Document:

Prepared by R.R. Donnelley Financial -- EMPLOYEE AGREEMENT

  EXHIBIT 10.01 
  EMPLOYMENT AGREEMENT 
             This Agreement is made as of the 6th day of August, 2002 by and between Entercom Communications Corp., a Pennsylvania corporation (hereinafter referred to as the
“Company” or “we”), and Stephen F. Fisher (hereinafter referred to as “you”).
             The parties hereto agree to
amend the terms of your employment with the Company as follows:
             1.      Term. The term of this
Agreement shall commence January 1, 2002 and continuing through February 28, 2005, subject to termination as provided herein. This Agreement shall automatically renew from year to year thereafter, unless either party gives at least 120 days prior
written notice of its election to either terminate or to renegotiate the terms of this Agreement at the end of the original or any then current renewal term. 
             2.      Salary and Benefits. You will be paid a salary as follows:
 
            (a)   For the period of 1/1/2002 to 6/30/2002 you will be paid a semi-monthly salary of $12,500 (annual rate of $300,000).
 
            (b)   For the period from 7/1/2002 to the end of this Agreement you will be paid a semi-monthly salary of $14,583.33 (annual rate of
$350,000). 
 
            (c)   Commencing July 1, 2003 and each July 1, thereafter, your salary shall be increased by the
percentage increase in the Consumer Price Index for all Urban Consumers (“CPI-U”) as published by the U.S. Department of Labor for the immediately preceding May compared to the CPI-U for the month of May one year earlier.

            (d)   You will be paid a cash signing bonus of $30,000 in the next regularly scheduled payroll of the Company after the date
that this agreement is fully executed. 
             Such salary and any other compensation to be paid to you hereunder will be subject to all
payroll deductions or withholding authorized by you or required by federal, state or local laws or regulations. 
             In addition, you will
be eligible to participate in the Company’s 401(k) Plan and you will be provided with coverage under the Company’s life insurance and LTD insurance plans and any other benefits generally available to officers of the Company, and you and
your dependents will be provided with coverage under the Company’s major medical and dental insurance plans.
             3.      Annual Incentive Bonus. You will be eligible for an annual cash bonus of up to $230,000 with respect to each Fiscal year of
the Company. The actual amount of such bonus will be determined in the sole discretion of the Compensation Committee of the Board of 
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  Directors based on a review of the Company’s performance and your performance during the fiscal year then ended. You must work through the end of the fiscal year to be eligible for
the bonus for that year and the bonus will be determined and then paid after the completion of the financial statements for the fiscal year in question.
             4.      Stock Options. Subject to the approval of the Compensation Committee of the Board of Directors, you will be eligible for
discretionary grants of options to purchase Class A common stock of the Company under the Entercom 1998 Equity Compensation Plan (the “Plan”). Such options will have a ten-year term and will vest 25% per year at the end of each of the
first four years of full time employment following the grant. If your employment with the Company is terminated for Cause (as defined in the Plan) all unexercised options will be forfeited in accordance with the terms of the Plan. If your employment
is terminated by the Company without Cause all option grants not then vested will continue to vest as set forth in paragraph 10(b) hereof (or paragraph 8 in the case of a termination or Constructive Termination incident to a Change of Control);
except that, if such termination is due to your death or disability, the vesting of options shall be as provided in the Plan. Any vested options at the time of the termination of your employment by the Company without Cause or by reason of your
death or disability, or which later vest as provided in this Agreement, may be exercised at any time within the shorter of the expiration of the original ten year term of the option in question or three years from the date of termination. The
foregoing notwithstanding, if you violate any of the Restrictive Covenants contained in paragraph 11 hereof, all unexercised options will be forfeited. Such options will contain such other terms as determined by the Compensation Committee of the
Board of Directors. Any option grants hereunder shall be adjusted for any dilution event as described in paragraph 3(b)of the Plan. All existing option grants that you now hold will be modified to provide for vesting and that
they will be exercisable as set forth above and in paragraphs 8 and 10(b) as appropriate.
             5.      Restricted
Stock. You will be granted 5,000 shares of Restricted Stock under the Plan effective on the date of this Agreement. 1,500 of these shares of Restricted Stock will vest (i.e. the restrictions will be removed) and the unrestricted shares
will be issued to you on the first business day of 2003. An additional 1,500 of these shares of Restricted Stock will vest and the unrestricted shares will be issued to you on the first business day of 2004. The final 2,000 of these shares of
Restricted Stock will vest and the unrestricted shares will be issued to you on the first business day of 2005. If your employment with the Company is terminated for Cause, all unvested Restricted Stock grants will be forfeited. If your employment
is terminated by the Company without Cause, all Restricted Stock grants not then vested will continue to vest as set forth in paragraphs 10( b) hereof (or paragraph 8 in the case of a termination or Constructive Termination incident to a Change of
Control); except that, if such termination is due to your death or disability, the vesting of Restricted Stock shall be as provided in the Plan . The foregoing notwithstanding, if you violate any of the Restrictive Covenants contained in paragraph
11 hereof any unvested Restricted Stock grants and undelivered shares of unrestricted stock will be forfeited. Such Restricted Stock grants will be in the form attached hereto as Exhibit B. Any Restricted Stock grants hereunder shall be adjusted for
any dilution event as described in paragraph 3(b) of the Plan.
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              6.      Car Allowance. You will receive a monthly car allowance of $1,500
commencing January 1, 2002.
             7.      Duties. As Executive Vice President and Chief Financial Officer
of the Company you will be responsible for the general management and supervision of the fiscal affairs of the Company and discharge such other duties as may from time to time be assigned by the Board of Directors, the CEO or the President of the
Company. As part of such duties and responsibilities, you shall see that a full and accurate accounting of all financial transactions of the Company is made, oversee the investment and reinvestment of the capital funds of the Company, cooperate in
the conduct of the annual audit of the Corporation’s financial records and manage the relationships with the Company’s lenders and investors. You agree that you will devote your full time and best efforts to the Company’s business and
will not accept any outside employment without the prior written cons ent of the Company.
             8.      Change of
Control. If there is a “Change of Control” of the Company (as defined in the Plan) your salary, auto allowance, employee benefits, Restricted Stock and options will be treated as set forth in the attached Exhibit “A”
– Change of Control Decision Tree where:
 
            (i)   all stock prices are determined by the closing price of the stock
in question on the date in question.
 
            (ii)   the Black-Scholes value of options shall be determined on the
valuation date, as if your employment hereunder were to continue following such date, using the Black-Scholes method in the same manner as such options are valued by the Company for SEC accounting purposes, except that the volatility index to be
used in making such valuation shall be the average volatility of the S&P 500 at the time of such valuation. 
 
            (iii)   “Constructive Termination” shall mean your resignation from employment with the surviving entity due to a diminution in your compensation
package or job duties and such resignation occurs within the first thirty (30) days after such diminution becomes effective.
 
            (iv)   “Surviving Entity” means the entity that survives or succeeds ETM after a change of control.
 
            (v)   “Cause” in connection with any termination of employment shall mean cause as defined in the Plan.
             (vi)   “Salary Continuation” shall mean that when Salary Continuation applies in accordance with Exhibit A, you shall be entitled to have your
then current salary, auto allowance and employee benefits continue to be paid to you for a period which is the longer of (i) the period through February 28,2005 or (ii) one (1) year from the date of such termination of employment. In addition you
will be paid a one-time bonus of $230,000 within 15 days of the date of such termination of employment.
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              9.      Going Private Transaction. In the event that there is a “Going
Private” or “LBO” type transaction and as a result the Company’s equity securities are no longer publicly traded, then you will be eligible to participate in such transaction on a basis similar to other members of senior
management of the Company. 
  
             10.      Termination. This Agreement may be
terminated during the original term or any renewal term as follows:
 
            (a)   The Company may terminate this Agreement at
any time for cause and without further obligation hereunder.
 
            (b)   The Company may terminate this Agreement for
its convenience and without cause. In the event of such a termination without Cause, subject to the conditions set forth below, (except in the case of a termination incident to a Change of Control or a Constructive Termination in the one year period
after a Change of Control as provided in paragraph 8 above, which terminations will be governed by paragraph 8 hereof) the Company shall be obligated to continue to pay to you the salary, auto allowance and bonus (computed as set forth below) for
the period through February 28, 2005 or one year from the date of such termination, whichever is longer and all grants of options and Restricted Stock made through the effective date of such termination will continue to vest during the period ending
February 28, 2005, as if you had remained employed hereunder through that date. Such continued payments and vesting of options and Restricted Stock are expressly conditioned on: (i) your signing a release in form satisfactory to the Company
releasing the Company and all of its officers, directors, employees and agents from any and all claims or liabilities arising out of your employment and/or the termination of employment and (ii) your full compliance with the restrictive covenants
contained in paragraph 11 hereof. For purpose of the foregoing, the bonuses to be paid for any particular year shall be in an amount computed in accordance with the following formula:
 Bonus = $230,000 * Annual Percentage * Other Bonus Percentage

  Where: the “Annual Percentage” (i) is 75% for the year in which the
termination of employment occurs if the termination is on or before 9/30 of that year and 100% thereafter, (ii) is 50% for the year after the year in which the termination occurs, and (iii) is 25% for the second year after the year in which the
termination occurs; and the “Other Bonus Percentage” is the average of the percentage of actual to target bonus for the other Executive Officers of the Company for the year in question.
 

 
             Any payments made under paragraph 8 or 10(b) incident to a termination of employment shall be in lieu of and in satisfaction of all claims for
severance, payment in lieu of notice or other compensation which may otherwise arise upon termination of employment with the Company except for salary and auto allowance earned through the date of termination and payment of earned but unused
vacation in accordance with Company policy then in existence.
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              If this Agreement terminates as of 2/28/2005 due to a notice pursuant to paragraph 1 hereof by the Company, it
shall not be deemed a termination by the Company and there shall be no acceleration of vesting of options or Restricted Stock or extension of the period for exercise of options after termination from that provided in the Plan and there shall be no
payment of severance (except as may be provided for under Company policy then in effect) or continuation payments thereafter. 
 
            (c)   You may terminate this Agreement by giving 90 days prior written notice of termination, if for any two consecutive calendar year periods (i) your
aggregate annual bonus for such two years is less than a total of $322,000 or (ii) your option grants total an aggregate of less than 120,000 shares for such two years. Such notice must be given within the first 30 days after payment of the bonus or
option grant for the second calendar year of you will be deemed to have waived the right to terminate under this subparagraph (c) as a result of the aggregate bonus paid or options granted for those two years. If you terminate this Agreement
pursuant to this paragraph 10(c), you will be entitled payment of salary and auto allowance earned through the date of termination and payment of earned but unused vacation in accordance with Company policy then in existence but you will not be
entitled to any continued compensation or vesting of options or Restricted Stock after the effective date of the termination.
             11.      Restrictive Covenants. You agree to the following Restrictive Covenants:
 
            (a)      Non-Competition. It is understood and agreed that so long as you are employed by the Company or being paid your salary after
termination of employment as provided in this Agreement and for a period of one year thereafter you will not directly or indirectly, provide any service either as an employee, employer, consultant, contractor, agent, principal, partner, substantial
stockholder, corporate officer or director of or for a company or enterprise which competes in any material manner with the then present or planned business activities (as defined below) of the Company, including without limitation, audio
programming, production, engineering, promotion or broadcasting regardless of the method of its delivery, which methods include, without limitation, AM, FM, satellite, PCS, cable, Internet, or any other means. The foregoing
notwithstanding, if the Company either (i) elects to terminate your employment for reasons other than Cause or (ii) offers you a salary and bonus package which is lower than your then current package in connection with an election by the Company to
renegotiate the terms of this Agreement and your employment terminates due to a failure to reach Agreement on a lower salary and bonus package, then in either such event the length of the foregoing covenant against competition shall be reduced to
the period following the termination of your employment which is the sum of: (i) any period of notice provided for in this Agreement for which you are given payment in lieu thereof; (ii) the time of any salary continuation as provided in this
Agreement plus the time equivalent, at your then curre nt salary rate, of any additional payments made to you in connection with such termination; and (iii) three (3) months. For purpose of the foregoing “planned business activities” shall
mean a business initiative materially discussed by the Board of Directors or which is currently under consideration by the Board of Directors or which has been approved by the Board of Directors.
             (b)      Non-Solicitation. In addition it is understood and agreed that for the one year period following any termination of your
employment with the Company you will not, 
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  without the express prior written permission of the Company, employ, offer to employ, counsel a third party to employ, or participate in any manner in the recommendation, recruitment or
solicitation of the employment of any person who was an employee of the Company on the date of the termination of your employment or at any time within the 90 days prior thereto. In the event that any such person shall be employed in a position
under your direct or indirect supervision within such one year period without the Company’s express prior written permission, it shall be conclusively presumed that this restriction has been violated. 
 
            (c)      Non-Disparagement. You agree that you will not make any statement that would adversely reflect on the Company or its
management or take any action that might interfere with the Company’s activities or damage the Company’s reputation in any way. Prohibited actions would include, but not be limited to, Private or public comments, whether oral or written,
critical or disparaging of the Company or any of its managers. You agree that a material portion of the covenants of the Company contained in this Agreement and of the compensation, including any bonuses set forth herein, benefits and training that
you will receive hereunder are consideration for the restrictions contained in this paragraph 11. In the event you violate the restrictive covenants set forth in (a) or (b) above, it is agreed that the time period for which the restrictive covenant
so violate d is applicable shall be extended for a period of one (1) year from the date you cease such violation. You acknowledge that any violation of the provisions set forth in this paragraph 11 may cause irreparable harm to the Company. You,
therefore, expressly agree that the Company, in addition to any other rights or remedies which it may possess, shall be entitled to injunctive and other equitable relief to prevent a breach of these restrictions. 
              12.      Confidentiality and Intellectual Property Rights.    Your position involves a close and
confidential relationship in which you will be privy to proprietary information of the Company, including without limitation strategic planning, acquisition and investment analysis, research, consulting reports, computer programs and sales,
technical, financial and programming practices and data all of which you agree will be held in the strictest confidence at all times. All trade secret, copyright, trademark and/or other intellectual property rights of any kind developed while this
Agreement is in effect which relate to the Company’s business or to your duties hereunder shall be considered a “work for hire” and shall be and remain the sole and exclusive property of the Company and you shall, to the extent deemed
necessary or desirable by the Company , cooperate and assist the Company in assigning to the Company and perfecting, filing and recording any such rights in the name of the Company.   
             13.      No Restrictions. In making this Agreement you represent and warrant that you are free to enter into and perform this
Agreement and are not and will not be under any disability, restriction or prohibition, contractual or otherwise, with respect to (a) your right to execute this Agreement; (b) your right to make the covenants contained herein; and (c) your right to
fully perform each and every term and obligation hereunder. You further agree not to do or attempt to do, or suffer to be done, during or after the term hereof, any act in derogation of or inconsistent with the obligations under this Agreement.

             14.      Miscellaneous. This Agreement constitutes the entire agreement and understanding between
you and the Company concerning the compensation to be paid to you and 
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 all of the terms and conditions of your employment and supercedes all prior agreements concerning same, whether written or oral. Each party agrees to pay reasonable attorney’s
fees and costs incurred by the other if the other party is successful in enforcing its rights under this Agreement in any court action, arbitration or other proceeding. This Agreement supersedes any prior understandings, representations or
agreements, whether oral or written, concerning the subject matter hereof. This Agreement may not be modified or amended except by written instrument duly executed by each of the parties. A waiver by either party of any term or condition of this
Agreement or the breach thereof shall not be deemed to constitute a waiver of any other term or condition of this Agreement or of any subsequent breach of any term or condition hereof.
             IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have affixed their hands and seals as of the date first written above.

	

	 	

	 	 	By:  	 /s/ Stephen F. Fisher                            

		 	 	
	 	 	 	Stephen F. Fisher

	

	 	 ENTERCOM COMMUNICATIONS CORP. 
 

	 	 	By:  	 /s/ David J.
Field                                   
		 	 	
	 	 	 	David J. Field
	 	 	Title: 	President and Chief Executive Officer

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  EXHIBIT B 
  ENTERCOM COMMUNICATIONS CORP. 
 1998 EQUITY COMPENSATION PLAN 
 
 RESTRICTED STOCK GRANT  
             This RESTRICTED STOCK GRANT, dated as of _______ (the “Date of Grant”), is delivered by
Entercom Communications Corp. (the “Company”), to Stephen F. Fisher (the “Grantee”).
   RECITALS  
             A.   The Entercom Communications Corp. 1998 Equity Compensation Plan (the “Plan”) provides for the grant of restricted stock to directors,
employees and certain consultants and advisors of the Company, in accordance with the terms and conditions of the Plan. A copy of the Plan and a “prospectus”, as required under Section 10(a) of the Securities Act of 1933, is
attached.
             B.   The committee (the “Committee”) appointed by the Board of Directors of the Company (the
“Board”) to administer the Plan has determined that it is to the advantage and interest of the Company to make a restricted stock grant as an inducement for the Grantee to continue as an employee of the Company and to promote the best
interests of the Company and its shareholders.
             C.   This grant is subject to the terms of the Plan, which are hereby
incorporated into this Agreement by this reference. The Plan is administered by the Committee.
             NOW, THEREFORE, the parties to this
agreement, intending to be legally bound hereby, agree as follows:
             1.    Restricted Stock Grant.  Subject to the
terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee 5,000 shares of Class A common stock of the Company (“Restricted Stock”). The shares of Restricted Stock may not be transferred by
the Grantee or subjected to any security interest until the shares have become vested pursuant to this Agreement and the Plan.
             2.    Vesting of Restricted Stock.  Subject to the conditions described in Paragraph 1 above:
             a.   The shares of Restricted Stock shall vest on the following dates with respect to the number of shares listed opposite each date, and the restrictions
on such shares shall lapse according to the following schedule, provided and on the condition that the Grantee has been continuously employed by Company or continuously providing service to the Company (as defined in the Plan) through the applicable
date:

	 Dates on Which Shares Vest 	 Number of Shares Vested 
	   January 1, 2003	1,500   Shares
	   January 1, 2004	1,500   Shares
	   January 1, 2005	2,000   Shares

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 The vesting of the Restricted Stock is cumulative. 
             b.   In addition, (i) if the Grantee’s End of Service Date (as defined in Paragraph 2(c) below) is due to the Grantee’s death, the Restricted
Stock shall become fully vested (ii) if Grantee’s End of Service Date is due to a termination of Grantee’s employment by the Company for Cause (as defined in the Plan) or is due to Grantee’s resignation from employment, any shares of
Restricted Stock which have not yet vested at the time of Grantee’s End of Service Date shall be immediately forfeited, shall not thereafter become vested and this Grant shall be deemed to have terminated with respect to any such unvested
Restricted Stock. If Grantee’s employment with the Company is terminated by the Company and the termination is not for Cause (as defined in the Plan) then the Restricted Stock will continue to vest as set forth in Section 2(a); above subject to
the conditions in paragraphs 5 and 10(b) of your Employment Agreement dated July 1, 2002. 
             c.   For purpose of this
Grant, Grantee’s End of Service Date, unless otherwise specified by the Committee, shall be the date of cessation of employment with the Company.
  
             3.    Certificates. 
             a.   Stock certificates representing the Restricted Stock may be issued by the Company and held in escrow by the Company until the Restricted Stock vests,
or the Company may determine that the Restricted Stock will be held by the Company as non-certificated shares until the Restricted Stock vests. During the period before the shares vest (the “Restriction Period”), the Grantee shall not be
entitled to receive any cash dividends with respect to the shares of Restricted Stock and shall not be entitled to vote the shares of Restricted Stock. In the event of a dividend or distribution payable in stock or other property or a
reclassification, split up or similar event, the shares or other property issued or declared with respect to the shares of non-vested Restricted Stock shall be subject to the same terms and conditions relating to vesting as the shares to which they
relate.
             b.   When the Grantee obtains a vested right to shares of Restricted Stock, a certificate representing the vested
shares shall be issued to the Grantee, free of the restrictions under this Agreement. 
             4.    Nonassignability of
Rights.  During the Restriction Period, the Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of by the Grantee. Any attempt to assign, transfer, pledge or otherwise dispose of the shares contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the shares, shall be null and void and without effect. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the
Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.
             5.    Change of Control.  In the event of a Change of Control, any unvested Restricted Stock shall be treated as set forth in the Grantee’s
Employment Agreement dated ______, 2002 the Committee may take such actions as it deems appropriate pursuant to the Plan.
             6.    Grant Subject to Plan Provisions.  This grant 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 is subject to the provisions of the Plan and 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) rights and obligations with respect to withholding taxes, (ii) the registration, qualification or listing of the shares, (iii) changes in capitalization of
the Company, (iv) compliance with applicable federal communications laws, and (v) other requirements of applicable law. The Committee shall have the authority to interpret and construe 
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  the grant pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
             7.    No Employment or Other Rights.  This grant shall not confer upon the Grantee any right to be retained by or in the employ or service of the
Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment or service at any time. The right of the Company to terminate at will the Grantee’s employment or service shall be governed by
Grantee’s Employment Agreement.
             8.    Applicable Law.  The validity, construction, interpretation and effect
of this instrument shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.
             IN WITNESS WHEREOF, Entercom Communications Corp. has caused its duly authorized officers to execute and attest this instrument, and the Grantee has placed his signature
hereon, effective as of the date of grant.

	

	 	 ENTERCOM COMMUNICATIONS CORP. 

	 	 	By:  	
                                        
                      
		 	 	
	 	 	 	 

 I hereby accept the grant of Restricted Stock described in this Agreement. I have read the Entercom Communications Corp. 1998 Equity Compensation Plan, received the Plan
prospectus and agree to be bound by the terms of the Plan and this Agreement.

	

	 	

	 	 	 	
                                        
                      
Stephen F. Fisher
		 	 	
	 	 	Date: 	
                                        
                      

  3<PAGE>

                                                                    EXHIBIT 10.1

                          EXECUTIVE SEVERANCE AGREEMENT

         This Severance Agreement is made as of the 25/th/ day of July, 2002 by
and between Cephalon, Inc., a Delaware corporation (the "Company"), and Frank
Baldino, Jr., Ph.D. ("Executive").

         WHEREAS, Executive is an executive of the Company, currently serving as
its Chairman and Chief Executive Officer;

         WHEREAS, the Company has determined that appropriate steps should be
taken to, and encourage the attention and dedication of, Executive to his
assigned duties without distraction; and

         WHEREAS, in consideration of Executive's continued employment with the
Company and agreeing to keep Company information confidential and not to compete
with the Company in the event Executive's employment is terminated, the Company
agrees that Executive shall receive the compensation and benefits set forth in
this Agreement as a cushion against the financial and career impact on Executive
in the event Executive's employment with the Company is terminated for a reason
set forth in this Agreement.

         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 (individually a "Party" and together, the
"Parties") agree as follows:

         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 the Executive by the Company and its
affiliates (as defined in section 1504 of the Code without regard to subsection
(b) thereof), 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 the Executive by the Company (including authorized
deferrals, salary reduction amounts and any car allowance) immediately prior to
the Executive's Termination Date.

               (b) "Annual Bonus" shall mean 100% of Executive's target annual
bonus for the year in which Executive's Termination Date occurs, plus 100% of
any other bonuses Executive receives, or is entitled to receive, during the year
in which Executive's Termination Date occurs, including, but not limited to,
bonuses under the Company's executive special bonus program.

               (c) "Board" shall mean the Board of Directors of the Company.

<PAGE>

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

               (e) "Cause" shall mean Executive has engaged in any act of
unethical conduct, willful misconduct, fraud or embezzlement, any unauthorized
disclosure of confidential information or trade secrets, or any other act that
is materially and demonstrably detrimental to the Company.

               (f) "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 the Company or a person that
         directly or indirectly controls, is controlled by, or is under common
         control with, the Company) of beneficial ownership (within the meaning
         of Rule 13d-3 of the Securities Exchange Act of 1934) of securities
         possessing more than thirty percent (30%) of the combined voting power
         of the Company's outstanding securities pursuant to a tender or
         exchange offer made directly to the Company's shareholders which the
         Board does not recommend such shareholders to accept;

                       (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 the Company'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 the Company's assets in a single or
         related series of transactions.

               (g) "Code" means the Internal Revenue Code of 1986, as amended.

               (h) "Constructive Termination" means:

                       (i)   with respect to a termination of employment prior
to a Change in Control, Executive's voluntary resignation following either of
the following events: (x) a change in his position with the Company which
materially reduces his level of responsibility or (y) a reduction in his base
salary by more than twenty-five percent (25%); or

                                      -2-

<PAGE>

                       (ii) with respect to a termination of employment after,
or in connection with, a Change in Control, Executive's voluntary resignation
following any of the following events: (x) a change in his position with the
Company or the successor thereto which materially reduces his level of
responsibility; (y) a reduction in his level of compensation (including base
salary, significant fringe benefits or any non-discretionary and
objective-standard incentive payment or bonus award) by more than ten percent
(10%) in the aggregate; or (z) a relocation of the Executive's place of
employment by more than fifty (50) miles; provided, however, such change,
reduction or relocation is effected by the Company or the successor thereto
without Executive's consent.

               (i) "Disability" shall mean Executive is, 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 or service.

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

               (k) "Termination Date" shall mean the last day of Executive's
employment with the Company.

               (l) "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: (i) an involuntary termination by the Company for any
reason other than Cause, death or Disability, or (ii) the Executive voluntarily
terminates employment with the Company on account of a Constructive Termination,
Executive shall be entitled to the benefits provided in subsection (b) of this
Section 2.

               (b) Compensation Upon Termination Prior to Change in Control.
Subject to the provisions of Section 5 hereof, in the event a termination
described in subsection (a) of this Section 2 occurs, the Company shall pay to
Executive within thirty (30) days after the Termination Date (or the end of the
revocation period for the Release (as defined in Section 5), if later), the
following:

                       (i)  Executive shall receive a lump sum payment equal to
         the sum of (x) three (3) times Executive's Annual Base Salary at the
         rate in effect immediately before the Executive's Termination Date, (y)
         three (3) times Executive's Annual Bonus, and (z) the Bonus Multiplier
         times Executive's Annual Bonus.

                       (ii) For a period of thirty-six (36) months following his
         Termination Date, Executive shall continue to receive the medical and
         dental coverage in effect on his

                                      -3-

<PAGE>

         Termination Date (or generally comparable coverage) for himself and,
         where applicable, his spouse and dependents, as the same may be changed
         from time to time for employees generally, as if Executive had
         continued in employment during such period; or, as an alternative, the
         Company may elect to pay Executive cash in lieu of such coverage in an
         amount equal to Executive's after-tax cost of continuing such coverage,
         where such coverage may not be continued (or where such continuation
         would adversely affect the tax status of the plan pursuant to which the
         coverage is provided). The COBRA health care continuation coverage
         period under section 4980B of the Code, shall run concurrently with the
         foregoing thirty-six (36) month benefit period.

                       (iii) To cover the cost of outplacement assistance
         services for Executive provided by an outplacement agency selected by
         Executive in an amount not to exceed $15,000.

                       (iv)  Executive shall receive any amounts earned, accrued
         or owing but not yet paid to Executive as of his 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 18 hereof.

         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) an involuntary
termination by the Company following a Change in Control for any reason other
than Cause, death or Disability, (ii) the Executive voluntarily terminates
employment with the Company following a Change in Control on account of a
Constructive Termination, (iii) 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, or
(iv) voluntarily by Executive for any reason (other than for death, Disability,
or under circumstances in which Executive engaged in conduct that would
constitute Cause) during the thirty (30) day period immediately following the
first anniversary of the occurrence of a 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)(iii) above, Executive shall be entitled to such benefits
upon his 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 Sections 5 and 12 hereof, in the
event of a termination described in subsection (a) of this Section 3 occurs, the
Company shall pay to Executive within thirty (30) days after the Termination
Date (or, as soon as possible thereafter in the event that the procedures set
forth in Section 12(b) hereof cannot be completed within thirty (30) days, or
the end of the revocation period for the Release (as defined in Section 5), if
later), the following:

                                      -4-

<PAGE>

                       (i)   Executive shall receive a lump sum payment equal to
         the sum of (x) three (3) times Executive's Annual Base Salary at the
         rate in effect immediately before the Executive's Termination Date, (y)
         three (3) times Executive's Annual Bonus, and (z) the Bonus Multiplier
         times Executive's Annual Bonus.

                       (ii)  For a period of thirty-six (36) months following
         his Termination Date, Executive shall continue to receive the medical
         and dental coverage in effect on his Termination Date (or generally
         comparable coverage) for himself and, where applicable, his spouse and
         dependents, as the same may be changed from time to time for employees
         generally, as if Executive had continued in employment during such
         period; or, as an alternative, the Company may elect to pay Executive
         cash in lieu of such coverage in an amount equal to Executive's
         after-tax cost of continuing such coverage, where such coverage may not
         be continued (or where such continuation would adversely affect the tax
         status of the plan pursuant to which the coverage is provided). The
         COBRA health care continuation coverage period under section 4980B of
         the Code, shall run concurrently with the foregoing thirty-six (36)
         month benefit period.

                       (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 the Executive's Termination Date as set forth in the
         applicable option agreements with the Company.

                       (iv)  To cover the cost of outplacement assistance
         services for Executive provided by an outplacement agency selected by
         Executive in an amount not to exceed $15,000.

                       (v)   Executive shall receive any amounts earned, accrued
         or owing but not yet paid to Executive as of his 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 3 shall be communicated by a Notice of Termination to the other Parties
hereto in accordance with Section 18 hereof.

         4. Termination of Employment on Account of Disability. Notwithstanding
anything in this Agreement to the contrary, if Executive's employment terminates
on account of Disability, 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 Agreement and shall not receive benefits pursuant to Sections 2 and 3
hereof.

         5. Release. Notwithstanding the foregoing, no such payments shall be
made unless Executive executes, and does not revoke, the Company's standard
written release (the "Release"), of any and all claims against the Company and
all related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in

                                      -6-

<PAGE>

which Executive participated and under which Executive has accrued or become
entitled to a benefit) or the termination thereof.

         6.  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, including, but
not limited to, benefits required to be provided to him under the terms of his
split dollar life insurance agreement, if any, with the Company, except that no
cash payments shall be paid to Executive under the Company's then current
severance pay policies.

         7.  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 6 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 Agreement, interest,
compounded daily, on any amount remaining unpaid from the date payment is
required under Sections 2, 3 and 6, as appropriate, until paid to Executive, at
the rate from time to time announced by First Union Bank as its "prime rate"
plus 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 his rights
under Sections 2, 3 and 6 of this Agreement 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 on demand the amount necessary to advance to or
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 Agreement.

         8.  No Mitigation. Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement 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.

         9.  Non-Exclusivity of Rights. Except as provided in Section 6, nothing
in this Agreement 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.

         10. No Set-Off. The Company's obligation to make the payments provided
for in this Agreement 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.

         11. Taxes. Any payment required under this Agreement 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.

                                      -6-

<PAGE>

     12.  Certain Increases in Payment.

               (a)  Anything in this Agreement to the contrary notwithstanding,
in the event that it shall be determined that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Payment"), would constitute an "excess parachute payment" within
the meaning of section 280G of the Code, Executive shall be paid an additional
amount (the "Gross-Up Payment") such that the net amount retained by Executive
after deduction of any excise tax imposed under section 4999 of the Code, and
any federal, state and local income and employment tax and excise tax imposed
upon the Gross-Up Payment shall be equal to the Payment. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to pay
federal income tax and employment taxes at the highest marginal rate of federal
income and employment taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Executive's residence (or, if
greater, the state and locality in which Executive is required to file a
nonresident income tax return with respect to the Payment) on the Termination
Date, net of the maximum reduction in federal income taxes that may be obtained
from the deduction of such state and local taxes.

               (b)  All determinations to be made under this Section 12 shall be
made by the Company's independent public accountant immediately prior to the
Change in Control (the "Accounting Firm"), which firm shall provide its
determinations and any supporting calculations both to the Company and Executive
within 10 days of the Termination Date. Any such determination by the Accounting
Firm shall be binding upon the Company and Executive. Within five days after the
Accounting Firm's determination, the Company shall pay (or cause to be paid) or
distribute (or cause to be distributed) to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement.

               (c)  Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after Executive knows of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the thirty day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:

                    (i)   give the Company any information reasonably requested
     by the Company relating to such claim;

                    (ii)  take such action in connection with contesting such
     claim as the Company shall reasonably request in writing from time to time,
     including, without limitation, accepting legal representation with respect
     to such claim by an attorney reasonably selected by the Company;

                                      -7-

<PAGE>

               (iii) cooperate with the Company in good faith in order to
     effectively contest such claim; and

               (iv)  permit the Company to participate in any proceedings
     relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any excise tax, income tax or employment tax, including
interest and penalties, with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 12, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearing and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a termination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided further, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any excise
tax, income tax or employment tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

          (d)  If, after the receipt by Executive of an amount advanced by the
Company pursuant to this Section, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of this Section) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to this Section, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

          (e)  All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in this Section shall be borne solely by the
Company. The Company agrees to indemnify and hold harmless the Accounting Firm
of and from any and all claims, damages and expenses resulting from or relating
to its determinations pursuant to this Section,

                                      -8-

<PAGE>

except for claims, damages or expenses resulting from the gross negligence or
willful misconduct of the Accounting Firm.

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

     14.  Non-Competition.

               (a)  During the period of Executive's employment by the Company
and, if Executive's employment with the Company terminates for any reason other
that described in Section 3(a) above, for a period of one (1) year thereafter,
except with the written consent of the Board, Executive shall not directly or
indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be connected as an
officer, director, employee, partner, principal, agent, representative,
stockholder, consultant, investor or otherwise with, or use or permit his name
to be used in connection with, any person, business or enterprise which directly
or indirectly engages in (i) the development of compounds, or (ii) the sale or
marketing of products, that compete with the Company's compounds or products
(the "Company's Business"). In further consideration for the Company's promises
herein, Executive agrees that for the period beginning with the termination of
his 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:

                    (i)   except with the prior written consent of the Board,
     directly or indirectly solicit, entice or induce any customer to become a
     customer of any other person, firm or corporation with respect to the
     Company's Business or to cease doing business with the Company or its
     subsidiaries or affiliates, and that Executive will not approach any such
     person, firm or corporation for such purpose or authorize or knowingly
     approve, encourage or assist the taking of such actions by any other
     person, firm or corporation; or

                    (ii)  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.

          (b)  The foregoing restrictions shall not be construed to prohibit
Executive's ownership of less than five percent of any class of securities of
any corporation which is engaged in any of the foregoing businesses and has a
class of securities registered pursuant to the Securities Exchange Act of 1934,
as amended, provided that such ownership represents a passive investment and
that neither Executive nor any group of persons including Executive in any way,
either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any
part in its business, other than exercising Executive's rights as a stockholder,
or seeks to do any of the foregoing.

                                      -9-

<PAGE>

     15.  Equitable Relief.

               (a)  Executive acknowledges that the restrictions contained in
Sections 13 and 14 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 Agreement 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 his experience and capabilities are
such that the restrictions contained in Section 14 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) he has been advised by the Company to
consult his own legal counsel in respect of this Agreement, and (ii) that he has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with his 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 13 or 14 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 13 or 14 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 13 or 14
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 United States District Court for the District of Delaware, or if
such court does not have jurisdiction or will not accept jurisdiction, in any
court of general jurisdiction in Delaware, (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 18
hereof.

     16.  Term of Agreement. This Agreement 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 Agreement, this Agreement shall remain in effect until all of the
obligations of the Parties hereunder are satisfied or have expired.

     17.  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 Agreement 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 Agreement in the same
manner

<PAGE>

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 effectiveness of any such succession shall be a breach of
this Agreement. As used in this Agreement, 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.

     18.  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, Inc.
                        145 Brandywine Parkway
                        West Chester, PA 19380
                        Attn: Robert J. Feeney, Ph.D.

               With a copy to:

                        Morgan, Lewis & Bockius LLP
                        1701 Market Street
                        Philadelphia, PA 19103-2921
                        Attn: I. Lee Falk, Esquire

               If to Executive, to:

                        Frank Baldino, Jr., Ph.D.
                        106 Bellefair Lane
                        West Chester, PA 19382

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 18 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 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.

     19.  Governing Law. This Agreement shall be governed by and interpreted
under the laws of the State of Delaware without giving effect to any conflict of
laws provisions.

                                      -11-

<PAGE>

     20.  Contents of Agreement, Amendment and Assignment.

               (a)  This Agreement supersedes all prior agreements, 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 Agreement 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 Agreement
shall supersede any provisions to the contrary in such plans, and such plans
shall be deemed to have been amended to correspond with this Agreement without
further action by the Company or the Board.

               (b)  Nothing in this Agreement shall be construed as giving
Executive any right to be retained in the employ of the Company, or as changing
or modifying the "at will" nature of Executive's employment status.

               (c)  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, 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 his 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 Agreement to Executive's devises, legates or other designees
or, if there is no such designee, to Executive's estate.

     21.  Severability. If any provision of this Agreement 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 Agreement which can be given effect without
the invalid or unenforceable provision or application.

     22.  Remedies Cumulative; No Waiver. No right conferred upon the Parties by
this Agreement 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.

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

                                      -12-

<PAGE>

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

                            CEPHALON, INC.

Attest: __________________  By:  /s/ Robert J. Feeney
                                 --------------------------------------
                                 Robert J. Feeney, Ph.D.
                            Its: Chairman of the Compensation and Stock Option
                                 Committee, and Member of the Board of Directors

                            /s/ Frank Baldino, Jr.
__________________________  ----------------------------------------------------
Witness                     EXECUTIVE

                                      -13-

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