**EXHIBIT 10.7****Compensatory Arrangements for Non-Employee Directors**Annual Retainer Fee:     OSI Pharmaceuticals, Inc. (“OSI” or the “Company”) compensates its non-employee directors forservice on the Board of Directors. The annual cash retainer fee payable to the members of theBoard of Directors is set forth in the table below.          **Service**  **Annual Retainer Fee**  Chairman of the Board  $150,000   Chairman of the Audit Committee  $90,000   Member of Audit Committee  $75,000   Member of Other Board Committee  $62,500   Option Grants and Restricted Stock Awards:     Each non-employee director receives an initial grant of options under the Plan upon his or herinitial election to the Board. Each individual who becomes a director receives an initial optionto purchase 25,000 shares of common stock and an award of 8,500 shares of restricted stock,restricted stock units or deferred stock units upon his or her initial election to the Board.Future appointees to the position of Chairman of the Board will receive an additional option topurchase 25,000 shares of common stock and an additional award of 8,500 shares of restricted stock,restricted stock units or deferred stock units upon his or her initial election as Chairman. Therestricted stock and restricted stock units represent the right of a director to receive one shareof OSI common stock upon vesting. Each deferred stock unit represent the right of a director toreceive one share of OSI common stock upon the earlier of the director’s termination from serviceon the Board of Directors or on a date no earlier than two years from the date of grant, asdesignated by the director.     In addition to initial equity awards, non-employee directors receive annual equity grantsunder the Plan. Non-employee directors with the exception of the Chairman of the Board receive anoption to purchase 3,000 shares of common stock and an award of 1,500 shares of restricted stock,restricted stock units or deferred stock units upon each re-election for a one-year Board term.The Chairman of the Board receives an option to purchase 6,000 shares of common stock and an awardof 3,000 shares of restricted stock restricted stock units or deferred stock units upon re-electionfor a one-year Board term.     The stock option awards and restricted stock awards, including restricted stock units anddeferred stock units, granted to the directors after June 14, 2006 vest annually over four years ofthe date of grant. The option awards expire on the seventh anniversary of their respective grantdates, subject to the earlier expiration upon the occurrence of certain events set forth under theterms of the Plan. The exercise price of all option awards is equal to 100% of the fair marketvalue of the underlying common stock on the date of grant.
 

 
Post-Retirement Medical Benefits:     Prior to April 2007, we provided post-retirement medical and life insurance benefits toeligible employees and qualified dependents, and members of our Board of Directors. Eligibility wasbased on age and service requirements. These benefits are subject to deductibles, co-paymentprovisions and other limitations. In April 2007, we terminated this benefit and grandfathered thedirectors who were eligible for participation in the plan at the time of termination (Mr. White andDrs. Mehta and Granner).
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