Company Name: Cytyc Corp.
 Public Availability Date: February 23, 2004

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

January 16, 2004

BY HAND DELIVERY

U.S. Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Cytyc CorporationStockholder Proposal of Marc E. Vincent

Ladies and Gentlemen:

On behalf of our client, Cytyc Corporation, a Delaware corporation ("Cytyc" or the "Company"), we are submitting this letter pursuant to Rule 14a-8(j) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to notify the Securities and Exchange Commission (the "Commission") of the Company's intention to exclude from its proxy materials for its 2004 annual meeting of stockholders (the "Proxy Materials") a stockholder proposal (the "Proposal") submitted by Marc E. Vincent. The Company asks that the staff of the Division of Corporation Finance (the "Staff") confirm that it will not recommend any enforcement action to the Commission if, in reliance on one or more of the interpretations of Rule 14a-8 set forth below, the Company excludes the Proposal from its Proxy Materials. The definitive copies of the Proxy Materials are currently scheduled to be filed with the Commission pursuant to Rule 14a-6 under the Exchange Act on or about April 9, 2004.

Pursuant to Rule 14a-8(j), we are furnishing the Staff with six copies of this letter and the Proposal, which is attached hereto as Exhibit A. We have also included in Exhibit A a copy of all correspondence between the Company and Mr. Vincent. A copy of this letter is also being provided simultaneously to Mr. Vincent.

As discussed more fully below, we believe that the Proposal may be excluded from the Proxy Materials pursuant to the following rules:

(a) Rule 14a-8(i)(13), because the Proposal relates to specific amounts of cash dividends;

(b) Rule 14a-8(i)(3), because the Proposal violates Rule 14a-9 under the Exchange Act, which prohibits materially false or misleading statements in proxy soliciting materials; and

(c) Rule 14a-8(i)(1), because the Proposal is not a proper subject for action by stockholders under Delaware law.

I. PROPOSAL

The Proposal, which is more fully set forth in Exhibit A to this letter, mandates that:

"Before any further awards be made to Senior Management or Board Members in the form of Stock Options, Bonuses or Salary increases, we as Stockholders must see a reasonable rate of return on investment (based on Industry Standards) and must receive a dividend of not less than 30% of real Net income (after taxes and interest) paid quarterly to Stockholders of record before any Awards are made to Senior Management in the form of bonuses, stock options and salary increases."

II. REASONS FOR EXCLUSION

a. Rule 14a-8(i)(13)The Proposal relates to specific amounts of cash dividends

Rule 14a-8(i)(13) permits a company to exclude a stockholder proposal that "relates to specific amounts of cash or stock dividends." The Proposal seeks to tie increases in salary, bonuses and stock option awards to the Company's senior management and directors1 to a mandatory dividend payment of not less than 30% of the Company's real net income. The Staff has consistently held that stockholder proposals that require executive and/or director compensation to be reduced or restricted until a specific dividend goal is attained may be excluded under Rule 14a-8(i)(13), and its predecessor, Rule 14a-8(c)(13), as relating to specific amounts of dividends. For example, in The Boeing Company (February 7, 1998), the Staff permitted exclusion of a proposal that directed the company to place a moratorium on all salary increases and bonuses until the company's dividend was increased by 35%. See also Qwest Communications International Inc. (March 20, 2003) (proposal requesting that all options to officers be suspended until an annual dividend rate of $1.00 was reestablished); Wachovia Corporation (February 17, 2002) (proposal mandating that the total compensation package for individual executive officers and directors be cut in half until the dividend was restored to a prior level for a minimum of one year); Central Vermont Public Service Corporation (November 30, 1995) (proposal requesting that all executive salaries be reduced and all bonuses and stock options be frozen until the dividend was restored to a prior level); Banknorth Group, Inc. (February 16, 1995) (proposal mandating that no bonuses, stock, options or other forms of incentive compensation be awarded to the company's officers so long as the dividend remained at less than a specified amount); SCEcorp (January 24, 1995) (proposal directing the company to reduce salaries of all non-union employees and directors until the dividend rate was restored to a prior level); UJB Financial Corporation (March 4, 1994) (proposal requesting the company's board of directors to freeze or downsize all forms of compensation to the company's chief executive officer, directors and management until the dividend rate was returned to $1.16 per share); and Unysis Corporation (January 24, 1994) (proposal requesting the company's board of directors to limit compensation of inside directors to $1.00 per year until the $1.00 per share dividend was restored). The Proposal is virtually identical to the proposal in Boeing as well as numerous other proposals that impermissibly sought to create a direct link between executive/director compensation and a specific dividend level. Accordingly, we believe the Proposal may be excluded under Rule 14a-8(i)(13) because it relates to specific amounts of cash dividends.

b. Rule 14a-8(i)(3)The Proposal violates the Commission's Proxy Rules

Rule 14a-8(i)(3) permits a company to exclude a stockholder proposal that is "contrary to any of the Commission's proxy rules and regulations, including [Rule] 14a-9, which prohibits false or misleading statements in proxy soliciting materials." The Proposal is misleading because (1) it is so vague and indefinite that neither the stockholders voting on the Proposal, nor the Company, would be able to determine with reasonable certainty exactly what action or measures would be required in the event the Proposal was adopted, and (2) it impugns the character, integrity and reputation of the directors serving on the Compensation Committee of the Company's Board of Directors (the "Compensation Committee") without factual foundation and contains other unsubstantiated misleading statements. Therefore, we believe the Proposal may be excluded under Rule 14a-8(i)(3).

1. The Proposal is vague and indefinite.

The Staff has recognized on a number of occasions that a proposal may be excluded under Rule 14a-8(i)(3) if it is so vague and indefinite that neither the stockholders voting on the proposal, nor the company, would be able to determine with reasonable certainty exactly what action or measures would be required in the event the proposal was adopted. See e.g., Alcoa Inc. (December 24, 2002) (proposal requesting the "full implementation of these human rights standards"); Norfolk Southern Corporation (February 13, 2002) (proposal seeking to replace directors with candidates who are "with solid background, experience, and records of demonstrated performance in key managerial positions within the transportation industry"); CBRL Group, Inc. (September 6, 2001) (proposal seeking to have the company include a disclosure in its annual report "of all expenses relating to corporate monies being used for personal benefit of officers and directors"); IDACORP, Inc. (September 10, 2001) (proposal setting forth "particulars" and procedures for the "recall" of the board members); and Microlog Corporation (December 22, 1994) (proposal recommending restrictions on "bonuses, contributions to 401-K, issuance of options, or salary increases to all salaried employees, officers, or members of the Board of Directors if the Company's net earnings and net assets, without any deferred contingencies or compensation, do not exceed the average three month Federal Bill rate for the previous 12 months prior to the fiscal year").

We believe that the Proposal is similarly vague and indefinite in its mandate that stockholders must see "a reasonable rate of return on investment (based on Industry Standards) and must receive a dividend of not less than 30% of real Net income (after taxes and interest) paid quarterly to Stockholders of record." Specifically, the Proposal does not define the terms "reasonable rate of return" or "Industry Standards," each of which is subject to greatly differing interpretations. There is no "Industry Standard" for determining what constitutes a reasonable return on investment, and the suggestion that there is such a standard is itself misleading. Clearly, each stockholder would assess the Proposal to a large extent based on his or her own view of what constitutes a reasonable rate of return, such that, if the Proposal were approved, it would be impossible to know what rate of return stockholders expected before the Company could increase salaries or bonuses or make further option grants.

The Proposal also does not provide guidance on how to calculate "real net income," whether it should be calculated in accordance with generally accepted accounting principles or an alternative method. In addition, it is unclear from the language of the Proposal whether it seeks to restrict increases in compensation to only senior management or to both senior management and directors. The second paragraph of the Proposal begins with a statement that dividend payment must be made to stockholders before compensation increases are made to senior management and directors. However, the ending clause of that sentence only refers to senior management.

As the foregoing demonstrates, the stockholders are being asked to approve a Proposal that provides no guidance or standards as to what steps the Company should take in its implementation. Without such guidance or standards, the Company could potentially implement the Proposal in a way contrary to the intentions of the stockholders who voted for it. Accordingly, based on the reasons set forth above, we believe the Proposal to be so vague and indefinite as to be misleading within the scope of Rule 14a-9 and therefore subject to exclusion under Rule 14a-8(i)(3).

2. The Proposal impugns the character, integrity and reputation of certain directors without factual foundation and contains other unsubstantiated misleading statements.

Note (b) to Rule 14a-9 states that a statement may be considered misleading within the meaning of Rule 14a-9 if it "directly or indirectly impugns character, integrity or personal reputation, or directly or indirectly makes charges concerning improper, illegal or immoral conduct or associations, without factual foundation." The first paragraph of the Proposal states that "management has been given all sorts of Bonuses, Stock Options and salary increases by the Compensation Committee while the Company's profitability has been virtually nonexistent and as result the Stockholders have received nothing in the way of dividends or price appreciation for their investment...." This statement purports to state facts regarding conduct of the Compensation Committee and the Company's financial performance without any supporting evidence. By stating that management was "given all sorts of Bonuses, Stock Options and salary increases by the Compensation Committee," the Proposal implies that the directors serving on the Compensation Committee did not fulfill their fiduciary duties in determining management compensation and diverted investment return away from the stockholders. The Staff has permitted companies to exclude proposals in their entirety under Rule 14a-8(i)(3) if they impugn the character, integrity or reputation of directors without factual foundation. See e.g., The Swiss Helvetia Fund, Inc. (April 3, 2001) (proposal implying that the board of directors of the fund violated, or may choose to violate, their fiduciary duty); and Phoenix Gold International, Inc. (November 21, 2000) (proposal implying that directors are not independent). We believe the Company similarly should be permitted to exclude the entire Proposal on this basis.

If the Staff does not concur with this position, we believe that, at a minimum, the first paragraph of the Proposal should be deleted. The Staff has indicated that, "when a proposal and supporting statement will require detailed and extensive editing in order to bring them into compliance with the proxy rules, we may find it appropriate for companies to exclude the entire proposal, supporting statement, or both, as materially false or misleading." Staff Legal Bulletin No. 14 (July 13, 2001). The first paragraph of the Proposal contains several misleading statements that will require extensive editing. In addition to the statement described in the above paragraph, the statement that "the Company's profitability has been virtually nonexistent" is unsupported and factually incorrect and should therefore be deleted. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 shows that the Company has had positive net income in fiscal years 1999 through 2002. Furthermore, the assertion that "stockholders have received nothing in the way of dividends or price appreciation for their investment" is not only unsupported but also inflammatory and should also be deleted. The Staff has concurred that a company may exclude portions of stockholder proposals and supporting statements from its proxy materials if they contain false and misleading statements or omit material facts necessary to make such proposals and supporting statements not false and misleading. See e.g., Peoples Energy Corporation (November 3, 2002) (requiring deletion of a statement quoting director independence guidelines set forth by CalPERS); General Magic, Inc. (May 1, 2000) (permitting exclusion of entire proposal implying that the company promotes or tolerates dishonest and disrespectful conduct from the employees); CCBT Bancorp, Inc. (April 20, 1999) (requiring deletion of a statement implying that directors breached their fiduciary duties by making incomplete disclosure to and intimidating stockholders); and Phoenix (requiring deletion from a cumulative voting proposal of the phrase, "permitting outside shareholders the opportunity to elect a truly independent director"). Accordingly, we believe that, at a minimum, the first paragraph of the Proposal is misleading under Rule 14a-9 and may be excluded under Rule 14a-8(i)(3).

c. Rule 14a-8(i)(1)The Proposal is improper under Delaware law

Rule 14a-8(i)(1) permits a company to exclude a stockholder proposal that, under the laws of the jurisdiction of the company's organization, is not a proper subject for action by stockholders. The Note to Rule 14a-8(i)(1) states that "some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders." The Staff has consistently concurred that a stockholder proposal which mandates or directs a company's board to take action is generally inconsistent with the discretionary authority granted to a board of directors pursuant to state law, and thus excludable under Rule 14a-8(i)(1). See e.g., DCB Financial Corp. (March 5, 2003) (permitting exclusion of a proposal mandating the company's board to retain an investment bank unless the proposal is recast as a recommendation); American Electric Power Company, Inc. (February 18, 2003) (permitting exclusion of a proposal mandating the company's board to issue a report disclosing economic risks associated with the company's gas emissions unless the proposal is recast as a recommendation); and Alaska Air Group, Inc. (March 26, 2000) (permitting exclusion of a proposal mandating reinstatement of simple majority voting on all matters submitted to shareholder vote unless the proposal is recast as a recommendation). The Proposal states that the stockholders "must see a reasonable rate of return on investment (based on Industry Standards) and must receive a dividend of not less than 30% of real Net income" (emphasis added) before any awards are made to senior management or board members in the form of stock options, bonuses and salary increases. As evidenced by its language, the Proposal is not a request but rather a mandate for action by the Company's Board of Directors.

The Company is incorporated under Delaware law. A binding proposal to the board of directors of a Delaware corporation is inconsistent with Section 141(a) of the Delaware General Corporation Law ("DGCL") which entrusts the management of the business and affairs of the corporation to the board of directors. Section 141(a) of the DGCL states that "[t]he business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors, except as may be otherwise provided in this chapter or in its certificate of incorporation." The Company's Certificate of Incorporation does not limit the board's statutory powers under Section 141(a) of the DGCL. Therefore, neither the Delaware law nor the Company's Certificate of Incorporation give the stockholders the authority to bind the board of directors in the manner envisioned by the Proposal. To the contrary, Section 170 of the DGCL grants to the directors of a Delaware corporation the authority to declare and pay dividends upon the shares of the corporation's capital stock. The legal power to declare and pay dividends rests solely with the board of directors. See Leibert v. Grinnell Corp., 194 A.2d 846 (Del. Ch. 1963).

In its adopting release for the Rule 14a-8(c)(1) (now Rule 14a-8(i)(1)), the Commission stated that, under state corporation statutes such as Section 141(a) of the DGCL, "the board may be considered to have exclusive discretion in corporate matters.... Accordingly, proposals by security holders that mandate or direct the board to take certain action may constitute unlawful intrusion on the board's discretionary authority under the typical statute." See SEC Release No. 34-12999 (November 22, 1976). The Release also stated that "mandatory dividend proposals would continue to be excludable under subparagraph (c)(1) of the revised rule, to the extent that they would intrude on the board's exclusive discretionary authority under the applicable state law to make decisions on dividends." Under Delaware law, decisions as to the manner of paying dividends and awarding bonuses, salary increases or stock options fall within the purview of the board of directors. If implemented, the Proposal would prevent the Company's directors from continuing to make determinations regarding the Company's dividend distributions as well as salary and bonus payments to the senior management and directors. Because the Proposal would improperly mandate that the Company's Board of Directors take certain actions, we believe the Proposal may be excluded from the Proxy Materials under Rule 14a-8(i)(1).

III. CONCLUSION

For the reasons set forth above, we believe the Company may exclude the Proposal from the Proxy Materials under Rules 14a-8(i)(13), (i)(3) and (i)(1), or any of them, and hereby request confirmation that the Staff will not recommend any enforcement action to the Commission if the Company so excludes the Proposal.

Please do not hesitate to contact the undersigned at (202) 637-5945 with any comments, questions or requests for additional information regarding the foregoing.

Sincerely,

/s/

Joseph E. Gilligan

cc: A. Suzanne Meszner-Eltrich, General Counsel, Cytyc Corporation
Marc E. Vincent

Enclosures: 6 copies of the Proposal

6 copies of all correspondence between the Company and Mr. Vincent

-----FOOTNOTES-----

¹ As discussed in Part II.b.1. of this letter, based on the language of the Proposal, it is unclear if the restriction on compensation increases applies only to senior management or to both senior management and directors.

[INQUIRY LETTER]

November 21, 2003

Cytyc Corporation
Office of the Secretary of the Corporation
85 Swanson Road
Boxborough, Mass. 01719

Attn: Susanne Meszner-Eltrich, Secretary

Dear Ms Meszner-Eltrich,

I would like to have the following resolution included in the Proxy Material for our next annual Stockholders Meeting.

To Whom It May Concern:

Whereas here-to-fore management has been given all sorts of Bonuses, Stock Options and salary increases by the Compensation Committee while the Company's profitability has been virtually nonexistent and as result the Stockholders have received nothing in the way of dividends or price appreciation for their investment, now therefore

BE IT RESOLVED:

Before any further awards be made to Senior Management or Board Members in the form of Stock Options, Bonuses or Salary increases, we as Stockholders must see a reasonable rate of return on investment (based on Industry Standards) and must receive a dividend of not less than 30% of real Net income (after taxes and interest) paid quarterly to Stockholders of record before any Awards are made to Senior Management in the form bonuses, stock options and salary increases.

Stockholders have invested their hard earned money in this Company as has Pension Plans, Mutual Funds etc. all of whom are entitled to a reasonable return on their on their investment.

Please vote for this resolution

/s/

[STAFF REPLY LETTER]

February 23, 2004

Response of the Office of Chief Counsel Division of Corporation Finance

Re: Cytyc Corporation Incoming letter dated January 16, 2004

The proposal mandates that shareholders receive a dividend of not less than 30% of real net income paid before any awards are made to senior management in the form of bonuses, stock options, and salary increases.

There appears to be some basis for your view that Cytyc may exclude the proposal under rule 14a-8(i)(13). Accordingly, we will not recommend enforcement action to the Commission if Cytyc omits the proposal from its proxy materials in reliance on rule 14a-8(i)(13). In reaching this position, we have not found it necessary to address the alternative bases for omission upon which Cytyc relies.

Sincerely,

/s/

Keir D. Gumbs
Special Counsel