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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 ▇▇▇▇ ▇▇▇▇ ("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
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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).
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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
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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
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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
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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
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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
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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
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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
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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 ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company: Pet Quarters, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇ ▇▇▇▇▇▇▇▇
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.
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(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.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
EXECUTIVE
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Niloofar ▇▇▇▇ ▇▇▇▇
PET QUARTERS, INC.
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▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
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