<PAGE> 1
As filed with the Securities and Exchange Commission on November 24, 1997
Registration No. 333-
-----
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------------------
DIGENE CORPORATION
--------------------------------------------------
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 52-1536128
- ------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9000 Virginia Manor Road
Beltsville, Maryland 20705
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Digene Corporation Omnibus Plan
Digene Corporation 1997 Stock Option Plan
-----------------------------------------
(FULL TITLE OF THE PLANS)
Charles M. Fleischman,
Executive Vice President
9000 Virginia Manor Road
Beltsville, Maryland 20705
--------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(301) 470-6500
---------------------------------------------------------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Copies to:
Morris Cheston, Jr., Esquire
Ballard Spahr Andrews & Ingersoll
1735 Market Street - 51st Floor
Philadelphia, Pennsylvania 19103
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Proposed Proposed Amount of
Title of Maximum Maximum Registration
Securities Amount Offering Aggregate Fee
to be to be Price Per Offering
Registered Registered (1) Share (2) Price (2)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.01 par value 800,000 (3) $ (2) $8,075,000 $2,446.97
- -------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this
Registration Statement shall be deemed to cover an indeterminate
number of additional shares of Common Stock issuable in the event the
number of outstanding shares of the Company is increased by split-up,
reclassification, stock dividend and the like.
(2) In accordance with Securities and Exchange Commission Rule 457(h)(1),
the price shown is based upon (i) 200,000 shares offered pursuant to
options outstanding exercisable at the following prices: 75,000 shares
at $13.00 per share and 125,000 shares at $10 per share; and (ii)
600,000 shares reserved for issuance upon exercise of options to be
granted in the future, the proposed offering price of which has been
determined based upon the average of the high and low price per share
of Common Stock ($9.75) on November 17, 1997 as reported by the Nasdaq
National Market.
(3) This registration statement relates to 500,000 shares of Common Stock,
$.01 par value per share, reserved for issuance under the Digene
Corporation 1997 Stock Option Plan (the "1997 Plan") and to 300,000
shares of Common Stock, $.01 par value per share, reserved for
issuance under the Digene Corporation Omnibus Plan (the "Omnibus
Plan"), which shares are in addition to 1,700,000 shares of Common
Stock, $.01 par value per share, previously registered pursuant to a
Registration Statement on Form S-8 and filed with the Securities and
Exchange Commission (Registration No. 333-14933). The current filing
is being made to register the 500,000 shares which are issuable under
the 1997 Plan as well as an additional 300,000 shares which are
issuable under the Omnibus Plan.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be
included in Part I of this Registration Statement will be given or sent to all
persons who were granted options to purchase shares of Common Stock of Digene
Corporation ("Shares") pursuant to the 1997 Digene Corporation Stock Option
Plan and the Digene Corporation Omnibus Plan (collectively, the "Plans") as
specified by Rule 428 under the Securities Act of 1933, as amended (the "Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. - INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), by Digene Corporation (the "Company") (File No. 0-28194) are
incorporated herein by reference:
(a) The Annual Report of the Company on Form 10-K
for the year ended June 30, 1997;
(b) The Quarterly Report on Form 10-Q of the Company
for the quarter ended September 30, 1997; and
(c) The description of the Company's Common Stock
contained in Item 1 of the Company's Registration Statement on Form
8-A dated April 11, 1996.
Each document filed by the Company subsequent to the date
hereof pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
after the date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement, which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
document. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified
<PAGE> 4
or superseded for purposes hereof to the extent that a statement contained
herein (or in any subsequently filed document that also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
Item 4.- DESCRIPTION OF SECURITIES
Not applicable.
Item 5.- INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6.- INDEMNIFICATION OF DIRECTORS AND OFFICERS
As set forth below, the Company has adopted the provisions of
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL") which
eliminate or limit the personal liability of a director to the Company or its
stockholders for monetary damages for breach of fiduciary duty under certain
circumstances. Furthermore, under Section 145 of the DGCL, the Company shall
indemnify each of its directors and officers against expenses (including
reasonable costs, disbursements, and counsel fees) in connection with any
proceeding involving such person by reason of having been an officer or
director of the Company. In addition, the Company has obtained Directors' and
Officers' Liability Insurance in the aggregate amount of $5,000,000 which
insures its officers and directors against certain liabilities such persons may
incur in their capacities as officers or directors of the Company.
Articles EIGHTH and NINTH of the Company's Amended and
Restated Certificate of Incorporation provides as follows:
EIGHTH. Except to the extent that the DGCL prohibits the
elimination or limitation of liability of directors for breaches of fiduciary
duty, no director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, notwithstanding any provision of law imposing
such liability. No amendment to or repeal of this provision shall apply to or
have any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment.
NINTH. (a) Each person who was or is a party or is threatened
to be made a party to or is involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
4
<PAGE> 5
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the DGCL, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) actually and reasonably incurred
or suffered by such person in connection therewith, and such indemnification
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, except as provided in Section (b)
of this Article NINTH, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred
in this Article NINTH shall be a contract right and shall include the right to
be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if the
DGCL requires, the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article NINTH
or otherwise. The Corporation may, by action of its Board of Directors,
provide indemnification to employees and agents of the Corporation with the
same scope and effect as the foregoing indemnification of directors and
officers.
(b) If a claim under Section (a) of this Article NINTH is not
paid in full by the Corporation within thirty days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in
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whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the DGCL for
the Corporation to indemnify the claimant for the amount claimed, but the
burden of providing such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition
conferred in this Article NINTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any such expense, liability or
loss, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the DGCL.
Item 7.- EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
6
<PAGE> 7
Item 8.- EXHIBITS
4.1**Specimen copy of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-1, Reg. No. 333-2968)
5* Opinion of Ballard Spahr Andrews & Ingersoll re: legality
23.1*Consent of Ernst & Young LLP
23.2*Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)
24* Power of Attorney (included on signature page)
99* Digene Corporation 1997 Stock Option Plan
- ---------------------
* Filed herewith.
** Incorporated by reference.
Item 9.- UNDERTAKINGS
A. Rule 415 Offering
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered
(if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of
7
<PAGE> 8
Registration Fee" table in the effective registration
statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the registration statement or any material change
in such information in the registration statement;
Provided, however, that paragraphs (A)(1)(i)
and (A)(1)(ii) do not apply if the registration statement is
on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from any registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
B. Filings Incorporating Subsequent Exchange Act Documents By
Reference
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Incorporated Annual and Quarterly Reports
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security holders that
is incorporated by reference in the
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prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the prospectus to
provide such interim financial information.
D. Request for Acceleration of Effective Date or Filing of
Registration Statement on Form S-8
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Beltsville, State of Maryland, on November 21,
1997.
DIGENE CORPORATION
By:/s/ Evan Jones
-------------------------
Evan Jones
President,
Chief Executive Officer
and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Each person whose signature appears below in so signing also
makes, constitutes and appoints Evan Jones and Charles M. Fleischman, and each
of them, his true and lawful attorney-in-fact, with full power of substitution,
for him in any and all capacities, to execute and cause to be filed with the
Securities and Exchange Commission any and all amendments and post-effective
amendments to this Registration Statement, with exhibits thereto and other
documents in connection therewith, and hereby ratifies and confirms all that
said attorney-in-fact or his substitute or substitutes may do or cause to be
done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/Evan Jones President, Chief November 21, 1997
- ----------------------- Executive Officer
Evan Jones (principal executive
officer) and Chairman
of the Board
/s/Charles M. Fleischman Executive Vice November 21, 1997
- ------------------------ President, Chief
Charles M. Fleischman Operating Officer,
Chief Financial
Officer (principal
financial officer)
and Director
<PAGE> 11
/s/Joseph P. Slattery Controller (principal November 21, 1997
- ----------------------- accounting officer)
Joseph P. Slattery
/s/ John J. Whitehead Director November 21, 1997
- ------------------------
John J. Whitehead
/s/ Joseph P. Migliara Director November 21, 1997
- ------------------------
Joseph P. Migliara
/s/ Wayne T. Hockmeyer Director November 21, 1997
- ------------------------
Wayne T. Hockmeyer
/s/ John H. Landon Director November 21, 1997
- ------------------------
John H. Landon
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Specimen copy of Common Stock Certificate
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1, Reg.
No. 333-2968)
5 Opinion of Ballard Spahr Andrews & Ingersoll re: legality
23.1 Consent of Ernst & Young LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in
Exhibit 5)
24 Power of Attorney (included on signature page)
99 Digene Corporation 1997 Stock Option Plan
</TABLE>
<PAGE> 1
EXHIBIT 5
[Letterhead of Ballard Spahr
Andrews & Ingersoll]
November 21, 1997
Digene Corporation
9000 Virginia Manor Road
Beltsville, MD 20705
Re: Digene Corporation 1997 Stock Option Plan and
Digene Corporation Omnibus Plan
Gentlemen:
We have acted as counsel to Digene Corporation (the "Company")
in connection with the registration under the Securities Act of 1933, as
amended, of 800,000 shares of common stock of the Company, par value $.01 per
share (the "Shares"), issuable upon the exercise of options (the "Options")
granted and to be granted under the Digene Corporation 1997 Stock Option Plan
and the Digene Corporation Omnibus Plan (collectively, the "Plans").
The opinion expressed below is based on the assumption that
the Registration Statement on Form S-8 with respect to the Shares issuable upon
the exercise of the Options will have been filed by the Company with the
Securities and Exchange Commission and will have become effective before any of
the Shares are issued, that the persons acquiring the Shares will receive a
prospectus containing all of the information required by Part I of Form S-8
before acquiring such Shares and that the Company will comply with its
undertakings in Item 9 of Part II of Form S-8.
In rendering our opinion, we have reviewed such certificates,
documents, corporate records and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinion expressed below.
In giving this opinion, we are assuming the authenticity of all instruments
presented to us as originals, the conformity with the originals of all
instruments presented to us as copies and the genuineness of all signatures.
Based on the foregoing, we are of the opinion that the 800,000
Shares, when issued upon exercise of Options granted or
<PAGE> 2
Digene Corporation
November 21, 1997
Page 2
to be granted under the Plans and upon payment of the option exercise price,
all in accordance with the terms of each of the Plans, as appropriate, will be
legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 being filed with respect to the offering of
the Shares.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-____) pertaining to the Digene Corporation Omnibus Plan and
the Digene Corporation 1997 Stock Option Plan of Digene Corporation of our
report dated August 15, 1997, with respect to the consolidated financial
statements and schedule of Digene Corporation included in the Annual Report
(Form 10-K) for the year ended June 30, 1997.
/s/ ERNST & YOUNG LLP
Vienna, Virginia
November 20, 1997
<PAGE> 1
EXHIBIT 99
DIGENE CORPORATION 1997 STOCK OPTION PLAN
ARTICLE I
PURPOSE; EFFECTIVE DATE; DEFINITIONS
1.1 PURPOSE. This Digene Corporation 1997 Stock Option 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 consultants providing services to 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 9, 1997.
1.3 DEFINITIONS. Throughout this Plan, the following terms shall
have the meanings indicated:
(a) "BOARD" shall mean the Board of Directors of the
Company.
(b) "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.
(c) "COMMITTEE" shall mean any committee of the Board
designated by the Board to administer this Plan.
(d) "COMMON STOCK" shall mean the common stock, par value
$.01 per share, of the Company.
(e) "COMPANY" shall mean Digene Corporation, a Delaware
corporation.
(f) "CONSULTANT" shall mean a person that has entered
into an agreement or arrangement (written or otherwise) to provide, or is
currently engaged in providing, bona fide services (other than services in
connection with the offer or sale of securities in a capital-raising
transaction) to or for the benefit of the Company and is not an employee,
officer or director of the Company or any of its subsidiaries on the date of
grant of the Option; provided, that the Committee shall have sole discretion in
the determination of whether a person is a Consultant to the Company for the
purposes of this Plan.
(g) "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended.
<PAGE> 2
(h) "FAIR MARKET VALUE" shall mean with respect to the
Common Stock on any day, (i) the closing sales price 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 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 of a share of Common Stock 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. The market value of an Option granted under
the Plan on any day shall be the market value of the underlying Common Stock,
determined as aforesaid, less the exercise price of the Option. A "business
day" is any day on which the relevant market is open for trading.
(i) "OPTION" shall mean an option to purchase shares of
Common Stock granted by the Committee under this Plan.
(j) "OPTION AGREEMENT" shall mean the certificate
evidencing an Option grant.
(k) "OPTION SHARES" shall mean the shares of Common Stock
issuable upon exercise of an Option.
(l) "PLAN" shall mean this Digene Corporation 1997 Stock
Option Plan, as the same may be amended from time to time.
(m) "TERMINATION OF ENGAGEMENT" shall mean the
termination of a Consultant's consulting engagement with the Company such that
from and after such date the Consultant is no longer expected, in the sole
discretion of the Committee, to be engaged in providing bona fide services to
or for the benefit of the Company; provided, however, that a Termination of
Engagement shall not be deemed to have occurred if the Consultant has become an
employee, officer or director of the Company in which event a Termination of
Engagement shall occur only upon the termination (whether voluntary or
involuntary) of all positions with the Company.
2
<PAGE> 3
ARTICLE II
ADMINISTRATION
2.1 COMMITTEE ADMINISTRATION. This Plan and the Options granted
hereunder shall be interpreted, construed and administered by the Committee in
its sole discretion. A person who has been granted Options under the Plan may
appeal to the Committee in writing any decision or action of the Committee with
respect to the Plan that adversely affects such person. Upon review of such
appeal and in any other case where the Committee has acted with respect to the
Plan, the interpretation and construction by the Committee of any provisions of
this Plan or of any Option shall be conclusive and binding on all parties.
2.2 COMMITTEE COMPOSITION. The Committee shall consist of not
less than two persons who shall be members of the Board and shall be subject to
such terms and conditions as the Board may prescribe. Each Committee member
shall be a "Non-Employee Director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act. Once designated, the Committee shall continue to serve
until otherwise directed by the Board. From time to time, the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused and remove all members of the
Committee.
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.
2.3 COMMITTEE POWERS. The Committee shall have authority to grant
Options pursuant to an Option Agreement providing for such terms (not
inconsistent with the provisions of this Plan) as the Committee may consider
appropriate. Such terms shall include, without limitation, as applicable, the
number of shares, the Option price, the medium and time of payment, the term of
each grant and any vesting requirements 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 Committee may, in its
discretion, at any time on or after the date of grant, accelerate the time at
which any Option may be exercised. In addition, the Committee shall have
complete discretionary authority to prescribe the form of Option Agreements; to
adopt, amend and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for
the administration of this Plan. The express grant in the Plan of any specific
3
<PAGE> 4
power to the Committee shall not be construed as limiting any power or
authority of the Committee. All expenses of administering this Plan shall be
borne by the Company.
2.4 LIMITATION ON RECEIPT OF OPTIONS BY COMMITTEE MEMBERS. No
person while a member of the Committee shall be eligible to be granted Options
under this Plan, but a member of the Committee may be granted and may exercise
options to purchase stock granted under other plans of the Company, and a
member of the Committee may exercise Options granted under this Plan prior to
his or her becoming a member of the Committee.
2.5 GOOD FAITH DETERMINATIONS. No member of the Committee or
other member of the Board shall be liable for any action or determination made
in good faith with respect to this Plan or any Option granted hereunder.
ARTICLE III
ELIGIBILITY; SHARES SUBJECT TO PLAN
3.1 ELIGIBILITY. The Committee shall from time to time determine
and designate Consultants to receive Options under this Plan, the number of
Options to be granted to each such Consultant, the formula or other basis on
which such Options shall be granted to Consultants and any condition or
conditions to the exercise of such Options consistent with the terms of this
Plan. In making any such grant, the Committee may take into account the nature
of services rendered by a Consultant, commissions, fees or other compensation
paid by the Company to the Consultant, the capacity of the Consultant to
contribute to the success of the Company and other factors that the Committee
may consider relevant.
3.2 SHARES SUBJECT TO THIS PLAN. Subject to the provisions of
Section 4.1(e) (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. Such shares may be authorized
and unissued shares or authorized and issued shares that have been reacquired
by the Company. 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.
ARTICLE IV
STOCK OPTIONS
4.1 GRANT; TERMS AND CONDITIONS. The Committee, in its
discretion, may from time to time grant Options to any Consultant eligible to
receive Options under this Plan. Each Consultant who is granted an Option
shall receive an Option Agreement from the Company in a form specified by the
Committee and containing such provisions, consistent
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with this Plan, as the Committee, in its sole discretion, shall determine at
the time the Option is granted.
(a) NUMBER OF SHARES. Each Option Agreement shall state
the number of shares of Common Stock to which it pertains.
(b) OPTION PRICE. Each Option Agreement shall state the
Option exercise price, which shall be the price determined by the Committee, in
its absolute discretion, to be suitable to attain the purposes of this Plan;
provided that the exercise price of an Option shall not be lower than the Fair
Market Value of the Common Stock as of the date of the grant.
(c) 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 Committee 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 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 Common 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 granted to the optionee under the Plan, then such Options shall be
valued at their Fair Market Value as of the date the Option is exercised. For
the purpose of assisting an optionee to exercise an Option, the Company may, in
the discretion of the Board, make loans to the optionee or guarantee loans made
by third parties to the optionee, in either case on such terms and conditions
as the Board may authorize.
(d) TERM AND EXERCISE OF OPTIONS. The term of each
Option shall be determined by the Committee 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. 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. During the lifetime of an optionee, the Option
shall be exercisable only by him or her and shall not be assignable or
transferable by him or her and no person shall acquire any rights therein. An
Option may only be transferred (unless the Committee otherwise prescribes) by
will or the laws of descent or distribution.
(e) RECAPITALIZATION; REORGANIZATION. 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, the number of shares
of Common Stock covered by each outstanding Option, the kind of shares subject
to outstanding Options and the per share exercise price under each outstanding
Option shall be adjusted, in each case, to the extent and in the manner the
Committee 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,
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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.
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, 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 the
merger. A dissolution, liquidation or consolidation of the Company or a merger
in which the Company is not the surviving corporation, other than a merger
effected for the purpose of changing the Company's domicile, shall cause each
outstanding Option to terminate, provided that each holder shall, in such
event, have the right immediately prior to such dissolution, liquidation,
merger or consolidation to exercise his or her Option in whole or in part
without regard to any installment provision contained in his or her Option
Agreement. Notwithstanding the foregoing, in no event shall any Option be
exercisable after the date of termination of the exercise period of such
Option. In the case of a merger 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 immediately prior to such merger, adjusted for
any increase or decrease in the number of outstanding shares of common stock of
the surviving corporation effected without receipt of consideration.
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.
The foregoing adjustments shall be made by the Committee,
whose determination shall be final, binding and conclusive.
Except as expressly provided in this subsection, the holder of
an Option 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 this subsection, 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 price of shares of Common Stock subject to the Option.
The grant of an Option pursuant to this Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or
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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.
(f) RIGHTS AS A STOCKHOLDER. Subject to Section 5.9 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 subsection 4.1(e).
(g) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of this Plan,
the Committee may, on or after the date of grant, 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). No modification of an Option shall, without the consent of the
holder thereof, alter or impair any rights or obligations under any Option
theretofore granted under this Plan.
(h) 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, unless otherwise
determined by the Committee on or after the date of grant, an Option shall
terminate and may not be exercised after the date of a Termination of
Engagement, except that: (1) unless the Committee shall determine that the
Consultant's engagement was terminated for conduct that in the judgment of the
Committee involves dishonesty or action by the Consultant that is detrimental
to the best interest of the Company, the Consultant may at any time within
three months after Termination of Engagement exercise his or her Option but
only to the extent the Option was exercisable on the date of Termination of
Engagement; (2) if such Consultant's engagement terminates on account of total
and permanent disability, then the Consultant may at any time within one year
after Termination of Engagement exercise the Option but only to the extent that
the Option was exercisable on the date of Termination of Engagement; and (3) if
such Consultant dies while engaged by the Company, or within the three or
twelve month period following Termination of Engagement as described in clause
(1) or (2) above, then the Option may be exercised at any time within twelve
months following death by the person or persons to whom his or her rights under
the Option shall pass by will or by the laws of descent and distribution, but
only to the extent that such Option was exercisable by him or her on the date
of Termination of Engagement. The Committee 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 Consultant's death or
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disability. The Committee 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.
4.2 OTHER TERMS AND CONDITIONS. Through the Option Agreements
authorized under this Plan, the Committee 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 INCLUSION OF PRIOR GRANTS. From and after the Effective Date
of this Plan, the grants of rights to purchase shares of Common Stock listed
below shall, for the purposes of this Plan, be deemed to be Options granted
under the terms of, and in accordance with, this Plan, such Options shall be
governed by the terms of this Plan, and the terms of such Options shall include
the terms and provisions of this Plan, the terms and conditions theretofore
adopted by the Committee in connection with the grant of such Options and the
terms and conditions set forth in the Option Agreements relating to such
Options:
<TABLE>
<CAPTION>
Number of Shares
Name of Consultant Date of Grant Subject to Options
------------------ ------------- ------------------
<S> <C> <C>
Robert McG. Lilley 4/18/97 125,000
Gerson Dores 7/18/97 25,000
Mark Van Asten 7/18/97 25,000
Greg Brown 7/18/97 25,000
</TABLE>
ARTICLE V
MISCELLANEOUS
5.1 WITHHOLDING TAXES. A Consultant granted Options under this
Plan shall be conclusively deemed to have authorized the Company to withhold
from the commissions, fees or other compensation of such Consultant funds in
amounts or property (including Common Stock or Options) in value equal to any
federal, state and local income, employment or other withholding taxes
applicable to the income recognized by such Consultant and attributable to the
Options or Option Shares 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 Consultant (or 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.
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5.2 AMENDMENT, SUSPENSION, DISCONTINUANCE OR TERMINATION OF PLAN.
The Board or the Committee 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 Committee shall adversely
affect any Option theretofore granted under this Plan without the consent of
the holder so affected. Unless sooner terminated by the Committee, this Plan
will terminate on September 9, 2007.
5.3 GOVERNING LAW. This Plan shall be governed by, and construed
in accordance with, the laws of the State of Maryland (without giving effect to
principles of conflict of laws).
5.4 DESIGNATION. This Plan may be referred to in other documents
and instruments as the "Digene Corporation 1997 Stock Option Plan."
5.5 INDEMNIFICATION OF COMMITTEE. In addition to such other
rights of indemnification as they may have as directors or as members of the
Committee, the members of the Committee 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 Option, 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 Committee member 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 Committee
member shall in writing offer the Company the opportunity, at its own expense,
to handle and defend the same.
5.6 RESERVATION OF SHARES. The Company shall at all times during
the term of this Plan, and so long as any Option 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.
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5.7 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.
5.8 NO OBLIGATION TO EXERCISE. The granting of an Option shall
impose no obligation upon the holder to exercise or otherwise realize the value
of that Option.
5.9 UNCERTIFICATED SHARES. A Consultant who exercises an Option
to acquire Common 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 Consultant where no certificate is
issued in the name of the Consultant. Such Company records, absent manifest
error, shall be binding on Consultants. In all instances where the date of
issuance of shares may be deemed significant but no certificate is issued in
accordance with this Section 5.9, the date of the book entry shall be the
relevant date for such purposes.
5.10 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, 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 Consultant, then that participant's rights to any Options
hereunder shall automatically be forfeited, subject to a determination to the
contrary by the Committee.
5.11 SUCCESSORS. This Plan shall be binding upon any and all
successors of the Company.
5.12 ENGAGEMENT RIGHTS. Nothing in this Plan or in any Option
Agreement shall confer on any Consultant any right to continue as a Consultant
of the Company or any of its subsidiaries or shall interfere in any way with
the right of the Company or any of its subsidiaries to terminate such person's
engagement at any time.
5.13 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 of limitation, the right of the
Company to grant options for proper corporate purposes other than under the
Plan with respect to any employee or other person, firm, corporation or
association.
5.14 TAX TREATMENT AND CHARACTERIZATION. The Options granted
hereunder shall not be considered incentive stock options that qualify under
Code Section 422.
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5.15 LEGEND. The Committee may require each person exercising an
Option to represent to and agree with the Company in writing that he or she is
acquiring the Option Shares without a view to distribution thereof. In
addition to any legend required by this Plan, the stock certificates
representing such Option Shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
All certificates for Option Shares 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 upon which the Common Stock is then
listed, 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.
5.16 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute
an "unfunded plan for incentive compensation. With respect to any payment not
yet made to a participant in this Plan 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.
5.17 LISTING AND OTHER CONDITIONS.
(a) If the Common Stock is listed on a national
securities exchange, the issuance of any shares of Common Stock upon exercise
of an Option shall be conditioned upon such shares being listed on such
exchange. The Company shall have no obligation to issue such shares unless and
until such shares are so listed, and the right to exercise any Option 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 upon exercise of an
Option 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, and the right to exercise any
Option 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 5.17, any Option 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.
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5.18 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.
5.19 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.
5.20 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.
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