-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EACbL9KurZeaNMYa4q5CkFhCbS+Qpf1nLkQUzE0SAfnF2pfGCcpW/dNnLpWzOstj IcFdiemwSzystGBwZ1BVgw== 0000950123-05-004889.txt : 20050422 0000950123-05-004889.hdr.sgml : 20050422 20050422171859 ACCESSION NUMBER: 0000950123-05-004889 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20050418 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050422 DATE AS OF CHANGE: 20050422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000729922 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 133159796 STATE OF INCORPORATION: DE FISCAL YEAR END: 1204 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15190 FILM NUMBER: 05768190 BUSINESS ADDRESS: STREET 1: 58 SOUTH SERVICE RD. STREET 2: SUITE 110 CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 631-962-2000 MAIL ADDRESS: STREET 1: 58 SOUTH SERVICE RD. STREET 2: SUITE 110 CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: ONCOGENE SCIENCE INC DATE OF NAME CHANGE: 19920703 8-K 1 y08086e8vk.txt FORM 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 April 18, 2005 Date of Report (Date of earliest event reported) OSI PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-15190 13-3159796 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.)
58 SOUTH SERVICE ROAD MELVILLE, NY 11747 (Address of principal executive offices) (631)962-2000 (Registrant's telephone number, including area code) N/A (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 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT On April 18, 2005, the Compensation Committee of the Board of Directors of OSI Pharmaceuticals, Inc. ("OSI" or the "Company") approved the terms of an Employment Separation Agreement and Release of Legal Rights (the "Separation Agreement") with Dr. Nicole Onetto, Executive Vice President and Chief Medical Officer of OSI, effective May 2, 2005. The Separation Agreement, which supersedes the employment-at-will letter agreement with Dr. Onetto, dated December 21, 2001, provides for (i) the payment, upon termination of Dr. Onetto's employment with the Company, effective May 2, 2005, of a lump sum equal to $375,000, representing one year's salary plus $50,000, representing a prorata portion of her fiscal year 2005 bonus,(ii) the acceleration of the vesting of options which, if her employment were not to terminate as of May 2, 2005, would vest on or before April 30, 2006, (iii) the extension of the exercise period for all exercisable options from the normal 90-day period following termination of employment to December 31, 2005, and (iv) the payment of $14,760 as a lump sum for reimbursement of 12 months of certain health benefits. Further details of Dr. Onetto's severance arrangement are set forth in the Separation Agreement attached as Exhibit 10.1 to this Current Report on Form 8-K (the "Form 8-K") and incorporated herein by reference. On April 18, 2005, the Compensation Committee also approved the terms of an Employment Agreement with Michael G. Atieh, pursuant to which Mr. Atieh will serve as Executive Vice President, Chief Financial Officer and Treasurer of OSI, effective May 31, 2005. The Employment Agreement has a fixed term of three years but provides for automatic extensions for additional one-year terms. It provides for a minimum base salary of $410,000, plus such other amounts, if any, as the Board of Directors may from time to time determine. In addition, Mr. Atieh is eligible for an annual incentive bonus (with a $250,000 target). He will also be entitled to receive other customary fringe benefits generally available to our executive employees. The Employment Agreement also provides that, on June 1, 2005, Mr. Atieh will receive options to purchase 150,000 shares of the Company's common stock (vesting one-third after one year and the balance ratably over the ensuing four years) as well as 15,000 shares of restricted common stock which will vest at twenty percent per year over a period of five years. Mr. Atieh will also be entitled to a relocation package as well as certain severance benefits. Further details of Mr. Atieh's employment package are set forth in the Employment Agreement attached as Exhibit 10.2 to this Form 8-K and incorporated herein by reference. On April 18, 2005, the Compensation Committee also increased the salary of Robert Simon to $335,000, in connection with Mr. Simon's promotion on such date to Executive Vice President, Pharmaceutical Development and Technical Operations. ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS On April 18, 2005, the Board of Directors of OSI elected Katharine B. Stevenson as a director of the Company, effective May 1, 2005 to serve until the next annual meeting of stockholders of the Company or until her successor is elected and shall have qualified. Ms. Stevenson was also appointed as Chair of the Board's Audit Committee, effective May 1, 2005. The Board of Directors has determined that Ms. Stevenson qualifies as an audit committee 2 financial expert (as that term is defined in Item 401(h) of Regulation S-K of the regulations promulgated by the Securities and Exchange Commission). On April 18, 2005, the Board of Directors appointed Mr. Atieh, age 51, as Executive Vice President, Chief Financial Officer and Treasurer of OSI, effective May 31, 2005. Mr. Atieh joined the Board of Directors of OSI in June 2003 and was appointed Chairman of the Board's Audit Committee in October 2003. He was Group President of Dendrite International through February 2004. From October 2000 to July 2001, he was Senior Vice President and Chief Financial Officer of Dendrite. Mr. Atieh began his career in July 1975 at Arthur Young & Company (now Ernst & Young). In July 1981, Mr. Atieh joined Merck where, from July 1981 to April 1994, he served in a variety of roles including Director of Accounting Standards; Director of Accounting; Director of Investor Relations; Vice President Government Relations; Treasurer; and Vice President, Public Affairs. From April 1994 to December 1998, Mr. Atieh was at the Merck-Medco Managed Care Division of Merck with his last position as Senior Vice President, Sales and Business Development. From January 1999 to October 2000, he was Vice President and General Manager-Medicare Business Initiative of Merck's U.S. Human Health Division. Mr. Atieh is currently a member of the board of directors and the Audit Committee of ACE Limited. The terms of Mr. Atieh's Employment Agreement are summarized under Item 1.01 of this Form 8-K. In addition, Mr. Atieh's Employment Agreement is attached to this Form 8-K as Exhibit 10.2. Robert L. Van Nostrand, currently Vice President, Chief Financial Officer, and Treasurer, will assume the role of Senior Vice President and Chief Compliance Officer, a newly created position, effective May 31, 2005. On April 20, 2005, Mr. Atieh submitted his resignation from the Board of Directors of the Company, effective May 31, 2005. ITEM 8.01 OTHER EVENTS On April 14, 2005, OSI purchased all of the outstanding shares held by the minority shareholders of its then majority-owned subsidiary, Prosidion Limited ("Prosidion"), resulting in Prosidion becoming a wholly-owned subsidiary of OSI (the "Transaction"). Additional details of the Transaction are set forth in OSI's press release dated April 18, 2005, which is attached hereto as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference. On April 19, 2005, OSI issued a press release summarizing the highlights from presentations made by the Company at this year's Annual Meeting of the American Association for Cancer Research ("AACR"), which covered certain preclinical data from the Company's oncology research and development programs. Details of the presentations are described in OSI's press release dated April 19, 2005, which is attached hereto as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference. On April 20, 2005, OSI issued a press release presenting data the Company released at AACR regarding the data from a comparative clinical study on the effects of smoking on the pharmacokinetics of 3 Tarceva(TM) in healthy (non-cancer patients) smoker and non-smokers. Further details of the data are set forth in OSI's press release dated April 20, 2005, which is attached hereto as Exhibit 99.3 to this Form 8-K and is incorporated herein by reference. On April 21, 2005, OSI issued a press release relating to certain changes in the Company's management team and board of directors. Details of such changes are set forth in OSI's press release dated April 21, 2005, which is attached as Exhibit 99.4 to this Form 8-K and is incorporated herein by reference. ITEM 9.01 EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ----------- 10.1 Employment Separation Agreement and Release of Legal Rights, dated April 20, 2005, by and between OSI Pharmaceuticals, Inc. and Nicole Onetto, M.D. 10.2 Employment Agreement, dated April 21, 2005, by and between OSI Pharmaceuticals, Inc. and Michael G. Atieh. 99.1 Press Release, dated April 18, 2005. 99.2 Press Release, dated April 19, 2005. 99.3 Press Release, dated April 20, 2005. 99.4 Press Release, dated April 21, 2005.
4 SIGNATURE 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. Date: April 22, 2005 OSI PHARMACEUTICALS, INC. By: /s/ Robert L. Van Nostrand ------------------------------------- Robert L. Van Nostrand Vice President and Chief Financial Officer (Principal Financial Officer) 5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- 10.1 Employment Separation Agreement and Release of Legal Rights, dated April 20, 2005, by and between OSI Pharmaceuticals, Inc. and Nicole Onetto, M.D. 10.2 Employment Agreement, dated April 21, 2005, by and between OSI Pharmaceuticals, Inc. and Michael G. Atieh. 99.1 Press Release, dated April 18, 2005. 99.2 Press Release, dated April 19, 2005. 99.3 Press Release, dated April 20, 2005. 99.4 Press Release, dated April 21, 2005.
6 EX-10.1 2 y08086exv10w1.txt EX-10.1: EMPLOYMENT SEPARATION AGREEMENT AND RELEASE OF LEGAL RIGHTS EXHIBIT 10.1 EMPLOYMENT SEPARATION AGREEMENT AND RELEASE OF LEGAL RIGHTS This Agreement is entered into between OSI Pharmaceuticals, Inc., including its Directors, officers, employees and agents (the "Company") and Nicole Onetto, M.D. ("Dr. Onetto"). I. STIPULATIONS 1. The Company and Dr. Onetto have mutually agreed to amicably terminate their existing employment relationship effective May 2, 2005. 2. The purpose of this Agreement is to facilitate Dr. Onetto's separation from employment with the Company and provide her with enhanced severance payments, some of which she is not otherwise entitled to in exchange for her release of legal rights. 3. The Company and Dr. Onetto are parties to an Employment Agreement dated December 21, 2001 (the "Employment Agreement") and Employment Covenants Agreement signed by Dr. Onetto on August 25, 2003 (the "Covenants Agreement"). 4. This Agreement extinguishes and supercedes all of the Company's obligations under the Employment Agreement, but does not extinguish Dr. Onetto's obligations under the provisions of the Covenants Agreement designed to survive termination of her employment with the Company. It is therefore understood that certain terms of the Covenants Agreement continue in effect pursuant to the terms of that Agreement. 5. Both the Company and Dr. Onetto are represented by legal counsel and Dr. Onetto has accordingly been advised of the legal rights she is giving up by signing this Agreement. Dr. Onetto's legal counsel is Susan M. Gardner, Pratt Gardner & Fredrick, LLP, 214 S. Spring Street, Independence, Missouri 64050. Except as provided otherwise in this Agreement, the Company and Dr. Onetto shall each pay its and her own costs and attorneys fees in connection with the negotiation, execution and enforcement of this Agreement. 6. It is intended that this Agreement be interpreted in the broadest possible manner in favor of forever resolving all disputes between Dr. Onetto and the Company. The only exceptions to the scope of the legal release executed by Dr. Onetto in favor of the Company are specifically noted in this Agreement, and all such exceptions are to be narrowly construed. 7. Dr. Onetto understands that all payments made by the Company under this Agreement are subject to tax reporting obligations and standard payroll deductions for federal and state taxes. The Company, however, makes no representations whatsoever concerning the tax consequences of this Agreement to Dr. Onetto. 8. Dr. Onetto's last day of work for the Company will be May 2, 2005, at which time all pay and benefits associated with her employment will terminate except as provided for in this Agreement or under applicable law. II. CONSIDERATION 9. As consideration for signing this Agreement, and for the release of her legal rights, Dr. Onetto will receive the following enhanced severance payments and benefits, some of which she is not currently entitled to under her existing Employment Agreement: (i) Severance pay equal to one year's salary in the gross amount of $375,000; (ii) A prorated portion of her bonus for 2005 in the gross amount of $50,000; and (iii) Payment of these two amounts (the "Total Severance Amount") shall be paid in full on May 2, 2005. 10. In addition to the Total Severance Amount of $425,000, all unvested options previously granted to Dr. Onetto which, if her employment were not to terminate as of May 2, 2005, would vest on or before April 30, 2006, shall vest and become exercisable on May 2, 2005. Notwithstanding any provision to the contrary in the Option Agreements accompanying the grants of her options, the Compensation Committee of the Board of Directors has approved a modification to such agreements to allow the exercise of such options through December 31, 2005. 11. At or about the time of her termination from employment on May 2, 2005, Dr. Onetto will receive notice of her right to continue her medical insurance at her own expense for eighteen (18) months under a federal law known as COBRA. The Company, however, will pay Dr. Onetto a lump sum payment at the time of her termination to reimburse her for twelve (12) months of medical expenses in the gross amount of $14,760. This is in addition to the Total Severance Amount. III. IMPORTANT REQUIRED NOTICE 12. Because Dr. Onetto is over age forty, she has special rights under a federal law known as the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Protection Act. Under this federal law, employees over age forty have a right to be free from discrimination in all aspects of the employment relationship. Dr. Onetto understands that she is giving up the right to sue the Company for age discrimination by signing this Agreement. 13. In exchange for giving up these legal rights, Dr. Onetto is receiving pay or benefits that she is not otherwise entitled to under her Employment Agreement or under any existing Company policy. 14. Because this is a legally binding document, the Company has an obligation to inform Dr. Onetto that she should consult a lawyer before signing this Agreement and giving up her legal rights and Dr. Onetto represents that she is represented by the lawyer identified in this Agreement. 2 15. Dr. Onetto has the right to take twenty-one days to decide whether or not to sign this Agreement and give up her legal rights. If she signs before the expiration of twenty-one days, she is not required to do so and could have taken the entire twenty-one days to consider this Agreement. 16. Dr. Onetto also has the right to revoke this Agreement within seven days after signing it. Such revocation must be in writing addressed to Barbara A. Wood, Vice President and General Counsel of the Company, 58 S. Service Rd., Melville, NY 11747. If this Agreement is revoked, however, Dr. Onetto will not be entitled to any of the severance pay or benefits provided in this Agreement except for the benefits that she is already entitled to under existing Company policy or the terms of her existing Employment Agreement. IV. LEGAL RELEASE 17. Dr. Onetto releases the Company (as defined in this Agreement, which includes all officers, Directors, employees and agents and all subsidiaries and affiliated companies) from all legal claims and obligations of whatever nature or kind, including all legal claims relating to Dr. Onetto's employment and separation from employment. 18. The legal claims that Dr. Onetto is giving up by signing this Agreement include, but are not limited to, the following: (i) All claims that Dr. Onetto may have against the Company under the laws of any state, including claims for breach of contract (express or implied), misrepresentation, fraud, defamation, claims for unpaid wages, or any claims of fraud or misrepresentation in connection with the negotiation and execution of this Agreement; (ii) All claims for alleged personal injury sustained; (iii) All claims that Dr. Onetto may have against the Company for alleged age discrimination in employment, if based in whole or in part on acts, occurrences, or omissions that occurred before the effective date of this Agreement, or that relate in any way to Dr. Onetto's employment or discharge from employment; (iv) All claims that Dr. Onetto may have alleging any other forms of discrimination in employment arising out of federal or state laws; and (v) All claims arising under the Employment Retirement Income Security Act (ERISA) except future rights to vested benefits of employment, if any. 19. This legal release in favor of the Company is intended to be construed in the broadest possible manner and is subject only to the following exceptions, which are to be narrowly construed: (i) Workers compensation claims to the extent such claims cannot be released under state law without the approval of a court of competent jurisdiction; 3 (ii) Rights to retirement benefits previously vested by operation of law pursuant to the terms of the Company's 401(k) Plan; (iii) Rights to unemployment compensation benefits under state law, to the extent such claims cannot be waived in an agreement between the parties; (iv) Actions to enforce the terms of this Agreement to the extent that specific rights and benefits are conferred by this Agreement; and (v) Actions to enforce the Company's indemnity obligations under applicable law, with specific reference to the securities class action lawsuit styled Kassover v. OSI Pharmaceuticals, Inc. et al. (the "Class Action"), in which Dr. Onetto is named as an individual defendant. V. NON-DISPARAGEMENT OBLIGATIONS 20. Dr. Onetto acknowledges that she enjoyed a position of trust and confidence with the Company, and has a fiduciary duty to act in the Company's best interests. Dr. Onetto agrees that this fiduciary duty shall continue for a period of twelve (12) months following the termination of her employment with the Company under this Agreement. 21. Dr. Onetto further agrees that following her termination of employment with the Company and for the next five (5) years thereafter, she will not make any statement that is professionally or personally disparaging about, or adverse to, the interests of the Company, any of its officers, Directors, Shareholders or employees, including, without limitation, any statement that disparages any product, service, financial condition, or financial capability of the Company, or that is disparaging to any Director, officer, Shareholder, or executive of the Company. This includes the obligation to refrain from any conduct that is intended to or has the result of damaging the professional or personal reputation of the Company or any of its Directors, officers, or executives. 22. Dr. Onetto acknowledges that the Company may disclose the terms of this Agreement if disclosure is required by law or by a governmental agency or court order. 23. In the event the Company has reason to believe that Dr. Onetto has violated her obligations of non-disparagement hereunder or the provisions of the Covenants Agreement intended to survive termination of her employment with the Company, the following dispute resolution procedures shall apply: (i) If the Company has any reason to believe that Dr. Onetto is not complying with her non-disparagement obligations or the provisions of the Covenants Agreement, it shall notify her in writing and give her a reasonable opportunity to explain why she is in compliance. (ii) If, following reasonable consideration, the Company is not satisfied with Dr. Onetto's explanation, it shall have the right to commence a final and binding arbitration proceeding in accordance with Article VI below in order to enforce its rights. 4 VI. FINAL AND BINDING ARBITRATION 24. Any dispute concerning Dr. Onetto's non-disparagement obligations of this Agreement and her obligations under the surviving terms of the Covenants Agreement (but no other provisions of this Agreement) shall be resolved only by final and binding arbitration under the Federal Arbitration Act. The parties acknowledge that the Federal Arbitration Act applies because the Company is engaged in interstate commerce. 25. Dr. Onetto or the Company may invoke arbitration with the American Arbitration Association and the arbitration shall be conducted before a single arbitrator in Denver, Colorado, pursuant to the employment dispute resolution rules of the American Arbitration Association. 26. The Company shall pay the administrative costs of the arbitration, including the arbitrator's fees and costs. Each party, however, shall be solely responsible for payment of its and her own attorneys fees and costs. It is the intent of this provision to deprive the arbitrator of the discretion to award fees and costs to the prevailing party. 27. The jurisdiction of the arbitrator shall be limited to a determination of whether Dr. Onetto has complied with her obligations of non-disparagement under this Agreement or under the surviving provisions of the Covenants Agreement. If she has not complied, the arbitrator shall order Dr. Onetto to repay the amount, if any, sought by the Company. The arbitrator shall have no jurisdiction to award punitive or compensatory damages. VII. MISCELLANEOUS PROVISIONS 28. At any time and from time to time after the termination of Dr. Onetto's employment with the Company, Dr. Onetto shall cooperate with the Company and shall use all commercially reasonable efforts to take, or cause to be taken, any and all actions as may be required by the Company (or any lawyers engaged by the Company and acting on its behalf) in its reasonable discretion in connection with any investigation, prosecution, defense or settlement of any litigation or proceeding (including, without limitation, any proceeding brought by a governmental agency) brought against the Company and, in particular, the Class Action, including, without limitation, providing information, documents, files, books or records, and meeting with defense counsel for the Class Action and being available for depositions and other activities related to the Class Action as needed. The Company will reimburse Dr. Onetto, upon request, for travel and other out-of-pocket expenses reasonably incurred by Dr. Onetto in the course of taking any such actions under this Section 28 upon the presentation of appropriate receipts and other relevant documentation for all such expenses as part of any request by Dr. Onetto for reimbursement. 29. This is the entire agreement between the parties regarding the subject matter hereof, other than the Covenants Agreement, the surviving terms of which shall remain in full force and effect, and any amendment to, modification of, or supplement to this Agreement must be in writing and signed by each party or an expressly authorized representative. 30. If any term or provision of this Agreement shall be held to be invalid or unenforceable for any reason, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without affecting the validity of the remaining terms or provisions 5 of this Agreement, and such invalid term shall be deemed modified to the extent necessary to make it enforceable. 31. Except for the waiver of federal claims, this Agreement shall be construed in accordance with and governed by the laws of the State of Colorado, without regard to choice of law provisions. 32. This Agreement may be enforced in any court of competent jurisdiction. 33. By her signature below, Dr. Onetto acknowledges that she understands and accepts the terms of this Agreement, that she has the legal capacity to enter into this Agreement, and understands that it is legally binding, and that she has been advised by her lawyer concerning this Agreement. /s/ /s/ - ------------------------------------- ---------------------------------------- Nicole Onetto, M.D. OSI Pharmaceuticals, Inc. Dated: April 20, 2005 By: ------------------------------------ Dated: April 20, 2005 6 EX-10.2 3 y08086exv10w2.txt EX-10.2: EMPLOYMENT AGREEMENT EXHIBIT 10.2 April 21, 2005 Mr. Michael Atieh 10 Longwood Road Morristown, NJ 07920 Re: Employment Agreement Dear Mike: This letter is to confirm our understanding with respect to (i) your future employment by OSI Pharmaceuticals, Inc. (the "Company"), (ii) your agreement not to solicit employees or customers of the Company, or any present or future parent, subsidiary or affiliate of the Company (each, a "Company Affiliate" and collectively, together with the Company, the "Company", (iii) your agreement to protect and preserve information and property which is confidential and proprietary to the Company, and (iv) your agreement with respect to the ownership of inventions, ideas, copyrights and patents which may be used in the business of the Company (the terms and conditions agreed to in this letter are hereinafter referred to as the "Agreement"). In consideration of the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, we have agreed as follows: 1. Employment. (a) Subject to the terms and conditions of this Agreement, the Company will employ you, and you will be employed by the Company and/or any Company Affiliate designated by the Company, initially as Executive Vice President and Chief Financial Officer, of the Company reporting to the Chief Executive Officer (the "CEO") of the Company. You will have the responsibilities, duties and authority customarily performed, undertaken and exercised by a person in a similar executive capacity. You will also perform such other and/or different services for the Company as may be assigned to you from time to time by the CEO. The principal location at which you will perform such services will be the Company's headquarters located at 58 South Service Road, Melville, New York, although you will be available to perform services at any other Company facility and to travel as the needs of business may require. (b) Devotion to Duties. While you are employed hereunder, you will, to the best of your ability, perform faithfully and diligently all duties assigned to you pursuant to this Agreement and will devote your full business time and energies to the business and affairs of the Company. While you are employed hereunder, you will not undertake any other employment from any person or entity without the prior written consent of the Company. 2. Term. Except for earlier termination as provided for in Section 4 hereof, your employment under this Agreement (the "Employment Term") shall be for an initial term commencing on May 31, 2005 (the "Effective Date") and ending on the third anniversary of the Effective Date (the "Initial Term"). Unless written notice is given of an intent not to extend the Initial Term or any extension thereof by you or the Company at least 90 days prior to an anniversary of the Effective Date, the Employment Term shall be deemed, as of such 90th day, to have been extended and continue until the end of the successive 12-month period unless otherwise terminated as provided for in Section 4 hereof. In the event the Company elects not to renew the Employment Term, you shall be entitled to the payments and benefits set forth in Section 6(c). 3. Compensation. (a) Base Salary. While you are employed hereunder, the Company will pay you a base salary at the annual rate of $410,000 (the "Base Salary"). Your Base Salary will be reviewed on an annual basis each January (or such other time as determined by the CEO and/or the Compensation Committee of the Board of Directors of the Company (the "Board")), commencing with January, 2006. The Base Salary will be payable in equal installments in accordance with the Company's payroll practices as in effect from time to time. The Company will deduct from each such installment all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which you participate. (b) Bonus. In addition to the Base Salary, for each fiscal year of the Company ending during the Term of the Agreement, beginning with the 2005 fiscal year, you will be eligible to receive a target bonus of between $200,000 - $300,000, determined and payable in accordance with the Company's practices applicable to bonuses paid to its executives. The Company's bonus system is a discretionary annual performance-based incentive bonus system, approved by the Company's Board, and is based upon a combination of personal and corporate performance contributing to your maximum target. Bonuses are determined in December of each year. (c) Equity Compensation. (i) Initial Grant. On the Effective Date and pursuant to a written stock option agreement (the "Stock Option Agreement") between the Company and you under the OSI Pharmaceuticals, Inc. Amended and Restated Stock Incentive Plan (the "Plan"), you will be granted a non-qualified option (the "Initial Option") to purchase 150,000 shares of the Company's common stock, par value, $.01 per share (the "Common Stock"). The exercise price will be determined based on the fair market value determined at the close of business on the first business day of the month after your employment begins. The Initial 2 Option will have a term of 10 years and will become exercisable with respect to 33% of such shares on the first anniversary of the date of grant with the remaining shares vesting over the succeeding 48 months following the first anniversary of the date of grant on a monthly pro-rated basis. Notwithstanding the foregoing, the Initial Option shall vest and be fully exercisable upon a Change of Control (as hereinafter defined). (ii) Future Grants. On each date that annual stock options or other equity compensation are granted by the Company to its executive management group, so long as you then remain in the employ of the Company, the Company will grant to you an option (an "Annual Option") to purchase a number of shares of Common Stock to be determined by the Compensation Committee of the Board based upon your grade level. The exercise price for each Annual Option will be the fair market value per share of Common Stock on the date the Annual Option is granted and the other terms and conditions of the Annual Option will be as set forth in the Plan and Option Agreement accompanying such Annual Option. Each Annual Option will have a term of 10 years and will become exercisable with respect to 33% of such shares on the first anniversary of the date of grant with the remaining shares vesting over the succeeding 24 months following the first anniversary of the date of grant on a monthly pro-rated basis. Notwithstanding the foregoing, each Annual Option shall vest and be fully exercisable upon a Change of Control (as hereinafter defined). (iii) Restricted Stock Grant On the first business day of the month after your employment begins you will be granted a restricted stock grant of 15, 000 shares at the closing price of the stock on such date. The restrictions will lift on an annual basis at twenty percent per year over a period of five years. Notwithstanding the foregoing, the Restricted Stock Grant shall vest and be fully exercisable upon a Change of Control (as hereinafter defined). (d) Vacation. You will be entitled to 22 paid vacation days in each calendar year, and paid holidays plus personal days in accordance with the Company's policies for its senior executives as in effect from time to time. (e) Fringe Benefits. In addition to the equity compensation provided for herein, you will be entitled to participate in employee benefit plans which the Company provides or may establish for the benefit of its senior executives generally (for example, term life, disability, medical, dental and other insurance, retirement, pension, profit-sharing and similar plans) (collectively, the "Fringe Benefits"). Your eligibility to participate in the Fringe Benefits and receive benefits thereunder will be subject to the plan documents governing such Fringe Benefits. Nothing contained herein will require the Company to establish or maintain any Fringe Benefits. (f) Relocation. The Company will assist you in your relocation to Long Island in accordance with the following: 3 (i) Relocation Service. American International will assist you in your relocation from New Jersey to Long Island. (ii) Current Residence. The Company, through American International and at your request, will appraise your current residence in New Jersey. You will market your home with their assistance to try to find a third-party buyer. If the sale price is less than the averaged appraisals, OSI will reimburse you the difference. (iii) Expenses. The Company will reimburse you, either directly or through its relocation service, American International, for all expenses relating to your relocation from New Jersey to Long Island, including, without limitation, expenses relating to packing and moving household goods, temporary storage of household goods, closing costs (including 2 mortgage points) associated with the purchase of a new home on Long Island, sales and closing costs associated with the sale of your home in New Jersey, expenses incurred by you and/or your family relating to house-hunting trips (including transportation, hotel accommodations and meals) and expenses incurred by you and/or your family for temporary living accommodations for up to six months prior to your move into a new home (including transportation, lease or sublease amounts, utilities, hotel or other accommodations, brokers' fees). During this 6 month period The Company will pay for a car service to bring you to and from Long Island on Mondays and Fridays. The Company will continue to pay for your living costs and for a car service after the six month period, but any such costs will be fully recaptured versus your final relocation costs. (iv) Mortgage Assistance. For a period of three years following your purchase of a home on Long Island (the "Long Island Home"), the Company will pay you a mortgage assistance allowance equal to $50,000 per annum, payable in equal monthly installments. The foregoing is subject to your continued employment with the Company during such three-year period. If (A) your employment terminates "without cause" (as defined in Section 4(e) hereof), (B) you terminate your employment for "good reason" (as defined in Section 4(d) hereof), or (C) upon a "Change of Control" (as defined in Section 7 hereof) prior to the end of such three-year period, you will continue to receive such mortgage assistance allowance on the terms described in this section provided that you remain resident in the Long Island Home. (v) Lump Sum Payment. In addition to the amounts provided for in Sections 3 (f) (iii) and (iv), upon your purchase of the Long Island Home, you will receive a one-time lump sum payment equal to $25,000 to cover incidental expenses. (vii) Pay-Back. If, within 12 months following the Effective Date, you terminate your employment with the Company "without good reason" (as defined in Section 4(f) hereof), you shall pay back all (based upon the date of your termination) of 4 the amounts paid to you pursuant to Sections 3 (f) (iii), (iv), (v) and (vi) (the "Relocation Expenses"). (viii) Documentation. Reimbursement of the expenses provided for in this Section 3(f) shall be made upon presentation of documentation reasonably satisfactory to the Company in accordance with the Company's policies with respect thereto as in effect from time to time. Receipts shall not be required for payment covered under Section 3 (f) (v). (ix) Any amounts paid under this Section 3 (f) deemed to be taxable income to you will be grossed up for taxes at the appropriate rate. (g) Reimbursement of Expenses. Upon presentation of documentation of such expenses reasonably satisfactory to the Company, the Company will reimburse you for all ordinary and reasonable out-of-pocket business expenses that are reasonably incurred by you in furtherance of the Company's business in accordance with the Company's policies with respect thereto as in effect from time to time. 4. Termination. The Employment Term shall end upon the earliest of the following to occur: (a) Your death. (b) Upon written notice to you of termination as a result of your Permanent Disability. "Permanent Disability" means your inability, by reason of any physical or mental impairment, to substantially perform your duties and responsibilities hereunder for two or more periods of 90 days each in any 360-day period, as determined by a qualified physician with no history of prior dealings with you or the Company, as reasonably agreed upon by you (or, if you are unable to make such selection, by an adult member of your immediate family) and the Company. Such physician's written determination of your Permanent Disability shall, upon delivery to the Company, be final and conclusive for purposes of this Agreement. (c) Your termination by the Company for "cause" as evidenced by, and effective upon, delivery by the Company to you of a Notice of Termination (as defined in Section 5 below). "Cause" shall mean, for purposes of this Agreement, (i) an act of fraud or embezzlement against the Company or an unauthorized disclosure of Confidential Information (as defined in Section 8(a)(iv) hereof) of the Company, in each case which is willful and results in material damage to the Company, (ii) any criminal violation of the Securities Act of 1933 or the Securities Exchange Act of 1934, (iii) your conviction (or a plea of nolo contendere) of any felony, (iv) your gross neglect of your duties or your willful and continuing refusal to perform your duties, provided you have been given written notice of such neglect or refusal and within 30 days have failed to cure such neglect and refusal, or (v) your material willful misconduct with respect to the business or affairs of the Company. (d) Your termination of your employment for "good reason" by delivering to the Company a Notice of Termination (as defined in Section 5 below) not less than 30 5 days prior to the effective date of such termination. For purposes of this Agreement, "good reason" shall mean the occurrence of any of the events hereinafter set forth which are not cured by the Company within 30 days after the Company has received written notice from you specifying the particular events or conditions which constitute "good reason": (i) a material reduction in your duties, title, responsibilities, authority, status, or reporting responsibilities unless you have previously consented in writing to such reduction (which consent may be given or withheld in your sole discretion); (ii) a material reduction in your Base Salary or the range of your target bonus; or; (iii) the Company's requiring you to be based more than 35 miles from the Company's current headquarters in Melville, New York or to any location for which the average commute from your residence exceeds 45 minutes; or (iv) change of control (as defined in Section 7 hereof). (e) Termination of your employment by the Company "without cause" by delivery by the Company to you of a Notice of Termination (as defined in Section 5 below) not less than 30 days prior to the effective date of such termination. Your termination by the Company shall be considered to be "without cause" if you are terminated or dismissed by the Company for reasons other than death, permanent disability or for "cause". (f) Your termination of your employment "without good reason" by delivery by you to the Company of a Notice of Termination (as defined in Section 5 below). Your termination of your employment shall be considered to be "without good reason" unless you resign for "good reason" (as defined in Section 4(d)). 5. Notice of Termination. Any termination by the Company or by you shall be communicated by a written "Notice of Termination" to the other party hereto. A "Notice of Termination" shall mean a notice which indicates a termination date and the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated. 6. Payments Upon Termination. (a) Upon termination of your employment for any reason you will become entitled to (i) any accrued and unpaid Base Salary up to the date of termination, and (ii) any accrued and unpaid vacation pay up to the date of termination ((i) and (ii) being collectively referred to as the "Accrued Compensation"). (b) Upon termination of your employment due to death or Permanent Disability, in addition to Accrued Compensation, you (or your estate, as the case may be) 6 will become entitled to an amount equal to the bonus that you would have been entitled to receive for the fiscal year in which your termination occurs had you continued to be employed until the end of such fiscal year, multiplied by a fraction (i) the numerator of which is the number of days in such fiscal year through the termination date and (ii) the denominator or which is 365 (a "Pro-rata Bonus"). (c) Upon a termination of your employment by the Company "without cause" or by you "for good reason" or upon a "Change of Control" (as defined in Section 7 hereof), in addition to Accrued Compensation, you will become entitled to (i) your Base Salary for 12 months following the date of termination, (ii) your Pro-rata Bonus, and (iii) continued coverage for 12 months following termination under any health and dental program in which you were eligible to participate as of the time of termination of your employment. (d) You shall not be required to mitigate the amount of any payment provided for under this Section 6 by seeking other employment or otherwise and no payment shall be offset or reduced by the amount of any compensation or benefits provided to you in any subsequent employment. The Company's obligation to make the payments provided for in this Section 6 and otherwise perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against you or others. 7. Change of Control. For purposes of this Agreement, a "Change of Control" shall mean the approval by stockholders of the Company of (a) a merger or consolidation involving the Company if the stockholders of the Company, immediately before such merger or consolidation, do not, as a result of such merger or consolidation, directly or indirectly, continue to hold greater than 60% of the voting power in the resulting entity, or (b) an agreement for the sale or other disposition of all or substantially all of the assets of the Company. 8. Prohibited Activities. (a) Certain Acknowledgements and Agreements. (i) We have discussed, and you recognize and acknowledge the competitive and proprietary aspects of the business of the Company. (ii) You acknowledge that your employment by the Company creates a relationship of confidence and trust between the Company and you with respect to certain information relating to the business and affairs of the Company or applicable to the business of any client, customer, consultant, partner, external collaborator or service provider of the Company, which may be made known to you by the Company or by any client, customer, consultant, partner, external collaborator or service provider of the Company, or learned by you during the period of your affiliation with the Company. 7 (iii) You further acknowledge that, while you are employed hereunder, the Company will furnish, disclose or make available to you Confidential Information (as defined in Section 8 (a) (iv) below) related to the business of the Company (whether or not the information has commercial value to the Company's business). You also acknowledge that such Confidential Information has been developed and will be developed by the Company through the expenditure by the Company of substantial time, effort and money and that all such Confidential Information could be used by you to compete with the Company. You also acknowledge that if you become employed or affiliated with any competitor of the Company, it is possible that you would disclose Confidential Information to such competitor and would use Confidential Information, knowingly or unknowingly, on behalf of such competitor. (iv) For purposes of this Agreement, "Confidential Information" means confidential and proprietary information of the Company, whether in written, oral, electronic or other form, including, without limitation, systems, processes, formulae, data, functional specifications, computer software, programs and displays, know-how, improvements, discoveries, inventions, developments, designs, techniques, marketing plans, strategies, forecasts, new and proposed products and technologies, unpublished financial statements and financial information, business plans, budgets, projections, licenses, prices, costs, training methods and materials, sales prospects, and customer, supplier, manufacturer, collaborator, partner, and client lists and any and all intellectual properties, including any scientific, technical or trade secrets of the Company or of any third party provided to you or the Company under a condition of confidentiality, provided that Confidential Information will not include information that is in the public domain other than through any fault or act by you. (b) Covenants. While you are employed hereunder and for a period of one year following the termination of your employment hereunder for any reason or for no reason, you will not, without the prior written consent of the Company: (i) Engage, directly or indirectly, for your benefit or the benefit of others, in any activity or employment in the performance of which any Confidential Information obtained during the course of your employment would, by necessity, need to be disclosed by you in order to engage in any such activity or employment. This covenant shall not be construed to limit in any way your obligation not to use or disclose Confidential Information as set forth in Section 9 below. (ii) Either individually or on behalf of or through any third party, directly or indirectly, solicit, divert or appropriate or attempt to solicit, divert or appropriate, any customers of the Company or any prospective customers with respect to which the Company has developed or made a sales presentation (or similar offering of services) for the purpose of directly competing with the Company with respect to the Company's "principal marketed products" (i.e., those products which are in the first or second detail position) or its development 8 candidates which have material financial significance to the Company and which are in Phase III programs; or (iii) Either individually or on behalf of or through any third party, directly or indirectly, (A) solicit, entice or persuade or attempt to solicit, entice or persuade any employees of or consultants to the Company to leave the service of the Company for any reason, or (B) employ, cause to be employed, or solicit the employment of, any employees of or consultants to the Company while any such person is providing services to the Company or within six months after any such person has ceased providing services to the Company; or (iv) Either individually or on behalf of or through any third party, directly or indirectly, interfere with, or attempt to interfere with, the relations between the Company and any manufacturer or supplier to or customer of the Company. (c) Reasonableness of Restrictions. You understand that the provisions set forth in Section 8(b) are not meant to prevent you from earning a living or fostering your career. They are intended, however, to prevent competitors of the Company from gaining an unfair advantage from your knowledge of Confidential Information. You understand that, by making any other employer aware of the provisions set forth in this Section 8, that employer can take such action as to avoid your breach of this Section 8. (d) Survival of Acknowledgements and Agreements. Your acknowledgements and agreements set forth in this Section 8 will survive the termination of this Agreement and the termination of your employment hereunder for any reason or for no reason. 9. Protected Information. All Confidential Information shall be the sole property of the Company and its assigns. You hereby assign to the Company any right you may have or acquire in such Confidential Information. You will at all times, both during the period while you are employed hereunder and after the termination of this Agreement and the termination of your employment hereunder for any reason or for no reason, maintain in confidence and will not, without the prior written consent of the Company, use, except as required in the course of performance of your duties for the Company or by court order, disclose or give to others any Confidential Information. In the event you are questioned by anyone not employed by the Company or by an employee of or a consultant to the Company not authorized to receive Confidential Information, in regard to any Confidential Information, or concerning any fact or circumstance relating thereto, you will promptly notify the Company. Upon the termination of your employment hereunder for any reason or for no reason, or if the Company otherwise requests, you will return to the Company all tangible Confidential Information and copies thereof (regardless how such Confidential Information or copies are maintained). The terms of this Section 9 are in addition to, and not in lieu of, any statutory or other contractual or legal obligation that you may have relating to the protection of the Company's Confidential Information. The terms of this Section 9 will survive indefinitely any termination of this Agreement and/or any termination of your employment hereunder for any reason or for no reason. 9 10. Ownership of Ideas, Copyrights and Patents. (a) Property of the Company. All ideas, discoveries, creations, manuscripts and properties, innovations, improvements, know-how, inventions, designs, developments, apparatus, techniques, methods, biological processes, cell lines, laboratory notebooks and formulae (collectively, the "Inventions") which may be used in the current or planned business of the Company or which in any way relates to such business, whether patentable, copyrightable or not, which you may conceive, reduce to practice or develop while you are employed hereunder (and, if based on or related to any Confidential Information, within two years after termination of such employment for any reason or for no reason), alone or in conjunction with another or others, whether during or out of regular business hours, whether or not on the Company's premises or with the use of its equipment, and whether at the request or upon the suggestion of the Company or otherwise, will be the sole and exclusive property of the Company, and that you will not publish any of the Inventions without the prior written consent of the Company. Without limiting the foregoing, you also acknowledge that all original works of authorship which are made by you (solely or jointly with others) within the scope of your employment or which relate to the business of the Company and which are protectable by copyright are "works made for hire" pursuant to the United States Copyright Act (17 U.S.C. Section 101). You will promptly disclose to the Company all of the foregoing and you hereby assign to the Company all of your right, title and interest in and to all of the foregoing. You further represent that, to the best of your knowledge and belief, none of the Inventions will violate or infringe upon any right, patent, copyright, trademark or right of privacy, or constitute libel or slander against or violate any other rights of any person, firm or corporation, and that you will use your best efforts to prevent any such violation. (b) Cooperation. At any time during your employment hereunder or after the termination of your employment hereunder for any reason or for no reason, you will cooperate fully with the Company and its attorneys and agents in the preparation and filing of all papers and other documents as may be required to perfect the Company's rights in and to any of such Inventions, including, without limitation, joining in any proceeding to obtain letters patent, copyrights, trademarks or other legal rights with respect to any such Inventions in the United States and in any and all other countries, provided that the Company will bear the expense of such proceedings, and that any patent or other legal right so issued to you personally will be assigned by you to the Company without charge by you. (c) Licensing and Use of Inventions. With respect to any Inventions, and work of any similar nature (from any source), whenever created, which you have not prepared or originated in the performance of your employment, but which you provide to the Company or incorporate in any Company product or system, you hereby grant to the Company a royalty-free, fully paid-up, non-exclusive, perpetual and irrevocable license throughout the world to use, modify, create derivative works from, disclose, publish, translate, reproduce, deliver, perform, dispose of, and to authorize others so to do, all such Inventions. You will not include in any Inventions you deliver to the Company or 10 use on its behalf, without the prior written approval of the Company, any material which is or will be patented, copyrighted or trademarked by you or others unless you provide the Company with the written permission of the holder of any patent, copyright or trademark owner for the Company to use such material in a manner consistent with then-current Company policy. (d) Prior Inventions. Listed on Exhibit 10(d) to this Agreement are any and all Inventions in which you claim or intend to claim any right, title and interest (collectively, "Prior Inventions"), including, without limitation, patent, copyright and trademark interests, which to the best of your knowledge will be or may be delivered to the Company in the course of your employment, or incorporated into any Company product or system. You acknowledge that your obligation to disclose such information is ongoing while you are employed hereunder. 11. Records. Upon termination of your employment hereunder for any reason or for no reason and at any other time requested by the Company, you will deliver to the Company any property of the Company which may be in your possession, including products, materials, memoranda, notes, records, reports, or other documents or photocopies of the same. 12. Representations. You hereby represent and warrant to the Company that you understand this Agreement, that you enter into this Agreement voluntarily and that your employment under this Agreement will not conflict with any legal duty owed by you to any other party, or with any agreement to which you are a party or by which you are bound, including, without limitation, any non-competition or non-solicitation provision contained in any such agreement. 13. General. (a) Notices. All notices, requests, consents and other communications hereunder which are required to be provided, or which the sender elects to provide, in writing, will be addressed to the receiving party's address set forth above or to such other address as a party may designate by notice hereunder, and will be either (i) delivered by hand, (ii) sent by overnight courier, or (iii) sent by registered or certified mail, return receipt requested, postage prepaid. All notices, requests, consents and other communications hereunder will be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by registered or certified mail, on the fifth business day following the day such mailing is made. (b) Entire Agreement. This Agreement, and the other agreements specifically referred to herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this 11 Agreement will affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement. (c) Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto. (d) Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent will be deemed to be or will constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver or consent. (e) Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company's business or that aspect of the Company's business in which you are principally involved or to any Company Affiliate; provided, that the Company shall remain responsible for any payments and obligations to you to the extent any assignee fails to fulfill such payments and obligations. You may not assign your rights and obligations under this Agreement without the prior written consent of the Company and any such attempted assignment by you without the prior written consent of the Company will be void. (f) Benefit. All statements, representations, warranties, covenants and agreements in this Agreement will be binding on the parties hereto and will inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement will be construed to create any rights or obligations except between the Company and you, except for your obligations to the Company as set forth herein, and no person or entity (except for a Company Affiliate as set forth herein) will be regarded as a third-party beneficiary of this Agreement. (g) Governing Law. This Agreement and the rights and obligations of the parties hereunder will be construed in accordance with and governed by the laws of the State of New York, without giving effect to the conflict of law principles thereof. (h) Jurisdiction, Venue and Service of Process. Any legal action or proceeding with respect to this Agreement that is not subject to arbitration pursuant to Section 14 (i) below will be brought in the courts of Suffolk County, New York. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. (i) Arbitration. Any controversy, dispute or claim arising out of or in connection with this Agreement, other than a controversy, dispute or claim arising under Section 8, 9 or 10 hereof, will be settled by final and binding arbitration to be conducted in New York, New York pursuant to the national rules for the resolution of employment disputes of the American Arbitration Association then in effect. The decision or award in 12 any such arbitration will be final and binding upon the parties and judgment upon such decision or award may be entered in any court of competent jurisdiction or application may be made to any such court for judicial acceptance of such decision or award and an order of enforcement. In the event that any procedural matter is not covered by the aforesaid rules, the procedural law of New York will govern. Any disagreement as to whether a particular dispute is arbitrable under this Agreement shall itself be subject to arbitration in accordance with the procedures set forth herein. The fees of the arbitrators shall be paid by the Company. (j) WAIVER OF JURY TRIAL. ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT THAT IS NOT SUBJECT TO ARBITRATION PURSUANT TO SECTION 14(i) ABOVE WILL BE RESOLVED BY A JUDGE ALONE AND EACH OF YOU AND THE COMPANY WAIVE ANY RIGHT TO A JURY TRIAL THEREOF. (k) Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement is to any extent declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and each portion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held to be unenforceable because of the duration of such provision, the geographic area covered thereby, or other aspect or scope of such provision, the court making such determination will have the power to reduce the duration, geographic area of such provision, or other aspect or scope of such provision, and/or to delete specific words and phrases ("blue-penciling"), and in its reduced or blue-penciled form, such provision will then be enforceable and will be enforced. (l) Injunctive Relief. You hereby expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in Section 8, 9 or 10 of this Agreement will result in substantial, continuing and irreparable injury to the Company. Therefore, in addition to any other remedy that may be available to the Company, the Company will be entitled to injunctive or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of Section 8, 9 or 10 of this Agreement. The period during which the covenants contained in Section 8 will apply will be extended by any periods during which you are found by a court to have been in violation of such covenants. (m) No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, will operate as a waiver of any such right, power or remedy of the party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, will preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto will not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under 13 this Agreement will entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand. (n) Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. (o) Opportunity to Review. You hereby acknowledge that you have had adequate opportunity to review these terms and conditions and to reflect upon and consider the terms and conditions of this Agreement, and that you have had the opportunity to consult with counsel of your own choosing regarding such terms. You further acknowledge that you fully understand the terms of this Agreement and have voluntarily executed this Agreement. (p) Survival of the Company's Obligations. Notwithstanding the termination of this agreement pursuant to Section 4, the Company's obligation to make payments and provide benefits to you as set forth in Section 3 (g) (iv) and Section 6 will remain in effect. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 14 If the foregoing accurately sets forth our agreement, please so indicate by signing and returning to us the enclosed copy of this Agreement. Very truly yours, OSI Pharmaceuticals, Inc. By: /s/ ------------------------------------ Name: Colin Goddard, Ph.D Title: Chief Executive Officer Accepted and Approved: /s/ April 21, 2005 - ------------------------------------- Date Michael Atieh 15 EXHIBIT 10(d) PRIOR INVENTIONS 16 EX-99.1 4 y08086exv99w1.txt EX-99.1: PRESS RELEASE EXHIBIT 99.1 ((OSI)(TM) PHARMACEUTICALS LOGO) NEWS RELEASE Contact: OSI Pharmaceuticals, Inc. Burns McClellan (representing OSI) Kathy Galante Jonathan Nugent (Investors) Director Kathy Jones, Ph.D. (Media) Investor / Public Relations (212) 213-0006 631-962-2000 OSI PHARMACEUTICALS ANNOUNCES ACQUISITION OF ALL MINORITY INTEREST SHARES OF PROSIDION LIMITED, UK-BASED DIABETES AND OBESITY SUBSIDIARY MELVILLE, N.Y., APRIL 18, 2005 - OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) announced today that it has completed a stock-for-stock exchange resulting in the acquisition of all minority interest shares of the Company's majority-owned UK-based diabetes and obesity subsidiary, Prosidion Limited. A total of 84,940 new shares of OSIP were issued in exchange for the 286,200 minority interest shares of Prosidion, which represents 2.7 percent of Prosidion shares. The issued OSIP shares represented an approximately 0.17% dilution of total OSIP shares outstanding. "The transaction is a vote of confidence in our rapidly evolving diabetes and obesity programs and represents a firm commitment by the OSI board and management team to maximizing the value we believe to be inherent in these R&D programs," stated Colin Goddard, Ph.D., Chief Executive Officer of the Company. The Company will continue to operate its diabetes and obesity effort in its Oxford, UK facility as (OSI) Prosidion and Dr. Anker Lundemose, the Chief Executive Officer of Prosidion Limited, has been appointed Executive Vice President and President of (OSI) Prosidion and will join OSI's Executive Management Committee. Prosidion Limited was formed in January 2003 and has, through internal R&D and an aggressive licensing and acquisition program, assembled a promising pipeline of diabetes and obesity product candidates. The most advanced of these is PSN9301, a dipeptidyl peptidase IV (DP-IV) inhibitor which was acquired, along with an associated intellectual property estate, from the German company Probiodrug AG in June 2004. PSN9301 is currently in Phase II clinical trials. In addition, drug candidates targeting the activation of glucokinase and the inhibition of glycogen phosphorylase, both key enzymes in the regulation of glucose metabolism, are expected to enter clinical trials this year. ABOUT OSI PHARMACEUTICALS OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development and commercialization of high-quality pharmaceutical products that extend life or improve the quality of life for cancer and diabetes patients worldwide. OSI's primary business remains oncology, but the Company has a second business interest in the area of diabetes through its subsidiary, Prosidion Limited, based in the United Kingdom. Tarceva(TM) (erlotinib), OSI's flagship product, is the first drug discovered and developed by OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the ability to improve survival in non-small cell lung cancer and pancreatic cancer. OSI exclusively markets Novantrone(R) (mitoxantrone concentrate for injection) for the approved oncology indications and markets Gelclair(R) Bioadherent Oral Gel for the relief of pain associated with oral mucositis. This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, the completion of clinical trials, the FDA review process and other governmental regulation, OSI's and its collaborators' abilities to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, the ability to effectively market products, and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. ### EX-99.2 5 y08086exv99w2.txt EX-99.2: PRESS RELEASE EXHIBIT 99.2 ((OSI)(TM) PHARMACEUTICALS LOGO) NEWS RELEASE Contact: OSI Pharmaceuticals, Inc. Burns McClellan (representing OSI) Kathy Galante Jonathan Nugent (Investors) Director Kathy Jones, Ph.D. (Media) Investor / Public Relations (212) 213-0006 631-962-2000 OSI PHARMACEUTICALS SUMMARIZES PRE-CLINICAL DATA FROM ITS RESEARCH & DEVELOPMENT PROGRAM PRESENTED AT THE 96TH ANNUAL MEETING OF THE AMERICAN ASSOCIATION FOR CANCER RESEARCH MELVILLE, N.Y., APRIL 19, 2005 - OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) today provided an informational update summarizing highlights from presentations made at this year's Annual Meeting of the American Association for Cancer Research (AACR) being held from April 16-20 in Anaheim, Calif. OSI presentations covered a number of areas important to the development of the Company's portfolio of oncology products and drug candidates including: EPITHELIAL MESENCHYMAL TRANSITION (EMT) MAY PREDICT SENSITIVITY OF SOLID TUMORS OF EPIDERMAL GROWTH FACTOR RECEPTOR (EGFR) INHIBITORS SUCH AS TARCEVA(TM) Graeme Griffin et al (abstract #2313) presented pre-clinical data showing that cell lines and tumor xenografts that express epithelial markers (e.g. E-cadherin and gamma catenin) may be more sensitive to Tarceva (erlotinib) than cell lines and tumor xenografts that express mesenchymal markers (e.g. vimentin and fibronectin). These biological markers are associated with a process termed Epithelial Mesenchymal Transition (EMT). EMT is thought to be a marker of tumor progression, with tumors that express mesenchymal markers having a greater tendency to be invasive and metastasize than those tumors only expressing epithelial markers. Tumors expressing mesenchymal markers are thought to have a worse prognosis than tumors expressing epithelial markers. This new data supports the hypothesis that Tarceva may be effective in earlier-stage disease, such as an adjuvant or front-line setting in lung cancer, since these earlier-stage tumors are likely to be more epithelial-like in their histology. OSI, together with its alliance partners, Genentech and Roche, anticipate the initiation of clinical trials for Tarceva in both the front-line and adjuvant settings in lung cancer as part of the ongoing Tarceva clinical program. "The implications of this work are very significant," stated Neil Gibson, Ph.D., OSI's Vice President of Research. "By understanding the role of EMT in solid tumors we believe we will be better positioned to expand the use of Tarceva to disease settings enriched with patients whose tumors are more 'epithelial' in nature thus allowing the evaluation of Tarceva across a broad range of solid tumor types such as colon cancer, breast cancer, head and neck cancer, ovarian cancer and prostate cancer. We look forward to continued pursuit of this emerging area of interest for the oncology community." RNA INTERFERENCE: IDENTIFYING AND VALIDATING NEW DRUG TARGETS Julie L.C. Kan et al (abstract #1706) presented data highlighting the utility of RNA interference (RNAi) in the identification and validation of new drug targets suitable for exploration in combination with Tarceva. One component of this study used the insulin-like growth factor-1 receptor (IGF-1R) as a model system to evaluate whether RNAi directed against this target could synergize with Tarceva in inhibiting lung cancer cell lines. IGF-1 is a growth factor, or hormone, known to stimulate growth and inhibit death in normal and cancerous cells. The data show that inhibition of IGF-1R enhances the degree of inhibition of proliferation and/or a greater induction of apoptosis in lung cancer cell lines treated with Tarceva. The data support combination of Tarceva with an IGF-1R inhibitor as a potential therapeutic option in the treatment of lung cancer. RNAi refers to the use of short segments of double-stranded RNA, which can block or reduce gene expression of specific protein products. By "knocking down" specific cancer-related genes using RNAi technology, OSI's scientists can validate therapeutic targets before embarking on longer-term and more costly drug research. RNAi provides OSI with the technology to rapidly assess which of these targets will have greatest potential for drug discovery. Further, RNAi can be used to survey existing tumor cell lines in order to profile tissue and tumor response to intervention at an individual gene target that may serve to guide the initial clinical evaluation of new targeted anti-cancer compounds. Comparison of RNAi and lead compound effects on tumor line phenotype may also help to define potentially unknown pharmacological activities and improve our understanding of the multi-step processes by which cancers arise. OSI has explored the use of RNAi technology in its research program through an ongoing collaboration with scientists at Cold Spring Harbor Laboratory. OSI'S C-KIT /VEGFR INHIBITOR PROGRAM Mary Srebernak et al (abstract #677) presented data on OSI-930, a co-inhibitor of the receptor-tyrosine kinases c-kit and VEGFR (also known as KDR). OSI-930 is equally active against both the mutant and wild type versions of c-kit. OSI-930 was found to have single agent in vivo activity against tumor xenografts that may be driven by wild type c-kit or mutant c-kit. Scientists also characterized the pre-clinical anti-tumor activity of OSI-930 in combination with the chemotherapeutics agents, cisplatin/ etoposide in small cell lung cancer and FOLFOX in colorectal carcinoma. The data demonstrated that OSI-930 can be administered safely and effectively with current standard therapeutic regimens in pre-clinical models and suggest the potential for use of OSI-930 in combination with chemotherapeutics or as maintenance therapy. Combining the inhibition of c-kit originated growth and survival pathways with anti-angiogenic activity arising from VEGFR inhibition in one molecule may potentially translate into a broad range of clinical activity. Data were also presented from several pre-clinical studies designed to identify potential biomarkers of OSI-930 activity. This work used a variety of cell lines that express either mutant or wild type c-kit to determine the effects of OSI-930 treatment on signaling events within cells both in vitro and in vivo. Initial data suggests that the activation state of proteins within the PI-3 kinase signaling pathway may be good biomarkers of OSI-930 activity both in vitro and in vivo. The goal of ongoing studies will be to establish biomarkers suitable to monitor the activity of OSI-930 in clinical trials. OSI-930 originated from the Company's de novo oncology research efforts and is being evaluated in a Phase I clinical trial. ABOUT TARCEVA Tarceva is a small molecule designed to target the human epidermal growth factor receptor 1 (HER1) pathway, which is one of the factors critical to cell growth in non-small cell lung cancer (NSCLC). HER1, also known as EGFR, is a component of the HER signaling pathway, which plays a role in the formation and growth of numerous cancers. Tarceva is designed to inhibit the tyrosine kinase activity of the HER1 signaling pathway inside the cell, which may block tumor cell growth. Tarceva was approved by the FDA in November 2004 and by the Swiss health authority, Swissmedic, in March 2005. Tarceva is an oral tablet indicated for daily administration for the treatment of patients with locally advanced or metastatic NSCLC after failure of at least one prior chemotherapy regimen. Tarceva is the only EGFR inhibitor to have demonstrated a survival benefit in NSCLC. Results from two earlier large, randomized, placebo-controlled clinical trials in first-line advanced NSCLC patients showed no clinical benefit with concurrent administration of Tarceva with doublet platinum-based chemotherapy (carboplatin and paclitaxel or gemcitabine and cisplatin) and its use is not recommended in that setting. Additional early-stage trials of Tarceva are being conducted in other solid tumors. ABOUT TARCEVA SAFETY In the pivotal NSCLC trial, the most common adverse reactions in patients receiving Tarceva were rash and diarrhea. Grade three/four rash and diarrhea occurred in nine and six percent of Tarceva-treated patients, respectively. Rash and diarrhea each resulted in discontinuation of one percent of Tarceva-treated patients. Six and one percent of patients needed dose reduction for rash and diarrhea, respectively. Historically, there have been infrequent reports of serious interstitial lung disease (ILD), including fatalities, in patients receiving Tarceva for treatment of NSCLC or other advanced solid tumors. In the Phase III trial, severe pulmonary reactions, including potential cases of interstitial lung disease, were infrequent (0.8 percent) and were equally distributed between treatment arms. The overall incidence of ILD in Tarceva-treated patients from all studies was approximately 0.7 percent. ABOUT OSI PHARMACEUTICALS OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development and commercialization of high-quality pharmaceutical products that extend life or improve the quality of life for cancer and diabetes patients worldwide. OSI's primary business remains oncology, but the Company has a second business interest in the area of diabetes through its subsidiary, Prosidion Limited, based in the United Kingdom. Tarceva(TM) (erlotinib), OSI's flagship product, is the first drug discovered and developed by OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the ability to improve survival in non-small cell lung cancer and pancreatic cancer. OSI exclusively markets Novantrone(R) (mitoxantrone concentrate for injection) for the approved oncology indications and markets Gelclair(R) Bioadherent Oral Gel for the relief of pain associated with oral mucositis. This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, the completion of clinical trials, the FDA review process and other governmental regulation, OSI's and its collaborators' abilities to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, the ability to effectively market products, and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. ### EX-99.3 6 y08086exv99w3.txt EX-99.3: PRESS RELEASE EXHIBIT 99.3 ((OSI)(TM) PHARMACEUTICALS LOGO) NEWS RELEASE Contact: OSI Pharmaceuticals, Inc. Burns McClellan (representing OSI) Kathy Galante Jonathan Nugent (Investors) Director Kathy Jones, Ph.D. (Media) Investor / Public Relations (212) 213-0006 631-962-2000 OSI PHARMACEUTICALS PRESENTS DATA ON THE IMPACT OF SMOKING ON THE BLOOD LEVELS OF TARCEVA AT THE 96TH ANNUAL MEETING OF THE AACR MELVILLE, N.Y., APRIL 20, 2005 - OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) presented data at the 96th Annual Meeting of the American Association for Cancer Research (AACR) showing that smoking results in a reduction in the blood levels of Tarceva(TM) (erlotinib) following oral dosing of the drug in healthy volunteers. Tarceva was approved by the FDA in November 2004 for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) after failure of at least one prior chemotherapy regimen. The findings, from a comparative clinical study on the effects of smoking on the pharmacokinetics of Tarceva in healthy (non-cancer patients) smokers and non-smokers, built upon observations made from an analysis of Tarceva exposure in lung cancer patients enrolled in the pivotal BR.21 Phase III trial that formed the basis of the Company's New Drug Application (NDA) for Tarceva. In the BR.21 trial the effect of Tarceva on survival was observed in both never smokers and smokers, however an apparently larger effect was observed in patients who never smoked. The Company intends to pursue studies in cancer patients in order to further explore whether an increase in Tarceva dose in smokers will result in enhanced clinical benefit. "We believe that effective dosing at or close to the maximum tolerated dose of Tarceva therapy for most lung cancer patients is an important component," stated Gabe Leung, Executive Vice President and President of Oncology at OSI Pharmaceuticals. "This observation reported at AACR may be of fundamental importance to the optimization of Tarceva treatment in the subset of lung cancer patients who are smokers." Marta Hamilton et al (abstract #6165) presented an analysis of the exposure/effects analysis based on the trough level concentrations and the population pharmacokinetics from the BR.21 study prior to describing the results from the subsequent comparative clinical study in healthy volunteers. The BR.21 analysis showed that of all the factors assessed, only smoking status was associated with potentially clinically relevant differences in Tarceva exposure. Tarceva is extensively metabolized by liver and lung enzymes including CYP1A1 and 1A2, these enzymes are known to be induced by cigarette smoking. As stated in the Tarceva package insert, smokers had a 24% higher rate of Tarceva clearance resulting in a reduction in the blood levels of Tarceva. Based on these observations a comparative study was conducted in 32 healthy male subjects, 16 smokers and 16 non-smokers. Patients were dosed at both 150mg and 300mg of Tarceva and a full pharmacokinetic profile assessed. At the 150mg dose smokers had approximately 36% of overall exposure to Tarceva (Area Under the Curve or AUC of 6718 ng.h/ml vs. 18,726 ng.h/ml) as compared to non-smokers. Further, the overall exposure achieved in studies at the 300mg dose was similar to that of non-smokers at the 150mg dose (19,049 ng.h/ml vs. 18,726 ng.h/ml). The authors concluded that Tarceva plasma profiles in current smokers were consistent with the hypothesis that reduced exposure results from induction of CYP1A1 and 1A2 enzymes and that studies in cancer patients should be conducted in order to explore whether an increase in Tarceva exposure in smokers will increase clinical benefit. ABOUT TARCEVA Tarceva is a small molecule designed to target the human epidermal growth factor receptor 1 (HER1) pathway, which is one of the factors critical to cell growth in non-small cell lung cancer (NSCLC). HER1, also known as EGFR, is a component of the HER signaling pathway, which plays a role in the formation and growth of numerous cancers. Tarceva is designed to inhibit the tyrosine kinase activity of the HER1 signaling pathway inside the cell, which may block tumor cell growth. Tarceva was approved by the FDA in November 2004 and by the Swiss health authority, Swissmedic, in March 2005. Tarceva is an oral tablet indicated for daily administration for the treatment of patients with locally advanced or metastatic NSCLC after failure of at least one prior chemotherapy regimen. Tarceva is the only EGFR inhibitor to have demonstrated a survival benefit in NSCLC. Results from two earlier large, randomized, placebo-controlled clinical trials in first-line advanced NSCLC patients showed no clinical benefit with concurrent administration of Tarceva with doublet platinum-based chemotherapy (carboplatin and paclitaxel or gemcitabine and cisplatin) and its use is not recommended in that setting. Additional early-stage trials of Tarceva are being conducted in other solid tumors. ABOUT TARCEVA SAFETY In the pivotal NSCLC trial, the most common adverse reactions in patients receiving Tarceva were rash and diarrhea. Grade three/four rash and diarrhea occurred in nine and six percent of Tarceva-treated patients, respectively. Rash and diarrhea each resulted in discontinuation of one percent of Tarceva-treated patients. Six and one percent of patients needed dose reduction for rash and diarrhea, respectively. Historically, there have been infrequent reports of serious interstitial lung disease (ILD), including fatalities, in patients receiving Tarceva for treatment of NSCLC or other advanced solid tumors. In the Phase III trial for NSCLC, severe pulmonary reactions, including potential cases of interstitial lung disease, were infrequent (0.8 percent) and were equally distributed between treatment arms. The overall incidence of ILD in Tarceva-treated patients from all studies was approximately 0.7 percent. ABOUT OSI PHARMACEUTICALS OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development and commercialization of high-quality pharmaceutical products that extend life or improve the quality of life for cancer and diabetes patients worldwide. OSI's primary business remains oncology, but the Company has a second business interest in the area of diabetes through its subsidiary, Prosidion Limited, based in the United Kingdom. Tarceva(TM) (erlotinib), OSI's flagship product, is the first drug discovered and developed by OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the ability to improve survival in non-small cell lung cancer and pancreatic cancer. OSI exclusively markets Novantrone(R) (mitoxantrone concentrate for injection) for the approved oncology indications and markets Gelclair(R) Bioadherent Oral Gel for the relief of pain associated with oral mucositis. This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, the completion of clinical trials, the FDA review process and other governmental regulation, OSI's and its collaborators' abilities to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, the ability to effectively market products, and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. ### EX-99.4 7 y08086exv99w4.txt EX-99.4: PRESS RELEASE EXHIBIT 99.4 ((OSI)(TM) PHARMACEUTICALS LOGO) NEWS RELEASE Contact: OSI Pharmaceuticals, Inc. Burns McClellan (representing OSI) Kathy Galante Jonathan Nugent (Investors) Director Kathy Jones, Ph.D. (Media) Investor / Public Relations (212) 213-0006 631-962-2000 OSI PHARMACEUTICALS ANNOUNCES REALIGNMENT AND STRENGTHENING OF THE COMPANY'S EXECUTIVE MANAGEMENT TEAM AND BOARD OF DIRECTORS - MICHAEL G. ATIEH APPOINTED EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER - - KATHARINE B. STEVENSON, APPOINTED TO THE BOARD OF DIRECTORS, WILL ASSUME CHAIRMANSHIP OF THE COMPANY'S AUDIT COMMITTEE - MELVILLE, N.Y., APRIL 21, 2005 - OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) announced today a series of appointments at the Board of Directors and executive management level which reflect a realignment and strengthening of the Company at the senior level. Michael G. Atieh will join the Company's senior management team as Executive Vice President and Chief Financial Officer, effective May 31, 2005. Mr. Atieh currently serves as an outside director of the Company and recently resigned as Chairman of the Board's Audit Committee. He will resign as a director effective with his new appointment. The Company's Board of Directors has appointed Ms. Katharine B. Stevenson to the board as an outside director and chair of the Company's audit committee effective May 1, 2005. Ms. Stevenson is currently Treasurer of Nortel Networks and serves as a director of Nortel Networks Inc., Nortel's U.S. subsidiary. Mr. Robert L. Van Nostrand will continue to serve as the Company's Chief Financial Officer until the end of May 2005 when he will assume the role of Senior Vice President and Chief Compliance Officer, a newly created position within the Company. Both Mr. Atieh and Mr. Van Nostrand will report to Dr. Colin Goddard, the Company's Chief Executive Officer. The reorganization follows the recent commercial launch of the Company's flagship product, Tarceva(TM) (erlotinib), and the recently completed acquisition of the minority interests in the Company's UK-based diabetes and obesity subsidiary, Prosidion Limited. "Evolving our strength and breadth of expertise as the Company grows is an essential ingredient to success," stated Robert A. Ingram, Chairman of the Board of Directors of OSI Pharmaceuticals. "I am delighted that we have been able to attract someone of Kate's caliber and integrity to chair the Audit Committee and I look forward to working with Mike in his new role as CFO." "These changes reflect the increased complexity of the Company as we prepare for the next stage of our growth," stated Colin Goddard, Ph.D., Chief Executive Officer of the Company. "Mike's extensive experience on the commercial side of the pharmaceutical industry, his past roles in government affairs and investor relations, and his strength and experience on the financial side will add significantly to the senior management team. I am also delighted that Bob, who has contributed so much to the Company's journey to date, will continue to play an essential role as Chief Compliance Officer where his intimate knowledge of the business will be of immense value in the new regulatory environment." The Company also announced that it will continue to operate two separately focused business teams around its efforts in the oncology and diabetes/obesity arenas. Mr. Gabe Leung has assumed the role of Executive Vice President and President of (OSI) Oncology and Dr. Anker Lundemose has assumed the role of Executive Vice President and President of (OSI) Prosidion. Additionally, a new Pharmaceutical Development and Technical Operations Group, covering the regulatory affairs, drug safety, CMC (chemical, manufacturing and controls), quality assurance, toxicology and pharmacokinetics areas has been formed under the leadership of Mr. Robert Simon, who has assumed the role of Executive Vice President, in order to better meet these needs for both business teams. Each business team will continue to have separate commercial, clinical and research and development efforts. The Company also announced that Dr. Nicole Onetto, the Company's Chief Medical Officer is leaving the Company to pursue other interests, effective May 1, 2005. Dr. Pablo Cagnoni, who was recently appointed to the newly created position of Vice President of Medical Affairs and Translational Research, will serve as the senior medical officer for oncology clinical development on an interim basis pending recruitment of a Head of Clinical Oncology. The Company further announced the appointment of Dr. Jonathan Rachman as Vice President of Clinical Development for the diabetes/obesity team. Dr. Rachman joins OSI having successfully held various clinical positions at both Eli Lilly and Pfizer in the U.K. Dr. Karsten Witt will serve as the senior medical officer for drug safety in the Company. "We thank Nicole for her tremendous contributions over the last several years and wish her well in her new endeavors," commented Dr. Goddard. "We also congratulate Pablo and Jonathan on their new roles which, with the addition of translational research to the oncology team and clinical development to the Prosidion team, reflect our commitment to continue to broaden and deepen our expertise in the development area." INTRODUCING KATHARINE B. STEVENSON Kate Stevenson is treasurer at Nortel Networks. She is responsible for all treasury activity for the corporation including treasury operations, corporate and structured finance, credit, risk management, pension fund management and mergers and acquisitions. Kate serves as a director of a number of major Nortel subsidiaries, including Nortel Networks Inc., the U.S. operations of the company. Kate joined Nortel in 1995 from J.P. Morgan, a global investment banking firm, where she was Vice-President, Corporate Finance based primarily in New York. Her experience at J.P. Morgan included underwriting and arranging a wide variety of public and private debt offerings and derivative transactions. Kate joined J.P.Morgan in New York after graduating Magna Cum Laude from Harvard College. Kate will assume her role as an outside director and chair of the Audit Committee on May 1, 2005. INTRODUCING MICHAEL G. ATIEH Mike has most recently served as Chair of the OSI Audit Committee (from which he recently resigned) and will continue as an outside director until he takes up his appointment as Executive Vice President and Chief Financial Officer on May 31, 2005. He has been a director of the corporation since June 2003. Mike was recently Group President of Dendrite International and was previously Senior Vice-President and Chief Financial Officer at Dendrite. Having started his career as an audit manager at Arthur Young & Company (now Ernst & Young), Mike joined Merck and Company and held a number of senior positions from 1981-1994 including Director of Accounting, Director of Investor Relations, Vice-President Government Relations, Treasurer, and Vice-President of Public Affairs. Mike then moved to the Merck-Medco Division of Merck where he held a number of positions including Senior Vice President of Sales and Business Development. Mike subsequently served as Vice President and General Manager of Merck's Medicare business initiative in their U.S. Human Health Division. ABOUT OSI PHARMACEUTICALS OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development and commercialization of high-quality pharmaceutical products that extend life or improve the quality of life for cancer and diabetes patients worldwide. OSI's primary business remains oncology, but the Company has a second business interest in the area of diabetes through its subsidiary, Prosidion Limited, based in the United Kingdom. Tarceva(TM) (erlotinib), OSI's flagship product, is the first drug discovered and developed by OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the ability to improve survival in non-small cell lung cancer and pancreatic cancer. OSI exclusively markets Novantrone(R) (mitoxantrone concentrate for injection) for the approved oncology indications and markets Gelclair(R) Bioadherent Oral Gel for the relief of pain associated with oral mucositis. This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, the completion of clinical trials, the FDA review process and other governmental regulation, OSI's and its collaborators' abilities to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, the ability to effectively market products, and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. ### -----END PRIVACY-ENHANCED MESSAGE-----