Document:

Exhibit 10.2

 

 

August 27, 2013

 

James P. Connelly
 777 E. Wisconsin Avenue
 Milwaukee, WI  53202

 

RE:  Consulting Agreement for Healthcare System Outreach Services

 

Dear Jim:

 

This letter memorializes and serves as a contract regarding the terms and conditions pursuant to which you agree to provide healthcare system outreach services for Exact.  Please confirm your agreement to these terms and conditions by signing where indicated below and returning the signed letter to Kevin Conroy.

 

Business Issue

 

Exact’s commercialization strategy is dependent upon acceptance and adoption of the CRC screening test at large group practices and leading healthcare institutions.  To further this objective, we have a need for a highly experienced and well respected advisor who has strong relationships with CEOs and CMOs of large healthcare providers to provide expert assistance and executive level access to key decision makers with regard to the commercialization of our colon cancer screening product. In addition, the advisor will work very closely with Exact’s Chief Operating Officer, Maneesh Arora, to provide insight and options with regard to the overall communication plan and messaging to these institutions.

 

Services and Responsibilities

 

We propose that you provide such advisory services, in addition to your current role as board chairman.  We believe your 20-years of experience as outside general counsel to the American Group Medical Association can help accelerate the achievement of Exact’s commercial objectives by:

 

·                  Making introductions to CEOs/CMOs with whom you have long-standing professional and personal relationships,

·                  Helping Exact make the case for Cologuard’s adoption within these institutions, and

·                  Providing counsel to Maneesh Arora regarding the individual dynamics of institutions/prospective customers.

 

Other Terms and Conditions

 

The term of the contract would be twelve (12) months from the date set forth above (the “Effective Date”), terminable by either you or Exact at any time for any reason.

 

 

 

Over the term of the contract, in addition to the general advisory services described above, you will provide:

 

·                  Feedback on Exact’s outreach and communication plan including value propositions and key messaging to leading group practices and integrated delivery networks.

 

·                  Outreach to the Top 12 opinion shapers, which may include, but is not limited to:

 

·                  Personal outreach to CXO level contacts to introduce the company and begin to establish a relationship.  Communication to personal contacts as Exact reaches key milestones in the trial, approval and commercialization process.

 

·                  Facilitation of meetings with the CXO office and sponsor for the purpose of gaining market insight and establishing a shared objective of eradicating colorectal cancer.

 

·                  Facilitation of stakeholder identification and understanding of acceptance process, to include escalation if needed.

 

·                  Outreach to an additional 38 institutions, which may include, but is not limited to:

 

·                  Personal outreach to introduce the company and facilitate stakeholder identification.

 

Engagement Fees

 

You agree to dedicate one to two days per month for outreach activity for a total of approximately 24 days per year. Actual hours per month will depend on the outreach activity and need during a particular month.

 

The rate for your services will be $5,000 per month (pro-rated for any partial months).  It is agreed that you will work on an as-needed basis through completion of this engagement or unless Exact provides notice requesting an amended schedule including terminating the agreement at any time.  You agree that under this agreement, you are serving as a consultant and an independent contractor, and not as an employee, officer or agent of Exact.

 

Out-of-pocket expenses are expected on this engagement. Reasonable, out-of-pocket expenses (including transportation to Exact’s Madison location, transportation to healthcare institutions, hotels, per diems, etc.) will be billed at the actual amounts incurred, and will be in accordance with Exact’s travel policies.

 

 

In addition, Exact will issue an equity grant to you for restricted stock units under the company’s equity plan equal in value to $50,000.00 upon the Effective Date.  Such restricted stock units will vest one year following the grant date.

 

 

	
 
    	
 
    	
Sincerely,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Lionel N. Sterling
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Lionel   N. Sterling
    
	
 
    	
 
    	
Chairman,   Audit Committee
    
	
 
    	
 
    	
 
    
	
AGREED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   James P. Connelly
    	
 
    	
 
    
	
James   P. ConnellyExhibit 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
    	
 
    	
 
    

 

 

	
 
    	
—
    	
 
    	
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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