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Exhibit 10.8    
  

 
 

VETERINARY PET SERVICES, INC.
  1996 INCENTIVE STOCK OPTION PLAN    
    
    AGREEMENT    
  

        THIS AGREEMENT made
this                        , by and between VETERINARY PET SERVICES, INC., a California
corporation, hereinafter called the "COMPANY," and [1], hereinafter called "EMPLOYEE." 

        WHEREAS,
the Board of Directors of the COMPANY has determined that it is to the advantage and interest of the COMPANY and its stockholders to grant the option provided for herein to
EMPLOYEE as an inducement to remain in the employ of the COMPANY or its subsidiary corporations, and as an incentive for increased effort during such service, and has adopted this 1996 Incentive Stock
Option Plan for the benefit of EMPLOYEE. 

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

        1.    Grant of Option.    The Company grants to EMPLOYEE the right and option to purchase from the COMPANY, on the
terms and conditions hereinafter set forth, all or any part of an aggregate of [2] shares of the authorized common stock of the COMPANY, at the purchase price of
$            per share (being not less than the fair market value per share of said stock on the date hereof) as EMPLOYEE may from time to time elect, exercisable on or
after                        and
including                        (the latter date hereinafter referred to as the "terminal date"), all in accordance with the
schedule attached hereto and marked Exhibit "A." No partial exercise of such
option may be for less than 200 full shares, unless the number purchased is the total number at the time purchasable under the option. In no event shall the COMPANY be required to transfer fractional
shares to EMPLOYEE. 

        2.    Method of Exercise.    The option granted hereunder shall be exercisable, from time to time, as hereinabove
provided, by the payment in cash or by check to the COMPANY of the purchase price of the shares which EMPLOYEE shall then elect to purchase. The COMPANY shall not be required to transfer or deliver
any certificate or certificates for the shares purchased upon exercise of the option
granted hereunder until (a) compliance with all then applicable requirements of law; and (b) admission of such shares for trading privileges on any stock exchange on which the stock may
then be listed. 

        3.    Termination of Option.    The option and all rights granted hereunder to the extent such rights shall not have
been exercised, shall terminate and become null and void on the terminal date or sooner if EMPLOYEE ceases to be in the continuous employ of the COMPANY (whether by resignation, retirement, dismissal,
or otherwise), except that: (a) in the event of termination of such employment for any reason other than the permanent disability of EMPLOYEE, as defined in Section 22(e)(3) of the
Internal Revenue Code, as amended and as presently in effect (the "Code"), EMPLOYEE may at any time within a period of three months thereafter exercise the option granted hereunder to the extent such
option was exercisable by him on the date of the termination of such employment; and (b) in the event of the permanent disability of EMPLOYEE while in the employ of the COMPANY, the option
granted hereunder, to the extent that EMPLOYEE was entitled to exercise such option on the date of his disability, may be exercised within one year after such termination as a result of disability by
EMPLOYEE or the person or persons to whom EMPLOYEE's rights under the option granted hereby shall pass by will or by the applicable laws of descent and distribution. Notwithstanding anything herein to
the contrary, however, the option and all rights herein granted shall in all events terminate and become null and void five years from the date of this Agreement. 

        4.    Limitation Upon Transfer.    During the lifetime of EMPLOYEE, the option and all rights granted hereunder shall
be exercisable only by EMPLOYEE, and except as in paragraph 3 otherwise provided, the option and all rights granted hereunder shall not be transferred, assigned, pledged, or hypothecated in any
way (whether by operation of law or otherwise), and shall not be subject to 

execution, attachment, or similar process. Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such option or of such rights contrary to the provisions hereof, or upon
the levy of any attachment or similar process upon such option or such rights, such option and such rights shall immediately become null and void. 

        5.    Condition of Employment.    In order to be entitled to exercise the option granted hereunder as to the first
increment of shares as shown in Exhibit "A," EMPLOYEE must remain in the continuous employ of the COMPANY for the period of at least six months from the date hereof. 

        6.    Stock as Investment.    By accepting this option, the EMPLOYEE acknowledges for himself, his heirs and legatees,
that any and all shares purchased hereunder shall be acquired for investment and not for distribution, and upon the transfer of any or all of the shares subject to the option granted hereunder, the
EMPLOYEE, or his heirs or legatees receiving such shares, shall deliver to the COMPANY a representation in writing that such shares are being acquired in good faith for investment and not for
distribution. The EMPLOYEE shall not dispose (whether by sale, exchange, gift or any other transfer) of any shares of stock acquired pursuant to the exercise of the option granted hereunder, within
two years after the grant of this option or one year after the transfer of such shares to him upon his exercise of such option. EMPLOYEE further recognizes that any disposition (whether a sale,
exchange, gift or any other transfer) of any shares of stock prior to the aforementioned periods will not only be a
breach of this Agreement, but will also disqualify the option as a incentive stock option under Section 422A of the Code. 

        7.    Reclassification, Consolidation, or Merger.    In the event of any change in the common stock of the COMPANY
subject to the option granted hereunder, through merger, consolidation, reorganization, recapitalization, stock split, stock dividend, or other change in the corporate structure, appropriate
adjustment shall be made by the COMPANY in the number of shares subject to such option and the price per share; provided, however, that in accordance with the provisions of Section 425(a) of
the Code, a new option may be substituted for the option granted hereunder or such option may be assumed by an employer corporation, or a parent or subsidiary of such corporation, in connection with
any transaction to which such Section is applicable. Upon the dissolution or liquidation of the COMPANY other than in connection with a transaction to which such Section is applicable, the option
granted hereunder shall terminate and become null and void, but EMPLOYEE shall have the right immediately prior to such dissolution or liquidation to exercise the option granted hereunder to the full
extent not before exercised. 

        8.    Right as Stockholder.    Neither EMPLOYEE nor his executors, administrators, heirs or legatees, shall be or have
any rights or privileges of a stock holder of the COMPANY in respect of the shares transferable upon exercise of the option granted hereunder, unless and until certificates representing such shares
shall have been endorsed, transferred and delivered and the transferee has caused his name to be entered as the stockholder of record on the books of the COMPANY. 

        9.    Notices.    Any notice to be given under the terms of this Agreement shall be addressed to the COMPANY in care
of its Secretary at the corporate headquarters of the COMPANY, and any notice to be given to EMPLOYEE shall be addressed to him at such place as EMPLOYEE may hereafter designate in writing. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as herein required, certified and deposited (postage and certification prepaid) in a post office
regularly maintained by the United States Government. 

        10.    Binding Effect.    This Agreement shall be binding upon and inure to the benefit of any successor or successors
of the COMPANY. 

        11.    Internal Revenue Code.    All options granted hereunder are granted pursuant to the Internal Revenue Code, as
amended, as it is in force and effect at the date of grant. 

        12.    Gender.    Any reference herein to the masculine gender shall also include the feminine gender whenever
required by the context thereof. 

        IN WITNESS WHEREOF, the COMPANY has caused these presents to be executed on its behalf by its President, to be sealed by its corporate
seal, and attested by its Secretary, and EMPLOYEE has hereunto set his hand the date and year first above written, which is the time of the granting of the option hereunder. 

	COMPANY:	 	EMPLOYEE:
	

VETERINARY PET SERVICES, INC.

a California corporation	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
 Jack L. Stephens,
 Chief Executive Officer	 	
 [1]
	

Corporate Seal	
 	

 
	

ATTEST:	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
 Bruce H. Haglund,
 Secretary	 	 

 
 

EXHIBIT "A"    
    
    VETERINARY PET SERVICES, INC.
  1996 INCENTIVE STOCK OPTION PLAN    
    
    EXERCISE SCHEDULE    
  

	Option Period
 
	 	Number of Exercisable Option Shares

	1.	 	On or after [date]

until [date]	 	 
	2.	 	On or after [date]

until [date]	 	 
	3.	 	On or after [date]

until [date]	 	 

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Exhibit 10.8

VETERINARY PET SERVICES, INC. 1996 INCENTIVE STOCK OPTION PLAN AGREEMENT

EXHIBIT "A" VETERINARY PET SERVICES, INC. 1996 INCENTIVE STOCK OPTION PLAN EXERCISE SCHEDULEQuickLinks
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Exhibit 10.9    
  

 
 

NON-QUALIFIED
  STOCK OPTION AGREEMENT
  of
  VETERINARY PET SERVICES, INC.    
  

        THIS NON-QUALIFIED STOCK OPTION AGREEMENT, hereinafter referred to as the "Option" or the "Agreement," is made as of the February 28, 1997,
between VETERINARY PET SERVICES, INC., a California corporation (the "COMPANY"), and [1] (the "OPTIONEE"). 

        The
Board of Directors of the COMPANY hereby grants an option on 10,000 shares of common stock of the COMPANY ("Common Stock") to the OPTIONEE at the price and in all respects subject to
the terms, definitions and provisions of the Agreement. 

        1.    Option Price.    The option price is $4.00 per share. 

        2.    Exercise of Option.    

        2.1    Right to Exercise.    The options shall be exercisable (i) by the OPTIONEE, his personal representative,
or his assignee, in whole or in part in accordance with the terms of this Agreement, (ii) is exercisable from the date hereof and on or before February 28, 2007, and, (iii) shall
not be subject to adjustment in terms of the exercise price or the number of shares issuable hereunder. 

        2.2    Method of Exercise.    This Option shall be exercisable by a written notice which shall: 

        (a)  State
the election to exercise the Option, the number of shares in respect of which it is being exercised, the person in whose name the shares are to be issued (if the
shares are issued to individuals), the names, addresses and Social Security Numbers of such persons; and 

        (b)  Contain
such representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as are required by law or as may be
satisfactory to the COMPANY's counsel; and 

        (c)  Be
signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or persons other than the OPTIONEE, be accompanied
by proof, satisfactory to counsel for the COMPANY, of the right of such person or persons to exercise the Option; and 

        (d)  Be
accompanied by a payment for the purchase price of those shares with respect to which the Option is being exercised in the form of cash or check. The certificate or
certificates for shares of Common Stock as to which the Option shall be exercised shall be registered in the name of the person or persons exercising the Option. 

        2.3    Restrictions on Exercise.    As a condition to his exercise of this Option, the COMPANY may require the person
exercising this Option to comply with applicable laws or regulations. 

        3.    Transferability of Option.    This Option may be transferred in any manner by will or the laws of descent
or
distribution and may be exercised during the lifetime of the OPTIONEE by an assignee of the OPTIONEE. 

        4.    Stock Subject to the Option.    The COMPANY shall set aside shares of Common Stock, which it now holds as
authorized and unissued shares, in an amount equal to the number of shares which will be issued upon the exercise of this Option. If the Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject thereto shall be free from any restrictions occasioned by this Option Agreement. If the COMPANY has been listed on a
stock exchange, the COMPANY will not be required to issue or deliver any certificate or 

1

 

certificates for shares to be issued hereunder until such shares have been listed (or authorized for listing upon official notice of issuance) upon each stock exchange on which outstanding shares of
the same class may then be listed and until the COMPANY has taken such steps as may, in the opinion of counsel for the COMPANY, be required by law and applicable regulations, including the rules and
regulations of the Securities and Exchange Commission, and state blue sky laws and regulations, in
connection with the issuance or sale of such shares, and the listing of such shares on each such exchange. The COMPANY will use its best efforts to comply with any such requirements forthwith upon the
exercise of the Option. 

        5.    No Adjustments Upon Changes in Capitalization.    The Option price shall not be subject to mandatory
adjustment
upon a change in capitalization or under any other circumstances. 

        6.    Notices.    Each notice relating to this Agreement shall be in writing and delivered in person or by
certified
mail to the proper address. Each notice shall be deemed to have been given on the date it is received. Each notice to the COMPANY shall be addressed to it at its principal office at 4175 East La Palma
Avenue, Suite 100, Anaheim, California 92807, or to its then primary business address, to the attention of the Secretary of the COMPANY. Each notice to the OPTIONEE or other person or persons then
entitled to exercise the Option shall be addressed to the OPTIONEE or such other person or persons at such address as provided by OPTIONEE. Anyone to whom a notice may be given under this Agreement
may designate a new address by notice to that effect. 

        7.    Benefits of Agreement.    This Agreement shall inure to the benefit of and be binding upon each successor
of the
COMPANY. All obligations imposed upon the OPTIONEE and all rights granted to the COMPANY under this Agreement shall be binding upon the OPTIONEE's heirs, legal representatives, and successors. This
Agreement shall be the sole and exclusive source of any and all rights which the OPTIONEE, his heirs, legal representatives, or successors may have in respect to the Plan or any options or Common
Stock granted or issued thereunder, whether to him, or herself, or to any other person. 

        8.    Resolution of Disputes.    Any dispute or disagreement which should arise under, or as a result of, or in
any
way relate to, the interpretation, construction or application of this Agreement will be determined by the Board of Directors of the COMPANY. Any determination made hereunder shall be final, binding,
and conclusive for all purposes. 

        IN WITNESS WHEREOF, the COMPANY and the OPTIONEE have caused this Agreement to be executed as of the day, month and year first
above-written. 

	COMPANY:	 	OPTIONEE:
	

VETERINARY PET SERVICES, INC.

a California corporation	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
 Jack L. Stephens,
 Chief Executive Officer	 	
 [1]
	

(CORPORATE SEAL)	
 	

 

2

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Exhibit 10.9

NON-QUALIFIED STOCK OPTION AGREEMENT of VETERINARY PET SERVICES, INC.

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