**Exhibit 10.61****Compensatory Arrangements for Non-Employee Directors**     OSI Pharmaceuticals, Inc. (“OSI” or the “Company”) compensates its non-employee directors forservice on the Company’s Board of Directors (the “Board”) with both cash and equity compensationupon initial election and annual election to the Board. In 2007, the Compensation Committee of theBoard (the “Committee”) engaged Radford Consulting (“Radford”), its independent compensationconsultant, to evaluate OSI’s Board compensation. Upon evaluation and review, Radford, theCommittee and the Board determined that the compensation structure should be revised in order to(1) better align Board members’ compensation with their responsibilities and (2) align Boardcompensation with the more typical practices at peer companies. OSI’s current Board compensationprovides greater compensation upon initial election to the Board as opposed to subsequentelections. Pursuant to Radford’s recommendation and the Committee’s and Board’s review, the Boardapproved changes to the compensation structure (1) to compensate the Chairs of Board committees andservice on more than one committee and (2) in general, to decrease the amount of compensation uponinitial election to the Board and increase the amount of annual compensation. The Board approvedthe changes effective beginning the date of the Company’s 2008 Annual Meeting of Stockholders inJune (the “Annual Meeting”). In addition, in order to be more equitable and avoid any windfalls,the Board approved a requirement that all members of the Board elected to the Board prior to theAnnual Meeting must serve at least three years on the Board before they are eligible to receive theincreases to their annual equity grants described below.Annual Retainer Fee:     The annual cash retainer fee payable to the members of the Board until the Annual Meeting isset forth in the table below.     Chair of the Board $150,000 Chair of the Audit Committee $90,000 Member of the Audit Committee $75,000 Member of Other Board Committee $62,500      The annual cash retainer fee payable to the members of the Board of Directors effective afterthe Annual Meeting is set forth in the table below.     BaselineCash Compensation                           Board Member Retainer Fee $50,000      AdditionalCash Compensation                       Chair of Board $100,000 Chair of Audit Committee $30,000 Chair of Compensation Committee $15,000 Chair of Corporate Governance and Nominating Committee $10,000 Chair of All Other Committees $10,000 Member of Audit Committee $15,000 Member of Compensation Committee $7,500 Member of Corporate Governance and Nominating Committee $5,000 Member of All Other Committees (excluding the Executive Committee) $5,000 
 

 
Option Grants and Other Stock Awards:*Initial Grants*     Each non-employee director receives an initial grant of options upon his or her initialelection to the Board. Until the Annual Meeting, each individual who becomes a director with theexception of the Chairman of the Board receives an initial option to purchase 25,000 shares ofcommon stock and an award of 8,500 shares of restricted stock, restricted stock units or deferredstock units. Until the Annual Meeting, the Chairman receives an additional grant of options 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. After the Annual Meeting, each individual whobecomes a director will receive an option to purchase 15,000 shares of common stock and an award of5,000 shares of restricted stock, restricted stock units or deferred stock units upon his or herinitial election to the Board.*Annual Grants*     In addition to initial equity awards, non-employee directors receive annual equity grants.Until the Annual Meeting, non-employee directors with the exception of the Chairman of the Boardreceive an option to purchase 3,000 shares of common stock and an award of 1,500 shares ofrestricted stock, restricted stock units or deferred stock units. Until the Annual Meeting, theChairman of the Board receives an option to purchase 6,000 shares of common stock and an award of3,000 shares of restricted stock, restricted stock units or deferred stock units. After the AnnualMeeting, each non-employee director will receive options to purchase 7,500 shares of common stockand an award of 2,500 shares of restricted stock, restricted stock units or deferred stock unitsupon each re-election for a one-year Board term so long as each current director has served 3 yearson the Board. After the Annual Meeting, the Chairman will receive options to purchase 10,000shares of common stock and an award of 4,000 shares of restricted stock, restricted stock units ordeferred stock units upon re-election for a one-year Board term.*Forms of Awards*     The restricted stock and restricted stock units represent the right of a director to receiveone share of OSI common stock upon vesting. Each deferred stock unit represents the right of adirector to receive one share of OSI common stock upon the earlier of the director’s terminationfrom service on the Board or on a date no earlier than two years from the date of grant, asdesignated by the director.       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 in theCompany’s Amended and Restated Stock Incentive Plan. The exercise price of all option awards isequal to 100% of the fair market value 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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