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) January 31, 2008

Cephalon, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-19119	23-2484489
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

41 Moores Rd. 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:

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

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

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

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

Item 1.01 Entry into a Material Definitive Agreement

On January 31, 2008, the independent members of the Board of Directors (the “Board”) of Cephalon, Inc. (the “Company”), upon the recommendation of the Stock Option and Compensation Committee (the “Compensation Committee”), adopted the 2008 Management Incentive Compensation Program (the “MICP”) for the Company’s executive officers appointed by the Board and key employees. Under the MICP, the Company’s executive officers shall be entitled to earn cash bonus compensation (an “Award”) based upon the achievement of certain pre-established performance goals for 2008 outlined in the MICP (the “Performance Goals”) for each executive officer.

The Performance Goals for 2008 consist of both financial and operational goals. Financial goals are based on equally weighted targets for total product sales and pro forma net income in 2008. Operational goals are focused on three areas: clinical, manufacturing and technical operations, and research and development. Within these areas, the operational goals include, among other things, securing regulatory approval of specified product candidates, progressing or completing specified clinical trials in the U.S. and Europe, providing timely and cost-effective manufacturing support for new and existing products and products in clinical development, and advancing the Company’s research and development plan by continuing pre-clinical development of specified compounds including, as warranted, filing investigational new drug applications. The following table summarizes the components of the MICP for 2008.

	Chief Executive Officer	Other Executive Officers

Financial Goals	· Total product sales target (30%)	· Total product sales target (15%)
	· Pro forma net income target (30%)	· Pro forma net income target (15%)

Operational Goals	Performance goals in the areas of clinical (20%), manufacturing and technical operations (10%) and R&D (10%)	Objectives are specific to each individual executive officer and his or her areas of responsibility (70%)

MICP “Score”	· Weighted average minimum MICP score of 85 of the above listed components required for CEO to be eligible for an MICP award · For each MICP point below 100, target bonus percentage of 100% is decreased by approximately 7% (e.g., MICP score of 98 yields a bonus payout of 87% of base salary) · For each MICP point above 100, target bonus percentage is increased by an average of approximately 14% for MICP scores from 101 to 111. For example, an MICP score of 102 yields a bonus payout of 128% of base salary. At an MICP score of 112, the maximum bonus will be earned.	· Weighted average minimum MICP score of 90 of the above listed components required for an executive officer to be eligible for an MICP award · For each MICP point above or below 100, target bonus percentage of 100% is increased or decreased by an average of 3.5%, respectively (e.g., MICP score of 98 yields a bonus payout of 43% of base salary). At an MICP score of 120, the maximum bonus will be earned.

Target MICP Bonus	100% of 2008 base salary	50% of 2008 base salary

MICP Award Percentage	Could range from 0% (for an MICP score below 85) to 300% of base salary (at maximum performance)	Could range from 0% (for an MICP score below 90) to 110% of an NEO’s base salary (at maximum performance)

MICP Award Dollar Value	Could range from $0 (for an MICP score below 85) to $ $3,733,800 (for maximum performance).	Individual awards could range from $0 (for an MICP score below 90) to approximately $624,400 (for maximum performance).

At the end of each fiscal year, the Compensation Committee is responsible for assessing the performance of each executive officer against the established Performance Goals and determining the level of awards, if any, under the MICP. The Compensation Committee then presents its decisions to the independent members of the Board for ratification.

The MICP for 2008 is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

With respect to the MICP for 2008, the information required by this Item 5.02 is incorporated by reference to the information contained in Item 1.01 above.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.			Description of Document
10.1			Cephalon, Inc. 2008 Management Incentive Compensation Plan.

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: February 1, 2008	By:	/s/ J. Kevin Buchi
		J. Kevin Buchi
		Executive Vice President & Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description of Document
10.1		Cephalon, Inc. 2008 Management Incentive Compensation Plan