Exhibit 10.4

 

AMENDMENT TO EMPLOYMENT CONTRACT

 

This Amendment to Employment Contract (“Amendment”) is made as of the 10th day
of March, 2011 by and between Cephalon France, a Société par Actions Simplifiées
(the “Company”), and Alain Aragues (“Executive”).

 

WHEREAS, Executive is an executive of the Company, currently serving as its
Executive Vice President and President of Cephalon Europe;

 

WHEREAS, the Company and Executive entered into that certain Employment Contract
dated December 9, 2008 and amended as of July 20, 2010 (the “Employment
Contract”);

 

WHEREAS, the Company and Executive desire to amend and restate the Addendum to
the Employment Contract (the “Prior Addendum”), which provides certain severance
payments and benefits in the event that Executive’s employment is terminated as
set forth below; and

 

WHEREAS, Executive shall be entitled to the severance payments and benefits
under the amended and restated Addendum or those provided under the Employment
Contract, whichever is greater.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth and intending to be legally bound hereby, the
Company and Executive agree as follows:

 

1.                                       The Employment Contract is hereby
amended by replacing the Prior Addendum with the attached amended and restated
Addendum.

 

2.                                       In all respects not amended, the
Employment Contract is hereby ratified and confirmed.

 

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

 

 

 

 

CEPHALON FRANCE

 

 

 

Attest:

/s/ Robin DeRogatis

 

By:

/s/ J. Kevin Buchi

 

 

 

Its:

Director

 

 

 

 

 

 

 

 

 

 

/s/ Alain Aragues

Witness

 

ALAIN ARAGUES

 

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ADDENDUM

 

EXECUTIVE SEVERANCE PROVISIONS

 

The following amended and restated Addendum is an amendment to the Employment
Contract dated December 9, 2008 and amended as of July 20, 2010 (the “Employment
Contract”) between Cephalon France, a Société par Actions Simplifiées (the
“Company”), and Alain Aragues (“Executive”).

 

Executive shall not receive severance payments under both Article 12 of the
Employment Contract and this Addendum.  Instead, in the event of Executive’s
termination of employment with the Company and its affiliates under
circumstances that allow Executive to receive severance payments, Executive
shall receive severance payments under either Article 12 of the Employment
Contract or this Addendum, whichever provides the greater payments.

 

1.                                       Definitions.

 

(a)                                  “Annual Base Salary” shall mean twelve
times the greater of (i) the highest monthly base salary paid or payable
(including any base salary which has been earned but deferred) to Executive by
the Company and its affiliates, together with any and all salary reduction
authorized amounts under any of the Company’s benefit plans or programs, or
(ii) the monthly base salary paid or payable to Executive by the Company
(including authorized deferrals, salary reduction amounts and any car allowance)
immediately prior to Executive’s Termination Date.

 

(b)                                 “Annual Bonus” shall mean one hundred
percent (100%) of Executive’s target annual bonus for the year in which
Executive’s Termination Date occurs, plus one hundred percent (100%) of any
other bonuses Executive receives, or is entitled to receive, during the year in
which Executive’s Termination Date occurs.

 

(c)                                  “Board” shall mean the Board of Directors
of Cephalon.

 

(d)                                 “Bonus Multiplier” shall mean the quotient
determined by dividing the total number of months in which Executive performed
services for the Company during the calendar year in which Executive’s
Termination Date occurs divided by twelve (12).

 

(e)                                  “Cause” shall mean Executive has engaged in
any gross misconduct or negligence (faute grave ou lourde) and in particular in
any unauthorized disclosure of confidential information or trade secrets, or any
other act that is materially and demonstrably detrimental to the Company.

 

(f)                                    “Cephalon” shall mean Cephalon, Inc.,
which is a parent of the Company.

 

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(g)                                 “Change in Control” shall be deemed to have
occurred if any of the following events occurs:

 

(i)                                     the direct or indirect acquisition by
any person or related group of persons (other than Cephalon or a person that
directly or indirectly controls, is controlled by, or is under common control
with, Cephalon) of beneficial ownership of securities possessing more than
thirty percent (30%) of the combined voting power of Cephalon’s outstanding
securities;

 

(ii)                                  a change in the composition of the Board
over a period of twenty-four (24) months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (x) have been Board
members continuously since the beginning of such period, or (y) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (x) who were still in
office at the time such election or nomination was approved by the Board;

 

(iii)                               a merger or consolidation in which
securities possessing more than fifty percent (50%) of the combined voting power
of Cephalon’s outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction; or

 

(iv)                              the sale, transfer or other disposition of
more than seventy-five percent (75%) of Cephalon’s assets in a single or related
series of transactions.

 

(h)                                 “Disability” shall mean Executive is
considered as disabled (incapacité) in accordance with French law.

 

(i)                                     “Notice of Termination” means a written
notice which (i) indicates the specific termination provision in this Addendum
relied upon, and (ii) briefly summarizes the facts and circumstances deemed to
provide a basis for termination of Executive’s employment under the provision so
indicated.

 

(j)                                     “Termination Date” shall mean the last
day of Executive’s employment with the Company.

 

(k)                                  “Termination of Employment” shall mean the
termination of Executive’s active employment relationship with the Company.

 

2.                                       Termination of Employment Prior to a
Change in Control.

 

(a)                                  Termination Prior to a Change in Control. 
In the event that Executive’s employment with the Company is terminated prior to
a Change in Control on account of a

 

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termination by the Company for any reason other than Cause, death or Disability,
Executive shall be entitled to the benefits provided in subsection (b) of this
Section 2.

 

(b)                                 Compensation Upon Termination Prior to
Change in Control.  In the event a termination described in subsection (a) of
this Section 2 occurs, the Company shall provide Executive with the following:

 

(i)                                     Executive shall receive a cash payment
equal to one and a half (1.5) times Executive’s Annual Base Salary at the rate
in effect immediately before Executive’s Termination Date.  The payment shall be
made in a lump sum payment within sixty (60) days after Executive’s Termination
Date.

 

(ii)                                  The Company shall pay Executive a pro rata
bonus for the year in which Executive’s Termination Date occurs.  The pro rata
bonus shall be based on the full year annual bonus that would otherwise have
been payable to Executive, based upon the achievement of the applicable
performance objectives, multiplied by a fraction, the numerator of which is the
number of days during which Executive was employed by the Company in the year in
which the Termination Date occurs and the denominator of which is 365.  The pro
rata bonus shall be paid at the same time as annual bonuses are paid to other
executives of the Company.

 

(iii)                               Executive shall receive a cash payment equal
to the premium cost that Executive would have to pay, at the rates in effect on
Executive’s Termination Date, to continue the Company’s supplementary private
health insurance (“mutuelle”) for Executive and, where applicable, Executive’s
spouse and dependents, if receiving such coverage on Executive’s Termination
Date, for a period of eighteen (18) months following Executive’s Termination
Date.  The payment shall be made in a lump sum payment within sixty (60) days
after Executive’s Termination Date.

 

(iv)                              The Company shall cover the cost of reasonable
outplacement assistance services for Executive that are directly related to
Executive’s Termination of Employment and are actually provided by an
outplacement agency selected by Executive, in an amount not to exceed US $15,000
converted into Euros at the exchange rate applicable at the Termination Date.

 

(v)                                 Executive shall receive any amounts earned,
accrued or owing but not yet paid to Executive as of Executive’s Termination
Date, payable in a lump sum, and any benefits accrued or earned in accordance
with the terms of any applicable benefit plans and programs of the Company.

 

(c)                                  Notice of Termination.  Any termination on
account of this Section 2 shall be communicated by a Notice of Termination to
the other Parties hereto given in accordance with Section 17 hereof.

 

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3.                                       Termination of Employment on Account of
a Change in Control.

 

(a)                                  Termination on Account of a Change in
Control.  In the event that Executive’s employment with the Company is
terminated after, or in connection with, a Change in Control on account of:
(i) a termination by the Company following a Change in Control for any reason
other than Cause, death or Disability, or (ii) a termination by the Company
(other than for Cause, death or Disability) prior to or in connection with an
anticipated Change in Control at the request or direction of the acquirer
involved in the Change in Control, Executive shall be entitled to the benefits
provided in subsection (b) of this Section 3. If Executive is entitled to
benefits described in subsection (b) of this Section 3 by reason of clause
(a)(ii) above, Executive shall be entitled to such benefits upon Executive’s
Termination of Employment regardless of whether the Change in Control actually
occurs.

 

(b)                                 Compensation in Connection With a
Termination on Account of a Change in Control.  Subject to the provisions of
Section 5 hereof, in the event a termination described in subsection (a) of this
Section 3 occurs, the Company shall provide Executive with the following:

 

(i)                                     Executive shall receive a cash payment
equal to the sum of (x) three (3) times Executive’s Annual Base Salary at the
rate in effect immediately before Executive’s Termination Date, (y) three
(3) times Executive’s Annual Bonus, and (z) the Bonus Multiplier times
Executive’s Annual Bonus.  The payment shall be made in a lump sum payment
within sixty (60) days after Executive’s Termination Date.

 

(ii)                                  Executive shall receive a cash payment
equal to the premium cost that Executive would have to pay, at the rates in
effect on Executive’s Termination Date, to continue the Company’s supplementary
private health insurance (“mutuelle”) for Executive and, where applicable,
Executive’s spouse and dependents, if receiving such coverage on Executive’s
Termination Date, for a period of thirty-six (36) months following Executive’s
Termination Date.  The payment shall be made in a lump sum payment within sixty
(60) days after Executive’s Termination Date.

 

(iii)                               All stock options and restricted stock held
by Executive will become fully vested and/or exercisable, as the case may be, on
the Termination Date, and all stock options shall remain exercisable after
Executive’s Termination Date as set forth in the applicable option agreements
with the Company.

 

(iv)                              The Company shall cover the cost of reasonable
outplacement assistance services for Executive that are directly related to
Executive’s Termination of Employment and are actually provided by an
outplacement agency selected by Executive, in an amount not to exceed US $15,000
converted into Euros at the exchange rate applicable at the Termination Date.

 

(v)                                 Executive shall receive any amounts earned,
accrued or owing but not yet paid to Executive as of Executive’s Termination
Date, payable in a lump sum, and

 

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any benefits accrued or earned in accordance with the terms of any applicable
benefit plans and programs of the Company.

 

(c)                                  Notice of Termination.  Any termination on
account of this Section 3 shall be communicated by a Notice of Termination to
the other Parties hereto in accordance with Section 17 hereof.

 

4.                                       Termination of Employment on Account of
Disability.  Notwithstanding anything in this Addendum to the contrary, if
Executive’s employment terminates on account of Disability (“incapacité”),
Executive shall be entitled to receive disability benefits under any disability
program maintained by the Company that covers Executive, and Executive shall not
be considered to have terminated employment under this Addendum and shall not
receive benefits pursuant to Sections 2 and 3 hereof.

 

5.                                       Other Payments.  The payments due under
Sections 2 and 3 hereof shall be in addition to and not in lieu of any payments
or benefits due to Executive under any other plan, policy or program of the
Company, except that no cash payments shall be paid to Executive under the
Company’s then current severance pay policies and there shall be no duplication
of benefits between Article 12 of the Employment Contract and this Addendum.  In
the event of Executive’s termination of employment with the Company and its
affiliates under circumstances that allow Executive to receive severance
payments, Executive shall receive severance payments under either Article 12 of
the Employment Contract or this Addendum, whichever provides the greater
payments.

 

6.                                       Enforcement.

 

(a)                                  In the event that the Company shall fail or
refuse to make payment of any amounts due Executive under Sections 2, 3 and 5
hereof within the respective time periods provided therein, the Company shall
pay to Executive, in addition to the payment of any other sums provided in this
Addendum, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Sections 2, 3 and 5, as appropriate, until paid
to Executive, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its “prime rate” plus two percent (2%), each change in such rate to take
effect on the effective date of the change in such prime rate.

 

(b)                                 It is the intent of the Parties that
Executive not be required to incur any expenses associated with the enforcement
of Executive’s rights under Sections 2, 3 and 5 of this Addendum by arbitration,
litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Executive
hereunder.  Accordingly, the Company shall pay Executive the amount necessary to
reimburse Executive in full for all expenses (including all attorneys’ fees and
legal expenses) incurred by Executive in enforcing any of the obligations of the
Company under this Addendum.

 

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7.                                       No Mitigation.  Executive shall not be
required to mitigate the amount of any payment or benefit provided for in this
Addendum by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for herein be reduced by any compensation earned by
other employment or otherwise.

 

8.                                       Non-Exclusivity of Rights.  Except as
provided in Section 5, nothing in this Addendum shall prevent or limit
Executive’s continuing or future participation in or rights under any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
subsidiaries or affiliates and for which Executive may qualify.

 

9.                                       No Set-Off.  The Company’s obligation
to make the payments provided for in this Addendum and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against Executive or others.

 

10.                                 Taxes.  Any payment required under this
Addendum shall be subject to all requirements of the law with regard to the
withholding of taxes, filing, making of reports and the like, and the Company
shall use its best efforts to satisfy promptly all such requirements.

 

11.                                 Confidential Information.  Executive shall
remain subject to the terms and conditions of Executive’s Employee
Confidentiality Agreement, which shall continue in full force and effect, except
as specifically modified herein.

 

12.                                 Non-Solicitation.   In further consideration
for the Company’s promises herein, Executive agrees that for the period
beginning with the termination of Executive’s employment with the Company for
any reason other than that described in Section 3(a) above, and for a period of
one (1) year thereafter, Executive will not, directly or indirectly solicit,
recruit or hire any part-time or full-time employee, representative or
consultant of the Company or its subsidiaries or affiliates to work for a third
party other than the Company or its subsidiaries or affiliates or engage in any
activity that would cause any employee, representative or consultant to violate
any agreement with the Company or its subsidiaries or affiliates.  The foregoing
covenant shall not apply to any person after twelve (12) months have elapsed
after the date on which such person’s employment by the Company has terminated.

 

13.                                 Equitable Relief.

 

(a)                                  Executive acknowledges that the
restrictions contained in Sections 11 and 12 hereof are reasonable and necessary
to protect the legitimate interests of the Company and its affiliates, that the
Company would not have entered into this Addendum in the absence of such
restrictions, and that any violation of any provision of those Sections will
result in irreparable injury to the Company.  Executive represents that
Executive’s experience and capabilities are such that the restrictions contained
in Section 12 hereof will not prevent Executive from obtaining employment or
otherwise earning a living at the same general level of economic benefit as is
currently the case.  Executive further represents and acknowledges that
(i) Executive

 

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has been advised by the Company to consult Executive’s own legal counsel in
respect of this Addendum, and (ii) that Executive has had full opportunity,
prior to execution of this Addendum, to review thoroughly this Addendum with
Executive’s legal counsel.

 

(b)                                 Executive agrees that the Company shall be
entitled to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of Sections 11 or 12
hereof, which rights shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled.  In the event that any of the
provisions of Sections 11 or 12 hereof should ever be adjudicated to exceed the
time, geographic, service, or other limitations permitted by applicable law in
any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, service, or other limitations
permitted by applicable law.

 

(c)                                  Executive irrevocably and unconditionally
(i) agrees that any suit, action or other legal proceeding arising out of
Section 11 or 12 hereof, including without limitation, any action commenced by
the Company for preliminary and permanent injunctive relief or other equitable
relief, may be brought in the appropriate Labour Court, or if such court does
not have jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in France, (ii) consents to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding, and (iii) waives any
objection which Executive may have to the laying of venue of any such suit,
action or proceeding in any such court.  Executive also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 17
hereof.

 

14.                                 Term of Addendum.  This Addendum shall
continue in full force and effect for the duration of Executive’s employment
with the Company; provided, however, that after the termination of Executive’s
employment during the term of this Addendum, this Addendum shall remain in
effect until all of the obligations of the Parties hereunder are satisfied or
have expired.

 

15.                                 Indemnification.  Executive shall be
entitled to indemnification under the charter or bylaws of the Company and its
affiliates, and under any director’s and officer’s insurance policies maintained
by the Company and its affiliates, that provide for indemnification for
Executive’s actions while a director, officer, employee, or agent of the Company
or any of its affiliates, and under the Indemnification Agreement between the
Executive and the Company dated March 10, 2011.

 

16.                                 Successor Company.  The Company shall
require any successor or successors (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by agreement in form and substance satisfactory to
Executive, to acknowledge expressly that this Addendum is binding upon and
enforceable against the Company in accordance with the terms hereof, and to
become jointly and severally obligated with the Company to perform this Addendum
in the same manner and to the same extent that the Company would be required to
perform if no such succession or successions had taken place.  Failure of the
Company to obtain such agreement prior to the

 

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effectiveness of any such succession shall be a breach of this Addendum.  As
used in this Addendum, the Company shall mean the Company as herein before
defined and any such successor or successors to its business and/or assets,
jointly and severally.

 

17.                                 Notice.  All notices and other
communications required or permitted hereunder or necessary or convenient in
connection herewith shall be in writing and shall be delivered personally or
mailed by registered or certified mail, return receipt requested, or by
overnight express courier service, as follows:

 

If to the Company, to:

 

Cephalon France

20 rue Charles Martigny

94704 Maisons-Alfort, France

 

If to Executive, to:

 

[Executive Officer Address]

 

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to the other Parties hereto in the manner
specified in this Section; provided, however, that if no such notice is given by
the Company following a Change in Control, notice at the last address of the
Company or to any successor pursuant to this Section 17 shall be deemed
sufficient for the purposes hereof.  Any such notice shall be deemed delivered
and effective when received in the case of personal delivery, five (5) days
after deposit, postage prepaid, with the U.S. Postal Service in the case of
registered or certified mail, or on the next business day in the case of
overnight express courier service.

 

18.                                 Governing Law.  This Addendum shall be
governed by and interpreted under French law.

 

19.                                 Contents of Agreement, Addendum and
Assignment.

 

(a)                                  This Addendum supersedes the Prior Addendum
and all prior agreements except the Employment Contract and the Employee
Confidentiality Agreement and Indemnification Agreement referred to above and
sets forth the entire understanding between the Parties hereto with respect to
the subject matter hereof and cannot be changed, modified, extended or
terminated except upon written amendment executed by Executive and executed on
the Company’s behalf by a duly authorized officer.  The provisions of this
Addendum may provide for payments to Executive under certain compensation or
bonus plans under circumstances where such plans would not provide for payment
thereof.  It is the specific intention of the Parties that the provisions of
this Addendum shall supersede any provisions to the contrary in such plans, and
such plans shall be deemed to have been amended to correspond with this Addendum
without further action by the Company or the Board.

 

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(b)                                 All of the terms and provisions of this
Addendum shall be binding upon and inure to the benefit of and be enforceable by
the respective heirs, representatives, successors and assigns of the Parties
hereto, except that the duties and responsibilities of Executive and the Company
hereunder shall not be assignable in whole or in part by the Company.  If
Executive should die after Executive’s Termination Date and while any amount
payable hereunder would still be payable to Executive hereunder if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Addendum to Executive’s devises,
legates or other designees or, if there is no such designee, to Executive’s
estate.

 

20.                                 Severability.  If any provision of this
Addendum or application thereof to anyone or under any circumstances shall be
determined to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions or applications of this Addendum which can
be given effect without the invalid or unenforceable provision or application.

 

21.                                 Remedies Cumulative; No Waiver.  No right
conferred upon the Parties by this Addendum is intended to be exclusive of any
other right or remedy, and each and every such right or remedy shall be
cumulative and shall be in addition to any other right or remedy given hereunder
or now or hereafter existing at law or in equity.  No delay or omission by a
Party in exercising any right, remedy or power hereunder or existing at law or
in equity shall be construed as a waiver thereof.

 

22.                                 Company Recoupment Policy.  Executive agrees
that any compensation payable under the Addendum and the Employment Contract or
otherwise shall be subject to any applicable recoupment or clawback policy that
the Board may implement from time to time with respect to officers of the
Company.

 

23.                                 Survival.  The provisions of Sections 6, 11,
12, 13, 15 and 22 shall survive termination of this Addendum.

 

24.                                 Miscellaneous.  All section headings are for
convenience only.  This Addendum may be executed in several counterparts, each
of which is an original. It shall not be necessary in making proof of this
Addendum or any counterpart hereof to produce or account for any of the other
counterparts.

 

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

 

 

 

CEPHALON FRANCE

 

 

 

Attest:

/s/ Robin DeRogatis

 

By:

/s/ J. Kevin Buchi

 

 

 

Its:

Director

 

 

 

 

 

 

 

 

 

 

/s/ Alain Aragues

Witness

 

ALAIN ARAGUES

 

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