Document:

Employment Agreement between Registrant and Jason A. Napolitano

 
EXHIBIT 10.28

 
EMPLOYMENT AGREEMENT 
 
 
THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Heska Corporation, a Delaware corporation with its principal office at 1613 Prospect Parkway, Fort Collins, Colorado 80525 (“Company”) and
Jason Napolitano (“Employee”), effective as of May 6, 2002. 
 
W I T N E S S E T H: 
 
Whereas
Company desires to employ Employee to act as its Executive Vice President, Chief Financial Officer and Corporate Secretary in an at-will capacity; and 
 
Whereas Employee wishes to act as Company’s Executive Vice President, Chief Financial Officer and Corporate Secretary as an employee in an
at-will capacity; 
 
NOW, THEREFORE, in consideration of the mutual
covenants and warranties contained herein, the parties agree as follows: 
 
1.    Employment.    Company hereby employs Employee as its Executive Vice President, Chief Financial Officer, Corporate Secretary and Employee hereby accepts such employment.

 
2.    Duties and
Responsibilities.    Employee shall serve as Executive Vice President, Chief Financial Officer of Company and Corporate Secretary, with such duties and responsibilities as may be assigned to him from time to time by his
superior officers (the “Senior Management”) and/or the Board of Directors of Company, and with such on-going daily duties and responsibilities as are typically entailed in such position. The Senior Management and/or the Board of Directors
shall be entitled to change such title, duties and responsibilities from time to time, in their discretion. Employee shall devote his full time and energies to such duties. 
 
3.    Compensation.    Company shall pay Employee, as compensation for
services rendered under this Agreement, a “base salary” per year, the amount of which shall initially be $215,000, which may be increased from time-to-time by the Company in its discretion. If for any reason during any given year, Employee
does not work an entire year, other than normal vacations as provided hereunder, the compensation will be prorated to compensate only for the actual time worked. 
 
4.    Expenses.    Company shall reimburse Employee for his reasonable
out-of-pocket expenses incurred in connection with the business of Company, including travel away from the Company’s facilities, upon presentation of appropriate written receipts and reports and subject to the customary practices and
limitations of Company. 
 
5.    Employee
Benefits.    During the term of his employment hereunder, Employee shall be entitled to receive the same benefits that the Board of Directors establishes generally for the officers and other employees of Company. These may
include, from time to time, medical insurance, life insurance, paid vacation time and medical disability insurance. 
 

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6.    Termination. 
 
(a)    At-Will. This is an at-will employment agreement and does not bind either of the parties to any specific term or duration. 
 
(i)    Employee is free to terminate employment with Company at any time, for any reason,
or for no reason, for cause or without cause, and without any prior notice. 
 
(ii)    Company is free to terminate the employment of Employee at any time, for any reason or for no reason, for cause or without cause, and without any prior notice. 
 
(b)    Termination “Without
Cause” – Separation Benefits. 
 
(i)    Upon “involuntary termination” of his employment with Heska Corporation for other than a “change of control”, as defined in Paragraph 6(c)(iii) below, Employee will be entitled to
severance pay as provided in Paragraph 6(b)(ii) below, unless he is terminated for “cause”, as defined in Paragraph 6(d)(ii) below. Employee’s entitlement to any severance pay is dependent on his execution of a complete release of
claims against Company and its affiliates. 
 
(ii)    In the event that severance pay is due to Employee as a result of the “involuntary termination” of his employment “without cause”, Employee will be paid six months’ “base
salary” at the rate in effect immediately prior to the termination in six equal monthly installments (subject to all applicable taxes and other deductions), with the first such installment due 15 days after the date of such termination and with
the following five installments due no later than monthly thereafter on Company’s then regular payroll dates. The Company will also pay the employer contribution and administrative cost of the health insurance premiums for the medical and
dental insurance coverage previously maintained by the Company for Employee and his eligible dependents during this six month period or until Employee is provided or obtains medical and dental insurance coverage by another employer or entity,
whichever first occurs. 
 
(c)    Change of Control – Separation Benefits. 
 
(i)    Upon “involuntary termination” of his employment due to a “change of control” of Heska Corporation, Employee will be entitled to severance pay as provided
in Paragraph 6(c)(iv) below, unless he is terminated for “cause”, as defined in Paragraph 6(d)(ii) below. Employee’s entitlement to any severance pay is dependent on his execution of a complete release of claims against Company and
its affiliates. 
 
(ii)    For
the purposes of this Employment Agreement, “change of control” is defined as the merger, acquisition or sale of Company or all or substantially all of its assets with, into, or to a previously unaffiliated third party entity, other than a
merger in which the shareholders of Company prior to the merger, by reason of such shareholdings, own more than 50% of the outstanding shares of the company after the merger. 
 
(iii)    The parties agree that for the purposes of this Employment Agreement, an
“involuntary termination” due to a “change of control” will be deemed to have 
 

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occurred when Employee is no longer employed by the Company’s successor following a
“change of control” because the Employee’s position is eliminated within nine (9) months of the “change of control” or when Employee’s job responsibilities are materially and negatively changed within nine (9) months of
the “change of control”, and Employee elects to resign. 
 
(iv)    In the event that severance pay is due to Employee as a result of the “involuntary termination” of his employment without “cause” due to a “change of control”,
Employee will be paid twelve (12) months “base salary” at the rate in effect immediately prior to the termination in 12 equal monthly installments (subject to all applicable taxes and other deductions), with the first such installment due
15 days after the date of such termination and with the following eleven installments due no later than monthly thereafter on Company’s then regular payroll dates. The Company will also pay the employer contribution and administrative cost of
the health insurance premiums for the medical and dental insurance coverage previously maintained by the Company for Employee and his eligible dependents during this twelve month period or until Employee is provided or obtains medical and
dental insurance coverage by another employer or entity, whichever first occurs. Employee also shall be entitled to the immediate vesting as of the effective date of termination, under all stock option agreements, stock purchase agreements, or other
stock rights granted to Employee by Company prior to the effective termination date. 
 
(d)    Termination “For Cause”; Voluntary Resignation. 
 
(i)    If Company or its successor terminates Employee for “cause” or if Employee’s employment
terminates for any reason other than a termination by the Company “without cause” (as set forth in paragraph 6(b)) or due to a “change of control” (as set forth in Paragraph 6(c)), Employee will not be entitled to any severance
pay and shall only receive pay and benefits which Employee earned as of the date of termination. 
 
(ii)    The parties agree that for the purposes of this Employment Agreement, a termination for “cause” will be deemed to have occurred when Company terminates
Employee’s employment because of the occurrence of any of the following events: 
 
(A)    Employee shall refuse to accept a change or modification of his title, duties or responsibilities by senior management and/or the Board of Directors; 
 
(B)    Employee shall refuse to accept a
reasonable transfer not arising from a change in control to a position with comparable responsibility and salary with any affiliated company that does not involve commuting more than fifty (50) miles each way from the Company headquarters in the
Fort Collins, Colorado area; 
 
(C)    Employee shall die, be adjudicated to be mentally incompetent or become mentally or physically disabled to such an extent that Employee is unable to perform his duties under this Employment Agreement for a
period of ninety (90) consecutive days; 
 

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(D)    Employee shall commit any breach of his obligations under this Agreement; 
 
(E)    Employee shall commit any breach of any material fiduciary duty to Company; 
 
(F)    Employee shall be convicted of, or
enter a plea of nolo contendere to, any crime involving moral turpitude or dishonesty, whether a felony or misdemeanor, or any crime which reflects so negatively on Company as to be detrimental to Company’s image or interests;

 
(G)    Employee shall
commit insubordination or refusal to comply with any request of his supervisor or the Board of Directors of Company relating to the scope or performance of Employee’s duties; 
 
(H)    Employee shall possess any illegal drug on Company premises or Employee shall be
under the influence of illegal drugs or abusing prescription drugs or alcohol while on Company business or on Company premises; or 
 
(I)    Employee shall conduct himself in a manner that, in the good faith and reasonable determination of the Senior
Management and/or the Board of Directors, demonstrates Employee’s unfitness to serve. 
 
7.    Proprietary Information.    Employee agrees that, if he has not already done so, he will promptly execute Company’s standard employee
proprietary information and assignment of inventions agreement. 
 
8.    Arbitration; Attorneys’ Fees.    If any dispute arises under this Agreement or by reason of any asserted breach of it, or from the Parties’ employment relationship or any
other relationship, the Company, at its sole discretion, may elect to have the dispute resolved through arbitration, so long as all of the arbitrator’s fees and expenses are borne exclusively by the Company. The arbitration shall be conducted
pursuant to the rules of the American Arbitration association, with the arbitrator being selected by mutual agreement of the parties. Regardless of whether the dispute is resolved through arbitration or litigation, the prevailing party shall be
entitled to recover all costs and expenses, including reasonable attorneys’ fees, incurred in enforcing or attempting to enforce any of the terms, covenants or conditions, including costs incurred prior to commencement of arbitration or legal
action, and all costs and expenses, including reasonable attorneys’ fees, incurred in any appeal from an action brought to enforce any of the terms, covenants or conditions. For purposes of this section, “prevailing party” includes,
without limitation, a party who agrees to dismiss a suit or proceeding upon the other’s payment or performance of substantially the relief sought. 
 
9.    Notices.    Any notice to be given to Company under the terms of this Agreement shall be addressed to
Company at the address of its principal place of business. Any notice to be given to Employee shall be addressed to him at his home address last shown on the records of Company, or to such other address as Employee shall have given notice of
hereunder. 
 
10.    Miscellaneous.    This Agreement shall be governed by the laws of the State of Colorado as applied to contracts between residents of that state to be performed wholly within that
state. This Agreement is the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior understandings and agreements. This Agreement may be modified 
 

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only by a written document signed by both parties, except that the Company, in its discretion, may modify
any policies, guidelines or other directives, none of which shall constitute a binding agreement or impose any contractual obligations. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties.

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

	 HESKA CORPORATION

	
	 By:
	 	 /s/    Robert B.
Grieve        

	
	 Title:
	 	 Chairman and Chief Executive Officer

 

	
	 EMPLOYEE

	
	 Name:
	 	 /s/    Jason
Napolitano        

	 	 	                 Jason
Napolitano

 

5<PAGE>

                                      NOTE

$2,000,000.00                                                Arlington, Virginia
                                                                  April 27, 1999

     FOR VALUE RECEIVED, PAUL L. PERITO (the "Maker"), promises to pay to the
order of STAR SCIENTIFIC, INC. ("SSI"), at 16 South Market Street, Petersburg,
Virginia 23803, or at such other place as the holder hereof may in writing
designate, without offset, in immediately available funds, the principal sum of
Two Million Dollars and No Cents ($2,000,000.00), plus accrued interest on the
unpaid principal balance of this Note at the rate of seven percent (7%) per
annum.

     This Note shall be payable interest only annually on the 27th day of each
and every April beginning on April 27, 2000, and continuing until April 27,
2004, when the unpaid principal balance of this Note, plus all accrued interest,
charges and fees shall be due and payable in full. Interest shall be calculated
on the basis of a 365-day year for the actual number of days outstanding. This
Note may be prepaid in full, or in part, at any time without penalty or premium.

     Maker's liability for repayment of amounts due under this Note shall be
limited to fifteen percent (15%) of the original principal balance of this Note.

     The failure of Maker to make when due any installment or other payment
described herein, whether of principal, interest, late charges or other
authorized charges due under this Note, which continues for a period of ten (10)
days after receipt by Maker of notice thereof from SSI shall be an event of
default under this Note and upon such an event of default, the entire unpaid
balance of this Note shall, at the option of the holder, become immediately due
and payable without notice or demand. The remedies provided in this Note and by
any other agreement between the holder and any party are cumulative and not
exclusive of any remedies provided by law. No failure or delay on the part of
SSI to exercise any right, power or remedy under this Note shall be constructed
as a waiver of the right to exercise the same or any other right at any time.
Maker agrees to pay all costs and expenses, including reasonable attorneys' fees
which the holder incurs in collecting this Note.

     Maker waives presentment, demand, protest and notice of dishonor and all
exemptions, whether homestead or otherwise, as to the obligations evidenced by
this Note.

     SSI and any and each of its successors and assigns which holds this Note is
herein referred to as the "holder." This Note shall apply to and bind each
party's heirs, personal representatives, successors, and assigns and shall inure
to the benefit of the holder, its successors and assigns.

     This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia, without reference to its conflict of laws
principles.

<PAGE>

     IN WITNESS WHEREOF, the Maker has executed and delivered this Note as of
the date first above written.

                                                  /s/ Paul L. Perito      [SEAL]
                                                 --------------------------
                                                  Paul L. Perito

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