Exhibit 10.2


 


SEPARATION OF EMPLOYMENT AGREEMENT


AND GENERAL RELEASE, DATED AUGUST 31, 2006


WHEREAS Paul Blake, FRCP (“Blake”)
has been employed by Cephalon, Inc. (hereinafter “Employer”) as Executive Vice
President, Worldwide Medical and Regulatory Operations, and because, as Blake
acknowledges, Blake and Employer desire to end Blake’s employment with Employer
in an amicable fashion, Blake and Employer agree as follows:


1.     In consideration of the
promises of the Employer set forth in the memorandum attached to the Separation
of Employment Agreement and General Releases to provide lump severance payment
in an amount corresponding to one and a half (1.5) times his current gross
annualized salary of $465,000, less applicable taxes and customary deductions,
for the period commencing September 1, 2006 and ending on March 1, 2008, which
corresponds to a total gross amount of $697,500, Blake (and his heirs,
executors, and administrators) intending to be legally bound, hereby
permanently and irrevocably terminates his employment with his Employer, and
releases and discharges his Employer (and its parents, subsidiaries,
affiliates, and its and their officers, directors, shareholders, employees,
agents, successors, assigns, heirs, benefit plans, benefit plan fiduciaries,
benefit plan administrators, executors, and administrators), and any individual
or organization related to his Employer, and against whom or which Blake could
claim (hereinafter referred to collectively as “Releasees”) from any and all
causes of actions, suits, debts, claims, and demands whatsoever, which he had,
has, or may have against Releasees up until the date of his execution of the
Separation of Employment Agreement and General Release (Agreement and
Release).  Particularly, but without
limitation, Blake so releases any claims relating in any way to his employment
or the termination of his employment relationship with his Employer, including,
but not limited to claims arising under the Pennsylvania Human Relations Act (“PHRA”)
Pennsylvania Wage Payment and Collection Law, 43 Pa. Stat. Ann. §§260.1-260.11a,
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. S2000c et
seq. (Title VII), (“Title VII”), the
















Age
Discrimination in Employment Act, 29 U.S.C., Section 621 et  seq.
(the “ADEA”), the Americans with Disabilities Act, 42 U.S.C. § 12101 et  seq.,
(the “ADA”), and the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et
seq. (“ERISA”) and all other claims under any federal, state, or common
law, statutory or regulatory provisions, now or hereafter recognized and all
claims for counsel fees and costs.  Blake
further agrees that he will not seek personal legal or equitable relief against
the Releasees involving any matters released in this paragraph.


2.     Except as set forth in this
Agreement and its Release, it is expressly agreed and understood that his
Employer does not have, and will not have, any obligation to provide at any
time in the future with any payments, benefits, or consideration other than
those recited in the attached memorandum, which in any event will be subject to
applicable taxes including Federal Insurance Contribution Act tax (hereinafter “FICA”),
and/or other federal, state and/or local taxes.


3.     Blake hereby agrees and
recognizes that his employment relationship with his Employer has been
permanently and irrevocably severed. 
Blake further recognizes that Employer is under no obligation to hire,
rehire or employ him in the future.  Blake
agrees that he will not seek or accept employment with Releasees in the future.  Also, to the best of his ability and upon
reasonable request, from time to time, Blake will cooperate with Employer, and
will answer for Employer, any questions regarding matters related to his
employment at Employer.  It is understood
that this will not detract from Blake’s other full time employment activities.


4.     Blake recognizes that many employees and Employer have access to
varying levels and degrees of confidential information, and that Blake’s
solicitation or assistance of such persons may be seriously disruptive to the
buiness of Employer in that such solicitations may result in disclosure of such
proprietary information and could impair the relationship between Employer and
its employees.



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5.     The parties acknowledge that the performance of the promises of
each are expressly contingent upon the fulfillment and satisfaction of the
obligations of the other party as set forth in this Agreement and Release and
its attached Exhibits.


6.     Blake agrees and
acknowledges that this Agreement and Release is not and shall not be construed
to be an admission of any violation of any federal, state or local statute or
regulation, or of any duty owed by Employer.


7.     Blake agrees, convenants,
and promises that he will not communicate or disclose the terms of this Agreement
and Release to any persons with the exception of members of his immediate
family and his attorney or financial advisors.


8.     Blake hereby certifies that
he has read the terms of this Agreement and Release, that he has had adequate
time to consider it fully, and that he understands its terms and effects.  Blake further certifies that neither his
Employer, nor any of its agents, representatives, employees or attorneys have
made any representations to Blake, construing the terms or effects of the Separation
of Employment Agreement and General Release other than those expressly
contained herein.


9.     Both parties agree that
this Agreement and Release, along with the attachments, represents the entire
agreement between the parties and fully supersedes any and all other oral and
written understandings or agreements between the parties.  Neither party shall have any duty to the
other that is not specifically set forth in these documents.


10.   Blake certifies and
acknowledges as follows:


a.               That he has read the terms of this Agreement
and Release and that he understands its terms and effects, including the fact
that he has agreed to RELEASE AND FOREVER DISCHARGE his Employer in accordance
with Paragraph 1;


b.              That he has signed this Agreement and Release
voluntarily and knowingly in exchange for the consideration described in the
attached memorandum;



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c.               That he has been advised by his Employer
through this document to consult with an attorney prior to signing this
Agreement and Release;


d.              That neither his Employer, nor any of its
agents, representatives, employees or attorneys have made any representations
to him construing the terms or effects of this Agreement and Release other than
those expressly set forth in this Agreement and Release;


e.               That he has been given a reasonable period of
at least 21 days to review and consider this Agreement and Release with an
attorney of his choice; and


f.                 That he may revoke the Agreement and Release
for a period of seven (7) days following the day he signs it by submitting (by
hand delivery) written notice of the revocation to Carl A. Savini, Executive
Vice President and Chief Administrative Officer.  The Agreement and Release shall become
effective and enforceable upon expiration of the seven-day revocation period.



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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have executed the foregoing Separation of Employment Agreement and
General Release this 23rd day of
August, 2006.


	
  Witness:

  	
  /s/ Beverly Wrightstone

  	
   

  	
  /s/ Paul Blake, FRCP

  	
   

  
	
   

  	
   

  	
  Paul Blake, FRCP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Witness:

  	
  /s/ Beverly Wrightstone

  	
   

  	
  By:

  	
  /s/ Carl A. Savini

  	
   

  
	
   

  	
   

  	
   

  	
   Carl A.
  Savini

  
	
   

  	
   

  	
   

  	
   Executive
  Vice President and Chief

  
	
   

  	
   

  	
   

  	
   Administrative
  Officer

  
	
   

  	
   

  	
   

  	
   Cephalon,
  Inc.

  
							



 



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EXHIBIT A


	
  TO:

  	
  Paul Blake, FRCP

  	
   

  
	
  FROM:

  	
  Carl A. Savini

  	
   

  
	
  DATE:

  	
  August 22, 2006

  	
   

  
	
  SUBJECT:

  	
  Agreement to End Employment

  	
   

  



 


This
memo will confirm that we have agreed to end your employment with Cephalon,
Inc. (“Employer”), effective August 31, 2006. 
This is a Termination Prior to Change in Control on account of an
involuntary termination by the Company for any reason other than Cause, death
or Disability (“Involuntary Termination”), as defined in your Executive
Severance Agreement of July 25, 2002.


The
details of your severance package are as follows:


1)              You will receive a lump sum severance payment
equal to one and a half (1.5) times your current gross annualized salary of
$465,000 for the period commencing September 1, 2006 and ending on March 1,
2008, which corresponds to a total gross amount of $697,500, less applicable
taxes and customary deductions.


2)              To assist you in your job search, we are
providing you with outplacement assistance. 
A representative from Right Management will provide you with additional
details of this program.


3)              For a period of eighteen (18) months
following your termination date, you shall continue to receive the medical and
dental coverage in effect for yourself and your spouse and dependents.  The COBRA health care continuation coverage
period under section 4980B of the CODE shall run concurrently with the
foregoing eighteen (18) month benefit period. 
Your participation in all other Company benefits, including the 401(k)
will cease August 31, 2006.  You will
receive information on the Life and LTD Insurances under separate cover.


4)              In accordance with our Equity Compensation
and Stock Option plans, you will have ninety (90) days following your
termination in which to exercise any previously unexercised options which have
vested as of August 31, 2006.  All
vesting ends as of August 31, 2006 and any stock awards or options that have
not vested as of such date will immediately terminate and revert to the
Company.


5)              You should be advised that the terms of your separation
must be disclosed under the federal securities laws, and that we plan to issue
the following disclosure statement:


“On August 31, 2006, Cephalon, Inc. (the “Company”)
and Dr. Paul Blake agreed to end Dr. Blake’s employment as the Company’s Executive
Vice President, Worldwide Medical and Regulatory Operations effective as of
August 31, 2006.  In connection with this
matter, the Company and Dr. Blake executed a Separation Agreement dated as of
August 31, 2006 (the “Separation Agreement”), providing for compensation and
benefits that would have been paid under an existing Severance Agreement dated
July 25, 2002 between the Company and Dr. Blake, including (i) a lump sum
payment of $697,000, which is equal to one and a half (1.5) times Dr. Blake’s
current annual base salary (or 18 months thereof); (ii) dental and medical
coverage continuation for Dr. Blake, his spouse
















and dependents until February 2008; and (iii)
payment of up to $15,000 to cover the costs of outplacement assistance
services.  In consideration of such
benefits, Dr. Blake agreed pursuant to the terms of the Separation Agreement to
release the Company from all claims, demands and causes of action related to
his employment with the Company.”


This
severance package is conditional upon the following:


1.     According to Section 5 of your Executive Severance Agreement, in
order to receive the severance payment, on or after August 31, 2006, you will
sign without alteration, and not thereafter revoke and you will at all times
comply with the terms and conditions of Employer’s attached form of Separation
of Employment Agreement and General Release Statement dated August 31, 2006.


2.     You agree to preserve the confidential nature of all trade
secrets and other proprietary information of the Employer; immediately deliver
to the Employer all documents and other materials acquired during the course of
your employment; and keep confidential any information or documents concerning
or relating to the Employer that you have acquired to date for your own or anyone
else’s benefit, without the prior written consent of the Employer.


3.     To the best of your ability and upon reasonable request, you
will cooperate with Employer, and you will answer for Employer, any questions
regarding matters in your area or expertise as long as you conintue to receive
payments from the Employer.  In addition,
you will not make any comment or statement, orally or in writing that is
designed to, or does, disparage the personal or business reputation of
Employer, its related companies, directors, officers, employees or agents.


4.     You will surrender immediately all company property including
files, memos and primary data to your supervisor.  This includes copies of these data and
materials.  You are also advised that
these data and materials are the intellectual property of Employer and may not
be used in any manner without written permission.


5.     During the severance periods, if necessary you will answer
Employer’s questions concerning your previous duties, upon Employer’s
reasonable request.  You will not receive
any additional compensation for such services, other than the salary or
benefits continuation or severance described above.  Without in any manner limiting the foregoing,
you acknowledge and agree that you will not be eligible for, nor will you
receive any bonuses or incentive compensation payments for calendar years 2006
or 2007.


You
will not receive any payment until at least eight (8) days after you execute
the applicable attached Separation of Employment Agreement and General Release
in order to allow for the expiration of the seven (7) day revocation period of
that agreement.



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If
I can be of any assistance to you now, or during the salary continuation or
severance periods, please do not hesitate to contact me.


	
  /s/ Carl A. Savini

  	
   

  
	
  Carl A. Savini

  
	
  Executive Vice
  President and Chief Administrative Officer

  
	
  Cephalon, Inc.

  
	
   

  
	
  Agreed to and Accepted:

  
	
   

  
	
   

  
	
  /s/ Paul Blake, FRCP

  	
   

  
	
  Paul Blake, FRCP

  
	
   

  
	
  23rd August 2006

  	
   

  	
   

  
	
  Date

  
	
   

  
	
  Attachment

  
					



 



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