Exhibit 10.1

October 23, 2006

Jeffrey R. Luber

Senior Vice President, Chief Financial Officer, Treasurer,
General Counsel and Secretary

EXACT Sciences Corporation
100 Campus Drive
Marlborough, MA  01752

Re:  Employee Retention Agreement

Dear Mr. Luber:

This letter agreement (“Agreement”) will confirm the terms of severance payments
due to you by EXACT Sciences Corporation (“EXACT” or the “Company”) under the
circumstances described below.

1.      Subject to the conditions set forth below, you will be entitled to
receive “Severance Payments” (as set forth below in Section 2) for a period of
twelve (12) months (the “Severance Period”) (i) upon the termination of your
employment by the Company for any reason other than Cause (as defined below), or
(ii) following the occurrence of any one of the events set forth in (A), (B) or
(C) below within one year following the closing of (x) the sale by the Company
of all or substantially all of its assets, or (y) the merger or consolidation of
the Company with or into another entity in a transaction where the shares of the
Company’s capital stock outstanding immediately prior to the closing of such
merger or consolidation represent or are converted into or exchanged for shares
that represent less than a majority of the shares of capital stock of the
resulting or surviving entity outstanding immediately after the closing of such
merger or consolidation (each of the foregoing being referred to as “Business
Event”):

(A) the termination of your employment for any reason other than Cause; or

(B) you suffer a material diminution in job responsibility or a material
reduction in compensation; or

(C) the Company moves your place of employment more than 35 miles from the
Company’s current office location in Marlborough, Massachusetts.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS PARAGRAPH 1, THE
ISSUANCE BY THE COMPANY OF ITS CAPITAL STOCK IN AN EQUITY FINANCING, EITHER IN A
PRIVATE OR PUBLIC TRANSACTION, SHALL NOT CONSTITUTE A BUSINESS EVENT.  FOR
PURPOSES OF THIS AGREEMENT, THE FOLLOWING SHALL CONSTITUTE “CAUSE” FOR SUCH
TERMINATION: (I) ANY ACT, WHETHER OR NOT INVOLVING YOU OR ANY AFFILIATE, OF
FRAUD OR GROSS MISCONDUCT, THE LATTER OF WHICH SHALL BE CONSIDERED TO INCLUDE
ANY ACT OF A SEXUAL NATURE THAT WOULD BE EXPECTED TO BE OFFENSIVE TO A
REASONABLE EMPLOYEE; (II) DISHONEST STATEMENTS OR ACTS BY YOU WITH RESPECT TO
EXACT OR ANY AFFILIATE OF EXACT; (III) THE COMMISSION BY YOU OF (A) A FELONY OR
(B) ANY MISDEMEANOR INVOLVING MORAL TURPITUDE, DECEIT, DISHONESTY OR FRAUD; (IV)
GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR INSUBORDINATION BY YOU WITH RESPECT TO
EXACT OR ANY AFFILIATE OF EXACT; OR (V) A BREACH BY YOU OF ANY OF YOUR
OBLIGATIONS UNDER THIS AGREEMENT OR ANY NONDISCLOSURE OR NONCOMPETITION
AGREEMENT WITH EXACT OR AN AFFILIATE OF EXACT.

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2.     The Severance Payments will be equal to salary continuation at a rate
equal to your base salary at the time of your termination of employment from
EXACT or its successor. The Severance Payments will be paid in accordance with
EXACT’s, or its successors, then existing payroll practices as such practices
may be established or modified from time to time. The Severance Payments shall
be subject to applicable federal, state and local withholding and payroll taxes.
You will only be entitled to Severance Payments upon the occurrence of the
events specified in Section 1 of this Agreement and all Severance Payments shall
cease upon your obtaining full-time employment at any time during the Severance
Period. You will not be entitled to any Severance Payments or other benefits if
you voluntarily resign from EXACT or if your employment is terminated by EXACT
for Cause.

3.     You shall be entitled to a retention bonus (a “Retention Bonus”) in the
amount of One Hundred Twenty Two Thousand Five Hundred Dollars ($122,500) to be
paid at the earlier of (i) December 31, 2007, provided, that you are an employee
in good standing at the time of payment, and (ii) your earlier termination by
EXACT or its successor without Cause.  The Retention Bonus shall be payable in a
lump sum payment. The total unpaid Retention Bonus amount shall be accelerated
and payable to you upon the occurrence of (i) the sale by EXACT of all or
substantially all of its assets, (ii) the merger or consolidation of EXACT with
or into another entity in a transaction where the shares of EXACT’s capital
stock outstanding immediately prior to the closing of such merger or
consolidation represent or are converted into or exchanged for shares that
represent less than a majority of the shares of capital stock of the resulting
or surviving entity outstanding immediately after the closing of such merger or
consolidation, or (iii) a vote by EXACT’s Board of Directors or stockholders to
commence with the liquidation, dissolution or winding up of EXACT.

4.     Prior to, and as a condition of, receiving the Severance Payments set
forth in this Agreement, you agree to sign a full and comprehensive release in a
form and of a scope acceptable to the Company and you at the time of your
termination of employment. EXACT shall have no obligation to pay you any
Severance Payments unless and until it receives this release executed by you and
all statutory waiting periods have expired.

5.     If you materially breach your obligations under any agreement entered
into between you and EXACT, including, without limitation, any non-disclosure or
non-competition agreement, the Company may immediately cease payment of all
Severance Payments set forth in this Agreement. The cessation of any Severance
Payments shall be in addition to, and not as an alternative to, any other
remedies at law or in equity available to EXACT, including the right to seek
specific performance or an injunction.

6.     Nothing in this Agreement is intended, or shall be construed, to restrict
or otherwise limit EXACT’s right to terminate your employment with or without
Cause and with or without notice. This letter is not a guarantee of continued
employment, it being understood you are and continue to be employed at-will.

7.     Breach of any of the terms of this Agreement by you shall be considered a
material breach of this Agreement. In the event of such a breach, EXACT shall be
released from any obligations to make any Severance Payments under this
Agreement or, if any such payments

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have been made, EXACT shall be entitled to recover from you any amounts already
paid under this Agreement in addition to any and all of its remedies under law
arising of such breach.

8.     This Agreement sets forth the entire Agreement of the parties with
respect to the subject matter hereof and expressly supersedes and replaces all
prior commitments, agreements and understandings among the parties with respect
to the subject matter hereof.  This Agreement may not be changed orally. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

Please indicate your acceptance of this Agreement by signing the enclosed copy
of this letter and returning it to me.

 

Very truly yours,

 

 

 

 

 

/s/ Don Hardison

 

 

Don Hardison

 

Chief Executive Officer

 

 

 

 

Accepted and Agreed:

 

/s/ Jeffrey R. Luber

 

Name: Jeffrey R. Luber

Title: Senior Vice President, Chief Financial Officer, Treasurer,

 General Counsel and Secretary

 

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