EX-4.1



 






Exhibit
4.1




OSI PHARMACEUTICALS, INC.

STOCK INCENTIVE PLAN FOR PRE-MERGER EMPLOYEES OF

EYETECH PHARMACEUTICALS, INC.





	1.	 	Purpose





     Pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated August 21, 2005, by
and among OSI Pharmaceuticals, Inc. (the “Company”), Merger EP Corporation, a wholly-owned
subsidiary of the Company (“Merger Sub”), and Eyetech Pharmaceuticals, Inc. (“Eyetech”), subject to
approval of Eyetech stockholders and certain other conditions, Eyetech will merge with Merger Sub
(the “Merger”), and Eyetech, as the surviving corporation, will become a wholly-owned subsidiary of
the Company. In connection therewith, the Company has adopted this Stock Incentive Plan for
Pre-Merger Employees of Eyetech Pharmaceuticals, Inc. (the “Plan”) as an incentive to induce
certain persons who were employees of Eyetech prior to the effective date of the Merger
(“Pre-Merger Employees”) 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 Code.



     Pursuant to the Plan, the Company may grant: (i) Non-Qualified Stock Options; (ii) Stock
Appreciation Rights; (iii) Restricted Stock; and (iv) Stock Bonuses, as such terms are defined in
Section 2.




	2.	 	Definitions





     Capitalized terms not otherwise defined in the Plan shall have the following meanings:



          (a) “Award Agreement” shall mean a written agreement, in such form as the Committee shall
determine, that evidences the terms and conditions of a Stock Award granted under the Plan.



          (b) “Fair Market Value” on a specified date means the value of a share of Common Stock,
determined as follows:



               (i) if the Common Stock is listed on any established stock exchange or a national market
system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, Inc., its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the
day of determination, as reported in The Wall Street Journal or such other source as the Committee
deems reliable;



               (ii) if the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the



 









 







high bid and low asked prices for the Common Stock on the day of determination, as reported in
The Wall Street Journal or such other source as the Committee deems reliable; or



               (iii) in the absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Committee.



          (c) “Code” shall mean the Internal Revenue Code of 1986, as amended.



          (d) “Non-Qualified Stock Option” shall mean an option that is not an “incentive stock option”
within the meaning of Section 422 of the Code.



          (e) “Restricted Stock” shall mean an award of shares of Common Stock that is subject to
certain conditions on vesting and restrictions on transferability as provided in Section 8 of this
Plan.



          (f) “Stock Appreciation Right” shall mean a right to receive payment of the appreciated value
of shares of Common Stock as provided in Section 7 of this Plan.



          (g) “Stock Award” shall mean a Non-Qualified Stock Option, a Restricted Stock award, a Stock
Appreciation Right or a Stock Bonus award.



          (h) “Stock Bonus” shall mean a bonus award payable in shares of Common Stock as provided in
Section 9 of this Plan.




	3.	 	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 Stock Awards 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 Stock Award, and other terms and conditions of the Stock Award.



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	4.	 	Shares of Stock Subject to the Plan





     Except as provided in Section 10, the number of shares that may be issued or transferred
pursuant to Stock Awards granted under the Plan shall not exceed 800,000 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. Any shares subject to a Stock Award which for any
reason expires, is cancelled or is unexercised may again be subject to a Stock Award under the
Plan.




	5.	 	Eligibility





     Stock Awards may be granted to directors, officers, employees and consultants of the Company
or a parent or subsidiary of the Company who are Pre-Merger Employees of Eyetech and only for the
purpose set forth in Section 1.




	6.	 	Granting of Options





     The Committee may grant options to such persons eligible under the Plan as the Committee may
select from time to time. Such options shall be granted at such times, in such amounts and upon
such other terms and conditions as the Committee shall determine, which shall be evidenced under an
Award Agreement and subject to the following terms and conditions:



          (a) Option Price. The purchase price under each Non-Qualified Stock Option shall be not less
than 100% of the Fair Market Value of the Common Stock at the time the option is granted and not
less than the par value of the 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, if the Committee consents in its sole
discretion, an “in the money” Non-Qualified Stock 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.



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          (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.



          (d) Non-Assignability of Options. Except as may otherwise be specifically provided by the
Committee, no Non-Qualified Stock 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, Non-Qualified Stock Options
shall be exercisable only by such recipient. If the Committee approves provisions in any
particular case allowing for assignment or transfer of a Non-Qualified Stock 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.



          (e) 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. Unless otherwise determined by the Committee and defined in the
applicable Award Agreement, 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 60 and who has completed at least twenty 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. 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 Award 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.



          (f) 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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          (g) 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 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 options to
purchase stock 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.



          (h) Restrictions on Sale of Shares. No stock acquired by an optionee upon exercise of a
Non-Qualified Stock 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 Non-Qualified Stock Option
was granted, unless otherwise provided by the Committee.




	7.	 	Grant of Stock Appreciation Rights





     The Committee may grant Stock Appreciation Rights to such persons eligible under the Plan as
the Committee may select from time to time. Stock Appreciation Rights shall be granted at such
times, in such amounts and under such other terms and conditions as the Committee shall determine,
which terms and conditions shall be evidenced under an Award Agreement, subject to the terms of the
Plan. Subject to the terms and conditions of the Award Agreement, a Stock Appreciation Right
shall entitle the award recipient to exercise the Stock Appreciation Right, in whole or in part, in
exchange for a payment of shares of Common Stock, cash or a combination thereof, as determined by
the Committee and provided under the Award Agreement, equal in value to the excess of the Fair
Market Value of the shares of Common Stock underlying the Stock Appreciation Right, determined on
the date of exercise, over the base amount set forth in the Award Agreement for shares of Common
Stock underlying the Stock Appreciation Right, which base amount shall not be less than the Fair
Market Value of such Common Stock, determined as of the date the Stock Appreciation Right is
granted.




	8.	 	Grant of Restricted Stock





     The Committee may grant Restricted Stock awards to such persons eligible under the Plan as the
Committee may select from time to time. Restricted Stock awards shall be granted at such times, in
such amounts and under such other terms and conditions as the Committee shall determine, which
terms and conditions shall be evidenced under an Award Agreement, subject to the terms of the Plan.
The Award Agreement shall set forth any conditions on vesting and restrictions on transferability
that the Committee may determine is appropriate for the Restricted Stock award, including the
performance of future services or satisfaction of performance goals established by the Committee.
The books and records of the Company shall reflect the issuance of shares of Common Stock under a
Restricted Stock award and any applicable restrictions and limitations in such manner as the
Committee determines is appropriate. Unless otherwise



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provided in the Award Agreement, a recipient of a Restricted Stock award shall be the record
owner of the shares of Common Stock to which the Restricted Stock relates and shall have all voting
and dividend rights with respect to such shares of Common Stock.




	9.	 	Grant of Stock Bonus





     The Committee may grant Stock Bonus awards to such persons eligible under the Plan as the
Committee may select from time to time. Stock Bonus awards shall be granted at such times, in such
amounts and under such other terms and conditions as the Committee shall determine, which terms and
conditions shall be evidenced under an Award Agreement, subject to the terms of the Plan. Upon
satisfaction of any conditions, limitations and restrictions set forth in the Award Agreement, a
Stock Bonus award shall entitle the recipient to receive payment of a bonus described under the
Stock Bonus award in the form of shares of Common Stock of the Company. Prior to the date on which
a Stock Bonus award is required to be paid under an Award Agreement, the Stock Bonus award shall
constitute an unfunded, unsecured promise by the Company to distribute Common Stock in the future.




	10.	 	Adjustments in the Event of 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 issuable under Stock Awards theretofore granted shall be increased or
decreased proportionately, as the case may be, without change in the aggregate purchase price that
may be applicable thereto. 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.




	11.	 	Withholding of Applicable Taxes





     It shall be a condition to the performance of the Company’s obligation to issue or transfer
Common Stock or make a payment of cash pursuant to any Stock Award that the award recipient pay, or
make provision satisfactory to the Company for the payment of, any taxes (other than stock transfer
taxes) the Company or any subsidiary is obligated to collect with respect to the issuance or
transfer of Common Stock or the payment of cash under such Stock Award, including any applicable
federal, state, or local withholding or employment taxes.



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	12.	 	General Restrictions





     Each Stock Award 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 of Common Stock issuable or transferable under the Stock Award 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 the Stock Award or the issue or transfer, of shares of Common Stock thereunder,
shares of Common Stock issuable or transferable under any Stock Award shall not be issued or
transferred, 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 Stock
Awards, require the individual to whom the award is to be granted to enter into an agreement with
the Company stating that as a condition precedent to the receipt of shares of Common Stock issuable
or transferable under the Stock Award, in whole or in part, he shall, if then required by the
Company, represent to the Company in writing that such receipt 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 Stock Awards granted and/or Common Stock held, in the event of the
termination of employment or association, as the case may be, of the award recipient 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 award recipient,
pursuant to any such agreement, without interest thereon.




	13.	 	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 Stock Award theretofore granted under the Plan.




	14.	 	Term of the Plan





     The Plan shall terminate on November 9, 2015, or on such earlier date as the Board of
Directors or the Committee may determine. Any Stock Award outstanding at the termination date
shall remain outstanding until it has either expired or been exercised or cancelled pursuant to its
terms.



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	15.	 	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.




	16.	 	Rights as a Stockholder





     A recipient of a Stock Award shall have no rights as a stockholder with respect to any shares
issuable or transferable thereunder until the date a stock certificate is issued to him for such
shares unless otherwise provided in the Award Agreement under the Plan. 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.




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