RESIGNATION AGREEMENT AND GENERAL RELEASE
This Resignation Agreement and General Release ("Agreement") is entered
into between Heska Corporation ("EMPLOYER") and Xxxxx X. Xxxxxx ("EMPLOYEE").
EMPLOYER and EMPLOYEE may be referred to in this Agreement together as the
"Parties," or individually as a "Party." For purposes of this Agreement,
EMPLOYER includes any company related to EMPLOYER, in the past or present; the
past and present officers, directors, employees, shareholders, investors,
attorneys, agents and representatives of the EMPLOYER; any present or past
employee benefit plan sponsored by EMPLOYER and/or the officers, directors,
trustees, administrators, employees, attorneys, agents and representatives of
such plan; and any person who acted on behalf of EMPLOYER or on instruction from
EMPLOYER (collectively referred to as the "RELEASEES").
In exchange for the releases and other agreements specified in this
Agreement, the Parties agree as follows:
A. EMPLOYEE'S RESIGNATION. EMPLOYEE will resign as an employee of EMPLOYER
effective June 30, 2002 (the "Resignation Date"). EMPLOYEE will not
apply for or otherwise seek or accept future employment or reinstatement
with EMPLOYER. Even though EMPLOYER will pay EMPLOYEE to settle and
release any claims, EMPLOYER does not admit that it is legally obligated
to EMPLOYEE and EMPLOYER denies that it is responsible or legally
obligated for any claims or that it has engaged in any improper conduct
or wrongdoing against EMPLOYEE.
B. EMPLOYEE'S CONTINUING OBLIGATION TO PRESERVE EMPLOYER'S CONFIDENTIAL
INFORMATION. EMPLOYEE acknowledges that he has entered into a Non-
Disclosure Agreement with EMPLOYER (the "Confidentiality Agreement") and
that by reason of his position with EMPLOYER he has been given access to
confidential information with respect to the business affairs of
EMPLOYER. [Examples include any trade secrets, manufacturing plans, new
product information, customer lists, etc.] EMPLOYEE represents that he
has held all such information confidential and will continue to do so in
accordance with his obligations under the Confidentiality Agreement and
will not engage in any conduct or activity reasonably related to his
employment with the EMPLOYER which is likely to have an adverse effect
on the operations of the EMPLOYER. EMPLOYEE further agrees that he will
not disclose, or cause to be disclosed in any way, any confidential
information or documents obtained as a result of or in connection with
his employment with EMPLOYER to any third person, without the express,
written consent of EMPLOYER, unless required to do so by subpoena or
court order in which case EMPLOYEE shall notify EMPLOYER in writing
within three (3) days of receiving such subpoena or other court order.
C. SETTLEMENT CONSIDERATION FOR EMPLOYEE. EMPLOYER has paid EMPLOYEE all
employment compensation and has provided EMPLOYEE with all benefits to
which EMPLOYEE is entitled through and including the effective date of
this Agreement. EMPLOYER will make the following additional payments to
EMPLOYEE and will provide EMPLOYEE with the benefits and consideration
set forth herein in exchange for EMPLOYEE'S release of EMPLOYER and in
settlement of any claim or claims EMPLOYEE may have against EMPLOYER.
1. SETTLEMENT PAYMENT. As consideration for EMPLOYEE'S release of all
claims against EMPLOYER, EMPLOYER will pay EMPLOYEE twelve months
base salary at the rate in effect immediately prior to the
Resignation Date in twelve equal monthly installments (subject to
all applicable taxes and other deductions), with the first such
installment due 30 days after the Resignation Date and with the
following eleven installments due no later than monthly thereafter
on EMPLOYER'S then regular payroll dates. Payment will be in the
form of an EMPLOYER'S check to EMPLOYEE mailed to him at his
residence address.
2. MEDICAL AND DENTAL PAYMENTS. Provided that EMPLOYEE timely elects
continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), EMPLOYER shall
pay, on his behalf, the portion of premiums of EMPLOYEE'S group
health insurance, including coverage for EMPLOYEE'S eligible
dependents, that EMPLOYER paid prior to EMPLOYEE'S termination of
employment with Heska. EMPLOYER will pay such premiums for
EMPLOYEE'S eligible dependents only for coverage for which those
dependents were enrolled immediately prior to EMPLOYEE'S
termination of employment. EMPLOYEE will continue to be required
to pay that portion of the premium of his health coverage, including
coverage for his eligible dependents, that he was required to pay as
an active employee immediately prior to his termination of
employment. EMPLOYEE is eligible for twelve (12) months of such
premium payments beginning July 1, 2002 through July 31, 2003. For
the balance of the period that EMPLOYEE is entitled to coverage
under COBRA, EMPLOYEE shall be entitled to maintain coverage for
himself and his eligible dependents at his own expense.
3. CAREER TRANSITION. EMPLOYER will provide a check for $2,000.00
payable to EMPLOYEE after the Resignation Date that may be used for
professional career transition purposes.
4. VESTING/EXPIRATION OF STOCK OPTIONS/RESTRICTED STOCK. The vesting
schedule for stock options currently vested and exercisable as of
the Resignation Date will remain unchanged and no options will
continue to vest following the Resignation Date. However, effective
as of the Resignation Date, EMPLOYEE shall be entitled to
acceleration of an additional one year's vesting from the
Resignation Date. As of the Resignation Date, EMPLOYEE is entitled
to a total of 218,750 options, which includes the additional one
year's vesting as stated in the previous sentence. The exercise
price for such options has previously been determined on the date of
their grant. In addition, the exercise period following the
Resignation Date in which such vested options must be exercised
will be extended from three months to twelve months. EMPLOYEE
understands that if he exercises such vested options after the 90th
day following his Resignation Date, any option that was originally
intended to qualify as an ISO, or incentive stock option, will be
converted to an NSO, or nonstatutory stock option.
The vesting schedule for EMPLOYEE'S restricted stock which is
vested as of the Resignation Date will remain unchanged and no
shares will continue to vest following the Resignation Date.
However, effective as of the Resignation Date, EMPLOYER agrees to
waive its repurchase right and permit the acceleration of an
additional one year's vesting of such restricted shares. As of the
Resignation Date, EMPLOYEE is entitled to a total of 145,860 shares
of restricted stock, which includes the additional one year's
vesting as stated in the previous sentence. The value of the one
year's worth of accelerated shares will be set as of the closing
price of the EMPLOYER's common stock on June 28, 2002. EMPLOYEE
will be solely liable for any tax liability assessed in connection
with the accelerated shares. EMPLOYER also hereby notifies EMPLOYEE
of its intention to repurchase from EMPLOYEE all unvested restricted
shares at a price of $0.001 per share which shall be paid to
EMPLOYEE prior to the 120th day following the Resignation Date.
Other than as specifically set forth herein, all other terms of
EMPLOYER'S 1997 Stock Incentive Plan and the individual stock
agreements entered into between EMPLOYEE and EMPLOYER (collectively
the "Stock Agreements") shall apply to such stock options and
restricted stock.
5. EMPLOYMENT AGREEMENT. EMPLOYEE acknowledges that this Agreement
supercedes and replaces EMPLOYER'S obligations to pay severance
pursuant to the Employment Agreement dated January 18, 1999 entered
into between the parties.
(a) Such payment as set forth herein shall be treated by
EMPLOYER as income to EMPLOYEE from which ordinary federal and state
withholding and taxes shall be deducted. Furthermore,
notwithstanding the Mutual Release as set forth in Section E,
EMPLOYEE will indemnify and hold EMPLOYER harmless from any costs,
liability or expense, including reasonable attorney's fees, arising
from the taxation, if any of any amounts received by EMPLOYEE
pursuant to this Agreement, including but not limited to any
penalties, administrative expenses, or any claim for any loss, cost,
damage, or expense arising out of any dispute over the non-
withholding, or other tax treatment or any of the consideration,
stock and stock options received by EMPLOYEE as a result of this
Agreement. EMPLOYEE represents that he has sought independent
advice on the possible tax treatment of the consideration paid
pursuant to this Agreement and is not relying on any representations
by EMPLOYER as to any potential tax consequences or liabilities that
may be owed by EMPLOYEE under this Agreement.
D. RETURN OF COMPANY PROPERTY. EMPLOYEE agrees to return all EMPLOYER'S
property to the designated Company representative no later than the exit
interview on the effective date of this agreement. This property
includes, but is not limited to, Company documents, materials, keys,
credit cards, laptops, computer disks and badges.
E. MUTUAL RELEASE.
1. GENERAL RELEASE. EMPLOYEE agrees that the consideration stated
herein represents settlement in full of all outstanding obligations
owed to EMPLOYEE by EMPLOYER. EMPLOYEE understands this Agreement
is a knowing and voluntary waiver of claims by EMPLOYEE related to
his employment with and separation from EMPLOYER. In exchange for
the consideration set forth in this Agreement, and except for matter
specifically provided in this Agreement, the parties, on behalf of
themselves, their representatives, successors and assigns, release,
and forever discharge each other from any and all claims, demands,
damages, losses, obligations, rights and causes of action, whether
known or unknown, including but not limited to, all claims, causes
of action or administrative complaints that each now has or has ever
had against each other relating in any way to EMPLOYEE'S employment
with EMPLOYER. The parties agree not to bring any lawsuits against
each other relating to the claims that each has released nor will
either party allow any to be brought or continued on the party's
behalf or in the party's name (the "RELEASED CLAIMS").
The RELEASED CLAIMS include but are not limited to those which arise
out of, relate to, or are based upon: (i) EMPLOYEE'S employment with
EMPLOYER or the termination thereof, (ii) statements, acts or
omissions by EMPLOYER whether in its individual or representative
capacities, (iii) express or implied agreements between the Parties,
(iv) any and all claims relating to or arising from EMPLOYEE'S right
to purchase or actual purchase of shares of stock of EMPLOYER
including without limitation any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under
applicable state corporate law, and securities fraud under any state
or federal law, provided however that EMPLOYER reserves its rights
of indemnification as set forth in Section C5(a); and (v) all state
and federal statutes, including but not limited to claims based on
race, sex, disability, age, or any other characteristic of EMPLOYEE
under the Americans with Disabilities Act, the Older Worker's
Benefit Protection Act, the Fair Labor Standards Act, the Equal Pay
Act, Title VII of the Civil Rights Act of 1964 (as amended), the
Civil Rights Act of 1991, the Civil Rights Acts of 1866 and 1871,
the Family and Medical Leave Act, the National Labor Relations Act,
the Occupational Safety and Health Act, the Rehabilitation Act,
Executive Order 11246, the Colorado Labor Peace Act, the Colorado
Wage Claim Act, the Employee's Retirement Income Security Act of
1974, the Rehabilitation Act of 1973, and/or the Worker Adjustment
and Retraining Notification Act, and all federal and common law.
The RELEASED CLAIMS include, but are not limited to, claims related
to the negotiation and execution of this Agreement, including but
not limited to claims that this Agreement was fraudulently induced.
Notwithstanding the foregoing, EMPLOYER specifically reserves any
cause of action that it may have against EMPLOYEE for any
intentional or negligent acts of misconduct or fraud by EMPLOYEE.
2. EMPLOYEE'S SPECIFIC ADEA RELEASE OF EMPLOYER. EMPLOYEE acknowledges
and agrees that by entering into this Agreement he is waiving any
and all rights that he may have arising from the Age Discrimination
in Employment Act of 1967 ("ADEA"), as amended, which have arisen on
or before the date of execution of this Agreement. EMPLOYEE further
expressly acknowledges and agrees that:
a. EMPLOYEE is entering this Agreement voluntarily.
b. EMPLOYEE understands and agrees that, by signing the Agreement,
he is giving up any right to file legal proceedings against the
EMPLOYER arising before the date of the Agreement. EMPLOYEE is
not waiving (or giving up) rights or claims that may arise after
the date the Agreement is executed.
c. In return for this Agreement, EMPLOYEE will receive compensation
due him as a result of this Resignation Agreement and General
Release.
d. EMPLOYEE is hereby advised in writing by this Agreement to
consult with an attorney before signing this Agreement.
e. EMPLOYEE understands that he has at least twenty-one (21) days
from the day he received this Agreement, not counting the day
upon which he received it, to consider whether he wishes to sign
this Agreement. If he cannot make up his mind in that period of
time, EMPLOYER may or may not allow more time. EMPLOYEE further
acknowledges that if he signs this Agreement before the end of
the twenty-one (21) day period, it will be his personal,
voluntary decision to do so and he has not been pressured to make
a decision sooner.
f. Nothing in this Agreement prevents or precludes EMPLOYEE from
challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs from doing so, unless
specifically authorized by federal law.
g. RIGHT TO RESCIND. EMPLOYEE further understands that he may
rescind (that is, cancel) this Agreement for any reason within
seven (7) calendar days after signing it. EMPLOYEE agrees that
the rescission must be in writing and hand-delivered or mailed to
EMPLOYER. If mailed, the rescission must be postmarked within
the seven (7) day period, properly addressed to:
HESKA CORPORATION
ATTN: XXXX XXXXXXXXX
VP, HUMAN RESOURCES
0000 XXXXXXXX XXXXXXX
XXXX XXXXXXX, XX 00000
and sent by certified mail, return receipt requested.
EMPLOYEE understands that he will not receive any settlement
payment under this Agreement if he revokes or rescinds it, and in
any event, EMPLOYEE will not receive any settlement until after
the seven (7) day revocation period has expired.
3. UNKNOWN FACTS. This Agreement includes claims of every nature and
kind, known or unknown, suspected or unsuspected. The parties
hereby acknowledge that they may hereafter discover facts different
from, or in addition to, those which they now know to be or believe
to be true with respect to this Agreement, and they agree that this
Agreement and the release contained herein shall be and remain
effective in all respects, notwithstanding such different or
additional facts or the discovery thereof.
4. INDEMNIFICATION. Notwithstanding anything in this Agreement to the
contrary, EMPLOYER acknowledges and agrees to fulfill any
indemnification and defense obligations it may have to EMPLOYEE, by
virtue of his status as an executive officer of EMPLOYER, for acts
committed within the scope of his employment by EMPLOYER, to the
same extent as its obligations to indemnify and defend EMPLOYER's
other executive officers.
F. CONFIDENTIALITY OF AGREEMENT. EMPLOYEE agrees to keep this Agreement
confidential and will not communicate the terms of this Agreement, the
facts or circumstances giving rise to this Agreement, or the fact that
such Agreement exists, to any third party except, as necessary, his
immediate family, accountants, legal or financial advisors or otherwise
appropriate or necessary as required by law or court order.
G. NO COOPERATION. EMPLOYEE agrees that he will not act in any manner that
might damage the business of EMPLOYER. EMPLOYEE agrees that he will not
encourage, counsel or assist any attorneys or their clients in the
presentation or prosecution of any disputes, differences, grievances,
claims, charges, or complaints by any third party against any of the
RELEASEES, unless under a subpoena or other court order to do so.
EMPLOYEE shall inform EMPLOYER in writing within three (3) days of
receiving any such subpoena or other court order.
H. NON-DISPARAGMENTDISPARAGEMENT. The parties agree to refrain from any
defamation, libel or slander of each other, and any tortuous interference
with contracts, relationships, and prospective economic advantage.
I. NO PENDING OR FUTURE LAWSUITS. The parties represent that they have no
lawsuits, claims, or actions pending in their name, or on behalf of any
other person or entity, against the other party or any other person or
entity referred to herein. EMPLOYEE also represents that he does not
intend to bring any claims on his own behalf or on behalf of any other
person or entity against EMPLOYER or any other person referred to herein.
EMPLOYER represents that it does not intend to bring any claims on its
own behalf or on behalf of any person or entity against EMPLOYEE,
provided that EMPLOYER reserves any cause of action identified in
Paragraph E(1)(iv) it may have against EMPLOYEE that it discovers after
the effective date of this Agreement. Notwithstanding anything in this
Agreement to the contrary, EMPLOYER agrees that any claims it may have
against EMPLOYEE shall be barred after one year from the Effective Date.
J. ENFORCEMENT. This Agreement does not release any claims for enforcement
of the terms, conditions or warranties contained herein. The Parties
shall be free to pursue any remedies available to them to enforce this
Agreement subject to paragraphs L and M.
K. SEVERABILITY. If any provision of this Agreement is declared by any
court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions of this Agreement,
which shall be fully severable, and given full force and effect.
L. GOVERNING LAW AND JURISDICTION. This Agreement shall be construed in
accordance with the laws of Colorado, without regard to its conflicts of
law provisions. The Parties both consent to personal jurisdiction in
Colorado.
M. ARBITRATION. The Parties agree that any and all disputes arising out of
the terms of this Agreement, their interpretation, and any of the matters
herein released, shall be subject to binding arbitration in Colorado
before the American Arbitration Association under its Employment Dispute
Resolution Rules, or by a judge to be mutually agreed upon. The Parties
agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court of competent jurisdiction to enforce the
arbitration award. The Parties agree that the prevailing party in any
arbitration shall be awarded its reasonable attorneys' fees and costs.
THE PARTIES HEREBY WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM
RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. This paragraph will not
prevent either party from seeking injunctive relief (or any other
provisional remedy) from any court having jurisdiction over the Parties
and the subject matter of their dispute relating to Employee's
obligations under this Agreement and the agreements incorporated by
reference.
N. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding between EMPLOYER and EMPLOYEE concerning EMPLOYEE's
employment with and separation from the Company and the events leading
thereto and associated therewith, and supersedes and replaces any and
all prior agreements and understandings concerning EMPLOYEE's
relationship with EMPLOYER, with the exception of the Confidentiality
Agreement, the EMPLOYER's Stock Plan, and any applicable stock option
agreements between EMPLOYEE and EMPLOYER.
O. NO REPRESENTATIONS. Each party represents that it has had the
opportunity to consult with an attorney, and has carefully read and
understands the scope and effect of the provisions of this Agreement.
Neither party has relied upon any representations or statements made by
the other party hereto which are not specifically set forth in this
Agreement.
P. NO ORAL MODIFICATION. Any modification or amendment of this Agreement,
or additional obligation assumed by either party in connection with this
Agreement, shall be effective only if placed in writing and signed by
both Parties. No provision of this Agreement can be changed, altered,
modified, or waived except by an executed writing by both Parties.
Q. EFFECTIVE DATE. The effective date of this Agreement shall be the
eighth day after EMPLOYEE signs and returns this Agreement to EMPLOYER
so long as he does not exercise his right to rescind this Agreement as
set forth in Section E(2)(g).
CAUTION; PLEASE READ ENTIRE DOCUMENT BEFORE SIGNING
SIGNED:
Heska Corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Typed Name: Xxxxxx X. Xxxxxx Typed Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board and CEO Title:
SS#: ###-##-####
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Date: June 12, 2002 Date: June 12, 2002
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