Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into effective as of the 15th day of March, 2011, by and between John M. Krayacich (“Employee”) and Exact Sciences Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Company desires to employ Employee as its Senior Vice President, Sales and Marketing  and Employee desires to accept such employment pursuant to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:

 

1.             Employment.  The Company hereby agrees to employ Employee as the Company’s Senior Vice President, Sales and Marketing, in which capacity Employee will function as the Company’s chief commercial officer, and Employee hereby agrees to serve the Company in such position, subject to the terms and provisions of this Agreement subject to the authority and direction of the Board of Directors of the Company.  Employee agrees (a) to devote his full-time professional efforts, attention and energies to the business of the Company, and (b) shall faithfully and to the best of his ability perform his duties hereunder.  Employee may serve as a director or committee member of other corporations, charitable organizations and trade associations (provided that the Company is notified in advance of all such positions) and may otherwise engage in charitable and community activities, deliver lectures and fulfill speaking engagements (with the prior approval of the CEO), and manage personal investments, but only if such services and activities do not interfere with the performance of his duties and responsibilities under this Agreement.

 

2.             Term of Employment.  Employee’s employment (the “Employment Term”) will continue until terminated as provided in Section 6 below.

 

3.             Compensation. During the Employment Term, Employee shall receive the following compensation.

 

3.1           Base Salary. Employee’s annual base salary on the date of this Agreement is $300,000, payable in accordance with the normal payroll practices of the Company (“Base Salary”). Employee’s Base Salary will be subject to annual review by the Chief Executive Officer (“CEO”), the Compensation Committee and the Board of Directors of the Company. During the Employment Term, on each anniversary date of this Agreement, the Company shall review the Base Salary amount to determine any increases. In no event shall the Base Salary be less than the Base Salary amount for the immediately preceding twelve (12) month period other than as permitted in Section 6.1(c) hereunder.

 

3.2           Annual Bonus Compensation. Employee shall be eligible to receive an annual cash bonus as determined by the Company’s Chief Executive Officer and the Compensation Committee each calendar year (including a pro-rated bonus for calendar year 2011, measured for the period between Employee’s first day of employment with the Company and December 31, 2011). Employee’s target annual bonus percentage that he is eligible to earn for each calendar year shall be forty percent (40%) of his Base Salary as of January 1 of the applicable new calendar year. Any such bonus shall be based upon the achievement of goals determined by the Compensation Committee after consultation with the CEO, shall be paid no later than March 15 following the end of each calendar year, and except as set forth in Section 7 hereof, Employee shall not be entitled to receive an annual bonus for any calendar year (including the bonus referenced above) unless he remains employed with the Company through

 

 

December 31 of the applicable calendar year; provided, however, that if Employee is terminated with Cause or resigns without Good Reason, no bonus will be due.

 

3.3           Equity Incentives.

 

(a)           The Board of Directors, upon the recommendation of the Compensation Committee, or the Compensation Committee, may grant Employee from time to time options to purchase shares of the Company’s common stock, and/or other equity awards including without limitation restricted stock, both as a reward for past individual and corporate performance, and as an incentive for future performance.  Such options and/or other awards, if awarded, will be pursuant to the Company’s then current equity incentive plan.

 

(b)           Employee will receive an initial stock option grant of Three Hundred  Thousand (300,000) shares of the Company’s common stock pursuant to the Company’s stock option plan upon commencement of employment.  Such stock option shall qualify as an incentive stock option to the maximum amount permissible by law while the remainder will be non-qualified stock options.  The price of the stock option grant will be not less than the fair market value per share on the date of grant and such option will have a term of ten years.  Twenty five percent (25%) of the shares underlying such options shall vest on the first anniversary of the date of grant and the balance shall vest in equal monthly installments over the remaining three-year period, subject to the acceleration of vesting (i) as described in Section 6.3 hereof, (ii) as described in Section 7.1(d) and 7.2(b) hereof, and (iii) as may be set forth in the grant agreements issued by the Company, as amended, provided, that in the event of a conflict between any grant agreement and this Agreement, this Agreement shall control.

 

(c)           Within the (2) years following the effective date of this Agreement, the Board of Directors, upon the recommendation of the Compensation Committee, or the Compensation Committee, may, in its sole and absolute discretion, grant Employee a performance-based option to purchase up to One Hundred Thousand shares of the Company’s common stock, or grant an alternative equity-based award (including of restricted stock) of approximately equivalent value.  The amount and the performance bases of any such award shall be determined by the Board of Directors, upon the recommendation of the Compensation Committee, or the Compensation Committee, in its sole and absolute discretion.  The price of any such award that is a stock option will be not less than the fair market value per share on the date of grant and such option will have a term of ten years.  Twenty five percent (25%) of any such award shall vest on the first anniversary of the date of grant and the balance shall vest in equal monthly installments over the remaining three-year period, subject to the acceleration of vesting (i) as described in Section 6.3 hereof, (ii) as

 

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described in Section 7.1(d) and 7.2(b) hereof, and (iii) as may be set forth in the grant agreements issued by the Company, as amended, provided, that in the event of a conflict between any grant agreement and this Agreement, this Agreement shall control.

 

4.             Benefits.

 

4.1           Benefits. Employee will be entitled to participate, effective on his first day of employment with the Company, in the sick leave, insurance (including medical, life and long-term disability), profit-sharing, retirement, and other benefit programs that are generally provided to employees of the Company similarly situated, all in accordance with the rules and policies of the Company as to such matters and the plans established therefore.

 

4.2           Vacation and Personal Time. The Company will provide Employee with four (4) weeks of paid vacation each calendar year Employee is employed by the Company, in accordance with Company policy. The foregoing vacation days shall be in addition to standard paid holiday days for employees of the Company.

 

4.3           Indemnification. To the fullest extent permitted by applicable law and as provided for in the Company’s articles of incorporation and bylaws the Company will, during and after termination of employment, indemnify Employee (including providing advancement of expenses) for any judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, incurred by Employee in connection with the defense of any lawsuit or other claim or investigation to which Employee is made, or threatened to be made, a party or witness by reason of being or having been an officer, director or employee of the Company or any of its subsidiaries or affiliates as deemed under the Securities Exchange Act of 1934 (“Affiliates”) or a fiduciary of any of their benefit plans.

 

4.4           Liability Insurance. Both during and after termination (for any reason) of Employee’s employment, the Company shall cause Employee to be covered under a directors and officers’ liability insurance policy for his acts (or non-acts) as an officer of the Company or any of its Affiliates. Such policy shall be maintained by the Company, at its expense in an amount and on terms (including the time period of coverage after the Employee’s employment terminates) at least as favorable to the Employee as policies covering the Company’s other members of its Board of Directors.

 

4.5       Relocation Expenses.  Company shall reimburse Employee for actual, customary, and reasonable, out-of-pocket relocation expenses incurred in connection with his relocation to Wisconsin for purposes of his employment with the Company in an aggregate amount not to exceed Seventy-Five Thousand Dollars ($75,000) (“Relocation Expenses”).  Each reimbursement payment pursuant to this Section 4.5 will be grossed up by 40% to compensate Employee approximately for any increased taxes payable by Employee as a result of such expense reimbursement.  Relocation Expenses include closing costs relating to the sale of Employee’s current house, payment for moving Employee’s household goods to Wisconsin, including packing, unpacking, and insurance, and the cost of moving up to two vehicles.  To obtain reimbursement for Relocation Expenses, Employee must timely provide the Company with reasonable documentation of such Relocation Expenses.  Employee agrees that if Employee terminates his employment with the Company without Good Reason (as defined below), or if the Company terminates Employee’s employment for Cause (as defined below), at any time before the first anniversary of the effective date of this Agreement, Employee shall repay all payments made to him pursuant to this Section 4.5 (including the amount by which payments of reimbursable Relocation Expenses are grossed up pursuant to the second sentence of this Section 4.5) within thirty (30) days of the effective date of his termination.  Any taxes payable with respect to the payments made by the Company to Employee pursuant to this Section 4.5 (including the gross up amounts paid pursuant to

 

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this Section 4.5) shall be the sole responsibility of Employee, and the Company will follow federal, state and local tax regulations with regard to the reporting such payments.

 

5.             Business Expenses. Upon submission of a satisfactory accounting by Employee, consistent with the policies of the Company, the Company will reimburse Employee for any reasonable and necessary out-of-pocket expenses incurred by Employee in the furtherance of the business of the Company.

 

6.             Termination.

 

6.1           By Employee.

 

(a)           Without Good Reason. Employee may terminate his employment pursuant to this Agreement at any time without Good Reason (as defined below) with at least thirty (30) business days’ written notice (the “Employee Notice Period”) to the Company. Upon termination by Employee under this section, the Company may, in its sole discretion and at any time during the Employee Notice Period, suspend Employee’s duties for the remainder of the Employee Notice Period, as long as the Company continues to pay compensation to Employee, including benefits, throughout the Employee Notice Period.

 

(b)           With Good Reason. Employee may terminate his employment pursuant to this Agreement with Good Reason (as defined below) at any time within ninety (90) days after the occurrence of an event constituting Good Reason.

 

(c)           Good Reason. “Good Reason” shall mean any of the following: (i) Employee’s Base Salary is reduced (x) in a manner that is not applied proportionately to other senior executive officers of the Company or (y) by more than thirty percent (30%) of Employee’s then current Base Salary; (ii) Employee’s duties, authority or responsibilities are materially reduced or are materially inconsistent with the scope of authority, duties and responsibilities of Employee’s position; (iii) the occurrence of a material breach by the Company of any of its obligations to Employee under this Agreement or (iv) the Company materially violates or continues to materially violate any law or regulation contrary to the written advice of Employee and the Company’s outside counsel to the Board of Directors and the Company fails to rectify such violation within thirty (30) days of the written advice that such violations are taking place.

 

6.2           By the Company.

 

(a)           With Cause. The Company may terminate Employee’s employment pursuant to this Agreement for Cause, as defined below, immediately upon written notice to Employee.

 

(b)           “Cause” shall mean any of the following:

 

(i)            any willful failure or refusal to perform the Employee’s duties which continues for more than ten (10) days after written notice from the Company, specifically identifying the manner in which the Company believed the Employee had failed or refused to perform his duties;

 

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(ii)           the commission of any fraud or embezzlement by the Employee in connection with the Employee’s duties or committed in the course of Employee’s employment;

 

(iii)          any gross negligence or willful misconduct of the Employee with regard to the Company or any of its subsidiaries resulting in a material economic loss to the Company;

 

(iv)          a conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving moral turpitude,

 

(v)           the Employee is convicted of a misdemeanor the circumstances of which involve fraud, dishonesty or moral turpitude and which is substantially related to the circumstances of Employee’s job with the Company;

 

(vi)          any willful and material violation by the Employee of any statutory or common law duty of loyalty to the Company or any of its subsidiaries resulting in a material economic loss; or

 

(vii)         any material breach by the Employee of this Agreement or any of the agreements referenced in Section 8 of this Agreement.

 

(c)           Without Cause.  Subject to Section 7.1, the Company may terminate Employee’s employment pursuant to this Agreement without Cause upon at least thirty days’ written notice (“Company Notice Period”) to Employee.  Upon any termination by the Company under this Section 6.2(c), the Company may, in its sole discretion and at any time during the Company Notice Period, suspend Employee’s duties for the remainder of the Company Notice Period, as long as the Company continues to pay compensation to Employee, including benefits, throughout the Company Notice Period.

 

6.3           Death or Disability. Notwithstanding Section 2, in the event of the death or disability of Employee during the Employment Term, (i) Employee’s employment and this Agreement shall immediately and automatically terminate, (ii) the Company shall pay Employee (or in the case of death, employee’s designated beneficiary) Base Salary and accrued but unpaid bonuses, in each case up to the date of termination, and (iii) all equity awards granted to Employee, whether stock options or stock purchase rights under the Company’s equity compensation plan, or other equity awards, that are unvested at the time of termination shall immediately become fully vested and exercisable upon such termination. Neither Employee, his beneficiary nor estate shall be entitled to any severance benefits set forth in Section 7 if terminated pursuant to this section. In the event of the disability of Employee, the parties agree to comply with applicable federal and state law.

 

6.4           Survival. The Confidential Information Agreement described in Section 8 hereof and attached hereto as Schedule A shall survive the termination of this Agreement.

 

7.             Severance and Other Rights Relating to Termination and Change of Control.

 

7.1           Termination of Agreement Pursuant to Section 6.l(b) or 6.2(c). If the Employee terminates his employment for Good Reason pursuant to Section 6.1(b), or the Company terminates Employee’s employment without Cause pursuant to Section 6.2(c), subject to the conditions described in Section 7.3 below, the Company will provide Employee the following payments and other benefits:

 

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(a)           (i) provided the Employee has completed six (6) full months as an employee of the Company at the time of such termination, salary continuation for a period of twelve (12) months at Employee’s then current Base Salary, which shall commence on the first payroll date which is on or immediately follows the 30th day following the termination of Employee’s employment, (ii) any accrued but unpaid Base Salary as of the termination date; and (iii) any accrued but unpaid bonus, including without limitation any performance-based bonus, as of the termination date, all on the same terms and at the same times as would have applied had Employee’s employment not terminated.

 

(b)           If Employee elects COBRA coverage for health and/or dental insurance in a timely manner, the Company shall pay the monthly premium payments for such timely elected coverage (consistent with what was in place at the date of termination) when each premium is due until the earlier of: (i) (12) twelve months from the date of termination; (ii) the date Employee obtains new employment which offers health and/or dental insurance that is reasonably comparable to that offered by the Company; or (iii) the date COBRA continuation coverage would otherwise terminate in accordance with the provisions of COBRA. Thereafter, health and dental insurance coverage shall be continued only to the extent required by COBRA and only to the extent Employee timely pays the premium payments himself.

 

(c)           Within thirty (30) days of the effective date of termination, the Company shall pay Employee Ten Thousand Dollars ($10,000) towards the cost of an outplacement consulting package for Employee.

 

(d)           The vesting of the then unvested equity awards granted to Employee, whether stock options, restricted stock or stock purchase rights under the Company’s equity compensation plan, or other equity awards, shall immediately accelerate by a period of 12 months upon such termination or resignation. Employee will be entitled to exercise such equity awards in accordance with Section 7.6.

 

7.2           Change of Control. The Board of Directors of the Company has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (defined in Section 7.2(a) below). The Board believes it is imperative to diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other similarly-situated companies. Therefore, in order to accomplish these objectives, the Board has caused the Company to include the provisions set forth in this Section 7.2.

 

(a)           Change of Control. “Change of Control” shall mean, and shall be deemed to have occurred if, on or after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or group acting in concert, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the

 

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Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 50% of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any 12-month period, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the consummation of a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of the Company’s assets.

 

(b)           Acceleration of Vesting of Equity Awards. Subject to Employee’s agreement to remain employed by the Company (or any successor), if requested, for a period of at least six (6) months following such Change of Control at his then current Base Salary, one hundred percent (100%) of the then unvested equity awards granted to Employee, whether stock options, restricted stock or stock purchase rights under the Company’s equity compensation plan, or other equity awards, shall immediately become fully vested and exercisable upon a Change of Control.  Employee will be entitled to exercise such vested equity awards in accordance with the applicable grant agreements.

 

7.3           Conditions Precedent. The Company’s obligations to Employee described in Sections 7.1 and 7.2 are contingent on Employee’s delivery to the Company of a signed waiver and release in a form reasonably satisfactory to the Company of all claims he may have against the Company, and his not revoking such release within 21 days after his date of termination. Moreover, the Employee’s rights to receive ongoing payments and benefits pursuant to Sections 7.1 and 7.2 (including, without limitation, the right to ongoing payments under the Company’s equity plans) are conditioned on the Employee’s ongoing compliance with his obligations as described in Section 8 hereof.  Any cessation by the Company of any such payments and benefits shall be in addition to, and not in lieu of, any and all other remedies available to the Company for Employee’s breach of his obligations described in Section 8 hereof.

 

7.4           No Severance Benefits. Employee is not entitled to any severance benefits if this Agreement is terminated pursuant to Sections 6.1(a) or 6.2(a) of this Agreement; provided however, Employee shall be entitled to (i) Base Salary prorated through the effective date of such termination; (ii) Bonuses which have been earned and for which the payment date occurs prior to the effective date of such termination; and (iii) medical coverage and other benefits required by law and plans (as provided in Section 7.5, below).

 

7.5           Benefits Required by Law and Plans: Vacation Time Pay. In the event of the termination of Employee’s employment, Employee will be entitled to medical and other insurance coverage, if any, as is required by law and, to the extent not inconsistent with this Agreement, to receive

 

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such additional benefits as Employee may be entitled under the express terms of applicable benefit plans (other than bonus or severance plans) of the Company, its subsidiaries and Affiliates.

 

7.6           Exercise Period of Equity Awards after Termination. Unless it would subject the Employee to adverse tax consequences under Section 885 of the American Jobs Creation Act of 2004, Pub. Law No. 108-357, 118 Stat. 1418 (the Act), which added § 409A to the Internal Revenue Code, notwithstanding anything contained herein or in the equity grant agreements to the contrary, in the event of the termination of Employee’s employment with the Company, Employee’s vested equity awards shall be open for exercise until the earlier of (i) two (2) years from the date of termination or (ii) the latest date on which those equity awards expire or are eligible to be exercised under the grant agreements, determined without regard to such termination or resignation; provided further that such extended exercise period shall not apply in the event the Employee resigns without Good Reason or is terminated by the Company for Cause, in which case, the exercise periods shall continue to be governed by the terms of the grant agreements.

 

7.7           409A Compliance.  Notwithstanding anything in this Section 7 to the contrary, to the extent that any payments under this Section 7 are considered deferred compensation subject to Section 409A of the Internal Revenue Code, such payments shall not be paid for six months following the Employee’s separation from service (if, and only to the extent, applicable and required for compliance with Section 409A).  To the extent that any payment is delayed pursuant to this subsection, it shall be paid on the first day after the end of such required period.

 

8.             Restrictions.

 

8.1           The Confidential Information Agreement. Employee will enter into and comply with the terms of the Employee Confidentiality and Assignment Agreement in substantially the form attached hereto as Exhibit A (the “Confidential Information Agreement”).

 

8.2           Agreement Not to Compete. In consideration for all of the payments and benefits that may become due to Employee under this Agreement, Employee agrees that during Employee’s employment by the Company and for a period of eighteen (18) months after termination of his employment for any reason, he will not, directly or indirectly, without the Company’s prior written consent, (a) perform for a Competing Entity in any Restricted Area any of the same services or substantially the same services that he performed for the Company; (b) in any Restricted Area, advise, assist, participate in, perform services for, or consult with a Competing Entity regarding the management, operations, business or financial strategy, marketing or sales functions or products or product development (including without limitation clinical trials) of the Competing Entity (the activities in clauses (a) and (b) collectively are, the “Restricted Activities”); or (c) solicit or divert the business of any Restricted Customer by offering competitive products or services to such Restricted Customer to the detriment of the Company. Employee acknowledges that in his position with the Company he has had and will have access to knowledge of confidential information about all aspects of the Company that would be of significant value to the Company’s competitors.

 

8.3           Additional Definitions.

 

(a)                                  “Customer” means any individual or entity for whom the Company has provided services or products or made a proposal to perform services or provide products.

 

(b)                                 “Restricted Customer” means any Customer with whom/which Employee had contact on behalf of the Company during the 12 months preceding the end, for whatever reason, of his employment.

 

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(c)                                  “Competing Entity” means any business entity engaged in the development, design, manufacture, marketing, distribution or sale of molecular diagnostic products.

 

(d)                                 “Restricted Area” means any geographic location where if Employee were to perform any Restricted Activities for a Competing Entity in such a location, the effect of such performance would be competitive to the Company.

 

8.4           Reasonable Restrictions On Competition Are Necessary.  Employee acknowledges that reasonable restrictions on competition are necessary to protect the interests of the Company. Employee also acknowledges that he has certain skills necessary to the success of the Company, and that the Company has provided and will provide to him certain confidential information that it would not otherwise provide because he has agreed not to compete with the business of the Company as set forth in this Agreement.

 

8.5           Restrictions Against Solicitations. Employee further covenants and agrees that during Employee’s employment by the Company and for a period of eighteen (18) months following the termination of his employment with the Company for any reason, he will not, except with the prior consent of the Company’s Chief Executive Officer, directly or indirectly, solicit or hire, or encourage the solicitation or hiring of, any person who is an employee of the Company for any position as an employee, independent contractor, consultant or otherwise, provided that the foregoing shall not prevent Employee from serving as a reference.

 

8.6           Affiliates. For purposes of this Section 8, the term “Company” will be deemed to include the Company and its Affiliates.

 

8.7           Ability to Obtain Other Employment. Employee hereby represents that his experience and capabilities are such that in the event his employment with the Company is terminated, he will be able to obtain employment if he so chooses during the period of noncompetition following the termination of employment described above without violating the terms of this Agreement, and that the enforcement of this Agreement by injunction, as described below, will not prevent him from becoming so employed.  To assist Employee in obtaining subsequent employment, the Company agrees to respond within 3 business days to any request of Employee as to whether a new position would be viewed by the Company as violation of the restrictions in this Agreement.

 

8.8           Injunctive Relief. Employee understands and agrees that if he violates any provision of this Section 8, then in any suit that the Company may bring for that violation, an order may be made enjoining him from such violation, and an order to that effect may be made pending litigation or as a final determination of the litigation. Employee further agrees that the Company’s application for an injunction will be without prejudice to any other right of action that may accrue to the Company by reason of the breach of this Section 8.

 

8.9           Severability. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  If, moreover, any one or more of the provisions contained in this Section 8 shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

 

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8.10         Section 8 Survives Termination. The provisions of this Section 8 will survive termination of this Agreement and the termination of the Employee’s employment. Employee understands that his obligations under this Section 8 will continue in accordance with its express terms regardless of any changes in title, position, duties, salary, compensation or benefits or other terms and conditions of employment.  The Company will have the right to assign Employee’s obligations under this Section 8 to its affiliates, successors and assigns.  Employee expressly consents to be bound by the provisions of this Section 8 for the benefit of the Company or any parent, subsidiary or affiliate to whose employ Employee may be transferred without the necessity that this Agreement be re-executed at the time of such transfer.

 

9.             Arbitration. Unless other arrangements are agreed to by Employee and the Company, any disputes arising under or in connection with this Agreement, other than a dispute in which the primary relief sought is an equitable remedy such as an injunction, will be resolved by binding arbitration to be conducted pursuant to the Agreement for Arbitration Procedure of Certain Employment Disputes attached as Exhibit B hereof.

 

10.           Assignments: Transfers: Effect of Merger. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation, or pursuant to the sale or transfer of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company. This Agreement will not be terminated by any merger, consolidation or transfer of assets of the Company referred to above. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement will be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to above, it will cause any successor or transferee unconditionally to assume, either contractually or as a matter of law, all of the obligations of the Company hereunder in a writing promptly delivered to the Employee. This Agreement will inure to the benefit of, and be enforceable by or against, Employee or Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, designees and legatees. None of Employee’s rights or obligations under this Agreement may be assigned or transferred by Employee other than Employee’s rights to compensation and benefits, which may be transferred only by will or operation of law. If Employee should die while any amounts or benefits have been accrued by Employee but not yet paid as of the date of Employee’s death and which would be payable to Employee hereunder had Employee continued to live, all such amounts and benefits unless otherwise provided herein will be paid or provided in accordance with the terms of this Agreement to such person or persons appointed in writing by Employee to receive such amounts or, if no such person is so appointed, to Employee’s estate.

 

11.           No Set-off. No Mitigation Required. Except as expressly provided otherwise in this Agreement, the obligation of the Company to make any payments provided for hereunder and otherwise to perform its obligations hereunder will not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Employee or others. In no event will Employee be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement, and such amounts will not be reduced (except as otherwise specifically provided herein) whether or not Employee obtains other employment.

 

12.           Taxes. The Company shall have the right to deduct from any payments made pursuant to this Agreement any and all federal, state, and local taxes or other amounts required by law to be withheld.

 

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13.           409A Compliance.  The intent of Employee and the Company is that the severance and other benefits payable to Employee under this Agreement not be deemed “deferred compensation” under, or otherwise fail to comply with, Section 409A of the Internal Revenue Code.  Employee and the Company agree to use reasonable best efforts to amend the terms of this Agreement from time to time as may be necessary to avoid the imposition of penalties or additional taxes under Section 409A of the Internal Revenue Code; provided, however, any such amendment will provide Employee substantially equivalent economic payments and benefits as set forth herein and will not in the aggregate, materially increase the cost to, or liability of, the Company hereunder.

 

14.           Miscellaneous. No amendment, modification or waiver of any provisions of this Agreement or consent to any departure thereof shall be effective unless in writing signed by the party against whom it is sought to be enforced. This Agreement contains the entire Agreement that exists between Employee and the Company with respect to the subjects herein contained and replaces and supersedes all prior agreements, oral or written, between the Company and Employee with respect to the subjects herein contained. Nothing herein shall affect any terms in the Confidential Information Agreement, the Agreement for Arbitration Procedure of Certain Employment Disputes, and any stock plans or agreements between Employee and the Company now and hereafter in effect from time to time (except as and to the extent expressly provided herein). If any provision of this Agreement is held for any reason to be unenforceable, the remainder of this Agreement shall remain in full force and effect. Each section is intended to be a severable and independent section within this Agreement. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. This Agreement is made in the State of Wisconsin and shall be governed by and construed in accordance with the laws of said State.

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. All notices and all other communications provided for in this Agreement shall be in writing and shall be considered duly given upon personal delivery, delivery by nationally reputable overnight courier, or on the third business day after mailing from within the United States by first class certified or registered mail, return receipt requested, postage prepaid, all addressed to the address set forth below each party’s signature. Any party may change its address by furnishing notice of its new address to the other party in writing in accordance herewith, except that any notice of change of address shall be effective only upon receipt.

 

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EXECUTION VERSION

 

The parties hereto have executed this Employment Agreement as of the date first written above.

 

 

	
 
    	
/s/   John M. Krayacich
    
	
 
    	
John   M. Krayacich (“Employee”)
    
	
 
    	
 
    
	
Notice   Address:
    	
 
    
	
188   Meyersville Road
    	
 
    
	
Chatham,   NJ 07928
    	
 
    
	
 
    	
Exact   Sciences Corporation (“Company”)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kevin T. Conroy
    
	
 
    	
 
    	
Kevin   T. Conroy
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
Notice   Address:
    	
 
    
	
441   Charmany Drive
    	
 
    
	
Madison,   WI 53719Exhibit 10.50

 

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

 

RESTRICTED STOCK AWARD AGREEMENT made as of  , between CITY NATIONAL CORPORATION, a Delaware corporation (the “Company”), and , an employee of the Company or a subsidiary of the Company (“Colleague”), with reference to the following:

 

A.                                   On April 23, 2008 the shareholders of the Company adopted the City National Corporation 2008 Omnibus Plan as amended from time to time thereafter, (the “Plan”), pursuant to which the Compensation, Nominating & Governance Committee of the Board of Directors (the “Committee”) may award selected officers and other Company or Company subsidiary employees restricted shares of the Company’s common stock, (the “Common Stock”).

 

B.                                     The Committee has determined to grant to Colleague an award of restricted shares of Stock pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the performance of the mutual covenants contained herein, it is hereby agreed as follows:

 

1.                                      Grant of Restricted Stock Award.

 

(a)                                  Details of Award. The Company hereby grants a Restricted Stock Award (as defined in the Plan), upon the terms and conditions set forth in this Agreement, with the following terms:

 

(i)                                     Number of Shares to be issued:   Shares (the “Restricted Shares”) of Stock;

 

(ii)                                  The date of issuance:    (the “Award Date”); and

 

(iii)                               The consideration, if any, for the Restricted Shares:  Colleague’s employment with the Company.

 

(b)                                 Issuance of Restricted Shares.  The Restricted Shares shall be issued upon acceptance hereof by Colleague and upon satisfaction of the conditions of this Agreement.

 

2.                                      Restricted Shares.  Colleague hereby accepts the Restricted Shares when issued and agrees with respect thereto as follows:

 

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(a)                                  Forfeiture Restrictions.  The Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of (the “Forfeiture Restrictions”) to the extent that Forfeiture Restrictions have not lapsed. In the event of termination of Colleague’s employment with the Company or employing subsidiary for any reason other than  (i) death or (ii) Total Disability, except as otherwise provided in the last sentence of subparagraph (b) of this Paragraph 2, Colleague shall, for no consideration, forfeit to the Company all Restricted Shares to the extent then subject to the Forfeiture Restrictions. The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted Shares.

 

(b)                                 Lapse of Forfeiture Restrictions.  The Forfeiture Restrictions shall lapse as to the Restricted Shares in accordance with “Exhibit A” provided that Colleague has been continuously employed by the Company from the Award Date through the lapse date.

 

Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the Restricted Shares on the earlier of (i) subject to the discretion of the Committee, the occurrence of a Change in Control Event (as such term is defined in the Plan), or (ii) the date Colleague’s employment with the Company is terminated by reason of death or Total Disability. In the event Colleague’s employment is terminated for any other reason, the Committee or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of Forfeiture Restrictions as to any or all Restricted Shares still subject to such restrictions, such lapse to be effective on the date of such approval or Colleague’s termination date, if later.

 

(c)                                  Certificates/Shareholder Rights. Shares of Restricted Stock will be evidenced by memorandum entries on the records of the Company’s transfer agent. Colleague shall have voting rights and shall be entitled to receive all dividends unless and until the Restricted Shares are forfeited pursuant to the provisions of this Agreement. Cash dividends paid on Shares of Common Stock will be paid to Colleague for the Restricted Shares on the same date as paid to other Shareholders.  Upon request of the Committee or its delegate, Colleague shall deliver to the Company a stock power, endorsed in blank, relating to the Restricted Shares then subject to the Forfeiture Restrictions.  Upon the lapse of the Forfeiture Restrictions, the Company shall cause the shares to be issued to you or your broker, per your election on file, in the name of the colleague, or such other name as provided in the Plan, for the Shares upon which Forfeiture Restrictions lapsed.  Notwithstanding any other provisions of this Agreement, the issuance or delivery of any shares of Common Stock (whether subject to restrictions or unrestricted) may be postponed for such period as may be required to comply with applicable requirements of any national securities exchange or any requirements under any law or regulation applicable to the issuance or delivery of such Shares.  The Company shall not be obligated to issue or deliver any shares of Common Stock if the issuance or delivery thereof shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange.

 

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3.                                      Withholding of Tax.  The receipt of Restricted Shares or the lapse of any Forfeiture Restrictions may result in income to you for federal or state tax purposes.  To the extent that you become subject to taxation, you shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money or Shares of unrestricted Common Stock, as the Company may require to meet its withholding obligation under applicable tax laws or regulations.  If you fail to do so, the Company is authorized to withhold from any cash or stock remuneration then or thereafter payable to you any tax required to be withheld by reason of such resulting compensation income.  Your delivery of Shares to meet the tax withholding obligation is subject to the Company’s Securities Trading Policy as may be in effect from time to time.  You must have owned any Common Stock you deliver for at least six months.   Any Common Stock you deliver or which is withheld by the Company will be valued on the date of which the amount of tax to be withheld is determined.  Any fractional Shares of Common Stock resulting from withholding of taxes will be paid to you in cash.

 

4.                                      Status of Common Stock.  Colleague agrees that the Restricted Shares to which the restrictions have lapsed will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws.  Colleague also agrees (i) that the certificates representing the Shares may bear such legend or legends as the Company deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the Shares on the stock transfer records of the Company if such proposed transfer would be in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Shares.

 

5.                                      Limitation on Transfer.  Other than upon death or pursuant to a DRO, the Restricted Shares and all rights granted under this Agreement are personal to Colleague and cannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to execution, attachment or similar processes.

 

6.                                      Employment Relationship.  For purposes of this Agreement, Colleague shall be considered to be in the employment of the Company as long as Colleague remains a Colleague of either the Company, any successor corporation or a parent or subsidiary corporation (as defined in section 424 of the Internal Revenue Code) of the Company or any successor corporation.

 

Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final.

 

Neither the Plan nor this Agreement shall constitute a contract of employment between the Company, including, any successor corporation or a parent or subsidiary corporation of the Company or any successor corporation and Colleague.  Colleague is an at-will employee except as provided in any other written agreement.  Nothing contained

 

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in the Plan or the Agreement (or any Award made pursuant to the Plan) shall confer upon any eligible Participant any right to continue in the employment of the Company, or guarantee of payment of future incentives, or shall interfere with, affect or restrict in any way, the rights of the Company, which are expressly reserved, to discharge Colleague, any time for any reason whatsoever, with or without cause.

 

7.                                      Availability of Plan/Plan Incorporated.  Colleague acknowledges that the Company has made available a copy of the Plan, and agrees that this Award of Restricted Shares shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, pursuant to the terms thereof, which Plan is incorporated herein by reference as a part of this Agreement. In the event of any conflict between the Plan and this Agreement, the provisions of the Plan will prevail.  Colleague’s rights hereunder are subject to modification or termination in certain events, as provided in the Plan, including without limitation such rules and regulations as may from time to time be adopted or promulgated in accordance with paragraph 1.3 of the Plan.  Capitalized terms not defined in this Agreement shall have the meanings set forth in the Plan.

 

8.                   Committee’s Powers.  No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Shares. All decisions of the Committee (as established pursuant to the Plan) with respect to any questions concerning the application, administration or interpretation of the Plan will be conclusive and binding on the Company and Colleague.

 

9.                                      Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Colleague.

 

10.                               Dispute Resolution.  If a dispute arises between Colleague and Company in connection with the Restricted Stock Award, the dispute will be resolved by binding arbitration with the American Arbitration Association (AAA) in accordance with the AAA’s Commercial Arbitration Rules then in effect.

 

11.                               Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Colleague has executed this Agreement, all as of the date first above written.

 

 

	
 
    	
CITY   NATIONAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Christopher   J. Carey, Executive Vice
    
	
 
    	
 
    	
President,   Chief Financial Officer 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
Colleague
    

 

PLEASE RETURN ONE COPY OF THE SIGNED AGREEMENT TO THE COMPENSATION SECTION OF HUMAN RESOURCES (86-001)

 

5

 

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

 

Exhibit “A”

 

All Restricted Stock Awards are subject to forfeiture, as provided in Section 2(b) of the Restricted Stock Award Agreement until the forfeiture restrictions lapse as follows:

 

{insert applicable vesting schedule}

 

Ratable Vesting

Schedule 1: ratable vesting over years two through five:

 

	
 
    	
 
    	
Percentage of
    	
 
    	
 
    	
 
    
	
Time from
    	
 
    	
Restrictions Which
    	
 
    	
Total Percentage of
    	
 
    
	
Date of Award
    	
 
    	
Lapse (Vesting)
    	
 
    	
Restrictions Lapsed
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After 1 year
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 2 years
    	
 
    	
25
    	
%
    	
25
    	
%
    
	
After 3 years
    	
 
    	
25
    	
%
    	
50
    	
%
    
	
After 4 years
    	
 
    	
25
    	
%
    	
75
    	
%
    
	
After 5 years
    	
 
    	
25
    	
%
    	
100
    	
%
    

 

Alternative Schedule 2: ratable vesting over years one through four:

 

	
 
    	
 
    	
Percentage of
    	
 
    	
 
    	
 
    
	
Time from
    	
 
    	
Restrictions Which
    	
 
    	
Total Percentage of
    	
 
    
	
Date of Award
    	
 
    	
Lapse (Vesting)
    	
 
    	
Restrictions Lapsed
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After 1 year
    	
 
    	
25
    	
%
    	
25
    	
%
    
	
After 2 years
    	
 
    	
25
    	
%
    	
50
    	
%
    
	
After 3 years
    	
 
    	
25
    	
%
    	
75
    	
%
    
	
After 4 years
    	
 
    	
25
    	
%
    	
100
    	
%
    

 

Alternative Schedule 3: ratable vesting over years five through six:

 

6

 

	
 
    	
 
    	
Percentage of
    	
 
    	
 
    	
 
    
	
Time from
    	
 
    	
Restrictions Which
    	
 
    	
Total Percentage of
    	
 
    
	
Date of Award
    	
 
    	
Lapse (Vesting)
    	
 
    	
Restrictions Lapsed
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After 1 year
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 2 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 3 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 4 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 5 years
    	
 
    	
50
    	
%
    	
50
    	
%
    
	
After 6 years
    	
 
    	
50
    	
%
    	
100
    	
%
    

 

Cliff Vesting

Alternative Schedule 4: five year cliff vesting

 

	
 
    	
 
    	
Percentage of
    	
 
    	
 
    	
 
    
	
Time from
    	
 
    	
Restrictions Which
    	
 
    	
Total Percentage of
    	
 
    
	
Date of Award
    	
 
    	
Lapse (Vesting)
    	
 
    	
Restrictions Lapsed
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After 1 year
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 2 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 3 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 4 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 5 years
    	
 
    	
100
    	
%
    	
100
    	
%
    

 

Alternative Schedule 5: four year cliff vesting:

 

	
 
    	
 
    	
Percentage of
    	
 
    	
 
    	
 
    
	
Time from
    	
 
    	
Restrictions Which
    	
 
    	
Total Percentage of
    	
 
    
	
Date of Award
    	
 
    	
Lapse (Vesting)
    	
 
    	
Restrictions Lapsed
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After 1 year
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 2 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 3 years
    	
 
    	
0
    	
%
    	
0
    	
%
    
	
After 4 years
    	
 
    	
100
    	
%
    	
100
    	
%
    

 

Other ratable and cliff vesting schedules may be used.

 

7

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