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                                                                     EXHIBIT 4.1


                            OSI PHARMACEUTICALS, INC.
                       NON-QUALIFIED STOCK OPTION PLAN FOR
                               FORMER EMPLOYEES OF
                           CADUS PHARMACEUTICAL CORP.

1.       Purpose

                  OSI Pharmaceuticals, Inc. (the "Company") has acquired certain
         of the assets of Cadus Pharmaceutical Corp. ("Cadus"). In connection
         therewith, the Company has adopted this Non-Qualified Stock Option Plan
         for Former Employees of Cadus Pharmaceutical Corp. (the "Plan") as an
         incentive to induce certain former employees of Cadus to accept
         employment with, or become associated with, the Company or a parent or
         subsidiary of the Company, and to encourage them to acquire a
         proprietary interest in the Company through the ownership of common
         stock, par value $.01 per share (the "Common Stock"), of the Company.
         Such ownership will provide them with a more direct stake in the future
         welfare of the Company. No option granted under the Plan shall be
         considered an "incentive stock option" as defined in Section 422 of the
         Internal Revenue Code of 1986, as amended (the "Code").

                  As used herein, the term "parent" or "subsidiary" shall mean
         any present or future corporation which is or would be a "parent
         corporation" or "subsidiary corporation" of the Company as the term is
         defined in Section 424 of the Code (determined as if the Company were
         the employer corporation).

2.       Administration of the Plan

                  The Plan shall be administered by a committee (the
         "Committee") as appointed from time to time by the Board of Directors
         of the Company, which may be the Compensation Committee of the Board of
         Directors. Except as otherwise specifically provided herein, no person,
         other than members of the Committee, shall have any discretion as to
         decisions regarding the Plan. The Company may engage a third party to
         administer routine matters under the Plan, such as establishing and
         maintaining accounts for Plan participants and facilitating
         transactions by participants pursuant to the Plan.

                  In administering the Plan, the Committee may adopt rules and
         regulations for carrying out the Plan. The interpretations and
         decisions made by the Committee with regard to any question arising
         under the Plan shall be final and conclusive on all persons
         participating or eligible to participate in the Plan. Subject to the
         provisions of the Plan, the Committee shall determine the terms of all
         options granted pursuant to the Plan, including, but not limited to,
         the persons to whom, and the time or times at which, grants shall be
         made, the number of shares to be covered by each option, the duration
         of options, the exercisability of options, and the option price.

3.       Shares of Stock Subject to the Plan

                  Except as provided in paragraphs 6(h), 6(i) and 7 hereof, the
         number of shares that may be issued or transferred pursuant to the
         exercise of options granted under the Plan shall not exceed 415,000
         shares of Common Stock. Such shares may be authorized and unissued
         shares or previously issued shares acquired or to be acquired by the
         Company and held in treasury.

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4.       Eligibility

                  Options may be granted only to directors, officer, employees
         and consultants who are former employees of Cadus.

5.       Granting of options

                  No options pursuant to this Plan may be granted after ten
         years from the date of the closing of the Asset Purchase Agreement by
         and between the Company and Cadus. The date of the grant of any option
         shall be the date on which the Committee authorizes the grant of such
         option.

6.       Options

                  Options shall be evidenced by stock option agreements in such
         form, consistent with the Plan, as the Committee shall approve from
         time to time, which agreements need not be identical and shall be
         subject to the following terms and conditions:

                           (a)      Option Price. The purchase price under each
                  option shall be specified by the Committee, but shall in no
                  case be less than the greater of 50% of the Fair Market Value
                  of the Common Stock at the time the option is granted and the
                  par value of such Common Stock.

                           (b)      Medium and Time of Payment. Stock purchased
                  pursuant to the exercise of an option shall at the time of
                  purchase be paid for in full in cash, or, upon conditions
                  established by the Committee, by delivery of shares of Common
                  Stock owned by the recipient. If payment is made by the
                  delivery of shares, the value of the shares delivered shall be
                  the Fair Market Value of such shares on the date of exercise
                  of the option. In addition, unless otherwise provided by the
                  Committee, an "in the money" option may be exercised on a
                  "cashless" basis in exchange for the issuance to the optionee
                  (or other person entitled to exercise the option) of the
                  largest whole number of shares having an aggregate value equal
                  to the value of such option on the date of exercise. For this
                  purpose, the value of the shares delivered by the Company and
                  the value of the option being exercised shall be determined
                  based on the Fair Market Value of the Common Stock on the date
                  of exercise of the option. Upon receipt of payment and such
                  documentation as the Company may deem necessary to establish
                  compliance with the Securities Act of 1933, as amended (the
                  "Securities Act"), the Company shall, without stock transfer
                  tax to the optionee or other person entitled to exercise the
                  option, deliver to the person exercising the option a
                  certificate or certificates for such shares. It shall be a
                  condition to the performance of the Company's obligation to
                  issue or transfer Common Stock upon exercise of an option or
                  options that the optionee pay, or make provision satisfactory
                  to the Company for the payment of, any taxes (other than stock
                  transfer taxes) the Company is obligated to collect with
                  respect to the issue or transfer of Common Stock upon such
                  exercise, including any federal, state, or local withholding
                  taxes.

                           (c)      Waiting Period. The waiting period and time
                  for exercising an option shall be prescribed by the Committee
                  in each particular case; provided, however, that no option may
                  be exercised after 10 years from the date it is granted.

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                           (d)      Rights as a Stockholder. A recipient of
                  options shall have no rights as a stockholder with respect to
                  any shares issuable or transferable upon exercise thereof
                  until the date a stock certificate is issued to him for such
                  shares. Except as otherwise expressly provided in the Plan, no
                  adjustment shall be made for dividends or other rights for
                  which the record date is prior to the date such stock
                  certificate is issued.

                           (e)      Non-Assignability of Options. Except as may
                  otherwise be specifically provided by the Committee, no option
                  shall be assignable or transferable by the recipient except by
                  will or by the laws of descent and distribution. During the
                  lifetime of a recipient, except as may otherwise be
                  specifically provided by the Committee, options shall be
                  exercisable only by such recipient. If the Committee approves
                  provisions in any particular case allowing for assignment or
                  transfer of an option, then such option will nonetheless be
                  subject to a six-month holding period commencing on the date
                  of grant during which period the recipient will not be
                  permitted to assign or transfer such option, unless the
                  Committee further specifically provides for the assignability
                  or transferability of such option during this period. See
                  paragraph 8 hereof for restrictions on sale of shares.

                           (f)      Effect of Termination of Employment. If a
                  recipient's employment (or service as an officer, director or
                  consultant) shall terminate for any reason, other than death
                  or Retirement (as defined below), the right of the recipient
                  to exercise any option otherwise exercisable on the date of
                  such termination shall expire unless such right is exercised
                  within a period of 90 days after the date of such termination.
                  The term "Retirement" shall mean the voluntary termination of
                  employment (or service as an officer, director or consultant)
                  by a recipient who has attained the age of 55 and who has
                  completed at least five years of service with the Company. If
                  a recipient's employment (or service as an officer, director
                  or consultant) shall terminate because of death or Retirement,
                  the right of the recipient to exercise any option otherwise
                  exercisable on the date of such termination shall be
                  unaffected by such termination and shall continue until the
                  normal expiration of such option. Option rights shall not be
                  affected by any change of employment as long as the recipient
                  continues to be employed by either the Company or a parent or
                  subsidiary of the Company. In no event, however, shall an
                  option be exercisable after the expiration of its original
                  term as determined by the Committee pursuant to subparagraph
                  6(c) above. The Committee may, if it determines that to do so
                  would be in the Company's best interests, provide in a
                  specific case or cases for the exercise of options which would
                  otherwise terminate upon termination of employment with the
                  Company for any reason, upon such terms and conditions as the
                  Committee determines to be appropriate. Nothing in the Plan or
                  in any option agreement shall confer any right to continue in
                  the employ of the Company or any parent or subsidiary of the
                  Company or interfere in any way with the right of the Company
                  or any parent or subsidiary of the Company to terminate the
                  employment of a recipient at any time.

                           (g)      Leave of Absence. In the case of a recipient
                  on an approved leave of absence, the Committee may, if it
                  determines that to do so would be in the best interests of the
                  Company, provide in a specific case for continuation of
                  options during such leave of absence, such continuation to be
                  on such terms and conditions as the Committee determines to be
                  appropriate, except that in no event shall an option be
                  exercisable after 10 years from the date it is granted.

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                           (h)      Recapitalization. In the event that
                  dividends payable in Common Stock during any fiscal year of
                  the Company exceed in the aggregate five percent of the Common
                  Stock issued and outstanding at the beginning of the year, or
                  in the event there is during any fiscal year of the Company
                  one or more splits, subdivisions, or combinations of shares of
                  Common Stock resulting in an increase or decrease by more than
                  five percent of the shares outstanding at the beginning of the
                  year, the number of shares available under the Plan shall be
                  increased or decreased proportionately, as the case may be,
                  and the number of shares deliverable upon the exercise
                  thereafter of any options theretofore granted shall be
                  increased or decreased proportionately, as the case may be,
                  without change in the aggregate purchase price. Common Stock
                  dividends, splits, subdivisions, or combinations during any
                  fiscal year that do not exceed in the aggregate five percent
                  of the Common Stock issued and outstanding at the beginning of
                  such year shall be ignored for purposes of the Plan. All
                  adjustments shall be made as of the day such action
                  necessitating such adjustment becomes effective.

                           (i)      Sale or Reorganization. In case the Company
                  is merged or consolidated with another corporation, or in case
                  the property or stock of the Company is acquired by another
                  corporation, or in case of a separation, reorganization, or
                  liquidation of the Company, the Board of Directors of the
                  Company, or the board of directors of any corporation assuming
                  the obligations of the Company hereunder, shall either (i)
                  make appropriate provisions for the protection of any
                  outstanding options by the substitution on an equitable basis
                  of appropriate stock of the Company, or appropriate stock or
                  options of the merged, consolidated, or otherwise reorganized
                  corporation, or (ii) give written notice to optionees that
                  their options, which will become immediately exercisable
                  notwithstanding any waiting period otherwise prescribed by the
                  Committee, must be exercised within 30 days of the date of
                  such notice or they will be terminated.

                           (j)      General Restrictions. Each option granted
                  under the Plan shall be subject to the requirement that, if at
                  any time the Board of Directors shall determine, in its
                  discretion, that the listing, registration, or qualification
                  of the shares issuable or transferable upon exercise thereof
                  upon any securities exchange or under any state or federal
                  law, or the consent or approval of any governmental regulatory
                  body is necessary or desirable as a condition of, or in
                  connection with, the granting of such option or the issue,
                  transfer, or purchase of shares thereunder, such option may
                  not be exercised in whole or in part unless such listing,
                  registration, qualification, consent, or approval shall have
                  been effected or obtained free of any conditions not
                  acceptable to the Board of Directors.

                           The Company shall not be obligated to sell or issue
                  any shares of Common Stock in any manner in contravention of
                  the Securities Act, the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act"), the rules and regulations of the
                  Securities and Exchange Commission, any state securities law,
                  the rules and regulations promulgated thereunder or the rules
                  and regulations of any securities exchange or over the counter
                  market on which the Common Stock is listed or in which it is
                  included for quotation. The Board of Directors may, in
                  connection with the granting of each option, require the
                  individual to whom the option is to be granted to enter into
                  an agreement with the Company stating that as a condition
                  precedent to each exercise of the option, in whole or in part,
                  he shall, if then required by the Company, represent to the
                  Company in writing

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                  that such exercise is for investment only and not with a view
                  to distribution, and also setting forth such other terms and
                  conditions as the Committee may prescribe. Such agreements may
                  also, in the discretion of the Committee, contain provisions
                  requiring the forfeiture of any options granted and/or Common
                  Stock held, in the event of the termination of employment or
                  association, as the case may be, of the optionee with the
                  Company. Upon any forfeiture of Common Stock pursuant to an
                  agreement authorized by the preceding sentence, the Company
                  shall pay consideration for such Common Stock to the optionee,
                  pursuant to any such agreement, without interest thereon.

                           (k)      "Fair Market Value." Fair Market Value for
                  all purposes under the Plan shall mean the closing price of
                  shares of Common Stock, as reported in The Wall Street
                  Journal, in the NASDAQ National Market Issues or similar
                  successor consolidated transactions reports (or a similar
                  consolidated transactions report for the exchange on which the
                  shares of Common Stock are then trading) for the relevant
                  date, or if no sales of shares of Common Stock were made on
                  such date, the average of the high and low sale prices of
                  shares as reported in such composite transaction report for
                  the preceding day on which sales of shares were made. If the
                  shares are not listed on a national securities exchange or
                  included for quotation in the NASDAQ National Market System at
                  the time Fair Market Value is to be determined, then Fair
                  Market Value shall be determined by the Committee in good
                  faith pursuant to such method as to the Committee deems
                  appropriate and equitable. Under no circumstances shall the
                  Fair Market Value of a share of Common Stock be less than its
                  par value.

7.       Termination and Amendment of the Plan

                  The Board of Directors or the Committee shall have the right
         to amend, suspend, or terminate the Plan at any time; provided,
         however, that no such action shall affect or in any way impair the
         rights of a recipient under any option right theretofore granted under
         the Plan; and, provided, further, that unless first duly approved by
         the stockholders of the Company entitled to vote thereon at a meeting
         (which may be the annual meeting) duly called and held for such
         purpose, except as provided in subparagraphs 6(h) and 6(i), no
         amendment or change shall be made in the Plan increasing the total
         number of shares which may be issued or transferred under the Plan,
         materially increasing the benefits to Plan participants or modifying
         the requirements as to eligibility for participation in the Plan.

8.       Restriction on Sale of Shares

                  No stock acquired by an optionee upon exercise of an option
         granted hereunder may be disposed of by the optionee (or other person
         eligible to exercise the option) within six months from the date such
         option was granted, unless otherwise provided by the Committee.

9.       Effective Date of the Plan

                  This Plan shall become effective upon the closing of the Asset
         Purchase Agreement by and between the Company and Cadus. The Plan shall
         terminate after ten years from the date of the closing of the Asset
         Purchase Agreement by and between the Company and Cadus, or on such
         earlier date as the Board of Directors or the Committee may determine.
         Any option outstanding at the termination date shall remain outstanding
         until it has either expired or has been exercised.

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10.      Compliance with Rule 16b-3

                  With respect to persons subject to Section 16 of the Exchange
         Act, transactions under this Plan are intended to comply with all
         applicable conditions of Rule 16b-3 or its successors. To the extent
         any provision of the Plan or action by the Committee (or any other
         person on behalf of the Committee or the Company) fails to so comply,
         it shall be deemed null and void, to the extent permitted by law and
         deemed advisable by the Committee.