EXHIBIT 10.47.1
CHOLESTECH CORPORATION
FIRST AMENDMENT TO
CHANGE OF CONTROL SEVERANCE AGREEMENT
This First Amendment to the Change of Control Severance Agreement dated
as of August 28, 2001 (the "Agreement"), is made as of January 23, 2003 (the
"Amendment"), by and between Cholestech Corporation, a California corporation
(the "Company"), and Terry L. Wassmann (the "Employee").
WHEREAS, the Company and the Employee desire to amend Section 6 of the
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth herein, the Company and the Employee agree as follows:
1. Section 6 is hereby amended to read in its entirety as
follows:
"Golden Parachute Excise Tax. In the event that the benefits provided
for in this Agreement or otherwise payable to the Employee constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") that are subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then the Employee shall receive (i)
a one-time payment from the Company sufficient to pay such excise tax (the
"Excise Tax Gross-Up"), and (ii) an additional one-time payment from the Company
sufficient to pay the additional excise tax and federal and state income taxes
arising from the Excise Tax Gross-Up made by the Company to the Employee
pursuant to this Section (the "Additional Gross-Up"); provided, however, that
the Company shall only pay the Excise Tax Gross-Up and Additional Gross-Up if
the cumulative value of such payments to the Employee equals or exceeds $10,000.
In the event that such payments to the Employee is less than $10,000, then the
Employee's benefits hereunder shall be either (x) delivered in full, or (y)
delivered as to such lesser extent which would result in no portion of such
severance benefits being subject to the Excise Tax, whichever of the foregoing
amounts, taking into account the applicable federal, state and local income and
employment taxes and the Excise Tax, results in the receipt by the Employee on
an after-tax basis, of the greatest amount of severance benefits,
notwithstanding that all or some portion of such benefits may be taxable under
the Excise Tax. Unless the Company and the Employee otherwise agree in writing,
the determination of the Employee's excise tax liability and the amount required
to be paid under this Section 6 shall be made in writing in good faith by the
accounting firm serving as the Company's independent public accountants
immediately prior to the Change of Control (the "Accountants"). In the event
that the Excise Tax incurred by the Employee is determined by the Internal
Revenue Service to be greater or lesser than the amount so determined by the
Accountants, the Company and the Employee agree to promptly make such additional
payment, including interest and any tax penalties, to the other party as the
Accountants reasonably determine is appropriate. For purposes of making the
calculations required by this Section 6, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
interpretations concerning the application of the Code for which there is a
"substantial authority" tax reporting position. The Company and the Employee
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a
determination under this Section 6. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 6."
2. Except as amended as set forth above, the Agreement shall
continue in full force and effect and the parties thereto shall continue to
enjoy and be bound by all of their rights and obligations thereunder.
3. This Amendment shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
4. This Amendment may be executed in one or more counterparts,
all of which shall be considered one and the same amendment, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
5. Capitalized terms not otherwise defined in this Amendment
shall have the meanings ascribed to them in the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Change of Control Severance Agreement as of the day and year
first above written.
CHOLESTECH CORPORATION
a California corporation
By: /s/ Warren E. Pinckert II
-------------------------------------
Warren E. Pinckert II
President and Chief Executive Officer
/s/ Terry L. Wassmann
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Terry L. Wassmann
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