Exhibit
10.1


AMENDMENT
2006-1


TO THE


CEPHALON,
INC.


2004
EQUITY COMPENSATION PLAN


        WHEREAS,
Cephalon, Inc. (the “Company”) maintains the Cephalon, Inc. 2004
Equity Compensation Plan (the “Plan”) for the benefit of its eligible
employees, certain consultants and advisors who perform services for the
Company, and non-employee members of the Company’s Board of Directors (the “Board”);


        WHEREAS,
pursuant to Section 12(a) of the Plan, the Board may amend the Plan
at any time;


        WHEREAS, pursuant
to Section 141 of the Delaware General Corporation Law, the Board has
delegated its authority to amend or modify any of the Company’s existing equity
compensation plans, including the Plan, to the Stock Option and Compensation
Committee of the Board of Directors (the “Committee”), as more fully described
in Section III of the Committee’s charter;


        WHEREAS, the
Committee desires to amend the Plan to increase, by an additional 1,750,000
shares, the aggregate number of shares of Company common stock (“Company Stock”)
authorized for issuance under the Plan, so that a total of 11,450,000 shares of
Company Stock are authorized for issuance under the Plan, and to provide that
no more than 600,000 of these additional 1,750,000 shares of Company Stock may be
issued pursuant to stock awards under the Plan; and


        WHEREAS, the
Committee also desires to amend the Plan to provide that certain previously
issued shares that are returned to the Company will not again be available for
issuance as future grants under the Plan.


        NOW, THEREFORE,
in accordance with the foregoing, effective as of May 17, 2006, the Plan
shall be amended as follows:


        1. Section 3(a) of the Plan
shall be amended in its entirety to read as follows, with Section 3(a)(1) subject
to the approval of the Company’s stockholders:


        “(1) Shares Authorized.
  Subject to adjustment as described
below, the aggregate number of shares of common stock of the Company (“Company
Stock”) that may be issued or transferred under the Plan is 4,700,000 shares
and, (i) effective February 1, 2002, the aggregate number of shares
of Company Stock that may be issued or transferred under the Plan shall be
increased by 1,200,000 shares so that the total number of shares of Company
Stock authorized for issuance or transfer under the Plan shall be 5,900,000
shares; provided, however, that no more than 100,000 of these additional shares
of Company Stock shall be available for issuance as Stock Awards; (ii) effective
February 6, 2003, the aggregate number of shares of Company Stock that may
be issued or transferred under the Plan shall be increased by 2,500,000 shares
so that the total number of shares of Company Stock authorized for issuance or
transfer under the Plan shall be 8,400,000 shares; provided, however, that no
more than 100,000 of these additional shares of Company Stock shall be
available for issuance as Stock Awards; (iii) effective February 5,
2004, the aggregate number of shares of Company Stock that may be issued or
transferred under the Plan shall be increased by 1,300,000 shares so that the
total number of shares of Company Stock authorized for issuance or transfer
under the Plan shall be 9,700,000 shares; provided, however, that no more than
500,000 of these additional shares of Company Stock shall be available for
issuance as Stock Awards; and (iv) effective May 17, 2006, the
aggregate number of shares of Company stock that may be issued or transferred
under the Plan shall be increased by 1,750,000 shares to that the total number
of shares of Company Stock authorized for issuance or transfer under the Plan
shall be 11,450,000 shares; provided, however, that no more than 600,000 of
these additional shares of Company Stock shall be available for issuance as
Stock Awards.









 



 


        (2) Annual Individual Maximum.
The maximum aggregate number of shares of Company Stock that shall be subject
to Grants of Options made under the Plan to any individual during any calendar
year shall not exceed 500,000 shares, subject to adjustment as described below.


        (3) Source of Shares for Issuance.
Shares issuable pursuant to the exercise of Options and the grant of Stock
Awards may be delivered out of the authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan.


        (4) Expiration of Options;
Canceled, Forfeited, Exchanged, Surrendered Options. With
respect to Options granted under the Plan that expire at the end of their
original term without having been exercised, the shares of Company Stock
subject to such Options will not be available for future issuance or transfer
under the Plan. With respect to Options granted under the Plan that terminate
or are canceled, forfeited, exchanged or surrendered without having been
exercised prior to the end of their original term, or any Stock Awards that are
forfeited prior to the end of the applicable Restriction Period (as defined in Section 7),
the shares of Company Stock subject to such Grants shall again be available for
future issuance or transfer under the Plan.”


        2. As thus amended, the Plan is hereby
ratified, republished and reconfirmed and said Plan and this amendment thereto
hereby constitute the Plan.


        IN WITNESS WHEREOF, and
as evidence of the adoption of Amendment 2006-1 to the Plan as set forth
herein, the Committee has caused this Amendment 2006-1 to be executed
this 31st day of January 2006.


 


	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Carl A.
  Savini

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President, Chief Administrative Officer

  	
   

  
						



 



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