EXHIBIT 10.2
November 21, 2006
Mr. Evan Jones
Chairman and CEO
Digene Corporation
1201 Clopper Road
Gaithersburg, MD 20878
Dear Evan:
          On behalf of the Board of Directors of Digene Corporation (the
“Company”), in my capacity as Lead Director and Chairman of the Nominating and
Corporate Governance Committee, I am pleased to confirm the arrangements
pursuant to which you will voluntarily resign as Chief Executive Officer of the
Company and will transition to the role of non-executive Chairman of the Board
of Directors of the Company. The purpose of this letter is to outline the
financial and other components of our understanding.
          1. You will resign as Chief Executive Officer of the Company effective
upon the commencement of employment of Daryl Faulkner as Chief Executive Officer
and President, presently contemplated for December 11, 2006. Subsequent to your
resignation, you will be available as reasonably requested to assist in the
transition of your duties to Mr. Faulkner.
          2. Your employment by the Company will terminate and, except as
specifically set forth herein, the Employment Agreement, dated as of
February 17, 2006, between you and the Company, except for the provisions of
Sections 7, 8, 9, 10, 12 and 13 thereof, and the Change in Control Employment
Agreement, dated as of February 17, 2006, between you and the Company will
terminate on December 31, 2006.
          3. Effective January 1, 2007, you will serve in a non-executive
capacity as Chairman of the Board of Directors of the Company to serve at the
pleasure of the Board.
          4. Effective with your resignation, you will vacate the Company’s
premises, except as thereafter needed in the performance of your transition
duties as requested by Mr. Faulkner or as appropriate in the performance of your
duties as Chairman.

 

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Mr. Evan Jones
November 21, 2006
Page 2
          5. You will be paid your fiscal 2007 bonus (prorated for the six
months of your employment during fiscal 2007) at the same time as payment of the
other fiscal 2007 executive officer bonuses, as approved by the Compensation
Committee and the Board of Directors.
          6. Commencing January 1, 2007, you will receive the following
compensation for service as a director of the Company:
               (a) The same annual retainer as is paid to the other non-employee
directors (prorated in the first year for the period of your service as a
non-employee director);
               (b) Meeting fees at the same rate as is paid to the other
non-employee directors;
               (c) A $50,000 annual retainer as non-executive Chairman of the
Board (prorated in the first year for the period of service as a non-executive
Chairman);
               (d) Commencing with the 2007 Annual Meeting of Stockholders, you
will be granted stock options and awarded restricted stock units in the same
amount and on the same terms as the other non-employee directors; and
               (e) You will be reimbursed for your reasonable business expenses
in a similar manner to the other non-employee directors.
          7. During your period of service as a director of the Company, your
outstanding employee stock options will continue to vest and be exercisable.
Upon ceasing to be a director at the request of the Board, or if the Board does
not nominate you for election as a director at the 2008 Annual Meeting, your
outstanding employee stock options will become fully vested and exercisable.
Upon otherwise ceasing to be a director, your outstanding employee stock options
will cease to vest. Upon ceasing to be a director, you will have three
(3) months within which to exercise those options that were vested and
exercisable at the time you ceased to be a director. Unvested options will
terminate.
          8. During your period of service as a director, your Performance
Shares Awards will continue to vest. Upon ceasing to be a director, your
outstanding Performance Shares Awards will be prorated for that portion of the
Performance Period during which you served as an employee or a director of the
Company and will vest at target.
          9. You will be entitled to the other benefits to which other employees
whose employment has terminated are generally entitled.
          10. No adjustment will be made for vacation days taken in excess of
allowed vacation days or for unused sick days as of December 31, 2006.
          11. Except in the normal course of business in the performance of your
duties, you shall not, during the period of your service as a director or at any
time thereafter, directly or

 

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Mr. Evan Jones
November 21, 2006
Page 3
indirectly, disclose or permit to be known, to any person, firm or corporation,
any confidential information acquired by you during the course of, or as an
incident to, your employment by the Company or your service as a director,
relating to the Company, the directors of the Company, or any entity with which
the Company does business, including, but not limited to, the business affairs
of each of the foregoing. Such confidential information shall include, but shall
not be limited to, proprietary technology, trade secrets, patented processes,
research and development data, know-how, formulae, pricing policies, the
substance of agreements with customers and others, and arrangements, customer
lists and any other documents embodying such confidential information; provided,
however, that confidential information shall not include any information that
has become public knowledge through no fault of yours. You also agree not to
disclose any confidential or proprietary information that the Company obtains
from a third party and which the Company treats as confidential or proprietary
or designates as confidential, whether or not such information is owned or
developed by the Company.
          All information and documents relating to the Company shall be the
exclusive property of the Company, and you shall use your best efforts to
prevent any publication or disclosure thereof. Upon termination of your service
as a director, all documents, records, reports, writings and other similar
documents containing confidential information then in your possession or control
shall be returned to and left with the Company; provided, however, that you may
retain any such documents which have been generally distributed to the entire
Board of Directors.
          12.
               (a) You hereby acknowledge and recognize that, during the period
of your service as a director, you will be privy to trade secrets and
confidential proprietary information critical to the Company’s business and,
accordingly you agree that, in consideration of the benefits to be received by
you hereunder, you will not, from and after the date hereof until the later of
the termination of your service as a director and the second anniversary of the
payment of all your outstanding Performance Shares Awards (i) directly or
indirectly engage in the development, production, marketing or sale of products
that compete (or, upon commercialization, would compete) with products of the
Company being developed (so long as such development has not been abandoned),
produced, marketed or sold during the period of your service as a director or,
if later, until the time of the payment of all your outstanding Performance
Shares Awards (hereinafter a “Competing Business”) whether such engagement shall
be as an owner, partner, investor, employee, officer, director, affiliate,
consultant, advisor or other participant in any Competing Business; (ii) assist
others in engaging in any Competing Business in the manner described in clause
(i) above; or (iii) induce employees of the Company or any subsidiary thereof to
terminate their employment with the Company or any subsidiary thereof or engage
in any Competing Business. The ownership of not more than 5% of the stock of any
entity having a class of equity securities actively traded on a national
securities exchange or on the NASDAQ Stock Market or a minority investment in
any private entity which, at the time of your investment, was not, or expected
to be, a Competing Business shall not be deemed, in and of itself, to violate
the prohibitions of this Section 12(a).

 

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Mr. Evan Jones
November 21, 2006
Page 4
               (b) During the period of your service as a director and for five
(5) years thereafter, you shall not disparage, deprecate, or make any comments
or take any other actions, directly or indirectly, that will reflect adversely
on the Company or its officers, directors, employees or agents or adversely
affect their business reputation or goodwill.
               (c) You understand that the foregoing restrictions may limit your
ability to earn a livelihood in a business similar to the business of the
Company, but nevertheless believe that you have received and will receive
sufficient consideration and other benefits, as an employee and as a director of
the Company and as otherwise provided herein, to justify such restrictions
which, in any event (given your education, skills and ability), you believe
would not prevent you from earning a living.
               (d) If any portion of the restrictions set forth in this
Section 12 should, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected. You declare that the
territorial, time limitations and scope of activities restricted as set forth in
this Section 12 are reasonable and properly required for the adequate protection
of the business of the Company. In the event that any such territorial, time
limitation and scope of activities restricted is deemed to be unreasonable by a
court of competent jurisdiction, the Company and you agree to the reduction of
the territorial, time limitation or scope to the area or period which such court
shall have deemed reasonable.
               (e) The existence of any claim or cause of action by you against
the Company shall not constitute a defense to the enforcement by the Company of
the foregoing restrictive covenants, but such claim or cause of action shall be
litigated separately.
          13. You will promptly disclose, grant and assign to the Company, for
its sole use and benefit (including its subsidiaries), any and all inventions,
improvements, technical information and suggestions in any way relating to the
business of the Company (as conducted during your employment with the Company or
your service as a director) which you may develop or acquire (whether or not
during usual working hours) until the later of the termination of your
employment by the Company and the second anniversary of the payment of all your
outstanding Performance Shares Awards, together with all patent applications,
letters patent, copyrights and reissues thereof that may at any time be granted
for or upon any such invention, improvement or technical information. In
connection therewith: (i) you shall, without charge, but at the expense of the
Company, promptly at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be necessary or proper in
the opinion of the Company to vest title to any such inventions, improvements,
technical information, patent applications, patents, copyrights or reissues
thereof in the Company and to enable it to obtain and maintain the entire right
and title thereto throughout the world; and (ii) you shall render to the
Company, at its expense (including a reasonable payment for the time involved in
case you are not then in its employ or serving as a director), all such
assistance as it may require in the prosecution of applications of said patents,
copyrights or reissues thereof, in the prosecution or defense of interferences
which may be declared involving any said applications, patents or copyrights and
in any litigation in which the Company may be involved

 

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Mr. Evan Jones
November 21, 2006
Page 5
relating to any such patents, inventions, improvements or technical information.
The provisions of this Section 13 will survive any termination of this Agreement
and the termination of your employment with the Company or service as a
director.
          14. During the period of your service as a director, you shall abide
by and conduct yourself in accordance with the Company’s policies on sexual
harassment, insider trading, confidentiality, corporate disclosure, conflicts of
interest and any other written policy of the Company, the violation of which
could result in the termination of an employee.
          15. It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforceable to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, to the extent that a restriction contained
in this Agreement is more restrictive than permitted by the laws of any
jurisdiction where this Agreement may be subject to review and interpretation,
the terms of such restriction, for the purpose only of the operation of such
restriction in such jurisdiction, will be the maximum restriction allowed by the
laws of such jurisdiction and such restriction will be deemed to have been
revised accordingly herein.
          16.
               (a) You acknowledge and understand that the provisions of the
covenants contained in Sections 11, 12, 13 and 14 hereof, the violation of which
cannot be accurately compensated for in damages by an action at law, are of
crucial importance to the Company, and that the breach or threatened breach of
such provisions would cause the Company irreparable harm. In the event of a
breach or threatened breach by you of the provisions of Sections 11, 12, 13 or
14 hereof, the Company will be entitled to seek an injunction restraining you
from such breach. Nothing herein contained will be construed as prohibiting the
Company from pursuing any other remedies available for any breach or threatened
breach of this Agreement.
               (b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of Sections 11, 12, 13, 14, 15 and 16 hereof will
survive the expiration or other termination of this Agreement until, by their
terms, such provisions are no longer operative.
          17. To the extent that the provisions of Sections 11, 12, 13 and 14
hereof are similar to or duplicates of provisions contained in other agreements
between you and the Company, the provisions of this Agreement shall control;
provided, however, that in the event that the provisions of Sections 11, 12, 13
and 14 hereof expire prior to similar provisions in any such other agreements,
the provisions of such other agreements will continue to apply after expiration
of the applicable terms of this Agreement.
          18. Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand, or sent by registered or
certified mail, return receipt requested, or overnight delivery using a national
courier service, or by facsimile or electronic

 

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Mr. Evan Jones
November 21, 2006
Page 6
transmission, with confirmation as to receipt, to the Company at the address set
forth below and to you at the address set forth in the personnel records of the
Company, or such other address as either party may from time to time designate
in writing to the other, and shall be deemed given as of the date of the
delivery or mailing:
Digene Corporation
1201 Clopper Road
Gaithersburg, Maryland 20878
Attention: General Counsel
with a copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103-7599
Attention: Morris Cheston, Jr., Esquire
          19. If any of the covenants contained in this Agreement, any part of
any such covenant, are hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, or the
remainder of the Agreement, which shall be given full effect, without regard to
the invalid portions.
          20. The waiver or breach of any term or condition of this Agreement
shall not be deemed to constitute a waiver or breach of any other term or
condition.
          21. This Agreement constitutes the entire agreement of the parties
with respect to its subject matter, and no modification or waiver of any
provision hereof shall be valid unless it be in writing and signed by all of the
parties hereto. Subject to Sections 2 and 17 hereof, this Agreement supersedes
all prior agreements or understandings between the parties with respect to the
subject matter hereof, including, without limitation, that certain Employment
Agreement, dated as of February 17, 2006, between you and the Company and that
certain Change in Control Employment Agreement, dated as of February 17, 2006,
between you and the Company.
          22. This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of any successor or successors of the
Company by reorganization, merger or consolidation and any assignee of all or
substantially all of its business and properties, and upon your legal
representatives, heirs and distributes, but, except as to any such successor or
assignee of the Company, neither this Agreement nor any rights or benefits
hereunder may be assigned or transferred by either party without the prior
written consent of the other party.
          23. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland without reference to principles of
conflicts of laws.

 

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Mr. Evan Jones
November 21, 2006
Page 7
          If the foregoing accurately sets forth your understanding of our
agreement, please so indicate by signing and dating the enclosed copy of this
letter and returning it to me in the envelope provided.

            Sincerely,

DIGENE CORPORATION
      By:   /s/ Joseph M. Migliara         Joseph M. Migliara        Chairman
Nominating and Corporate Governance
Committee and Lead Director     

Agreed to this 22nd day of November, 2006

     
/s/ Evan Jones
 
           Evan Jones