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EXHIBIT 10.40
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 DAN T. STINCHCOMB
("Employee"), effective as of MAY 1, 2000.
W I T N E S S E T H:
Whereas Company desires to employ Employee to act as its EXECUTIVE VICE
PRESIDENT, RESEARCH AND DEVELOPMENT in an at-will capacity; and
Whereas Employee wishes to act as Company's EXECUTIVE VICE PRESIDENT, RESEARCH
AND DEVELOPMENT 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,
RESEARCH AND DEVELOPMENT, and Employee hereby accepts such employment.
2. Duties and Responsibilities. Employee shall serve as EXECUTIVE VICE
PRESIDENT, RESEARCH AND DEVELOPMENT of Company, 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 $180,000, 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.
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(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 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 one (1) year's "base salary" at the rate in effect
immediately prior to the termination in twelve 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 one year period or until
Employee is provided or obtains medical and dental insurance
coverage by another employer or entity, whichever first
occurs.
(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;
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(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;
(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.
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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 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 hereinabove written.
HESKA CORPORATION
By: /s/ Robert B. Grieve
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Title: Chairman and Chief Executive Officer
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EMPLOYEE
Name: /s/ Dan. T. Stinchcomb
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DAN T. STINCHCOMB
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