Document:

Exhibit

10.7A

 

AMENDMENT

AGREEMENT

 

This Amendment Agreement between Ostex

International, Inc. (the “Company”), a Washington corporation, and Thomas A.

Bologna (“Executive”) is dated and entered into as of February 10, 1998.

 

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.

 

B.            The

parties entered into a Stock Option Agreement evidencing a stock option grant

from the Company to Executive on July 16, 1997 (the “Stock Option Agreement”).

 

B.            The

parties now desire to amend the Employment Agreement and Stock Option

Agreement, upon the terms set forth herein.

 

AGREEMENT

 

Therefore, it is agreed as follows:

 

1.             Employment

Agreement.  The Employment Agreement

shall be amended by deleting the third sentence of Section 5.4 thereof.  Therefore, page 4 containing Section 5.4 of

the Employment Agreement shall be restated in the form attached hereto as

Exhibit A and inserted as a substitute page in the existing Employment

Agreement.

 

2.             Stock

Option Agreement.  The Stock Option

Agreement shall be amended by deleting the third and fourth sentences of the

paragraph entitled “Vesting.” 

Therefore, page 1 containing the “Vesting” paragraph shall be restated

in the form attached hereto as Exhibit B and inserted as a substitute page in

the existing Stock Option Agreement.

 

 

IN WITNESS WHEREOF, the parties have executed and

entered into this Amendment No. 2 as of the date set forth above.

 

	

   

  	

  EXECUTIVE

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  /s/ Thomas A. Bologna

  	

   

  
	

   

  	

  Thomas A. Bologna

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  COMPANY:

  
	

   

  	

   

  
	

   

  	

  OSTEX

  INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Thomas J. Cable

  	

   

  
	

   

  	

   

  	

  Thomas J. Cable

  
	

   

  	

  Its

  	

  Chairman

  	

   

  
					

 

 

EXHIBIT

A

 

(including utilities, telephone and similar expenses), such leases to

be subject to the Company’s approval (iii) limited moving expenses, and (iv)

temporary living accommodations in Seattle until an apartment is rented.  The Company and the Executive shall agree on

a budget for such expenses as soon as practicable after the date of this

Agreement and shall initial such final budget to acknowledge the agreed levels

of expenses.  To the extent that such

reimbursement or direct payment shall be treated as taxable income, the

Executive shall receive a “gross up” bonus to compensate the Executive for any

and all income taxes that the Executive may be required to pay with respect to

such reimbursement and gross up bonus (whenever such taxes may be assessed or

paid).  The Executive shall report all

such reimbursement and “gross up” bonuses as ordinary income for income tax

purposes.  Upon termination of

Executive’s employment, if Executive so requests, the Company shall reimburse

the Executive for the reasonable expense of relocating to San Diego (or another

location designated by Executive within the United States) and shall assume any

lease which Executive may have entered into in Seattle.

 

5.4          Stock Options

 

Simultaneously herewith, the Company has

granted options to purchase 700,000 shares of Common Stock to the Executive

under the authority of its Amended and Restated 1994 Stock Option Plan and

pursuant to the terms and conditions of the Stock Option Agreement dated

July 16, 1997 between the parties (the “Stock Option Agreement”).  Annually, the Board of Directors shall

consider, at its sole discretion, granting additional stock options to the

Executive.  The Company represents and

warrants to the Executive that all stock options (both incentive stock options

and nonqualified stock options) it has granted under the 1994 Stock Option Plan

have contained a provision that vested options will terminate upon the

expiration of 90 days from the date of an optionee’s termination of employment

or contractual relationship with the Company for any reason other than death or

disability.

 

5.5          Insurance

 

During the term of the Executive’s

employment, the Company will obtain term life insurance on the life of the

Executive, which insurance will provide for the payment of an amount equal to

the Base Salary for one year (or an amount equal to two times the Base Salary following

a Change in Control) to the Executive’s spouse in the event of the Executive’s

death; provided that the Company may obtain such

 

 

 

EXHIBIT B

 

OSTEX INTERNATIONAL, INC.

 

AMENDED AND RESTATED 1994 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

	

  To:  Thomas

  A. Bologna

  	

   

  	

  Date of Grant: 

  July 16, 1997

  

 

We are pleased to inform you that you have

been granted a stock option for the purchase of shares of common stock of Ostex

International, Inc., a Washington corporation (the “Company”), under the

Amended and Restated 1994 Stock Option Plan (the “Plan”).  The terms of this option are as set forth in

the Plan and in this Agreement and the Plan is incorporated into this Agreement

by reference.  The most important of the

terms are summarized as follows:

 

	

  Number of Shares:  700,000

  	

   

  	

  Exercise Price:  $3.125

  
	

   

  	

   

  	

   

  
	

  Term:  Ten

  years

  	

   

  	

   

  

 

Vesting:  This option will

vest and become exercisable with each month of continuous employment in equal

monthly installments over a four–year period, commencing July 16,

1997; provided, however, that this option shall automatically accelerate so

that this option shall become 100% vested and exercisable upon your death or

disability at any time after you have been continuously employed by the Company

for at least two years.In the event of any Change in Control (as defined in

Section 5.14.1 of the Plan), this option shall automatically accelerate so

that this option shall, immediately prior to the specified effective date for

the Change in Control, become 100% vested and exercisable.

 

Type

of Option.  This

option shall constitute an incentive stock option, except to the extent any

portion of this option fails to qualify as an incentive stock option under

Section 422(d) of the Code, as reflected in the next succeeding paragraph,

which portion shall constitute a nonqualified stock option.

 

ISO

Qualification:  On

the date of grant of this option, Section 422(2) of theCode provides that, to

the extent that the aggregate fair market value of the shares with respect to

which an option is exercisable for the first time by you during any calendar

year (under this option and all other incentive stock options you hold) exceeds

$100,000, the excess portion will be treated as a nonqualified stock option,

unless the Internal Revenue Service changes the rules and regulations governing

the $100,000 limit for incentive stock options.Exhibit

10.7B

 

AMENDMENT

NO. 2

TO

EMPLOYMENT AGREEMENT

 

This Amendment No. 2 between Ostex International,

Inc. (the “Company”), a Washington corporation, and Thomas A. Bologna

(“Executive”) is dated and entered into as of January 16, 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, 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.                                       Outside

Activities.  Section 2(i) of

the Employment Agreement shall be replaced in its entirety by the following

language:

 

“(i)                               are

described to the Chairman of the Compensation Committee of the Board of

Directors of the Company at the time they are being undertaken and”

 

2.                                       Term.  The expiration of the term of the Employment

Agreement shall be changed in the first sentence, third line of Section 3

of the Employment Agreement from July 15, 2001 to July 15, 2006.

 

 

IN WITNESS WHEREOF, the parties have executed and

entered into this Amendment No. 2 as of the date set forth above.

 

	

   

  	

  EXECUTIVE

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/ Thomas A. Bologna

  	

   

  
	

   

  	

  Thomas A. Bologna

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  COMPANY:

  
	

   

  	

   

  	

   

  
	

   

  	

  OSTEX INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

   /s/ Thomas J. Cable

  	

   

  
	

   

  	

   

  	

  Thomas J. Cable

  
	

   

  	

  Its

  	

  Chairman of the

  Compensation Committee

  
	

   

  	

   

  	

  and Director

  
						

 

2Exhibit

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

  	

   

  
						

 

2

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