EXHIBIT 10.10

HESKA CORPORATION 1997 STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

(OUTSIDE DIRECTORS)

Tax Treatment

 

This option is intended to be a nonstatutory option.

 

Vesting/
Exercisability

 

This option is immediately exercisable, but subject to vesting as indicated in
the Notice of Stock Option Grant. In the event of termination of your service as
an Outside Director of the Company, any unvested shares issued upon exercise are
subject to repurchase by the Company at the same price as the original Exercise
Price Per Share. The Company’s right to repurchase such shares shall lapse as
the shares become vested as indicated in the Notice of Stock Option Grant.

 

In addition, this option becomes vested in full if one of the following events
occurs:

 

·                  Your service as an Outside Director of the Company terminates
because of death, total and permanent disability, or retirement at or after age
65, or

 

·                  A Change in Control with respect to the Company occurs while
you are an Outside Director of the Company.

 

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.

 

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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.

 

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.

 

 

 

Exercise of

 

 

Unvested Shares

 

Exercise of unvested shares is allowed under the Plan. If you would like to
exercise your option before it is vested, you must complete a Stock Repurchase
Agreement, which provides for the repurchase of that portion of the shares that
remain unvested at the time of your termination.

 

 

 

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

 

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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.

 

 

 

Repurchase Rights

 

In the event that you exercise unvested shares through the execution of a Stock
Repurchase Agreement, the Company will have 90 days to repurchase any shares
that remain unvested at the time of your termination. The terms of any such
repurchase will be set forth in the Stock Repurchase Agreement.

 

 

 

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 give you the right to be employed or
otherwise retained by the Company or a Subsidiary in any capacity.

 

 

 

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.

 

 

 

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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 COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE 1997 STOCK INCENTIVE PLAN.

 

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