Document:

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                                                                    Exhibit 10.5

                                             EMPLOYEE NON-QUALIFIED STOCK OPTION
                                                            (AS AMENDED 4/22/04)
                                                            (AS AMENDED 6/15/05)

                            OSI PHARMACEUTICALS, INC.

                           NON-QUALIFIED STOCK OPTION
                    AMENDED AND RESTATED STOCK INCENTIVE PLAN

      THIS NON-QUALIFIED STOCK OPTION is granted as of _______________by OSI
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), to
_______________________ (the "Optionee"), an employee of the Company.

      Pursuant to the OSI Pharmaceuticals, Inc. Amended and Restated Stock
Incentive Plan (the "Plan"), a copy of which has been provided to Optionee as of
the date hereof, the Optionee was granted a non-qualified stock option to
purchase shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), as hereinafter set forth. The option granted herein is not
intended to qualify as an "incentive stock option" as defined in Section 422 of
the Internal Revenue Code of 1986, as amended.

                              W I T N E S S E T H:

      1. Grant. Effective as of __________________ (the "Date of Grant"), the
Company granted to the Optionee an option (the "Option") to purchase on the
terms and conditions set forth herein and in the Plan all or any part of an
aggregate of _____ shares of Common Stock (the "Option Shares"), at the purchase
price of $_____ per share (the "Option Price").

      2. Vesting. The Optionee shall have the cumulative right to exercise the
Option, and the Option is only exercisable, as follows:

            (a) The Option shall not be exercisable prior to the first annual
anniversary of the Date of Grant (the "First Anniversary");

            (b) Beginning on the First Anniversary, one quarter of the Option
Shares shall become exercisable, with any fractional number of Option Shares
that would otherwise become exercisable as of that date rounded to a whole
integer as determined in the discretion of the Committee.

            (c) The remaining three-quarters of the Option Shares shall become
exercisable ratably as of each monthly anniversary of the Date of Grant
beginning with the 13th monthly anniversary of the Date of Grant and ending on
the 48th monthly anniversary of the Date of Grant, with any fractional number of
Option Shares that would otherwise become exercisable as of any such monthly
anniversary rounded to a whole integer as determined in the discretion of the
Committee.
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      3. Term. The Option shall terminate in all events at 5:00 p.m. (local New
York, New York time) on [INSERT DATE IMMEDIATELY PRIOR TO SEVENTH ANNIVERSARY OF
DATE OF GRANT] (the "Termination Date"), unless sooner terminated as provided in
Subparagraphs (a) or (b) below.

            (a) Termination of Employment or Service. The Option shall terminate
and shall no longer be exercisable ninety (90) days after the Optionee's
employment (or service as an officer or consultant) with the Company and any
parent or subsidiary of the Company terminates, unless such termination of
employment or service was caused by the Optionee's death or Retirement (as
defined in the Plan). The death or Retirement of the Optionee shall not affect
the remaining term of the Option. Following a termination of employment or
service, the Optionee (or the Optionee's heirs or personal representatives if
Optionee is deceased) may, during the remaining term of the Option, purchase any
remaining Option Shares which could have been purchased on the date Optionee's
employment or service was terminated, but may not purchase any Option Shares
which would otherwise have first become purchasable following such termination
of employment or service.

            (b) Sale or Reorganization. As provided in Section 6(h) of the Plan,
if the Company is merged or consolidated with another corporation, or if the
property or stock of the Company is acquired by another corporation, or if there
is a separation, reorganization or liquidation of the Company, the Board of
Directors of the Company may, in its discretion, give Optionee a written notice
that the Option will terminate thirty (30) days after the date of such written
notice. In any such case, the Option will become immediately exercisable in
full, notwithstanding Paragraph 2 above.

      4. Method of Exercise and Payment.

            (a) Method of Exercise. The Option may be exercised by delivering to
the Company at its principal office, directed to the attention of the Secretary,
(i) a written notice of exercise in the form attached hereto as Exhibit "A",
signed by the person entitled to exercise the Option, stating the number of
Option Shares such person then elects to purchase hereunder; (ii) payment of the
aggregate Option Price of the Option Shares being purchased; and (iii) if the
Option is being exercised by a person other than the Optionee, evidence
satisfactory to the Company that such person has a right to exercise the Option.
Upon due exercise of the Option and payment of the Option Price, the Company
shall deliver to the Optionee or other person entitled to exercise the Option a
certificate for the Option Shares being purchased. The Company shall be
responsible for any stock transfer tax due upon the purchase or issuance of the
Option Shares.

            (b) Medium of Payment. Optionee may pay for Option Shares (i) in
cash, (ii) by certified check payable to the order of the Company, or (iii) by a
combination of the foregoing. Furthermore, subject to the restrictions described
below, payment may be made all or in part in shares of the Common Stock of the
Company held by the Optionee. If payment is made in whole or in part in shares
of Common Stock, then the Optionee shall deliver to the Company certificates
registered in the name of such Optionee representing shares of Common Stock
legally and beneficially owned by such Optionee, free of all liens, claims and

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encumbrances of every kind and having a Fair Market Value on the date of
delivery of such Common Stock that is not less than the product of the Option
Price and the number of Option Shares to be purchased with Common Stock,
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates. If payment is made with Common Stock,
the Fair Market Value of such Common Stock shall be determined as provided in
Section 6(k) of the Plan, without regard to the last sentence of such section.
Notwithstanding the foregoing, the Board of Directors, in its sole discretion,
may refuse to accept shares of Common Stock in payment of the Option Price. In
that event, any certificates representing shares of Common Stock which were
delivered to the Company shall be returned to the Optionee with notice of the
refusal of the Board of Directors to accept such shares in payment of the Option
Price.

            (c) Taxes. It shall be a condition to the performance of the
Company's obligation to issue or transfer Option Shares upon the exercise of the
Option that the Optionee remit to the Company an amount sufficient to satisfy
any federal, state and/or local tax withholding requirements arising in
connection with the exercise of the Option or the issuance of Option Shares,
other than stock transfer taxes. If the Company for any reason does not require
the Optionee to make a payment sufficient to satisfy such withholding
requirements, any tax withholding payments made by the Company to any federal,
state or local tax authority with respect to the exercise of the Option shall
constitute a personal obligation of the Optionee to the Company, payable upon
demand or, at the option of the Company, by deduction from future compensation
payable to the Optionee.

            (d) Partial Exercise. To the extent otherwise exercisable, the
Option may be exercised in whole or in part, except that the Option may in no
event be exercised with respect to fractional shares.

      5. Transfers. The Option is not transferable by the Optionee otherwise
than by will or pursuant to the laws of descent and distribution in the event of
the Optionee's death, in which event the Option may be exercised by the heirs or
legal representatives of the Optionee. The Option may be exercised during the
lifetime of the Optionee only by the Optionee. Any attempt at assignment,
transfer, pledge or disposition of the Option contrary to the provisions hereof
or the levy of any execution, attachment or similar process upon the Option
shall be null and void and without effect. Any exercise of the Option by a
person other than the Optionee shall be accompanied by appropriate proofs of the
right of such person to exercise the Option.

      6. Adjustments on Changes in Common Stock. In the event that dividends
payable in Common Stock during any fiscal year of the Company exceed in the
aggregate five percent (5%) 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 (5%) of the
shares of Common Stock outstanding at the beginning of the year, the number of
Option Shares deliverable upon the exercise thereafter of the Option shall be
increased or decreased proportionately, as the case may be, without change in
the aggregate purchase price payable upon exercise of the Option. Common Stock
dividends, splits, subdivisions or combinations during any fiscal year which do
not exceed in the aggregate five percent (5%) of the Common Stock

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issued and outstanding at the beginning of such year shall not result in any
adjustment under the Option. All adjustments shall be made as of the day such
action necessitating such adjustment becomes effective.

      7. Legal Requirements.

            (a) Listing Requirements. If at any time the Board of Directors
shall determine, in its discretion, that the listing, registration, or
qualification of any of the Option Shares 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 Option or the issue, transfer or purchase of Option
Shares hereunder, the Option may not be exercised 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.

            (b) Securities Laws. The Company shall not be obligated to sell or
issue any Option Shares in any manner in contravention of the Securities Act of
1933, as amended, or any state securities law. The Board of Directors or the
Committee may, at any time, require, as a condition to the exercise of the
Option, the representation or agreement of the Optionee to the effect that the
Option Shares issuable upon exercise of the Option are acquired by the Optionee
for investment purposes and not with a view to the resale or distribution
thereof, and may require such other representations and documents as may be
required to comply with applicable securities laws.

      8. Administration. The Option has been granted pursuant to, and is subject
to the terms and provisions of, the Plan. All terms used herein which are
defined in the Plan and not otherwise defined herein shall have the same
meanings as in the Plan. To the extent that the provisions hereof conflict with
those of the Plan, the provisions of the Plan shall control. All decisions or
interpretations made by the Committee (as designated under the Plan) regarding
any issue or question arising under the Option or the Plan shall be final,
binding and conclusive on the Company and the Optionee.

      9. Rights as Stockholder. The Optionee shall have none of the rights of a
stockholder with respect to the Option Shares unless and until such Option
Shares shall be issued to the Optionee upon the exercise of the Option. Except
as provided in Paragraph 6 above, no adjustments shall be made for dividends or
other rights for which the record date is prior to the date the stock
certificate is issued.

      10. Continued Employment or Service. Nothing contained herein or in the
Plan shall confer any right to continue in the employ or service 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, services, responsibilities or duties of the Optionee at any time for
any reason whatsoever.

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      11. Sale of Option Shares. Unless otherwise provided by the Committee, no
Option Shares acquired upon exercise of the Option may be sold or otherwise
disposed of by the Optionee within six months from the Date of Grant.

      12. Notices. Any notice to be given to the Company hereunder shall be
delivered personally to the Secretary of the Company or mailed or delivered to
the Company at its principal executive office, addressed to the attention of the
Secretary, and any notice to be given to the Optionee hereunder shall be
delivered personally or mailed or delivered to the Optionee at the address then
appearing on the records of the Company. Such addresses may be changed at any
time by notice from one party to the other. Notices given hereunder shall be in
writing, and shall be deemed to have been duly given upon delivery thereof, if
personally delivered, or three days after being deposited in the United States
mail, registered or certified mail, properly addressed, with proper postage and
fees prepaid, or one day after being deposited with a delivery service
guaranteeing overnight delivery, properly addressed, with fees paid by the
sender.

      13. Binding Effect. This agreement shall be binding upon and inure to the
benefit of the parties hereto, including the successors and assigns of the
Company and the heirs and personal representatives of the Optionee.

      IN WITNESS WHEREOF, the Company has granted this Option as of the day and
year first above written.

                                    OSI PHARMACEUTICALS, INC.

                                    -----------------------------
                                    Name:  Michael G. Atieh
                                    Title: Executive Vice President and
                                           Chief Financial Officer

                                    ACCEPTED BY (OPTIONEE):

                                    -----------------------------
                                    Name:

                                       5<PAGE>
                                                                    Exhibit 10.6

                 COMPENSATORY ARRANGEMENTS OF EXECUTIVE OFFICERS
                           AMENDED AS OF JUNE 30, 2005

      The Compensation Committee (the "Committee") of the Board of Directors of
OSI Pharmaceuticals, Inc. ("OSI" or the "Company") approved the 2005 annual base
salaries and 2004 cash bonuses for OSI's executive officers including the
Company's named executive officers (as that term is defined in Item 402 of
Regulation S-K) as set forth in OSI's proxy statement dated February 2, 2005.
The following table sets forth the annual base salary levels of such officers
for 2005 as compared to 2004 as well as the 2004 cash bonuses for each such
officer:

<TABLE>
<CAPTION>
         NAME AND POSITION                    2004 BASE        2005 BASE       2004 BONUS
                                               SALARY           SALARY
-----------------------------------           ---------        ---------       ----------
<S>                                           <C>              <C>             <C>
Colin Goddard, Ph.D                           $550,000         $600,000         $400,000
Chief Executive Officer

Gabriel Leung                                 $361,000         $400,000         $145,000
Executive Vice President and
President, (OSI) Oncology

Anker Lundemose, M.D., Ph.D.,           (pound)150,000   (pound)175,000    (pound)60,000
D.Sc.(1)
Executive Vice President and
President, (OSI) Prosidion

Robert Simon(2)                               $280,000         $335,000         $100,000
Executive Vice President,
Pharmaceutical Development and
Technical Operations

Michael G. Atieh                                   n/a         $410,000              n/a
Executive Vice President and Chief
Financial Officer

Barbara A. Wood                               $277,000         $287,000         $ 90,000
Vice President, General Counsel and
Secretary
</TABLE>

(1)   During fiscal 2004, Dr. Lundemose received an additional bonus of
      (pound)94,000 related to the identification and successful acquisition by
      Prosidion Limited, OSI's wholly-owned subsidiary, of certain assets from
      Probiodrug AG as per his Employment Agreement.

(2)   During 2004, Mr. Simon agreed to relocate from Boulder, Colorado to the
      Company's headquarters in Melville, New York. In connection with his
      relocation, the Company agreed to a relocation package and the forgiveness
      of a $100,000 loan assumed by the Company as part of its 2001 acquisition
      of Gilead Sciences Inc.'s oncology business. The total amount of
      relocation costs reimbursed in 2004 were $251,423 including the
      forgiveness of the loan. The Company anticipates additional payments of
      relocation costs in fiscal 2005.

Bonuses

      The Committee's policy of awarding annual bonuses is designed to
specifically relate executive pay to Company and individual performance. All
Company employees, including the executive officers, are assigned a grade level,
and each grade level is assigned a bonus target, a percentage of which is tied
to Company performance and a percentage of which is tied to individual
performance. With respect to executive officers, the percentage tied to the
Company
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performance is weighted more heavily than the individual performance. For
example, in the case of a bonus for an executive officer with a grade level of
11, 25% of the bonus is based on individual performance and 75% of the bonus is
based upon Company performance. With regard to each of the two components
(Company performance and individual performance), an employee can earn a range
around the target level (100%). The range for the Company performance component
is 0% to 150% and the percentage is recommended by the CEO each year and
approved by the Committee. The range for the individual performance component is
also 0% to 150% and is based upon individual performance. Individual performance
is measured in accordance with the Company's employee performance management
procedures, and the percentage is recommended by the CEO for the executive
officers and approved by the Committee. For purposes of compensation decisions
for 2004, the Committee measured the Company's performance and that of each
executive officer in fiscal year 2004 against goals established by the executive
officers and ratified by the Committee under the Company's Annual Business Plan
prior to the start of the fiscal year. For 2004, the Committee awarded the
respective executive officers' discretionary bonuses in accordance with the
foregoing process. For 2004, the Company performance component was set at 150%.

      The bonus targets for the executive officers are either set in accordance
with their employment agreements or are based upon their respective grade
levels, the latter of which are currently under review for 2005.

Stock Option Grants

      Executive officers are eligible for awards of stock options or shares of
stock pursuant to the Company's Amended and Restated Stock Incentive Plan. Such
awards are made at the discretion of the Committee.

      Annual stock option grants for executive officers are a key element of the
executive officer's total compensation. As for all Company employees, the stock
option grants made annually to the executive officers are made in accordance
with the Company's formula-based policy for granting options. According to the
formula, each grade level is assigned a grant multiple. The number of options
granted to an executive officer is determined by multiplying the executive
officer's salary by the grant multiple and then dividing the product by a stock
price which is determined by the CEO and ratified by the Committee and is
typically a 3-6 month trailing average. In 2004, the CEO recommended stock
option grants for the executive officers based upon the foregoing criteria, and
the Committee reviewed and approved the grants.

      Perquisites

      The only perquisite granted to executive officers which is not available
to other employees relates to the use of automobiles and is in the form of
either the payment of a car lease or, in lieu thereof, a monthly cash payment.
Currently, Mr. Atieh is the only executive officer who does not receive the
perquisites.

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