CEPHALON INC
EXHIBIT 10.3
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<TYPE>EX-10.3
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<DESCRIPTION>EXHIBIT 10.3
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<BR></FONT><FONT SIZE=2><B>Exhibit 10.3    <BR>    </B></FONT></P>

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<IMG SRC="g762697.jpg" ALT="GRAPHIC" WIDTH="270" HEIGHT="81">
 </B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>CREDIT SUISSE FIRST BOSTON INTERNATIONAL</FONT></TD>
</TR>
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<TD WIDTH="52%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%"><FONT SIZE=2>One Cabot<BR>
Square, London<BR>
E14 4QJ</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%"><FONT SIZE=2>Telephone 0207 888 2000<BR>
Facsimile 0207 888 4125/3862</FONT></TD>
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<P ALIGN="RIGHT"><FONT SIZE=2>January&nbsp;22, 2003 </FONT></P>

<P><FONT SIZE=2>Cephalon,&nbsp;Inc.<BR>
145 Brandywine Parkway<BR>
West Chester, PA 19380-4245 </FONT></P>

<P><FONT SIZE=2>Attn:
J. Kevin Buchi<BR>
Fax: 610-344-7563 </FONT></P>

<P><FONT SIZE=2>Dear
Sirs: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Transaction entered into between Party A and Party B on the Trade Date specified
below (the "Transaction") on the terms set out below. This Confirmation constitutes a "Confirmation" as referred to in the Agreement specified below. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
definitions and provisions contained in the 2000 ISDA Definitions (as published by the International Swaps and Derivatives Association,&nbsp;Inc.) are incorporated
into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the 2000 ISDA Definitions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of 22 January&nbsp;2003, as amended and supplemented from time to time (the
"Agreement"). All provisions contained in the Agreement govern this Confirmation except as expressly modified below. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Agreement and each Confirmation thereunder will be governed by and construed in accordance with the law of the State of New York without reference to choice of law doctrine and each
party hereby submits to the jurisdiction of the Courts of the State of New York. For purposes of Section&nbsp;6 of the Agreement, Second Method and Loss shall apply to this Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Party
A and Party B each represents to the other that it has entered into this Transaction in reliance upon such tax, accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>In this Confirmation, "Party A" means Credit Suisse First Boston International, "Party B" means Cephalon,&nbsp;Inc.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General
terms of the Transaction: </FONT></P>

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<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>Notional Amount:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>$200,000,000, subject to a Conversion Event, Redemption Event, Amendment Event, Repayment Event (as each term is defined below) or any other similar occurrences as determined by the Calculation Agent.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Trade Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
January&nbsp;22, 2002</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Effective Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
January&nbsp;24, 2002</FONT></TD>
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<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Termination Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The earlier of: (i)&nbsp;December&nbsp;15, 2006, subject to adjustment in accordance with the Following Business Day Convention, and (ii)&nbsp;the Early Termination Date, subject to the Early Termination and Additional Termination Event provisions
set forth below</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2><BR>
Fixed Amounts:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Fixed Rate Payer:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Party A</FONT></TD>
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<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Fixed Rate Payer Payment Dates:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Each June&nbsp;15 and December&nbsp;15, subject to adjustment in accordance with the Following Business Day Convention, using no Adjustment of Period End Dates; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that upon a Redemption Event or Conversion Event, Party A's obligation to pay the Fixed Amount in respect of the related Terminated Amount (as defined below) shall terminate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Fixed Rate:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
2.5%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Accrued Fixed Amounts Upon a Redemption or Conversion Event:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
In the event of a Redemption Event, Party A shall pay any accrued but unpaid Fixed Amounts in respect of the related Terminated Amount to, but excluding, the date fixed for such redemption pursuant to the terms of the Indenture. In the event a
Conversion Event, no Fixed Amounts accrued but unpaid since the most recent Fixed Rate Payer Payment Date in respect of the related Terminated Amount shall be paid upon such Conversion Event.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Fixed Rate Day Count Fraction:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
30/360</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2><BR>
Floating Amounts:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Floating Rate Payer:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Party B</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Floating Rate Payer Payment Dates:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The last Business Day of each March, June, September and December, subject to adjustment in accordance with the Modified Following Business Day Convention, subject to Early Termination; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that upon a Redemption Event or Conversion Event, Party B's obligation to pay the Floating Amount in respect of the related Terminated Amount shall terminate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Floating Rate for initial Calculation Period:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
1.65%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Floating Rate Option:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
USD-LIBOR-BBA</FONT></TD>
</TR>
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<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Accrued Floating Amounts Upon a Redemption or Conversion Event:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
In the event of a Redemption Event, Party B shall pay any accrued but unpaid Floating Amounts in respect of the related Terminated Amount to, but excluding, the date fixed for such redemption pursuant to the terms of the Indenture. In the event of a
Conversion Event, no Floating Amounts accrued but unpaid since the most recent Floating Rate Payer Payment Date in respect of the related Terminated Amount shall be paid upon such Conversion Event.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Designated Maturity:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Three (3)&nbsp;months</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Spread:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
.29%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Floating Rate Day Count Fraction:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Actual/360</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Reset Dates:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The first day of each Calculation Period</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Compounding:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Inapplicable</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2><BR>
Early Termination:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Early Termination Upon Redemption or Conversion:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
If Party B receives notice of a Conversion Event (defined below) with respect to any Reference Bonds or in the event of a Redemption Event (defined below), Party B shall immediately (and no later than one (1)&nbsp;Business Day following receipt of
such notice) provide written notice (each a "Termination Notice") to Party A, specifying the details of such event, including the principal amount of Reference Bonds being converted or redeemed.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Notional Adjustment:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
If Party A receives a Termination Notice, then a portion of this Transaction shall terminate equal to the Notional Amount multiplied by the Termination Ratio (defined below) (the "Terminated Amount") and the Calculation Agent shall reduce the
Notional Amount of this Transaction by the Terminated Amount.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
There shall be no payment due to either party hereunder under Section&nbsp;6 of the Agreement in respect of a Terminated Amount.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Notwithstanding any right of Party B to reissue or resell the Reference Bonds, Party A has no obligation to increase or otherwise take into consideration any such reissued or resold Reference Bonds in respect of the Notional Amount.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Conversion Event:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The conversion of all or a portion of the Reference Bonds into Shares by the Issuer pursuant to the terms of the Indenture.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Redemption Event:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The redemption of all or a portion of the Reference Bonds by the Issuer pursuant to the Indenture</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Termination Ratio:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
With respect to any Conversion Event or Redemption Event, the ratio of (a)&nbsp;the principal amount of the Reference Bonds converted or redeemed in connection therewith to (b)&nbsp;the total principal amount of Reference Bonds originally
issued.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Reference Bonds:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Party B's (also sometimes referred to as the "Issuer's") $600,000,000 aggregate principal amount of 2<SUP>1</SUP>/<SMALL>2</SMALL>% Convertible Subordinated Notes Due December&nbsp;15, 2006, CUSIP Numbers 156708AD1 and 156708AE9, convertible into
7,407,480 shares of common stock of $0.01 par value common stock of Party B (the "Shares")</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Indenture:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
The Indenture dated as of December&nbsp;11, 2001 between the Issuer and State Street Bank and Trust Company, as trustee, as amended or supplemented from time to time</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Business Days:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
London and New York</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
Calculation Agent:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2><BR>
Party A, whose determinations and calculations will be binding in the absence of manifest error. The Calculation Agent will have no responsibility for good faith errors or omissions in making any determination as provided herein.</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional
Termination Events: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;The
parties hereto agree that (a)&nbsp;the occurrence of any of the following shall automatically be an Additional Termination Event with respect to Party B in which
Party B is the sole Affected Party and this Transaction is the only Affected Transaction, and (b)&nbsp;notwithstanding anything to the contrary in the Agreement, Party A may designate the date of
the occurrence of any of the following events, or any date thereafter, as the Early Termination Date and Party B hereby agrees that upon verbal notice thereof by Party A, such notice shall be deemed
effective for purposes of Section&nbsp;6 of the Agreement </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;an
Amendment Event occurs (in which case the entirety of this Transaction shall be subject to termination); or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;a
Repayment Event occurs (in which case this Transaction shall only be subject to termination in respect of the Additional Terminated Amount (defined below)). The
Calculation Agent shall reduce the Notional Amount by the Additional Terminated Amount and, for the avoidance of doubt, the terms of this Transaction shall continue to apply to the remaining Notional
Amount, if any. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;As
used in this Section&nbsp;3: </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Amendment
Event" means that the Issuer amends, modifies, supplements or waives any term of the Indenture or the Reference Bonds if such amendment, modification, supplement or waiver has
a material effect on this transaction or Party A's ability to hedge all or a portion of this Transaction, with such materiality determination to be made in the sole discretion of the Calculation
Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Repayment
Event" means that (a)&nbsp;any Reference Bonds are repurchased or redeemed (in each case whether in connection with or as a result of a change of control, howsoever defined,
or for any other reason) by the Issuer, (b)&nbsp;any Reference Bonds are delivered to the Issuer in exchange for delivery of any property or assets of the Issuer or any of its affiliates (howsoever
described), (c)&nbsp;any principal of any of the Reference Bonds is repaid prior to the scheduled maturity date of the Reference Bonds (whether following acceleration of the Reference Bonds or
otherwise), or (d)&nbsp;any Reference </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>Bonds
are exchanged by or for the benefit of holders thereof for any other securities of the Issuer or any of its affiliates (or any other property, or any combination thereof) pursuant to any
exchange offer or similar transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Additional
Terminated Amount" means the Notional Amount multiplied by the ratio of (a)&nbsp;the principal amount of the Reference Bonds subject to the Repayment Amount to
(b)&nbsp;the total principal amount of Reference Bonds originally issued. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional
Party B Covenants and Representations: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;&nbsp;Party
B agrees to notify Party A in writing immediately, and in no event later than within one (1)&nbsp;Business Day, of the occurrence of any Conversion Event,
Redemption Event, Amendment Event or Repayment Event. Such notice shall include a detailed description of any such Amendment Event, shall
identify the nature of any such Repayment Event and the principal amount of the Reference Bonds being paid and contain details of any Conversion Event or Redemption Event. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.&nbsp;&nbsp;Party
B hereby represents that, on the Trade Date, it has publicly disclosed all material information concerning the Issuer and the Reference Bonds as may be required
to allow Party B to purchase or sell Shares or the Reference Bonds in compliance with the applicable federal securities laws and that it has publicly disclosed all material information required to be
disclosed by it under applicable federal securities laws. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit
Support Documents: </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2><BR>
Party A and Party B:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
The Credit Support Annex to the Schedule to the Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>Independent Amount:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>Party A:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>None</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>Party B:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>An amount in U.S. dollars equal to not less than 1.5&nbsp;percent of the Notional Amount</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Account
Details: </FONT></P>

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<TD COLSPAN=2><FONT SIZE=2>Interest Rate Swap Transaction:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="34%"><FONT SIZE=2>Payments to Party A:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>To be advised</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="34%"><FONT SIZE=2>Payments to Party B:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>To be advised</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit
Suisse First Boston International is regulated by The Financial Services Authority and has entered into this transaction as principal. The time at which the above transaction was
executed will be notified to Party B on request. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please
confirm that the foregoing correctly sets forth the terms of our agreement by signing and returning this Confirmation. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Yours faithfully,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
CREDIT SUISSE FIRST BOSTON INTERNATIONAL<BR>
By its Agent: CREDIT SUISSE FIRST BOSTON LLC</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
<BR></FONT>
</TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>LISA F. LINDBLOM</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>Lisa F. Lindblom</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>Vice President</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Confirmed
as of the date first written above: </FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>CEPHALON,&nbsp;INC.</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JOHN E. OSBORN</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2>John E. Osborn</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2>Senior Vice President, General Counsel and Secretary</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<BR>
<P><br><A NAME="03PHI1179_4">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2><A HREF="#toc_mm1179_1">Exhibit 10.3</A></FONT><BR>
</UL>
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