EX-10.1






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.




 









 








          (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.




2









 








          (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.




3









 








          (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



4









 







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



5









 







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



6









 






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



7









 







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



8









 






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.



9









 





               (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.



10









 





          (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



11









 






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



12









 






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



13









 






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



14









 






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.




15









 





          (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



16









 






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.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




17









 








     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 	 
	 	 	 
	 




18