THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 10.1

THIRD AMENDMENT

Amendment to Employment Agreement between Medicis Pharmaceutical Corporation and Jonah Shacknai, dated July 1, 1996, as amended by an agreement dated April 1, 1999, as further amended by an agreement dated February 21, 2001 (the “Agreement”).

     This Third Amendment is made as of this 30th day of December, 2005 between Medicis Pharmaceutical Corporation, a corporation organized under the laws of the State of Delaware (the “Company”), with offices located at 8125 North Hayden Road, Scottsdale, Arizona, and Jonah Shacknai (the “Executive”), residing in Scottsdale, Arizona:

WITNESSETH

     WHEREAS, the Company and the Executive desire to enter into the present amendment whereby the Executive will continue to provide personal services to the Company as Chairman and Chief Executive Officer; and

     WHEREAS, the Company recognizes the unique services of the Executive to the Company and to its financial success, and further recognizes the limitations of the Executive’s ability to travel due to parental obligations; and

     WHEREAS, the Company highly values the past and present services and contributions of the Executive to furtherance of shareholder value, and believes that the ongoing participation of the Executive as Chairman and Chief Executive Officer is an important element of the Company’s future success; and

     WHEREAS, the Company recognizes that the Executive has provided such services and made such extraordinary contributions in furtherance of shareholder value while simultaneously providing for the custodial care of his two minor children; and

     WHEREAS, the Company recognizes that the Executive has engaged in and presently engages in extensive philanthropic and charitable activities in Arizona and elsewhere, which activities significantly inure to the benefit of the Company in numerous

ways, including reinforcing positive public relations for the Company in the local community and elsewhere; and

     WHEREAS, the Executive has received local, regional and national recognition for his business, charitable and philanthropic efforts; and

     WHEREAS, the Company desires that the Executive continue his engagement and participation in such philanthropic and charitable activities in a similar manner and extent; and

     WHEREAS, the Executive shall continue to have the duties and responsibilities set forth in Section 2(a) of the July 1, 1996 Agreement, as amended on April 1, 1999, and is further amended on February 27, 2001,

     NOW, THEREFORE, in consideration of the continued employment of the Executive by the Company as Chairman and Chief Executive Officer, the above premises and the mutual agreements hereinafter set forth, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties agree to amend their July 1, 1996 Employment Agreement, as further amended on April 1, 1999 and thereafter on February 21, 2001 (the “Agreement”) as follows:

     1. The Agreement shall be extended for a five (5) year period commencing on January 1, 2006 and expiring on December 31, 2011 (the amended term) and shall be subject to automatic renewal for successive periods as provided for in Article 4 of the Agreement.

     2. Section 2(b) of the Agreement, as amended by the amendment agreed to on April 1, 1999, shall be further amended to read:

“(b) Throughout his employment hereunder, the Executive shall continue to work a minimum of four (4) days per week, during normal working hours during the business week or otherwise, including but not limited to, conventions, meetings and off-site activities, to the fulfillment of the duties of his employment, with full

recognition of his other obligations as designated hereinafter which may occur outside the Company’s headquarters in the Phoenix Metropolitan area. The Executive shall conduct such business activities at the Company’s headquarters at 8125 North Hayden Road, Scottsdale, Arizona, or from such other headquarters located in the greater Phoenix area as the Company may determine. Alternatively, the Executive shall be available during the business week to meet with Company personnel, attend telephonic meetings, and participate in other corporate matters from his home during the normal business week and/or at such other times as the Executive may be available, provided that the Executive’s children are not in his care at such time. It is expressly understood and agreed that the Executive may not be available for corporate matters during such times that he is providing care for his children. Further, the Company acknowledges and agrees that the participation by the Executive in philanthropic, community education and/or charitable activities during the normal business week shall be considered to be in furtherance of the Executive’s duties of his employment with the Company.”

     3. Exhibit A of the Agreement shall be amended, as provided and attached hereto, is to state, among other items, that the base salary of the Executive effective January 1, 2006 shall be $1,020,000 per annum, and shall be subject to all provisions set forth in the Agreement concerning adjustment of the Executive’s base salary.

     4. Section 5 of the Agreement shall have added a subsection (j) which shall read:

“(j) Notwithstanding anything to the contrary contained in the Agreement, in the event the Agreement is extended beyond January 1, 2011 by virtue of the automatic renewal provisions of subsection (a) of Section 4 of the Agreement, or otherwise, the terms of the Agreement setting forth the payments by the Company to th