UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
March 17, 2015
Date of Report (Date of earliest event reported)
HESKA CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 000-22427 | 77-0192527 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
3760 Rocky Mountain Avenue
Loveland, Colorado 80538
(Address of principal executive offices) (Zip Code)
(970) 493-7272
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. | ||
| (a)-(d) | N/A | ||
| (e) | On March 17, 2015, the Compensation Committee (the "Committee") of the Board of Directors of Heska Corporation | ||
| (the "Company") authorized and approved at a Committee meeting the following issuances of unvested, performance-based, restricted shares of common stock to each of Jason A. Napolitano, Executive Vice President, Chief Financial Officer and Secretary of the Company, Michael J. McGinley, Ph.D., President, Biologicals and Pharmaceuticals of the Company, Steven M. Eyl, Executive Vice President, Commercial Operations, of the Company, Nancy Wisnewski, Ph.D., Executive Vice President, Product Development and Customer Support of the Company; Steven M. Asakowicz, Executive Vice President, Companion Animal Health Sales of the Company and Rodney A. Lippincott, Executive Vice President, Companion Animal Health Sales of the Company. The Committee approved a performance-based restricted stock grant related to the Company’s 2015 Management Incentive Plan (each, an "MIP Grant") and a separate performance-based restricted stock grant unrelated to the MIP Grant (each, a "Performance Grant"), in each case under and pursuant to the Company’s 1997 Stock Incentive Plan. | |||
| Each Performance Grant is to vest, if at all, on March 17, 2018, subject to the Company’s achievement of $7 million in Operating Cash Flow, as defined in the underlying Performance Grant agreement, in any of fiscal year 2015, 2016 or 2017, and other vesting provisions, including continued employment through the vesting date, in the Performance Grant agreement, a form of which is included as an exhibit to this current report. Each MIP Grant is to vest, if at all, on the date payouts are to be made under the 2015 Management Incentive Plan ("MIP") and are subject to the Company’s achievement of the financial goals and other vesting provisions, including continued employment through the vesting date, in the related MIP Grant agreement, a form of which is included as an exhibit to this current report. Mr. Napolitano received a Performance Grant of 12,863 shares and an MIP Grant of 4,583 shares, Dr. McGinley received a Performance Grant of 12,863 shares and an MIP Grant of 3,592 shares, Mr. Eyl received a Performance Grant of 5,446 shares and an MIP Grant of 4,340 shares, Dr. Wisnewski received a Performance Grant of 10,892 shares and an MIP Grant of 3,454 shares, Mr. Asakowicz received a Performance Grant of 5,446 shares and an MIP Grant of 4,340 shares, and Mr. Lippincott received a Performance Grant of 5,446 shares and an MIP Grant of 4,340 shares. | |||
| The foregoing brief description of the terms and conditions of the Performance Grants and MIP Grants is not complete. Investors and other interested parties are encouraged to review the exhibits to this current report in their entirety for a more complete description of these arrangements because they contain important information not summarized above. | |||
| (f) | N/A | ||
| Item 9.01 | Financial Statements and Exhibits. | ||
| (a)-(c) | N/A | ||
| (d) | Exhibits. | ||
Exhibit No. |
Exhibit Description |
||
99.1 |
Form of Performance Grant Agreement |
||
| 99.2 | Form of MIP Grant Agreement | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Heska Corporation
| ||
| Dated: March 23, 2015 | By: | /s/ Jason A. Napolitano |
| Name: | Jason A. Napolitano | |
| Title: | Executive Vice President, Chief Financial Officer and Secretary | |
EXHIBIT INDEX
| Exhibit No. | Exhibit Description | ||
|
99.1 |
Form of Performance Grant Agreement | ||
| 99.2 | Form of MIP Grant Agreement | ||
Exhibit 99.1
HESKA CORPORATION
1997 STOCK INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT
THIS AGREEMENT is made as of the _________ day of ____________, 2015 (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 1997 Stock 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 on the third anniversary of the Grant Date, but only if the Company has earned Operating Cash Flow of $________________ in either calendar year 2015, 2016 or 2017. For this purpose, "Operating Cash Flow" means operating income plus depreciation plus amortization, calculated in the sole discretion of the Company.
b. In the event of a Change of Control prior to the third anniversary of the Grant Date, the 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 prior to vesting, Executive will forfeit all right to the 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 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 12 of the Plan, Executive agrees to make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan under applicable federal, state, local or foreign
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law. The Company in its discretion may permit Executive to satisfy all or part of his withholding or income tax obligations by having the Company withhold all or a portion of the Shares that otherwise would be issued to him on vesting.
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 Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| HESKA CORPORATION | ||||
| EXECUTIVE | a Delaware corporation
| |||
| By: | ||||
| Title: | ||||
| Address | ||||
| -3- |
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 __________ __, 2015.
Instruction: Please do not fill in any blanks other than the signature line.
Exhibit 99.2
HESKA CORPORATION
1997 STOCK INCENTIVE PLAN
RESTRICTED STOCK GRANT AGREEMENT
(Management Incentive Plan Award)
THIS AGREEMENT is made as of the ________________ day of ____________, 2015 (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 2015 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 1997 Stock 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 vesting requirements as established in connection with the Management Incentive Plan, including the terms and conditions for awards made in 2015 under the Management Incentive Plan (the "MIP"). As described in more detail in the MIP, the portion of the Shares that vest will be calculated at the time payments are made under the MIP by multiplying the number of Shares by the "Payout Percentage," which this purpose means one-half of the percentage calculated by dividing the amount of the Executive's MIP Payout (as defined in the MIP) by the amount of the Executive's Incentive Target (as defined in the MIP), and rounding to the nearest whole Share. Executive will forfeit all Shares that do not vest at that time. In the event that Executive's employment with the Company is terminated prior to vesting, Executive will forfeit all right to the 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 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 12 of the Plan, Executive agrees to make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan under applicable federal, state, local or foreign law. The Company in its discretion may permit Executive to satisfy all or part of his withholding or income tax obligations by having the Company withhold all or a portion of the Shares that otherwise would be issued to him on vesting.
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.
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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 Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| HESKA CORPORATION | ||||
| EXECUTIVE | a Delaware corporation
| |||
| By: | ||||
| Title: | ||||
| Address | ||||
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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 __________ __, 2015.
Instruction: Please do not fill in any blanks other than the signature line.