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Exhibit 4.1

DIGENE CORPORATION

AMENDED AND RESTATED 1999 INCENTIVE PLAN

Article I

Purpose

     The purpose of the 1999 Incentive Plan (the “Plan”) is to enable Digene Corporation (the
“Company”) to offer Employees of the Company and its Subsidiaries equity interests in the Company
and options to acquire equity interests in the Company, thereby helping to attract, retain and
reward such persons and strengthen the mutuality of interests between such persons and the
Company’s stockholders.

Article II

Definitions

     For purposes of the Plan, the following terms shall have the following meanings:

     2.1 “Award” shall mean an award under the Plan of a Stock Option, Restricted Stock
Unit, Unrestricted Stock or Performance Shares.

     2.2 “Board” shall mean the Board of Directors of the Company.

     2.3 “Change of Control” shall mean (a) the reorganization, consolidation or merger of
the Company or any of its Subsidiaries holding or controlling a majority of the assets relating to
the business of the Company, with or into any third party (other than a Subsidiary); (b) the
assignment, sale, transfer, lease or other disposition of all or substantially all, but at least
40%, of the assets of the Company and its Subsidiaries taken as a whole (measured by gross fair
market value without regard to liabilities); or (c) the acquisition by any third party or group of
third parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended)
of shares of voting stock of the Company, the result of which in the case of any transaction
described in clauses (a), (b) and (c) above is that immediately after the transaction the
stockholders of the Company immediately before the transaction, other than the acquiror, own less
than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled
to vote generally in the election of directors of the surviving or resulting corporation in a
transaction specified in clause (a) above, the acquiror in a transaction specified in clause (b)
above, or the Company or the acquiror in a transaction specified in clause (c) above.

     2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended.

     2.5 “Committee” shall mean the Compensation Committee of the Board, or any other
committee of the Board designated by the Board to administer this Plan, with any such Committee
consisting of two or more members of the Board; provided, that if the Compensation

 

 

Committee or any other such committee does not meet the applicable independence requirements
of Rule 16b-3(d) promulgated under the Securities Exchange Act of 1934, or NASDAQ, for Awards to
Reporting Persons the term “Committee” shall mean the Board and for purposes of all Awards granted
to the Chief Executive Officer of the Company under this Plan the term “Committee” shall mean the
independent members of the Board.

     2.6 “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the
Company.

     2.7 “Date of Grant” shall mean the date designated by the Committee as the date as of
which the Committee grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.

     2.8 “Disability” shall mean a disability that results in a Participant’s Termination
of Employment with the Company or a Subsidiary, as determined pursuant to standard Company
procedures.

     2.9 “Effective Date” shall mean the date on which the Plan was originally adopted by
the Board.

     2.10 “Employee” shall mean any person engaged or proposed to be engaged as an officer
or employee of the Company or one of its Subsidiaries; provided, however, that in the case of an
Incentive Stock Option, the term “Employee” shall mean any employee of the Company or of a
“subsidiary corporation” (within the meaning of Section 424(f) of the Code) of the Company.

     2.11 “Fair Market Value” for purposes of the Plan, unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, shall mean with respect to
the Common Stock on any day, (i) the closing sales price (or other exchange-designated daily sales
price) on the immediately preceding business day of a share of Common Stock as reported on the
principal securities exchange on which shares of Common Stock are then listed or admitted to
trading, or (ii) if not so reported, the closing sales price (or other Nasdaq-designated daily
sales price) on the immediately preceding business day of a share of Common Stock as published in
the Nasdaq National Market Issues report in the Eastern Edition of The Wall Street Journal, or
(iii) if not so reported, the average of the closing (or other designated) bid and asked prices on
the immediately preceding business day as reported on the Nasdaq National Market System, or (iv) if
not so reported, as furnished by any member of the National Association of Securities Dealers, Inc.
selected by the Committee. In the event that the price of a share of Common Stock shall not be so
reported or furnished, the Fair Market Value of a share of Common Stock shall be determined by the
Committee in good faith. A “business day” is any day, other than Saturday or Sunday, on which the
relevant market is open for trading.

     2.12 “Incentive Stock Option” shall mean any Stock Option awarded under the Plan to an
Employee that is intended to be and designated as an “Incentive Stock Option” within the meaning of
Section 422 of the Code.

     2.13 “Non-Qualified Stock Option” shall mean any Stock Option granted under the Plan
that is not an Incentive Stock Option.

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     2.14 “Participant” shall mean an Employee to whom an Award has been granted.

     2.15 “Performance Goal” shall mean objective financial or operating goals and measures
established by the Committee in accordance with Section 162(m) of the Code. Such Performance Goals
for any Performance Shares Award must be established in writing not later than ninety (90) days
after the commencement of a Performance Period; provided that the outcome of each Performance Goal
is substantially uncertain at the time the Performance Goal is established. Such Performance Goals
may relate to identified business units, or the Company or any Subsidiary and be based upon such
performance criteria or combination of factors as the Committee may deem appropriate, including,
but not limited to, specified levels of earnings per share, return on investment, return on
stockholders’ equity, sales, costs or other objective measures related to the Company’s
performance.

     2.16 “Performance Period” shall mean the period of time selected by the Committee
during which the achievement of Performance Goals is measured for purposes of determining the
extent to which an applicable Performance Shares Award has been earned or will vest.

     2.17 “Performance Shares” shall mean an Award, granted pursuant to Article VII of this
Plan, of the contingent right to receive a designated number of shares of Common Stock, payable in
Common Stock, cash, or a combination of both (depending on the medium of payment selected by the
Committee), at the end of a specified Performance Period if specified Performance Goals are
achieved. Such rights are subject to forfeiture or reduction if the applicable Performance Goals
are not met within the applicable Performance Period.

     2.18 “Performance Shares Award” shall mean an Award of Performance Shares.

     2.19 “Performance Shares Award Commitment” shall mean the written commitment delivered
by the Company to the Participant evidencing a Performance Shares Award and setting forth such
terms and conditions of the Award as may be deemed appropriate by the Committee. The Performance
Shares Award Commitment shall be in a form approved by the Committee, and once executed, shall be
deemed amended from time to time to include such additional terms and conditions as the Committee
may specify after the execution in the exercise of its powers under the Plan.

     2.20 “Restricted Stock Unit” shall mean an Award granted pursuant to Section 8.1
hereof, subject to such restrictions as the Committee may determine, as evidenced in a Restricted
Stock Unit Agreement. Shares of Common Stock issuable under a Restricted Stock Unit Award will be
issued when, in accordance with the terms of the Restricted Stock Unit Agreement, they become
transferable and free of risk of forfeiture.

     2.21 “Restricted Stock Unit Agreement” shall mean the agreement evidencing the grant
of Restricted Stock Units to an Employee pursuant to this Plan.

     2.22 “Restriction Period” shall have the meaning set forth in Section 8.2(c).

     2.23 “Stock Option” or “Option” shall mean any option to purchase shares of
Common Stock granted pursuant to Article VI hereof.

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     2.24 “Subsidiary” shall mean any subsidiary of the Company, 50% or more of the voting
stock of which is owned, directly or indirectly, by the Company, that is currently existing as of
the Effective Date or formed or acquired by the Company while any Award is outstanding under the
Plan.

     2.25 “Termination of Employment” shall mean a termination of employment with the
Company and all of its Subsidiaries for reasons other than a military or personal leave of absence
granted by the Company or any Subsidiary.

     2.26 “Unrestricted Stock” shall mean Common Stock granted under Section 8.3 hereof.

     2.27 “Unrestricted Stock Agreement” shall mean the agreement evidencing the grant of
Unrestricted Stock to an Employee pursuant to this Plan.

Article III

Administration

     3.1 The Committee. The Plan shall be administered and interpreted by the Committee.

     3.2 Awards. The Committee shall have full authority to grant, pursuant to the terms
of the Plan, Stock Options, Restricted Stock Units, Unrestricted Stock or Performance Shares to
persons eligible under Article V. In particular, the Committee shall have the authority:

          (a) to select the persons to whom Stock Options, Restricted Stock Units, Unrestricted Stock or
Performance Shares may from time to time be granted;

          (b) to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Units, Unrestricted Stock or Performance Shares, or any combination
thereof, are to be granted to one or more persons eligible to receive Awards under Article V;

          (c) to determine the number of shares of Common Stock to be covered by each Award granted
hereunder; and

          (d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder (including, but not limited to, the option price, the option term, and
provisions relating to any restriction or limitation, any vesting schedule or acceleration, any
performance guidelines or criteria or any forfeiture restrictions or waiver provisions of the
Award), and any conditions (in addition to those contained in this Plan) on the exercisability of
all or any part of an Option or on the transferability or forfeitability of Restricted Stock Units.
Notwithstanding any such conditions, the Committee may, in its discretion at any time, accelerate
the time at which any Option may be exercised or the time at which the Common Stock underlying
Restricted Stock Units may become transferable or nonforfeitable.

     3.3 Guidelines. Subject to Article IX hereof, the Committee shall have the authority
to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan

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as it shall, from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any Award granted under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan. The express grant in the Plan of any specific power to
the Committee shall not be construed as limiting any other power or authority of the Committee.
The Committee may correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award in the manner and to the extent it shall deem necessary or advisable to carry
out the purposes of the Plan. Notwithstanding the foregoing, no action of the Committee under this
Section 3.3 shall impair the rights of any Participant without the Participant’s consent, unless
otherwise required by law.

     A majority of the entire Committee shall constitute a quorum, and the action of a majority of
the members present at any meeting at which a quorum is present shall be deemed the action of the
Committee. In addition, any decision or determination reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. Subject to the provisions of this Plan and the Company’s Bylaws, and
to any terms and conditions prescribed by the Board, the Committee may make such additional rules
and regulations for the conduct of its business as it shall deem advisable. The Committee shall
hold meetings at such times and places as it may determine.

     3.4 Decisions Final. Any decision, interpretation or other action made or taken in
good faith by the Committee arising out of or in connection with the Plan shall be final, binding
and conclusive on the Company, all Participants and their respective heirs, executors,
administrators, successors and assigns.

Article IV

Share Limitation

     4.1 Shares. The maximum aggregate number of shares of Common Stock that may be issued
under the Plan is 5,100,000 (subject to increase or decrease pursuant to Section 4.3), which may be
either authorized and unissued shares of Common Stock or authorized and issued shares of Common
Stock reacquired by the Company; provided that any grant of Performance Shares, Restricted Stock
Units or Unrestricted Stock under the Plan on or after October 26, 2005 will be counted against the
maximum aggregate number of shares issuable under the Plan as two shares of Common Stock for every
one share of Common Stock subject thereto. If any Option granted under the Plan shall expire,
terminate or be canceled for any reason without having been exercised in full, the number of shares
of Common Stock not purchased under such Option shall again be available for the purposes of the
Plan. Further, if any Performance Shares are unearned or forfeited, or Restricted Stock Units are
forfeited, the shares subject to the portion of such Award unearned or forfeited, as the case may
be, shall again be available under the Plan; provided that, to the extent that a share of Common
Stock that was subject to an Award that counted as two shares against the maximum aggregate number
of shares issuable under the Plan is recycled back into the Plan, the Plan will be credited with
two shares. Notwithstanding anything to the contrary in this Section 4.1, (i) should the exercise
price of a Stock Option be paid with shares of Common Stock or by reducing the number of shares of
Common Stock issuable upon such exercise, or (ii) should shares of Common Stock otherwise issuable
under the Plan be paid in cash or withheld by the Company in satisfaction of the withholding taxes
incurred in connection with the exercise of a Stock Option or the vesting of an Award, then the

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number of shares of Common Stock available for issuance under the Plan shall be reduced by the
gross number of shares for which the Stock Option is exercised or which vest under the Award, and
not by the net number of shares of Common Stock issued to the holder of such Stock Option or Award.

     4.2 Individual Limit. No Employee may be granted Awards covering more than 500,000
shares of Common Stock (subject to increase or decrease pursuant to Section 4.3) during any
calendar year.

     4.3 Changes. In the event of any merger, reorganization, consolidation,
recapitalization, dividend (other than a regular cash dividend), stock split, or other change in
corporate structure affecting the Common Stock, such substitution or adjustment shall be made in
the maximum aggregate number of shares which may be issued under the Plan, the maximum number of
shares with respect to which Awards may be granted to any individual during any year, the number
and option price of shares subject to outstanding Options, and the number of shares subject to
other outstanding Awards, as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any Award shall always be a whole number.

Article V

Eligibility

     5.1 Awards to Employees. All officers and other Employees of the Company and its
Subsidiaries are eligible to be granted Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock Units, Unrestricted Stock or Performance Shares under the Plan. A Director who is
an Employee of the Company or a Subsidiary shall be eligible to receive Awards pursuant to this
Article V.

Article VI

Stock Options

     6.1 Options. Each Stock Option granted under the Plan shall be either an Incentive
Stock Option or a Non-Qualified Stock Option.

     6.2 Grants. The Committee shall have the authority to grant to any person eligible
under Section 5.1 one or more Incentive Stock Options, Non-Qualified Stock Options, or both types
of Stock Options. To the extent that any Stock Option does not qualify as an Incentive Stock
Option (whether because of its provisions or the time or manner of its exercise or otherwise), such
Stock Option or the portion thereof which does not qualify as an Incentive Stock Option shall
constitute a separate Non-Qualified Stock Option.

     6.3 Incentive Stock Options. Anything in the Plan to the contrary notwithstanding, no
term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor
shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code, or, without the consent of the Participants affected, to
disqualify any Incentive Stock Option under such Section 422 of the Code.

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     6.4 Terms of Options. Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

          (a) Stock Option Certificate. Each Stock Option shall be evidenced by, and subject to
the terms of, a Stock Option Certificate evidencing the Stock Option grant. The Stock Option
Certificate shall specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option, the number of shares of Common Stock subject to the Stock Option, the option price, the
option term, and the other terms and conditions applicable to the Stock Option.

          (b) Option Price. Subject to subsection (m) below, the option price per share of
Common Stock purchasable upon exercise of a Stock Option shall be determined by the Committee at
the time of grant, but shall be not less than 100% of the Fair Market Value of the Common Stock on
the Date of Grant.

          (c) Option Term. Subject to subsection (m) below, the term of each Stock Option shall
be fixed by the Committee at the time of grant, but no Stock Option granted prior to September 20,
2005 shall be exercisable more than ten years after the date it is granted and no Stock Option
granted on or after September 20, 2005 shall be exercisable more than seven years after the date it
is granted.

          (d) Exercisability. Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at the time of grant;
provided, however, that the Committee may waive any installment exercise or waiting period
provisions, in whole or in part, at any time after the Date of Grant, based on such factors as the
Committee shall deem appropriate in its sole discretion.

          (e) Method of Exercise. Subject to such installment exercise and waiting period
provisions as may be imposed by the Committee, Stock Options may be exercised in whole or in part
at any time during the option term by delivering to the Company written notice of exercise
specifying the number of shares of Common Stock to be purchased and the option price therefor. The
notice of exercise shall be accompanied by payment in full of the option price and, if requested,
by the representation described in Section 11.2. Payment of the option price may be made (i) in
cash or by check payable to the Company, (ii) unless otherwise determined by the Committee on or
after the Date of Grant, in shares of Common Stock duly owned by the Participant (and for which the
Participant has good title free and clear of any liens and encumbrances) or (iii) in the case of an
Option that is not an Incentive Stock Option, unless otherwise determined by the Committee on or
after the Date of Grant, by reduction in the number of shares of Common Stock issuable upon such
exercise, based, in each case, on the Fair Market Value of the Common Stock on the date of
exercise. Upon satisfaction of the conditions provided herein, a stock certificate representing
the number of shares of Common Stock to which the Participant is entitled shall be issued and
delivered to the Participant, subject to Section 11.3. For the purpose of assisting a Participant
to exercise an Option, the Company may, in the discretion of the Board, make loans to the
Participant or guarantee loans made by third parties to the Participant, in either case on such
terms and conditions as the Board may authorize. Nothing
contained in this Plan shall prevent or prohibit a Participant from exercising his or her
Options under a broker-facilitated cashless exercise transaction.

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          (f) Death. Unless otherwise determined by the Committee on or after the Date of
Grant, in the event of a Participant’s Termination of Employment by reason of death, any Stock
Option held by such Participant which was exercisable on the date of death may thereafter be
exercised by the legal representative of the Participant’s estate until the earlier of one year
after the date of death or the expiration of the stated term of such Stock Option, and any Stock
Option not exercisable on the date of death shall be forfeited.

          (g) Disability. Unless otherwise determined by the Committee on or after the Date of
Grant, in the event of a Participant’s Termination of Employment by reason of Disability, any Stock
Option held by such Participant which was exercisable on the date of such Termination of Employment
may thereafter be exercised by the Participant until the earlier of one year after such date or the
expiration of the stated term of such Stock Option, and any Stock Option not exercisable on the
date of such Termination of Employment shall be forfeited. If the Participant dies during such
one-year period, any unexercised Stock Options held by the Participant at the time of death may
thereafter be exercised by the legal representative of the Participant’s estate until the earlier
of one year after the date of the Participant’s death or the expiration of the stated term of such
Stock Option. If an Incentive Stock Option is exercised after the expiration of the exercise
period that applies for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.

          (h) Termination of Employment. Subject to Section 11.4, in the event of a
Participant’s Termination of Employment by reason of retirement or for any reason other than death
or Disability, all Stock Options held by such Participant that were exercisable on the date of such
Termination of Employment may be exercised by the Participant at any time during the longer of: (i)
the three (3) month period after his or her Termination of Employment; or (ii) in the case of an
Option that is not an Incentive Stock Option and in the sole discretion of the Committee and as
long as such change does not have an adverse affect under Section 409A of the Code, if, at the time
of the Participant’s Termination of Employment, the Participant is engaged as a consultant by the
Company, the period during which the Participant is engaged as a consultant by the Company but not
to exceed twelve (12) months after the Participant’s Termination of Employment; provided, however,
that if the Committee shall determine that the Employee’s employment was terminated for conduct
that in the judgment of the Committee involves dishonesty or action by the Employee that is
detrimental to the best interest of the Company, all Stock Options held by the Employee on the date
of such Termination of Employment shall be forfeited. Notwithstanding anything to the contrary in
this Subsection, but subject to the last sentence of this Subsection, a Stock Option shall not
terminate upon a Participant’s Termination of Employment if at the time thereof the Participant
serves as a Director of the Company or its successor. In such event, once the Participant ceases
to be a Director of the Company or its successor, all Stock Options held by such Participant that
were exercisable on the date the Participant ceased to be a Director may be exercised by the
Participant at any time during the three month period after the Participant ceases to be a
Director. Notwithstanding anything to the contrary in this Subsection, no Stock Option may be
exercised after the expiration of the stated term of such Stock Option.

          (i) Change of Control. Notwithstanding the provisions of Section 4.3, in the event of
a Change of Control, all outstanding Stock Options shall immediately become fully

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exercisable, and upon payment by the Participant of the option price (and, if requested,
delivery of the representation described in Section 11.2), a stock certificate representing the
Common Stock covered thereby shall be issued and delivered to the Participant. This Section 6.4(i)
shall apply to any outstanding Stock Options which are Incentive Stock Options to the extent
permitted by Code Section 422(d), and any outstanding Incentive Stock Options in excess thereof
shall, immediately upon the occurrence of such a Change of Control be treated for all purposes of
the Plan as Non-Qualified Stock Options and shall be immediately exercisable as set forth in this
Section 6.4(i).

          (j) Merger and Other Fundamental Transactions. In the event the Company is succeeded
by another company in a reorganization, merger, consolidation, acquisition of property or stock,
separation or liquidation, the successor company shall assume all of the outstanding Options
granted under this Plan or shall substitute new options for them, which shall provide that each
Participant, at the same cost, shall be entitled upon the exercise of each such option to receive
such securities as the Board of Directors (or equivalent governing body) of the succeeding,
resulting or other company shall determine to be equivalent, as nearly as practicable, to the
nearest whole number and class of shares of stock or other securities to which the Participant
would have been entitled under the terms of the agreement governing the reorganization, merger,
consolidation, acquisition of property or stock, separation or liquidation as if, immediately prior
to such event, the Participant had been the holder of record of the number of shares of Common
Stock which were then subject to the outstanding Option granted under this Plan.

          (k) Non-Transferability of Options. No Stock Option shall be transferable by the
Participant otherwise than by will or by the laws of descent and distribution, to the extent
consistent with the terms of the Plan and the Option, and all Stock Options shall be exercisable,
during the Participant’s lifetime, only by the Participant.

          (l) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market
Value (determined as of the Date of Grant) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year under
the Plan and/or any other stock option plan of the Company or any subsidiary or parent corporation
(each within the meaning of Section 424 of the Code) exceeds $100,000, such Options shall be
treated as Options which are not Incentive Stock Options.

          (m) Ten-Percent Stockholder Rule. Notwithstanding any other provision of the Plan to
the contrary, no Incentive Stock Option shall be granted to any person who, immediately prior to
the grant, owns stock possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any subsidiary or parent corporation (each within the meaning of
Section 424 of the Code), unless the option price is at least 110% of the Fair Market Value of the
Common Stock on the Date of Grant and the Option, by its terms, expires no later than five years
after the Date of Grant.

     Should the foregoing provisions not be necessary in order for the Stock Options to qualify as
Incentive Stock Options, or should any additional provisions be required, the Committee may amend
the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the
Company.

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     6.5 Rights as Stockholder. A Participant shall not be deemed to be the holder of
Common Stock, or to have any of the rights of a holder of Common Stock, with respect to shares
subject to the Option, unless and until the Option is exercised and a stock certificate
representing such shares of Common Stock is issued to the Participant.

Article VII

Performance Shares

     7.1 Award of Performance Shares. The Committee shall have the authority to award
Performance Shares to any person eligible under Section 5.1. The Committee shall determine the
eligible Employees to whom, and the time or times at which, Performance Shares shall be awarded,
the number of Performance Shares to be awarded to any Employee, the duration of the Performance
Period with respect to each Performance Shares Award, the medium of payment upon vesting and the
other terms and conditions of the Performance Shares Award, including those set forth in Section
7.2.

     7.2 Terms and Conditions. Performance Shares awarded pursuant to this Article VII
shall be subject to the following terms and conditions and such other terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:

          (a) Performance Period. At the time of a Performance Shares Award, the Committee, in
its sole discretion, shall establish a Performance Period of not less than (1) year nor more than
five (5) years, commencing on the Date of Grant of the Performance Shares Award.

          (b) Performance Goals. A Performance Shares Award will vest and be earned based on
the attainment of one or more identified Performance Goals determined by the Committee. The
Performance Goals (although their measurement, including adjustments, if any, as permitted under
Subsection 7.2(c), will not occur until after the expiration of the applicable Performance Period)
must be met during the continuance of the Participant’s employment with the Company or any
Subsidiary, prior to the expiration of the applicable Performance Period. Performance Goals may
vary among Participants and among Performance Shares Awards to a Participant.

          (c) Revisions for Significant Events. When circumstances occur (including, but not
limited to, unusual or nonrecurring events, changes in tax laws or accounting principles or
practices) that cause any Performance Goal to be inappropriate in the judgment of the Committee,
the Committee may make such changes as it deems equitable in recognition of any unforeseen events
or changes in circumstances or changed business or economic conditions, as long as any such changes
are consistent with Section 162(m) of the Code.

          (d) Performance Shares Award Commitment. Each Performance Shares Award shall be
evidenced by, and subject to the terms of, a Performance Shares Award Commitment. The Performance
Shares Award Commitment shall specify the number of shares of Common Stock subject to the
Performance Shares Award, the medium of payment, the applicable Performance Period and the other
terms and conditions applicable to such Performance Shares Award.

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          (e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, the Committee shall be entitled to
determine the impact of such event on outstanding Performance Shares Awards, and to make
adjustments to each Performance Shares Award to the extent necessary to provide that the
Participant receive, to the extent possible, equivalent rights under such Performance Shares Award
after consummation of such event.

          (f) Achievement of Performance Goals. Within a period of time determined by the
Committee, but not to exceed 90 days after the end of a Performance Period, the Committee will
determine if the applicable Performance Goals were met with respect to applicable Performance
Shares Awards. If the Committee certifies in writing, after the expiration of the Performance
Period, that the Performance Goals specified in a Performance Shares Award Commitment and all other
material terms of the Award have been satisfied, the Performance Shares Award shall be vested and
earned in accordance with such Committee certification.

          (g) Payment of Performance Shares Awards. Payment of a vested, earned Performance
Shares Award shall be made either in shares of Common Stock, or in cash, or in some combination
thereof, as determined by the Committee. The medium of payment shall be set forth in the
Committee’s resolution granting the Performance Shares Award and in the Performance Shares Award
Commitment with the Participant. For an earned Performance Shares Award, or portion thereof, to be
settled through the issuance of shares of Common Stock, the number of shares delivered shall be
equal to the number of applicable Performance Shares earned. The holder may elect to reduce this
amount by the number of shares of Common Stock which have, on the date the Performance Shares Award
is settled, a Fair Market Value equal to the applicable federal, state and local withholding tax
due on the receipt of the Common Stock, in lieu of making a cash payment equal to the amount of
such withholding tax due. For an earned Performance Shares Award, or portion thereof, to be
settled in cash, the amount of cash paid shall be equal to the number of applicable Performance
Shares earned multiplied by the Fair Market Value of a share of Common Stock on such date following
the lapse of the Performance Period and the satisfaction of any other applicable conditions
established by the Committee at the time of grant, that the Participant first becomes entitled to
receive such payment. Such amount will be reduced by applicable federal, state and local
withholding tax due. For any earned Performance Shares Award paid in cash, the shares of Common
Stock designated in the Performance Shares Award shall be deemed to have been issued for purposes
of Section 4.1 hereof.

          (h) Non-Transferability of Performance Shares Awards. No Performance Shares Awards
shall be transferable by the Participant prior to the determination that such Performance Shares
Award is vested and earned, otherwise than by will or by the laws of descent and distribution, to
the extent consistent with the terms of the Plan.

     7.3 Death or Disability. Subject to the provisions of this Plan and the Performance
Shares Award Commitment, in the event of the death or Disability of a Participant, the Participant
or the Participant’s estate, as the case may be, shall be entitled to receive, at the expiration of
the Performance Period, a percentage of Performance Shares that is equal to the percentage of the
Performance Period that had elapsed as of the date of death or date on which such Disability
commenced (as determined by the Committee in its sole discretion); provided

11

 

that the Committee, in its sole discretion, determines that the conditions specified in the
Performance Shares Awards Commitment have been satisfied. Payment of such portion of the
Performance Shares Award shall be made to the Participant or the Participant’s estate, as the case
may be, in accordance with this Article VII.

     7.4 Change of Control. At the time a Performance Shares Award is made by the
Committee, the Committee shall be entitled, notwithstanding the provisions of Section 4.3, to
provide for different terms and provisions in the event of a Change in Control, including, but not
limited to, the authority to provide for the settlement of a Performance Shares Award, regardless
of whether the applicable Performance Period has expired or whether the applicable Performance
Goals have been met.

     7.5 Termination of Employment. Subject to Sections 7.4 and 11.4, in the event of a
Participant’s Termination of Employment by reason of retirement or for any reason other than death
or Disability, all Performance Shares Awards held by such Participant that were earned on the date
of such Termination of Employment will be paid to the Participant; provided, however, that if the
Committee shall determine that the Employee’s employment was terminated for conduct that in the
judgment of the Committee involves dishonesty or action by the Employee that is detrimental to the
best interest of the Company, all earned but unpaid Performance Shares held by the Employee on the
date of such Termination of Employment shall be forfeited. Notwithstanding anything to the
contrary in this Subsection, a Performance Shares Award shall not terminate upon a Participant’s
Termination of Employment if at the time thereof the Participant serves as a Director of the
Company or its successor, in which event the Performance Shares Awards shall terminate if the
Participant ceases to be a Director of the Company or its successor, and any earned Performance
Shares Award will be then paid in accordance with this Subsection.

Article VIII

Restricted Stock Units and Unrestricted Stock

     8.1 Awards of Restricted Stock Units. The Committee shall have the authority to grant
to any person eligible under Section 5.1 one or more Restricted Stock Unit Awards. The Committee
shall determine the eligible Employees to whom, and the time or times at which, grants of
Restricted Stock Units will be made, the number of shares to be awarded, the time or times within
which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration
thereof, and the other terms and conditions of the Awards in addition to those set forth in Section
8.2.

     8.2 Terms and Conditions. Restricted Stock Units shall be subject to the following
terms and conditions and such other terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable:

          (a) Restricted Stock Unit Agreement. Each Restricted Stock Unit Award shall be
evidenced by, and subject to the terms of, a Restricted Stock Unit Agreement executed by the
Company and the Participant. The Restricted Stock Unit Agreement shall specify the number of
shares of Common Stock subject to the Award, the time or times within which such
Award is subject to forfeiture and the other terms, conditions and restrictions applicable to
such Award.

12

 

          (b) Stock Certificate. Subject to Section 11.3, when the restrictions applicable to a
Restricted Stock Unit Award, or any portion thereof, lapse, a stock certificate representing the
number of shares of Common Stock covered by such Restricted Stock Unit Award, or portion thereof,
shall be issued and delivered to the Participant. A Participant shall not be deemed to be the
holder of Common Stock, or to have any of the rights of a holder of Common Stock, with respect to
shares underlying any Restricted Stock Unit Award, unless and until the forfeiture restrictions
lapse and a stock certificate representing such shares of Common Stock is issued to the
Participant.

          (c) Restriction Period. Subject to the provisions of the Plan and the Restricted
Stock Unit Agreement, Restricted Stock Units will be forfeited to the Company in the event of a
Participant’s Termination of Employment during a period (not to exceed five years) set by the
Committee commencing with the date of such Award (the “Restriction Period”). Subject to the
provisions of the Plan, the Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may waive such restrictions, in whole or in part, at any time,
based on such factors as the Committee shall deem appropriate in its sole discretion.

          (d) Termination of Employment. Subject to Section 11.4, in the event of a
Participant’s Termination of Employment prior to the expiration of the Restriction Period, then he
or she shall forfeit all of his or her Restricted Stock Units with respect to which the Restriction
Period has not yet expired; provided, however, that the terms of the Restricted Stock Unit
Agreement, in the discretion of the Committee and pursuant to such terms and conditions as it may
impose, may provide: (i) that, if such Employee’s employment is terminated for any reason other
than conduct that in the judgment of the Committee involves dishonesty or action by the Employee
that is detrimental to the best interests of the Company, then the Restricted Stock Units or any
related compensation deferral or a portion thereof shall not be forfeited; (ii) that, if such
Employee’s employment is terminated on account of Disability, then the Employee shall not forfeit
his or her Restricted Stock Units or any related compensation deferral or a portion thereof; and
(iii) that, if such Employee dies while employed by the Company or any of its Subsidiaries, then
his or her Restricted Stock Units or any related compensation deferral or a portion thereof is not
forfeited.

          (e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, then any shares or other
securities of the Company or succeeding, resulting or other company to be received by the Employee
under the Restricted Stock Unit Agreement shall be subject to the same restrictions applicable to
the Restricted Stock Units.

          (f) Non-Transferability of Restricted Stock Unit Awards. No Restricted Stock Units
shall be transferable by the Participant prior to vesting and/or lapse of the applicable forfeiture
restrictions otherwise than by will or by the laws of descent and distribution, to the extent
consistent with the terms of the Plan.

     8.3 Unrestricted Stock. The Committee shall have the authority to grant to any person
eligible under Section 5.1 one or more Unrestricted Stock Awards. Each Employee who

13

 

is awarded Unrestricted Stock shall receive an Unrestricted Stock Agreement from the Company
in a form specified by the Committee and containing the terms and conditions of the award and such
other matters, consistent with this Plan, as the Committee, in its sole discretion, shall determine
at the time the Award is made. Such conditions may include, but shall not be limited to, the
deferral of a percentage of the Employee’s annual cash compensation, not including dividends paid
on the Unrestricted Stock, if any, to be applied toward the purchase of Unrestricted Stock upon
such terms and conditions, including such discounts, as may be set forth in the Unrestricted Stock
Agreement. Upon the issuance of Unrestricted Stock to an Employee hereunder, the Employee shall
have the entire beneficial ownership and all the rights and privileges of a stockholder with
respect to the Unrestricted Stock awarded to him or her, including the right to receive dividends
and the right to vote such Unrestricted Stock. Subject to Section 11.3, each Employee who is
awarded Unrestricted Stock may, but need not, be issued a stock certificate in respect of such
shares of Unrestricted Stock.

Article IX

Termination or Amendment

     9.1 Termination or Amendment of Plan. The Committee may at any time amend,
discontinue or terminate the Plan or any part thereof (including any amendment deemed necessary to
ensure that the Company may comply with any regulatory requirement referred to in Article XI) or
amend any Award previously granted, prospectively or retroactively (subject to Article IV);
provided, however, that, (i) unless otherwise required by law, the rights of a Participant with
respect to Awards granted prior to such amendment, discontinuance or termination may not be
impaired without the consent of such Participant; (ii) except as otherwise provided in Section 4.3
hereof, the Committee shall not reduce the exercise price of Stock Options previously awarded to
any Participant, whether through amendment, cancellation and replacement grant, or any other means,
without prior stockholder approval; and (iii) the Company will seek the approval of the Company’s
stockholders for any amendment if such approval is necessary to comply with the Code, Federal or
state securities laws or any other applicable laws or regulations, including the Marketplace Rules
of the National Association of Securities Dealers, Inc.

Article X

Unfunded Plan

     10.1 Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payment not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are greater than those of
a general creditor of the Company.

14

 

Article XI

General Provisions

     11.1 Nonassignment. Except as otherwise provided in the Plan, any Award granted
hereunder and the rights and privileges conferred thereby shall not be sold, transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be
subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of an Award, right or privilege contrary to the provisions hereof,
or upon the levy of any attachment or similar process thereon, such Award and the rights and
privileges conferred hereby shall immediately terminate and the Award shall immediately be
forfeited to the Company.

     11.2 Legend. The Committee may require each person acquiring shares pursuant to an
Award to represent to the Company in writing that the Participant is acquiring the shares without a
view to distribution thereof. The stock certificates representing such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on transfer.

     All certificates representing shares of Common Stock delivered under the Plan shall be subject
to such stock transfer orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange Commission, any stock
exchange or stock market upon which the Common Stock is then listed or traded, any applicable
Federal or state securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.

     11.3 Uncertificated Shares. Each Employee who exercises an Option to acquire Common
Stock, is issued Common Stock upon the vesting of a Performance Shares Award or lapse of forfeiture
restrictions under a Restricted Stock Unit Award or is issued Unrestricted Stock may, but need not,
be issued a stock certificate in respect of the Common Stock so acquired. A “book entry”
(i.e., a computerized or manual entry) shall be made in the records of the Company to
evidence the issuance of shares of Common Stock to an Employee where no certificate is issued in
the name of the Employee. Such Company records, absent manifest error, shall be binding on
Employees. In all instances where the date of issuance of shares may be deemed significant but no
certificate is issued in accordance with this Section 11.3, the date of the book entry shall be the
relevant date for such purposes.

     11.4 Forfeiture for Competition. If a Participant in this Plan provides services to a
competitor of the Company or any of its subsidiaries, whether as an employee, officer, director,
independent contractor, consultant, agent or otherwise, such services being of a nature that can
reasonably be expected to involve the skills and experience used or developed by the Participant
while an Employee, and the Committee determines, in its sole discretion, that the provision of such
services constitutes a breach of the Participant’s non-compete agreement with the Company, then
that Participant’s rights to any Awards hereunder shall automatically be forfeited.

     11.5 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.

15

 

     11.6 No Right to Employment. Neither the Plan nor the grant of any Award hereunder
shall give any Participant or other Employee any right with respect to continuance of employment by
the Company or any Subsidiary, nor shall the Plan impose any limitation on the right of the Company
or any Subsidiary by which a Participant is employed to terminate such Participant’s employment at
any time.

     11.7 Withholding of Taxes. The Company shall have the right to reduce the number of
shares of Common Stock otherwise deliverable pursuant to an Award under this Plan by an amount that
would have a fair market value equal to the minimum amount of all Federal, state and local taxes
required to be withheld, or to deduct the amount of such taxes from any cash payment otherwise to
be made to the Participant. In connection with such withholding, the Committee may make such
arrangements as are consistent with the Plan as it may deem appropriate.

     11.8 Listing and Other Conditions.

          (a) If the Common Stock is listed on a national securities exchange or The Nasdaq Stock
Market, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or The Nasdaq Stock Market. The Company shall have no
obligation to issue any shares of Common Stock unless and until such shares are so listed, and the
right to exercise any Option or vest in any Restricted Stock Unit shall be suspended until such
listing has been effected.

          (b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under the Securities Act
of 1933, as amended, or otherwise with respect to shares of Common Stock or Awards, and the right
to exercise any Option or vest in any Restricted Stock Unit shall be suspended until, in the
opinion of such counsel, such sale or delivery shall be lawful or shall not result in the
imposition of excise taxes.

          (c) Upon termination of any period of suspension under this Section 11.8, any Award affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Option.

     11.9 Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof.

     11.10 Construction. Wherever any words are used in the Plan in the masculine gender
they shall be construed as though they were also used in the feminine gender in all cases where
they would so apply, and wherever any words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases where they would so apply.

16

 

     11.11 Liability of the Board and the Committee. No member of the Board or the
Committee nor any Employee of the Company or any of its subsidiaries shall be liable for any act or
action hereunder, whether of omission or commission, by any other member or Employee or by any
agent to whom duties in connection with the administration of the Plan have been delegated or,
except in circumstances involving bad faith, gross negligence or fraud, for anything done or
omitted to be done by himself.

     11.12 Other Benefits. No payment pursuant to an Award shall be deemed compensation
for purposes of computing benefits under any retirement plan of the Company or any Subsidiary nor
affect any benefits under any other benefit plan now or hereafter in effect under which the
availability or amount of benefits is related to the level of compensation.

     11.13 Costs. The Company shall bear all expenses incurred in administering the Plan,
including expenses related to the issuance of Common Stock pursuant to Awards.

     11.14 Severability. If any part of the Plan shall be determined to be invalid or void
in any respect, such determination shall not affect, impair, invalidate or nullify the remaining
provisions of the Plan which shall continue in full force and effect.

     11.15 Successors. The Plan shall be binding upon and inure to the benefit of any
successor or successors of the Company.

     11.16 Headings. Article and section headings contained in the Plan are included for
convenience only and are not to be used in construing or interpreting the Plan.

Article XII

Term of Plan

     12.1 Effective Date. The Plan shall be effective as of the Effective Date, but the
grant of any Award hereunder is subject to the express condition that the Plan be approved by the
stockholders of the Company within 12 months after the Effective Date.

     12.2 Termination Date. Unless sooner terminated, the Plan shall terminate ten years
after the Effective Date and no Awards may be granted thereafter. Termination of the Plan shall
not affect Awards granted before such date.

As originally adopted by the Board by unanimous written consent dated September 14, 1999 and
approved by the stockholders at the Annual Meeting held on October 28, 1999.

As revised by the Board by unanimous written consent dated September 21, 2000 and approved by the
stockholders at the Annual Meeting held on October 26, 2000 — the first sentence of Section 4.1 was
amended to increase the maximum aggregate number of shares of Common Stock that may be issued under
the Plan from 1,000,000 to 2,000,000.

As revised by the Board at its October 26, 2000 meeting to clarify the “Change of Control”
definition.

As revised by the Board by unanimous written consent dated September 5, 2001 and approved by the
stockholders at the Annual Meeting held on October 25, 2001 — the first sentence of Section 4.1 was
amended

17

 

to increase the maximum aggregate number of shares of Common Stock that may be issued under the
Plan from 2,000,000 to 3,000,000.

As revised by the Board at its meeting held February 19, 2002 — sentence was added to the end of
Section 6.4(h), “Termination of Employment”, regarding termination of options if optionee continues
as a Director.

As revised by the Board at its meeting held September 12, 2002 and approved by the stockholders at
the Annual Meeting held on October 24, 2002 — the first sentence of Section 4.1 was amended to
increase the maximum aggregate number of shares of Common Stock that may be issued under the Plan
from 3,000,000 to 4,000,000.

As revised by the Board at its meeting held September 5, 2003 and approved by the stockholders at
the Annual Meeting held on October 30, 2003 — the first sentence of Section 4.1 was amended to
increase the maximum aggregate number of shares of Common Stock that may be issued under the Plan
from 4,000,000 to 4,900,000.

As revised by the Board at its meeting held October 30, 2003 to remove the provisions vesting sole
authority in the Board to grant Awards to Reporting Persons and to amend the definition of
Committee.

As revised by the Board at its meeting held September 9, 2004 and approved by the stockholders at
the Annual Meeting held on October 27, 2004 to include provisions providing for the grant of
Performance Shares under the Plan.

As revised by the Board by unanimous written consent dated September 20, 2005 to require
stockholder approval of any reduction of the exercise price of outstanding Stock Options, to limit
the term of Stock Options granted on or after September 20, 2005 to a maximum of seven years, to
require that the exercise price of any Stock Options granted under the Plan be no less than 100% of
the Fair Market Value of the Common Stock on the date of grant, to clarify that the number of
shares of common stock available for issuance under the Plan will be reduced by the gross, not net,
number of shares of common stock subject to Awards, and to make certain technical amendments to the
Plan to comply with Section 409A of the Code.

As revised by the Board by unanimous written consent dated September 20, 2005 and approved by the
stockholders at the Annual Meeting held on October 26, 2005 to amend Section 4.1 to increase the
maximum aggregate number of shares of Common Stock that may be issued under the Plan from 4,900,000
to 5,100,000 and to provide that any grant of Performance Shares, Restricted Stock Units or
Unrestricted Stock under the Plan on or after October 26, 2005 will be counted against the Plan’s
share reserve as two shares for every one share subject to such Award and to amend Section 6.4(h)
to extend the period during which vested Stock Options may be exercised following an optionee’s
termination of employment if the optionee is engaged as a consultant by the Company following his
or her termination.

As revised by the Compensation Committee at its meeting on January 25, 2006 to include provisions
regarding the restriction on transferability of Performance Shares Awards and Restricted Stock Unit
Awards, and to modify all references in the Plan to Restricted Stock Awards to be and refer to
Restricted Stock Unit Awards, to more properly reflect the actual nature of the Awards.

18exv4w2

 

Exhibit 4.2

DIGENE CORPORATION

AMENDED AND RESTATED DIRECTORS’ EQUITY COMPENSATION PLAN

ARTICLE 1

PURPOSE; EFFECTIVE DATE; DEFINITIONS

     1.1 Purpose. This Digene Corporation Directors’ Equity Compensation Plan (the
“Plan”) is intended to secure for Digene Corporation (the “Company”) and its
stockholders the benefits of the incentive inherent in common stock ownership by the directors of
the Company and to afford such persons the opportunity to obtain or increase their proprietary
interest in the Company on a favorable basis and thereby have an opportunity to share in its
success.

     1.2 Effective Date. This Plan shall be effective on and after September 6, 1996.

     1.3 Definitions. Throughout this Plan, the following terms shall have the meanings
indicated:

          (a) "Award” shall mean an award under the Plan of Options, Restricted Stock Units or
Restricted Stock.

          (b) "Board” shall mean the Board of Directors of the Company.

          (c) "Change of Control” shall mean (a) the reorganization, consolidation or merger of
the Company or any of its subsidiaries holding or controlling a majority of the assets relating to
the business of the Company, with or into any third party (other than a subsidiary); (b) the
assignment, sale, transfer, lease or other disposition of all or substantially all, but at least
40%, of the assets of the Company and its subsidiaries taken as a whole (measured by gross fair
market value without regard to liabilities); or (c) the acquisition by any third party or group of
third parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended)
of shares of voting stock of the Company, the result of which in the case of any transaction
described in clauses (a), (b) and (c) above is that immediately after the transaction the
stockholders of the Company immediately before the transaction, other than the acquiror, own less
than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled
to vote generally in the election of directors of the surviving or resulting corporation in a
transaction specified in clause (a) above, the acquiror in a transaction specified in clause (b)
above, or the Company or the acquiror in a transaction specified in clause (c) above.

          (d) "Code” shall mean the Internal Revenue Code of 1986, as amended, any successor
revenue laws of the United States, and the rules and regulations promulgated thereunder.

          (e) "Common Stock” shall mean the common stock, par value $.01 per share, of the
Company.

 

 

          (f) "Company” shall mean Digene Corporation, a Delaware corporation.

          (g) "Director” shall mean any person who is a member of the Board.

          (h) “Disability” shall mean the inability of a Participant to engage in any
substantial gainful activity by reason of any medically-determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve months.

          (i) "Employee” shall mean any person engaged or proposed to be engaged as an officer
or employee of the Company or one of its subsidiaries.

          (j) "Fair Market Value” shall mean with respect to the Common Stock on any day, (i)
the closing sales price on the immediately preceding business day of a share of Common Stock as
reported on the principal securities exchange on which shares of Common Stock are then listed or
admitted to trading, or (ii) if not so reported, the closing sales price on the immediately
preceding business day of a share of Common Stock as published in the NASDAQ National Market Issues
report in the Eastern Edition of The Wall Street Journal, or (iii) if not so reported, the average
of the closing bid and asked prices on the immediately preceding business day as reported on the
NASDAQ National Market System, or (iv) if not so reported, as furnished by any member of the
National Association of Securities Dealers, Inc. selected by the Board. In the event that the
price of a share of Common Stock shall not be so reported or furnished, the Fair Market Value of a
share of Common Stock shall be determined by the Board in good faith. “Fair Market Value” shall
mean, with respect to an Option granted under the Plan on any day the Fair Market Value of the
underlying Common Stock, determined as aforesaid, less the exercise price of the Option. A
“business day” is any day, other than Saturday or Sunday, on which the relevant market is open for
trading.

          (k) "Non-Employee Director” shall mean a member of the Board who is not an Employee.

          (l) "Option” shall mean an option to purchase shares of Common Stock granted by the
Board pursuant to this Plan.

          (m) "Option Agreement” shall mean the certificate evidencing an Option grant.

          (n) "Option Shares” shall mean the shares of Common Stock purchased upon exercise of
an Option.

          (o) "Participant” shall mean a Director to whom an Award has been granted.

          (p) "Plan” shall mean this Digene Corporation Directors’ Equity Compensation Plan, as
the same may be amended from time to time.

          (q) "Restricted Stock” shall mean an Award of Common Stock pursuant to Article VI
hereof, subject to such restrictions as the Board may determine, as evidenced in a Restricted Stock
Agreement. Shares of Common Stock shall cease to be Restricted Stock when,
in accordance with the terms of the Restricted Stock Agreement, they become transferable and
free of risk of forfeiture.

2

 

          (r) "Restricted Stock Agreement” shall mean the agreement evidencing the Award of
Restricted Stock pursuant to this Plan.

          (s) “Restricted Stock Award” shall mean an Award of Restricted Stock pursuant to this
Plan.

          (t) "Restricted Stock Unit” shall mean a right to receive, without payment to the
Company, a number of shares of Common Stock as of a future date, subject to such restrictions as
the Board may determine, as evidenced by a Restricted Stock Unit Agreement. A Restricted Stock
Unit does not represent or entitle the recipient to any equity securities of the Company until such
future date.

          (u) "Restricted Stock Unit Agreement” shall mean the agreement evidencing the Award of
Restricted Stock pursuant to this Plan.

ARTICLE 2

ADMINISTRATION

     2.1 Administration. This Plan and the Awards granted hereunder shall be interpreted,
construed and administered by the Board in its sole discretion. A Director eligible under the Plan
may appeal to the Board in writing any decision or action of the Board with respect to the Plan
that adversely affects the Director. Upon review of such appeal and in any other case where the
Board has acted with respect to the Plan, the interpretation and construction by the Board of any
provisions of this Plan or of any Award shall be conclusive and binding on all parties.

     2.2 Board Action. A majority of the entire Board shall constitute a quorum, and the
action of a majority of the members present at any meeting at which a quorum is present shall be
deemed the action of the Board. In addition, any decision or determination reduced to writing and
signed by all of the members of the Board shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. Subject to the provisions of this Plan and the
Company’s bylaws, the Board may make such additional rules and regulations for the conduct of its
business as it shall deem advisable.

     2.3 Board Powers. The Board shall have authority to grant Awards with such terms (not
inconsistent with the provisions of this Plan) as the Board may consider appropriate. Such terms
shall include, without limitation, as applicable, the number of shares, the term of each Award, any
vesting requirements, any restrictions, any forfeiture provisions, the Option price and the medium
and time of payment and may include conditions (in addition to those contained in this Plan) on the
exercisability of all or any part of an Option. Notwithstanding any such conditions, the Board
may, in its discretion, accelerate the time at which any Option may be exercised, any Restricted
Stock Unit vests or when restrictions are lifted on Restricted Stock. In addition, the Board shall
have complete discretionary authority to prescribe the forms of Option Agreement, Restricted Stock
Unit Agreement and Restricted Stock Agreement; to adopt, amend and rescind rules and regulations
pertaining to the administration of the Plan; and

3

 

to make all other determinations necessary or advisable for the administration of this Plan.
The express grant in the Plan of any specific power to the Board shall not be construed as limiting
any power or authority of the Board. All expenses of administering this Plan shall be borne by the
Company.

     2.4 Good Faith Determinations. No member of the Board shall be liable for any action
or determination made in good faith with respect to this Plan or any Award granted hereunder.

ARTICLE 3

ELIGIBILITY; TYPES OF BENEFITS; SHARES SUBJECT TO PLAN

     3.1 Eligibility. The Board shall from time to time determine and designate the
Directors to receive Awards under this Plan and the number of Awards to be awarded to each such
Director or the formula or other basis on which such Awards shall be awarded to Directors. In
making any such award, the Board may take into account such factors as it considers relevant.

     3.2 Shares Subject to this Plan. Subject to the provisions of Section 3.4 (relating
to adjustment for changes in Common Stock), the maximum number of shares that may be issued under
this Plan shall not exceed in the aggregate 500,000 shares of Common Stock, provided that any grant
of Restricted Stock or Restricted Stock Units under the Plan on or after October 26, 2005 will be
counted against the maximum aggregate number of shares issuable under the Plan as two shares of
Common Stock for every one share of Common Stock subject thereto. If any Options granted under
this Plan shall for any reason terminate or expire or be surrendered without having been exercised
in full, then the shares not purchased under such Options shall be available again for grant
hereunder. Further, if any Restricted Stock Units or shares of Restricted Stock are forfeited, the
shares subject to the portion of such Award forfeited shall again be available under the Plan;
provided that, to the extent that a share of Common Stock that was subject to an Award that counted
as two shares against the maximum aggregate number of shares issuable under the Plan is recycled
back into the Plan, the Plan will be credited with two shares. Notwithstanding anything in this
Subsection to the contrary, (i) should the exercise price of an Option be paid with shares of
Common Stock or other outstanding Options or (ii) should shares of Common Stock otherwise issuable
under the Plan be paid in cash or withheld by the Company in satisfaction of the withholding taxes
incurred in connection with the exercise of an Option or the vesting of an Award, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the Option is exercised or which vest under the Award, and not by the
net number of shares of Common Stock issued to the holder of such Option or Award.

     3.3 Individual Limit. Anything in this Plan to the contrary notwithstanding, in no
event shall any Director receive in any calendar year Awards under this Plan involving more than
50,000 shares of Common Stock (subject to adjustment as provided in Section 3.4).

     3.4 Changes. Subject to any required action by the stockholders of the Company, the
maximum number of shares of Common Stock that may be issued under this Plan pursuant to Section 3.2
above, the maximum number of shares of Common Stock with respect to which Awards may be granted to
any individual in any calendar year pursuant to Section 3.3 above, the number of shares of Common
Stock covered by each outstanding Award, the kind of shares

4

 

subject to outstanding Awards and the per share exercise price under each outstanding Option
shall be adjusted, in each case, to the extent and in the manner the Board deems appropriate for
any increase or decrease in the number of issued shares of Common Stock resulting from a
reorganization, recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, subdivision or consolidation of shares or the payment of a stock
dividend (but only on the Common Stock) or any other change in the corporate structure or state of
the Company. In the event of a change in the Common Stock as presently constituted, which change
is limited to a change of all of the authorized shares with par value into the same number of
shares with a different par value or without par value, the shares resulting from any such change
shall be deemed to be the Common Stock within the meaning of this Plan.

ARTICLE 4

STOCK OPTIONS

     4.1 Grant; Terms and Conditions. The Board, in its discretion, may from time to time
grant Options to any Director eligible to receive Options under this Plan. Each Director who is
granted an Option shall receive an Option Agreement from the Company in a form specified by the
Board and containing such provisions, consistent with this Plan, as the Board, in its sole
discretion, shall determine at the time the Option is granted.

          (a) Type of Options. All Options granted under the Plan will be non-qualified options
and are not intended to be incentive stock options (as defined in Section 422 of the Code).

          (b) Number of Shares. Each Option Agreement shall state the number of shares of
Common Stock to which it pertains.

          (c) Option Price. Each Option Agreement shall state the Option exercise price, which
shall not be less than 100% of the Fair Market Value per share of Common Stock on the date of grant
of the Option. The date of the grant of an Option shall be the date specified by the Board in its
grant of the Option.

          (d) Medium and Time of Payment. Upon the exercise of an Option, the Option exercise
price shall be payable in United States dollars, in cash (including by check) or (unless the Board
otherwise prescribes) in shares of Common Stock owned by the optionee, in Options granted to the
optionee under the Plan which are then exercisable or options granted to the optionee under any of
the Company’s other stock option plans which are then exercisable, or in a combination of cash,
Common Stock and options. If all or any portion of the Option exercise price is paid in Common
Stock owned by the optionee, then that stock shall be valued at its Fair Market Value as of the
date the Option is exercised. If all or any portion of the Option exercise price is paid in
Options or in options granted to the optionee under any of the Company’s other stock option plans,
then such options shall be valued at their Fair Market Value as of the date the Option is
exercised.

          (e) Term and Exercise of Options. The term of each Option shall be determined by the
Board at the time the Option is granted; provided that the term of an Option shall in no event be
more than ten years from the date of grant for Options granted prior to September 20, 2005 and
shall in no event be more than seven years from the date of grant for
Options granted on or after September 20, 2005. Not less than one hundred shares may be
purchased at any one time unless the number purchased is the total number at the time purchasable
under the Option.

5

 

          (f) Change of Control. Notwithstanding the provisions of Section 3.4, in the event of
a Change of Control, all outstanding Options shall immediately become fully exercisable, and upon
payment by the Participant of the exercise price (and, if requested, delivery of the representation
described in Section 7.18), a stock certificate representing the Common Stock covered thereby shall
be issued and delivered to the Participant. Any Option not exercised immediately prior to such
transaction shall pertain to and apply to the securities that a holder of the number of shares of
Common Stock subject to the Option would have been entitled to receive in the transaction.

          (g) Merger and Other Fundamental Transactions. Subject to any action that may be
required on the part of the stockholders of the Company, if the Company is the surviving
corporation in any merger, consolidation, sale, transfer, acquisition, tender offer or exchange
offer which does not result in a Change of Control, other than such transaction effected for the
purpose of changing the Company’s domicile, then each outstanding Option shall pertain to and apply
to the securities or other consideration that a holder of the number of shares of Common Stock
subject to the Option would have been entitled to receive in such transaction.

          In the case of a merger, consolidation, sale, transfer, acquisition, tender offer or exchange
offer effected for the purpose of changing the Company’s domicile, each outstanding Option shall
continue in effect in accordance with its terms and shall apply or relate to the same number of
shares of common stock of such surviving corporation as the number of shares of Common Stock to
which it applied or related immediately prior to such transaction, adjusted for any increase or
decrease in the number of outstanding shares of common stock of the surviving corporation effected
without receipt of consideration.

          A dissolution or liquidation of the Company shall cause each outstanding Option to terminate,
provided that each holder shall, in such event, have the right immediately prior to such
dissolution or liquidation to exercise his or her Option in whole or in part without regard to any
vesting schedule contained in his or her Agreement.

          (h) Rights as a Stockholder. Subject to Section 7.9 of this Plan regarding
uncertificated shares, an optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his or her Option until the date of the issuance
of a stock certificate to him or her for those shares upon payment of the exercise price. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 3.4.

          (i) Modification, Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of this Plan, the Board may modify, extend or renew
outstanding Options granted under this Plan or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in substitution
therefor (to the extent not theretofore exercised); provided, however, that (1) no modification of
an Option shall, without the consent of the optionee, alter or impair any rights or obligations
under any Option theretofore granted under this Plan; and (2) except as otherwise provided in
Section 3.4 hereof, the Board shall not reduce the exercise price of Options previously
awarded to any optionee, whether through amendment, cancellation and replacement grant, or any
other means, without prior stockholder approval.

6

 

          (j) Exercisability and Term of Options. Unless earlier terminated, Options granted
pursuant to this Plan shall be exercisable at any time on or after the dates of exercisability and
before the expiration date set forth in the Option Agreement. Notwithstanding the foregoing, an
Option shall terminate and may not be exercised if the Director to whom it is granted ceases to be
a member of the Board, except that: (1) unless the Board shall determine that the Director was
removed from the Board for conduct that in the judgment of the Board involves dishonesty or action
by the Director that is detrimental to the best interest of the Company, the Director may at any
time within three months after ceasing to be a member of the Board exercise his or her Option but
only to the extent the Option was exercisable by him or her on the date he or she ceased to be a
member of the Board; (2) if such Director ceases to be a member of the Board on account of a
Disability, then the Director may at any time within one year after ceasing to be a member of the
Board exercise his or her Option but only to the extent that the Option was exercisable on the date
he or she ceased to be a member of the Board; and (3) if such Director dies while a member of the
Board, or within the three or twelve month period after ceasing to be a member of the Board as
described in clause (1) or (2) above, then his or her Option may be exercised at any time within
twelve months following his or her death by the person specified in Section 4.1(d), but only to the
extent that such Option was exercisable by him or her on the date he or she ceased to be a member
of the Board. The Board may, in its discretion, provide in any Option Agreement or determine at
any time after the date of grant that the exercisability of an Option will be accelerated, in whole
or in part, in the event of a Director’s retirement, death or Disability. The Board may, in its
discretion, extend the post-termination exercise periods set forth in this subsection, but not
beyond the expiration date of the Option. Notwithstanding anything to the contrary in this
subsection, an Option may not be exercised by anyone after the expiration of its term.

          (k) Termination. Notwithstanding anything to the contrary in the Plan, in no event
shall any Option be exercisable after the date of termination of the exercise period of such
Option.

     4.2 Other Terms and Conditions. Through the Option Agreements authorized under this
Plan, the Board may impose such other terms and conditions, not inconsistent with the terms hereof,
on the grant or exercise of Options, as it deems advisable.

     4.3 Non-Employee Director Options. Immediately following the Company’s Annual Meeting
of Stockholders each year during the term of this Plan, beginning with the Company’s 2005 Annual
Meeting of Stockholders, each Non-Employee Director will automatically be granted an Option for
5,000 shares of Common Stock (subject to adjustment as provided in Section 3.4); provided, however,
that a Non-Employee Director who ceases to be a member of the Board at such Annual Meeting of
Stockholders shall not be granted any such automatic Option on that date. The Option exercise
price for such Options will be equal to the Fair Market Value of a share of Common Stock on the
date the Option is granted. All Options granted under this Section 4.3 shall be immediately
exercisable and shall expire on the seventh anniversary of the date of grant. In all other
respects, the Options granted pursuant to this Section 4.3 shall be subject to the provisions of
Section 4.1 (including subsection 4.1(j)).

7

 

ARTICLE 5

RESTRICTED STOCK UNITS

     5.1 Award; Terms and Conditions. The Board, in its discretion, may from time to time
award Restricted Stock Units to any Director eligible to receive Restricted Stock Units under this
Plan. Each Director who is awarded Restricted Stock Units shall receive a Restricted Stock Unit
Agreement from the Company in the form specified by the Board and containing such provisions,
consistent with this Plan, as the Board, in its sole discretion, shall determine at the time the
Restricted Stock Units are awarded.

          (a) Number of Shares and Forfeiture. Each Restricted Stock Unit Agreement shall
specify the number of shares of Common Stock subject to the Award and the time or times within
which such Restricted Stock Units are subject to forfeiture.

          (b) Vesting Period. Subject to the provisions of the Plan and the Restricted Stock
Unit Agreement, Restricted Stock Units will be forfeited to the Company in the event that the
Participant to whom such Restricted Stock Units are awarded ceases to be a member of the Board
during a period (not to exceed five years) set by the Board commencing with the date of such Award
(the “Restricted Unit Vesting Period”). Subject to the provisions of the Plan, the Board, in its
sole discretion, may provide for vesting in installments or early vesting, in whole or in part, at
any time, based on such factors as the Board shall deem appropriate in its sole discretion.

          (c) Termination. Subject to Section 7.10, and the terms of each Award, if the
Participant to whom Restricted Stock Units are awarded ceases to be a member of the Board prior to
the expiration of the Restricted Unit Vesting Period, then he or she shall forfeit all of his or
her Restricted Stock Units with respect to which the Restricted Unit Vesting Period has not yet
expired; provided however that if such Participant ceases to be a member of the Board on account of
death or Disability during the Restricted Unit Vesting Period, then all restrictions on outstanding
Restricted Stock Units shall lapse.

          (d) Changes. Subject to any action that may be required on the part of the
stockholders of the Company, if any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, then any outstanding Restricted
Stock Units immediately prior to the scheduled effectiveness of such transaction shall pertain to
and apply to the securities or other consideration that a holder of the number of shares of Common
Stock underlying the Restricted Stock Units would have been entitled to receive in the transaction.

          (e) Change of Control. In the event of a Change of Control, all restrictions on
outstanding Restricted Stock Units shall lapse immediately.

          (f) Payment of Restricted Stock Units. Payment of vested Restricted Stock Units shall
be made in shares of Common Stock. The number of shares delivered shall be equal to the number of
Restricted Stock Units vested. The holder may elect to reduce this amount by the number of shares
of Common Stock which have, on the date the Restricted Stock Units vest,
a Fair Market Value equal to the estimated applicable federal, state and local income tax due
on the receipt of the Common Stock, which amount shall be paid promptly to the holder in cash.

8

 

          (g) Common Stock Ownership. A Participant shall not be deemed to be the holder of
Common Stock, or to have any of the rights of a holder of Common Stock, with respect to the shares
of Common Stock subject to the Restricted Stock Units, unless and until the vesting of such
Restricted Stock Units and a stock certificate representing such shares of Common Stock is issued
to the Participant.

     5.2 Non-Employee Director Restricted Stock Units. Immediately following the Company’s
Annual Meeting of Stockholders each year during the term of this Plan, beginning with the Company’s
2005 Annual Meeting of Stockholders, each Non-Employee Director will automatically be awarded
Restricted Stock Units representing the number of shares of Common Stock having Fair Market Value
equal to $45,000 on the date of award; provided, however, that a Non-Employee Director who ceases
to be a member of the Board at such Annual Meeting of Stockholders shall not be automatically
awarded any such Restricted Stock Units on that date. All Restricted Stock Units awarded under
this Section 5.2 shall have a vesting period that commences on the date of award and vests on the
earlier of the date of the Company’s next Annual Meeting of Stockholders or one year from the date
of award. In all other respects, the Restricted Stock Units awarded pursuant to this Section 5.2
shall be subject to the provisions of Section 5.1.

ARTICLE 6

RESTRICTED STOCK AWARDS

     6.1 Award; Terms and Conditions. The Board, in its discretion, may from time to time
award Restricted Stock to any Director eligible to receive Restricted Stock under this Plan. Each
Director who is awarded a Restricted Stock Award shall receive a Restricted Stock Agreement from
the Company in the form specified by the Board and containing such provisions, consistent with this
Plan, as the Board, in its sole discretion, shall determine at the time the Restricted Stock Award
is awarded.

          (a) Number of Shares and Forfeiture. Each Restricted Stock Agreement shall specify
the number of shares of Common Stock subject to the Award and the time or times within which such
Restricted Stock is subject to forfeiture.

          (b) Stock Certificate. Subject to Section 7.9, the Company will hold in escrow, until
the restrictions applicable to a Restricted Stock Award, or any portion thereof, lapse, the stock
certificate representing the number of shares of Common Stock issued pursuant to such Restricted
Stock Award, or portion thereof. After the lapse of such restrictions, the Company shall release
such stock certificate to the Participant. A Participant shall be the holder of the shares of
Restricted Stock subject to the Award as of the date of issuance of the Restricted Stock Award.

          (c) Restriction Period. Subject to the provisions of the Plan and the Restricted
Stock Agreement, shares of Restricted Stock will be forfeited to the Company in the event that the
Participant to whom such Restricted Stock is awarded ceases to be a member of

9

 

the Board during a period (not to exceed five years) established by the Board commencing with
the date of such Award (the “Restriction Period”). Subject to the provisions of the Plan, the
Board, in its sole discretion, may provide for the lapse of such restrictions in installments and
may waive such restrictions, in whole or in part, at any time, based on such factors as the Board
shall deem appropriate in its sole discretion.

          (d) Termination. Subject to Section 7.10, if the Participant to whom a Restricted
Stock Award is awarded ceases to be a member of the Board prior to the expiration of the
Restriction Period, then he or she shall forfeit all of his or her Restricted Stock with respect to
which the Restriction Period has not yet expired; provided however that if such Participant ceases
to be a member of the Board on account of death or Disability that occurs during the Restriction
Period, then the forfeiture restrictions on outstanding Restricted Stock Awards shall lapse.

          (e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, then any shares or other
securities of the Company or succeeding, resulting or other company to be received by the
Participant under the Restricted Stock Agreement shall be subject to the same restrictions
applicable to the Restricted Stock.

          (f) Change of Control. In the event of a Change of Control, all restrictions on
outstanding Restricted Stock Awards shall lapse immediately.

ARTICLE 7

MISCELLANEOUS

     7.1 Withholding Taxes. A Director granted Awards under this Plan shall be
conclusively deemed to have authorized the Company to withhold from the compensation of such
Director funds in amounts or property (including Common Stock) in value equal to any federal, state
and local income, employment or other withholding taxes applicable to the income recognized by such
Director and attributable to the Awards as, when and to the extent, if any, required by law;
provided, however, that, in lieu of the withholding of federal, state and local taxes as herein
provided, the Company may require that the Director (or in the case of an Option, other person
exercising such Option) pay the Company an amount equal to the federal, state and local withholding
taxes on such income at the time such withholding is required or such other time as shall be
satisfactory to the Company.

     7.2 Amendment, Suspension, Discontinuance or Termination of Plan. The Board may from
time to time amend, suspend or discontinue this Plan or revise it in any respect whatsoever for the
purpose of maintaining or improving the effectiveness of this Plan as an incentive device, for the
purpose of conforming this Plan to applicable governmental regulations or to any change in
applicable law or regulations or for any other purpose permitted by law; provided, however, that no
such action by the Board shall adversely affect any Award theretofore granted under this Plan
without the consent of the holder so affected. Unless sooner terminated by the Board, this Plan
will terminate on October 26, 2015.

10

 

     7.3 Governing Law. This Plan shall be governed by, and construed in accordance with,
the laws of the State of Delaware (without giving effect to principles of conflict of laws).

     7.4 Designation. This Plan may be referred to in other documents and instruments as
the “Digene Corporation Directors’ Equity Compensation Plan.”

     7.5 Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board, Directors shall be indemnified by the Company against the reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any investigation, action, suit or proceeding, or in connection with any appeal
therefrom, to which they or any of them may be a party by reason of any action taken or failure to
act under or in connection with this Plan or any Award, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in or dismissal or other discontinuance
of any such investigation, action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such investigation, action, suit or proceeding that such Director is liable
for negligence or misconduct in the performance of his or her duties; provided that, within 60 days
after institution of any such investigation, action, suit or proceeding, a Director shall in
writing offer the Company the opportunity, at its own expense, to handle and defend the same.

     7.6 Reservation of Shares. The Company shall at all times during the term of this
Plan, and so long as any Award shall be outstanding, reserve and keep available (and will seek or
obtain from any regulatory body having jurisdiction any requisite authority in order to issue) such
number of shares of its Common Stock as shall be sufficient to satisfy the requirements of this
Plan. Inability of the Company to obtain from any regulatory body of appropriate jurisdiction
authority considered by the Company to be necessary or desirable to the lawful issuance of any
shares of its Common Stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of such Common Stock as to which such requisite authority shall not have been
obtained.

     7.7 Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to the exercise of Options will be used for general corporate purposes.

     7.8 No Obligation to Exercise. The granting of a Option shall impose no obligation
upon the holder to exercise or otherwise realize the value of that Option.

     7.9 Uncertificated Shares. Each Director who exercises an Option to acquire Common
Stock, is issued Common Stock upon the vesting of Restricted Stock Units or is awarded Restricted
Stock may, but need not, be issued a stock certificate in respect of the Common Stock so acquired.
A “book entry” (i.e., a computerized or manual entry) shall be made in the records of the
Company to evidence the issuance of shares of Common Stock to a Director where no certificate is
issued in the name of the Director. Such Company records, absent manifest error, shall be binding
on Directors. In all instances where the date of issuance of shares may be deemed significant but
no certificate is issued in accordance with this Section 7.9, the date of the book entry shall be
the relevant date for such purposes.

     7.10 Forfeiture for Competition. If a Participant in this Plan provides services to a
competitor of the Company or any of its subsidiaries, whether as an employee, officer, director,

11

 

independent contractor, consultant, agent or otherwise, such services being of a nature that
can reasonably be expected to involve the skills and experience used or developed by the
participant while a Director, then that Participant’s rights to any Awards hereunder that are
unvested or subject to forfeiture restrictions shall automatically be forfeited, subject to a
determination to the contrary by the Board.

     7.11 Adjustments. Except as expressly provided for in Sections 3.4, 4.1(f), 4.1(g),
5.1(d) or 6.1(e) of the Plan, the holder of an Award shall have no rights by reason of (i) any
subdivision or consolidation of shares of any class, (ii) any stock dividend, (iii) any other
increase or decrease in the number of shares of stock of any class, (iv) any dissolution,
liquidation, merger or consolidation or spin-off, split-off or split-up of assets of the Company or
stock of another corporation or (v) any issuance by the Company of shares of stock of any class or
securities convertible into shares of stock of any class. Moreover, except as expressly provided
in 3.4, 4.1(f), 4.1(g), 5.1(d) and 6.1(e), the occurrence of one or more of such events shall not
affect, and no adjustment by reason thereof shall be made with respect to, the number or, if
applicable, price of shares of Common Stock subject to the Award. Any adjustments pursuant to
sections 3.4, 4.1(f), 4.1(g), 5.1(d) and 6.1(e) shall be made by the Board, whose determination
shall be final, binding and conclusive.

     7.12 Rights of Company. The grant of an Award pursuant to this Plan shall not affect
in any way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate, sell or otherwise transfer all or any part of its business or assets.

     7.13 Successors. This Plan shall be binding upon any and all successors of the
Company.

     7.14 Nonassignment. Except as the Board may otherwise determine from time to time:
(i) no Award and no right under any Award shall be assignable, alienable, saleable or transferable
by a Participant otherwise than by will or by the laws of descent and distribution; provided,
however, that a Participant may, by written notification delivered to the Board prior to the
Participant’s death, designate a beneficiary to exercise the rights of the Participant, and to
receive any property distributable, with respect to any Award upon the death of the Participant;
(ii) each Award, and each right under any Award, shall be exercisable during the Participant’s
lifetime only by the Participant or, if permissible under applicable law, by the Participant’s
guardian or legal representative; and (iii) no Award and no right under any such Award, may be
pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable against the Company. The
provisions of this paragraph shall not apply to any Award which has been fully exercised, earned or
paid, as the case may be, and shall not preclude forfeiture of an Award in accordance with the
terms thereof.

     7.15 Board Service. Nothing in this Plan or in any Option Agreement, Restricted Stock
Unit Agreement or Restricted Stock Agreement shall confer on any Director any right to continue to
serve as a member of the Board, nor is there any implied agreement or understanding that such
Director will be nominated for reelection to the Board.

     7.16 Other Actions. Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including, but not by way

12

 

of limitation, the right of the Company to grant options or other equity-based compensation
for proper corporate purposes other than under the Plan with respect to any employee or other
person, firm, corporation or association.

     7.17 Tax Treatment and Characterization. Neither the Company nor any other person
represents or warrants to any Plan participant that favorable or desirable tax treatment or
characterization will be applicable in respect of any Award.

     7.18 Legend. The Board may require each person acquiring shares pursuant to an Award
to represent to and agree with the Company in writing that he or she is acquiring the shares for
investment purposes and without a view to distribution thereof. In addition to any legend required
by this Plan, the stock certificates representing such shares may include any legend which the
Board deems appropriate to reflect any restrictions on transfer.

     All certificates representing shares of Common Stock delivered under the Plan shall be subject
to such stock transfer orders and other restrictions as the Board may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, any applicable federal or state securities
law, and any applicable corporate law, and the Board may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

     7.19 Listing and Other Conditions.

          (a) If the Common Stock is listed on a national securities exchange or the NASDAQ Stock
Market, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or the NASDAQ Stock Market. The Company shall have no
obligation to issue any shares of Common Stock unless and until such shares are so listed, and the
right to exercise any Option or vest in any Restricted Stock Unit shall be suspended until such
listing has been effected.

          (b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under the Securities Act
of 1933, as amended, or otherwise with respect to shares of Common Stock or Awards, and the right
to exercise any Option or vest in any Restricted Stock Unit shall be suspended until, in the
opinion of such counsel, such sale or delivery shall be lawful or shall not result in the
imposition of excise taxes.

          (c) Upon termination of any period of suspension under this Section 7.19, any Award affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Award.

13

 

As revised by the Board at its meeting held September 10, 1998 — the last two sentences of
Section 4.1(d) were added and subsection (3) of the second sentence of Section 4.1(h) was revised.

As amended and restated by the Board at its meeting held October 26, 2000 — adding and clarifying
the definition “Change of Control” to Section 1.3(b), amending and restating Section 4.1(e) with
new provisions regarding the treatment of Options in the event of a Change of Control transaction
and adding Section 4.3 regarding automatic Option grants to certain Non-Employee Directors.

As revised by the Board at its meeting held September 12, 2002 — the first sentence of Section 4.3
was revised.

As revised by the Board at its meeting held October 23, 2002 —Section 4.3 was revised.

As revised by the Board by unanimous written consent dated September 20, 2005 to require
stockholder approval of any reduction of the exercise price of outstanding Options, to limit the
term of Options granted on or after September 20, 2005 to a maximum of seven years, to require that
the exercise price of any Options granted under the Plan be no less than 100% of the Fair Market
Value of the Common Stock on the date of grant, to clarify that the number of shares of common
stock available for issuance under the Plan will be reduced by the gross, not net, number of shares
of common stock subject to Awards, to change the governing law of the Plan to Delaware law and to
make certain technical amendments to the Plan to comply with Section 409A of the Code.

As revised by the Board by unanimous written consent dated September 20, 2005 and approved by the
stockholders at the Annual Meeting held on October 26, 2005 to include provisions for the award of
Restricted Stock and Restricted Stock Units, to extend the termination date of the Plan to October
26, 2015, to revise Section 4.3 and to make conforming changes throughout the Plan.

14

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