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EXHIBIT 4.1
OSI PHARMACEUTICALS, INC.
NON-QUALIFIED STOCK OPTION PLAN FOR
FORMER EMPLOYEES OF
CADUS PHARMACEUTICAL CORP.
1. Purpose
OSI Pharmaceuticals, Inc. (the "Company") has acquired certain
of the assets of Cadus Pharmaceutical Corp. ("Cadus"). In connection
therewith, the Company has adopted this Non-Qualified Stock Option Plan
for Former Employees of Cadus Pharmaceutical Corp. (the "Plan") as an
incentive to induce certain former employees of Cadus 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
Internal Revenue Code of 1986, as amended (the "Code").
As used herein, the term "parent" or "subsidiary" shall mean
any present or future corporation which is or would be a "parent
corporation" or "subsidiary corporation" of the Company as the term is
defined in Section 424 of the Code (determined as if the Company were
the employer corporation).
2. 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
options 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 option, the duration
of options, the exercisability of options, and the option price.
3. Shares of Stock Subject to the Plan
Except as provided in paragraphs 6(h), 6(i) and 7 hereof, the
number of shares that may be issued or transferred pursuant to the
exercise of options granted under the Plan shall not exceed 415,000
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.
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4. Eligibility
Options may be granted only to directors, officer, employees
and consultants who are former employees of Cadus.
5. Granting of options
No options pursuant to this Plan may be granted after ten
years from the date of the closing of the Asset Purchase Agreement by
and between the Company and Cadus. The date of the grant of any option
shall be the date on which the Committee authorizes the grant of such
option.
6. Options
Options shall be evidenced by stock option agreements in such
form, consistent with the Plan, as the Committee shall approve from
time to time, which agreements need not be identical and shall be
subject to the following terms and conditions:
(a) Option Price. The purchase price under each
option shall be specified by the Committee, but shall in no
case be less than the greater of 50% of the Fair Market Value
of the Common Stock at the time the option is granted and the
par value of such 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, unless otherwise provided by the
Committee, an "in the money" 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. It shall be a
condition to the performance of the Company's obligation to
issue or transfer Common Stock upon exercise of an option or
options that the optionee pay, or make provision satisfactory
to the Company for the payment of, any taxes (other than stock
transfer taxes) the Company is obligated to collect with
respect to the issue or transfer of Common Stock upon such
exercise, including any federal, state, or local withholding
taxes.
(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.
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(d) Rights as a Stockholder. A recipient of
options shall have no rights as a stockholder with respect to
any shares issuable or transferable upon exercise thereof
until the date a stock certificate is issued to him for such
shares. 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.
(e) Non-Assignability of Options. Except as may
otherwise be specifically provided by the Committee, no 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, options shall be
exercisable only by such recipient. If the Committee approves
provisions in any particular case allowing for assignment or
transfer of an 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. See
paragraph 8 hereof for restrictions on sale of shares.
(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.
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. 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 pursuant to subparagraph
6(c) above. 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 option 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.
(g) 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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(h) 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 deliverable upon the exercise
thereafter of any options theretofore granted shall be
increased or decreased proportionately, as the case may be,
without change in the aggregate purchase price. 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.
(i) 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 separation, 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 stock or
options 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.
(j) General Restrictions. Each option 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 issuable or transferable upon exercise thereof
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 such option or the issue,
transfer, or purchase of shares thereunder, such 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.
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 each option, require the
individual to whom the option is to be granted to enter into
an agreement with the Company stating that as a condition
precedent to each exercise of the option, in whole or in part,
he shall, if then required by the Company, represent to the
Company in writing
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that such exercise 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 options granted and/or Common
Stock held, in the event of the termination of employment or
association, as the case may be, of the optionee 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 optionee,
pursuant to any such agreement, without interest thereon.
(k) "Fair Market Value." Fair Market Value for
all purposes under the Plan shall mean the closing price of
shares of Common Stock, as reported in The Wall Street
Journal, in the NASDAQ National Market Issues or similar
successor consolidated transactions reports (or a similar
consolidated transactions report for the exchange on which the
shares of Common Stock are then trading) for the relevant
date, or if no sales of shares of Common Stock were made on
such date, the average of the high and low sale prices of
shares as reported in such composite transaction report for
the preceding day on which sales of shares were made. If the
shares are not listed on a national securities exchange or
included for quotation in the NASDAQ National Market System at
the time Fair Market Value is to be determined, then Fair
Market Value shall be determined by the Committee in good
faith pursuant to such method as to the Committee deems
appropriate and equitable. Under no circumstances shall the
Fair Market Value of a share of Common Stock be less than its
par value.
7. 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 option right theretofore granted under
the Plan; and, provided, further, that unless first duly approved by
the stockholders of the Company entitled to vote thereon at a meeting
(which may be the annual meeting) duly called and held for such
purpose, except as provided in subparagraphs 6(h) and 6(i), no
amendment or change shall be made in the Plan increasing the total
number of shares which may be issued or transferred under the Plan,
materially increasing the benefits to Plan participants or modifying
the requirements as to eligibility for participation in the Plan.
8. Restriction on Sale of Shares
No stock acquired by an optionee upon exercise of an 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
option was granted, unless otherwise provided by the Committee.
9. Effective Date of the Plan
This Plan shall become effective upon the closing of the Asset
Purchase Agreement by and between the Company and Cadus. The Plan shall
terminate after ten years from the date of the closing of the Asset
Purchase Agreement by and between the Company and Cadus, or on such
earlier date as the Board of Directors or the Committee may determine.
Any option outstanding at the termination date shall remain outstanding
until it has either expired or has been exercised.
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10. 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.
