Document:

ex10-3.htm

 

 

Exhibit 10.3

[OSI LETTERHEAD]

 

April 1, 2010

Jonathan Rachman, MBChB, DPhil, MRCP

Senior Vice President, Research and Development, Diabetes & Obestity

Dear Jonathan:

It is my pleasure to provide to you, effective today, the following additional benefits:

 

In the event that there is a “Change in Control” of OSI Pharmaceuticals, Inc. (“OSIP”) and within 12 months following a Change in Control either (a) your employment is terminated without “Cause” or (b) you terminate your employment with “Good Reason” (terminations following a Change in Control described in clause (a) or (b) being referred to herein as a “Severance”),

	  	
(i)

	
you will be entitled to a lump sum cash payment as soon as practicable but in no event later than 10 days after the date on which you have incurred a Severance (the “Severance Date”) equal to (A) one times (1x) your annual base salary (immediately prior to the Change in Control or immediately prior to your Severance Date, whichever is higher) plus (B) a pro-rated bonus in respect of the fiscal year in which the Change of Control occurs for the period up to and including the Severance Date, based on 100% of Target (as defined in OSIP’s/Prosidion’s compensation program) plus (C) any accrued but previously unpaid annual base salary and any accrued vacation pay through the Severance Date;

	  	  	  
	  	
(ii)

	
within 30 days of the Severance Date, Prosidion shall pay (a) into your personal pension plan, a lump sum payment equal to employer pension contributions for 12 months (for the avoidance of doubt, such contributions to be calculated at 9% of your base salary), and (b) to you (in lieu of private healthcare insurance, life assurance and income protection benefits for 12 months) a lump sum payment equal to £500 per month for 12 months; and

	  	  	  
	  	
(iii)

	
the vesting of all unvested equity or equity based awards held by you at the time of such Severance, including stock options and RSU’s and, for the avoidance of doubt, any equity,  equity-based awards or other benefits of either

  

  

  

	  	  	
OSIP or a successor into which unvested equity of OSIP held by you at the time of a Change in Control is converted in connection with such Change in Control, will accelerate and be immediately exercisable or payable, as the case may be, immediately prior to such Severance.   This provision supersedes the provisions regarding the same subject in the agreements evidencing your grants of stock options and RSU’s made in December 2009.

For purposes of this letter agreement, the terms Change in Control, Cause and Good Reason (and the defined terms included in such definitions) shall have the meaning set forth on Appendix A hereto.

 

If you are in agreement with this letter, please sign both copies of this letter and return one copy to Amy Sheehan and one copy to Geraldine Chapman in the enclosed envelope.  One copy is for your records.

Sincerely,

/s/ Colin Goddard

Colin Goddard, Ph.D.

Chief Executive Officer

 

 

	
Accepted by:

	
/s/ Jonathan Rachman

	  
	  	
Jonathan Rachman

	  

Date: _______________________

  

  

  

APPENDIX A – APPLICABLE DEFINITIONS

“Affiliate” shall mean, with respect to any individual or entity, any other individual or entity who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such individual or entity.

“Board” shall mean the Board of Directors of OSIP.

"Cause" shall mean that you have: (a) willfully and continually failed to substantially perform, or been willfully grossly negligent in the discharge of, your duties to Prosidion and/or OSIP or any of its subsidiaries (in any case, other than by reason of a disability, physical or mental illness or analogous condition), which failure or negligence continues for a period of 10 business days after a written demand for performance is delivered to you by the Board, which specifically identifies the manner in which the Board believes that you have not substantially performed, or been grossly negligent in the discharge of, his or her duties; (b) committed or engaged in an act of theft, embezzlement or fraud, or committed a willful and material breach of confidentiality with respect to Prosidion or OSIP or any of its subsidiaries or a willful unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information of Prosidion or OSIP or any of its subsidiaries; (c) willfully breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of Prosidion or OSIP or any of its subsidiaries; or (d) been convicted of a felony or a misdemeanor with respect to which fraud or dishonesty is a material element.  No act or failure to act on your part shall be deemed "willful" unless done, or omitted to be done, by you not in good faith or without reasonable belief that your act or failure to act was in the best interests of Prosidion and OSIP.

A "Change in Control" shall be deemed to mean the first of the following events to occur after the date hereof:

(a)           The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (1) the then-outstanding shares of common stock of OSIP (the "Outstanding Company Common Stock") or (2) the combined voting power of the then-outstanding voting securities of OSIP entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that, for purposes of this clause (a), the following acquisitions shall not constitute a Change in Control; (A) any acquisition directly from OSIP, (B) any acquisition by OSIP, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by OSIP or any Affiliate of OSIP or a successor, or (D) any acquisition by any entity pursuant to a transaction that complies with clause (c)(1) or (c)(2) below;

(b)           Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by OSIP's shareholders, was approved by a vote of at least two-thirds of

  

  

  

the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)           The consummation of a merger or consolidation of OSIP or any direct or indirect subsidiary of OSIP with any other corporation, other than (1) a merger or consolidation which results in the directors of OSIP immediately prior to such merger or consolidation continuing to constitute at least a majority of the board of directors of OSIP, the surviving entity or any parent thereof or (2) a merger or consolidation effected to implement a recapitalization of OSIP (or similar transaction) in which no Person acquires beneficial ownership, directly or indirectly, of securities of OSIP (not including in the securities beneficially owned by such Person any securities acquired directly from OSIP) representing 50% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities; or

(d)           Shareholders of OSIP approve a plan of complete liquidation or dissolution of OSIP or there is consummated an agreement for the sale or disposition by OSIP of all or substantially all of OSIP 's assets, other than a sale or disposition by OSIP of all or substantially all of OSIP 's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of OSIP in substantially the same proportions as their ownership of OSIP immediately prior to such sale.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Good Reason” shall mean a (i) material adverse alteration in the nature or status of your responsibilities with Prosidion from those in effect immediately prior to the Change in Control, (ii) a reduction in your salary or target bonus opportunity from those in effect immediately prior to the Change in Control, or (iii) a relocation of your principal place of business so that it is at least 35 miles further from your home.ex10-4.htm

 

 

Exhibit 10.4

 

 

[OSI LETTERHEAD]

 

REVISED – March 24, 2006

March 23, 2006

 

STRICTLY PRIVATE & CONFIDENTIAL

 

Dr. David Epstein

56 Pine Street

Belmont, MA 02478

 

Dear David:

 

We are pleased to offer you the position at OSI Eyetech of Vice President, Research & Preclinical Development reporting to Anthony Adamis, Executive Vice President, Research. We at OSI Pharmaceuticals, Inc. are very excited about the possibility of you joining our team and we look forward to the prospect of working with you. The following outlines the specific terms of our offer to you:

 

	
  

	
1)

	
Your start date will be on or around Monday, April 24, 2006. Please indicate on the second page of this offer your intended start date.

 

	
  

	
2)

	
Your starting salary is payable bi-weekly at a rate of $8,076.92, less taxes, which annualized is $210,000, less taxes. The position is considered an exempt position for purposes of federal wage-hour law, which means that you will not be eligible for overtime pay for hours worked in excess of 40 hours in a given workweek.

 

	
  

	
3)

	
You will receive a $125,000 bonus (net). This amount will be grossed up to assist with the tax implications to you. After the completion of one year of service with the company 25% of the bonus will be forgivable. After your 4th year of service the entire bonus will be forgiven. If you involuntarily terminated from the Company you will not be required to re-pay this bonus.

 

	
  

	
4)

	
Our Relocation Company will assist you in your move and OSI will pay for the following relocation expenses:

 

	
  

	
·

	
OSI will pay for the packing and movement of household goods.

	
  

	
·

	
OSI will pay for typical transaction costs in selling your home in Massachusetts through our relocation program and closing costs on the purchase of a new home in New York, up to and including two points. Home purchase closing costs will be grossed up to assist with the tax implications to you.

	
  

	
·

	
OSI will pay for five months of temporary housing and storage. Temporary housing and storage after 30 days will be grossed up to assist with the tax implications to you.

	
  

	
·

	
OSI will pay you two weeks incidental pay for miscellaneous expenses that you may incur while relocating. This amount will be paid with your first paycheck.

	
  

	
·

	
You and your family may take up to ten nights for house-hunting trips to New York to search for a new residence, which will be reimbursed by the Company. This will include reasonable transportation, hotel accommodations and meals in line with our relocation policy.

	
  

	
·

	
OSI will pay for one-way coach airline fares and in transit charges in line with our current relocation policy to transport you and your immediate family to your new location. The amounts reimbursed will be grossed up to assist with the tax implications to you.

 

Please review OSI's relocation policy for further details. Please note that if you choose to leave the Company within 12 months of relocating you will be required to re-pay all relocation amounts given to you. Specific information will be in a separate Relocation Agreement that must be signed and returned to Human Resources.

 

 

  

  

  

 

 

	
  

	
5)

	
The Company will issue you an initial grant of 20,000 stock options of OSI Pharmaceuticals common stock on the first business day  of the month after your employment begins. OSI's stock options vest over 4 years.

 

	
  

	
6)

	
You will receive a restricted stock grant of 10,000 shares. The restrictions will lift on an annual basis at 25% per year over a 4 year period.

 

	
  

	
7)

	
You will receive mortgage assistance of $20,000 (net), per year for a period of 3 years beginning after you relocate to New York.

 

	
  

	
8)

	
In addition to your base salary in 2006, you will also be eligible for a guaranteed bonus payment at 30% of your base salary pending satisfactory performance. For 2007 and thereafter, bonus eligibility and amount will be subject to the Board of Directors approved bonus plan as set forth for all employees each year.

 

	
  

	
9)

	
If you are involuntarily terminated for a reason other than performance, OSI will assist with the following:

 

	
  

	
a.

	
After 6 months of employment: You will receive 6 months salary as severance and 6 months of Cobra payments to cover your medical premiums.

	
  

	
b.

	
After 1 year of employment: You will receive 12 months of your base salary as severance and 12 months of Cobra payments to cover your medical premiums.

	
  

	
c.

	
After 18 months of employment: You will receive 18 months of your base salary as severance and 18 months of Cobra payments to cover your medical premiums.

 

	
  

	
10)

	
You are entitled to 15 days paid vacation per annum in accordance with the Company's vacation policy.

 

*This offer is preliminary, subject to final review after completion of background and reference checks.

 

You are also entitled to certain employee benefits established by the Company, provided that you meet the respective eligibility requirements with respect thereto. Currently, these benefits include, but are not limited to, term life insurance, basic medical, dental and hospitalization coverage, long-term disability coverage, a 401K savings and investment plan and a tuition reimbursement plan. Further explanation of the benefits described herein will be provided during your orientation meeting upon your arrival.

 

The foregoing does not constitute an employment contract between you and the Company, nor does the foregoing otherwise constitute an agreement or promise by the Company to employ you for any specific length of time or under any specific terms and conditions.

 

In connection with your employment you will be required to execute such employment, confidentiality and other agreements and documents as we request and to present proof of U.S. citizenship or official authorization of employment in compliance with the Immigration Reform and Control Act of 1986.

 

We do hope that you will decide to accept this opportunity to join us at OSI during what is a particularly exciting time in the growth and development of the Company. If there is anything further that you wish to discuss or any issues that require clarification, please do not hesitate to contact me at              .

 

David, if you accept the terms of this offer, kindly sign two copies of this letter and return one copy to Human Resources in the enclosed envelope. As soon as we receive your acceptance, we will send you orientation materials, which we would like you to complete and bring with you on your first day of employment. They will be reviewed with you during your New Employee Orientation.

 

Sincerely

 

/s/ Amy R. Sheehan

 

Amy R. Sheehan

Associate Director, Human Resources

Corporate Headquarters

 

cc:           Gayle Gironda, Director, HR Eyetech

 

	
Accepted by:

	
/s/ David Epstein

	  
	  	  	  
	
Date:

	
March 27, 2006

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