Exhibit 10.1
Execution Copy
December 16, 2008
Mr. Pierre Legault
c/o OSI Pharmaceuticals, Inc.
41 Pinelawn Road
Melville, New York 11747
     Re: Employment Agreement
Dear Pierre:
     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 then existing 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, as Executive Vice President, Chief
Financial Officer and Treasurer, 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 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.

 

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          (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. 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, or (iii) otherwise result in a breach of
any of the provisions of this Agreement.
     2. Term. Your employment under this Agreement shall commence on
December 29, 2008 (the “Effective Date”) and shall continue until terminated in
accordance herewith.
     3. Compensation.
          (a) Base Salary. While you are employed hereunder, the Company will
pay you a base salary at the annual rate of $450,000 (the “Base Salary”). Your
Base Salary will be reviewed on an annual basis (or such other time as
determined by the CEO and the Compensation Committee of the Board of Directors
of the Company (the “Board” and such Committee, the “Compensation Committee”),
provided, however, that the Base Salary shall not be 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 Term of the Agreement, beginning with the 2009 fiscal
year, you will be eligible to receive a target bonus equal to 55% of the Base
Salary, 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
Compensation Committee, and is based upon a combination of personal and
corporate performance. Your split between personal and corporate performance
will be 15% personal performance and 85% corporate performance. Any bonus
payable to you hereunder shall be paid at the time bonuses are otherwise paid to
other executive officers of the Company, but in any event, by March 15 of the
calendar year following the year with respect to which such annual bonus is
earned.

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          (c) Equity Compensation.
               (i) Initial Grant. On the first business day of the month
following your commencement of employment hereunder (i.e., January 2, 2009) 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, as amended (the “Plan”), you will be granted a
non-qualified option (the “Initial Option”) to purchase 125,000 shares of the
Company’s common stock, par value, $.01 per share (the “Common Stock”). The
exercise price will be the fair market value of the Common Stock on the date of
grant. The Initial Option will have a term of seven years and will become
exercisable with respect to 1/3 of such shares on each of the third, fourth and
fifth anniversaries of the date of grant. Notwithstanding the foregoing, the
Initial Option shall vest and be fully exercisable upon a Change in Control (as
hereinafter defined) or upon a termination of your employment by the Company
“without cause” (as defined in Section 4 (e)) or by you for “good reason” (as
defined in Section 4(d)).
               (ii) Restricted Stock Units Grant. On the first business day of
the month following your commencement of employment hereunder (i.e., January 2,
2009), you will be granted restricted stock units with respect to 12,500 shares
of Common Stock. Twenty-five percent of the restricted stock units will vest,
and shares of Common Stock will become immediately distributable in respect
thereof, on each anniversary of the date of grant over a period of four years.
Notwithstanding the foregoing, the restricted stock units shall vest, and shares
will become immediately distributable in respect thereof (it being acknowledged
that any sale of other disposition of such shares is subject to the terms of the
OSI Pharmaceuticals, Inc. Insider Trading Policy), upon a Change in Control or
upon a termination of your employment by the Company “without cause” or by you
for “good reason”.
               (iii) Future Grants. On each date that annual stock options
and/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 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 based upon your grade level and an annual
evaluation of your performance by the CEO and Compensation Committee. The terms
and conditions of the Annual Equity Grant will be as set forth in the Plan and
the agreement or agreements accompanying such Annual Equity Grant.
Notwithstanding the foregoing, each Annual Equity Grant shall vest and be fully
exercisable upon a Change in Control or upon a termination of your employment by
the Company “without cause” or by you for “good reason”.
          (d) Vacation. You will be entitled to 20 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.

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          (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 New
York in accordance with the following:
               (i) Relocation Service. American International Relocation Company
(“American International”) will assist you in your relocation to New York.
               (ii) Expenses. The Company will reimburse you, either directly or
through American International, for all moving expenses relating to your
relocation to New York and incurred during your employment hereunder, including,
without limitation, expenses relating to packing and moving household goods,
temporary storage of household goods for a period of six months, closing costs
associated with the purchase of a new home in New York, expenses incurred by you
and/or your family relating to up to 10 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 lease or sublease amounts,
utilities, hotel or other accommodations, brokers’ fees). During this six-month
period, if needed and requested by you, the Company will reimburse you for the
costs of a rental car.
               (iii) Down-Payment Assistance. On the Effective Date, the Company
will pay you $134,615 as assistance for a down payment on the purchase of a home
in New York and to defray other miscellaneous and incidental expenses you may
incur while relocating.
               (iv) Pay-Back. If, within 12 months following the Effective Date,
you terminate your employment with the Company without “good reason”, you shall
within 60 days of such termination pay back to the Company 100% of the amounts
which had been theretofore paid to you pursuant to this Section 3(f).
               (v) Reverse Relocation Expenses. We recognize that you are
relocating to New York for the sole purpose of commencing employment with us.
Therefore, if within 12 months following the Effective Date, your employment is
either terminated by the Company “without cause” or by you for “good reason”,
the Company will reimburse you, either directly or through American
International (or such other relocation company used by the Company at the time
of such termination), for all packing and moving expenses, transfer taxes,
broker’s commissions and other closing costs, fees and expenses incurred in the
sale of your New York residence, and other

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expenses related to your relocation out of New York, provided that such expenses
are incurred within one year following such termination of your employment.
               (vi) Documentation. Reimbursement of the expenses described in
this Section 3(f)(ii) and (v) 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)(iii).
          (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. Your employment hereunder 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 a disability as described in
Treasury Regulation § 1.409A-3(i)(4)(i)(B).
          (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, each as amended, (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.” For
purposes of this Agreement, “good reason” shall mean the occurrence of any of
the events hereinafter set forth unless you have previously consented in writing
(which consent may be given or withheld in your sole discretion):
               (i) a material reduction in your duties, title, responsibilities,
authority, status, or reporting responsibilities;
               (ii) a reduction in your Base Salary or the target rate of your

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bonus;
               (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 other
location for which the average commute from your residence exceeds 45 minutes;
or
               (iv) any other material breach of this Agreement by the Company.
In order to invoke a termination for “good reason”, you must deliver a written
notice to the Company specifying the particular events or conditions which
constitute “good reason” within 30 days of the occurrence of the event or
condition. The Company shall have 30 days to cure the breach. In order to
terminate your employment, if at all, for “good reason”, you must terminate
employment within 7 days of the end of the cure period if the breach has not
been cured.
          (e) Termination of your employment by the Company “without cause” by
delivery by the Company to you of a Notice of Termination 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. 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”). Such amounts will be paid in a lump sum within seven days
following termination.
          (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) will become entitled to an amount equal to your target bonus for
the fiscal year in which your termination occurs, multiplied by a fraction
(i) the numerator of which is the number

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of days in such fiscal year through the termination date and (ii) the
denominator of which is the number of days in such fiscal year (a “Pro-rata
Bonus”). Such amounts will be paid in a lump sum within seven days following
termination.
          (c) Upon a termination of your employment (i) by the Company “without
cause” or (ii) by you for “good reason” or (iii) as a result of your resignation
for any reason within 60 days of a Change in Control, in addition to Accrued
Compensation, you will become entitled to (x) a lump sum equal to twice your
Base Salary and twice your target bonus, (y) your Pro-rata Bonus and any bonus
for the prior fiscal year earned but not yet paid at the time of termination,
and (z) Company—funded continued coverage following termination under any health
and dental program in which you were eligible to participate as of the time of
termination of your employment for the maximum period of time allowable by law
but in no event longer than 24 months following termination. The amounts
described in parts (x) and (y), above, will be paid in a lump sum within seven
days following termination. For avoidance of doubt, amounts payable hereunder
are intended to satisfy the requirements of the short-term deferral exemption
described in Treasury Regulation § 1.409A-1(b)(4).
          (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.
          (e) (i) Subject to Section 6(e)(ii) below, if the Total Payments (as
defined below) would result in the imposition of a Parachute Excise Tax (as
defined below) on you, the Company will make an additional payment to you in an
amount such that, after the payment of all federal and state income, employment
and excise taxes on both the Total Payments and the additional payment made
pursuant to this Section 6(e)(i), you will be in the same after-tax position as
if no Parachute Excise Tax had been imposed. Any additional payment made
pursuant to this paragraph will be paid by the Company at the time the
applicable Parachute Excise Tax is required to be withheld by the Company and
remitted to the relevant taxing authorities or, to the extent such excise tax is
not required to be withheld, 5 business days before it is required to be paid by
you to the relevant taxing authorities.
               (ii) Notwithstanding any other provision in this Agreement, no
additional payment will be made to you pursuant to Section 6(e)(i) and the Total
Payments will instead be reduced or limited to the Capped Amount (as defined
below), if the additional payment described above in Section 6(e)(i) would not
cause Total After-Tax Payments (as defined below) to exceed the economic value
of the Capped Amount (after reduction for all applicable taxes) by more than
10%. If a reduction to the Total Payments is required pursuant to this
paragraph, such reduction shall be made to the

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payments, rights or other benefits constituting the Total Payments in the order
that least diminishes the economic value of such payments, rights and benefits.
               (iii) For purposes of this Agreement:
                    (A) “Capped Amount” means the largest amount payable to you
without causing the application of a Parachute Excise Tax.
                    (B) “Parachute Excise Tax” means the federal excise tax
levied on “excess parachute payments” under Section 4999 of the Internal Revenue
Code (the “Code”) or any successor provision.
                    (C) “Total After-Tax Payments” means the total economic
value of all “parachute payments” (as that term is defined in Section 280G(b)(2)
of the Code) made to or for the benefit of Employee (whether made under this
Agreement or otherwise), after reduction for all applicable taxes (including,
without limitation, the Parachute Excise Tax).
                    (D) “Total Payments” means the total of all “parachute
payments” (as that term is defined in Section 280G(b)(2) of the Code, but
determined without regard to Section 280G(b)(2)(A)(ii)) made to or for your
benefit, whether made under this Agreement or otherwise.
     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

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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 (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.
The foregoing notwithstanding, no event or transaction will constitute a “Change
in Control” for purposes of Section 6 of this Agreement unless that event or
transaction also constitutes a “change in ownership” of the Company, a “change
in effective control” of the Company or a “change in the ownership of a
substantial portion of the assets” of the Company, as those terms are used in
Section 409A(a)(2)(v) of the Code and regulations issued thereunder.
     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.
               (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.

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               (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 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 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.
     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

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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 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. You here by acknowledge and agree that you do
not claim or intend to claim any right, title and interest in any Invention
(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

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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 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 there from 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

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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 it 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 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

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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) in 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 word 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 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.

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          (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 provisions of this
Agreement will survive to the extent necessary to achieve their intended effect.
          (q) Expenses. The Company shall pay or reimburse you for reasonable
legal fees and expenses incurred by you in connection with the preparation,
negotiation, execution and delivery of this Agreement upon presentation to the
Company of invoices for such fees and expenses.
     14. Section 409A.
          (a) To the extent that you would be subject to the additional 20% tax
imposed on certain deferred compensation arrangements pursuant to Section 409A
of the Code as a result of any provision of this Agreement, such provision shall
be deemed amended to the minimum extent necessary to avoid application of such
tax and the parties shall promptly execute any amendment reasonably necessary to
implement this Section 14.
          (b) For purposes of the application of Treasury Regulation §
1.409A-1(b)(4) (or any successor provision), each payment in a series of
payments will be deemed a separate payment.
          (c) If the termination of employment giving rise to the severance
benefits described in Section 6 is not a “separation from service” within the
meaning of Treasury Regulation § 1.409A-1(h)(1), then to the extent necessary to
avoid the imposition of any accelerated or additional tax under Section 409A of
the Code, such benefits will be deferred without interest until you experience a
separation from service.
          (d) If at the time of your separation from service, (i) you are a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by the Company from time to time), and
(ii) the Company makes a good faith determination that an amount payable to you
constitutes deferred compensation (within the meaning of Section 409A) the
payment of which is required to

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be delayed pursuant to the six-month delay rule set forth in Section 409A in
order to avoid taxes or penalties under Section 409A (“the Delay Period”), then
the Company will not pay such amount on the otherwise scheduled payment date but
will instead pay it in a lump sum on the first business day after such six-month
period. To the extent that any benefits to be provided during the Delay Period
is considered deferred compensation under Code Section 409A provided on account
of a “separation from service,” and such benefits are not otherwise exempt from
Code Section 409A, you shall pay the cost of such benefits during the Delay
Period, and the Company shall reimburse you, to the extent that such costs would
otherwise have been paid by the Company or to the extent that such benefits
would otherwise have been provided by the Company at no cost to you, the
Company’s share of the cost of such benefits upon expiration of the Delay
Period, and any remaining benefits shall be reimbursed or provided by the
Company in accordance with the procedures specified herein.
          (e) To the extent an expense or in-kind benefit provided pursuant to
this Agreement constitutes a “deferral of compensation” within the meaning of
Section 409A of the Code (1) the expenses will be reimbursed to you as promptly
as practical and in any event not later than the last day of the calendar year
after the calendar year in which the expenses are incurred, (2) the amount of
expenses eligible for reimbursement or in-kind benefits provided during any
calendar year will not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided in any other calendar year, (3) the right to
payment or reimbursement or in-kind benefits hereunder may not be liquidated or
exchanged for any other benefit.
     15. Directors’ and Officers’ Protection. During your employment and
thereafter, the Company agrees (a) that it will not amend its governing
documents (including, without limitation, its certificate of incorporation) in a
manner that provides you with lesser indemnification rights than those enjoyed
by then current officers or directors of the Company, and (b) that it will not
alter its directors’ and officers’ liability insurance coverage in such a way so
that you are not covered to the same extent and for so long as such coverage is
maintained for the benefit of then current officers and directors.
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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:   /s/ Colin Goddard         Name:   Colin Goddard, Ph.D.       
Title:   Chief Executive Officer     

          Accepted and Approved:
      /s/ Pierre Legault      December 16, 2008    Name:  Pierre Legault   
Date           

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