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 




 





























 




(“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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