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Medicis CEO Shacknai's Contract Put Kids Ahead of Company

The likelihood of Valeant's (VRX) proposed takeover of Medicis (MRX) looks a whole lot different once you've read Medicis CEO Jonah Shacknai's employment agreement. It requires that he work only four days per week, that he be allowed to work from home, that charity functions be considered part of his work, and that he "may not be available for corporate matters during such times that he is providing care for his children."

The childcare terms are unusually generous, according to the Footnoted financial blog. Childcare was also an issue on Shacknai's Q2 conference call, in which Shacknai said he would return to work -- following the mysterious deaths of his 6-year-old son and 32-year-old girlfriend at their Coronado, Calif., mansion in July -- after his other two other children started school again in Arizona:

I expect very quickly to return to the normal work schedule at the office. School commences momentarily in Arizona. At this time, I've really been with the kids, waiting for school to begin. But as soon as that happens, I expect to be on my my normal calendar in the office doing all the things I have done previously.
The childcare clause dates back to 1999. It's not clear why Shacknai wanted such flexible hours. He is the founder of the company, and as such dictates his terms to a large extent.

Two other drug companies have been subjected to power struggles following the personal troubles of their CEOs recently. Cephalon was acquired by Teva (TEVA) after the death of its CEO, Frank Baldino Jr., who died in December. And Forest Labs (FRX) is fighting a proxy battle over control of its board of directors after the federal government said it might try to exclude CEO Howard Solomon from doing business with Medicare and Medicaid.

In other news, Radar reported that no suicide note was found near Rebecca Zahau Nalepa, Shacknai's girlfriend, who was found hanging nude from a balcony at his house July 13. The police investigation is expected to take several more weeks -- a time period in which Valeant clearly sees a weakened company with a distracted leader, ripe for the picking.

Updated Timeline of Deaths at Jonah Shacknai's Coronado Mansion: