Exhibit 10.24


 


Heska
Corporation


 


Management
Incentive Plan Master Document


 


December
15, 2005


 


This Management
Incentive Plan Master Document (“MIP”) is intended to provide incentives to the
senior management of Heska Corporation (“Heska” or the “Company”) for the
achievement of goals and objectives that are essential to the growth and
continued success of the Company.  This
MIP is to act as a master document for future plans and replaces in its
entirety any and all previous Management Incentive Plans.  At the sole and absolute discretion of the
Compensation Committee of the Board of Directors (the “Compensation Committee”),
Heska may adopt an annual plan for a given year (a “Plan Year”) by agreeing
upon Category Percentages, a Plan Allocation, Key Parameters and a Payout
Structure, as defined and discussed below. 
For example, a plan effective January 1, 20xx and ending December 31, 20xx
with given characteristics could be adopted by the Compensation Committee and
would be referred to as the “20xx MIP”.  As
described below, any and all payments made under the MIP (each an “MIP Payout”)
must be funded by an Incentive Pool (defined below).


 


The
MIP will include an “Incentive Target” (as defined below) for each eligible
participant to be based on a percentage of the participant’s base salary earned
during the year.  This calculation
excludes commissions, bonuses, relocation payments or other forms of
compensation not considered part of the participant’s base pay.  The percent of base salary used for
determining the Incentive Target will determined by the category of position
held by the participant (the “Category Percentages”).  The Compensation Committee shall agree upon
the Category Percentages for each Plan Year.


 


Each participant’s Category Percentage will
be multiplied by the individual’s actual earnings for each Plan Year while a
participant of the plan.  This will
result in an Incentive Target for each participant.  The Compensation Committee shall agree on a “Plan
Allocation”, which may include parameters such as company, department or
individual performance, for each Plan Year. 
The Plan Allocation is to be used as a guideline in determining any MIP
Payout to each participant in a given Plan Year, although the Chief Executive
Officer (the “CEO”) or the Compensation Committee, as outlined below, shall
maintain sole and absolute discretion in determining the appropriate MIP Payout
for any participant.


 


For individuals becoming eligible for
participation in the MIP after the beginning of a Plan Year, all MIP calculations
shall be based on the amount of base pay earned while a plan participant.  Earnings prior to becoming a plan participant
shall be excluded. 


 

















 


The MIP is built on the following components:


 


•                  “Key Parameters”
to be determined by the Compensation Committee for each Plan Year which may
consist of one or more items such as earnings per share, net income or revenue
growth


•                  Self funding
status


 


For each plan year, the Compensation
Committee shall agree upon a “Payout Structure” based on the Key Parameters.  The Payout Structure shall fund an “Incentive
Pool” based on performance in excess of agreed upon targets for the Key
Parameters.  The Compensation Committee,
in its sole and absolute discretion, may include or exclude items it considers
to be extraordinary, unusual, or unanticipated in setting the targets for the Key
Parameters for purposes of calculating the Incentive Pool.  A “Fully Funded Pool” shall be defined as an
Incentive Pool equal to the sum of the Incentive Targets of all MIP participants.


 


While self funding status is an important and
underlying principle of the MIP, executive management and the Compensation
Committee recognize that the MIP may not actually be cash self funding under
certain circumstances and it may not be wise to fully or partially fund the
plan in cash under these or other circumstances.  Therefore, while the intent of the MIP is
that the Incentive Pool will consist solely of cash, alternative forms of
compensation may be used for part or all of the Incentive Pool at the sole and
absolute discretion of the Compensation Committee.  For example, if the Compensation Committee
determines it is not wise to fund the Incentive Pool in cash, it may fund the
Incentive Pool in stock valued at the closing market value on a date determined
by the Compensation Committee.


 


The Compensation Committee will determine any
MIP Payout to the CEO.  Any individual
MIP Payouts to other executive officers will generally be recommended to the
Compensation Committee by the CEO, although the Compensation Committee will
make the final determination of any individual MIP Payouts to executive
officers other than the CEO.  Any individual
MIP Payouts to other plan participants will be determined by the CEO.


 


All MIP Payouts earned shall be paid only after
the Compensation Committee has reviewed management’s calculations of such MIP
Payouts and ensured the Incentive Pool is large enough to cover all such MIP
Payouts.  MIP Payouts shall be made as
soon as reasonably possible following the first Form 10-K filing with the
Securities and Exchange Commission by Heska after the end of a given Plan Year.


 


MIP participants are determined by the CEO
and must remain active employees of Heska Corporation or one of its affiliates
in a position which qualifies for MIP participation through the end of a given
Plan Year in order to be eligible to earn any MIP Payouts.


 


In the case of a Change of Control.    If
the Company experiences a Change in Control (as defined in Heska’s 1997 Stock
Incentive Plan) during any Plan Year, the Plan Year Incentive Pool will be a
Fully Funded Pool and any MIP Payouts will be prorated from the beginning of
the Plan Year until the date of the Change of Control.  Payouts will occur at a time as close to the Change
of Control as practical.


 

















 


In the case of disability.  Time spent on Short Term Disability will
count as active time in the plan.  Long
Term Disability time will not count as active time.  Personal leave time will be considered by the
Compensation Committee or its designee on a case by case basis.


 


In the case of death.  A prorated payment of any MIP Payout will be
made to the employee’s designated beneficiary. The payment will be paid at the
normal payment time of the MIP Payouts.


 


The Compensation Committee must approve
partial payments or exceptions to any major provision of this plan.


 


Nothing in this document is to be construed
as a contract of employment of a defined period of time or otherwise altering
the status of employee as an at-will employee of the company.  Either party may elect to terminate the
employment relationship at any time, without cause or advance notice.


 

















 


Heska Corporation 2006 Management Incentive Plan


 


The following is intended to implement the
Heska Corporation Management Incentive Plan Master Document for the year
beginning on January 1, 2006 and ending on December 31, 2006 (the “2006 MIP”).  The Compensation Committee has agreed on the
following for the 2006 MIP.


 


1)
The Category Percentages for the 2006 MIP are as follows:


 


	
  Chief Executive Officer

  	
   

  	
  50.0% of base pay

  
	
  Chief Financial Officer

  	
   

  	
  35.0% of base pay

  
	
  Vice Presidents

  	
   

  	
  35.0% of base pay

  
	
  Directors

  	
   

  	
  25.0% of base pay

  



 


2)
The Plan Allocation for the 2006 MIP is as follows:


 


75% on overall achievement of the
company-wide financial objective and 25% on individual performance


 


3)
The Key Parameters for the 2006 MIP is as follows:


 


Pre-MIP
Net Income


 


4)
The Payout Structure for the 2006 MIP is as follows:


 


The Payout Structure is designed so that
after specific Pre-MIP Net Income target is achieved a Share Percentage is
applied to the amount of Pre-MIP Net Income over a specific target.  There are pre-set Share Percentages
associated with Pre-MIP Net Income targets. The result of this relationship
creates a cumulative amount of funding.


 


The plan is designed to begin funding the
Incentive Pool once $1.00 of Pre-MIP Net Income is achieved.


 


2006 MIP Table


 


	
  Pre-MIP
  Net

  Income

  	
   

  	
  MIP Funding

  by increment

  	
   

  	
  Share

  Percentage

  	
   

  	
  MIP

  Cumulative

  Funding

  	
   

  	
  Post-MIP Net

  Income by

  increment

  	
   

  	
  Post-MIP

  Cumulative Net

  Income

  	
   

  
	
  >$

  	
  3,000,001

  	
   

  	
  —

  	
   

  	
  0

  	
  %

  	
  $

  	
  1,500,000

  	
   

  	
  Pre-MIP
  Net Income

  	
   

  	
  >$

  	
  1,500,001

  	
   

  
	
  $

  	
  2,500,001 to $3,000,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  50

  	
  %

  	
  $

  	
  1,500,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
  $

  	
  2,000,001 to $2,500,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  50

  	
  %

  	
  $

  	
  1,250,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  $

  	
  1,500,001 to $2,000,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  50

  	
  %

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  $

  	
  1,000,001 to $1,500,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  50

  	
  %

  	
  $

  	
  750,000

  	
   

  	
  $

  	
  250,000

  	
   

  	
  $

  	
  750,000

  	
   

  
	
  $

  	
  1 to $1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  	
  50

  	
  %

  	
  $

  	
  500,000

  	
   

  	
  $

  	
  500,000

  	
   

  	
  $

  	
  500,000

  	
   

  
																		



 


Any MIP payment based on Pre-MIP Net Income
over $3,000,000 will be at the sole and absolute discretion of the Compensation
Committee.