Exhibit 10.4
EXECUTION COPY

     
 
   
 
  June 14, 2006
 
   
 
  Amended June 21, 2006

Colin Goddard, Ph.D.
c/o OSI Pharmaceuticals, Inc.
41 Pinelawn Road
Melville, New York 11747

    Re:      Employment Agreement

Dear Colin:
     This letter is to confirm our understanding with respect to (i) your
continuing employment by OSI Pharmaceuticals, Inc. (“OSI” and, together with
Company Affiliates (as defined below), the “Company”), (ii) your agreement not
to solicit employees or customers of the Company or any Company Affiliate,
(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”). As used herein, any
presently existing parent, subsidiary or affiliate of OSI is referred to as a
“Company Affiliate.” 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, as the Chief Executive Officer (the “CEO”)
of the Company, reporting solely to the Company’s Board of Directors (the
“Board”). You will have the responsibilities, duties and authority customarily
performed, undertaken and exercised by a person in a similar executive capacity.
The principal location at which you will perform such services will be the
Company’s headquarters presently located at 41 Pinelawn 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 necessary business time
and energies to the business and affairs

 

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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. Notwithstanding the foregoing, nothing contained herein shall limit
your ability to manage your own personal investments on your own personal time
or from serving on no more than two outside boards of directors or advisory
boards of a public company, so long as such activities do not (i) involve a
business or organization which competes with the Company or any Company
Affiliate (except, in the case of personal investments, you may own up to 1% of
the outstanding capital stock of a corporation if, at the time of your
acquisition such stock is listed on a national securities exchange, is reported
on NASDAQ, or is regularly traded in the over-the-counter market by a member of
a national securities exchange), (ii) interfere or conflict with the performance
of your duties as an employee of the Company or any Company Affiliate of the
Company, or (iii) otherwise result in a breach of any of the provisions of this
Agreement.
     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 the date hereof (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 for an additional 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 $600,000 (the “Base Salary”). Your
Base Salary will be reviewed on an annual basis each December (or such other
time as determined by the Compensation Committee of the Board), commencing with
December, 2006, and may be increased (but not decreased) as a result of any such
review. 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 Employment Term, beginning with the 2006 fiscal year,
you will be eligible to receive a target bonus of 100% of the Base Salary,
determined and payable in accordance with the Company’s practices applicable to
bonuses paid to its executives and payable on such date as the Company pays
bonuses to its executives generally but no later than February 28th of the year
following the year for which such bonus is paid. 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. On each date that annual stock options or
other equity compensation, including restricted stock, restricted stock units or
deferred stock units, are granted by the Company to its executive management
group, so long as you then remain in the

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employ of the Company, the Company will grant you stock options or other equity
compensation (an “Annual Equity Grant”) in respect of a number of shares of
Common Stock to be determined by the Compensation Committee of the Board based
upon your grade level, which during the Employment Term shall be the highest of
any of the annual equity grants to executive officers of the Company. The terms
and conditions of each Annual Equity Grant will be as set forth in the OSI
Pharmaceuticals, Inc. Amended and Restated Stock Incentive Plan and accompanying
agreement or agreements evidencing the grant or other applicable plans or
agreements then in effect with regard to such Annual Equity Grant.
Notwithstanding the foregoing, each Annual Equity Grant (as well as stock
options and other equity compensation granted prior to the date of this
Agreement) shall vest and be fully exercisable upon a Change in Control (as
defined in Section 7) or upon a termination of your employment by the Company
“without cause” (as defined in Section 4(c)) or by you for “good reason” (as
defined in Section 4(d)).
          (d) Vacation. You will be entitled to 25 paid vacation days in each
calendar year, including 2006, 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. Without limiting the foregoing, during the Employment Term
you will be provided with individual long term disability coverage (which the
Company may provide directly or through insurance) providing benefits equal to
at least 65% of your Base Salary if you experience a Permanent Disability (as
defined in Section 4(b)). The Company will structure all applicable premium
payments so that any disability payments made to you in the event of a Permanent
Disability will not be considered taxable income to you. Except as expressly
provided in this Agreement, the Company shall not be required to establish or
maintain any Fringe Benefits.
          (f) Company Car. The Company will provide you with an approved company
car and will reimburse you for related expenses in accordance with the Company’s
policy for its senior executives as in effect from time to time.
          (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 you are, by reason of any
medically determinable

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physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, unable to
perform substantially all of your duties under this Agreement. Determinations of
the foregoing shall be made 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 9(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 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 (to the
extent cure is possible) 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 (including as specifically
provided herein) unless you have previously consented to such reduction (which
consent may be given or withheld in your sole discretion);
     (ii) your failure to be reelected to the Board and, as a result thereof,
your service on the Board ceases;
     (iii) a reduction in your Base Salary or the target rate of your bonus;
     (iv) a material failure to pay or provide Fringe Benefits or other benefits
described in this Agreement or any other material breach of this Agreement by
the Company;
     (v) the Company’s requiring you to be based more than 50 miles from the
Company’s current headquarters in Melville, New York or to any location for
which the average commute from your residence exceeds one hour; or
     (vi) a Change in Control (as defined in Section 7).

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          (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, (ii) any accrued and unpaid vacation pay up to the date of
termination, and (iii) 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 (A) the numerator of which is the number of days in such fiscal year
through the termination date and (B) the denominator or which is 365 ((i),
(ii) and (iii) being collectively referred to as the “Accrued Compensation”).
          (b) Upon termination of your employment due to death or Permanent
Disability you (or your estate, as the case may be) will be entitled to receive
your Accrued Compensation.
          (c) Upon a termination of your employment by the Company “without
cause” or by you “for good reason”, or following the expiration of the
Employment Term if the Company elects not to renew the Employment Term, in
addition to Accrued Compensation, subject to Section 6(e) below you will become
entitled to (i) your Base Salary at the rate in effect as of the time of
termination of your employment for 36 months following the date of termination,
and (ii) continued coverage for 36 months following termination under any
health, dental and disability program in which you were participating as of the
time of termination of your employment, at levels comparable to those in effect
as of the time of such termination.
          (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

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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.
          (e) Any payments under Section 6(b) or (c) to which you may become
entitled will not commence until the first day of the seventh month following
the date your employment with the Company is terminated, and shall continue on
the first day of each month thereafter (as applicable), so as to avoid any
adverse tax consequences with respect to Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), or any successor statute, regulation and
guidance thereto. With respect to the continued monthly payments that may become
due to you under Section 6(c)(i) and (iii), on the first day of the seventh
month following the termination of your employment, you shall receive an amount
equal to seven monthly payments otherwise due to you under the terms of
Section 6(c)(i) and (iii), and thereafter, you shall receive a pro-rata monthly
payment on the first day of each month until all payments due under the terms of
Section 6(c)(i) and (iii) have been fully paid.
     7. Change in Control. For purposes of this Agreement, a “Change in Control”
shall occur on the date that:
          (a) any one person, entity or group acquires ownership of capital
stock of the Company that, together with the capital stock of the Company
already held by such person, entity or group, constitutes more than 50% of the
total fair market value or total voting power of the capital stock of the
Company; provided, however, if any one person, entity or group is considered to
own more than 50% of the total fair market value or total voting power of the
capital stock of the Company, the acquisition of additional capital stock by the
same person, entity or group shall not be deemed to be a Change in Control;
          (b) any one person, entity or group acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such
person, entity or group) ownership of capital stock of the Company possessing
35% or more of the total voting power of the capital stock of Company;
          (c) a majority of members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by the
nominating committee of the Board prior to the date of the appointment or
election; or
          (d) any one person, entity or group acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such
person, entity or group) assets from the Company that have a total gross fair
market value at least equal to 40% of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, a transfer of assets by the Company shall not
deemed to be a Change in Control if the assets are transferred to (i) a
shareholder of the Company (immediately before the asset transfer) in exchange
for or with respect to its capital stock in the Company, (ii) an entity, 50% or
more of the total value or voting power of which is owned, directly or
indirectly, by the Company, (iii) a person, entity or group that owns, directly
or indirectly, 50% or more of the total value or voting power of all the
outstanding capital stock of the Company, or

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(iv) an entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly, by a person, entity or group described in
subparagraph (iii) above. In all respects, the definition of “Change in Control”
shall be interpreted to comply with Code Section 409A, and the provisions of
Treasury Notice 2005-1, and any successor statute, regulation and guidance
thereto.
     8. Excise Tax. If it is determined that the amounts payable to you under
this Agreement, when considered together with any amounts payable to you in
connection with a Change in Control, cause such payments to be treated as excess
parachute payments within the meaning of Section 280G of the Code, then the
Company will make an additional “gross up” payment to you in order to pay for
any additional tax imposed on you pursuant to Section 4999 of the Code.
     9. 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.
     (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 9 (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

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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 or is lawfully and in good faith made available to you by a third
party under no obligation of confidentiality with respect thereto.
          (b) Covenants. While you are employed hereunder and for a period of
six months 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
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.

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          (c) Reasonableness of Restrictions. You understand that the provisions
set forth in Section 9(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 9, that employer can take such action as to
avoid your breach of this Section 9.
          (d) Survival of Acknowledgements and Agreements. Your acknowledgements
and agreements set forth in this Section 9 will survive the termination of this
Agreement and the termination of your employment hereunder for any reason or for
no reason.
     10. 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 10 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 10 will survive indefinitely any termination of this
Agreement and/or any termination of your employment hereunder for any reason or
for no reason.
     11. 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, 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

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(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 reasonably 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 will compensate you at a
reasonable agreed upon daily rate for your time, 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 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.
     12. 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.
     13. 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.
     14. 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

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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, including your existing Employment Agreement dated as
of April 30, 1998. No statement, representation, warranty, covenant or agreement
of any kind not expressly set forth in this 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. Notwithstanding the foregoing, the Company and you agree to
jointly execute an amendment to modify this Agreement to the extent necessary to
comply with the requirements of Code Section 409A, or any successor statute,
regulation and guidance thereto; provided that no such amendment shall increase
the total financial obligation of the Company under this Agreement.
          (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

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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 15 (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 9, 10 or 11 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 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 15(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 9, 10 or 11 of this

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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 seek 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 9, 10 or 11 of this Agreement. The
period during which the covenants contained in Section 9 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 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 6 will remain
in effect.
          (q) Expenses. The Company shall bear its own fees and expenses
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and shall pay or reimburse you for your fees and expenses
(including, legal fees and expenses) incurred in connection with the same.
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     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:
Name:   /s/ Robert Ingram
 
Robert A. Ingram    
 
  Title:   Chairman, duly authorized    

         
Accepted and Approved:
       
 
       
/s/ Colin Goddard
  6/21/2006    
 
Colin Goddard, Ph.D.
   Date    

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