Exhibit 10.4

    

HESKA CORPORATION
STOCK INCENTIVE PLAN

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HESKA CORPORATION
STOCK INCENTIVE PLAN

MOST RECENTLY AMENDED AND RESTATED EFFECTIVE MAY 2, 2019
TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION1
ARTICLE 2. ADMINISTRATION.1
2.1Committee Composition    1
2.2Committee Responsibilities    2
2.3Indemnification    2
2.4Beneficiary Designations    2
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.2
3.1Basic Limitation    2
3.2Additional Shares    3
3.3Minimum Vesting Requirements    3
3.4Limitation on Outside Director Compensation    3
3.5Per-Participant Annual Award Limits    3
ARTICLE 4. ELIGIBILITY.4
4.1Awards other than ISOs    4
4.2Incentive Stock Options    4
ARTICLE 5. OPTIONS.4
5.1Stock Option Agreement    4
5.2Number of Shares    4

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5.3Exercise Price    4
5.4Incentive Stock Options    4
5.5Exercisability    5
5.6Option Term    5
5.7Effect of Change in Control    6
5.8Modification or Assumption of Options    6
5.9Payment for Option Shares    6
ARTICLE 6. RESTRICTED SHARES.7
6.1Time, Amount and Form of Awards    7
6.2Payment for Awards    7
6.3Vesting Conditions    7
6.4Voting and Dividend Rights    7
ARTICLE 7. RESTRICTED STOCK UNITS.8
7.1Time, Amount and Form of Awards    8
7.2Restrictions and Conditions    8
7.3Rights as a Stockholder    8
7.4 Settlement of Restricted Stock Units    9
ARTICLE 8. STOCK APPRECIATION RIGHTS.9
8.1In General    9
8.2Rights as Stockholder    9
8.3Exercisability    9
8.4Payment Upon Exercise    10
8.5Termination of Employment or Service    10

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8.6Term    10
ARTICLE 9. OTHER STOCK-BASED OR CASH-BASED AWARDS.11
9.1In General    11
9.2Vesting    11
ARTICLE 10. PERFORMANCE MEASURES.    11
10.1In General    11
10.2Performance Goals    11
ARTICLE 11. CLAWBACK14
ARTICLE 12. PROTECTION AGAINST DILUTION.14
12.1Adjustments    14
12.2Dissolution or Liquidation    14
12.3Reorganizations    14
ARTICLE 13. AWARDS UNDER OTHER PLANS.15
ARTICLE 14. LIMITATION ON RIGHTS.15
14.1Retention Rights    15
14.2Stockholders’ Rights    15
14.3Regulatory Requirements    15
ARTICLE 15. WITHHOLDING TAXES; PARACHUTE PAYMENTS.15
15.1General    15
15.2Section 280G    16
ARTICLE 16. FUTURE OF THE PLAN.16
16.1Term of the Plan    16

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16.2Performance Awards    16
ARTICLE 17. CODE SECTION 409A17
ARTICLE 18. DEFINITIONS.17
ARTICLE 19. EXECUTION.22

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HESKA CORPORATION
STOCK INCENTIVE PLAN
Most Recently Amended and Restated Effective May 2, 2019

ARTICLE 1.
INTRODUCTION
The Heska Corporation 1997 Stock Incentive Plan was originally adopted by the
Board effective March 15, 1997 (the “Original Plan”). The Original Plan was
subsequently amended and/or restated as of March 6, 2007, May 5, 2009, February
22, 2012, March 25, 2014, and May 6, 2014, March 28, 2016, March 7, 2018, May 3,
2018 and December 19, 2018 (the “Amended and Restated Plan”). The number of
Common Shares available for issuance and subject to Awards under the Amended and
Restated Plan was adjusted in connection with completion of the Company’s
1-for-10 Reverse Stock Split on December 30, 2010. The Board approved on March
14, 2019, and the Company’s stockholders approved on May 2, 2019, the further
amendment and restatement of the Amended and Restated Plan to, among other
things, provide the Company with the ability to make Awards in the form of
Restricted Stock Units, Stock Appreciation Rights, Other Cash-Based Awards, and
Other Stock-Based Awards, in addition to its existing ability to grant Awards of
Restricted Shares and Options, and to add an annual limit on the cash and equity
compensation that may be paid to each Outside Director of the Company.
The purpose of the Plan is to promote the long-term success of the Company and
the creation of stockholder value by (a) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased
stock ownership. The Plan seeks to achieve this purpose by providing for Awards
in the form of Restricted Shares, Restricted Stock Units, Options (which may
constitute ISOs or NQOs), Stock Appreciation Rights, Performance-Based Awards,
Other Cash-Based Awards, or Other Stock-Based Awards.
The Plan shall be governed by, and construed in accordance with, the laws of the
State of Colorado (except its choice-of-law provisions).

ARTICLE 2.    
ADMINISTRATION.

2.1
COMMITTEE COMPOSITION    . The Plan shall be administered by the Committee. The
Committee shall consist exclusively of two or more directors of the Company, who
shall be appointed by the Board. In addition, the composition of the Committee
shall satisfy:

(a)
Such requirements as the Securities and Exchange Commission may establish for
administrators acting under plans intended to qualify for exemption under Rule
16b-3 (or its successor) under the Exchange Act; and

(b)
Such requirements as the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption under section
162(m)(4)(C) of the Code.

The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not satisfy the
foregoing requirements, who may administer the Plan with respect to Employees
and Consultants who are not considered officers or directors of the Company
under section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all terms of such Awards.

2.2
COMMITTEE RESPONSIBILITIES    . The Committee shall (a) select the Employees,
Outside Directors and Consultants who are to receive Awards under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The Committee
may amend or modify any outstanding Awards in any manner to the extent the
Committee would have had the authority under the Plan initially to make such
Awards as so amended or modified. The Committee’s determinations under the Plan
shall be final and binding on all persons.

2.3
INDEMNIFICATION. No member of the Board or the Committee, or any officer or
employee of the Company or any Subsidiary thereof acting on behalf of the Board
or the Committee, shall be personally liable for any action, omission,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Committee and each and any officer or
employee of the Company and of any Subsidiary thereof acting on their behalf
shall, to the maximum extent permitted by applicable law and the Company’s
by-laws and governing documents, be fully indemnified and protected by the
Company in respect of any such action, omission, determination or
interpretation.

2.4
BENEFICIARY DESIGNATIONS. If permitted by the Committee, a Participant under the
Plan may name a beneficiary or beneficiaries to whom any vested but unpaid Award
shall be paid in the event of the Participant’s death.  Each such designation
shall revoke all prior designations by the Participant and shall be effective
only if given in a form and manner acceptable to the Committee.  In the absence
of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the beneficiary designated by the
Participant in the Company’s qualified 401(k) savings plan, or if none, to the
Participant’s surviving spouse, or if none, to the Participant’s estate.

ARTICLE 3.    
SHARES AVAILABLE FOR GRANTS.

3.1
BASIC LIMITATION    . Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares, or shares reacquired by the
Company in any manner. The number of Common Shares stated in this Section 3.1 as
available for the grant of Awards is subject to adjustment in accordance with
Article 12. As of March 7, 2018, the aggregate number of Common Shares
cumulatively authorized by the Company’s stockholders for issuance as Awards
under the Plan was 2,635,130. Of that total, as of March 7, 2018, Previously
Issued Awards have been issued covering 2,578,093 Common Shares, leaving 57,037
Common Shares for the issuance of Awards under the Plan. With the March 7, 2018
amendment and restatement of the Plan, the Company’s Board and stockholders
approved an increase of 250,000 in the aggregate number of Common Shares
available for Awards under the Plan, to a new total of 2,885,130.
Notwithstanding the foregoing, the additional 250,000 Common Shares the
Company’s Board and stockholders approved for Awards under the Plan as of March
7, 2018 will not be available for issuance with respect to any Award granted
prior to November 2, 2017.

3.2
ADDITIONAL SHARES    . Any Common Shares subject to an Award that is canceled,
forfeited or expires prior to exercise or realization, either in full or in
part, shall again become available for issuance under the Plan as Awards.
Notwithstanding anything to the contrary contained herein: Common Shares subject
to an Award under the Plan shall not again be made available for issuance or
delivery under the Plan if such Common Shares are (a) tendered in payment of an
Option, or (b) delivered or withheld by the Company to satisfy any tax
withholding obligation.

3.3
MINIMUM VESTING REQUIREMENTS. Subject to the following sentence, Awards granted
under the Plan shall be subject to a minimum vesting period of one year.
Notwithstanding the foregoing, (a) the Committee may permit acceleration of
vesting of an Award in the event of a Participant’s death, Disability, or
Retirement, or the occurrence of a Change in Control, and (ii) the Committee may
grant Awards covering five percent (5%) or fewer of the total number of Common
Shares authorized under the Plan without respect to the above-described minimum
vesting requirements. Notwithstanding the foregoing, with respect to Awards made
to Outside Directors, the vesting of such Awards will be deemed to satisfy the
one-year minimum vesting requirement to the extent that the Awards vest on the
earlier of the one-year anniversary of the date of grant and the next regular
annual meeting of the Company’s stockholders that is at least fifty (50) weeks
after the immediately preceding year’s annual meeting.

3.4
LIMITATION ON OUTSIDE DIRECTOR COMPENSATION. Notwithstanding anything herein to
the contrary, compensation paid to an Outside Director, including cash fees and
Awards under the Plan (based on the grant date Fair Market Value of such Awards
for financial reporting purposes), shall not exceed $300,000 per fiscal year in
respect of his or her service as an Outside Director. For the avoidance of
doubt, compensation shall be counted toward this limit for the Board
compensation year in which it is earned (and not when it is paid or settled in
the event that it is deferred).

3.5
PER-PARTICIPANT ANNUAL AWARD LIMITS. The Awards granted under the Plan to one
Participant in a single fiscal year of the Company may not exceed the following
limits: (i) 50,000 Common Shares subject to Options and/or Stock Appreciation
Rights in the aggregate, except that Options and/or Stock Appreciation Rights
granted to a new Employee in the fiscal year of the Company in which his or her
service as an Employee first commences shall not cover more than 100,000 Common
Shares in the aggregate; (ii) 45,000 Common Shares granted in the form of
Restricted Shares, Restricted Stock Units, and/or Other Stock-Based Awards in
the aggregate, except a new Employee may receive grants of up to 75,000
Restricted Shares, Restricted Stock Units, and/or Other Cash-Based Awards in the
aggregate in the fiscal year of the Company in which his or her service with the
Company begins; and (iii) no more than $500,000 may be paid in the form of Other
Cash-Based Awards to any single Participant per calendar year. The limitations
set forth in the preceding sentence shall be subject to adjustment in accordance
with Article 12.

ARTICLE 4.    
ELIGIBILITY.

4.1
AWARDS OTHER THAN ISOS. Employees, Outside Directors and Consultants shall be
eligible for the grant of Awards other than ISOs.

4.2
INCENTIVE STOCK OPTIONS    . Only Employees who are common-law employees of the
Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.

ARTICLE 5.    
OPTIONS.

5.1
STOCK OPTION AGREEMENT    . Each grant of an Option under the Plan shall be
evidenced by an Award Agreement between the Participant and the Company. Such
Option shall be subject to all applicable terms of the Plan and may be subject
to any other terms that are not inconsistent with the Plan. The Award Agreement
shall specify whether the Option is an ISO or an NQO. The provisions of the
various Award Agreements entered into under the Plan need not be identical.
Options may be granted in consideration of a cash payment or in consideration of
a reduction in the Participant’s other compensation.

5.2
NUMBER OF SHARES    . Each Award Agreement shall specify the number of Common
Shares subject to the Option and shall provide for the adjustment of such number
in accordance with Article 12.

5.3
EXERCISE PRICE    . Each Award Agreement shall specify the Exercise Price;
provided that the Exercise Price under an Option shall in no event be less than
100% of the Fair Market Value of a Common Share on the date of grant.

5.4
INCENTIVE STOCK OPTIONS. The grant of ISOs shall be subject to all of the
requirements of Code Section 422, including the following limitations:

(a)
The Exercise Price of an ISO shall not be less than one-hundred percent (100%)
of the Fair Market Value of a Common Share on the date of grant; provided,
however, if on the date of grant, the Employee (together with persons whose
stock ownership is attributed to the Employee pursuant to Code Section 424(d))
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any of its Subsidiaries (a “10%
Stockholder”), the Exercise Price shall not be less than one-hundred and ten
percent (110%) of the Fair Market Value of a Common Share on the date of grant.

(b)
ISOs may be granted only to persons who are, as of the date of grant, Employees
of the Company or a Subsidiary, and may not be granted to Consultants or Outside
Directors.

(c)
To the extent that the aggregate Fair Market Value of the Common Shares with
respect to which ISOs are exercisable for the first time by any individual
during any calendar year (under all plans of the Company) exceeds $100,000, such
Options will be treated as NQOs to the extent required by Code Section 422. For
purposes of this Section 5.4(c), ISOs shall be taken into account in the order
in which they were granted. The Fair Market Value of the Common Shares shall be
determined as of the time the Option with respect to such Common Shares is
granted.

(d)
In the event of a Participant’s change of status from Employee to Consultant or
Outside Director, an ISO held by the Participant shall cease to be treated as an
ISO and shall be treated for tax purposes as an NQO three (3) months and one (1)
day following such change of status.

5.5
EXERCISABILITY     . Each Award Agreement shall specify the date when all or any
installment of the Option is to become exercisable. A Stock Option Agreement may
provide for accelerated exercisability in the event of the Participant’s death,
Disability or Retirement or other events and may provide for expiration prior to
the end of its term in the event of the termination of the Participant’s
service. NQOs may also be awarded in combination with Restricted Shares, and
such an Award may provide that the NQOs will not be exercisable unless the
related Restricted Shares are forfeited.

5.6
OPTION TERM . Unless otherwise specified in an Award Agreement, but in any
event, no later than ten (10) years from the date of grant thereof, each Option
shall terminate no later than the first to occur of the following events:

(a)
Date in Award Agreement. The date for termination of the Option set forth in the
Award Agreement;

(b)
Termination of Service. The ninetieth (90th) day following the date on which the
Participant’s service terminates (other than for a reason described in
subsections (c) or (d) below);

(c)
Disability. In the event that a Participant’s service terminates due to the
Participant’s Disability, the Participant may exercise his or her Option at any
time within twelve (12) months following the date of such termination, but only
to the extent that the Participant was entitled to exercise it at the date of
such termination (but in no event later than the expiration of the term of the
Option as set forth in the applicable Award Agreement). If, at the date of
termination, the Participant is not entitled to exercise his or her entire
Option, the Common Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Participant does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Common Shares covered by such Option shall revert to the
Plan;

(d)
Death. In the event of the death of a Participant, the Participant’s Option may
be exercised at any time within twelve (12) months following the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the applicable Award Agreement), by the Participant’s estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Participant was entitled to exercise the Option
at the date of death. If, at the time of death, the Participant was not entitled
to exercise his or her entire Option, the Common Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Participant’s estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Common
Shares covered by such Option shall revert to the Plan; or

(e)
Ten Years from Grant. An Option shall expire no more than ten (10) years after
the date of grant; provided, however, that if an ISO is granted to a 10%
Stockholder, such ISO may not be exercised after the expiration of five (5)
years from the date of grant.

5.7
EFFECT OF CHANGE IN CONTROL    . The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable as
to all or part of the Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.

5.8
MODIFICATION OR ASSUMPTION OF OPTIONS    . The Committee may modify, extend or
assume outstanding Options or may accept the cancellation of outstanding Options
(whether granted by the Company or by another issuer) in return for the grant of
new Options for the same or a different number of Common Shares and at the same
or a different exercise price; provided, that an extension of the term of an ISO
shall be subject to limitations applicable to ISOs and provided further that any
such extension may not exceed the maximum term of the Option. The foregoing
notwithstanding, no modification of an Option shall, without the consent of the
Participant, alter or impair his or her rights or obligations under such Option
(except that the Committee has the authority to amend any outstanding Option
without the Participant’s consent if the Committee deems it necessary or
advisable to comply with Code Section 409A). In addition, to the extent the
Committee’s modification of the purchase price or the exercise price of any
outstanding Award effects a repricing, shareholder approval shall be required
before the repricing is effective.

5.9
PAYMENT FOR OPTION SHARES.

(a)
General Rule. The entire Exercise Price of Common Shares issued upon exercise of
Options shall be payable in cash or cash equivalents at the time when such
Common Shares are purchased, except as follows:

(1)
In the case of an ISO granted under the Plan, payment shall be made only
pursuant to the express provisions of the applicable Award Agreement. The Award
Agreement may specify that payment may be made in any form(s) described in this
Section 5.9.

(2)
In the case of an NQO, the Committee may at any time accept payment in any
form(s) described in this Section 5.9.

(b)
Surrender of Stock. To the extent that this Section 5.9(b) is applicable, all or
any part of the Exercise Price may be paid by surrendering Common Shares that
are already owned by the Participant. Such Common Shares shall be valued at
their Fair Market Value on the date when the new Common Shares are purchased
under the Plan. The Participant shall not surrender Common Shares in payment of
the Exercise Price if such action could cause the Company to recognize
additional compensation expense with respect to the Option for financial
reporting purposes under GAAP accounting at the time of such proposed surrender.

(c)
Exercise/Sale. To the extent that this Section 5.9(c) is applicable, all or any
part of the Exercise Price may be paid by delivering (on a form prescribed by
the Company) an irrevocable direction to a securities broker approved by the
Company to sell all or part of the Common Shares being purchased under the Plan
and to deliver all or part of the sales proceeds to the Company.

(d)
Other Forms of Payment. To the extent that this Section 5.9(d) is applicable,
all or any part of the Exercise Price may be paid in any other form that is
consistent with applicable laws, regulations and rules, including, without
limitation, pursuant to a net exercise.

ARTICLE 6.    
RESTRICTED SHARES.

6.1
TIME, AMOUNT AND FORM OF AWARDS    . Awards under the Plan may be granted in the
form of Restricted Shares. Restricted Shares may also be awarded in combination
with NQOs, and such an Award may provide that the Restricted Shares will be
forfeited in the event that the related NQOs are exercised.

6.2
PAYMENT FOR AWARDS    . To the extent that an Award is granted in the form of
newly issued Restricted Shares, the Award recipient, as a condition to the grant
of such Award, shall be required to pay the Company in cash, cash equivalents or
any other form of legal consideration acceptable to the Company, including but
not limited to future services, an amount equal to the par value of such
Restricted Shares. To the extent that an Award is granted in the form of
Restricted Shares from the Company’s treasury, no cash consideration shall be
required of the Award recipients.

6.3
VESTING CONDITIONS    . Each Award of Restricted Shares shall be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Award Agreement. An Award Agreement may provide
for accelerated vesting in the event of the Participant’s death, Disability or
Retirement or other events. Notwithstanding any other provision of the Plan to
the contrary, the Committee may determine, at the time of granting Restricted
Shares or thereafter, that all or part of such Restricted Shares shall become
vested in the event that a Change in Control occurs with respect to the Company.

6.4
VOTING AND DIVIDEND RIGHTS    . Unless otherwise provided in the Award
Agreement, the holder of Restricted Shares awarded under the Plan shall have the
same voting, dividend and other rights as the Company’s other stockholders;
provided, that to the extent that a Restricted Share carries with it a right to
receive dividends, any dividends declared shall be accumulated and paid at the
time (and to the extent) that the Restricted Shares vest, but in no event later
than two-and-a-half months following the end of the calendar year in which the
vesting occurs. Without limitation, an Award Agreement may require that the
holders of Restricted Shares invest any cash dividends received in additional
Restricted Shares (in which case such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid).

ARTICLE 7.    
RESTRICTED STOCK UNITS.

7.1
TIME, AMOUNT AND FORM OF AWARDS    . Awards under the Plan may be granted in the
form of Restricted Stock Units. Restricted Stock Units may be issued either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the eligible individuals to whom, and the time or times at which,
grants of Restricted Stock Units shall be made; the number of Restricted Stock
Units to be awarded; the period of restrictions, if any, applicable to
Restricted Stock Units; the performance goals (if any) applicable to Restricted
Stock Units; and all other conditions of the Restricted Stock Units. If the
restrictions, performance goals and/or conditions established by the Committee
are not attained, a Participant shall forfeit his or her Restricted Stock Units
in accordance with the terms of the grant. The provisions of Restricted Stock
Units need not be the same with respect to each Participant.

7.2
RESTRICTIONS AND CONDITIONS    . Each Award of Restricted Stock Units shall be
subject to the following restrictions and conditions and any additional
restrictions or conditions as determined by the Committee at the time of grant
or, subject to Code Section 409A, thereafter:

(a)
Vesting shall occur, in full or in installments, upon satisfaction of the
conditions specified in the Award Agreement.

(b)
An Award Agreement may provide for accelerated vesting in the event of the
Participant’s death, Disability or Retirement or other events. Notwithstanding
any other provision of the Plan to the contrary, the Committee may determine, at
the time of granting Restricted Stock Units or thereafter, that all or part of
such Restricted Stock Units shall become vested in the event that a Change in
Control occurs with respect to the Company.

(c)
Participants holding Restricted Stock Units shall have no voting rights. A
Restricted Stock Unit may, at the Committee’s discretion, carry with it a right
to dividend equivalents. Such right would entitle the holder to be credited with
an amount equal to all cash dividends paid on one Common Share while the
Restricted Stock Unit is outstanding. The Committee, in its discretion, may
grant dividend equivalents from the date of grant or only after a Restricted
Stock Unit is vested. Notwithstanding anything herein to the contrary, to the
extent that a Restricted Stock Unit carries with it rights to dividend
equivalents, any dividend equivalents with respect to dividends declared shall
be accumulated and paid at the time (and to the extent) that the Restricted
Stock Units vest, but in no event later than two-and-a-half months following the
end of the calendar year in which the vesting occurs.

(d)
The rights of Participants granted Restricted Stock Units upon termination of
employment or service as an Outside Director or Consultant of the Company or an
Affiliate thereof terminates for any reason while the Restricted Stock Units
remain outstanding shall be set forth in the Award Agreement.

7.3
RIGHTS AS A STOCKHOLDER. Except as may otherwise be provided in an Award
Agreement with respect to dividend equivalents (in accordance with Section
7.2(c)), a Participant shall have no rights to dividends or any other rights of
a stockholder with respect to the Common Shares subject to Restricted Stock
Units until the Participant has satisfied all conditions of the Award Agreement
and the requirements of Section 15.1 of the Plan, and the Common Shares have
been issued to the Participant.

7.4
SETTLEMENT OF RESTRICTED STOCK UNITS. Settlement of vested Restricted Stock
Units shall be made to Participants in the form of Common Shares, unless the
Committee, in its sole discretion, provides for the payment of the Restricted
Stock Units in cash (or partly in cash and partly in Common Shares) equal to the
Fair Market Value of the Common Shares that would otherwise be distributed to
the Participant.

ARTICLE 8.    
STOCK APPRECIATION RIGHTS.

8.1
IN GENERAL. Stock Appreciation Rights may be granted either alone (“Free
Standing Rights”) or in conjunction with all or part of any Option granted under
the Plan (“Related Rights”). Related Rights may be granted either at or after
the time of the grant of such Option. The Committee shall determine the eligible
individuals to whom, and the time or times at which, grants of Stock
Appreciation Rights shall be made, the number of Common Shares to be awarded,
the price per Common Share, and all other conditions of Stock Appreciation
Rights. Notwithstanding the foregoing, no Related Right may be granted for more
Common Shares than are subject to the Option to which it relates and any Stock
Appreciation Right must be granted with an Exercise Price not less than the Fair
Market Value of Common Stock on the date of grant. The provisions of Stock
Appreciation Rights need not be the same with respect to each Participant. Stock
Appreciation Rights granted under the Plan shall be subject to the following
terms and conditions set forth in this Section 8.1 and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable, as set forth in the applicable Award
Agreement.

8.2
RIGHTS AS STOCKHOLDER . A Participant shall have no rights to dividends or any
other rights of a stockholder with respect to the Common Shares subject to a
Stock Appreciation Right until the Participant has given written notice of the
exercise thereof, has satisfied the requirements of Section 15.1 of the Plan and
the Common Shares have been issued to the Participant.

8.3
EXERCISABILITY.

(a)
Stock Appreciation Rights that are Free Standing Rights shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee in the applicable Award Agreement.

(b)
Stock Appreciation Rights that are Related Rights shall be exercisable only at
such time or times and to the extent that the Options to which they relate shall
be exercisable in accordance with the provisions of Article 5 and this Article 8
of the Plan.

(c)
An Award Agreement may provide for accelerated vesting in the event of the
Participant’s death, Disability or Retirement or other events. Notwithstanding
any other provision of the Plan to the contrary, the Committee may determine, at
the time of granting Stock Appreciation Rights or thereafter, that all or part
of such Stock Appreciation Rights shall become vested in the event that a Change
in Control occurs with respect to the Company.

8.4
PAYMENT UPON EXERCISE.

(a)
Upon the exercise of a Free Standing Right, the Participant shall be entitled to
receive up to, but not more than, that number of Common Shares, determined using
the Fair Market Value, equal in value to the excess of the Fair Market Value as
of the date of exercise over the price per Common Share specified in the Free
Standing Right multiplied by the number of Common Shares in respect of which the
Free Standing Right is being exercised.

(b)
A Related Right may be exercised by a Participant by surrendering the applicable
portion of the related Option. Upon such exercise and surrender, the Participant
shall be entitled to receive up to, but not more than, that number of Common
Shares, determined using the Fair Market Value, equal in value to the excess of
the Fair Market Value as of the date of exercise over the Exercise Price
specified in the related Option multiplied by the number of Common Shares in
respect of which the Related Right is being exercised. Options which have been
so surrendered, in whole or in part, shall no longer be exercisable to the
extent the Related Rights have been so exercised.

(c)
Notwithstanding the foregoing, the Committee may determine to settle the
exercise of a Stock Appreciation Right in cash (or in any combination of Common
Shares and cash).

8.5
TERMINATION OF EMPLOYMENT OR SERVICE.

(a)
In the event of the termination of employment or service with the Company and
all Affiliates thereof of a Participant who has been granted one or more Free
Standing Rights, such rights shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee in
the applicable Award Agreement.

(b)
In the event of the termination of employment or service with the Company and
all Affiliates thereof of a Participant who has been granted one or more Related
Rights, such rights shall be exercisable at such time or times and subject to
such terms and conditions as set forth in the related Options.

8.6
TERM.

(a)
The term of each Free Standing Right shall be fixed by the Committee, but no
Free Standing Right shall be exercisable more than ten (10) years after the date
such right is granted.

(b)
The term of each Related Right shall be the term of the Option to which it
relates, but no Related Right shall be exercisable more than ten (10) years
after the date such right is granted.

ARTICLE 9.    
OTHER STOCK-BASED OR CASH-BASED AWARDS.

9.1
IN GENERAL. The Committee is authorized to grant Awards to Participants in the
form of Other Stock‑Based Awards or Other Cash-Based Awards, as deemed by the
Committee to be consistent with the purposes of the Plan and as evidenced by an
Award Agreement. The Committee shall determine the terms and conditions of such
Awards, consistent with the terms of the Plan, at the date of grant or
thereafter, including any performance goals and performance periods. Common
Shares or other securities or property delivered pursuant to an Award in the
nature of a purchase right granted under this Section 9.1 shall be purchased for
such consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, Common Shares, other Awards, notes or other
property, as the Committee shall determine, subject to any required corporate
action.

9.2
VESTING. An Award Agreement with respect to an Other Stock-Based Award or Other
Cash-Based Award may provide for accelerated vesting in the event of the
Participant’s death, Disability or Retirement or other events. Notwithstanding
any other provision of the Plan to the contrary, the Committee may determine, at
the time of granting an Other Stock-Based Award or Other Cash-Based Award or
thereafter, that all or part of such Awards shall become vested in the event
that a Change in Control occurs with respect to the Company.

ARTICLE 10.    
PERFORMANCE MEASURES.

10.1
IN GENERAL. For purposes of qualifying grants of Restricted Shares as
“performance-based compensation” under Code Section 162(m), the Committee, in
its discretion, may make Restricted Shares subject to vesting based on the
achievement of performance goals, in which case the Committee will specify in
writing, by resolution or otherwise, the Participants eligible to receive such
an Award (which may be expressed in terms of a class of individuals) and the
performance goals applicable to such Awards within 90 days after the
commencement of the period to which the performance goals relate, or such
earlier time as required to comply with Section 162(m) of the Code. No such
Award shall be payable unless the Committee certifies in writing, by resolution
or otherwise, that the performance goals applicable to the Award were satisfied.
In no case may the Committee increase the value of an Award granted under this
Section 10.1 above the maximum value determined under the performance formula by
the attainment of the applicable performance goals, but the Committee retains
the discretion to reduce the value below such maximum.

10.2
PERFORMANCE GOALS. Unless and until the Committee proposes for stockholder vote
and the stockholders approve a change in the general performance measures
applicable to Awards, the performance goals upon which the payment or vesting of
an Award that is intended to qualify as performance based compensation are
limited to the following Performance Measures:

(1)
operating income or operating profit (including but not limited to operating
income and any affiliated growth measure);

(2)
net earnings or net income (before or after taxes, including but not limited to
deferred taxes, and any affiliated growth measure);

(3)
basic or diluted earnings per share (before or after taxes, including but not
limited to deferred taxes, and any affiliated growth measure);

(4)
revenues (including but not limited to revenue, gross revenue, net revenue, and
any affiliated growth measure);

(5)
gross profit or gross profit growth;

(6)
return on assets, capital, invested capital, equity or sales;

(7)
cash flow (including, but not limited to, operating cash flow, free cash flow,
and cash flow return on capital);

(8)
earnings before or after taxes, interest, depreciation and/or amortization
(including but not limited to changes in this measure);

(9)
improvements or changes in capital structure (including but not limited to debt
balances or debt issuance);

(10)
budget management;

(11)
productivity targets;

(12)
economic value added or other value added measurements;

(13)
share price (including, but not limited to, growth measures and total
shareholder return);

(14)
expense targets;

(15)
margins (including but not limited to gross or operating margins);

(16)
efficiency measurements (including but not limited to availability measurements,
call wait times, call, meeting, shipping or other volume measurements,
turnaround times and error rates);

(17)
working capital targets (including but not limited to items reported on the
Company’s balance sheet and time-based or similar measures such as days
inventory, days receivable and days payable);

(18)
equity or market value measures;

(19)
enterprise or adjusted market value measures;

(20)
safety record;

(21)
completion of business acquisition, divestment or expansion;

(22)
book value or changes in book value (including but not limited to tangible book
value and net asset measures);

(23)
assets or changes in assets;

(24)
cash position or changes in cash position;

(25)
employee retention or recruiting measures;

(26)
milestones related to filings with government entities or related approvals
(including but not limited to filings with the Securities and Exchange
Commission which may require stockholder approval);

(27)
changes in location or the opening or closing of facilities;

(28)
contract or other development of relationship with identified suppliers,
distributors or other business partners; and

(29)
new product development (including but not limited to third-party collaborations
or contracts, and with milestones that may include but are not limited to
contract execution, proof of concept, regulatory approval, product launch and
targets such as unit volume and revenue following product launch).

Any performance measures may be used to measure the performance of the Company
as a whole and/or any one or more business segments, regional operations,
products and/or Affiliates of the Company or any combination thereof, as the
Committee may deem appropriate, and any performance measures may be used in
comparison to the performance of a group of peer companies, or a published or
special index that the Committee, in its sole discretion, deems appropriate. The
Committee also has the authority to provide in an Award for accelerated vesting
of an Award based on the achievement of performance goals.
The Committee may provide in any Award that any evaluation of attainment of a
performance goal may include or exclude any of the following events that occurs
during the relevant period: (a) asset write downs; (b) litigation judgments or
settlements; (c) the effect of changes in tax laws, accounting principles, or
other laws or regulations affecting reported results; (d) any reorganization
and/or restructuring transactions or programs; (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s Annual Report on Form 10-K for the
applicable year; and (f) acquisitions or divestitures and associated costs; (g)
any other specific unusual or nonrecurring events, or objectively determinable
category thereof; (h) foreign currency gains and losses; and (i) a change in the
Company’s fiscal year.
In the event that applicable tax and/or securities laws change to permit
discretion by the Committee to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that do not qualify as performance based compensation, the
Committee may make such grants without satisfying the requirements of Section
162(m) of the Code. Effective with respect to Awards granted in 2018 or later,
the Committee may make Awards subject to the achievement of performance goals
other than the performance goals listed in Section 10.2 without regard to
whether stockholders have approved such performance goals.

ARTICLE 11.    
CLAWBACK
Notwithstanding any other provisions in this Plan to the contrary, any Award
received by a Subject Participant, and/or any Common Share issued upon exercise
of any Award received by a Subject Participant hereunder, and/or any amount
received with respect to any sale of any such Award or Common Share, will be
subject to potential cancellation, recoupment, rescission, payback or other
action to the extent required pursuant to applicable law, government regulation
or national securities exchange listing requirement (or any clawback policy
adopted by the Company from time to time pursuant to any such law, government
regulation or national securities exchange listing requirement or to comport
with good corporate governance practices). Each Subject Participant agrees and
consents to the Company’s application, implementation and enforcement of any
clawback policy established by the Company that may apply to the Subject
Participant and any provision of applicable law, government regulation or
national securities exchange listing requirement relating to cancellation,
rescission, payback or recoupment of compensation, and expressly agrees that the
Company may take such actions as are necessary to effectuate any such policy (as
applicable to the Subject Participant) or applicable law, government regulation
or national securities exchange listing requirement without further consent or
action being required by the Subject Participant.

ARTICLE 12.    
PROTECTION AGAINST DILUTION.

12.1
ADJUSTMENTS    . In the event of a subdivision of the outstanding Common Shares,
a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spin-off or a similar occurrence,
the Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of (a) the number of Common Shares available for
issuance pursuant to future Awards under Article 3, (b) the limitations set
forth in Section 3.5, (c) the number of Common Shares covered by each
outstanding Option and Stock Appreciation Right or (d) the Exercise Price under
each outstanding Option and Stock Appreciation Right. Except as provided in this
Article 12, a Participant shall have no rights by reason of any issue by the
Company of stock of any class or securities convertible into stock of any class,
any subdivision or consolidation of shares of stock of any class, the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class.

12.2
DISSOLUTION OR LIQUIDATION    . To the extent not previously exercised, Options
shall terminate immediately prior to the dissolution or liquidation of the
Company.

12.3
REORGANIZATIONS    . In the event that the Company is a party to a merger or
other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization. Such agreement may provide, without limitation, for
the continuation of outstanding Awards by the Company (if the Company is a
surviving corporation), for their assumption by the surviving corporation or its
parent or subsidiary, for the substitution by the surviving corporation or its
parent or subsidiary of its own awards for such Awards, for accelerated vesting
and accelerated expiration, or for settlement in cash or cash equivalents.

ARTICLE 13.    
AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may be
settled in the form of Common Shares issued under this Plan. Such Common Shares
shall be treated for all purposes under the Plan like Restricted Shares and
shall, when issued, reduce the number of Common Shares available under Article
3.

ARTICLE 14.    
LIMITATION ON RIGHTS.

14.1
RETENTION RIGHTS    . Neither the Plan nor any Award granted under the Plan
shall be deemed to give any individual a right to remain an Employee, Outside
Director or Consultant. The Company and its Parents, Subsidiaries and Affiliates
reserve the right to terminate the service of any Employee, Outside Director or
Consultant at any time, with or without cause, subject to applicable laws, the
Company’s certificate of incorporation and bylaws and a written employment
agreement (if any).

14.2
STOCKHOLDERS’ RIGHTS    . Subject to the other terms and conditions of the Plan,
a Participant shall have no dividend rights, voting rights or other rights as a
stockholder with respect to any Common Shares covered by his or her Award prior
to the time when a stock certificate for such Common Shares is issued or, in the
case of an Option or Stock Appreciation Right, the time when he or she becomes
entitled to receive such Common Shares by filing a notice of exercise and paying
the Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly
provided in the Plan.

14.3
REGULATORY REQUIREMENTS    . Any other provision of the Plan notwithstanding,
the obligation of the Company to issue Common Shares under the Plan shall be
subject to all applicable laws, rules and regulations and such approval by any
regulatory body as may be required. The Company reserves the right to restrict,
in whole or in part, the delivery of Common Shares pursuant to any Award prior
to the satisfaction of all legal requirements relating to the issuance of such
Common Shares, to their registration, qualification or listing or to an
exemption from registration, qualification or listing.

ARTICLE 15.    
WITHHOLDING TAXES; PARACHUTE PAYMENTS.

15.1
GENERAL    . To the extent provided by the terms of an Award Agreement and
subject to the discretion of the Committee, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under an Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the
Participant by the Company) or by a combination of such means: (a) tendering a
cash payment; (b) authorizing the Company to withhold Common Shares from the
Common Shares otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Shares under the Award, provided, however, that no
Common Shares are withheld with a value exceeding the amount of tax required to
be withheld by law or such other greater amount up to the maximum statutory rate
under applicable law, as applicable to such Participant, if such other greater
amount would not result in adverse financial accounting treatment, as determined
by the Committee (including in connection with the effectiveness of FASB
Accounting Standards Update 2016-09); or (c) delivering to the Company
previously owned and unencumbered Common Shares. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

15.2
SECTION 280G    . To the extent that any of the payments and benefits provided
for under the Plan or any other agreement or arrangement between the Company or
its Affiliates and a Participant (collectively, the “Payments”) (i) constitute a
“parachute payment” within the meaning of Code Section 280G and (ii) but for
this paragraph would be subject to the excise tax imposed by Section 4999 of the
Code, then the Payments shall be payable either (i) in full or (ii) as to such
lesser amount which would result in no portion of such Payments being subject to
excise tax under Section 4999 of the Code (determined in accordance with the
reduction of payments and benefits paragraph set forth below); whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the
participant’s receipt on an after-tax basis, of the greatest amount of benefits
under this Plan, notwithstanding that all or some portion of such benefits may
be taxable under Section 4999 of the Code. Any determination required under this
provision will be made by accountants chosen by the Company, whose determination
shall be conclusive and binding upon the participant and the Company for all
purposes.

Except to the extent, if any, otherwise agreed in writing between a participant
and the Company, reduction of payments and benefits hereunder, if applicable,
will be made by reducing, first, payments or benefits to be paid in cash in the
order in which such payment or benefit would be paid or provided (beginning with
such payment or benefit that would be made last in time and continuing, to the
extent necessary, through to such payment or benefit that would be made first in
time) and, then, reducing any benefit to be provided in-kind hereunder in a
similar order; provided, however, that any reduction or elimination of
accelerated vesting of any equity award will first be accomplished by reducing
or eliminating the vesting of such awards that are valued in full for purposes
of Section 280G of the Code, then the reduction or elimination of vesting of
other equity awards.

ARTICLE 16.    
FUTURE OF THE PLAN.

16.1
TERM OF THE PLAN    . The Plan was initially effective on March 14, 1997. The
Board may, at any time and for any reason, amend, suspend or terminate the Plan
(subject to the approval of the Company’s stockholders only to the extent
required by applicable law, regulations or rules). The Committee may issue ISOs
under the Plan until the tenth anniversary of the date of its most recent
amendment or restatement. The Committee may issue any Award other than ISOs at
any time prior to the date, if any, that the Board suspends or terminates the
Plan. No Award may be granted pursuant to the Plan after such date, but Awards
granted before such date may extend beyond that date.

16.2
PERFORMANCE AWARDS    . Unless the Company determines to submit the Plan to the
Company’s stockholders at the first stockholder meeting that occurs in the fifth
year following the year in which the Plan was last approved by stockholders (or
any earlier meeting designated by the Board), in accordance with the
requirements of Code Section 162(m), and unless such stockholder approval is
obtained, then no further Awards made under Article 10 will qualify as
performance-based compensation for purposes of Code Section 162(m).

ARTICLE 17.    
CODE SECTION 409A
The intent of the parties is that payments and benefits under the Plan comply
with Code Section 409A to the extent subject thereto, and, accordingly, to the
maximum extent permitted, the Plan shall be interpreted and be administered to
be in compliance therewith. Any payments described in the Plan that are due
within the “short-term deferral period” as defined in Code Section 409A shall
not be treated as deferred compensation unless applicable law requires
otherwise. Notwithstanding anything to the contrary in the Plan, to the extent
required in order to avoid accelerated taxation and/or tax penalties under Code
Section 409A, amounts that would otherwise be payable and benefits that would
otherwise be provided upon a “separation from service” to a Participant who is a
“specified employee” shall be paid on the first business day after the date that
is six (6) months following the Participant’s separation from service (or upon
the Participant’s death, if earlier). In addition, for purposes of the Plan,
each amount to be paid or benefit to be provided to the Participant pursuant to
the Plan, which constitute deferred compensation subject to Code Section 409A,
shall be construed as a separate identified payment for purposes of Code
Section 409A. Nothing contained in the Plan or an Award Agreement shall be
construed as a guarantee of any particular tax effect with respect to an Award.
The Company does not guarantee that any Awards provided under the Plan will
satisfy the provisions of Code Section 409A, and in no event will the Company be
liable for any or all portion of any taxes, penalties, interest or other
expenses that may be incurred by a Participant on account of any non-compliance
with Code Section 409A.

ARTICLE 18.    
DEFINITIONS.
18.1
Affiliate means any entity other than a Subsidiary, if the Company and/or one or
more Subsidiaries own not less than fifty percent (50%) of such entity.

18.2
Award means any award of an Option, Restricted Share, Restricted Stock Unit,
Stock Appreciation Right, Other Stock-Based Award or Other Cash-Based Award
under the Plan.

18.3
Award Agreement means any agreement, contract or other instrument or document
evidencing an Award. Evidence of an Award may be in written or electronic form,
may be limited to notation on the books and records of the Company and, with the
approval of the Committee, need not be signed by a representative of the Company
or a Participant. Any Common Shares that become deliverable to a Participant
pursuant to the Plan may be issued in certificate form in the name of the
Participant or in book-entry form in the name of the Participant.

18.4
Board means the Company’s Board of Directors, as constituted from time to time.

18.5
Cause shall have the meaning assigned to such term in a Participant’s written
employment, severance, or similar agreement or Award Agreement with the Company,
or, if no such agreement exists or the agreement does not define “Cause,” Cause
means a Participant’s termination of service by the Company due to the
Participant’s (a) failure to perform his or her assigned duties or
responsibilities as an Employee, Consultant or Outside Director of the Company
or an Affiliate thereof (other than a failure resulting from the Participant’s
Disability) after notice thereof from the Company describing his or her failure
to perform such duties or responsibilities; (b) breach of any confidentiality
agreement, invention assignment agreement or written restrictive covenant
agreement between the Participant and the Company or an Affiliate thereof; (c)
engagement 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; (d) violation of any written Company policy,
including, without limitation, any policy with respect to sexual harassment in
the workplace; (e) violation of any federal or state law or regulation
applicable to the Company’s business; or (f) conviction of, or entrance of a
plea of nolo contendere to, any crime. In addition, a Participant’s service
shall be deemed to have terminated for “Cause” if, on the date the Participant’s
service terminates, facts and circumstances exist that would have justified a
termination for Cause, even if such facts and circumstances are discovered after
such termination.

18.6
Change in Control shall mean:

(a)
The consummation of a merger or consolidation of the Company with or into
another entity of any other corporate reorganization, if more than fifty percent
(50%) of the combined voting power of the continuing or surviving entity’s
securities outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the Company
immediately prior to such merger, consolidation, or other reorganization;

(b)
The consummation of a sale, transfer or other disposition of all or
substantially all of the Company’s assets;

(c)
A majority of the members of the Board are replaced during any eighteen (18)
month period by directors whose appointment or election is not endorsed by a
majority of the Board before the date of appointment or election; or

(d)
Solely with respect to Awards granted in 2018 or later, any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (i)
the Company, (ii) a Subsidiary thereof, (iii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary thereof, or (iv) any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the total voting power
represented by the Company’s then outstanding voting securities.

18.7
Code means the Internal Revenue Code of 1986, as amended.

18.8
Committee means a committee of the Board, as described in Article 2.

18.9
Common Share means one share of common stock, par value $0.01 per share, of the
Company.

18.10
Company means Heska Corporation, a Delaware corporation.

18.11
Consultant means a consultant or adviser who provides bona fide services to the
Company, a Parent, a Subsidiary or an Affiliate as an independent contractor.
Service as a Consultant shall be considered employment for all purposes of the
Plan, except as provided in Section 4.2.

18.12
Disability shall have the meaning assigned to such term in a Participant’s
written employment, severance, or similar agreement or Award Agreement with the
Company, or, if no such agreement exists or the agreement does not define
“Disability,” Disability means a Participant’s inability 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.

18.13
Employee means a common-law employee of the Company, a Parent, a Subsidiary or
an Affiliate.

18.14
Exchange Act means the Securities Exchange Act of 1934, as amended.

18.15
Exercise Price means, with respect to any Award under which the holder may
purchase Common Shares, the price per Common Share at which a holder of such
Award granted hereunder may purchase Common Shares issuable upon exercise of
such Award, as specified in the applicable Award Agreement.

18.16
Fair Market Value means, for so long as the Common Shares are listed on any
established stock exchange or a national market system, the value of a Common
Share as determined by reference to the most recent reported sale price of a
Common Share (or if no sales were reported, the most recent closing price) as
quoted on such exchange or system at the time of determination. In the absence
of an established market for the Common Shares, the Fair Market Value shall be
determined in good faith by the Committee and such determination shall be
conclusive and binding on all persons.

18.17
ISO means an incentive stock option described in section 422(b) of the Code.

18.18
NQO means a stock option not described in sections 422 or 423 of the Code.

18.19
Option means an ISO or NQO granted under the Plan and entitling the holder to
purchase Common Shares.

18.20
Other Cash-Based Award means a cash Award granted to a Participant under Article
9 of the Plan, including cash awarded as a bonus or upon the attainment of
performance goals or otherwise as permitted under the Plan.

18.21
Other Stock-Based Award means a right or other interest granted to a Participant
under Article 9 of the Plan that may be denominated or payable and valued in
whole or in part by reference to, or otherwise based on or related to, Common
Shares, including, but not limited to, unrestricted Common Shares or dividend
equivalents, each of which may be subject to the attainment of performance goals
or a period of continued employment or other terms or conditions as permitted
under the Plan.

18.22
Outside Director shall mean a member of the Board who is not an Employee.

18.23
Parent means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain. A corporation that attains the status of a Parent on a date after the
adoption of the Plan shall be considered a Parent commencing as of such date.

18.24
Participant means an individual or estate who holds an Award.

18.25
Plan means this Heska Corporation Stock Incentive Plan, as amended from time to
time.

18.26
Previously Issued Awards means Restricted Shares which were not subject to
further vesting conditions, Common Shares issued pursuant to the exercise of
ISOs, Common Shares issued pursuant to the exercise of NQOs, Restricted Shares
subject to further vesting conditions, outstanding ISOs and outstanding NQOs.

18.27
Restricted Share means a Common Share awarded under the Plan. An Award of
Restricted Shares constitutes a transfer of ownership of Common Shares to a
Participant from the Company subject to restrictions against transferability,
assignment and hypothecation. Under the terms of the Award, the restrictions
against transferability are removed when the Participant has met the specified
vesting requirement.

18.28
Restricted Stock Unit means a notional account established pursuant to an Award
granted to a Participant, as described in Article 7 of the Plan, that is (i)
valued solely by reference to Common Shares, (ii) subject to restrictions
specified in the Award Agreement, and (iii) payable in cash or in Common Shares
(as specified in the Award Agreement). The Restricted Stock Units awarded to the
Participant will vest according to the time-based criteria or performance goal
criteria specified in the Award Agreement.

18.29
Retirement shall mean a Participant’s termination of service with the Company
(for any reason other than for Cause) on or after the attainment of age 55 with
at least ten (10) years of service with the Company and its Affiliates
(including service with another company prior to it becoming an Affiliate).

18.30
Stock Appreciation Right means the right pursuant to an Award granted under
Article 8 of the Plan to receive an amount equal to the excess, if any, of (i)
the aggregate Fair Market Value, as of the date such Award or portion thereof is
surrendered, of the Common Shares covered by such Award or such portion thereof,
over (ii) the aggregate Exercise Price of such Award or such portion thereof.

18.31
Subsidiary means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. A corporation that attains the
status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

18.32
Subject Participant means a Participant who is designated by the Board as an
“executive officer” under the Exchange Act.

1

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ARTICLE 19.    
EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to execute this document in the name of the Company.

HESKA CORPORATION

By: _/s/Jason Napolitano___________
    Chief Operating Officer and Chief Strategist

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