Document:

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.

2

 

	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.

8EX-4.2

 

Exhibit 4.2

OSI PHARMACEUTICALS, INC.

STOCK PLAN FOR ASSUMED OPTIONS OF PRE-MERGER

EMPLOYEES OF EYETECH PHARMACEUTICALS, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE NO.
	SECTION 1. ESTABLISHMENT AND PURPOSE	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2. ADMINISTRATION	 	 	1	 
	 
	 	 	 	 	 	 
	(A)

	 	COMMITTEES OF THE BOARD OF DIRECTORS
	 	 	1	 
	(B)

	 	AUTHORITY OF THE BOARD OF DIRECTORS
	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 3. ELIGIBILITY	 	 	1	 
	 
	 	 	 	 	 	 
	(A)

	 	GENERAL RULE
	 	 	1	 
	(B)

	 	TEN-PERCENT STOCKHOLDERS
	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 4. STOCK SUBJECT TO PLAN	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES	 	 	2	 
	 
	 	 	 	 	 	 
	(A)

	 	STOCK PURCHASE AGREEMENT
	 	 	2	 
	(B)

	 	DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS
	 	 	2	 
	(C)

	 	PURCHASE PRICE
	 	 	2	 
	(D)

	 	WITHHOLDING TAXES
	 	 	2	 
	(E)

	 	RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING
	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 6. TERMS AND CONDITIONS OF OPTIONS	 	 	3	 
	 
	 	 	 	 	 	 
	(A)

	 	STOCK OPTION AGREEMENT
	 	 	3	 
	(B)

	 	NUMBER OF SHARES
	 	 	3	 
	(C)

	 	EXERCISE PRICE
	 	 	3	 
	(D)

	 	EXERCISABILITY
	 	 	3	 
	(E)

	 	ACCELERATED EXERCISABILITY
	 	 	3	 
	(F)

	 	BASIC TERM
	 	 	4	 
	(G)

	 	TERMINATION OF SERVICE (EXCEPT BY DEATH)
	 	 	4	 
	(H)

	 	LEAVES OF ABSENCE
	 	 	4	 
	(I)

	 	DEATH OF OPTIONEE
	 	 	4	 
	(J)

	 	RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING
	 	 	5	 
	(K)

	 	TRANSFERABILITY OF OPTIONS
	 	 	5	 
	(L)

	 	WITHHOLDING TAXES
	 	 	5	 
	(M)

	 	NO RIGHTS AS A STOCKHOLDER
	 	 	5	 
	(N)

	 	MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS
	 	 	6	 
	 
	 	 	 	 	 	 
	SECTION 7. PAYMENT FOR SHARES	 	 	6	 
	 
	 	 	 	 	 	 
	(A)

	 	GENERAL RULE
	 	 	6	 
	(B)

	 	SURRENDER OF STOCK
	 	 	6	 
	(C)

	 	SERVICES RENDERED
	 	 	6	 
	(D)

	 	PROMISSORY NOTE
	 	 	6	 
	(E)

	 	EXERCISE/SALE
	 	 	6	 
	(F)

	 	EXERCISE/PLEDGE
	 	 	7	 
	 
	 	 	 	 	 	 
	SECTION 8. ADJUSTMENT OF SHARES	 	 	7	 
	 
	 	 	 	 	 	 
	(A)

	 	GENERAL
	 	 	7	 
	(B)

	 	MERGERS AND CONSOLIDATIONS
	 	 	7	 
	(C)

	 	RESERVATION OF RIGHTS
	 	 	7	 
	 
	 	 	 	 	 	 
	SECTION 9. SECURITIES LAW REQUIREMENTS	 	 	8	 
	 
	 	 	 	 	 	 
	(A)

	 	GENERAL
	 	 	8	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	PAGE NO.
	(B)

	 	FINANCIAL REPORTS
	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 10. NO RETENTION RIGHTS	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 11. DURATION AND AMENDMENTS	 	 	8	 
	 
	(A)

	 	TERM OF THE PLAN
	 	 	8	 
	(B)

	 	RIGHT TO AMEND OR TERMINATE THE PLAN
	 	 	8	 
	(C)

	 	EFFECT OF AMENDMENT OR TERMINATION
	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 12. DEFINITIONS	 	 	8	 

ii

 

OSI PHARMACEUTICALS, INC.

STOCK PLAN FOR ASSUMED OPTIONS OF PRE-MERGER EMPLOYEES OF

EYETECH PHARMACEUTICALS, INC.

SECTION 1. ESTABLISHMENT AND 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 (“Merger Sub”) and
Eyetech Pharmaceuticals, Inc.(“Eyetech”), Eyetech has merged with Merger Sub (the “Merger”), and
Eyetech, as the surviving corporation, has become a wholly-owned subsidiary of the Company. In
connection therewith, pursuant to the terms of this Plan, the Company assumes Eyetech’s 2001 Stock
Plan and all option and other awards issued and outstanding thereunder to persons who were
Employees, Consultants or Outside Directors of Eyetech (“Pre-Merger Employees”) prior to the
Merger. The Plan provides both for the direct award or sale of Shares and for the grant of Options
to purchase Shares. Options granted under the Plan may include Nonstatutory Options as well as
ISOs intended to qualify under Section 422 of the Code.

     Capitalized terms are defined in Section 12.

SECTION 2. ADMINISTRATION.

     (a) COMMITTEES OF THE BOARD OF DIRECTORS. The Plan may be administered by one or more Committees.
Each Committee shall consist of one or more members of the Board of Directors who have been
appointed by the Board of Directors. Each Committee shall have such authority and be responsible
for such functions as the Board of Directors has assigned to it. If no Committee has been
appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of
Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board
of Directors has assigned a particular function.

     (b) AUTHORITY OF THE BOARD OF DIRECTORS. Subject to the provisions of the Plan, the Board of
Directors shall have full authority and discretion to take any actions it deems necessary or
advisable for the administration of the Plan. All decisions, interpretations and other actions of
the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons
deriving their rights from a Purchaser or Optionee.

SECTION 3. ELIGIBILITY.

     (a) GENERAL RULE.Only Employees, Outside Directors and Consultants who are Pre-Merger Employees shall be eligible
for grants under the Plan, and such grants shall be made only for the purpose set forth in Section 1.

     (b) TEN-PERCENT STOCKHOLDERS. A person who owns more than 10% of the total combined voting power
of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not
be eligible for designation as an Optionee or Purchaser unless (i) the

 

 

Exercise Price is at least
110% of the Fair Market Value of a Share on the date of grant, (ii) the Purchase Price (if any) is
at least 100% of the Fair Market Value of a Share and (iii) in the case of an ISO, such ISO by its
terms is not exercisable after the expiration of five years from the date of grant. For purposes
of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.

SECTION 4. STOCK SUBJECT TO PLAN.

     Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. The
aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other
rights to acquire Shares) shall not exceed 250,000 Shares, subject to adjustment pursuant to
Section 8. The number of Shares that are subject to Options or other rights outstanding at any
time under the Plan shall not exceed the number of Shares that then remain available for issuance
under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.

     (a) STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the Plan (other than upon
exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and
the Company. Such award or sale shall be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan
and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement.
The provisions of the various Stock Purchase Agreements entered into under the Plan need not be
identical.

     (b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to acquire Shares under the
Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30
days after the grant of such right was communicated to the Purchaser by the Company. Such right
shall not be transferable and shall be exercisable only by the Purchaser to whom such right was
granted.

     (c) PURCHASE PRICE. The Purchase Price of Shares to be offered under the Plan shall not be less
than 85% of the Fair Market Value of such Shares, and a higher percentage may be required by
Section 3(b), subject
to adjustment as provided under the Merger Agreement. Subject to the preceding sentence, the Board
of Directors shall determine the Purchase Price at its sole discretion. The Purchase Price shall
be payable in a form described in Section 7.

     (d) WITHHOLDING TAXES. As a condition to the purchase of Shares, the Purchaser shall make such
arrangements as the Board of Directors may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with such purchase.

     (e) RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING. Any Shares awarded or sold under the
Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first
refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any
restrictions that may apply to holders of Shares generally. In

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the case of a Purchaser who is not
an officer of the Company, an Outside Director or a Consultant:

     (i) Any right to repurchase the Purchaser’s Shares at the original Purchase Price (if
any) upon termination of the Purchaser’s Service shall lapse at least as rapidly as 20% per
year over the five-year period commencing on the date of the award or sale of the Shares;

     (ii) Any such right may be exercised only for cash or for cancellation of indebtedness
incurred in purchasing the Shares; and

     (iii) Any such right may be exercised only within 90 days after the termination of the
Purchaser’s Service.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

     (a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be evidenced by a Stock
Option Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Board of Directors deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements
entered into under the Plan need not be identical.

     (b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the number of Shares that are
subject to the Option and shall provide for the adjustment of such number in accordance with
Section 8 and the Merger Agreement. The Stock Option Agreement shall also specify whether the
Option is an ISO or a Nonstatutory Option.

     (c) EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise Price. Subject to
adjustment as provided in the Merger Agreement, the Exercise Price of an ISO shall not be less than
100% of the Fair Market Value of a Share on the date of grant, and a higher percentage may be
required by Section 3(b). Subject to adjustment as provided in the Merger Agreement, the Exercise
Price of a Nonstatutory Option shall not be less than 85% of the Fair Market Value of a Share on
the date of grant, and a higher percentage may be required by Section 3(b). Subject to the
preceding two sentences, the Exercise Price under any Option shall be determined by the Board of
Directors at its sole discretion. The Exercise Price shall be payable in a form described in
Section 7.

     (d) EXERCISABILITY. Each Stock Option Agreement shall specify the date when all or any installment
of the Option is to become exercisable. In the case of an Optionee who is not an officer of the
Company, an Outside Director or a Consultant, an Option shall become exercisable at least as
rapidly as 20% per year over the five-year period commencing on the date of grant. Subject to the
preceding sentence, the Board of Directors shall determine the exercisability provisions of any
Stock Option Agreement at its sole discretion.

     (e) ACCELERATED EXERCISABILITY. Unless the applicable Stock Option Agreement provides otherwise,
all of an Optionee’s Options shall become exercisable in full if (i) the Company is subject to a
Change in Control before the Optionee’s Service terminates, (ii)

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such Options do not remain
outstanding, (iii) such Options are not assumed by the surviving corporation or its parent and (iv)
the surviving corporation or its parent does not substitute options with substantially the same
terms for such Options.

     (f) BASIC TERM. The Stock Option Agreement shall specify the term of the Option. The term shall
not exceed 10 years from the date of grant, and a shorter term may be required by Section 3(b).
Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine
when an Option is to expire.

     (g) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee’s Service terminates for any reason
other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the
following occasions:

     (i) The expiration date determined pursuant to Subsection (f) above;

     (ii) The date three months after the termination of the Optionee’s Service for any
reason other than Disability, or such later date as the Board of Directors may determine; or

     (iii) The date six months after the termination of the Optionee’s Service by reason of
Disability, or such later date as the Board of Directors may determine.

     The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration
of such Options under the preceding sentence, but only to the extent that such Options had become
exercisable before the Optionee’s Service terminated (or became exercisable as a result of the
termination) and the underlying Shares had vested before the Optionee’s Service terminated (or
vested as a result of the termination). The balance of such Options shall lapse when the
Optionee’s Service terminates. In the event that the Optionee dies after the termination of the
Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options
may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate
or by any person who has acquired such Options directly from the Optionee by beneficiary
designation, bequest or inheritance, but only to the extent that such Options had become
exercisable before the Optionee’s Service terminated (or became exercisable as a result of the
termination) and the underlying Shares had vested before the Optionee’s Service terminated (or
vested as a result of the termination).

     (h) LEAVES OF ABSENCE. For purposes of Subsection (g) above, Service shall be deemed to continue
while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in
writing and if continued crediting of Service for this purpose is expressly required by the terms
of such leave or by applicable law (as determined by the Company).

     (i) DEATH OF OPTIONEE. If an Optionee dies while the Optionee is in Service, then the Optionee’s
Options shall expire on the earlier of the following dates:

     (i) The expiration date determined pursuant to Subsection (f) above; or

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     (ii) The date 12 months after the Optionee’s death, or such later date as the Board of
Directors may determine.

All or part of the Optionee’s Options may be exercised at any time before the expiration of such
Options under the preceding sentence by the executors or administrators of the Optionee’s estate or
by any person who has acquired such Options directly from the Optionee by beneficiary designation,
bequest or inheritance, but only to the extent that such Options had become exercisable before the
Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had
vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of
such Options shall lapse when the Optionee dies.

     (j) RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING. Any Shares issued upon exercise of an
Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may determine. Such
restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares
generally. In the case of an Optionee who is not an officer of the Company, an Outside Director or
a Consultant:

     (i) Any right to repurchase the Optionee’s Shares at the original Exercise Price upon
termination of the Optionee’s Service shall lapse at least as rapidly as 20% per year over
the five-year period commencing on the date of the option grant;

     (ii) Any such right may be exercised only for cash or for cancellation of indebtedness
incurred in purchasing the Shares; and

     (iii) Any such right may be exercised only within 90 days after the later of (A) the
termination of the Optionee’s Service or (B) the date of the option exercise.

     (k) TRANSFERABILITY OF OPTIONS. An Option shall be transferable by the Optionee only by (i) a
beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as
provided in the next sentence. If the applicable Stock Option Agreement so provides, an NSO shall
also be transferable by the Optionee by (i) a gift to a member of the Optionee’s Immediate Family
or (ii) a gift to an inter vivos or testamentary trust in which members of the Optionee’s Immediate
Family have a beneficial interest of more than 50% and which provides that such NSO is to be
transferred to the beneficiaries upon the Optionee’s death. An ISO may be exercised during the
lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal
representative.

     (l) WITHHOLDING TAXES. As a condition to the exercise of an Option, the Optionee shall make such
arrangements as the Board of Directors may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with such exercise. The
Optionee shall also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.

     (m) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an Optionee, shall have no rights
as a stockholder with respect to any Shares covered by the

5

 

Optionee’s Option until such person
becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise
Price pursuant to the terms of such Option.

     (n) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the limitations of the Plan, the
Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation
of outstanding Options (whether granted by the Company or another issuer) in return for the grant
of new Options for the same or a different number of Shares and at the same or a different Exercise
Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of
the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such
Option.

SECTION 7. PAYMENT FOR SHARES.

     (a) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares issued under the Plan
shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as
otherwise provided in this Section 7.

     (b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so provides, all or any part
of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that
are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form
for transfer and shall be valued at their Fair Market Value on the date when the Option is
exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of
the Exercise Price if such action would cause the Company to recognize compensation expense (or
additional compensation expense) with respect to the Option for financial reporting purposes.

     (c) SERVICES RENDERED. At the discretion of the Board of Directors, Shares may be awarded under
the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to
the award.

     (d) PROMISSORY NOTE. To the extent that a Stock Option Agreement or Stock Purchase Agreement so
provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares
issued under the Plan may be paid with a full-recourse promissory note. However, the par value of
the Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be
pledged as security for payment of the principal amount of the promissory note and interest
thereon. The interest rate payable under the terms of the promissory note shall not be less than
the minimum rate (if any) required to avoid the imputation of additional interest under the Code.
Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such note.

     (e) EXERCISE/SALE. To the extent that a Stock Option Agreement so provides, and if Stock is
publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares
and to deliver all or part of the sales proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

6

 

     (f) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so provides, and if Stock is
publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by
the Company,
as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment
of all or part of the Exercise Price and any withholding taxes.

SECTION 8. ADJUSTMENT OF SHARES.

     (a) GENERAL. In the event of a subdivision of the outstanding Stock, a declaration of a dividend
payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares
in an amount that has a material effect on the Fair Market Value of the Stock, a combination or
consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate
adjustments in one or more of (i) the number of Shares available for future grants under Section 4,
(ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each
outstanding Option.

     (b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a party to a merger or
consolidation, outstanding Options shall be subject to the agreement of merger or consolidation.
Such agreement shall provide for:

     (i) The continuation of such outstanding Options by the Company (if the Company is the
surviving corporation);

     (ii) The assumption of the Plan and such outstanding Options by the surviving
corporation or its parent;

     (iii) The substitution by the surviving corporation or its parent of options with
substantially the same terms for such outstanding Options;

     (iv) The full exercisability of such outstanding Options and full vesting of the Shares
subject to such Options, followed by the cancellation of such Options; or

     (v) The settlement of the full value of such outstanding Options (whether or not then
exercisable) in cash or cash equivalents, followed by the cancellation of such Options.

     (c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an Optionee or Purchaser shall
have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class,
(ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of
stock of any class. Any issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option.
The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of
its business or assets.

7

 

SECTION 9. SECURITIES LAW REQUIREMENTS.

     (a) GENERAL. Shares shall not be issued under the Plan unless the issuance and delivery of such
Shares comply with (or are exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company’s securities may then be traded.

     (b) FINANCIAL REPORTS. The Company each year shall furnish to Optionees, Purchasers and
stockholders who have received Stock under the Plan its balance sheet and income statement, unless
such Optionees, Purchasers or stockholders are key Employees whose duties with the Company assure
them access to equivalent information. Such balance sheet and income statement need not be
audited.

SECTION 10. NO RETENTION RIGHTS.

     Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the
Purchaser or Optionee any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at any time and for
any reason, with or without cause.

SECTION 11. DURATION AND AMENDMENTS.

     (a) TERM OF THE PLAN. The Plan, as set forth herein, shall be effective as of closing date of the
Merger. The Plan shall terminate automatically on April 3, 2011. The Plan may be terminated on
any earlier date pursuant to Subsection (b) below.

     (b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may amend, suspend or terminate
the Plan at any time and for any reason; provided, however, that any amendment of the Plan which
increases the number of Shares available for issuance under the Plan (except as provided in Section
8), or which materially changes the class of persons who are eligible for the grant of ISOs, shall
be subject to the approval of the Company’s stockholders. Stockholder approval shall not be
required for any other amendment of the Plan.

     (c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under the Plan after the termination thereof, except upon
exercise of an Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option previously granted
under the Plan.

SECTION 12. DEFINITIONS.

     In addition to the definitions set forth in Section 1 above,

     (a) “BOARD OF DIRECTORS” shall mean the Board of Directors of the Company, as constituted from
time to time.

8

 

     (b) “CHANGE IN CONTROL” shall mean:

     (i) The consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization own
immediately after such merger, consolidation or other reorganization 50% or more of the
voting power of the outstanding securities of each of (A) the continuing or surviving entity
and (B) any direct or indirect parent corporation of such continuing or surviving entity; or

     (ii) The sale, transfer or other disposition of all or substantially all of the
Company’s assets.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state
of the Company’s incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities immediately before such
transaction.

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

     (d) “COMMITTEE” shall mean a committee of the Board of Directors, as described in Section
2(a).

     (e) “CONSULTANT” shall mean a person who performs bona fide services for the Company or a
Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

     (f) “DISABILITY” shall mean that the Optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment.

     (g) “EMPLOYEE” shall mean any individual who is a common-law employee of the Company or a
Subsidiary.

     (h) “EXERCISE PRICE” shall mean the amount for which one Share may be purchased upon exercise
of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

     (i) “FAIR MARKET VALUE” shall mean the fair market value of a Share, as determined by the
Board of Directors in good faith. Such determination shall be conclusive and binding on all
persons.

     (j) “IMMEDIATE FAMILY” shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and shall include adoptive relationships.

     (k) “ISO” shall mean an employee incentive stock option described in Section 422(b) of the
Code.

9

 

     (l) “NONSTATUTORY OPTION” shall mean a stock option not described in Sections 422(b) or 423(b)
of the Code.

     (m) “OPTION” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the
holder to purchase Shares.

     (n) “OPTIONEE” shall mean a person who holds an Option.

     (o) “OUTSIDE DIRECTOR” shall mean a member of the Board of Directors of Eyetech who is not an
Employee.

     (p) “PLAN” shall mean this OSI Pharmaceuticals, Inc. Stock Plan for Assumed Options of
Pre-Merger Employees of Eyetech Pharmaceuticals, Inc.

     (q) “PURCHASE PRICE” shall mean the consideration for which one Share may be acquired under
the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

     (r) “PURCHASER” shall mean a person to whom the Board of Directors has offered the right to
acquire Shares under the Plan (other than upon exercise of an Option).

     (s) “SERVICE” shall mean service as an Employee, Outside Director or Consultant.

     (t) “SHARE” shall mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).

     (u) “STOCK” shall mean the common stock of the Company, with a par value of $0.01 per Share.

     (v) “STOCK OPTION AGREEMENT” shall mean the agreement between the Company and an Optionee that
contains the terms, conditions and restrictions pertaining to the Optionee’s Option.

     (w) “STOCK PURCHASE AGREEMENT” shall mean the agreement between the Company and a Purchaser
who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining
to the acquisition of such Shares.

     (x) “SUBSIDIARY” shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.

10

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