Document:

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                                                                  EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and
entered into as of June 6, 2000 by and between PET QUARTERS, INC., an Arkansas
corporation (the "COMPANY"), and Gregg Rollins, an Arkansas resident
("EXECUTIVE").

                  WHEREAS, Executive and the Company deem it to be in their
respective best interests to enter into an agreement providing for the
Company's employment of Executive pursuant to the terms herein stated.

                  NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.       START DATE. This Agreement shall be effective as of the date hereof,
         and the "TERM OF EMPLOYMENT" (as defined herein) shall commence as of
         June 1, 2000 (the "START DATE").

2.       POSITION AND DUTIES. The Company hereby employs Executive in the
         capacity as Chief Financial Officer commencing as of the Start Date
         for the Term of Employment. Executive shall devote his best efforts to
         the performance of the services customarily incident to such offices
         and positions and to such other services of a senior executive nature
         as may be reasonably requested by the Chief Executive Officer of the
         Company (collectively, "COMPANY MATTERS"). Executive, in his capacity
         as an employee and officer of the Company, shall be responsible to and
         obey the reasonable and lawful directives of the Chief Executive
         Officer or the Board of Directors. Executive shall report directly to
         the Board of Directors of Company only, and Executive shall have such
         authority and duties as are customary in such position. During the
         Term of Employment, Executive's office shall be located within the
         City of Lonoke, Arkansas or the City of Little Rock, Arkansas, and
         Executive shall not be required to locate outside of either of these
         two cities without Executive's written consent.

3.       COMPENSATION.

         (a)      BASE SALARY. The Company shall pay to Executive for the
                  duration of the Term of Employment a minimum salary at the
                  rate of ninety two thousand dollars ($92,000.00) per calendar
                  year and agrees that such salary shall be reviewed quarterly
                  by the Board and, if appropriate, will be increased based on
                  the Company's ability to meet its budgetary and strategic
                  goals and objectives (the "Base Salary"). Such salary shall
                  be payable at least monthly in accordance with the Company's
                  normal payroll procedures. At no time during the Term of
                  Employment shall Executive's Base Salary be decreased from
                  the amount of the Base Salary then in effect without the
                  consent of Executive.

         (b)      PERFORMANCE BONUS. In addition to the compensation otherwise
                  payable to Executive pursuant to this Agreement, Executive be
                  eligible to receive additional

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                  annual bonuses to the extent, if any, awarded by the Board in
                  the sole discretion of the Board (the "DISCRETIONARY BONUS").

         (c)      STOCK OPTIONS. In addition to the compensation otherwise
                  payable to Executive pursuant to this Agreement, Executive
                  shall receive, under a separate agreement, stock options
                  according to terms and conditions comparable to
                  similarly-situated officers of the Company.

4.       BENEFITS. During the Term of Employment:

         (a)      Executive shall be eligible to participate in any life,
                  health and long-term disability insurance programs, pension
                  and retirement programs, stock option and other incentive
                  compensation programs, and other fringe benefit programs made
                  available to senior executive employees of the Company from
                  time to time, and Executive shall be entitled to receive such
                  other fringe benefits as may be granted to him from time to
                  time by the Company's Board.

         (b)      Executive shall be allowed vacations and leaves of absence
                  with pay in accordance with Company policy.

         (c)      The Company shall reimburse Executive for reasonable business
                  expenses incurred in performing Executive's duties and
                  promoting the business of the Company, including, but not
                  limited to, reasonable entertainment expenses, travel and
                  lodging expenses, long distance and cellular telephone
                  expenses, and approved professional memberships, following
                  presentation of documentation in accordance with the
                  Company's business expense reimbursement policies.

         (d)      Executive shall be added as an additional named insured under
                  all liability insurance policies now in force or hereafter
                  obtained covering any officer or director of the Company in
                  his or her capacity as an officer or director. Company shall
                  indemnify Executive in his capacity as an officer or director
                  and hold him harmless from any cost, expense or liability
                  arising out of or relating to any acts or decisions made by
                  him on behalf of or in the course of performing services for
                  the Company (to the maximum extent provided by the Bylaws of
                  the Company and applicable law).

5.       TERM; TERMINATION OF EMPLOYMENT. As used herein, the phrase "TERM OF
         EMPLOYMENT" shall mean the period commencing on the Start Date and
         ending approximately two (2) years from the Start Date on May 31,
         2000; provided, however, that, unless either the Company or Executive
         provides two (2) months notice to the contrary prior to the end of the
         Term of Employment, the Term of Employment shall automatically be
         extended for one (1) year periods. Notwithstanding the foregoing, the
         Term of Employment shall expire on the first to occur of the following
         (the "TERMINATION DATE"):

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         (a)      TERMINATION BY THE COMPANY WITHOUT CAUSE. Notwithstanding
                  anything to the contrary in this Agreement, whether express
                  or implied, the Company may, at any time, terminate
                  Executive's employment for any reason other than Cause (as
                  defined below), Disability (as defined below), or Death by
                  giving Executive at least thirty (30) days prior written
                  notice of the effective date of termination. In the event
                  Executive's employment hereunder is terminated by the Company
                  other than for Cause, Disability or Death, Executive shall be
                  entitled to receive from Company all amounts specified below
                  as follows:

                  i.       Base Salary and Bonuses. Company shall pay or cause
                           to be paid within 15 days of the termination date in
                           a lump sum, an amount equal to Executive's Base
                           Salary and any accrued Bonuses as he would have
                           received such amounts during the period commencing
                           on the effective date of such termination and ending
                           at the latter of the Term of Employment or twelve
                           (12) months after the Termination Date (the "SALARY
                           CONTINUATION PERIOD").

                  ii.      Benefits. During the first six months of the Salary
                           Continuation Period, Executive and his spouse,
                           dependents and beneficiaries shall be entitled to
                           continue to be covered by all group medical, health
                           and accident insurance or other such health care
                           arrangements in which Executive was a participant as
                           of the effective date of such termination pursuant
                           to this Subsection, at the same coverage level and
                           on the same terms and conditions which applied
                           immediately prior to the effective date of
                           Executive's termination of employment pursuant to
                           this Subsection, until Executive obtains alternative
                           comparable coverage under another group plan, which
                           coverage does not contain any pre-existing condition
                           exclusions or limitations. At the termination of the
                           benefits coverage under the preceding sentence,
                           Executive and his spouse, dependents and
                           beneficiaries shall be entitled to continuation
                           coverage pursuant to Section 4980B of the Internal
                           Revenue Code of 1986, as amended, Sections 601-608
                           of the Employee Retirement Income Security Act of
                           1974, as amended, and under any other applicable
                           law, to the extent required by such laws, as if
                           Executive had terminated employment with the Company
                           on the date such benefits coverage terminates.

                  iii.     Stocks/Stock Options. Any unvested stock options,
                           stock appreciation rights, warrants, bonus units, or
                           comparable rights (collectively, "options") granted
                           or to be granted to Executive, and any shares or
                           other units (collectively "shares") granted or to be
                           granted to Executive, pursuant to any plan involving
                           or based upon equity in the Company, shall
                           automatically and fully vest in Executive (and any
                           and all conditions applicable thereto shall be
                           deemed satisfied). In addition, any options granted
                           or to be granted to Executive, vested or unvested,
                           and all shares of common stock of the Company owned
                           by Executive shall automatically double. Such
                           options shall be fully vested in accordance with
                           this

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                           subsection except the exercise price for such
                           options granted pursuant to this subsection shall be
                           the closing bid price for shares of common stock of
                           the Company on the Termination Date, and such shares
                           of common stock granted pursuant to this subsection
                           shall be deemed to be validly issued, fully paid,
                           and nonassessable.

         (b)      TERMINATION FOR CAUSE. The Company shall have the right to
                  terminate Executive's employment at any time for Cause by
                  giving Executive written notice of the effective date of
                  termination (which effective date may, except as otherwise
                  provided below, be the date of such notice). If the Company
                  terminates Executive's employment for Cause, Executive shall
                  be paid his unpaid Base Salary accrued through the date of
                  termination, and the Company shall have no further obligation
                  hereunder from and after the effective date of termination
                  under this Subsection and shall have all other rights and
                  remedies available under this or any other agreement and at
                  law or in equity.

                           For purposes of this Agreement, "CAUSE" shall mean:

                  (i)      theft, forgery, fraud, misappropriation,
                           embezzlement, moral turpitude or other act of
                           material misconduct against the Company or any of
                           its affiliates;

                  (ii)     willful and knowing violation of any rules or
                           regulations of any governmental or regulatory body,
                           which is or is reasonably expected to be materially
                           injurious to the financial condition of the Company;
                           or

                  (iii)    conviction of, or plea of guilty or nolo contendere
                           to, a felony or any crime of theft, forgery, fraud,
                           misappropriation, embezzlement, moral turpitude or
                           other act of material misconduct;

                  (iv)     a material violation of any fiduciary duty owed to
                           the Company;

                  provided, however, that for any such event, activity or
                  omission in clause (iv) of this subsection, Executive shall
                  be given (A) prior written notification of the Company's
                  intended actions and a description of the alleged events,
                  activities or omissions giving rise thereto, and (B) with
                  respect to those events, activities or omissions for which a
                  cure is reasonably possible, a reasonable opportunity (of not
                  less than thirty (30) days) to cure such breach.

         (c)      TERMINATION ON ACCOUNT OF DEATH. In the event of Executive's
                  death while in the employ of the Company, his employment
                  hereunder shall terminate on the date of his death and
                  Executive shall be paid his unpaid Base Salary through the
                  date of termination. In addition, any other benefits payable
                  on behalf of Executive shall be determined under the
                  Company's insurance and other compensation and benefit plans
                  and programs then in effect in accordance with the terms of
                  such programs.

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         (d)      TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
                  prohibited by The Americans With Disabilities Act of 1990,
                  if, as a result of Executive's incapacity due to physical or
                  mental illness (as determined in good faith by a physician
                  acceptable to the Company and Executive), Executive is unable
                  to substantially render to the Company the services required
                  under this Agreement for more than ninety (90) days out of
                  any consecutive one hundred and eighty (180) day period or if
                  a physician acceptable to the Company advises the Company
                  that it is likely that Executive will be unable to return to
                  the performance of his duties for more than ninety (90) days
                  out of any consecutive one hundred and eighty (180) day
                  period his employment may be terminated for "DISABILITY."
                  During any period that Executive fails to perform his duties
                  with the Company as a result of incapacity due to physical or
                  mental illness, he shall continue to receive his Base Salary
                  and other benefits provided hereunder, together with all
                  compensation payable to him under the Company's disability
                  plan or program or other similar plan during such period,
                  until Executive's employment hereunder is terminated pursuant
                  to this subsection. Thereafter, Executive's benefits shall be
                  determined under the Company's retirement, insurance, and
                  other compensation and benefit plans and programs then in
                  effect, in accordance with the terms of such programs.

         (e)      TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive shall
                  have the right to terminate Executive's employment, without
                  further obligation or liability to Company, except that any
                  termination of Executive's employment under this Section 5(f)
                  shall have the same effect as a termination without cause by
                  Company under Section 5(a) above, upon the occurrence of any
                  one or more of the following events, which events shall be
                  deemed termination by Executive for "Good Reason":

                  i.       CHANGE IN REPORTING. If Executive no longer reports
                           directly to the Board of Directors of Company.

                  ii.      REDUCTION IN DUTIES OR TITLE. If Executive's duties
                           hereunder are diminished in any material respect or
                           Executive's title as Chief Executive Officer is
                           diminished without his prior written consent;

                  iii.     OTHER MATERIAL BREACH. If Company willfully commits
                           a material breach of this Agreement with the actual
                           knowledge that its conduct constitutes a breach of
                           this Agreement;

                  iv.      CHANGE IN LOCATION. If Executive's office is
                           re-located outside of the cities listed in Section 2
                           without his prior written consent;

                  v.       EFFECTIVENESS OF NOTICE. Upon the failure to cure
                           any of the events/breaches set out in Section
                           5(b)(i) through 5(b)(iv) within thirty (30) days
                           after Company's receipt of written notice from
                           Executive specifying the applicable events/breaches
                           and expressly referring to this Section 5(f) (the
                           "Initial Notice"), Executive shall have the right to
                           elect to terminate

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                           his employment for Good Reason by giving a second
                           written notice (the "Second Notice") to Company to
                           such effect and referring to this Section 5(f);
                           provided, however, that with respect to any such
                           events/breaches that are capable of prospective
                           cure, if Company commences to effect such a cure
                           within the foregoing thirty (30) day period, Company
                           shall be permitted additional time to cure and not
                           be deemed in breach so long as it diligently
                           continues to seek to effect a cure. Executive shall
                           be deemed to have terminated his employment for Good
                           Reason under this Section 5(f) effective ten (10)
                           days following Second Notice.

6.       CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.

         (a)      During the Term of Employment and thereafter, Executive shall
                  not, except as may be required to perform his duties
                  hereunder or as required by applicable law, disclose to
                  others or use, whether directly or indirectly, any
                  Confidential Information regarding the Company. "CONFIDENTIAL
                  INFORMATION" shall mean information about the Company, its
                  subsidiaries and affiliates, and their respective clients and
                  customers that is not available to the general public and
                  that was learned by Executive in the course of his employment
                  by the Company, including, but not limited to, any
                  proprietary knowledge, trade secrets, data, formulae,
                  information, and client and customer lists and all papers,
                  resumes, records (including computer records) and the
                  documents containing such Confidential Information. Executive
                  acknowledges that such Confidential Information is
                  specialized, unique in nature and of great value to the
                  Company, and that such information gives the Company a
                  competitive advantage. Upon the termination of his employment
                  for any reason whatsoever, Executive shall promptly deliver
                  to the Company all documents, computer tapes and disks (and
                  all copies thereof) containing any Confidential Information.

         (b)      During the period that Executive is receiving payments under
                  this Agreement, Executive shall not, directly or indirectly
                  in any manner or capacity (e.g., as an advisor, principal,
                  agent, partner, officer, director, shareholder, employee,
                  member of any association or otherwise) engage in, work for,
                  consult, provide advice or assistance or otherwise
                  participate in any activity which is competitive with the
                  business of the Company. Executive further agrees that during
                  such period he will not assist or encourage any other person
                  in carrying out any activity that would be prohibited by the
                  foregoing provisions of this Section if such activity were
                  carried out by Executive and, in particular, Executive agrees
                  that he will not induce any employee of the Company to carry
                  out any such activity; provided, however, that the
                  "beneficial ownership" by Executive, either individually or
                  as a member of a "group," as such terms are used in Rule 13d
                  of the General Rules and Regulations under the Exchange Act,
                  of not more than one percent (1%) of the voting stock of any
                  publicly held corporation shall not be a violation of this
                  Agreement. It is further expressly agreed that the Company
                  will or would suffer irreparable injury if Executive were to
                  compete with the Company or any subsidiary or affiliate of
                  the Company in violation of this Agreement and that the
                  Company would by reason of

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                  such competition be entitled to injunctive relief in a court
                  of appropriate jurisdiction, and Executive further consents
                  and stipulates to the entry of such injunctive relief in such
                  a court prohibiting Executive from competing with the Company
                  or any subsidiary or affiliate of the Company in violation of
                  this Agreement.

         (c)      During the period that Executive is receiving payments under
                  this Agreement and for one (1) year after such payments
                  terminate, Executive shall not, directly or indirectly,
                  influence or attempt to influence suppliers, customers or
                  affiliates of the Company to divert their business to any
                  competitor of the Company.

         (d)      Executive recognizes that he will possess confidential
                  information about other employees of the Company relating to
                  their education, experience, skills, abilities, compensation
                  and benefits, and interpersonal relationships with customers
                  of the Company. Executive recognizes that the information he
                  will possess about these other employees is not generally
                  known, is of substantial value to the Company in developing
                  its business and in securing and retaining customers, and
                  will be acquired by him because of his business position with
                  the Company. Executive agrees that, during the period that
                  Executive is receiving payments under this Agreement and for
                  one (1) year after such payments terminate, Executive will
                  not, directly or indirectly, solicit or recruit any employee
                  of the Company for the purpose of being employed by Executive
                  or by any competitor of the Company on whose behalf he is
                  acting as an agent, representative or employee and that he
                  will not convey any such confidential information or trade
                  secrets about other employees of the Company to any other
                  person.

         (e)      If it is determined by a court of competent jurisdiction in
                  any state that any restriction in this Section is excessive
                  in duration or scope or is unreasonable or unenforceable
                  under the laws of that state, it is the intention of the
                  parties that such restriction may be modified or amended by
                  the court to render it enforceable to the maximum extent
                  permitted by the law of that state.

7.       CONSOLIDATION. MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.

         (a)      In the event that, following the date hereof, directly or
                  indirectly, (x) the Company shall consolidate with, or merge
                  with and into, any other entity (other than a subsidiary of
                  the Company), and the Company shall not be the continuing or
                  surviving corporation of such consolidation or merger, (y)
                  any person (other than a subsidiary of the Company) shall
                  consolidate with, or merge with or into, the Company, and the
                  Company shall be the continuing or surviving corporation of
                  such consolidation or merger and, in connection with such
                  consolidation or merger, all or part of the outstanding
                  shares of common stock of the Company shall be changed into
                  or exchanged for stock or other securities of any other
                  entity or cash or any other property, or (z) the Company
                  shall sell or otherwise transfer (or one or more of its
                  subsidiaries shall sell or otherwise transfer), in one
                  transaction or a series of related transactions, assets or
                  earning power aggregating

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                  more than 50% of the assets, operating income, cash flow or
                  earning power of the Company and its subsidiaries (taken as a
                  whole) to any person(s) or entity(ies) (other than the
                  Company or any subsidiary of the Company), then, and in each
                  such case and except as contemplated by subsection (d),
                  Executive shall have been deemed terminated without cause for
                  purposes of Section 5(a)(iii), regardless of whether
                  Executive remains employed by Company or its survivor
                  pursuant to this Agreement, and any termination of Executive
                  within twelve (12) months of such consolidation or merger
                  shall be deemed to be without cause and the remaining
                  provisions of Section 5(a) shall be applicable.

         (b)      The Company shall not consummate any such consolidation,
                  merger, sale or transfer unless the surviving entity shall
                  have a sufficient number of authorized shares of its common
                  stock that have not been issued or reserved for issuance to
                  permit the exercise in full of the rights of Executive in
                  accordance with Section 5(a)(iii) and unless prior thereto
                  the Company and such surviving entity shall have executed and
                  delivered to the Executive an agreement acknowledging the
                  Company's or the surviving entity's obligation to, as soon as
                  practicable after the date of any Section 7 event, prepare
                  and file a registration statement under the Securities Act of
                  1933 (the "Act"), with respect to all shares of common stock
                  owned by Executive or to be acquired by Executive pursuant to
                  any option, and will use its best efforts to cause such
                  registration statement to (A) become effective as soon as
                  practicable after such filing and (B) remain effective (with
                  a prospectus at all times meeting the requirements of the
                  Act) until Executive has sold all of his shares of common
                  stock in the Company or the surviving entity or Executive can
                  sell of his shares of common stock in the Company or the
                  surviving entity without such current registration statement.

         (c)      The provisions of this Section 7 shall similarly apply to
                  successive mergers or consolidations or sales or other
                  transfers.

8.       DESIGNATED BENEFICIARY. In the event of the death of Executive while
         in the employ of the Company, or at any time thereafter during which
         amounts remain payable to Executive under SECTION 5, such payments
         (other than the right to continuation of welfare benefits) shall
         thereafter be made to such person or persons as Executive may
         specifically designate (successively or contingently) to receive
         payments under this Agreement following Executive's death by filing a
         written beneficiary designation with the Company during Executive's
         lifetime. Such beneficiary designation shall be in such form as may be
         prescribed by the Company and may be amended from time to time or may
         be revoked by Executive pursuant to written instruments filed with the
         Company during his lifetime. Beneficiaries designated by Executive may
         be any natural or legal person or persons, including a fiduciary, such
         as a trustee or a trust or the legal representative of an estate.
         Unless otherwise provided by the beneficiary designation filed by
         Executive, if all of the persons so designated die before Executive on
         the occurrence of a contingency not contemplated in such beneficiary
         designation, then the amounts payable under this Agreement shall be
         paid to Executive's estate.

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9.       TAXES. All payments to be made to Executive under this Agreement will
         be subject to any applicable withholding of federal, state and local
         income and employment taxes.

10.      RESOLUTION OF DISPUTES. If any dispute shall arise under or related to
         this Agreement or the transactions contemplated hereby, other than
         pursuant to and under Section 6, such dispute shall be settled by
         arbitration in accordance with the rules of the American Arbitration
         Association (the "AAA"). Such dispute shall be settled by arbitration
         in the City of Little Rock, Arkansas by three (3) arbitrators, one of
         whom shall be appointed by Executive, one by the Company, and the
         third by the first two arbitrators. If either party fails to appoint
         an arbitrator within ten (10) days of a request in writing by the
         other party to do so or if the first two arbitrators cannot agree on
         the appointment of a third arbitrator within ten (10) days, then such
         arbitrator shall be appointed in accordance with the rules of the AAA.
         Except as to the selection of arbitrators which shall be as set forth
         above, the arbitration shall be conducted promptly and expeditiously
         in accordance with the rules of the AAA so as to enable the
         arbitrators to render an award within sixty (60) days of the
         commencement of the arbitration proceedings. The decision of the
         arbitrators shall be binding upon the parties, and judgment upon the
         award rendered by the arbitrators may be entered in any court having
         jurisdiction thereof. The decision of the arbitrators shall include
         within the arbitration award a recovery by the prevailing party or
         parties of its or their expenses of arbitration, including the fees
         and expenses of the arbitrators, other costs associated with the
         arbitration proceeding and the reasonable attorneys' fees and expenses
         of the prevailing party or parties incurred in connection with the
         arbitration.

11.      ATTORNEYS' FEES. Except as otherwise provided herein, should either
         party hereto or their successors retain counsel for the purpose of
         enforcing, or preventing the breach of, any provision hereof,
         including, but not limited to, by instituting any action or proceeding
         in arbitration or a court to enforce any provision hereof or to enjoin
         a breach of any provision of this Agreement, or for a declaration of
         such party's rights or obligations under the Agreement, or for any
         other remedy, whether in arbitration or in a court of law, then the
         successful party shall be entitled to be reimbursed by the other party
         for all costs and expenses incurred thereby, including, but not
         limited to, reasonable fees and expenses of attorneys and expert
         witnesses, including costs of appeal. If such successful party shall
         recover judgment in any such action or proceeding, such costs,
         expenses and fees may be included in and as part of such judgment. The
         successful party shall be the party who is entitled to recover the
         costs of suit, whether or not the suit proceeds to final judgment. If
         no costs are awarded, the successful party shall be determined by the
         arbitrator or court, as the case may be.

12.      RELEASE. In exchange for the promises and the payments set forth in
         Section 5(a) above, Executive covenants and agrees to release, acquit,
         and forever discharge the Company of and from any and all claims,
         injuries, demands and causes of action, including, but not limited to:
         breach of contract, wages, severance pay, vacation benefits, bonuses,
         defamation, claims arising under the Arkansas Civil Rights Act of
         1993, Title VII of the Civil Rights Act of 1964, as amended, Section
         1981 of the Civil Rights Act of 1866, the Americans with Disabilities
         Act, the Family Medical Leave Act and the Age Discrimination
         Employment Act of 1967, as amended, which

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         he may now have and which he may ever have as a result of, arising out
         of, or by reason of: his employment by the Company; the termination of
         his employment; any of the Company's employment practices, acts or
         omissions; and any acts or omissions of the Company. It is Executive's
         express desire to release and waive each and every claim for injuries,
         damages and consequences, known or unknown, developed or which might
         develop in the future resulting from any practices, acts or omissions
         of the Company which occurred prior to the effective date of any
         termination of this Agreement pursuant to and in accordance with
         Section 5(a) hereof.

13.      REVIEW PERIOD. Executive understands and agrees that he:

         (a)      Has a full 21 days within which to consider this Agreement
                  before executing it;

         (b)      Has carefully read and fully understands all of the
                  provisions of this Agreement;

         (c)      Is, through this Agreement, releasing the Company from any
                  and all claims he may have against them, including any and
                  all claims under state or federal securities laws;

         (d)      Knowingly and voluntarily agrees to all the terms set forth
                  in this Agreement;

         (e)      Knowingly and voluntarily intends to be legally bound by this
                  Agreement;

         (f)      Was advised and hereby is advised in writing to consider the
                  terms of this Agreement and consult with an attorney of his
                  choice prior to executing this Agreement;

         (g)      Has a full seven days following the execution of this
                  Agreement to revoke this Agreement and has been and hereby is
                  advised in writing that this Agreement shall not become
                  effective or enforceable until the revocation period has
                  expired; and

         (h)      Understands that claims or rights under the Age
                  Discrimination in Employment Act that may arise after the
                  date this Agreement is executed are not waived.

13.      MISCELLANEOUS. This Agreement shall also be subject to the following
         miscellaneous considerations:

         (a)      REPRESENTATIONS AND WARRANTIES.

                  (i)      Executive represents and warrants to the Company
                           that he has the authorization, power and right to
                           deliver, execute and fully perform his obligations
                           under this Agreement in accordance with its terms.
                           Executive further represents and warrants that this
                           Agreement does not require any authorization,
                           consent, approval, exemption or other action by any
                           other party and does not (A) conflict with or result
                           in the breach of the terms, conditions or provisions
                           of, (B) constitute a default under, or (C) result in
                           a

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                           violation of any agreement, instrument, order,
                           judgment or decree to which Executive is subject.
                           Executive will, to the fullest extent permitted by
                           applicable law, as from time to time in effect,
                           indemnify the Company and hold the Company harmless
                           for any breach of the representations set forth in
                           this subparagraph (i).

                  (ii)     The Company represents and warrants to Executive
                           that it has the authorization, power and right to
                           deliver, execute and fully perform its obligations
                           under this Agreement in accordance with its terms.
                           The Company further represents and warrants that
                           this Agreement does not require any authorization,
                           consent, approval, exemption or other action by any
                           other party and does not (A) conflict with or result
                           in the breach of the terms, conditions or provisions
                           of, (B) constitute a default under, or (C) result in
                           a violation of any agreement, instrument, order,
                           judgment or decree to which the Company is subject.
                           The Company will, to the fullest extent permitted by
                           applicable law, as from time to time in effect,
                           indemnify Executive and hold Executive harmless for
                           any breach of its representations set forth in this
                           subparagraph (ii).

         (b)      DIVISIBILITY OF THE AGREEMENT. If any provision of this
                  Agreement or any portion thereof is declared invalid,
                  illegal, or incapable of being enforced by any court of
                  competent jurisdiction, the remainder of such provisions and
                  all of the remaining provisions of this Agreement shall
                  continue in full force and effect.

         (c)      CHOICE OF LAW. This Agreement shall be construed, interpreted
                  and the rights of the parties determined in accordance with
                  the internal laws of the State of Arkansas without reference
                  to the choice of law provisions of such State's law, except
                  with respect to matters of law concerning the internal
                  corporate affairs of any corporate entity which is a party to
                  or the subject of this Agreement, and as to those matters of
                  the law the jurisdiction under which the respective entity
                  derives its powers shall govern, and to the extent governed
                  by federal law.

         (d)      ASSIGNMENT. This Agreement shall be binding on and shall
                  inure to the benefit of the parties to it and their
                  respective heirs, legal representatives, successors and
                  assigns, except as otherwise provided herein. The Company may
                  assign this Agreement to any direct or indirect subsidiary or
                  parent of the Company or joint venture in which the Company
                  has an interest, or any successor (whether by merger,
                  consolidation, purchase or otherwise) to all or substantially
                  all of the stock, assets or business of the Company and this
                  Agreement shall be binding upon and inure to the benefit of
                  such successors and assigns; provided however that no such
                  assignment shall relieve Company of its obligations due to
                  Executive hereunder. Except as expressly provided herein,
                  Executive may not sell, transfer, assign, or pledge any of
                  her rights or interests pursuant to this Agreement.

         (e)      NO ABROGATION. Any rights of Executive hereunder shall be in
                  addition to any rights Executive may otherwise have under
                  benefit plans, agreements, or

                                      11
<PAGE>   12

                  arrangements of the Company to which he is a party or in
                  which he is a participant, including, but not limited to, any
                  Company-sponsored employee benefit plans. Provisions of this
                  Agreement shall not in any way abrogate Executive's rights
                  under such other plans, agreements, or arrangements.

         (f)      NOTICE. For the purposes of this Agreement, notices, demands
                  and all other communications provided for in this Agreement
                  shall be in writing and shall be deemed to have been duly
                  given when personally delivered or one day after delivery to
                  an overnight air courier guaranteeing next day delivery,
                  addressed as follows:

         If to Executive:           Gregg Rollins
                                    1700 Royal Drive
                                    Conway, Arkansas 72032

         If to the Company:         Pet Quarters, Inc.
                                    720 East Front Street
                                    Lonoke, Arkansas 72086
                                    Attn:  Steve Dempsey, CEO

         With copies to:            Wright, Lindsey & Jennings LLP
                                    200 West Capitol Avenue, Suite 2200
                                    Little Rock, Arkansas 72201
                                    Attn:  C. Tad Bohannon

                  or to such other address as any party may have furnished to
                  the others in writing in accordance herewith, except that
                  notices of change of address shall be effective only upon
                  receipt.

         (g)      HEADINGS. Section headings in this Agreement are included
                  herein for convenience of reference only and shall not
                  constitute a part of this Agreement for any other purpose.

         (h)      WAIVER. Failure to insist upon strict compliance with any of
                  the terms, covenants, or conditions hereof shall not be
                  deemed a waiver of such term, covenant, or condition, nor
                  shall any waiver or relinquishment of, or failure to insist
                  upon strict compliance with, any right or power hereunder at
                  any one or more times be deemed a waiver or relinquishment of
                  such right or power at any other time or times.

         (i)      EXECUTIVE'S ACKNOWLEDGMENT. Executive acknowledges (i) that
                  he has consulted with or has had the opportunity to consult
                  with independent counsel of his own choice concerning this
                  Agreement and has been advised to do so by the Company, and
                  (ii) that he has read and understands the Agreement, is fully
                  aware of its legal effect, and has entered into it freely
                  based on his own judgment.

                                      12
<PAGE>   13

         (j)      COUNTERPARTS. This Agreement may be executed in several
                  counterparts, each of which shall be deemed to be an original
                  but all of which together will constitute one and the same
                  instrument.

         (k)      ENTIRE AGREEMENT; AMENDMENT. This Agreement (i) contains a
                  complete statement of all the arrangements between the
                  parties with respect to Executive's employment by the
                  Company, (ii) supersedes all prior and existing negotiations
                  and agreements between the parties concerning Executive's
                  employment and (iii) can only be changed or modified pursuant
                  to a written instrument duly executed by each of the parties
                  hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                   EXECUTIVE

                                   -----------------------------------------
                                   Gregg Rollins

                                   PET QUARTERS, INC.

                                By:
                                   ----------------------------------------
                                   Steven B. Dempsey, CEO

                                      13<PAGE>   1
                                                                   EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and
entered into as of May 30, 2000 by and between PET QUARTERS, INC., an Arkansas
corporation (the "COMPANY"), and Niloofar Razi Howe ("EXECUTIVE").

                  WHEREAS, Executive and the Company deem it to be in their
respective best interests to enter into an agreement providing for the Company's
employment of Executive pursuant to the terms herein stated.

                  NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.       START DATE. This Agreement shall be effective as of the date hereof,
         and the "TERM OF EMPLOYMENT" (as defined herein) shall commence as of
         the date hereof, unless the Company and Executive agree to a different
         date (the "START DATE").

2.       POSITION AND DUTIES. The Company hereby employs Executive in the
         capacity as President commencing as of the Start Date for the Term of
         Employment. Executive shall devote her best efforts to the performance
         of the services customarily incident to such offices and positions and
         to such other services of a senior executive nature as may be
         reasonably requested by the Chief Executive Officer of the Company
         (collectively, "COMPANY MATTERS"). Executive, in her capacity as an
         employee and officer of the Company, shall be responsible to and obey
         the reasonable and lawful directives of the Chief Executive Officer.
         Executive shall report directly to the CEO of Company only, and
         Executive shall have such authority and duties as are customary in such
         position. During the Term of Employment, Executive's office shall be
         located within the county of Los Angeles, and Executive shall not be
         required to locate outside of the county of Los Angeles without
         Executive's written consent.

3.       COMPENSATION.

         (a)  BASE SALARY. The Company shall pay to Executive for the duration
              of the Term of Employment a minimum salary at the rate of one
              hundred thousand dollars ($100,000.00) per calendar year and
              agrees that such salary shall be reviewed quarterly by the Board
              and, if appropriate, will be increased based on the Company's
              ability to meet its budgetary and strategic goals and objectives
              (the "Base Salary"). Such salary shall be payable at least monthly
              in accordance with the Company's normal payroll procedures. At no
              time during the Term of Employment shall Executive's Base Salary
              be decreased from the amount of the Base Salary then in effect
              without the consent of Executive.

         (b)  PERFORMANCE BONUS. In addition to the compensation otherwise
              payable to Executive pursuant to this Agreement, Executive be
              eligible to receive additional annual bonuses

<PAGE>   2

              to the extent, if any, awarded by the Board in the sole discretion
              of the Board (the "DISCRETIONARY BONUS").

         (c)  STOCK OPTIONS. In addition to the compensation otherwise payable
              to Executive pursuant to this Agreement, Executive shall receive,
              under a separate agreement, stock options according to terms and
              conditions comparable to similarly-situated officers of the
              Company.

4.       BENEFITS.  During the Term of Employment:

         (a)      Executive shall be eligible to participate in any life, health
                  and long-term disability insurance programs, pension and
                  retirement programs, stock option and other incentive
                  compensation programs, and other fringe benefit programs made
                  available to senior executive employees of the Company from
                  time to time, and Executive shall be entitled to receive such
                  other fringe benefits as may be granted to her from time to
                  time by the Company's Board.

         (b)      Executive shall be allowed vacations and leaves of absence
                  with pay in accordance with Company policy.

         (c)      The Company shall reimburse Executive for reasonable business
                  expenses incurred in performing Executive's duties and
                  promoting the business of the Company, including, but not
                  limited to, reasonable entertainment expenses, travel and
                  lodging expenses, long distance and cellular telephone
                  expenses, and approved professional memberships, following
                  presentation of documentation in accordance with the Company's
                  business expense reimbursement policies.

         (d)      Executive shall be added as an additional named insured under
                  all liability insurance policies now in force or hereafter
                  obtained covering any officer or director of the Company in
                  his or her capacity as an officer or director. Company shall
                  indemnify Executive in her capacity as an officer or director
                  and hold her harmless from any cost, expense or liability
                  arising out of or relating to any acts or decisions made by
                  her on behalf of or in the course of performing services for
                  the Company (to the maximum extent provided by the Bylaws of
                  the Company and applicable law).

                                       2
<PAGE>   3

5.       TERM; TERMINATION OF EMPLOYMENT. As used herein, the phrase "TERM OF
         EMPLOYMENT" shall mean the period commencing on the Start Date and
         ending one (1) year from the Start Date; provided, however, that,
         unless either the Company or Executive provides two (2) months notice
         to the contrary prior to the end of the Term of Employment, the Term of
         Employment shall automatically be extended for one (1) year periods.
         Notwithstanding the foregoing, the Term of Employment shall expire on
         the first to occur of the following (the "TERMINATION DATE"):

         (a)  TERMINATION BY THE COMPANY WITHOUT CAUSE. Notwithstanding anything
              to the contrary in this Agreement, whether express or implied, the
              Company may, at any time, terminate Executive's employment for any
              reason other than Cause (as defined below), Disability (as defined
              below), or Death by giving Executive at least thirty (30) days
              prior written notice of the effective date of termination. In the
              event Executive's employment hereunder is terminated by the
              Company other than for Cause, Disability or Death, Executive shall
              be entitled to receive from Company all amounts specified below as
              follows:

                  i.       Base Salary and Bonuses. Company shall pay or cause
                           to be paid within 15 days of the termination date in
                           a lump sum, an amount equal to Executive's Base
                           Salary and any accrued Bonuses as she would have
                           received such amounts during the period commencing on
                           the effective date of such termination and ending six
                           months thereafter (the "SALARY CONTINUATION PERIOD").

                  ii.      Benefits. During the Salary Continuation Period,
                           Executive and her spouse, dependents and
                           beneficiaries shall be entitled to continue to be
                           covered by all group medical, health and accident
                           insurance or other such health care arrangements in
                           which Executive was a participant as of the effective
                           date of such termination pursuant to this Subsection,
                           at the same coverage level and on the same terms and
                           conditions which applied immediately prior to the
                           effective date of Executive's termination of
                           employment pursuant to this Subsection, until
                           Executive obtains alternative comparable coverage
                           under another group plan, which coverage does not
                           contain any pre-existing condition exclusions or
                           limitations. At the termination of the benefits
                           coverage under the preceding sentence, Executive and
                           her spouse, dependents and beneficiaries shall be
                           entitled to continuation coverage pursuant to Section
                           4980B of the Internal Revenue Code of 1986, as
                           amended, Sections 601-608 of the Employee Retirement
                           Income Security Act of 1974, as amended, and under
                           any other applicable law, to the extent required by
                           such laws, as if Executive had terminated employment
                           with the Company on the date such benefits coverage
                           terminates.

                  iii.     Stocks/Stock Options. Any unvested stock options,
                           stock appreciation rights, warrants, bonus units, or
                           comparable rights (collectively, "options") granted
                           or to be granted to Executive, and any shares or
                           other unites (collectively "shares") granted or to be
                           granted to Executive, pursuant to any plan involving

                                       3
<PAGE>   4

                           or based upon equity in the Company, shall
                           automatically and fully vest in Executive (and any
                           and all conditions applicable thereto shall be deemed
                           satisfied).

         (b)      TERMINATION FOR CAUSE. The Company shall have the right to
                  terminate Executive's employment at any time for Cause by
                  giving Executive written notice of the effective date of
                  termination (which effective date may, except as otherwise
                  provided below, be the date of such notice). If the Company
                  terminates Executive's employment for Cause, Executive shall
                  be paid her unpaid Base Salary accrued through the date of
                  termination, and the Company shall have no further obligation
                  hereunder from and after the effective date of termination
                  under this Subsection and shall have all other rights and
                  remedies available under this or any other agreement and at
                  law or in equity.

                           For purposes of this Agreement, "CAUSE" shall mean:

                  (i)      theft, forgery, fraud, misappropriation,
                           embezzlement, moral turpitude or other act of
                           material misconduct against the Company or any of its
                           affiliates;

                  (ii)     willful and knowing violation of any rules or
                           regulations of any governmental or regulatory body,
                           which is or is reasonably expected to be materially
                           injurious to the financial condition of the Company;
                           or

                  (iii)    conviction of, or plea of guilty or nolo contendere
                           to, a felony or any crime of theft, forgery, fraud,
                           misappropriation, embezzlement, moral turpitude or
                           other act of material misconduct;

                  (iv)     a material violation of any fiduciary duty owed to
                           the Company;

                           provided, however, that for any such event, activity
                           or omission in clause (iv) of this Subsection,
                           Executive be given (A) prior written notification of
                           the Company's intended actions and a description of
                           the alleged events, activities or omissions giving
                           rise thereto, and (B) with respect to those events,
                           activities or omissions for which a cure is
                           reasonably possible, a reasonable opportunity (of not
                           less than thirty (30) days) to cure such breach.

         (c)      TERMINATION ON ACCOUNT OF DEATH. In the event of Executive's
                  death while in the employ of the Company, her employment
                  hereunder shall terminate on the date of her death and
                  Executive shall be paid her unpaid Base Salary and accrued
                  Minimum Bonus through the date of termination. In addition,
                  any other benefits payable on behalf of Executive shall be
                  determined

                                       4
<PAGE>   5

                  under the Company's insurance and other compensation and
                  benefit plans and programs then in effect in accordance with
                  the terms of such programs.

         (e)      TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
                  prohibited by The Americans With Disabilities Act of 1990, if,
                  as a result of Executive's incapacity due to physical or
                  mental illness (as determined in good faith by a physician
                  acceptable to the Company and Executive), Executive is unable
                  to substantially render to the Company the services required
                  under this Agreement for more than ninety (90) days out of any
                  consecutive one hundred and eighty (180) day period or if a
                  physician acceptable to the Company advises the Company that
                  it is likely that Executive will be unable to return to the
                  performance of her duties for more than ninety (90) days out
                  of any consecutive one hundred and eighty (180) day period her
                  employment may be terminated for "Disability." During any
                  period that Executive fails to perform her duties with the
                  Company as a result of incapacity due to physical or mental
                  illness, she shall continue to receive her Base Salary,
                  accrued Minimum Bonus, and other benefits provided hereunder,
                  together with all compensation payable to her under the
                  Company's disability plan or program or other similar plan
                  during such period, until Executive's employment hereunder is
                  terminated pursuant to this Subsection. Thereafter,
                  Executive's benefits shall be determined under the Company's
                  retirement, insurance, and other compensation and benefit
                  plans and programs then in effect, in accordance with the
                  terms of such programs.

         (f)      TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive shall have
                  the right to terminate Executive's employment, without further
                  obligation or liability to Company, except that any
                  termination of Executive's employment under this Section 5(e)
                  shall have the same effect as a termination without cause by
                  Company under Section 5(b) above, upon the occurrence of any
                  one or more of the following events, which events shall be
                  deemed termination by Executive for "Good Reason":

                  i.       CHANGE IN REPORTING. If Executive no longer reports
                           directly to the CEO of the Company or to the Board of
                           Directors of Company.

                  ii.      REDUCTION IN DUTIES OR TITLE. If Executive's duties
                           hereunder are diminished in any material respect or
                           Executive's title as President is diminished without
                           her prior written consent;

                  iii.     OTHER MATERIAL BREACH. If Company willfully commits a
                           material breach of this Agreement with the actual
                           knowledge that its conduct constitutes a breach of
                           this Agreement;

                  iv.      CHANGE IN LOCATION. If Executive's office is
                           re-located outside of the county of Los Angeles
                           without her prior written consent;

                  v.       EFFECTIVENESS OF NOTICE. Upon the failure to cure any
                           of the events/breaches set out in Section 5(e)(i)
                           through 5(e)(iv) within thirty (30) days after
                           Company's receipt of written notice from Executive
                           specifying the applicable events/breaches

                                       5
<PAGE>   6

                           and expressly referring to this Section 5(e) (the
                           "Initial Notice"), Executive shall have the right to
                           elect to terminate her employment for Good Reason by
                           giving a second written notice (the "Second Notice")
                           to Company to such effect and referring to this
                           Section 5(e); provided, however, that with respect to
                           any such events/breaches that are capable of
                           prospective cure, if Company commences to effect such
                           a cure within the foregoing thirty (30) day period,
                           Company shall be permitted additional time to cure
                           and not be deemed in breach so long as it diligently
                           continues to seek to effect a cure. Executive shall
                           be deemed to have terminated her employment for Good
                           Reason under this Section 5(e) effective ten (10)
                           days following Second Notice.

6.       CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.

         (a)      During the Term of Employment and thereafter, Executive shall
                  not, except as may be required to perform her duties hereunder
                  or as required by applicable law, disclose to others or use,
                  whether directly or indirectly, any Confidential Information
                  regarding the Company. "CONFIDENTIAL INFORMATION" shall mean
                  information about the Company, its subsidiaries and
                  affiliates, and their respective clients and customers that is
                  not available to the general public and that was learned by
                  Executive in the course of her employment by the Company,
                  including, but not limited to, any proprietary knowledge,
                  trade secrets, data, formulae, information, and client and
                  customer lists and all papers, resumes, records (including
                  computer records) and the documents containing such
                  Confidential Information. Executive acknowledges that such
                  Confidential Information is specialized, unique in nature and
                  of great value to the Company, and that such information gives
                  the Company a competitive advantage. Upon the termination of
                  her employment for any reason whatsoever, Executive shall
                  promptly deliver to the Company all documents, computer tapes
                  and disks (and all copies thereof) containing any Confidential
                  Information.

         (b)      During the period that Executive is receiving payments under
                  this Agreement, Executive shall not, directly or indirectly in
                  any manner or capacity (e.g., as an advisor, principal, agent,
                  partner, officer, director, shareholder, employee, member of
                  any association or otherwise) engage in, work for, consult,
                  provide advice or assistance or otherwise participate in any
                  activity which is competitive with the business of the
                  Company. Executive further agrees that during such period she
                  will not assist or encourage any other person in carrying out
                  any activity that would be prohibited by the foregoing
                  provisions of this Section if such activity were carried out
                  by Executive and, in particular, Executive agrees that she
                  will not induce any employee of the Company to carry out any
                  such activity; provided, however, that the "beneficial
                  ownership" by Executive, either individually or as a member of
                  a "group," as such terms are used in Rule 13d of the General
                  Rules and Regulations under the Exchange Act, of not more than
                  one percent (1%) of the voting stock of any publicly held
                  corporation shall not be a violation of this Agreement. It is
                  further expressly agreed that the Company will or would suffer
                  irreparable injury if Executive were to compete with the
                  Company or any

                                       6
<PAGE>   7

                  subsidiary or affiliate of the Company in violation of this
                  Agreement and that the Company would by reason of such
                  competition be entitled to injunctive relief in a court of
                  appropriate jurisdiction, and Executive further consents and
                  stipulates to the entry of such injunctive relief in such a
                  court prohibiting Executive from competing with the Company or
                  any subsidiary or affiliate of the Company in violation of
                  this Agreement.

         (c)      During the period that Executive is receiving payments under
                  this Agreement and for one (1) year after such payments
                  terminate, Executive shall not, directly or indirectly,
                  influence or attempt to influence suppliers, customers or
                  affiliates of the Company to divert their business to any
                  competitor of the Company.

         (d)      Executive recognizes that she will possess confidential
                  information about other employees of the Company relating to
                  their education, experience, skills, abilities, compensation
                  and benefits, and interpersonal relationships with customers
                  of the Company. Executive recognizes that the information she
                  will possess about these other employees is not generally
                  known, is of substantial value to the Company in developing
                  its business and in securing and retaining customers, and will
                  be acquired by her because of her business position with the
                  Company. Executive agrees that, during the period that
                  Executive is receiving payments under this Agreement and for
                  one (1) year after such payments terminate, Executive will
                  not, directly or indirectly, solicit or recruit any employee
                  of the Company for the purpose of being employed by Executive
                  or by any competitor of the Company on whose behalf she is
                  acting as an agent, representative or employee and that she
                  will not convey any such confidential information or trade
                  secrets about other employees of the Company to any other
                  person.

         (e)      If it is determined by a court of competent jurisdiction in
                  any state that any restriction in this Section is excessive in
                  duration or scope or is unreasonable or unenforceable under
                  the laws of that state, it is the intention of the parties
                  that such restriction may be modified or amended by the court
                  to render it enforceable to the maximum extent permitted by
                  the law of that state.

7.       MITIGATION. After a termination of employment pursuant to SECTION 5(a)
         or 5(f), Executive shall have a duty to mitigate the damages specified
         under Section 5(a)(i) by seeking other comparable employment. If
         Executive accepts employment elsewhere after termination pursuant to
         SECTION 5(a) or 5(f), the Company will have the right to offset any
         damages or amounts owed to Executive by Company pursuant to Section
         5(a)(i).

8.       DESIGNATED BENEFICIARY. In the event of the death of Executive while in
         the employ of the Company, or at any time thereafter during which
         amounts remain payable to Executive under SECTION 5, such payments
         (other than the right to continuation of welfare benefits) shall
         thereafter be made to such person or persons as Executive may
         specifically designate (successively or contingently) to receive
         payments under this Agreement following Executive's death by filing a
         written beneficiary designation with the Company during Executive's
         lifetime. Such beneficiary designation shall be in such form as may be

                                       7
<PAGE>   8

         prescribed by the Company and may be amended from time to time or may
         be revoked by Executive pursuant to written instruments filed with the
         Company during her lifetime. Beneficiaries designated by Executive may
         be any natural or legal person or persons, including a fiduciary, such
         as a trustee or a trust or the legal representative of an estate.
         Unless otherwise provided by the beneficiary designation filed by
         Executive, if all of the persons so designated die before Executive on
         the occurrence of a contingency not contemplated in such beneficiary
         designation, then the amounts payable under this Agreement shall be
         paid to Executive's estate.

9.       TAXES. All payments to be made to Executive under this Agreement will
         be subject to any applicable withholding of federal, state and local
         income and employment taxes.

10.      RESOLUTION OF DISPUTES. Notwithstanding anything herein to the
         contrary, in the event that there shall be a dispute among the parties
         arising out of or relating to this Agreement or the breach thereof,
         other than SECTION 6, the parties agree that such dispute shall be
         resolved by final and binding arbitration in Los Angeles, California,
         in accordance Commercial Arbitration Rules then in effect of
         JAMS/ENDISPUTE. Depositions may be taken and other discovery may be
         obtained during such arbitration proceedings to the same extent as
         authorized in civil judicial proceedings. Any award issued as a result
         of such arbitration shall be final and binding between the parties
         thereto, and shall be enforceable by any court having jurisdiction over
         the party against whom enforcement is sought. The fees and expenses of
         such arbitration (including, but not limited to, reasonable attorneys'
         fees) or any action to enforce an arbitration award shall be paid by
         the party that does not prevail in such arbitration.

11.      ATTORNEYS' FEES. Should either party hereto or their successors retain
         counsel for the purpose of enforcing, or preventing the breach of, any
         provision hereof, including, but not limited to, by instituting any
         action or proceeding in arbitration or a court to enforce any provision
         hereof or to enjoin a breach of any provision of this Agreement, or for
         a declaration of such party's rights or obligations under the
         Agreement, or for any other remedy, whether in arbitration or in a
         court of law, then the successful party shall be entitled to be
         reimbursed by the other party for all costs and expenses incurred
         thereby, including, but not limited to, reasonable fees and expenses of
         attorneys and expert witnesses, including costs of appeal. If such
         successful party shall recover judgment in any such action or
         proceeding, such costs, expenses and fees may be included in and as
         part of such judgment. The successful party shall be the party who is
         entitled to recover her costs of suit, whether or not the suit proceeds
         to final judgment. If no costs are awarded, the successful party shall
         be determined by the arbitrator or court, as the case may be.

12.      MISCELLANEOUS. This Agreement shall also be subject to the following
         miscellaneous considerations:

         (a)      REPRESENTATIONS AND WARRANTIES.

                  (i)      Executive represents and warrants to the Company that
                           she has the authorization, power and right to
                           deliver, execute and fully perform her

                                       8
<PAGE>   9

                           obligations under this Agreement in accordance with
                           its terms. Executive further represents and warrants
                           that this Agreement does not require any
                           authorization, consent, approval, exemption or other
                           action by any other party and does not (A) conflict
                           with or result in the breach of the terms, conditions
                           or provisions of, (B) constitute a default under, or
                           (C) result in a violation of any agreement,
                           instrument, order, judgment or decree to which
                           Executive is subject. Executive will, to the fullest
                           extent permitted by applicable law, as from time to
                           time in effect, indemnify the Company and hold the
                           Company harmless for any breach of the
                           representations set forth in this subparagraph (i).

                  (ii)     The Company represents and warrants to Executive that
                           it has the authorization, power and right to deliver,
                           execute and fully perform its obligations under this
                           Agreement in accordance with its terms. The Company
                           further represents and warrants that this Agreement
                           does not require any authorization, consent,
                           approval, exemption or other action by any other
                           party and does not (A) conflict with or result in the
                           breach of the terms, conditions or provisions of, (B)
                           constitute a default under, or (C) result in a
                           violation of any agreement, instrument, order,
                           judgment or decree to which the Company is subject.
                           The Company will, to the fullest extent permitted by
                           applicable law, as from time to time in effect,
                           indemnify Executive and hold Executive harmless for
                           any breach of its representations set forth in this
                           subparagraph (ii).

         (b)      DIVISIBILITY OF THE AGREEMENT. If any provision of this
                  Agreement or any portion thereof is declared invalid, illegal,
                  or incapable of being enforced by any court of competent
                  jurisdiction, the remainder of such provisions and all of the
                  remaining provisions of this Agreement shall continue in full
                  force and effect.

         (c)      CHOICE OF LAW. This Agreement shall be construed, interpreted
                  and the rights of the parties determined in accordance with
                  the internal laws of the State of California without reference
                  to the choice of law provisions of such State's law, except
                  with respect to matters of law concerning the internal
                  corporate affairs of any corporate entity which is a party to
                  or the subject of this Agreement, and as to those matters of
                  the law the jurisdiction under which the respective entity
                  derives its powers shall govern, and to the extent governed by
                  federal law.

         (d)      ASSIGNMENT. This Agreement shall be binding on and shall inure
                  to the benefit of the parties to it and their respective
                  heirs, legal representatives, successors and assigns, except
                  as otherwise provided herein. The Company may assign this
                  Agreement to any direct or indirect subsidiary or parent of
                  the Company or joint venture in which the Company has an
                  interest, or any successor (whether by merger, consolidation,
                  purchase or otherwise) to all or substantially all of the
                  stock, assets or business of the Company and this Agreement
                  shall be binding upon and inure to the benefit of such
                  successors and assigns; provided however that no such
                  assignment shall relieve Company of its obligations due to
                  Executive

                                       9
<PAGE>   10

                  hereunder. Except as expressly provided herein, Executive may
                  not sell, transfer, assign, or pledge any of her rights or
                  interests pursuant to this Agreement.

         (e)      NO ABROGATION. Any rights of Executive hereunder shall be in
                  addition to any rights Executive may otherwise have under
                  benefit plans, agreements, or arrangements of the Company to
                  which she is a party or in which she is a participant,
                  including, but not limited to, any Company-sponsored employee
                  benefit plans. Provisions of this Agreement shall not in any
                  way abrogate Executive's rights under such other plans,
                  agreements, or arrangements.

         (f)      NOTICE. For the purposes of this Agreement, notices, demands
                  and all other communications provided for in this Agreement
                  shall be in writing and shall be deemed to have been duly
                  given when personally delivered or one day after delivery to
                  an overnight air courier guaranteeing next day delivery,
                  addressed as follows:

                  If to Executive:           Niloo Razi Howe
                                             660 S. Gretna Green Way
                                             Los Angeles, CA 90049

                  If to the Company:         Pet Quarters, Inc.
                                             720 East Front Street
                                             Lonoke, Arkansas  72086
                                             Attn:  Steve Dempsey

                  With  copies to:           Wright, Lindsey & Jennings LLP
                                             200 West Capitol Avenue, Suite 2200
                                             Little Rock, Arkansas 72201
                                             Attn:  C. Tad Bohannon

                  or to such other address as any party may have furnished to
                  the others in writing in accordance herewith, except that
                  notices of change of address shall be effective only upon
                  receipt.

         (g)      HEADINGS. Section headings in this Agreement are included
                  herein for convenience of reference only and shall not
                  constitute a part of this Agreement for any other purpose.

         (h)      WAIVER. Failure to insist upon strict compliance with any of
                  the terms, covenants, or conditions hereof shall not be deemed
                  a waiver of such term, covenant, or condition, nor shall any
                  waiver or relinquishment of, or failure to insist upon strict
                  compliance with, any right or power hereunder at any one or
                  more times be deemed a waiver or relinquishment of such right
                  or power at any other time or times.

                                       10
<PAGE>   11

         (i)      EXECUTIVE'S ACKNOWLEDGMENT. Executive acknowledges (i) that
                  she has consulted with or has had the opportunity to consult
                  with independent counsel of her own choice concerning this
                  Agreement and has been advised to do so by the Company, and
                  (ii) that she has read and understands the Agreement, is fully
                  aware of its legal effect, and has entered into it freely
                  based on her own judgment.

         (j)      COUNTERPARTS. This Agreement may be executed in several
                  counterparts, each of which shall be deemed to be an original
                  but all of which together will constitute one and the same
                  instrument.

         (k)      ENTIRE AGREEMENT; AMENDMENT. This Agreement (i) contains a
                  complete statement of all the arrangements between the parties
                  with respect to Executive's employment by the Company, (ii)
                  supersedes all prior and existing negotiations and agreements
                  between the parties concerning Executive's employment and
                  (iii) can only be changed or modified pursuant to a written
                  instrument duly executed by each of the parties hereto.

                                       11
<PAGE>   12

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

                                            EXECUTIVE

                                            ------------------------------------
                                            Niloofar Razi Howe

                                            PET QUARTERS, INC.

                                            ------------------------------------
                                            Steve Dempsey, CEO

                                      S-1

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