Document:

Exhibit 10.8

 

Heska Corporation 2008 Management
Incentive Plan

 

The
following is intended to implement the Heska Corporation Management Incentive
Plan Master Document for the year beginning on January 1, 2008 and ending
on December 31, 2008 (the “2008 MIP”). 
The Compensation Committee has agreed on the following for the 2008 MIP.

 

1)
The Category Percentages for the 2008 MIP are as follows:

 

	
  Chief
  Executive Officer

  	
   

  	
  50.0%
  of base pay

  
	
  Chief
  Financial Officer

  	
   

  	
  35.0%
  of base pay

  
	
  Vice
  Presidents

  	
   

  	
  35.0%
  of base pay

  
	
  Directors

  	
   

  	
  25.0%
  of base pay

  

 

 

2)
The Plan Allocation for the 2008 MIP is as follows:

 

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

 

3)
The Key Parameters for the 2008 MIP is as follows:

 

Budgeted
Pre-MIP Operating Income results in 100% payout.

 

4)
The Payout Structure for the 2008 MIP is as follows:

 

	
  Pre-MIP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Post-MIP

  	
   

  
	
  Operating Income

  	
   

  	
  MIP Payout

  	
   

  	
  MIP Amount (A)

  	
   

  	
  Operating Income

  	
   

  
	
  <=5,862,139

  	
   

  	
  0.0%

  	
   

  	
  —

  	
   

  	
  <=5,862,139

  	
   

  
	
  6,220,577

  	
   

  	
  10.0%

  	
   

  	
  (115,489)

  	
   

  	
  6,105,088

  	
   

  
	
  6,579,015

  	
   

  	
  20.0%

  	
   

  	
  (230,978)

  	
   

  	
  6,348,037

  	
   

  
	
  6,937,453

  	
   

  	
  30.0%

  	
   

  	
  (346,467)

  	
   

  	
  6,590,986

  	
   

  
	
  7,295,891

  	
   

  	
  40.0%

  	
   

  	
  (461,956)

  	
   

  	
  6,833,935

  	
   

  
	
  7,654,329

  	
   

  	
  50.0%

  	
   

  	
  (577,445)

  	
   

  	
  7,076,885

  	
   

  
	
  8,012,767

  	
   

  	
  60.0%

  	
   

  	
  (692,933)

  	
   

  	
  7,319,834

  	
   

  
	
  8,371,205

  	
   

  	
  70.0%

  	
   

  	
  (808,422)

  	
   

  	
  7,562,783

  	
   

  
	
  8,729,643

  	
   

  	
  80.0%

  	
   

  	
  (923,911)

  	
   

  	
  7,805,732

  	
   

  
	
  9,088,081

  	
   

  	
  90.0%

  	
   

  	
  (1,039,400)

  	
   

  	
  8,048,681

  	
   

  
	
  9,446,519

  	
   

  	
  100.0%

  	
   

  	
  (1,154,889)

  	
   

  	
  8,291,630

  	
   

  
	
  9,804,957

  	
   

  	
  110.0%

  	
   

  	
  (1,270,378)

  	
   

  	
  8,534,579

  	
   

  
	
  10,163,395

  	
   

  	
  120.0%

  	
   

  	
  (1,385,867)

  	
   

  	
  8,777,528

  	
   

  
	
  10,521,833

  	
   

  	
  130.0%

  	
   

  	
  (1,501,356)

  	
   

  	
  9,020,477

  	
   

  
	
  10,880,271

  	
   

  	
  140.0%

  	
   

  	
  (1,616,845)

  	
   

  	
  9,263,426

  	
   

  
	
  11,238,709

  	
   

  	
  150.0%

  	
   

  	
  (1,732,333)

  	
   

  	
  9,506,376

  	
   

  
	
  11,238,709+

  	
   

  	
  Capped

  	
   

  	
  (1,732,333)

  	
   

  	
  9,506,376+

  	
   

  

Notes: 

(A) 
MIP payout equals 32.22% of incremental Operating Income above the baseline
point of 2007, capped at a maximum of $1.732 million (which occurs at pre-MIP
Operating Income of $11,238,709).

 

Any
MIP payment based on Pre-MIP Operating Income over $11,238,709 will be at the
sole and absolute discretion of the Compensation Committee.Exhibit 10.10

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION
AGREEMENT is effective as of [insert date] (“Agreement”), by and between Heska
Corporation, a Delaware corporation (the “Company”), and [insert name of
person] (the “Indemnitee”), with reference to the following facts:

 

A.            The Company desires the benefits of having Indemnitee
serve as an officer and/or director secure in the knowledge that any expenses,
liability and/or losses incurred by him in his good faith service to the
Company will be borne by the Company or its successors and assigns;

 

B.            Indemnitee is willing to serve in his position with the
Company only on the condition that he be indemnified for such expenses,
liability and/or losses;

 

C.            The Company and Indemnitee recognize that obtaining
liability insurance for directors, officers and agents of a corporation at
reasonable cost may at times be difficult;

 

D.            The Company and Indemnitee recognize that there has been substantial
litigation against corporate directors, officers and agents; and

 

E.             The Company’s Restated Certificate of Incorporation
allows the Company to indemnify its directors, officers and agents to the
maximum extent permitted under Delaware law.

 

NOW, THEREFORE, the
parties hereby agree as follows:

 

1.     Definitions.  For purposes of this Agreement:

 

1.1       “Agent” shall mean any person who (a) is
or was a director, officer, employee or agent of the Company or a subsidiary of
the Company whether serving in such capacity or as a director, officer,
employee, agent, fiduciary or other official of another corporation, joint
venture, trust or other enterprise at the request of, for the convenience of,
or to represent the interests of the Company or a subsidiary of the Company or (b) was
a director, officer, employee or agent of Heska Corporation, a California
corporation and the predecessor by merger to the Company (the “Predecessor
Corporation”), whether serving in such capacity or as a director, officer,
employee, agent, fiduciary or other official of another corporation, joint venture,
trust or other enterprise at the request of, for the convenience of, or to
represent the interests of such Predecessor Corporation.

 

 

1.2       “Change of Control” shall mean the
occurrence of any of the following events after the date of this Agreement:

 

(a)           A change in the composition of the
board of directors of the Company (the “Board”), as a result of which fewer
than two-thirds of the incumbent directors are directors who either (a) had
been directors of the Company 24 months prior to such change or (b) were
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the directors who had been directors of the Company 24
months prior to such change and who were still in office at the time of the
election or nomination; or

 

(b)           Any “person” (as such term is used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”), as amended) through the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20 percent or more of the combined voting power of the
Company’s then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of
directors (the “Capital Stock”); provided, however, that any change in ownership of the Company’s
securities by any person resulting solely from a reduction in the aggregate
number of outstanding shares of Capital Stock, and any decrease thereafter in such
person’s ownership of securities, shall be disregarded until such person
increases in any manner, directly or indirectly, such person’s beneficial
ownership of any securities of the Company.

 

1.3       “Disinterested Director” shall mean a
director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is being sought by Indemnitee.

 

1.4       “Expenses” shall be broadly construed and
shall include, without limitation, (a) all direct and indirect costs
incurred, paid or accrued, (b) all attorneys’ fees, retainers, court
costs, transcripts, fees of experts, witness fees, travel expenses, food and
lodging expenses while traveling, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service, freight or other
transportation fees and expenses, (c) all other disbursements and
out-of-pocket expenses, (d) amounts paid in settlement, to the extent not
prohibited by Delaware Law, and (e) reasonable compensation for time spent
by Indemnitee for which he is otherwise not compensated by the Company or any
third party, actually 

 

2

 

and reasonably incurred
in connection with or arising out of a Proceeding, including a Proceeding by
Indemnitee to establish or enforce a right to indemnification under this
Agreement, applicable law or otherwise.

 

1.5       “Independent Counsel” shall mean a law
firm or a member of a law firm that neither is presently nor in the past five
years has been retained to represent: (a) the Company, an affiliate of the
Company or Indemnitee in any matter material to either party or (b) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall
not include any person who, under the applicable standards of professional
conduct then prevailing would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s right
to indemnification under this Agreement.

 

1.6       “Liabilities” shall mean liabilities of
any type whatsoever, including, but not limited to, judgments or fines, ERISA
or other excise taxes and penalties, and amounts paid in settlement (including
all interest, assessments or other charges paid or payable in connection with
any of the foregoing) actually and reasonably incurred by Indemnitee in
connection with a Proceeding.

 

1.7       “Delaware Law” means the Delaware General
Corporation Law, as amended and in effect from time to time or any successor or
other statutes of Delaware having similar import and effect.

 

1.8       “Proceeding” shall mean any pending,
threatened or completed action, hearing, suit or any other proceeding, whether
civil, criminal, arbitrative, administrative, investigative or any alternative
dispute resolution mechanism, including without limitation any such Proceeding
brought by or in the right of the Company.

 

2.     Employment Rights and Duties.  Subject to any other obligations imposed on
either of the parties by contract or by law, and with the understanding that
this Agreement is not intended to confer employment rights on either party
which they did not possess on the date of its execution, Indemnitee agrees to
serve as a director or officer so long as he is duly appointed or elected and
qualified in accordance with the applicable provisions of the Restated
Certificate of Incorporation (the “Certificate”) and Bylaws (the “Bylaws”) of
the Company or any subsidiary of the Company and until such time as he resigns
or fails to stand for election or until his employment terminates. Indemnitee
may from time to time also perform other services at the request, or for the
convenience of, or otherwise benefiting the Company. Indemnitee may at any time
and for any reason resign or be removed from such position (subject to any
other contractual obligation or other obligation imposed by operation of law),
in which event the Company shall have no obligation under this Agreement to
continue Indemnitee in any such position.

 

 

3

 

2.1       Directors’ and Officers’ Insurance.

 

(a)           The Company hereby covenants and
agrees that, so long as Indemnitee shall continue to serve as a director or
officer of the Company and thereafter so long as Indemnitee shall be subject to
any possible Proceeding, the Company, subject to Section 2.1(c), shall
maintain directors’ and officers’ insurance in full force and effect.

 

(b)           In all policies of directors’ and
officers’ insurance, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee the same rights and benefits, subject to the same
limitations, as are accorded to the Company’s directors or officers most favorably
insured by such policy.

 

3.     Indemnification.  The Company shall indemnify Indemnitee to the
fullest extent not prohibited by Delaware Law and the provisions of the
Certificate and Bylaws of the Company in effect on the date hereof, and as
Delaware Law, the Certificate and Bylaws may from time to time be amended (but,
in the case of any such amendment, only to the extent such amendment permits
the Company to provide broader indemnification rights than Delaware Law, the
Certificate and Bylaws permitted the Company to provide before such amendment).
The right to indemnification conferred in the Certificate shall be presumed to
have been relied upon by Indemnitee in serving or continuing to serve the
Company as a director or officer and shall be enforceable as a contract right.
Without in any way diminishing the scope of the indemnification provided by the
Certificate and this Section 3, the Company will indemnify Indemnitee if
and whenever he is or was a witness, party or is threatened to be made a
witness or a party to any Proceeding, by reason of the fact that he is or was
an Agent or by reason of anything done or not done, or alleged to have been
done or not done, by him in such capacity, against all Expenses and Liabilities
actually and reasonably incurred by Indemnitee or on his behalf in connection
with the investigation, defense, settlement or appeal of such Proceeding. In
addition to, and not as a limitation of, the foregoing, the rights of
indemnification of Indemnitee provided under this Agreement shall include those
rights set forth in the remainder of this Agreement.

 

4.     Payment
of Expenses.

 

4.1       All Expenses incurred by or on behalf of
Indemnitee shall be advanced by the Company to Indemnitee within 20 days after
the receipt by the Company of a written request for such advance which may be
made from time to time, whether prior to or after final disposition of a
Proceeding (unless there has been a final determination by a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified for such
Expenses). Indemnitee’s entitlement to advancement of Expenses 

 

 

4

 

shall include those
incurred in connection with any Proceeding by Indemnitee seeking a
determination, an adjudication or an award in arbitration pursuant to this
Agreement. The requests shall reasonably evidence the Expenses incurred by
Indemnitee in connection therewith. Indemnitee hereby undertakes to repay the
amounts advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified pursuant to the terms of this Agreement.

 

4.2       Notwithstanding any other provision in
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any Proceeding, Indemnitee shall be indemnified
against all Expenses and Liabilities actually and reasonably incurred by
Indemnitee in connection therewith.

 

5.     Procedure for Determination of
Entitlement to Indemnification.

 

5.1       Whenever Indemnitee believes that he is
entitled to indemnification pursuant to this Agreement, Indemnitee shall submit
a written request for indemnification (the “Indemnification Request”) to the
Company to the attention of the Chief Executive Officer with a copy to the
Secretary. This request shall include documentation or information which is
necessary for the determination of entitlement to indemnification and which is
reasonably available to Indemnitee. Determination of Indemnitee’s entitlement
to indemnification shall be made no later than 60 days after receipt of the
Indemnification Request. The Chief Executive Officer or the Secretary shall, promptly
upon receipt of Indemnitee’s request for indemnification, advise the Board in
writing that Indemnitee has made such request for indemnification.

 

5.2       The Indemnification Request shall set
forth Indemnitee’s selection of which of the following forums shall determine
whether Indemnitee is entitled to indemnification:

 

(1)           A majority vote of Directors who are
not parties to the action with respect to which indemnification is sought, even
though less than a quorum.

 

(2)           A written opinion of an Independent
Counsel (provided there are no such Directors as set forth in (1) above or
if such Directors as set forth in (1) above so direct or there has been a
Change of Control).

 

(3)           A majority vote of the stockholders
at a meeting at which a quorum is present, with the shares owned by the person
to be indemnified not being entitled to vote thereon.

 

 

5

 

(4)           The court in which the Proceeding is
or was pending upon application by Indemnitee.

 

The Company agrees to bear
any and all costs and expenses incurred by Indemnitee or the Company in
connection with the determination of Indemnitee’s entitlement to
indemnification by any of the above forums.

 

6.     Presumptions and Effect of Certain
Proceedings.  No initial finding by
the Board, its counsel, Independent Counsel, arbitrators or the stockholders
shall be effective to deprive Indemnitee of the protection of this indemnity,
nor shall a court or other forum to which Indemnitee may apply for enforcement
of this indemnity give any weight to any such adverse finding in deciding any
issue before it. Upon making a request for indemnification, Indemnitee shall be
presumed to be entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by judgment, order,
settlement, arbitration award or conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, (a) adversely affect the rights
of Indemnitee to indemnification except as indemnification may be expressly
prohibited under this Agreement, (b) create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Company or (c) with respect to
any criminal action or proceeding, create a presumption that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

 

7.                     Remedies of Indemnitee in Cases of
Determination not to Indemnify or to Advance Expenses.

 

7.1       In the event that (a) an initial
determination is made that Indemnitee is not entitled to indemnification, (b) advances
for Expenses are not made when and as required by this Agreement, (c) payment
has not been timely made following a determination of entitlement to
indemnification pursuant to this Agreement or (d) Indemnitee otherwise
seeks enforcement of this Agreement, Indemnitee shall be entitled to a final
adjudication in an appropriate court of the State of Delaware of his
entitlement to such indemnification or advance. Alternatively, Indemnitee at
his option may seek an award in arbitration. If the parties are unable to agree
on an arbitrator, the parties shall provide Judicial Arbitration &
Mediation Services, Inc. (“JAMS”) with a statement of the nature of the
dispute and the desired qualifications of the arbitrator. JAMS will then
provide a list of three available arbitrators. Each party may strike one of the
names on the list, and the remaining person will serve as the arbitrator. If
both parties strike the same person, JAMS will select the arbitrator from the
other two names. The arbitration award shall be made within 90 days following
the demand for arbitration. Except as set forth herein, the provisions of Delaware
law shall apply to any such arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or arbitration award. In any
such proceeding or arbitration 

 

 

6

 

Indemnitee shall be
presumed to be entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption.

 

7.2       An initial determination, in whole or in
part, that Indemnitee is not entitled to indemnification shall create no
presumption in any judicial proceeding or arbitration that Indemnitee has not
met the applicable standard of conduct for, or is otherwise not entitled to,
indemnification.

 

7.3       If an initial determination is made or
deemed to have been made pursuant to the terms of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in the absence of (a) a misrepresentation of a material fact
by Indemnitee in the request for indemnification or (b) a specific finding
(which has become final) by a court of Competent jurisdiction that all or any
part of such indemnification is expressly prohibited by law.

 

7.4       The Company and Indemnitee agree herein
that a monetary remedy for breach of this Agreement, at some later date, will
be inadequate, impracticable and difficult of proof, and further agree that
such breach would cause Indemnitee irreparable harm. Accordingly, the Company
and Indemnitee agree that Indemnitee shall be entitled to temporary and
permanent injunctive relief to enforce this Agreement without the necessity of
proving actual damages or irreparable harm. The Company and Indemnitee further
agree that Indemnitee shall be entitled to such injunctive relief, including
temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bond or other undertaking in
connection therewith. Any such requirement of bond or undertaking is hereby
waived by the Company, and the Company acknowledges that in the absence of such
a waiver, a bond or undertaking may be required by the court.

 

7.5       The Company shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable. The Company shall stipulate in any such court or
before any such arbitrator that the Company is bound by all the provisions of
this Agreement and is precluded from making any assertion to the contrary.

 

7.6       Expenses incurred by Indemnitee in
connection with his request for indemnification under, seeking enforcement of
or to recover damages for breach of this Agreement shall be borne and advanced
by the Company.

 

8.     Other Rights to Indemnification.  Indemnitee’s rights of indemnification and
advancement of expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may now or in the future be
entitled under 

 

7

 

applicable law, the
Certificate, the Bylaws, an employment agreement, a vote of stockholders or
Disinterested Directors, insurance or other financial arrangements or
otherwise.

 

9.             Limitations on Indemnification.  No indemnification pursuant to Section 3
shall be paid by the Company nor shall Expenses be advanced pursuant to Section 3:

 

9.1       Insurance.  To the extent that Indemnitee is reimbursed
pursuant to such insurance as may exist for Indemnitee’s benefit.
Notwithstanding the availability of such insurance, Indemnitee also may claim
indemnification from the Company pursuant to this Agreement by assigning to the
Company any claims under such insurance to the extent Indemnitee is paid by the
Company. Indemnitee shall reimburse the Company for any sums he receives as
indemnification from other sources to the extent of any amount paid to him for
that purpose by the Company;

 

9.2           Section 16(b).  On account and to the extent of any wholly or
partially successful claim against Indemnitee for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the Company pursuant
to the provisions of Section 16(b) or the Securities Exchange Act of
1934, as amended, and amendments thereto or similar provisions of any federal,
state or local statutory law.

 

9.3           Indemnitee’s Proceedings.  Except as otherwise provided in this
Agreement, in connection with all or any part of a Proceeding which is
initiated or maintained by or on behalf of Indemnitee, or any Proceeding by
Indemnitee against the Company or its directors, officers, employees or other
agents, unless (a) such indemnification is expressly required to be made
by Delaware Law, (b) the Proceeding was authorized by a majority of the
Disinterested Directors or (c) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in the Company
under Delaware Law.

 

10.   Duration and Scope of Agreement; Binding
Effect.  This Agreement shall
continue so long as Indemnitee shall be subject to any possible Proceeding
subject to indemnification by reason of the fact that he is or was an Agent and
shall be applicable to Proceedings commenced or continued after execution of
this Agreement, whether arising from acts or omissions occurring before or
after such execution. This Agreement shall be binding upon the Company and its
successors and assigns (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company) and shall inure to the benefit of Indemnitee and his
spouse, assigns, heirs, devisees, executors, administrators and other legal
representatives.

 

11.   Notice by Indemnitee and Defense of Claims.  Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any matter
which may 

 

8

 

be subject to
indemnification hereunder, whether civil, criminal, arbitrative, administrative
or investigative; but the omission so to notify the Company will not relieve it
from any liability which it may have to Indemnitee if such omission does not
actually prejudice the Company’s rights and, if such omission does prejudice
the Company’s rights, it will relieve the Company from liability only to the
extent of such prejudice; nor will such omission relieve the Company from any
liability which it may have to Indemnitee otherwise than under this Agreement.
With respect to any Proceeding the Company will be entitled to participate
therein at its own expense;

 

12.   Contribution.  In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to
Indemnitee in whole or part:

 

12.1     With respect to any Claim in which the
Company is jointly liable with Indemnitee (or would be if joined in the Claim)
shall in the first instance pay the entirety of the amount of Expenses,
judgments, fines, penalties and amounts paid in settlement and shall waive any
right of contribution from Indemnitee.

 

12.2     In the event that subparagraphs 12.1 of
this paragraph is held unenforceable for any reason, the Company shall , after
taking into account, among other things, contributions by other directors and
officers of the Company pursuant to indemnification agreements or otherwise,
and, in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of Indemnitee, contribute to the
payment of Indemnitee’s losses to the extent that, after other contributions
are taken into account, such losses exceed: (i) in the case of a director
of the Company or any of its subsidiaries who is not an officer of the Company
or any of such subsidiaries, the amount of fees paid to the director for serving
as a director during the 12 months preceding the commencement of the
Proceeding; or (ii) in the case of a director of the Company or any of its
subsidiaries who is also an officer of the Company or any of such subsidiaries,
the amount set forth in clause (i) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during
the 12 months preceding the commencement of the Proceeding; or (iii) in
the case of an officer of the Corporation or any of its subsidiaries, 5% of the
aggregate cash compensation paid to such officer for service in such office(s) during
the 12 months preceding the commencement of such Proceeding.

 

12.3     In the event that subparagraphs 12.1 and
12.2 are held unenforceable for any reason, with respect to any Claim in which
the Company is jointly liable with Indemnitee (or would be if joined in the
Claim), the Company shall contribute to the amount of Expenses, judgments,
fines, penalties and amounts paid in settlement as appropriate to reflect: (i) the
relative benefits received by the Company, on the one hand, and Indemnitee, on
the other hand, from the transaction from which 

 

9

 

the Claim arose, and (ii) the
relative fault of the Company, on the one hand, and of Indemnitee, on the
other, in connection with the events which resulted in such Expenses,
judgments, fines, penalties and amounts paid in settlement, as well as any
other relevant equitable considerations. 
The relative fault of the Company, on the one hand, and of Indemnitee,
on the other, shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent the circumstances resulting in such Expenses and Liabilities.

 

13.   Establishment of Trust.  Upon a Change of Control of the Company, the
Company or its successor or assign shall establish a Trust (the “Trust”) for
the benefit of the Indemnitee, the trustee (the “Trustee”) of which shall be
chosen by the Company and which is reasonably acceptable to the Indemnitee.
Thereafter, from time to time, upon receipt of a written request from
Indemnitee, the Company shall fund the Trust in amounts sufficient to satisfy
any and all Liabilities and Expenses reasonably anticipated at the time of such
request for which the Company may indemnify Indemnitee hereunder. The amount or
amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by mutual agreement of the Indemnitee and the
Company or, if the Company and the Indemnitee are unable to reach such an
agreement, by Independent Counsel selected jointly by the Company and the
Indemnitee.  The terms of the Trust shall
provide that except upon the consent of the Indemnitee and the Company, (i) the
Trust shall not be revoked or the principal thereof invaded, without the
written consent of the Indemnitee, (ii) the Trustee shall advance to the
Indemnitee, within 20 days of a request by the Indemnitee, any and all
Expenses, the Indemnitee hereby agreeing to reimburse the Trustee of the Trust
for all Expenses so advanced if a final determination is made by a court in a
final adjudication from which there is no further right of appeal that the
Indemnitee is not entitled to be indemnified under this Agreement, (iii) the
Trust shall continue to be funded by the Company in accordance with the funding
obligations set forth in this Section, (iv) the Trustee shall promptly pay
to the Indemnitee any amounts to which the Indemnitee shall be entitled
pursuant to this Agreement, and (v) all unexpended funds in the Trust
shall revert to the Company upon a final determination by Independent Counsel
selected by Indemnitee or a court of competent jurisdiction that Indemnitee has
been fully indemnified with respect to the Proceeding giving rise to the
funding of the Trust under the terms of this Agreement.

 

14.   Miscellaneous Provisions.

 

14.1     Severability, Partial Indemnity.  If any provision or provisions of this
Agreement (or any portion thereof) shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable for any reason whatever: (a) such
provision shall be limited or modified in its application to the minimum extent
necessary to avoid the invalidity, illegality or unenforceability of such
provision; (b) the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby; and (c) to the fullest extent 

 

10

 

possible, the provisions
of this Agreement shall be construed so as to give effect to the intent
manifested by the provision (or portion thereof) held invalid, illegal or
unenforceable. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of any Expenses or
Liabilities of any type whatsoever incurred by him in the investigation,
defense, settlement or appeal of a Proceeding but not entitled to all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
such total amount except as to the portion thereof for which it has been
determined pursuant to Section 5 hereof that Indemnitee is not entitled.

 

14.2     Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement.

 

14.3     Interpretation of Agreement.  It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to Indemnitee to the fullest extent not now or hereafter
prohibited by law.

 

14.4     Headings.  The headings of the Sections and paragraphs
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of, this Agreement or to affect the construction thereof.

 

14.5     Pronouns.  Use of the masculine pronoun shall be deemed
to include use of the feminine pronoun where appropriate.

 

14.6     Modification and Waiver.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties to this Agreement. No waiver of any provision of this Agreement shall
be deemed to constitute a waiver of any of the provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver. No waiver of
any provision of this Agreement shall be effective unless executed in writing.

 

14.7     Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed or (ii) mailed
by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

	
   

  	
  (a)

  	
   

  	
  If to
  Indemnitee, to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Insert name, address, and phone of

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Indemnitee]

  

11

 

	
   

  	
  (b)

  	
   

  	
  If to the
  Company to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  HESKA CORPORATION

  
	
   

  	
   

  	
   

  	
  3760 Rocky Mountain Avenue

  
	
   

  	
   

  	
   

  	
  Loveland, Colorado 80538

  
	
   

  	
   

  	
   

  	
  Attention: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  	
  (970) 493-7272

  
	
   

  	
   

  	
   

  	
  Telefax:

  	
   

  	
  (970) 619-3003

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  HESKA CORPORATION

  
	
   

  	
   

  	
   

  	
  3760 Rocky Mountain Avenue

  
	
   

  	
   

  	
   

  	
  Loveland, Colorado 80538

  
	
   

  	
   

  	
   

  	
  Attention: Secretary

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  	
  (970) 493-7272

  
	
   

  	
   

  	
   

  	
  Telefax:

  	
   

  	
  (970) 619-3003

  

 

or to such other
address as may have been furnished to Indemnitee by the Company or to the
Company by Indemnitee, as the case may be.

 

14.8     Governing Law.  The parties agree that this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, as applied to contracts between Delaware residents entered
into and to be performed entirely within Delaware.

 

14.9     Consent to Jurisdiction.  The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out
of or relates to this agreement and agree that any action instituted under this
agreement shall be brought only in the state courts of the State of Delaware.

 

14.10   Entire Agreement.  This Agreement represents the entire
agreement between the parties hereto, and there are no other agreements,
contracts or understanding between the parties hereto with respect to the
subject matter of this Agreement, except as specifically referred to herein or
as provided in Sections 8 and 2 hereof.

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement to be effective on the day and year
first above written.

 

12

 

	
   

  	
  HESKA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Robert B. Grieve

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman of the Board and

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of [Indemnitee]

  

 

 

13

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