Document:

Exhibit

Exhibit 10.8

HESKA CORPORATION
2003 EQUITY INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT

THIS AGREEMENT is made as of the _________ day of ____________, 20__ (the “Grant Date”) by and between Heska Corporation (the “Company”) and ___________ (the “Executive”).
In consideration of the mutual covenants and representations herein set forth, the Company and Executive agree as follows:
SECTION 1.    GRANT OF STOCK
1.1    Precedence of Plan.  This Agreement is subject to and shall be construed in accordance with the terms and conditions of the Heska Corporation 2003 Equity Incentive Plan (the “Plan”), as now or hereinafter in effect.  Any capitalized terms that are used in this Agreement without being defined and that are defined in the Plan shall have the meaning specified in the Plan.  
1.2    Grant of Stock.  The Company hereby grants to Executive an aggregate of ___________ shares of Restricted Stock (the “Shares”), subject to vesting as provided in Section 2.

SECTION 2.    UNVESTED SHARES SUBJECT TO FORFEITURE.

2.1    Shares Subject to Forfeiture.  The Shares are subject to time-based and performance-based vesting requirements.

a.    The Shares will vest in accordance with the Vesting Schedule attached as Attachment 1, with the performance-based vesting to be tied to one or more of the Company’s annual operating cash flow, annual operating income, annual revenue, stock price level and stock price performance as compared to the S&P 500 Index over a specified time period.  The shares will vest or be forfeited in a maximum of seven (7) years.

b.    In the event of a Change of Control prior to the vesting of all Shares, any remaining unvested Shares will vest.  For this purpose, “Change of Control” means (i) a sale of all or substantially all of the Company's assets, (ii) any merger, consolidation, or other business combination transaction of the Company with or into another corporation, entity, or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, (iii) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company, (iv) a contested election of Directors, as a result of which or in connection with which the persons who were Directors before such election 

or their nominees cease to constitute a majority of the Board, or (v) a dissolution or liquidation of the Company.

c.    In the event that Executive's employment with the Company is terminated at least one (1) year following the Grant Date because of either (i) Executive's death or (ii) Executive’s Disability, any remaining unvested Shares will vest.

d.    In the event that Executive's employment with the Company is terminated prior to the vesting of all Shares for any reason other than death or Disability, Executive will forfeit all right to any unvested Shares.  In the event that Executive’s employment with the Company is terminated prior to one (1) year following the Grant Date because of either (i) Executive’s death or (ii) Executive’s Disability, Executive will forfeit all right to any unvested Shares.

2.2    Restriction on Transfer.  Until the Shares are vested, the Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated.

SECTION 3.    STOCKHOLDER RIGHTS

3.1    Stock Register and Certificates.  The Shares will be recorded in the stock register of the Company in the name of Executive.  If applicable, a stock certificate or certificates representing the Shares will be registered in the name of Executive, but such certificates shall remain in the custody of the Company.  Executive shall deposit with the Company a Stock Assignment Separate from Certificate in the form attached below as Attachment 2, endorsed in blank, so as to permit retransfer to the Company of all or a portion of the Shares that are forfeited or otherwise do not become vested in accordance with the Plan and this Agreement.

3.2    Exercise of Stockholder Rights.  Executive shall have the right to vote the Shares (to the extent of the voting rights of said Shares, if any), to receive and retain all regular cash dividends and such other distributions, as the Board of Directors of the Company may, in its discretion, designate, pay or distribute on such Shares, and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Shares, except as set forth in this Agreement and the Plan.

3.3    Legends.  Certificates, if any, representing the Shares will contain the following or other legends in the Company’s discretion:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON AND OBLIGATIONS WITH RESPECT TO TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
SECTION 4.    RESPONSIBILITY FOR TAXES.

4.1    Section 83(b) Election.  Executive may complete and file with the Internal Revenue Service an election pursuant to Section 83(b) of the Internal Revenue Code to be taxed 

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currently on the fair market value of the Shares without regard to the vesting restrictions set forth in this Agreement.  Executive shall be responsible for all taxes associated with the acceptance of the transfer of the Shares, including any tax liability associated with the representation of fair market value if the election is made pursuant to Code Section 83(b).

4.2    Withholding.  In accordance with Section 11 of the Plan, Executive agrees to remit to the Company an amount sufficient to satisfy federal, state and local taxes (including the Executive’s FICA obligation) required to be withheld with respect to the vesting of the Shares, or otherwise to satisfy such obligation as permitted under the Plan.  The Company has the right to deduct from any salary or other payments to be made to Executive any federal, state or local taxes required by law to be so withheld.  

SECTION 5.    MISCELLANEOUS.

5.1    Not an Employment Contract.  This Agreement is not an employment contract and nothing in this Agreement shall be deemed to create in any way whatsoever any obligation on the part of Executive to remain in the service of the Company in any capacity, or of the Company to continue Executive’s service in any capacity.

5.2    Effect on Employee Benefits.  Executive agrees that the Award will constitute special incentive compensation that will not be taken into account as “salary” or “compensation” or “bonus” in determining the amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless so provided in such plan.

5.3    Further Assurances.  The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

5.4    Entire Agreement.  This Agreement, including any exhibits, is the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral and written understandings of the parties.

5.5    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware as applied to contracts between Delaware residents to be wholly performed within the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
	
					
	EXECUTIVE
	 
	HESKA CORPORATION

	 
	 
	 
	a Delaware corporation

	 
	 
	 
	 
	 

	 
	 
	By:
	 

	 
	 
	 
	Title:
	 

	Address
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

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Attachment 1

VESTING SCHEDULE

Attachment 2

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, I, _____________________, hereby sell, assign and transfer  unto ______________________________(__________) shares of the Common Stock of Heska Corporation, standing in my name on the books of said corporation represented by Certificate No.         herewith and do hereby irrevocably constitute and appoint                                              to transfer said stock on the books of the within-named corporation with full power of substitution in the premises.

Dated:                 , 20    .
	
			
	 
	Signature:
	 

This Assignment Separate from Certificate was executed in conjunction with the terms of a Restricted Stock Grant Agreement between the above assignor and Heska Corporation, dated __________ __, 20__.

		
	Instruction:
	Please do not fill in any blanks other than the signature line.Exhibit

Exhibit 10.9

HESKA CORPORATION
2003 EQUITY INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT

(Management Incentive Plan Award)

THIS AGREEMENT is made as of the _________ day of ____________, 20__ (the “Grant Date”) by and between Heska Corporation (the “Company”) and ___________ (the “Executive”), in connection with the Executive’s election to receive a portion of Executive’s award under the ____ Management Incentive Plan in the form of Restricted Stock.
In consideration of the mutual covenants and representations herein set forth, the Company and Executive agree as follows:
SECTION 1.    GRANT OF STOCK.

1.1    Precedence of Plan.  This Agreement is subject to and shall be construed in accordance with the terms and conditions of the Heska Corporation 2003 Equity Incentive Plan (the “Plan”), as now or hereinafter in effect.  Any capitalized terms that are used in this Agreement without being defined and that are defined in the Plan shall have the meaning specified in the Plan.  

1.2    Grant of Stock.  The Company hereby grants to Executive an aggregate of ___________ shares of Restricted Stock (the “Shares”), subject to vesting as provided in Section 2.

SECTION 2.    UNVESTED SHARES SUBJECT TO FORFEITURE.

2.1    Shares Subject to Forfeiture.  

a.    The Shares are subject to vesting requirements as established in connection with the Management Incentive Plan, including the terms and conditions for awards made under the _____ Management Incentive Plan (the “MIP”). As described in more detail in the MIP, up to 100% of the Shares will vest at the later of the time payments are made under the MIP (the “Payout Time”) or one (1) year from the Grant Date, and will vest as determined by dividing ___% of the Executive’s MIP Payout (as defined in the MIP) by $_____, and rounding to the nearest whole Share. Executive will forfeit all Shares that do not vest at that time.

b.    In the event that the Executive is an active employee through December 31, ____ and at least one (1) year from the Grant Date and Executive’s employment with the Company is terminated because of either (i) Executive's death or (ii) Executive’s Disability, up to 100% of the Shares will vest at the Payout Time as determined by dividing ___% of the Executive’s MIP Payout (as defined in the MIP) by $_____, and rounding to the nearest whole Share. Executive will forfeit all Shares that do not vest at that time.

c.    Except in the cases of (i) either a Change in Control of the Company, the effect of which is governed by the MIP, or (ii) the circumstances described in subsection b. above, which is governed by subsection b. above, in the event that Executive’s employment with 

the Company is terminated prior to vesting, Executive will forfeit all right to the Shares.  For the avoidance of doubt, in the event Executive’s employment is terminated due to Executive’s death on or before December 31, ____, Executive will forfeit all right to the Shares but this forfeiture is not intended to dimish any MIP Payout to which Executive’s designated beneficiary is entitled, as governed by the MIP.

2.2    Restriction on Transfer.  Until the Shares are vested, the Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated.

SECTION 3.    STOCKHOLDER RIGHTS

3.1    Stock Register and Certificates.  The Shares will be recorded in the stock register of the Company in the name of Executive.  If applicable, a stock certificate or certificates representing the Shares will be registered in the name of Executive, but such certificates shall remain in the custody of the Company.  Executive shall deposit with the Company a Stock Assignment Separate from Certificate in the form attached below as Attachment 1, endorsed in blank, so as to permit retransfer to the Company of all or a portion of the Shares that are forfeited or otherwise do not become vested in accordance with the Plan and this Agreement.

3.2    Exercise of Stockholder Rights.  Executive shall have the right to vote the Shares (to the extent of the voting rights of said Shares, if any), to receive and retain all regular cash dividends and such other distributions, as the Board of Directors of the Company may, in its discretion, designate, pay or distribute on such Shares, and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Shares, except as set forth in this Agreement and the Plan.

3.3    Legends.  Certificates, if any, representing the Shares will contain the following or other legends in the Company’s discretion:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON AND OBLIGATIONS WITH RESPECT TO TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
SECTION 4.    RESPONSIBILITY FOR TAXES.

4.1    Section 83(b) Election.  Executive may complete and file with the Internal Revenue Service an election pursuant to Section 83(b) of the Internal Revenue Code to be taxed currently on the fair market value of the Shares without regard to the vesting restrictions set forth in this Agreement.  Executive shall be responsible for all taxes associated with the acceptance of the transfer of the Shares, including any tax liability associated with the representation of fair market value if the election is made pursuant to Code Section 83(b).

4.2    Withholding.  In accordance with Section 11 of the Plan, Executive agrees to remit to the Company an amount sufficient to satisfy federal, state and local taxes (including the Executive’s FICA obligation) required to be withheld with respect to the vesting of the Shares, or 

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otherwise to satisfy such obligation as permitted under the Plan.  The Company has the right to deduct from any salary or other payments to be made to Executive any federal, state or local taxes required by law to be so withheld. 
 
SECTION 5.    MISCELLANEOUS.

5.1    Not an Employment Contract.  This Agreement is not an employment contract and nothing in this Agreement shall be deemed to create in any way whatsoever any obligation on the part of Executive to remain in the service of the Company in any capacity, or of the Company to continue Executive’s service in any capacity.

5.2    Effect on Employee Benefits.  Executive agrees that the Award will constitute special incentive compensation that will not be taken into account as “salary” or “compensation” or “bonus” in determining the amount of any payment under any pension, retirement, profit sharing or other remuneration plan of the Company unless so provided in such plan.

5.3    Further Assurances.  The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

5.4    Entire Agreement.  This Agreement, including any exhibits, is the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral and written understandings of the parties.

5.5    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware as applied to contracts between Delaware residents to be wholly performed within the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
	
					
	EXECUTIVE
	 
	HESKA CORPORATION

	 
	 
	 
	a Delaware corporation

	 
	 
	 
	 
	 

	 
	 
	By:
	 

	 
	 
	 
	Title:
	 

	Address
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

-3-

Attachment 1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, I, _____________________, hereby sell, assign and transfer unto                                                                  (                 ) shares of the Common Stock of Heska Corporation, standing in my name on the books of said corporation represented by Certificate No.         herewith and do hereby irrevocably constitute and appoint                                              to transfer said stock on the books of the within-named corporation with full power of substitution in the premises.

Dated:                 , 20    .
	
			
	 
	Signature:
	 

This Assignment Separate from Certificate was executed in conjunction with the terms of a Restricted Stock Grant Agreement between the above assignor and Heska Corporation, dated __________ __, 20__.

		
	Instruction:
	Please do not fill in any blanks other than the signature line.

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