EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Heska Corporation, a Delaware corporation with its principal office at 0000
Xxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000 ("Company"), and Xxxxx Xxxxxx
("Employee"), effective as of January 18, 1999.
WITNESSETH:
WHEREAS Company desires to employ Employee to act as its Chief Operating
Officer and President, in an at-will capacity; and
WHEREAS Employee wishes to act as Company's Chief Operating Officer and
President, 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 Chief Operating
----------
Officer and President, and Employee hereby accepts such employment.
2. Duties and Responsibilities. Employee shall serve as Chief Operating
---------------------------
Officer and President of Company, with such duties and responsibilities as may
be assigned to him from time to time by or under the direction of the Board of
Directors of Company, and with such on-going daily duties and responsibilities
as are typically entailed in such position. 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, compensation at the rate of $240,000 per year,
payable in accordance with the usual and customary payroll practices of Company.
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. In addition, Company
shall pay Employee, within sixty (60) days of the effective date hereof, a one-
time starting bonus in the amount of $60,000.
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 of Company.
In addition, Company shall pay or reimburse Employee for Employee's reasonable
moving and relocation expenses incurred in connection with Employee's relocation
from Orange County, California to Fort Xxxxxxx, Colorado (or surrounding area),
including the actual costs of moving and storage of Employee's household
belongings, temporary rental housing expenses for Employee in the Fort Xxxxxxx,
Colorado area, and travel expenses incurred by Employee or his spouse for up to
six visits between Colorado and southern California pending Employee's permanent
move to Colorado, all in accordance with Company's moving and relocation
policies as outlined in writing to Employee by 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.
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.
(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
prior notice.
(b) Severance Pay.
-------------
(i) Upon involuntary termination of his employment as defined in
subsection (ii) below, Employee will be entitled to severance pay as provided
below. Upon request by Company, Employee will sign a release of claims against
Company and its affiliates as a condition to receiving severance pay. Severance
pay shall be payable upon any involuntary termination of Employee's employment
as defined in subsection (ii) below and in all other termination circumstances
Employee shall only receive pay and benefits which Employee earned as of the
date of termination.
(ii) "Involuntary termination" shall mean any termination of
Employee's employment either: (1) as a result of a Change in Control Event (as
defined below); or (2) by Company, other than, with respect to a termination by
Company:
(A) any termination caused by Employee's transfer to any company
affiliated with Company;
(B) any termination by Company or Employee following Employee's refusal to
accept a reasonable transfer 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 his home in Fort Xxxxxxx, Colorado;
(C) Employee shall die, be adjudicated to be mentally incompetent or
become mentally or physically disabled to such an extend that Employee is unable
to perform his duties under this Employment Agreement for a period of ninety
(90) consecutive days;
(D) Company shall discontinue its business (for the purpose of this
provision, a merger, acquisition or sale of Company, or a sale of substantially
all of the assets of the Company, that does not constitute a Change in Control
Event (as defined below) shall not be deemed to be a discontinuance of the
business of Company);
(E) Employee shall commit any material breach of his obligations
under this Agreement;
(F) Employee shall commit any material breach of any material
fiduciary duty to Company;
-2-
(G) 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 to be
detrimental to Company's image or interests;
(H) Employee shall commit repeated insubordination or refusal to
comply with any reasonable request of the Board of Directors of Company relating
to the scope or performance of Employee's duties;
(I) 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
(J) Employee shall conduct himself in a manner which, in the good
faith and reasonable determination of the Board of Directors, demonstrates
Employee's substantial unfitness to serve.
For purposes of this Section 6(b)(ii), a "Change in Control Event"
shall occur upon consummation of a merger, acquisition or sale of Company or all
or substantially all its assets with, into, or to a previously unaffiliated
third party entity where, in conjunction with such event, either (x) Employee
declines to continue his employment with the acquiring company (y) Employee is
not offered a position of employment with the acquiring entity with comparable
pay, benefits, title and responsibility, or (z) the acquiring company refuses to
assume or be bound by the terms of this Agreement.
(iii) In the event that severance pay is due to Employee under Section
6(b)(i) above as a result of an involuntary termination of his employment (as
defined in Section 6(b)(i)), within three years of the date of this Agreement:
(A) Employee will be paid one (1) year's salary in twelve equal monthly
installments (subject to all applicable tax and other deductions), with the
first such installment due 15 days after the date of such termination and with
the following eleven installments due monthly thereafter on Company's regular
payroll dates; (B) in the event of an involuntary termination other than a
Change in Control Event, an additional twelve (12) months of vesting (calculated
from the effective termination date, and not from the end of the severance pay
period) under all stock option agreements, stock purchase agreement or other
stock rights granted to Employee by Company prior to the effective termination
date; and (C) in the event of an involuntary termination constituting a Change
in Control Event, 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.
(iv) In the event that severance pay is due to Employee under Section
6(b)(i) as a result of an involuntary termination of his employment (as defined
in Section 6(b)(i)), three (3) or more years after the date of this Agreement:
(A) Employee will be paid six (6) months' salary in six (6) equal monthly
installments (subject to all applicable tax and other deductions), with the
first such installment due 15 days after the date of such termination and with
the following five installments due monthly thereafter on Company's regular
payroll dates; (B) in the event of an involuntary termination other than a
Change in Control Event, an additional six (6) months of vesting (calculated
from the effective termination date, and not from the end of the severance pay
period) under all stock option agreements, stock purchase agreement or other
stock rights granted to Employee by Company prior to the effective termination
date; and (C) in the event of an involuntary termination constituting a Change
in Control Event, 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.
-3-
7. Proprietary Information. Employee agrees that he will promptly execute
-----------------------
Company's standard employee proprietary information and assignment of inventions
agreement.
8. Attorney's Fees. If any legal action arises under this Agreement or by
---------------
reason of any asserted breach of it, the prevailing party shall be entitled to
recover all costs and expenses, including reasonable attorney's fees, incurred
in enforcing or attempting to enforce any of the terms, covenants or conditions,
including costs incurred prior to commencement of 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, and 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 a party 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 resident 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 only by a writing
signed by both parties. 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 hereinabove written.
HESKA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
Its: Chief Executive Officer
EMPLOYEE
Name: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
-4-
