EX-10.62





Exhibit 10.62




Compensatory Arrangements for Non-Employee Directors




     OSI Pharmaceuticals, Inc. (“OSI” or the “Company”) compensates its non-employee directors for
service on the Company’s Board of Directors (the “Board”) with both cash and equity compensation
upon initial election and annual election to the Board. In 2007, the Compensation Committee of the
Board (the “Committee”) engaged Radford Consulting (“Radford”), its independent compensation
consultant, to evaluate OSI’s Board compensation. Upon evaluation and review, Radford, the
Committee 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 Board
compensation with the more typical practices at peer companies. OSI’s former Board compensation
provided greater compensation upon initial election to the Board as opposed to subsequent
elections. Pursuant to Radford’s recommendation and the Committee’s and Board’s review, the Board
approved changes to the compensation structure, effective beginning the date of the Company’s 2008
Annual Meeting of Stockholders (the “2008 Annual Meeting”), (1) to compensate the Chairs of Board
committees and service on more than one committee and (2) in general, to decrease the amount of
compensation upon initial election to the Board and increase the amount of annual compensation. 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 the 2008 Annual Meeting must serve at least
three years on the Board before they are eligible to receive the revised annual equity grants
described below. Set forth below is a summary of the current Board compensation.



Annual Retainer Fee:




     Each of the non-employee directors of the Company receives an annual cash retainer fee as set
forth in the table below.



	 	 	 	 	 
	Baseline
Cash Compensation
	 	 	 	 
	Board Member Retainer Fee
	 	$	50,000	 
	 
	 	 	 	 
	Additional
Cash 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 to purchase 15,000 shares of
common stock and also receives an award of 5,000 shares of restricted stock, restricted stock units
or deferred stock units upon his or her initial election to the Board.



Annual Grants




     In addition to initial equity awards, non-employee directors receive annual equity grants.
Each non-employee director, not including the Chairman of the Board, receives options to purchase
7,500 shares of common stock and an award of 2,500 shares of restricted stock, restricted stock
units or deferred stock units upon each re-election for a one-year Board term, with the exception
of those directors who as of the 2008 Annual Meeting had not served three years on the Board. Such
directors receive an annual option 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 until they have served
three years on



 









 




the Board, at which time they would receive the grants described above. The Chairman of the Board
receives options to purchase 10,000 shares of common stock and an award of 4,000 shares of
restricted stock, restricted stock units or deferred 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 receive
one share of OSI common stock upon vesting. Each deferred stock unit represents the right of a
director to receive one share of OSI common stock upon the earlier of the director’s termination
from service on the Board or on a date no earlier than two years from the date of grant, as
designated by the director.



     The stock option awards and restricted stock awards, including restricted stock units and
deferred stock units, granted to the directors after June 14, 2006 vest annually over four years of
the date of grant. The option awards expire on the seventh anniversary of their respective grant
dates, subject to the earlier expiration upon the occurrence of certain events set forth in the
Company’s Amended and Restated Stock Incentive Plan. The exercise price of all option awards is
equal 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 to
eligible employees and qualified dependents, and members of our Board of Directors. Eligibility was
based on age and service requirements. These benefits are subject to deductibles, co-payment
provisions and other limitations. In April 2007, we terminated this benefit and grandfathered the
directors who were eligible for participation in the plan at the time of termination (Mr. White and
Drs. Mehta and Granner).



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