Exhibit 10.4

 

Exact Sciences Corporation

 

Non-Employee Director Compensation Policy

 

The purpose of this Director Compensation Policy of Exact Sciences Corporation,
a Delaware corporation (the “Company”), is to provide a total compensation
package that enables the Company to attract and retain, on a long-term basis,
high caliber directors who are not employees or officers of the Company or its
subsidiaries.

 

In furtherance of the purpose stated above, all non-employee directors shall be
paid compensation for services provided to the Company as set forth below:

 

A.            Initial Compensation

 

Upon his or her initial election to the board, a new director shall receive
stock options having a value equal to $210,000.  Such options shall vest
annually over three years (1/3 on the first anniversary of the grant, 1/3 on the
second anniversary of the grant and 1/3 on the third anniversary of the grant). 
If a director ceases to serve as a director before such stock options are fully
vested due to death, or if there is a Change in Control prior to such vesting,
then such options shall become fully vested as of the date of such death or
Change in Control, as applicable.

 

B.            Annual Compensation

 

1.             Annual Cash Compensation

 

a.             On the date of each annual meeting of the Company’s stockholders,
each non-employee director who is continuing as a director following such annual
meeting shall be paid an annual cash retainer as follows:

 

Board Member Compensation

 

 

 

 

 

 

Annual retainer for each director:

 

$45,000

 

Board chair additional retainer:

 

$25,000

 

 

 

 

 

 

Committee Member Compensation

 

 

 

 

 

 

 

 

 

Committee chair compensation

 

 

 

 

 

 

 

—

 

Audit

 

$16,000

 

—

 

Compensation

 

$14,000

 

—

 

Nominating & Governance

 

$10,000

 

—

 

Innovation & Technology

 

$10,000

 

 

 

 

 

 

Committee member (other than committee chair) compensation

 

 

 

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—

 

Audit

 

$8,000

 

—

 

Compensation

 

$7,000

 

—

 

Nominating & Governance

 

$5,000

 

—

 

Innovation & Technology

 

$5,000

 

b.             In lieu of cash, a director may elect to receive restricted stock
having an equivalent dollar value based on the closing sale price of the
Company’s common stock on the date of grant.  To be effective, notice of such
election must be delivered to the Company’s Chief Financial Officer in writing
or electronically prior to the annual meeting at which such election shall first
take effect, and such election shall be irrevocable and remain in effect until
the later of (i) immediately prior to the second annual meeting following the
date of delivery of such notice, or (ii) written or electronic notice from the
director to the Chief Financial Officer terminating such election.

 

2.             Annual Equity Compensation

 

a.             On the date of each annual meeting of the Company’s stockholders,
each non-employee director who is continuing as a director following the date of
such annual meeting shall be granted restricted stock or deferred stock units
having a value of $140,000 with the number of restricted stock or deferred stock
units to be issued being determined, based on the closing sale price of the
Company’s common stock on the date of grant.  A director shall elect whether
such award is restricted stock or deferred stock units by delivering written or
electronic notice of such election to the Chief Financial Officer prior to
January 1 of the calendar year in which such award will be made (or the date of
the annual meeting with respect to the first award made to a director under this
Policy if it is not possible for the director to make his or her election prior
to January 1 of the calendar year in which such award will be made); provided,
however, that if the Chief Financial Officer receives no such election, such
grant shall be made in restricted stock.

 

b.             On the date of each annual meeting of the Company’s stockholders,
the board chair, provided such individual will continue as board chair following
the date of the annual meeting, shall be granted an additional annual award
having a value equal to $15,000 based on the closing sale price of the Company’s
common stock on the date of grant.  The chair may elect to receive such award in
either restricted stock or deferred stock units by delivering written or
electronic notice of such election to the Chief Financial Officer prior to
January 1 of the calendar year in which such award will be made (or the date of
the annual meeting with respect to the first award made to the chair under this
Policy if it is not possible for the chair to make his or her election prior to
January 1 of the calendar year in which such award will be made); provided,
however, that if the Chief Financial Officer receives no such election, such
grant shall be made in restricted stock.

 

c.             Grants of annual equity compensation described in Section 2 of
this Policy shall not become vested until the first anniversary of the grant
date (or, if earlier, the date of the next annual meeting of the Company’s
stockholders (the “Annual Award Vesting Date”).  If a director ceases to serve
as a director before the Annual Award Vesting Date due to the director’s

 

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death, or if there is a Change in Control prior to the Annual Award Vesting
Date, then the shares shall become fully vested as of the date of such death or
Change in Control, as applicable.  If a director ceases to serve as a director
at any time for any reason other than death before the earlier of the Annual
Award Vesting Date or a Change in Control, then the annual equity grant shall
become vested pro rata (based on the number of days between the grant date and
the date of cessation of services divided by (x) 365 days for awards made at an
annual stockholders meeting or (y) the number of days from the date of
commencement of services until the next annual stockholders meeting for an award
made other than at an annual stockholders meeting), and to the extent the shares
are not thereby vested they shall be forfeited as of the date of such cessation
of services.  These vesting rules will apply whether an award is payable in
shares or deferred stock units.

 

3.             Partial Year Compensation

 

If a director is elected or appointed to the board other than on the date of an
annual meeting of stockholders, such director’s annual cash and equity
compensation for the period between the date of such election or appointment and
the anticipated date of the next following annual meeting of the Company’s
stockholders shall be granted in accordance with subsection B of this Policy but
equitably adjusted by the board to reflect the date of such director’s election
or appointment and the anticipated date of the next following annual meeting of
the Company’s stockholders.

 

4.             Per-Meeting Cash Compensation in Special Circumstances

 

Additional cash compensation shall be paid at the rate of $1,500 per meeting
attended, whether such meeting is attended in person or by telephone, in the
following special circumstances:

 

a.             To the extent the number of board meetings or committee meetings,
calculated on a per-committee basis, exceeds 10 in a given year.  For purposes
of this section, a year commences with the Company’s annual meeting of
stockholders.  Only the members of a given committee are eligible for the
payments described in this section with respect to meetings of that committee. 
For the avoidance of doubt, no additional compensation would be payable under
this section if a director attends 9 board meetings, 9 compensation committee
meetings and 9 audit committee meetings; rather, additional compensation would
only be triggered by the 11th meeting of the board or a given committee.

 

b.             To the extent the board creates a special committee, or
designates the members of a standing committee to function with respect to a
special purpose as members of a special committee.  Only the members of the
special committee are eligible for the payments described in this section with
respect to meetings of such special committee.

 

C.            Additional Terms

 

1.             All equity and equity-based awards under this Policy (including
stock options, restricted stock and deferred stock units) shall be made under
and pursuant to the Company’s 2010

 

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Omnibus Long-Term Incentive Plan (“Plan”).  Capitalized terms used herein and
not otherwise defined shall have the meanings given to them in the Plan.

 

2.             Deferred stock units are bookkeeping entries representing the
equivalent of shares of the Company’s common stock.  Deferred stock units are
paid in shares of the Company’s common stock on the effective date of the
director’s retirement or removal from the board.

 

3.             All vesting under the equity grants described in this Policy
immediately ceases upon cessation of service as a director for any reason.

 

4.             A director may not sell, transfer or otherwise dispose of any
shares of restricted stock awarded under this Policy until they become vested;
however, the director shall have the right to receive dividends with respect to
such shares and to vote such shares prior to vesting.

 

5.             The exercise price for all stock options under this Policy shall
be the Company’s closing stock price on the date of grant, or, if the date of
grant is not a trading day, then the first trading day after the date of grant.

 

6.             For purposes of determining the number of stock options in a
given grant, stock options shall be valued using the Black-Scholes method.

 

7.             The compensation described in this Policy is in addition to
reimbursement of all out-of-pocket expenses incurred by directors in attending
meetings of the board.

 

Effective July 25, 2013 (supersedes all prior Non-Employee Director Compensation
Policies)

 

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