Exhibit 10.2


 




	
  Notice
  of Grant of

  	
   

  	
  Cephalon, Inc.

  
	
  Non-Qualified
  Stock Option

  	
   

  	
  41
  Moores Road

  
	
   

  	
   

  	
  Frazer,
  PA 19355

  
	
   

  	
   

  	
   

  
	
  Grantee
  Name & Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Plan:                   2004 Equity Compensation
  Plan

  






 


Effective
as of XX/XX/XXXX (“Date of Grant”), you have been granted a Non-Qualified Stock
Option (“Option”) to purchase XXXX shares of the common stock of Cephalon, Inc.
(“Shares”) under the Cephalon, Inc. 2004 Equity Compensation Plan (the “Plan”)
at an exercise price of $XX.XX per Share.


 


Unless
otherwise provided in the corresponding Grant Agreement or the Plan, the Option
shall become exercisable according to the following schedule, provided you are
employed by Cephalon, Inc. (“Company”) or a subsidiary of the Company, on
the applicable Exercisability Date:


 


	
  Exercisability Date

  	
   

  	
  Portion of Option Exercisable 

  on or after Exercisability Date

  	
   

  
	
  First
  Anniversary of the Date of Grant

  	
   

  	
  25

  	
  %

  
	
  Second
  Anniversary of the Date of Grant

  	
   

  	
  25

  	
  %

  
	
  Third
  Anniversary of the Date of Grant

  	
   

  	
  25

  	
  %

  
	
  Fourth
  Anniversary of the Date of Grant

  	
   

  	
  25

  	
  %

  



 


The
exercisability of the Option is cumulative, but shall not exceed 100% of the
Shares subject to the Option.  If the
foregoing schedule would produce fractional Shares, the number of Shares for
which the Option becomes exercisable shall round down to the nearest whole
Share.  The Option shall become fully
exercisable on the Fourth Anniversary of the Date of Grant, provided you are
employed by the Company or a subsidiary of the Company on such date.


 


The
Option will have a term of ten years from the Date of Grant and, therefore,
will remain exercisable until xx/xx/xxxx unless terminated on an earlier date
as set forth in the Grant Agreement or the Plan.


 


To
accept this Option and acknowledge your agreement to the terms and conditions
of the Option, you must click on the “Accept” box below.


 


By
accepting this Option, you accept the Option described in this Notice of Grant
of Non-Qualified Stock Option and the corresponding Grant Agreement and the
Plan, and agree to be bound by the terms and conditions of this Notice of Grant
of Non-Qualified Stock Option and the Grant Agreement and the Plan, each of
which is made part of this Notice of Grant of Non-Qualified Stock Option.  By accepting this Option, you also agree that
all of the decisions and determinations of the Committee (as defined in the
Plan) and the Company’s Board of Directors, as applicable, with respect to this
Option are final and binding.


 


In
addition, by accepting this Option you hereby certify to the following:


·                  I have read and understand the Company’s
Policy Statement on Securities Traded by Cephalon Personnel (updated July 2008)
(the “Policy Statement”) and have retained a copy for my records.  I also understand that Todd Longsworth,
Senior Counsel, is available to answer any questions regarding the Policy
Statement.


·                  Since the date of my last certification (or
for new employees, since the date I became an employee of the Company or a
subsidiary), I have complied with the Policy Statement.


·                  I will continue to comply with the Policy
Statement for as long as I am subject to it.


 

















 


GRANT AGREEMENT


 


THIS
GRANT AGREEMENT (the”Agreement”) sets forth the terms and conditions of the
non-qualified stock option that has been granted to you pursuant to the
corresponding Notice of Grant of Non-Qualified Stock Option (the “Notice”)
effective as of the Date of Grant (as defined in the Notice).


 


1.                                     Grant
of Option.


 


Subject
to the terms and conditions set forth in the Notice, this Agreement and the
Cephalon, Inc. 2004 Equity Compensation Plan (the “Plan”), Cephalon, Inc.
(the “Company”) has granted to you, as of the Date of Grant, a non-qualified
stock option (the “Option”) to purchase the number of shares of common stock of
the Company as listed in the Notice (the “Shares”) at the exercise price per
Share (the “Exercise Price”) set forth in the Notice.  This Option will become exercisable as
described in Section 2, below.


 


2.                                     Dates
of Exercise.


 


Unless
otherwise provided in this Agreement, this Option will become exercisable in
accordance with the exercisability schedule set forth in the Notice, provided
that you are employed by the Company or a subsidiary of the Company
(collectively, the “Employer”) on the applicable date.


 


3.                                     Term
of Option.


 


(a) 
This Option will terminate at the close of business on the date specified in
the Notice (“Expiration Date”), unless it is terminated at an earlier date
pursuant to the provisions of the Notice, this Agreement or the Plan.


 


(b) 
This Option shall automatically terminate upon the happening of the first of
the following events:


 


(i)                                     Should you
terminate employment with the Employer (other than by reason of retirement (as
defined below), death, permanent disability (as defined below) or termination
for cause (as defined below)), this Option will, solely to the extent that it
is exercisable immediately prior to such termination of employment, remain
exercisable during the three-month period following the date of such
termination of employment; provided, however, that in no event will this Option
be exercisable at any time after the Expiration Date.   Notwithstanding the foregoing, if, at the
time of your termination of employment, you are unable to sell the Shares
acquired upon 


 

















 


exercise
of the Option (i) without liability under Section 16(b) of the
Securities Exchange Act of 1934, as amended (or any successor provision) (“Section 16(b)”)
or (ii) because you are in possession of material non-public information
about the Employer (“Non-public Information”), then the three-month period referred
to in the preceding sentence shall not commence until the later of the first
day that you may sell such Shares without liability under Section 16(b) or
the first day that you are not in possession of Non-public Information;
provided, however, that in no event will this Option be exercisable at any time
after the Expiration Date.


 


(ii)                                  Should you
terminate employment with the Employer on account of retirement, this Option
will, solely to the extent that it is exercisable immediately prior to such
termination of employment, remain exercisable until the Expiration Date.  You will be deemed to cease to be an employee
of the Employer on account of retirement if you resign as an employee of the
Employer on or after you have attained age 55 and completed 10 years of service
with the Employer.


 


(iii)                               Should you
become permanently disabled and terminate employment with the Employer, this
Option will, solely to the extent that it is exercisable immediately prior to
such termination of employment, remain exercisable during the one-year period
following the date of such termination of employment; provided, however, in no
event will this Option be exercisable at any time after the Expiration
Date.  You will be deemed to be “permanently
disabled” if you are, by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration
of not less than one year, unable to engage in any substantial gainful
employment.


 


(iv)                              Should you die
while employed by the Employer, this Option, to the extent it is at the time
outstanding under this Plan, shall automatically accelerate and become fully
exercisable as to all Shares subject to the Option and shall remain exercisable
until the Expiration Date.  In addition,
if you die during the three-month period referred to in clause (i) or
during the one-year period referred to in clause (iii), this Option shall
remain exercisable until the Expiration Date. 
Your executors or administrators of estate or heirs or legatees (as the
case may be) will have the right to exercise this Option, during the remainder
of the term of this Option.


 


(v)                                 Should your
employment with the Employer be terminated for cause (including, but not
limited to, any act of dishonesty, unethical conduct, willful misconduct, fraud
or embezzlement, or any unauthorized disclosure of confidential information or
trade secrets), this Option, whether 


 

















 


exercisable
or not, will immediately terminate and cease to be exercisable when notice of
termination of employment is given.


 


Any
portion of this Option that is not exercisable when you terminate employment
with the Employer shall immediately terminate as of such date.


 


4.                                     Privilege
of Stock Ownership.


 


The
holder of this Option will have none of the rights of a stockholder with
respect to the Shares until such individual has exercised the Option and has
been issued a stock certificate for the Shares.


 


5.                                     Option
Nontransferable.


 


This
Option is not transferable or assignable by you other than by will or by the
laws of descent and distribution, and during your lifetime, this Option is
exercisable only by you.  Any attempt to
transfer or assign this Option by you will be deemed null, void and without
effect.  The rights and protections of
the Company hereunder shall extend to any successor or assigns of the Company
and to the Company’s parents, subsidiaries and affiliates.  This Agreement and the Notice may be assigned
by the Company without your consent.


 


6.                                     Manner
of Exercising Option.


 


In
order to exercise all or any part of the Shares that are exercisable, you (or
in the case of exercise after your death, the executor, administrator, heir or
legatee, as the case may be) must take the following actions:


 


(a)                                  Provide notice
of intent to exercise by executing those materials issued by the Company and/or
its designated administrator.  The
instructions should contain, at a minimum, payment method, number of Shares
subject to this Option to be exercised, Exercise Price per Share and Date of
Grant.


 


(b)                                 Pay the
aggregate Exercise Price, plus applicable withholding taxes, for the Shares to
be purchased in accordance with procedures established by the Committee (as
defined in the Plan) from time to time based on type of payment being made but,
in any event, prior to the issuance of the Shares


 


(c) You
may pay the Exercise Price and applicable withholding taxes in one or more of
the following alternative forms:  (i) full
payment, in cash or by check payable as required in the amount of the exercise
price for the Shares 


 

















 


being
purchased and applicable withholding taxes; (ii) full payment in Shares
held for at least six months and having an aggregate fair market value on the
day of exercise (as determined under the terms of the Plan) equal to the
exercise price for the Shares being purchased and ; (iii) a combination of
Shares held for at least six months and valued at fair market value on the day
of exercise (as determined under the terms of the Plan) and cash or check
payable as per the Company’s instruction, equal in the aggregate to the
Exercise Price and applicable withholding taxes for the Shares being purchased;
or (iv) to the extent permitted by applicable law, by such other method as
the Committee may approve; and


 


(d)                                 In the event of
your death, the person or persons exercising the Option must furnish the
Company with appropriate documentation that they have the right to exercise
this Option.


 


7.                                     Certain
Company Transactions.


 


The
provisions of the Plan applicable to a Change of Control (as defined in the
Plan) and Corporation Transaction (as defined in the Plan) shall apply to the
Option, and, in the event of a Change of Control and Corporation Transaction,
the Committee may take such actions as it deems appropriate pursuant to the
Plan.


 


8.                                     Compliance
with Laws and Regulations.


 


(a)                                  The exercise of
this Option and the issuance of Shares upon such exercise is subject to
compliance by the Company and you with all applicable requirements of law
relating thereto and with all applicable regulations of any stock exchange on
which the Shares may be listed at the time of such exercise and issuance.


 


(b)                                 In connection
with the exercise of this Option, the Company may require you (or in the case
of exercise after your death, your executor, administrator, heir or legatee, as
the case may be) to execute and deliver to the Company such representations in
writing as may be requested by the Company so that it may comply with the
applicable requirements of federal and state securities laws.


 


(c)                                  All obligations
of the Company under this Agreement and the Notice shall be subject to the
rights of the Company as set forth in the Plan to withhold amounts required to
be withheld for any taxes that result from your (or in the case of exercise
after your death, your executor, administrator, heir or legatee, as the case
may be) exercise of the Option.


 

















 


9.                                     Liability
of Company.


 


The
inability of the Company to obtain approval from any regulatory body having
authority deemed by the Company to be necessary to the lawful issuance and sale
of any Shares pursuant to this Option will relieve the Company of any liability
with respect to the non-issuance or sale of the Shares as to which such
approval is not obtained.


 


10.                               No
Employment Contract.


 


Nothing
in this Agreement, the Notice or in the Plan confers upon you any right to
continue in the employ of the Employer or interferes with or restricts in any
way the rights of the Employer, which are hereby expressly reserved, to
discharge you at any time for any reason or no reason, with or without cause.  Except to the extent the terms of any
employment contract between you and the Employer expressly provide otherwise,
neither the Company nor any of its subsidiaries is under any obligation to
continue your employment for any period of specified duration.


 


11.                               Notices.


 


Any
notice required to be given or delivered to the Company under the terms of this
Agreement will be in writing and addressed to the Company in care of its
Executive Vice President & Chief Administrative Officer at its
corporate office at 41 Moores Road, Frazer, Pennsylvania, 19355.  Any notice required to be given or delivered
to you will be in writing and addressed to you at the address provided on the
notice of grant or such other address provided in writing by you to the
Employer.  All notices will be deemed to
have been given or delivered upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.


 


12.                               Grant
Subject to Plan Provisions


 


The
grant of this Option is made pursuant to the Plan, the terms of which are
incorporated herein by reference, and in all respects shall be interpreted in
accordance with the Plan.  The grant and
exercise of this Option are subject to interpretations, regulations and
determinations concerning the Plan established from time to time by the
Committee in accordance with the provisions of the Plan, including, but not
limited to, provisions pertaining to (i) the registration, qualification
or listing of the Shares, (ii) changes in capitalization of the Company,
and (iii) other requirements of applicable law.  The Committee shall have the authority to
interpret and construe this 


 

















 


Option
pursuant to the terms of the Plan, and its decisions shall be conclusive and
binding on all persons having an interest in this Option.


 


13.                               Governing
Law.


 


The
interpretation, performance and enforcement of this Agreement, the Notice and
the Plan will be governed by the laws of the Commonwealth of Pennsylvania,
without giving effect to the conflicts of laws provisions thereof.


 


“Accept”