PART I. FINANCIAL INFORMATION (UNAUDITED)

EX-10.11 3 p67030exv10w11.txt EX-10.11 EXHIBIT 10.11 June 18, 2002 Mr. Timothy E. Kullman 375 Waters Bend Way Alpharetta, GA 30022 Dear Tim: PETsMART, Inc. ("PETsMART" or the company) is pleased to offer you the position of Senior Vice President, Chief Financial Officer, starting no later than July 8, 2002, on the following terms: 1. As Senior Vice President, Chief Financial Officer of PETsMART, you will work at 19601 N. 27th Avenue, Phoenix AZ 85027 and perform the duties customarily associated with this position, including but not limited to such duties as may be assigned to you by the Company's Chief Executive Officer, Phil Francis. Of course, the Company may change your position, duties and work location from time to time, as it deems necessary. 2. Your initial base salary will be $340,000 (three hundred and forty thousand dollars) per year less standard deductions and withholdings, paid biweekly. 3. You will be eligible to participate in the Company's Employee Stock Purchase Plan, as may be modified from time to time with the approval of the Company's Board of Directors. In addition, you are eligible to participate in the Company Incentive Bonus Plan. The annualized bonus objective initially established for your position is 50% of your base salary, subject to annual review by the Compensation Committee of the Board. As with all executives, receipt of year-end bonus will be subject to the achievement of our annual financial plan and individual management objectives. For the fiscal year of 2002, you will be guaranteed a 50% bonus of $170,000. 4. Upon approval by the Board after commencement of your employment with PETsMART, you will receive an incentive stock option grant, under the terms of the Company's 1995 Equity Incentive Plan, in the total amount of 100,000 (one hundred thousand) shares of PETsMART common stock. From time to time, the Board reviews the outstanding option grants for senior Company executives and may issue additional options at its discretion. 5. The Company will reimburse you for reasonable documented business expenses pursuant to Company policy. 6. You will receive relocation benefits for your move from Alpharetta, GA to Phoenix, AZ, under the terms of the enclosed Officer Relocation Policy. 7. PETsMART will make available to you a bridge loan and payment of the lesser of two mortgages for a reasonable time should that be necessary. 8. In addition to your salary and incentive compensation, you will be eligible for the following Company benefits consistent with Company policy: 4 (four) weeks of vacation per year, life insurance, and medical and dental coverage. Dependent medical and dental coverage is also available to you, with a varying portion of the cost paid by you by payroll deduction, depending on your level of participation. You are eligible for our Medical Benefit coverage on the first day of the month after hire date. Details about these benefits are provided in the Associate Handbook and Summary Plan Descriptions. The Company reserves the right to modify your compensation and benefits from time to time, as it deems necessary. 9. Of course, you will be expected to abide by all of the Company's policies and procedures. As a further condition of your employment, you agree to refrain from any unauthorized use or disclosure of the Company's proprietary or confidential information or materials. You also agree to sign and comply with the Company's Confidentiality Agreement and Non-Compete Agreement. By accepting this offer, you are representing that you are not a party to any agreement (e.g., a non-compete) with any third party or prior employer which would conflict with or inhibit your performance of your duties with PETsMART. 10. In the event of a dissolution, liquidation or sale of substantially all of the assets of the company or a merger or consolidation in which the company is not the surviving corporation and where your employment is terminated as a result of this change of control, within 18 months of the date of the change in control, all of your non vested stock options will immediately become vested. Further detail regarding this change will be included in your stock option grant, which will be issued to you after your employment begins and the Board of Directors approves your stock options. 11. In the event your employment is terminated with PETsMART, you hereby authorize PETsMART to deduct any amounts you owe to PETsMART from your final paycheck, including any vacation pay, advances, bonus, severance, or other amounts owed to you by PETsMART. 12. Either you or the Company may terminate your employment relationship at any time for any reason whatsoever, with or without cause or advance notice. If the Company terminates your employment without cause at any time, the Company will pay you, as the only severance compensation, in bi-weekly payments, an amount equal to 12 months of your base salary, subject to standard payroll deductions and withholdings. If you resign or your employment is terminated for cause, all compensation and benefits will cease immediately, and you will receive no severance benefits. 13. This letter constitutes the complete, final and exclusive embodiment of the entire agreement between you and PETsMART with respect to the terms and conditions of your employment. In entering into this agreement, neither party is relying upon any promise or representation, written or oral, other than those expressly contained herein, and this agreement supersedes any other such promises, representations or agreements. It may not be amended or modified except in a written agreement signed by you and a duly authorized Company officer. As required by law, this offer of employment is subject to proof of your right to work in the United States. This offer is also subject to your submission to a mandatory drug test. The results of this test may disqualify you from employment with the Company. 14. To ensure rapid and economical resolution of any disputes which may arise under this agreement, you and the Company agree that any and all disputes or controversies of any nature whatsoever, regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by confidential, final and binding arbitration (rather than trial by jury or court or resolution in some other forum) under the then existing rules of American Arbitration Association. We are looking forward to you accepting our offer as described above, please sign below and return this letter in the enclosed envelope to: Carol Cox, Senior Vice President, Human Resources, 19601 N. 27th Avenue, Phoenix, Arizona 85027 immediately. I look forward to you joining the PETsMART team and feel that you have a great deal to contribute to our organization. I am confident you will find challenge, satisfaction and opportunity while at PETsMART. Very truly yours, PETsMART, INC. /s/ Carol Cox - -------------------------------------- Carol Cox Senior Vice President, Human Resources Agreed and Accepted: /s/ Timothy E. Kullman - -------------------------------------- Timothy E. Kullman Dated: June 18, 2002 ccox/personnel/kullman.doc Enclosures