THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into and
effective as of November 1, 1997, by and between Peapod, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx ("Employee").
WHEREAS, effective as of the date hereof, the Company wishes
to employ Employee and Employee wishes to accept employment with the Company.
NOW, THEREFORE, for and in consideration of the promises and
the mutual covenants and agreements herein contained, the Company and the
Employee hereby agree as follows:
1. Employment-At-Will Employee and the Company acknowledge and
agree that Employee is an "employee-at-will" and that Employee and the Company
each shall have the right to terminate Employee's employment with the Company at
any time and for any reason, subject to Section 3 herein.
2. Confidentiality, Nonsolicitation and Noncompete Agreement.
As a condition to Employee's employment by the Company, Employee agrees to enter
into, effective as of the effective date of this Agreement, an "Employee
Nonsolicitation and Noncompete Agreement" (hereinafter "Employee Confidentiality
Agreement") in substantially the form attached hereto as Exhibit A, as it may be
modified from time to time, and Employee agrees to comply fully with all of the
terms and provisions of such Employee Confidentiality Agreement as if such terms
and provisions were fully set forth in this Agreement. The covenants contained
in the Employee Confidentiality Agreement and its subsequent modifications shall
survive the expiration of this Agreement and the termination of Employee's
employment with the Company, regardless of when or the reason for such
termination, as set forth therein.
3. Severance Benefits. (a) If Employee is terminated by the Company for "Cause"
(as hereinafter defined), Employee shall receive Employee's then current annual
base salary through the date of termination (subject to any applicable payroll
or other taxes required to be withheld). Employee shall not be eligible to
receive any additional benefits or payments, pro rata or otherwise, under any
other Company compensation plans, including bonus, commission, or stock
compensation. "Cause" as used herein shall mean: if, in the Company's reasonable
determination: Employee "grossly neglects" (as hereinafter defined) his or her
duties; Employee engages in "misconduct" (as hereinafter defined); or Employee
refuses to sign or violates any confidentiality, non-competition,
non-solicitation, or intellectual property agreement. "Gross neglect" means the
failure in any material respect to perform the essential functions of Employee's
job or the failure to carry out the Company's reasonable directions with respect
to material duties. "Misconduct" means: embezzlement or misappropriation of
corporate or other funds, theft from any grocer or other supplier or vendor of
the Company, or other acts of fraud, dishonesty, theft, or self-dealing, whether
directed at the Company or otherwise; willful refusal to perform assigned
duties; material violation of significant Company policy(ies) or practice(s);
significant violation of any statutory, regulatory, or common law duty of
loyalty to the Company; drug usage (not administered under and in accordance
with medical supervision) or habitual intoxication; or indictment for a felony.
(b) If Employee terminates Employee's employment with the
Company for any reason, Employee shall provide the Company with 2 weeks (14
calendar days) written notice thereof ("Notice Period"). Upon receipt of such
written notice, the Company may accelerate the date of Employee's termination.
In the event that the Company accelerates Employee's date of termination,
Employee shall receive his or her then current annual base salary payments for
the balance of the two-week Notice Period (subject to any applicable payroll or
other taxes required to be withheld). Employee shall not be eligible to receive
any additional payments or benefits, pro rata or otherwise, under any other
Company compensation plans, including bonus, commission, or stock compensation.
(c) If Employee is terminated by the Company for any reason
other than for "Cause" (as defined above), Employee shall be entitled to (i)
payments equivalent to 12 months of his or her then current annual base salary
(subject to any applicable payroll or other taxes required to be withheld) and
(ii) pro rata participation (as defined below) in the Company's bonus
compensation plans for which Employee was eligible immediately prior to such
termination. Such amount(s) shall be paid at such interval(s) as they would
otherwise be paid. Any requirement of the Company that the Employee be based
anywhere other than Evanston, Illinois, Skokie, Illinois, or outside a 30-mile
radius of such locations, without "Cause" existing at such time, shall be deemed
a termination of Employee other than for "Cause."
(d) Employee's employment shall terminate automatically upon
Employee's death. Employee or his or her estate shall receive Employee's then
current base salary payments through the date of termination and pro rata
participation in the Company's bonus compensation plans for which Employee was
eligible immediately prior to such termination. Such amount(s) shall be paid at
such interval(s) as they would otherwise be paid.
(e) Upon Employee's Incapacity (as defined herein), the
Company may terminate Employee's employment with thirty days notice. Incapacity
shall mean such physical or mental condition, or combination of conditions, of
the Employee which exists for at least 26 weeks, either continuously or over a
52-week period and which, in the reasonable opinion of the Company, renders
Employee incapable of performing the essential functions of his or her position
with or without reasonable accommodation. Employee agrees to submit to any
reasonable medical examination(s) as may be directed by the Company for the
purpose of determining the existence of the Incapacity. During the 26 weeks and
through the date of termination, Employee shall receive (i) base salary payments
reduced by amounts Employee receives pursuant to any Company plan or policy
because of the physical or mental condition, or combination of conditions,
underlying the Incapacity and (ii) pro rata participation in the Company's
compensation plans, including bonus, commission, or stock compensation for which
Employee was eligible immediately prior to such termination. Such amount(s)
shall be paid at such interval(s) as they would otherwise be paid. The Company
also reserves the right to terminate Employee's employment under other
provisions of this Section 3 as may be applicable during the period of
Incapacity, except that the Incapacity shall not be the basis of a termination
for gross neglect under Section 3(a).
(f) As used in this Agreement, "pro rata participation" in any
Company compensation plan shall mean the percentage share derived by dividing
Employee's duration of employment within the compensation period, as determined
by the particular compensation plan, in which Employee's employment terminates
by that total compensation period.
(g) The severance benefits provided hereunder shall be the
total severance benefits to which Employee is entitled and shall be in lieu of,
and not in addition to, any other severance plan, policy, or arrangement of the
Company or previously agreed to by Employee and the Company.
4. Notices. Any notice or request required or permitted to be
given hereunder must be, and shall be sufficient if, in writing and delivered
personally or if sent by registered or certified mail, return receipt requested,
as follows: if to the Employee, to the address of Employee as set forth in the
records of the Company, and if to the Company, to 0000 Xxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000, Attention: President, or to any other address designated by
either party by notice similarly given. Such notice shall be deemed to have been
given upon the personal delivery or such mailing thereof, as the case may be.
5. Authority; No Conflict. Employee expressly represents and
warrants to the Company that Employee has full and sole right and authority to
execute and deliver this Agreement and to comply with the terms and provisions
hereof and that the execution and delivery of this Agreement and compliance with
the terms and provisions hereof by Employee will not conflict with or result in
a breach of the terms, conditions, or provisions of any other agreement,
restriction, or obligation by which the Employee is bound or will become bound.
6. Assignment and Succession. This Agreement shall be binding
upon and shall operate for the benefit of the parties hereto and their
respective legal representatives, legatees, distributees, heirs, and successors
and assigns. Employee acknowledges that the services Employee renders pursuant
to this Agreement are unique and personal. Accordingly, Employee may not assign
any of Employee's rights contained in this Agreement or delegate any of
Employee's job duties or any duties under this Agreement. The Company may assign
its rights, duties, or obligations under this Agreement to a purchaser or
transferee of all, or substantially all, of the Company's assets.
7. Applicable Law. This Agreement, and any claim or
controversy arising out of or relating to this Agreement, shall at all times be
construed, interpreted, and enforced in accordance with, and be governed by, the
internal laws (as opposed to conflict of laws provisions) of the State of
Illinois.
8. Severability. Whenever possible, each provision of this
Agreement will be construed and interpreted in such manner as to be effective
and valid under applicable law. In the event that any provision or any part of a
provision of this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement shall continue in full force and effect.
9. Waiver, Etc. The waiver of a breach of any provision of
this Agreement shall not operate or be construed to be a waiver of any other or
a subsequent breach. No delay or omission in the exercise of any power, remedy,
or right herein provided or otherwise available to any party, shall impair or
affect the right of such party thereafter to exercise the same. Any extension of
time or other indulgence granted to a party hereunder or to any other person
shall not otherwise alter or affect any power, remedy, or right of any other
party, or obligations of the party to whom such extension or indulgence is
granted except as specifically waived.
10. Dispute Resolution. Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association ("AAA") in
accordance with its National Rules for the Resolution of Employment Disputes, to
the extent not inconsistent with this provision or the provision designating the
internal laws of Illinois as the law governing any controversies, claims, or
breaches of this Agreement. Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Such arbitration shall
be conducted in Chicago, Illinois before a single arbitrator. The parties shall
select an arbitrator by mutual agreement from a panel of arbitrators experienced
in arbitrating employment disputes proposed by AAA. If the parties are unable to
agree on an arbitrator, AAA shall select an arbitrator in accordance with its
procedures. Nothing herein shall preclude the Company from seeking and/or
obtaining injunctive relief from a court of competent jurisdiction and/or in
arbitration pursuant to the Employee Confidentiality Agreement required
hereunder to be executed by the Employee.
11. Entire Agreement. This Agreement, together with the
Employee Confidentiality Agreement and its later modifications, contain the
entire agreement of the parties relating to the subject matter hereof including,
but not limited to, any previous written agreements concerning Employee's
employment with the Company. This agreement may not be modified or discharged
orally, but only by an agreement in writing signed by the party against whom
enforcement of any change, modification, waiver, extension, or discharge is
sought.
12. Termination. This Agreement shall terminate on the third
anniversary of its effective date ("Agreement Termination Date") and shall
thereafter be of no further force or effect; provided, however, that if upon the
Agreement Termination Date, the Company does not have a severance pay policy in
effect under which Employee would be eligible to receive severance benefits in
the event of Employee's termination without cause, then Employee shall be
entitled to receive severance benefits consistent with paragraph 3(c) of this
Agreement if terminated without cause.
THE PARTIES HERETO AGREE TO THE TERMS HEREOF AND AGREE TO BE BOUND BY THEM AND
TO ADHERE TO THEM IN GOOD FAITH.
EMPLOYEE NEW PEAPOD, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
