EXACT SCIENCES CORPEXAS
EXACT SCIENCES CORP Stock Compensation Disclosure
STOCK-BASED COMPENSATION
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Stock-Based Compensation Plans
The Company maintains the following plans for which awards were granted from or had awards outstanding in 2025: the 2010 Omnibus Long-Term Incentive Plan (As Amended and Restated Effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, the 2025 Omnibus Long-Term Incentive Plan, and the 2010 Employee Stock Purchase Plan. These plans are collectively referred to as the “Stock Plans.”
The Stock Plans are administered by the Human Capital Committee of the Company’s Board of Directors (“Human Capital Committee”). The 2019 Omnibus Long-Term Incentive Plan provides that upon an acquisition of the Company, all equity will accelerate by a period of one year. In addition, upon the termination of an employee without cause or for good reason prior to the first anniversary of the completion of the acquisition, all equity awards then outstanding under the respective plan held by that employee will immediately vest.
2025 Omnibus Long-Term Incentive Plan. The Company adopted the 2025 Omnibus Long-Term Incentive Plan (the “2025 Stock Plan”) on June 12, 2025 to grant share-based awards to employees, officers, directors, consultants, and advisors. Awards granted under the 2025 Stock Plan may include incentive stock options, as defined under the Internal Revenue Code, non-qualified options, restricted stock awards and other stock awards in amounts and with terms and conditions determined by the Human Capital Committee, subject to the provisions of the 2025 Stock Plan. The 2025 Stock Plan will expire on April 15, 2035 and after such date no further awards may be granted under the plan. Options granted under the 2025 Stock Plan expire ten years from the date of grant. Grants made from the 2025 Stock Plan generally vest over a period of to four years. At December 31, 2025, there were no options to purchase shares outstanding under the 2025 Stock Plan and 66,320 shares of restricted stock and restricted stock units were outstanding. At December 31, 2025, there were 12,357,179 shares available for future grant under the 2025 Stock Plan.
2019 Omnibus Long-Term Incentive Plan. The Company adopted the 2019 Omnibus Long-Term Incentive Plan (the “2019 Stock Plan”) on July 25, 2019 to grant share-based awards to employees, officers, directors, consultants, and advisors. Awards granted under the 2019 Stock Plan may include incentive stock options, as defined under the Internal Revenue Code, non-qualified options, restricted stock awards and other stock awards in amounts and with terms and conditions determined by the Human Capital Committee, subject to the provisions of the 2019 Stock Plan. The 2019 Stock Plan will expire on July 25, 2029 and after such date no further awards may be granted under the plan. Options granted under the 2019 Stock Plan expire ten years from the date of grant. Grants made from the 2019 Stock Plan generally vest over a period of to four years. At December 31, 2025, options to purchase 270,749 shares were outstanding under the 2019 Stock Plan and 7,874,434 shares of restricted stock and restricted stock units were outstanding. The Company's stockholders approved amendments to the 2019 Stock Plan to increase the number of shares available for future grant thereunder by 14,000,000 and 4,340,000 shares on June 9, 2022 and June 8, 2023, respectively. At December 31, 2025, there were no shares available for future grant under the 2019 Stock Plan.
2010 Omnibus Long-Term Incentive Plan. The Company adopted the 2010 Omnibus Long-Term Incentive Plan (the “2010 Stock Plan”) on July 16, 2010 to grant share-based awards to employees, officers, directors, consultants, and advisors. Awards granted under the 2010 Stock Plan may include incentive stock options, as defined under the Internal Revenue Code, non-qualified options, restricted stock awards and other stock awards in amounts and with terms and conditions determined by the Human Capital Committee, subject to the provisions of the 2010 Stock Plan. The 2010 Stock Plan expired on July 16, 2020 and after such date no further awards may be granted under the plan. Options granted under the 2010 Stock Plan expire ten years from the date of grant. Grants made from the 2010 Stock Plan generally vest over a period of to four years. At December 31, 2025, there were 510,540 share options and 3,340 shares of restricted stock and restricted stock units outstanding under the 2010 Stock Plan. At December 31, 2025, there were no shares available for future grant under the 2010 Stock Plan.
2010 Employee Stock Purchase Plan. The 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”) was adopted by the Company on July 16, 2010 to provide participating employees the right to purchase shares of common stock at a discount through a series of offering periods. The 2010 Purchase Plan will expire on October 31, 2030. The Company’s stockholders approved amendments to the 2010 Employee Stock Purchase Plan to increase the number of shares available for purchase thereunder by 500,000 shares, 2,000,000 shares, 3,000,000 shares, and 4,000,000 shares on July 24, 2014, July 28, 2016, June 9, 2022, and June 12, 2025, respectively. At December 31, 2025, there were 4,193,108 shares of common stock available for purchase by participating employees under the 2010 Purchase Plan.
Generally, all employees whose customary employment is more than 20 hours per week and more than five months in any calendar year are eligible to participate in the 2010 Purchase Plan. Participating employees authorize an amount, between 1% and 15% of the employee’s compensation, to be deducted from the employee’s pay during the offering period. On the last day of the offering period, the employee is deemed to have exercised the employee’s option to purchase shares of Company common stock, at the option exercise price, to the extent of accumulated payroll deductions. Under the terms of the 2010 Purchase Plan, the option exercise price is an amount equal to 85% of the fair market value, as defined under the 2010 Purchase Plan, and no employee can purchase more than $25,000 of Company common stock under the 2010 Purchase Plan in any calendar year. Rights granted under the 2010 Purchase Plan terminate upon an employee’s voluntary withdrawal from the 2010 Purchase Plan at any time or upon termination of employment. At December 31, 2025, there were 5,606,892 cumulative shares issued under the 2010 Purchase Plan.
Stock-Based Compensation Expense
The Company records stock-based compensation expense in connection with the amortization of restricted stock and restricted stock unit awards (“RSUs”), performance share units (“PSUs”), stock purchase rights granted under the Company’s employee stock purchase plan (“ESPP”) and stock options granted to employees, non-employee consultants, and non-employee directors. A summary of non-cash stock-based compensation expense by expense category included in the Company’s consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023 is as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cost of sales | $ | 17,244 | $ | 20,518 | $ | 20,761 | ||||||||||||||
| Research and development | 37,379 | 39,684 | 41,242 | |||||||||||||||||
| Sales and marketing | 66,762 | 68,236 | 73,016 | |||||||||||||||||
| General and administrative | 96,281 | 86,447 | 96,293 | |||||||||||||||||
| Total stock-based compensation | $ | 217,666 | $ | 214,885 | $ | 231,312 | ||||||||||||||
In connection with the Merger Agreement and to mitigate the potential impact of Sections 280G and 4999 of the Internal Revenue code of 1986, as amended, on the Company and certain of its employees, the Human Capital Committee approved the acceleration of 454,811 shares of previously unvested RSUs held by 12 employees and 1,227,496 shares of previously unvested PSUs held by 14 employees. Accelerated PSUs were accelerated based on the number of PSUs that would have otherwise been deemed achieved under the terms of the Merger Agreement. These modifications resulted in incremental stock-based compensation expense that will be recognized over the in substance service period of the respective award, which was not significant for the year ended December 31, 2025.
As of December 31, 2025, there was approximately $314.9 million of expected total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 2.33 years.
Stock Options
The Company determined the fair value of each service-based option award on the date of grant using the Black-Scholes option-pricing model, which utilized several key assumptions including risk-free interest rate, expected term, expected volatility, and dividend yield. There were no option awards granted during the years ended December 31, 2025, 2024 and 2023.
A summary of stock option activity under the Stock Plans is as follows:
| Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (1) | ||||||||||||||||||||||
| (Aggregate intrinsic value in thousands) | ||||||||||||||||||||||||||
Outstanding, January 1, 2025 | 982,742 | $ | 53.60 | 3.1 | ||||||||||||||||||||||
| Exercised | (161,596) | 27.48 | ||||||||||||||||||||||||
| Forfeited | (39,857) | 85.58 | ||||||||||||||||||||||||
Outstanding, December 31, 2025 | 781,289 | $ | 57.37 | 2.4 | $ | 34,528 | ||||||||||||||||||||
Vested and expected to vest, December 31, 2025 | 781,289 | $ | 57.37 | 2.4 | $ | 34,528 | ||||||||||||||||||||
Exercisable, December 31, 2025 | 781,289 | $ | 57.37 | 2.4 | $ | 34,528 | ||||||||||||||||||||
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(1) The total intrinsic value of options exercised, net of shares withheld for taxes, during the years ended December 31, 2025, 2024, and 2023 was $6.0 million, $7.8 million, and $11.7 million, respectively, determined as of the date of exercise.
Restricted Stock and Restricted Stock Units
The fair value of restricted stock and RSUs is determined on the date of grant using the closing stock price on that day.
A summary of restricted stock and RSU activity is as follows:
| Restricted Shares | Weighted Average Grant Date Fair Value (1) | |||||||||||||
Outstanding, January 1, 2025 | 7,244,796 | $ | 63.18 | |||||||||||
| Granted | 3,661,929 | 51.61 | ||||||||||||
| Released (2) | (3,102,685) | 66.18 | ||||||||||||
| Forfeited | (907,813) | 55.98 | ||||||||||||
Outstanding, December 31, 2025 | 6,896,227 | $ | 56.12 | |||||||||||
(1) The weighted average grant date fair value of the RSUs granted during the years ended December 31, 2024 and 2023 was $56.94 and $62.36, respectively.
(2) The fair value of RSUs vested and converted to shares of the Company’s common stock was $205.3 million, $184.2 million, and $158.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. The stock-based compensation expense associated with the RSUs that were accelerated and vested in 2025 related to the modification of awards to mitigate the potential impact of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, as discussed in further detail above, will continue to be recognized over the substantive service period of the respective award.
Performance Share Units
The Company has issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones.
A summary of PSU activity is as follows:
| Performance Share Units (1) | Weighted Average Grant Date Fair Value (2) | |||||||||||||
| Outstanding, January 1, 2025 | 2,021,208 | $ | 75.86 | |||||||||||
| Granted | 1,283,717 | 59.49 | ||||||||||||
| Released (3) | (1,380,061) | 79.03 | ||||||||||||
| Forfeited | (876,997) | 81.24 | ||||||||||||
| Outstanding, December 31, 2025 | 1,047,867 | $ | 62.20 | |||||||||||
(1) The PSUs listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding PSUs as of December 31, 2025 was 631,833.
(2) The weighted average grant date fair value of the PSUs granted during the years ended December 31, 2024 and 2023 was $63.68 and $80.50, respectively.
(3) The fair value of PSUs vested and converted to shares of the Company’s common stock was $77.2 million, $9.9 million, and $1.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. The stock-based compensation expense associated with the PSUs that were accelerated and vested in 2025 related to the modification of awards to mitigate the potential impact of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, as discussed in further detail above, will continue to be recognized over the substantive service period of the respective award.
Employee Stock Purchase Plan
A summary of ESPP activity is as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares issued under the 2010 Purchase Plan | 685,693 | 955,392 | 924,448 | |||||||||||||||||
| Cash received under the 2010 Purchase Plan | $ | 26,544 | $ | 31,227 | $ | 28,344 | ||||||||||||||
| Weighted average fair value per share of stock purchase rights granted during the period | $ | 19.17 | $ | 16.26 | $ | 16.32 | ||||||||||||||
The 685,693 shares issued during the year ended December 31, 2025 were as follows:
| Offering period ended | Number of Shares | Weighted Average price per Share | ||||||||||||
| April 30, 2025 | 419,070 | $ | 38.26 | |||||||||||
| October 31, 2025 | 266,623 | $ | 39.42 | |||||||||||
The fair value of shares purchased under the ESPP is based on the assumptions in the following table:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Risk-free interest rates | 4.22% - 5.15% | 4.71% - 5.30% | 4.68% - 4.71% | |||||||||||||||||
| Expected term (in years) | 0.50 - 1.25 | 1.17 - 1.25 | 1.25 | |||||||||||||||||
| Expected volatility | 44.40% - 60.67% | 44.40% - 63.13% | 63.13% - 67.30% | |||||||||||||||||
| Dividend yield | 0% | 0% | 0% | |||||||||||||||||
Shares Reserved for Issuance
The Company has reserved shares of its authorized common stock for issuance pursuant to its employee stock purchase and equity plans, including all outstanding stock option grants noted above at December 31, 2025, as follows:
| Shares reserved for issuance | ||||||||
2025 Stock Plan | 12,357,179 | |||||||
| 2010 Purchase Plan | 4,193,108 | |||||||
| 16,550,287 | ||||||||
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.