Exhibit 10.1

 

CEPHALON, INC.

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (the “Agreement”) is entered into as of February 5,
2010, by and between Cephalon, Inc., a Delaware corporation (the “Company”), and
Robert P. Roche, Jr. (“Consultant”).

 

WHEREAS, Consultant resigned his position as Executive Vice President, Worldwide
Pharmaceutical Operations with the Company, effective as of February 5, 2010.

 

WHEREAS, the Company wishes to engage Consultant as a consultant to assist with
the transition of responsibilities with respect to worldwide pharmaceutical
operations, and Consultant wishes to provide such services, all subject to the
terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth,
and intending to be legally bound hereby, the Company and Consultant hereby
agree as follows:

 

1.               Term.  The term of this Agreement shall begin on February 8,
2010 (the “Effective Date”) and shall continue until August 8, 2010, unless
terminated earlier pursuant to Paragraph 6 below (the “Term”).

 

2.               Services to be Provided.  During the Term of this Agreement,
Consultant shall make himself available to the Company to assist with the
transition of responsibilities with respect to worldwide pharmaceutical
operations of the Company, including advice with respect to selling, marketing
and review of business development opportunities (the “Services”).   Consultant
shall be subject to the direction of the Chief Operating Officer (“COO”) of the
Company or such person as the COO may reasonably designate.  Consultant shall
perform the Services at any one of the Company’s locations or at other places as
may be mutually convenient and agreed upon by Consultant and the Company.  The
Services under this Agreement shall not prevent Consultant from providing
services to other entities, consistent with the covenants set forth in
Consultant’s Restated Executive Severance Agreement dated as of June 24, 2008,
as amended as of December 31, 2008, with the Company (the “Executive Severance
Agreement”).

 

3.               Compensation; No Benefits.

 

(a)                                  Compensation.  As compensation for
Consultant’s performance of the Services under this Agreement, the Company shall
pay Consultant a lump sum cash payment of three hundred and two thousand dollars
(US $302,000) on August 12, 2010.

 

(b)                                 Expenses.  The Company shall reimburse
Consultant for all reasonable business and pre-approved traveling expenses
incurred by Consultant in connection with the performance of the Services in
accordance with the Company’s expense reimbursement policies in effect from time
to time.

 

(c)                                  No Benefits.  Consultant acknowledges that
for purposes of this Agreement and any and all Services to be provided
hereunder, he shall not be an employee of Company and will not be entitled to
participate in or receive any benefit or right as a Company employee under any
Company employee benefit or executive compensation plan, including, without
limitation, employee insurance, pension, savings, medical, health care, fringe
benefit,

 

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stock option, equity compensation, deferred compensation or bonus plans.  This
Agreement shall have no effect on any of Consultant’s equity awards received
from the Company.  If for any reason Consultant’s status is re-characterized by
a third party to constitute employee status, Consultant shall not be eligible to
participate in or receive any benefit or right as a Company employee under any
Company plan.

 

(d)                                 Equity Awards.  Notwithstanding anything in
any agreement to the contrary and as a condition for the Company to enter into
this Agreement, Consultant hereby agrees that all of Consultant’s outstanding
equity awards that are not vested as of February 5, 2010 shall terminate and
Consultant shall have no further rights with respect to such nonvested awards.

 

4.               Independent Contractor; Performance.  For purposes of this
Agreement and all Services to be provided hereunder, Consultant shall not be
considered a partner, co-venturer, agent, employee, or representative of the
Company, but shall remain in all respects an independent contractor, and neither
party shall have any right or authority to make or undertake any promise,
warranty or representation, to execute any contract, or otherwise to assume any
obligation or responsibility in the name of or on behalf of the other party. 
Consultant shall perform all Services in a professional manner, consistent with
industry standards and the Company’s goals and ethical standards.

 

5.               Tax Obligations.  Consultant shall be responsible for all
income taxes, employment taxes and workers’ compensation insurance associated
with the compensation received under this Agreement and agrees that the Company
will not withhold or pay any of the foregoing in connection with Consultant’s
Services to the Company.

 

6.               Termination.  Notwithstanding the provisions of Paragraph 1,
the Company may terminate this Agreement at any time during the Term upon
written notice to Consultant, if the Services are not being performed as
requested by the Company or if Consultant breaches the non-competition,
confidentiality or non-solicitation covenants under the Executive Severance
Agreement.  Consultant may terminate this Agreement at any time by providing 30
days prior written notice to the Company.  Such termination by the Company or
Consultant is referred to as an “Early Termination.”  In the event of an Early
Termination, the Company shall pay Consultant a pro rata portion of the
compensation described in Paragraph 3(a), on the date set forth in Paragraph
3(a), determined by multiplying $302,000 by a fraction, the numerator of which
is the number of days from the Effective Date to the Early Termination date and
the denominator of which is 181.   Within five days after the Early Termination
date (or if there is no Early Termination date, at the end of the Term),
Consultant shall deliver to the Company all work product resulting from the
performance of the Services.

 

7.               No Conflicting Agreements; Non-Exclusive Engagement;
Confidentiality; Insider Trading; Disclosure.

 

(a)                                  No Conflicting Agreements.  Consultant
represents that Consultant is not a party to any existing agreement that would
prevent Consultant from entering into and performing this Agreement.  Consultant
will not enter into any other agreement that is in conflict with Consultant’s
obligations under this Agreement.  Subject to the foregoing, Consultant may from
time to time act as a consultant to, perform professional services for, or enter
into agreements similar to this Agreement with other persons or entities without
the necessity of obtaining approval from the Company.

 

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(b)                                 Non-Exclusive Engagement.  The Company may
from time to time (i) engage other persons and entities to act as consultants to
the Company and perform services for the Company, including services that are
similar to the Services, and (ii) enter into agreements similar to this
Agreement with other persons or entities, in all cases without the necessity of
obtaining approval from Consultant.

 

(c)                                  Confidentiality.  Consultant shall remain
subject to the terms and conditions of his Employee Confidentiality Agreement,
which Agreement shall continue in full force and effect during the Term of this
Agreement and thereafter.

 

(d)                                 Insider Trading.  Notwithstanding
Consultant’s status as an independent contractor as of and following the
Effective Date, Consultant acknowledges and agrees that he will remain subject
to and abide by the Company’s Policy Statement on Securities Trading, until such
time as he is no longer aware of any material nonpublic information concerning
the Company.

 

(e)                                  Disclosure.  Consultant acknowledges that
the Company intends to publicly disclose the existence and material terms of
this Agreement, and file a copy of this Agreement, as required by the rules and
regulations of the U.S. Securities and Exchange Commission.

 

8.               Entire Agreement, Amendment and Assignment.  This Agreement is
the sole agreement between Consultant and the Company with respect to the
Services to be performed hereunder and it supersedes all prior agreements and
understandings with respect to the Services, whether oral or written.  For the
avoidance of doubt, this Agreement has no effect on Consultant’s covenants under
the Executive Severance Agreement.  No modification to any provision of this
Agreement shall be binding unless in writing and signed by both Consultant and
the Company.  No waiver of any rights under this Agreement will be effective
unless in writing signed by the party to be charged.  All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto, except that the
duties and responsibilities of Consultant hereunder are of a personal nature and
shall not be assignable or delegable in whole or in part by Consultant.

 

9.               Governing Law.  This Agreement shall be governed by and
interpreted in accordance with laws of the Commonwealth of Pennsylvania, without
giving effect to any conflict of laws provisions.

 

10.         Notices.  All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered, sent by facsimile or
mailed by registered or certified mail, as follows (provided that notice of
change of address shall be deemed given only when received):

 

If to the Company, to:

 

Cephalon, Inc.

41 Moores Road

Frazer, PA 19355

Attention: Chairman and CEO

 

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If to Consultant, to the most recent address on file with the Company or to such
other names or addresses as the Company or Consultant, as the case may be, shall
designate by notice to each other person entitled to receive notices in the
manner specified in this Paragraph 11.

 

11.         Counterparts.  This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, shall bear the
signatures of Consultant and the Company.  This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original as against
any party whose signature appears thereon, but all of which together shall
constitute but one and the same instrument.

 

12.         Severability.  If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.

 

13.         Social Security Number.  Consultant certifies that he has provided
the Company with his true and correct Social Security Number.  Consultant
acknowledges that Company will rely upon the foregoing certification in filing
certain documents and instruments required by law in connection with this
Agreement including, without limitation, Form 1099 (or any successor form) under
the Internal Revenue Code of 1986, as amended (the “Code”).

 

14.         Section 409A.  The Company and Consultant agree that it is
reasonably anticipated that Consultant’s Services hereunder will require
Consultant to render Services each month at a level that will not exceed 20% of
the average level of Consultant’s services as an employee of the Company over
the preceding 36-month period.  The parties acknowledge that, for purposes of
section 409A of the Code, Consultant has undergone a “separation from service,”
within the meaning of section 409A, from the Company on the date of Consultant’s
termination of employment with the Company on February 5, 2010.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly
executed this Agreement as of the date first above written.

 

 

CEPHALON, INC.

 

 

 

 

 

By:

/s/ J. Kevin Buchi

 

Name:

J. Kevin Buchi

 

Title:

Chief Operating Officer

 

 

 

 

 

CONSULTANT

 

 

 

 

 

/s/ Robert P. Roche, Jr.

 

Robert P. Roche, Jr.

 

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