SECTION 8(B) ABOVE SHALL PROHIBIT
EXECUTIVE FROM BEING EMPLOYED OR ENGAGED IN A CORPORATE FUNCTION OR SENIOR
MANAGEMENT POSITION (AND HOLDING COMMENSURATE EQUITY INTERESTS) WITH A
RESTRICTED COMPANY THAT IS ENGAGED IN MULTIPLE LINES OF BUSINESS, ONE OF WHICH
INCLUDES A RESTRICTED DIVISION, SO LONG AS EXECUTIVE DOES NOT PROVIDE TO THE
RESTRICTED DIVISION SERVICES OF A SORT THAT DIFFER SIGNIFICANTLY FROM THE
SERVICES HE PROVIDES TO THE OTHER DIVISIONS, UNITS OR AFFILIATES FOR WHICH HE
HAS RESPONSIBILITY WITHIN THE OVERALL ORGANIZATION.
(E)
DISABILITY. FOR PURPOSES OF THIS AGREEMENT, DISABILITY SHALL HAVE
THE SAME DEFINED MEANING AS IN HESKA'S LONG-TERM DISABILITY PLAN APPLICABLE TO
SENIOR EXECUTIVE OFFICERS.
(F)
GOOD REASON FOR PURPOSES OF THIS AGREEMENT, "GOOD REASON" MEANS
THE OCCURRENCE OF ANY OF THE FOLLOWING WITHOUT EXECUTIVE'S EXPRESS WRITTEN
CONSENT:
(I)
EXECUTIVE'S POSITION WITH HESKA IS, OR HIS DUTIES AND
RESPONSIBILITIES AS CEO ARE, MATERIALLY DIMINISHED RELATIVE TO HIS POSITION,
DUTIES AND
7
RESPONSIBILITIES AS IN EFFECT IMMEDIATELY PRIOR TO SUCH CHANGE, OTHER THAN THE
REMOVAL FROM THE POSITION OF CHAIRMAN IF THE BOARD DECIDES TO SEPARATE THE ROLES
OF CEO AND CHAIRMAN;
(II)
A REDUCTION IN EXECUTIVE'S BASE SALARY AS IN EFFECT IMMEDIATELY
PRIOR TO SUCH REDUCTION; PROVIDED, THAT AN ACROSS-THE-BOARD REDUCTION IN THE
BASE COMPENSATION AND BENEFITS OF ALL OTHER EXECUTIVE OFFICERS OF HESKA BY THE
SAME PERCENTAGE AMOUNT (OR UNDER THE SAME TERMS AND CONDITIONS) AS PART OF A
GENERAL BASE COMPENSATION REDUCTION AND/OR BENEFIT REDUCTION SHALL NOT
CONSTITUTE SUCH A QUALIFYING REDUCTION;
(III)
A RELOCATION OF EXECUTIVE'S PRINCIPAL PLACE OF EMPLOYMENT SUCH
THAT THE NEW LOCATION RESULTS IN A COMMUTE FOR EXECUTIVE THAT IS BOTH (A) LONGER
THAN HIS COMMUTE PRIOR TO THE RELOCATION AND (B) GREATER THAN FIFTY (50) ROAD
MILES EACH WAY FROM HIS HOME IN THE SEVERANCE, COLORADO AREA;
(IV)
ANY MATERIAL BREACH BY HESKA OF ANY PROVISION OF THIS AGREEMENT,
AFTER WRITTEN NOTICE DELIVERED TO HESKA OF SUCH BREACH AND HESKA'S FAILURE TO
CURE SUCH BREACH, IF CURABLE, WITHIN THIRTY (30) DAYS FOLLOWING DELIVERY OF SUCH
NOTICE; AND
(V)
ANY ACQUIRING COMPANY FAILS TO ASSUME OR BE BOUND BY THE TERMS OF
THIS AGREEMENT IN CONNECTION WITH A CHANGE OF CONTROL.
(G)
IN CONNECTION WITH A CHANGE OF CONTROL. FOR PURPOSES OF THIS
AGREEMENT, A TERMINATION OF EXECUTIVE'S EMPLOYMENT WITH THE COMPANY IS "IN
CONNECTION WITH A CHANGE OF CONTROL" IF EXECUTIVE'S EMPLOYMENT IS TERMINATED
WITHOUT CAUSE OR FOR GOOD REASON DURING THE PERIOD BEGINNING THREE MONTHS PRIOR
TO A CHANGE OF CONTROL AND ENDING EIGHTEEN MONTHS FOLLOWING A CHANGE OF CONTROL.
10.
INDEMNIFICATION AND INSURANCE. EXECUTIVE WILL BE COVERED UNDER
HESKA'S INSURANCE POLICIES AND, SUBJECT TO APPLICABLE LAW, WILL BE PROVIDED
INDEMNIFICATION TO THE MAXIMUM EXTENT PERMITTED BY HESKA'S BYLAWS AND
CERTIFICATE OF INCORPORATION. THE COMPANY WILL PROVIDE EXECUTIVE WITH DIRECTOR
AND OFFICER ERROR AND OMISSIONS INSURANCE AND ERISA FIDUCIARY INSURANCE IN
ACCORDANCE WITH THE HESKA'S INSURANCE PRACTICES FOR EXECUTIVE OFFICERS DURING
THE TERM OF AGREEMENT, AND SHALL ALSO PURCHASE AND MAINTAIN "TAIL COVERAGE" FOR
AT LEAST TWO YEARS POST