OSI PHARMACEUTICALS, INC.
Exhibit 10.2
OSI PHARMACEUTICALS, INC.
1999 INCENTIVE AND NON-QUALIFIED
STOCK OPTION PLAN AGREEMENT
STOCK OPTION PLAN AGREEMENT
THIS NON-QUALIFIED STOCK OPTION (this “Option”) is dated as of June 21, 2006, by OSI
PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), to [Employee] (the
“Optionee”), an employee of Prosidion Limited (“the UK Subsidiary”). The Option is granted subject
to a condition that any liability of the UK Subsidiary (as employer or former employer of the
Optionee) to pay secondary national insurance contributions (“Secondary NIC”) in respect of the
exercise, assignment or release of the Option shall be the liability of the Optionee and payable by
the Optionee and that the Optionee shall be required to enter into an election in the form
envisaged in Paragraph 313(1) of Schedule 1 to the Social Security Contributions and Benefits Xxx
0000 (“Election”) to that effect when required to do so by the UK Subsidiary provided that the
Committee may in its discretion at any time or times release the Optionee from this liability or
reduce his liability thereunder unless that Election has been entered into between the UK
Subsidiary and the Optionee and that Election (or the legislation which provides for such an
Election to be effective) does not allow for such an Election to be subsequently varied. For the
avoidance of doubt the terms of the Election shall include a statement to the effect that the
Optionee is liable to pay any Secondary NIC arising on the exercise of the Option even if he is no
longer an employee of the UK Subsidiary and/or no longer resident in the United Kingdom at the date
of exercise.
The Compensation Committee of the Board of Directors of the Company (the “Committee”) approved
on (the “Grant Date”) the grant to the Optionee of 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 (i) pursuant to the OSI Pharmaceuticals, Inc.
1999 Incentive and Non-Qualified Stock Option Plan (the “Plan”), a copy of which has been provided
to Optionee as of the date hereof, and (ii) 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. On the Grant Date, 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 over
a period of four years, with one quarter (25%) of the Option Shares becoming exercisable on each of
the next four anniversaries of the Grant Date, with any fractional number of Option Shares
that would otherwise become exercisable as of any such anniversary rounded to a whole integer
as determined in the discretion of the Committee.
3. Term. The Option shall terminate in all events at 5:00 p.m. (local New York, New
York time) on June 12, 2013 (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 (including due to death or Retirement),
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. Subject to Paragraph 4(c) below, the Option shall be exercised
through the Company’s broker-assisted stock option program (the “Broker Program”), in accordance
with the terms and conditions of the Broker Program as may be in effect from time to time.
b. 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 an amount
on an indemnity basis sufficient to satisfy any federal, state and/or local tax withholding
requirements (including any interest or penalties due in respect of such sums) arising in
connection with the exercise of the Option or the issuance of Option Shares, other than stock
transfer taxes, in each case in accordance with any terms and conditions of the Broker Program as
may be in effect from time to time. 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
(including any interest or penalties due in respect of such sums) 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.
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c. National Insurance Contributions. No stock shall be allotted or transferred to the
Optionee by the Company until the UK Subsidiary has received an amount in cash equal to the amount
of the Secondary NIC for which the Optionee is liable under the terms of the Election (“the NIC
Amount”). The Optionee shall by completing the Election grant to the UK Subsidiary (as employer or
former employer of the Optionee) the irrevocable authority, as agent of the Optionee and on his
behalf, to appoint an Independent Transfer Agent to act as agent of the Optionholder and on his
behalf to sell or procure the sale of sufficient of the Stock acquired on the exercise, assignment
or release of the Option and remit the net sale proceeds to the UK Subsidiary so that the net
proceeds payable to the UK Subsidiary are so far as possible equal to but not less than the NIC
Amount and the UK Subsidiary shall account to the Optionee for any balance. In this paragraph
4(c), “Independent Transfer Agent” means any person (other than the Company or any company
affiliated with the Company or any individual affiliated with any such company) who is registered
as a broker-dealer with the U.S. Securities and Exchange Commission and who is thereby able to sell
and transfer shares in the Company on behalf of 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 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 of the Company shall
determine, in its discretion, that the listing, registration, or qualification of any of the
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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 of the Company.
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 or
foreign securities law. The Board of Directors of the Company 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 UK Subsidiary, the Company or any
parent or other subsidiary of the Company or interfere in any way with the right of the UK
Subsidiary, the Company or any parent or other subsidiary of the Company to terminate the
employment, services, responsibilities or duties of the Optionee at any time for any reason
whatsoever.
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 Grant Date.
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
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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. Governing Law. This Option, the documents to be entered into pursuant thereto,
and all matters arising from or connected with it are governed by and shall be construed in
accordance with the laws of England and Wales.
14. Binding Effect. This Option 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.
15. Counterparts. This Option may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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Exhibit 10.2
IN WITNESS WHEREOF, the Company has granted this Option as of the day and year first above written.
| OSI PHARMACEUTICALS, INC. | ||||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Executive Vice President and | |||
| Chief Financial Officer | ||||
| ACCEPTED BY (OPTIONEE): | ||||
| Name: | [Employee] | |||
| Date: | ||||
