Exhibit 10.14


 


EXACT SCIENCES CORPORATION


 


Incentive Stock Option Agreement


Terms and Conditions


 


1.             Grant
Under Plan. 
This option is granted pursuant to and is governed by the Company’s 2000 Stock
Option and Incentive Plan (the “Plan”) and, unless the context otherwise
requires, terms used herein shall have the same meaning as in the Plan. 
Determinations made in connection with this option pursuant to the Plan shall
be governed by the Plan as it exists on the Grant Date.


 


2.             Grant as Incentive Stock Option.  This option is intended to
qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”).


 


3.             Vesting of Option if Employment
Continues. 
All of the Option Shares initially shall be unvested shares.  For so long
as the Employee remains continuously employed by the Company the Option Shares
shall become vested according to the schedule set forth below and the Employee
may exercise this option as to any vested shares:


 


	
  Vesting Date

  	
   

  	
  Number of Vested Shares

  
	
   

  	
   

  	
   

  
	
  One year from the
  Vesting Start Date

  	
  -

  	
  25% of the Option
  Shares

  
	
   

  	
   

  	
   

  
	
  On the 1st day of each
  subsequent one month period following one year from the vesting start date.

  	
  -

  	
  2.083% of the Option
  Shares

  



 


Notwithstanding
the foregoing, the Board may, in its discretion, accelerate the date that any
installment of this option becomes exercisable.  The foregoing rights are
cumulative and (subject to Sections 4 or 5 hereof if the Employee ceases to be
employed by the Company) may be exercised only before the date which is ten
years from the date of this option grant.


 


4.             Termination of Employment.


 


(a)           Termination Other Than for Cause.  If the Employee ceases to be
employed by the Company, other than by reason of death or disability as defined
in Section 5 or termination for Cause as defined in Section 4(c), no
further installments of this option shall become exercisable, and this option
shall expire (may no longer be


 

















 


exercised) after the passage of three months from the
Employee’s last day of employment, but in no event later than the scheduled
expiration date.  For purposes hereof, employment shall not be considered
as having terminated during any  leave
of absence if such leave of absence has been approved in writing by the Company
and if such written approval contractually obligates the Company to continue
the employment of the Employee after the approved period of absence; in the
event of such an approved leave of absence, vesting of this option shall be
suspended (and the period of the leave of absence shall be added to all vesting
dates) unless otherwise provided in the Company’s written approval of the leave
of absence.  For purposes hereof, employment shall include a consulting
arrangement between the Employee and the Company that immediately follows
termination of employment, but only if so stated in a written consulting
agreement executed by the Company that specifically refers to this
option.  This option shall not be affected by any change of employment within
or among the Company and its Subsidiaries so long as the Employee continuously
remains an employee of the Company or any Subsidiary (as defined in the Plan).


 


(b)           Termination for Cause.  If the employment of the Employee
is terminated for Cause (as defined in Section 4(c)), this option shall
expire (that is, may no longer be exercised) upon the Employee’s receipt of
written notice of such termination and shall thereafter not be exercisable to
any extent whatsoever.


 


(c)           Definition of Cause.  “Cause” shall mean conduct
involving one or more of the following: (i) the substantial and continuing
failure of the Employee, after notice thereof, to render services to the
Company in accordance with the terms or requirements of his or her employment; (ii) disloyalty,
gross negligence, willful misconduct, dishonesty, fraud or breach of fiduciary
duty to the Company;  (iii) deliberate disregard of the rules or
policies of the Company, or breach of an employment or other agreement with the
Company, which results in direct or indirect loss, damage or injury to the
Company; (iv) the unauthorized disclosure of any trade secret or
confidential information of the Company; or (v) the commission of an act
which constitutes unfair competition with the Company or which induces any customer
or supplier to breach a contract with the Company.


 


5.             Death; Disability.


 


(a)           Death.  If the Employee dies while in the
employ of the Company, this option may be exercised, to the extent otherwise
exercisable on the date of his or her death, by the Employee’s estate, personal
representative or beneficiary to whom this option has been transferred pursuant
to Section 9, only at any time within 180 days after the date of
death, but not later than the scheduled expiration date.


 


(b)           Disability.  If the Employee ceases to be
employed by the Company by reason of his or her disability, this option may be
exercised, to the extent otherwise exercisable on the date of cessation of
employment, only at any time within 180 days after such cessation of employment,
but not later than the scheduled expiration date.  For


 


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purposes hereof, “disability”
means “permanent and total disability” as defined in Section 22(e)(3) of
the Code.


 


6.             Partial Exercise.  This option may be exercised in
part at any time and from time to time within the above limits, except that
this option may not be exercised for a fraction of a share.


 


7.             Payment of Exercise Price.


 


(a)           Payment Options.  The exercise price shall be paid
by one or any combination of the following forms of payment that are applicable
to this option, as indicated on the cover page hereof:


 


(i)                                    in cash, or by check payable to the order
of the Company;


 


(ii)                                if the Common Stock is then traded on a
national securities exchange or on the Nasdaq National Market (or successor
trading system), delivery of an irrevocable and unconditional undertaking,
satisfactory in form and substance to the Company, by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
delivery by the Employee to the Company of a copy of irrevocable and
unconditional instructions, satisfactory in form and substance to the Company,
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient
to pay the exercise price;


 


(iii)                            subject to Section 7(b) below,
if the Common Stock is then traded on a national securities exchange or on the
Nasdaq National Market (or successor trading system), by delivery of shares of
Common Stock owned by the Employee having a fair market value equal as of the
date of exercise to the option price; or


 


(iv)                               any combination of (i), (ii) and (iii) above.


 


In the case of (iii) above,
fair market value as of the date of exercise shall be determined as of the last
business day for which such prices or quotes are available prior to the date of
exercise and shall mean (x) the last reported sale price (on that date) 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 (y) the last reported sale price (on that date) of
the Common Stock on the Nasdaq National Market (or successor trading system),
if the Common Stock is not then traded on a national securities exchange.


 


(b)           Limitations on Payment by Delivery
of Common Stock. 
If Section 7(a)(iii) is applicable, and if the Employee delivers
Common Stock held by the Employee (“Old Stock”) to the Company in full
or partial payment of the exercise price and the Old


 


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Stock so delivered is subject to restrictions or
limitations imposed by agreement between the Employee and the Company, an
equivalent number of Option Shares shall be subject to all restrictions and
limitations applicable to the Old Stock to the extent that the Employee paid
for the Option Shares by delivery of Old Stock, in addition to any restrictions
or limitations imposed by this Agreement.  Notwithstanding the foregoing,
the Employee may not pay any part of the exercise price hereof by transferring
Common Stock to the Company unless such Common Stock has been owned by the
Employee free of any substantial risk of forfeiture for at least
six months.


 


8.             Method of Exercising Option.  Subject to the terms and
conditions of this Agreement, this option may be exercised by written notice to
the Company at its principal executive office, or to such transfer agent as the
Company shall designate.  Such notice shall state the election to exercise
this option and the number of Option Shares for which it is being exercised and
shall be signed by the person or persons so exercising this option.  Such
notice shall be accompanied by payment of the full purchase price of such
shares, and the Company shall deliver a certificate or certificates
representing such shares as soon as practicable after the notice shall be
received.  Such certificate or certificates shall be registered in the
name of the person or persons so exercising this option (or, if this option shall
be exercised by the Employee and if the Employee shall so request in the notice
exercising this option, shall be registered in the name of the Employee and
another person jointly, with right of survivorship). In the event this option
shall be exercised, pursuant to Section 5 hereof, by any person or persons
other than the Employee, such notice shall be accompanied by appropriate proof
of the right of such person or persons to exercise this option.


 


9.             Option Not Transferable.  This option is not transferable
or assignable except by will or by the laws of descent and distribution. 
During the Employee’s lifetime only the Employee can exercise this option.


 


10.          No Obligation to Exercise Option.  The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.


 


11.          No Obligation to Continue
Employment. 
Neither the Plan, this Agreement, nor the grant of this option imposes any
obligation on the Company to continue the employment of the Employee.


 


12.          No Rights as Stockholder until
Exercise. 
The Employee shall have no rights as a stockholder with respect to the Option
Shares until such time as the Employee has exercised this option by delivering
a notice of exercise and has paid in full the purchase price for the shares so
exercised in accordance with Section 8.  Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to such date of exercise.


 


13.          Capital Changes and Business
Successions. 
The Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and mergers.  Provisions in the Plan
for adjustment with respect to stock subject to options and the related


 


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provisions with respect
to successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.


 


14.          Withholding Taxes.  If the Company in its discretion
determines that it is obligated to withhold any tax in connection with the
exercise of this option, or in connection with the transfer of, or the lapse of
restrictions on, any Common Stock or other property acquired pursuant to this
option, the Employee hereby agrees that the Company may withhold from the
Employee’s wages or other remuneration the appropriate amount of tax.  At
the discretion of the Company, the amount required to be withheld may be
withheld in cash from such wages or other remuneration or in kind from the
Common Stock or other property otherwise deliverable to the Employee on
exercise of this option.  The Employee further agrees that, if the Company
does not withhold an amount from the Employee’s wages or other remuneration
sufficient to satisfy the withholding obligation of the Company, the Employee
will make reimbursement on demand, in cash, for the amount underwithheld.


 


15.          Early Disposition.  The Employee agrees to notify the
Company in writing immediately after the Employee transfers any Option Shares,
if such transfer occurs on or before the later of (a) the date that is two
years after the date of this Agreement or (b) the date that is one year
after the date on which the Employee acquired such Option Shares.  The
Employee also agrees to provide the Company with any information concerning any
such transfer required by the Company for tax purposes.


 


16.          Lock-up Agreement. The Employee agrees that in the event
that the Company effects an underwritten public offering of Common Stock
registered under the Securities Act, the Option Shares may not be sold, offered
for sale or otherwise disposed of, directly or indirectly, without the prior
written consent of the managing underwriter(s) of the offering, for such period
of time after the execution of an underwriting agreement in connection with
such offering that all of the Company’s then directors and executive officers
agree to be similarly bound.


 


17.          Provision of Documentation to
Employee. 
By signing this Agreement the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Plan.


 


18.          Compliance with Securities Act.  The Company shall not be obligated
to sell or issue any Common Stock or other securities pursuant to the exercise
of this option unless the shares of Common Stock or other securities with
respect to which this option is being exercised are at that time effectively
registered or exempt from registration under the Securities Act of 1933, as
amended, and applicable state securities laws.  In the event shares or
other securities shall be issued which shall not be so registered, the Employee
hereby represents, warrants and agrees that he will receive such shares or
other securities for investment and not with a view to their resale or distribution,
and will execute an appropriate investment letter satisfactory to the Company
and its counsel.


 


19.          Amendment of Option.  The Board may amend, modify or
terminate this option including, but not limited to, substituting therefor
another option of the same or a different type and changing the date of
exercise or realization, provided that, the
Employee’s consent to such


 


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action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Employee.


 


20.          Miscellaneous.


 


(a)           Notices.  All notices hereunder shall be in
writing and shall be deemed given when sent by certified or registered mail,
postage prepaid, return receipt requested, if to the Employee, to the address
set forth on the Cover Sheet or at the address shown on the records of the
Company, and if to the Company, to the Company’s principal executive offices,
attention of the Corporate Secretary.


 


(b)           Entire Agreement.  This Agreement constitutes the
entire agreement between the parties relative to the subject matter hereof, and
supersedes all proposals, written or oral, and all other communications between
the parties relating to the subject matter of this Agreement.


 


(c)           Fractional Shares.  If this option becomes exercisable for a
fraction of a share because of the adjustment provisions contained in the Plan,
such fraction shall be rounded down to the nearest whole share.


 


(d)           Severability.  The invalidity, illegality or
unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision.


 


(e)           Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, subject to the limitations set forth in Section 9
hereof.


 


(f)            Governing Law.  This Agreement shall be governed
by and interpreted in accordance with the laws of the Delaware, without giving
effect to the principles of the conflicts of laws thereof.


 


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