Edgar Filing: PETMED EXPRESS INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)

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14a-6(e)(2))
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PetMed Express, Inc.
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(Name of Registrant as Specified In Its Charter)

Not Applicable
------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)

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[ LOGO 1-800-PetMeds[R] ]

PETMED EXPRESS, INC. PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 28, 2006

TO THE OWNERS OF COMMON STOCK
OF PETMED EXPRESS, INC.

The Annual Meeting of Stockholders of PetMed Express, Inc. (the
"Company") will be held on Friday, July 28, 2006, at 1:00 p.m.,
Eastern Time, at the Sheraton Suites Cypress Creek Fort Lauderdale,
555 N.W. 62nd Street, Fort Lauderdale, FL 33309. The purposes of the
meeting are:

1. To elect five Directors to our Board of Directors,

2. To ratify the appointment of Goldstein Golub Kessler LLP as
the independent registered public accounting firm for the
Company to serve for the 2007 fiscal year,

3. To approve the adoption of the PetMed Express, Inc. 2006
Employee Equity Compensation Restricted Stock Plan,

4. To approve the adoption of the PetMed Express, Inc. 2006
Outside Director Equity Compensation Restricted Stock Plan,
and

5. To transact any other business as may properly come before the
meeting.

These items are described in this proxy statement.

Only stockholders of record at the close of business on Tuesday,
June 6, 2006, the record date, are entitled to notice of and to vote
at the annual meeting. Each stockholder of record on the record date
is entitled to one vote for each share of Common Stock held. On June
6, 2006, there were 24,009,706 shares of Common Stock issued and
outstanding.

A list of stockholders entitled to vote will be available for
examination for ten days prior to the annual meeting, during normal
business hours, at the Company's principal place of business at 1441
S.W. 29th Avenue, Pompano Beach, FL 33069. This list will also be
available to stockholders at the annual meeting.

I would like to extend a personal invitation for you to join us
at our annual meeting. Your vote is important to us and to our
business. I encourage you to sign and return your proxy card prior to
the meeting, so that your shares will be represented and voted at the
meeting even if you cannot attend. If you attend, you may withdraw
your proxy and vote in person.

This proxy statement and our 2006 Annual Report to Stockholders
on Form 10-K are being distributed on or about June 23, 2006.

By Order of the Board of Directors,

MENDERES AKDAG
Chief Executive Officer,
President and Director

Pompano Beach, Florida
June 23, 2006

TABLE OF CONTENTS

Page

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING 1

ITEM 1 - ELECTION OF DIRECTORS 4

ITEM 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM 4

ITEM 3 - APPROVAL OF THE EMPLOYEE EQUITY COMPENSATION
RESTRICTED STOCK PLAN 4

ITEM 4 - APPROVAL OF THE OUTSIDE DIRECTOR EQUITY COMPENSATION
RESTRICTED STOCK PLAN 6

DIRECTORS AND EXECUTIVE OFFICERS 9

BOARD GOVERNANCE AND OPERATIONS 10

Corporate Code of Business Conduct and Ethics 10
Policy with Regard to the Consideration of Director
Candidate Recommendations by our Stockholders 11
Stockholder Communications with the Board 11
Meetings of the Board of Directors 11
Committees of the Board of Directors 12

REPORT OF THE AUDIT COMMITTEE 13

PRINCIPAL ACCOUNTANT FEES AND SERVICES 14

Pre-Approval Policy for Services of Independent
Registered Public Accounting Firm 15

BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT 16

Section 16(a) Beneficial Ownership Reporting Compliance 16

REPORT OF THE COMPENSATION COMMITTEE 17

EXECUTIVE COMPENSATION 18

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 19

PERFORMANCE GRAPH 20

INTEREST OF CERTAIN PERSONS IN OPPOSITION TO MATTERS TO BE
ACTED UPON 21

OTHER MATTERS 21
EXHIBIT A - 2006 EMPLOYEE EQUITY COMPENSATION RESTRICTED
STOCK PLAN 22

EXHIBIT B - 2006 OUTSIDE DIRECTOR EQUITY COMPENSATION
RESTRICTED STOCK PLAN 28

QUESTIONS AND ANSWERS
ABOUT THE MEETING AND VOTING

What am I voting on?

* To elect five directors to our Board of Directors (Menderes
Akdag, Frank J. Formica, Gian M. Fulgoni, Ronald J. Korn, Robert
C. Schweitzer).
* To ratify the appointment of Goldstein Golub Kessler LLP as our
independent registered public accounting firm.
* To approve the adoption of the PetMed Express, Inc. 2006 Employee
Equity Compensation Restricted Stock Plan.
* To approve the adoption of the PetMed Express, Inc. 2006 Outside
Director Equity Compensation Restricted Stock Plan.

What is a proxy?

It is your legal designation of another person to vote the stock you
own. That other person is called a proxy. If you designate someone
as your proxy in a written document, that document also is called a
proxy or a proxy card. We have designated Bruce S. Rosenbloom, our
Chief Financial Officer and Alison Berges, our Corporate Secretary and
General Counsel, as proxies for the 2006 Annual Meeting of
Stockholders.

How will my proxy vote my shares?

Your proxy will vote according to your instructions. If you complete
your proxy instructions but do not indicate your vote on one or all of
the business matters, your proxy will vote "FOR" these items. Also,
your proxy is authorized to vote on any other business that properly
comes before the annual meeting in accordance with the recommendation
of our Board of Directors.

Why did I receive this proxy statement?

Our Board of Directors is soliciting your proxy to vote at the
annual meeting because you were a stockholder of record at the close
of business on June 6, 2006, the record date, and are entitled to vote
at the meeting. This proxy statement and the 2006 Annual Report to
Stockholders, along with either a proxy card or a voting instruction
card, are being mailed to stockholders beginning on or about June 23,
2006. This proxy statement summarizes the information you need to know
to vote at the annual meeting. You do not need to attend the annual
meeting to vote your shares.

What is the difference between holding shares as a stockholder of
record and as a beneficial owner?

If your shares are registered directly in your name with our
transfer agent, Florida Atlantic Stock Transfer, Inc., you are
considered, with respect to those shares, the "stockholder of record."
The proxy statement, annual report and proxy card have been sent
directly to you by us.

If your shares are held in a stock brokerage account by a bank or
other nominee, you are considered the "beneficial owner" of shares
held in the "street name." The proxy statement and annual report have
been forwarded to you by your broker, bank or other nominee who is
considered, with respect to those shares, the stockholder of record.
As the beneficial owner, you have the right to direct your broker,
bank or other nominee on how to vote your shares by using the voting
instruction card included in the mailing or by following their
instructions for voting.

How do I vote?

If your shares are held in the street name, through a broker, bank
or other nominee, that institution will send you separate instructions
describing the procedure for voting your shares. Stockholders of
record can vote as follows:

* By Mail: Stockholders should sign, date and return their proxy
cards in the pre-addressed, postage-paid envelope that is
provided.
* At the Meeting: If you attend the annual meeting, you may vote in
person by ballot, even if you have previously returned a proxy
card.

Who is entitled to vote and how many votes do they have?

Holders of our common stock as of the close of business on June 6,
2006, the record date, are entitled to vote at the annual meeting.
Each share of our Common Stock is entitled to one vote. As of the
record date, 24,009,706 shares of our Common Stock were outstanding
and entitled to vote at the annual meeting.

May I change my vote after I return my proxy card?

Yes, you may change your vote at any time before your shares are
voted at the annual meeting by:

* Notifying our Corporate Secretary, in writing at PetMed Express,
Inc., 1441 S.W. 29th Avenue, Pompano Beach, FL 33069 that you are
revoking your proxy;
* Executing and delivering a later dated proxy card; or
* Voting in person at the annual meeting.

However, if you have shares held through a brokerage firm, bank or
other custodian, you may revoke your instructions only by informing
the custodian in accordance with any procedures it has established.

What is a quorum of stockholders?

Shares representing the majority of the total outstanding votes
present or represented by proxy constitute a quorum. If you vote or
return a proxy card, your shares will be considered part of the
quorum.

What vote is required for approval of the proposals?

At the annual meeting, directors will be elected by a plurality of
votes cast. Only votes cast "FOR" or "AGAINST" will affect the
outcome of this proposal. Therefore, the five directors who receive
the greatest number of votes cast "FOR" the election of directors will
be elected to serve as directors.

Ratification of the appointment of our independent registered public
accounting firm requires the affirmative vote of a majority of the
shares of our common stock present at the annual meeting in person or
by proxy, and entitled to vote on the matter.

Adoption of the 2006 Employee Equity Compensation Restricted Stock
Plan requires the affirmative vote of a majority of the shares of our
common stock present at the annual meeting in person or by proxy, and
entitled to vote on the matter, and adoption of the 2006 Outside
Director Equity Compensation Restricted Stock Plan requires the
affirmative vote of a majority of the shares of our common stock
present at the annual meeting in person or by proxy, and entitled to
vote on the matter.

How are abstentions and broker non-votes counted?

Abstentions are considered shares present at the annual meeting in
person or by proxy, and will be counted for purposes of determining
whether a quorum is present. Abstentions will have no effect on the
election of directors, but will have the effect of a vote "AGAINST"
ratification of the appointment of our independent registered public
accounting firm, the approval of the Employee Equity Compensation
Restricted Stock Plan and the approval of the Outside Director Equity
Compensation Restricted Stock Plan.

Broker non-votes refer to PetMed's shares held in street name by a
brokerage firm or nominee (such as Cede & Co.) under circumstances
where the beneficial owner has not instructed the broker or nominee as
to how the shares should be voted. Broker non-votes are considered
present by proxy for purposes of determining whether a quorum is
present at the meeting. If your shares are held in street name, the
broker or nominee in whose name your shares are held is permitted to
vote your shares on the matters to be voted upon at the annual
meeting, even if you have not provided specific direction on how your
shares should be voted.

Who will count the votes?

A representative of The Altman Group, a company contracted by us to
assist the Company in the tabulation of proxies, and our Corporate
Secretary and General Counsel, Alison Berges, will tabulate the votes
and act as inspector of election.

What happens if a nominee for director is unable to serve as a
director?

If any of the nominees becomes unavailable for election, which we do
not expect, votes will be cast for such substitute nominee or nominees
as may be designated by our Board of Directors, unless our Board of
Directors reduces the number of directors. Under the policies of our
Board of Directors, directors are expected to attend regular board
meetings, board committee meetings and our annual stockholders
meeting.

How do I get an admission card to attend the annual meeting?

If you are a stockholder of record, your admission card is attached
to your proxy card. You will need to bring it with you to the
meeting. If you own shares in the street name, you will need to ask
your broker or bank for an admission card in the form of a legal
proxy. You will need to bring the legal proxy with you to the
meeting. If you do not receive the legal proxy in time or you want to
attend the meeting but not vote in person, bring your most recent
brokerage statement with you to the meeting. We can use that to
verify your ownership of Common Stock and admit you to the meeting;
however you will not be able to vote your shares at the meeting
without a legal proxy. Please note that if you own shares in the
street name and you request a legal proxy, any previously executed
proxy will be revoked, and your vote will not be counted unless you
appear at the meeting and vote in person.

You will also need to bring a photo ID to gain admission.

Who is soliciting my proxy and who pays the cost?

PetMed Express, Inc. and the Board of Directors are soliciting your
proxy. The cost of soliciting proxies will be borne by the Company.
PetMed Express, Inc. will also reimburse brokerage firms, banks and
other custodians for their reasonable out-of-pocket expenses for
forwarding these proxy materials to you. Our directors, officers and
employees may also solicit proxies by mail, telephone and personal
contact. They will not receive any additional compensation for these
activities.

In addition, to assist in the solicitation of proxies from brokers,
bank nominees, and other institutional holders, and from other
stockholders, the Company has engaged The Altman Group for a fee not
to exceed $6,500 plus out-of-pocket expenses.

When are stockholder proposals due for next year's annual meeting?

Pursuant to Rule 14a-8 under the Securities Exchange Act,
stockholders may present proper proposals for inclusion in the
Company's proxy statement and for consideration at the 2007 annual
meeting of stockholders by submitting their proposals to the Company
in a timely manner. Proposals that stockholders wish to be included
in next year's Proxy Statement for the annual meeting to be held in
2007 must be received at the Company's principal place of business at
1441 S.W. 29th Avenue, Pompano Beach, FL 33069, addressed to the
Corporate Secretary's attention, no later than March 15, 2007.

Can different stockholders sharing the same address receive only one
Annual Report and Proxy Statement?

Yes. The Securities and Exchange Commission permits companies and
intermediaries, such as a brokerage firm or a bank, to satisfy the
delivery requirements for proxy statements and annual reports with
respect to two or more security holders sharing the same address by
delivering only one proxy statement and annual report to that address.
This process which is commonly referred to as "householding" can
effectively reduce our printing and postage costs. Under
householding, each stockholder would continue to receive a separate
proxy card or voting instruction card.

Certain of our stockholders whose shares are held in the street name
and who have consented to householding will receive only one set of
our annual meeting materials per household this year. If your
household received a single set of our annual meeting materials this
year, you can request to receive additional copies of these materials
by calling or writing your broker, bank or other nominee. If you own
your shares in the street name, you can request householding by
calling or writing your broker, bank or other nominee.

ITEM 1 - ELECTION OF DIRECTORS

The Board of Directors unanimously recommends a vote "FOR" the
election of the following directors:

Menderes Akdag, Frank J. Formica, Gian M. Fulgoni, Ronald J. Korn,
and Robert C. Schweitzer.

Each of the nominated directors has agreed to serve if elected. If
elected the directors will serve until the next annual meeting of
stockholders or until the director is succeeded by another director
who has been elected. However, if for some reason one or more of them
is unable to accept nomination, or election, proxies will be voted for
the election of a nominee(s) designated by our Board of Directors.
Biographical information for each of the nominees is presented below.

ITEM 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The Board of Directors unanimously recommends a vote "FOR" the
ratification of the appointment of Goldstein Golub Kessler LLP as the
Company's independent registered public accounting firm.

The Audit Committee has appointed and approved Goldstein Golub
Kessler LLP to audit our fiscal year 2007 consolidated financial
statements. Representatives of the firm will be available at the
annual meeting to make a statement, if they choose, and to answer any
questions you may have.

ITEM 3 - APPROVAL OF THE EMPLOYEE EQUITY COMPENSATION
RESTRICTED STOCK PLAN

The Board of Directors unanimously recommends a vote "FOR" the
approval of the Employee Equity Compensation Restricted Stock Plan.

APPROVAL OF 2006 EMPLOYEE EQUITY COMPENSATION RESTRICTED STOCK PLAN

The Board of Directors of the Company has adopted the PetMed
Express, Inc. 2006 Employee Equity Compensation Restricted Stock Plan
(the "Plan"), subject to the approval of the Company's stockholders.
If the stockholders approve the Plan, it will become effective on July
28, 2006. If stockholders do not approve the Plan, the Plan will have
no effect.

The purpose of the Plan is to promote the interests of the Company
by securing and retaining employees of outstanding ability and to
provide additional motivation to such employees to exert their best
efforts on behalf of the Company. The Company expects that it will
benefit from the added commitment which such employees will have in
the welfare of the Company as a result of their ownership or increased
ownership of the Company's Common Stock. All employees will be
eligible to receive awards ("Awards") under the Plan, which consist of
grants of Restricted Stock. Awards may be made under the Plan until
July 28, 2016.

The following is a summary of the material terms and provisions of
the Plan and the tax consequences to the Company and to those
employees who receive Awards of Restricted Stock under the Plan. This
summary is qualified in its entirety by reference to the Plan, a copy
of which is attached to this Proxy Statement as Exhibit A. To the
extent that there is a conflict between this summary and the Plan, the
terms of the Plan will govern.

Description of the Restricted Stock Plan

Administration. The Plan shall be administered by the Compensation
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Committee of the Board of Directors, each of whom is a "non-employee
director" as defined in Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Committee"). The Committee shall have the sole authority to (i) award
shares under the Plan; (ii) consistent with the Plan, determine the
provisions of the shares to be awarded, the restrictions and other
terms and conditions applicable to each award of shares under the
Plan; (iii) interpret the Plan, the instruments evidencing the
restrictions imposed upon stock awarded under the Plan and the shares
awarded under the Plan; (iv) adopt, amend and rescind rules and
regulations for the administration of the Plan; and (v) generally
administer the Plan and make all determinations in connection
therewith which may be necessary or advisable, and all such actions
of the Committee shall be binding upon all participants.

Eligibility. All employees, including officers, of the Company who
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are, from time to time, responsible for the management, growth and
protection of the business of the Company shall be eligible for awards
of stock under the Plan. No member of the Board of Directors of the
Company shall be eligible to participate in the Plan unless such
director is also an employee of the Company. The employees who shall
receive awards under the Plan shall be selected from time to time by
the Committee in its sole discretion, from among those eligible, and
the Committee shall determine, in its sole discretion, the number of
shares to be awarded to each such employee selected.

Awards. The shares that may be awarded under the Plan (without
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payment by participants) ("Restricted Stock") shall be the common
stock, par value $.001 per share, of the Company ("Common Stock"), and
shall be authorized, but un-issued, shares. The maximum number of
shares of Common Stock that may be awarded hereunder (subject to any
adjustments as provided below) shall not in the aggregate exceed
1,000,000 shares.

Written Agreements. The terms and conditions of each Award, including
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those related to the Restriction Period, will be set forth in a
written agreement executed by the Company and employee.

Transfer Restrictions. No share awarded under the 2006 Plan shall be
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sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of during the Restriction Period applicable thereto.

Restrictions and Restriction Period. In addition to such other terms,
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conditions and restrictions as may be imposed by the Committee and
contained in the written instrument under which Awards of Common Stock
are made pursuant to the Plan, (i) no Common Stock so awarded shall be
restricted for a period (the "Restriction Period") of less than one
year or more than ten years unless otherwise specified by the
Committee; and (ii) except as provided in the Plan, and described
below under "Accelerated Vesting; Forfeiture", the recipient of the
Award shall remain in the employ of the Company during the Restriction
Period or otherwise forfeit all right, title and interest in and to
the Restricted Stock subject to such restrictions.

Stock Certificates; Escrow. Certificates representing the Restricted
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Stock shall be registered in the name of the participant, such
certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such shares, and PetMed
shall retain physical possession of the certificate in escrow until
all restrictions have been lifted or requirements met.

Accelerated Vesting; Forfeiture. Each outstanding Award shall become
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immediately vested and unrestricted upon the occurrence of a change in
control of the Company, upon the death or permanent disability, of the
employee, or if the employee is terminated without cause. Shares of
Restricted Stock shall be forfeited in the event the employee
voluntarily resigns or is terminated for cause during the Restriction
Period. If the Restricted Stock fails to vest as specified in the
applicable award agreement, the shares of Restricted Stock will be
canceled and forfeited by the employee. All shares of Restricted Stock
that are canceled or forfeited will be available for future Awards
under the Plan.

Voting and Dividend Rights. Prior to the vesting of any Restricted
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Stock Awards under this Plan, a participant will have all of the
rights of a stockholder with respect to the shares of Common Stock so
awarded, including, but not limited to, the right to receive such cash
dividends, if any, as may be declared on such shares from time to time
and the right to vote (in person or by proxy) such shares at any
meeting of PetMed's stockholders. As a condition to the grant of the
Award under the Plan, dividends, if any, as may be declared on such
shares of Common Stock shall be deposited into an escrow or similarly
segregated account, and disbursement of such dividends to the
participant will occur only upon the delivery of the shares of Common
Stock to which such dividends relate, and in the event the shares of
Common Stock to which such dividends relate are forfeited, the
participant's right to receive disbursement of such dividends will be
forfeited and the amount of the dividends shall be returned to the
Company.

Federal Income Tax Consequences

The following discussion of the federal tax consequences of the Plan
is based on the provisions of the Internal Revenue Code (the "Code")
currently in effect, current regulations, and administrative rulings
of the Internal Revenue Service. The discussion is limited to the tax
consequences on United States citizens and does not consider the
potential impact of state or local tax laws. It is not intended to be
a complete discussion of all of the United States income tax
consequences of the Plan or of all of the requirements that must be
satisfied to qualify for the tax treatment described in this
discussion. Changes in the law and the regulations may modify the
discussion, and, in some cases, changes may be retroactive. In
addition, tax consequences may vary depending upon the personal
circumstances of individual holders of stock and the tax requirements
applicable to residents of countries other than the United States.

With respect to an Award, unless an employee makes an election
under Section 83(b) of the Internal Revenue Code (an "83(b)
election"), as described below, the employee will generally recognize
ordinary compensation income in an amount equal to the fair market
value of the shares subject to the grant of Restricted Stock at the
time the Restricted Stock ceases to be subject to forfeiture.
Dividends paid to an employee on the shares of Restricted Stock where
no 83(b) election is made are treated as compensation income of the
employee in the year received. The employee's holding period for long-
term capital gains purposes will not begin to run until the stock
becomes unrestricted.

With respect to an Award, an employee may make an 83(b) election
only with the prior approval of the Committee. If an employee makes an
83(b) election within the required period of thirty days after receipt
of the Restricted Stock, the employee will be immediately taxed, as
compensation income, on the fair market value of the Restricted Stock
issued to such employee, valued on the date of grant. Any dividends
received on stock subject to an 83(b) election will be treated as
ordinary dividend income. Where an 83(b) election is made, an
employee's holding period for long-term capital gains purposes begins
to run on receipt of the Restricted Stock. A forfeiture of Restricted
Stock after an 83(b) election is made, even though the employee has
included the stock as income, does not entitle the employee to a tax
deductible loss if no amount was paid for the Restricted Stock by the
employee.

Subject to the limitations on deductibility contained in Section
162(m) of the Code, the Company will receive a deduction for federal
income tax purposes equal to the compensation income recognized by the
employee receiving the Award.

Vote Required

The affirmative vote of the holders of a majority of the shares of
common stock present in person or represented by proxy and entitled to
vote at the annual meeting is required to approve the Plan. Unless
instructed to the contrary, the shares represented by the proxies will
be voted to approve the Plan.

ITEM 4 - APPROVAL OF THE OUTSIDE DIRECTOR EQUITY COMPENSATION
RESTRICTED STOCK PLAN

The Board of Directors unanimously recommends a vote "FOR" the
approval of the Outside Director Equity Compensation Restricted Stock
Plan.

APPROVAL OF 2006 OUTSIDE DIRECTOR EQUITY COMPENSATION RESTRICTED STOCK
PLAN

The Board of Directors of the Company has adopted the PetMed
Express, Inc. 2006 Outside Director Equity Compensation Restricted
Stock Plan (the "Director Plan"), subject to the approval of the
Company's stockholders. If the stockholders approve the Director Plan,
it will become effective on July 28, 2006. If stockholders do not
approve the Director Plan, the Director Plan will have no effect.

The purpose of the Director Plan is to promote the interests of the
Company by attracting, retaining and compensating highly qualified
individuals who are not employees or affiliates of PetMed or any of
its subsidiaries, to serve as members of the Company's Board of
Directors (the "Board"), and to enable them to increase their
ownership of PetMed's Common Stock, thereby increasing their
proprietary interest in PetMed and their identification with the
interests of PetMed's stockholders. Awards may be made under the
Director Plan until July 28, 2016.

The following is a summary of the material terms and provisions of
the Director Plan and the tax consequences to the Company and to those
outside directors who receive Awards of Restricted Stock under the
Director Plan. This summary is qualified in its entirety by reference
to the Director Plan, a copy of which is attached to this Proxy
Statement as Exhibit B. To the extent that there is a conflict between
this summary and the Director Plan, the terms of the Director Plan
will govern.

Description of the Restricted Stock Director Plan

Administration. The Director Plan shall be administered by the Board.
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The Board shall have the sole authority to (i) award shares of Common
Stock ("Restricted Stock") under the Director Plan; (ii) interpret the
Director Plan, the instruments evidencing the restrictions imposed
upon shares of Common Stock with respect to which Restricted Stock
Awards are awarded under the Director Plan; (iii) adopt, amend and
rescind rules and regulations for the administration of the Director
Plan; and (iv) administer the Director Plan and make all
determinations in connection therewith which may be necessary or
advisable, and all such actions of the Board shall be binding upon all
participants.

(a) Initial Grants. Each person who was an Outside Director as of
--------------
July 28, 2006 will automatically be granted, as of the date on
which stockholder approval of the Director Plan is obtained, a
Restricted Stock Award of 5,000 shares of Common Stock, and the
Grant Date with respect to such initial Restricted Stock Awards
will be the date on which stockholder approval of the Director
Plan is obtained.

(b) Annual Grants. Thereafter, each person who is an Outside Director
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following an annual meeting of Stockholders each year will
automatically be granted a Restricted Stock Award of 5,000 shares
of Common Stock (subject to change with Board approval), and the
Grant Date with respect to each such Restricted Stock Awards will
be the date on which the award is granted.

Eligibility. Each "Outside Director" of PetMed shall be a participant
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in the Director Plan. For purposes of the Director Plan, an "Outside
Director" is any member of PetMed's Board who, as of the close of
business on the date of the annual meeting of PetMed's stockholders,
meets the definition of "Non-Employee Director" as set forth in Rule
16b-3(b)(3)(i) adopted under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

Awards. The shares that may be awarded under the Director Plan
------
(without payment by participants) ("Restricted Stock") shall be the
common stock, par value $.001 per share, of the Company ("Common
Stock"), and shall be authorized, but un-issued, shares. The maximum
number of shares of Common Stock that may be awarded hereunder
(subject to any adjustments as provided below) shall not in the
aggregate exceed 200,000 shares.

Transfer Restrictions. No share awarded under the Director Plan shall
---------------------
be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of during the Restriction Period applicable thereto.

Restrictions and Restriction Period. In addition to such other terms,
-----------------------------------
conditions and restrictions as may be imposed and contained in the
written instrument under which Awards of Common Stock are made
pursuant to the Director Plan, (i) no Common Stock so awarded shall be
restricted for a period (the "Restriction Period") of less than one
year or more than ten years unless otherwise specified; and (ii)
except as provided in the Director Plan, and described below under
"Accelerated Vesting; Forfeiture", the recipient of the Award shall
serve as an outside director for the Company during the Restriction
Period or otherwise forfeit all right, title and interest in and to
the Restricted Stock subject to such restrictions.

Accelerated Vesting; Forfeiture. Each outstanding Award shall become
-------------------------------
immediately vested and unrestricted upon the occurrence of a change in
control of the Company, or upon the death or permanent disability of
the participant. Shares of Restricted Stock shall be forfeited in the
event that the participant ceases service as an outside director for
any reason other than his or her death or permanent disability

Voting and Dividend Rights. Prior to the vesting of any Restricted
--------------------------
Stock Awards under this Director Plan, a participant will have all of
the rights of a stockholder with respect to the shares of Common Stock
so awarded, including, but not limited to, the right to receive such
cash dividends, if any, as may be declared on such shares from time to
time and the right to vote (in person or by proxy) such shares at any
meeting of PetMed's stockholders. As a condition to the grant of the
Award under the Director Plan, dividends, if any, as may be declared
on such shares of Common Stock shall be deposited into an escrow or
similarly segregated account, and disbursement of such dividends to
the participant will occur only upon the delivery of the shares of
Common Stock to which such dividends relate, and in the event the
shares of Common Stock to which such dividends relate are forfeited,
the participant's right to receive disbursement of such dividends will
be forfeited and the amount of the dividends shall be returned to the
Company.

Federal Income Tax Consequences

The following discussion of the federal tax consequences of the
Director Plan is based on the provisions of the Code currently in
effect, current regulations, and administrative rulings of the
Internal Revenue Service. The discussion is limited to the tax
consequences on United States citizens and does not consider the
potential impact of state or local tax laws. It is not intended to be
a complete discussion of all of the United States income tax
consequences of the Director Plan or of all of the requirements that
must be satisfied to qualify for the tax treatment described in this
discussion. Changes in the law and the regulations may modify the
discussion, and, in some cases, changes may be retroactive. In
addition, tax consequences may vary depending upon the personal
circumstances of individual holders of stock and the tax requirements
applicable to residents of countries other than the United States.

With respect to an Award, unless an participant makes an election
under Section 83(b) of the Internal Revenue Code (an "83(b)
election"), as described below, the participant will generally
recognize ordinary compensation income in an amount equal to the fair
market value of the shares subject to the grant of Restricted Stock at
the time the Restricted Stock ceases to be subject to forfeiture.
Dividends paid to a participant on the shares of Restricted Stock
where no 83(b) election is made are treated as compensation income of
the participant in the year received. The participant's holding period
for long-term capital gains purposes will not begin to run until the
stock becomes unrestricted.

With respect to an Award, a participant may make an 83(b) election
only with the prior approval of the Board. If a participant makes an
83(b) election within the required period of thirty days after receipt
of the Restricted Stock, the participant will be immediately taxed, as
compensation income, on the fair market value of the Restricted Stock
issued to such participant, valued on the date of grant. Any dividends
received on stock subject to an 83(b) election will be treated as
ordinary dividend income. Where an 83(b) election is made, a
participant's holding period for long-term capital gains purposes
begins to run on receipt of the Restricted Stock. A forfeiture of
Restricted Stock after an 83(b) election is made, even though the
participant has included the stock as income, does not entitle the
participant to a tax deductible loss if no amount was paid for the
Restricted Stock by the participant.

Vote Required; Board Recommendation

The affirmative vote of the holders of a majority of the shares of
common stock present in person or represented by proxy and entitled to
vote at the annual meeting is required to approve the Director Plan.
Unless instructed to the contrary, the shares represented by the
proxies will be voted to approve the Director Plan.

DIRECTORS AND EXECUTIVE OFFICERS

MENDERES AKDAG, age 45, has served as our Chief Executive Officer
since March 2001 and as a member of our Board of Directors since
November, 2002, and was appointed President in August 2005. Prior to
joining PetMed Express, from November 2000 until March 2001, Mr. Akdag
served as Chief Executive Officer of International Cosmetics Marketing
Co. d/b/a Beverly Sassoon & Co., a publicly held (PS:SASN) direct
sales company distributing skin care and nutritional products. From
May 1991 until August 2000, Mr. Akdag was employed by Lens Express,
Inc., a direct sales company distributing replacement contact lenses,
serving as its President from May 1996 until August 2000, Chief
Executive Officer and a member of the Board of Directors from August
1992 until May 1996, and Chief Financial Officer and a member of the
Board of Directors from May 1991 until August 1992. On December 14,
1998, Netel Inc., a corporation in which Mr. Akdag served as a member
of the Board of Directors, filed a Petition for Chapter 11 bankruptcy
in the United States Bankruptcy Court Southern District of Florida.
The proceeding was styled IN RE: NETEL, INC., CASE NO.98-28929-BKC-
PGH. On July 19, 1999, the Bankruptcy Court entered an Order
Confirming an Amended Chapter 11 Plan. On December 21, 1999, the
Bankruptcy Court entered a Final Decree, Discharge of Trustee, and
closed the case. Mr. Akdag holds a Bachelor of Science degree in
Business Administration with a major in finance from the University of
Florida.

FRANK J. FORMICA, age 62, has served as a member of our Board of
Directors since August 2003. Mr. Formica has served as a legal
consultant and expert in corporate securities and securities industry
litigation and arbitration cases since 1999. From 1969 until 1999,
Mr. Formica held various positions with the National Association of
Securities Dealers ("NASD"), including Director of the NASD's
Congressional and State Liaison Department, Director of the Corporate
Finance Department, and Vice President and Deputy General Counsel.
Mr. Formica received his Juris Doctor degree from the Washington
College of Law at American University and an undergraduate degree from
Ohio University. He is a member of the New York State Bar.

GIAN M. FULGONI, age 58, has served as a member of our Board of
Directors since November 2002. Mr. Fulgoni has been the Executive
Chairman of ComScore Networks, Inc. since 1999. From 1981 until 1998,
Mr. Fulgoni served as President and Chief Executive Officer of
Information Resources, Inc. (NASDAQ: IRIC). He was a member of our
Board of Directors from August 1999 through November 2000. Mr.
Fulgoni served on the Board of Directors of Platinum Technology, Inc.
from 1990 to 1999, U.S. Robotics, Inc. from 1991 to 1994, and
Yesmail.com, Inc. in 1999. Educated in the United Kingdom, Mr.
Fulgoni holds a Masters degree in Marketing from the University of
Lancaster and a Bachelor of Science degree in Physics from the
University of Manchester.

RONALD J. KORN, age 66, has served as a member of our Board of
Directors since November 2002. Mr. Korn has been the President of
Ronald Korn Consulting, a business consulting firm, since 1991. He
served as the Managing Partner of KPMG, LLP's Miami office from 1985
to 1991. Mr. Korn held various positions including Partner with KPMG,
an international accounting firm, from 1961 until 1991. He has served
as a Director and Chairman of the Audit Committee of Ocwen Financial
Corporation (NYSE:OCN) since July 2003. He has also served as a
Director and Chairman of the Audit Committee of ComScore Networks,
Inc. since November, 2005. Mr. Korn previously served as a Director
and Chairman of the Audit Committee of a number of public companies
and a privately held financial institution. Mr. Korn holds a Juris
Doctor degree from the New York University Law School and a Bachelor
of Science degree in Economics from the University of Pennsylvania,
Wharton School.

MARC PULEO, M.D., age 42, has served as Chairman of our Board of
Directors since our inception in January 1996. From January 1996
until March 2001, Dr. Puleo served as our Chief Executive Officer,
from January 1996 to August 2005 as our President, and from January
1996 until May 2001 as our Treasurer. Dr. Puleo has also been the
President of South Florida Anesthesia Professionals, an entity located
in Fort Lauderdale, Florida, since founding that company in January
1996. Dr. Puleo was Vice President of Dynamic Press, Inc., an offset
printing and direct marketing company, from June 1997 until June 1998.
Dr. Puleo, an anesthesiologist, was employed with Anesthesia
Professional Association, North Ridge Medical Center and North Ridge
Outpatient Surgery Center from December 1994 through December 1995.
Dr. Puleo was an anesthesia resident with the University of Illinois
Hospitals and Clinics, the Michael Reese Hospital, the Westside
Veteran's Administration Hospital, the University of Illinois Eye and
Ear Infirmary, the Nathan Cummings Surgicenter, and the University of
Illinois Pain Clinic, all located in the Chicago, Illinois area, from
July 1991 through June 1994. Dr. Puleo received his medical degree
from the University of Illinois College of Medicine, Chicago,
Illinois.

ROBERT C. SCHWEITZER, age 60, has served as a member of our Board of
Directors since November 2002. Mr. Schweitzer has been the Florida
Regional President for Northwest Savings Bank since October 2005
following the sale of Equinox Bank where he was President and Chief
Executive Officer, to Northwest Savings. From June 2004 to March 2005
he was a consultant to Equinox Bank (formerly Horizon Bank), and
became President and Chief Executive Officer of Equinox Bank in March
2005. Mr. Schweitzer was the Regional President of Union Planters
Bank for Broward and Palm Beach County Florida markets from April 1999
to December 2002. Prior to joining Union Planters, Mr. Schweitzer
served as the Executive Vice President and Head of Commercial Banking
for Barnett Bank/NationsBank in Jacksonville, Florida from 1993 to
1999. Other positions held include Director and Head of Real Estate
Consulting for Coopers & Lybrand in Washington, D.C.; Senior Vice
President and Manager of Central North America Real Estate for the
First National Bank of Chicago, and Manager of Domestic Credit Process
Review; and Senior Vice President and Manager of Central North
American Banking for Wachovia Bank. Mr. Schweitzer holds a Masters
degree in Business Administration from the University of North
Carolina, and a Bachelor of Science degree from the United States
Naval Academy.

BRUCE S. ROSENBLOOM, age 37, was appointed Chief Financial Officer in
May 2001. Mr. Rosenbloom served as the Manager of Finance and
Financial Reporting of Cooker Restaurant Corporation, a publicly held
(PS: CGRTQ) restaurant, in West Palm Beach, Florida, from December
2000 until May 2001. Mr. Rosenbloom's duties included all internal
and external reporting including all SEC filings and Annual Reports to
Shareholders. Mr. Rosenbloom was a senior audit accountant for
Deloitte & Touche LLP, an international accounting firm, West Palm
Beach, Florida, from January 1996 until December 2000. Mr. Rosenbloom
was responsible for planning and conducting all aspects of audit
engagements for clients in various industries, including direct
marketing, healthcare, manufacturing, financial institutions, and
professional service firms. From August 1992 to May 1995, Mr.
Rosenbloom was an Account Executive for MCI Telecommunications. Mr.
Rosenbloom, a certified public accountant, received a Bachelor of
Science degree in Accounting from Florida Atlantic University, Boca
Raton, Florida in 1996 and a Bachelor of Arts degree in Economics from
the University of Texas, Austin, Texas in 1992.

BOARD GOVERNANCE AND OPERATIONS

The business and affairs of PetMed Express, Inc. are managed by or
under the direction of our Board of Directors. Our Board includes a
majority of independent directors. Our Board reaffirms its
accountability to stockholders through the stockholder election
process. Our Board reviews and ratifies executive officer selection
and compensation, and monitors overall corporate performance and the
integrity of our financial controls. Our Board of Directors also
oversees our strategic and business planning processes.

Corporate Code of Business Conduct and Ethics

Our Board of Directors has adopted a Corporate Code of Business
Conduct and Ethics, which is applicable to all directors, officers and
employees, including our principal executive officer, and principal
financial and accounting officer. A Code of Business Conduct and
Ethics is a written standard designed to deter wrongdoing and to
promote:

* honest and ethical conduct;
* full, fair, accurate, timely and understandable disclosure in
regulatory filings and public statements;
* compliance with applicable laws, rules and regulations;
* the prompt reporting of violation of the code; and
* accountability for adherence to the Code of Business Conduct and
Ethics.

Our Corporate Code of Business Conduct and Ethics is filed with the
Securities and Exchange Commission as Exhibit 14 to our Form 10-K for
the year ended March 31, 2006. Anyone who wishes to receive a copy of
our Corporate Code of Business Conduct and Ethics, without charge, can
send a letter addressed to our General Counsel at PetMed Express,
Inc., 1441 S.W. 29th Avenue, Pompano Beach, FL 33069.

Policy with Regard to the Consideration of Director Candidate
Recommendations by our Stockholders

The Corporate Governance and Nominating Committee has a policy
pursuant to which it considers director candidates recommended by our
stockholders. All director candidates recommended by our stockholders
are considered for selection to the Board on the same basis as if such
candidates were recommended by one or more of our directors or other
sources. To recommend a director candidate for consideration by our
Corporate Governance and Nominating Committee, a stockholder must
submit the recommendation in writing to our Corporate Secretary not
later than one hundred twenty (120) calendar days prior to the
anniversary date of our proxy statement distributed to our
stockholders in connection with our most recent annual meeting of
stockholders, and the recommendation must provide the following
information: (i) the name of the stockholder making the
recommendation, (ii) the name of the candidate, (iii) the candidate's
resume or a listing of his or her qualifications to be a director,
(iv) the proposed candidate's written consent to being named as a
nominee and to serving as one of our directors if elected, and (v) a
description of all relationships, arrangements or understandings, if
any, between the proposed candidate and the recommending stockholder
and between the proposed candidate and us so that the candidate's
independence may be assessed. The stockholder or the director
candidate also must provide any additional information requested by
our Corporate Governance and Nominating Committee to assist the
Committee in appropriately evaluating the candidate.

Working closely with the full Board, the Corporate Governance and
Nominating Committee develops criteria for open Board positions,
taking into account such factors as it deems appropriate, including,
among others, the current composition of the Board, the range of
talents, experiences and skills that would best complement those
already represented on the Board, the balance of management and
independent Directors and the need for financial or other specialized
expertise.

Stockholder Communications with the Board

PetMed provides an informal process for stockholders to send
communications to our Board of Directors. Stockholders who wish to
communicate directly with our Board of Directors, or specified
individual directors, may do so in writing to the Board of Directors
or individual director in c/o Corporate Secretary and General Counsel,
PetMed Express, Inc., 1441 S.W. 29th Avenue, Pompano Beach, FL 33069.
Correspondence directed to an individual board member is referred,
unopened, to that member. Correspondence not directed to a particular
board member is referred, unopened, to the Chairman of the Corporate
Governance and Nominating Committee.

Meetings of the Board of Directors

During the fiscal year ended March 31, 2006, there were four
meetings of our Board of Directors, and the Board took action five
times by written consent in lieu of a meeting. Each director attended
all of the meetings of the Board and meetings held by committees on
which he served. Members of the Board are required to attend the
annual meeting of stockholders. A director who is unable to attend
our annual meeting of stockholders is expected to notify the Board in
advance of the meeting.

Committees of the Board of Directors

Our Board of Directors maintains three standing committees, an Audit
Committee, a Compensation Committee, and a Corporate Governance and
Nominating Committee. All members of the committees are independent
directors within the meaning of Rule 10A-3 under the Securities
Exchange Act of 1934 and satisfy the independence standards of NASDAQ
Marketplace Rules 4200. The following table shows the present members
of each committee, the number of committee meetings held during FY
2006 and the functions performed by each committee:

Committee Functions
--------- ---------

Audit
Oversees the Company's systems of internal
controls regarding finance, accounting and
Number of Meetings during FY 2006: 8 legal compliance

Oversees the Company's auditing, accounting
Members: and financial reporting processes generally
Ronald J. Korn*, Financial Expert (1)
Oversees the Company's financial statements
Robert C. Schweitzer and other financial information provided by
Gian M. Fulgoni the Company to its stockholders, the public
and others

Oversees the Company's compliance with legal
and regulatory requirements

Oversees the performance of the Company's
independent auditors

Conducts an annual performance evaluation
of the Committee

Compensation
Establishes, in consultation with senior
management, the Company's general compensation
Number of Meetings during FY 2006: 3 philosophy, and oversees development and
implementation of the compensation programs
Members:
Reviews and approves corporate goals and
Robert C. Schweitzer* objectives relating to the compensation of
Ronald J. Korn the Company's CEO
Gian M. Fulgoni
Recommends, subject to Board approval,
salaries and other compensation matters for
executive and other senior officers

Approves annual incentive plans for the
Company's officers and employees, grants
stock options to directors, officers and
employees and supervises administration of
employee benefit plans

Oversees, in consultation with management,
regulatory compliance with respect to
compensation matters

Reviews and approves any severance or similar
termination payment proposed to be made
to any Company executive or senior officer

Recommends, subject to the approval of the
Board of Directors, compensation for directors

Corporate Governance and Nominating
Conducts an annual performance evaluation of the
Committee
Number of Meetings during FY 2006: 1
Recommends the slate of director nominees for
election to Board of Directors
Members:
Identifies and recommends candidates to fill
Frank J. Formica* vacancies occurring between annual shareholders
Gian M. Fulgoni meetings
Robert C. Schweitzer
Develops and recommends to the Board of
Ronald J. Korn Directors corporate governance principles

Leads annual review of performance of Board of
Directors
* Chairman

(1) The Board considers Mr. Korn to be an audit committee financial
expert within the meaning of Item 401(h) of Regulation S-K. In
general, an "audit committee financial expert" is an individual member
of the audit committee who (a) understands generally accepted
accounting principles and financial statements, (b) is able to assess
the general application of such principles in connection with
accounting for estimates, accruals and reserves, (c) has experience
preparing, auditing, analyzing or evaluating financial statements
comparable to the breadth and complexity to the Company's financial
statements, (d) understands internal controls over financial
reporting, and (e) understands audit committee functions. An "audit
committee financial expert" may qualify as such through: education and
experience as a principal financial officer, principal accounting
officer, controller, public accountant, auditor or person serving
similar functions; experience actively supervising a principal
financial officer, principal accounting officer, controller, public
accountant, auditor or person serving similar functions; experience
overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing or evaluation of
financial statements; or, other relevant experience.

In addition to the above standing committees, the Board of Directors
determined that it was advisable and in the best interest of the
Company to form an Investment Committee, with the primary purpose of
such Committee to establish policies and guidelines for the investment
of excess cash held by or available to the Company and to revise or
update such policies and guidelines whenever, in the judgment of the
Committee, it is appropriate to do so. The Committee is comprised of
Menderes Akdag, Robert C. Schweitzer and Ronald J. Korn. Mr. Akdag
and Bruce S. Rosenbloom, the Company's Chief Financial Officer, are
authorized to take any and all action that is necessary to implement
any recommendation of the Investment Committee as approved by the
Board of Directors. The Investment Committee had one meeting during FY
2006.

REPORT OF THE AUDIT COMMITTEE

The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by
reference into any other filing by us under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent we specifically incorporate this Report by
reference therein.

The Securities and Exchange Commission rules require us to
include in this proxy statement a report from the Audit Committee of
our Board of Directors. The following report concerns the Audit
Committee's activities regarding oversight of our financial reporting
and auditing process.

The Audit Committee is comprised solely of independent
directors, as defined in the Marketplace Rules of the Nasdaq National
Market and under Securities Exchange Act Rule 10A-3(b)(1), and it
operates under a written charter adopted by the Company's Board of
Directors. The composition of the Audit Committee, the attributes of
its members and the responsibilities of the Audit Committee, as
reflected in its charter, are intended to be in accordance with
applicable requirements for corporate audit committees. The Audit
Committee reviews and assesses the adequacy of its charter on an
annual basis.

As described more fully in its charter, the purpose of the
Audit Committee is to assist the Board of Directors in the oversight
of its financial reporting, internal control and audit functions.
Management is responsible for the preparation, presentation and
integrity of its consolidated financial statements, accounting and
financial reporting principles, and internal controls and procedures
designed to ensure compliance with accounting standards and applicable
laws and regulations. Goldstein Golub Kessler LLP, the Company's
independent registered public accounting firm, is responsible for
performing an independent audit of the Company's consolidated
financial statements in accordance with auditing standards generally
accepted in the United States.

The Audit Committee members are not professional accountants or
auditors, and their functions are not intended to duplicate or to
certify the activities of management and the independent registered
public accounting firm, nor can the Audit Committee certify that the
independent registered public accounting firm is "independent" under
applicable rules. The Audit Committee serves a board-level oversight
role, in which it provides advice, counsel and direction to management
and the independent registered public accounting firm on the basis of
the information it receives, discussions with management and the
independent registered public accounting firm and the experience of
the Audit Committee's members in business, financial and accounting
matters.

Among other matters, the Audit Committee monitors the
activities and performance of the Company's independent registered
public accounting firm, including the audit scope, external audit
fees, registered public accounting firm independence matters and the
extent to which the independent registered public accounting firm may
be retained to perform non-audit services. The Audit Committee and the
Board of Directors have ultimate authority and responsibility to
select, evaluate and, when appropriate, replace the independent
registered public accounting firm. The Audit Committee also reviews
the results of the audit work with regard to the adequacy and
appropriateness of financial, accounting and internal controls.
Management and independent registered public accounting firm
presentations to and discussions with the Audit Committee also cover
various topics and events that may have significant financial impact
or are the subject of discussions between management and the
independent registered public accounting firm. In addition, the Audit
Committee generally oversees internal compliance programs.

The Audit Committee has reviewed and discussed the Company's
consolidated financial statements with management and the independent
registered public accounting firm, management represented to the Audit
Committee that its consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the
independent registered public accounting firm represented that its
presentations included the matters required to be discussed with the
independent registered public accounting firm by Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees."

Goldstein Golub Kessler LLP, the independent registered public
accounting firm, also provided the Audit Committee with the written
disclosures required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and the Audit
Committee discussed with Goldstein Golub Kessler LLP the firm's
independence.

Following the Audit Committee's discussions with management and
Goldstein Golub Kessler LLP, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial
statements in the Company's annual report on Form 10-K for the fiscal
year ended March 31, 2006.

Audit Committee

RONALD J. KORN, Chairman
ROBERT C. SCHWEITZER
GIAN M. FULGONI

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the fees billed to us by
Goldstein Golub Kessler LLP ("GGK"), our independent registered public
accounting firm, as of and for the fiscal years ended March 31, 2006
and March 31, 2005:

For the Year Ended
March 31,
2006 2005
--------- ----------

Audit fees $ 199,500 $ 65,294
Audit-related fees - -
Tax fees - -
All other fees - -
--------- ----------
$ 199,500 $ 65,294
========= ==========

Audit fees billed by GGK related to the audit of our annual
consolidated financial statements and of our assessment on internal
control over financial reporting for the fiscal years ended March 31,
2006 and the audit of our annual consolidated financial statements for
the fiscal year ended March 31, 2005. Audit fees included the review
of our Annual Report on Form 10-K, and the review of our interim
consolidated financial statements included in our Quarterly Reports on
Form 10-Q for the periods ended June 30, September 30, and December
31, 2004 and 2005.

Through September 30, 2005, GGK had a continuing relationship with
American Express Tax and Business Services, Inc., from which it leased
auditing staff who were full-time, permanent employees of American
Express Tax and Business Services, Inc. and through which its partners
provide non-audit services. Subsequent to September 30, 2005, this
relationship ceased and the firm established a similar relationship
with RSM McGladrey, Inc. GGK has no full-time employees and therefore
none of the audit services performed were provided by full-time,
permanent employees of GGK. GGK manages and supervises the audit and
audit staff, and is exclusively responsible for the opinion rendered
in connection with its examination.

Other services, which do not include Financial Information System
Design and Implementation fees, have been provided by American Express
Tax and Business Services, Inc. or RSM McGladrey, Inc.

Pre-Approval Policy for Services of Independent Registered Public
Accounting Firm

The Audit Committee shall:

* Have the responsibility to review and consider and ultimately
pre-approve all audit and permitted non-audit services to be
performed by our independent registered public accounting firm.

* Select, evaluate, and, where appropriate, replace the
independent registered public accounting firm or nominate the
independent registered public accounting firm for shareholder
approval. The Committee also has the responsibility to approve
all audit engagement fees and terms and all non-audit
engagements with the independent registered public accounting
firm. The following sets forth what the Committee shall do in
order to fulfill its responsibilities and duties with respect to
the independent registered public accounting firm: be directly
responsible for the appointment, compensation approval and
oversight of the work of the independent registered public
accounting firm (including resolution of disagreements between
management and the independent registered public accounting firm
regarding financial reporting) for the purpose of preparing its
audit report or related work.

* Have the sole authority to review in advance, and grant any
appropriate pre-approvals of: (i) all auditing services to be
provided by the independent registered public accounting firm,
(ii) all non-audit services to be provided by the independent
registered public accounting firm as permitted by Section 10A of
the Securities Exchange Act of 1934, and (iii) in connection
therewith to approve all fees and other terms of engagement. The
Committee shall also review and approve disclosures required to
be included in Securities and Exchange Commission periodic
reports filed under Section 13(a) of the Securities Exchange Act
of 1934 with respect to non-audit services.

* Review the performance of the Company's independent registered
public accounting firm on at least an annual basis.

* On an annual basis, review and discuss with the independent
registered public accounting firm all relationships the
independent registered public accounting firm have with the
Company in order to evaluate the independent registered public
accounting firm's continued independence. The Committee: (i)
shall ensure that the independent registered public accounting
firm submit to the Committee on an annual basis a written
statement (consistent with Independence Standards Board
Standards No. 1) delineating all relationships and services that
may impact the objectivity and independence of the independent
registered public accounting firm; (ii) shall discuss with the
independent registered public accounting firm any disclosed
relationship or services that may impact the objectivity and
independence of the independent registered public accounting
firm; and (iii) shall satisfy itself as to the independent
registered public accounting firm's independence.

* At least annually, obtain and review an annual report from the
independent registered public accounting firm describing: (i)
the independent registered public accounting firm's internal
quality control procedures and (ii) any material issues raised
by the most recent internal quality control review, or peer
review, of the independent registered public accounting firm, or
by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or
more independent audits carried out by the independent
registered public accounting firm, and any steps taken to deal
with any such issues.

* Confirm that the lead audit partner, or the lead audit partner
responsible for reviewing the audit for the Company's
independent registered public accounting firm, has not performed
audit services for the Company for each of the five previous
fiscal years.

* Review all reports required to be submitted by the independent
registered public accounting firm to the Committee under Section
10A of the Securities Exchange Act of 1934.

* Review, based upon the recommendation of the independent
registered public accounting firm and management, the scope and
plan of the work to be done by the independent registered public
accounting firm for each fiscal year.

Our Audit Committee has considered whether the provision of
non-audit services is compatible with maintaining the independence of
Goldstein Golub Kessler LLP, and has concluded that the provision of
such services is compatible with maintaining the independence of our
registered public accounting firm.

BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth information regarding beneficial
ownership of our Common Stock as of June 6, 2006, by each person known
by us to own beneficially or exercise voting or dispositive control
over 5% or more of our outstanding Common Stock, by each of our
executive officers and directors, and by all executive officers and
directors as a group. In general, "beneficial ownership" includes
those shares a person has the power to vote or transfer, and options
to acquire our Common Stock that are exercisable currently or become
exercisable within 60 days. Except as otherwise indicated, we believe
that the beneficial owners of the Common Stock listed below, based on
information furnished by these owners, have sole investment,
dispositive and voting power with respect to these shares, except as
otherwise provided by community property laws where applicable.
Unless otherwise indicated below, the address for each person is 1441
S.W. 29th Avenue, Pompano Beach, FL 33069.

Aggregate Number of Percent of
Shares Shares
Name and Address of Beneficial Owner Beneficially Owned Outstanding
------------------------------------ ------------------ -----------

Tricon Holdings, LLC 2,902,500 (1) 12.1%
Marc Puleo, M.D. 649,964 (2) 2.7%
Menderes Akdag 586,666 (3) 2.4%
Gian M. Fulgoni 43,334 (4) *
Bruce S. Rosenbloom 42,333 (5) *
Robert C. Schweitzer 35,334 (6) *
Ronald J. Korn 33,334 (7) *
Frank J. Formica 15,000 (8) *
All executive officers and directors as
a group (seven persons) 1,405,965 (9) 5.8%

------------------------

* Less than 1% of the issued and outstanding shares.

(1) Emel Yesil and Ragip Devres are the managers of Tricon
Holdings, LLC ("Tricon"). Creslin Limited ("Creslin") is the sole
member (shareholder) of Tricon. Mr. Robert G. Guest is the officer,
and Mr. Guest and Christopher J. Pitaluga are the directors of
Creslin. Creslin Limited Trust, established by Mustafa Yesil, owns
99% of Creslin. Abacus Trustees (Gibraltar) Limited is the trustee
and Emel Yesil and Engin Yesil are the beneficiaries of the Creslin
Limited Trust. Emel Yesil and Engin Yesil are Mustafa Yesil's
daughter and son, respectively. The address for Tricon is 1020 N.W.
163rd Drive, Miami, FL 33169.
(2) Dr. Puleo's holdings include 549,964 shares of our Common
Stock held by Marpul Trust, a trust established by Dr. Puleo under
an agreement dated September 3, 1999 and of which he is the
beneficiary. Southpac Trust International, Inc. is a trustee of the
Marpul Trust, and has voting and dispositive control over the
securities of PetMed held by the Trust. Dr. Puleo's holdings also
include vested options to purchase 20,000 shares of Common Stock at
$1.05 per share until May 2007 and 80,000 shares of Common Stock at
$1.05 per share until May 2008.
(3) Mr. Akdag's holdings include vested options to purchase 83,333
shares of our Common Stock at $10.64 per share until March 2008 and
83,333 shares of our Common Stock at $10.64 per share until March
2009, but exclude options to purchase an additional 83,334 shares of
our Common Stock at $10.64 per share, which have not yet vested.
(4) Mr. Fulgoni's holdings include vested options to purchase
6,667 shares of our Common Stock at $8.90 per share until June 2008
and 6,667 shares of our Common Stock at $6.60 per share until May
2009, but exclude options to purchase an additional 13,333 shares of
our Common Stock at $8.90 per share and 13,333 shares of our Common
Stock at $6.60, which have not yet vested.
(5) Mr. Rosenbloom's holdings include vested options to
purchase 5,000 shares of our Common Stock at $3.45 until June 2008,
6,000 shares of our Common Stock at $8.90 until June 2008, and 6,667
shares of our Common Stock at $6.60 until May 2009, but exclude
options to purchase an additional 5,000 shares of our Common Stock
at $3.45 per share, 12,000 of our Common Stock at $8.90, and 13,333
of our Common Stock at $6.60, which have not yet vested.
(6) Mr. Schweitzer's holdings include vested options to
purchase 6,667 shares of our Common Stock at $8.90 per share until
June 2008 and 6,667 shares of our Common Stock at $6.60 per share
until May 2009, but exclude options to purchase an additional 13,333
shares of our Common Stock at $8.90 per share and 13,333 shares of
our Common Stock at $6.60, which have not yet vested.
(7) Mr. Korn's holdings include vested options to purchase
5,000 shares of our Common Stock at $1.90 until November 2008, 6,667
shares of our Common Stock at $8.90 per share until June 2008 and
6,667 shares of our Common Stock at $6.60 per share until May 2009,
but exclude options to purchase an additional 13,333 shares of our
Common Stock at $8.90 per share and 13,333 shares of our Common
Stock at $6.60, which have not yet vested.
(8) Mr. Formica's holdings include vested options to purchase
5,000 shares of our Common Stock at $7.90 per share until August
2008, 3,333 shares of our Common Stock at $8.90 per share until June
2008, and 6,667 shares of our Common Stock at $6.60 per share until
May 2009, but exclude options to purchase 10,000 shares of our
common stock at $7.90 per share, 6,667 shares of our Common Stock at
$8.90, and 13,333 shares of our Common Stock at $6.60, which have
not yet vested.
(9) Incorporates (1) through (8) above.

Section 16(a) Beneficial Ownership Reporting Compliance

We became a reporting company under the Securities Exchange Act
of 1934 (the "Exchange Act") in March 2000. Based solely upon a
review of Forms 3 and 4 and amendments thereto furnished to us under
Rule 16a-3(d) of the Exchange Act through the fiscal year ended March
31, 2006, the Company is not aware of any person that failed to file
on a timely basis, as disclosed in the aforementioned forms, reports
required by Section 16(a) of the Exchange Act during the fiscal year
ended March 31, 2006.

REPORT OF COMPENSATION COMMITTEE

The following Report of the Compensation Committee of our Board
of Directors and the performance graphs included elsewhere in this
proxy statement do not constitute soliciting material and should not
be deemed filed or incorporated by reference into any other filings by
us under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent we specifically
incorporate this Report or the performance graphs by reference
therein.

The primary purposes of our Compensation Committee of our Board of
Directors, a committee which is comprised solely of independent
directors, are to oversee the administration of the Company's
compensation programs, review the compensation of executive officers
and directors, prepare any report on executive compensation required
by the rules and regulations of the Securities and Exchange Commission
and generally to provide assistance to the Board of Directors on
compensation matters.

During FY 2006, we recommended to the Board of Directors that
the Company implement a 4% match of employee 401(k) contributions,
that any future options granted have an expiration date of 10 years,
with said options vesting equally in 1/3 increments (as is currently
done), and that a proposal to our stockholders be made at the 2006
Annual Meeting concerning the issuance of restricted stock instead of
options.

Components of Executive Compensation

The basic components of executive compensation are:

* Annual Cash Compensation, specifically, base salary; and
* Long-Term Incentive Compensation, specifically, stock options or
restricted stock if approved by the stockholders.

Annual Cash Compensation - Base Salary

The purpose of base salary is to create a secure base of cash
compensation for executives that is competitive with the market.
Executives' salary increases do not follow a preset schedule or
formula; however, the following will be considered when determining
appropriate salary levels and increases: the individual's current and
sustained performance results and the methods utilized to achieve such
results; and non-financial performance indicators to include strategic
developments for which an executive has responsibility and managerial
performance.

We exercise discretion in making salary decisions taking into
account, among other things, each individual's performance and the
Company's overall performance. With regard to individual performance
of executive officers other than the Chief Executive Officer, we rely
to a large extent on the Chief Executive Officer's evaluations of each
individual executive officer's performance.

Long-Term Incentive Compensation - Stock Options

Long-term incentives comprise the largest portion of the total
compensation package for executives. The form of long-term incentives
that has been used in the past for executives is stock options, and
stock options may be used going forward along with Restricted Stock,
if the Employee Equity Compensation Restricted Stock Plan is approved
by the stockholders at the 2006 Annual Meeting. Grant levels will be
determined for each executive based on individual performance and
potential, history of past grants, time in current job and level of,
or significant changes in, responsibility. The purpose of stock
options is to provide equity compensation whose value is directly
related to the creation of share-owner value. Stock options provide
executives a vehicle to increase equity ownership and share in the
appreciation of the value of Company stock.

Compensation Committee

ROBERT C. SCHWEITZER, Chairman
RONALD J. KORN
GIAN M. FULGONI

EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term compensation
paid by the Company for services performed on our behalf for the last
three completed fiscal years ended March 31, 2006, 2005, and 2004,
with respect to our Chief Executive Officer and other officers serving
as such who earned compensation greater than $100,000 in these fiscal
years:

Summary Compensation Table

Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
Other Securities
Name and Principal Annual Underlying LTIP All Other
Position Year Salary Bonus Compensation($) Options/SARs Payouts ($) Compensation ($)
-------- ---- ------ ----- --------------- ------------ ----------- ----------------
(#)
---

Menderes Akdag 2006 $ 250,000 $ - - - - -
Chief Executive 2005 250,000 - - - - -
Officer and President 2004 201,731 - - 250,000 - -

Marc Puleo, M.D. 2006 150,000 - - - - -
Chairman of Board 2005 150,000 - - - - -
2004 146,154 - - - - -

Bruce Rosenbloom 2006 135,156 850 - 20,000 - -
Chief Financial 2005 125,577 700 - 18,000 - -
Officer 2004 106,461 1,600 - 15,000 - -

The following table sets forth certain information for the fiscal
year ended March 31, 2006, with respect to options granted to
individuals named in the Summary Compensation Table above.

Option Grants for Fiscal Year Ended March 31, 2006
Individual Grants

Potential Realizable Value at Assumed
Annual Rates of Stock Price Appreciation

Number of % of Total
Securities Options Exercise
Underlying Granted to Price Expiration
Name Options (#) Employees ($/Share) Date 0% ($) 5% ($) 10% ($)
----- ----------- --------- --------- ---------- --------- --------- ---------

Bruce Rosenbloom 20,000 (1) 17% $6.60 5/20/2009 $ 223,400 $ 241,170 $ 258,940
Menderes Akdag - (2) - - - - - -
Marc Puleo, M.D. - (2) - - - - - -

(1) The Company granted Mr. Rosenbloom options to purchase 20,000
shares of its Common Stock on May 20, 2005, under the Company's 1998
Stock Option Plan at an exercise price of $6.60 per share which will
vest at the rate of 6,667, 6,667, and 6,666 options on each of May
20, 2006, 2007, and 2008.
(2) No options were issued to the individual during fiscal 2006.

The following table sets forth certain information with respect
to the number of shares covered by both exercisable and unexercisable
stock options held by the individuals named in the Summary
Compensation Table as of March 31, 2006. Also reported are the values
for "in-the-money" stock options that represent the positive spread
between the respective exercise prices of outstanding stock options
and the fair market value of our Common Stock as of March 31, 2006 ($ per
share).

Aggregate Option Exercises and Fiscal Year-End Option Values

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End (#) at Fiscal Year End ($) (1)
------------------------------ ---------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----- ------------ ------------ ----------- ------------- ----------- -------------

Menderes Akdag - $ - 166,667 83,333 $ 1,188,336 $ 594,164
Marc Puleo, M.D. 190,000 2,588,600 100,000 - 1,672,000 -
Bruce Rosenbloom 31,668 348,189 31,000 45,000 348,220 289,740

(1) Represents the difference between the closing price ($17.77) of
the Company's Common Stock on March 31, 2006, the last trading day
of the Company's 2006 fiscal year, and the exercise price of the
options.

Employment Agreement with Menderes Akdag, Chief Executive Officer and
President

On March 16, 2001, the Company had entered into an employment
agreement with its current Chief Executive Officer, Menderes Akdag.
Under the terms of this three-year agreement the Company paid Mr.
Akdag an annual salary of $150,000 for the first six months of the
agreement, and thereafter his annual salary was to be increased to
$200,000. The Company also granted Mr. Akdag options to purchase
750,000 shares of its common stock under the Company's 1998 Stock
Option Plan at an exercise price of $.32 per share, which vested at
the rate of 187,500 options on each of March 16, 2001, 2002, 2003 and
2004.

The agreement provided the following: the Company can terminate
the employment of Mr. Akdag either upon mutual consent or for cause.
If the Company should terminate Mr. Akdag for cause, or if Mr. Akdag
should terminate the agreement without "good reason" as described in
the employment agreement, no severance benefits would be paid. If the
Company should terminate Mr. Akdag without cause, the Company would be
required to give Mr. Akdag three months' notice and continue to
compensate him under the terms of this employment agreement during
those three months. At the end of the three-month period, the Company
would have to pay Mr. Akdag severance benefits equal to his annual
base salary, and any previously granted but unvested options would
immediately vest. If the Company should terminate Mr. Akdag for
cause, as defined in the employment agreement, no severance benefits
would be paid. The agreement can be terminated upon the mutual
consent of the parties, or upon 90 days' notice by the Company during
which time the Company would continue to compensate him under the
terms of his employment agreement.

On March 16, 2004, the Company amended Mr. Akdag's existing
employment agreement. The amendments are as follows: the term of the
agreement will be for three years, commencing on March 16, 2004; Mr.
Akdag's salary will be increased to $250,000 per year throughout the
term of the agreement, and Mr. Akdag shall be granted 250,000
incentive stock options under the Company's 1998 Stock Option Plan at
an exercise price of $10.64 per share, which vest at the rate of
83,333 options on each of March 16, 2005 and 2006, and 83,334 options
on March 16, 2007. All other terms of Mr. Akdag's original employment
agreement remain in effect.

Directors' Compensation

Each member of our Board of Directors who is not employed by us
receives an annual retainer of $10,000 per year, paid quarterly.
Additionally, upon initial election to the Board of Directors, each
director not employed by us was granted 30,000 stock options, under
our 1998 Stock Option Plan, to purchase our Common Stock, at an
exercise price equal to the fair market value of the stock at the time
of granting, with the options vesting equally over a three-year
period. From time to time at the discretion of the Board, additional
options may be issued in the future. We also pay the reasonable
travel and accommodation expenses of directors in connection with
their participation in meetings of the Board of Directors.

1998 Stock Option Plan

The Company established the 1998 Stock Option Plan (the "Option
Plan") effective July 31, 1998, which provides for the issuance of
qualified options to officers and key employees, and nonqualified
options to directors, consultants and other service providers. The
Company has reserved 5,000,000 shares of common stock for issuance
under the Option Plan. The exercise prices of options issued under
the Option Plan must be equal to or greater than the market price of
the Company's common stock as of the date of issuance.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended March 31, 2006, Robert C. Schweitzer,
Ronald J. Korn and Gian M. Fulgoni served on the Compensation
Committee. All members of the Compensation Committee are independent.
Accordingly, insiders do not participate in compensation decisions.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our Board's policy requires that transactions with related parties
must be entered into in good faith on fair and reasonable terms that
are no less favorable to us than those that would be available in a
comparable transaction in arm's-length dealings with an unrelated
third party. Our Board, by a vote of the disinterested directors,
must approve all related party transactions, recommended by the Audit
Committee. Since the beginning of the Company's last fiscal year, the
Company has not had, or been a party to, nor is there currently
proposed, a transaction with a related party.

PERFORMANCE GRAPH

Set forth below is a graph comparing the cumulative performance of
our Common Stock with the Standard & Poor's Composite-500 Stock Index
(the "S&P 500") and the Nasdaq Composite (the "NASDAQ") from March 31,
2001 to March 31, 2006. The graph assumes that $100 was invested on
March 31, 2001 in each of our Common Stock, the S&P 500 and the NASDAQ
and that all dividends were reinvested.

[LINE GRAPH]

Value of $100 Investment made March 31, 2001

3/31/2001 3/31/2002 3/31/2003 3/31/2004 3/31/2005 3/31/2006
--------- --------- --------- --------- --------- ---------

Nasdaq Composite 100.00 100.30 72.88 108.40 108.60 127.10
S&P 500 100.00 98.88 73.10 97.06 101.70 101.70
PetMed Express, Inc. 100.00 85.29 251.60 1173.00 790.00 1894.00

INTEREST OF CERTAIN PERSONS IN OPPOSITION
TO MATTERS TO BE ACTED UPON

Management is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any officer,
director, or associate of the foregoing persons in any matter to be
acted on, as described herein, other than elections to the board.

OTHER MATTERS

Our Board of Directors does not intend to present, or have any
reason to believe others will present, any items of business other
than those stated above. If other matters are properly brought before
the Board of Directors at the annual meeting, the persons named in the
accompanying proxy will vote the shares represented by it in
accordance with the recommendation of our Board of Directors.

A copy of our annual report on Form 10-K for the year ended March
31, 2006, exclusive of certain exhibits filed with the Securities and
Exchange Commission, accompanies this proxy statement These exhibits,
as well as our interim quarterly reports on Form 10-Q, are available
without charge to stockholders through our website at
http://www.1800PetMeds.com, or upon written request to the Corporate
--------------------------
Secretary and General Counsel, PetMed Express, Inc., 1441 S.W. 29th
Avenue, Pompano Beach, FL 33069. The information on our website is
not a part of this proxy statement. Copies of our filings are also
available at the Securities and Exchange Commission website at
http://www.sec.gov.
------------------

By Order of the Board of Directors,

MENDERES AKDAG
Chief Executive Officer,
President and Director

Pompano Beach, Florida
June 23, 2006

EXHIBIT A

PETMED EXPRESS, INC.
2006 EMPLOYEE EQUITY COMPENSATION
RESTRICTED STOCK PLAN

1. PURPOSE OF PLAN

The purpose of the PetMed Express, Inc. 2006 Restricted Stock
Plan (the "2006 Plan"), which is being established by PetMed Express,
Inc. on behalf of itself, its subsidiaries and affiliates
(collectively, the "Company"), is to secure and retain employees of
outstanding ability and to provide additional motivation to such
employees to exert their best efforts on behalf of the Company. The
Company expects that it will benefit from the added commitment which
such employees will have in the welfare of the Company as a result of
their ownership or increased ownership of the Company's Common Stock.

2. STOCK SUBJECT TO THE 2006 PLAN

The shares that may be awarded under the 2006 Plan (without
payment by participants) shall be the common stock, par value $.001
per share, of the Company ("Common Stock"), and shall be authorized,
but un-issued, shares. The maximum number of shares of Common Stock
that may be awarded hereunder (subject to any adjustments as provided
below) shall not in the aggregate exceed 1,000,000 shares. Shares of
Common Stock forfeited as a result of a participant's termination of
employment shall again become available for award under the 2006 Plan.

3. ADMINISTRATION

The 2006 Plan shall be administered by the Compensation Committee
of the Board of Directors, each of whom is a "non-employee director"
as defined in Rule 16b-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Committee"). No
member of the Committee shall be eligible to participate in the 2006
Plan.

The Committee shall have the sole authority to (i) award shares
of Common Stock ("Restricted Stock") under the 2006 Plan; (ii)
consistent with the 2006 Plan, determine the provisions of the shares
to be awarded, the restrictions and other terms and conditions
applicable to each award of shares under the 2006 Plan; (iii)
interpret the 2006 Plan, the instruments evidencing the restrictions
imposed upon stock awarded under the 2006 Plan and the shares awarded
under the 2006 Plan; (iv) adopt, amend and rescind rules and
regulations for the administration of the 2006 Plan; and (v) generally
administer the 2006 Plan and make all determinations in connection
therewith which may be necessary or advisable, and all such actions
of the Committee shall be binding upon all participants. Committee
decisions and selections shall be made by a majority of its members
present at the meeting at which a quorum is present, and shall be
final. Any decision or selection reduced to writing and signed by all
of the members of the Committee shall be as fully effective as if it
had been made at a meeting duly held.

4. ELIGIBILITY

All employees, including officers, of the Company who are, from
time to time, responsible for the management, growth and protection of
the business of the Company shall be eligible for awards of stock
under the 2006 Plan. No member of the Board of Directors of the
Company shall be eligible to participate in the 2006 Plan unless such
director is also an employee of the Company. The employees who shall
receive awards under the 2006 Plan shall be selected from time to time
by the Committee in its sole discretion, from among those eligible,
and the Committee shall determine, in its sole discretion, the number
of shares to be awarded to each such employee selected. The Committee
may, within the terms of the 2006 Plan, be selective and non-uniform
with respect to its determination of the amount of awards and the
eligible employees to whom such awards are made.

5. RIGHTS WITH RESPECT TO SHARES

A participant to whom an award of Restricted Stock has been made
under the 2006 Plan will have all of the rights of a stockholder with
respect to the shares of Common Stock so awarded, including, but not
limited to, the right to receive, subject to the following sentence,
such cash dividends, if any, as may be declared on such shares from
time to time and the right to vote (in person or by proxy) such shares
at any meeting of the Company's stockholders. As a condition to the
grant of the award under the 2006 Plan, and without limiting the
provisions of Section 7(b) hereof, dividends, if any, as may be
declared on such shares of Common Stock shall be deposited into an
escrow or similarly segregated account, and disbursement of such
dividends to the participant will occur only upon the delivery of the
shares of Common Stock to which such dividends relate, and in the
event the shares of Common Stock to which such dividends relate are
forfeited, the participant's right to receive disbursement of such
dividends will be forfeited and the amount of the dividends shall be
returned to the Company.

6. INVESTMENT REPRESENTATION

If the shares of Common Stock that have been awarded to an
employee pursuant to the terms of the 2006 Plan are not registered
under the Securities Act of 1933, as amended, pursuant to an exemption
from registration, such employee, if the Committee shall deem it
advisable, may be required to represent and agree in writing (i) that
any shares of Common Stock acquired by such employee pursuant to the
2006 Plan will not be sold except pursuant to an effective
registration statement under the Securities Act of 1933, as amended,
or pursuant to an exemption from registration under such Act, and (ii)
that such employee has acquired such shares of Common Stock for the
participant's own account and not with a view to the distribution
thereof.

7. RESTRICTIONS

(a) Terms, Conditions and Restrictions. In addition to such other
terms, conditions and restrictions as may be imposed by the Committee
and contained in the instrument under which awards of Common Stock are
made pursuant to the 2006 Plan, (i) no Common Stock so awarded shall
be restricted for a period (the "Restriction Period") of less
than one year or more than ten years unless otherwise specified
by the Committee; and (ii) except as provided in paragraph (e) below,
the recipient of the award shall remain in the employ of the Company
during the Restriction Period or otherwise forfeit all right, title
and interest in and to the shares subject to such restrictions.

(b) Transferability Restriction. No share awarded under the 2006 Plan
shall be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of during the Restriction Period applicable
thereto.

(c) Agreements; Stock Legend. As a condition to the grant of an award
under the 2006 Plan, each eligible employee selected to participate
shall execute and deliver to the Company an agreement in form and
substance satisfactory to the Committee reflecting the conditions and
restrictions imposed upon the Common Stock awarded. Certificates for
shares of Common Stock delivered pursuant to such awards may, if the
Committee so determines, bear a legend referring to the restrictions
and the instruments to which such awards are subject.

(d) Additional Conditions. In the agreements evidencing awards or
otherwise, the Committee may impose such other and additional terms,
conditions and restrictions upon the award as it, in its
discretion, deems appropriate including, without limitation, that
the Company shall have the right to deduct from payments of any kind
due to the participant, any federal, state or local taxes of any kind
required by law to be withheld with respect to the shares awarded.

(e) Lapse of Restrictions. The restrictions imposed under paragraph
(a) above shall terminate with respect to the shares of Common Stock
to which they apply on the earliest to occur of the following, unless
otherwise specified by the Committee:

(i) the expiration of the Restriction Period;

(ii) the participant's total and permanent disability; or

(iii) the participant's death.

Certificates for shares of Common Stock with respect to which
restrictions have lapsed as provided above shall, upon lapse thereof,
be released from escrow and delivered to the participant or, in the
event of participant's death, to participant's personal
representative. Any stock legend referring to the restrictions
imposed hereunder shall thereupon be removed.

(f) Change of Control of the Company. Upon the occurrence of a Change
of Control, unless otherwise specifically prohibited under applicable
laws or by the rules and regulations of any governing governmental
agencies or national securities exchanges, or unless the Committee
shall determine otherwise, any Restriction Period and restrictions
imposed on Restricted Stock shall terminate.
For purposes of the 2006 Plan, a "Change in Control" of the Company
shall be deemed to have occurred if:

(a) any person, as such term is used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended, becomes a
beneficial owner (within the meaning of Rule 13d-3 under such Act) of
20% or more of the Company's outstanding Common Stock;

(b) there occurs within any period of two consecutive years any
change in the directors of the Company such that the members of the
Company's Board of Directors prior to such change do not constitute a
majority of the directors after giving effect to all changes during
such two-year period unless the election, or the nomination for
election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the period; or

(c) the Company is merged, consolidated or reorganized into or
with, or sells all or substantially all of its assets to, another
company or other entity, and immediately after such transaction less
than 80% of the voting power of the then-outstanding securities of
such company or other entity immediately after such transaction is
held in the aggregate by holders of the Company's Common Stock
immediately before such transaction.

In addition, if the Company enters into an agreement or
series of agreements or the Board of Directors of the Company adopts
a resolution which results in the occurrence of any of the foregoing
events, and the employment of a participant is terminated after and as
the sole result of the entering into of such agreement or series of
agreements or the adoption of such resolution then, upon the
occurrence of any of the events described above, a Change in Control
shall be deemed to have retroactively occurred on the date of
entering into of the earliest of such agreements or the adoption of
such resolution and the participants shall be entitled to the
delivery as of such date of any forfeited Restricted Stock.

8. MISCELLANEOUS

(a) No Right to Receive Award. Nothing in the 2006 Plan shall be
construed to give any employee of the Company any right to receive an
award under the 2006 Plan.

(b) Additional Shares Received With Respect to Restricted Stock. Any
shares of Common Stock or other securities of the Company received by
an employee as a stock dividend on, or as a result of stock splits,
combinations, exchanges of shares, reorganizations, mergers,
consolidations or otherwise with respect to shares of Common Stock
received pursuant to an award hereunder shall have the same status, be
subject to the same restrictions and bear the same legend, if any, as
the shares received pursuant to the original award.

(c) Certificates for Shares. Shares of Restricted Stock granted under
the 2006 Plan shall be evidenced by certificates. Certificates
representing the Restricted Stock shall be registered in the name of
the participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to
such shares and the Company shall retain physical possession of the
certificate in escrow until all restrictions have been lifted or
requirements met.

(d) No Effect on Employment Rights. Nothing in the 2006 Plan or in
the instruments evidencing the grant of an award hereunder shall in
any manner be construed to limit in any way the right of the Company
or a subsidiary to terminate an employee's employment at any time, or
give any right to an employee to remain employed by the Company.

(e) Governing Law. All provisions of the 2006 Plan shall be construed
in accordance with the laws of Florida except to the extent preempted
by federal law.

(f) No Restriction on Corporate Action. Nothing contained in the 2006
Plan shall be construed to prevent the Company or any subsidiary from
taking any corporate action that is deemed by the Company or such
subsidiary to be appropriate or in the best interest, whether or not
such action would have an adverse effect on the 2006 Plan or any
shares of Common Stock granted under the 2006 Plan. No employee, non-
employee director, beneficiary or other person shall have any claim
against the Company or any subsidiary as a result of any such action.

9. EFFECTIVE DATE OF 2006 PLAN

The 2006 Plan shall become effective when approved by the
Shareholders of the Company.

10. AMENDMENTS

The Committee may amend or terminate the 2006 Plan without
shareholder approval unless shareholder approval is required by any
federal or state law or regulation or the rules of The Nasdaq Stock
Market. The Committee shall not have the right to amend the 2006 Plan
to:

(i) except as provided in paragraph 8(b) of the 2006 Plan,
increase the maximum number of shares reserved for
purposes of the 2006 Plan;

(ii) extend the duration of the 2006 Plan; or

(iii) materially increase the benefits accruing to participants
under the 2006 Plan.

Any amendment or alteration which impairs the rights of any
participant during the Restriction Period is not effective unless
written consent from the participant is obtained.

11. DURATION AND TERMINATION

This 2006 Plan shall terminate, and no further stock shall be
awarded hereunder, after July 28, 2016. In addition, the Committee may
terminate the 2006 Plan at any time prior thereto. The termination of
this 2006 Plan shall not, however, affect any restriction previously
imposed or restricted stock awarded pursuant to this 2006 Plan.

12. COMPLIANCE WITH SECTION 16(B)

The 2006 Plan is intended to comply with all applicable
conditions of Rule 16b-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended. All transactions
involving the Company's executive officers are subject to such
conditions, regardless of whether the conditions are expressly set
forth in the 2006 Plan. Any provision of the 2006 Plan that is
contrary to a condition of Rule 16b-3 shall not apply to executive
officers of the Company.

FORM OF RESTRICTED STOCK AGREEMENT PURSUANT TO
PETMED EXPRESS, INC. 2006 RESTRICTED STOCK PLAN

THIS RESTRICTED STOCK AGREEMENT is made this _____ day of
_________, _____ by and between ________________________ (the
"Participant") and PetMed Express, Inc., a Florida corporation, on
behalf of itself, its subsidiaries and affiliates (collectively, the
"Company") pursuant to the Company's 2006 Restricted Stock Plan (the
"2006 Plan").

WHEREAS, the Compensation Committee (the "Committee") of the
Board of Directors of the Company at its meeting on __________
authorized and directed the Company to make an award of stock to the
Participant under the 2006 Plan for the purposes expressed in the 2006
Plan;

NOW THEREFORE, in consideration of the foregoing and the mutual
undertakings herein contained, the parties agree as follows:

1. Grant of Stock. In accordance with the terms of the 2006 Plan and
subject to the further terms, conditions and restrictions contained in
this Agreement, the Company hereby grants to the Participant ______
shares (the "Shares") of the Company's common stock, par value $.001
per share (the "Common Stock"). As long as the Shares are subject to
the Restrictions set forth in Section 4 of this Agreement, such shares
shall be deemed to be, and are referred to in this Agreement as, the
"Restricted Shares."

2. Certificates for Shares. Certificates evidencing Restricted Stock
shall be deposited with the Company to be held in escrow until such
Shares are released to the Participant or forfeited in accordance with
this Agreement. The Participant shall, simultaneously with the
delivery of this Agreement, deliver to the Company a stock power, in
blank, executed by the Participant. If any Restricted Stock is
forfeited, the Company shall direct the transfer agent of the Common
Stock to make the appropriate entries in its records showing the
cancellation of the certificate or certificates for such Restricted
Stock and to return the Shares represented thereby to the Company's
treasury.

3. Adjustments in Restricted Stock. In the event of any change in
the outstanding Common Stock by reason of a stock dividend or
distribution, recapitalization, merger, consolidation, split-up,
combination, exchange of shares or the like, the Committee shall make
equitable adjustments in the Restricted Stock corresponding to
adjustments made by the Committee in the number and class of shares of
Common Stock which may be issued under the 2006 Plan. Any new,
additional or different securities to which the Participant shall be
entitled in respect of Restricted Stock by reason of such adjustment
shall be deemed to be Restricted Stock and shall be subject to the
same terms, conditions, and restrictions as the Restricted Stock so
adjusted.

4. Restrictions. During applicable periods of restriction determined
in accordance with Section 6 of this Agreement, Restricted Stock and
all rights with respect to such Stock, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered
or disposed of and shall be subject to the risk of forfeiture
contained in Section 5 of this Agreement (such limitations on
transferability and risk of forfeiture being herein referred to as
"Restrictions"), but the Participant shall have all other rights
of a stockholder, including, but not limited to, the right to vote
and receive dividends on Restricted Stock, subject to any dividend to
be held in escrow pursuant to the terms of the 2006 Plan.

5. Forfeiture of Restricted Stock. In the event that the Participant
terminates employment with the Company for any reason other than his
or her death or permanent disability, such event shall constitute an
"Event of Forfeiture" and all Shares which at that time are Restricted
Stock shall thereupon be forfeited by the Participant to the Company
without payment of any consideration by the Company, and neither the
Participant nor any successor, heir, assign or personal representative
of the Participant shall have any right, title or interest in or to
such Restricted Stock or the certificates evidencing them.

6. Lapse of Restrictions. (a) Except as provided in subsection (b)
below, the Restrictions on the Restricted Stock granted under this
Agreement shall lapse ratably on each of the anniversaries of the date
of this Agreement in accordance with the following schedule:

[INSERT TABLE]

(b) In the event that a Participant's employment with the Company
terminates as a result of his or her death or permanent disability,
the Restrictions shall lapse on the Restricted Stock (if not already
lapsed pursuant to subsection (a) above) on the date of such event.

Upon lapse of the Restrictions in accordance with this Section, the
Company shall, as soon as practicable thereafter, deliver to the
Participant, or to the Participant's personal representative, an
unrestricted certificate for the Shares with respect to which such
Restrictions have lapsed.
(c) In the event of a change in control, as defined in the 2006 Plan,
any Restriction Period and restrictions imposed on Restricted Stock
shall lapse.

7. Withholding Requirements. The Company shall have the right to
withhold from sums due to the Participant, or to require the
Participant to remit to the Company in an amount sufficient to satisfy
any Federal, state or local withholding tax requirements prior to
making such payments or delivering any certificate evidencing such
Shares.

8. Effect of Employment. Nothing contained in this Agreement shall
confer upon the Participant the right to continue in the employment of
the Company or affect any right which the Company may have to
terminate the employment of the Participant.

9. Amendment. This Agreement may not be amended except with the
consent of the Committee and by a written instrument duly executed by
the Participant and the Company.

10. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their heirs, personal
representatives, successors and assigns. Participant acknowledges
receipt of a copy of the 2006 Plan, which is annexed hereto,
represents that he or she is familiar with the terms and provisions
thereof and accepts the award of Shares hereunder subject to all of
the terms and conditions thereof and of this Agreement. Participant
hereby agrees to accept as binding, conclusive and final all decisions
and interpretations of the Committee upon any questions arising under
the 2006 Plan or this Agreement.

IN WITNESS WHEREOF, the Company and the Participant have each
executed and delivered this Agreement as of the date first above
written.

COMPANY:

___________________________
Chief Executive Officer

PARTICIPANT:

___________________________

EXHIBIT B

PETMED EXPRESS, INC.
2006 OUTSIDE DIRECTOR EQUITY COMPENSATION
RESTRICTED STOCK PLAN

1. PURPOSE OF PLAN

The PetMed Express, Inc. 2006 Outside Director Restricted Stock Award
Plan (the "Plan") is established by PetMed Express, Inc. ("PetMed" or
the "Company") to attract, retain and compensate highly qualified
individuals who are not employees or affiliates of PetMed or any of
its subsidiaries, to serve as members of the Company's Board of
Directors (the "Board of Directors"), and to enable them to increase
their ownership of PetMed's Common Stock, thereby increasing their
proprietary interest in PetMed and their identification with the
interests of PetMed's stockholders.

2. STOCK SUBJECT TO THE 2006 PLAN

The shares that may be awarded under the 2006 Plan (without
payment by participants) shall be the common stock, par value $.001
per share, of the Company ("Common Stock"), and shall be authorized,
but un-issued, shares. The maximum number of shares of Common Stock
that may be awarded hereunder (subject to any adjustments as provided
below) shall not in the aggregate exceed 200,000 shares. Shares of
Common Stock forfeited as a result of a participant's termination of
service as a director shall again become available for award under the
2006 Plan.

3. ADMINISTRATION

The Plan shall be administered by the Board of Directors
("Board"). The Board shall have the sole authority to (i) award shares
of Common Stock ("Restricted Stock") under the 2006 Plan; (ii)
interpret the Plan, the instruments evidencing the restrictions
imposed upon shares of Common Stock with respect to which Restricted
Stock Awards are awarded under the Plan; (iii) adopt, amend and
rescind rules and regulations for the administration of the Plan; and
(iv) administer the Plan and make all determinations in connection
therewith which may be necessary or advisable, and all such actions of
the Board shall be binding upon all participants.

(a) Initial Grants. Each person who was an Outside Director as of
--------------
July 28, 2006 will automatically be granted, as of the date on which
stockholder approval of the Plan is obtained, a Restricted Stock Award
of 5,000 shares of Common Stock, and the Grant Date with respect to
such initial Restricted Stock Awards will be the date on which
stockholder approval of the Plan is obtained.

(b) Annual Grants. Thereafter, each person who is an Outside Director
-------------
following an annual meeting of Stockholders each year will
automatically be granted a Restricted Stock Award of 5,000 shares of
Common Stock (subject to change with Board approval), and the Grant
Date with respect to each such Restricted Stock Awards will be the
date on which the award is granted.

4. ELIGIBILITY

Each "Outside Director" of PetMed shall be a participant in the
Plan. For purposes of the Plan, an "Outside Director" is any member of
PetMed's Board of Directors who, as of the close of business on the
date of the annual meeting of PetMed's stockholders, meets the
definition of "Non-Employee Director" as set forth in Rule 16b-
3(b)(3)(i) adopted under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

5. RIGHTS WITH RESPECT TO SHARES

A participant to whom an award of Restricted Stock has been made under
the 2006 Plan will have all of the rights of a stockholder with
respect to the shares of Common Stock so awarded, including, but not
limited to, the right to receive, subject to the following sentence,
such cash dividends, if any, as may be declared on such shares from
time to time and the right to vote (in person or by proxy) such shares
at any meeting of the Company's stockholders. As a condition to the
grant of the award under the 2006 Plan, and without limiting the
provisions of Section 7(b) hereof, dividends, if any, as may be
declared on such shares of Common Stock shall be deposited into an
escrow or similarly segregated account, and disbursement of such
dividends to the participant will occur only upon the delivery of the
shares of Common Stock to which such dividends relate, and in the
event the shares of Common Stock to which such dividends relate are
forfeited, the participant's right to receive disbursement of such
dividends will be forfeited and the amount of the dividends shall be
returned to the Company.

6. INVESTMENT REPRESENTATION

If the shares of Common Stock underlying the Restricted Stock
Award granted to a participant pursuant to the terms of the Plan are
not registered under the Securities Act of 1933, as amended (the
"Act"), pursuant to an exemption from registration , such participant
shall be required to represent and agree in writing (i) that any
shares of Common Stock acquired pursuant to the Plan will not be sold
except pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act, and (ii)
that such participant has acquired such shares of Common Stock for the
participant's own account and not with a view to the distribution
thereof.

7. RESTRICTIONS

(a) Terms, Conditions and Restrictions. In addition to such other
terms, conditions and restrictions as may be imposed by the Board and
contained in the instrument under which awards of Common Stock are
made pursuant to the 2006 Plan, (i) no Common Stock so awarded shall
be restricted for a period (the "Restriction Period") of less
than one year or more than ten years unless otherwise specified by the
Committee; and (ii) except as provided in paragraph (e) below, the
recipient of the award shall serve as an outside director during the
Restriction Period or otherwise forfeit all right, title and interest
in and to the shares subject to such restrictions.

(c) Agreements; Stock Legend. As a condition to the grant of an award
under the 2006 Plan, all outside directors shall execute and deliver
to the Company an agreement in form and substance satisfactory to the
Board reflecting the conditions and restrictions imposed upon the
Common Stock awarded. Certificates for shares of Common Stock
delivered pursuant to such awards may, if the Board so determines,
bear a legend referring to the restrictions and the instruments to
which such awards are subject.

(d) Additional Conditions. In the agreements evidencing awards or
otherwise, the Board may impose such other and additional terms,
conditions and restrictions upon the award as it, in its discretion,
deems appropriate including, without limitation, that the Company
shall have the right to deduct from payments of any kind due to the
participant any federal, state or local taxes of any kind required by
law to be withheld with respect to the shares awarded.

(i) the expiration of the Restriction Period;

(ii) the participant's total and permanent disability; or

(iii) the participant's death.

For purposes of the 2006 Plan, a "Change in Control" of the Company
shall be deemed to have occurred if:

In addition, if the Company enters into an agreement or series
of agreements or the Board of Directors of the Company adopts a
resolution which results in the occurrence of any of the foregoing
events, and the services of a participant is terminated after and as
the sole result of the entering into of such agreement or series of
agreements or the adoption of such resolution then, upon the
occurrence of any of the events described above, a Change in Control
shall be deemed to have retroactively occurred on the date of entering
into of the earliest of such agreements or the adoption of such
resolution and the participant shall be entitled to the delivery as of
such date of any forfeited Restricted Stock.

8. MISCELLANEOUS

(a) No Right to Receive Award. Nothing in the 2006 Plan shall be
construed to give any outside director any right to receive an award
under the 2006 Plan.

(b) Additional Shares Received With Respect to Restricted Stock. Any
shares of Common Stock or other securities of the Company received by
an outside director as a stock dividend on, or as a result of stock
splits, combinations, exchanges of shares, reorganizations, mergers,
consolidations or otherwise with respect to shares of Common Stock
received pursuant to an award hereunder shall have the same status, be
subject to the same restrictions and bear the same legend, if any, as
the shares received pursuant to the original award.

(d) Governing Law. All provisions of the 2006 Plan shall be construed
in accordance with the laws of Florida except to the extent preempted
by federal law.

(e) No Restriction on Corporate Action. Nothing contained in the 2006
Plan shall be construed to prevent the Company or any subsidiary from
taking any corporate action that is deemed by the Company or such
subsidiary to be appropriate or in the best interest, whether or not
such action would have an adverse effect on the 2006 Plan or any
shares of Common Stock granted under the 2006 Plan. No employee,
outside director, beneficiary or other person shall have any claim
against the Company or any subsidiary as a result of any such action.

9. EFFECTIVE DATE OF 2006 PLAN

The 2006 Plan shall become effective when approved by the
Shareholders of the Company.

10. AMENDMENTS

The Board may amend or terminate the 2006 Plan without
shareholder approval unless shareholder approval is required by any
federal or state law or regulation or the rules of The Nasdaq Stock
Market. The Board shall not have the right to amend the 2006 Plan to:

(i) except as provided in paragraph 8(b) of the 2006 Plan,
increase the maximum number of shares reserved for purposes
of the 2006 Plan;

(ii) extend the duration of the 2006 Plan; or

(iii) materially increase the benefits accruing to participants
under the 2006 Plan.

Any amendment or alteration which impairs the rights of any
participant during the Restriction Period is not effective unless
written consent from the participant is obtained.

11. DURATION AND TERMINATION

This 2006 Plan shall terminate, and no further stock shall be
awarded hereunder, after July 28, 2016. In addition, the Board may
terminate the 2006 Plan at any time prior thereto. The termination of
this 2006 Plan shall not, however, affect any restriction previously
imposed or restricted stock awarded pursuant to this 2006 Plan.

12. COMPLIANCE WITH SECTION 16(B)

OUTSIDE DIRECTOR FORM OF RESTRICTED STOCK AGREEMENT
PURSUANT TO PETMED EXPRESS, INC. 2006 RESTRICTED STOCK PLAN

WHEREAS, the Participant is an outside director and is entitled
to an award of stock under the 2006 Plan for the purposes expressed in
the 2006 Plan;

NOW THEREFORE, in consideration of the foregoing and the mutual
undertakings herein contained, the parties agree as follows:

4. Restrictions. During applicable periods of restriction determined
in accordance with Section 6 of this Agreement, Restricted Stock and
all rights with respect to such Stock, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise
encumbered or disposed of and shall be subject to the risk of
forfeiture contained in Section 5 of this Agreement (such limitations
on transferability and risk of forfeiture being herein referred to as
"Restrictions"), but the Participant shall have all other rights of
a stockholder, including, but not limited to, the right to vote and
receive dividends on Restricted Stock, subject to any dividend to be
held in escrow pursuant to the terms of the 2006 Plan.

5. Forfeiture of Restricted Stock. In the event that the Participant
ceases service as an outside director for any reason other than his
or her death or permanent disability, such event shall constitute an
"Event of Forfeiture" and all Shares which at that time are Restricted
Stock shall thereupon be forfeited by the Participant to the Company
without payment of any consideration by the Company, and neither the
Participant nor any successor, heir, assign or personal representative
of the Participant shall have any right, title or interest in or to
such Restricted Stock or the certificates evidencing them.

[INSERT TABLE]

(b) In the event that a Participant's service as an outside director
terminates as a result of his or her death or permanent disability,
the Restrictions shall lapse on the Restricted Stock (if not already
lapsed pursuant to subsection (a) above) on the date of such event.

(c) In the event of a change in control, as defined in the 2006 Plan,
any Restriction Period and restrictions imposed on Restricted Stock
shall lapse.

8. Amendment. This Agreement may not be amended except with the
consent of the Board and by a written instrument duly executed by the
Participant and the Company.

9. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their heirs, personal
representatives, successors and assigns. Participant acknowledges
receipt of a copy of the 2006 Plan, which is annexed hereto,
represents that he or she is familiar with the terms and provisions
thereof and accepts the award of Shares hereunder subject to all of
the terms and conditions thereof and of this Agreement. Participant
hereby agrees to accept as binding, conclusive and final all decisions
and interpretations of the Committee upon any questions arising under
the 2006 Plan or this Agreement.

IN WITNESS WHEREOF, the Company and the Participant have each
executed and delivered this Agreement as of the date first above
written.

COMPANY

___________________________
Chief Executive Officer

PARTICIPANT:

___________________________

[LOGO] 1-800-PetMeds

PETMED EXPRESS, INC. ADMISSION TICKET

2006 ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, JULY 28, 2006 AT 1:00 P.M. ET

TO BE HELD AT THE SHERATON SUITES CYPRESS CREEK FORT LAUDERDALE

AT 555 N.W. 62nd STREET, FORT LAUDERDALE, FL 33009

THIS TICKET MUST BE PRESENTED TO ENTER THE MEETING

FOLD AND DETACH HERE
---------------------------------------------------------------------------
PETMED EXPRESS, INC.
Proxy Solicited on behalf of the Board of Directors of PetMed Express, Inc.

The undersigned hereby appoints Bruce S. Rosenbloom and Alison Berges, and
each of them, proxies, with full power of substitution in each of them, for
and on behalf of the undersigned to vote as proxies, as directed and
permitted herein to vote the undersigned's shares of PetMed Express, Inc.
Common Stock at the Annual Meeting of Stockholders of PetMed Express, Inc.
to be held on Friday, July 28, 2006, at 1:00 P.M. Eastern Time, at the
Sheraton Suites Cypress Creek Fort Lauderdale and at any adjournments
thereof upon matters set forth in the proxy statement and, in their
judgment and discretion, upon such other business as may properly come
before the meeting.

This proxy when properly executed will be voted in the manner directed
hereof by the Stockholder.

If no direction is made, this proxy will be voted FOR all nominees listed
and items 2, 3, and 4.

Please Vote, Sign, Date and Return Promptly in the Enclosed Envelope.

Votes must be [X] The Board of Directors unanimously recommends a
indicated (x) in vote "FOR" each item.
Black or Blue Ink.

1. To elect five (5) Directors to the Board of Directors:
FOR all nominees [ ] WITHHOLD AUTHORITY [ ] *EXCEPTIONS [ ]
listed below to vote for all
nominees listed below

Nominees: Menderes Akdag, Frank J. Formica, Gian M. Fulgoni, Ronald J.
Korn, and Robert C. Schweitzer

Instructions: To withhold authority to vote for any individual nominee,
mark the "*EXCEPTIONS" box and write that nominee's name in the space
provided below.

* EXCEPTIONS PetMed Express, Inc.
1441 S.W. 29th Avenue
Pompano Beach, FL 33069

2. To ratify the appointment of Goldstein Golub Kessler LLP as the
independent registered accounting firm for the Company to serve for the
2007 fiscal year:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Continued and to be dated and signed on the reverse side.)

FOLD AND DETACH HERE
-------------------------------------------------------------------------

3. To approve the adoption of the PetMed Express, Inc. 2006 Employee
Equity Compensation Restricted Stock Plan:

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To approve the adoption of the PetMed Express, Inc. 2006 Outside
Director Equity Compensation Restricted Stock Plan:

FOR [ ] AGAINST [ ] ABSTAIN [ ]

To include any comments, please [ ]
mark this box.

To change your address, please [ ]
mark this box.

Dated:_________________________________________, 2006

_____________________________________________________
Stock Owner sign here

______________________________________________________
Co-Owner sign here (if applicable)

The signature of this Proxy should correspond exactly
with the stockholder's name as printed to the left.
In case of joint tenancies, co-executors, or co-
trustees, both should sign. Persons signing as
Attorney, Executor, Administrator, Trustee or Guardian
should give their full title.