EX-10.63






Exhibit 10.63




Compensatory Arrangements for Executive Officers




     The Compensation Committee (the “Committee”) of the Board of Directors of OSI Pharmaceuticals,
Inc. (“OSI” or the “Company”) approved the 2009 salaries and 2008 cash bonuses for OSI’s named
executive officers (as that term is defined in Item 402 of Regulation S-K) as set forth in OSI’s
proxy statement dated May 2, 2008 (the “2008 Proxy”). The following table sets forth the annual
base salary level of such named executive officers for 2009 and the 2008 cash bonuses for each such
officer as well as the 2009 annual base salary of the Company’s current chief financial officer:



	 	 	 	 	 	 	 	 	 
	Name and Position	 	2009 Base Salary	 	 	2008 Bonus	 
	Colin Goddard, Ph.D.
	 	$	640,000	 	 	$	705,000	 
	Chief Executive Officer
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Michael G. Atieh (1)
	 	$	—	 	 	$	233,000	 
	Former Executive Vice President, Chief Financial Officer and Treasurer
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Gabriel Leung
	 	$	455,000	 	 	$	235,000	 
	Executive Vice President and President, (OSI) Oncology
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Pierre Legault (2)
	 	$	450,000	 	 	$	—	 
	Executive Vice President, Chief Financial Officer and Treasurer
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Anker Lundemose, M.D., Ph.D., D.Sc.
	 	£	236,000	 	 	£	130,000	 
	Executive Vice President and President, (OSI) Prosidion
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Robert L. Simon
	 	$	415,000	 	 	$	223,000	 
	Executive Vice President, Pharmaceutical Development and Manufacturing
	 	 	 	 	 	 	 	 









 




			
	(1)	 	Mr. Atieh retired from his position as the Company’s Chief Financial Officer and Treasurer
effective December 29, 2008 and its Executive Vice President effective January 5, 2009, and
received a 2008 bonus in accordance with the terms of his employment agreement.
	 
	(2)	 	Mr. Legault’s employment as Executive Vice President, Chief Financial Officer and Treasurer
commenced on December 29, 2008. As such, he was not entitled to a bonus for 2008.





Cash Bonuses




     The 2008 bonus awards were computed in accordance with the Committee’s policy of awarding
annual bonuses for executive officers, as disclosed in the Compensation Discussion and Analysis
section of the 2008 Proxy. The bonus awards were paid out in February 2009 based on individual and
corporate performance measurers considered in December 2008 and February 2009, respectively. OSI
has established a discretionary annual cash bonus program for all of its employees, including its
executive officers. The bonus targets, which are a percentage of base salary, for all of its
executive officers are based upon their respective grade levels. The amount of bonus actually paid
to its employees, including the executive officers (other than OSI’s CEO), is a function of the
corporate and individual performance measures. The CEO’s bonus is based entirely on corporate
performance measures. Consistent with its compensation objectives, a larger portion of the bonuses for OSI’s executive officers is tied to
corporate performance as compared to individual performance. In addition, the performance of their
respective department(s) or function group(s) is the largest component in measuring the individual
performance for executive officers (other than the CEO).



 









 





     The actual amount of the bonuses paid to its executive officers, including the CEO, varies
depending upon the Company’s performance (which is 80% of the total bonus) and, for executive
officers other than the CEO, such executive officers’ individual performance (which is 20% of the
total bonus). The corporate component has ranged between 80% and 150% of the corporate component
target and the individual performance component has ranged between approximately 80% and 130% of
the individual performance component target depending upon an executive’s individual performance
rating. In 2008, the Committee set the corporate component at 110% for all executive officers,
including the CEO. The individual component of the annual cash bonus is based on the executive
officer’s individual performance rating, determined in the manner discussed above. For 2008, the
individual performance component of the annual cash bonus was set between approximately 80% and
130% for executive officers who received one of the top three performance ratings



     The bonus targets for the named executive officers are either set in accordance with their
employment agreements or are based upon their respective grade levels. The 2009 bonus targets
(which represent a percentage of base salary) for the named executive officers are as follows:



	 	 	 	 	 
	Name	 	Target
	Colin Goddard, Ph.D.
	 	 	100	%
	Pierre Legault
	 	 	55	%
	Gabriel Leung
	 	 	50	%
	Anker Lundemose, M.D., Ph.D., D.Sc.
	 	 	50	%
	Robert L. Simon
	 	 	50	%






Equity Awards




     OSI grants equity awards of stock options, restricted stock, restricted stock units and/or
deferred stock units to certain employees under its Amended and Restated Stock Incentive Plan. Most
of its employees, including its executive officers, receive an annual equity grant in December. The
total amount of equity to be granted is initially determined by the CEO in consultation with the
Senior Vice President of Human Resources and Training, and then recommended to the Committee for
approval. The exercise price for all stock options is set at the closing price of OSI’s common
stock on the date that the Committee approves the annual grant, with such approval date serving as
the date of grant. Equity grants to the named executive officers are designed to provide a level of
equity compensation that is at the approximate 50th percentile of that awarded by OSI’s peer group
of companies. OSI determines the value of the grants provided to each executive officer. For 2008,
the named executive officers received grants within 20% of their target guidelines, with the
exception of Mr. Simon who received a grant of options and restricted stock units in excess of his
20% target guideline based on his individual performance rating.



     As noted above, Mr. Atieh retired from OSI effective January 5, 2009. In connection with his
retirement, the Committee approved the following: that all of Mr. Atieh’s unvested options as of
January 5, 2009 continue to vest for an additional three months and remain exercisable through the
life of the grant and that the exercise period for all of Mr. Atieh’s vested options, not meeting
the retirement provision of our incentive plan, as of January 5, 2009 that would terminate within
three months of January 5, 2009 be extended for an additional three months.



Perquisites




     OSI provides very few perquisites to its executive officers. Certain of its named executive
officers receive a reimbursement of relocation expenses, temporary housing allowance, legal fees
and home security systems.




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