Document:

Exhibit 10.4

 

ARDEN GROUP, INC.

THIRD AMENDMENT TO

EMPLOYMENT AGREEMENT OF

BERNARD BRISKIN

 

This Third Amendment to Employment Agreement (the “Third Amendment”) is
made and entered into effective as of December 31, 2008 by and between
Arden Group, Inc., a Delaware corporation (“Arden Group”), Arden-Mayfair, Inc.,
a Delaware corporation and a wholly-owned subsidiary of Arden Group (“Arden-Mayfair”),
AMG Holdings, Inc., formerly known as Telautograph Corporation, a Virginia
corporation and a wholly-owned subsidiary of Arden-Mayfair (“AMG”), Gelson’s
Markets, a California corporation and a wholly-owned subsidiary of
Arden-Mayfair (“Gelson’s”)(Arden Group, Arden-Mayfair, AMG and Gelson’s are
herein sometimes referred to collectively as the “Companies” and individually
as a “Company”), and Bernard Briskin (“Employee”), with reference to the
following facts:

 

A.            The parties hereto
are parties to that certain Employment Agreement dated as of May 13, 1988,
as amended by that certain Amendment to Employment Agreement dated April 27,
1994, and as further amended by that certain Second Amendment To Employment
Agreement dated January 1, 1997 (collectively, the “Agreement”).

 

B.            Pursuant to Section 21
of the Agreement, the parties desire to amend the Agreement, effective December 31,
2008, as set forth herein.

 

NOW, THEREFORE, for and in consideration of the promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:

 

1.             The first sentence of Section 9(a) of the
Agreement is deleted and replaced with the following two (2) sentences:

 

                “(a)         Commencing on the date which is six (6) months
after the later of (i) the date of Employee’s Retirement (as said term is
hereafter defined in subsection 9(c) below) or (ii) the date Employee
experiences a “separation from service” as defined under Treas. Reg. §
1.409A-1(h), the Company shall pay to Employee on a monthly basis in arrears
for so long as Employee shall be living an amount per annum equal to
twenty-five (25%) of Employee’s average Base Salary and Bonus (not including
benefits, stock option rights or other employee compensation) which Employee
had earned and accrued with respect to the last three (3) full fiscal
years of the Company prior to Employee’s Retirement.  Notwithstanding the preceding sentence, a
portion of such benefit shall be paid to Employee on a monthly basis during the
six (6) month period immediately following the later of (i) or (ii) in
the immediately preceding sentence on a regularly scheduled payment pursuant to
this Section 9 in an amount equal to one-twelfth (1/12th) of two times the lesser of
(x) the sum of the Employee’s annualized compensation based upon the
annual rate of pay for services provided to the Company for the Employee’s
taxable year preceding the taxable year in which the Employee has a “separation
from service” with the Company (adjusted for any increase during that year that
was expected to continue indefinitely if the Employee had not separated from
service); or (y) the maximum amount that may be taken into account under a
qualified plan pursuant to Section 401(a)(17) of Internal Revenue Code of
1986, as amended, for the year in which 

 

 

the Employee has a “separation from service.”  The amount of any such benefit that cannot be
paid pursuant the preceding sentence limitation during said six (6) month
period shall be paid to Employee in a lump-sum with the first regularly
scheduled payment otherwise paid pursuant to this Section 9.”

 

2.             The last three lines of Section 9(a) of the
Agreement are amended to read as follows:

 

“would commence to accrue on June 1,
2001 in the amount of $13,402.75 per month, and would, to the extent
permissible under this Section 9(a), be payable commencing July 1,
2001.”

 

3.             The first sentence of Section 12 of the Agreement
is amended by deleting the words, “90 days” and replacing them with the words, “75
days.”

 

4.             Section 26(b) of the Agreement is hereby
amended in its entirety to read as follows:

 

                “(b)         Termination by Companies Without
Cause.   The Companies may terminate
the employment of Employee without “cause” (as defined in subsection 26 (a) above)
at any time during the term hereof by giving written notice to Employee
specifying therein the effective date of termination.  In the event the employment of Employee is
terminated pursuant to this subsection 26 (b) without “cause,” Companies
shall be obligated to pay to Employee his Base Salary and his Bonus pursuant to
Section 5 of this Agreement and all other benefits payable to Employee
under this Agreement for the balance of the remaining term under Section 3
(without extension).  Notwithstanding the
preceding sentence, in the case that Employee is a “specified employee” as
defined in Section 409A (2)(B) of the Internal Revenue Code of 1986,
as amended, who becomes eligible for benefits under this subsection 26(b), due
to a “separation from service” as defined under Treas. Reg. § 1.409A-1(h), no
payment of any benefit under this subsection 26(b) shall be made before
the date which is six (6) months after the date of Employee’s separation
of service; provided, however,
that notwithstanding the foregoing, a portion of such benefit shall be paid to
Employee on a monthly basis during the said six (6) month period on a
regularly scheduled payment pursuant to this Section 26 in an amount equal
to one-twelfth (1/12th) of two times
the lesser of (i) the sum of the Employee’s annualized compensation based
upon the annual rate of pay for services provided to the Company for the
Employee’s taxable year preceding the taxable year in which the Employee has a “separation
from service” with the Company  (adjusted for
any increase during that year that was expected to continue indefinitely if the
Employee had not separated from service); or (ii) the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of Internal Revenue Code of 1986, as amended, for the year in which the
Employee has a “separation from service,” but in no event shall the aggregate
amount payable during said 6-month period pursuant to this Section 26(b) plus
any amount payable during said 6-month period pursuant to Section 9 exceed
the lesser of the amounts referred to in clauses (x) or (y) of the
penultimate sentence of Section 9(a). 
The amount of any such benefit that cannot be paid pursuant the
preceding sentence limitation during said six (6) month period shall be
paid to Employee in a lump-sum with the first regularly scheduled payment
otherwise paid pursuant to this Section 26(b).  Employee shall have no duty to
mitigate and Companies shall have no right to offset any other compensation
paid to Employee during the applicable time period.”

 

5.             The effective date of this Amendment shall be December 31,
2008.

 

6.             Except
as expressly modified and amended by this Third Amendment, the Agreement shall
remain in full force and effect in accordance with its terms.

 

2

 

IN WITNESS WHEREOF, the parties have executed this Amendment effective
the date first written above.

 

	
  ARDEN GROUP, INC

  	
   

  	
  ARDEN-MAYFAIR, INC

  
	
   

  	
   

  	
   

  
	
  by:

  	
   

  	
   

  	
  by:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMG HOLDINGS, INC

  	
  GELSON’S MARKETS

  
	
   

  	
   

  
	
  by:

  	
   

  	
   

  	
  by:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bernard Briskin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
									

 

3Exhibit 10.4

 

HESKA
CORPORATION

 

 

2003 EQUITY INCENTIVE PLAN

 

(As Amended and Restated Effective January 8,
2009)

 

 

HESKA CORPORATION

 

AMENDED AND RESTATED 2003 EQUITY INCENTIVE
PLAN

 

HESKA CORPORATION hereby amends and restates in its entirety the Heska
Corporation 2003 Equity Incentive Plan, which was established and became
effective as of April 15, 2003, effective as of January 8, 2009.

 

SECTION 1

BACKGROUND AND PURPOSE

 

1.1           Background. 
The Plan permits the grant of certain awards, including but not limited to,
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, and Performance Shares.

 

1.2           Purpose of the Plan. 
The Plan is intended to attract, motivate, and retain (a) employees of the
Company and its Affiliates, (b) consultants who provide significant
services to the Company and its Affiliates, and (c) directors of the
Company who are employees of neither the Company nor any Affiliate.  The Plan also is designed to encourage stock
ownership by Participants, thereby aligning their interests with those of the
Company’s shareholders.

 

SECTION 2

DEFINITIONS

 

The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:

 

2.1           “1934 Act” means
the Securities Exchange Act of 1934, as amended.  Reference to a specific section of the 1934
Act or regulation thereunder shall include such section or regulation, any
valid regulation promulgated under such section, and any comparable provision
of any future legislation or regulation amending, supplementing or superseding
such section or regulation.

 

2.2           “Affiliate”
means any corporation or any other entity (including, but not limited to,
partnerships and joint ventures) controlling, controlled by, or under common
control with the Company.

 

2.3           “Affiliated SAR”
means a SAR that is granted in connection with a related Option, and which
automatically will be deemed to be exercised at the same time that the related
Option is exercised.

 

2.4           “Annual Revenue”
means the Company’s or a business unit’s net sales for the Fiscal Year,
determined in accordance with generally accepted accounting principles;
provided, however, that prior to the Fiscal Year, the Committee shall determine
whether any significant item(s) shall be 

 

2

 

excluded or included from the
calculation of Annual Revenue with respect to one or more Participants.

 

2.5           “Award” means,
individually or collectively, a grant under the Plan of Nonqualified Stock Options,
Incentive Stock Options, SARs, Restricted Stock, Performance Units, or
Performance Shares.

 

2.6           “Award Agreement”
means the written agreement setting forth the terms and provisions applicable
to each Award granted under the Plan.

 

2.7           “Board” or “Board
of Directors” means the Board of Directors of the Company.

 

2.8           “Cash Position”
means the Company’s level of cash and cash equivalents.

 

2.9           “Change in Control”
means the occurrence of any of the following events:

 

(a)           Any
“person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities;

 

(b)           The
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets;

 

(c)           A
change in the composition of the Board occurring within a two-year period, as a
result of which fewer than a majority of the directors are Incumbent
Directors.  “Incumbent Directors” means
directors who either (A) are Directors as of the effective date of the
Plan, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Directors at the time of such
election or nomination (but will not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or

 

(d)           The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately
after such merger or consolidation.

 

2.10         “Code” means the
Internal Revenue Code of 1986, as amended. 
Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated
under such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.

 

2.11         “Committee” means
the Board or a committee appointed by the Board (pursuant to Section 3.1)
to administer the Plan.

 

3

 

2.12         “Company” means
Heska Corporation, a Delaware corporation, or any successor thereto.

 

2.13         “Consultant” means
any consultant, independent contractor, or other person who from time to time
provides services to the Company or its Affiliates pursuant to a formal
engagement, but who is neither an Employee nor a Director.

 

2.14         “Director” means
any individual who is a member of the Board of Directors of the Company or its
Subsidiaries.

 

2.15         “Disability” means
a permanent and total disability within the meaning of Section 22(e)(3) of
the Code, provided that in the case of Awards other than Incentive Stock
Options, the Committee in its discretion may determine whether a permanent and
total disability exists in accordance with uniform and non-discriminatory
standards adopted by the Committee from time to time.

 

2.16         “Earnings Per Share”
means as to any Fiscal Year, the Company’s or a business unit’s Net Income,
divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding, determined in accordance with
generally accepted accounting principles.

 

2.17         “Employee” means
any employee of the Company or of an Affiliate, whether such employee is so
employed at the time the Plan is adopted or becomes so employed subsequent to
the adoption of the Plan.

 

2.18         “Exercise Price”
means the price at which a Share may be purchased by a Participant pursuant to
the exercise of an Option.

 

2.19         “Fair Market Value”
means the last quoted per share selling price for Shares on the relevant date,
or if there were no sales on such date, the closing bid on the relevant
date.  If there are neither bids nor sales
on the relevant date, then the Fair Market Value shall mean the arithmetic mean
of the highest and lowest quoted selling prices on the nearest day before and
the nearest day after the relevant date, as determined by the Committee.  Notwithstanding the preceding, for federal,
state, and local income tax reporting purposes, fair market value shall be
determined by the Committee (or its delegate) in accordance with uniform and
nondiscriminatory standards adopted by it from time to time.

 

2.20         “Fiscal Year”
means the fiscal year of the Company.

 

2.21         “Freestanding SAR”
means a SAR that is granted independently of any Option.

 

2.22         “Grant Date”
means, with respect to an Award, the date that the Award was granted.

 

2.23         “Incentive Stock
Option” means an Option to purchase Shares that is designated as an
Incentive Stock Option and is intended to meet the requirements of Section 422
of the Code.

 

2.24         “Individual Objectives”
means as to a Participant, the objective and measurable goals set by a “management
by objectives” process and approved by the Committee (in its discretion).

 

4

 

2.25         “Net Income” means
as to any Fiscal Year, the income after taxes of the Company for the Fiscal
Year determined in accordance with generally accepted accounting principles,
provided that prior to the Fiscal Year, the Committee shall determine whether
any significant item(s) shall be included or excluded from the calculation
of Net Income with respect to one or more Participants.

 

2.26         “Nonqualified Stock
Option” means an option to purchase Shares that is not intended to be an
Incentive Stock Option.

 

2.27         “Operating Cash Flow”
means the Company’s or a business unit’s sum of Net Income plus depreciation
and amortization less capital expenditures plus changes in working capital
comprised of accounts receivable, inventories, other current assets, trade
accounts payable, accrued expenses, product warranty, advance payments from
customers and long-term accrued expenses, determined in accordance with
generally acceptable accounting principles.

 

2.28         “Operating Income”
means the Company’s or a business unit’s income from operations but excluding
any unusual items, determined in accordance with generally accepted accounting
principles.

 

2.29         “Option” means an
Incentive Stock Option or a Nonqualified Stock Option.

 

2.30         “Participant”
means an Employee, Consultant, or Director who has an outstanding Award.

 

2.31         “Performance Goals”
means the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant with respect to an
Award.  As determined by the Committee,
the Performance Goals applicable to an Award may provide for a targeted level
or levels of achievement using one or more of the following measures: (a) Annual
Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Individual
Objectives, (e) Net Income, (f) Operating Cash Flow, (g) Operating
Income, (h) Return on Assets, (i) Return on Equity, (j) Return
on Sales, and (k) Total Shareholder Return.  The Performance Goals may differ from
Participant to Participant and from Award to Award.

 

2.32         “Performance Share”
means an Award granted to a Participant pursuant to Section 8.

 

2.33         “Performance Unit”
means an Award granted to a Participant pursuant to Section 8.

 

2.34         “Period of Restriction”
means the period during which the transfer of Shares of Restricted Stock are
subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture.  As provided in Section 7,
such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined
by the Committee, in its discretion.

 

2.35         “Plan” means the
Heska Corporation Amended and Restated 2003 Equity Incentive Plan, as set forth
in this instrument and as hereafter amended from time to time.

 

2.36         “Restricted Stock”
means an Award granted to a Participant pursuant to Section 7.

 

5

 

2.37         “Return on Assets”
means the percentage equal to the Company’s or a business unit’s Operating
Income before incentive compensation, divided by average net Company or
business unit, as applicable, assets, determined in accordance with generally
accepted accounting principles.

 

2.38         “Return on Equity”
means the percentage equal to the Company’s Net Income divided by average
stockholder’s equity, determined in accordance with generally accepted
accounting principles.

 

2.39         “Return on Sales”
means the percentage equal to the Company’s or a business unit’s Operating
Income before incentive compensation, divided by the Company’s or the business
unit’s, as applicable, revenue, determined in accordance with generally
accepted accounting principles.

 

2.40         “Rule 16b-3”
means Rule 16b-3 promulgated under the 1934 Act, and any future regulation
amending, supplementing or superseding such regulation.

 

2.41         “Section 16
Person” means a person who, with respect to the Shares, is subject to Section 16
of the 1934 Act.

 

2.42         “Shares” means the
shares of common stock of the Company.

 

2.43         “Stock Appreciation
Right” or “SAR” means an Award, granted alone or in connection with
a related Option, that pursuant to Section 6 is designated as a SAR.

 

2.44         “Subsidiary” means
any corporation in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

2.45         “Tandem SAR” means
a SAR that is granted in connection with a related Option, the exercise of
which shall require forfeiture of the right to purchase an equal number of
Shares under the related Option (and when a Share is purchased under the
Option, the SAR shall be canceled to the same extent).

 

2.46         “Termination of
Service” Means the failure of an individual to qualify as an Employee,
Director or Consultant at any time.

 

2.47         “Total Shareholder
Return” means the total return (change in share price plus reinvestment of
any dividends) of a Share.

 

SECTION 3

ADMINISTRATION

 

3.1           The Committee. 
The Plan shall be administered by the Committee.  If the Committee is not the Board then the
Committee shall consist of not less than two (2) Directors who shall be
appointed from time to time by, and shall serve at the pleasure of, the Board
of Directors.  If the Committee is not
the Board then the Committee shall be comprised solely of Directors who both
are (a) “non-employee directors” under Rule 16b-3, and (b) “outside
directors” under Section 162(m) of the Code.

 

6

 

3.2           Authority of the
Committee.  It shall be the duty of the Committee to administer the
Plan in accordance with the Plan’s provisions. 
The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but
not limited to, the power to (a) determine which Employees, Consultants
and Directors shall be granted Awards, (b) prescribe the terms and
conditions of the Awards, (c) interpret the Plan and the Awards, (d) adopt
such procedures and subplans as are necessary or appropriate to permit
participation in the Plan by Employees and Directors who are foreign nationals
or employed outside of the United States, (e) adopt rules for the
administration, interpretation and application of the Plan as are consistent
therewith, and (f) interpret, amend or revoke any such rules.

 

3.3           Delegation by the
Committee.  The Committee, in its sole discretion and on such terms
and conditions as it may provide, may delegate all or any part of its authority
and powers under the Plan to one or more Directors or officers of the Company;
provided, however, that the Committee may not delegate its authority and powers
(a) with respect to Section 16 Persons, or (b) in any way which
would jeopardize the Plan’s qualification under Section 162(m) of the
Code or Rule 16b-3.

 

3.4           Decisions Binding. 
All determinations and decisions made by the Committee, the Board, and any
delegate of the Committee pursuant to the provisions of the Plan shall be
final, conclusive, and binding on all persons, and shall be given the maximum
deference permitted by law.

 

SECTION 4

SHARES SUBJECT TO THE PLAN

 

4.1           Number of Shares. 
Subject to adjustment as provided in Section 4.3, the total number of
Shares available for grant under the Plan shall not exceed 2,390,500.  Shares granted under the Plan may be either
authorized but unissued Shares or treasury Shares.

 

4.2           Lapsed Awards. 
If an Award is settled in cash, or is cancelled, terminates, expires, or lapses
for any reason (with the exception of the termination of a Tandem SAR upon
exercise of the related Option, or the termination of a related Option upon
exercise of the corresponding Tandem SAR), any Shares subject to such Award
again shall be available to be the subject of an Award.

 

4.3           Adjustments in
Awards and Authorized Shares.  In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs such that an adjustment is
determined by the Committee (in its sole discretion) to be appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust the number and class of Shares which
may be delivered under the Plan, the number, class, and price of Shares subject
to outstanding Awards, and the numerical limits of Sections 5.1, 6.1, 7.1
and 8.1.  Notwithstanding the preceding,
the number of Shares subject to any Award always shall be a whole number.

 

7

 

SECTION 5

STOCK OPTIONS

 

5.1           Grant of Options. 
Subject to the terms and provisions of the Plan, Options may be granted to
Employees, Consultants and Directors at any time and from time to time as
determined by the Committee in its sole discretion.  The Committee, in its sole discretion, shall
determine the number of Shares subject to each Option, provided that during any
Fiscal Year, no Participant shall be granted Options covering more than 500,000
Shares.  Notwithstanding the foregoing
limitation, in connection with a Participant’s initial service as an Employee,
a Participant may be granted Options to purchase up to an additional 500,000  Shares. 
The Committee may grant Incentive Stock Options, Nonqualified Stock
Options, or a combination thereof.

 

5.2           Award Agreement. 
Each Option shall be evidenced by an Award Agreement that shall specify the
Exercise Price, the expiration date of the Option, the number of Shares to
which the Option pertains, any conditions to exercise the Option, and such
other terms and conditions as the Committee, in its discretion, shall
determine.  The Award Agreement shall
also specify whether the Option is intended to be an Incentive Stock Option or
a Nonqualified Stock Option.

 

5.3           Exercise Price. 
Subject to the provisions of this Section 5.3, the Exercise Price for each
Option shall be determined by the Committee in its sole discretion.

 

5.3.1        Nonqualified Stock
Options.  In the case of a
Nonqualified Stock Option, the Exercise Price shall be not less than one
hundred percent (100%) of the Fair Market Value of a Share on the Grant Date.

 

5.3.2        Incentive Stock Options.  In the case of an Incentive Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date; provided, however, that if on the
Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code)
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value of a Share on the Grant Date.

 

5.3.3        Substitute Options.  Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code
(e.g., the acquisition of property or stock from an unrelated corporation),
persons who become Employees, Directors or Consultants on account of such
transaction may be granted Options in substitution for options granted by their
former employer.  If such substitute
Options are granted, the Committee, in its sole discretion and consistent with Section 424(a) of
the Code, may determine that such substitute Options shall have an exercise
price less than one hundred percent (100%) of the Fair Market Value of the
Shares on the Grant Date.

 

5.4           Expiration of
Options.

 

5.4.1        Expiration Dates.  Each Option shall terminate no later than the
first to occur of the following events:

 

8

 

(a)           The date for
termination of the Option set forth in the written Award Agreement, or

 

(b)           If no date for the
termination of the Option is set forth in the written Award Agreement (other
than reference to Section 5.4.1(c)), the expiration of three (3) months
from the date of the Participant’s Termination of Service for any reason; or

 

(c)           The expiration of ten (10) years
from the Grant Date.

 

5.4.2        Committee Discretion.  Subject to the limits of Section 5.4.1,
the Committee, in its sole discretion, (a) shall provide in each Award
Agreement when each Option expires and becomes unexercisable, and (b) may,
after an Option is granted, extend the maximum term of the Option (subject to Section 5.8.4
regarding Incentive Stock Options).

 

5.5           Exercisability of
Options.  Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
determine in its sole discretion.  After
an Option is granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option.

 

5.6           Payment. 
Options shall be exercised by the Participant’s delivery of a written notice of
exercise to the Secretary of the Company (or its designee), setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

 

Upon the exercise of any Option, the Exercise
Price shall be payable to the Company in full in cash or its equivalent.  The Committee, in its sole discretion, also
may permit exercise (a) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Exercise
Price (such previously acquired Shares must have been held for the requisite
period necessary to avoid a charge to the Company’s earnings for the financial
reporting purposes, unless otherwise determined by the Committee), or (b) by
any other means which the Committee, in its sole discretion, determines to both
provide legal consideration for the Shares, and to be consistent with the
purposes of the Plan.

 

As soon as practicable after receipt of a
written notification of exercise and full payment for the Shares purchased, the
Company shall deliver to the Participant (or the Participant’s designated
broker), Share certificates (which may be in book entry form) representing such
Shares.

 

5.7           Restrictions on
Share Transferability.  The Committee may impose such restrictions on
any Shares acquired pursuant to the exercise of an Option as it may deem
advisable, including, but not limited to, restrictions related to applicable
federal securities laws, the requirements of any national securities exchange
or system upon which Shares are then listed or traded, or any blue sky or state
securities laws.

 

9

 

5.8           Certain Additional
Provisions for Incentive Stock Options.

 

5.8.1        Exercisability.  The aggregate Fair Market Value (determined
on the Grant Date(s)) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any calendar
year (under all plans of the Company and its Subsidiaries) shall not exceed
$100,000.

 

5.8.2        Termination of Service.  No Incentive Stock Option may be exercised
more than three (3) months after the Participant’s Termination of Service
for any reason other than Disability or death, unless (a) the Participant
dies during such three-month period, and/or (b) the Award Agreement or the
Committee permits later exercise.  No
Incentive Stock Option may be exercised more than one (1) year after the
Participant’s Termination of Service on account of death or Disability, unless
the Award Agreement or the Committee permit later exercise.

 

5.8.3        Company and
Subsidiaries Only.  Incentive Stock
Options may be granted only to persons who are employees of the Company or a
Subsidiary on the Grant Date.

 

5.8.4        Expiration.  No Incentive Stock Option may be exercised
after the expiration of ten (10) years from the Grant Date; provided,
however, that if the Option is granted to an Employee who, together with
persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of
the Code, owns stock possessing more than 10% of the total combined voting
power of all classes of the stock of the Company or any of its Subsidiaries,
the Option may not be exercised after the expiration of five (5) years
from the Grant Date.

 

SECTION 6

STOCK APPRECIATION RIGHTS

 

6.1           Grant of SARs. 
Subject to the terms and conditions of the Plan, a SAR may be granted to
Employees, Directors and Consultants at any time and from time to time as shall
be determined by the Committee, in its sole discretion.  The Committee may grant Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof.

 

6.1.1        Number of Shares.  The Committee shall have complete discretion
to determine the number of SARs granted to any Participant, provided that
during any Fiscal Year, no Participant shall be granted SARs covering more than
500,000 Shares, except that such Participant may receive SARS covering up to an
additional 500,000 Shares in the fiscal year of the Company in which his or her
service as an Employee first commences.

 

6.1.2        Exercise Price and
Other Terms.  The Committee, subject
to the provisions of the Plan, shall have complete discretion to determine the
terms and conditions of SARs granted under the Plan.  However, the exercise price of a Freestanding
SAR shall be not less than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date.  The
exercise price of Tandem or Affiliated SARs shall equal the Exercise Price of
the related Option.

 

6.2           Exercise of Tandem
SARs.  Tandem SARs may be exercised for all or part of the Shares
subject to the related Option upon the surrender of the right to exercise the
equivalent portion of the related Option. 
A Tandem SAR may be exercised only with respect to the Shares for which

 

10

 

its related Option is
then exercisable.  With respect to a
Tandem SAR granted in connection with an Incentive Stock Option: (a) the
Tandem SAR shall expire no later than the expiration of the underlying
Incentive Stock Option; (b) the value of the payout with respect to the
Tandem SAR shall be for no more than one hundred percent (100%) of the
difference between the Exercise Price of the underlying Incentive Stock Option
and the Fair Market Value of the Shares subject to the underlying Incentive
Stock Option at the time the Tandem SAR is exercised; and (c) the Tandem
SAR shall be exercisable only when the Fair Market Value of the Shares subject
to the Incentive Stock Option exceeds the Exercise Price of the Incentive Stock
Option.

 

6.3           Exercise of
Affiliated SARs.  An Affiliated SAR shall be deemed to be exercised
upon the exercise of the related Option. 
The deemed exercise of an Affiliated SAR shall not necessitate a
reduction in the number of Shares subject to the related Option.

 

6.4           Exercise of
Freestanding SARs.  Freestanding SARs shall be exercisable on such
terms and conditions as the Committee, in its sole discretion, shall determine.

 

6.5           SAR Agreement. 
Each SAR grant shall be evidenced by an Award Agreement that shall specify the
exercise price, the term of the SAR, the conditions of exercise, and such other
terms and conditions as the Committee, in its sole discretion, shall determine.

 

6.6           Expiration of SARs. 
A SAR granted under the Plan shall expire upon the date determined by the
Committee, in its sole discretion, and set forth in the Award Agreement.  Notwithstanding the foregoing, the rules of
Section 5.4 also shall apply to SARs.

 

6.7           Payment of SAR
Amount.  Upon exercise of a SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:

 

(a)           The
difference between the Fair Market Value of a Share on the date of exercise
over the exercise price; times

 

(b)           The
number of Shares with respect to which the SAR is exercised.

 

At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.

 

SECTION 7

RESTRICTED STOCK

 

7.1           Grant of Restricted
Stock.  Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Shares of Restricted
Stock to Employees, Directors and Consultants in such amounts as the Committee,
in its sole discretion, shall determine. 
The Committee, in its sole discretion, shall determine the number of
Shares to be granted to each Participant, provided that during any Fiscal Year,
no Participant shall receive more than 100,000 Shares of Restricted Stock.  In addition, no more than 500,000 Shares
available for grant under the Plan may be issued pursuant to Shares of
Restricted Stock with a purchase price that is less than 100% of Fair Market
Value.

 

11

 

7.2           Restricted Stock
Agreement.  Each Award of Restricted Stock shall be evidenced by an
Award Agreement that shall specify the Period of Restriction, the number of
Shares granted, and such other terms and conditions as the Committee, in its
sole discretion, shall determine.  Unless
the Committee determines otherwise, Shares of Restricted Stock shall be held by
the Company as escrow agent until the restrictions on such Shares have lapsed.

 

7.3           Transferability. 
Except as provided in this Section 7, Shares of Restricted Stock may not
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction.

 

7.4           Other Restrictions. 
The Committee, in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock as it may deem advisable or appropriate, in
accordance with this Section 7.4.

 

7.4.1        General Restrictions.  The Committee may set restrictions based upon
the achievement of specific performance objectives (Company-wide, divisional,
or individual), applicable federal or state securities laws, or any other basis
determined by the Committee in its discretion.

 

7.4.2        Section 162(m) Performance
Restrictions.  For purposes of
qualifying grants of Restricted Stock as “performance-based compensation” under
Section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of Performance Goals.  The Performance Goals shall be set by the
Committee on or before the latest date permissible to enable the Restricted
Stock to qualify as “performance-based compensation” under Section 162(m) of
the Code.  In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the
Committee shall follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of
the Code (e.g., in determining the Performance Goals).

 

7.4.3        Legend on Certificates.  The Committee, in its discretion, may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions.

 

7.5           Removal of
Restrictions.  Except as otherwise provided in this Section 7,
Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall be released from escrow as soon as practicable after the last
day of the Period of Restriction.  The
Committee, in its discretion, may accelerate the time at which any restrictions
shall lapse or be removed.  After the restrictions
have lapsed, the Participant shall be entitled to have any legend or legends
under Section 7.4.3 removed from his or her Share certificate, and the
Shares shall be freely transferable by the Participant.

 

7.6           Voting Rights. 
During the Period of Restriction, Participants holding Shares of Restricted
Stock granted hereunder may exercise full voting rights with respect to those
Shares, unless the Committee determines otherwise.

 

7.7           Dividends and Other
Distributions.  During the Period of Restriction, Participants holding
Shares of Restricted Stock shall be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the
Award Agreement.  If any such 

 

12

 

dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

 

7.8           Return of Restricted
Stock to Company.  On the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed shall revert to the
Company and again shall become available for grant under the Plan.

 

SECTION 8

PERFORMANCE UNITS AND PERFORMANCE SHARES

 

8.1           Grant of Performance
Units/Shares.  Performance Units and Performance Shares may be granted
to Employees, Directors and Consultants at any time and from time to time, as
shall be determined by the Committee, in its sole discretion.  The Committee shall have complete discretion
in determining the number of Performance Units and Performance Shares granted
to each Participant provided that during any Fiscal Year, (a) no
Participant shall receive Performance Units having an initial value greater
than $1,000,000, except that such Participant may receive Performance Units in
the fiscal year of the Company in which his or her service as an Employee first
commences with an initial value no greater than $2,000,000, and (b) no
Participant shall receive more than 500,000 Performance Shares, except that
such Participant may receive up to an additional 500,000 Performance Shares in
the fiscal year of the Company in which his or her service as an Employee first
commences.

 

8.2           Value of Performance
Units/Shares.  Each Performance Unit shall have an initial value that
is established by the Committee on or before the Grant Date.  Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the Grant Date.

 

8.3           Performance
Objectives and Other Terms.  The Committee shall set performance
objectives in its discretion which, depending on the extent to which they are
met, will determine the number or value of Performance Units/Shares that will
be paid out to the Participants.  The
time period during which the performance objectives must be met shall be called
the “Performance Period.”  Each Award of
Performance Units/Shares shall be evidenced by an Award Agreement that shall
specify the Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.

 

8.3.1        General Performance
Objectives.  The Committee may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals, applicable federal or state securities laws, or any other
basis determined by the Committee in its discretion.

 

8.3.2        Section 162(m) Performance
Objectives.  For purposes of
qualifying grants of Performance Units/Shares as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its
discretion, may determine that the performance objectives applicable to
Performance Units/Shares shall be based on the achievement of Performance
Goals.  The Performance Goals shall be
set by the Committee on or before the latest date permissible to enable the
Performance Units/Shares to qualify as “performance-based compensation” under Section 162(m) of
the Code.  In granting Performance
Units/Shares which are intended to qualify under Section 162(m) of
the Code, the Committee shall follow any procedures determined by it from

 

13

 

time to time to be
necessary or appropriate to ensure qualification of the Performance
Units/Shares under Section 162(m) of the Code (e.g., in determining
the Performance Goals).

 

8.4           Earning of
Performance Units/Shares.  After the applicable Performance Period has
ended, the holder of Performance Units/Shares shall be entitled to receive a
payout of the number of Performance Units/Shares earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance objectives have been achieved.  After the grant of a Performance Unit/Share,
the Committee, in its sole discretion, may reduce or waive any performance
objectives for such Performance Unit/Share.

 

8.5           Form and Timing
of Payment of Performance Units/Shares.  Payment of earned Performance
Units/Shares shall be made as soon as practicable after the expiration of the
applicable Performance Period.  The
Committee, in its sole discretion, may pay earned Performance Units/Shares in
the form of cash, in Shares (which have an aggregate Fair Market Value equal to
the value of the earned Performance Units/Shares at the close of the applicable
Performance Period) or in a combination thereof.

 

8.6           Cancellation of
Performance Units/Shares.  On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares shall be forfeited
to the Company, and again shall be available for grant under the Plan.

 

SECTION 9

MISCELLANEOUS

 

9.1           Change in Control.

 

9.1.1        Options and SARs.

 

(a)           In the event of a
Change in Control, each outstanding Option and SAR shall be assumed or an
equivalent option or right substituted by the successor corporation or a parent
or Subsidiary of the successor corporation.

 

(b)           In
the event that the successor corporation refuses to assume or substitute for
the Option or SAR, then the Options and SARs held by such Participant shall
become one hundred percent (100%) exercisable. 
If an Option or SAR becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a Change in Control, the Company
shall notify the Participant in writing or electronically that the Option or
SAR shall be fully vested and exercisable (subject to the consummation of the
Change in Control) for a period of fifteen (15) days from the date of such
notice, and the Option or SAR shall terminate upon the expiration of such
period.

 

(c)           For the purposes of
this Section 9.1.1, the Option or SAR shall be considered assumed if,
following the Change in Control, the option or right confers the right to
purchase or receive, for each Share subject to the Option or SAR immediately
prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by holders of
Shares for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration 

 

14

 

received in the Change in
Control is not solely common stock of the successor corporation or its parent, the
Committee or the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
SAR, for each Share subject to the Option or SAR, to be solely common stock of
the successor corporation or its parent equal in fair market value to the per
share consideration received by holders of Shares in the Change in Control, as
determined on the date of the Change in Control.

 

9.1.2        Restricted Stock.  In the event of a Change in Control, any Company
repurchase or reacquisition right with respect to outstanding Shares of
Restricted Stock held by the Participant will be assigned to the successor
corporation.  In the event that the
successor corporation refuses to accept the assignment of any such Company
repurchase or reacquisition right, such Company repurchase or reacquisition
right will lapse and the Participant will become one hundred percent (100%)
vested in such Shares of Restricted Stock immediately prior to the Change in
Control.

 

9.1.3        Performance Shares and
Performance Units.  In the event of a
Change in Control, the Committee or the Board, in its discretion, may provide
for any one or more of the following with respect to the Performance Shares and
Units: (a) any outstanding Performance Shares and Units shall be assumed
by the successor corporation or a parent or Subsidiary of the successor
corporation, (b) any outstanding Performance Shares and Units shall be
terminated immediately prior to the Change in Control, or (c) with respect
to a Change in Control that occurs prior to a Participant’s Termination of
Service, one hundred percent (100%) of any outstanding Performance Shares or
Units shall be deemed to be earned and shall be immediately payable to the
Participant, or, in cases where a Participant has received a target award of
Performance Units or Shares, up to one hundred percent (100%) of the target
amount shall vest.  In the event any
outstanding Performance Shares and Units are assumed, the successor corporation
shall have the ability to reasonably and equitably adjust the Performance
Goals.

 

9.2           Deferrals. 
The Committee, in its sole discretion, may permit a Participant to defer
receipt of the payment of cash or the delivery of Shares that would otherwise
be due to such Participant under an Award. 
Any such deferral elections shall be subject to such rules and
procedures as shall be determined by the Committee in its sole discretion.

 

9.3           No Effect on
Employment or Service.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause.  For purposes of the Plan, transfer of
employment of a Participant between the Company and any one of its Affiliates
(or between Affiliates) shall not be deemed a Termination of Service.  Employment with the Company and its
Affiliates is on an at-will basis only.

 

9.4           Participation. 
No Employee or Consultant shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be selected to receive a
future Award.

 

9.5           Indemnification. 
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from (a) any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a 

 

15

 

party or in which he or
she may be involved by reason of any action taken or failure to act under the
Plan or any Award Agreement, and (b) from any and all amounts paid by him
or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by
contract, as a matter of law, or otherwise, or under any power that the Company
may have to indemnify them or hold them harmless.

 

9.6           Successors. 
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.

 

9.7           Beneficiary
Designations.  If permitted by the Committee, a Participant under the
Plan may name a beneficiary or beneficiaries to whom any vested but unpaid
Award shall be paid in the event of the Participant’s death.  Each such designation shall revoke all prior
designations by the Participant and shall be effective only if given in a form
and manner acceptable to the Committee. 
In the absence of any such designation, any vested benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s estate
and, subject to the terms of the Plan and of the applicable Award Agreement,
any unexercised vested Award may be exercised by the administrator or executor
of the Participant’s estate.

 

9.8           Limited
Transferability of Awards.  No Award granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution, or to the limited
extent provided in Section 9.6.  All
rights with respect to an Award granted to a Participant shall be available
during his or her lifetime only to the Participant.  Notwithstanding the foregoing, the
Participant may, in a manner specified by the Committee, (a) transfer a
Nonqualified Stock Option to a Participant’s spouse, former spouse or dependent
pursuant to a court-approved domestic relations order which relates to the
provision of child support, alimony payments or marital property rights, and (b) transfer
a Nonqualified Stock Option by bona fide gift and not for any consideration, to
(i) a member or members of the Participant’s immediate family, (ii) a
trust established for the exclusive benefit of the Participant and/or member(s) of
the Participant’s immediate family, (iii) a partnership, limited liability
company of other entity whose only partners or members are the Participant and/or
member(s) of the Participant’s immediate family, or (iv) a foundation
in which the Participant and/or member(s) of the Participant’s immediate
family control the management of the foundation’s assets.

 

9.9           No Rights as
Stockholder.  Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any
of the rights or privileges of a stockholder of the Company with respect to any
Shares issuable pursuant to an Award (or exercise thereof), unless and until certificates
representing such Shares shall have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to the Participant
(or beneficiary).

 

16

 

SECTION 10

AMENDMENT, TERMINATION, AND DURATION

 

10.1         Amendment, Suspension,
or Termination.  The Board, in its sole discretion, may amend, suspend
or terminate the Plan, or any part thereof, at any time and for any
reason.  The amendment, suspension, or
termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award theretofore granted
to such Participant.  No Award may be
granted during any period of suspension or after termination of the Plan.  Notwithstanding the foregoing, the Board may
not, without stockholder approval, (a) reduce the exercise price of any
outstanding Award, (b) cancel and re-grant Options at a lower exercise
price (including entering into a 6-month-and-1-day cancellation and re-grant
program), (c) replace underwater Options with other Awards in an exchange,
buy-back or other scheme, or (d) replace Awards with an Award of the same
type having a lower exercise price or accelerated vesting schedule in an
exchange, buy-back or other scheme.

 

10.2         Duration of the Plan. 
The Plan shall be effective as of April 15, 2003, and subject to Section 10.1
(regarding the Board’s right to amend or terminate the Plan), shall remain in
effect thereafter.  However, without
further stockholder approval, no Incentive Stock Option may be granted under
the Plan after April 15, 2013.

 

SECTION 11

TAX WITHHOLDING

 

11.1         Withholding
Requirements.  Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy federal, state, and local taxes (including the
Participant’s FICA obligation) required to be withheld with respect to such
Award (or exercise thereof).

 

11.2         Withholding
Arrangements.  The Committee, in its sole discretion and pursuant to
such procedures as it may specify from time to time, may permit a Participant
to satisfy such tax withholding obligation, in whole or in part by (a) electing
to have the Company withhold otherwise deliverable Shares, or (b) delivering
to the Company already-owned Shares having a Fair Market Value equal to the
minimum amount required to be withheld. 
The amount of the withholding requirement shall be deemed to include any
amount which the Committee agrees may be withheld at the time the election is
made, not to exceed the amount determined by using the maximum federal, state
or local marginal income tax rates applicable to the Participant with respect to
the Award on the date that the amount of tax to be withheld is to be
determined.  The Fair Market Value of the
Shares to be withheld or delivered shall be determined as of the date that the
taxes are required to be withheld.

 

SECTION 12

LEGAL CONSTRUCTION

 

12.1         Gender and Number. 
Except where otherwise indicated by the context, any masculine term used herein
also shall include the feminine; the plural shall include the singular and the
singular shall include the plural.

 

17

 

12.2         Severability. 
In the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

 

12.3         Requirements of Law. 
The granting of Awards and the issuance of Shares under the Plan shall be
subject to all applicable laws, rules, and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

 

12.4         Securities Law
Compliance.  With respect to Section 16 Persons, transactions
under this Plan are intended to comply with all applicable conditions of Rule 16b-3.  To the extent any provision of the Plan,
Award Agreement or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by
the Committee.

 

12.5         Governing Law. 
The Plan and all Award Agreements shall be construed in accordance with and
governed by the laws of the State of Delaware.

 

12.6         Captions. 
Captions are provided herein for convenience only, and shall not serve as a
basis for interpretation or construction of the Plan.

 

18

 

EXECUTION

 

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Plan on the date indicated below.

 

	
   

  	
  HESKA CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: January 8, 2009

  	
  By:

  	
       /s/ Robert B. Grieve

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

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