Compensatory Arrangements Of Executive Officers - OSI PHARMACEUTICALS INC - 8-9-2005

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Compensatory Arrangements Of Executive Officers - OSI PHARMACEUTICALS INC - 8-9-2005 Powered By Docstoc
					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:
NAME AND POSITION ----------------------------------Colin Goddard, Ph.D Chief Executive Officer Gabriel Leung Executive Vice President and President, (OSI) Oncology Anker Lundemose, M.D., Ph.D., D.Sc.(1) Executive Vice President and President, (OSI) Prosidion Robert Simon(2) Executive Vice President, Pharmaceutical Development and Technical Operations Michael G. Atieh Executive Vice President and Chief Financial Officer Barbara A. Wood Vice President, General Counsel and Secretary 2004 BASE SALARY --------$550,000 2005 BASE SALARY --------$600,000 2004 BONUS ---------$400,000

$361,000

$400,000

$145,000

(pound)150,000

(pound)175,000

(pound)60,000

$280,000

$335,000

$100,000

n/a

$410,000

n/a

$277,000

$287,000

$ 90,000

(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

performance is weighted more heavily than the individual performance. For example, in the case of a bonus for an

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. -2-

Exhibit 10.7 AMENDMENT NO. 2 TO THE OSI PHARMACEUTICAL, INC. AMENDED AND RESTATED STOCK INCENTIVE PLAN Pursuant to the powers reserved to the Board of Directors of OSI Pharmaceutical, Inc., a Delaware corporation, under Section 13 of the OSI Pharmaceuticals, Inc., Amended and Restated Stock Incentive Plan (the "Plan"), the Plan is hereby amended as follows, effective as of June 15, 2005: FIRST AND ONLY CHANGE Section 6(f) of the Plan is amended to make the changes indicated and to read as follows: "(f) 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

Exhibit 10.7 AMENDMENT NO. 2 TO THE OSI PHARMACEUTICAL, INC. AMENDED AND RESTATED STOCK INCENTIVE PLAN Pursuant to the powers reserved to the Board of Directors of OSI Pharmaceutical, Inc., a Delaware corporation, under Section 13 of the OSI Pharmaceuticals, Inc., Amended and Restated Stock Incentive Plan (the "Plan"), the Plan is hereby amended as follows, effective as of June 15, 2005: FIRST AND ONLY CHANGE Section 6(f) of the Plan is amended to make the changes indicated and to read as follows: "(f) 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. For Options issued prior to June 15, 2005, 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 55 and who has completed at least five years of service with the Company. For Options issued on or after June 15, 2005, 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. Notwithstanding the foregoing, the tax treatment available pursuant to Section 421 of the Code upon the exercise of an Incentive Stock Option will not be available in connection with the exercise of any Incentive Stock Option more than three months after the date of termination of such option recipient's employment due to Retirement. 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." -2-

EXHIBIT 31.1 CERTIFICATION I, Colin Goddard, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of OSI Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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." -2-

EXHIBIT 31.1 CERTIFICATION I, Colin Goddard, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of OSI Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

EXHIBIT 31.1 CERTIFICATION I, Colin Goddard, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of OSI Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 9, 2005

/s/ Colin Goddard, PH.D. -----------------------Colin Goddard, Ph.D. Chief Executive Officer

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 9, 2005

/s/ Colin Goddard, PH.D. -----------------------Colin Goddard, Ph.D. Chief Executive Officer

EXHIBIT 31.2 CERTIFICATION I, Michael G. Atieh, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of OSI Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

EXHIBIT 31.2 CERTIFICATION I, Michael G. Atieh, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of OSI Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 9, 2005

/s/ Michael G. Atieh ---------------------------------Michael G. Atieh Executive Vice President and Chief Financial Officer

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 9, 2005

/s/ Michael G. Atieh ---------------------------------Michael G. Atieh Executive Vice President and Chief Financial Officer

EXHIBIT 32.1 OSI PHARMACEUTICALS, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of OSI Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Colin Goddard, Ph.D., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: August 9, 2005 /s/ Colin Goddard, Ph.D. --------------------------Colin Goddard, Ph.D. Chief Executive Officer

EXHIBIT 32.2 OSI PHARMACEUTICALS, INC. CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO

EXHIBIT 32.1 OSI PHARMACEUTICALS, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of OSI Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Colin Goddard, Ph.D., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: August 9, 2005 /s/ Colin Goddard, Ph.D. --------------------------Colin Goddard, Ph.D. Chief Executive Officer

EXHIBIT 32.2 OSI PHARMACEUTICALS, INC. CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of OSI Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael G. Atieh, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: August 9, 2005 /s/ Michael G. Atieh -------------------------------------Michael G. Atieh Executive Vice President and Chief Financial Officer

EXHIBIT 32.2 OSI PHARMACEUTICALS, INC. CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of OSI Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael G. Atieh, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: August 9, 2005 /s/ Michael G. Atieh -------------------------------------Michael G. Atieh Executive Vice President and Chief Financial Officer