Exhibit 10.7C

 

AMENDMENT NO. 3

TO EMPLOYMENT AGREEMENT

 

This Amendment No. 3 between Ostex International, Inc. (the “Company”), a
Washington corporation, and Thomas A. Bologna (“Executive”) is dated and entered
into as of July 9, 2002.

 

RECITALS

 

A.                                   The parties entered into an Executive
Employment Agreement dated as of July 16, 1997 providing for the employment of
Executive by the Company (as amended on February 10, 1998 and January 16, 2002,
the “Employment Agreement”).

 

B.                                     The parties now desire to amend the
Employment Agreement, upon the terms set forth herein.

 

AGREEMENT

 

Therefore, it is agreed as follows:

 

1.                                       Golden Parachute Limitation.  A new
Section 7.4 shall be added to the Employment Agreement to read as follows:

 

7.4                               Golden Parachute Limitation

 

Notwithstanding anything to the contrary in this Agreement, if the aggregate of
all termination payments described in Section 7 of this Agreement and the
vesting acceleration of options granted to the Executive by the Company, whether
under the terms of the Amended and Restated 1994 Stock Option Plan or otherwise
(collectively, the “Parachute Payments”), valued according to Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), would subject the
Executive to tax under Section 4999 of the Code, the Executive, in his sole
discretion, may reduce or reject any portion of the Parachute Payments so that
the present value of such reduced Parachute Payments (as determined in
accordance with Sections 280G of the Code) has the greatest aggregate present
value without being subject to tax under Section 4999 of the Code (the “Reduced
Amount”).

 

In the application of the preceding paragraph of this Section 7.4, it is
possible that amounts will have been paid or distributed by the Company to or
for the benefit of the Executive pursuant to this Agreement which should not
have been so paid or distributed

 

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(“Overpayment”) or that additional amounts which will not have been paid or
distributed by the Company to or for the benefit of the Executive pursuant to
the preceding paragraph of this Section 7.4 could have been so paid or
distributed (“Underpayment”), in each case, consistent with the calculation of
the Reduced Amount.  In the event it is determined that an Overpayment has been
made, any such Overpayment paid or distributed by the Company to or for the
benefit of the Executive will be treated for all purposes as a loan by the
Company to the Executive, which loan shall be repaid by the Executive upon
demand together with interest calculated at the lowest interest rate authorized
for such loans under the Code without a requirement that further interest be
imputed.  In the event it is determined that an Underpayment has occurred, any
such Underpayment will be promptly paid by the Company to or for the benefit of
the Executive together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.  The determination of Overpayment or
Underpayment, as the case may be, for purposes of this Section 7.4 shall be
subject to the reasonable confirmation by the Company’s independent tax counsel
or certified public accounting firm, which shall be consistent with controlling
precedent, substantial authority or assertions of any deficiency by the Internal
Revenue Service in this matter for which such counsel or firm believes there is
a high probability of success.

 

IN WITNESS WHEREOF, the parties have executed and entered into this Amendment
No. 3 as of the date set forth above.

 

 

EXECUTIVE

 

 

 

 

 

 

 

/s/ Thomas A. Bologna

 

 

Thomas A. Bologna

 

 

 

 

 

 

 

COMPANY:

 

 

 

 

OSTEX INTERNATIONAL, INC.

 

 

 

 

 

 

 

By

/s/ Thomas J. Cable

 

 

Its

Chairman, Compensation Committee

 

 

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