EXHIBIT 10.3
CHANGE IN CONTROL
EMPLOYMENT AGREEMENT
          This AGREEMENT by and between Digene Corporation (the “Company”), and
                                         (the “Employee”), is dated as of the
                     day of                     , 2006, and is an amendment and
restatement of the Change In Control Employment Agreement, dated March 4, 2003,
between the Employee and the Company.
          The Board of Directors of the Company (the “Board”) has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company and its subsidiaries will have the continued dedication of the
Employee, notwithstanding the possibility, threat, or occurrence of a Change in
Control (as defined below) of the Company. 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 threatened or pending Change in Control, to
encourage the Employee’s full attention and dedication to the Company currently
and in the event of any threatened or pending Change in Control, and to provide
the Employee with compensation arrangements upon a Change in Control that
provide the Employee with individual financial security and which are
competitive with those of other comparably situated companies and, in order to
accomplish these objectives, the Board has authorized the Company to enter into
this Agreement.
          NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
          1. Effective Date.
               (a) The “Effective Date” shall be the first date during the
“Change in Control Period” (as defined in Section 1(b)) on which a Change in
Control occurs. Anything in this Agreement to the contrary notwithstanding, if
the Employee’s employment with the Company is terminated prior to the date on
which a Change in Control occurs, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or (ii) otherwise arose in
connection with or anticipation of a Change in Control, then for all purposes of
this Agreement the “Effective Date” shall mean the date immediately prior to the
date of such termination.
               (b) The “Change in Control Period” is the period commencing on
the date hereof and ending on the second anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
is hereinafter referred to as the “Renewal Date”), the Change in Control Period
shall be automatically extended so as to terminate two years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Company shall give
notice that the Change in Control Period shall not be so extended.

 

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          2. Change in Control. For the purpose of this Agreement, a “Change in
Control” shall mean:
               (a) The acquisition, directly or indirectly, other than from the
Company, by any person, entity or “group” (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), excluding, for this purpose, the Company, its
subsidiaries, and any employee benefit plan of the Company or its subsidiaries
which acquires beneficial ownership of voting securities of the Company) (a
“Third Party”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of the combined voting
power of the Company’s then outstanding voting securities entitled to vote
generally in the election of directors; or
               (b) Individuals who, as of October 26, 2005, constitute the Board
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided, that any person becoming a director subsequent
to such date whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the Incumbent
Directors who are directors at the time of such vote shall be, for purposes of
this Agreement, an Incumbent Director; or
               (c) Consummation of (i) a reorganization, merger or
consolidation, or (ii) a liquidation or dissolution of the Company or the sale
of all or substantially all, but at least 40%, of the assets of the Company
(whether such assets are held directly or indirectly) to a Third Party; or
               (d) Any event or transaction that a majority of the Incumbent
Directors who are “independent directors” (as such term is defined under the
Marketplace Rules of the National Association of Securities Dealers, Inc.)
determine to be a “Change in Control” for the purposes of this Agreement;
except that any event or transaction which would be a “Change in Control” under
(a) or (c)(i) of this definition shall not be a “Change in Control” if persons
who were the stockholders of the Company immediately prior to such event or
transaction (other than the acquiror in the case of a reorganization, merger or
consolidation), immediately thereafter, beneficially own more than 50% of the
combined voting power of the Company’s or the reorganized, merged or
consolidated company’s then outstanding voting securities entitled to vote
generally in the election of directors.
          3. Other Employment Agreement. The Employee and the Company have
entered into an agreement, dated                                         , 2006
(the “Employment Agreement”), which provides for certain benefits to be paid to
the Employee upon certain terminations of Employee’s employment with the
Company. Such Employment Agreement shall remain in full force and effect except
that it shall be superceded by this Agreement during the Employment Period;
provided, however, that, notwithstanding the foregoing, the authority of the
Compensation Committee to end the period of employment under the Employment
Agreement shall remain in full force and effect during the Employment Period,
and the non-competition, non-solicitation and non-disparagement provisions of
the Employment Agreement shall remain in full force and effect during the
Employment Period and, if applicable, after the Date of Termination, in
accordance with the provisions of the Employment Agreement.

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          4. Employment Period. The Company hereby agrees to continue the
Employee in its employ, and the Employee hereby agrees to remain in the employ
of the Company, for the period commencing on the Effective Date and ending on
the second anniversary of such date (the “Employment Period”).
          5. Terms of Employment.
               (a) Position and Duties.
                    (i) During the Employment Period,
                         (A) the Employee’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date, and
                         (B) the Employee’s services shall be performed at the
location where the Employee was employed immediately preceding the Effective
Date or any office or location less than forty (40) miles from such location.
                    (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Employee is entitled, the Employee
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Employee hereunder, to use the
Employee’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Employee to
                         (A) serve on corporate, civic or charitable boards or
committees,
                         (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and
                         (C) manage personal investments,
so long as such activities do not significantly interfere with the performance
of the Employee’s responsibilities as an employee of the Company in accordance
with this Agreement. It is expressly understood and agreed that to the extent
that any such activities have been conducted by the Employee prior to the
Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the
Employee’s responsibilities to the Company.
               (b) Compensation.
                    (i) Base Salary. During the Employment Period, the Employee
shall receive a base salary (“Base Salary”) at a monthly rate at least equal to
the

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highest monthly base salary paid or payable to the Employee by the Company
during the twelve-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and from time to
time as shall be substantially consistent with increases in base salary awarded
in the ordinary course of business to other key employees of the Company and its
subsidiaries with similar level of responsibilities. Any increase in Base Salary
shall not serve to limit or reduce any other obligation to the Employee under
this Agreement. Base Salary shall not be reduced after any such increase.
                    (ii) Annual Bonus. In addition to Base Salary, the Employee
shall be awarded, for each calendar year ending during the Employment Period, an
annual bonus (an “Annual Bonus”) in cash at least equal to the bonus paid or
payable to the Employee for the last calendar year preceding the calendar year
in which the Effective Date occurs. In the event the Employment Period contains
a partial year, the Employee shall be awarded a pro-rated bonus, calculated in
accordance with the prior sentence, for such partial year period. Each Annual
Bonus shall be determined and paid in full by March 15 of the year following the
calendar year for which the bonus is payable.
                    (iii) Incentive, Savings and Retirement Plans. In addition
to Base Salary and Annual Bonus payable as hereinabove provided, the Employee
shall be entitled to participate during the Employment Period in all incentive,
savings and retirement plans, practices, policies and programs applicable to
other key employees of the Company and its subsidiaries.
                    (iv) Welfare Benefit Plans. During the Employment Period,
the Employee and/or the Employee’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its subsidiaries
(including, without limitation, medical, prescription, dental, disability,
employee life and accidental death and dismemberment insurance plans and
programs), at least as favorable as the most favorable of such plans, practices,
policies and programs of the Company and its subsidiaries in effect at any time
during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Employee and/or the Employee’s family, as in effect at any time
thereafter with respect to other key employees of the Company and its
subsidiaries with similar level of responsibilities.
                    (v) Expenses. During the Employment Period, the Employee
shall be entitled to receive prompt reimbursement for all reasonable business
expenses incurred by the Employee in accordance with the most favorable
policies, practices and procedures of the Company and its subsidiaries in effect
at any time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Employee, as in effect at any time thereafter with
respect to other key employees of the Company and its subsidiaries with similar
level of responsibilities.
                    (vi) Fringe Benefits. During the Employment Period, the
Employee shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the

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Employee, as in effect at any time thereafter with respect to other key
employees of the Company and its subsidiaries with similar level of
responsibilities.
                    (vii) Vacation. During the Employment Period, the Employee
shall be entitled to paid holidays and vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
subsidiaries as in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect
at any time thereafter with respect to other key employees of the Company and
its subsidiaries with similar level of responsibilities.
          6. Termination.
               (a) Death or Disability. This Agreement shall terminate
automatically upon the Employee’s death. If the Company determines in good faith
that the Disability of the Employee has occurred (pursuant to the definition of
“Disability” set forth below), it may give to the Employee written notice of its
intention to terminate, or its intention to cause its subsidiary to terminate,
the Employee’s employment. In such event, the Employee’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Employee (the “Disability Effective Date”); provided that, within 30 days
after such receipt, the Employee shall not have returned to full-time
performance of the Employee’s duties. For purposes of this Agreement,
“Disability” means disability as defined in the Company’s Long Term Disability
Plan (or, if the Company does not have such a plan, a disability which, at least
26 weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Employee
or the Employee’s legal representative (with such agreement as to acceptability
not to be withheld unreasonably)).
               (b) Cause. The Company may terminate the Employee’s employment
for “Cause.” For purposes of this Agreement, “Cause” means (i) an act or acts of
personal dishonesty taken by the Employee and intended to result in substantial
personal enrichment of the Employee at the expense of the Company, (ii) repeated
violations by the Employee of the Employee’s obligations under Section 5(a) of
this Agreement which are willful and deliberate on the Employee’s part and which
are not remedied in a reasonable period of time after receipt of written notice
from the Company, (iii) breach by the Employee of the Employee’s obligations
under the Employee’s Non Competition, Non Disclosure and Developments Agreement
with the Company, (iv) violation by the Employee of any of the Company’s
policies, including, but not limited to, policies regarding sexual harassment,
insider trading, corporate disclosure, substance abuse and conflicts of
interest, which violation could result in termination of the Employee’s
employment or (v) the conviction of the Employee of a felony.
               (c) Good Reason. The Employee’s employment may be terminated by
the Employee for Good Reason. For purposes of this Agreement, “Good Reason”
means
                    (i) the assignment to the Employee of any duties
inconsistent in any respect with the Employee’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 5(a) of this Agreement, or any other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities;

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                    (ii) any failure by the Company to comply with any of the
provisions of Section 5(b) of this Agreement;
                    (iii) the Company’s requiring the Employee to be based at
any office or location other than that described in Section 5(a)(i)(B) hereof,
except for travel reasonably required in the performance of the Employee’s
responsibilities;
                    (iv) any purported termination by the Company of the
Employee’s employment otherwise than as expressly permitted by this Agreement;
or
                    (v) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement;
provided, that within fifteen (15) days after the occurrence of any of the
events listed in clauses (i), (ii), (iii), (iv) or (v) above the Employee
delivers written notice to the Company of his intention to terminate for Good
Reason specifying in reasonable detail the facts and circumstances claimed to
give rise to the Employee’s right to terminate his employment for Good Reason
and the Company shall not have cured such facts and circumstances within thirty
(30) days after delivery of such notice by the Employee to the Company (unless
the Company shall have waived its right to cure by written notice to the
Employee); and provided further that within fifteen (15) days after the
expiration of such thirty (30) day period or the date of receipt of such waiver
notice, if earlier, the Employee delivers a Notice of Termination to the Company
under Section 6(d) based on the same Good Reason specified in the notice of
intent to terminate delivered to the Company under this Section 6(c).
          Notwithstanding the foregoing, it is understood that a Change in
Control may result in the Company becoming a subsidiary or division of another
public company and no longer existing as a free-standing public company. In such
event, a change in the Employee’s position, title or reporting requirements will
not constitute Good Reason as long as the Employee retains a position of similar
scope and responsibility and a title consistent with such position in such
subsidiary or division.
          For purposes of this Section 6(c), any good faith determination of
“Good Reason” made by the Employee shall be conclusive.
               (d) Notice of Termination. A Notice of Termination shall
communicate any termination by the Company for Cause or by the Employee for Good
Reason to the other party hereto given in accordance with Section 15(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than fifteen (15) days after
the giving of such notice). The failure by the Employee to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.

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               (e) Date of Termination. “Date of Termination” means the date of
receipt of the Notice of Termination or any later date specified therein as
permitted by Section 6(d), as the case may be; provided, however, that (i) if
the Employee’s employment is terminated by the Company or a subsidiary of the
Company other than for Cause or Disability, the Date of Termination shall be the
date on which the Company or such subsidiary notifies the Employee of such
termination and (ii) if the Employee’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the
Employee or the Disability Effective Date, as the case may be.
          7. Obligations of the Company upon Termination.
               (a) Death. If the Employee’s employment is terminated during the
Employment Period by reason of the Employee’s death, this Agreement shall
terminate without further obligations to the Employee’s legal representatives
under this Agreement, other than (i) those obligations accrued or earned and
vested (if applicable) by the Employee as of the Date of Termination, including,
for this purpose (A) the Employee’s full Base Salary through the Date of
Termination at the rate in effect on the Date of Termination, (B) subject to
Section 7(e), any compensation previously deferred by the Employee (together
with any accrued interest thereon) and not yet paid by the Company and (C) any
accrued vacation pay not yet paid by the Company (such amounts are hereinafter
referred to as “Accrued Obligations”) and (ii) a lump sum payment equal to the
Employee’s annual Base Salary at the rate in effect on the Date of Termination.
All such Accrued Obligations and the payment described in subparagraph
(ii) above shall be paid to the Employee’s estate or beneficiary, as applicable,
in a lump sum in cash within 30 days after the Date of Termination, or earlier
if required by law.
               (b) Disability. If the Employee’s employment is terminated during
the Employment Period by reason of the Employee’s Disability, this Agreement
shall terminate without further obligations to the Employee, other than (i) the
Accrued Obligations and (ii) continuation of health care benefits coverage to
which the Employee is entitled under Section 5(b)(iv) hereof for the twelve
(12) month period following the effective Date of Termination, with such
coverage to be provided at the same level and subject to the same terms and
conditions (including, without limitation, any applicable co-pay obligations,
but excluding any applicable tax consequences for the Employee) as in effect for
officers of the Company generally during such period; provided, however, that if
benefits are being provided under the Company’s Long-Term Disability Plan then
in effect, nothing in this Section 7(b) shall provide any additional benefits or
coverage than that in effect for officers of the Company during such period
under the Company’s Long-Term Disability Plan. All of the Accrued Obligations
shall be paid to the Employee in a lump sum in cash within 30 days after the
Date of Termination, or earlier if required by law.
               (c) Termination for Cause; Termination by Employee Other than for
Good Reason. If, during the Employment Period, the Employee’s employment is
terminated for Cause or the Employee terminates employment other than for Good
Reason, this Agreement shall terminate without further obligations to the
Employee, other than Accrued Obligations. Subject to Section 7(e), all such
Accrued Obligations shall be paid to the Employee in a lump sum in cash within
30 days after the Date of Termination, or earlier if required by law.

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               (d) Termination for Good Reason; Termination by the Company Other
than for Cause, Death or Disability. If, during the Employment Period, the
Company terminates the Employee’s employment other than for Cause, Disability,
or death or the Employee terminates his employment for Good Reason:
                    (i) subject to Section 7(e), the Company shall pay to the
Employee the Accrued Obligations.
                    (ii) the Company shall pay as a severance benefit to the
Employee in a lump sum in cash (less applicable withholding), the aggregate of
the following amounts:
                         (A) an amount equal to the following formula: A x (B ÷
365); where A equals the Annual Bonus paid to the Employee for the last calendar
year before the Date of Termination; and B equals the number of days in the
current calendar year through the Date of Termination; and
                         (B) an amount equal to two (2) times the sum of the
Employee’s annual Base Salary at the highest rate in effect at any time during
the period beginning 90 days before the Effective Date through the Date of
Termination plus the Annual Bonus paid to the Employee for the last calendar
year before the Date of Termination; and
                    (iii) for a period of two years after the Date of
Termination, or such longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits to the Employee and/or the
Employee’s family at levels substantially equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 5(b)(iv) of this Agreement if the Employee’s employment had
not been terminated, including health, disability and life insurance, in
accordance with the most favorable plans, practices, programs or policies of the
Company and its subsidiaries in effect during the 90-day period immediately
preceding the Date of Termination or, if more favorable to the Employee, as in
effect at any time thereafter with respect to other key employees with similar
level of responsibilities and their families; provided, however, that the
Company may, at its election, pay to the Employee an amount in cash equal to the
Company’s cost of providing any of such benefits for such period, in lieu of
continuing to provide the benefits. For purposes of eligibility for retiree
benefits pursuant to such plans, practices, programs and policies and for
purposes of health benefit continuation coverage pursuant to Section 601 et seq.
of ERISA (“COBRA”), the Employee shall be considered to have remained employed
until the end of the period for which Company-provided health plan coverage is
continued under this clause (iii), and to have retired on the last day of such
period.
Notwithstanding anything to the contrary herein, payments under this Section
7(d) shall comply with the applicable requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and the regulatory
guidance promulgated thereunder. Payment of the Accrued Obligations (subject to
Section 7(e)) and the lump amount described in clause (ii) of this Section 7(d)
shall be made within thirty (30) days after the Date of Termination, or earlier
if required by law; provided, however, that if the Employee is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, payment of
the lump sum amount described in

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clause (ii) of this Section 7(d) shall be made within five (5) business days
following the date which is six (6) months following the Employee’s separation
from service following a Notice of Termination (or, if earlier, the Employee’s
death) if the Company reasonably determines that the aggregate amount of:
(1) payments under clause (ii) of this Section 7(d); (2) the portion of the
welfare benefits described in clause (iii) of this Section 7(d) provided on an
after-tax basis, including the cash payment, if any, in lieu of providing
certain welfare benefits described in clause (iii) of this Section 7(d); (3) the
Gross-up Payment, if any, under Section 10 of this Agreement; and (4) payments,
if any, made under any other Company-provided separation pay arrangement,
represent the payment of non-qualified deferred compensation subject to the
requirements of Section 409A of the Code, including the requirement of a
six-month delay in the commencement of payments described in Code
Section 409A(a)(2)(B)(i). The lump sum shall be adjusted for simple interest
that accrues during the initial six-month period following the Employee’s
separation from service at the applicable Federal rate provided for in Code
Section 7872(f)(2).
If the Employee is subject to the six-month delay period, the benefit described
in clause (iii) of this Section 7(d) shall be provided as follows:
                         (A) To the extent such welfare benefits can be provided
to the Employee on a before-tax basis, such benefit shall be so provided.
                         (B) To the extent such welfare benefit must be provided
on an after-tax basis, the Employee shall pay the cost thereof (based on
applicable COBRA rates) for the first six months, and the Company shall
reimburse such amounts within five (5) business days after the close of the
six-month delay period.
                         (C) If a cash payment in lieu of providing such welfare
benefits is made, such payment shall take place within five (5) business days
after the close of the six-month delay period.
The Company shall have no obligation under this Section 7(d) unless the Employee
executes and delivers to the Company a valid general release agreement in a form
reasonably acceptable to the Company in which the Employee releases the Company
from any and all possible liability, including, without limitation, any and all
liability based on the Employee’s employment or the termination of his
employment; provided, however, that nothing in such release shall include any
release of the Company’s indemnification obligations to or for the benefit of
the Employee.
               (e) Previously Deferred Compensation. If the Employee has
previously deferred compensation under a plan or arrangement not described above
which has not yet been paid by the Company, the Employee’s right to payment of
such compensation shall be considered vested and nonforfeitable as of the Date
of Termination. Such deferred compensation shall be paid to the Employee in
accordance with the terms of the deferred compensation plan or arrangement,
subject to the applicable requirements of Code Section 409A.
          8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Employee’s continuing or future participation in any benefit,
bonus, incentive or other plans, programs, policies or practices provided by the
Company or its subsidiaries and for which the Employee may qualify, nor shall
anything herein limit or otherwise affect such rights as the

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Employee may have under any stock option or other agreements with the Company or
any of its subsidiaries. Amounts which are vested benefits or which the Employee
is otherwise entitled to receive under any plan, policy, practice or program of
the Company or any of its subsidiaries at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program.
          9. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Employee or others. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement. Upon termination
of the Employee’s employment during the Employment Period, the Employee shall
not be entitled to any benefits or payments other than as provided in this
Agreement.
          10. Certain Additional Payments by the Company.
               (a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement) (a
“Payment”) would be subject to the excise tax imposed by Code Section 4999, or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Employee shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount equal to the Excise
Tax imposed upon the Payment.
               (b) Subject to the provisions of Section 10(c), all
determinations required to be made under this Section 10, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a firm of independent accountants selected by the Audit Committee of the
Company’s Board of Directors which firm may be, if consistent with applicable
securities laws, the firm of independent accountants engaged to audit the
Company’s financial statements (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Employee within 15
business days after the Date of Termination or such earlier time as is requested
by the Company. The Gross-Up Payment, if any, as determined pursuant to this
Section 10(b), shall be paid to the Employee within five days of the receipt of
the Accounting Firm’s determination (or if later, within five (5) business days
after the earliest date payment can be made consistent with Section 409A of the
Code with respect to a “specified person” described in Code Section
409A(a)(2)(B)(i)). If the Accounting Firm determines that no Excise Tax is
payable by the Employee, it shall furnish the Employee with an opinion that he
has substantial authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Company and the Employee. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not
have been made by the Company should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 10(c) and the Employee
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine

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the amount of the Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of the Employee.
               (c) The Employee shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Employee knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Employee shall not pay
such claim prior to the expiration of the thirty-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Employee in writing prior to the expiration of such period
that it desires to contest such claim, the Employee shall:
                    (i) give the Company any information reasonably requested by
the Company relating to such claim,
                    (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
                    (iii) cooperate with the Company in good faith in order
effectively to contest such claim,
                    (iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 10(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, if in
compliance with applicable securities laws, either direct the Employee to pay
the tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Employee to pay such claim and sue for a refund,
the Company shall advance a portion of such payment equal to the Gross-Up
Payment to the Employee, on an interest-free basis, and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax on the Payment
or income tax, including interest or penalties with respect thereto; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect to which such contested
amount is claimed to be due is limited solely to such

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contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
               (d) If, after the receipt by the Employee of an amount advanced
by the Company pursuant to Section 10(c), the Employee becomes entitled to
receive any refund with respect to such claim, the Employee shall (subject to
the Company’s complying with the requirements of Section 10(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 10(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
          11. Confidential Information and Company Policies. During the
Employment Period, the Employee shall abide by, conduct himself in accordance
with, and be subject to, the non-competition, non-solicitation,
non-disparagement and confidentiality provisions of the Employment Agreement and
the Company’s policies on sexual harassment, insider trading, corporate
disclosure, substance abuse and conflicts of interest and any other written
policy of the Company, the violation of which could result in termination of
employment.
          12. Successors.
               (a) This Agreement is personal to the Employee and without the
prior written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee’s legal
representatives.
               (b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
               (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) acquiring all or
substantially all of the business and/or assets of the Company (whether such
assets are held directly or indirectly) to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
          13. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or any breach hereof, shall be settled in accordance with the
terms of this Section 13. All claims by the Employee for benefits under this
Agreement shall first be directed to and determined by the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Employee in writing within thirty (30) days and

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shall set forth the specific reasons for the denial and the specific provisions
of this Agreement relied upon. The Board shall afford a reasonable opportunity
to the Employee for a review of the decision denying a claim and shall further
allow the Employee to appeal to the Board a decision of the Board within thirty
(30) days after notification by the Board that the Employee’s claim has been
denied. Any further dispute, controversy or claim arising out of or relating to
this Agreement, or the interpretation or alleged breach hereof, shall be settled
by arbitration in accordance with Employment Dispute Resolution Rules of the
American Arbitration Association (or such other rules as may be agreed upon by
the Employee and the Company). The place of the arbitration shall be Washington,
DC and any court having jurisdiction thereof may enter judgment upon the award
rendered by the arbitrator(s). Such an award shall be binding and conclusive
upon the parties hereto.
          14. Legal Expenses. The Company agrees to reimburse the Employee, to
the full extent permitted by law, for all costs and expenses (including without
limitation reasonable attorneys’ fees) which the Employee may reasonably incur
as a result of any contest of the validity or enforceability of, or the
Company’s liability under, any provision of this Agreement, plus in each case
interest at the applicable Federal rate provided for in Code Section 7872(f)(2);
provided, however, that such payment shall be made only if the Employee prevails
on at least one material issue.
          15. Miscellaneous.
               (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
               (b) 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 transmission, with confirmation
as to receipt, to the Company at the address set forth below and to the Employee
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:

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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
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
               (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
               (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
               (e) The Employee’s failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.
               (f) This Agreement contains the entire understanding of the
Company and the Employee with respect to the subject matter hereof. This
Agreement supercedes all other agreements and understandings between the Company
and the Employee relating to the subject matter hereof, but only during the
Employment Period.

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          IN WITNESS WHEREOF, the Employee has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.

               
 
             
 
            DIGENE CORPORATION
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

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