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,


 

















 


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.


 

















 


(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


 

















 


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.