Exhibit 10.2 

Heska Corporation 1997 Stock Incentive Plan

Stock Option Agreement

(employees and consultants)

 

Tax Treatment This option is intended to be an incentive stock option under
section 422 of the Internal Revenue Code or a nonstatutory option, as provided
in the Notice of Stock Option Grant.

Vesting/

Exercisability

This option vests and becomes exercisable in installments, as shown in the
Notice of Stock Option Grant. In addition, this option shall vest and become
exercisable in full if one of the following events occurs:

·        Your service as an Employee, Consultant or Outside Director of the
Company or a Subsidiary terminates because of death, or

·        The Company is a party to a merger or other reorganization while you
are an Employee or Consultant of the Company or a Subsidiary, this option is not
continued by the Company and is not assumed by the surviving corporation or its
parent, and the surviving corporation or its parent does not substitute its own
option for this option, or

·         The Company is subject to a “Change in Control” while you are an
Employee or Consultant of the Company or a Subsidiary and, within 12 months
after the Change in Control, the surviving entity terminates your service
without your consent and without Cause, as defined below. If the surviving
entity demotes you to a lower position, materially reduces your authority or
responsibilities, materially reduces your total compensation or announces its
intention to relocate your principal place of work by more than 20 miles, then
that action will be treated as a termination of your service.

·       “Cause” shall mean (i) your failure to perform your assigned duties or
responsibilities as an Employee or Consultant of the Company or a Subsidiary
(other than a failure resulting from total and permanent disability, as
discussed below) after notice thereof from the Company describing your failure
to perform such duties or responsibilities; (ii) your material breach of any
confidentiality agreement or invention assignment agreement between you and the
Company or a Subsidiary; (iii) your engaging in any act of dishonesty, fraud,
misrepresentation, moral turpitude or misappropriation of material property that
was or is materially injurious to the Company or its affiliates; (iv) your
violation of any federal or state law or regulation applicable to the Company’s
business; or (v) your being convicted of, or entering a plea of nolo contendere
to, any crime.

No additional shares become vested after your service as an Employee, Consultant
or Outside Director of the Company or a Subsidiary has terminated for any reason
other than those outlined herein.

 

 

 

Term This option expires in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of Grant, as
shown in the Notice of Stock Option Grant.  (It will expire earlier if your
service terminates, as described below.) Regular
Termination If your service as an Employee, Consultant or Outside Director of
the Company or a Subsidiary terminates for any reason except death or total and
permanent disability, then this option will expire at the close of business at
Company headquarters on the date three months after your termination date.  The
Company determines when your service terminates for this purpose. Death If your
service as an Employee, Consultant or Outside Director of the Company or a
Subsidiary terminates because of your death, then this option will expire at the
close of business at Company headquarters on the date 12 months after the date
of death. Disability

If your service as an Employee, Consultant or Outside Director of the Company or
a Subsidiary terminates because of your total and permanent disability, then
this option will expire at the close of business at Company headquarters on the
date 12 months after your termination date.

For all purposes under this Agreement, “total and permanent disability” means
that you are unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted, or can be expected to last, for a
continuous period of not less than one year.

Leaves of Absence

Vesting of this option shall be suspended during any unpaid leave of absence
unless continued vesting is required by the terms of the leave or by applicable
law.

For purposes of this option, your service does not terminate when you go on a
military leave, a sick leave or another bona fide leave of absence, if the
Company approved your leave in writing and if continued crediting of service is
required by the terms of the leave or by applicable law.

For purposes of incentive stock options, no such leave may exceed 90 days,
unless reemployment upon expiration of such leave is guaranteed by the terms of
the leave or by applicable law. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, then three months
following the 91st day of such leave, an incentive stock option shall cease to
be treated as an incentive stock option and shall be treated for tax purposes as
a nonstatutory option.

Unless you immediately return to active work when the approved leave ends, your
service will terminate.

Restrictions on

Exercise

The Company will not permit you to exercise this option if the issuance of
shares at that time would violate any law or regulation.

 

 

 

 

Notice of Exercise

When you wish to exercise this option, you must notify the Company by filing the
proper “Notice of Exercise” form at the address given on the form. Your notice
must specify how many shares you wish to purchase. The exercise will be
effective when the Company receives the Notice of Exercise with the option
exercise payment described herein.

If someone else wants to exercise this option after your death, that person must
prove to the Company's satisfaction that he or she is entitled to do so.

Form of Payment

When you submit your notice of exercise, you must include payment of the option
exercise price for the shares you are purchasing. Payment may be made in one (or
a combination of two or more) of the following forms:

·       Your personal check, a cashier's check or a money order.

·       Certificates for shares of Company stock that you own, along with any
forms needed to affect a transfer of those shares to the Company. The value of
the shares, determined as of the effective date of the option exercise, will be
applied to the option exercise price. However, you may not surrender shares of
Company stock in payment of the exercise price if your action would cause the
Company to recognize compensation expense (or additional compensation expense)
with respect to this option for financial reporting purposes.

·       Irrevocable directions to a securities broker approved by the Company to
sell all or part of your option shares and to deliver to the Company proceeds
from the sale in an amount sufficient to pay the option exercise price and any
withholding taxes. (The balance of the sale proceeds, if any, will be delivered
to you.) The directions must be given by signing a special “Notice of Exercise”
form provided by the Company.

Withholding Taxes
and Stock
Withholding You will not be allowed to exercise this option unless you make
arrangements acceptable to the Company to pay any withholding taxes that may be
due as a result of the option exercise.  These arrangements may include (with
the Company’s approval) withholding shares of Company stock that otherwise would
be issued to you when you exercise this option.  The value of these shares,
determined as of the effective date of the option exercise, will be applied to
the withholding taxes. Restrictions on
Resale By signing this Agreement, you agree not to sell any option shares at a
time when applicable laws, Company policies or an agreement between the Company
and its underwriters prohibit a sale.  This restriction will apply as long as
you are an Employee, Consultant or Outside Director of the Company or a
Subsidiary.

 

 

 

 

Transfer of Option

Prior to your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. You may, however, dispose of this option in your will, by
the laws of descent and distribution or through a beneficiary designation.

Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your former spouse, nor is the
Company obligated to recognize your former spouse's interest in your option in
any other way.

Retention Rights Neither your option nor this Agreement gives you the right to
be employed or otherwise retained by the Company or a Subsidiary in any
capacity.  The Company or a Subsidiary reserves the right to terminate your
service at any time, with or without cause. Stockholder Rights You, or your
estate or heirs, have no rights as a stockholder of the Company until you have
exercised this option by giving the required notice to the Company and paying
the exercise price.   Applicable Law This Agreement will be interpreted and
enforced under the laws of the State of Colorado (without giving effect to its
conflict of laws provisions). The Plan and
Other Agreements

The 1997 Stock Incentive Plan is incorporated in this Agreement by reference.
Unless otherwise defined herein, all capitalized terms herein have the same
defined meanings as in the 1997 Stock Incentive Plan.

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this option. Any prior agreements, commitments or
negotiations concerning this option are superseded. This Agreement may be
amended only by another written agreement, signed by both parties.

By signing the notice of stock option grant of this Agreement, you agree to all
of the terms and conditions described above and in the 1997 Stock Incentive
Plan.