Document:

EXHIBIT 10.9

HESKA CORPORATION 1997 STOCK
INCENTIVE PLAN

STOCK OPTION AGREEMENT

(EMPLOYEES AND CONSULTANTS)

Tax Treatment                                                                This
option is intended to be an incentive stock option under section 422 of the
Internal Revenue Code or a nonstatutory option, as provided in the Notice of
Stock Option Grant.

 

Vesting/

Exercisability                                                                     This
option vests and becomes exercisable in installments, as shown in the Notice of
Stock Option Grant.  In addition, this
option shall vest and become exercisable in full if one of the following events
occurs:

 

·                       Your
service as an Employee, Consultant or Outside Director of the Company or a
Subsidiary terminates because of death, or

 

·                       The
Company is a party to a merger or other reorganization while you are an
Employee or Consultant of the Company or a Subsidiary, this option is not
continued by the Company and is not assumed by the surviving corporation or its
parent, and the surviving corporation or its parent does not substitute its own
option for this option, or

 

·                       The
Company is subject to a “Change in Control” while you are an Employee or
Consultant of the Company or a Subsidiary and, within 12 months after the
Change in Control, the surviving entity terminates your service without your
consent and without Cause, as defined below. 
If the surviving entity demotes you to a lower position, materially
reduces your authority or responsibilities, materially reduces your total
compensation or announces its intention to relocate your principal place of
work by more than 20 miles, then that action will be treated as a termination
of your service.

 

·                       “Cause”
shall mean (i) your failure to perform your assigned duties or responsibilities
as an Employee or Consultant of the Company or a Subsidiary (other than a
failure resulting from total and permanent disability, as discussed below)
after notice thereof from the Company describing your failure to perform such
duties or responsibilities; (ii) your material breach of any confidentiality
agreement or invention assignment agreement between you and the Company or a
Subsidiary; (iii) your engaging in any act of dishonesty, fraud,
misrepresentation, moral turpitude or misappropriation of material property
that was or is materially injurious to the Company or its affiliates; (iv) your
violation of any federal or state law or regulation applicable to the Company’s

                             business;
or (v) your being convicted of, or entering a plea of nolo contendere to, any
crime.

 

No
additional shares become vested after your service as an Employee, Consultant
or Outside Director of the Company or a Subsidiary has terminated for any
reason other than those outlined herein.

 

Term                                                                                                                  This
option expires in any event at the close of business at Company headquarters on
the day before the 10th anniversary of the Date of Grant, as shown in the
Notice of Stock Option Grant.  (It will
expire earlier if your service terminates, as described below.)

 

Regular Termination                            If
your service as an Employee, Consultant or Outside Director of the Company or a
Subsidiary terminates for any reason except death or total and permanent
disability, then this option will expire at the close of business at Company
headquarters on the date three months after your termination date.  The Company determines when your service
terminates for this purpose.

 

Death                                                                                                                If
your service as an Employee, Consultant or Outside Director of the Company or a
Subsidiary terminates because of your death, then this option will expire at
the close of business at Company headquarters on the date 12 months after the
date of death.

 

Disability                                                                                           If
your service as an Employee, Consultant or Outside Director of the Company or a
Subsidiary terminates because of your total and permanent disability, then this
option will expire at the close of business at Company headquarters on the date
12 months after your termination date.

 

For all purposes under
this Agreement, “total and permanent disability” means that you are unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.

 

Leaves of Absence                                             Vesting of
this option shall be suspended during any unpaid leave of absence unless
continued vesting is required by the terms of the leave or by applicable law.

 

For purposes of this
option, your service does not terminate when you go on a military leave, a sick
leave or another bona fide leave of absence, if
the Company approved your leave in writing and if continued crediting of
service is required by the terms of the leave or by applicable law.

 

For purposes of incentive
stock options, no such leave may exceed 90 days, unless reemployment upon
expiration of such leave is guaranteed by the terms of the leave or by
applicable law.  If reemployment upon
expiration of a leave of absence approved by the Company is not so 

guaranteed, then three
months following the 91st day of such leave, an incentive stock option shall
cease to be treated as an incentive stock option and shall be treated for tax
purposes as a nonstatutory option.

 

Unless you immediately
return to active work when the approved leave ends, your service will
terminate.

 

Restrictions on Exercise          The Company will not
permit you to exercise this option if the issuance of shares at that time would
violate any law or regulation.

 

Notice of Exercise                                              When
you wish to exercise this option, you must notify the Company by filing the
proper “Notice of Exercise” form at the address given on the form.  Your notice must specify how many shares you
wish to purchase.  The exercise will be
effective when the Company receives the Notice of Exercise with the option
exercise payment described herein.

 

If someone else wants to
exercise this option after your death, that person must prove to the Company’s
satisfaction that he or she is entitled to do so.

 

Form of Payment                                                    When
you submit your notice of exercise, you must include payment of the option
exercise price for the shares you are purchasing.  Payment may be made in one (or a combination
of two or more) of the following forms:

 

·                  Your
personal check, a cashier’s check or a money order.

 

·                  Certificates
for shares of Company stock that you own, along with any forms needed to affect
a transfer of those shares to the Company. 
The value of the shares, determined as of the effective date of the
option exercise, will be applied to the option exercise price. However, you may
not surrender shares of Company stock in payment of the exercise price if your
action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to this option for financial reporting
purposes.

 

·                  Irrevocable
directions to a securities broker approved by the Company to sell all or part
of your option shares and to deliver to the Company proceeds from the sale in
an amount sufficient to pay the option exercise price and any withholding
taxes.  (The balance of the sale
proceeds, if any, will be delivered to you.) 
The directions must be given by signing a special “Notice of Exercise”
form provided by the Company.

 

Withholding 

Taxes and Stock 

Withholding                                                                           You
will not be allowed to exercise this option unless you make arrangements
acceptable to the Company to pay any withholding taxes that may be due as a result
of the option exercise.  These
arrangements may include (with the Company’s approval) withholding shares of
Company stock that otherwise would be issued to you when you 

exercise this
option.  The value of these shares,
determined as of the effective date of the option exercise, will be applied to
the withholding taxes.

 

Restrictions on Resale                    By signing
this Agreement, you agree not to sell any option shares at a time when
applicable laws, Company policies or an agreement between the Company and its
underwriters prohibit a sale.  This
restriction will apply as long as you are an Employee, Consultant or Outside
Director of the Company or a Subsidiary.

 

Transfer of Option                                          Prior
to your death, only you may exercise this option.  You cannot transfer or assign this
option.  For instance, you may not sell
this option or use it as security for a loan. 
You may, however, dispose of this option in your will, by the laws of
descent and distribution or through a beneficiary designation.

 

Regardless of any marital
property settlement agreement, the Company is not obligated to honor a notice
of exercise from your former spouse, nor is the Company obligated to recognize
your former spouse’s interest in your option in any other way.

 

Retention Rights                                                   Neither
your option nor this Agreement give you the right to be employed or otherwise
retained by the Company or a Subsidiary in any capacity.  The Company or a Subsidiary reserves the
right to terminate your service at any time, with or without cause.

 

Stockholder Rights                                     You,
or your estate or heirs, have no rights as a stockholder of the Company until
you have exercised this option by giving the required notice to the Company and
paying the exercise price.

 

Applicable Law                                                              This
Agreement will be interpreted and enforced under the laws of the State of
Colorado (without giving effect to its conflict of laws provisions).

The Plan and 

Other Agreements                                         The
1997 Stock Incentive Plan is incorporated in this Agreement by reference.  Unless otherwise defined herein, all
capitalized terms herein have the same defined meanings as in the 1997 Stock
Incentive Plan.

 

This Agreement and the
Plan constitute the entire understanding between you and the Company regarding
this option.  Any prior agreements,
commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by another
written agreement, signed by both parties.

BY
SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND 

CONDITIONS DESCRIBED ABOVE AND IN THE 1997 STOCK INCENTIVE PLAN.EXHIBIT 10.10

HESKA CORPORATION 1997 STOCK
INCENTIVE PLAN

STOCK
OPTION AGREEMENT

(OUTSIDE DIRECTORS)

	
  Tax Treatment

  	
   

  	
  This option is intended to be a nonstatutory option.

  

 

	
  Vesting/

  Exercisability

  	
   

  	
  This option is immediately exercisable, but subject
  to vesting as indicated in the Notice of Stock Option Grant. In the event of
  termination of your service as an Outside Director of the Company, any
  unvested shares issued upon exercise are subject to repurchase by the Company
  at the same price as the original Exercise Price Per Share. The Company’s
  right to repurchase such shares shall lapse as the shares become vested as
  indicated in the Notice of Stock Option Grant.

  

 

In addition, this option
becomes vested in full if one of the following events occurs:

 

·                  Your service as
an Outside Director of the Company terminates because of death, total and permanent
disability, or retirement at or after age 65, or

 

·                  A Change in
Control with respect to the Company occurs while you are an Outside Director of
the Company.

 

No additional shares
become vested after your service as an Employee, Consultant or Outside Director
of the Company or a Subsidiary has terminated for any reason other than those
outlined herein.

 

	
  Term

  	
   

  	
  This option expires in any event at the close of
  business at Company headquarters on the day before the 10th anniversary of
  the Date of Grant, as shown in the Notice of Stock Option Grant. (It will
  expire earlier if your service terminates, as described below.)

  
	
   

  	
   

  	
   

  
	
  Regular

  Termination

  	
   

  	
  If your service as an Employee, Consultant or
  Outside Director of the Company or a Subsidiary terminates for any reason
  except death or total and permanent disability, then this option will expire
  at the close of business at Company headquarters on the date three months
  after your termination date. The Company determines when your service
  terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Death

  	
   

  	
  If your service as an Employee, Consultant or
  Outside Director of the Company or a Subsidiary terminates because of your
  death, then this option will expire at the close of business at Company
  headquarters on the date 12 months after the date of death.

  
	
   

  	
   

  	
   

  
	
  Disability

  	
   

  	
  If your service as an Employee, Consultant or
  Outside Director of the Company or a Subsidiary terminates because of your
  total and permanent disability, then this option will expire at the close of
  business at Company headquarters on the date 12 months after your termination
  date.

  

 

For all purposes under
this Agreement, “total and permanent disability” means that you are unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.

 

	
  Restrictions on

  Exercise

  	
   

  	
  The Company will not permit you to exercise this
  option if the issuance of shares at that time would violate any law or
  regulation.

  

 

	
  Notice of Exercise

  	
   

  	
  When you wish to exercise this option, you must
  notify the Company by filing the proper “Notice of Exercise” form at the
  address given on the form. Your notice must specify how many shares you wish
  to purchase. The exercise will be effective when the Company receives the
  Notice of Exercise with the option exercise payment described herein.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If someone else wants to exercise this option after
  your death, that person must prove to the Company’s satisfaction that he or
  she is entitled to do so.

  
	
   

  	
   

  	
   

  
	
  Exercise of

  	
   

  	
   

  
	
  Unvested Shares

  	
   

  	
  Exercise of unvested shares is allowed under the
  Plan. If you would like to exercise your option before it is vested, you must
  complete a Stock Repurchase Agreement, which provides for the repurchase of
  that portion of the shares that remain unvested at the time of your
  termination.

  
	
   

  	
   

  	
   

  
	
  Form of Payment

  	
   

  	
  When you submit your notice of exercise, you must
  include payment of the option exercise price for the shares you are
  purchasing. Payment may be made in one (or a combination of two or more) of
  the following forms:

  

 

·                  Your
personal check, a cashier’s check or a money order.

 

·                  Certificates
for shares of Company stock that you own, along with any forms needed to affect
a transfer of those shares to the Company. 
The value of the shares, determined as of the effective date of the
option exercise, will be applied to the option exercise price.  However, you may not surrender shares of
Company stock in payment of the exercise price if your action would cause the
Company to recognize compensation expense (or additional compensation expense)
with respect to this option for financial reporting purposes.

 

·                  Irrevocable
directions to a securities broker approved by the Company to sell all or part
of your option shares and to deliver to the Company proceeds from the sale in
an amount sufficient to pay the option exercise price and any withholding
taxes.  (The balance of the sale
proceeds, if any, will be delivered to you.) 
The directions must be given by signing a special “Notice of Exercise”
form provided by the Company.

 

	
  Withholding 

  Taxes and Stock

  Withholding

  	
  You will not be allowed to exercise this option
  unless you make arrangements acceptable to the Company to pay any withholding
  taxes 

  

 

 

	
  

  	
   

  	
  that may be due as a result of the option exercise.
  These arrangements may include (with the Company’s approval) withholding
  shares of Company stock that otherwise would be issued to you when you
  exercise this option. The value of these shares, determined as of the
  effective date of the option exercise, will be applied to the withholding
  taxes.

  
	
   

  	
   

  	
   

  
	
  Repurchase Rights

  	
   

  	
  In the event that you exercise unvested shares
  through the execution of a Stock Repurchase Agreement, the Company will have
  90 days to repurchase any shares that remain unvested at the time of your
  termination. The terms of any such repurchase will be set forth in the Stock
  Repurchase Agreement.

  
	
   

  	
   

  	
   

  
	
  Restrictions on Resale

  	
   

  	
  By signing this Agreement, you agree not to sell any
  option shares at a time when applicable laws, Company policies or an
  agreement between the Company and its underwriters prohibit a sale. This
  restriction will apply as long as you are an Employee, Consultant or Outside
  Director of the Company or a Subsidiary.

  
	
   

  	
   

  	
   

  
	
  Transfer of Option

  	
   

  	
  Prior to your death, only you may exercise this
  option. You cannot transfer or assign this option. For instance, you may not
  sell this option or use it as security for a loan. You may, however, dispose of
  this option in your will, by the laws of descent and distribution or through
  a beneficiary designation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Regardless of any marital property settlement
  agreement, the Company is not obligated to honor a notice of exercise from
  your former spouse, nor is the Company obligated to recognize your former
  spouse’s interest in your option in any other way.

  
	
   

  	
   

  	
   

  
	
  Retention Rights

  	
   

  	
  Neither your option nor this Agreement give you the
  right to be employed or otherwise retained by the Company or a Subsidiary in any
  capacity.

  
	
   

  	
   

  	
   

  
	
  Stockholder Rights

  	
   

  	
  You, or your estate or heirs, have no rights as a
  stockholder of the Company until you have exercised this option by giving the
  required notice to the Company and paying the exercise price.

  
	
   

  	
   

  	
   

  

Applicable Law                                                              This
Agreement will be interpreted and enforced under the laws of the State of
Colorado (without giving effect to its conflict of laws provisions).

 

	
  The Plan and Other Agreements

  	
   

  	
  The 1997 Stock Incentive Plan is incorporated in
  this Agreement by reference. Unless otherwise defined herein, all capitalized
  terms herein have the same defined meanings as in the 1997 Stock Incentive
  Plan.

  

 

This Agreement and the
Plan constitute the entire understanding between you and the Company regarding
this option.  Any prior agreements,
commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by another
written agreement, signed by both parties.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE 1997 STOCK INCENTIVE PLAN.

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