#1Calling for a Special Meeting of Allergan Shareholders: PERSHING 27 SQUARE ISS Presentation July 16, 2014 Pershing Square Capital Management, L.P.#2Legal Disclaimer This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to Pershing Square Capital Management, LP's ("Pershing Square") solicitation of written requests to call a special meeting of shareholders of Allergan, Inc. ("Allergan") in connection with the proposal which Valeant Pharmaceuticals International, Inc. ("Valeant") has made for a business combination transaction with Allergan. In furtherance of this proposal and subject to future developments, Pershing Square has filed a definitive solicitation statement with the Securities and Exchange Commission (the "SEC") on July 11, 2014 (the "solicitation statement"). Valeant has filed a registration statement on Form S-4 (the "Form S-4") and a tender offer statement on Schedule TO (including the offer to exchange, the letter of election and transmittal and other related offer materials) with the SEC on June 18, 2014 (together with the Form S-4, the "Schedule TO"), and a preliminary proxy statement on June 24, 2014 with respect to a meeting of Valeant shareholders. Pershing Square and Valeant (and, if a negotiated transaction is agreed, Allergan) may file one or more solicitation statements, registration statements, proxy statements, tender or exchange offer documents or other documents with the SEC. This communication is not a substitute for the solicitation statement, the Schedule TO, or any other solicitation statement, proxy statement, registration statement, prospectus, tender or exchange offer document or other document Pershing Square, Valeant and/or Allergan may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF VALEANT AND ALLERGAN ARE URGED TO READ THE SOLICITATION STATEMENT, PROXY STATEMENT(S), REGISTRATION STATEMENT, PROSPECTUS, TENDER OR EXCHANGE OFFER DOCUMENTS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The solicitation statement is currently being mailed to stockholders of Allergan. Any definitive solicitation statement or proxy statement(s) or definitive tender or exchange offer documents (if and when available) will be mailed to stockholders of Allergan and/or Valeant, as applicable. Investors and security holders will be able to obtain free copies of the solicitation statement and the Schedule TO and will be able to obtain free copies of these other documents filed with the SEC by Pershing Square and/or Valeant through the web site maintained by the SEC at http://www.sec.gov. Information regarding the names and interests in Allergan and Valeant of Pershing Square and persons related to Pershing Square who may be deemed participants in any solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available in the solicitation statement. The solicitation statement can be obtained free of charge from the sources indicated.#3Legal Disclaimer (Cont.) The information in this presentation is for informational purposes only, and this presentation shall not constitute an offer to sell or a solicitation of an offer to purchase any security or investment product, nor does it constitute professional advice. This presentation and the information contained herein is not investment advice or a recommendation or solicitation to buy or sell any securities. All investments involve risk, including the loss of principal. Pershing Square recognizes that there may be confidential information in the possession of the companies discussed in this presentation that could lead these companies to disagree with Pershing Square's conclusions. The information contained in this presentation is subject in all respects to the disclosure set forth in the reports filed by Allergan and Valeant with the SEC. Except where otherwise indicated, the information in this presentation speaks only as of the date of this presentation. Permission to quote third-party reports in this presentation has been neither sought nor obtained, nor was consent obtained or sought with respect to third party statements referenced in this presentation. This presentation is not all inclusive and may not contain all of the information that you require in order to evaluate Allergan and Valeant and the transactions described in this presentation. You should review Valeant's and Allergan's most recent annual and quarterly reports and other reports filed by Valeant and Allergan with the SEC. You should rely on your own independent analysis to assess the accuracy and completeness of all information contained herein. No representation, warranty or undertaking, expressed or implied, is or will be made and no responsibility or liability is or will be accepted by Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, as to, or in relation to, the accuracy or completeness of the information contained in the presentation, or any other information, errors therein or omissions therefrom. By presenting this information, none of Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, is providing investment, legal, tax, financial, accounting or other advice to you or to any other party. None of Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, is acting as an advisor or fiduciary in any respect in connection with providing this information. Funds managed by Pershing Square and its affiliates are invested in Allergan common stock and other securities. Pershing Square manages funds that are in the business of trading - buying and selling - securities and financial instruments. It is possible that there will be developments in the future that cause Pershing Square to change its position regarding Allergan, Valeant and the proposed Valeant- Allergan business combination. Pershing Square may buy, sell, cover or otherwise change the form of its investment in Allergan for any reason. Pershing Square hereby disclaims any duty to provide any updates or changes to the analyses contained here including, without limitation, the manner or type of any Pershing Square investment.#4Legal Disclaimer (Cont.) Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, including but not limited to cash net income and EBITDA (collectively. "non-GAAP financial measures). These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Pershing Square believes that the presentation of these financial measures enhances an investor's understanding of Valeant's and Allergan's financial performance. Pershing Square further believes that these financial measures are useful financial metrics to assess operating performance from period to period by excluding certain items that it believes are not representative of Valeant's and Allergan's respective core businesses. Pershing Square also believes that these financial measures provide investors with a useful tool for assessing the comparability between periods of Valeant's and Allergan's respective abilities to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. Pershing Square believes these financial measures are commonly used by investors to evaluate companies' performance. However, the use of these non- GAAP financial measures in this presentation may vary from that of other companies in Valeant's and Allergan's industry. These non- GAAP financial measures should not be considered as alternatives to performance measures derived in accordance with GAAP.#5Legal Disclaimer (Cont.) This presentation contains forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding Valeant's offer to acquire Allergan, Valeant's financing of the proposed transaction, Valeant's or Allergan's expected future value and performance (including expected results of operations and financial guidance), and the combined company's future financial condition, operation results, strategy and plans. Forward-looking statements may be identified by the use of the words "anticipates," "expects," "intends," "plans," "should," "could." "would," "may." "will," "believes," "estimates," "potential," "target," "opportunity," "tentative," "positioning," "designed," "create." "predict," "project," "seek," "ongoing." "upside, increases" or "continue" and variations or similar expressions and include but are not limited to beliefs expressed regarding future performance. These statements are based upon the current expectations and beliefs of Pershing Square and are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results to differ materially from those described in the forward-looking statements. These assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in Valeant's and/or Allergan's most recent annual or quarterly reports filed with the SEC and the Canadian Securities Administrators (the "CSA") and assumptions, risks and uncertainties relating to the proposed merger, as detailed from time to time in Valeant's filings with the SEC and the CSA Important factors that could cause actual results to differ materially from the forward-looking statements we make in this presentation are set forth in other reports or documents that Valeant and/or Allergan file from time to time with the SEC or the CSA, and include, but are not limited to: the ultimate outcome of any possible transaction between Valeant and Allergan, including the possibilities that Valeant will not pursue a transaction with Allergan and that Allergan will reject a transaction with Valeant; if a transaction between Valeant and Allergan were to occur, the ultimate outcome and results of integrating the operations of Valeant and Allergan, the ultimate outcome of Valeant's pricing and operating strategy applied to Allergan and the ultimate ability to realize synergies; the effects of the business combination of Valeant and Allergan, including the combined company's future financial condition, operating results, strategy and plans the effects of governmental regulation on Valeant's and Allergan's business or potential business combination transaction; ability to obtain regulatory approvals and meet other closing conditions to the transaction, including all necessary stockholder approvals, on a timely basis: Valeant's and Allergan's ability to sustain and grow revenues and cash flow from operations in their respective markets and to maintain and grow their respective customer bases, the need for innovation and the related capital expenditures and the unpredictable economic conditions in the United States and other markets; the impact of competition from other market participants; the development and commercialization of new products; the availability and access, in general, of funds to meet Valeant's and Allergan's debt obligations prior to or when they become due and to fund their operations and necessary capital expenditures, either through (1) cash on hand, (i) free cash flow, or () access to the capital or credit markets: Valeant's and Allergan's ability to comply with all covenants in their respective indentures and credit facilities any violation of which, if not cured in a timely manner, could trigger a default of their respective other obligations under cross-default provisions; and the risks and uncertainties detailed by Valeant and Allergan with respect to their respective businesses as described in their respective reports and documents filed with the SEC. All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. None of Pershing Square or any of its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors undertakes any obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect actual outcomes.#6Executive Summary There are two principal reasons we are calling for a special meeting 1) To fix the special meeting provisions in Allergan's bylaws, which are unduly onerous and anti-shareholder 2) To remove directors and propose the appointment of new directors who will engage with Valeant on its compelling and certain offer to acquire Allergan at a 50%+ premium to Allergan's unaffected share price#7Table of Contents I || IV V VI A Special Meeting is Warranted Given Allergan's Record of Poor Corporate Governance The Current Offer Justifies Board Engagement and Meets Investors' "Asking Price" The Valeant Offer Satisfies the Prevailing M&A Proxy Fight Analytical Framework Investors and Research Analysts Are Confident in Valeant's Operating Model and the Strategic Combination Risks in Allergan's Business Model Allergan's History of Poor Cost Management, Poor Capital Allocation, and Shareholder Unfriendly Compensation Policies VII We Believe There is Significant Downside to Allergan's Standalone Stock Price#8I. A Special Meeting is Warranted Given Allergan's Record of Poor Corporate Governance#9A Special Meeting is Warranted Given Allergan's Record of Poor Corporate Governance To date, Allergan's board has responded to Valeant's highly compelling and certain offer by refusing to engage with Valeant, refusing to meet with Pershing Square without management present, and by attacking Valeant's business model and management with claims unsupported by factual evidence Members of the board of directors of a Delaware corporation faced with a takeover bid are required to inform themselves of all material information about a transaction and then act with care in evaluating it. By failing to authorize the board's advisors to meet with Valeant to address any of the board's stated concerns about Valeant, the board and its advisors have failed to do any reasonable investigation of the Valeant transaction, depriving shareholders of the opportunity to consider this offer#10A Special Meeting is Warranted Given Allergan's Record of Poor Corporate Governance (Cont.) This board's recent behavior is consistent with Allergan's past poor corporate governance. Shareholders deserve the right to elect a board who will protect their interests as owners of the company. Shareholders also deserve the right to call a special meeting free of onerous provisions and impediments. We have proposed a special meeting, which Allergan has sought to suppress, to enfranchise shareholders#11ISS Supports Special Meeting and Written Consent Rights as Important Tools for Empowering Shareholders to Respond to Attractive Offers ISS 2014 US Proxy Voting Guidelines: "In terms of day-to-day governance, shareholders may lose an important right- the ability to remove directors or initiate a shareholder resolution without having to wait for the next scheduled meeting-if they are unable to call a timely special meeting. Shareholders could also be powerless to respond to a beneficial offer if a bidder cannot call a special meeting. Over the past few years...companies have responded to shareholder resolutions seeking the right to call special meetings by offering management proposals with stricter requirements... Such restrictions can be used as anti-takeover devices- impeding the removal of incumbent board members or delaying a takeover attempt of the company-and, therefore, run counter to the stated intention of allowing shareholders to call special meetings." "Limitations on written consent are clearly contrary to shareholder interests... Beneficial tender offers may also be precluded because of a bidder's inability to take action by written consent." 10#12ISS Supports Special Meeting and Written Consent Rights as Important Tools for Empowering Shareholders to Respond to Attractive Offers (Cont.) ISS analysis on Darden Restaurants (April 24, 2014): ISS recommendation: FOR the Consent to Request a Special Meeting "But the value of a shareholder meeting is precisely that it provides a definitive, authentic, and unassailable answer to the question of what shareholders want. Not every shareholder is in agreement on every issue, to be sure-but shareholders in general, and institutional shareholders in particular, accept that the shareholder vote is the premier mechanism for the owners of the company to settle significant questions about the company's future." "Engagement can be a very effective mechanism for providing the board with insight; for settling complex questions about the company's future, however, it lacks the definitive authority of the shareholder vote itself." 11#13Allergan has Used Procedural Restrictions to Neuter Mechanisms for Shareholder Action 2012 Shareholder Proposal (% of votes cast) Mgmt Rec. ISS Rec. GL Rec. Mgmt Response Restrictions (1) Call special meetings with 10% of the vote (55.3%) AGAINST FOR FOR Placed on ballot a year later but with substantial restrictions 25% of the vote required ▸ Timing restrictions Unduly onerous disclosure requirements to make request Restrictions on "similar items" Restriction on stock sales by shareholders requesting a special meeting Votes FOR as % of votes [FOR AGAINST 2013 Right to act by written consent (50.2%) AGAINST 12 FOR FOR Placed on ballot a year later but with substantial restrictions 25% of the vote required ▸ Timing restrictions ▸ Restrictions on "similar items" 2014 Separation of Chairman / CEO (50.5%) AGAINST FOR FOR No action taken, to date N/A#14Allergan's Special Meeting Provision Provides a Heavily Restricted Right To frustrate shareholder action, Allergan designed unnecessary restrictions to calling a special meeting ► 25% of the voting power of the company's common stock required to request a special meeting ► The meeting request must be "IN PROPER FORM", meaning the requesting shareholders must make certain concessions including: ■ Representations that they INTEND TO HOLD THEIR SHARES through the date of the special meeting ■ Acknowledgements that a sale of their Allergan shares prior to the meeting date will constitute a corresponding reduction of shares in support of the special meeting request, even if shares are repurchased prior to the meeting Shareholders requesting the special meeting must continue to hold at least 25% of the company's shares until the special meeting date or the meeting may be cancelled 13#15Allergan's Special Meeting Provision Provides a Heavily Restricted Right (Cont.) To frustrate shareholder action, Allergan designed unnecessary restrictions to calling a special meeting ► Allergan's special meeting timing restrictions effectively limit the special meeting window to only one meeting per year within a narrow three and a half-month period May 7: ■ Allergan's board can delay a special meeting by up to 120 days from the date requested Illustrative Timeline: Solicitation period; a. Late May- No requests are allowed from 90 days prior to the anniversary of the previous AGM until the adjournment of the next AGM b. Mid June- a.~2 weeks for SEC clearance b. -4 weeks for proxy solicitation Jun Jul Assumes request is made the first day after the AGM Management can delay up to 120 days Aug Sep Oct Mid October -3.5 months Special meeting window Nov 14 Dec Jan Early February Feb 90-days prior to anniversary of AGM Apr May Mar May 6: ▸ Anniversary of previous AGM#16Allergan's Special Meeting Provision Provides a Heavily Restricted Right (Cont.) To frustrate shareholder action, Allergan designed unnecessary restrictions to calling a special meeting Special meetings may not consider any "Similar Items" covered at a meeting in the previous year ■ By which the Allergan board seeks to PROHIBIT THE ELECTION OF NEW DIRECTORS at a special meeting, even if current Allergan directors are removed (1) Unduly onerous disclosure requirements (with ongoing duty to update) for requesting shareholders (e.g., 2-year trading date, relationships with AGN employees and competitors) Highly unusual requirement for Cede & Co. to itself submit individual signed meeting requests (rather than granting the usual omnibus proxy) and for shareholders themselves to become record owners adds substantial logistical barriers ► The board determines, in sole discretion, whether meeting requests are compliant A shareholder derivative lawsuit is pending in Delaware challenging the Allergan board's attempted application of "Similar Items to replacing directors (in re Allergan, Inc Stockholder Litigation) 15#17Misperceptions Regarding Calling a Special Meeting ► Allergan's bylaws as written provide onerous burdens ► There are, however, misperceptions that should be dismissed ■ Shareholders are required to represent that they intend to hold shares through the special meeting ■ Shareholders are still permitted to sell their shares after announcing their intention to hold them, but any shares sold will not count towards the 25% requirement to call a special meeting While the sale of a share revokes that share from the special meeting solicitation, the remainder of that investor's position will continue to qualify in support for the meeting 16#18Allergan's Written Consent Provision Provides the Illusion of Shareholder Rights ► 25% of the company's shares are required to request a record date to act by written consent ► Similar unduly onerous disclosure requirements (with ongoing duty to update) for requesting a record date as those to request a special meeting ► Action by written consent cannot cover "Similar Items" considered at a meeting in the previous 12 months, including the election of directors, or any business to be presented at a meeting to be held within 90 days ▸ No consents can be dated or delivered until 90 days after delivery of the request for a record date ► Stockholders cannot act by written consent if the Allergan board calls a meeting to present a substantially "Similar Item" A special meeting will allow shareholders to remedy these problematic governance provisions as quickly as possible 17#19Allergan's Board has Taken Steps to Obstruct a Special Meeting Allergan's board and management used ambiguity regarding the poison pill to discourage the solicitation of proxies On April 22nd, the same day that Valeant first announced its proposal, Allergan adopted a poison pill that limits shareholder communication ▸ On June 6th, Pershing Square asked Allergan to clarify, among other things, that the solicitation and receipt of proxies would not trigger the pill ► In Allergan's June 11th reply, Allergan refused to respond directly on this issue ▸ Only after Pershing Square commenced an action in Delaware court regarding this issue did management confirm that the solicitation of proxies and certain related activities would not trigger the pill 18#20Allergan's Board has Taken Steps to Obstruct a Special Meeting (Cont.) It takes up to four procedural steps to call a special meeting but only one step to support a revocation ►Allergan shareholders must comply with a series of up to four procedural steps, each requiring extensive disclosure and documentation, to submit a request to call a special meeting ► The Allergan board has launched a revocation campaign against calling a special meeting ■ To support a revocation, shareholders need only submit a simple proxy card providing their name and checking a box in one step Steps 4 1 Allergan management is soliciting against a fundamental right it has supposedly granted shareholders#21Allergan's Argument Against Holding a Special Meeting ► Allergan states that the distraction and time and financial cost of holding a meeting are the reasons why a special meeting should not be held ► These costs would go away if Allergan would immediately engage with Valeant regarding the proposed transaction There are certain significant risks and costs associated with calling and holding a special meeting of which stockholders should be aware before making the decision of whether to execute and return a white Written Request card in connection with the Pershing Square/Valeant Solicitation. A special meeting and the related solicitations risk diverting significant time and resources when it is critical that Allergan's Board and management be fully focused on operations and executing the Company's strategies. Rather than hold a special meeting, our Board and management strongly believe that the more prudent course of action is for Allergan to focus on extending its track record of substantial growth that the Board and management are confident will create significantly more value for stockholders than Pershing Square's and Valeant's proposal. Successive solicitations would also require Allergan to incur additional financial costs, including with respect to internal allocations, third-party advisory fees, printing, mailing and solicitation expenses and other costs. Allergan Schedule 14A filed July 15, 2014 20#22Allergan has Ignored its Own Corporate Governance Guidelines Contacting our Board of Directors Any interested person, including any stockholder, who desires to contact the current director presiding over the executive sessions or the other board members may do so by writing to the Allergan, Inc. Board of Directors, Attn: Secretary, P.O. Box 19534, Irvine, CA 92623. Communications received will be distributed by our Secretary to the director presiding over the executive sessions or such other board member or members as deemed appropriate by our Secretary, depending on the facts and circumstances outlined in the communication received. Mr. Gallagher, as the Board's lead independent director, holds a critical role in assuring effective corporate governance and in managing the affairs of our Board. Among other responsibilities, Mr. Gallagher: consults with the Chairman of the Board and other board members on corporate governance practices and policies, and assuming the primary leadership role in addressing issues of this nature if, under the circumstances, it is inappropriate for the Chairman of the Board to assume such leadership, [Emphasis added] -Allergan's 2014 proxy statement Mr. Gallagher, like all of our directors, is available to each of our major stockholders for consultation and direct communication -Allergan's 2014 proxy supplement Despite this clearly stated guideline, Allergan has refused any opportunity to discuss the Valeant proposal with the lead independent director without Mr. Pyott being present Pershing Square first requested a discussion with Mr. Gallagher on April 23rd. Allergan complied but included Mr. Pyott on the call ■ During the call, Mr. Ackman requested a meeting with Mr. Gallagher in executive session, which Mr. Gallagher rejected ■ Mr. Ackman proposed a subsequent conversation with Mr. Gallagher, but Mr. Gallagher refused to provide any contact details ■ Mr. Ackman offered to speak with Mr. Gallagher with the board's counsel present, but Mr. Gallagher again refused ■ On May 13th, Mr. Pyott told Mr. Ackman that he was the only member of the board authorized to speak with shareholders 21#23Allergan's Board is Characterized by Long Tenures, Low Stock Ownership, and Weak Governance Name Shareholder proposal passed at 2014 AGM to separate CEO/Chairman roles David E.I. Pyot Michael R. Gallagher Deborah Dunsire, M.D. Trevor M. Jones, Ph.D. Louis J. Lavigne, Jr. Peter J. McDonnell, M.D. Timothy D. Proctor Russell T. Ray Henri A. Termeer Source (1) Title I ICEO/Chairman I Lead Director Director Director Director Director Director Director Director Board Tenure (Y) Age Lengthy tenure may impact independence and objectivity 16 16 10 9 1 0 60 68 51 71 65 55 64 66 68 Shares Held Committees Shares Audit / Corp. Org. & Sci. & (000's) % 0/S Finance Gov. Comp. Tech. T I 1 T 1 234.2 39.2 38.0 1 7.51 20.0 5.61 5.6 27.2 1 I 251 <0.1% <0.1% <0.1% <0.1% -0.1% -0.1% <0.1% <0.1% <0.1% No "skin in the game", limited alignment with investors M M M с CH T M [1 M C M M M M C M M % Votes 91.4% 66.7% 95.0% 88.5% 94.9% 88.3% 94.0% 94.2% 95.0% Members of Corporate Governance Committee received lower than average shareholder support at the 2014 AGM 2014 AGM ISS Rec. FOR FOR FOR AGAINST AGAINST FOR FOR FOR FOR M² FOR GL Rec. FOR FOR AGAINST! FOR AGAINST FOR FOR FOR Name te tenure, age and committees per Allergan's proxy statement filed with the SEC March 20 2014 Shares held per FactSet 55 recommendation per Apel 23, 2014 155 report Glass Lewis recommendation per Apri 13, 2014 Guss Lewis report and vote results per Alergan's Form 8-K fed with the SEC May 9. 2014 155 recommended AGAINST the re-election of Mr Gallagher at the 2014 AGM for failing as Corporate Governance and Compliance Committee Chair to fully implement a shareholder proposal that received majority support at the 2013 AGM to amend the corporate charter to allow shareholders to act by written consent Athough the Board did indude such a proposal at the 2014 AGM #included a restriction imting agenda tems and a requirement that 25 percent of the outstanding shares are required to request a record date 22#24ISS Has Identified a High Possibility of Governance Risk at Allergan This May, ISS awarded Allergan a governance QuickScore of 8, indicating a HIGH POSSIBLILITY OF GOVERNANCE RISK(1) Board structure (10/10) ■ The board did not adequately address a shareholder proposal supported by the majority of shares voted ISS recommended AGAINST the re-election of Mr. Gallagher at the 2014 AGM for failing as Corporate Governance and Compliance Committee Chair to fully implement the 2013 shareholder proposal to allow action by written consent; Gallagher received 33.3% withhold votes ■ 8 of 9 of directors received shareholder approval rates below the average (95%) level at the most recent shareholder meeting 3 directors received below 90% of the vote ■ 3 of 8 of the non-executive directors on the board have lengthy tenure The roles of Chairman and CEO have not been separated even though a majority of shareholders voting approved a proposal to separate at Allergan's 2014 AGM Shareholder rights (9/10) ■ The company has a poison pill in effect with a 10% trigger threshold ■ 25% of share capital is needed to convene a special meeting or act by written consent There are material restrictions on shareholders' right to call special meetings or act by written consent Source: Institutional Shareholder Services (1) May 28, 2014 ISS Governance QuickScore Profie. 23#25Why a Special Meeting is Necessary to Protect Shareholder Rights ► The existence of a poison pill makes it impossible for shareholders to take advantage of Valeant's exchange offer for Allergan shares ▸ Without a special meeting, Allergan's board could disenfranchise shareholders on this transaction until the company's next AGM ■ Allergan could delay the company's 2015 AGM beyond next May ► In the meantime, we believe there is significant risk to shareholder value at Allergan ■ Valeant may be forced or choose to abandon the transaction ■Allergan's board could take value-destructive actions to thwart the Valeant offer The special meeting provides shareholders an important opportunity to: Create a path to completion of a compelling offer Rectify onerous bylaw and charter provisions that disenfranchise shareholders 24#26A Viable Path to Effect a Deal ▸ At the Special Meeting, shareholders can vote to remove Allergan directors ► Pershing Square will propose to remove six of Allergan's nine directors, to be replaced with new candidates Pershing Square has identified ► If the Allergan board refuses to appoint these new directors, shareholders of 10% or more can seek a summary election under Delaware General Corporation Law § 223 (c) § 223 (c) provides in relevant part: "If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the voting stock... summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office ..."#27Pershing Square is Proposing a Slate of Qualified and Independent Nominees to Protect Shareholder Interests Betsy Atkins (61) Chief Executive Officer of Baja LLC • CEO of Baja LLC, an independent venture capital firm focused on technology, renewable sciences, and sciences, since 1994 • Co-founded several successful high tech and consumer companies, including Ascend Communications, which was sold to Lucent Technologies in 1999 for $24 billion • Formerly CEO and Chairman of Clear Standards, an on-demand enterprise energy management sustainability software company, from 2008 to 2009, at which time it was acquired by SAP AG. Former Chairman of the Board of Directors of Third Screen Media, a company that was eventually sold to AOL • Has served as a director of Polycom, Inc. since April 1999, Schneider Electric, SA since April 2011, HD Supply Holdings, Inc. since September 2013, and Ciber Inc. since July 2014. Formerly served on the Boards of Directors of Human Genome Sciences Inc., HealthSouth Corporation, Vonage Holdings Inc., Towers Watson & Co., Reynolds American Inc., SunPower Corporation, and Chico's FAS, Inc. Has agreed she will remain on only three other boards if elected to Allergan's board Cathleen P. Black (70) Senior Advisor at RRE Ventures LLC • Senior Advisor at RRE Ventures LLC, an early stage venture capital firm, since 2011, and has served on the boards of two of RRE Ventures LLC's portfolio companies, Yieldbot Inc. and Bark & Co Inc. She is also a board member of PubMatic, Inc. • Previously served as President of Hearst Magazines and also served as a director of the Hearst Corporation from January 1996 until late 2010. Served as President of USA Today from October 1983 until June 1991 and was a board member of the parent company, Gannett Co. • Served as a director of Vibrant Media Inc., a global leader of in-content contextual technology, from October 2012 until 2013, served as an independent director of International Business Machines Corp. from 1995 until 2010, and served as a director of The Coca-Cola Company from 1992 until 2010 Fredric N. Eshelman (65) Principal of Eshelman Ventures, LLC • Principal at Eshelman Ventures, LLC, which is a fund that invests primarily in early-stage healthcare • Served as Founding Chairman of Furiex Pharmaceuticals, Inc., a drug development company, from its founding in 2009 until the sale of the company to Forest Laboratories LLC in July 2014 for $1.5 billion. Founded Pharmaceutical Product Development (PPD), an international contract research organization, and served as the CEO of PPD until 1989 and from July 1990 until July 2009, Vice Chairman of its board of directors from July 1993 until July 2009, and Executive Chairman from July 2009 until its sale to private equity in 2011 for $3.9 billion. From 1989 until 1990, Dr. Eshelman was Senior Vice President of Development at Glaxo, Inc. and served on the board of the U.S. subsidiary of Glaxo Holdings plc. . Currently serves as director on several private company boards. Served on the board of Princeton Pharma Holdings LLC from February 2008 until May 2010, when it was acquired by Valeant Pharmaceuticals International, Inc. 26#28Pershing Square is Proposing a Slate of Qualified and Independent Nominees to Protect Shareholder Interests Steven J. Shulman (63) Managing Director of Shulman Ventures, Inc. • Managing Director of Shulman Ventures Inc., a private equity firm, and has been a strategic advisor to Water Street Healthcare Partners, a health care private equity firm, since 2008 • Served as Chairman of Health Management Associates Inc. from 2013 until January 2014, and served as Chairman and CEO of Magellan Health Services, Inc. from 2003 until 2009 . Founded and was Chairman and CEO at Internet Healthcare Group, LLC, a health care services and technology venture fund, from 1999 until 2003, and served as the Chairman, President and CEO of Prudential Healthcare, Inc. from 1997-1999 Has served as Chairman of CareCentrix, Inc. since 2008, Access MediQuip, LLC since 2009, and Accretive Health, Inc. since 2014, and has served on numerous privately held company boards David A. Wilson (73) Former President and CEO of the Graduate Management Admission Council . Former President and CEO of the Graduate Management Admission Council, a not-for-profit association dedicated to creating access to graduate management and professional education, a position he held from 1995 until December 2013 Has served as a Director for CoreSite Realty Corporation since 2010 and Barnes & Noble, Inc. since 2010. Served as a Director for Terra Industries, Inc. from 2009 until 2010 and Laureate Education, Inc. from 2002 until 2007. • . Worked in various capacities for Emst & Young LLP from 1978 until 1994. Also held faculty positions at Queen's University from 1968 until 1970, the University of Illinois at Urbana Champaign from 1970 until 1972, the University of Texas from 1972 until 1978, and Harvard University's Graduate School of Business from 1976 until 1977 John J. Zillmer (58) Former President, CEO and Director of Univar, Inc. • Former Executive Chairman of Univar, Inc., a position he held from May 2012 until December 2012. Served as Director, President and CEO of Univar, Inc. from 2009 to May 2012. • Served as Chairman and CEO of Allied Waste Industries, Inc. from 2005 until 2008, at which time Allied Waste Industries, Inc. merged with Republic Services, Inc. Served as Executive VP of ARAMARK Corporation from 2000 until 2004 • Has served as a Director of Veritiv Corporation since June 2014, Reynolds American Inc. since 2007 and Ecolab Inc. since 2006. Has also served as Director of Liberty Capital Partners, Investment Arm, a private equity and venture capital firm specializing in startups, early stage, growth equity, buyouts, and acquisitions, since June 2004 27#29In addition to providing a forum to vote on the proposed transaction, the special meeting will allow shareholders the opportunity to fix Allergan's egregious special meeting bylaws If Allergan's special meeting bylaws are allowed to stand, they will be widely promoted by "defense" firms and risk being widely adopted in Corporate America 28#30II. The Current Offer Justifies Board Engagement and Meets Investors' "Asking Price" 29#31History of the Transaction On April 22nd, Valeant announces initial offer to acquire Allergan for 0.83 Valeant shares and $48.30 per share in cash ▸ On May 12th, Allergan rejects initial Valeant offer ▸ On May 27th, Allergan publishes presentation attacking Valeant's business model and management team ■ Allergan publishes subsequent presentations on June 10th and July 14th On May 28th, Valeant raises cash component of offer to $58.30 per share plus a contingent value right for DARPin On May 30th, in response to investor feedback, Valeant raises cash component of the offer to $72.00 per share and commits to not raise offer again without substantial engagement from Allergan ■ Valued at Valeant's current share price, the current offer implies a ~50%+ premium to Allergan's unaffected trading price and 23x+ EBITDA multiple On June 23rd, Allergan's unanimously rejects Valeant's revised bid and describes the bid as "grossly inadequate" Pershing Square is Allergan's largest investor with 9.7% ownership 30#32The Offer is Compelling Even When Valued at Valeant's Current Share Price: The "Look-Through" Value of the Deal Pharmaceutical M&A transactions over $15 billion in last 10 years (ranked by upfront premium paid) Acquiror AstraZeneca VALEANT sonori aventis (T) 3 abbvie MERCK Target Medimmune ALLERGAN I genzyme I I Shire opinghough SCHERING Pfizer I Wyeth IN Actavis Source Company Nings and FactSet as of 7/14/14 Note Date Announced 4/23/07 4/21/14 2/16/11 6/20/14 3/9/09 3/23/06 1/25/09 2/18/14 Mean Median Transaction Value (S in billions) Upfront / Total Mean and median values do not include proposed Alergan/Valent transaction Roche/Genetech and Novarts/Alcon transactions excluded because they were mub-stage acquisitions Total includes upfront and contingent payments at face value impled EV based on total transaction value including contingent payments AstraZeneca Medimmune unaffected date of 4/12/07 $16 $53 + CVR $20 / $24 $35 $25 $41 $20 $68 $25 $36 $25 31 Form of Consideration Cash Cash/ Stock Cash Cash & Stock Cash & Stock Cash Cash & Stock Cash & Stock B (10) Premium to Unaffected Price Upfront / Total 54% 48% + CVR 48% / 76 % 38% 34% 34% 33% 27% 42% 34% Implied EVI LTM Revenue Upfront / Total 11.3x 7.9x + CVR 4.8x / 5.8x 6.0x 4.8x 10.9x 2.5x 2.9x 28x 6.5x 6.1x 5.8x Valeant/Allergan unaffected date of 4/10/14 Sanch-Avents/Genzyme unaffected date of 7/10 Implied EV / LTM EBITDA Upfront / Total NM 22.8x + CVR 17.9x / 21.4x 18.1x 15.0x 25.9x 10.3x 12.2x 8.2x 34.30 18.7x 16.8x Based on most recent offer on 7/14/14 Schering financials converted using 3/23/00 exchange rate of 1.198 USD/EUR Bayer Schering unaffected date of 3/13/08 Pfizer/Wyeth unaffected date of 1/2209 Forest Laboratories LTM revenue and EBITDA pro forma for Agtas acquiston#33Proper Way to Value the Proposed Transaction Valued on an unaffected basis, this transaction is a merger between a $42 billion equity market cap company, Valeant, and a $35 billion company, Allergan¹ Allergan shareholders will own 44% of the combined company ► In such a stock transaction, one cannot value the offer using the current market value of the acquirer's common stock ■ Investors must use the projected value of the combined entity, considering any cost and revenue synergies, strategic benefits of the transaction, and likely changes to the multiple investors assign to the earnings of the combined company in their valuation ► Compare this transaction to one where target company shareholders will own a minimal amount of the combined company ■ In that case, this logic does not apply, and investors could use the current market value of the acquirer's stock to value the offer (1) Reffects Allergan's market capitalization as of April 10, 2014, the day before Pershing Square began its rapid accumulation program, and Valeant's market capitalization as of April 21, 2014, the day before Valeant announced its bid to acquire Allergan.#34We Believe Valeant's Current Stock Price Does Not Reflect the Full Value of the Offer We believe Valeant's current stock price does not reflect the anticipated value of the combined entity, including synergies, and therefore serves as a poor measure to evaluate the offer ► Valeant management believes the transaction delivers immediate accretion of ~25% to Valeant's 2014 EPS on a pro forma basis(¹) ■ We believe transaction uncertainty created by Allergan's obstructionism has kept Valeant's stock price from reflecting the transaction's benefits ► We believe merger arbitrage activity has affected Valeant's stock price (1) ■ Short interest is 4x the average level prior to deal announcement ■ Arbitrage investors require compensation for uncertainty and time value of money Based on EPS of $8.55-$8 80 standalone and $10.69-$11.00 pro forma (Valeant management estimates-May 28, 2014 and June 2, 2014, respectively) 33#35Using the Fair Value of the Combined Company Implies a Considerably Higher Offer Value ► We believe Allergan's board has erred in using Valeant's current stock price to value the transaction We believe a valuation that takes into account the fair value of the combined company, of which Allergan investors will own ~44%, is the proper methodology for valuing the offer Equity Consideration Calculation Valeant Stock X Price Exchange Ratio $182 X 0.83 Per Share Equity Consideration $151 $10.85 x 16.8 p/e = $182 per share Pro-Forma 2014 EPS = $10.85(1) Blended Unaffected 2014 P/E Multiple = 16.8x(²) 34 Per Share Cash Consideration $72 || Total $223 (Source Management estimate, Valeant June 2nd presentation (2) Source Management estimate, Valeant May 28th presentation#36Independent Investment Research Validates Pershing Square's Valuation Methodology J.P.Morgan VRX/AGN Revised Bid Further Increases Odds Of A Deal Moving Forward - ALERT • Revised terms value AGN at roughly $180 on the current VRX share price and we see further upside to the extent VRX shares trade up to reflect merger accretion. Under the revised terms, today's updated offer values AGN at roughly $180/share, a level our recent survey suggests would be an acceptable takeout value. We now estimate accretion would be in the range of $1.75 to VRX's 2016 EPS, implying proforma 2016 earnings of roughly $13.20/share and pro forma leverage of-4x. Even assuming no multiple expansion from VRX's unaffected standalone 2016 EPS multiple of 11x-11.5x would imply an AGN takeout value in the mid-$190s and a VRX share price of $145-$150. We ultimately believe VRX's multiple would trade above this range assuming a successful deal given the high-growth, durable assets in AGN's portfolio. 35 North America Equity Research 30 May 2014#37Independent Investment Research Validates Pershing Square's Valuation Methodology (Cont.) Louise Chen, Guggenheim; "Pershing Square and VRX Getting More Aggressive on Consummating AGN Deal", June 2, 2014: "We also think it is compelling that AGN shareholders can get the $180 deal they wanted now (without assuming an increase in VRX's stock price) and this excludes the DARPin CVR as well as any potential upside from an increase in VRX's stock price driven by certainty of a deal. We estimate AGN shares could be worth as much as $225 if the Street appropriately values the combined entity, and it would be hard for AGN to trump this with other potential options, in our view." 36#38We Believe the Current Offer Meets Investors' "Asking Price" ► J. P. Morgan's May 16th May 20th survey suggests investors are seeking a $160 to $200 per share acquisition price: ■ Following Allergan's May 12th revised long-term plan announcement, J.P. Morgan conducted a survey of 123 Allergan investors ■ ~77% of those surveyed believe an offer of $160-$200 per share will be sufficient Based on the surveyed investors' expected value of the combined company, Valeant's current offer is worth $188-$221 Investor View of Value - J.P. Morgan Survey (1) Combined Company Stock Price $140 $180 (160% of survey respondents believe the combined company would be worth $140 to $180 per share 37 Implied Offer Value $188 $221#39Even More Compelling Deal When Valued at the Fair Value of the Combined Company: The "Fair Value" of the deal Pharmaceutical M&A transactions over $15 billion in last 10 years (ranked by upfront premium paid) Acquiror VALEANT AstraZeneca €68 sonoll aventis genzyme MERCK Target abbvie 1 Shire Pfizer AN Actavis 1 lil Medimmune 4/23/07 1 op Schering Pough SCHERING 1 Wyeth Source Company fings and FactSet as of 711414 Note Date Announced 4/21/14 2/16/11 6/20/14 3/9/09 3/23/06 1/25/09 2/18/14 Mean Median Transaction Value (S in billions) Upfront / Total Mean and median values do not include proposed Alengan/Valeant transaction Roche / Genetech and Novarts/Alcon transactions excluded because they were mult-stage acquisitions Total includes upfront and contingent payments at tace value impled EV based on total transaction value including contingent payments Valeare/Alergan unaffected date of 4/10/14 $70 CVR $16 $20 / $24 $56 $41 $20 $68 $25 $35 $36 $25 $25 8 Form of Consideration Cash/ Stock Cash Cash Cash & Stock Cash & Stock Cash Cash & Stock Cash & Stock 84 B S M (10) Premium to Unaffected Price Upfront / Total 91% + CVR 54% 48% 76 % 38% 34% 34% 33% 29% 27% 42% 34% Implied EVI LTM Revenue Upfront / Total 10.6x + CVR 4.8x / 5.8x 6.0x 11.3x 4.8x 10.9x 2.5x 2.9x 28x (10) 6.5x 6.1x 5.8x Implied EVI LTM EBITDA Upfront / Total 30.3x + CVR NM 17.9x / 21.4x 18.1x 15.0x 25.9x 10.3x 122x 8.2x 34.30 18.7x 16.8x AstraZeneca/Medimmune unaffected date of 4/1207 Sanch Avents/Genzyme unaffected date of 75/10 Based on most recent offer on 7/14/14 Schering financials converted using 3/23/00 exchange rate of 1 198 USD/EUR Bayer Schering unaffected date of 3/13/08 Pfizer/Wyeth unaffected date of 1/22/09 Forest Laboratories LTM revenue and EBITDA pro forma for Agtas acquiston#40Even Adjusted For Peer Movements, the Offer is a Large Premium Peer movements since the unaffected date imply a 33% to 72% premium over a standalone Allergan today Dow Jones S&P 500 S&P 1500 Pharma Dow Jones 11- Allergan Proxy Peers (3) 04/10/2014 1.833.1 523.0 16,170.2 100.0 07/14/2014 1,977.1 564.7 17,055.4 111.4 % Change 7.9% 8.0% 5.5% 11.4% Implied AGN share price $125.79 $125.93 $123.01 $129.92 Look-Through Price as a % premium to implied price 39 37.1% 37.0% 40.2% 32.8% Fair Value as a % premium to implied price 77.3% 77.1% 81.3% 71.6% Source: FactSet Implied Allergan share price based on relative change in index price from unaffected price of $116 63 on April 10, 2014. Per Allergan proxy statement dated March 26, 2014 (Abbott Laboratories, Amgen, Biogen Idec, Bristol-Myers Squibb, Celgene, Eli Lilly, Endo Health Solutions, Gilead Sciences, Johnson & Johnson, St. Jude Medical, Stryker Corporation, and Valeant Pharmaceuticals). Excludes Forest Laboratories due to acquisition by Actavis on July 1, 2014.#41The Offer Represents a Large Premium to Analysts' Pre-bid 12-Month Price Targets The offer is a 28% to 65% premium to analysts' 12-month price targets prior to Valeant's initial public offer Broker Bank of America Barclays BMO Capital Markets Buckingham Research Group Cowen and Company Credit Suisse Goldman Sachs Guggenheim Securities LLC JPMorgan Piper Jaffray RBC Capital Markets Sanford C. Bernstein & Co Sterne, Agee & Leach Stifel SunTrust Robinson Humphrey Susquehanna Financial Group UBS William Blair & Co Median Source: Note: (1) Prior to 4/21/2014 12-Month Target Price Bloomberg, FactSet $172.50/share offer based on closing prices as of July 14, 2014. Currently advising Allergan on the Valeant proposal. $109 $132 40 $130 1$124 $140 $145 $125 $140 1 $135 I$130 $135 $135 12 mo. Price Target $135.00 Median $125 $142 $130 $150 $145 $138 Look-Through Price $172.50 offer as a % premium 27.8% I 1 1 Fair Value $223 offer as a % premium 65.2%#42How Some Large Shareholders Are Thinking About The Transaction Valeant's revised proposal offers substantial value to AGN shareholders and is highly superior to AGN's standalone value What Valeant's proposal offers: ► $72 of cash per share ► $9.01 of Valeant 2014 earnings per AGN share(1) ► + DARPin CVR Or, if $72 of cash is reinvested in additional VRX shares at $121/share: $15.46 of Valeant 2014 earnings per AGN share (2) + DARPin CVR 41 What standalone AGN offers: $0 cash ► 2014 EPS Guidance = $5.69 272% increase in earnings per AGN share (1) $9.01=0.83 x 10.85 2014 Pro Forma VRX EPS (2) $15.46 = 1.425 x 10.85 2014 Pro Forma VRX EPS#43We Believe Valeant Offers More Value in One Year than Standalone Allergan is Projected to Offer in Five Years The Valeant proposal offers ~$15.50 of EPS in 2014. Allergan offers -$14 of EPS in 2019 What Valeant's proposal offers: If $72 of cash is reinvested in additional VRX shares at $121/share: 2014 $15.46 earnings per AGN share(1) ► + DARPin CVR (1) $15.46 = 1.425 x 10.85 2014 Pro Forma VRX EPS 42 What standalone AGN offers: (2019 EPS Guidance = $14 ► $0 cash#44III. The Valeant Offer Satisfies the Prevailing M&A Proxy Fight Analytical Framework 43#45Adequacy of the Offer Scorecard: Look-Through Price Transaction premium Transaction multiple Unaffected standalone price Analyst price targets Deal spread Long-term investor feedback Descriptions = 48% premium to Allergan's unaffected closing share price of $116.63 on April 10, 2014 (see page 72 for unaffected price chart), the final trading day before Pershing Square started to rapidly accumulate shares 7.9x EV/LTM Revenue 22.8x EV/LTM EBITDA 43.0x LTM P/E ☐ Offer represents -33% - 40% premium over Allergan's standalone price today Valeant/Pershing Square's cash and stock offer is a 28% premium to the median Allergan equity research analyst price target prior to Valleant/Pershing Square's initial public offer Currently trading 3.2% below the offer) ☐ Fundamental investors reportedly seeking $180 take-out price Source Company SEC fings, Bloomberg, FactSet (1) (2) Based on analyst price targets prior to April 21, 2014 Based on closing price of $167.02 as of July 14, 2014 close. 44 Score#46Adequacy of the Offer Scorecard: Fair Value Transaction premium Transaction multiple Unaffected standalone price Analyst price targets Deal spread Long-term investor feedback Descriptions ☐ 91% premium to Allergan's unaffected closing share price of $116.63 on April 10, 2014 (see page 72 for unaffected price chart), the final trading day before Pershing Square started to rapidly accumulate shares ☐ 10.6x EV/LTM Revenue 30.3x EV/LTM EBITDA 56.3x LTM P/E ☐ Offer represents -72% -81% premium over Allergan's standalone price today Valeant/Pershing Square's cash and stock offer is a 65% premium to the median Allergan equity research analyst price target prior to Valleant/Pershing Square's initial public offer Currently trading 25.1% below the offer) ☐ Fundamental investors reportedly seeking $180 take-out price Source Company SEC fings, Bloomberg, FactSet (1) (2) Based on analyst price targets prior to April 21, 2014 Based on closing price of $167.02 as of July 14, 2014 close. 45 Score#47The Valeant Offer is Certain and Adequate Certainty of the offer Adequacy of the offer Appropriateness of the board's response ■ Partnership with Pershing Square and action to date indicate Valeant is a serious buyer No financing contingency; Tender offer launched; Initiated HSR review Investors and research analysts endorse Valeant's operating model and the strategic merits of the deal ■ Offer is compelling by transaction multiples and premiums The offer represents an attractive premium to the "unaffected" standalone price today absent Valeant's offer, as well as to the 12- month analyst price targets before the initial bid ■ Offer meets the "asking-price" of long-term investors Downside risk is significant To date, the Allergan board has not responded properly by refusing to engage with Valeant to perform due diligence on the transaction proposal and by attempting to thwart Pershing Square's special meeting process to determine the will of shareholders 46#48IV. Investors and Research Analysts Are Confident in Valeant's Operating Model and the Strategic Combination 47#49Substantial Overlap of Ownership The large percentage of Allergan shareholders that also own Valeant stock indicates their confidence in Valeant's currency Alex Arfaei, BMO; "New Offer in Line With Our Expectations; Good Sale of Assets, Impressive Presentation", May 28, 2014: "We believe this deal will eventually go to AGN shareholders, who are interested in maximizing value. Given the reported over 50% overlap in VRX/AGN shareholders, we believe that most AGN shareholders are familiar enough with Valeant's business model to invest in the combined entity." 48#50Research Analysts' Recommendations Suggest that Valeant's Stock is Undervalued Median analyst price target of $168 per share is a 39% premium to Valeant's current share price Broker Aegis Capital Corp. BMO Capital Markets Canaccord Genuity Corp Cantor Fitzgerald CIBC World Markets CRT Capital Group FBR Capital Markets Guggenheim Securities LLC Jefferies JPMorgan Morningstar, Inc Paradigm Capital Inc Piper Jaffray Stifel Susquehanna Financial Group TD Securities Source: Bloomberg Note: Price Target ΝΑ Most recent recommendations and price targets as of July 14, 2014 $165 $168 $180 $160 $170 $153 $154 $151 $178 $180 $175 $165 $170 $160 $209 Rec. Buy Outperform Buy Buy Sector Outperform Buy Outperform Buy Buy Overweight Buy Buy Neutral Buy Positive Buy#51Research Analysts Are Confident in Valeant's Operating Model and the Strategic Combination William Tanner, FBR; "Allergan Bid Upped Again, and Pershing Square Goes All In for Stock-- Looks Like a Best and Final Offer to Us", June 2, 2014: "The CEO's extensive management consulting experience may provide unique insight into how to best avoid mistakes made by larger companies in the industry. For the last several years, since the merger with Biovail, Valeant has executed on an ambitious business development strategy that is unique among peers." Lennox Gibbs, TD Securities; "Increased Clarity and a New Bid", May 29, 2014: "We believe that Valeant is in a strong position, both with respect to its base business and relative to the strategic growth opportunity that exists across the Pharmaceutical industry" 50#52Research Analysts Are Confident in Valeant's Operating Model and the Strategic Combination (Cont.) Stephanie Price, CIBC; "Growth on Steroids: Initiating Coverage at Sector Outperformer", May 20, 2014: "Valeant has a strong track record of creating value by acquiring firms with solid product portfolios and investing only in late-stage/low-risk R&D. Management has proven that M&A can lead to better returns than early-stage R&D given Valeant's ability to strip out costs." Irina Rivkind Koffler, Cantor Fitzgerald; "We Like Standalone Business, with AGN Upside; Maintain BUY, Increase PT to $209", June 2, 2014: "We don't think that Valeant promotionally starves its brands, but rather makes selective investments in highest value programs like Luzu and local DTC...the roll-up strategy is difficult, and Valeant's execution know-how and experience is an intangible asset that will continue to drive value, in our view." Raghuram Selvaraju, Aegis Capital; “Valeant Ups the Ante in Allergan Acquisition Bid”, May 28, 2014: "Whether the acquisition happens or not, however, we believe that the Valeant business model remains valid and we do not believe that Allergan management's allegations regarding Valeant's strategy are valid." 51#53Research Analysts Are Confident in Valeant's Operating Model and the Strategic Combination (Cont.) Vamil Divan, MD, Credit Suisse; "VRX Takeout Could Complete a Rapid AGN Turnaround", April 21, 2014: "We see the opportunity for significant cost synergies with this deal given the overlap in the VRX and AGN businesses and the possibility of tax savings given VRX's mid-single digit corporate tax rate." "Media-reported cost savings target of ~$2.5 bn would represent ~68% of AGN's combined 2014 SG&A and R&D expenses but we believe this could be achieved given the significant overlap in the two companies cosmetic and ophthalmology businesses and VRX's strong track record in achieving synergies from previous acquisitions. Simply removing this level of expenses from our AGN model by 2016 would suggest a DCF valuation for AGN of over $230/share, with additional upside possible when tax synergies are factored in." Chris Schott, J. P. Morgan; “Buyside Survey Results Suggest Broad Expectation of a VRX- AGN Transaction", May 23, 2014: "75% believe Valeant's $2.7 Bn synergy target for a potential AGN acquisition is realistic."#54Pershing Square Performed Independent Due Diligence on Valeant Pershing Square presented a comprehensive white paper on April 22nd, 2014, titled "The Outsider," disclosing its findings about Valeant's business model and accounting practices, as well as the strategic and financial merits of this combination Pershing Square has committed to take all stock in the transaction at an exchange ratio inferior to the offer available to other Allergan shareholders, representing ~$600mm of immediate value contribution to other shareholders in the transaction (1) Pershing's all stock election increased cash available to other shareholders by ~$2bn (1) $600mm is measured as of May 30, 2014. 53#55V. Risks in Allergan's Business Model#56Risks in Allergan's Business Model * Not diversified * Highly exposed to patent expirations * Large price increases have significantly contributed to growth x Black box R&D model 55#57Highly Concentrated Portfolio Allergan's top four drugs contribute 64% of total revenue Other Products 36% Alphagan Franchise 7% Lumigan Franchise 9% Botox 32% Restasis 16% Source: Sales for top drugs per Valeant management estimates. Total AGN sales per consensus estimates as of June 19, 2014.#58High Exposure to Patent Cliffs Allergan is currently benefiting from a window of patent exclusivity, but by 2027 Allergan will lose exclusivity on products comprising -37% of current revenue Products maintaining exclusivity or durability (currently marketed products only, shown as a % of 2014E revenue) 100% 80% 60% 40% 20% End of Management Five-Year Plan Impact of Patent Expirations 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: Allergan management commentary, Wall Street research, Pershing Square estimates. Total 2014E sales are as per Wall Street consensus estimates. Note. Assumes 100% of revenue lost in year of patent expiration. Uses year of patent expiration in the U.S. as a proxy for global patent expirations, except for Ganfort which uses the year of patent expiration in the EU since the drug is not marketed in the U.S. Assumptions for year of patent expiry by drug are Restasis 2024, Alphagan 2022, Lumigan 2027, Aczone 2016, Ganfort 2022, Ozurdex 2024, Latisse 2024, Lastacaft 2029. Patent data per-Allergan 10-K and FDA orange book 57#59Generics Manufacturers May Challenge Existing Patents ► Risk of successful patent challenges greatest for "Life Extension" patents ► Allergan recently received negative news on Latisse, which employs the same active ingredient used in another AGN product, Lumigan Allergan loses Latisse patent fight, jeopardizing up to $200M in sales "The U.S. Court of Appeals for the Federal Circuit in Washington has deemed a pair of Latisse patents invalid, paving the way for Novartis' Sandoz unit and the generics maker Apotex to sell their copies. The patents on Latisse--a variation of Allergan's Lumigan, used to treat glaucoma--cover ways to apply the drug to promote eyelash growth. But that growth is a 'known potential side effect of glaucoma treatments, the court ruled, rendering Allergan's patent claims obvious." - Fierce Pharma; June 11, 2014 58#60Patent Cliffs + Concentration = High Risk In 2013, Allergan's stock fell by 19% within one week, in large part due to increased risk of loss of exclusivity for Restasis, one of Allergan's largest products Share Price Performance of AGN from 5/1/13 to 6/30/13 Share Price (USD) $105 $100 $95 $90 $85 $80 05/01/13 Source: Bloomberg 05/11/13 05/21/13 05/31/13 59 6/20/13: FDA issues guidance on Restasis generic pathway 06/10/13 06/20/13 06/30/13#61Pricing has Driven Growth Allergan has relied on large price increases to drive revenue growth, both historically and in 2014 7-9% Price Increases in 2014 ■ Acuvail ■ Elestat Lastacraft ■ Betagan ■ Zymaxid 10%+ Price Increases in 2014 ■ Alphagan ■ Combigan Lumigan ■ Restasis ■ Aczone ■ Tazorac ■ Avage ■ Azalex Source: Wolters Kluwer: Med-Span Price Rx and Valeant management estimates. 60 100% + Price Increases in 2014 ■ Pred-G ■ Pred Miled FML Forte Bleph-10#62Valeant has a Lower Risk Product Portfolio Valeant's portfolio is both more durable and more diversified 60% Durability 85% Allergan Durable Valeant Durable % of Portfolio % of Portfolio Source: Valeant management estimates 61 Product Concentration 64% Allergan Top 4 Products 18% Valeant Top 10 Products#63We Believe a Combination with Valeant Reduces Portfolio Risk The combined drug portfolio is expected to be more durable and more diversified Durability More durable 60% Standalone Allergan Source: Valeant management estimates 74% PF Allergan + Valeant 62 Product Concentration: Top 4 Drugs % of Total Sales 64% Standalone Allergan More diversified 29% PF Allergan + Valeant#64Allergan's Black Box R&D Model * No project-level expense guidance * No guidance on expected returns from R&D investment * Limited visibility of R&D creates uncertainty * History of losses outside of low-risk projects * Compensation program promotes R&D spending without providing accountability for return on investment 63#65Limited Project Level R&D Guidance Despite a major forecasted increase in R&D spending, Allergan has not provided guidance on major areas of increased expenditure and the expected return on investment David Pyott, Allergan Chairman and CEO; Q2 2013 Earnings Call: "Also, as a quick reminder, I have explained on several occasions that in the coming five or so years, there will be a major step-up in R&D from roughly $1 billion-plus this year to roughly $1.5 billion some five years from now." Seamus Fernandez, Leerink Swann; May 12, 2014 Special Call: "And then as a second question, just wondering if -- one of the criticisms that we've heard of Allergan, at least as it relates to pipeline and the revelation of Phase II data, just wondering if there will be more disclosure around that going forward, or are we going to stick to sort of the same process of disclosure you simply - - primarily providing information for Phase III products at medical meetings?"#66Limited Project Level R&D Guidance While the sales potential from Allergan's R&D pipeline remains opaque, peers such as Astra Zeneca give more detailed disclosure: Oncology RIA CVMD MEDI4736 (incl.combination -$6.5bn therapies) AZD9291 (monotherapy) Olaparb PT003 PT010 Benralizumab Non-Risk Adjusted PYS Potential Saxa/Dapa FDC Source: Astra Zeneca May 2014 investor presentation -$3bn -$2bn -$4bn -$2bn -$3bn Non-Risk Adjusted Analyst PYS Range $2bn-$7bn $1bn-$2bn $1.5bn-$3bn $3.5bn-$4bn $1bn-$2bn Key Dates Advantage Q2:14 (Phl data) 65 02:14 (Phl data) 3 Oct 14 (PDUFA date) 01:15 (Phill results) 2015 (Phill start) 02:14 (Phil date) Q2:14 (Phill data) • Potential first-to-market PD-L1 in Stage III NSCLC following chemoradiation Novel targeted mechanism of action with breakthrough therapy designation Potential first to market PARP inhibitor . • Potential first-in-class LABAILAMA in COPD in a pMDI Triple therapy in development for both COPD and Asthma Anti-IL-SR with potential best-in-class efficacy for eosinophil depletion . Fixed dose combination with potential to develop triple combination A#67Limited Visibility of R&D Creates Uncertainty Lack of visibility and risk inherent in an early-stage R&D model creates uncertainty for Allergan investors Shibani Malhotra, RBC Capital Markets; Q1 2013 Earnings Call: "Given you had to set back both these expectations of products [Latisse for Scalp and DARPin] since you talked about last year at your R&D day. How should we think about your commitment to this growth and are you going to have to look elsewhere to drive this? Or are you still confident that you can grow Allergan organically from a revenue and earnings standpoint?" 66#68Limited Visibility of R&D Creates Uncertainty - DARPin Allergan's experience with DARPin demonstrates lack of visibility and risk inherent in an early stage R&D model Jami Rubin, Goldman Sachs; Q1 2013 Earnings Call: "Scott, I don't mean to beat a dead horse, but if you could just provide us a little bit more color on what the magnitude of the benefit you saw over LUCENTIS. You said you did see that in some patients, maybe not in others. And what gives you confidence that the program will be delayed one to two years versus just a complete bust?" Marc Goodman, UBS; Q1 2013 Earnings Call: "But if that's the case, I guess I'm a little curious, why were you so bullish on this product four months ago, five months ago? It made it seem like you had enough data to be very bullish on the product and now you're kind of saying, 'Well, maybe, we didn't have enough information?"" AGN shares fell 13% the day of Allergan's Q1 2013 earnings call 67#69History of Losses Outside of Low-Risk Projects Opportunity to deliver same R&D output at lower cost $9.5B Cumulative Allergan R&D spend since 1998 Source: Valeant April 2014 investor presentation -$2.0B Estimated cost of delivering line extensions and lower-risk products under Valeant model 68 Examples ■ -10 Botox indications ■ Restasis ■ Combigan Latisse ■ Tazorac#70History of Losses Outside of Low-Risk Projects Allergan has had at least 35 R&D failures since 1998 Abandoned / Suspended R&D Projects by Phase Research project Pre-Clinical Phase I Phase II Phase III Source: Valeant April 2014 investor presentation 3 5 6 10 11 • Ophthalmic RNAI . . . . • • . Examples • Retinoic Acid Metabolism AGN/NRX 194310 AGN 197075 AGN 199981 PS388023 AGN-207281 AGN 195795 AGN 201781 AGN 210669 AGN 210676 AGN818 NRX 195183 Sima-027 (AGN 745)#71Incentives Matter Poorly Designed R&D Reinvestment Compensation Target Allergan Management Annual Bonus Targets (March 26, 2014 Proxy) Threshold Target Maximum Adjusted earnings per share Sales revenue growth in local currency R&D reinvestment rate (of annual sales) $4.53 5.0% $4.76 12.7% ► The R&D target rewards Allergan executives for R&D spending irrespective of the returns on that investment 15.7% 16.9% David Pyott is eligible to receive a bonus up to 25% of his base salary if the company exceeds its annual R&D spending target By contrast, at Merck, management is compensated for achieving pipeline ROI and NPV goals 70 David Pyott, Allergan Chairman and CEO; Q3 2009 Earnings Call: "Of course, R&D is not about the expenditure but it is about results." $4.91 18.8% 17.9%#72Allergan's June 30th Pipeline Update Highlighted Flawed R&D Strategy And Misunderstanding of Evolving Markets Despite spending $1.3 billion on product acquisitions and $2.8 billion on R&D over the last three years, it remains unclear whether Allergan has any late stage programs capable of moving the needle ► Anti-VEGF DARPin ■ Efficacy data, to date, lack sufficient clinical differentiation vs. incumbents ■ Significant safety concerns persist and may ultimately preclude adoption ■ Two entrenched market leaders with same the mechanism-of-action (anti-VEGF) limit market penetration if approved ■ Broad use of Avastin a major threat to marginally differentiated, late entrants ■ Anti-PDGF, gene therapy and combination products in others' pipelines competing for increasingly crowded AMD market Semprana/Levadex ■ Overpaid for an asset that lacks clinical differentiation ■ Approval delays eroding opportunity as generics and new branded products enter market ■ Development of highly effective prophylactics (GCRP mAbs) may shrink opportunity Ozuredex ■ Narrow label limits use to select patient sub-populations ■ Potential new competitor, lluvien, as early as year-end 2014 ▸ Bimatoprost Sustained-Release ■ Use will be limited to patients who prefer injection in eyeball to daily drops ■ Outstanding pricing question: similar to generics or branded agents? 71#73The Crowded Competitive Landscape Raises Significant Questions About DARPin's Market Potential That Are Amplified By Program Delays And Marginal Phase 2 Data Marketed anti-VEGF Ab for wet AMD Efficacy Loss of 15 letters in Gain of 16 letters in VA at 52 weeks VA at 52 weeks Product Lucentis Eylea Avastin Product AGN 160998 (Anti-VEGF DARPIN) Fovista ESBA-1008 ALG-1001 Ava-101 Company Rocher Novartis DE-120 Regenerov Bayer Santen Roche Company Alergary Molecular Paters "Avason usage for wet AMD is off-label Key pipeline product candidates for wet AMD Developeriavitat Combo With VEGF? Novartal Oprenotech Alcon Avalanche Phase 20 Sarten Phase 3 Allegro Ophthalmics Phase 1/2 Phase 2 Phase 1/2 91% Phase 1/2 90% MOA Panant-VEGF DARP Art-POGF aptamer Pan-VEGF inhibitor integrin nhibitor Are-VEGF Dual VEGF/POGF inhibitor Source: Company filings, Clinical publications and Wall Street equity research (1) Duta taken from Phase 3 ANCHOR study involving O4W Lucentis No Yes No No No 31% No 31% Mean change in VA from baseline at 52 weeks +6.3 letters +80 letters (vs 9.4 letters wf Lucents) +80 letters (vs+85 letters w Lucents) Efficacy 20mg dose 82 ters at 10 works 10mg done +63 eters at 16 weeks (vs+53 ters / Lucer 24 weeks (vs 65 letters w/ Lucents alone) Phase 2 efficacy data expected in 402014 5 letters sustained for 3-4 months demonstrated in subset of 15 wAMD Dosing regimen Prase 1/2 efficacy data expected in 202014 Once a month (2) 72 (3) Once a month for first 3 months then every 2 months thereafter Once a month and PRN Cumenty investigating once a month No imbalances in AES or SAEs (ocular 1.5mg FovistaLucents +10 6 letters at regimen for first 12 months, followed by, or systemic) and no difference in once every two months regimen for next intraocular pressure between arms 12 months Low dose +87 letters after 52 weeks High dose 6.3 letters after 52 weeks Safety profile Arterothromboc: 47% Death 1.4% Currently investigating injections vs injections w/ Eylea in Phase 2 study Arterothrombotic: 3.3% (vs 3.2% for Lucents in head-to-head) Dosing regimen Safety profile 8 weeks Doses at the start of tral and after 4 and 20 mg dose Ocular inflammation in 8% of patients 10 mg dose Ocular inflammation in 13% of patents vs additional doses after 12 and 16 Artenothrombotic 2.1% vs 23% for Lucentis in head-to-head) Death 1.4% (vs 1.3% for Lucents in head-to-head) Cumenty investigating safety and efficacy of a single injection in dose escalating study Cumenty investigating regimen of three monthly injections in six-morth dose ranging study Phase 1/2 trial showed that doses were well tolerated as assessed by the absence of adverse events within 7 days of injection No serious or significant adverse events reported in Phase 1 human safety study with DME patients Phase 2a top-line data expected in mid 2015 Cumenty investigating in dose escalating sequential-cohort Phase 1/2 Phase 1/2 safety data expected in 202014 Data taken from Phase 3 VIEW-2 study comparing Q4W Eylea with Q4W Lucentis Data taken from 2011 CATT study that was conducted by the NEI comparing Q4W Awastin with 04W Lucentis#74VI. Allergan's History of Poor Cost Management, Poor Capital Allocation, and Shareholder Unfriendly Compensation Policies 73#75Allergan's Elevated SG&A Expense Allergan's SG&A spending is well above other specialty and global pharmaceutical companies SG&A Expense as % of Total Revenue (2013) 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 38.5% Allergan 30.4% Shire Source Company filings, Pershing Square estimates Over 800 bps above next highest peer and over 1,200 bps above peer average 29.5% UCB SA 27.5% Pfizer 74 26.5% Merck 26.0% Merck KGaA Avg. (ex-AGN) = 26.2% 22.4% 21.4% Valeant Actavis#76Analysts Recognize the Cost Opportunity but have Repeatedly Questioned Management's Commitment to Solving the Problem Shibani Malhotra, RBC Capital Markets; Q4 2011 Earnings Call: "You've talked about bringing your SG&A down to 35% over the last couple of years. But [I] understand why you are spending as much as you did in terms of SG&A, but are you still thinking of taking the SG&A amount down to 35%? And what do you mean by medium-term and near- term because it's been four years now you've been saying that. How should we be thinking about it?" Jami Rubin, Goldman Sachs; Q2 2013 Earnings Call: "But in your contingency plans, I would imagine that there will be a lot of room to restructure, given how high your SG&A ratio is. Can you talk about how variable your costs are and how realistic it would be to bring down those costs...?" Jami Rubin, Goldman Sachs; Q4 2013 Earnings Call: "And do you see a scenario where you could bring your SG&A ratio to the low 30s from, what 37%, 38%?" 75#77Allergan Management has Admitted that SG&A is "Very High" but has not Made Meaningful Progress Solving the Problem David Pyott, Allergan Chairman and CEO; Q3 2010 Earnings Call: "Maybe a last comment on SG&A, we've said for some time now, we expect this to gradually trend down into the mid-30s. As a company, we've historically been very high." David Pyott, Allergan Chairman and CEO; Q4 2011 Earnings Call: "Well, clearly, we've stated over the years that gradually, the SG&A rates will come down into the mid-30s. David Pyott, Allergan Chairman and CEO; Q4 2013 Earnings Call: "Going back to SG&A leverage, we've always stated that our target in the midterm is the mid-30s, so I'd reiterate that. And clearly, this is not by cutting. It just means the rate of increase for SG&A is lower than the rate of sales growth." Source Company filings. 76 SG&A Ratio 2010: 40% 2011: 40% 2013: 39%#78Allergan Management has Admitted that SG&A is "Very High" but has not Made Meaningful Progress Solving the Problem (Cont.) David Buck, Buckingham; Question on Q3 2010 Earnings Call: "And one more big-picture question, I guess, for David. You talked a little bit about going to SG&A levels of sort of 35% over time, anything structurally that you're planning for next year?" David Pyott, Allergan Chairman and CEO; Response on Q3 2010 Earnings Call: "I think this will be more a case of evolution versus revolution." David Pyott, Allergan Chairman and CEO; Q2 2013 Earnings Call: "You're quite right that we've had very high SG&A ratios relative to the rest of the industry... So the good news is that we have a lot more room for maneuver than most companies, and that will be helpful as we start doing that form of scenario planning." 77#79Allergan has a Poor Capital Allocation History * Flawed capital allocation framework x Questionable business development track record x Excess cash balances 78#80Analysts have Repeatedly Questioned Allergan's Capital Allocation Strategy Frank Pinkerton, SunTrust Robinson; Q1 2011 Earnings Call: "Can management better serve investors by maybe being more aggressive with cash deployment and maybe even taking advantage of some of these lower rates near term?" Gregg Gilbert, BofA Merrill Lynch; Q1 2012 Earnings Call: "For David and for Jeff, what's your philosophy on having a net cash position and whether you think that's ideal?" Louise Chen, Guggenheim Securities; Q3 2012 Earnings Call: "My question is with respect to your capital allocation strategies. Wondering if you could provide an update now especially given your large cash balance and also your decision to potentially divest your obesity franchise." 79#81Flawed Capital Allocation Framework: M&A Allergan's interest in acquisitions seems to be motivated by growth for growth's sake rather than shareholder value creation Gregg Gilbert, Bank of America; Question on Q3 2013 Earnings Call: "I was wondering though if you and the board are open to deals that create economic value and add to franchise value even if they don't meet that [10%] revenue growth threshold?" David Pyott, Allergan Chairman and CEO; Response on Q3 2013 Earnings Call: "Then your question on profile of potential companies, clearly, we're looking to franchises that have growth potential because Allergan is a growth company." David Pyott, Allergan Chairman and CEO; Q4 2013 Earnings Call: "... we would have no interest in buying, and I'll exaggerate, a product or a company that were only growing 2% or 3%, because all we do would be diluting our already really strong internal performance."#82Flawed Capital Allocation Framework: Share Buybacks ► Capital return program is not designed to create shareholder value ■ Allergan's buyback program aims only to offset the dilution from stock based compensation - Valuation is not a consideration ■ Did not buy back shares last year when the stock fell to the $80-$90 per share range and stayed in that range for several months David Pyott, Allergan Chairman and CEO; Q4 2013 Earnings Call: "Well, maybe ending with the easiest part. On share repurchase, over a long period of time, our goal has been to hold the share count roughly flat. We'll go up and down at the margin quarter-to-quarter, so the treasury is on the other side, if you like of the dilution caused by employees appropriately exercising their stock options." 81#83Management has Highlighted M&A as a Primary Use of Cash in the Past David Pyott, Allergan Chairman and CEO; Q3 2012 Earnings Call: "And I think you as investors would prefer that we find good-return assets like that versus the very modest levels of return we can get by investing in the capital markets where, obviously, right now, the returns are very, very low indeed." Jeff Edwards, Allergan CFO; Q1 2011 Earnings Call: "We have sufficient liquidity on our balance sheet that enables us to be proactive with respect to business development activities. Finding smaller opportunities that are very focused, you've noted, I'm sure, that we've been fairly active and aggressive in those areas. Finding that larger opportunity is a bit tougher and we're very disciplined how we go about it." 82#84Allergan has Historically Not Been Able to Identify Attractive Acquisition Targets Between 2011 and 2013, Allergan generated $4.4bn of cash from operations but invested only $1.3bn of cash in acquisitions Ken Cacciatore, Cowen & Company; Q3 2013 Earnings Call: "It would seem obvious to many of us that you should be hoping or seeking to leverage your balance sheet more aggressively. But when we talked to investors, some argue that there aren't actually many assets available in your therapeutic categories or in aesthetic and derm. So it's an issue that you'd like to be more aggressive, but can't find the assets?" 83#85Allergan's Acquisition Track Record is Questionable - Inamed Allergan sold nearly a third of the largest business it ever acquired for 3.3% of the aggregate purchase price ► In 2005, Allergan acquired Inamed Corporation for $3.3 billion At the time of the acquisition, the obesity intervention business or LAP- BAND franchise represented approximately 30% of total Inamed sales Post-acquisition, LAP-BAND was shown to be less effective than alternative therapies and insurers stopped covering it ► In 2013, Allergan sold its obesity intervention business for $110 million and recorded a $408 million pre-tax loss on the sale ■ ~80% of the net book value(1) of the business was written off ► In addition, sales in Inamed's largest division, Natrelle breast aesthetics, profoundly disappointed with sales falling ~36% below Wall Street analyst expectations by 2010 (²) As the only major acquisition during David Pyott's tenure, Inamed is not an encouraging example of management's M&A acumen Source: Company filings, press releases (1) Based on the book value as of 12/31/2012 related to the obesity intervention business unit. (2) 2010 actual sales compared to analysts revenue consensus on the same year sales as of three months after the acquisition in 2006. 84#86Allergan's Acquisition Track Record is Questionable - Sanctura Franchise Three years after Allergan acquired Sanctura, the company recorded an impairment charge equal to the entire $371 million purchase price ► In September 2007, Allergan acquired Esprit Pharma, whose only major product line was the Sanctura franchise, for $371 million in cash ■ Allergan management stated that they expected peak-year revenue from Sanctura XR, a replacement for the original Sanctura formulation, of between $300 million and $400 million Generic manufacturers challenged Allergan's patents on Sanctura XR in 2009, and filed applications to market generic equivalents ► In the third quarter of 2010, Allergan recorded an impairment charge related to the Sanctura franchise of $369.1 million, or 99.6% of the initial purchase price(¹) ► In April of 2012, a Delaware judge ruled in favor of the generic manufacturers and declared Allergan's Sanctura XR patents invalid Source: Company filings, press releases. (1) Alergan 2013 10-K 85#87Allergan's Acquisition Track Record is Questionable - MAP Pharmaceuticals (Levadex) Forty-six days after Allergan spent $872 million to acquire Levadex, the FDA rejected Allergan's second request to market the drug ▸ In January 2011, Allergan and MAP Pharmaceuticals ("MAP") established a 50/50 partnership to develop Levadex ■ The FDA rejected the companies' first request to market Levadex in March 2012, citing concerns about manufacturing of the product's inhaler ▸ On March 1st, 2013, Allergan acquired MAP for $872 million ▸ On April 16th, 2013, the FDA rejected Allergan's second request to market Levadex, citing nearly identical concerns about the inhaler ■ In order to improve the quality of the inhaler device, Allergan spent an additional $20 million to acquire Exemplar Pharma, maker of the inhaler On June 30th, 2014, Allergan reported that the FDA had rejected Levadex a third time While Levadex is likely to be approved at some point, Allergan has lost at least three years of peak-year market exclusivity, an estimated $1.5bn of sales (¹), and has allowed a competing product to enter their product launch window 86 (1) Based on Allergan management estimate of peak-year sales of $500 million.#88Allergan's Acquisition Track Record is Questionable - MAP Pharmaceuticals (Levadex) Allergan management took an inappropriate risk by buying MAP weeks before the Levadex FDA decision, despite working closely with MAP for years on the Levadex project Analysts were appropriately concerned about an adverse FDA outcome: Gregg Gilbert, BofA Merrill Lynch; Question on January 23, 2013 M&A Call: "And then David and Scott, I assume that Allergan is very confident in the provability of the product on taxpayers sooner but can you talk maybe more broadly how you -- or specifically, how you protected shareholders of Allergan in the event of an undesired FDA outcome?" David Pyott, Allergan Chairman and CEO; Response on January 23, 2013 M&A Call: "I think on my side, if I look at the risk of delay beyond the PDUFA date, this is just normal with any program that exists whether it's our internal program or an external. And of course, in this instance, we have been the partner of MAP from the very beginning. So our team and their team has worked hand in glove. So we're very well informed." 87#89Allergan's Largest Acquisitions, Using -$5 Billion of Capital, Have All Disappointed The largest acquisitions of Pyott's tenure have all disappointed LAP-BAND SYSTEM Natrelle SANCTURA XR¹ MAP PHARMACEUTICALS INC Semprana (Levadex) Date Tx value $3.3Bn 3/23/06 3/23/06 $3.3Bn 10/16/07 $371M 3/1/13 $872M "Lap-Band and Natrelle were acquired as part of the Inamed acquisition 89 x 80% of net book value written off * Sales have fallen >30% short of expectations at the time of the acquisition * 99.6% of purchase price written off as impairment charge * Three FDA CRLs and resulting multi-year delay has significantly impaired the value of the asset#90Allergan's Poorly Designed Executive Compensation Program ► Based on ISS executive compensation analysis, only 13% of David Pyott's total compensation in 2013 was tied to performance ■ ISS recently cautioned that the CEO's level of long-term incentive compensation was high relative to peers and was not conditioned on specific performance goals By contrast, 68% of Valeant CEO Michael Pearson's total compensation in 2013 was performance-based incentive pay ► In 2013, David Pyott received total compensation of $14.1 million while delivering 1-year TSR of 21.3%, in a year in which the S&P 500 TSR was 32.4% ■ The median total compensation received by CEO's in Allergan's proxy peer group was $14.5 million while delivering 1-year TSR of 65.8% ▸ By contrast, Michael Pearson received total compensation of $7.0 million while delivering 1-year TSR of 96.4%, nearly three times the TSR of the S&P 500 Source: 2014 ISS reports of Allergan and its peer group as defined by the company in its proxy statement dated March 26, 2014.#91Allergan's Poorly Designed Executive Compensation Program (Cont.) Time-Vested Stock Options ■ Time-vested options comprise nearly all of senior management's long- term equity compensation The options have no performance trigger The options are issued at the money, making them valuable even if Allergan's share price growth is meager over the life of the option Inadequate TSR Trigger (on one-time grants) ■ In 2012, CEO Pyott was granted 165,000 restricted stock units to "recognize over a decade of outstanding performance" ■ To achieve maximum vesting, total shareholder return must be 9% over a five year period ■9% is below the 10% minimum TSR Valeant must achieve for any of management's restricted stock to vest 90#92Allergan Management was Granted Options only Months before Revised Guidance was Announced Management's 2014 options grant was struck at an Allergan share price of $124 in February 2014, three months before management chose to announce its revised guidance ►This implies one of the following: ■ Management was under-reporting the profit potential of the business at the time of the options grant, or ■ Management's current estimate of Allergan's long-term earnings is unrealistically high ► In February, David Pyott was granted 257,756 options worth a Black-Scholes value of $13 million¹ ■ These options are worth $22 million at Allergan's current $167 share price¹ (1) Option values calculated using a volatility of 27.5% 91#93Allergan Has Revised Its Long-Term Plan But Not Its Compensation Policy Notably, management has not tied long-term compensation to the new long-term financial plan Valeant is "all in" on aligning compensation with performance - we challenge Allergan to do the same Valeant Management Compensation Structure: Annual Cash Incentive Compensation ■Up to 200% of base salary possible if goals are achieved Long-Term Incentive Compensation ■ 50% time-vested stock options ■ 50% performance share units; three-year annualized Total Shareholder Return (TSR) vesting Source: Valeant 2014 proxy statement. 92 Michael Pearson & Howard Schiller Annualized TSR (IRR) <10% 10% 20% 30% % of PSUS vesting 0% 100% 200 300%#94VII. We Believe There is Significant Downside to Allergan's Standalone Stock Price 93#9530% Downside the Unaffected Share Price (USD) Allergan's unaffected share price is $116.63, the closing price on April 10th, the day before Pershing Square began its rapid accumulation program Allergan share price and volume from 2/25/2014 to 7/14/2014 $185 $175 $165 $155 $145 $135 $125 $115 $105 Feb-25 ADTV Date Range 1/1/2014 4/10/2014 2.6mm 4/11/2014 4/21/2014 6.8mm 4/22/2014 7/14/2014 4.1mm Mar-03 Apr. 9-10: No Pershing purchases Mar-07 Mar-13 to AGN Shares if they Revert to Share Price malico.l Mar-19 Mar-25 Mar-31 Apr-04 Apr-10 Apr-16 Apr-23 Apr-29 May-05 May-09 May-15 May-21 May-28 Jun-03 30% downside to unaffected share price of $116.63 dumdu Jun-09 Volume Jun-13 Jun-19 Jun-25 Jul-01 Jul-08 -Share Price Jul-14 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Shares, Options, and Forwards Purchased by Pershing Square Note: Chart shows Allergan's share price, volume, and the number of shares, delta-one options, and forwards purchased by Pershing Square from February 25, 2014, the day Pershing Square began its purchases, to July 14, 2014 Share price and volume data are as per Capital IQ. 94 0 Volume ('000 shares)#96Long-Term Investors have Sold at Prices Significantly Below the Current Offer Almost all of Allergan's top shareholders were sellers at some point in the last two years, when the stock was more than 30% below the look-through price 1 Pershing Square Capital Management P 2 Cape Global Investors) 3 The Vanguard Group, Inc 4 55gA Funds Management, inc 5 Nomura Securities Co., Ltd Private Banking) 6 BlackRock Fund Advisors 7 Jenson Associates LLC 8 State Farm Investment Management Corp 9 T. Rowe Price Associates, Inc 10 Delaware Management Business Trust 11 Allancebenstein LP 12 OppenheimerFunds, Inc 13 Edgewood Management LLC 14 Northern Trust investments, inc 15 Montag & Caldwell LLC 16 TIAA CREF investment Management LLC 17 BlackRock Advisors LLC 18 Fidelity Management & Research Co 19 UBS Global Asset Management 20 Polen Capital Management LLC Top 20 shareholders Average Price Highest price over quarter Lowest price over quarter Source: FactSet as of Q1 2014. Current Change over SOS last two years 20,878.530 3.7% 18,794,109 E 14,976,461 5.0% 12,155,824 11,949.171 4.0% 11,325,917 3.81 10.654,005 3.6% 10,526.400 3.5% 7.592.851 2.65 7,031,837 2.45 5,391,637 US 4,554,114 1.3% 3.938.793 1.35 3,050,338 1.35 3,752,042 1.3% 3,000,005 1.25 3,145,476 1.15 2.979,705 1.0% 2.000,013 0.9% 2.648,064 170,335,400 57.2% 4,047.109 2.360,327 1,003,276 11,906,446 1.154,712 214.075 2,467,753 1401.000 945.731 1,503.593 1.955,473 (65.294) (1,018.538) (534,539) 1,938,297 (4.501,483) (1,775.529) $16,162 21.903.752 3/31/14 107 401 1,321.570 456,284 11,948012 363 012 1.546 STF (MM0.005) 718.700 1,180 209 453 000 60.302 113.800 17,701 374 $121.50 $131.43 $110.28 12/31/13 95 274,878 410.000 1.290,675 2.718.795 21,299 (1,744) 387,875 $95.44 $111.08 50648 ------ Position change for the quarter ending 6:3013 3/31/113 1/2013 1666.700 10.788 15.01) 70 441) 1.305.000 106.810 503.68 102.63 $83.90 21,400 741.001 1.002.032 (871 844) (1.633.046) (5.832.518) $103.83 $116.17 $81.90 2577 800 4500 306 002 1.872641 665.ces 1.800 1411.7911 (141 910) 29.043 1541.92 254.587 2,400.574 401.301 7.298.950 $106.54 $111.80 501.73 12/31/12 830.000 309,917 367 076 (42M 327.710 (4.320 42:00 1.314.571 $31,06 $95.29 8/30/12 3:30.303 1,40 1,121.770 315.787 118 910 86.000 91.377 623.077 114.501 8047211 3.594,454 $47.34 $9505 $82.07 372-350 430,001 8.530 706.324 138.000 016350 86.404 1272 812 410 (9467.907 192.45 1 506 50 505.00#97High Trading Volume Since Initial Valeant Bid Since Valeant's initial bid, trading in AGN shares has exceeded 88% of the company's float Share Price (USD) 185.00 180.00 175.00- 170.00 165.00 160.00 155.00 150.00 145.00 140.00- 135.00 April 22: Initial VRX proposal May 30: Third VRX proposal May 28: Second VRX proposal Apr-22 Apr-24 Apr-28 Apr-30 May-02 May-06 May-08 May-12 May-14 May-16 May-20 May-22 May-271 May-29 Jun-02 Cumulative % of Float Traded Source: Bloomberg, company filings Note: % of float traded excludes shares owned by Pershing Square and Valeant. 96 Jun-04 Jun-06 Jun-10 Jun-12 Jun-161 Jun-18 Jun-20 Jun-24 Jun-26 Jun-30 Jul-021 Jul-07 <-Share Price 60-inr Jul-11 100% 90% 80% 70% 60% 50% - 40% -30% 20% 10% 0% Cumulative % of Float Traded#98Long-Term Investors See Risk We believe that recent sellers of AGN shares include long-term investors who fear that Allergan's board and management will not act to maximize shareholder value ► 88% (¹) of Allergan's float has changed hands since the initial VRX bid, likely indicating that many long-term AGN investors have sold shares ■ We believe selling shareholders recognize that the standalone value of Allergan is below the current AGN share price ■ We believe selling shareholders also recognize that value- destructive actions taken by Allergan management to scuttle the Valeant deal remain a risk ► Recent buyers of Allergan shares likely support the transaction ■ Recent buyers have paid >$160 per share ■ We believe these buyers likely support the Valeant transaction and believe in the value creation of the business combination 97 (1) % of float traded excludes shares owned by Pershing Square and Valeant#99We Believe Recent Option Trading also Suggests Meaningful Downside if the Deal Breaks Open interest contracts (100 shares / contract) A number of investors have purchased put option protection at prices materially below where AGN is currently trading Allergan Options October Open Interest 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 18 5,943 $145/ (13%) 37 893 $150/ (10 %) Source: Bloomberg as of July 14, 2014 Note: Open interest equais number of contracts 41 427 $155/ (7%) 916 897 $160/ Current AGN trading price: $167.02 174 472₁ $165/1 (1%) 319 205 98 142, Strike price/Premium (discount) to current 350 $170/ $175/ +3% +6% 87 10 $180/ +9% Puts Calls 196 11 $185/ +12% 414 33 $190/ +15%#100Allergan Insiders have Sold a Significant Number of Shares at Prices Much Lower than the Current Offer Allergan Insider Annual Open Market Sales 176K Shares $12mm $72 1,054K Shares $76mm 2010 Source: FactSet $83 As of July 14, 2014 628K Shares $53mm 338K Shares $27mm 2011 Non-10b5-1 Shares Sold (000's) $92 689K Shares $65mm 622K Shares $56mm 2012 110b5-1 Shares Sold (000's) 99 $172.50¹) Look-Through Price $103 $223 Fair Value 192K Shares $21mm $121 108K Shares $12mm Includes 252k shares sold by David Pyott at $123.12 per share (not 10b5-1), for total proceeds of $31mm 623K Shares $76mm 156K Shares $15mm 2013 Weighted Average Sale Price 84% premium Q1 2014 43% premium#101Allergan CEO/CFO Sales Compared to Peers Since January 2013 It appears Allergan executives had a far less bullish view of their stock prior to the Valeant offer Market Cap ($Baj $234mm $63mm) $50mm $19mm 549,600 shares WAP: $115.29 per share $16mm $12mm $8mm $5mm VRX management exhibiting confidence in business model $3mm $2mm $2mm $1mm $0mm $0mm $0mm $0mm! SYK i VRX $31.6 $40.6 GILD AGN BIIB BMY PFE ABT CELG STJ JNJ LLY MRK FRX $138.0 $49.7 $75.8 $81.3 $192.9 $62.8 $70.8 $19.8 $298.1 $70.5 $170,0 $27.1 ABBV AMGN $87.2 $90.1 Source: FactSet, 2013-Q1 2014. Note: Market cap based on basic shares outstanding (1) Market cap as of July 14, 2014. FRX shown as of closing price of $99 00 on June 30, 2014, the final day of trading prior to the acquisition by Actavis Plc. 100 23.4x Peer Median#102Allergan's Revised Long-Term Financial Plan On May 12th, in reaction to Valeant's April 22nd bid, Allergan management announced a new revised long- term plan We question the credibility and value creation potential of this long-term plan 101#103Higher Guidance Appears Driven by the Valeant Bid, not a Fundamental Change in the Business Management Revenue Guidance has not Materially Changed David Pyott, Allergan Chairman and CEO; Q2 2013 Earnings Call: "And [on] many occasions, I've talked about our midterm growth aspirations being around about 10% sales growth..." David Pyott, Allergan Chairman and CEO; May 12, 2014 Special Call (After Valeant's Proposal): "Beyond 2015, we believe we'll grow revenue at the double digits..." Allergan Consensus Revenue Estimates, Before and After Revised Plan ($B, 2014E-2017E) $6.95 0.5% 2014E $6.99 $7.56 1.1% 2015E $7.64 $8.12 2.5% 2016E $8.32 $8.78 4.7% 2017E Prior to New Plan Current 102 Source: Bloomberg Consensus. Note: Prior to new plan estimates from May 9, 2014 for 2014E-2015E and May 8 2014 for 2016E-2017E. Current estimates as of July 14, 2014, $9.19#104Higher Guidance Appears Driven by the Valeant Bid, not a Fundamental Change in the Business (Cont.) Source of Improved SG&A Ratio Unclear Given Modest Increase in Revenue Growth And No Announced Major Cost Cuts David Pyott, Allergan Chairman and CEO; Q4 2013 Earnings Call: "Going back to SG&A leverage, we've always stated that our target in the midterm is the mid-30s, so I'd reiterate that." David Pyott, Allergan Chairman and CEO; May 12, 2014 Special Call (After Valeant's Proposal): "Now we're really cranking this in terms of [SG&A] leverage. And by the end of this period, it will get to the mid- to the high-20s. 103#105Higher Guidance Appears Driven by the Valeant Bid, not a Fundamental Change in the Business (Cont.) What, besides the Valeant proposal, changed in the three months between Allergan's February 5th, 2014 Q4 earnings conference call and the May 12th Special Call? Jeff Edwards, Allergan CFO; Q4 2013 Earnings Call: "Regarding the full year 2014, Allergan estimates... growth of between 12% and 15%, which is consistent with our aspiration of mid- teens EPS growth." David Pyott, Allergan Chairman and CEO; May 12, 2014 Special Call (After Valeant's Proposal): "... [we believe] we can achieve EPS growth of 20% on a compound annual basis over the next five years." If Allergan were being conservative about the fundamentals of the business before the Valeant proposal, why then were insiders, including Pyott, selling shares in Q1 2014? 104#106Higher Guidance Appears Driven by the Valeant Bid, not a Fundamental Change in the Business (Cont.) David Pyott, Allergan Chairman and CEO; June 23rd, 2014 "Our goal now is to give them most of what they want... We will raise earnings guidance further." - Pyott as quoted by Reuters at the BIO International Convention; emphasis added ► Why is this the goal "now"? ► How does raising guidance increase shareholder value? 105#107The Revised Plan Does Not Support Certain Standalone Analyst Price Target Increases... Certain analysts have increased their near-term price targets by up to 67% based on a 24% increase in EPS five years from now ▸ Management's increased guidance from a 15% EPS CAGR to a 20% EPS CAGR implies a 24% increase in 2019 EPS $250 $200 $150 $100 $50 $0 +44%, $140 $202 BMO +57%, $115 Source: Allergan June 10, 2014 investor presentation. (1) Represents midpoint of price target range $180 +67%/ BTIG $124 Buckingham Old Price Target $207 106 +44%/ New Price Target $135 (1) $195 Guggenheim +47%/ I 1 $124 $183 Leerink Swann#108...Other Analysts Question Management's Views on the Standalone Value of Allergan Alex Arfaei, BMO; "Will Likely Go the Distance With AGN; But Should Gain More Support", June 10, 2014: "Allergan asserts that its current 26.8x P/E multiple is 'Due to Accelerated EPS Outlook from Mid-teens to Revised Guidance of 20% Five-Year EPS CAGR,' essentially saying that there is no take- out premium in AGN stock related to the VRX offer. Given the stock's reaction following Valeant's offers, we believe most investors would disagree. 107#109Thoughts on Allergan's Valuation Multiple ► Some analysts have taken Allergan's revised guidance and applied AGN's historical average multiple to arrive at a target price. We believe this analysis is flawed ► We believe AGN's historic multiple priced in several opportunities that will disappear under the revised guidance: Opportunity for substantial SG&A and R&D savings, which are already captured in AGN's revised guidance Potential to reduce AGN's relatively high tax rate, which disappears without a tax inversion partner Premium for potential take-out, which decreases substantially under a "go-it-alone" approach, since few acquirers are willing to engage in hostile transactions 108#110Allergan's history of poor cost management and poorly designed management incentives should make investors question the credibility of the revised or any re-revised long-term plan 109#111The Expected, Re-Revised Allergan Operating Plan ► Allergan's management has indicated they will re-revise their long-term guidance at the time of their Q2 earnings announcement ► The re-revised plan is reactive both to the Valeant proposal and to shareholder's disappointment with their initial revised plan presented in May ► The new plan is not credible given management's previous statements and actions in addressing the considerable cost opportunity at Allergan Any new plan further validates Valeant's assertion that Allergan has significant waste in its SG&A and R&D spending ► Allergan's history of poor cost management indicate a lack of appropriate management oversight by the Allergan board 110#112Management is Considering Making Acquisitions of its Own to Thwart an Attractive Bid David Pyott, Allergan CEO, 8-K filed May 19, 2014: "We listened carefully to investors' perspectives and heard that they would like to see us harnessing this financial strength to create even more stockholder value by, among other suggestions, either purchasing growth oriented companies or technologies that fit our strategy and operating model, and/or buying back Allergan stock." Jeff Edwards, Allergan CFO, Conference call, May 12, 2014: "As you know, historically we produced strong free cash flow as well and we've managed to deploy a lion's share of that free cash flow. The number one priority is always business development, so M&A. By all means we will continue looking aggressively for opportunities across the therapeutic areas we presently do business, but also looking for adjacencies or other specialty areas that could provide significant value." 111#113Why is Now the Right Time to Make a Large Acquisition? ► We are dubious that Allergan shareholders would be better off paying a premium for another company than receiving a premium for their own business ►Given Allergan's poor M&A history, we expect shareholders will be skeptical of the value-creation potential of any acquisition ► Unlike Valeant, Allergan has no experience integrating a large acquisition ► Shareholders will likely be especially leery of acquisitions of pipeline assets, which are speculative in nature and have been particularly value-destructive for Allergan historically ► Any "value-creating" acquisitions would have most likely been available for years before the Valeant bid 112#114Management is Also Considering a Leveraged Buyback Reuters, July 1, 2014: "Pyott has met with investors to talk about the company's defense, which he said could include issuing new debt to buy back shares. He said Allergan could borrow up to $10 billion without affecting its investment-grade rating, but he did not say how much the company might spend on the buybacks." Source: Reuters. 113#115A Large Buyback at the Currently Elevated Share Price would be Value-Destructive ► Allergan has indicated that the company is contemplating a leveraged buyback of up to $10 billion(¹), compared to a total buyback of $2.4 billion from 2011 to Q1 2014 ► Allergan's stock is currently trading at 29x 2014E earnings per share, vs. 18x for its peers (2) ■ Represents 24% premium over 12-month median price target of $135 per share before initial Valeant bid ■ 82% premium over the three-year average price of $92 per share ▸ A leveraged buyback of this scale would likely have to be conducted at a meaningful premium to AGN's current price (1) (2) Source: Interview with David Pyott (Reuters, July 1), Company filings and FactSet Represents Allergan's maximum borrowing capacity while retaining investment-grade rating As of July 14, 2014. Peers from Allergan's 2014 proxy (excluding Forest Laboratories) 114#116Allergan Share Buyback - Too Little, Too Late Why didn't Allergan buy back stock at materially lower prices? Amount Repurchased (SMM) $1,000 $900 $800 $700 $600 $500 3 year average price: $91.80 $400 $300 $200 $100 SO $163 $136 $76 2011 Q1 Q2 Q3 Q4 588 Source: Company filings and Factset $217 Q1 $332 $174 $185 Q2 Q3 Q4 2012 Amount repurchased $645 115 Q1 50.7 Q2 - Stock price 2013 50.2 $398 $1.4 Q3 Q4 Q1 2014 July 14th closing price: $167.02 $200.00 $180,00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 82% premium#117David Pyott has Indicated His True Concerns Reuters, June 23, 2014: "Pyott said other drugmakers at the San Diego convention 'understand that if we were to succumb to this, then somebody even bigger is next on the menu, or at least a lot of them will be afternoon snacks."" Is David Pyott more concerned about protecting shareholder interests or preserving the privileges of fellow entrenched pharmaceutical managements? 116#118Conclusion ► At a special meeting, shareholders will be able to fix Allergan's onerous special meeting provisions and send a strong message to other companies that such onerous bylaws will not be tolerated by shareholders ► At the meeting, shareholders will also be able to vote on removing six of Allergan's nine current directors who are standing in the way of what is best for the company and its shareholders 117#119Appendix 118#120Allergan's Compensation Policy Further Reduces the Credibility of the Revised Long-Term Plan on USD thousands except for market capitalizations) Market capitalization CEO Company Biotech Gilead Sciences, Inc. Amgen Inc. Biogen Idec Inc Celgene Corporation Medical Devices Abbott Laboratories Stryker Corporation, Inc. St. Jude Medical, Inc. Pharmaceutical Johnson & Johnson Bristol-Myers Squibb Company El Lily and Company valeant Pharmaceuticals Forest Laboratories, Inc. Endo international Pic Allorgan, Inc. Peer Group Average Source: ISS reports. leses Note: (3) 133,758 91,622 78,513 36,006 62,766 32,375 19,096 299,489 79,942 70,190 42,244 27,055 10,390 50,748 76,716 J. Martin R.Bradway G. Scangos R. Hugin M. While K. Lobo D. Starks A Gorsky L. Andreotti J. Lechleiter J. Pearson H. Solomon R. De Siva D. Pyott Based on Allergan's proxy peers. FactSet as of July 2, 2014 in USD millions. Change in pension, Base salary deferred / other comp 1,569 1,491 1,490 1,263 1,900 1,025 1,045 1,454 1.687 1.500 1,750 1.350 975 1,358 1,424 561 761 213 1,416 218 37 1,931 774 90 458 143 92 448 516 Only 13% of total compensation tied to performance Bonus & non- B equity incentives Restricted stock Option grant Total salary 1-year TSR 3,544 3,598 3,560 7,237 As of closest month end to company FY 2013 end, per company 155 report, unless otherwise noted. Per the closing price of $99.00 on June 30, 2014, the final day of trading prior to the acquisition by Actavis Plc. As of closest month end to company FY 2012 end, per company ISS report. 119 3,150 1,340 1,430 4,867 3,800 2,877 14,790 406 5,604 1,8301 3,561 4,604 7,703 9.195 3,554 7,367 2.994 2,303 6,117 14,587 10,842 2,199 6,250 Contrast to Valeant management- Performance-based incentive pay is 68% of total compensation 6,893 12,179 5,467 3,491 5,848 3,231 - 900 1,764 10,490 3,059 16,097 13,353 15.015 24,445 19,290 9,067 10,664 17,601 20,848 15,309 6.998 4,998 14,775 114,126 14,544 Significant misalignment between pay and shareholder returns, relative to peers 104.5% 34.8% 91.0% 115.3% 20.4% 39.3% 74.9% 34.7% 69.7% 7.3% 96.4% 9.7% 157.2% 21.3% 66.8% Contrast to Valeant management - shareholder alignment