8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported)             December 31, 2008

Cephalon, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-19119	23-2484489
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
41 Moores Road
Frazer, Pennsylvania		19355
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code             (610) 344-0200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

On December 31, 2008, Cephalon, Inc. (the “Company”) and each of the Company’s executive officers listed below entered into an amendment (the “Amendment”) that amends each executive officer’s restated executive severance agreement dated as of June 24, 2008 (the “Severance Agreement”).  The Amendment revises provisions of the Severance Agreement to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended.  The Amendment also amends the Severance Agreement to provide that a relocation of an executive officer’s place of employment without his or her consent that would cause an increase in the executive officer’s commute by more than fifty (50) miles would be considered a “Constructive Termination” pursuant to the terms of the Agreement.

Each of the following executive officers of the Company executed the Amendment:

Frank Baldino, Jr., Ph.D., Chairman and Chief Executive Officer

Valli F. Baldassano, Esq., Executive Vice President, Chief Compliance Officer

J. Kevin Buchi, Executive Vice President & Chief Financial Officer

Peter E. Grebow, Ph.D., Executive Vice President, Worldwide Technical Operations

Gerald J. Pappert, Executive Vice President & General Counsel

Robert P. Roche, Jr., Executive Vice President, Worldwide Pharmaceutical Operations

Lesley Russell, MB.Ch.B, MRCP, Executive Vice President and Chief Medical Officer

Carl A. Savini, Executive Vice President & Chief Administrative Officer

Jeffry L. Vaught, Ph.D., Executive Vice President & Chief Scientific Officer

The Amendment for Dr. Baldino and the form of Amendment for each of the executive officers listed above (other than Dr. Baldino) are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference into this Item 1.01.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

Number	Description
10.1	Amendment 2008-1 to the Restated Executive Severance Agreement between Frank Baldino, Jr. and Cephalon, Inc. dated as of December 31, 2008.
10.2	Form of Amendment 2008-1 to the Restated Executive Severance Agreement between certain executive officers and Cephalon, Inc. dated as of December 31, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CEPHALON, INC.
Date: January 7, 2009	By:	/s/ Gerald J. Pappert
		Gerald J. Pappert
		Executive Vice President and General Counsel

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Amendment 2008-1 to the Restated Executive Severance Agreement between Frank Baldino, Jr. and Cephalon, Inc. dated as of December 31, 2008.
10.2	Form of Amendment 2008-1 to the Restated Executive Severance Agreement between certain executive officers and Cephalon, Inc. dated as of December 31, 2008.

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EX-10.1

Exhibit 10.1

AMENDMENT 2008-1
TO THE
RESTATED EXECUTIVE SEVERANCE AGREEMENT

THIS AMENDMENT, dated as of December 31, 2008, between Cephalon, Inc., a Delaware corporation, (the “Company”), and Frank Baldino, Jr. (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Restated Executive Severance Agreement, dated as of June 24, 2008, (the “Severance Agreement”), pursuant to which Executive is entitled to certain payments and benefits in the event that Executive’s employment is terminated on account of a reason set forth in the Severance Agreement;

WHEREAS, the Company and Executive desire to amend the Severance Agreement to make certain changes to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder; and

WHEREAS, Section 20(a) of the Severance Agreement provides that the Severance Agreement may be amended pursuant to a written agreement between the Company and Executive.

NOW, THEREFORE, the Company and the Executive hereby agree that, effective December 31, 2008, the Severance Agreement shall be amended as follows:

1.Section 1(h)(ii)(z) of the Severance Agreement is hereby amended in its entirety to read as follows:

“a relocation of Executive’s place of employment that would increase Executive’s commute 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.”

2.The last sentence of Section 2(b)(i) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

3.The last sentence of Section 2(b)(ii) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

4.The last sentence of Section 3(b)(i) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

5.The last sentence of Section 3(b)(ii) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

6.Section 24(a) of the Severance Agreement is hereby amended in its entirety to read as follows:

“(a)Interpretation. Notwithstanding the other provisions hereof, this Agreement is intended to comply with the requirements of Section 409A of the Code, to the extent applicable, and shall be interpreted to avoid any penalty sanctions under Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A and, if necessary, any such provision shall be deemed amended to comply with section 409A of the Code and regulations thereunder. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code. For purposes of section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment.”

7.In all respects not modified by this Amendment 2008-1, the Severance Agreement is hereby ratified and confirmed.

 [SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company and the Executive agree to the terms of the foregoing Amendment 2008-1, effective as of the date set forth above.

CEPHALON, INC.
By:	/s/ Charles A. Sanders, M.D.
Name:		Charles A. Sanders, M.D.
Title:		Director and Chairman of Stock
		Option and Compensation Committee
EXECUTIVE
/s/ Frank Baldino, Jr.
Frank Baldino, Jr.

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EX-10.2

Exhibit 10.2

AMENDMENT 2008-1

TO THE
RESTATED EXECUTIVE SEVERANCE AGREEMENT

THIS AMENDMENT, dated as of December 31, 2008, between Cephalon, Inc., a Delaware corporation, (the “Company”), and                              (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Restated Executive Severance Agreement, dated as of June 24, 2008, (the “Severance Agreement”), pursuant to which Executive is entitled to certain payments and benefits in the event that Executive’s employment is terminated on account of a reason set forth in the Severance Agreement;

WHEREAS, the Company and Executive desire to amend the Severance Agreement to make certain changes to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder; and

WHEREAS, Section 20(a) of the Severance Agreement provides that the Severance Agreement may be amended pursuant to a written agreement between the Company and Executive.

NOW, THEREFORE, the Company and the Executive hereby agree that, effective December 31, 2008, the Severance Agreement shall be amended as follows:

1.Section 1(h)(iii) of the Severance Agreement is hereby amended in its entirety to read as follows:

“a relocation of Executive’s place of employment that would increase Executive’s commute 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.”

2.The last sentence of Section 2(b)(i) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

3.The last sentence of the first paragraph in Section 2(b)(ii) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

4.The last sentence of Section 3(b)(i) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

5.The last sentence of the first paragraph in Section 3(b)(ii) of the Severance Agreement is hereby amended in its entirety to read as follows:

“Except as provided in Section 24(b), payment shall be made in a lump sum within sixty (60) days after Executive’s Termination Date.”

6.Section 24(a) of the Severance Agreement is hereby amended in its entirety to read as follows:

“(a)Interpretation. Notwithstanding the other provisions hereof, this Agreement is intended to comply with the requirements of Section 409A of the Code, to the extent applicable, and shall be interpreted to avoid any penalty sanctions under Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A and, if necessary, any such provision shall be deemed amended to comply with section 409A of the Code and regulations thereunder. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code. For purposes of section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment.”

7.In all respects not modified by this Amendment 2008-1, the Severance Agreement is hereby ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company and the Executive agree to the terms of the foregoing Amendment 2008-1, effective as of the date set forth above.

CEPHALON, INC.

By:

Name:

Title:

EXECUTIVE

[Print Name]

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