EXHIBIT 10.1

 

AMENDMENT No. 6 TO EXECUTIVE EMPLOYMENT AGREEMENT

 

This Amendment No. 6 to the Executive Employment Agreement (“Amendment No. 6”)
is entered into as of May 13, 2019 and shall be effective as of May 13, 2019
(the “Effective Date”) by and between PetMed Express, Inc. (“PetMed” or the
“Company”) and Menderes Akdag (the “Executive”).

 

WHEREAS, PetMed and the Executive entered into an Executive Employment Agreement
dated March 16, 2001 (“Executive Employment Agreement”), which was subsequently
amended by Amendment No. 1 to Executive Employment Agreement on March 16, 2004,
Amendment No. 2 to the Executive Employment Agreement on February 27, 2007 with
an effective date of March 16, 2007, Amendment No. 3 to the Executive Employment
Agreement on February 8, 2010 with an effective date of March 16, 2010,
Amendment No. 4 to the Executive Employment Agreement on January 25, 2013 with
an effective date of March 16, 2013, Amendment No. 5 to the Executive Employment
Agreement on January 29, 2016 with an effective date of March 16, 2016, and
Amendment No. 5a to the Executive Employment Agreement on March 15, 2019 with an
effective date of March 16, 2019 (collectively with the Executive Employment
Agreement shall be referred to as the “Agreement”), which Agreement is due to
expire May 13, 2019, and PetMed and the Executive wish to further amend the
Agreement.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

Effective as of May 13, 2019, so much of Section 4 of the Agreement, which reads
“The Term of employment hereunder will commence on March 16, 2019 and will end
on May 13, 2019 or earlier if further amended by the parties…” is hereby revised
to read “The Term of employment hereunder will commence on May 13, 2019 and end
on July 26, 2019...”

 

Effective as of July 26, 2019, so much of Section 4 of the Agreement, which
reads “The Term of employment hereunder will commence on May 13, 2019 and will
end on July 26, 2019…” is hereby revised to read “The Term of employment
hereunder will commence on July 26, 2019 and end on the earlier of (i) the date
of the Company’s 2020 Annual Stockholders’ Meeting, or (ii) August 1, 2020...”

 

Sections 5(a) and 5(b) of the Agreement shall be deleted and replaced with the
following:

 

●     a.     Salary. The Executive shall be paid a base salary, payable in
accordance with the Company’s policies from time to time for senior executives,
at an annual rate of Six Hundred Thousand Dollars ($600,000.00) plus the
percentage increase, if any, in salary described below based on pre-determined
individual and corporate-wide performance goals and objectives approved by the
Board of Directors for fiscal year 2019. The evaluation method used will measure
performance against planned objectives that can be determined quantitatively on
a rating scale of 1 to 5 (with 5 being the highest rating), apportioning weight
to each goal as a percentage (totaling 100%) and based on the final ratings,
awarding a percentage increase in salary as indicated below:

 

 

●

 

5 – 10% increase in salary

4 – 7% increase in salary

3 – 4% increase in salary

2 – 2% increase in salary

1 – 0% increase in salary

 

Page 1 of 3 of Exhibit 10.1

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As compensation for an approximate four month delay from the expiration date of
Amendment 5 to the Executive Employment Agreement to July 26, 2019, in addition
to the Executive receiving a salary in accordance with his previous annual rate
of six hundred thousand dollars ($600,000.00), the Executive will also receive a
one-time payment of ten thousand eight hundred dollars ($10,800) in full
satisfaction of any lost amounts in earned dividends for restricted stock that
would have been issued to the Executive on March 16, 2019 in connection with the
Executive’s compensation following the expiration date of Amendment 5 to the
Executive Employment Agreement.

 

 

●

b. Grant of Stock. In accordance with the terms of the PetMed Express, Inc. 2016
Employee Equity Compensation Restricted Stock Plan, and:

 

subject to the further terms, conditions and restrictions contained in a
separate agreement, titled “Restricted Stock Agreement Pursuant To PetMed
Express, Inc. 2016 Restricted Stock Plan,” to be entered into by and between the
Company and the Executive on July 26, 2019, incorporated herein by reference
upon its execution, the Executive will be granted 40,000 restricted shares of
the Company's common stock, par value $.001 per share, to vest on July 26, 2020;
and

 

subject to the Company and the Executive entering into an extension of the
Agreement for an additional one year period following the expiration of this
Amendment No. 6, and to the further terms, conditions and restrictions contained
in a separate agreement, titled “Restricted Stock Agreement Pursuant To PetMed
Express, Inc. 2016 Restricted Stock Plan,” to be entered into by and between the
Company and the Executive on the earlier of (i) the date of the Company’s 2020
Annual Stockholders’ Meeting or (ii) August 1, 2020, the Executive will be
granted restricted stock, to vest on the one year anniversary of the grant date,
in the below amounts based on the same pre-determined individual and
corporate-wide performance goals and objectives to be approved by the Board of
Directors upon which the Executive’s salary under Section 5(a) is based:

 

5 – 50,000 shares of restricted stock

4 – 45,000 shares of restricted stock

3 – 40,000 shares of restricted stock

2 – 35,000 shares of restricted stock

1 – 30,000 shares of restricted stock

 

The Company will pay the current withholding tax percentage for stock
compensation awards according to current IRS guidelines.  The Company will also
pay the Executive the Executive’s withholding tax by providing Executive gross
up compensation, which includes the withholding tax on the tax benefit paid by
the Company, in an amount similar to other employees of the company as approved
by the Board of Directors, which currently is approved for up to 28.2% (based on
the current IRS withholding guidelines according to IRS guidelines of 22%) for
employees.  This approved 28.2% withholding and tax benefit % may fluctuate
based on changes in the withholding percentage. The actual withholding tax
obligation is determined by using the following formula: Fair Market Value of
Vested Shares divided by (1.0 – .22) = Total grossed-up income which includes
withholding taxes. The 22% rate is based on current withholding guidelines. This
percentage may change in future years. This total grossed-up amount is then
multiplied by the current withholding percentage to determine the actual
withholding tax amount to be paid by the Company. FICA taxes on the grossed-up
amount will be paid by the Executive.

 

Sections 6(g)(1) shall be deleted and replaced with the following:

 

In the event that a Change in Control (as hereinafter defined) of the Company
shall occur at any time, the Executive shall have the right to terminate the
Executive’s employment under this Agreement upon thirty (30) days written notice
given at any time within one (1) year after the occurrence of such event, and
upon such termination of the Executive’s employment with the Company pursuant to
this Section 6g(1), the Executive shall be entitled to a one-time payment of two
times his salary as of the date of such termination.

 

Page 2 of 3 of Exhibit 10.1

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Except as expressly provided in this Amendment No. 6, all other terms,
conditions and provisions of the Agreement shall continue in full force and
effect as provided therein.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 6
as of the date set forth in the first paragraph above.

 

 

PetMed Express, Inc.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Robert C. Schweitzer

 

 

 

Robert C. Schweitzer

Chairman of the Board

 

 

 

 

 

  Executive             /s/ Menderes Akdag     Menderes Akdag  

 

 

Page 3 of 3 of Exhibit 10.1