Exhibit 10.1


 


EXACT SCIENCES CORPORATION


 


2000
EMPLOYEE STOCK PURCHASE PLAN


 


Article 1 - Purpose.


 


This 2000 Employee Stock
Purchase Plan (the “Plan”) is intended to encourage stock ownership by all
eligible employees of Exact Corporation (the “Company”),
a Delaware corporation, and its participating subsidiaries (as defined in Article 17)
so that they may share in the growth of the Company by acquiring or increasing
their proprietary interest in the Company. 
The Plan is designed to encourage eligible employees to remain in the
employ of the Company and its participating subsidiaries.  The Plan is intended to constitute an “employee
stock purchase plan” within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the “Code”).


 


Article 2 - Administration
of the Plan.


 


The Plan may be
administered by a committee appointed by the Board of Directors of the Company
(the “Committee”).  The Committee shall
consist of not less than two members of the Company’s Board of
Directors.  The Board of Directors may
from time to time remove members from, or add members to, the Committee.  Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. 
The Committee may select one of its members as Chairman, and shall hold
meetings at such times and places as it may determine.  Acts by a majority of the Committee, or acts
reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.


 


The interpretation and
construction by the Committee of any provisions of the Plan or of any option
granted under it shall be final, unless otherwise determined by the Board of
Directors.  The Committee may from time
to time adopt such rules and regulations for carrying out the Plan as it
may deem best, provided that any such rules and regulations shall be
applied on a uniform basis to all employees under the Plan.  No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.


 


In the event the Board of
Directors fails to appoint or refrains from appointing a Committee, the Board
of Directors shall have all power and authority to administer the Plan.  In such event, the word “Committee” wherever
used herein shall be deemed to mean the Board of Directors.


 


Article 3 - Eligible
Employees.


 


All employees of the
Company or any of its participating subsidiaries whose customary employment is
more than 20 hours per week and for more than five months in any calendar
year and who have completed three months of service shall be eligible
to receive options under


 





















 


the Plan to purchase
common stock of the Company, and all eligible employees shall have the same
rights and privileges hereunder; provided, however, that with respect to the
First Payment Period (as defined below), all employees of the Company or any of
its participating subsidiaries employed on the first day of the First Payment
Period and whose customary employment is more than 20 hours per week and
for more than five months in any calendar year shall be eligible to
receive options under the Plan to purchase common stock of the Company.  Persons who are eligible employees on the first
business day of any Payment Period (as defined in Article 5) shall receive
their options as of such day.  Persons
who become eligible employees after any date on which options are granted under
the Plan shall be granted options on the first day of the next succeeding
Payment Period on which options are granted to eligible employees under the
Plan.  In no event, however, may an
employee be granted an option if such employee, immediately after the option
was granted, would be treated as owning stock possessing five percent or
more of the total combined voting power or value of all classes of stock of the
Company or of any parent corporation or subsidiary corporation, as the terms “parent
corporation” and “subsidiary corporation” are defined in Section 424(e) and
(f) of the Code.  For purposes of
determining stock ownership under this paragraph, the rules of Section 424(d) of
the Code shall apply, and stock which the employee may purchase under
outstanding options shall be treated as stock owned by the employee.


 


Article 4 - Stock Subject to
the Plan.


 


The stock subject to the
options under the Plan shall be shares of the Company’s authorized but unissued common stock, par value $.01 per share (the “Common
Stock”), or shares of Common Stock reacquired by the Company, including shares
purchased in the open market.  The
aggregate number of shares which may be issued pursuant to the Plan is 300,000,  subject to
adjustment as provided in Article 12. 
If any option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to
be exercisable in whole or in part, the unpurchased shares subject thereto
shall again be available under the Plan.


 


Beginning February 1,
2002 and each February 1 thereafter (each, an “Adjustment Date”), the
number of shares which may be issued pursuant to the Plan shall automatically
increase by such number of shares as is equal to the greater of (i) 0.75%
of the number of shares of Common Stock outstanding on the immediately
preceding December 31, and (ii) the number of shares of Common Stock
that has been made subject to options under the Plan during the year
immediately preceding such Adjustment Date; provided, however, that the Board
may provide for a lesser number of shares on any Adjustment Date by designating
such lesser number by resolution adopted on or before such Adjustment Date; and
provided further, however that the cumulative number of additional shares that
may be issued pursuant to the Plan as a result of increases on all Adjustment
Dates taken together may not exceed 1,000,000 shares (such number to be subject
to adjustment in accordance with Article 12 below).


 


Article 5 - Payment Period
and Stock Options.


 


The first Payment Period
during which payroll deductions will be accumulated under the Plan shall commence
on the effective date of the registration statement on Form S-1
registering


 


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the shares to be offered
in the initial public offering of the Common Stock (the “Offering”) and shall
end on July 31, 2001 (the “First Payment Period”).  For the remainder of the duration of the
Plan, Payment Periods shall consist of six-month periods commencing on February 1
and August 1 and ending on July 31 and January 31 of each
calendar year.


 


Twice each year, on the first business day of each
Payment Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option to purchase on the last day of such Payment
Period, at the Option Price hereinafter provided for, a maximum of 1,000 shares, on condition that such employee remains
eligible to participate in the Plan throughout the remainder of such Payment
Period.  The participant shall be
entitled to exercise the option so granted only to the extent of the
participant’s accumulated payroll deductions on the last day of such Payment
Period.  If the participant’s accumulated
payroll deductions on the last day of the Payment Period would enable the
participant to purchase more than the maximum number of shares provided herein
except for the share limitation set forth herein, the excess of the amount of
the accumulated payroll deductions over the aggregate purchase price of the
maximum number of shares which many be purchased in accordance with this Article 5
shall be promptly refunded to the participant by the Company, without
interest.  The Option Price per share for
each Payment Period shall be the lesser of (i) 85% of the average market
price of the Common Stock on the first business day of the Payment Period and (ii) 85%
of the average market price of the Common Stock on the last business day of the
Payment Period, in either event rounded up to the nearest cent.  Notwithstanding the foregoing, with respect
to the First Payment Period, the Option Price shall be calculated as the lesser
of (i) 85% of the price per share at which the Common Stock is sold to the
underwriters in the Offering, without regard to any applicable discounts or
commissions provided to such underwriters, and (ii) 85% of the average
market price of the Common Stock on the last business day of the First Payment
Period.  The foregoing limitation on the
number of shares subject to option and the Option Price shall be subject to
adjustment as provided in Article 12.


 


For purposes of the Plan, the term “average market price”
on any date means (i) the average (on that date) of the high and low
prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on
that date) of the Common Stock on the NASDAQ National Market, if the Common
Stock is not then traded on a national securities exchange; or (iii) the
average of the closing bid and asked prices last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Common
Stock is not reported on the NASDAQ National Market; or (iv) if the Common
Stock is not publicly traded, the fair market value of the Common Stock as
determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm’s length.


 


For purposes of the Plan,
the term “business day” means a day on which there is trading on the NASDAQ
National Market or the aforementioned national securities exchange, whichever
is applicable pursuant to the preceding paragraph; and if neither is
applicable, a day that is not a Saturday, Sunday or legal holiday in State of
Massachusetts.


 


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No employee shall be
granted an option which permits the employee’s right to purchase stock under
the Plan, and under all other Section 423(b) employee stock purchase
plans of the Company and any parent or subsidiary corporations, to accrue at a
rate which exceeds $25,000 of fair market value of such stock (determined on
the date or dates that options on such stock were granted) for each calendar
year in which such option is outstanding at any time.  The purpose of the limitation in the
preceding sentence is to comply with Section 423(b)(8) of the
Code.  If the participant’s accumulated
payroll deductions on the last day of the Payment Period would otherwise enable
the participant to purchase Common Stock in excess of the Section 423(b)(8) limitation
described in this paragraph, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the shares actually
purchased shall be promptly refunded to the participant by the Company, without
interest.


 


Article 6 - Exercise of
Option.


 


Each eligible employee
who continues to be a participant in the Plan on the last day of a Payment
Period shall be deemed to have exercised his or her option on such date and
shall be deemed to have purchased from the Company such number of full shares
of Common Stock reserved for the purpose of the Plan as the participant’s
accumulated payroll deductions on such date will pay for at the Option Price,
subject to the maximum share limit of
the option and the Section 423(b)(8) limitation described in Article 5.  If the individual is not a participant on the
last day of a Payment Period, the he or she shall not be entitled to exercise
his or her option.  Only full shares of
Common Stock may be purchased under the Plan. 
Unused payroll deductions remaining in a participant’s account at the
end of a Payment Period by reason of the inability to purchase a fractional
share shall be carried forward to the next Payment Period.


 


Article 7 - Authorization
for Entering the Plan.


 


An employee may elect to
enter the Plan by filling out, signing and delivering to the Company an
authorization:


 


A.            Stating the percentage to be deducted regularly from the
employee’s pay;


 


B.            Authorizing the purchase of stock for the employee in
each Payment Period in accordance with the terms of the Plan; and


 


C.            Specifying the exact name or names in which stock
purchased for the employee is to be issued as provided under Article 11
hereof.


 


Such authorization must
be received by the Company at least ten days before the first day of the next
succeeding Payment Period and shall take effect only if the employee is an
eligible employee on the first business day of such Payment Period; provided, however,
that with respect to the First Payment Period, an option shall be granted to
each eligible employee and such authorization to participate in the plan must
be received no more than three weeks following the first day of the First
Payment Period.


 


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Unless a participant
files a new authorization or withdraws from the Plan, the deductions and
purchases under the authorization the participant has on file under the Plan
will continue from one Payment Period to succeeding Payment Periods as long as
the Plan remains in effect.


 


The Company will
accumulate and hold for each participant’s account the amounts deducted from
his or her pay.  No interest will be paid
on these amounts.


 


Article 8 - Maximum Amount
of Payroll Deductions.


 


An employee may authorize
payroll deductions in an amount (expressed as a whole percentage) not less than
one percent (1%) but not more than ten percent (10%) of the employee’s
total compensation, including base pay or salary and any overtime, bonuses or
commissions.


 


Article 9 - Change in
Payroll Deductions.


 


Deductions may not be
increased or decreased during a Payment Period. 
However, a participant may withdraw in full from the Plan.


 


Article 10 - Withdrawal from
the Plan.


 


A participant may
withdraw from the Plan (in whole but not in part) at any time prior to the last
day of a Payment Period by delivering a withdrawal notice to the Company.


 


To re-enter the Plan, an
employee who has previously withdrawn must file a new authorization at least
ten days before the first day of the next Payment Period in which he or she
wishes to participate.  The employee’s
re-entry into the Plan becomes effective at the beginning of such Payment
Period, provided that he or she is an eligible employee on the first business
day of the Payment Period.


 


Article 11 - Issuance of
Stock.


 


Certificates for stock
issued to participants shall be delivered as soon as practicable after each
Payment Period by the Company’s transfer agent.


 


Stock purchased under the
Plan shall be issued only in the name of the participant, or if the participant’s
authorization so specifies, in the name of the participant and another person
of legal age as joint tenants with rights of survivorship.


 


Article 12 - Adjustments.


 


Upon the happening of any
of the following described events, a participant’s rights under options granted
under the Plan shall be adjusted as hereinafter provided:


 


A.            In the event that the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if, upon a
reorganization, split-up,


 


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liquidation,
recapitalization or the like of the Company, the shares of Common Stock shall
be exchanged for other securities of the Company, each participant shall be
entitled, subject to the conditions herein stated, to purchase such number of
shares of Common Stock or amount of other securities of the Company as were
exchangeable for the number of shares of Common Stock that such participant
would have been entitled to purchase except for such action, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or exchange; and


 


B.            In the event the Company shall issue any of its shares as
a stock dividend upon or with respect to the shares of stock of the class which
shall at the time be subject to option hereunder, each participant upon
exercising such an option shall be entitled to receive (for the purchase price
paid upon such exercise) the shares as to which the participant is exercising
his or her option and, in addition thereto (at no additional cost), such number
of shares of the class or classes in which such stock dividend or dividends
were declared or paid, and such amount of cash in lieu of fractional shares, as
is equal to the number of shares thereof and the amount of cash in lieu of
fractional shares, respectively, which the participant would have received if
the participant had been the holder of the shares as to which the participant
is exercising his or her option at all times between the date of the granting
of such option and the date of its exercise.


 


Upon the happening of any
of the foregoing events, the class and aggregate number of shares set forth in Article 4
hereof which are subject to options which have been or may be granted under the
Plan and the limitations set forth in the second paragraph of Article 5
shall also be appropriately adjusted to reflect the events specified in
paragraphs A and B above. 
Notwithstanding the foregoing, any adjustments made pursuant to
paragraphs A or B shall be made only after the Committee, based on advice
of counsel for the Company, determines whether such adjustments would
constitute a “modification” (as that term is defined in Section 424 of the
Code).  If the Committee determines that
such adjustments would constitute a modification, it may refrain from making
such adjustments.


 


If the Company is to be
consolidated with or acquired by another entity in a merger, a sale of all or
substantially all of the Company’s assets or otherwise (an “Acquisition”), the
Committee or the board of directors of any entity assuming the obligations of
the Company hereunder (the “Successor Board”) shall, with respect to options
then outstanding under the Plan, either (i) make appropriate provision for
the continuation of such options by arranging for the substitution on an
equitable basis for the shares then subject to such options either (a) the
consideration payable with respect to the outstanding shares of the Common
Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c) such
other securities as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market value of the shares
of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant’s options in exchange for a cash
payment equal to the excess of (a) the fair market value on the date of
the Acquisition, of the number of shares of Common Stock that the participant’s
accumulated payroll deductions as of the date of the Acquisition could
purchase, at an option price determined with reference only to the first business
day of the applicable Payment Period and subject to the maximum share
limitation set forth in Article 5 hereof, Code


 


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Section 423(b)(8) and
fractional-share limitations on the amount of stock a participant would be
entitled to purchase, over (b) the result of multiplying such number of
shares by such option price.


 


The Committee or
Successor Board shall determine the adjustments to be made under this Article 12,
and its determination shall be conclusive.


 


Article 13 - No Transfer or
Assignment of Employee’s Rights.


 


An option granted under
the Plan may not be transferred or assigned, except by will or the laws of
descent and distribution, and shall be exercised, during the participant’s
lifetime, only by the participant.


 


Article 14 - Termination of
Employee’s Rights.


 


Whenever a participant
ceases to be an eligible employee because of retirement, voluntary or
involuntary termination, resignation, layoff, discharge, death or for any other
reason, his or her rights under the Plan shall immediately terminate, and the
Company shall promptly refund, without interest, the entire balance of his or
her payroll deduction account under the Plan. 
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or for so long as the
participant’s right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.


 


Article 15 - Termination and
Amendments to Plan.


 


Unless terminated sooner
as provided below, the Plan shall terminate on January 31, 2011.  The Plan may be terminated at any time by the
Company’s Board of Directors but such termination shall not affect options then
outstanding under the Plan.  It will
terminate in any case when all or substantially all of the unissued shares of
stock reserved for the purposes of the Plan have been purchased.  If at any time shares of stock reserved for
the purpose of the Plan remain available for purchase but not in sufficient
number to satisfy all then unfilled purchase requirements, the available shares
shall be apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise be
used to purchase stock, and the Plan shall terminate.  Upon such termination or any other
termination of the Plan, all payroll deductions not used to purchase stock will
be refunded, without interest.


 


The Committee or the
Board of Directors may from time to time adopt amendments to the Plan provided
that, without the approval of the stockholders of the Company, no amendment may
(i) increase the number of shares that may be issued under the Plan; (ii) change
the class of employees eligible to receive options under the Plan, if such
action would be treated as the adoption of a new plan for purposes of Section 423(b) of
the Code; or (iii) cause Rule 16b-3 under the Securities Exchange Act
of 1934 to become inapplicable to the Plan.


 


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Article 16 - Limits on Sale
of Stock Purchased under the Plan.


 


The Plan is intended to
provide shares of Common Stock for investment and not for resale.  The Company does not, however, intend to
restrict or influence any employee in the conduct of his or her own
affairs.  An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject
to compliance with any applicable federal or state securities laws and subject
to any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied.  THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE
OF THE STOCK.


 


Article 17 - Participating
Subsidiaries.


 


The term “participating
subsidiary” shall mean any present or future subsidiary of the Company, as that
term is defined in Section 424(f) of the Code, which is designated
from time to time by the Board of Directors to participate in the Plan.  The Board of Directors shall have the power
to make such designation before or after the Plan is approved by the
stockholders.


 


Article 18 - Optionees Not
Stockholders.


 


Neither the granting of
an option to an employee nor the deductions from his or her pay shall
constitute such employee a stockholder of the shares covered by an option until
such shares have been actually purchased by the employee.


 


Article 19 - Application of
Funds.


 


The proceeds received by
the Company from the sale of Common Stock pursuant to options granted under the
Plan will be used for general corporate purposes.


 


Article 20 - Notice to
Company of Disqualifying Disposition.


 


By electing to
participate in the Plan, each participant agrees to notify the Company in
writing immediately after the participant transfers Common Stock acquired under
the Plan, if such transfer occurs within two years after the first
business day of the Payment Period in which such Common Stock was
acquired.  Each participant further
agrees to provide any information about such a transfer as may be requested by
the Company or any subsidiary corporation in order to assist it in complying
with the tax laws.  Such dispositions
generally are treated as “disqualifying dispositions” under Sections 421 and
424 of the Code, which have certain tax consequences to participants and to the
Company and its participating subsidiaries.


 


Article 21 - Withholding of
Additional Income Taxes.


 


By electing to
participate in the Plan, each participant acknowledges that the Company and its
participating subsidiaries are required to withhold taxes with respect to the
amounts deducted from the participant’s compensation and accumulated for the
benefit of the participant under the Plan, and each participant agrees that the
Company and its participating subsidiaries may deduct additional amounts from
the participant’s compensation, when amounts are added to


 


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the participant’s
account, used to purchase Common Stock or refunded, in order to satisfy such
withholding obligations.  Each
participant further acknowledges that when Common Stock is purchased under the
Plan the Company and its participating subsidiaries may be required to withhold
taxes with respect to all or a portion of the difference between the fair market
value of the Common Stock purchased and its purchase price, and each
participant agrees that such taxes may be withheld from compensation otherwise
payable to such participant.  It is
intended that tax withholding will be accomplished in such a manner that the
full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. 
However, if amounts sufficient to satisfy applicable tax withholding
obligations have not been withheld from compensation otherwise payable to any
participant, then, notwithstanding any other provision of the Plan, the Company
may withhold such taxes from the participant’s accumulated payroll deductions
and apply the net amount to the purchase of Common Stock, unless the
participant pays to the Company, prior to the exercise date, an amount
sufficient to satisfy such withholding obligations.  Each participant further acknowledges that
the Company and its participating subsidiaries may be required to withhold
taxes in connection with the disposition of stock acquired under the Plan and
agrees that the Company or any participating subsidiary may take whatever
action it considers appropriate to satisfy such withholding requirements,
including deducting from compensation otherwise payable to such participant an
amount sufficient to satisfy such withholding requirements or conditioning any
disposition of Common Stock by the participant upon the payment to the Company
or such subsidiary of an amount sufficient to satisfy such withholding requirements.


 


Article 22 - Governmental
Regulations.


 


The Company’s obligation
to sell and deliver shares of Common Stock under the Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance or sale of such shares.


 


Government regulations may
impose reporting or other obligations on the Company with respect to the
Plan.  For example, the Company may be
required to identify shares of Common Stock issued under the Plan on its stock
ownership records and send tax information statements to employees and former
employees who transfer title to such shares.


 


Article 23 - Governing Law.


 


The validity and
construction of the Plan shall be governed by the laws of Delaware, without
giving effect to the principles of conflicts of law thereof.


 


Article 24 - Approval of
Board of Directors and Stockholders of the Company.


 


The Plan was adopted by the Board of Directors on October 17,
2000 and was approved by the stockholders of the Company on October 17,
2000. The Plan was subsequently amended by the Board of Directors, without the
need for stockholder approval, on July 22, 2003.


 


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