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Note 10 - Commitments and Contingencies
 12 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
(
10
)
Commitments and Contingencies
 
Legal Matters and Routine Proceedings
 
In
January 2019,
a putative class action complaint was filed in the United States District Court for the Southern District of New York alleging that company’s website,
www.1800petmeds.com,
did
not
comply with the ADA, NYSHRL, and NYCHRL, and discriminated against visually impaired individuals. The Company denied any wrongdoing, and on
July 24, 2019,
the Company and the Plaintiff reached a confidential settlement. The Plaintiff and the Company entered into a consent decree and the matter was dismissed on
March 23, 2020,
when an order was issued by the court approving the parties joint proposed consent decree.
 
The Company has settled complaints that had been filed with various states’ pharmacy boards in the past. There can be
no
assurances made that other states will
not
attempt to take similar actions against the Company in the future. The Company initiates litigation to protect its trade or service marks. There can be
no
assurance that the Company will be successful in protecting its trade or service marks. Legal costs related to the above matters are expensed as incurred.
 
Operating Leases
 
Upon acquisition of the Delray Beach property in
January 2016,
48%
of the property, approximately
88,000
square feet of the property was leased to
two
tenants. At
March 31, 2020,
the leases with these
two
tenants had a remaining weighted average lease term of
4.8
years. The Company recorded approximately
$645,000
and
$622,000
in rental revenue in fiscal
2020
and
2019,
respectively, which was included in other income. The Company expects to receive the following future lease payments over the next
five
years:
$670,000
in fiscal
2021;
$689,000
in fiscal
2022;
$710,000
in fiscal
2023;
$731,000
in fiscal
2024,
and
$566,000
in fiscal
2025.
 
Employment Agreements
 
On
January 29, 2016,
the Company entered into Amendment
No.
5
to the Executive Employment Agreement with Menderes Akdag, the Company’s President and Chief Executive Officer, as well as a Director, effective
March 16, 2016.
The term of the Agreement was for
three
years, with an increase in salary to
$600,000
per year throughout the term of the Agreement, and a grant of
120,000
shares of restricted stock in accordance with the Company’s
2006
Employee Equity Compensation
Restricted Stock Plan, with the restrictions lapsing ratably over a
three
-year period. On
March 15, 2019,
the day before Mr. Akdag’s Agreement was set to expire, the Company entered into Amendment
No.
5a
extending the term to
May 13, 2019
at his then-current salary. Following the Compensation Committee of the Board of Directors having worked with a nationally recognized compensation consulting firm to ensure executive pay to the Chief Executive Officer of the Company was consistent with a selected peer group and contained appropriate performance bench marks, on
May 13, 2019,
the Company entered into Amendment
No.
6
to the Agreement. That Agreement amended certain provisions of the Executive Employment Agreement as follows: the term of the Executive Employment Agreement was extended until the earlier of (i) the date of the Company’s
2020
Annual Stockholders Meeting, or (ii)
August 1, 2020;
and Mr. Akdag’s salary remained at
$600,000
per year throughout the term of the Agreement subject to a percentage increase adjustment, if any, commencing on the pay period ending on
May 17, 2019,
based on pre-determined individual and corporate performance goals and objectives for fiscal
2019
approved by the Board. According to the Agreement, on
July 26, 2019
Mr. Akdag was also to be granted
40,000
restricted shares of the Company’s common stock to vest on
July 26, 2020,
with the Company paying Mr. Akdag an additional amount (“Gross-Up Payment”) to cover Mr. Akdag’s withholding taxes which are required to be paid as a result of the issuance of the restricted shares.
 
On
July 12, 2019,
the Company entered into Amendment
No.
7
providing that in the event that a Change in Control (as was thereinafter defined) of the Company was to occur at any time, Mr. Akdag would have the right to terminate his employment for “Good Reason,” (as was thereinafter defined) upon
thirty
(
30
) days written notice given at any time within
one
(
1
) year after the occurrence of such event, and upon such termination Mr. Akdag would be entitled to a
one
-time payment of
two
times his salary as of the date of such termination.