Exhibit 10.1

 

 

HESKA CORPORATION

1997 EMPLOYEE STOCK PURCHASE PLAN

AS AMENDED AND RESTATED, EFFECTIVE JUNE 17, 2008

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TABLE OF CONTENTS

                                                                   
                                                                    
                                         Page

SECTION 1. PURPOSE OF THE PLAN

1

SECTION 2. ADMINISTRATION OF THE PLAN

1

 

(a) Committee Composition

1

 

(b) Committee Responsibilities

1

SECTION 3. ENROLLMENT AND PARTICIPATION

1

 

(a) Offering Periods

1

 

(b) Accumulation Periods

1

 

(c) Enrollment

1

 

(d) Duration of Participation

2

 

(e) Applicable Offering Period

2

SECTION 4. EMPLOYEE CONTRIBUTIONS

3

 

(a) Frequency of Payroll Deductions

3

 

(b) Amount of Payroll Deductions

3

 

(c) Changing Withholding Rate

3

 

(d) Discontinuing Payroll Deductions

3

 

(e) Limit on Number of Elections

3

SECTION 5. WITHDRAWAL FROM THE PLAN

3

 

(a) Withdrawal

3

 

(b) Re-Enrollment After Withdrawal

4

SECTION 6. CHANGE IN EMPLOYMENT STATUS

4

 

(a) Termination of Employment

4

 

(b) Leave of Absence

4

 

(c) Death

4

SECTION 7. PLAN ACCOUNTS AND PURCHASE OF SHARES

4

 

(a) Plan Accounts

4

 

(b) Purchase Price

4

 

(c) Number of Shares Purchased

4

 

(d) Available Shares Insufficient

5

 

(e) Issuance of Stock

5

 

(f) Unused Cash Balances

5

SECTION 8. LIMITATIONS ON STOCK OWNERSHIP

5

 

(a) Five Percent Limit

5

 

(b) $25,000 Limit

5

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SECTION 9. RIGHTS NOT TRANSFERABLE

6

SECTION 10. NO RIGHTS AS AN EMPLOYEE

6

SECTION 11. NO RIGHTS AS A STOCKHOLDER

6

SECTION 12. STOCK OFFERED UNDER THE PLAN

6

 

(a) Authorized Shares

6

 

(b) Anti-Dilution Adjustments

6

 

(c) Reorganizations

7

SECTION 13. AMENDMENT OR DISCONTINUANCE

7

SECTION 14. DEFINITIONS

7

 

(a) Accumulation Period

7

 

(b) Board

7

 

(c) Change in Control

7

 

(d) Code

7

 

(e) Committee

7

 

(f) Company

8

 

(g) Compensation

8

 

(h) Eligible Employee

8

 

(i) Exchange Act

8

 

(j) Fair Market Value

8

 

(k) Offering Period

9

 

(l) Participant

9

 

(m) Participating Company

9

 

(n) Plan

9

 

(o) Plan Account

9

 

(p) Purchase Price

9

 

(q) Stock

9

 

(r) Subsidiary

9

SECTION 15. EXECUTION

9

 

 

 

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HESKA CORPORATION

1997 EMPLOYEE STOCK PURCHASE PLAN

AS AMENDED AND RESTATED, EFFECTIVE JUNE 17, 2008

SECTION 1.

PURPOSE OF THE PLAN.

The Plan was adopted by the Board on April 23, 1997. The purpose of the Plan is
to provide Eligible Employees with an opportunity to increase their proprietary
interest in the success of the Company by purchasing Stock from the Company on
favorable terms and to pay for such purchases through payroll deductions. The
Plan is intended to qualify under section 423 of the Code.

The Plan was amended and restated on May 16, 2002, February 6, 2004 and February
24, 2005. The Plan is now amended and restated, effective June 17, 2008.

SECTION 2.

ADMINISTRATION OF THE PLAN.

(a)       Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of one or more directors of
the Company, who shall be appointed by the Board.

(b)       Committee Responsibilities. The Committee shall interpret the Plan and
make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. The Committee’s determinations under the Plan shall be final
and binding on all persons.

SECTION 3.

ENROLLMENT AND PARTICIPATION.

(a)       Offering Periods. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. Beginning on July 1,
2008, the Offering Periods shall consist of the five year periods commencing on
each January 1 and July 1.

(b)       Accumulation Periods. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. Beginning on July 1, 2008, the
Accumulation Periods shall consist of the six-month periods commencing on each
January 1 and July 1.

(c)       Enrollment. Any individual who, on the day preceding the first day of
an Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall be
filed with the Company at the prescribed location not later than 10 days prior
to the commencement of such Offering Period.

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(d)       Duration of Participation. Once enrolled in the Plan, a Participant
shall continue to participate in the Plan until he or she ceases to be an
Eligible Employee, withdraws from the Plan under Section 5(a) or does not
purchase Stock under the Plan during an Accumulation Period due to a decision to
discontinue employee contributions under Section 4(d). A Participant who did not
purchase Stock under the Plan during an Accumulation Period due to a decision to
discontinue employee contributions under Section 4(d) or withdrew from the Plan
under Section 5(a) may again become a Participant, if he or she then is an
Eligible Employee, by following the procedure described in Subsection (c) above.

(e)       Applicable Offering Period. For purposes of calculating the Purchase
Price under Section 7(b), the applicable Offering Period (only one Offering
Period may apply to a Participant at one time) shall be determined as follows:

(i)        Once a Participant is enrolled in the Plan for an Offering Period,
such Offering Period shall continue to apply to him or her until the earliest of
(A) the end of such Offering Period, (B) the end of his or her participation
under Subsection (d) above, (C) enrollment by the Participant in a subsequent
Offering Period following a written request on the prescribed form to enroll in
an immediately subsequent Offering Period filed with the Company at the
prescribed location not later than 10 days prior to the commencement of such
subsequent Offering Period, which shall only be effective if such Participant
has designated on the enrollment form filed with the Company at the prescribed
location not later than 10 days prior to the commencement of such subsequent
Offering Period that he or she elects to have withheld at least 1% of
Compensation in the first month of such subsequent Offering Period or (D)
automatic enrollment in a subsequent Offering Period under Paragraph (ii) below.

(ii)       In the event that the Fair Market Value of Stock on the last trading
day before the commencement of the Offering Period in which the Participant is
enrolled is higher than on the last trading day before the commencement of any
subsequent Offering Period, the Participant shall automatically be enrolled for
such subsequent Offering Period if the Participant has designated on the
enrollment form filed with the Company at the prescribed location not later than
10 days prior to the commencement of such subsequent Offering Period that he or
she elects to have withheld at least 1% of Compensation in the first month of
such subsequent Offering Period, unless the Participant has filed a written
request on the prescribed form not to be enrolled in such subsequent Offering
Period with the Company at the prescribed location not later than 10 days prior
to the commencement of such subsequent Offering Period.

(iii)      When a Participant reaches the end of an Offering Period but his or
her participation is to continue as the Participant has not discontinued payroll
deductions under Section 4(d) at the end of such Offering Period, then such
Participant shall automatically be enrolled for the Offering Period that
commences immediately thereafter.

 

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SECTION 4.

EMPLOYEE CONTRIBUTIONS.

(a)       Frequency of Payroll Deductions. A Participant may purchase shares of
Stock under the Plan solely by means of payroll deductions. Payroll deductions,
as designated by the Participant pursuant to Subsection (b) below, shall occur
on each payday during participation in the Plan.

(b)       Amount of Payroll Deductions. An Eligible Employee shall designate on
the enrollment form the portion of his or her Compensation that he or she elects
to have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee’s Compensation, but not less than 1% nor
more than 10%. Any other provision of the Plan notwithstanding, no Participant
shall have more than $25,000 withheld in the aggregate during all Accumulation
Periods ending in the same calendar year. If a Participant is precluded by this
Subsection (b) from making additional employee contributions, then his or her
employee contributions shall automatically be discontinued and shall resume at
the beginning of the earliest Accumulation Period ending in the next calendar
year (if he or she then is an Eligible Employee).

(c)       Changing Withholding Rate. If a Participant wishes to change the rate
of payroll withholding, he or she may do so by filing a new enrollment form with
the Company at the prescribed location at any time. The new withholding rate
shall be effective as soon as reasonably practicable after such form has been
received by the Company. The new withholding rate shall be a whole percentage of
the Eligible Employee’s Compensation, but not less than 1% nor more than 10%.

(d)       Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
enrollment form with the Company at the prescribed location at any time. Payroll
withholding shall cease as soon as reasonably practicable after such form has
been received by the Company. (In addition, employee contributions may be
discontinued automatically pursuant to Section 4(b) or 8(b).) A Participant who
has discontinued employee contributions may resume such contributions by filing
a new enrollment form with the Company at the prescribed location. Payroll
withholding shall resume as soon as reasonably practicable after such form has
been received by the Company.

(e)       Limit on Number of Elections. No Participant shall make more than two
elections under Subsection (c) or (d) above during any Accumulation Period.

SECTION 5.

WITHDRAWAL FROM THE PLAN.

(a)       Withdrawal. A Participant may elect to withdraw from the Plan by
filing the prescribed form with the Company at the prescribed location at any
time before the last day of an Accumulation Period. As soon as reasonably
practicable thereafter, payroll deductions shall cease and the entire amount
credited to the Participant’s Plan Account shall be refunded to him or her in
cash, without interest. No partial withdrawals shall be permitted.

 

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(b)       Re-Enrollment After Withdrawal. A former Participant who has withdrawn
from the Plan shall not be a Participant until he or she re-enrolls in the Plan
under Section 3(c). Re-enrollment may be effective only at the commencement of
an Offering Period.

SECTION 6.

CHANGE IN EMPLOYMENT STATUS.

(a)       Termination of Employment. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)

(b)       Leave of Absence. For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or another bona fide leave of absence, if the leave was approved by the Company
in writing and if continued crediting of service for such purpose is expressly
required by the terms of such leave or by applicable law (as determined by the
Company). Employment, however, shall be deemed to terminate 90 days after the
Participant goes on a leave, unless a contract or statute protects his or her
right to return to work. Employment shall be deemed to terminate in any event
when the approved leave ends, unless the Participant immediately returns to
work.

(c)       Death. In the event of the Participant’s death, the amount credited to
his or her Plan Account shall be paid to a beneficiary designated by him or her
for this purpose on the prescribed form or, if none, to the Participant’s
estate. Such form shall be valid only if it was filed with the Company at the
prescribed location before the Participant’s death.

SECTION 7.

PLAN ACCOUNTS AND PURCHASE OF SHARES.

(a)       Plan Accounts. The Company shall maintain a Plan Account on its books
in the name of each Participant. Whenever an amount is deducted from the
Participant’s Compensation under the Plan, such amount shall be credited to the
Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust
funds and may be commingled with the Company’s general assets and applied to
general corporate purposes. No interest shall be credited to Plan Accounts.

(b)       Purchase Price. The Purchase Price for each share of Stock purchased
at the close of an Accumulation Period shall be 85% of the Fair Market Value of
such share on the last trading day in such Accumulation Period.

(c)       Number of Shares Purchased. As of the last day of each Accumulation
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated in accordance with this Subsection (c), unless the
Participant has previously elected to withdraw from the Plan in accordance with
Section 5(a). The amount then in the Participant’s Plan Account shall be divided
by the Purchase Price, and the number of shares that results shall be purchased
from the Company with the funds in the Participant’s Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than 2,500 shares of Stock
with respect to any Accumulation Period nor more than the amounts of Stock set
forth in Sections 8(b) and

 

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12(a). Any fractional share, as calculated under this Subsection (c), shall be
rounded down to the next lower whole share.

(d)       Available Shares Insufficient. In the event that the aggregate number
of shares that all Participants elect to purchase during an Accumulation Period
exceeds the maximum number of shares remaining available for issuance under
Section 12(a), then the number of shares to which each Participant is entitled
shall be determined by multiplying the number of shares available for issuance
by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.

(e)       Issuance of Stock. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon
as reasonably practicable after the close of the applicable Accumulation Period,
except that the Committee may determine that such shares shall be held for each
Participant’s benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.

(f)        Unused Cash Balances. An amount remaining in the Participant’s Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant’s Plan Account to the next Accumulation Period.
Any amount remaining in the Participant’s Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
Subsection (c) above, Section 8(b) or Section 12(a) shall be refunded to the
Participant in cash, without interest.

SECTION 8.

LIMITATIONS ON STOCK OWNERSHIP.

(a)       Five Percent Limit. Any other provision of the Plan notwithstanding,
no Participant shall be granted a right to purchase Stock under the Plan if such
Participant, immediately after his or her election to purchase such Stock, would
own stock possessing more than 5% of the total combined voting power or value of
all classes of stock of the Company or any parent or Subsidiary of the Company.
For purposes of this Subsection (a), the following rules shall apply:

(i)        Ownership of stock shall be determined after applying the attribution
rules of section 424(d) of the Code;

(ii)       Each Participant shall be deemed to own any stock that he or she has
a right or option to purchase under this or any other plan; and

(iii)      Each Participant shall be deemed to have the right to purchase 2,500
shares of Stock under this Plan with respect to each Accumulation Period.

(b)       $25,000 Limit. Any other provision of the Plan notwithstanding, no
Participant shall purchase Stock with a Fair Market Value (determined at the
time such option is granted) in

 

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excess of $25,000 during any calendar year under this Plan and all other
employee stock purchase plans of the Company or any parent or Subsidiary of the
Company. For purposes of this Subsection (b), employee stock purchase plans not
described in section 423 of the Code shall be disregarded. If a Participant is
precluded by this Subsection (b) from purchasing additional Stock under the
Plan, then his or her employee contributions shall automatically be discontinued
and shall resume at the beginning of the earliest Accumulation Period ending in
the next calendar year (if he or she then is an Eligible Employee).

SECTION 9.

RIGHTS NOT TRANSFERABLE.

The rights of any Participant under the Plan, or any Participant’s interest in
any Stock or moneys to which he or she may be entitled under the Plan, shall not
be transferable by voluntary or involuntary assignment or by operation of law,
or in any other manner other than by beneficiary designation or the laws of
descent and distribution. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, other
than by beneficiary designation or the laws of descent and distribution, then
such act shall be treated as an election by the Participant to withdraw from the
Plan under Section 5(a).

SECTION 10.

NO RIGHTS AS AN EMPLOYEE.

Nothing in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her employment
at any time and for any reason, with or without cause.

SECTION 11.

NO RIGHTS AS A STOCKHOLDER.

A Participant shall have no rights as a stockholder with respect to any shares
of Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the last day of the applicable Accumulation
Period.

SECTION 12.

STOCK OFFERED UNDER THE PLAN.

(a)       Authorized Shares. The aggregate number of shares of Stock available
for purchase under the Plan shall be 2,750,000, subject to adjustment pursuant
to this Section 12.

(b)       Anti-Dilution Adjustments. The aggregate number of shares of Stock
offered under the Plan, the 2,500-share limitation described in Section 7(c) and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, any other increase
or decrease in such shares effected without receipt or payment of consideration
by the Company, the distribution of the shares of a Subsidiary to the Company’s
stockholders or a similar event.

 

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(c)       Reorganizations. Any other provision of the Plan notwithstanding,
immediately prior to the effective time of a Change in Control, the Offering
Period and Accumulation Period then in progress shall terminate and shares shall
be purchased pursuant to Section 7. In the event of a merger or consolidation to
which the Company is a constituent corporation and which does not constitute a
Change in Control, the Plan shall continue unless the plan of merger or
consolidation provides otherwise. The Plan shall in no event be construed to
restrict in any way the Company’s right to undertake a dissolution, liquidation,
merger, consolidation or other reorganization.

SECTION 13.

AMENDMENT OR DISCONTINUANCE.

The Board shall have the right to amend, suspend or terminate the Plan at any
time and without notice. Except as provided in Section 12, any increase in the
aggregate number of shares of Stock to be issued under the Plan shall be subject
to approval by a vote of the stockholders of the Company. In addition, any other
amendment of the Plan shall be subject to approval by a vote of the stockholders
of the Company to the extent required by an applicable law or regulation.

SECTION 14.

DEFINITIONS.

(a)        “Accumulation Period” means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).

(b)        “Board” means the Board of Directors of the Company, as constituted
from time to time.

(c)        “Change in Control” means:

(i)        The consummation of a merger or consolidation of the Company with or
into another entity or any other corporate reorganization, if more than 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; or

(ii)       The sale, transfer or other disposition of all or substantially all
of the Company’s assets or the complete liquidation or dissolution of the
Company.

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.

(d)        “Code” means the Internal Revenue Code of 1986, as amended.

(e)        “Committee” means a committee of the Board, as described in
Section 2.

 

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(f)        “Company” means Heska Corporation, a Delaware corporation.

(g)       “Compensation” means (i) the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, commissions and overtime pay, plus (ii) any pre-tax
contributions made by the Participant under Section 401(k) or 125 of the Code.
Compensation shall exclude moving or relocation allowances, car allowances,
imputed income attributable to cars or life insurance, fringe benefits,
contributions to employee benefit plans and similar items. The Committee shall
determine whether a particular item is included in Compensation.

(h)        “Eligible Employee” means any employee of a Participating Company
whose customary employment is for more than five months per calendar year and
for more than 20 hours per week. The foregoing notwithstanding, an individual
shall not be considered an Eligible Employee if his or her participation in the
Plan is prohibited by the law of any country which has jurisdiction over him or
her or if he or she is subject to a collective bargaining agreement that does
not provide for participation in the Plan.

(i)        “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(j)        “Fair Market Value” means the market price of Stock, determined by
the Committee as follows:

(i)        If Stock was traded over-the-counter on the date in question but was
not traded on The Nasdaq Stock Market or The Nasdaq National Market, then the
Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which Stock is quoted or, if the
Stock is not quoted on any such system, by the “Pink Sheets” published by the
National Quotation Bureau, Inc.;

(ii)       If Stock was traded over-the-counter on the date in question and was
traded on The Nasdaq Stock Market or The Nasdaq National Market, then the Fair
Market Value shall be equal to the last-transaction price quoted for such date
by The Nasdaq Stock Market or The Nasdaq National Market;

(iii)      If the Stock was traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by the
applicable composite transactions report for such date; and

(iv)      If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such basis as
it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in The Wall Street Journal or as reported
directly to the Company by Nasdaq or a comparable exchange. Such determination
shall be conclusive and binding on all persons.

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(k)       “Offering Period” means the five year period with respect to which the
right to purchase Stock may be granted under the Plan and during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(a).

(l)        “Participant” means an Eligible Employee who elects to participate in
the Plan, as provided in Section 3(c).

(m)      “Participating Company” means (i) the Company and (ii) each present or
future Subsidiary designated by the Committee as a Participating Company.

(n)       “Plan” means this Heska Corporation 1997 Employee Stock Purchase Plan,
as it may be amended from time to time.

(o)       “Plan Account” means the account established for each Participant
pursuant to Section 7(a).

(p)       “Purchase Price” means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7(b).

(q)       “Stock” means the Common Stock of the Company.

(r)        “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 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

SECTION 15.

EXECUTION.

To record the most recent amendment of the Plan by the Board or its Committee on
June 17, 2008, the Company has caused its authorized officer to execute the
same.

HESKA CORPORATION

 

By:      /s/ Robert B. Grieve                              
             ROBERT B. GRIEVE

Title:   Chairman and Chief Executive Officer

 

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