Document:

Exhibit
10.21

EMPLOYMENT
AGREEMENT

THIS
EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Heska
Corporation, a Delaware corporation with its principal office at 3760 Rocky
Mountain Avenue, Loveland, CO 80538 (“Company”) and John R. Flanders (“Employee”)
effective as of December 11, 2006.

W I T N E S S E T
H:

Whereas
Company desires to employ Employee to act as its Vice President, General
Counsel in an at-will capacity; and

Whereas
Employee wishes to act as Company’s Vice President, General Counsel as an
employee in an at-will capacity;

NOW, THEREFORE, in
consideration of the mutual covenants and warranties contained herein, the
parties agree as follows:

1.             Employment.  Company hereby employs Employee as its Vice
President, General Counsel and Employee hereby accepts such employment.

2.             Duties and Responsibilities.  Employee shall serve as Vice President,
General Counsel and also serve as Corporate Secretary with such duties and
responsibilities as may be assigned to him from time to time by his superior
officer (the Chief Executive Officer) and/or the Board of Directors of Company,
and with such on-going daily duties and responsibilities as are typically
entailed in such position.  The Chief
Executive Officer and/or the Board of Directors shall be entitled to change
such title, duties and responsibilities from time to time, in their
discretion.  Employee shall devote his
full time and energies to such duties.

3.             Compensation.  Company shall pay Employee, as compensation
for services rendered under this Agreement, a “base salary” per year, the
amount of which shall initially be $200,000 which may be increased from
time-to-time by the Company in its discretion. 
If for any reason during any given year, Employee does not work an
entire year, other than normal vacations as provided hereunder, the
compensation will be prorated to compensate only for the actual time worked.

4.             Expenses.  Company shall reimburse Employee for his
reasonable out-of-pocket expenses incurred in connection with the business of
Company, including travel away from the Company’s facilities, upon presentation
of appropriate written receipts and reports and subject to the customary
practices and limitations of Company.

5.             Employee Benefits. During
the term of his employment hereunder, Employee shall be entitled to receive the
same benefits that the Board of Directors establishes generally for the
officers and other employees of Company. 
These may include, from time to time, medical insurance, life insurance,
paid vacation time and medical disability insurance.

6.             Termination.

(a)           At-Will.  This is an at-will employment agreement and
does not bind either of the parties to any specific term or duration.

(i)            Employee is free to terminate
employment with Company at any time, for any reason, or for no reason, for
cause or without cause, and without any prior notice.

(ii)           Company is free to terminate the
employment of Employee at any time, for any reason or for no reason, for cause
or without cause, and without any prior notice.

(b)                                 Termination
“Without Cause” — Separation Benefits.

(i)            Upon “involuntary termination” of
his employment with Heska Corporation, for other than a “change of control” as
defined in Paragraph 6(c)(iii) below, Employee will be entitled to severance
pay as provided in Paragraph 6(b)(ii) below, unless he is terminated for “cause”
as defined in Paragraph 6(d)(ii) below. 
Employee’s entitlement to any severance pay is dependent on his
execution of a complete release of claims against Company and its affiliates.

(ii)           In the event that severance pay is
due to Employee as a result of the “involuntary termination” of his employment “without
cause”, Employee will be paid six months’ “base salary” at the rate in effect
immediately prior to the termination in six equal monthly installments (subject
to all applicable taxes and other deductions), with the first such installment
due 15 days after the date of such termination and with the following five
installments due no later than monthly thereafter on Company’s then regular payroll
dates.  The Company will also pay the
employer contribution and administrative cost of the health insurance premiums
for the medical and dental insurance coverage previously maintained by the
Company for Employee and his eligible dependents during this six month period
or until Employee is provided or obtains medical and dental insurance coverage
by another employer or entity, whichever first occurs.

(c)                                  Change
of Control — Separation of Benefits.

(i)            Upon “involuntary termination” of
his employment due to a “change of control” of Heska Corporation, Employee will
be entitled to severance pay as provided in Paragraph 6(c)(iv) below, unless he
is terminated for “cause”, as defined in Paragraph 6(d)(ii) below.  Employee’s entitlement to any severance pay
is dependent on his execution of a complete release of claims against Company
and its affiliates.

(ii)           For the purposes of this Employment
agreement, “change of control” is defined as the merger, acquisition or sale of
Company or all or substantially all of its assets with, into, or to a
previously unaffiliated third party entity, other than a merger in which the
shareholders of Company prior to the merger, by reason of such shareholdings,
own more than 50% of the outstanding shares of the company after the merger.

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(iii)          The parties agree that for the
purposes of this Employment Agreement, an “involuntary termination” due to a “change
of control” will be deemed to have occurred when Employee is no longer employed
by the Company’s successor following a “change of control” because the Employee’s
position is eliminated within nine (9) months of the “change of control” or
when Employee ‘s job responsibilities are materially and negatively changed
within nine (9) months of the “change of control”, and Employee elects to
resign.

(iv)          In the event that severance pay is due
to Employee as a result of the “involuntary termination” of his employment
without “cause” due to a “change of control”, Employee will be paid one (1)
year’s “base salary” at the rate in effect immediately prior to the termination
in twelve equal monthly installments (subject to all applicable taxes and other
deductions), with the first such installment due 15 days after the date of such
termination and with the following eleven installments due no later than
monthly thereafter on Company’s then regular payroll dates.  The Company will also pay the employer
contribution and administrative cost of the health insurance premiums for the
medical and dental insurance coverage previously maintained by the Company for
Employee and his eligible dependents during this one year period or until
Employee is provided or obtains medical and dental insurance coverage by
another employer or entity, whichever first occurs.

(d)                                 Termination
“For Cause”; Voluntary Resignation

(i)            If Company or its successor
terminates Employee for “cause” or if Employee’s employment terminates for any
reason other than a termination by the Company “without cause” (as set forth in
paragraph 6(b)) or due to a “change of control” (as set forth in Paragraph
6(c)), Employee will not be entitled to any severance pay and shall only
receive pay and benefits which Employee earned as of the date of termination.

(ii)           The parties agree that for the
purposes of this Employment Agreement, a termination for “cause” will be deemed
to have occurred when Company terminates Employee’s employment because of the
occurrence of any of the following events:

(A)          Employee shall refuse to accept a
change or modification of his title, duties or responsibilities by the Chief
Executive Officer and/or the Board of Directors;

(B)           Employee shall refuse to accept a
reasonable transfer not arising from a change of control to a position with
comparable responsibility and salary with any affiliated company that does not
involve commuting more than fifty (50) miles each way from the Company
headquarters in the Loveland, Colorado area;

(C)           Employee shall die, be adjudicated to
be mentally incompetent or become mentally or physically disabled to such an
extent that Employee is unable to perform his duties under this Employment
Agreement for a period of ninety (90) consecutive days;

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(D)          Employee shall commit any breach of
his obligations under this Agreement;

(E)           Employee shall commit any breach of
any material fiduciary duty to Company;

(F)           Employee shall be convicted of, or
enter a plea of nolo contendere to, any crime
involving moral turpitude or dishonesty, whether a felony or misdemeanor, or
any crime which reflects so negatively on Company as to be detrimental to
Company’s image or interests;

(G)           Employee shall commit insubordination
or refusal to comply with any request of his supervisor or the Board of
Directors of Company relating to the scope or performance of Employee’s duties;

(H)          Employee shall possess any illegal drug
on Company premises or Employee shall be under the influence of illegal drugs
or abusing prescription drugs or alcohol while on Company business or on
Company premises; or

(I)            Employee shall conduct himself in a
manner that, in the good faith and reasonable determination of the Chief
Executive Officer and/or the Board of Directors, demonstrates Employee’s
unfitness to serve.

7.             Proprietary Information.  Employee agrees that, if he has not already
done so, he will promptly execute Company’s standard Employee Confidential
Information And Inventions Agreement.

8.             Arbitration; Attorneys’ Fees.  If any dispute arises under this Agreement or
by reason of any asserted breach of it, or from the Parties’ employment
relationship or any other relationship, the Company, at its sole discretion,
may elect to have the dispute resolved through arbitration, so long as all of
the arbitrator’s fees and expenses are borne exclusively by the Company.  The arbitration shall be conducted pursuant
to the rules of the American Arbitration Association, with the arbitrator being
selected by mutual agreement of the parties. Regardless of whether the dispute
is resolved through arbitration or litigation, the prevailing party shall be
entitled to recover all costs and expenses, including reasonable attorneys’
fees, incurred in enforcing or attempting to enforce any of the terms,
covenants or conditions, including costs incurred prior to commencement of
arbitration or legal action, and all costs and expenses, including reasonable
attorneys’ fees, incurred in any appeal from an action brought to enforce any
of the terms, covenants or conditions. 
For purposes of this section, “prevailing party” includes, without
limitation, a party who agrees to dismiss a suit or proceeding upon the other’s
payment or performance of substantially the relief sought.

9.             Notices.  Any notice to be given to Company under the
terms of this Agreement shall be addressed to Company at the address of its
principal place of business.  Any notice
to be given to Employee shall be addressed to him at his home address last
shown on the records of Company, or to such other address as Employee shall
have given notice of hereunder.

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10.           Miscellaneous.  This Agreement shall be governed by the laws
of the State of Colorado as applied to contracts between residents of that
state to be performed wholly within that state. This Agreement is the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior understandings and agreements.  This Agreement may be modified only by a
written document signed by both parties, except that the Company, in its
discretion, may modify any policies, guidelines or other directives, none of
which shall constitute a binding agreement or impose any contractual obligations.  This Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of the parties.

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement the day and year
herein above written.

 

	
  

  	
  HESKA CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Robert B. Grieve

  
	
   

  	
   

  	
        Robert B. Grieve

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  /s/  John R. Flanders

  
	
   

  	
   

  	
        John R. Flanders

  

 

 5Exhibit 10.22

SEPARATION AND RELEASE AGREEMENT

This Separation and Release Agreement (the “Agreement”) is made between
Carol Talkington Verser, Ph.D (the “Employee”) and Heska Corporation (the “Company”)
as of the 31st day of December 2006.  The
Employee and the Company are referred to collectively as the “Parties” and
individually as a “Party.”

RECITALS

WHEREAS, on or about May 1, 2000, the Employee and the Company entered
into an Employment Agreement (the “Employment Agreement”);

WHEREAS, the Employee now wishes to voluntarily terminate her
employment with the Company effective as of December 31, 2006  (the “Termination Date”);

WHEREAS, the Employee and the Company wish to enter into a consulting
agreement to be effective as of January 1, 2007  attached
hereto as Exhibit A (the “Consulting Agreement”);

WHEREAS, the Employee and the Company entered into an Employee
Confidential Information and Inventions Agreement dated November 4, 1996 (the “Confidentiality
Agreement”);

WHEREAS, the Employee and the Company entered into several stock option
agreements (the “Stock Option Agreements”), 
granting the Employee the option to purchase shares of the Company’s
common stock (collectively, the “Options”) subject to the terms and conditions
of the Company’s 1988 and 1997 Stock Plans and Stock Option Agreements.  A schedule of the Employee’s Options is
attached hereto as Exhibit B; and

WHEREAS, the Parties wish to enter into this Agreement to resolve fully
and finally any potential disputes regarding the Employee’s employment with the
Company.

TERMS

NOW THEREFORE, in consideration of the mutual promises and undertakings
contained herein, the Parties to this Agreement agree as follows:

1.             Termination Date.  Employee’s last date of employment with the
Company is on the Termination Date. This Agreement will be effective on the
expiration of the revocation period set forth in Paragraph 7(e) below (the “Effective
Date”).

2.             Separation
Terms.

a.             Final Payments. 
Pursuant to the Employment Agreement, the Employee is not entitled to
any severance pay and shall receive only the pay which the Employee earned as
of the Termination Date.  Upon the
Termination Date, the Employee will be paid all accrued,

unused vacation. 
The Employee acknowledges and agrees that, by this payment, she will
have received from the Company the employment benefits, compensation, wages and
vacation pay owing to her from the Company. 
It is understood and agreed that the Company will reimburse the Employee
for any travel expenses incurred by the Employee through the Termination
Date.  The Employee acknowledges that all
outstanding travel expenses will be submitted for payment within forty-five
(45) days of the Termination Date. The Company and Employee acknowledge that
the Employee remains eligible to participate in the 2006 Management Incentive
Plan set forth in Paragraph 2(d) below.

b.             No
Benefits.  Employee’s health
insurance benefits will cease on the Termination Date, subject to the Employee’s
right to continue her health insurance under COBRA.  The Employee’s participation in all other
benefits and incidents of employment will cease on the Termination Date.  The Employee will cease accruing benefits,
including but not limited to, vacation time and paid time off as of the
Termination Date.  The vesting of Options
is described in Paragraph 2(c) below.

c.             Vesting/Expiration
of Stock Options/Restricted Stock. 
In consideration for the Employee signing and not revoking this
Agreement and entering into the Consulting Agreement, the Company agrees that
all Options issued to the Employee will continue to vest up to and through
January 31, 2007 whereupon the Employee will have 575,000  vested
Options.  Notwithstanding the Stock
Option Agreements, the Employee’s option to exercise such vested Options will
be subject to the terms of the Consulting Agreement.

d.             2006
Management Incentive Plan.  Employee
shall remain eligible to participate in the 2006 Management Incentive Plan (the
“2006 MIP”), to be paid in accordance with the terms and conditions of the 2006
MIP and subject to the Compensation Committee’s sole and absolute discretion.

3.             Return
of Company Property.  Employee agrees
to return all Company property to  the Company no
later than ten business days following the final day of the Term of the
Consulting Agreement.  This property
includes, but is not limited to, Company documents, materials, laptops,
computer disks and badges.  
Notwithstanding the above, Employee agrees to return Company keys and
credit cards within thirty (30) days of Termination Date.

4.             General
Release.

a.             Employee,
for herself, and for her affiliates, successors, heirs, subrogees, assigns,
principals, agents, partners, employees, associates, attorneys and
representatives voluntarily, knowingly and intentionally releases and
discharges the Company and its predecessors, successors, parents, subsidiaries,
affiliates, and assigns and each of their respective officers, directors,
principals, shareholders, agents, attorneys, board members, and employees from
any and all claims, actions, liabilities, demands, rights, damages, costs,
expenses, and attorneys’ fees (including, but not limited to, any claim of
entitlement for attorneys’ fees under any contract, statute, or rule of law
allowing a prevailing party or plaintiff to recover attorneys’ fees), of every
kind and description from the beginning of time through the Termination
Date   (the “Released Claims”).

b.             The
Released Claims include but are not limited to those which arise out of, relate
to, or are based upon: (i) the Employee’s employment with the Company or the
termination thereof; (ii) statements, acts or omissions by the  Parties whether in  their individual or representative
capacities, (iii) express or implied agreements between the Parties, (except as
provided herein); (iv) claims under any severance, stock, or stock option
agreement or plan or relating to or arising from the Employee’s right to
purchase or actual purchase, including, without limitation, any claims
for;  fraud, misrepresentation, breach of
fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law (v) all federal, state, and
municipal statutes, ordinances, and regulations, including, but not limited to,
claims of discrimination based on race, age, sex, disability, whistleblower
status, public policy, or any other characteristic of the Employee under the
Age Discrimination in Employment Act, the Older Worker’s Benefit Protection
Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the
Equal Pay Act, Title VII of the Civil Rights Act of 1964 (as amended), the
Employee Retirement Income Security Act of 1974, the Rehabilitation Act of
1973, the Worker Adjustment and Retraining Notification Act, or any other
federal, state, or municipal law prohibiting discrimination or termination for
any reason; (vi) state and federal common law; and (vii) any claim which was or
could have been raised by the Employee. 
The Released Claims include, but are not limited to, claims related to
the negotiation and execution of this Agreement, including but not limited to
claims that this Agreement was fraudulently induced.

c.             To
be clear, the General Release does not apply to any ongoing commitments under
this Agreement or under the Consulting Agreement.

5.             Unknown Facts.  This Agreement includes claims of every nature
and kind, known or unknown, suspected or unsuspected as of the Termination
Date.   The Employee hereby acknowledges
that she may hereafter discover
facts different from, or in addition to, those which she now knows to be or believes to be true with respect to this
Agreement, and she agrees that
this Agreement and the releases contained herein shall be and remain effective
in all respects, notwithstanding such different or additional facts or the
discovery thereof.

6.             No Admission of Liability.  The Parties agree that nothing contained
herein, and no action taken by any Party hereto with regard to this Agreement,
shall be construed as an admission by any Party of liability or of any fact
that might give rise to liability for any purpose whatsoever.

7.             Representations and Warranties.  Employee represents and warrants as follows:

a.             she
has read this Agreement and agrees to the conditions and obligations set forth
in it;

b.             she
has been advised to consult with an attorney prior to executing the agreement
and voluntarily executes this Agreement after having had full opportunity to
consult with counsel and without being pressured or influenced by any statement
or representation or omission of any person acting on behalf of the Company,
including without limitation its attorneys, officers, shareholders, directors,
employees and agents;

c.             she has had at least twenty-one (21)
days in which to consider the terms of this Agreement.  In the event that the Employee executes this
Agreement in less time, it is with

the full understanding that she had the full twenty-one (21) days if she so desired and that she
was not pressured by the Company or any of its representatives or agents to
take less time to consider the Agreement.  In such event, the Employee expressly intends
such execution to be a waiver of any right she had to review the Agreement for a full twenty-one (21) days;

d.             she has no knowledge of the existence
of any lawsuit, charge, or proceeding against the Company or any of its
officers, directors, board members, committee members, employees, successors,
affiliates, or agents arising out of or otherwise connected with any of the
matters herein released.  In the event
that any such lawsuit, charge, or proceeding has been filed, the Employee
immediately will take all actions necessary to withdraw or terminate that
lawsuit, charge, or proceeding;

e.             she
has been informed and understands that (i) to the extent that this Agreement
waives or releases any claims she might have under the Age Discrimination in
Employment Act, she may revoke her waiver and release within seven (7) calendar
days of her execution of this Agreement, and (ii) any such revocation must be
in writing and hand delivered to the Company, or, if sent by mail, postmarked
within the seven-day period, sent by certified mail, return receipt requested
and addressed as follows:

Heska Corporation

Attn: Mr. Mark Cicotello

Vice President, Human Resources

3760 Rocky Mountain Avenue

Loveland, CO  80538

 

f.              she
has full and complete legal capacity to enter into this Agreement.

8.             Severability.  If any provision of this Agreement is held
illegal, invalid, or unenforceable, such holding shall not affect any other
provisions hereof.  In the event any
provision is held illegal, invalid or unenforceable, such provision shall be
limited so as to effect the intent of the Parties to the fullest extent
permitted by applicable law.  Any claim
by the Employee against the Company shall not constitute a defense to
enforcement by the Company of this Agreement.

9.             Enforcement.  The release contained herein does not release
any claims for enforcement of the terms, conditions or warranties contained in
this Agreement.  The Parties shall be
free to pursue any remedies available to them to enforce this Agreement subject
to Paragraph 15 below.

10.           Entire
Agreement.  With the exception only
of the Employee’s obligations under the Confidentiality Agreement, the
Consulting Agreement following its execution and the Stock Option Agreements,
this Agreement contains the entire agreement between the Parties.  Other than the agreements set forth in the
preceding sentence, this Agreement supersedes and modifies any and all
agreements (except those described in the first sentence of this Paragraph),
prior and contemporaneous negotiations, correspondence and understandings.  This Agreement cannot be modified except in
writing signed by all Parties.

11.           Counterparts.  This Agreement may be executed in
counterparts.

12.           Assignment.  The Company may assign its rights under this
Agreement.  No other assignment shall be
permitted unless it is in writing and signed by the Parties.

13.           Non-Disparagement.  Employee agrees not to make to any person any
statement that disparages the Company or reflects negatively on the Company,
including, but not limited to, statements regarding the Company’s financial
condition, employment practices, or its officers, directors, board members,
employees, successors, or affiliates.

14.           Governing
Law.  This Agreement shall be
governed by the laws of the State of Colorado. 
Each article shall be independent and separable from all other articles,
and the invalidity of an article shall not affect the enforceability of any of
the other articles.

[Signatures to follow]

IN WITNESS WHEREOF, the Parties have executed this Agreement on the
dates written below.

 

	
  EMPLOYEE

  	
   

  	
  HESKA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ C. T. Verser

  	
   

  	
    /s/ Mark D. Cicotello

  
	
  Carol Talkington Verser, Ph.D

  	
   

  	
  Mark D. Cicotello

  
	
   

  	
   

  	
  Vice President, Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    December 29, 2006

  	
   

  	
    December 29, 2006

  
	
  Date

  	
   

  	
  Date

  

 

Exhibit A

Consulting Agreement

Exhibit A

HESKA CORPORATION

CONSULTANT SERVICES AND CONFIDENTIALITY AGREEMENT

This Agreement is made between the undersigned and
Heska Corporation and its affiliates, as defined in this Agreement (the “Company”),
effective as of January 1, 2007 (the “Agreement”).  All references to “I”, “me” or “Consultant”
shall mean Carol Talkington Verser, Ph.D. 
In consideration of the mutual promises and undertakings set forth
herein, the parties agree as follows:

1.0           Consulting.  I agree to serve as a Consultant to the
Company for the period commencing on the date of this Agreement and concluding
on the date set forth in Exhibit A hereto, subject to the termination of this
Agreement in accordance with Section 7. 
The period during which I serve as a Consultant to the Company is
referred to as the “Consulting Period”.

2.0           Duties.  My consulting services will be in connection
with the activities specified on Exhibit A, or as requested by an officer of
the Company and mutually agreed upon.  During
the Consulting Period, I will perform all duties to the best of my
ability.  In the performance of such
duties, I will consult with the Company in the manner set forth on Exhibit A,
to take place at the Company’s facilities or at another place reasonably
requested by the Company at the Company’s expense.  I will be available for reasonable telephone
consultation with the Company or the other parties with respect to whom my
consulting services are being rendered.

3.0           Compensation.  The parties agree that my sole compensation
for services rendered pursuant to this Agreement shall be as set forth on
Exhibit A.

4.0           Confidential
Information.

4.1           Access
to Confidential Information.  I
understand that, during the Consulting Period with the Company, I will be
exposed, in the trust and confidence of the Company, to confidential
information and data, including techniques, know-how, trade secrets,
procedures, business matters or affairs, inventions, designs, methods, systems,
improvements or other information designated as confidential (herein “Confidential
Information”) belonging to the Company or its subsidiaries or to its customers
or others with whom the Company has a joint venture, research contract or other
business relationship (all such subsidiaries, customers and other parties
referred to herein as “affiliates”) requiring the Company to maintain the
confidentiality of such information.

4.2           Nondisclosure of Confidential
Information.  I agree that, during
the Consulting Period and five (5) years thereafter, I will not, directly or
indirectly, disclose any Confidential Information to any third party or use any
Confidential Information for any purpose other than providing services to the
Company without the prior written approval of the Company.  For purposes of this Agreement, information
shall be considered to be confidential

if not known by the trade generally even though such
information has been disclosed to one or more third parties pursuant to
distribution agreements, joint research agreements or other agreements.  Such information will not be considered to be
confidential, however, to the extent that it is or becomes, through no fault of
mine, publicly known or to the extent that I already knew such information at the
time of its disclosure to me by the Company, as evidenced by written materials
in my files.

4.3           Confidential Information Property
of the Company.  I understand that
all data, including drawings, prints, specifications, designs, notes,
notebooks, records, documents, reproductions or other papers or memoranda of
every kind which come into my possession in the course of providing the
consulting services are the sole property of the Company, and I will surrender
all such property to the Company upon request and in any event upon termination
of my services.

5.0           Assignment of Inventions.

5.1           Maintenance of Records.  I agree to keep separate and segregated from
my other personal property, including any work I am doing for any other party,
all documents, records, notebooks and correspondence relating to my work for
the Company, and to maintain notebooks and other records in such form as the
Company reasonably requests.

5.2           Disclosure of Inventions.  I will promptly disclose to the Company all
Inventions, as defined below.  The term “Inventions”
includes, but is not limited to, concepts, ideas, processes, programs,
algorithms, methods, formulae, compositions, techniques, articles, and
machines, as well as improvements thereof or know-how related thereto and all
original works of authorship (herein “Inventions”), whether or not patentable,
copyrightable or protectable as trade secrets, which are conceived or made by
me, alone or with others, (i) during the Term of this Agreement, if such
Inventions relate to the actual business or research activities or anticipated
business or research activities disclosed to me under this Agreement that are
Confidential Information, including any business or research conducted by the
Company for or jointly with any other party, or (ii) during the Term of this
Agreement or thereafter, if such Inventions are developed using trade secret
information of the Company or result from work performed by me for the Company
under this Agreement.

5.3           Assignment of Inventions.  I hereby assign to the Company my entire
rights to each Invention described in Section 5.2 hereof.  I will execute all papers and documents as
requested by the Company to obtain and enforce any patent, copyright or other
protection which the Company elects to obtain or enforce, in any country, in my
name or the Company’s name (or the name of an appropriate Company affiliate),
as the case may be, at the Company’s expense. 
My obligation to assist the Company in obtaining and enforcing patents,
copyrights and other protections shall continue beyond the termination of my
services, but the Company shall compensate me at a reasonable rate after the
termination of my services for time actually spent at the Company’s request
providing such assistance.  If the
Company is unable, after reasonable effort, to secure my signature on any
document needed to apply for, prosecute or enforce any patent, copyright or
other protection relating to an Invention, whether because of my physical or
mental incapacity or for any other reason whatsoever, I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents
as my agent and

attorney-in-fact, to act for and in my behalf and
stead to execute and file any such document and to do all other lawfully
permitted acts to further the prosecution and enforcement of patents,
copyrights or similar protections with the same legal force and effect as if
executed by me.

6.0           No Conflicting Obligations.

6.1           No Conflicting Agreements.  The Company understands and agrees that
during the Consulting Period I may be retained by other companies,
corporations, and/or commercial enterprises to perform consulting
services.  I agree, however, that, during
the Consulting Period, I will not, for my account or as an officer, member,
employee, consultant, representative or advisor of another, engage in or
contribute my knowledge to engineering, development, manufacturing, research,
business analysis or sales relating to any product, equipment, process or
material that relates in any way to the Confidential Information of the Company
without the written permission of the Company. 
The foregoing provision, however, shall not prohibit me from engaging in
any work at any time after the Consulting Period, provided that Confidential
Information will not be involved in such work. 
The provisions of this Section 6.1 will not be construed as limiting to
any extent my continuing obligations under any other section of this Agreement.

6.2           No Conflict With Prior Agreements.  I represent and warrant to the Company and
its affiliates that my retention by the Company and my performance of my
obligations under this Agreement do not conflict with any prior obligations to
third parties, including former employers. 
I represent and warrant that the Company has not asked me to reveal, nor
will I do so, any trade secrets or other proprietary or confidential
information that may have been gained by me during my previous employment which
I am under obligation not to disclose.

7.0           Termination.  The Consulting Period may be terminated by me
for any reason upon 30 days’ prior written notice.  Either party may terminate this agreement
immediately in the event the other party fails to perform.   Should either party default in the
performance of this Agreement or materially breach any of its obligations under
this Agreement the non-breaching party may terminate this Agreement immediately
if the breaching party fails to cure the breach within 5 business days after
having received written notice by the non-breaching party of the breach or
default.  In the event of termination for
any reason or for default the Consultant shall be paid for any portion of
services rendered pursuant to Exhibit A that have been performed prior to the
termination.

8.0           Legal Relationship.  My relationship with the Company is that of
an independent contractor and not as an employee, as such is defined in C.R.S.
8-40-202(2)(a), nor an agent of the Company. 
I will not be entitled to any benefits or compensation from the Company
except as set forth in this Agreement.  I
agree that I am responsible for direct payment of any federal or state taxes on
the compensation paid to me under this Agreement.  I understand that I am not authorized to bind
the Company or make any representations on its behalf in any matter.

9.0           Assignment; Binding Upon Estate.  The services to be rendered under this
Agreement are personal in nature, and my rights and obligations under this
Agreement may

not be assigned by me without the prior written
consent of the Company.  Subject to this
restriction, this Agreement shall be binding upon me, my heirs, executors,
administrators or legal representatives and shall inure to the benefit of the
Company and its successors and assigns.

10.0         Governing Law.  This Agreement shall be governed by the laws
of the State of Colorado.  Each article
shall be independent and separable from all other articles, and the invalidity
of an article shall not affect the enforceability of any of the other articles.

11.0         Remedies.  I recognize that any violation of this
Agreement by me would cause the Company irreparable damage for which other
remedies would be inadequate, and I therefore agree that the Company shall have
the right to obtain, in addition to all other remedies, such injunctive and
other equitable relief from a court of competent jurisdiction as may be
necessary or appropriate to prevent any violation of this Agreement.

12.0         Waiver.  The Company’s waiver or failure to enforce
the terms of this Agreement or any similar agreement in one instance shall not
constitute a waiver of its rights hereunder with respect to other violations of
this or any other agreement.

13.0         Entire Agreement.  This Agreement contains the entire agreement
between the Company and myself relating to the subject matter hereof, and
supersedes and modifies any and all prior and contemporaneous negotiations,
correspondence, understandings and agreements between us relating to the
subject matter hereof.  This Agreement
cannot be modified except in writing signed by all parties.

IN
WITNESS WHEREOF, I have signed this Agreement as of the date on the first page
hereof, to be effective from and after the first date of the Consulting Period,
as set forth below.

	
  ACCEPTED FOR CONSULTANT:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ C. T. Verser

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Carol
  Talkington Verser, Ph.D.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED FOR
  HESKA CORPORATION:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Robert B. Grieve

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Robert B.
  Grieve

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: Chairman of the Board and Chief Executive
  Officer

  

 

EXHIBIT A

1.            Name of Consultant:

Carol
Talkington Verser

 

2.            Term of Consulting Period:

 

The term of this Agreement
is from  January 1, 2007  through
December 31, 2007 and is renewable at the end of the initial one (1) year term
for additional three month periods upon mutual written agreement (the “Term”).

3.            Duties of Consultant:

 

During the Term of this
Agreement, the Consultant shall consult with the Company on matters relating to
the business of the Company, including business development and patents.

4.            Consideration:

 

For Consultant’s services,
commitments and covenants hereunder, the Consultant shall receive no
compensation for the first twenty-two (22) hours per calendar month other than
reimbursement of reasonable out of pocket expenses and continued service to the
Company as outlined in various Stock Option Agreements between the Consultant
and the Company and other 1997 Incentive Stock Plan-related documents (each an “Option
Document”).  Consultant and Company
acknowledge that under all Option Documents outstanding, the Consultant’s
options will expire three (3) months following the final day of the Term of
this Agreement.  Consultant and Company
acknowledge that this Agreement does not represent a modification to any Option
Document and to the extent this Agreement shall conflict with any Option
Document, including in any manner that could be deemed a modification, the
Option Document shall rule.

For any hours worked in
excess of twenty-two (22) hours and up to forty (40) hours per calendar month,
the Consultant shall receive a fee of $140.00 per hour.  For any hours worked in excess of forty (40)
hours per calendar month, the Consultant shall receive a fee of $200.00 per
hour. Starting in the calendar month of February 2007, the Consultant and John
R. Flanders, Vice President, General Counsel, will mutually agree in advance
for any hours to be worked within a given calendar month in excess of
twenty-two (22) hours per calendar month.

The Company shall reimburse
Consultant for all reasonable expenses incurred on behalf of the Company in
connection with the performance of her services hereunder, upon the
presentation of appropriate receipts, provided that Consultant shall be
reimbursed only to the extent that such expenses have been approved in advance
by John R. Flanders.

Consultant shall keep
records of her time and, shall invoice the company monthly if necessary.  Company shall pay the Consultant within
forty-five (45) days of receipt of such invoice.

The Consultant further
acknowledges that during the Term of this Agreement she will continue to be
bound by the Company’s Amended Statement on Policies on Trading in Securities
by Officers and Directors and all applicable trading windows.  Upon request by the Consultant, this clause
will be reviewed for applicability after the first six (6) months of the
Agreement.

SIGNED:

	
  HESKA CORPORATION

  	
   

  	
  CONSULTANT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert B. Grieve

  	
   

  	
  By:

  	
  /s/ C. T. Verser

  
	
  Typed Name: Robert B. Grieve, Ph.D.

  Title: Chairman of the Board and

  Chief Executive Officer

  	
   

  	
  Typed Name: Carol Talkington Verser, Ph.D

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  December 30, 2006

  	
   

  	
  Date:

  	
  December 29, 2006

  
							

 

Exhibit
B

 

 

Schedule of Employee’s Stock Option

	
  

  	
   

  	
  Exhibit B

  
	
   

  	
   

  	
   

  
	
  Heska Corporation

  	
  Page 1

  	
   

  
	
  Personnel Grant Status

  	
  ID: 77-0192527

  	
  File:

  	
  Optstmt

  
	
   

  	
  3760 Rocky Mountain Avenue

  	
  Date:

  	
  10/11/2006

  
	
   

  	
  Loveland, CO 80538

  	
  Time:

  	
  4:47:54PM

  
	
   

  	
   

  	
   

  
	
  AS OF 10/11/2006

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Carol Verser

  	
   

  	
   

  

 

A W A R D S

 

	
  Number

  	
   

  	
  Grant Date

  	
   

  	
  Plan

  	
   

  	
  Type

  	
   

  	
  Granted

  	
   

  	
  Price

  	
   

  	
  Released

  	
   

  	
  Vested

  	
   

  	
  Cancelled

  	
   

  	
  Unvested

  	
   

  	
  Deferred

  	
   

  	
  Next Deferral

  Release Date

  	
   

  
	
  00003161

  	
   

  	
  10/1/2001

  	
   

  	
  1997

  	
   

  	
  RSA

  	
   

  	
  10,000

  	
   

  	
  $

  	
  0.00000

  	
   

  	
  10,000

  	
   

  	
  10,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10,000

  	
   

  	
   

  	
   

  	
  10,000

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
   

  	
   

  
																									

S T O C K  O P T I O N S

 

	
  Number

  	
   

  	
  Grant Date

  	
   

  	
  Plan

  	
   

  	
  Type

  	
   

  	
  Granted

  	
   

  	
  Price

  	
   

  	
  Exercised

  	
   

  	
  Vested

  	
   

  	
  Cancelled

  	
   

  	
  Unvested

  	
   

  	
  Outstanding

  	
   

  	
  Exercisable

  	
   

  
	
  00000459

  	
   

  	
  9/25/1995

  	
   

  	
  1988

  	
   

  	
  ISO

  	
   

  	
  20,000

  	
   

  	
  $

  	
  0.35000

  	
   

  	
  20,000

  	
   

  	
  20,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  00000627

  	
   

  	
  1/21/1997

  	
   

  	
  1988

  	
   

  	
  ISO

  	
   

  	
  5,000

  	
   

  	
  $

  	
  1.20000

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  5,000

  	
   

  
	
  00000733

  	
   

  	
  3/15/1997

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  5,000

  	
   

  	
  $

  	
  3.00000

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  5,000

  	
   

  
	
  00001664

  	
   

  	
  4/6/1999

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  10,000

  	
   

  	
  $

  	
  3.06000

  	
   

  	
  0

  	
   

  	
  10,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  10,000

  	
   

  	
  10,000

  	
   

  
	
  00002490

  	
   

  	
  11/17/1999

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  10,000

  	
   

  	
  $

  	
  2.00000

  	
   

  	
  0

  	
   

  	
  10,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  10,000

  	
   

  	
  10,000

  	
   

  
	
  00002641

  	
   

  	
  8/2/2000

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  15,000

  	
   

  	
  $

  	
  2.00000

  	
   

  	
  0

  	
   

  	
  15,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  15,000

  	
   

  	
  15,000

  	
   

  
	
  00002698

  	
   

  	
  2/5/2001

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  46,875

  	
   

  	
  $

  	
  1.25000

  	
   

  	
  0

  	
   

  	
  46,875

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  46,875

  	
   

  	
  46,875

  	
   

  
	
  00003192

  	
   

  	
  1/12/2002

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  88,542

  	
   

  	
  $

  	
  1.21000

  	
   

  	
  0

  	
   

  	
  88,542

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  88,542

  	
   

  	
  88,542

  	
   

  
	
  00003601

  	
   

  	
  1/6/2003

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  35,000

  	
   

  	
  $

  	
  0.34000

  	
   

  	
  0

  	
   

  	
  35,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  35,000

  	
   

  	
  35,000

  	
   

  
	
  00003649

  	
   

  	
  1/31/2003

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  60,000

  	
   

  	
  $

  	
  0.70000

  	
   

  	
  0

  	
   

  	
  55,000

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  60,000

  	
   

  	
  55,000

  	
   

  
	
  00004049

  	
   

  	
  1/5/2004

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  11,885

  	
   

  	
  $

  	
  2.30000

  	
   

  	
  0

  	
   

  	
  11,885

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  11,885

  	
   

  	
  11,885

  	
   

  
	
  00004050

  	
   

  	
  1/5/2004

  	
   

  	
  1997

  	
   

  	
  NQ

  	
   

  	
  48,115

  	
   

  	
  $

  	
  2.30000

  	
   

  	
  0

  	
   

  	
  48,115

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  48,115

  	
   

  	
  48,115

  	
   

  
	
  00004452

  	
   

  	
  2/5/2001

  	
   

  	
  1997

  	
   

  	
  NQ

  	
   

  	
  3,125

  	
   

  	
  $

  	
  1.25000

  	
   

  	
  0

  	
   

  	
  3,125

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  3,125

  	
   

  	
  3,125

  	
   

  
	
  00004453

  	
   

  	
  1/12/2002

  	
   

  	
  1997

  	
   

  	
  NQ

  	
   

  	
  36,458

  	
   

  	
  $

  	
  1.21000

  	
   

  	
  0

  	
   

  	
  36,458

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  36,458

  	
   

  	
  36,458

  	
   

  
	
  00004757

  	
   

  	
  3/30/2005

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  85,000

  	
   

  	
  $

  	
  0.88000

  	
   

  	
  0

  	
   

  	
  85,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  85,000

  	
   

  	
  85,000

  	
   

  
	
  00004821

  	
   

  	
  12/15/2005

  	
   

  	
  1997

  	
   

  	
  ISO

  	
   

  	
  11,760

  	
   

  	
  $

  	
  1.25000

  	
   

  	
  0

  	
   

  	
  11,760

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  11,760

  	
   

  	
  11,760

  	
   

  
	
  00004822

  	
   

  	
  12/15/2005

  	
   

  	
  1997

  	
   

  	
  NQ

  	
   

  	
  83,240

  	
   

  	
  $

  	
  1.25000

  	
   

  	
  0

  	
   

  	
  83,240

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  83,240

  	
   

  	
  83,240

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  575,000

  	
   

  	
   

  	
   

  	
  20,000

  	
   

  	
  570,000

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  	
  555,000

  	
   

  	
  550,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]