EMPLOYMENT AGREEMENT
Exhibit
10.2
This EMPLOYMENT AGREEMENT, dated as of November 13, 2006, is by and between Xxxxx X. Xxxxxxxx
(the “Executive”) and Digene Corporation, a Delaware corporation (the “Company”). The Executive
and the Company agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts employment with the Company, upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions for earlier termination as provided herein, the
term of this Agreement will be for a period beginning on December 11, 2006 and ending as set forth
in the following sentence. The Compensation Committee (the “Compensation Committee”) of the
Company’s Board of Directors (the “Board”) shall be entitled to terminate this Agreement at any
time by causing the Company to provide written notice to the Executive at least twenty-four (24)
months in advance of the termination date. The period of the Executive’s employment under this
Agreement, as it may be terminated as provided herein, is hereinafter referred to as the “Term.”
The termination of this Agreement in accordance with this Section 2 shall not be a termination as
set forth in Section 5 hereof and shall not entitle the Executive to receive any severance or other
payments as provided for in Section 6 hereof.
3. Duties and Responsibilities. The Executive shall perform such duties and functions
as the Board may from time to time determine which are consistent with the positions as set forth
on Annex A, a copy of which is attached hereto and the terms of which are incorporated by
reference herein, shall comply with the policies and reasonable directions of the Board and shall
discharge his responsibilities in a competent and faithful manner, consistent with sound business
practices. The Executive and the Company may amend Annex A from time to time to document
changes to the positions described therein.
During the Term of this Agreement, the Executive shall devote all of his business time,
attention and energies to the performance of his duties for the business of the Company, except to
the extent that the Board may specifically approve any outside interests; provided that the
first part of this sentence shall not preclude the Executive from (a) participating in civic
duties, (b) serving as a member of the board of directors of any other company if the Company
consents in writing to such service (such consent not to be unreasonably withheld), or (c) managing
the Executive’s personal investments, in each such case to the extent that such activities do not
materially impair the Executive’s ability to perform the Executive’s duties hereunder. The
Executive shall not, directly or indirectly, without the approval of the Board, engage or become
financially interested in any other business activity which, in the reasonable judgment of the
Board, conflicts with the duties of the Executive hereunder, whether or not such activity is
pursued for gain, profit or pecuniary advantage.
The Company shall use its best efforts to cause the Executive to be a member of its Board
during the term of the Executive’s employment hereunder and to cause him to be nominated by the
Board for election as a director at every stockholders’ meeting held during the
Executive’s employment hereunder at which his term as a director would otherwise expire. The
Executive shall not be entitled to compensation for services as a director.
4. Compensation.
(a) Base Salary. During the Term, the Executive shall receive from the Company (or, at
the Company’s option, any subsidiary or affiliate thereof) an annual base salary for
services rendered hereunder in the amount specified on Annex A, payable not less
frequently than semi-monthly consistent with the regular practices of the Company. The
Executive’s base salary shall be reviewed annually by the Compensation Committee and shall
be subject to change at the option and sole discretion of the Compensation Committee. The
Company may amend Annex A from time to time to document any such change.
(b) Bonus. The Executive shall be entitled to receive, as additional compensation, an
annual cash bonus determined in accordance with the Company’s executive bonus plan and
approved by the Compensation Committee in its sole discretion.
(c) Other Benefits. The Executive shall, in addition to the other compensation
described in this Section 4, be entitled to participate in such employee benefit plans or
programs of the Company and shall be entitled to such other fringe benefits as are from time
to time made available by the Company generally to employees of the Executive’s position,
tenure, salary, age, health and other qualifications (including, but not limited to, any
profit-sharing, stock option, incentive, pension, health insurance, major medical insurance
and group life insurance plans in accordance with the terms of such plans), all as
determined from time to time by the Compensation Committee. To the extent available at
reasonable cost, the Company will use its best efforts to promptly obtain and maintain
appropriate directors and officers liability insurance (“D&O”); if the Company determines
that it cannot obtain appropriate D&O, it will promptly so notify the Executive in writing,
but in no event later than sixty (60) days after such determination. The Executive
acknowledges and agrees that the Company does not guarantee the adoption or continuance of
any particular employee benefit plan or program or other fringe benefit during the Term, and
participation by the Executive in any such plan or program shall be subject to the rules and
regulations applicable thereto.
(d) Reimbursement for Expenses. The Company shall reimburse the Executive, in a manner
consistent with the regular practices of the Company, for any and all reasonable and
necessary business expenses incurred by the Executive in connection with the performance of
his duties, upon presentation of proper vouchers by the Executive to support said expenses.
5. Termination. The Executive’s employment by the Company hereunder shall terminate
on the occurrence of:
(a) Disability or Death. In the event of the Executive’s death during the Term, the
Executive’s employment shall be deemed to terminate on the date of the
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Executive’s death. In the event of the Executive’s Disability during the Term, the
Company, at its option, may terminate the employment of the Executive under this Agreement
immediately by giving the Executive written notice to that effect. For the purpose hereof,
the term “Disability” shall mean disability as defined in the Company’s Long-Term Disability
Plan or, if the Company does not have such a plan, the Executive’s physical or mental
inability to perform his essential duties and responsibilities hereunder, with reasonable
accommodation, for a period of at least ninety (90) consecutive days. Disability shall be
determined by the Compensation Committee or its designee. In the case of Disability, until
the Company terminates the Executive’s employment hereunder in accordance with the
foregoing, the Executive shall be entitled to receive compensation provided for herein
notwithstanding any such physical or mental inability to perform his duties hereunder.
(b) Termination for Cause. The Company may, with the approval of a majority of the
Board, terminate the employment of the Executive hereunder at any time during the Term and
effective immediately for “justifiable cause” (a “Termination for Cause”) by giving
Executive written notice of such Termination for Cause. For the purposes of the Agreement,
the term “justifiable cause” means: (i) the Executive’s conviction of a felony (which,
through lapse of time or otherwise, is not subject to appeal); (ii) the Executive’s willful
and substantial misconduct; (iii) the Executive’s repeated, after written notice from the
Company and a reasonable opportunity to cure, neglect of duties or failure to act which can
reasonably be expected to affect materially and adversely the business or affairs of the
Company or any subsidiary or affiliate; (iv) except in the normal course of business in the
performance of his duties, any material disclosure by the Executive to any person, firm or
corporation other than the Company, its subsidiaries and its and their directors, officers,
employees or professional advisors, of any confidential information or trade secret of the
Company or any of its subsidiaries; (v) the Executive’s repeated pursuit, after written
notice from the Company and a reasonable opportunity to cure, of activities or personal or
professional conduct or action that in the sole judgment of the Board is contrary to the
best interests of the Company; (vi) any material breach by the Executive of this Agreement
or, to the extent applicable, the Non Competition, Non Disclosure and Developments Agreement
between the Executive and the Company; (vii) any conduct or action by the Executive
prohibited under the policies of the Company, including, but not limited to, policies
regarding sexual harassment, xxxxxxx xxxxxxx, corporate disclosure, substance abuse and
conflicts of interest; or (viii) the engaging by the Executive in any business other than
the business of the Company and its subsidiaries which, in the sole judgment of the Board,
interferes with the performance of his duties hereunder.
(c) Termination Without Cause. The Company may terminate the employment of the
Executive hereunder at any time without “justifiable cause” (a “Termination Without Cause”)
by giving the Executive written notice of such termination at least thirty (30) days prior
to the effective date of such termination.
(d) Voluntary Termination. Any termination of employment of the Executive hereunder,
otherwise than as a result of death, Disability, a Termination for Cause or a Termination
Without Cause will be deemed to be a “Voluntary Termination.”
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A Voluntary Termination will be deemed to be effective immediately upon such
termination.
6. Effect of Termination of Employment.
(a) Voluntary Termination; Termination for Cause. Upon termination of the Executive’s
employment hereunder pursuant to a Voluntary Termination or a Termination for Cause, neither
the Executive nor his beneficiaries or estate will have any further rights or claims against
the Company under this Agreement except the right to receive: (i) the unpaid portion of his
then-current base salary provided for in Section 4(a) hereof, computed on a pro rata basis
to the date of termination; (ii) payment of his accrued but unpaid rights (including accrued
vacation time) in accordance with the terms of any incentive compensation, stock option,
retirement, employee welfare or other employee benefit plans or programs of the Company in
which the Executive is then participating in accordance with Section 4(b) or Section 4(c)
hereof; and (iii) reimbursement for any unreimbursed expenses as provided in Section 4(d)
hereof. Nothing in this Agreement shall restrict or limit the right of the Compensation
Committee or the Board to determine whether the forfeiture provisions of any of the
Company’s stock option or incentive compensation plans apply to vested stock options or
stock awards held by the Executive at the time of such termination for cause.
(b) Termination Without Cause. Upon termination of the Executive’s employment
hereunder pursuant to a Termination Without Cause, neither the Executive nor his
beneficiaries or estate will have any further rights or claims against the Company under
this Agreement except the right to receive, subject to Section 6(e) below: (i) the payment
and other rights provided for in Section 6(a) hereof; (ii) severance payments in the form of
semi-monthly payment of the Executive’s then-current base salary for a period of twenty-four
(24) months following the effective date of such termination; (iii) monthly payments of the
Pro-Rata Bonus Amount (as defined below) for a period of twenty-four (24) months following
the effective date of such termination; and (iv) continuation of the health care benefits
coverage to which the Executive is entitled under Section 4(c) hereof over the twenty-four
(24) month period described in clause (iii) above, with such coverage to be provided at the
same level and subject to the same terms and conditions (including, without limitation, any
applicable co-pay obligations, but excluding any applicable tax consequences for the
Executive) as in effect for officers of the Company generally during such period. For
purposes of this Agreement, “Pro-Rata Bonus Amount” shall mean one twenty-fourth (1/24) of
(x) the portion of the Executive’s annual bonus, as determined by the Compensation
Committee, applicable to that portion of the year in which such Termination Without Cause
occurs, plus the greater of (y) the most recent annual cash bonus paid to the Executive
prior to the date of his termination or (z) the average of the three most recent annual cash
bonuses paid to the Executive prior to the date of his termination. The Company shall have
no obligation under this Section 6(b) unless the Executive executes and delivers to the
Company a valid general release agreement in a form reasonably acceptable to the Company in
which the Executive releases the Company from any and all possible liability, including,
without limitation, any and all liability based on the Executive’s employment or the
termination of his
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employment; provided, however, that nothing in such release shall
include any release of the Company’s indemnification obligations to or for the benefit of
the Executive.
(c) Death or Disability. Upon termination of the Executive’s employment hereunder as a
result of death or Disability, neither the Executive nor his beneficiaries or estate will
have any further rights or claims against the Company under this Agreement except the right
to receive: (i) the payment and other rights provided for in Section 6(a) hereof; (ii) in
the case of death only, a lump sum payment equal to the Executive’s annual base salary as in
effect on the date of death; and (iii) in the case of Disability only, continuation of
health care benefits coverage to which the Executive is entitled under Section 4(c) hereof
for the twelve (12) month period following the effective date of such termination, with such
coverage to be provided at the same level and subject to the same terms and conditions
(including, without limitation, any applicable co-pay obligations, but excluding any
applicable tax consequences for the Executive) as in effect for officers of the Company
generally during such period; provided, however that nothing in this Section
6(c) shall provide any additional benefits or coverage than that in effect for officers of
the Company during such period under the Company’s Long-Term Disability Plan.
(d) Forfeiture of Rights. In the event that, subsequent to termination of employment
hereunder, the Executive (i) breaches any of the provisions of Sections 7, 8 or 9 hereof or
(ii) directly or indirectly makes or facilitates the making of any adverse public statements
or disclosures with respect to the business or securities of the Company, all payments and
benefits to which the Executive may otherwise be entitled pursuant to Section 6(a), 6(b) or
6(c) hereof shall immediately terminate and be forfeited, and any portion of such amounts as
may have been paid to the Executive shall forthwith be returned to the Company.
(e) Compliance with Code Section 409A. Notwithstanding anything to the contrary
herein, payments under this Article 6 shall comply with the applicable requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). In the event
that the Executive is a “specified employee” within the meaning of Code Section
409A(a)(2)(B)(i), the Company shall, in the event of a Termination Without Cause, determine
whether the aggregate of (1) the payments under Section 6(b)(ii), (iii) and (iv) (including
the Company’s share of the cost of continued health care benefits coverage if provided on an
after-tax basis) and (2) payments, if any, under any other Company-provided separation pay
arrangement, represent the payment of non-qualified deferred compensation subject to the
requirements of Code Section 409A (including the requirement of a six-month delay in the
commencement of payments as described in Code Section 409A(a)(2)(B)(i)). If such
determination is made, then the payments described in Section 6(b)(ii), (iii) and (iv) which
would otherwise be paid during the six-month period beginning on the day following the
Executive’s termination of employment described in Section 6(b) shall instead be paid to the
Executive in a single lump sum payment within five (5) business days after the end of such
six-month period. The lump sum payment shall be adjusted for simple interest that accrues
during the initial six-month period following Executive’s termination of employment at the
applicable Federal rate provided for in Code Section 7872(f)(2).
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(f) Coordination with COBRA. It is intended that the continuation of health care
benefits described in Section 6(b) or Section 6(c ) shall run concurrently with any period
of continuation coverage required by COBRA (Section 601 et seq. of the Employee Retirement
Income Security Act of 1974, as amended).
(g) Tax Withholdings. All payments under this Article 6 shall be made subject to
applicable tax withholdings.
7. Confidentiality. Except in the normal course of business in the performance of his
duties, the Executive shall not, during the Term of this Agreement, or at any time following the
end of the Term of this Agreement, directly or indirectly, disclose or permit to be known, to any
person, firm or corporation, any confidential information acquired by him during the course of, or
as an incident to, his employment hereunder, relating to the Company, the directors of the Company,
or any client of the Company, including, but not limited to, the business affairs of each of the
foregoing. Such confidential information shall include, but shall not be limited to, proprietary
technology, trade secrets, patented processes, research and development data, know-how, formulae,
pricing policies, the substance of agreements with customers and others, and arrangements, customer
lists and any other documents embodying such confidential information.
All information and documents relating to the Company shall be the exclusive property of the
Company, and the Executive shall use his best efforts to prevent any publication or disclosure
thereof. Upon termination of Executive’s employment with the Company, all documents records,
reports, writings and other similar documents containing confidential information then in the
Executive’s possession or control shall be returned to and left with the Company.
8. Restrictive Covenant.
(a) The Executive hereby acknowledges and recognizes that, during the Term, the
Executive will be privy to trade secrets and confidential proprietary information critical
to the Company’s business and, accordingly the Executive agrees that, in consideration of
the benefits to be received by him hereunder, the Executive will not, from and after the
date hereof until the second anniversary of the termination of the Term, (i) directly or
indirectly engage in the development, production, marketing or sale of products that compete
(or, upon commercialization, would compete) with products of the Company being developed (so
long as such development has not been abandoned), produced, marketed or sold at the time of
the Executive’s termination (hereinafter a “Competing Business”) whether such engagement
shall be as an owner, partner, investor, employee, officer, director, affiliate or other
participant in any Competing Business; (ii) assist others in engaging in any Competing
Business in the manner described in clause (i) above; or (iii) induce other employees of the
Company or any subsidiary thereof to terminate their employment with the Company or any
subsidiary thereof or engage in any Competing Business. The ownership of not more than 5%
of the stock of any entity having a class of equity securities actively traded on a national
securities exchange or on the Nasdaq Stock Market or any minority interest in any private
entity shall not be deemed, in and of itself, to violate the prohibitions of this Section
8(a).
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(b) During the Term of the Executive’s employment hereunder and for five (5) years
thereafter, the Executive shall not disparage, deprecate, or make any comments or take any
other actions, directly or indirectly, that will reflect adversely on the Company or its
officers, directors, employees or agents or adversely affect their business reputation or
goodwill.
(c) The Executive understands that the foregoing restrictions may limit the ability of
the Executive to earn a livelihood in a business similar to the business of the Company, but
nevertheless believes that the Executive has received and will receive sufficient
consideration and other benefits, as an employee of the Company and as otherwise provided
herein, to justify such restrictions which, in any event (given the education, skills and
ability of the Executive), the Executive believes would not prevent the Executive from
earning a living.
(d) If any portion of the restrictions set forth in this Section 8 should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or
enforceability of the remainder of such restrictions shall not thereby be adversely
affected. The Executive declares that the territorial, time limitations and scope of
activities restricted as set forth in this Section 8 are reasonable and properly required
for the adequate protection of the business of the Company. In the event that any such
territorial, time limitation and scope of activities restricted is deemed to be unreasonable
by a court of competent jurisdiction, the Company and the Executive agree to the reduction
of the territorial, time limitation or scope to the area or period which such court shall
have deemed reasonable.
(e) The existence of any claim or cause of action by the Executive against the Company
shall not constitute a defense to the enforcement by the Company of the foregoing
restrictive covenants, but such claim or cause of action shall be litigated separately.
9. Company Right to Inventions. The Executive will promptly disclose, grant and
assign to the Company, for its sole use and benefit (including its subsidiaries) any and all
inventions, improvements, technical information and suggestions in any way relating to the business
of the Company which the Executive may develop or acquire during the Term (whether or not during
usual working hours), together with all patent applications, letters patent, copyrights and
reissues thereof that may at any time be granted for or upon any such invention, improvement or
technical information. In connection therewith: (i) the Executive shall, without charge, but at
the expense of the Company, promptly at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be necessary or proper in the opinion of the
Company to vest title to any such inventions, improvements, technical information, patent
applications, patents, copyrights or reissues thereof in the Company and to enable it to obtain and
maintain the entire right and title thereto throughout the world; and (ii) the Executive shall
render to the Company, at its expense (including a reasonable payment for the time involved in case
the Executive is not then in its employ), all such assistance as it may require in the prosecution
of applications of said patents, copyrights or reissues thereof, in the prosecution or defense of
interferences which may be declared involving any said applications, patents or copyrights and in
any litigation in which the Company may be involved relating to any
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such patents, inventions, improvements or technical information. The provisions of this
Section 9 will survive any termination of this Agreement or the termination of the Executive’s
employment with the Company.
10. Impact on Other Agreements. To the extent the provisions of Sections 7, 8 or 9 of
this Agreement are similar to or duplicative of provisions contained in other agreements between
the Executive and the Company, the provisions of this Agreement shall control; provided,
however, that in the event the provisions of Section 7, 8 or 9 of this Agreement expire
prior to similar provisions of any such other agreement, the provisions of such other agreement
will continue to apply after expiration of the applicable terms of this Agreement.
11. Representations and Agreements of Executive. The Executive represents and
warrants that he is free to enter into this Agreement and to perform the duties required hereunder,
and that there are no employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties hereunder.
12. Enforcement. It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforceable to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. Accordingly, to the
extent that a restriction contained in this Agreement is more restrictive than permitted by the
laws of any jurisdiction where this Agreement may be subject to review and interpretation, the
terms of such restriction, for the purpose only of the operation of such restriction in such
jurisdiction, will be the maximum restriction allowed by the laws of such jurisdiction and such
restriction will be deemed to have been revised accordingly herein.
13. Remedies; Survival.
(a) The Executive acknowledges and understands that the provisions of the covenants
contained in Sections 7, 8 and 9 hereof, the violation of which cannot be accurately
compensated for in damages by an action at law, are of crucial importance to the Company,
and that the breach or threatened breach of such provisions would cause the Company
irreparable harm. In the event of a breach or threatened breach by the Executive of the
provisions of Sections 7, 8 or 9 hereof, the Company will be entitled to seek an injunction
restraining the Executive from such breach. Nothing herein contained will be construed as
prohibiting the Company from pursuing any other remedies available for any breach or
threatened breach of this Agreement.
(b) Notwithstanding anything contained in this Agreement to the contrary, the
provisions of Sections 6, 7, 8, 9, 10, 12 and 13 hereof will survive the expiration or other
termination of this Agreement until, by their terms, such provisions are no longer
operative.
14. Notices. Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand, or sent by registered or certified mail, return
receipt requested, or overnight delivery using a national courier service, or by facsimile or
electronic transmission, with confirmation as to receipt, to the Company at the address set forth
below and to the Executive at the address set forth in the personnel records of the Company, or
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such other address as either party may from time to time designate in writing to the other,
and shall be deemed given as of the date of the delivery or mailing:
with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Xx., Esquire
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Xx., Esquire
15. Severability. If any of the covenants contained in this Agreement, any part of
any such covenant, are hereafter construed to be invalid or unenforceable, the same shall not
affect the remainder of the covenant or covenants, or the remainder of the Agreement, which shall
be given full effect, without regard to the invalid portions.
16. Non-Waiver. The waiver or breach of any term or condition of this Agreement shall
not be deemed to constitute a waiver or breach of any other term or condition.
17. Entire Agreement. This Agreement, including Annex A hereto, constitutes
the entire agreement of the parties with respect to its subject matter, and no modification or
waiver of any provision hereof shall be valid unless it be in writing and signed by all of the
parties hereto. Subject to Section 10 hereof, this Agreement supersedes all prior agreements or
understandings between the parties with respect to the subject matter hereof.
18. Assignment. This Agreement and the rights and obligations of the parties hereto
shall bind and inure to the benefit of any successor or successors by reorganization, merger or
consolidation and any assignee of all or substantially all of its business and properties, but,
except as to any such successor or assignee of the Company, neither this Agreement nor any rights
or benefits hereunder may be assigned or transferred by either party without the prior written
consent of the other party.
19. Binding Effect. This Agreement and all of the provisions hereof shall be binding
upon the legal representatives, heirs, distributees, successors and assigns of the parties hereto.
20. Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland without reference to principles of conflicts of laws.
21. Headings. The Section headings appearing in this Agreement are for purposes of
easy reference and shall not be considered a part of this Agreement or in any way modify, amend, or
affect its provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| /s/ Xxxxx X. Xxxxxxxx | ||||
| XXXXX X. XXXXXXXX | ||||
| DIGENE CORPORATION | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: Xxxxxxx X. Xxxxxxxx | ||||
| Title: Senior Vice President and General Counsel | ||||
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Annex A
Positions with the Company:
As of December 11, 2006, the Executive’s positions with the Company shall be Chief Executive
Officer and President.
Base Salary:
As of December 11, 2006, the Executive’s annual base salary is $465,000.
Sign-on and Equity Compensation:
The Executive shall be eligible to participate in the Company’s fiscal year 2007 discretionary
bonus program. The target bonus shall be 55% of base salary, the maximum bonus that could be
earned for fiscal year 2007 will be 110% of base salary; the bonus shall be further pro-rated to
reflect the Executive’s actual employment period during fiscal year 2007. The Board will determine
whether such bonus is earned based on achievement of the Goals and Objectives for the fiscal year
2007 bonus program, previously approved by the Compensation Committee of the Board, and your
personal performance.
The Executive shall receive the sign-on equity awards described in paragraph 2, and the fiscal year
2007 annual equity awards described in paragraph 3, of the Offer Letter, dated October 31, 2006
(the “Offer Letter”). Such awards shall be approved by the Board of Directors. Such equity awards
will be granted pursuant to the Company’s Amended & Restated Equity Incentive Plan, and are subject
to the terms of such Plan.
Relocation and Temporary Living Reimbursement:
The Company will reimburse the Executive for the following relocation and temporary living
expenses:
(a) Usual and customary costs to pack, store (not to exceed 90 days), transport, insure and
unpack the Executive’s household possessions associated with his relocation from the residence
address set forth in the Offer Letter to the Washington, DC metropolitan area; provided that his
household possessions are moved by no later than June 30, 2007, or if the Executive is unable to
sell his current residence as contemplated in paragraph (d) below, then by December 31, 2007. Such
relocation expenses will include an aggregate of $4,000 for shipment of two vehicles and up to
$2,000 for shipment and kennel housing for your dogs.
(b) Temporary living expenses not to exceed $24,000 for up to six months; provided that if the
Executive is not able to sell his current residence promptly, the Board will work with him with
respect to these expenses.
(c) Reimbursement for country club fees, not to exceed $34,000, if the Executive is not able
to sell his existing country club membership with the sale of his residence; provided, the Company
will not provide such reimbursement for longer than 24 months.
(d) Realtor fees actually paid by the Executive associated with the sale of his residence not
to exceed 6% of sales price. The Company would expect that the Executive would take the necessary
steps to sell his home by June 30, 2007, but will extend this reimbursement commitment, and the
reimbursement identified below in paragraph (e) with respect to the purchase of a new home until
not later than December 31, 2007 if the Executive is not able to sell his residence by June 30,
2007.
(e) Closing costs per Digene’s standard practice (does not include items such as loan
origination fees, mortgage insurance, hazard insurance, interest, association fees, real estate
fees, etc.) on the Executive’s home purchase in the Washington, D.C. metropolitan area, as long as
such purchase occurs by June 30, 2007; provided, that if the Executive is not able to sell his
residence by June 30, 2007, this reimbursement commitment will be extended until not later than
December 31, 2007.
These costs reimbursed or otherwise paid for by the Company pursuant to this paragraph will be tax
equalized per the Company’s current practice. Any relocation and tax equalization payments must be
repaid by the Executive to the Company in full if the Executive resigns or is terminated for cause
within twelve (12) months after the final payment or reimbursement of these benefits; and at a 50%
reimbursement level if the Executive resigns or is terminated for cause within twenty-four (24)
months after the final payment or reimbursement of this benefits. All items subject reimbursement
by the Company must be submitted for reimbursement by no later than August 31, 2007 or, if the
Company’s reimbursement commitment is extended as set forth above in paragraph (a) through (e), by
no later than February 29, 2008.
