approve the merger?
A:		Approval of the proposal to adopt the merger agreement and approve the merger requires the affirmative vote of the holders of a majority of the outstanding shares of Inamed common stock entitled to vote at the special meeting.
Q:		How does the board of directors of Medicis recommend that Medicis stockholders vote?
A:		The Medicis board of directors believes that the merger is fair to, and in the best interest of, Medicis and its stockholders and has declared the merger to be advisable to its stockholders, and unanimously recommends that Medicis stockholders vote “FOR” approval of the issuance of shares of Medicis common stock to Inamed stockholders pursuant to the merger agreement. In addition, the Medicis board of directors unanimously recommends that Medicis stockholders vote “FOR” approval of the amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis common stock and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis” and “FOR” the

vi

---

Table of Contents

		proposal to adjourn the Medicis special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Medicis special meeting in favor of the foregoing.
Q:		How does the board of directors of Inamed recommend that Inamed stockholders vote?
A:		The Inamed board of directors has determined that the merger agreement and the merger are advisable and fair to and in the best interests of Inamed and its stockholders. Accordingly, the Inamed board of directors has approved the merger agreement and the merger. The Inamed board of directors unanimously recommends that Inamed stockholders vote “FOR” the proposal to adopt the merger agreement and approve the merger and “FOR” the proposal to adjourn the Inamed special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Inamed special meeting in favor of the foregoing.
Q:		When and where will the special meetings of stockholders be held?
A:		The Medicis special meeting will take place at                     , on                     , 2005, at       a.m. local time. The Inamed special meeting will take place at                     , on                     , 2005, at       a.m. local time.
Q:		Who can attend and vote at the special meetings?
A:		All Medicis stockholders of record as of the close of business on                     , 2005, the record date for the Medicis special meeting, are entitled to receive notice of and to vote at the Medicis special meeting. All Inamed stockholders of record as of the close of business on                     , 2005, the record date for the Inamed special meeting, are entitled to receive notice of and to vote at the Inamed special meeting.
Q:		What should Medicis and Inamed stockholders do now in order to vote on the proposals being considered at their company’s special meeting?
A:		Stockholders of record of Medicis as of the record date for the Medicis special meeting and stockholders of record of Inamed as of the record date of the Inamed special meeting may now vote by proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope or by submitting a proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. If you hold Medicis shares or Inamed shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please refer to the voting instruction card used by your broker, bank or nominee to see if you may submit voting instructions using the Internet or telephone.

		Additionally, you may also vote in person by attending your respective company’s special meeting of stockholders. If you plan to attend your respective company’s special meeting and wish to vote in person, you will be given a ballot at the special meeting. Please note, however, that if your shares are held in “street name,” and you wish to vote at your respective company’s special meeting, you must bring a proxy from the record holder of the shares authorizing you to vote at the special meeting. Whether or not Medicis stockholders or Inamed stockholders plan to attend the special meeting of their respective company, they are encouraged to grant their proxy as described in this joint proxy statement/ prospectus.

Q:		What will happen if I abstain from voting or fail to vote?
A:		An abstention, which occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting, will have the same effect as voting against the issuance of shares of Medicis common stock under the merger agreement, the approval of the amendment to Medicis’ certificate of incorporation and the approval of the adjournment proposal. The failure of a Medicis stockholder to vote or to instruct your broker to vote if your shares are held in “street name” may have a negative effect on Medicis’ ability to obtain the number of votes cast necessary for approval of the issuance of shares of Medicis common stock under the merger agreement in accordance with the listing requirements of the New York Stock Exchange and will have the same effect as voting against the approval of the amendment to Medicis’ certificate of incorporation.

vii

---

Table of Contents

		An abstention or the failure of an Inamed stockholder to vote or to instruct your broker to vote if your shares are held in “street name” will have the same effect as voting against the proposal to adopt the merger agreement and approve the merger. An abstention will also have the same effect as voting against the approval of the adjournment proposal.

Q:		Can I change my vote after I have delivered my proxy?
A:		Yes. If you are a holder of record, you can change your vote at any time before your proxy is voted at the special meeting by:

		• delivering a signed written notice of revocation to the corporate secretary of your respective company at:

Medicis Pharmaceutical Corporation 8125 North Hayden Road Scottsdale, Arizona 85258 Attn: Corporate Secretary		Inamed Corporation 5540 Ekwill Street Santa Barbara, California 93111 Attn: Corporate Secretary

		• signing and delivering a new, valid proxy bearing a later date; and if it is a written proxy, it must be signed and delivered to the attention of your respective company’s corporate secretary;
		• submitting another proxy by telephone or on the Internet (provided that your latest telephone or Internet voting instructions are followed); or
		• attending the special meeting and voting in person, although your attendance alone will not revoke your proxy.
		If your shares are held in “street name”, you must contact your broker, bank or other nominee to change your vote.

Q:		What should Medicis stockholders or Inamed stockholders do if they receive more than one set of voting materials?
A:		You may receive more than one set of voting materials, including multiple copies of this joint proxy statement/ prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a stockholder of Medicis and Inamed, you will receive one or more separate proxy cards or voting instruction cards for each company. Please complete, sign, date and return each proxy card and voting instruction card that you receive.
Q:		What risks should Medicis and Inamed stockholders consider prior to voting at the special meetings?
A:		Medicis and Inamed stockholders should carefully review the section of this joint proxy statement/ prospectus entitled “Risk Factors” beginning on page 19.

viii

---

Table of Contents

Q:		Who can help answer my questions?
A:		If you have any questions about the merger or how to submit your proxy, or if you need additional copies of this joint proxy statement/ prospectus, the enclosed proxy card or voting instructions, you should contact:

		if you are a Medicis stockholder:
		8125 North Hayden Road Scottsdale, Arizona 85258 Attention: Investor Relations Telephone: (602) 808-3854
		or
		The Proxy Advisory Group of Strategic Stock Surveillance, LLC 331 Madison Avenue — 4th Floor New York, New York 10017 Call toll-free (866) 657-8728
		if you are an Inamed stockholder:
		5540 Ekwill Street Santa Barbara, California 93111-2936 Attention: Investor Relations Telephone: (805) 683-6761

ix

---

Table of Contents

1

---

Table of Contents

2

---

Table of Contents

3

---

Table of Contents

4

---

Table of Contents

5

---

Table of Contents

6

---

Table of Contents

7

---

Table of Contents

8

---

Table of Contents

9

---

Table of Contents

10

---

Table of Contents

11

---

Table of Contents

12

---

Table of Contents

13

---

Table of Contents

14

---

Table of Contents

15

---

Table of Contents

16

---

Table of Contents

17

---

Table of Contents

18

---

Table of Contents

	Medicis and Inamed may be required to comply with material restrictions or conditions in order to obtain the regulatory approvals to complete the merger, and any delays in obtaining regulatory approvals will delay and may possibly prevent the merger.

19

---

Table of Contents

	The issuance of shares of Medicis common stock to Inamed stockholders in the merger will substantially reduce the percentage interests of Medicis stockholders.

The price of Medicis common stock at the time of your vote on the merger might decline prior to the completion of the merger, which would decrease the value of the stock portion of the merger consideration to be received by Inamed stockholders in the merger. Further, at the Inamed special meeting, Inamed stockholders will not know the exact value of Medicis common stock that will be issued in the merger.

	•	if the price of Medicis common stock declines after the time of the Inamed special meeting and before the completion of the merger, Inamed stockholders will receive shares of Medicis common stock that have a market value that will be less than the market value of such shares at the time of the Inamed special meeting; or
	•	if the price of Medicis common stock increases after the time of the Inamed special meeting and before the completion of the merger, Inamed stockholders will receive shares of Medicis common stock that have a market value that will be greater than the market value of such shares at the time of the Inamed special meeting.

20

---

Table of Contents

	The amount of cash per share that Inamed stockholders receive in the merger may be decreased, and the exchange ratio correspondingly increased, in order to preserve the tax treatment of the merger.

	Medicis will have more indebtedness after the merger, which could adversely affect its cash flows and business.

	•	require Medicis to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, dividends, acquisitions and other purposes;
	•	increase Medicis’ vulnerability to, and limit flexibility in planning for, adverse economic and industry conditions;
	•	adversely affect Medicis’ credit rating;
	•	limit Medicis’ ability to obtain additional financing to fund future working capital, capital expenditures, additional acquisitions and other general corporate requirements;
	•	create competitive disadvantages compared to other companies with less indebtedness; and
	•	limit Medicis’ ability to apply proceeds from an offering or asset sale to purposes other than the repayment of debt.

	If Medicis is unable to finance the merger through existing cash balances and financings, the completion of the merger will be jeopardized.

21

---

Table of Contents

	Medicis and Inamed may not realize all of the anticipated benefits of the merger.

	•	coordinating sales and marketing, research and development and manufacturing functions;
	•	unanticipated issues in integrating information, communications and other systems;
	•	unanticipated incompatibility of purchasing, logistics, marketing and administration methods;
	•	maintaining employee morale and retaining key employees;
	•	integrating the business cultures of both companies;
	•	preserving important strategic and customer relationships;
	•	consolidating corporate and administrative infrastructures and eliminating duplicative operations;
	•	the diversion of management’s attention from ongoing business concerns; and
	•	coordinating geographically separate organizations.

	To be successful, the combined company must retain and motivate key employees, and failure to do so could seriously harm the combined company.

22

---

Table of Contents

	If the combined company is unable to manage its growth, its business and financial results could suffer.

	The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the merger.

	Some of the conditions to the merger may be waived by Medicis or Inamed without resoliciting stockholder approval of the merger agreement.

23

---

Table of Contents

	If the proposed merger is not completed, Medicis and Inamed will have incurred substantial costs that may adversely affect Medicis’ and Inamed’s financial results and operations and the market price of Medicis and Inamed common stock.

	Provisions of the merger agreement may deter alternative business combinations and could negatively impact the stock prices of Medicis and Inamed if the merger agreement is terminated in certain circumstances.

	Directors and executive officers of Medicis and Inamed have interests in the merger that may be different from, or in addition to, the interests of Medicis or Inamed stockholders generally.

24

---

Table of Contents

	If the combined company is unable to reach an acceptable agreement with Q-Med AB regarding Medicis’ ability to compete against Q-Med AB in certain international facial aesthetics markets, the results of operations and financial condition of the combined company would suffer materially.

	Medicis derives a majority of its sales from its core products, and any factor adversely affecting sales of these products would harm Medicis’ business, financial condition and results of operations.

25

---

Table of Contents

	•	manufacturing or supply interruptions;
	•	the development of new competitive pharmaceuticals and technological advances to treat the conditions addressed by Medicis’ core products, including the introduction of new products into the marketplace;
	•	marketing or pricing actions by one or more of Medicis’ competitors;
	•	regulatory action by the FDA and other government regulatory agencies;
	•	changes in the prescribing or procedural practices of dermatologists, plastic surgeons and/or podiatrists;
	•	changes in the reimbursement or substitution policies of third-party payors or retail pharmacies;
	•	product liability claims;
	•	the outcome of disputes relating to trademarks, patents, license agreements and other rights;
	•	changes in state and federal law that adversely affect Medicis’ ability to market its products to dermatologists, plastic surgeons and/or podiatrists; and
	•	restrictions on travel affecting the ability of Medicis’ sales force to market to prescribing physicians and plastic surgeons in person.

	Medicis’ operating results and financial condition may fluctuate.

	•	changes in the amount Medicis spends to develop, acquire or license new products, technologies or businesses;
	•	untimely contingent research and development payments under Medicis’ third-party product development agreements;
	•	changes in the amount Medicis spends to promote its products;
	•	delays between Medicis’ expenditures to acquire new products, technologies or businesses and the generation of revenues from those acquired products, technologies or businesses;
	•	changes in treatment practices of physicians that currently prescribe Medicis’ products;
	•	changes in reimbursement policies of health plans and other similar health insurers, including changes that affect newly developed or newly acquired products;
	•	increases in the cost of raw materials used to manufacture Medicis’ products;
	•	manufacturing and supply interruptions, including failure to comply with manufacturing specifications;
	•	development of new competitive products by others;
	•	development of new competitive products by others;
	•	the mix of products that Medicis sells during any time period;
	•	lower than expected demand for Medicis’ products;
	•	Medicis’ responses to price competition;

26

---

Table of Contents

	•	expenditures as a result of legal actions;
	•	market acceptance of Medicis’ products;
	•	the timing and receipt of FDA approvals;
	•	the impairment and write-down of goodwill or other intangible assets;
	•	implementation of new or revised accounting or tax rules or policies;
	•	disposition of core products, technologies and other rights;
	•	termination or expiration of, or the outcome of disputes relating to, trademarks, patents, license agreements and other rights;
	•	increases in insurance rates for general economic and industry conditions, including changes in interest rates affecting returns on cash balances and investments that affect customer demand;
	•	existing products and the cost of insurance for new products;
	•	seasonality of demand for Medicis’ products;
	•	Medicis’ level of research and development activities;
	•	new accounting standards and/or changes to existing accounting standards that would have a material effect on Medicis’ consolidated financial position, results of operations or cash flows;
	•	costs and outcomes of any tax audits or any litigation involving intellectual property, customers or other issues; and
	•	timing of revenue recognition related to licensing agreements and/or strategic collaborations.

	Medicis will be unable to meet its anticipated development and commercialization timelines if clinical trials for its products are unsuccessful or delayed.

	•	lack of efficacy during the clinical trials;
	•	unforeseen safety issues;
	•	slower than expected patient recruitment; and
	•	government or regulatory delays.

27

---

Table of Contents

	If Medicis is unable to secure and protect its intellectual property and proprietary rights, or if its intellectual property rights are found to infringe upon the intellectual property rights of other parties, Medicis’ business could suffer.

	If Q-Med is unable to protect its intellectual property and proprietary rights with respect to Medicis’ dermal aesthetic enhancement products, Medicis’ business could suffer.

28

---

Table of Contents

	Medicis may not be able to collect all scheduled license payments from BioMarin.

	Medicis depends upon its key personnel and its ability to attract, train, and retain employees.

	Medicis’ continued growth depends upon its ability to develop new products.

29

---

Table of Contents

	Medicis may not be able to identify and acquire products, technologies and businesses on acceptable terms, if at all, which may constrain its growth.

	Medicis’ success depends on its ability to manage its growth.

	Medicis depends on licenses from others, and any loss of such licenses could harm its business, market share and profitability.

30

---

Table of Contents

	Medicis depends on a limited number of customers, and if Medicis loses any of them, its business could be harmed.

	Medicis relies on others to manufacture its products.

31

---

Table of Contents

	Medicis’ reliance on third-party manufacturers and suppliers can be disruptive to its inventory supply.

	Medicis could experience difficulties in obtaining supplies of RESTYLANE®, PERLANEtm and RESTYLANE FINE LINEStm.

	Supply interruptions may disrupt Medicis’ inventory levels and the availability of its products.

	•	timing, scheduling and prioritization of production by Medicis’ contract manufacturers;
	•	labor interruptions;
	•	changes in Medicis’ sources for manufacturing;
	•	the timing and delivery of domestic and international shipments;
	•	Medicis’ failure to locate and obtain replacement manufacturers as needed on a timely basis; and
	•	conditions affecting the cost and availability of raw materials.

32

---

Table of Contents

	Fluctuations in demand for Medicis’ products create inventory maintenance uncertainties.

	Medicis selectively outsources certain non-sales and non-marketing services, and cannot assure you that it will be able to obtain adequate supplies of such services on acceptable terms.

	Importation of products from Canada and other countries into the United States may lower the prices Medicis receives for its products.

33

---

Table of Contents

	If Medicis becomes subject to product liability claims, its earnings and financial condition could suffer.

	Rising insurance costs could negatively impact profitability.

	If Medicis suffers negative publicity concerning the safety of its products, its sales may be harmed and Medicis may be forced to withdraw products.

34

---

Table of Contents

	RESTYLANE® is a consumer product; trends may change and applicable laws may affect sales or product margins of RESTYLANE®.

	Medicis may not be able to repurchase the Old Notes and New Notes when required.

	Medicis’ publicly-filed SEC reports are reviewed by the SEC from time to time and any significant changes required as a result of any such review may result in material liability to Medicis and have a material adverse impact on the trading price of Medicis’ common stock.

35

---

Table of Contents

	If Inamed is unable to avoid significant product liability claims, product recalls, or indemnification claims, Inamed may be forced to pay substantial damage awards, claims, and other expenses that could exceed its accruals and insurance coverage.

36

---

Table of Contents

37

---

Table of Contents

	Inamed is subject to substantial government regulation, which could materially adversely affect its business.

38

---

Table of Contents

	There are material risks related to the potential delay or failure to consummate the proposed merger with Medicis.

	•	If the merger agreement is terminated by Medicis under certain circumstances, and Inamed enters into a change of control transaction subsequent to such termination, Inamed may be required to pay to Medicis a termination fee of $90 million. Inamed may also be required to pay a fee of $10 million upon its breach of the terms and conditions of the merger agreement. These fees may deter other parties from offering to acquire Inamed, which could interfere with the ability of its stockholders to receive a premium for their shares of Inamed’s stock;
	•	The price of Inamed’s common stock may decline, as the current market price of its common stock may reflect an assumption that the proposed merger will be consummated and that its stockholders will become stockholders of Medicis upon closing of the merger;
	•	Inamed must pay certain expenses related to the proposed merger, including substantial financial advisory, legal, accounting and other merger-related fees even if the merger is not consummated, which could affect Inamed’s results of operations and cash liquidity, and potentially its stock price;
	•	Significant management and other resources have been diverted to efforts to consummate the proposed merger and, if the merger is not consummated, such efforts will result in little or no benefit to Inamed;
	•	Current and prospective employees may experience uncertainty about their future role with Inamed, which may adversely affect Inamed’s ability to attract and retain key management, research and development, manufacturing and other personnel;
	•	The announcement of the proposed merger may have an adverse effect on Inamed’s revenues in the near-term and its market position if Inamed’s customers, suppliers, marketing and collaboration partners and other third parties delay, defer or cancel purchases pending resolution of the proposed merger; and
	•	If the merger agreement with Medicis is terminated and the Inamed board of directors decides to seek another merger or business combination, it may not be able to find a partner willing to pay an equivalent price to that which would have been obtained in the proposed merger with Medicis.

39

---

Table of Contents

	If Inamed suffers negative publicity concerning the safety of its products, Inamed’s sales may be harmed and Inamed may be forced to withdraw products.

	Inamed’s quarterly operating results are subject to substantial fluctuations and any failure to meet financial expectations for any fiscal quarter may disappoint securities analysts and investors and could cause Inamed’s stock price to decline.

	•	changes in demand for Inamed’s products;
	•	Inamed’s ability to meet the demand for its products;
	•	on-going and increased competition;
	•	the number, timing, pricing and significance of new products and product introductions and enhancements by Inamed and its competitors;
	•	regulatory approvals obtained either by Inamed or a competitor;
	•	Inamed’s ability to develop, introduce and market new products and enhanced versions of its existing products on a timely basis;
	•	changes in pricing policies by Inamed or its competitors;
	•	events related to the proposed merger with Medicis and/or the operating results or stock price of Medicis;
	•	merger-related expenses if the merger with Medicis is not consummated;
	•	the timing of significant orders and shipments;
	•	regulatory approvals or other regulatory action affecting new or existing products;
	•	litigation with respect to product liability, intellectual property, and other claims or product recalls and any insurance covering such claims or recalls; and
	•	general economic factors, such as foreign exchange rates.

40

---

Table of Contents

	If changes in the economy and consumer spending reduce consumer demand for Inamed’s products, Inamed’s sales and profitability will suffer.

	If Inamed is unable to continue to develop and market new products and technologies, Inamed may experience a decrease in demand for its products or its products could become obsolete.

	If clinical trials for Inamed’s products are unsuccessful or delayed, Inamed will be unable to meet its anticipated development and commercialization timelines, which could cause Inamed’s stock price to decline.

	•	lack of efficacy during the clinical trials;
	•	unforeseen safety issues;
	•	slower than expected patient recruitment; and

41

---

Table of Contents

	•	government or regulatory delays.

	If Inamed’s collaborative partners do not perform, Inamed will be unable to develop and market products as anticipated.

	Inamed’s failure to attract and retain key managerial, technical, selling and marketing personnel could adversely affect its business.

	If Inamed’s intellectual property rights do not adequately protect its products or technologies, others could compete against Inamed more directly, which would hurt its profitability.

42

---

Table of Contents

	If third parties claim Inamed is infringing their intellectual property rights, Inamed could suffer significant litigation or licensing expenses or be prevented from marketing its products.

	Inamed depends on a sole or limited number of suppliers for certain products and raw materials and certain of its manufacturing processes are only performed at one location worldwide.

	Inamed’s ability to sell bovine collagen-based products could be adversely affected if it experiences problems with the closed herd of domestic cattle from which it derive these products.

	Inamed’s international business exposes it to a number of risks.

43

---

Table of Contents

	•	foreign government regulation of Inamed’s products;
	•	product liability, intellectual property and other claims;
	•	new export license requirements;
	•	political or economic instability in Inamed’s target markets;
	•	trade restrictions;
	•	changes in tax laws and tariffs;
	•	inadequate protection of intellectual property rights in some countries;
	•	managing foreign distributors, manufacturers and staffing;
	•	managing foreign branch offices; and
	•	competition.

	Healthcare reform legislation could materially adversely affect Inamed’s business.

	If Inamed’s use of hazardous materials results in contamination or injury, Inamed could suffer significant financial loss.

	Inamed’s stock price has been volatile and its trading volume has historically been lower than that of many NASDAQ listed stocks.

	•	quarter-to-quarter variations in Inamed’s operating results;
	•	the results of testing, technological innovations, or new commercial products by Inamed or its competitors;

44

---

Table of Contents

	•	governmental actions, regulations, rules, and orders;
	•	general conditions in the healthcare, medical device, or plastic surgery industries;
	•	changes in earnings estimates by securities analysts;
	•	developments and litigation concerning patents or other intellectual property rights;
	•	litigation or public concern about the safety of Inamed’s products; and
	•	resignation of senior officers.

	Litigation and government investigations may harm Inamed’s business or otherwise distract its management.

	Inamed’s publicly-filed SEC reports are reviewed by the SEC from time to time and any significant changes required as a result of any such review may result in material liability to Inamed and have a material adverse impact on the trading price of Inamed’s common stock.

45

---

Table of Contents

	•	the anticipated size of the markets for the companies’ products;
	•	the timing and success of new product development by Medicis, Inamed or third parties;
	•	the availability of product supply;
	•	the receipt of required regulatory approvals for the transaction (including the approval of antitrust authorities necessary to complete the merger);
	•	the ability to realize the anticipated synergies and benefits of the merger;
	•	the ability to timely and cost-effectively integrate Medicis’ and Inamed’s operations;
	•	access to available and feasible financing (including financing for the merger) on a timely basis;
	•	the risks and uncertainties normally incident to the pharmaceutical and medical device industries, including product liability claims and FDA approvals;
	•	the introduction of federal and/or state regulations relating to Medicis’ or Inamed’s business;
	•	dependence on sales of key products;
	•	the uncertainty of future financial results and fluctuations in operating results;
	•	dependence on Medicis’ strategy, including the uncertainty of license payments and/or other payments due from third parties;
	•	competitive product introductions, including generic product introductions;
	•	the risks of pending or future litigation or government investigations, including Inamed’s current SEC investigation and the government inquiry into Medicis’ marketing and promotion of LOPROX® to pediatricians; and
	•	risks described from time to time in Medicis’ and Inamed’s SEC filings, including their Annual Reports on Form 10-K for the year ended June 30, 2005 and December 31, 2004, respectively.

46

---

Table of Contents

	•	to consider and vote upon a proposal to approve the issuance of shares of Medicis common stock pursuant to the Agreement and Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Masterpiece Acquisition Corp., a wholly owned subsidiary of Medicis, and Inamed Corporation;
	•	to consider and vote upon a proposal to approve an amendment to Medicis’ certificate of incorporation to increase the number of authorized shares of Medicis Class A common stock from 150,000,000 to 300,000,000 and change Medicis’ name from “Medicis Pharmaceutical Corporation” to “Medicis”;
	•	to consider and vote upon a proposal to adjourn the Medicis special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Medicis special meeting in favor of the foregoing; and
	•	to transact any other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

	Proposal 1

	Proposal 2

47

---

Table of Contents

	Proposal 3

	Proposal 1

48

---

Table of Contents

	Proposal 2

	Proposal 3

	Voting in Person

	Voting by Proxy

49

---

Table of Contents

	Revocation of Proxy

	•	delivering to the corporate secretary of Medicis a signed written notice of revocation, bearing a date later than the date of the proxy, stating that the proxy is revoked;
	•	signing and delivering a new proxy, relating to the same shares and bearing a later date;
	•	submitting another proxy by telephone or on the Internet (your latest telephone or Internet voting instructions are followed); or
	•	attending the Medicis special meeting and voting in person, although attendance at the special meeting will not, by itself, revoke a proxy.

	Medicis Pharmaceutical Corporation
	8125 North Hayden Road
	Scottsdale, Arizona 85258
	Attn: Corporate Secretary

50

---

Table of Contents

	•	to consider and vote upon a proposal to adopt the merger agreement and approve the merger pursuant to the Agreement and Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Masterpiece Acquisition Corp., a wholly owned subsidiary of Medicis, and Inamed Corporation;

51

---

Table of Contents

	•	to consider and vote upon a proposal to adjourn the Inamed special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Inamed special meeting in favor of the foregoing; and
	•	to transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

52

---

Table of Contents

	Voting in Person

	Voting by Proxy

53

---

Table of Contents

	Revocation of Proxies

	•	delivering to the corporate secretary of Inamed a signed written notice of revocation, bearing a date later than the date of the proxy, stating that the proxy is revoked;
	•	signing and delivering a new proxy, relating to the same shares and bearing a later date;
	•	submitting another proxy by telephone or on the Internet (your latest telephone or Internet voting instructions are followed); or
	•	attending the Inamed special meeting and voting in person, although attendance at the special meeting will not, by itself, revoke a proxy.

	Inamed Corporation
	5540 Ekwill Street
	Santa Barbara, California 93111
	Attn: Corporate Secretary

54

---

Table of Contents

55

---

Table of Contents

56

---

Table of Contents

	•	Representatives of Morrison & Foerster LLP discussed the board of directors’ fiduciary obligations when considering a potential transaction with Medicis;
	•	Representatives of JPMorgan discussed the current status of negotiations of the financial terms of the business combination and other strategic alternatives;
	•	Inamed’s management and advisors reviewed with the board of directors the status of the negotiations with Medicis; and
	•	Inamed’s board of directors authorized Inamed’s management to pursue further discussions with Medicis.

57

---

Table of Contents

	•	Inamed management and advisors reviewed key terms of Medicis’ proposed form of merger agreement distributed on February 7, 2005, including, among other things, the size of the breakup fee, the treatment of employee options, the operating covenants and the conditions to closing;
	•	Inamed management advised the board of directors of its belief that, subject to Medicis’ completion of satisfactory due diligence and the negotiation of several significant terms (including the composition of the board of directors and management of the combined company and material terms of the merger agreement), Medicis management would present a proposal to the Medicis board of directors that the consideration to be received by the Inamed stockholders in the merger would be a combination of cash and stock with value equivalent to an implied price of $75 per share, with the exchange ratio to be fixed prior to execution of a definitive merger agreement, inclusive of approximately $30 per share to be paid in cash; management highlighted for the board that the exchange ratio supporting this value was materially more favorable than the exchange ratio previously discussed, but had not been approved by the Medicis board of directors;
	•	Inamed’s management and advisors updated the board of directors on the results of Inamed’s ongoing due diligence review of Medicis;
	•	Representatives of Morrison & Foerster LLP discussed the board of directors’ fiduciary obligations when considering a potential transaction with Medicis;
	•	Representatives of JPMorgan discussed the status of negotiation of the financial terms of the potential transaction, provided an analysis of the proposed transaction terms and provided certain financial analyses of Inamed, Medicis and the combined company; and
	•	Inamed’s management and advisors updated the board of directors as to various key issues, including strategic issues related to the combination of the facial aesthetics businesses of the companies, finalizing the financing commitment documents between Medicis and Deutsche Bank for the financing necessary to pay the proposed cash portion of the merger consideration and the status of third party waivers and consents which were viewed by the board as a condition to the execution of the merger agreement.

58

---

Table of Contents

	•	Representatives of Latham & Watkins LLP advised the board of its fiduciary obligations when considering a potential transaction with Inamed;
	•	Medicis’ management reviewed the status of the negotiations of the proposed transaction and the material terms of the merger, including the proposed composition of the board and management of the combined company;
	•	Medicis’ management reviewed with the board of directors Inamed’s business, financial condition and prospects (including the findings of its advisors) and the potential risks and benefits of the potential merger with Inamed, and discussed various financial measures relating to the transaction and strategic alternatives to the transaction;
	•	Mr. Teti and a member of Inamed’s management joined the meeting and presented an overview of Inamed, its business, products, management and prospects, and responded to questions posed by the board of directors, after which Mr. Teti and the other member of Inamed’s management departed the meeting;
	•	Medicis’ management and its advisors also updated the board of directors on the results of Medicis’ due diligence review of Inamed, including regulatory, manufacturing and research and development;
	•	Representatives of PricewaterhouseCoopers LLP provided a summary of their tax and financial due diligence review;
	•	Representatives of Deutsche Bank provided certain financial analyses of Inamed, Medicis and the combined company; and
	•	Representatives of Latham & Watkins LLP reviewed the preliminary legal due diligence results and the status of discussions regarding the terms and conditions of the merger agreement.

	•	Representatives of KPMG LLP provided an update of their diligence review;
	•	Representatives of JPMorgan discussed the contents of a draft of the fairness opinion and the proposed merger consideration, and presented certain analyses of Inamed, Medicis and the combined company;
	•	Mr. Shacknai joined the meeting and presented an overview of Medicis and responded to questions posed by the board of directors, after which Mr. Shacknai left the meeting;
	•	Representatives of Morrison & Foerster LLP reviewed with the board of directors the current draft of the proposed merger agreement and related transaction documents, the proposed disclosure schedules to the merger agreement, Medicis’ financing commitment documents from Deutsche Bank and one of its affiliates, and the proposed amendment to Inamed’s stockholder rights agreement, and provided a summary of the legal due diligence review of Medicis;

59

---

Table of Contents

	•	Representatives of Morrison & Foerster LLP then discussed the board of directors’ fiduciary obligations when considering a potential transaction with Medicis and various legal and regulatory issues that could arise in connection with the proposed merger; and
	•	The board of directors discussed key issues relating to the transaction, including the management of the combined company and board and board committee composition.

	•	Medicis’ management reviewed the status of the negotiations of the proposed merger, and provided the board of directors with an update of the status of Medicis’ due diligence review;
	•	Medicis’ management reviewed the financing options available to the company and the terms and conditions of the proposed financing documents with Deutsche Bank and one of its affiliates;
	•	Representatives of Thomas Weisel Partners discussed certain financial analyses of Inamed, Medicis and the combined company; and
	•	Representatives of Latham & Watkins LLP advised the board of directors of its fiduciary obligations when considering a potential transaction with Inamed and reviewed the terms of the merger agreement and related transaction documents.

	•	Inamed management and representatives of JPMorgan updated the board on the terms of the proposed transaction, including new terms providing Inamed with certain termination fees in connection with the proposed dismissal of Inamed’s current litigation against Medicis and Q-Med AB;

60

---

Table of Contents

	•	Inamed management reviewed with the board Medicis’ business, financial condition and prospects (including the findings of its advisors) and the potential risks and benefits of the potential business combination with Medicis;
	•	Representatives of JPMorgan presented an analyses of key transaction terms, discussed certain financial analyses of Inamed, Medicis and the combined company, and provided an oral summary of its fairness opinion; and
	•	The board engaged in an extensive discussion of the proposed terms of the business combination and the status of third party waivers and consents.

	•	Representatives of JPMorgan provided an update on discussions with Medicis since March 19, 2005 regarding key transaction terms and delivered its oral fairness opinion, which was subsequently confirmed by a written opinion dated March 20, 2005. See “— Opinion of JPMorgan Securities”; and
	•	Representatives of Morrison & Foerster LLP reviewed legal due diligence related to the period from February 22, 2005 through the present, discussed the board of directors’ fiduciary obligations when considering a business transaction with Medicis, and reviewed key terms of the merger agreement and related transaction documents.

	•	Medicis management updated the board on the terms of the proposed transaction, as well as the final results of Medicis’ due diligence review of Inamed, including the reviews conducted by Medicis’ advisors;
	•	Medicis management reviewed with the board Inamed’s business, financial condition and prospects (including the findings of its advisors) and the potential risks and benefits of the potential business combination with Inamed, and discussed various financial measures relating to the transaction and strategic alternatives to the transaction;
	•	Medicis’ management also reviewed the financing options available to the company and the terms and conditions of the financing commitment documents with Deutsche Bank and one of its affiliates;
	•	Representatives of Latham & Watkins LLP advised the board of directors of its fiduciary obligations when considering a strategic business combination with Inamed and reviewed the terms of the proposed merger agreement and related transaction documents;
	•	Representatives of Latham & Watkins LLP also reviewed legal due diligence results, the history of discussions regarding the terms and conditions of the merger agreement and potential antitrust issues raised by the merger;
	•	Representatives of Deutsche Bank provided certain financial analyses of Inamed, Medicis and the combined company and delivered its opinion described herein, which was subsequently confirmed in a

61

---

Table of Contents

		written opinion dated March 20, 2005. See “— Opinions of Deutsche Bank and Thomas Weisel Partners — Deutsche Bank”; and
	•	Representatives of Thomas Weisel Partners provided certain financial analyses of Inamed, Medicis and the combined company and delivered its opinion described herein, which was subsequently confirmed in a written opinion dated March 20, 2005. See “— Opinions of Deutsche Bank and Thomas Weisel Partners — Thomas Weisel Partners”.

	•	determined that the merger is advisable, and is fair to and in the best interests of Medicis and its stockholders;
	•	approved the merger agreement;
	•	directed that approval of the issuance of Medicis common stock pursuant to the merger agreement be submitted for consideration by Medicis stockholders at a Medicis special meeting; and
	•	resolved to recommend that the Medicis stockholders vote “FOR” approval of the proposal to issue Medicis common stock in the merger pursuant to the merger agreement.

62

---

Table of Contents

	•	Strengthened Strategic Position. The Medicis board of directors considered that the merger would further enhance Medicis’ role as a specialty pharmaceutical leader with the benefits of increased size, product base, product pipeline and employees. The Medicis board of directors concluded that the merger with Inamed would strengthen and diversify Medicis’ product base and product pipeline in key areas and enhance Medicis’ strategic position within the specialty pharmaceutical market.
	•	Operating Efficiencies and Synergies. The Medicis board of directors reviewed the potential strategic and other benefits of the merger, including the complementary nature of the businesses of Medicis and Inamed and the opportunity for cost savings. The Medicis board of directors noted that, although no assurances can be given that any particular level of synergies will be achieved, Medicis management anticipates cost synergies of approximately $15 to $20 million in the combined company’s first full year. Medicis’ ability to achieve these goals is subject to various factors, a number of which will be beyond its control, including economic conditions and unanticipated changes in business conditions, and, therefore, there can be no assurance that these results will be achieved. See “Cautionary Statement Concerning Forward-Looking Statements.”
	•	Positioned for Long-Term Growth. The Medicis board of directors considered the fact that the merger with Inamed would likely accelerate Medicis’ future revenue and earnings growth, which would add stockholder value. The Medicis board of directors concluded that the merger with Inamed would improve Medicis’ prospects for long-term growth by creating a larger company with increased revenue and improved future earnings.
	•	Strategic Alternatives. The Medicis board of directors reviewed other possible acquisition candidates and determined that the merger with Inamed was a strategic fit and presented a unique opportunity to enhance and expand Medicis’ business, product line and position for future international growth.
	•	Integration of Inamed. The Medicis board of directors considered the fact that the combination of the businesses of Medicis and Inamed would be challenging. However, after consultation with Medicis management and its advisors, the Medicis board of directors determined that the operations of Inamed could be integrated with those of Medicis in an efficient manner.
	•	Terms of the Merger Agreement. The Medicis board of directors, with the assistance of counsel, considered the general terms of the merger agreement, including:

	•	Fixed Exchange Ratio. The Medicis board of directors considered the fact that the fixed exchange ratio provides certainty as to the number of shares of Medicis common stock to be issued to Inamed stockholders and the percentage of the total shares of Medicis common stock that current Inamed stockholders will own after the merger. The Medicis board of directors also considered the premium that the merger consideration implied.
	•	No Solicitation; Termination Fee. The Medicis board of directors reviewed the provisions of the merger agreement that limit the ability of Medicis and Inamed to solicit other acquisition offers and require each party to pay a fee to the other party under specified circumstances. The Medicis board of directors believed that these provisions were reasonable under the circumstances.
	•	Conditions to Consummation. The Medicis board of directors reviewed with counsel the conditions to consummation of the merger, in particular the likelihood of obtaining the necessary regulatory approvals and stockholder approvals, and the likelihood that the merger would be completed. While the Medicis board of directors believes that these approvals will be obtained in a timely fashion, the Medicis board of directors also noted that Medicis is not required to agree to any material divestitures or other material restrictions on the operation of the business of the combined company.
	•	Board Participation. The Medicis board of directors considered the fact that four members of the Inamed board of directors would be elected to the Medicis board of directors after the effective time of the merger. The Medicis board of directors also considered that the audit committee of the board

63

---

Table of Contents

		would consist of two members of the current Medicis board of directors and two members of the Inamed board of directors.

	•	Opinions of Deutsche Bank and Thomas Weisel Partners. The Medicis board of directors considered the separate opinions of Deutsche Bank and Thomas Weisel Partners that, as of the date of the opinions, and based upon and subject to the considerations described in the opinions and based on such other matters as Deutsche Bank and Thomas Weisel Partners considered relevant, the merger consideration to be paid by Medicis for each outstanding share of Inamed common stock pursuant to the merger agreement was fair from a financial point of view to Medicis. See “Opinions of Deutsche Bank and Thomas Weisel Partners.”
	•	Letter Agreement with Q-Med AB. The Medicis board of directors considered the effect of certain noncompetition provisions to which Medicis is subject under existing agreements between Medicis and Q-Med AB, which may restrict the ability of Medicis to compete against Q-Med AB in certain aesthetics markets. The Medicis board of directors then reviewed the terms and conditions of a letter agreement between Medicis and Q-Med AB, which is described below under “— Letter Agreement with Q-Med AB” on page 106, and the effect of Inamed’s agreement to dismiss the investigation pending in the United States International Trade Commission, captioned as In re Certain Injectable Implant Compositions, Inv. No. 337-TA-515, between Inamed, as complainant, and Q-Med AB and Medicis, as respondents, and the litigation pending in the United States District Court for the Southern District of California, captioned as Inamed Corp. v. Q-Med AB, et al, No. 3:04-CV-1064, between Inamed, as plaintiff, and Q-Med AB and Medicis, as defendants. As consideration for Inamed’s dismissal of these actions against Medicis and Q-Med AB, Medicis agreed to pay Inamed $16.5 million if the $10 million expense fee or the $70 million termination fee is payable by Medicis under the merger agreement or if the merger agreement is terminated because Medicis stockholders do not approve the issuance of shares pursuant to the merger agreement at the Medicis special meeting.
	•	Financing. The Medicis board of directors reviewed with management and its advisors the ability of Medicis to obtain the financing necessary to pay the cash portion of the merger consideration. See “— Senior Secured Financing Commitment Letter with Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc.” on page 107.

	•	the incremental debt associated with the merger could cause Medicis to have reduced financial flexibility;
	•	the ability of Medicis to obtain the necessary financing to pay the cash portion of the merger consideration, and the potential terms of such financing;
	•	the risk that the potential benefits sought in the merger might not be fully realized;
	•	the possibility that the merger might not be completed, or that completion might be unduly delayed;
	•	the effect of public announcement of the merger on Medicis’ stock price;
	•	the projected dilution of Medicis’ earnings per share as a result of the issuance of the shares in the merger, and the estimated time period for the merger to be accretive to Medicis’ earnings per share;
	•	the fact that the merger agreement does not contain a financing condition, other than a limited condition related to Medicis’ inability to obtain financing as a result of a pending SEC investigation of Inamed;
	•	the risks associated with the SEC’s pending investigation of Inamed, as described in Inamed’s Annual Report on Form 10-K for the year ended December 31, 2004;
	•	the risk that management’s efforts to integrate Inamed will disrupt Medicis’ operations;

64

---

Table of Contents

	•	the risk that Medicis and/or Inamed may have to agree to divest or license certain assets in order to obtain FTC approval of the merger;
	•	the substantial charges to be incurred in connection with the merger, including costs of integrating the businesses of Medicis and Inamed and transaction expenses arising from the merger;
	•	the risks associated with Inamed’s silicone breast implants and other Inamed products in development not being approved by the FDA;
	•	the risk that key management and research and development personnel might not remain employed by Medicis;
	•	the “non-solicitation” provisions, termination fee and related provisions in the merger agreement, although the Medicis board considered that these provisions would not preclude bona fide alternative proposals;
	•	the requirement that Medicis hold its stockholders’ meeting and allow stockholders to vote on the issuance of shares of Medicis common stock to Inamed stockholders pursuant to the merger agreement, even if a third party makes a superior proposal for a business combination with Medicis;
	•	the requirement that Medicis pay Inamed $16.5 million if the merger agreement is terminated because Medicis stockholders do not approve the issuance of shares pursuant to the merger agreement at the Medicis special meeting as consideration for Inamed’s dismissal of litigation against Medicis and Q-Med AB;
	•	the requirement that Medicis pay Inamed a termination fee of $70 million or an expense fee of $10 million if the merger agreement is terminated due to specified reasons and that, as consideration for Inamed’s dismissal of litigation against Medicis and Q-Med AB, Medicis pay Inamed $16.5 million in the event any such termination or expense fee becomes payable by Medicis;
	•	the provisions of the merger agreement that place restrictions on the conduct of Medicis’ business during the period between the signing of the merger agreement and the completion of the merger; and
	•	various other risks associated with the merger and the businesses of Medicis, Inamed and the combined company described in the section entitled “Risks Factors” and in the documents incorporated by reference into this joint proxy statement/ prospectus.

65

---

Table of Contents

	•	determined that the merger is advisable, and is fair to and in the best interests of Inamed and its stockholders;
	•	approved the merger agreement;
	•	directed that adoption of the merger agreement and approval of the merger be submitted for consideration by Inamed stockholders at an Inamed special meeting; and
	•	resolved to recommend that the Inamed stockholders vote “FOR” the proposal to adopt the merger agreement and approve the merger.

	•	Consideration to be received in the Merger. The Inamed board of directors considered the relationship of the consideration to be paid pursuant to the merger to the market price of Inamed common stock, as well as the form of the merger consideration to be received in the merger by the holders of Inamed common stock, including:

	•	the fact that the value of the merger consideration, based on the then-current market price for Medicis common stock, provides an opportunity for Inamed stockholders to receive a premium over the trading value of Inamed common stock on March 18, 2005, the last trading day before the public announcement of the proposed merger, and also over the average trading value of Inamed common stock in recent periods preceding that date;
	•	the fact that Inamed stockholders will receive a portion of the merger consideration in stock, which provides them with an opportunity to participate in the potential growth of the combined company following the merger as stockholders of Medicis;
	•	the fact that Inamed stockholders will receive a portion of the merger consideration in cash, which provides them with a measure of certainty of value despite stock market or industry volatility compared to a transaction in which they would receive all stock or other non-cash consideration;
	•	the opinion of JPMorgan that, as of the date of the opinion, and based upon and subject to the considerations described in the opinion and based on such other matters as JPMorgan considered relevant, the merger consideration to be received by the Inamed stockholders pursuant to the merger agreement was fair from a financial point of view to the Inamed stockholders. See “— Opinion of JPMorgan” on page 84; and
	•	the fact that Medicis will have a much larger public float than Inamed after completion of the merger, which could provide greater liquidity for Inamed stockholders and could prove to be less volatile.

	•	Greater Product Portfolio and Diversification of Revenues. The Inamed board of directors considered that the combination of Medicis’ and Inamed’s revenue generating products will help create a more

66

---

Table of Contents

		diversified product portfolio and revenue base, and enhance the combined company’s position as a specialty pharmaceutical leader with the potential benefits of increased size, product base, product pipeline and employees. The Inamed board of directors concluded that the merger would strengthen Medicis’ product base by, for example, combining the two companies’ respective facial aesthetics product lines and diversifying Inamed away from breast implant products and the risks associated with dependence upon these products for a majority of Inamed’s revenues.
	•	Operating Efficiencies and Synergies. The Inamed board of directors reviewed the potential strategic and other benefits of the merger, including the complementary nature of the businesses of Medicis and Inamed and the opportunity for cost savings and other synergies. The Inamed board of directors noted that, although no assurances can be given that any particular level of synergies will be achieved, Inamed management anticipates cost synergies of approximately $15 to $20 million in the combined company’s first full year. The combined company’s ability to achieve these goals is subject to various factors, a number of which will be beyond its control, including economic conditions and unanticipated changes in business conditions, and, therefore, there can be no assurance that these results will be achieved. See “Cautionary Statement Concerning Forward-Looking Statements.”
	•	Positioned for Long-Term Growth. The Inamed board of directors considered that the merger could improve Inamed’s prospects for long-term growth by creating a larger company with increased revenue and improved future earnings by, for example:

	•	Maximizing Product Development Potential — the Inamed board of directors considered that Medicis’ resources and revenues will help maximize the potential and advance the development of Inamed’s pipeline of products.
	•	Enhancing Research and Development — the Inamed board of directors considered that the combined company will have greater technical expertise and financial resources to devote to research and development, consistent with each party’s focus on building stockholder value by pursuing technological leadership through continuous innovation.
	•	Increased Product Sales Opportunities — the Inamed board of directors considered that the combined company will form a global, more diversified company that will be able to take advantage of a larger sales force and previously unavailable cross-selling opportunities among the expanded customer base.

	•	Information Regarding the Businesses of the Companies. The Inamed board of directors considered historical and current information about Medicis’ and Inamed’s businesses, prospects, financial performance and condition, operations, management and competitive position, management’s knowledge of the industry and conditions in the industry in general, all of which led the board of directors to believe that a combined entity with its greater financial resources may have greater potential and advantages than Inamed would have as a stand-alone entity.
	•	Information Regarding Comparable Transactions. The Inamed board of directors reviewed and considered summary information provided by JPMorgan regarding comparable merger transactions and the trading performance of stock in comparable companies in the industry.
	•	Strategic Alternatives. The Inamed board of directors assessed alternatives to the merger, including the potential for remaining a stand-alone entity, and concluded that the merger with Medicis represents the transaction most favorable to the Inamed stockholders that has been or is likely to be presented to Inamed stockholders.
	•	Terms of the Merger Agreement. The Inamed board of directors, with the assistance of counsel, considered the general terms of the merger agreement, including:

	•	No Solicitation; Termination Fee. The Inamed board of directors considered the provisions of the merger agreement that limit the ability of Medicis and Inamed to solicit other acquisition offers and require each party to pay a termination fee to the other party under specified circumstances, including the right of the Inamed board of directors to respond to, evaluate and negotiate certain

67

---

Table of Contents

		other business combination proposals. The Inamed board of directors believed that these provisions were reasonable under the circumstances and would not preclude Inamed from considering bona fide alternative proposals.
	•	Conditions to Consummation. The Inamed board of directors reviewed the conditions to consummation of the merger, in particular the likelihood of obtaining the necessary regulatory approvals and stockholder approvals, and the likelihood that the merger would be completed.
	•	Board participation. The Inamed board of directors considered the appointment of certain members of the Inamed board of directors to the Medicis board of directors after the effective time of the merger, including that:

	•	Four members of the Inamed board of directors would be appointed to the Medicis board of directors, with one being placed in a class with a term expiring in 2005, two being placed in a class with a term expiring in 2006 and one being placed in a class with a term expiring in 2007; and
	•	The Medicis audit committee would consist of four members, consisting of two current members of the Medicis board of directors, Mr. Vandewarker and Ms. Amundson (or another Inamed designee selected by the nominating committee of the Medicis board of directors).

	•	Tax Treatment. The Inamed board of directors also considered the expected qualification of the merger as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code resulting in the common stock portion of the merger consideration being received by Inamed stockholders without having to recognize gain at the time for federal income tax purposes.
	•	Financing. The Inamed board of directors reviewed with management and its advisors the ability of Medicis to obtain the financing necessary to pay the cash portion of the merger consideration, including the related Senior Secured Financing Commitment Letter with Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc.

	•	Arm’s-Length Negotiation. The Inamed board of directors considered that the merger agreement with Medicis was the product of arm’s-length negotiations between Inamed and its advisors, on the one hand, and Medicis and its advisors, on the other, which the Inamed board of directors believed would help ensure that the transaction is fair to and in the best interests of the Inamed stockholders.
	•	Letter Agreement with Q-Med AB. The Inamed board of directors considered the effect of certain noncompetition provisions to which Medicis is subject under existing agreements between Medicis and Q-Med AB, which may restrict the ability of Medicis to compete against Q-Med AB in certain aesthetics markets. The Inamed board of directors then reviewed the terms and conditions of a letter agreement between Medicis and Q-Med AB, which is described below under “— Letter Agreement with Q-Med AB” on page 106, and the effect of Inamed’s agreement to dismiss the investigation pending in the United States International Trade Commission, captioned as In re Certain Injectable Implant Compositions, Inv. No. 337-TA-515, between Inamed, as complainant, and Q-Med AB and Medicis, as respondents, and the litigation pending in the United States District Court for the Southern District of California, captioned as Inamed Corp. v. Q-Med AB, et al, No. 3:04-CV-1064, between Inamed, as plaintiff, and Q-Med AB and Medicis, as defendants. As consideration for Inamed’s dismissal of these actions against Medicis and Q-Med AB, Medicis agreed to pay Inamed $16.5 million if the $10 million expense fee or the $70 million termination fee is payable by Medicis under the merger agreement or if the merger agreement is terminated because Medicis stockholders do not approve the issuance of shares pursuant to the merger agreement at the Medicis special meeting.

	•	Under the terms of the merger agreement, between its execution date and the effective time of the merger, Inamed is required to obtain Medicis’ consent before it can take certain specified actions and is otherwise restricted in the conduct of its business, so that, among other things, Inamed’s ability to enter into collaboration discussions and financing arrangements during this preclosing period is limited;

68

---

Table of Contents

	•	The historic volatility of the trading price of Medicis common stock and the effect of potential declines in the trading price of Medicis common stock prior to the completion of the merger on the value of the premium and consideration received by holders of Inamed common stock in the merger;
	•	The fact that Inamed’s appointees to the Medicis board of directors would constitute a minority of the members of the Medicis board of directors;
	•	The time, effort and costs involved in combining the two businesses and the risk that integration would divert management attention from the ongoing businesses of the combined company and could disrupt Inamed’s operations. The Inamed board of directors considered the fact that the combination of the businesses of Medicis and Inamed would be challenging. However, after consultation with Inamed management and its advisors, the Inamed board of directors determined that the operations of Inamed could be integrated with those of Medicis in an efficient manner;
	•	The possibility that the merger may not be completed or that completion of the merger may be unduly delayed;
	•	The conditions to Medicis’ obligations to close the merger, and the possibility that those conditions might not be satisfied even if the merger is approved by stockholders;
	•	The risk that Medicis and/or Inamed may have to agree to divest or license certain assets in order to obtain FTC approval of the merger;
	•	The potential loss of key employees as a result of the merger and the announcement of having entered into a merger agreement, and the risk that despite the efforts of the combined company, key management and research and development personnel might not remain employed by the combined company;
	•	The possibility that the benefits anticipated and sought to be achieved in the merger might not be realized;
	•	The risks associated with Medicis’ marketed products and its product development pipeline;
	•	The risks associated with the government inquiry into Medicis’ marketing and promotion of LOPROX® to pediatricians, as described in “Risk Factors — Risks Relating to Medicis”;
	•	The “non-solicitation” provisions, termination fee and related provisions in the merger agreement, although the Inamed board concluded that these provisions would not preclude bona fide alternative proposals;
	•	If any third party makes a superior proposal for a business combination with Inamed, the Inamed board of directors could provide information to and engage in negotiations with such third party subject to the terms and conditions of the merger agreement, but absent receipt of a superior proposal, the merger agreement does not provide for the Inamed board of directors to reassess whether the merger is in the best interests of Inamed stockholders, except to the extent required by its fiduciary duties to Inamed stockholders;
	•	The requirement that Inamed hold its stockholders’ meeting and allow stockholders to vote on the merger agreement, even if a third party makes a superior proposal for a business combination with Inamed;
	•	The provisions of the merger agreement that require the payment of a termination fee of $90 million or $10 million by Inamed if the merger agreement is terminated due to specified reasons;
	•	The business, financial, operational and other risks associated with Inamed continuing to operate as an independent company;
	•	The possibility that the price or value of Inamed common stock might increase if Inamed were to remain an independent company; and

69

---

Table of Contents

	•	Various other risks associated with the merger and the businesses of Medicis, Inamed and the combined company described in the section entitled “Risk Factors — Risks Relating to the Merger” and in the documents incorporated by reference into this joint proxy statement/ prospectus.

	Deutsche Bank

	•	reviewed the reported prices and trading activity for Inamed common stock and Medicis common stock;

70

---

Table of Contents

	•	compared certain financial and stock market information for Medicis and Inamed with similar information for certain other companies whose securities are publicly traded;
	•	reviewed the financial terms of certain recent business combinations which it deemed comparable, in whole or in part, to the merger;
	•	reviewed the terms of the merger agreement; and
	•	performed such other studies and analyses and considered such other factors as it deemed appropriate.

	•	the representations and warranties of Medicis, Masterpiece Acquisition Corp. and Inamed contained in the merger agreement are true and correct;
	•	Medicis, Masterpiece Acquisition Corp. and Inamed will each perform all of the covenants and agreements to be performed under the merger agreement, and all conditions to the obligations of each of the parties to complete the merger transaction will be satisfied without any waiver;
	•	all material governmental, regulatory or other approvals and consents required in connection with the completion of the merger transaction will be obtained and that in connection with obtaining any necessary governmental, regulatory or other approvals and consents, or any amendments, modifications or waivers to any agreements, instruments or orders to which either Medicis or Inamed (or any of their respective affiliates) is a party or is subject or by which it is bound, no limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have a material adverse effect on Medicis or Inamed or materially reduce the contemplated benefits of the merger transaction;
	•	the merger transaction will be a tax-free reorganization to Medicis; and
	•	no adjustment to the merger consideration is made pursuant to the terms of the merger agreement.

	Financial Analysis of Deutsche Bank Securities Inc.

71

---

Table of Contents

	Selected Publicly Traded Companies Analysis

	•	current share price;
	•	equity market valuation;
	•	ratio of equity market valuation to net income; and
	•	ratio of equity market valuation to long term earnings growth rate.

72

---

Table of Contents

	Selected Precedent Transactions Analysis

	•	the acquisition of BioChem Pharma, Inc. by Shire Pharmaceuticals Group plc;
	•	the acquisition of Dura Pharmaceuticals, Inc. by Elan Corporation plc;
	•	the acquisition of Jones Pharma, Inc. by King Pharmaceuticals, Inc.;
	•	the acquisition of Roberts Pharmaceuticals Corp. by Shire Pharmaceuticals Group plc;
	•	the acquisition of Guidant Corp. by Johnson & Johnson;
	•	the acquisition of VISX, Incorporated by Advanced Medical Optics, Inc.;
	•	the acquisition of Ocular Sciences, Inc. by The Cooper Companies, Inc.;
	•	the acquisition of ALARIS Medical Systems, Inc. by Cardinal Health Inc.;
	•	the acquisition of TheraSense, Inc. by Abbott Laboratories;
	•	the acquisition of Centerpulse AG by Zimmer Holdings, Inc.;
	•	the acquisition of Disetronic Holding AG by Roche Holding AG;
	•	the acquisition of MiniMed, Inc. by Medtronic, Inc.;
	•	the acquisition of Inverness Medical Technologies Inc. (diabetes) by Johnson & Johnson;
	•	the acquisition of Summit Autonomous, Inc. by Alcon Laboratories Inc./ Nestle SA;
	•	the acquisition of Xomed Surgical Products, Inc. by Medtronic, Inc.; and
	•	the acquisition of Perclose, Inc. by Abbott Laboratories.

	Premiums Paid Analysis

73

---

Table of Contents

	Discounted Cash Flow Analyses

	Relative Contribution Analysis

74

---

Table of Contents

	Pro Forma Combined Earnings Analysis

	General

75

---

Table of Contents

	Thomas Weisel Partners

76

---

Table of Contents

	•	reviewed certain publicly available financial and other data with respect to Medicis and Inamed, including the consolidated financial statements for recent years and interim periods to December 31, 2004 with respect to Medicis and Inamed and certain other relevant financial and operating data relating to Medicis and Inamed made available to Thomas Weisel Partners from published sources and from the internal records of Medicis;
	•	reviewed the financial terms and conditions of the merger agreement;
	•	reviewed certain publicly available information concerning the trading of and the trading market for, Inamed common stock and Medicis common stock;
	•	compared Medicis and Inamed from a financial point of view with certain other companies in the medical device and specialty pharmaceutical industries which Thomas Weisel Partners deemed to be relevant;
	•	considered the financial terms, to the extent publicly available, of selected recent business combinations of companies in the medical device industry which Thomas Weisel Partners deemed to be comparable, in whole or in part, to the merger;
	•	reviewed and discussed with representatives of the management of Medicis certain information of a business and financial nature regarding Medicis and Inamed, furnished to Thomas Weisel Partners by management of Medicis, including financial forecasts and related assumptions for Medicis and Inamed;
	•	discussed with management of Medicis their description and assessment of the SEC investigation of Inamed, as described in Inamed’s Annual Report on Form 10-K for the year ended December 31, 2004;
	•	made inquiries regarding and discussed the merger and the merger agreement and other matters related thereto with Medicis’ counsel; and
	•	performed such other analyses and examinations as Thomas Weisel Partners deemed appropriate.

77

---

Table of Contents

	•	with respect to the financial forecasts for Medicis and Inamed prepared and provided by management of Medicis, Thomas Weisel Partners assumed for purposes of its opinion, upon the advice of Medicis, that the forecasts were reasonably prepared on bases reflecting the best available estimates and judgments of management of Medicis at the time of preparation as to the future financial performance of Medicis and Inamed, and these forecasts provide a reasonable basis upon which Thomas Weisel Partners could form its opinion;
	•	that with respect to Medicis management’s assessment of the SEC investigation of Inamed, as described in Inamed’s Annual Report on Form 10-K for the year ended December 31, 2004, such assessment is reasonable and reflects the best available information and judgments of management of Medicis;
	•	that there have been no material changes in Medicis’ or Inamed’s assets, financial condition, results of operations, business or prospects since the respective dates of their last financial statements made available to Thomas Weisel Partners; and
	•	that the merger will be consummated in accordance with the terms described in the merger agreement, without any further amendment thereto, and without waiver by Medicis of any of the conditions to its obligations thereunder.

	•	Thomas Weisel Partners relied, at Medicis’ direction and without independent verification, on management of Medicis as to all legal and financial reporting matters with respect to Medicis, the merger, the merger agreement and the Investigation;
	•	Thomas Weisel Partners assumed that the merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act, the Exchange Act, and all other applicable federal and state statutes, rules and regulations;
	•	Thomas Weisel Partners assumed that in the course of obtaining the necessary regulatory approvals for the merger, no restrictions including any divestiture requirements, will be imposed that could have a meaningful effect on the contemplated benefits of the merger; and
	•	Thomas Weisel Partners did not assume responsibility for making an independent evaluation, appraisal or physical inspection of any of the assets or liabilities (contingent or otherwise) of Medicis or Inamed, nor was Thomas Weisel Partners furnished with any such appraisals.

78

---

Table of Contents

	Comparable Companies Analysis

	•	Advanced Neuromodulation Systems, Inc.
	•	Allergan, Inc.
	•	American Medical Systems Holding Inc.
	•	ArthroCare Corporation
	•	Integra Lifesciences Holdings Corporation (pro forma for the January 3, 2005 acquisition of Newdeal Technologies SAS for approximately $53 million in cash)
	•	IntraLase Corp.
	•	Kyphon Inc.
	•	Laserscope Inc.
	•	Medicis
	•	Mentor Corporation
	•	VISX, Incorporated

Enterprise Value/

Revenue

EBITDA

EBIT

P/E

P/E/G

CY04

CY05

CY06

CY04

CY05

CY06

CY04

CY05

CY06

CY04

CY05

CY06

CY04

CY05

CY06

A

E

E

A

E

E

A

E

E

A

E

E

A

E

E

Selected Companies

High

6.9x

5.9x

5.5x

37.9x

20.6x

15.9x

44.8x

25.9x

18.7x

49.4x

35.8x

27.2x

1.69x

1.43x

1.25x

3rd Quartile

6.7x

4.7x

4.1x

25.2x

18.5x

15.0x

27.5x

19.7x

15.9x

42.0x

32.6x

24.9x

1.51x

1.17x

1.00x

Mean

5.2x

4.2x

3.6x

20.8x

15.3x

12.6x

24.2x

16.9x

13.7x

34.8x

27.9x

22.7x

1.39x

1.13x

0.89x

Median

4.9x

4.2x

3.1x

18.8x

14.1x

11.8x

19.8x

15.4x

13.4x

33.1x

27.3x

22.7x

1.39x

1.13x

0.89x

1st Quartile

4.6x

3.5x

2.9x

14.5x

12.9x

10.7x

17.1x

14.1x

11.8x

26.9x

23.4x

20.6x

1.28x

1.09x

0.83x

Low

3.0x

2.7x

2.5x

10.8x

9.0x

8.4x

12.4x

10.1x

9.4x

23.0x

20.3x

18.7x

1.03x

0.89x

0.47x

Inamed

6.0x

5.2x

4.3x

22.4x

19.2x

15.9x

25.7x

22.2x

18.0x

32.5x

28.7x

23.3x

1.5x

1.4x

1.1x

79

---

Table of Contents

				CY2004A Margins												CY2005E Margins												CY2006E Margins
												Net												Net												Net
				EBITDA				EBIT				Income				EBITDA				EBIT				Income				EBITDA				EBIT				Income
Selected Companies		High			45.1%				39.4%				27.3%				48.0%				43.0%				28.3%				49.1%				45.2%				28.8%
		3rd Quartile			29.6%				26.0%				17.9%				30.0%				27.3%				18.6%				31.8%				28.7%				19.6%
		Mean			27.0%				23.6%				16.5%				27.2%				24.6%				16.7%				29.7%				27.2%				18.6%
		Median			25.1%				22.4%				15.5%				24.2%				23.2%				14.8%				26.3%				25.4%				16.9%
		1st Quartile			19.0%				17.3%				13.5%				20.3%				18.8%				12.6%				22.0%				20.6%				15.5%
		Low			16.4%				11.3%				8.9%				10.6%				9.2%				10.3%				19.9%				16.7%				12.2%
Inamed					27.0%				23.5%				19.1%				27.3%				23.6%				18.8%				27.3%				24.1%				19.0%

	Comparable Precedent Transaction Multiples Analysis

Announcement Date		Name of Acquiror		Name of Target
December 5, 2004		Smiths Group Plc		Medex, Inc.
November 9, 2004		Advanced Medical Optics, Inc.		VISX, Incorporated
July 28, 2004		Cooper Companies, Inc.		Ocular Sciences, Inc.
May 19, 2004		Cardinal Health, Inc.		ALARIS Medical Systems, Inc.
January 13, 2004		Abbott Laboratories		TheraSense, Inc.
August 13, 2004		Synthes Stratec, Inc.		Mathys Medical Ltd.
May 20, 2003		Zimmer Holdings, Inc.		Centerpulse AG
May 30, 2001		Medtronic, Inc.		MiniMed Inc.
May 23, 2001		Johnson & Johnson		Inverness Medical Technology, Inc. (Diabetes Products Business)
September 27, 2000		Siemens		Acuson Corporation
November 2, 1998		Medtronic, Inc.		Sofamor Danek Group, Inc.
September 21, 1998		General Electric Company		Marquette Medical Systems, Inc.
August 14, 1998		Stryker Corporation		Howmedica Osteonics Corp.
July 21, 1998		Johnson & Johnson		DePuy, Inc.
June 16, 1998		Boston Scientific Corporation		Schneider Worldwide (Pfizer)

80

---

Table of Contents

Transaction Multiples

LTM

NTM

Net

Net

Revenue

EBITDA

EBIT

Income

Revenue

EBITDA

EBIT

Income

Selected Companies

3rd Quartile

6.8x

28.4x

32.9x

41.3x

6.7x

23.6x

26.7x

41.1x

Median

3.9x

16.1x

22.1x

35.3x

4.3x

14.7x

17.8x

31.3x

Mean

4.9x

24.6x

29.9x

39.7x

4.6x

21.8x

29.4x

43.5x

1st Quartile

2.7x

13.3x

19.4x

31.2x

3.1x

12.1x

17.6x

26.8x

	Comparable Precedent Transaction Premiums Analysis

Acquisition Date		Name of Acquiror		Name of Target
November 9, 2004		Advanced Medical Optics, Inc.		VISX, Incorporated
July 28, 2004		Cooper Companies, Inc.		Ocular Sciences, Inc.
May 19, 2004		Cardinal Health, Inc.		ALARIS Medical Systems, Inc.
January 13, 2004		Abbott Laboratories		TheraSense, Inc.
May 20, 2003		Zimmer Holdings, Inc.		Centerpulse AG
May 30, 2001		Medtronic, Inc.		MiniMed Inc.
September 27, 2000		Siemens		Acuson Corporation
November 2, 1998		Medtronic, Inc.		Sofamor Danek Group, Inc.
September 21, 1998		General Electric Company		Marquette Medical Systems, Inc.
July 21, 1998		Johnson & Johnson		DePuy, Inc.

				Price Premiums												Exchange Ratio Premiums
				1-Day				1-Week				1-Month				1-Day				1-Week				1-Month
Selected Transactions		3rd Quartile			43.2%				49.4%				46.3%				43.2%				48.4%				44.3%
		Median			19.1%				21.0%				26.8%				19.1%				22.3%				21.7%
		Mean			29.0%				33.0%				34.9%				29.0%				33.4%				36.6%
		1st Quartile			14.3%				16.9%				18.4%				14.3%				18.1%				20.3%

	Premiums Paid Analysis

81

---

Table of Contents

	Contribution Analysis

	Inamed Discounted Cash Flow Analysis

	Pro Forma Merger Analysis

82

---

Table of Contents

		Accretion/Dilution
		CY2005E				CY2006E
Pro Forma EPS (not converted)			(17.2	)%			0.8	%
Pro Forma EPS (as converted)			(11.1	)%			7.6	%
Pro Forma Cash EPS (not converted)			(8.5	)%			9.2	%
Pro Forma Cash EPS (as converted)			(2.1	)%			16.4	%

83

---

Table of Contents

	•	reviewed the merger agreement;
	•	reviewed certain publicly available business and financial information concerning Medicis and Inamed and the industries in which they operate;
	•	compared the proposed financial terms of the merger with the publicly available financial terms of certain transactions involving companies JPMorgan deemed relevant and the consideration received for such companies;
	•	compared the financial and operating performance of Medicis and Inamed with publicly available information concerning certain other companies JPMorgan deemed relevant and reviewed the current and historical market prices of Inamed common stock and Medicis common stock and certain publicly traded securities of such other companies;
	•	reviewed certain internal financial analyses and forecasts prepared by the managements of Medicis and Inamed relating to their respective businesses, including (x) analyses and forecasts prepared by the management of Inamed that take into account the possibility that the FDA may not approve any or all of Inamed’s new silicone breast products and Reloxin products and (y) analyses and forecasts prepared by the management of Inamed that assume that the FDA approves all of these new products;
	•	reviewed estimates prepared by the managements of Medicis and Inamed of the amount and timing of the cost savings and related expenses and synergies expected to result from the merger; and
	•	performed such other financial studies and analyses and considered such other information as JPMorgan deemed appropriate for the purposes of this opinion.

84

---

Table of Contents

	Stock Trading Analysis

85

---

Table of Contents

	Historical Exchange Ratio

		Implied
		Exchange Ratio
At $75.00			2.37x
Market as of March 18, 2005			2.09x
1 - week average			2.09x
1 - month average			2.03x
3 - month average			1.91x
6 - month average			1.66x
12 - month average			1.53x
24 - month average			1.44x

	Equity Analysts Price Targets

86

---

Table of Contents

	Selected Companies Analysis

	Large-Cap Medical Device Companies

	•	Medtronic, Inc.
	•	CR Bard, Inc.
	•	Boston Scientific Corporation

	Mid-Cap Medical Device Companies

	•	American Medical Systems
	•	Arthrocare Corporation
	•	Integra Lifesciences Holding Corporation
	•	Mentor Corporation

	Specialty Pharmaceutical

	•	Allergan, Inc.
	•	Medicis
	•	Endo Pharmaceuticals
	•	Cephalon, Inc.
	•	Shire Pharmaceuticals
	•	Biovail Corporation
	•	Forest Labs
	•	King Pharmaceuticals

	•	Allergan, Inc.
	•	Endo Pharmaceuticals
	•	Cephalon, Inc.
	•	Shire Pharmaceuticals
	•	Biovail Corporation

87

---

Table of Contents

	•	Forest Labs
	•	King Pharmaceuticals

	Selected Transaction Analysis

Acquiror		Target
• King Pharmaceutical		• Jones Pharmaceutical
• Shire Pharmaceutical		• BioChem Pharma
• Charles River Labs		• Inveresk Research Group
• Advanced Medical Optics		• VISX, Incorporated
• Cardinal Health		• Alaris Medical Systems
• Cooper Companies		• Ocular Sciences
• Sponsor Consortium		• Warner Chilcott
• Fisher Scientific		• Apogent
• Zimmer		• Centerpulse
• Mylan Laboratories		• King Pharmaceuticals
• Abbott Laboratories		• Thera Sense

88

---

Table of Contents

	Discounted Cash Flow Analysis

89

---

Table of Contents

		Implied
Comparison		Exchange Ratio
(0% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			2.42x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			1.52x
(50% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			2.88x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			1.80x
(100% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			3.33x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			2.09x

		Implied
Comparison		Exchange Ratio
(0% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			1.85	x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			1.19	x
(50% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			2.13	x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			1.36	x
(100% probability)
Highest estimated valuation of the Inamed common stock to lowest estimated valuation of Medicis common stock			2.41	x
Lowest estimated valuation of the Inamed common stock to highest estimated valuation of the Medicis common stock			1.53	x

90

---

Table of Contents

91

---

Table of Contents

	•	individuals who hold options in respect of Inamed common stock or who have acquired Inamed common stock under a compensatory or other employment-related arrangement;
	•	banks, insurance companies or other financial institutions;
	•	broker-dealers;
	•	tax-exempt organizations;
	•	expatriates;
	•	persons that have a functional currency other than the United States dollar;
	•	persons who are non-United States holders (as defined below);
	•	traders in securities that elect to mark-to-market;
	•	holders of Inamed common stock who also own, directly or constructively for United States federal income tax purposes, any stock of Medicis (apart from any Medicis common stock that such holders receive in the merger);
	•	persons who are S-corporations, partnerships or other pass-through entities;
	•	persons who are subject to the alternative minimum tax provisions of the Internal Revenue Code; and
	•	persons who hold Inamed common stock as part of a hedge, straddle or conversion transaction.

	•	a citizen or resident of the United States;
	•	a corporation or other entity treated as a corporation for United States federal income tax purposes created or organized in or under the laws of the United States or any state or the District of Columbia;
	•	a trust that (i) is subject to the supervision of a court within the United States and the control of one or more United States persons or (ii) has a valid election in effect under United States Treasury regulations to be treated as a United States person; or
	•	an estate that is subject to United States federal income tax on its income regardless of its source.

	General

92

---

Table of Contents

	Tax Consequences of the Merger

	•	neither Medicis nor Inamed will recognize gain or loss as a result of the merger;
	•	Medicis stockholders will not recognize any gain or loss for federal income tax purposes as a result of the merger;
	•	an Inamed stockholder will recognize gain (but not loss) with respect to its shares of Inamed common stock in an amount equal to the lesser of (i) any gain realized with respect to such stock or (ii) the amount of cash received with respect to such stock (other than any cash received instead of a fractional share of Medicis common stock). A holder’s gain realized will equal the difference between the fair market value of the Medicis common stock and cash received and such holder’s tax basis in the Inamed common stock surrendered. Any such gain recognized will be a capital gain;
	•	an Inamed stockholder’s aggregate tax basis for the shares of Medicis common stock received in the merger (including any fractional share interest for which cash is received) will equal the stockholder’s aggregate tax basis in the shares of Inamed common stock surrendered upon completion of the merger, increased by any gain recognized by such holder in the merger (other than gain resulting from the receipt of cash instead of a fractional share of Medicis common stock) and reduced by the amount of any cash received in the merger (other than any cash received instead of a fractional share of Medicis common stock);
	•	an Inamed stockholder’s holding period for the shares of Medicis common stock received in the merger (including any fractional share interest for which cash is received) will include the period during which the shares of Inamed common stock surrendered in the merger were held; and
	•	an Inamed stockholder who receives cash instead of a fractional share of Medicis common stock in the merger will generally recognize capital gain or loss in an amount equal to the difference between the amount of cash received instead of a fractional share and the stockholder’s adjusted tax basis allocable to such fractional share.

93

---

Table of Contents

	Backup Withholding; Information Reporting

94

---

Table of Contents

	•	deliver to Inamed, before the vote on the adoption of the merger agreement and approval of the merger at the Inamed special meeting, a written demand for the appraisal of the stockholder’s shares;
	•	not vote its shares of common stock in favor of adoption of the merger agreement and approval of the merger; and
	•	hold of record the shares of Inamed common stock on the date the written demand for appraisal is made and continue to hold the shares of record through the effective time of the merger.

95

---

Table of Contents

96

---

Table of Contents

97

---

Table of Contents

	•	an effective registration statement under the Securities Act covering the resale of those shares;
	•	an exemption under paragraph (d) of Rule 145 under the Securities Act; or
	•	any other applicable exemption under the Securities Act.

	Medicis

98

---

Table of Contents

	•	severance benefits to which Richard J. Havens, Mark A. Prygocki, Sr. and Mitchell S. Wortzman would become entitled under the Amended and Restated Executive Retention Plan upon a qualifying termination of employment with Medicis following the merger; and
	•	the right of each of the executive officers, in exchange for waiving his right to receive the accelerated vesting of his stock options and restricted stock awards upon stockholder approval of the merger, to receive a lump sum cash payment equal to $50,000, payable upon the closing of the merger, and the accelerated vesting of certain stock option and restricted stock awards upon a qualifying termination of his employment following the merger.

	Amended and Restated Executive Retention Plan

	•	the participant’s employment is terminated by Medicis without cause (as described below), or by the participant for good reason (as described below), not later than 24 months following the change in control;
	•	the participant’s employment is terminated due to his or her death or “disability” not later than 12 months following the change in control; or
	•	the participant’s employment is terminated by Medicis without cause (as described below) prior to the change in control and the participant demonstrates that such termination was at the request of a third party in connection with the change in control.

	•	an amount equal to 200% of the sum of (A) the participant’s base salary for the 12-month period preceding his or her termination of employment, plus (B) the participant’s highest annual bonus for any year during the last three fiscal years preceding the participant’s termination of employment;

99

---

Table of Contents

	•	medical, health, life, and/or disability insurance benefits for a period of two years, provided that continued participation is permissible under such plans and programs or, at the option of the participant, a cash payment in lieu of and equivalent to such insurance benefits;
	•	reimbursement for all legal fees and expenses incurred by the participant in contesting or disputing his or her termination or in seeking to obtain or enforce any right or benefit provided by his or her employment agreement, unless the participant’s claim is determined to be frivolous or without merit;
	•	the continued benefit for a period of two years of all active and retired employee benefit plans and programs or arrangements in which the participant was entitled to participate immediately prior to the change in control, provided that continued participation is possible under such plans and programs;
	•	a lump sum cash payment at the participant’s normal retirement age (or earlier retirement age should he or she so elect), in an amount equal to the value of the retirement pension to which the participant would have been entitled under Medicis’ pension plan, excess benefit plan and supplemental retirement plan, if any, if the participant’s employment had continued for an additional period of two years determined as of the participant’s normal retirement age (or earlier retirement age, should he or she elect) reduced by the present value of the participant’s actual benefits under such plans;
	•	the gross-up of payments subject to excise taxes under the Internal Revenue Code as “parachute payments” so that the participant receives the same amount he would have received had there been no applicable excise taxes; and
	•	the termination of any provision in any stock option agreements with the participant giving Medicis the right to the return of profits from the participant’s exercise of options during the 3-year period preceding his or her termination of employment.

		Estimated Value of
Name		Severance Benefits
Richard J. Havens		$	1,513,305
Mark A. Prygocki, Sr.		$	1,659,805
Mitchell S. Wortzman		$	1,249,705

	Employment Agreement of Jonah Shacknai

100

---

Table of Contents

	Consideration in Lieu of Option and Restricted Stock Acceleration

										Total Number of
		Total Number of				Intrinsic Value of				Unvested Medicis				Value of
		Unvested Medicis				Unvested Option				Restricted Shares				Restricted
Name		Option Shares				Shares Accelerating				Held				Shares
Jonah Shacknai			280,000			$	313,599				10,000			$	325,600
Richard J. Havens			163,800			$	813,267				10,000			$	325,600
Mark A. Prygocki, Sr.			218,402			$	1,084,389				10,000			$	325,600
Mitchell S. Wortzman			163,800			$	813,267				10,000			$	325,600

	Unvested Non-Employee Director Stock Options

	Inamed

	•	the retention of certain Inamed officers and directors as officers or directors of the combined company after the completion of the merger;
	•	severance benefits to which Nicholas L. Teti, Declan Daly, Joseph A. Newcomb, Vicente Trelles, Robert S. Vaters, Patricia S. Walker and Hani Zeini would become entitled under individual employment agreements or change in control agreements upon a qualifying termination of employment with Medicis following stockholder approval of the merger;
	•	the acceleration of vesting for certain stock options and restricted stock awards; and

101

---

Table of Contents

	•	the continued indemnification of directors and officers of Inamed pursuant to the merger agreement and providing these individuals with directors’ and officers’ insurance.

	Post-Merger Board Membership

	Post-Merger Employment of Declan Daly

	Employment/Change in Control Agreements of Inamed’s Executive Officers

102

---

Table of Contents

	Employment Agreement of Nicholas L. Teti

	Employment Agreement of Declan Daly

	Employment Agreement of Joseph A. Newcomb

103

---

Table of Contents

	Employment Agreement of Vicente Trelles

	Employment Agreement of Robert S. Vaters

	Change in Control Agreement of Patricia S. Walker

	Change in Control Agreement of Hani Zeini

104

---

Table of Contents

		Estimated Value of
Name		Severance Benefits
Nicholas L. Teti		$	1,622,415
Declan Daly		$	452,400
Joseph A. Newcomb		$	655,200
Vicente Trelles		$	640,000
Robert S. Vaters		$	624,000
Patricia S. Walker		$	325,000
Hani Zeini		$	687,960

	Accelerated Vesting of Certain Inamed Stock Options and Restricted Stock Awards

105

---

Table of Contents

										Total Number of
		Total Number of				Intrinsic Value of				Unvested Inamed				Value of
		Unvested Inamed				Unvested Option				Restricted Shares				Restricted
Name		Option Shares				Shares Accelerating				Held				Shares
Nicholas L. Teti			0			$	0				65,000			$	4,919,200
Declan Daly			19,500			$	670,617				32,600			$	2,467,168
Joseph A. Newcomb			0			$	0				26,650			$	2,016,872
Vicente Trelles			0			$	0				30,400			$	2,300,672
Robert S. Vaters			0			$	0				18,750			$	1,419,000
Patricia S. Walker, M.D., Ph.D.			66,667			$	1,790,676				0			$	0
Hani M. Zeini			0			$	0				30,400			$	2,300,672
Joy A. Amundson			7,500			$	62,475				0			$	0
Malcolm R. Currie, Ph.D.			7,500			$	103,350				0			$	0
John C. Miles II			7,500			$	0				0			$	0
Mitchell S. Rosenthal, M.D.			7,500			$	103,350				0			$	0
Terry E. Vandewarker			7,500			$	62,475				0			$	0

	Indemnification of Inamed Directors and Officers

	•	Q-Med AB will have no right to enforce the non-competition provisions embodied in Section 7.4(b) of the Supply Agreement, dated March 7, 2003, between Medicis and Q-Med AB for a period of 24 months following the closing of Medicis’ merger with Inamed pursuant to the merger agreement;
	•	Q-Med AB will have no right to enforce the diligence obligations embodied in Section 3.1 of the Amended and Restated License Agreement, dated March 6, 2003, between Q-Med AB and HA North American Sales AB for a period of 24 months following the closing of the merger;
	•	Medicis and Q-Med AB will work diligently to reach a comprehensive agreement, within six months of the closing of the merger, regarding certain business opportunities;
	•	If the comprehensive agreement referenced above is not executed within six months of the closing of the merger, Medicis will pay a specified royalty on net revenues of products acquired from Inamed as a

106

---

Table of Contents

		result of the merger that compete with Q-Med AB products outside Canada and the United States, until the competing products are divested or discontinued;
	•	Within five business days of the execution of the merger agreement, the parties will file motions to dismiss with prejudice (i) the investigation pending in the United States International Trade Commission, captioned as In re Certain Injectable Implant Compositions, Inv. No. 337-TA-515, between Inamed, as complainant, and Q-Med AB and Medicis, as respondents, and (ii) the litigation pending in the United States District Court for the Southern District of California, captioned as Inamed Corp. v. Q-Med AB, et al, No. 3:04-CV-1064, between Inamed, as plaintiff, and Q-Med AB and Medicis, as defendants. Each party will take all appropriate actions to ensure that such matters are dismissed within 30 days after filing such motions. On April 18, 2005 and March 25, 2005, respectively, the investigation in the United States International Trade Commission and the litigation pending in the United States District Court for the Southern District of California described in the preceding paragraph were dismissed; and
	•	If the merger agreement is terminated for any reason that would give rise to Medicis’ obligation to pay Inamed the $10 million expense fee or the $70 million termination fee pursuant to Section 5.10(c) of the merger agreement, Medicis will pay to Inamed $16.5 million in consideration for Inamed’s agreement to dismiss the litigation matters discussed above.

107

---

Table of Contents

	General

108

---

Table of Contents

	•	The exchange ratio shall be adjusted to a number, rounded to the nearest fourth decimal place, equal to (1) the product of 0.45 and the closing transaction value, divided by (2) the product of the “aggregate Inamed share number” and the “closing Medicis stock price”; and
	•	The cash merger consideration shall be adjusted to an amount, rounded to the nearest cent, equal to the quotient obtained by dividing (1) the amount obtained by subtracting the “aggregate dissenter’s value” from the product of 0.55 and the closing transaction value, by (2) the “aggregate Inamed share number.”

	Appraisal Rights

	•	a statement indicating book-entry ownership of Medicis common stock or, if requested, a certificate representing Medicis common stock;
	•	the cash consideration;
	•	cash in lieu of any fractional share of Medicis common stock; and

109

---

Table of Contents

	•	dividends or other distributions, if any, on Medicis common stock to which they are entitled under the terms of the merger agreement.

110

---

Table of Contents

	•	the adoption of the merger agreement and approval of the merger by Inamed stockholders and the approval of the issuance of shares of Medicis common stock in the merger by Medicis stockholders;
	•	the registration statement of which this joint proxy statement/prospectus is a part must be declared effective under the Securities Act and the registration statement shall not be subject to any stop order or proceeding seeking a stop order;
	•	the approval for listing on the NYSE of the shares of Medicis common stock to be issued in the merger, subject to official notice of issuance;
	•	the absence of any judgment, injunction, order or decree of any governmental entity making illegal or otherwise restraining or prohibiting the consummation of the merger;
	•	the receipt of all governmental and regulatory consents, approvals, orders and authorizations required to complete the merger, except for such consents, approvals, orders and authorizations the absence of which would not have a “Material Adverse Effect” on Medicis after the merger;
	•	the expiration or termination of the applicable waiting period and any extension of the waiting period under the HSR Act;
	•	the absence of any legal prohibition having the effect of preventing or prohibiting completion of the merger;
	•	the absence of any litigation by any governmental entity seeking to prohibit or restrain the merger or that otherwise would have a Material Adverse Effect on Medicis or Inamed;
	•	the absence of any pending suit, action or proceeding by any governmental entity seeking to prohibit the merger or that otherwise would have a Material Adverse Effect on Medicis or Inamed, provided that this condition is satisfied four days following the dismissal or final decision denying the governmental entity’s request for an injunction;
	•	the representations and warranties of the other party, without giving effect to any limitation as to materiality or Material Adverse Effect, being true and correct at and as of the effective time of the merger as if they were made on that date (except to the extent that the representations and warranties speak as of another date), except where the failure of the representations and warranties to be true and correct would not have a Material Adverse Effect on the other party, and the receipt of a certificate of an executive officer of the other party to that effect;
	•	the other party having performed or complied with its agreements and covenants in the merger agreement in all material respects, and the receipt of a certificate of an executive officer of the other party to that effect;
	•	absence of any facts, events, changes, effects, developments, conditions or occurrences since the date of the merger agreement, that would reasonably be expected to have a Material Adverse Effect on the other party; and
	•	the receipt of opinions from Medicis’ and Inamed’s respective counsel that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

111

---

Table of Contents

	•	the number of dissenting shares must not exceed 10% of the outstanding shares of Inamed common stock; and
	•	the pending SEC investigation of Inamed, as described in Inamed’s Annual Report on Form 10-K for the year ended December 31, 2004, shall not have prevented Medicis from obtaining financing consistent with the terms set forth in a financing commitment letter obtained by Medicis concurrent with the execution of the merger agreement, provided that Medicis used commercially reasonable efforts to obtain such financing.

	•	the medical device and specialty pharmaceutical industries generally (which changes or developments, in each case, do not disproportionately affect the referenced party in any material respect);
	•	financial or securities markets or the economy in general (which changes or developments, in each case, do not disproportionately affect the referenced party in any material respect);
	•	the referenced party’s stock price or trading volume, in and of itself;
	•	the referenced party’s failure to meet published revenue or earnings projections, in and of itself;
	•	the announcement of this merger or actions pursuant to (and required by) the merger agreement; or
	•	the determination by, or the delay of a determination by, the FDA, or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any of the referenced party’s products.

	•	corporate organization, qualification and power;
	•	subsidiaries;
	•	capital structure;
	•	corporate power and authority and board approval;
	•	reports and financial statements;
	•	absence of conflicts and required filings and consents;
	•	SEC filings, corporate governance and undisclosed liabilities;
	•	information supplied for inclusion in this joint proxy statement/ prospectus;
	•	absence of certain changes or events;
	•	tax matters;
	•	absence of changes in benefit plans;
	•	employee benefit plans, ERISA compliance and excess parachute payments;
	•	litigation;
	•	compliance with applicable laws;

112

---

Table of Contents

	•	regulatory compliance;
	•	real property;
	•	labor and other employment matters;
	•	validity and absence of breaches of material contracts;
	•	environmental matters;
	•	insurance matters;
	•	intellectual property;
	•	foreign corrupt practices and international trade sanctions;
	•	brokers used in connection with the merger agreement; and
	•	opinion of financial advisors.

	•	solicit, initiate, encourage or induce any inquiry regarding, or the making, submission or announcement of, an acquisition proposal;
	•	participate in any discussions or negotiations regarding, or furnish any non-public information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, an acquisition proposal; or
	•	enter into any letter of intent or similar document or contract (whether binding or not) contemplating or otherwise relating to an acquisition proposal.

	•	merger, consolidation, business combination or similar transaction involving the party or any of its significant subsidiaries pursuant to which the party’s stockholders immediately prior to such transaction would own less than 85% of the aggregate voting power of the entity surviving or resulting from such transaction (or the ultimate parent entity thereof);
	•	sale, lease, exclusive license or other disposition, directly or indirectly of the assets of the party or its subsidiaries representing 15% or more of the consolidated assets of the party and its subsidiaries;
	•	issuance, sale or other disposition of securities representing more than 15% of the voting power of the party;
	•	transaction in which any person or group of persons acquires beneficial ownership or the right to acquire beneficial ownership of 15% or more of the outstanding voting capital stock of the party; or
	•	any combination of the above.

113

---

Table of Contents

	•	the receiving party’s board of directors determines in good faith, after consulting with an independent financial advisor and outside legal counsel, that such proposal constitutes or is reasonably likely to result in a superior proposal; and
	•	prior to providing any such information, the receiving party enters into a confidentiality agreement containing (with certain exceptions) terms at least as restrictive as the terms of the confidentiality agreement between Medicis and Inamed and, contemporaneously with furnishing any nonpublic information to such person, the receiving party furnishes such nonpublic information to the other party.

	•	withdraw or modify, or publicly propose to withdraw or modify, in a manner adverse to the other party, the recommendations discussed above;
	•	approve any letter of intent, agreement in principle, acquisition agreement or similar agreement relating to any acquisition proposal; or
	•	approve or recommend, or publicly propose to approve or recommend, any acquisition proposal.

	•	the board of directors has determined in good faith, after consultation with outside counsel, that the failure to withdraw or modify its recommendation would be reasonably likely to result in a violation of its fiduciary duties under applicable law, and the withdrawing company has notified the other company in writing of this determination; and

114

---

Table of Contents

	•	in the case of any actions taken in connection with an acquisition proposal, at least five business days following receipt by the other company of the above notice, and taking into account any revised proposal made by the other company since receipt of the notice, the withdrawing company’s board of directors maintains its determination made above.

	General Restrictions on Operations

	•	conduct its business only in the ordinary course consistent with past practice;
	•	use its commercially reasonable efforts to preserve intact its current business organization and goodwill and keep available the services of its current officers, key employees and key independent contractors; and
	•	use its commercially reasonable efforts to preserve its goodwill and business relationships with its customers, suppliers, licensors, licensees, distributors and other persons with which it has business dealings.

	Additional Restrictions on Medicis’ Interim Operations

	•	amend or propose to amend its certificate of incorporation, bylaws or similar governing documents, or those of a subsidiary;
	•	split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
	•	declare, set aside or pay any dividend on, or make any other distributions payable in cash, stock, property, or otherwise, except for the payment of dividends or distributions to Medicis or any of its subsidiaries by a subsidiary of Medicis;
	•	merge or consolidate with any person (other than a merger among wholly-owned subsidiaries of Medicis or a merger between Medicis and its wholly-owned subsidiaries);
	•	enter into any agreement with respect to the voting of its capital stock or other securities held by Medicis or any of its subsidiaries;

115

---

Table of Contents

	•	issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any shares of, or any options, warrants or rights of any kind to acquire any shares of capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that Medicis may:

	•	issue shares of Medicis common stock (a) upon exercise of Medicis stock options outstanding on the date of the merger agreement or thereafter granted, or (b) in accordance with the terms of the Medicis rights agreement as in effect on the date of the merger agreement;
	•	grant Medicis stock options to purchase up to an aggregate of 75,000 shares of Medicis common stock and 75,000 shares of restricted stock in accordance with the terms of the Medicis stock plans consistent with past practice and with an exercise price per share of Medicis common stock no less than the fair market value of a share of Medicis common stock on the date of grant;
	•	in connection with Medicis’ annual fiscal year-end equity awards consistent with past practice, grant Medicis stock options and restricted stock in accordance with the terms of the Medicis stock plans consistent with past practice and, in respect of Medicis stock options, with an exercise price per share of Medicis common stock no less than the fair market value of a share of Medicis common Stock on the date of grant;
	•	grant stock options pursuant to existing contractual relationships as set forth the Medicis disclosure letter;
	•	issue one or more series of securities of Medicis in connection with a financing consistent with the terms and conditions of the merger agreement, the primary use of proceeds of which is to pay the cash merger consideration; and
	•	engage in transactions exclusively among Medicis and its subsidiaries;

	•	issue any debt securities, incur, guarantee or otherwise become contingently liable with respect to any indebtedness for borrowed money, or enter into any arrangement having the economic effect of any of the foregoing (other than (a) in connection with accounts payable in the ordinary course of business, (b) borrowings under the existing credit facilities of Medicis or any of its subsidiaries, and (c) the issuance of one or more series of securities of Medicis or the incurrence of indebtedness by Medicis in connection with a financing consistent with the terms and conditions of the merger agreement, the primary use of proceeds of which is to pay the cash merger consideration);
	•	make any loans, advances or capital contributions to, or investments in, any person, other than loans, advances, capital contributions or investments that are not, in the aggregate, in excess of $25 million;
	•	redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Medicis stock options pursuant to the terms of the Medicis stock plans and the relevant written agreements evidencing the grant of Medicis stock options;
	•	make any material acquisition of any assets or businesses (including by merger, consolidation, acquisition of stock or assets, in-bound license transactions or otherwise) other than acquisitions for which the fair market value of the total consideration (including license, royalty or other fees) does not exceed, in the aggregate, $25 million (provided that any such acquisition does not materially and adversely affect the ability of Medicis and Inamed to obtain applicable approvals under the antitrust laws);
	•	sell, pledge, assign, dispose of, transfer, lease, securitize or materially encumber any businesses or assets (other than Medicis owned intellectual property or Medicis licensed intellectual property) that are material to Medicis and its subsidiaries, taken as a whole, other than (a) sales of inventory and other assets in the ordinary course of business, (b) sales or dispositions of assets in one or a series of transactions having an aggregate value of $25 million or less, and (c) divestitures pursuant to the merger agreement;
	•	sell, pledge, assign, dispose of, transfer, securitize, lease or materially encumber any material Medicis owned intellectual property or material Medicis licensed intellectual property (except in connection with any contract or arrangement related to obtaining financing that is consistent with the terms and

116

---

Table of Contents

		conditions of the merger agreement, the primary use of proceeds of which is to pay the cash merger consideration);
	•	except in the ordinary course of business, as reasonably prudent to the conduct of the business or as provided for in Medicis material contracts in effect as of the date of the merger agreement:

	•	exclusively license, abandon or fail to maintain any material Medicis owned intellectual property or material Medicis licensed intellectual property;
	•	grant, extend, amend (except as required in the diligent prosecution of the material Medicis owned intellectual property), waive or modify any rights in or to any material Medicis owned intellectual property or material Medicis licensed intellectual property
	•	fail to diligently prosecute Medicis’ and its subsidiaries’ material patent applications; or
	•	fail to exercise a right of renewal or extension under any Medicis material license;

	•	enter into any contract or arrangement that materially limits or otherwise materially restricts Medicis or any of its subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area, or make any capital expenditure or expenditures, including leases and in-bound licenses (other than capital expenditures that are not, in the aggregate, in excess of $10 million and capital expenditures for unbudgeted repairs and maintenance in the ordinary course of business consistent with past practice);
	•	except in the ordinary course of business, make any material tax election or settle or compromise any material tax liability or refund, or change any annual tax accounting period or material method of tax accounting, file any material amendment to a tax return, enter into any closing agreement relating to any material tax, surrender any right to claim a material tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material tax claim or assessment, in each case, other than as required by law;
	•	take, or agree to take, any action that would prevent the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code;
	•	waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration, except in the ordinary course of business;
	•	modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which Medicis is a party and which relates to a business combination or other similar extraordinary transaction;
	•	take any action to render inapplicable, or to exempt any third person from, (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover or similar law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
	•	take any action that is intended or would reasonably be expected to result in any of the conditions to the merger not being satisfied; or
	•	agree, authorize or otherwise to take any of the foregoing actions.

	Additional Restrictions on Inamed’s Interim Operations

	•	amend or propose to amend its certificate of incorporation, bylaws or similar governing documents, or those of a subsidiary;
	•	split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
	•	declare, set aside or pay any dividend on, or make any other distributions payable in cash, stock, property, or otherwise, except for the payment of dividends or distributions to Inamed or any of its subsidiaries by a subsidiary of Inamed;

117

---

Table of Contents

	•	merge or consolidate with any person (other than a merger among wholly-owned subsidiaries of Inamed or a merger between Inamed and its wholly-owned subsidiaries);
	•	enter into any agreement with respect to the voting of its capital stock or other securities held by Inamed or any of its subsidiaries;
	•	issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any shares of, or any options, warrants or rights of any kind to acquire any shares of capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that Inamed may:

	•	issue shares of Inamed common stock (a) upon the exercise of Inamed purchase rights outstanding on the date of the merger agreement or thereafter granted, (b) upon exercise of Inamed stock options outstanding on the date of the merger agreement or thereafter granted, or (c) in accordance with the terms of the Inamed rights agreement as in effect on the date merger agreement;
	•	grant Inamed stock options to purchase up to an aggregate of 100,000 shares of Inamed common stock to new employees of Inamed or its subsidiaries in accordance with the terms of the Inamed stock plans consistent with past practice and with an exercise price per share of Inamed common stock no less than the fair market value of a share of Inamed common stock on the date of grant, provided that the vesting of such options does not accelerate as a result of the merger or the transactions contemplated by the merger agreement and provided, further, that no such grant to purchase more than 25,000 shares of Inamed common stock shall be made to any individual;
	•	grant stock options pursuant to existing contractual relationships as set forth in the Inamed disclosure letter;
	•	grant purchase rights in accordance with the terms of the Inamed employee stock purchase plan (as in effect on the date of the merger agreement);
	•	grant up to an aggregate of 10,000 shares of restricted stock to new employees of Inamed or its subsidiaries in accordance with the terms of the restricted stock plan consistent with past practice, provided that the vesting of such shares does not accelerate as a result of the merger or the transactions contemplated by the merger agreement and provided, further, that no such grant to purchase more than 1,000 shares of Inamed common stock shall be made to any individual; and
	•	engage in transactions exclusively among Inamed and its subsidiaries;

	•	except for transactions exclusively among Inamed and its subsidiaries, issue any debt securities, incur, guarantee or otherwise become contingently liable with respect to any indebtedness for borrowed money, or enter into any arrangement having the economic effect of any of the foregoing (other than in connection with accounts payable in the ordinary course of business or borrowings under the existing credit facilities of the Inamed or any of its subsidiaries);
	•	make any loans, advances or capital contributions to, or investments in, any person;
	•	redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Inamed stock options pursuant to the terms of the Inamed stock plans and the relevant written agreements evidencing the grant of Inamed stock options and repurchases of outstanding shares of Inamed restricted stock pursuant to the terms of the Inamed restricted stock plan;
	•	make any material acquisition of any assets or businesses (including by merger, consolidation, acquisition of stock or assets, in-bound license transactions or otherwise) other than acquisitions for which the fair market value of the total consideration (including license, royalty or other fees) does not exceed, individually, $2 million or, in the aggregate, $5 million (provided that any such acquisition does not adversely affect the ability of Medicis and Inamed to obtain applicable approvals under the applicable antitrust laws);
	•	sell, pledge, assign, dispose of, transfer, lease, securitize or materially encumber any businesses or assets that are material to Inamed and its subsidiaries, taken as a whole (excluding intellectual property) other than (a) sales of inventory and other assets in the ordinary course of business, (b) sales

118

---

Table of Contents

		or dispositions of assets in one or a series of transactions having an aggregate value of $3 million or less, and (c) divestitures pursuant to the merger agreement;
	•	sell, pledge, assign, dispose of, transfer, securitize, lease or materially encumber any material Inamed owned intellectual property or material Inamed licensed intellectual property;
	•	except in the ordinary course of business, as reasonably prudent to the conduct of the business or as provided for in Inamed material contracts in effect as of the date of the merger agreement:

	•	exclusively license, abandon or fail to maintain any material Inamed owned intellectual property or material Inamed licensed intellectual property;
	•	grant, extend, amend (except as required in the diligent prosecution of the material Inamed owned intellectual property), waive or modify any rights in or to any material Inamed owned intellectual property or material Inamed licensed intellectual property;
	•	fail to diligently prosecute Inamed’s and its subsidiaries’ material patent applications; or
	•	fail to exercise a right of renewal or extension under any Inamed material license;

	•	enter into any contract or arrangement that materially limits or otherwise materially restricts Inamed or any of its subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area;
	•	vary its inventory practices in any material respect from its past practices, except as required by GAAP or by law;
	•	make any capital expenditure or expenditures (including leases and in-bound licenses) in the aggregate in excess of the aggregate amount set forth in Inamed’s budget provided to Medicis prior to the date of the merger agreement (other than capital expenditures for unbudgeted repairs and maintenance in the ordinary course of business consistent with past practice);
	•	grant, enter into or amend any employment, severance, change in control, special pay arrangement with respect to termination of employment or other similar arrangements or contract with any directors, officers or employees of Inamed or its subsidiaries, except (a) pursuant to previously existing contractual arrangements or policies between such current directors, officers or employees and Inamed, (b) pursuant to employment agreements entered into with a person who is not already an officer of Inamed in the ordinary course of business and is hired or promoted by Inamed or one of its subsidiaries after the date of the merger agreement in the ordinary course of business or (c) to the minimum extent necessary to comply with Section 409A of the Internal Revenue Code without increasing the benefits provided to any person;
	•	increase the salary, benefits or monetary compensation of any directors, executive officers or employees, except (a) for increases in the ordinary course of business, (b) pursuant to previously existing contractual arrangements, (c) in connection with the assumption by such employee of new or additional responsibilities or (d) to respond to offers of employment made by other persons;
	•	establish, adopt, enter into, or materially amend any, collective bargaining agreement or bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan, arrangement, trust, fund, policy or agreement, except to the minimum extent necessary to comply with Section 409A of the Internal Revenue Code without increasing the benefits provided to any person or as otherwise required by any other applicable law;
	•	accelerate, amend or change the period of exercisability or vesting of options, restricted stock or similar awards under any Inamed stock plan, except to the minimum extent necessary in order to comply with Section 409A of the Internal Revenue Code without accelerating the exercisability or vesting of any such award;
	•	authorize cash payments in exchange for any options granted under any of such plans except as required by the terms of such plans or any related agreements in effect as of the date of the merger agreement;
	•	waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;

119

---

Table of Contents

	•	take, or agree to take, any action that would prevent the merger from qualifying as a reorganization with the meaning of Section 368(a) of the Internal Revenue Code;
	•	adopt, enter into, or amend any benefit plan to materially increase the benefits, liability, or obligations of any Inamed benefit plan, except as (a) involves any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date of the merger agreement as permitted by the merger agreement, or (b) as required pursuant to existing contractual arrangements or the merger agreement;
	•	change any method or principle of financial accounting in a manner that is inconsistent with past practice, except to the extent required by GAAP as advised by Inamed’s regular independent accountants;
	•	make any material tax election or settle or compromise any material tax liability or refund, or change any annual tax accounting period or material method of tax accounting, file any material amendment to a tax return, enter into any closing agreement relating to any material tax, surrender any right to claim a material tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material tax claim or assessment, in each case, other than as required by law;
	•	modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which Inamed is a party and which relates to a business combination or other similar extraordinary transaction;
	•	take any action to render inapplicable, or to exempt any third person from, (a) the provisions of Section 203 of the DGCL, or (b) any other state takeover or similar law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
	•	take any action that is intended or would reasonably be expected to result in any of the conditions to the merger not being satisfied; or
	•	agree, authorize or otherwise to take any of the foregoing actions.

	•	provide Medicis with copies or reports of all correspondence between Inamed and the SEC or its staff, and all information provided by Inamed to the SEC or its staff;
	•	furnish Medicis with all non-privileged information related to the investigation as reasonably requested by Medicis;
	•	afford Medicis reasonable access to the officers, employees and representatives of Inamed concerning the investigation; and

120

---

Table of Contents

	•	keep Medicis fully informed of all material information and developments regarding the investigation.

	•	obtain any government clearances or approvals required for the closing under the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other federal, state or foreign law or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade, which we refer to herein collectively as the “antitrust laws”;
	•	to obtain the expiration of any applicable waiting period under any antitrust laws;
	•	to respond to any government requests for information under any antitrust laws;
	•	to contest and resist any action, including any legislative, administrative or judicial action; and
	•	and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that restricts, prevents or prohibits the consummation of the merger or any other transactions contemplated by the merger agreement under any antitrust laws.

	•	license, divest, dispose of or hold separate any material assets or businesses of Medicis or Inamed or any of their respective subsidiaries or otherwise take or commit to take any action that limits in any material respect its freedom of action with respect to, or its ability to retain, any of the assets or businesses of Medicis or Inamed or any of their respective subsidiaries; or
	•	agree to or effect any license, divestiture, disposition or hold separate any business or take any other action or agree to any limitation that is not conditioned on the consummation of the merger.

121

---

Table of Contents

	Inamed Equity Awards

	Stock Options

	•	each unvested Inamed stock option outstanding that was granted on or before March 20, 2005 will immediately become fully vested and exercisable upon the closing of the merger;
	•	each Inamed stock option granted under Inamed’s Non-Employee Director’s Stock Option Plan, 1998 Stock Option Plan, and 2004 Performance Stock Option Plan will be exercisable for the number of whole shares of Medicis common stock determined by multiplying the number of shares of Inamed common stock that were issuable upon exercise of such option, whether or not exercisable, immediately prior to the merger by 2.3674, rounded down to the nearest whole number of shares of Medicis common stock;
	•	the per share exercise price for the shares of Medicis common stock issuable upon exercise of each option granted under Inamed’s Non-Employee Director’s Stock Option Plan, 1998 Stock Option Plan, and 2004 Performance Stock Option Plan will be equal to the quotient determined by dividing the exercise price per share of Inamed common stock at which such option was exercisable immediately prior to the merger by 2.3674, rounded up to the nearest whole cent;
	•	each Inamed stock option granted under Inamed’s 1999 Stock Option Plan or 2000 Stock Option Plan will be exercisable for the aggregate amount of merger consideration the optionee would have been entitled to receive in connection with the merger if he or she exercised such option in full, whether or not exercisable, immediately prior to the effective time of the merger and received the merger consideration in exchange for the Inamed shares purchased (see “The Merger Agreement — Merger Consideration” on page 108 for additional information); and

122

---

Table of Contents

	•	the exercise price for each “unit” subject to an assumed stock option granted under Inamed’s 1999 Stock Option Plan and 2000 Stock Option Plan will be equal to the sum obtained by dividing the aggregate exercise price payable for the Inamed common stock subject to such option immediately prior to the closing of the merger by the number of units subject to such assumed option immediately following the closing of the merger, rounded up to the nearest whole cent. “Unit” means one share of Medicis common stock plus an amount of cash equal to the sum obtained by dividing (x) the aggregate amount of cash for which the assumed option is exercisable immediately following the effective time of the merger by (y) the whole number of shares of Medicis common stock issuable upon exercise of such assumed option immediately following the effective time of the merger, rounded down to the nearest whole cent.

	Employee Stock Purchase Plan

	•	all Inamed purchase rights issued and outstanding as of the date of the Inamed stockholder approval will be exercised on such date;
	•	no Inamed purchase rights will be issued and outstanding as of the effective time of the merger;
	•	conditioned upon the occurrence of the closing, the employee stock purchase plan will be terminated no later than the effective time of the merger; and
	•	the employee stock purchase plan will be suspended and no additional offering periods will commence on or after the date of the Inamed stockholder approval.

	Repurchase Rights

	•	the assigned repurchase rights will be adjusted to apply to the merger consideration received in exchange for the unvested shares of Inamed common stock subject to the assigned repurchase rights; and
	•	the repurchase price to be paid (if any) for the merger consideration received in exchange for a share of Inamed restricted stock will be an amount determined by dividing the repurchase price per share of Inamed restricted stock, as determined immediately prior to the closing of the merger, by 2.3674, rounded down to the nearest whole cent.

123

---

Table of Contents

	Inamed Benefit Plans

	•	provide each employee of Inamed or its subsidiaries with service or other credit for all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to Inamed employees under any new benefit plan that is a welfare plan that such employees may be eligible to participate in after the merger, to the extent that such employee would receive credit for such conditions under the corresponding welfare plan in which any such employee participated immediately prior to the effective time of the merger;
	•	provide each employee of Inamed or its subsidiaries with credit for any co-payments and deductibles paid in satisfying any applicable deductible or out-of-pocket requirements under any new benefit plan that is a welfare plan that such employees are eligible to participate in after the effective time of the merger;
	•	provide each employee with credit for all service for purposes of eligibility, vesting and benefit accruals (but not for benefit accruals under any defined benefit pension plan) with Inamed and its subsidiaries, under each employee benefit plan, program, or arrangement of Medicis or its subsidiaries in which such employees are eligible to participate after the effective time of the merger; and
	•	provide benefits under medical, dental, vision and similar health and welfare plans that are in the aggregate no less favorable than those provided to similarly situated employees of Medicis and its subsidiaries; provided, however, that in no event will the employees be entitled to any credit to the extent that it would result in a duplication of benefits with respect to the same period of service.

124

---

Table of Contents

	•	notify Inamed of any proposed or executed amendments to the financing commitment letter that Medicis entered into with Deutsche Bank Securities Inc. and Deutsche Bank Trust Company Americas;
	•	provide to Inamed copies of any other commitment letters and any definitive agreements entered into by Medicis or any of its subsidiaries in connection with the financing commitment letter or any alternative financing and all notices and all proposed or executed amendments or modifications regarding any such documents or arrangements;
	•	keep Inamed informed of the status of any contemplated or proposed financing;
	•	notify Inamed of any assertion by any lender under the financing commitment letter or any other commitment letter or definitive agreements entered into in relation to a financing that any condition contained in the financing commitment letter, any other commitment letter or definitive agreements entered into in relation to a financing has not been satisfied or cannot be satisfied at the time such condition is required to be satisfied; and
	•	discuss with Inamed at Inamed’s reasonable request the status of any contemplated or proposed financing.

125

---

Table of Contents

	Termination by Medicis or Inamed

	•	Medicis and Inamed mutually agree to the termination;
	•	the merger is not completed by December 19, 2005, which may be extended by either party up to and including January 31, 2006 in the event that (a) Medicis has been unable to obtain funds on terms satisfactory to Medicis sufficient to pay the full amount of the cash merger consideration, or (b) all other conditions to consummation of the merger are satisfied or capable of being satisfied and the sole reason the merger has not been consummated is that one or more of the regulatory conditions have not been satisfied at the time of the extension, except that this right to terminate the merger agreement is not available to any party whose failure to fulfill any obligation under the merger agreement has been the cause of the failure of the merger to close (this date, as it may be extended, is referred to herein as the “termination date”);
	•	any governmental entity issues an order, decree or ruling or takes any other action permanently restraining, enjoining or otherwise prohibiting the merger, and the order, decree, ruling or other action has become final and nonappealable;
	•	Inamed stockholders do not adopt the merger agreement and approve the merger at a duly convened stockholders meeting at which the vote to adopt the merger agreement and approve the merger was taken; or
	•	Medicis stockholders do not approve the issuance of Medicis common stock to Inamed stockholders in the merger at a duly convened stockholders meeting at which the vote to approve the share issuance was taken.

	Termination by Medicis

	•	Inamed breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which would result in a failure of a closing condition relating to the accuracy of the representations and warranties of Inamed or the performance by Inamed of its obligations under the merger agreement and the breach or failure to perform cannot be or has not been cured prior to the termination date;
	•	the Inamed board of directors withdraws or adversely modifies its recommendation of the merger, or resolves to do so;
	•	the Inamed board of directors approves or recommends to Inamed stockholders an acquisition proposal other than the merger agreement, or resolves to do so;
	•	a tender offer or exchange offer for shares of Inamed common stock is commenced (other than by Medicis or any of its affiliates) and the Inamed board of directors recommends that the Inamed stockholders tender their shares in such tender or exchange offer or such board of directors fails to recommend that the Inamed stockholders reject such tender or exchange offer within ten business days after receipt of Medicis’ request to do so; or
	•	for any reason Inamed fails to call, hold or convene the Inamed stockholders’ meeting on or before the fifth business day prior to the termination date, subject to certain limitations.

126

---

Table of Contents

	Termination by Inamed

	•	Medicis breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which would result in a failure of a closing condition relating to the accuracy of the representations and warranties of Medicis or the performance of its obligations under the merger agreement and the breach or failure to perform cannot be or has not been cured prior to the termination date;
	•	the Medicis board of directors withdraws or adversely modifies its recommendation of the share issuance, or resolves to do so;
	•	the Medicis board of directors approves or recommends to Medicis stockholders an acquisition proposal other than the merger agreement, or resolves to do so;
	•	a tender offer or exchange offer for shares of Medicis common stock is commenced (other than by Inamed or any of its affiliates) and the Medicis board of directors recommends that the Medicis stockholders tender their shares in such tender or exchange offer or such board of directors fails to recommend that the Medicis stockholders reject such tender or exchange offer within ten business days after receipt of Inamed’s request to do so; or
	•	for any reason Medicis fails to call, hold or convene the Medicis stockholders’ meeting on or before the fifth business day prior to the termination date, subject to certain limitations.

	Expense Fees

127

---

Table of Contents

	Termination Fees

	•	prior to the Inamed special meeting, any person publicly announces an acquisition proposal relating to Inamed which has not been expressly and bona fide publicly withdrawn;
	•	the merger agreement is terminated (i) by either Medicis or Inamed because of Inamed’s failure to obtain the requisite stockholder approval at the Inamed special meeting or (ii) by Medicis as a result of a breach by Inamed of any representation, warranty, covenant or agreement (a) which would result in a failure of Inamed to perform its obligations under the merger agreement in all material respects, or (b) where such representations and warranties are not true and correct as of the effective time of the merger, except where such failure would not constitute a material adverse effect to Inamed, and neither (a) nor (b) can be cured prior to the termination date; and
	•	within 12 months after the date of termination of the merger agreement, Inamed enters into a definitive agreement with respect to an acquisition transaction or consummates an acquisition transaction.

	•	the Inamed board of directors has withdrawn or adversely modifies its recommendation with respect to the merger, or resolves to do so;
	•	the Inamed board of directors approves or recommends to Inamed stockholders, or resolves to do so, an acquisition proposal other than the merger agreement;
	•	a tender offer or exchange offer for shares of Inamed common stock is commenced (other than by Medicis or any of its affiliates) and the Inamed board of directors recommends that the Inamed stockholders tender their shares in such tender or exchange offer or fails to recommend that the Inamed stockholders reject such tender or exchange offer within ten business days after receipt of Medicis’ request to do so; or
	•	Inamed fails to call, hold or convene the Inamed stockholders’ meeting on or before the fifth business day prior to the termination date, subject to certain limitations.

	•	prior to the Medicis special meeting, any person publicly announces an acquisition proposal relating to Medicis which has not been expressly and bona fide publicly withdrawn;
	•	the merger agreement is terminated (i) by either Medicis or Inamed because of Medicis’ failure to obtain the requisite stockholder approval at the Medicis special meeting or (ii) by Inamed as a result of a breach by Medicis of any representation, warranty, covenant or agreement (a) which would result in a failure of Medicis to perform its obligations under the merger agreement in all material respects, or (b) where such representations and warranties are not true and correct as of the effective time of the merger, except where such failure would not constitute a material adverse effect to Medicis, and neither (a) nor (b) can be cured prior to the termination date; and
	•	within 12 months after the date of termination of the merger agreement, Medicis enters into a definitive agreement with respect to an acquisition transaction or consummates an acquisition transaction.

128

---

Table of Contents

	•	the Medicis board of directors has withdrawn or adversely modifies its recommendation with respect to the merger, or resolves to do so;
	•	the Medicis board of directors approves or recommends to Medicis stockholders an acquisition proposal other than the merger agreement, or resolves to do so;
	•	a tender offer or exchange offer for shares of Medicis common stock is commenced (other than by Inamed or any of its affiliates) and the Medicis board of directors recommends that the Medicis stockholders tender their shares in such tender or exchange offer or fails to recommend that the Medicis stockholders reject such tender or exchange offer within ten business days after receipt of Inamed’s request to do so; or
	•	Medicis fails to call, hold or convene the Medicis stockholders’ meeting on or before the fifth business day prior to the termination date, subject to certain limitations.

	•	a merger, consolidation, business combination or similar transaction involving the party or any of its significant subsidiaries pursuant to which the party’s stockholders immediately prior to such transaction would own less than 50% of the aggregate voting power of the entity surviving or resulting from such transaction;
	•	the sale, lease, exclusive license or other disposition, directly or indirectly of the assets of the party or its subsidiaries representing 50% or more of the consolidated assets of the party and its subsidiaries;
	•	the issuance, sale or other disposition of securities representing more than 50% of the voting power of the party;
	•	a transaction in which any person or group of persons acquires beneficial ownership or the right to acquire beneficial ownership of 50% or more of the outstanding voting capital stock of the party; or
	•	any combination of the above.

	Litigation Dismissal Fee

	•	the $10 million expense fee or the $70 million termination fees become payable by Medicis; or
	•	the merger agreement is terminated because Medicis stockholders do not approve the issuance of shares pursuant to the merger agreement at the Medicis special meeting.

129

---

Table of Contents

130

---

Table of Contents

	•	redeem the rights associated with Inamed’s rights agreement;
	•	amend its rights agreement, unless required to do so by a court; or
	•	adopt a new stockholder rights plan or poison pill.

	•	redeem the rights associated with Medicis’ rights agreement;
	•	amend its rights agreement, unless required to do so by a court; or
	•	adopt a new stockholder rights plan or poison pill.

	Amendments

131

---

Table of Contents

	Extensions and Waivers

	•	extend the time for the performance of any of the obligations or other acts of the other parties;
	•	waive any inaccuracies in the representations and warranties of the other parties contained in the merger agreement or in any document delivered pursuant to the merger agreement; or
	•	waive compliance by the other parties with any of the agreements or conditions contained in the merger agreement (except for those conditions relating to legal opinions); provided that after the Medicis stockholders approve the issuance of shares of Medicis common stock in the merger and the Inamed stockholders adopt the merger agreement and approve the merger, there shall be made no waiver that by law requires further approval by the Medicis or Inamed stockholders, respectively, without such approval.

132

---

Table of Contents

	•	accompanying notes to the unaudited pro forma condensed combined financial statements;
	•	separate historical audited financial statements of Medicis as of and for the year ended June 30, 2005 included in Medicis’ Annual Report on Form 10-K for the year ended June 30, 2005, which is incorporated by reference into this joint proxy statement/ prospectus;
	•	separate historical audited financial statements of Inamed as of and for the year ended December 31, 2004 included in Inamed’s Annual Report on Form 10-K for the year ended December 31, 2004, which is incorporated by reference into this joint proxy statement/ prospectus; and
	•	separate historical unaudited financial statements of Inamed as of and for the six months ended June 30, 2005 and 2004 included in Inamed’s Quarterly Reports on Form 10-Q for the six month period ended June 30, 2005 and 2004, which are incorporated by reference into this joint proxy statement/ prospectus.

133

---

Table of Contents

					Historical
													Pro Forma								Pro Forma
					Medicis				Inamed				Adjustments				Notes				Combined
					(In millions)
					Increase/ (Decrease)
ASSETS
Current assets:
	Cash and cash equivalents				$	177.8			$	81.2			$	(150.9	)			a			$	108.1
	Short-term investments					425.8				68.2				(300.0	)			b				194.0
	Accounts receivable, net					47.2				76.9				—								124.1
	Inventories, net					20.7				59.7				21.0				c				101.4
	Deferred tax assets, net					11.0				8.8				(7.4	)			g				12.4
	Other current assets					16.4				14.1				—								30.5
		Total current assets				698.9				308.9				(437.3	)							570.5
Property and equipment, net						6.1				60.4				0.2				d				66.7
Net intangible assets						259.6				49.0				805.2				e				1,113.8
Goodwill						64.7				136.4				1,241.7				f				1,442.8
Deferred tax assets						—				18.3				(18.3	)			g				—
Deferred financing costs, net						5.4				—				11.4				h				16.8
Other non-current assets						8.6				1.8				—								10.4
		Total assets			$	1,043.3			$	574.8			$	1,602.9							$	3,221.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	30.8			$	24.2			$	—							$	55.0
	Short-term contract obligation					27.5				—				—								27.5
	Current portion of long-term debt					—				12.5				6.5				h				19.0
	Income taxes payable					10.2				2.9				—								13.1
	Other current liabilities					30.4				39.3				30.0				i				99.7
		Total current liabilities				98.9				78.9				36.5								214.3
Contingent convertible senior notes						453.1				—				—								453.1
Long-term debt						—				—				643.5				h				643.5
Deferred tax liability, net						5.0				—				262.6				g				267.6
Other long-term liabilities						—				16.7				2.6				j				19.3
		Total liabilities				557.0				95.6				945.2								1,597.8
Commitments and Contingencies
Stockholders’ Equity:
	Common stock of Medicis					0.9				—				0.7				k				1.6
	Additional paid-in capital — Medicis					539.4				—				1,614.0				k				2,153.4
	Common stock of Inamed					—				0.4				(0.4	)			1				—
	Additional paid-in capital — Inamed					—				260.8				(260.8	)			1				—
	Deferred compensation					(0.7	)			(10.7	)			10.7				1				(0.7	)
	Retained earnings					288.5				226.3				(704.1	)			1				(189.3	)
	Treasury stock, at cost					(341.2	)			—				—								(341.2	)
	Accumulated other comprehensive income (loss)					(0.6	)			2.4				(2.4	)			1				(0.6	)
		Total stockholders’ equity				486.3				479.2				657.7								1,623.2
			Total liabilities and stockholders’ equity		$	1,043.3			$	574.8			$	1,602.9							$	3,221.0

134

---

Table of Contents

				Historical
												Pro Forma								Pro Forma
				Medicis				Inamed				Adjustments				Notes				Combined
				(In millions, except per share data)
				Increase/ (Decrease)
Net revenues				$	376.9			$	413.8			$	—							$	790.7
Cost of product revenue(i)					55.4				110.6				6.5				m				172.5
		Gross profit			321.5				303.2				(6.5	)							618.2
Operating expenses:
Selling, general and administrative					135.2				173.4				(11.9	)			m, n				296.7
Research and development					65.7				37.7				—				1				103.4
Depreciation and amortization					22.4				5.3				56.4				d, o				84.1
Restructuring charges					—				(0.7	)			—								(0.7	)
		Total operating expenses			223.3				215.7				44.5								483.5
Operating income					98.2				87.5				(51.0	)							134.7
Interest income					11.5				2.5				(6.0	)			p				8.0
Interest expense					(10.6	)			(1.4	)			(50.4	)			q				(62.4	)
Royalty income and other					—				4.5				—								4.5
Income before income tax expense					99.1				93.1				(107.4	)							84.8
Income tax expense					34.1				23.0				(40.4	)			r				16.7
Net income				$	65.0			$	70.1			$	(67.0	)						$	68.1
(i) amounts exclude amortization of intangible assets related to acquired products				$	19.6			$	4.7			$	41.8				o			$	66.1
Earnings Per Share (Note 6):
Net income per common share
	Basic			$	1.18															$	0.64
	Diluted			$	1.01															$	0.60
Weighted average number of common shares outstanding
	Basic				55.2																106.8
	Diluted				70.9																123.7

135

---

Table of Contents

1.	Basis of Presentation and New Accounting Pronouncements

	New Accounting Pronouncements

136

---

Table of Contents

2.	Purchase Price and Financing Considerations

	Purchase Price

137

---

Table of Contents

Number of shares of Inamed common stock outstanding as of June 30, 2005 (in thousands)			36,313
Exchange ratio			1.4205
			51,583
Multiplied by Medicis’ average stock price for the period two days prior through two days after the public announcement of the proposed merger on March 21, 2005		$	30.19
Share consideration						$	1,557.3				million
Number of shares of Inamed common stock outstanding as of June 30, 2005 (in thousands)			36,313
Cash consideration per share		$	30.00
Cash consideration							1,089.4				million
Estimated fair value of Inamed stock options outstanding as of June 30, 2005 expected to be exchanged for Medicis stock options or merger consideration*							57.4				million
Estimated value of litigation dismissal fee							(16.5	)			million
Estimated transaction costs							29.7				million
Estimated purchase price						$	2,717.3				million

*	Estimated fair value of the options is calculated by using an option pricing model, based on appropriate assumptions and Medicis stock price of $30.19, which represented the average stock price for the period two days prior through two days after the March 21, 2005 announcement of the merger transaction.

138

---

Table of Contents

		(In millions)
Book value of net assets acquired at June 30, 2005		$	479.2
Eliminate existing goodwill and other intangible assets			(185.4	)
Adjusted book value of net assets acquired			293.8
Remaining allocation:
Decrease short term investments to fair value			(0.1	)
Increase inventory to fair value(3)			21.0
Increase property and equipment to fair value			0.2
Identifiable intangible assets at fair value(1)			854.2
In-process research and development(2)			461.0
Allocation to unfavorable leases obligation			(2.6	)
Increase deferred taxes liabilities			(288.3	)
Goodwill			1,378.1
Estimated purchase price		$	2,717.3

(1)	We estimate that substantially all of the acquired identifiable intangible assets will be attributable to the following categories:

		Estimated				Estimated				Estimated Annual
		Fair Value				Useful Lives				Amortization
		(In millions)								(In millions)
Core technology including patents		$	615.5				8 to 17 years			$	39.6
Brand names			137.9				20 years				6.9
Other (consists of customer relationship, distributor relationship, and non-compete agreements)			100.8				2 to 20 years				10.2
		$	854.2							$	56.7

	We recognize that if the final valuation, which is expected to be completed within three to six months from the completion of the merger, derives different amounts from our estimate, we will adjust these expected identifiable intangible amounts to those amounts.
	In accordance with the requirements of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), the goodwill associated with the merger will not be amortized.

(2)	As required by Financial Accounting Standards Board Interpretation No. 4, “Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method” (“FIN 4”), the purchase price allocated to in-process research and development will be immediately expensed.

	We do not have sufficient information at this time to provide specifics with regard to individual products, valuation methods and appraisal methods. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other relevant laws and regulations, there are significant limitations regarding the information that can be exchanged between the parties prior to closing the transaction. Medicis and Inamed have not been able to exchange information or engage in specific discussions regarding many of the in-process research and development projects and the range of possible outcomes for these projects.
	A valuation performed using the guidance in Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations” (“SFAS No. 141”) and the AICPA Practice Aid “Assets Acquired in a Business Combination to Be Used In Research and Development Activities: A Focus on

139

---

Table of Contents

Software, Electronic Devices and Pharmaceutical Industries” would recommend the fair value be determined using the income approach on a project by project basis utilizing the following information: a forecast of the estimated future net cash flows expected and then discounting these estimated future net cash flows to their present value using an appropriate discount rate that reflects the stage of completion (risk) of the project. This risk adjustment would reflect the probability of success of each project based upon the nature of the product, the scientific data associated with the technology, the current patent situation and the stage of completion of the project. The forecast of future cash flows would require the following assumptions to be made:

	•	Revenue that is likely to result from both specific in-process research and development projects and research and development projects not yet commenced, including estimated number of units to be sold, estimated selling prices, estimated market penetration and estimated market share and year over year growth rates over the product life cycles;
	•	Cost of sales related to the potential products using historical data, industry data or other sources of market data;
	•	Sales and marketing expense using historical financial data of the acquired company, industry data or other market data;
	•	General and administrative expense; and
	•	Research and development expense.

	As data that would be needed to conduct a valuation as described above of specific projects cannot be shared due to legal constraints, and as the process will take more than three months to complete, Medicis has not done a project-by-project valuation of Inamed’s in-process research and development. Inamed has projects in various stages of clinical development. The more significant projects include the development of Responsive (for breast implant), Cohesive (for breast implant), Hydrafill (for facial contouring and wrinkle correction) and Reloxin (for correcting facial contours above eye level). Instead, Medicis determined the $461 million in-process research and development charge included as part of the Pro Forma Financial Data was a reasonable estimate based upon what it knows about the various products within the Inamed pipeline indicated above and the market for such potential products, Medicis’ general understanding of Inamed’s procedures, the amount of money spent on such projects to date and Medicis’ own extensive experience with research and development activities.
	Although we believe that Medicis’ estimate of the in-process research and development charge arising from the merger transaction of the Inamed research portfolio is reasonable, no assurance can be given that a project-by-project valuation in accordance with SFAS No. 141 based upon the above cited factors will confirm Medicis’ estimate. If the actual valuation, which is expected to be completed within three to six months from the completion of the merger, derives a different amount from the $461 million estimate, Medicis will adjust the expected write-off to that amount. The expected write-off and related disclosures will be included in the combined company’s periodic filings with the SEC.

(3)	The non-cash inventory purchase accounting adjustment of $21.0 million will impact cost of goods sold during the approximate six months after closing of the acquisition, during which time the inventory on hand on the date of the merger transaction is sold.

	Financing Considerations

	(i) Medicis will issue approximately 51.6 million shares of Medicis Class A common stock and pay approximately $1,089.4 million cash to Inamed in the transaction. The number of shares to be issued and

140

---

Table of Contents

	the additional cash consideration were computed based on the number of shares of Inamed common stock outstanding on June 30, 2005. For purposes of computing the purchase price, the price of the Medicis common stock to be issued is assumed to be $30.19 per common share, which represents the average closing price of Medicis’ common stock on the NYSE two days prior through two days after the public announcement of the proposed merger on March 21, 2005.
	(ii) The cash portion of the purchase price will be funded by Medicis in part through:

	a. The sale of short term investments with a carrying value of $299.9 million. The net investment income on such short term investment of $6 million for the year 2005 was computed based upon the average yield of 2% during 2005. The sale of short term investments and the elimination of the related annual investment income are reflected as pro forma adjustments in the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of income, respectively; and
	b. The issuance of $650 million new senior notes at an interest rate of 7.5% using Medicis’ current anticipated borrowing rates for such type of loan. The estimated interest rate is based on current bank prime rate plus applicable margin. The loan is expected to have a seven year term which amortizes at 1% per year in the first six years and 94% in the last year. The estimated fee and other origination costs related to the issuance of the notes is $11.4 million and such cost is being amortized over seven years resulting in $1.6 million of expense per annum. The interest expense on such loan of $48.8 million for the year 2005 was computed based upon the current estimated interest rate. Interest expense and amortization of deferred financing cost have been reflected in the accompanying unaudited pro forma condensed combined statement of income.

3.	Pro Forma Adjustments

	Pro Forma Balance Sheet Adjustments

141

---

Table of Contents

	Pro Forma Statement of Income Adjustments

142

---

Table of Contents

4.	Cost savings

5.	Merger Related Costs

143

---

Table of Contents

6.	Pro Forma Earnings Per Share

			(In millions except
			per share data)
BASIC
Pro forma net income			$	68.1
Historical Medicis basic weighted average shares				55.2
Incremental shares issued in the merger				51.6
Pro forma combined basic weighted average shares				106.8
Pro forma basic net income per common share			$	0.64
DILUTED
Pro forma net income			$	68.1
Add:
	Historical Medicis tax-effected interest expense and issue costs related to Old Notes			3.3
	Historical Medicis tax-effected interest expense and issue costs related to New Notes			3.4
Pro forma net income assuming dilution			$	74.8
Pro forma combined basic weighted average shares				106.8
Effect of dilutive securities:
	Historical Medicis Old Notes			5.8
	Historical Medicis New Notes			7.3
	Historical Medicis stock options and restricted stock			2.6
	Incremental dilutive securities (stock options)			1.2
Pro forma combined diluted weighted average shares				123.7
Pro forma diluted net income per common share			$	0.60

144

---

Table of Contents

7.	Inamed’s Historical Statement of Income for the Year Ended June 30, 2005

						Subtracting				Adding
		Latest				Preceding				Subsequent
		Year End				Period				Period				Recast
		Jan 1, 2004				Jan 1, 2004				Jan 1, 2005				Year Ended
		to Dec 31,				to June 30,				to June 30,				June 30,
		2004				2004				2005				2005
Net sales		$	384.4			$	190.5			$	219.9			$	413.8
Cost of goods sold			97.9				48.4				61.1				110.6
Gross profit			286.5				142.1				158.8				303.2
Operating expenses:
Selling, general and administrative			179.7				98.0				91.7				173.4
Research and development			28.8				11.9				20.8				37.7
Amortization of intangible assets			5.0				2.4				2.7				5.3
Restructuring charges			—				—				(0.7	)			(0.7	)
Total operating expenses			213.5				112.3				114.5				215.7
Operating income			73.0				29.8				44.3				87.5
Interest income			2.0				1.0				1.5				2.5
Interest expense			(1.5	)			(0.7	)			(0.6	)			(1.4	)
Royalty income and other			4.8				2.1				1.8				4.5
Income before income tax expense			78.3				32.2				47.0				93.1
Income tax expense			15.2				4.9				12.7				23.0
Net income		$	63.1			$	27.3			$	34.3			$	70.1

145

---

Table of Contents

		Medicis		Inamed
Authorized Capital Stock		The authorized capital stock of Medicis consists of (i) 150,000,000 shares of Class A Common Stock, par value $0.014 per share, (ii) 1,000,000 shares of Class B Common Stock, par value $0.014 per share and (iii) 5,000,000 shares of Preferred Stock, par value $0.01 per share.		The authorized capital stock of Inamed consists of (i) 100,000,000 shares of common stock, par value $0.01 per share, and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share.
Number of Directors		Medicis’ certificate of incorporation and bylaws provide that the Medicis board of directors will consist of not less than three nor more than twelve directors, the exact number of directors to be determined from time to time by the Medicis board of directors. The Medicis board of directors currently consists of eight directors.		Inamed’s bylaws provide that the Inamed board of directors will consist of not less than three nor more than nine directors, the exact number of directors to be fixed from time to time by the Inamed board of directors. The Inamed board of directors currently consists of six directors.
Classification of Board of Directors		Medicis’ certificate of incorporation classifies the board of directors into three separate classes, consisting as nearly equal in number as may be possible of one-third of the total number of		Inamed’s certificate of incorporation and bylaws do not provide for classification of the board of directors.

146

---

Table of Contents

		Medicis		Inamed
		directors constituting the entire board of directors, with staggered three-year terms.
Quorum of Directors		Medicis’ bylaws provide that a majority of the fixed number of directors constitutes a quorum.		Inamed’s bylaws provide that a majority of the fixed number of directors constitutes a quorum.
Cumulative Voting		Medicis’ certificate of incorporation does not provide for cumulative voting, and accordingly, holders of Medicis’ common stock do not have cumulative voting rights in connection with the election of directors.		Inamed’s certificate of incorporation does not provide for cumulative voting, and accordingly, holders of Inamed’s common stock do not have cumulative voting rights in connection with the election of directors.
Removal of Directors		Section 141(k)(1) of the DGCL provides that, unless a corporation’s certificate of incorporation provides otherwise, directors of a corporation with a classified board of directors may only be removed for cause. Medicis’ certificate of incorporation does not provide otherwise. Any Medicis director or Medicis’ entire board of directors may be removed for cause from the board of directors at any meeting of stockholders by the affirmative vote of a majority in voting power of the outstanding stock entitled to vote in an election of directors.		Inamed’s certificate of incorporation provides that, subject to the rights of the holders of any series of preferred stock to elect directors, any director may be removed from office with or without cause by the affirmative vote of the stockholders holding a majority of the shares entitled to vote in the election of such director. This provision makes it easier to remove Inamed directors than it is to remove Medicis directors.
Vacancies on the Board of Directors		Medicis’ certificate of incorporation provides that except as otherwise required by law, any vacancy on the board of directors that results from an increase in the number of directors shall be filled only by a majority of the board of directors then in office, provided that a quorum is present, and any other vacancy occurring in the board of directors shall be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.		Inamed’s certificate of incorporation and bylaws provide that any vacancies and newly created directorships shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum. Any director so elected shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred, and until a successor shall have been elected and qualified.
Stockholder Action by Written Consent		Medicis’ certificate of incorporation does not contain a prohibition upon action by written		Inamed’s bylaws provide that any action that may be taken at an annual or special meeting of

147

---

Table of Contents

		Medicis		Inamed
		consent of stockholders. Medicis’ bylaws provide that any action required to be, or which may be, taken at a meeting of stockholders, may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be (i) signed and dated by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and (ii) delivered to Medicis by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Medicis registered office shall be by hand or by certified or registered mail, return receipt requested.		stockholders may be taken without a meeting, without prior notice and without a vote, if a written consent stating the action to be taken is signed by stockholders having no less than the minimum number of votes necessary to take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
Amendment to Certificate of Incorporation		Medicis’ certificate of incorporation provides that Medicis reserves the right to amend, alter, change or repeal any provision contained in its certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders are granted subject to this reservation. Under the DGCL, Medicis’ certificate of incorporation may be amended only if the proposed amendment is approved by the board of directors and holders of a majority of the outstanding stock entitled to vote at the meeting.		Inamed’s certificate of incorporation provides that Inamed reserves the right to adopt, repeal, rescind, alter or amend any provision contained in the certificate of incorporation in the manner prescribed by statute. Under the DGCL, Inamed’s certificate of incorporation may be amended only if the proposed amendment is approved by the board of directors and holders of a majority of the outstanding stock entitled to vote at the meeting. Inamed’s certificate of incorporation also provides that where an interested stockholder, or an affiliate or associate of an interested stockholder, has proposed to repeal, rescind, alter or amend certain provisions of the certificate of incorporation, an affirmative vote of the holders of a majority of the outstanding shares of voting stock voting together as a single class, other than the shares held by the interested stockholder proposing

148

---

Table of Contents

		Medicis		Inamed
				the action, is required to approve the action.
Amendment of Bylaws		Medicis’ certificate of incorporation provides that the board of directors is expressly authorized to adopt, amend or repeal the bylaws.		Inamed’s certificate of incorporation provides that Inamed’s bylaws may be adopted, repealed, rescinded, altered or amended by the board of directors or by an affirmative vote of the holders of a majority of the outstanding shares of voting stock, voting together as a single class.
Special Meeting of Stockholders		Medicis’ bylaws provide that special meetings of the stockholders (i) may be called at any time by the chairman of the board of directors or the president or (ii) shall be called by the president or secretary at the request in writing of a majority of the board of directors.		Inamed’s bylaws provide that special meetings of stockholders may be called at any time by a majority of the board of directors, the chairman of the board of directors, the president, or by the holders of not less than 10% of the voting power of all outstanding shares of voting stock, voting together as a single class.
Notice of Stockholder Meetings		Medicis’ bylaws provide that written notice of each meeting of stockholders, stating the time and place of the meeting and the purpose of any special meeting, shall be mailed to each stockholder entitled to vote at or to notice of such meeting at the address shown on the books of Medicis not less than 10 nor more than 60 days prior to such meeting unless such stockholder waives notice of the meeting. If an agreement of merger or consolidation or a sale, lease, exchange, or other disposition of all or substantially all the property and assets of Medicis is to be considered at any annual or special meeting, the written notice shall state the purpose of such meeting and shall be given to each stockholder, whether or not entitled to vote thereon, not less than 20 days before such meeting. Any stockholder may execute a waiver of notice, in person or by proxy, either before or after any meeting, and shall be deemed to have waived notice if he or she is present at such meeting in person		Inamed’s bylaws provide that written notice of each annual or special meeting stating the date, time, and place of the meeting and the purpose of any special meeting shall be delivered personally or mailed to each stockholder entitled to vote at such meeting at the address shown on the books of Inamed not less than 10 nor not more than 60 days before the date of the meeting.

149

---

Table of Contents

		Medicis		Inamed
		or by proxy. If such notice is for a special meeting, the purpose of such meeting shall be stated in the waiver of notice of such meeting and the business transacted at such meeting shall be limited to the matters so stated in said notice and any matters reasonably related thereto. Notice of any meeting may be given by the chairman of the board of directors, the president or the secretary.
Delivery and Notice Requirements of Stockholder Nominations and Proposals		Medicis’ bylaws provide that any business to be conducted at an annual meeting, including, without limitation, any nomination for election to the board of directors, must be: • specified in the notice of meeting given by or at the direction of the board of directors; • brought before the annual meeting by or at the direction of the chair of the meeting, the board of directors, or a committee thereof; or • brought before the annual meeting, in compliance with notice procedures, by any stockholder of Medicis who is a stockholder of record on the record date for the determination of stockholders entitled to vote at such meeting. Medicis’ bylaws also provide that a stockholder intending to nominate a candidate for election to the board of directors or to bring any other business before an annual meeting must give timely written notice thereof to the secretary of Medicis. In order to be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of Medicis, not less than 75 days nor more than 105 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided,		Under Inamed’s bylaws, stockholders who are entitled to vote for the election of directors and who provide timely written notice to Inamed’s secretary may nominate a person for election to the board or make a stockholder proposal. Notice is timely if Inamed receives the notice not less than 90 days or more than 120 days prior to the stockholders’ meeting or, if no annual meeting was held in the previous year, not less than 90 nor more than 120 days in advance of May 15 of the current year. In addition, the stockholder giving notice of nominees for election must provide: • the name and record address of the stockholder; • the class and number of shares beneficially owned by the stockholder; and • certain information about the proposed nominee.

150

---

Table of Contents

		Medicis		Inamed
		however, that in the event that the annual meeting is called for a date that is not within the 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 15th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the meeting was made, whichever first occurs. A stockholder’s notice to the secretary shall set forth as to each matter of any other business: • a brief description of the business desired to be brought before the annual meeting; and • the reasons for conducting such business at the annual meeting. A stockholder’s notice to the secretary shall set forth as to the stockholder proposing any such nomination or other business: • the name and record address of the stockholder; • the class and number of shares of Medicis stock which are beneficially owned by the stockholder; • a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of the stockholder in such nomination or business; and • a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. Medicis may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of such proposed nominee to serve as director.

151

---

Table of Contents

		Medicis		Inamed
		The chair of the meeting shall, if the facts warrant, determine and declare to the meeting that the nomination was not made in accordance with procedure, and if he should so determine, shall so declare to the meeting and the nomination shall be disregarded.
Proxy		Medicis’ bylaws provide that a stockholder may vote either in person or by proxy duly executed in writing. No proxy shall be valid after three years from its date unless the proxy expressly provides for a longer period.		Inamed’s bylaws provide that each stockholder may vote in person or by proxy duly executed in writing. No proxy shall be valid after three years from its date unless the proxy expressly provides for a longer period.
Quorum of Stockholders		Medicis’ bylaws provide that the holders of a majority of the shares issued and outstanding and entitled to vote at a meeting, present in person or by proxy, shall constitute a quorum.		Inamed’s bylaws provide that the holders of a majority of the shares issued and outstanding and entitled to vote at a meeting, present in person or by proxy, shall constitute a quorum.
Preemptive Rights		Medicis’ certificate of incorporation does not grant any preemptive rights.		Inamed’s certificate of incorporation does not grant any preemptive rights.
Dividends		The DGCL provides that directors of a corporation may declare and pay dividends out of the corporation’s surplus, or, subject to certain limitations, out of its net profits. Holders of Medicis common stock share ratably any dividend declared by Medicis, subject to the rights of the preferred stockholders.		The DGCL provides that directors of a corporation may declare and pay dividends out of the corporation’s surplus, or, subject to certain limitations, out of its net profits. Inamed’s certificate of incorporation places no additional restrictions on the board’s ability to declare dividends.
Limitation of Personal Liability of Directors		Medicis’ certificate of incorporation provides that, to the fullest extent permitted by the DGCL, no director will be personally liable to Medicis or its stockholders for monetary damages for breach of fiduciary duty as a director.		Inamed’s certificate of incorporation provides that, to the fullest extent permitted by the DGCL, no director will be personally liable to Inamed or its stockholders for monetary damages for breach of fiduciary duty as a director.
Indemnification of Officers and Directors		Medicis’ certificate of incorporation and bylaws provide that Medicis will indemnify each person who was or is made a party to or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was		Inamed’s certificate of incorporation does not contain any provisions regarding the indemnification of directors and officers. Inamed’s bylaws provide that Inamed shall indemnify any person who is a party or is threatened to be made a party to any threatened, pending or completed action by reason of the person’s service for or at the

152

---

Table of Contents

		Medicis		Inamed
		a director, officer or employee of Medicis or is or was serving at the request of Medicis as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or (if serving for another corporation at the request of Medicis) agent or in any other capacity while serving as a director, officer, employee or (if serving for another corporation at the request of Medicis) agent, to the fullest extent authorized by the DGCL, against all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or (if serving for another corporation at the request of Medicis) agent and shall inure to the benefit of his or her heirs, executors and administrators. Medicis shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors. The right to indemnification is a contract right and shall include the right to be paid by Medicis the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was, or is rendered by such person while a director or		request of Inamed as follows: • In the case of actions other than those by or in the right of Inamed, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, if the person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of Inamed, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. • In the case of actions by or in the right of Inamed, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of Inamed, except that no indemnification will be made in respect of any matter as to which such person shall have been adjudged to liable to Inamed by a court of competent jurisdiction, unless the court determines that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses. Inamed’s bylaws provide that indemnification shall be authorized upon a determination that the person has satisfied the applicable standard of conduct by (i) a majority vote of a quorum consisting of directors not party to the action, (ii) if a quorum of disinterested directors is not obtainable or so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. If the person has

153

---

Table of Contents

		Medicis		Inamed
		officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to Medicis of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified. Medicis’ bylaws also provide that if a claim is not paid in full by Medicis within 90 days after a written claim has been received by Medicis, the claimant may at any time thereafter bring suit against Medicis to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to Medicis) that the claimant has not met the standards of conduct which make it permissible under the DGCL for Medicis to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on Medicis. Neither the failure of Medicis (including its board of directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by Medicis (including its board of directors, independent legal counsel or		been successful on the merits or otherwise, including dismissal without prejudice or settlement without admission of liability, the person will be indemnified against expenses. Any indemnification must be made within 90 days upon the written request of the agent, unless a determination is made that the agent is not entitled to indemnification. Except as limited by the above, Inamed will advance expenses if the person undertakes to repay the advancement if it is ultimately determined that such person is not entitled to be indemnified. However, no advance will be made if a determination is made by (i) a majority vote of a quorum consisting of directors not party to the action, or (ii) if a quorum of disinterested directors is not obtainable or so directs, by independent legal counsel in a written opinion, that based upon the facts known to the board of directors or counsel at the time the determination is made, the person acted in bad faith and in a manner that the person did not believe to be in or not opposed to the best interest of Inamed, or with respect to a criminal proceeding, that the person believed or had reasonable cause to believe that the conduct was unlawful. Inamed’s bylaws provide that a person’s right to indemnification is not exclusive of any other rights to which the person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Inamed’s bylaws also provide that Inamed may purchase and maintain insurance against Inamed’s indemnification expenses.

154

---

Table of Contents

		Medicis		Inamed
		stockholders) that the claim ant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Medicis’ certificate of incorporation and bylaws also provide that the right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of certificate of incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Medicis’ certificate of incorporation and bylaws further provide that Medicis may maintain insurance at its expense to protect itself and any director, officer, employee or agent of Medicis or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not Medicis would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Appraisal Rights		The DGCL provides that a stockholder has the right, in certain circumstances, to demand an appraisal of the fair value of his or her shares. Appraisal rights are not available to Medicis stockholders in the merger.		The DGCL provides that a stockholder has the right, in certain circumstances, to demand an appraisal of the fair value of his or her shares. Appraisal rights are available to Inamed stockholders in the merger. See “The Merger — Appraisal Rights” beginning on page 94.
Certain Business Combination Restrictions		Section 203 of the DGCL protects publicly-traded Delaware corporations from hostile takeovers, and from actions following the takeover, by prohibiting some transactions once an acquiror has gained a significant holding in the corporation. A corporation may		Section 203 of the DGCL protects publicly-traded Delaware corporations from hostile takeovers, and from actions following the takeover, by prohibiting some transactions once an acquiror has gained a significant holding in the corporation. A corporation may

155

---

Table of Contents

		Medicis		Inamed
		elect not to be governed by Section 203 of the DGCL. As neither Medicis’ certificate of incorporation nor its bylaws contain this election, Medicis is governed by Section 203 of the DGCL.		elect not to be governed by Section 203 of the DGCL. As neither Inamed’s certificate of incorporation nor its bylaws contain this election, Inamed is governed by Section 203 of the DGCL.
Stockholder Rights Plan		Medicis is a party to the Amended and Restated Rights Agreement dated as of August 17, 2005. The following description of the rights agreement is subject in its entirety to the terms and conditions of the rights agreement. You should read the rights agreement carefully. See “Additional Information — Where You Can Find More Information” below. Exercisability of Rights. Pursuant to Medicis’ rights agreement, Medicis declared a dividend of one special stock purchase right for each outstanding share of Medicis common stock on August 30, 1995, and one special stock purchase right attaches to each share of Medicis common stock issued after this date and prior to the earlier of any distribution, redemption or final expiration date. Each right entitles the holder after the rights become exercisable to purchase from Medicis one — one hundredth (1/100) of a preferred share at a price of $200, subject to adjustment. The rights currently are attached to and trade only together with outstanding certificates of Medicis common stock. The rights will not be exercisable or transferable apart from Medicis common stock until the earlier of: • ten days following a public announcement that a person or group has become an “acquiring person,” or a person who has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of Medicis common stock or 20% or more		Inamed is a party to the Amended and Restated Rights Agreement dated as of November 16, 1999, as amended by Amendment No. 1 dated as of December 22, 1999 and Amendment No. 2 dated as of April 1, 2002. The following description of the rights agreement, as amended, is subject in its entirety to the terms and conditions of the rights agreement. You should read the rights agreement carefully. See “Additional Information — Where You Can Find More Information” below. Pursuant to the rights agreement, one right is attached to each share of Inamed common stock outstanding. Exercisability of Rights. The rights become exercisable and henceforth transferable separately from Inamed common stock upon the earlier of: • ten business days after a person or group has acquired beneficial ownership of 15% or more of Inamed’s outstanding common stock, with certain exceptions; or • ten business days after a person or group announces a tender or exchange offer which would result in a person or group acquiring 15% or more of Inamed’s outstanding common stock. Once the rights become exercisable, all rights owned by the acquiring person, and the acquiring person’s affiliates and associates, will be null and void. If the rights become exercisable as the result of a tender offer, unless redeemed by Inamed, each right will entitle the registered

156

---

Table of Contents

		Medicis		Inamed
		for certain institutional investors; or • ten days, or a later date as approved by a majority of disinterested directors prior to the time any person becomes an acquiring person, after a person or group commences, or announces an intention to commence, a tender or exchange offer, the consummation of which would result in the beneficial ownership by a person or group of 15% or more of Medicis common stock or 20% or more for certain institutional investors. “Flip-In” Feature. If a person becomes an acquiring person, all holders of rights except the acquiring person may, for $200, purchase shares of Medicis common stock with a market value of $400, based on the market price of Medicis common stock prior to such acquisition. “Flip-Over” Feature. If Medicis is acquired in a merger or similar transaction after an acquiring person becomes such, all holders of rights except the acquiring person may, for $200, purchase shares of the acquiring corporation with a market value of $400 based on the market price of the acquiring corporation’s stock, prior to such merger. “Exchange” Feature. After a person or group becomes an acquiring person, but before an acquiring person owns 50% or more of Medicis’ common stock, the Medicis board of directors may extinguish the rights by exchanging one share of Medicis common stock or an equivalent security for each right, other than rights held by the acquiring person. Redemption of Rights. The Medicis board of directors may redeem the rights for $0.001 per right at any time before any person or group becomes an		holder to purchase 1/1000 th shares of Series A preferred stock at an exercise price of $80, subject to adjustment. Each share of Series A preferred stock is entitled to a preferential quarterly dividend payment of $1 per share or 1,000 times the aggregate per share amount of all dividends declared on Inamed common stock. In the event of a liquidation, the holders of Series A preferred stock are entitled to a preferential liquidation payment of $1,000 per share, plus accrued dividends, or 1,000 times the aggregate amount to be distributed per share of Inamed common stock. “Flip-In” Feature. Once a person or group acquires 15% of more of Inamed’s outstanding common stock, each right except the rights held by the acquiring person will entitle its holder to purchase, for the exercise price of the right, that number of shares of Inamed common stock having a market value equal to two times the exercise price of the right. “Flip-Over” Feature. In the event that Inamed is acquired in a merger or other business combination transaction or similar transaction, each right except the rights held by the acquiring person will entitle its holder to purchase, for the exercise price of the right, that number of shares of the acquiring entity’s common stock having a market value equal to two times the exercise price of the right, unless the rights are earlier redeemed by Inamed. “Exchange” Feature. At any time after any person or group acquires 15% of Inamed’s common stock but before the person or group’s acquisition of 50% or more of the outstanding common stock, the board of directors may exchange the rights at an exchange ratio of one common share per right. Redemption of Rights. Inamed

157

---

Table of Contents

		Medicis		Inamed
		acquiring person. If the board redeems any rights, it must redeem all of the rights. Once the rights are redeemed, the only right of the holders of rights will be to receive the redemption price of $0.001 per right. The redemption price will be adjusted if Medicis has a stock split or stock dividends of its common stock. Amendment of Rights Agreement. The terms of the rights agreement may be amended by the Medicis board of directors without the consent of the holders of the rights except that after a person or group becomes an acquiring person, the board may not amend the agreement in a way that adversely affects holders of the rights. Final Expiration Date. The rights expire on August 17, 2015 unless the expiration date is extended or the rights are redeemed or exchanged. The rights agreement does not apply to the proposed merger with Inamed described in this joint proxy statement/ prospectus.		may redeem the rights in whole at a price of $.01 per right at any time before the close of business on the tenth business day after a person or group obtains 15% or more of Inamed’s outstanding common stock. Amendment of Rights Agreement. With limited exceptions, the rights agreement may be amended by the board of directors without consent of the holders of the rights at any time before any person or group obtains 15% or more of Inamed’s outstanding common stock. After a person or group acquires 15% or more of Inamed’s common stock, the board of directors may not amend the rights agreement in any respect that may adversely affect the interests of the right holders without their approval. Final Expiration Date. The rights expire on June 2, 2007 unless the expiration date is extended or the rights are redeemed or exchanged. Inamed’s rights agreement has been amended in connection with the execution of the merger agreement to exclude the merger agreement and the merger from the scope of the rights agreement. Accordingly, the rights agreement does not apply to the proposed merger with Medicis described in this joint proxy statement/ prospectus.

	Medicis

158

---

Table of Contents

	Inamed

159

---

Table of Contents

	•	annual report of Medicis on Form 10-K for the fiscal year ended June 30, 2005, filed with the SEC on September 13, 2005;
	•	proxy statement on Schedule 14A dated October 18, 2004, filed with the SEC on October 21, 2004:
	•	current report of Medicis on Form 8-K dated October 19, 2005, filed with the SEC on October 20, 2005;
	•	the description of the amended and restated rights agreement, contained in the registration statement on Form 8-A/ A filed pursuant to Section 12 of the Exchange Act, dated August 17, 2005, filed with the SEC on August 18, 2005 and any amendment or report filed with the SEC for the purpose of updating the description; and
	•	the description of the common stock of Medicis contained in its registration statement, filed with the SEC on Form 8-A dated April 11, 1990 and any amendment or report filed with the SEC for the purpose of updating the description.

	•	annual report of Inamed on Form 10-K for the fiscal year ended December 31, 2004, filed with the SEC on March 16, 2005;
	•	amendment to the annual report of Inamed on Form 10-K/ A for the fiscal year ended December 31, 2004, filed with the SEC on April 29, 2005;
	•	quarterly report of Inamed on Form 10-Q for the quarterly period ended March 31, 2005, filed with the SEC on May 10, 2005;
	•	amendment to the quarterly report of Inamed on Form 10-Q/ A for the quarterly period ended March 31, 2005, filed with the SEC on May 11, 2005;
	•	quarterly report of Inamed on Form 10-Q for the quarterly period ended June 30, 2005, filed with the SEC on August 9, 2005;
	•	current report of Inamed on Form 8-K dated March 20, 2005, filed with the SEC on March 21, 2005;
	•	current report of Inamed on Form 8-K dated May 6, 2005, filed with the SEC on May 6, 2005;
	•	current report of Inamed on Form 8-K dated July 15, 2005, filed with the SEC on July 18, 2005;

160

---

Table of Contents

	•	the description of the rights agreement, contained in the registration statement on Form 8-A12G/ A filed pursuant to Section 12 of the Exchange Act, dated November 16, 1999, filed with the SEC on November 19, 1999, and any amendment or report filed with the SEC for the purpose of updating the description; and
	•	the description of the common stock of Inamed contained in its registration statement filed pursuant to Section 12 of the Securities Exchange Act of 1934, and any amendment or report filed with the SEC for the purpose of updating the description.

Medicis Pharmaceutical Corporation		Inamed Corporation
8125 North Hayden Road		5540 Ekwill Street
Scottsdale, Arizona 85258		Santa Barbara, California 93111
(602) 808-8800		(805) 683-6761
Attn: Investor Relations		Attn: Investor Relations

161

---

Table of Contents

---

Table of Contents

					Page
ARTICLE I THE MERGER						A-1
	Section 1.01.		The Merger			A-1
	Section 1.02.		Closing			A-1
	Section 1.03.		Effect of the Merger			A-1
	Section 1.04.		Certificate of Incorporation of the Surviving Corporation			A-1
	Section 1.05.		Bylaws of the Surviving Corporation			A-2
	Section 1.06.		Directors and Officers of the Surviving Corporation			A-2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES						A-2
	Section 2.01.		Conversion of Securities			A-2
	Section 2.02.		Adjustment to Merger Consideration			A-3
	Section 2.03.		Dissenting Stockholders			A-4
	Section 2.04.		Exchange of Certificates			A-4
	Section 2.05.		Stock Transfer Books			A-6
	Section 2.06.		Stock Options			A-6
	Section 2.07.		Employee Stock Purchase Plan			A-8
	Section 2.08.		Restricted Stock			A-8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY						A-9
	Section 3.01.		Organization and Qualification			A-9
	Section 3.02.		Capitalization			A-9
	Section 3.03.		Subsidiaries			A-10
	Section 3.04.		Authority; Non-Contravention; Approvals			A-10
	Section 3.05.		Reports and Financial Statements			A-12
	Section 3.06.		Absence of Undisclosed Liabilities			A-13
	Section 3.07.		Litigation			A-13
	Section 3.08.		Absence of Certain Changes or Events			A-13
	Section 3.09.		Registration Statement, Etc			A-14
	Section 3.10.		Compliance with Applicable Law; Permits			A-14
	Section 3.11.		Company Material Contracts; Defaults			A-15
	Section 3.12.		Taxes			A-16
	Section 3.13.		Employee Benefit Plans; ERISA			A-17
	Section 3.14.		Labor and Other Employment Matters			A-19
	Section 3.15.		Environmental Matters			A-20
	Section 3.16.		Intellectual Property			A-20
	Section 3.17.		Real Property			A-23
	Section 3.18.		Regulatory Compliance			A-24
	Section 3.19.		Insurance			A-25
	Section 3.20.		Opinion of Financial Advisor			A-26
	Section 3.21.		Brokers and Finders			A-26
	Section 3.22.		Foreign Corrupt Practices and International Trade Sanctions			A-26

A-i

---

Table of Contents

					Page
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT						A-26
	Section 4.01.		Organization and Qualification			A-26
	Section 4.02.		Capitalization			A-26
	Section 4.03.		Subsidiaries			A-28
	Section 4.04.		Authority; Non-Contravention; Approvals			A-28
	Section 4.05.		Reports and Financial Statements			A-29
	Section 4.06.		Absence of Undisclosed Liabilities			A-30
	Section 4.07.		Litigation			A-30
	Section 4.08.		Absence of Certain Changes or Events			A-31
	Section 4.09.		Registration Statement, Etc			A-31
	Section 4.10.		Compliance with Applicable Law; Permits			A-32
	Section 4.11.		Parent Material Contracts; Defaults			A-32
	Section 4.12.		Taxes			A-33
	Section 4.13.		Employee Benefit Plans; ERISA			A-34
	Section 4.14.		Labor and Other Employment Matters			A-35
	Section 4.15.		Environmental Matters			A-36
	Section 4.16.		Intellectual Property			A-37
	Section 4.17.		Real Property			A-39
	Section 4.18.		Regulatory Compliance			A-40
	Section 4.19.		Insurance			A-42
	Section 4.20.		Opinion of Financial Advisor			A-42
	Section 4.21.		Brokers and Finders			A-42
	Section 4.22.		Foreign Corrupt Practices and International Trade Sanctions			A-42
	Section 4.23.		Financing			A-42
	Section 4.24.		Interim Operations of Merger Sub			A-42
ARTICLE V COVENANTS						A-43
	Section 5.01.		Conduct of Business by the Company Pending the Closing			A-43
	Section 5.02.		Conduct of Business by Parent Pending the Closing			A-45
	Section 5.03.		No Solicitation by the Company			A-48
	Section 5.04.		No Solicitation by Parent			A-50
	Section 5.05.		Access to Information; Confidentiality			A-51
	Section 5.06.		Employee Benefits			A-52
	Section 5.07.		Registration Statement; Joint Proxy Statement; Stockholder Meetings; Listing of Shares			A-53
	Section 5.08.		Section 16 Matters			A-54
	Section 5.09.		Public Announcements			A-55
	Section 5.10.		Expenses and Fees			A-55
	Section 5.11.		Agreement to Cooperate			A-56
	Section 5.12.		Directors’ and Officers’ Indemnification			A-58
	Section 5.13.		Rule 145			A-59
	Section 5.14.		Tax Free Merger			A-59
	Section 5.15.		Stockholder Litigation			A-59
	Section 5.16.		Control of Other Party’s Business			A-60
	Section 5.17.		Rights Agreements			A-60

A-ii

---

Table of Contents

					Page
	Section 5.18.		Board of Directors			A-60
	Section 5.19.		Financing			A-60
	Section 5.20.		Further Assurances			A-61
ARTICLE VI CONDITIONS TO THE MERGER						A-61
	Section 6.01.		Conditions to the Obligations of Each Party			A-61
	Section 6.02.		Conditions to the Obligations of Parent			A-62
	Section 6.03.		Conditions to the Obligations of the Company			A-63
ARTICLE VII TERMINATION						A-63
	Section 7.01.		Termination			A-63
	Section 7.02.		Effect of Termination			A-65
ARTICLE VIII MISCELLANEOUS						A-65
	Section 8.01.		Non-Survival of Representations and Warranties			A-65
	Section 8.02.		Notices			A-65
	Section 8.03.		Defined Terms			A-66
	Section 8.04.		Interpretation			A-74
	Section 8.05.		Miscellaneous			A-74
	Section 8.06.		Counterparts			A-75
	Section 8.07.		Amendments; Extensions			A-75
	Section 8.08.		Entire Agreement			A-75
	Section 8.09.		Severability			A-75
	Section 8.10.		Specific Performance			A-75
	Section 8.11.		Disclosure			A-75
EXHIBITS
Exhibit A — Form of Affiliate Letter
Exhibit B — Tax Opinion Certificate of Parent and Merger Sub
Exhibit C — Tax Opinion Certificate of the Company

A-iii

---

Table of Contents

A-1

---

Table of Contents

	(i) Subject to this Article II, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled in accordance with Section 2.01(a)(ii) and Dissenting Shares referred to in Section 2.03) shall be converted into the right to receive (A) 1.4205 (the “Exchange Ratio”) shares of Class A common stock, par value $0.014 per share (“Parent Common Stock”), of Parent (the “Stock Merger Consideration”) and (B) $30.00 in cash, without interest (the “Cash Merger Consideration” and, together with the Stock Merger Consideration, the “Merger Consideration”), payable upon the surrender of the Certificates (as defined in Section 2.04(b)). From and after the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a Certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive, upon surrender of such Certificate in accordance with Section 2.04, the Merger Consideration pursuant to this Section 2.01(a), any cash in lieu of fractional shares payable pursuant to Section 2.04(e) and any dividends or other distributions to which such holder is entitled pursuant to Section 2.04(c), without interest.
	(ii) All shares of Company Common Stock that are (A) held by the Company as treasury shares or (B) owned by Parent or any wholly-owned Subsidiary of Parent, in each case, immediately prior to the Effective Time, shall be cancelled and retired and shall cease to exist, and no cash, securities of Parent or other consideration shall be delivered in exchange therefor.
	(iii) Each share of common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation.

A-2

---

Table of Contents

	(i) The Exchange Ratio shall be adjusted to a number, rounded to the nearest fourth decimal place, equal to (x) the product of 0.4500 and the Closing Transaction Value, divided by (y) the product of the Aggregate Company Share Number and the Closing Parent Stock Price; and
	(ii) The Cash Merger Consideration shall be adjusted to an amount, rounded to the nearest cent, equal to the quotient obtained by dividing (x) the amount obtained by subtracting the Aggregate Dissenter’s Value from the product of 0.5500 and the Closing Transaction Value, by (y) the Aggregate Company Share Number.

	(i) “Aggregate Dissenter’s Value” means the product of (x) the aggregate number of Dissenting Shares determined at Closing, and (y) the sum of (1) the Cash Merger Consideration (before any adjustment pursuant to Section 2.02) and (2) the product of the Exchange Ratio (before any adjustment pursuant to Section 2.02) and the Closing Parent Stock Price.
	(ii) “Aggregate Cash Amount” means the product of (x) the Cash Merger Consideration (before any adjustment pursuant to Section 2.02) and (y) the Aggregate Company Share Number.
	(iii) “Aggregate Company Share Number” means the number obtained by subtracting (x) the aggregate number of shares of Company Common Stock to be cancelled in the Merger pursuant to Section 2.01(a)(ii) and (y) the aggregate number of Dissenting Shares determined at Closing, from (z) the aggregate number of shares of Company Common Stock outstanding on the Closing Date.
	(iv) “Aggregate Parent Share Number” means the product of (x) the Exchange Ratio (before any adjustment pursuant to Section 2.02) and (y) the Aggregate Company Share Number.
	(v) “Aggregate Parent Stock Value” means the product of (x) the Aggregate Parent Share Number (before any adjustment pursuant to Section 2.02) and (y) the Closing Parent Stock Price.
	(vi) “Closing Parent Stock Price” means the mean between the high and low selling prices, regular way, of the Parent Common Stock on the NYSE on the date of the Effective Time.
	(vii) “Closing Transaction Value” means the sum of (x) the Aggregate Cash Amount, (y) the Aggregate Parent Stock Value and (z) the Aggregate Dissenters Value.

A-3

---

Table of Contents

A-4

---

Table of Contents

A-5

---

Table of Contents

A-6

---

Table of Contents

A-7

---

Table of Contents

A-8

---

Table of Contents

A-9

---

Table of Contents

A-10

---

Table of Contents

A-11

---

Table of Contents

A-12

---

Table of Contents

	(i) the Company and its Subsidiaries have conducted their business only in the ordinary course consistent with past practice;
	(ii) there has not been any split, combination or reclassification of any of the Company’s capital stock or any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, in lieu of, or in substitution for, shares of the Company’s capital stock;
	(iii) except as required by a change in GAAP, there has not been any change in accounting methods, principles or practices by the Company materially affecting the consolidated financial position or results of operations of the Company; and

A-13

---

Table of Contents

	(iv) the Company and its Subsidiaries have not made any material Tax election or settled or compromised any material Tax liability or refund, other than Tax elections required by Law, or changed any annual Tax accounting period or method of Tax accounting, filed any material amendment to a Tax Return, entered into any closing agreement relating to any material Tax, surrendered any right to claim a material Tax refund, or consented to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment; and
	(v) no action has been taken by the Company or its Subsidiaries to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan or Company Stock Option.

A-14

---

Table of Contents

A-15

---

Table of Contents

A-16

---

Table of Contents

A-17

---

Table of Contents

A-18

---

Table of Contents

A-19

---

Table of Contents

A-20

---

Table of Contents

A-21

---

Table of Contents

A-22

---

Table of Contents

A-23

---

Table of Contents

A-24

---

Table of Contents

A-25

---

Table of Contents

A-26

---

Table of Contents

A-27

---

Table of Contents

A-28

---

Table of Contents

A-29

---

Table of Contents

A-30

---

Table of Contents

	(i) Parent and its Subsidiaries have conducted their business only in the ordinary course consistent with past practice;
	(ii) there has not been any split, combination or reclassification of any of Parent’s capital stock or any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, in lieu of, or in substitution for, shares of Parent’s capital stock;
	(iii) except as required by a change in GAAP, there has not been any change in accounting methods, principles or practices by Parent materially affecting the consolidated financial position or results of operations of Parent;
	(iv) Parent and its Subsidiaries have not made any material Tax election or settled or compromised any material Tax liability or refund, other than Tax elections required by Law, or changed any annual Tax accounting period or method of Tax accounting, filed any material amendment to a Tax Return, entered into any closing agreement relating to any material Tax, surrendered any right to claim a material Tax refund, or consented to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment; and
	(v) no action has been taken by Parent or its Subsidiaries to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Parent Benefit Plan or Parent Stock Option.

A-31

---

Table of Contents

A-32

---

Table of Contents

A-33

---

Table of Contents

A-34

---

Table of Contents

A-35

---

Table of Contents

A-36

---

Table of Contents

A-37

---

Table of Contents

A-38

---

Table of Contents

A-39

---

Table of Contents

A-40

---

Table of Contents

A-41

---

Table of Contents

A-42

---

Table of Contents

	(a) (i) amend or propose to amend the Company’s certificate of incorporation or bylaws or similar governing documents, or materially amend or propose to materially amend any of the Company’s Subsidiaries’ certificate of incorporation or bylaws or similar governing documents, (ii) split, combine or reclassify their outstanding capital stock or issue or authorize the issuance of any other security in respect or, in lieu of, or in substitution for, share of its capital stock, (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company or any of its Subsidiaries by a Subsidiary of the Company, (iv) merge or consolidate with any Person (other than a merger among wholly-owned Subsidiaries of the Company or a merger between the Company and its wholly-owned Subsidiaries), or (v) enter into any agreement with respect to the voting of its capital stock or other securities held by the Company or any of its Subsidiaries;
	(b) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares of Company Common Stock (A) upon the exercise of Company Purchase Rights outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (iv) of this clause (b), (B) upon exercise of Company Stock Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (ii) or (iii) of this clause (b) or (C) in accordance with the terms of the Company Rights Agreement as in effect on the date hereof, (ii) the Company may grant Company Stock Options to purchase up to an aggregate of 100,000 shares of Company Common Stock to new employees of the Company or its Subsidiaries in accordance with the terms of the Company Stock Plans consistent with past practice and with an exercise price per share of Company Common Stock no less than the fair market value of a share of Company Common Stock on the date of grant, provided that the vesting of such options does not accelerate as a result of the Merger or the transactions contemplated by this Agreement and provided, further, that no such grant to purchase more than 25,000 shares of Company Common Stock shall be made to any individual, (iii) the Company may grant Company Stock Options pursuant to existing contractual relationships as set forth in Section 5.01(b) of the Company Disclosure Letter, (iv) the Company may grant Company Purchase Rights in accordance with the terms of the Company ESPP (as in effect on the date hereof), subject to Section 2.07, (v) the Company may grant up to an aggregate of 10,000 shares of Company Restricted Stock to new employees of the Company or its Subsidiaries in accordance with the terms of the Company Restricted Stock Plan consistent with past practice, provided that the vesting of such shares does not accelerate as a result of the Merger or the transactions contemplated by this Agreement and provided, further, that no such grant to purchase more than 1,000 shares of Company Common Stock shall be

A-43

---

Table of Contents

	made to any individual, and (vi) transactions exclusively among the Company and its Subsidiaries shall be permitted;
	(c) except for transactions exclusively among the Company and its Subsidiaries, (i) issue any debt securities, incur, guarantee or otherwise become contingently liable with respect to any indebtedness for borrowed money, or enter into any arrangement having the economic effect of any of the foregoing (other than in connection with accounts payable in the ordinary course of business or borrowings under the existing credit facilities of the Company or any of its Subsidiaries), (ii) make any loans, advances or capital contributions to, or investments in, any Person, (iii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Company Stock Options pursuant to the terms of the Company Stock Plans and the relevant written agreements evidencing the grant of Company Stock Options and repurchases of outstanding shares of Company Restricted Stock pursuant to the terms of the Company Restricted Stock Plan, (iv) make any material acquisition of any assets or businesses (including by merger, consolidation, acquisition of stock or assets, in-bound license transactions or otherwise) other than acquisitions the fair market value of the total consideration (including license, royalty or other fees) for which does not exceed, individually, $2,000,000 or, in the aggregate, $5,000,000 (provided that any such acquisition does not adversely affect the ability of Parent and the Company to obtain applicable approvals under the Antitrust Laws), or (v) sell, pledge, assign, dispose of, transfer, lease, securitize or materially encumber any businesses or assets that are material to the Company and its Subsidiaries, taken as a whole (excluding Intellectual Property, which is addressed in Section 5.01(d)) other than (A) sales of inventory and other assets in the ordinary course of business, (B) sales or dispositions of assets in one or a series of transactions having an aggregate value of $3,000,000 or less, and (C) divestitures pursuant to Section 5.11;
	(d) (i) sell, pledge, assign, dispose of, transfer, securitize, lease or materially encumber any material Company Owned Intellectual Property or material Company Licensed Intellectual Property, or (ii) except in the ordinary course of business, as reasonably prudent to the conduct of the business or as provided for in Company Material Contracts in effect as of the date hereof, (A) exclusively license, abandon or fail to maintain any material Company Owned Intellectual Property or material Company Licensed Intellectual Property, (B) grant, extend, amend (except as required in the diligent prosecution of the material Company Owned Intellectual Property), waive or modify any rights in or to any material Company Owned Intellectual Property or material Company Licensed Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ material patent applications, or (D) fail to exercise a right of renewal or extension under any Company Material License;
	(e) (i) enter into any Contract or arrangement that materially limits or otherwise materially restricts the Company or any of its Subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area, (ii) vary its inventory practices in any material respect from its past practices, except as required by GAAP or by Law, or (iii) make any capital expenditure or expenditures (including leases and in-bound licenses) in the aggregate in excess of the aggregate amount set forth in the Company’s budget provided to Parent prior to the date hereof (other than capital expenditures for unbudgeted repairs and maintenance in the ordinary course of business consistent with past practice);
	(f) grant, enter into or amend any employment, severance, change in control, special pay arrangement with respect to termination of employment or other similar arrangements or Contract with any directors, officers or employees of the Company or its Subsidiaries, except (i) pursuant to previously existing Contractual arrangements or policies between such current directors, officers or employees and the Company, (ii) pursuant to employment agreements entered into with a Person who is not already an officer of the Company in the ordinary course of business and is hired or promoted by the Company or one of its Subsidiaries after the date hereof in the ordinary course of business or (iii) to the minimum extent necessary to comply with Section 409A of the Code without increasing the benefits provided to any Person;

A-44

---

Table of Contents

	(g) (i) increase the salary, benefits or monetary compensation of any directors, executive officers or employees, except (A) for increases in the ordinary course of business, (B) pursuant to previously existing Contractual arrangements, (C) in connection with the assumption by such employee of new or additional responsibilities or (D) to respond to offers of employment made by other Persons, or (ii) establish, adopt, enter into, or materially amend any, collective bargaining agreement or bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan, arrangement, trust, fund, policy or agreement, except to the minimum extent necessary to comply with Section 409A of the Code without increasing the benefits provided to any Person or as otherwise required by any other applicable Law;
	(h) (i) accelerate, amend or change the period of exercisability or vesting of options, restricted stock or similar awards under any Company Stock Plan, except to the minimum extent necessary in order to comply with Section 409A of the Code without accelerating the exercisability or vesting of any such award, or (ii) authorize cash payments in exchange for any options granted under any of such plans except as required by the terms of such plans or any related agreements in effect as of the date hereof;
	(i) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
	(j) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
	(k) adopt, enter into, or amend any Company Benefit Plan to materially increase the benefits, Liability, or obligations of any Company Benefit Plan or to accelerate the payment of benefits under any Company Benefit Plan, except (i) as involves any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof as permitted by this Agreement; or (ii) as required pursuant to existing Contractual arrangements or this Agreement;
	(l) change any method or principle of financial accounting in a manner that is inconsistent with past practice, except to the extent required by GAAP as advised by the Company’s regular independent accountants;
	(m) make any material Tax election or settle or compromise any material Tax liability or refund, or change any annual Tax accounting period or material method of Tax accounting, file any material amendment to a Tax Return, enter into any closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment, in each case, other than as required by Law;
	(n) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Company is a party and which relates to a business combination or other similar extraordinary transaction;
	(o) take any action to render inapplicable, or to exempt any third Person from, (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover or similar Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
	(p) take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger in Article VI not being satisfied; or
	(q) agree, authorize or otherwise to take any of the foregoing actions.

A-45

---

Table of Contents

	(a) (i) amend or propose to amend Parent’s certificate of incorporation or bylaws or similar governing documents, or materially amend or propose to materially amend any of Parent’s Subsidiaries’ certificate of incorporation or bylaws or similar governing documents, (ii) split, combine or reclassify their outstanding capital stock or issue or authorize the issuance of any other security in respect or, in lieu of, or in substitution for, shares of its capital stock, (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to Parent or any of its Subsidiaries by a Subsidiary of Parent, (iv) merge or consolidate with any Person (other than a merger among wholly-owned Subsidiaries of Parent or a merger between Parent and its wholly-owned Subsidiaries), or (v) enter into any agreement with respect to the voting of its capital stock or other securities held by Parent or any of its Subsidiaries;
	(b) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) Parent may issue shares of Parent Common Stock upon exercise of Parent Stock Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (ii) or (iii) of this clause (b) or (B) in accordance with the terms of the Parent Rights Agreement as in effect on the date hereof, (ii) Parent may grant Parent Stock Options to purchase up to an aggregate of 75,000 shares of Parent Common Stock and 75,000 shares of restricted stock in accordance with the terms of the Parent Stock Plans consistent with past practice and with an exercise price per share of Parent Common Stock no less than the fair market value of a share of Parent Common Stock on the date of grant, (iii) in connection with Parent’s annual year-end equity awards consistent with past practice, Parent may grant Parent Stock Options and restricted stock in accordance with the terms of the Parent Stock Plans consistent with past practice and, in respect of Parent Stock Options, with an exercise price per share of Parent Common Stock no less than the fair market value of a share of Parent Common Stock on the date of grant, (iv) Parent may grant Parent Stock Options pursuant to existing contractual relationships as set forth in Section 5.02(b) of the Parent Disclosure Letter, (v) Parent may issue one or more series of securities of Parent in connection with a Financing consistent with the terms and conditions of this Agreement, the primary use of proceeds of which is to pay the Cash Merger Consideration, and (vi) transactions exclusively among Parent and its Subsidiaries shall be permitted;
	(c) except for transactions exclusively among Parent and its Subsidiaries, (i) issue any debt securities, incur, guarantee or otherwise become contingently liable with respect to any indebtedness for borrowed money, or enter into any arrangement having the economic effect of any of the foregoing (other than (A) in connection with accounts payable in the ordinary course of business, (B) borrowings under the existing credit facilities of Parent or any of its Subsidiaries, and (C) the issuance of one or more series of securities of Parent or the incurrence of indebtedness by Parent in connection with a Financing consistent with the terms and conditions of this Agreement, the primary use of proceeds of which is to pay the Cash Merger Consideration), (ii) make any loans, advances or capital contributions to, or investments in, any Person, other than loans, advances, capital contributions or investments that are not, in the aggregate, in excess of $25,000,000, (iii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Parent Stock Options pursuant to the terms of the Parent Stock Plans and the relevant written agreements evidencing the grant of Parent Stock Options, (iv) make any material acquisition of

A-46

---

Table of Contents

	any assets or businesses (including by merger, consolidation, acquisition of stock or assets, in-bound license transactions or otherwise) other than acquisitions the fair market value of the total consideration (including license, royalty or other fees) for which does not exceed, in the aggregate, $25,000,000 (provided that any such acquisition does not materially and adversely affect the ability of Parent and the Company to obtain applicable approvals under the Antitrust Laws); or (v) sell, pledge, assign, dispose of, transfer, lease, securitize or materially encumber any businesses or assets (other than Parent Owned Intellectual Property or Parent Licensed Intellectual Property) that are material to Parent and its Subsidiaries, taken as a whole, other than (A) sales of inventory and other assets in the ordinary course of business, (B) sales or dispositions of assets in one or a series of transactions having an aggregate value of $25,000,000 or less, and (C) divestitures pursuant to Section 5.11;
	(d) (i) sell, pledge, assign, dispose of, transfer, securitize, lease or materially encumber any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property (except in connection with any Contract or arrangement related to obtaining Financing that is consistent with the terms and conditions of this Agreement, the primary use of proceeds of which is to pay the Cash Merger Consideration), or (ii) except in the ordinary course of business, as reasonably prudent to the conduct of the business or as provided for in Parent Material Contracts in effect as of the date hereof, (A) exclusively license, abandon or fail to maintain any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property, (B) grant, extend, amend (except as required in the diligent prosecution of the material Parent Owned Intellectual Property), waive or modify any rights in or to any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property, (C) fail to diligently prosecute Parent’s and its Subsidiaries’ material patent applications, or (D) fail to exercise a right of renewal or extension under any Parent Material License;
	(e) (i) enter into any Contract or arrangement that materially limits or otherwise materially restricts Parent or any of its Subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area, or (ii) make any capital expenditure or expenditures, including leases and in-bound licenses (other than capital expenditures that are not, in the aggregate, in excess of $10,000,000 and (B) capital expenditures for unbudgeted repairs and maintenance in the ordinary course of business consistent with past practice);
	(f) except in the ordinary course of business, make any material Tax election or settle or compromise any material Tax liability or refund, or change any annual Tax accounting period or material method of Tax accounting, file any material amendment to a Tax Return, enter into any closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment, in each case, other than as required by Law;
	(g) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
	(h) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration, except in the ordinary course of business;
	(i) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which Parent is a party and which relates to a business combination or other similar extraordinary transaction;
	(j) take any action to render inapplicable, or to exempt any third Person from, (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover or similar Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
	(k) take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger in Article VI not being satisfied; or
	(l) agree, authorize or otherwise to take any of the foregoing actions.

A-47

---

Table of Contents

	(i) furnish information to the Company Potential Acquiror; provided that (A) prior to furnishing any such information, the Company receives from the Company Potential Acquiror an executed confidentiality agreement containing terms at least as restrictive as the terms contained in the Confidentiality Agreement (a “Competing Confidentiality Agreement”); provided, however, that such Competing Confidentiality Agreement shall not be required to contain standstill provisions; provided, further, that, if any Competing Confidentiality Agreement does not contain a standstill provision or contains a standstill provision that is more favorable to the other party thereto than the terms of the Confidentiality Agreement, the Confidentiality Agreement shall automatically, and without any further action of the parties, be amended to delete (in the case where the Competing Confidentiality Agreement does not contain a standstill provision) or amended to restate (in the case where the Competing Confidentiality Agreement contains a standstill agreement with terms more favorable to the other party thereto than the standstill provisions set forth in the Confidentiality Agreement) the standstill provision in the Confidentiality Agreement to make the terms of the Confidentiality Agreement relating to the standstill consistent with the more favorable terms of the Competing Confidentiality Agreement, and (B) contemporaneously with furnishing any such nonpublic information to the Company Potential Acquiror, the Company furnishes such nonpublic information to Parent (or, with respect to any such nonpublic information that has previously been furnished to Parent or its Representatives, a list identifying such nonpublic information delivered to Parent and its Representatives); and
	(ii) participate or engage in discussions or negotiations with the Company Potential Acquiror with respect to such Company Acquisition Proposal.

A-48

---

Table of Contents

	(w) The Company’s Board of Directors shall have determined in good faith, after consultation with outside legal counsel, that failure to take such action would reasonably be likely to constitute a violation of its fiduciary duties under applicable Law;
	(x) The Company’s Board of Directors has notified Parent in writing of the determination described in clause (w) above; and
	(y) in the case of any such actions taken in connection with a Company Acquisition Proposal, at least five (5) Business Days following receipt by Parent of the notice required pursuant to clause (x) above, and taking into account any revised proposal made by Parent since receipt of such notice, the Company’s Board of Directors maintains its determination described in clause (w) above.

A-49

---

Table of Contents

	(i) furnish information to the Parent Potential Acquiror; provided that (A) prior to furnishing any such information, Parent receives from the Parent Potential Acquiror a Competing Confidentiality Agreement; provided, however, that such Competing Confidentiality Agreement shall not be required to contain standstill provisions; provided, further, that if any Competing Confidentiality Agreement does not contain a standstill provision or contains a standstill provision that is more favorable to the other party thereto than the terms of the Confidentiality Agreement, the Confidentiality Agreement shall automatically, and without any further action of the parties, be amended to delete (in the case where the Competing Confidentiality Agreement does not contain a standstill provision) or amended to restate (in the case where the Competing Confidentiality Agreement contains a standstill agreement with terms more favorable to the other party thereto than the standstill provisions set forth in the Confidentiality Agreement) the standstill provision in the Confidentiality Agreement to make the terms of the Confidentiality Agreement relating to the standstill consistent with the more favorable terms of the Competing Confidentiality Agreement, and (B) contemporaneously with furnishing any such nonpublic information to the Parent Potential Acquiror, Parent furnishes such nonpublic information to the Company (or, with respect to any such nonpublic information that has previously been furnished to the Company or its Representatives, a list identifying such nonpublic information delivered to the Company and its Representatives); and
	(ii) participate or engage in discussions or negotiations with the Parent Potential Acquiror with respect to the Parent Acquisition Proposal.

A-50

---

Table of Contents

	(w) Parent’s Board of Directors shall have determined in good faith, after consultation with outside legal counsel, that failure to take such action would reasonably be likely to constitute a violation of its fiduciary duties under applicable Law;
	(x) Parent’s Board of Directors has notified the Company in writing of the determination described in clause (w) above; and
	(y) in the case of any such actions taken in connection with a Parent Acquisition Proposal, at least five (5) Business Days following receipt by Company of the notice required pursuant to clause (x) above, and taking into account any revised proposal made by the Company since receipt of such notice, Parent’s Board of Directors maintains its determination described in clause (w) above.

A-51

---

Table of Contents

A-52

---

Table of Contents

A-53

---

Table of Contents

A-54

---

Table of Contents

	(i) If this Agreement is terminated pursuant to Section 7.01(c), then the Company shall pay Parent $10,000,000 within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by Parent.
	(ii) If (i) after the date of this Agreement and prior to the Company Stockholders’ Meeting, any Person publicly announces a Company Acquisition Proposal which has not been expressly and bona fide publicly withdrawn, (ii) this Agreement is terminated by either the Company or Parent pursuant to Section 7.01(b)(iii) or by Parent pursuant to Section 7.01(c) as a result of a breach of a covenant or other affirmative obligation, and (iii) within 12 months after the date of termination of this Agreement, the Company enters into a definitive agreement with respect to a Company Acquisition Transaction or consummates a Company Acquisition Transaction, then the Company shall pay to Parent by wire transfer of same-day funds $90,000,000 (the “Company Termination Fee”), less any amount paid by the Company to Parent pursuant to Section 5.10(b)(i) at the earlier of the date the Company enters into a definitive agreement providing for a Company Acquisition Transaction and the date of consummation of such the Company Acquisition Transaction. Solely for the purposes of this Section 5.10(b)(ii), the term “Company Acquisition Transaction” shall have the meaning assigned to such term in Section 8.03(a), except that all references to “15%” or “85%” shall be changed to “50%”.
	(iii) If Parent terminates this Agreement pursuant to Section 7.01(e), the Company shall pay Parent the Company Termination Fee within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by Parent.

(i) If this Agreement is terminated pursuant to Section 7.01(d), then Parent shall pay the Company $10,000,000 within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by the Company. If this Agreement is terminated pursuant to Section 7.01(b)(iv), then Parent shall pay the Company $16,500,000 within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by the Company.

A-55

---

Table of Contents

	(ii) If (i) after the date of this Agreement and prior to the Parent Stockholders’ Meeting, any Person publicly announces a Parent Acquisition Proposal which has not been expressly and bona fide publicly withdrawn, (ii) this Agreement is terminated by either the Company or Parent pursuant to Section 7.01(b)(iv) or by the Company pursuant to Section 7.01(d) as a result of a breach of a covenant or other affirmative obligation, and (iii) within 12 months after the date of termination of this Agreement, Parent enters into a definitive agreement with respect to a Parent Acquisition Transaction or consummates a Parent Acquisition Transaction, then Parent shall pay to the Company by wire transfer of same-day funds $70,000,000 (the “Parent Termination Fee”), less any amount paid by Parent to the Company pursuant to Section 5.10(c)(i) or 5.10(c)(iv), at the earlier of the date Parent enters into a definitive agreement providing for a Parent Acquisition Transaction and the date of consummation of such Parent Acquisition Transaction. Solely for the purposes of this Section 5.10(c)(ii), the term “Parent Acquisition Transaction” shall have the meaning assigned to such term in Section 8.03(a), except that all references to “15%” or “85%” shall be changed to “50%”.
	(iii) If the Company terminates this Agreement pursuant to Section 7.01(f), Parent shall pay the Company the Parent Termination Fee within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by the Company.
	(iv) If either party terminates this Agreement pursuant to Section 7.01(b)(i) or 7.01(b)(ii) and all other conditions to consummation of the Merger are satisfied or capable of then being satisfied and the sole reason that the Merger has not been consummated on or prior to the date of such termination is that one or more conditions set forth in Section 6.01(b) or Section 6.01(c) has not been satisfied due to the failure to obtain the necessary consents and approvals under Antitrust Laws or a judgment, injunction, order or decree of a Governmental Entity of competent jurisdiction shall be in effect (including the effects of any such failure or acts) and such judgment, injunction, order or decree was issued under Antitrust Laws, then Parent shall pay the Company $10,000,000 within two (2) Business Days following termination by wire transfer of same-day funds to an account specified in writing by the Company; provided, however, that the Company shall not be entitled to such fee if, prior to or at the time of termination, (A) Parent is entitled to terminate this Agreement pursuant to Section 7.01(c) (excluding the notice provisions contained therein) or (B) the Company is in breach of its obligations set forth in Section 5.11 with respect to Antitrust Laws.
	(v) Notwithstanding the foregoing, Parent shall not be obligated to pay the Company a fee under both Section 5.10(c)(i) and Section 5.10(c)(iv).

A-56

---

Table of Contents

A-57

---

Table of Contents

A-58

---

Table of Contents

A-59

---

Table of Contents

A-60

---

Table of Contents

	(a) (i) The Company shall have obtained the Company Stockholder Approval and (ii) Parent shall have obtained the Parent Stockholder Approval;
	(b) No judgment, injunction, order or decree of a Governmental Entity of competent jurisdiction shall be in effect which has the effect of making the Merger illegal or otherwise restraining or prohibiting the consummation of the Merger; provided, however, that prior to asserting this condition, subject to Section 5.11, each of the parties shall have used its reasonable efforts to prevent the entry of any such judgment, injunction, order or decree;
	(c) (i) All consents, approvals, orders or authorizations from, and all material declarations, filings and registrations with, any Governmental Entity, including all necessary approvals under any applicable Antitrust Laws, required to consummate the Merger and the other transactions contemplated by this Agreement shall have been obtained or made, except for such consents, approvals, orders, authorizations, material declarations, filings and registrations, the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect (for purposes of this clause, after giving effect to the Merger), and (ii) the waiting period (and any extension thereof) applicable to consummation of the Merger under the HSR Act shall have expired or been terminated;
	(d) The Registration Statement shall have been declared effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before the SEC;

A-61

---

Table of Contents

	(e) The shares of Parent Common Stock to be issued in the Merger shall have been approved for listing on the NYSE, subject to official notice of issuance;
	(f) Parent shall have received a written opinion of Latham & Watkins LLP, in form and substance reasonably acceptable to it, dated as of the Closing Date to the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the Merger will constitute a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel to Parent shall be entitled to rely upon customary assumptions and representations reasonably satisfactory to such counsel, including representations set forth in certificates of officers of Parent, Merger Sub and the Company, in substantially the forms attached hereto as Exhibits B and C. The condition set forth in this Section 6.01(f) shall not be waivable after receipt of the Company Stockholder Approval or the Parent Stockholder Approval, unless further stockholder approval is obtained with appropriate disclosure;
	(g) The Company shall have received a written opinion of Morrison & Foerster LLP, in form and substance reasonably acceptable to it, dated as of the Closing Date to the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the Company Merger will constitute a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel to the Company shall be entitled to rely upon customary assumptions and representations reasonably satisfactory to such counsel, including representations set forth in certificates of officers of Parent, Merger Sub and the Company, in substantially the forms attached hereto as Exhibits B and C. The condition set forth in this Section 6.01(g) shall not be waivable after receipt of the Company Stockholder Approval or the Parent Stockholder Approval, unless further stockholder approval is obtained with appropriate disclosure; and
	(h) There shall not be pending any suit, action or proceeding by any Governmental Entity in any court of competent jurisdiction seeking to prohibit the consummation of the Merger or any other transaction contemplated by this Agreement or that would otherwise cause a Company Material Adverse Effect or a Parent Material Adverse Effect; provided that, if the court of competent jurisdiction dismisses or renders a final decision denying a Governmental Entity’s request for an injunction in such suit, action or proceeding, then four (4) Business Days following such dismissal or decision, this condition to closing shall, with respect to such suit, action or proceeding, thereafter be deemed satisfied whether or not such Governmental Entity appeals the decision of such court or files an administrative complaint before the Federal Trade Commission.

	(a) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time;
	(b) The representations and warranties of the Company contained in this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) at and as of the Effective Time as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) would not, individually or in the aggregate, result in a Company Material Adverse Effect;
	(c) Since the date of this Agreement, there shall not have been any state of facts, events, changes, effects, developments, conditions or occurrences that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect;
	(d) Parent shall have received a certificate signed by an executive officer of the Company indicating that the conditions set forth in clauses (a) and (b) of this Section 6.02 have been satisfied;

A-62

---

Table of Contents

	(e) Effective demands under Section 262 of the DGCL shall not have been received by the Company with respect to more than 10.0% of the outstanding shares of Company Common Stock; and
	(f) The Investigation (including the facts and circumstances related thereto) shall not have prevented Parent from obtaining Financing consistent with the terms and conditions set forth in the Financing Commitment Letter; provided, however, that Parent shall have used commercially reasonable efforts to obtain such Financing.

	(a) Parent shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time;
	(b) The representations and warranties of Parent contained in this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein) at and as of the Effective Time as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein) would not, individually or in the aggregate, result in a Parent Material Adverse Effect;
	(c) Since the date of this Agreement, there shall not have been any state of facts, events, changes, effects, developments, conditions or occurrences that, individually or in the aggregate, has had or would reasonably be expected to have a Parent Material Adverse Effect;
	(d) The Company shall have received a certificate signed by an executive officer of Parent indicating that the conditions set forth in clauses (a) and (b) of this Section 6.03 have been satisfied; and
	(e) Parent shall have the funds necessary to pay the Cash Merger Consideration.

	(a) by mutual written consent of Parent and the Company;
	(b) by either Parent or the Company:

(i) if the Merger has not been consummated on or before December 19, 2005 (such date, as it may be extended under clause (A) of this paragraph, the “Termination Date”); provided, however, that (A) the Termination Date may be extended by either party (by written notice thereof to the other party), from time to time, for an additional period of time not to exceed forty-three days if (y) if Parent has been unable to obtain funds on terms satisfactory to Parent sufficient to pay the full amount of the Cash Merger Consideration or (z) all other conditions to consummation of the Merger are satisfied or capable of then being satisfied and the sole reason that the Merger has not been consummated by such date is that one or more conditions set forth in Section 6.01(b), Section 6.01(c) or Section 6.01(d) has not been satisfied due to the failure to obtain the necessary consents and approvals under Antitrust Laws or a judgment, injunction, order or decree of a Governmental Entity of competent jurisdiction shall be in effect, and Parent or the Company are still attempting to obtain such necessary consents and approvals under Antitrust Laws or are contesting the refusal of the relevant Governmental Entity to give such consents or approvals or the entry of any such judgment, injunction, order or decree by a Governmental Entity or through other applicable proceedings, and (B) the right to terminate this Agreement pursuant to this Sec-

A-63

---

Table of Contents

	tion 7.01(b)(i) shall not be available to any party whose breach of any provision of this Agreement has been the cause of or resulted in the failure of the Merger to be consummated by the Termination Date;
	(ii) if any Governmental Entity shall have issued a final order, decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action is or shall have become final and nonappealable;
	(iii) if, upon a vote at a duly held meeting (or at any adjournment or postponement thereof) to obtain the Company Stockholder Approval, the Company Stockholder Approval is not obtained; or
	(iv) if, upon a vote at a duly held meeting (or at any adjournment or postponement thereof) to obtain the Parent Stockholder Approval, the Parent Stockholder Approval is not obtained;

	(c) by Parent, if there has been a breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement which (x) would result in a failure of a condition set forth in Section 6.02(a) or Section 6.02 (b) and (y) cannot be cured prior to the Termination Date; provided that Parent shall have given the Company written notice, delivered at least ten (10) Business Days prior to such termination, stating Parent’s intention to terminate this Agreement pursuant to this Section 7.01(c) and the basis for such termination;
	(d) by the Company, if there has been a breach by Parent of any representation, warranty, covenant or agreement contained in this Agreement which (x) would result in a failure of a condition set forth in Section 6.03(a) or Section 6.03(b) and (y) cannot be cured prior to the Termination Date; provided that the Company shall have given Parent written notice, delivered at least ten (10) Business Days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 7.01(d) and the basis for such termination;
	(e) by Parent, if (i) the Company’s Board of Directors shall have effected a Company Change of Recommendation or resolved to do so; (ii) the Company’s Board of Directors shall have approved or recommended to the Company’s stockholders a Company Acquisition Proposal or resolved to do so; (iii) a tender offer or exchange offer for shares of Company Common Stock is commenced (other than by Parent or any of its Affiliates) and the Company’s Board of Directors recommends that the Company’s stockholders tender their shares in such tender or exchange offer or such Board of Directors fails to recommend that the Company’s stockholders reject such tender or exchange offer within ten (10) Business Days after receipt of Parent’s request to do so; or (iv) for any reason the Company fails to call, hold or convene the Company Stockholders’ Meeting on or before the fifth Business Day prior to the Termination Date; provided that (A) Parent’s right to terminate this Agreement under clause (iv) shall not be available if at such time (y) the Company would be entitled to terminate this Agreement under Sections 7.01(b)(ii), (d) or (f) or (z) the conditions set forth in Sections 6.01(a)(ii), (b), (c), (d) or (h) shall not have been satisfied, and (B) with respect to clauses (i) and (ii), it being understood that neither disclosure of any competing proposal that is not being recommended by the Company’s Board of Directors nor disclosure of any facts or circumstances, together with a statement that the Company’s Board of Directors continues to recommend approval of this Agreement and the Merger, shall be considered to be a Company Change of Recommendation; or
	(f) by the Company, if (i) Parent’s Board of Directors shall have effected a Parent Change of Recommendation or resolved to do so; (ii) Parent’s Board of Directors shall have approved or recommended to Parent’s stockholders a Parent Acquisition Proposal or resolved to do so; (iii) a tender offer or exchange offer for outstanding shares of Parent Common Stock is commenced (other than by the Company or any of its affiliates) and Parent’s Board of Directors recommends that Parent’s stockholders tender their shares in such tender or exchange offer or such Board of Directors fails to recommend that Parent’s stockholders reject such tender or exchange offer within ten (10) Business Days after receipt of the Company’s request to do so; or (iv) for any reason Parent fails to call, hold or convene the Parent Stockholders’ Meeting on or before the fifth Business Day prior the Termination Date; provided that (A) the Company’s right to terminate this Agreement under clause (iv) shall not be available if at such

A-64

---

Table of Contents

time (y) Parent would be entitled to terminate this Agreement under Sections 7.01(b)(ii), (c) or (e) or (z) the conditions set forth in Sections 6.01(a)(i), (b), (c), (d) or (h) shall not have been satisfied, and (B) with respect to clauses (i) and (ii), it being understood that neither disclosure of any competing proposal that is not being recommended by Parent’s Board of Directors nor disclosure of any facts or circumstances, together with a statement that Parent’s Board of Directors continues to recommend approval of the Share Issuance, shall be considered to be a Parent Change of Recommendation.

	Medicis Pharmaceutical Corporation
	8125 North Hayden Road
	Scottsdale, Arizona 85258-2463
	Attention:  Chief Financial Officer
	Facsimile: (602) 808-3888

	Latham & Watkins LLP
	650 Town Center Drive, Suite 2000
	Costa Mesa, California 92626

	Attention:	Charles K. Ruck, Esq.

	R. Scott Shean, Esq.
	Facsimile: (714) 755-8290

	Inamed Corporation
	5540 Ekwill Street
	Santa Barbara, California 93111-2936
	Attention:  General Counsel
	Facsimile: (805) 692-5409

A-65

---

Table of Contents

	Morrison & Foerster LLP
	3811 Valley Centre Drive, Suite 500
	San Diego, California 92130-2332
	Attention:  Scott M. Stanton
	Facsimile: (858) 720-5125

	“Action” means any claim, suit, action, proceeding or investigation.
	An “Affiliate” of any Person shall mean another Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract, as trustee or executor, or otherwise.
	“Business Day” means any day, other than (i) a Saturday or a Sunday or (ii) a day on which banking and savings and loan institutions are authorized or required by Law to be closed in Los Angeles, California.
	“Company Acquisition Proposal” means any offer or proposal with respect to a potential or proposed the Company Acquisition Transaction.
	“Company Acquisition Transaction” means any (a) merger, consolidation, business combination or similar transaction involving the Company or any of its Significant Subsidiaries pursuant to which the stockholders of the Company immediately prior to such transaction would own less than 85% of the aggregate voting power of the entity surviving or resulting from such transaction (or the ultimate parent entity thereof), (b) sale, lease, exclusive license or other disposition, directly or indirectly, by merger, consolidation, business combination, share exchange, joint venture or otherwise of assets of the Company or its Subsidiaries representing 15% or more of the consolidated assets of the Company and its Subsidiaries, (c) issuance, sale or other disposition (including by way of merger, consolidation, business combination, share exchange, joint venture or any similar transaction) of securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 15% or more of the voting power of the Company, (d) transaction in which any Person shall acquire beneficial ownership, or the right to acquire beneficial ownership or any group shall have been formed which beneficially owns or has the right to acquire beneficial ownership of, 15% or more of the outstanding voting capital stock of the Company or (e) any combination of the foregoing (other than the Merger).
	“Company ERISA Affiliate Plan” shall mean each material employee benefit plan, program or policy providing benefits to any current or former employee, officer or director of any ERISA Affiliate of the Company or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored or contributed to by any ERISA Affiliate of the Company or any of its Subsidiaries or to which any ERISA Affiliate of the Company or any of its Subsidiaries contributes or is obligated to contribute or with respect to which any ERISA Affiliate of the Company or any of its Subsidiaries has or may have any Liability or obligations, including any employee welfare benefit plan within the meaning of Section 3(1) of ERISA or any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA) and any material bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, employment, change of control or fringe benefit or similar arrangement, agreement, plan, program or policy.
	“Company Key Product” shall mean any product or line of products which, in any of the preceding three calendar years, generated more than 5% of the Company’s or any of its Subsidiary’s net revenue for that year and any product which the Company reasonably expects to generate more than 5% of the Company’s or any Subsidiary’s net revenue in any of the next five years, but in any event including the

A-66

---

Table of Contents

	products sold or to be sold under the following trademarks and trade names: Lap-Band System, BIB (BioEntrerics Intragastric Balloon System), BioDimensional, 410 Signature Series, Biospan, McGhan, McGhan, Reloxin, Dysport, Cosmoderm, Cosmoplast, Hylaform, Captique, Zyderm, Zyplast Hydrafill, Hydrafill, JuveDerm or Juvinox.
	“Company Licensed Intellectual Property” means all material Intellectual Property licensed to the Company or any of its Subsidiaries.
	“Company Material Adverse Effect” shall mean any change, event, development or effect that (i) is materially adverse to the business or financial condition of the Company and its Subsidiaries, taken as a whole, except for any such change, event, development or effect resulting from or arising out of (A) changes or developments in the medical device and specialty pharmaceutical industries generally (which changes or developments, in each case, do not disproportionately affect the Company in any material respect), (B) changes or developments in financial or securities markets or the economy in general (which changes or developments, in each case, do not disproportionately affect the Company in any material respect), (C) any change in the Company’s stock price or trading volume, in and of itself, (D) any failure by the Company to meet published revenue or earnings projections, in and of itself, (E) any changes resulting from or arising out of the announcement of this Agreement or actions pursuant to (and required by) this Agreement, or (F) the determination by, or the delay of a determination by, the FDA, or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any of the Company’s products, or (ii) that prevents the Company from fulfilling its obligation to consummate the Merger.
	“Company Owned Intellectual Property” means all material Intellectual Property owned by the Company or any of its Subsidiaries.
	“Company Partner” means any Person which manufactures, develops, packages, processes, labels, tests or distributes products pursuant to a development, commercialization, manufacturing, supply, testing or other collaboration arrangement with the Company or any of its Subsidiaries.
	“Company Registered Brand Name” means all trademarks, trade names, brand names, and service marks registered by the Company or any of its Subsidiaries in any country throughout the world.
	“Company Restricted Stock” shall mean the Company Common Stock subject to the rights to acquire unvested shares outstanding under the Company Restricted Stock Plan.
	“Company Restricted Stock Plan” shall mean the Company’s 2003 Restricted Stock Plan.
	“Company Stock Plans” shall mean the Company’s Non-Employee Director’s Stock Option Plan, the Company’s 1998 Stock Option Plan, the Company’s 1999 Director’s Stock Election Plan, the Company’s 1999 Stock Option Plan, the Company’s 2000 Stock Option Plan, the Company’s 2003 Outside Director Compensation Plan, the Company’s 2004 Performance Stock Option Plan, the Company Restricted Stock Plan, the Standalone Option Agreements and any other plan or arrangement under which the Company or its subsidiaries grants equity-based awards.
	“Company Superior Proposal” means an unsolicited, bona fide written offer made by a Company Potential Acquiror to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, all or substantially all of the assets of the Company or a majority of the total outstanding voting securities of the Company and as a result of which the stockholders of the Company immediately preceding such transaction would hold less than 50% of the equity interests in the surviving or resulting entity of such transaction or any direct or indirect parent or subsidiary thereof, on terms that are more favorable to the Company’s stockholders than the terms of the Merger, taking into account, among other matters, all legal, financial, regulatory and other aspects of such offer and the Company Potential Acquiror, including (i) the likelihood and timing of consummation, (ii) any amendments to or modifications of this Agreement that Parent has offered at the time of determination and (iii) such other factors deemed relevant by the Company’s Board of Directors.

A-67

---

Table of Contents

	“Company Unregistered Brand Name” means all (i) trademarks, trade names, brand names, and service marks for which the Company or any of its Subsidiaries has filed an application with the U.S. Patent and Trademark Office or any foreign equivalent office and (ii) material trademarks, trade names, brand names, and service marks used by the Company or any of its Subsidiaries but not registered in any country anywhere in the world.
	“Contract” means any agreements, contracts, leases, powers of attorney, notes, loans, evidence of indebtedness, purchase orders, letters of credit, settlement agreements, franchise agreements, undertakings, covenants not to compete, employment agreements, licenses, covenants not to sue, instruments, obligations, commitments, understandings, policies, purchase and sales orders, quotations and other executory commitments to which any company is a party or to which any of the assets of the companies are subject, whether oral or written, express or implied (each, including all amendments thereto).
	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
	“ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 52 or 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
	“Environmental Law(s)” means any and all applicable international, federal, state, or local Laws or rule of common Law, permits, restrictions and licenses, which (i) regulate or relate to the protection or clean up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of Persons or property, including without limitation protection of the health and safety of employees; or (ii) impose liability or responsibility with respect to any of the foregoing, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other law of similar effect.
	“Environmental Permits” means any material permit, license, authorization or approval required under applicable Environmental Laws.
	“Exchange Act” means the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder).
	“FDA” means the U.S. Food and Drug Administration.
	“FDCA” means the Federal Food, Drug and Cosmetic Act of 1938, as amended, and the regulations of the FDA promulgated thereunder.
	“GAAP” means United States generally accepted accounting principles.
	“Good Clinical Practices” means the FDA’s standards for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials contained in Title 21 parts 50, 54, 56, 312, 314, 320, 812, and 814 of the Code of Federal Regulations.
	“Good Laboratory Practices” means the FDA’s standards for conducting non clinical laboratory studies contained in Title 21 part 58 of the Code of Federal Regulations.
	“Good Manufacturing Practices” means the requirements set forth in the quality systems regulations for medical devices contained in Title 21 part 820 of the Code of Federal Regulations, and the good manufacturing practice regulations for finished pharmaceutical or drug products contained in Title 21 parts 210 and 211 of the Code of Federal Regulations.

A-68

---

Table of Contents

	“Governmental Entity” means any foreign, federal, state, local or multi-national court, arbitral tribunal, administrative agency or commission or other governmental or regulatory body, agency, instrumentality or authority.
	“Hazardous Substances” means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, or chemical compound, or hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, including without limitation, any quantity of asbestos in any form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof, all forms of natural gas, petroleum products or by-products or derivatives.
	“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
	“Intellectual Property” means all intellectual property or other proprietary rights of every kind, foreign and domestic, including (i) patents, patent applications (including any provisionals, continuations, divisions, continuations-in-part, extensions, renewals, reissues, revivals and reexaminations, any national phase PCT applications, PCT international applications, and all foreign counterparts), statutory invention certificates, copyrights, mask works, industrial designs, URLs, domain names, trademarks, service marks, logotypes, brand names, trade dress and trade names, (ii) all rights in, applications for, registrations of any of the foregoing, (iii) moral rights, rights to use a natural person’s name and likeness, publicity rights, (iv) trade secrets, confidential information, inventions, discoveries, improvements, modifications, know-how, techniques, methods, data, embodied or disclosed in any computer programs; product specifications; manufacturing, assembly, testing, clinical trials, patient surveys, physician surveys, surgical methods, educational programs, and (v) all good will related to any of the foregoing.
	“IRS” means Internal Revenue Service.
	“Knowledge” shall mean the actual knowledge of the executive officers of the Company or Parent, as the case may be.
	“Law” means any foreign or domestic law, statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation, award, injunction, decree, treaty, convention, compact, protocol or arbitration award or finding.
	“Liability or Liabilities” mean any direct or indirect liability, indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or endorsement of or by any Person of any type, whether accrued, absolute, contingent, matured, unmatured, liquidated, unliquidated, known or unknown.
	“Liens” means any mortgage, deed of trust, deed to secure debt, title retention agreement, pledge, lien, encumbrance, security interest, conditional or installment sale agreement, charge or other claims of third parties of any kind.
	“Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 3(37) or 4001(a)(3) of ERISA.
	“NYSE” means the New York Stock Exchange, Inc.
	“Parent Acquisition Proposal” means any offer or proposal with respect to a potential or proposed Parent Acquisition Transaction.
	“Parent Acquisition Transaction” means any (a) merger, consolidation, business combination or similar transaction involving Parent or any of its Significant Subsidiaries pursuant to which the stockholders of Parent immediately prior to such transaction would own less than 85% of the aggregate voting power of the entity surviving or resulting from such transaction (or the ultimate parent entity thereof), (b) sale, lease, exclusive license or other disposition, directly or indirectly, by merger, consolidation, business combination, share exchange, joint venture or otherwise of assets of Parent or its Subsidiaries representing 15% or more of the consolidated assets of Parent and its Subsidiaries, (c) issuance, sale or other disposition (including by way of merger, consolidation, business combination, share exchange, joint venture or any similar transaction) of securities (or options, rights or warrants to

A-69

---

Table of Contents

	purchase, or securities convertible into or exchangeable for, such securities) representing 15% or more of the voting power of Parent, (d) transaction in which any Person shall acquire beneficial ownership, or the right to acquire beneficial ownership or any group shall have been formed which beneficially owns or has the right to acquire beneficial ownership of, 15% or more of the outstanding voting capital stock of Parent or (e) any combination of the foregoing (other than the Merger).
	“Parent ERISA Affiliate Plan” shall mean each material employee benefit plan, program or policy providing benefits to any current or former employee, officer or director of any ERISA Affiliate of the Company or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored or contributed to by any ERISA Affiliate of the Company or any of its Subsidiaries or to which any ERISA Affiliate of the Company or any of its Subsidiaries contributes or is obligated to contribute or with respect to which any ERISA Affiliate of the Company or any of its Subsidiaries has or may have any Liability or obligations, including any employee welfare benefit plan within the meaning of Section 3(1) of ERISA or any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA) and any material bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, employment, change of control or fringe benefit or similar arrangement, agreement, plan, program or policy.
	“Parent Key Product” shall mean any product or line of products which, in any of the preceding three calendar years, generated more than 5% of Parent’s or any of its Subsidiary’s net revenue for that year and any product which Parent reasonably expects to generate more than 5% of the Company’s or any Subsidiary’s net revenue in any of the next five years, but in any event including the products sold or to be sold under the following trademarks and trade names: Restylane, Loprox, Dynacin, Plexion and Triaz.
	“Parent Licensed Intellectual Property” means all material Intellectual Property licensed to Parent or any of its Subsidiaries.
	“Parent Material Adverse Effect” shall mean any change, event, development or effect that (i) is materially adverse to the business or financial condition of Parent and its Subsidiaries, taken as a whole, except for any such change, event, development or effect resulting from or arising out of (A) changes or developments in the medical device and specialty pharmaceutical industries generally (which changes or developments, in each case, do not disproportionately affect Parent in any material respect), (B) changes or developments in financial or securities markets or the economy in general (which changes or developments, in each case, do not disproportionately affect Parent in any material respect), (C) any change in Parent’s stock price or trading volume, in and of itself, (D) any failure by Parent to meet published revenue or earnings projections, in and of itself, (E) any changes resulting from or arising out of the announcement of this Agreement or actions pursuant to (and required by) this Agreement, or (F) the determination by, or the delay of a determination by, the FDA, or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any of Parent’s products, or (ii) that prevents Parent from fulfilling its obligation to consummate the Merger.
	“Parent Owned Intellectual Property” means all material Intellectual Property owned by Parent or any of its Subsidiaries.
	“Parent Partner” means any Person which manufactures, develops, packages, processes, labels or tests or distributes products pursuant to a development, commercialization, manufacturing, supply, testing or other collaboration arrangement with Parent or any of its Subsidiaries.
	“Parent Registered Brand Name” means all trademarks, trade names, brand names, and service marks registered by Parent or any of its Subsidiaries in any country throughout the world.
	“Parent Restricted Stock” shall mean the Parent Common Stock subject to the rights to acquire unvested shares outstanding under the Parent Restricted Stock Plan.
	“Parent Restricted Stock Plan” shall mean Parent’s 2001 Senior Executive Restricted Stock Plan.
	“Parent Stock Option” means any option to purchase Parent Common Stock granted under the Parent Stock Plans or otherwise.

A-70

---

Table of Contents

	“Parent Stock Plans” means Parent’s 1992 Stock Option Plan, Parent’s 1995 Stock Option Plan, Parent’s 1998 Stock Option Plan, Parent’s 2001 Senior Executive Restricted Stock Plan, Parent’s 2002 Stock Option Plan, Parent’s 2004 Stock Incentive Plan and any other plan or arrangement under which Parent grants equity-based awards.
	“Parent Superior Proposal” means an unsolicited, bona fide written offer made by a Parent Potential Acquiror to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, all or substantially all of the assets of Parent or a majority of the total outstanding voting securities of Parent and as a result of which the stockholders of Parent immediately preceding such transaction would hold less than 50% of the equity interests in the surviving or resulting entity of such transaction or any direct or indirect parent or subsidiary thereof, on terms that are more favorable to Parent’s stockholders than the terms of the Merger, taking into account, among other matters, all legal, financial, regulatory and other aspects of such offer and the Parent Potential Acquiror, including (i) the likelihood and timing of consummation, (ii) any amendments to or modifications of this Agreement that the Company has offered at the time of determination and (iii) such other factors deemed relevant by Parent’s Board of Directors.
	“Parent Unregistered Brand Name” means all (i) trademarks, trade names, brand names, and service marks for which Parent or any of its Subsidiaries has filed an application with the U.S. Patent and Trademark Office or any foreign equivalent office and (ii) material trademarks, trade names, brand names, and service marks used by Parent or any of its Subsidiaries but not registered in any country anywhere in the world.
	“Person” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity.
	“SEC” means the Securities and Exchange Commission.
	“Securities Act” means the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder).
	“Share Issuance” means the issuance of Parent Common Stock pursuant to Section 2.01(a)(i).
	“Significant Subsidiary” shall mean as such term is defined in Rule 1-02 of Regulation S-X of the Exchange Act.
	“SOX” means the Sarbanes-Oxley Act of 2002.
	“Standalone Option Agreements” shall mean the Option Agreement between the Company and Nicholas L. Teti, dated July 23, 2001 and the Option Agreement between the Company and Hani Zeini, dated September 28, 2001.
	“Subsidiary” means, with respect to any party, any corporation or other organization, whether incorporated or unincorporated, of which (i) such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the voting interest in such partnership) or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries.
	“Tax” or “Taxes” means all taxes of whatever kind or nature, including those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, estimated, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or other similar fees, assessments or charges of any kind whatsoever (together with any interest and any penalties, additions to tax or additional amounts), whether disputed or not, imposed by any Governmental Entity or Tax authority (domestic or foreign).

A-71

---

Table of Contents

	“Tax Returns” means any report, return (including information return), claim for refund, or statement relating to Taxes or required to be filed with any Tax authority (domestic or foreign), including any schedule or attachment thereto, and including any amendments thereof.
	“Warning Letter” is a letter issued by the FDA for an alleged violation of regulatory significance which provides individuals and firms an opportunity to take voluntary corrective action.

Term		Reference
1999 Option Plan			Section 2.06(a)
2000 Option Plan			Section 2.06(a)
Aggregate Cash Amount			Section 2.02(c)(ii)
Aggregate Company Share Number			Section 2.02(c)(iii)
Aggregate Dissenter’s Value			Section 2.02(c)(i)
Aggregate Parent Share Number			Section 2.02(c)(iv)
Aggregate Parent Stock Value			Section 2.02(c)(v)
Agreement			Preamble
Antitrust Laws			Section 5.11(b)
Assigned Repurchase Rights			Section 2.08
Cash Merger Consideration			Section 2.01(a)(i)(B)
Certificate			Section 2.04(b)
Certificate of Merger			Section 1.02
Closing			Section 1.02
Closing Date			Section 1.02
Closing Parent Stock Price			Section 2.02(c)(vi)
Closing Transaction Value			Section 2.02(c)(vii)
Code			Preamble
Company			Preamble
Company 10-K			Section 3.06
Company Benefit Plans			Section 3.13(a)
Company Change of Recommendation			Section 5.03(e)
Company Common Stock			Section 2.01(a)
Company Disclosure Letter			Article III Preamble
Company ESPP			Section 2.07
Company Financial Advisor			Section 3.20
Company Leases			Section 3.17(b)
Company Material Contracts			Section 3.11(a)
Company Material Leased Real Property			Section 3.17(b)
Company Material Licenses			Section 3.16(b)
Company Owned Real Property			Section 3.17(a)
Company Permits			Section 3.10(a)
Company Potential Acquiror			Section 5.03(b)
Company Preferred Stock			Section 3.02(a)
Company Purchase Rights			Section 3.02(a)
Company Qualified Plans			Section 3.13(d)
Company Required Statutory Approvals			Section 3.04(d)
Company Rights			Section 2.01(c)

A-72

---

Table of Contents

Term		Reference
Company Rights Agreement			Section 2.01(c)
Company SEC Documents			Section 3.05(a)
Company Stock Options			Section 2.06(b)
Company Stockholder Approval			Section 3.04(a)
Company Stockholders’ Meeting			Section 3.09
Company Superior Proposal Notice			Section 5.03(b)
Company Termination Fee			Section 5.10(b)(ii)
Competing Confidentiality Agreement			Section 5.03(b)(i)
Confidentiality Agreement			Section 5.05(c)
Conversion Options			Section 2.06(b)
Convertible Notes			Section 4.02(a)
Defaulting Party			Section 5.10(d)
DGCL			Preamble
Dissenting Shares			Section 2.03
Effective Time			Section 1.02
Exchange Agent			Section 2.04(a)
Exchange Fund			Section 2.04(a)
Exchange Options			Section 2.06(a)
Exchange Ratio			Section 2.01(a)(i)(A)
FCPA			Section 3.22
Financing			Section 5.19(a)
Financing Commitment Letter			Section 4.23
Former Company Superior Proposal			Section 5.03(d)
Former Parent Superior Proposal			Section 5.04(d)
Investigation			Section 5.05(d)
Joint Proxy Statement			Section 3.09
Maximum Premium			Section 5.12(b)
Merger			Preamble
Merger Consideration			Section 2.01(a)(i)(B)
Merger Sub			Preamble
New Benefit Plans			Section 5.06(a)
Option Exchange Ratio			Section 2.06(a)
Parent			Preamble
Parent 10-K			Section 4.06
Parent 10-Q			Section 4.06
Parent Benefit Plans			Section 4.13(a)
Parent Change of Recommendation			Section 5.04(e)
Parent Class B Stock			Section 4.02(a)
Parent Common Stock			Section 2.01(a)(i)(A)
Parent Disclosure Letter			Article IV Preamble
Parent Financial Advisors			Section 4.20
Parent Leases			Section 4.17(b)
Parent Material Contracts			Section 4.11(a)
Parent Material Leased Real Property			Section 4.17(b)

A-73

---

Table of Contents

Term		Reference
Parent Material Licenses			Section 4.16(b)
Parent Permits			Section 4.10(a)
Parent Potential Acquiror			Section 5.04(b)
Parent Preferred Stock			Section 4.02(a)
Parent Qualified Plans			Section 4.13(d)
Parent Required Statutory Approvals			Section 4.04(d)
Parent Rights			Section 2.01(c)
Parent Rights Agreement			Section 2.01(c)
Parent SEC Documents			Section 4.05(a)
Parent Stockholder Approval			Section 4.04(a)
Parent Stockholders’ Meeting			Section 3.09
Parent Superior Proposal Notice			Section 5.04(b)
Parent Termination Fee			Section 5.10(c)(ii)
Patent Litigations			Section 5.18
Program			Section 3.18(h)
Registration Statement			Section 3.09
Representatives			Section 5.03(a)
Repurchase Rights			Section 2.08
Section 16			Section 5.08
Stock Merger Consideration			Section 2.01(a)(i)(A)
Surviving Corporation			Section 1.01
Termination Date			Section 7.01(b)(i)
Unit			Section 2.06(b)

A-74

---

Table of Contents

A-75

---

Table of Contents

	MEDICIS PHARMACEUTICAL CORPORATION

	By:	/s/ Jonah Shacknai

	Jonah Shacknai
	Chairman of the Board and Chief Executive Officer
	MASTERPIECE ACQUISITION CORP.

	By:	/s/ Jonah Shacknai

	Jonah Shacknai
	President
	INAMED CORPORATION

	By:	/s/ Nicholas L. Teti

	Nicholas L. Teti
	Chairman, President and Chief Executive Officer

A-76

---

Table of Contents

B-1

---

Table of Contents

	Very truly yours,
	/s/ Deutsche Bank Securities Inc.
	DEUTSCHE BANK SECURITIES INC.

B-2

---

Table of Contents

C-1

---

Table of Contents

	Very truly yours,
	/s/ Thomas Weisel Partners LLC
	THOMAS WEISEL PARTNERS LLC

C-2

---

Table of Contents

D-1

---

Table of Contents

D-2

---

Table of Contents

	Very truly yours,
	/s/ JPMorgan
	J.P. MORGAN SECURITIES INC.

D-3

---

Table of Contents

	1. The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by deleting Article I thereof in its entirety and inserting the following in lieu thereof:

	The name of the corporation is Medicis (the “Corporation”).

	2. The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by deleting Section 1 of Article IV thereof in its entirety and inserting the following in lieu thereof:

	Section 1. AUTHORIZED SHARES.
	The total number of Shares of all classes that the Corporation is authorized to issue is 306,000,000, consisting of 300,000,000 shares of Class A Common Stock, par value $.014 per share (“Class A Common Stock”); 1,000,000 shares of Class B Common Stock, par value $.014 per share (“Class B Common Stock”); and 5,000,000 shares of Preferred Stock, par value $.01 per share (“Preferred Stock”).

	3. The foregoing amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

E-1

---

Table of Contents

	MEDICIS PHARMACEUTICAL CORPORATION

	By:

	Mark A. Prygocki, Sr.
	Executive Vice President, Chief Financial Officer Corporate Secretary, and Treasurer

E-2

---

Table of Contents

	(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
	(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

	a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
	b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;
	c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or
	d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.

	(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

F-1

---

Table of Contents

	(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
	(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

F-2

---

Table of Contents

F-3

---

Table of Contents

F-4

---

Table of Contents

Item 20.	Indemnification of Directors and Officers

	•	for any breach of the director’s duty of loyalty to the corporation or its stockholders;
	•	for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
	•	under Section 174 of the DGCL, which imposes liability on directors for unlawful payment of dividends or unlawful stock purchase or redemption; or
	•	for any transaction from which the director derived an improper personal benefit.

Item 21.	Exhibits and Financial Statement Schedules

Item 22.	Undertakings

II-1

---

Table of Contents

II-2

---

Table of Contents

	MEDICIS PHARMACEUTICAL CORPORATION

	By:	/s/ Jonah Shacknai

	Jonah Shacknai
	Chief Executive Officer

Signature				Title		Date
/s/ Jonah Shacknai   Jonah Shacknai				Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)		November 1, 2005
/s/ Mark A. Prygocki, Sr.   Mark A. Prygocki, Sr.				Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer (Principal Financial and Accounting Officer)		November 1, 2005
/s/ Arthur G. Altschul, Jr.   Arthur G. Altschul, Jr.				Director		November 1, 2005
/s/ Spencer Davidson   Spencer Davidson				Director		November 1, 2005
/s/ Stuart Diamond   Stuart Diamond				Director		November 1, 2005
/s/ Peter S. Knight, Esq.   Peter S. Knight, Esq.				Director		November 1, 2005

II-3

---

Table of Contents

Signature				Title		Date
/s/ Michael A. Pietrangelo   Michael A. Pietrangelo				Director		November 1, 2005
/s/ Philip S. Schein, M.D.   Philip S. Schein, M.D.				Director		November 1, 2005
/s/ Lottie Shackelford   Lottie Shackelford				Director		November 1, 2005

II-4

---

Table of Contents

	2	.1		Agreement of Merger by and between the Company, Medicis Acquisition Corporation and GenDerm Corporation, dated November 28, 1997(11)
	2	.1(a)		Agreement of Plan of Merger, dated as of October 1, 2001, by and among Medicis Pharmaceutical Corporation, MPC Merger Corp. and Ascent Pediatrics, Inc.(17)
	2	.1(b)		Agreement and Plan of Merger, dated as of March 20, 2005, by and among Medicis Pharmaceutical Corporation, Masterpiece Acquisition Corp. and Inamed Corporation(24)
	3	.1		Certificate of Incorporation of Medicis Pharmaceutical Corporation, as amended(23)
	3	.3(a)		Amended and Restated By-Laws of Medicis Pharmaceutical Corporation(13)
	4	.1		Rights Agreement, dated August 17, 1995, between Medicis Pharmaceutical Corporation and American Stock Transfer & Trust Company, as Rights Agent(4)
	4	.1(b)		Amendment No. 2 to Rights Agreement, dated March 17, 1997, between Medicis Pharmaceutical Corporation and Norwest Bank Minnesota, N.A.(9)
	4	.1(c)		Amendment No. 3 to Rights Agreement, dated May 31, 2002, between Medicis Pharmaceutical Corporation and Wells Fargo Bank Minnesota, N.A., as successor-in-interest to American Stock Transfer & Trust Company(18)
	4	.1(d)		Amended and Restated Rights Agreement, dated as of August 17, 2005, between Medicis Pharmaceutical Corporation and Wells Fargo Bank, N.A., as Rights Agent(26)
	4	.1(e)		Indenture, dated as of August 19, 2003, by and between Medicis Pharmaceutical Corporation, as issuer, and Deutsche Bank Trust Company Americas, as trustee(23)
	4	.1(f)		Indenture, dated as of June 4, 2002, by and between Medicis Pharmaceutical Corporation, as issuer, and Deutsche Bank Trust Company Americas, as trustee(19)
	4	.1(g)		Supplemental Indenture dated as of February 1, 2005 to Indenture dated as of August 19, 2003 between Medicis Pharmaceutical Corporation and Deutsche Bank Trust Company Americas as Trustee(25)
	4	.2		Registration Rights Agreement, dated as of June 4, 2002, by and between Medicis Pharmaceutical Corporation and Deutsche Bank Securities Inc.(19)
	4	.3		Form of specimen certificate representing Class A common stock(1)
	5	.1		Opinion of Latham & Watkins LLP regarding the validity of the securities(28)
	8	.1		Opinion of Latham & Watkins LLP as to tax matters (filed herewith)
	8	.2		Opinion of Morrison & Foerster LLP as to tax matters (filed herewith)
	10	.1		Asset Purchase Agreement among Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc., BioMarin Pharmaceutical Inc., and BioMarin Pediatrics Inc., dated April 20, 2004(23)
	10	.2		Securities Purchase Agreement among Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc., BioMarin Pharmaceutical Inc. and BioMarin Pediatrics Inc., dated May 18, 2004(23)
	10	.3		License Agreement among Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc. and BioMarin Pediatrics Inc., dated May 18, 2004(23)
	10	.8		Medicis Pharmaceutical Corporation 1995 Stock Option Plan (incorporated by reference to Exhibit C to the definitive Proxy Statement for the 1995 Annual Meeting of Shareholders previously filed with the SEC, File No. 0-18443)
	10	.9		Employment Agreement between Medicis Pharmaceutical Corporation and Jonah Shacknai, dated July 24, 1996(8)
	10	.9(a)		Amendment to Employment Agreement by and between Medicis Pharmaceutical Corporation and Jonah Shacknai, dated April 1, 1999(15)
	10	.9(b)		Amendment to Employment Agreement by and between Medicis Pharmaceutical Corporation and Jonah Shacknai, dated February 21, 2001(15)
	10	.20		Medicis Pharmaceutical Corporation 2002 Stock Option Plan(20)
	10	.21		Medicis Pharmaceutical Corporation 2004 Stock Incentive Plan(27)
	10	.30		Waiver Letter dated March 18, 2005 between Medicis Pharmaceutical Corporation and Q-Med AB(27)

---

Table of Contents

	10	.59		Supply Agreement, dated October 21, 1992, between Schein Pharmaceutical and Medicis Pharmaceutical Corporation(2)
	10	.70		Amendment to Manufacturing and Supply Agreement, dated March 2, 1993, between Schein Pharmaceutical and Medicis Pharmaceutical Corporation(3)
	10	.72(a)		Credit and Security Agreement, dated August 3, 1995, between Medicis Pharmaceutical Corporation and Norwest Business Credit, Inc.(5)
	10	.72(b)		First Amendment to Credit and Security Agreement, dated May 29, 1996, between Medicis Pharmaceutical Corporation and Norwest Bank Arizona, N.A. (8)
	10	.72(c)		Second Amendment to Credit and Security Agreement, dated November 22, 1996, by and between Medicis Pharmaceutical Corporation and Norwest Bank Arizona, N.A. as successor-in-interest to Norwest Business Credit, Inc.(10)
	10	.72(d)		Third Amendment to Credit and Security Agreement, dated November 22, 1998, by and between Medicis Pharmaceutical Corporation and Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(12)
	10	.72(e)		Fourth Amendment to Credit and Security Agreement, dated November 22, 2000, by and between Medicis Pharmaceutical Corporation and Wells Fargo Bank Arizona, N.A., formerly known as Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(16)
	10	.72(f)		Fifth Amendment to Credit and Security Agreement, dated November 22, 2002, by and between Medicis Pharmaceutical Corporation and Wells Fargo Bank Arizona, N.A., formerly known as Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(23)
	10	.73(a)		Patent Collateral Assignment and Security Agreement, dated August 3, 1995, by Medicis Pharmaceutical Corporation to Norwest Business Credit, Inc.(6)
	10	.73(b)		First Amendment to Patent Collateral Assignment and Security Agreement, dated May 29, 1996, by Medicis Pharmaceutical Corporation to Norwest Bank Arizona, N.A.(8)
	10	.73(c)		Amended and Restated Patent Collateral Assignment and Security Agreement, dated November 22, 1998, by Medicis Pharmaceutical Corporation to Norwest Bank Arizona, N.A.(12)
	10	.74(a)		Trademark Collateral Assignment and Security Agreement, dated August 3, 1995, by Medicis Pharmaceutical Corporation to Norwest Business Credit, Inc.(7)
	10	.74(b)		First Amendment to Trademark Collateral Assignment and Security Agreement, dated May 29, 1996, by Medicis Pharmaceutical Corporation to Norwest Bank Arizona, N.A.(8)
	10	.74(c)		Amended and Restated Trademark, Tradename, and Service Mark Collateral Assignment and Security Agreement, dated November 22, 1998, by Medicis Pharmaceutical Corporation to Norwest Bank Arizona, N.A.(12)
	10	.75		Assignment and Assumption of Loan Documents, dated May 29, 1996, from Norwest Business Credit, Inc., to and by Norwest Bank Arizona, N.A.(8)
	10	.76		Multiple Advance Note, dated May 29, 1996, from Medicis Pharmaceutical Corporation to Norwest Bank Arizona, N.A.(8)
	10	.89		Asset Purchase Agreement dated November 15, 1998, by and among Medicis Pharmaceutical Corporation and Hoechst Marion Roussel, Inc., Hoechst Marion Roussel Deutschland GMHB and Hoechst Marion Roussel, S.A.(12)
	10	.90		License and Option Agreement dated November 15, 1998, by and among Medicis Pharmaceutical Corporation and Hoechst Marion Roussel, Inc., Hoechst Marion Roussel Deutschland GMBH and Hoechst Marion Roussel, S.A.(12)
	10	.91		Loprox Lotion Supply Agreement dated November 15, 1998, by and between Medicis Pharmaceutical Corporation and Hoechst Marion Roussel, Inc.(12)
	10	.92		Supply Agreement dated November 15, 1998, by and between Medicis Pharmaceutical Corporation and Hoechst Marion Roussel Deutschland GMBH(12)
	10	.93		Asset Purchase Agreement effective January 31, 1999, between Medicis Pharmaceutical Corporation and Bioglan Pharma Plc(14)
	10	.94		Stock Purchase Agreement by and among Medicis Pharmaceutical Corporation, Ucyclyd Pharma, Inc. and Syed E. Abidi, William Brusilow, Susan E. Brusilow and Norbert L. Wiech, dated April 19, 1999(14)

---

Table of Contents

	10	.95		Asset Purchase Agreement by and between Medicis Pharmaceutical Corporation and Bioglan Pharma Plc, dated June 29, 1999(14)
	10	.96		Asset Purchase Agreement by and among The Exorex Company, LLC, Bioglan Pharma Plc, Medicis Pharmaceutical Corporation and IMX Pharmaceuticals, Inc., dated June 29, 1999(16)
	10	.97		Medicis Pharmaceutical Corporation Executive Retention Plan(14)
	10	.98		Asset Purchase Agreement between Warner Chilcott, plc and Medicis Pharmaceutical Corporation, dated September 14, 1999(14)
	10	.99(a)		Share Purchase Agreement between Q-Med International B.V. and Startskottet 21914 AB (under proposed change of name to Medicis Sweden Holdings AB), dated February 10, 2003(21)
	10	.99		Amendment No. 1 to Share Purchase Agreement between Q-Med International B.V. and Startskottet 21914 AB (under proposed change of name to Medicis Sweden Holdings AB), dated March 7, 2003(21)
	10	.100		Supply Agreement between Q-Med AB and Medicis Pharmaceutical Corporation, dated March 7, 2003(21)
	10	.101		Amended and Restated Intellectual Property Agreement between Q-Med AB and HA North American Sales AB, dated March 7, 2003(21)
	10	.102		Supply Agreement between Medicis Aesthetics Holdings Inc., a wholly owned subsidiary of Medicis Pharmaceutical Corporation, and Q-Med AB, dated July 15, 2004(23) Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934
	10	.103		Intellectual Property License Agreement between Q-Med AB and Medicis Aesthetics Holdings Inc., dated July 15, 2004 (23) Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934
	12			Computation of Ratios of Earnings to Fixed Charges(27)
	21	.1		Subsidiaries(27)
	23	.1		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, related to Medicis’ consolidated financial statements (filed herewith)
	23	.2		Consent of KPMG LLP, Independent Registered Public Accounting Firm, related to Inamed’s consolidated financial statements (filed herewith)
	23	.3		Consent of Latham & Watkins LLP (included in exhibits 5.1 and 8.1)
	23	.4		Consent of Morrison & Foerster LLP (included in exhibit 8.2)
	24	.1		Power of Attorney (See page II-3)
	99	.1		Exclusive Remedy Agreement, dated as of October 1, 2001, by and among Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc., FS Private Investments LLC, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC and FS Parallel Fund L.P., BancBoston Ventures Inc., Flynn Partners, Raymond F. Baddour, Sc.D., Robert E. Baldini, Medical Science Partners L.P. and Emmett Clemente, Ph.D(17)
	99	.1		Charter of the Nominating and Governance Committee of the Board of Directors of Medicis Pharmaceutical Corporation(22)
	99	.2		Note Agreement, dated as of October 1, 2001, by and among Ascent Pediatrics, Inc., Medicis Pharmaceutical Corporation, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC, FS Parallel Fund L.P., BancBoston Ventures Inc. and Flynn Partners (17)
	99	.2		Medicis Pharmaceutical Corporation Corporate Governance Guidelines(22)
	99	.3		Voting Agreement, dated as of October 1, 2001, by and among Medicis Pharmaceutical Corporation, MPC Merger Corp., FS Private Investments LLC, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC and FS Parallel Fund L.P.(17)
	99	.4		Consent of Deutsche Bank Securities Inc. (filed herewith)
	99	.5		Consent of Thomas Weisel Partners LLC (filed herewith)
	99	.6		Consent of JPMorgan Securities Inc. (filed herewith)

---

Table of Contents

	99	.7		Consent of Nicholas L. Teti to be named a director of Medicis upon completion of the merger (filed herewith)
	99	.8		Consent of Mitchell S. Rosenthal, M.D. to be named a director of Medicis upon completion of the merger (filed herewith)
	99	.9		Consent of Joy A. Amundson to be named a director of Medicis upon completion of the merger (filed herewith)
	99	.10		Consent of Terry E. Vandewarker to be named a director of Medicis upon completion of the merger (filed herewith)
	99	.11		Form of Proxy of Medicis (filed herewith)
	99	.12		Form of Proxy of Inamed(28)

	(1)	Incorporated by reference to the exhibit with the same number in the Registration Statement on Form S-1 of the Registrant, File No. 33-32918, filed with the SEC on January 16, 1990
	(2)	Incorporated by reference to the exhibit with the same number in Registration Statement on Form S-1 of Medicis Pharmaceutical Corporation, File No. 33-54276, filed with the SEC on June 11, 1993
	(3)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 1993, File No. 0-18443, filed with the SEC on October 13, 1993
	(4)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 1995, File No. 0-18443, previously filed with the SEC (the “1994 Form 10-K”)
	(5)	Incorporated by reference to exhibit number 4.2 in the 1995 Form 10-K
	(6)	Incorporated by reference to exhibit number 4.4 in the 1995 Form 10-K
	(7)	Incorporated by reference to exhibit number 4.5 in the 1995 Form 10-K
	(8)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 1996, File No. 0-18443, previously filed with the SEC
	(9)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-18443, previously filed with the SEC

(10)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1996, File No. 0-18443, previously filed with the SEC
(11)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on December 15, 1997
(12)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1998, File No. 0-18443, previously filed with the SEC
(13)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, File No. 0-18443, previously filed with the SEC
(14)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 1999, File No. 0-18443, previously filed with the SEC
(15)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, File No. 0-18443, previously filed with the SEC

---

Table of Contents

(16)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2001, File No. 0-18443, previously filed with the SEC
(17)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on October 2, 2001
(18)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s registration statement on Form 8-A12B/ A filed with the SEC on June 4, 2002
(19)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on June 6, 2002
(20)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, File No. 0-18443, previously filed with the SEC
(21)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on March 10, 2003
(22)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003, File No. 0-18443, previously filed with the SEC
(23)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004, File No. 0-18443, previously filed with the SEC
(24)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on March 21, 2005
(25)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 0-18443, previously filed with the SEC
(26)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Current Report on Form 8-K filed with the SEC on August 18, 2005
(27)	Incorporated by reference to the exhibit with the same number in Medicis Pharmaceutical Corporation’s Annual Report on Form 10-K filed with the SEC on September 13, 2005
(28)	To be filed by amendment.