<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Peapod, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF PEAPOD, INC.]
PEAPOD, INC.
9933 Woods Drive
Skokie, Illinois 60077
April 9, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders
of Peapod, Inc., a Delaware corporation, to be held at 10:00 a.m. (California
time) on Wednesday, May 12, 1999 at the Hyatt Regency Hotel, 5 Embarcadero
Center, San Francisco, California 94111.
The formal notice of the meeting, Proxy Statement and 1998 Annual Report
are enclosed. The matters to be considered at the meeting are described in the
accompanying Proxy Statement. Regardless of your plans for attending in
person, it is important that your shares be represented at the meeting.
Therefore, please complete, sign, date and return the enclosed proxy card in
the enclosed postage prepaid envelope. This will enable you to vote on the
business to be transacted whether or not you attend the meeting.
We hope that you can attend the 1999 Annual Meeting of Stockholders.
Sincerely,
/s/ Andrew B. Parkinson
Andrew B. Parkinson
Chairman, President and Chief
Executive Officer
<PAGE>
[LOGO OF PEAPOD, INC.]
PEAPOD, INC.
9933 Woods Drive
Skokie, Illinois 60077
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 12, 1999
To the Stockholders of
PEAPOD, INC.
The 1999 Annual Meeting of Stockholders of Peapod, Inc., a Delaware
corporation (the "Company"), will be held at the Hyatt Regency Hotel, 5
Embarcadero Center, San Francisco, California 94111 on Wednesday, May 12,
1999, at 10:00 a.m., California time, for the following purposes:
1. to elect two (2) Class II directors; and
2. to transact such other business as may properly come before the Annual
Meeting of Stockholders or any adjournments thereof.
The Board of Directors has fixed the close of business on March 31, 1999 as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting of Stockholders.
Your attention is directed to the accompanying Proxy Statement. Whether or
not you plan to attend the meeting in person, you are urged to complete, sign,
date and return the enclosed proxy card in the enclosed, postage prepaid
envelope. If you attend the meeting and wish to vote in person, you may
withdraw your proxy and vote your shares personally.
This Notice of Annual Meeting of Stockholders is first being sent to
stockholders on or about April 9, 1999.
By Order of the Board of Directors,
/s/ Andrew B. Parkinson
Andrew B. Parkinson
Chairman, President and
Chief Executive Officer
April 9, 1999
<PAGE>
PEAPOD, INC.
9933 Woods Drive
Skokie, Illinois 60077
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 12, 1999
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Peapod, Inc., a Delaware corporation
(the "Company"), for use at the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") to be held at 10:00 a.m. (California time) on May 12, 1999,
at the Hyatt Regency Hotel, 5 Embarcadero Center, San Francisco, California
94111.
The Annual Meeting may be postponed or adjourned from time to time without
any notice other than announcement at the meeting, and any and all business
for which notice is hereby given may be transacted at any such postponed or
adjourned meeting.
The Board of Directors has fixed the close of business on March 31, 1999 as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. On March 31, 1999, the Company had
outstanding 17,296,590 shares of Common Stock, par value $.01 per share
("Common Stock"). A list of stockholders of record entitled to vote at the
Annual Meeting will be available for inspection by any stockholder, for any
purpose germane to the meeting, during normal business hours, for a period of
10 days prior to the meeting, at the office of the Company located at 9933
Woods Drive, Skokie, Illinois 60077.
Whether or not you plan to attend the Annual Meeting, please sign, date and
mail your proxy card in the enclosed self-addressed postage prepaid envelope.
The proxy holders appointed by the Company will vote your shares according to
your instructions. If you return a properly signed and dated proxy card but do
not mark a choice on one or more items, your shares will be voted in
accordance with the recommendation of the Board of Directors as set forth in
this Proxy Statement. The proxy card gives authority to the proxy holders
appointed by the Company to vote your shares in their discretion on any other
matter properly presented at the Annual Meeting.
You may revoke your proxy at any time prior to voting at the Annual Meeting
by delivering written notice to the Secretary of the Company, by submitting a
subsequently dated proxy or by attending the Annual Meeting and voting in
person at the Annual Meeting.
This Proxy Statement is first being sent or given to stockholders on or
about April 9, 1999.
VOTING INFORMATION
Each holder of outstanding shares of Common Stock is entitled to one vote
for each share of Common Stock held in such holder's name with respect to all
matters on which holders of Common Stock are entitled to vote at the Annual
Meeting. Except as otherwise required by law, the holders of shares of Common
Stock shall vote together and not as separate classes. A holder of shares of
Common Stock may, with respect to the election of the Class II directors, (i)
vote FOR the election of the director nominees, (ii) WITHHOLD authority to
vote for such director nominees, or (iii) vote for the election of all such
director nominees but withhold authority to vote for an individual nominee by
writing such individual nominee's name in the space provided on the proxy
card. All properly executed and unrevoked proxies received in the accompanying
form in time for the Annual Meeting
<PAGE>
will be voted in the manner directed therein. If no direction is made on a
proxy, such proxy will be voted FOR the election of the named director nominees
to serve as Class II directors. The proxy card gives authority to the proxy
holders appointed by the Company to vote your shares in their discretion on any
other matter properly presented at the Annual Meeting. If a proxy indicates
that all or a portion of the votes represented by such proxy are not being
voted with respect to a particular matter, such non-votes will not be
considered present and entitled to vote on such matter, although such votes
will count for purposes of determining the presence of a quorum. A quorum will
be present if a majority of the shares of Common Stock are represented in
person or by proxy at the Annual Meeting.
The election of the Class II directors requires the affirmative vote of a
plurality of votes cast by the holders of shares of Common Stock present in
person or represented by proxy and entitled to vote on such matter at the
Annual Meeting. Accordingly, if a quorum is present at the Annual Meeting, the
persons receiving the greatest number of votes from the holders of shares of
Common Stock will be elected to serve as the Class II directors. Since the
election of directors requires only the affirmative vote of a plurality of the
votes cast by the holders of shares of Common Stock present in person or
represented by proxy and entitled to vote with respect to such matter,
withholding authority to vote for a nominee and non-votes with respect to the
election of directors will not affect the outcome of the election of directors.
PROPOSAL 1
ELECTION OF DIRECTORS
The business of the Company is managed under the direction of the Company's
Board of Directors. The Board of Directors is presently composed of seven
directors, divided into three classes. At the Annual Meeting, two Class II
directors will be elected to serve until the annual meeting in the year 2002,
or until their successors are elected and qualified. The nominees for election
as Class II directors are identified below. In the event the nominees who have
expressed an intention to serve if elected fail to stand for election, the
persons named in the proxy currently intend to vote for a substitute nominee
designated by the Board of Directors.
Nominees
The following persons, if elected at the Annual Meeting, will serve as Class
II directors until the annual meeting in the year 2002, or until their
successors are elected and qualified.
CLASS II DIRECTORS--TERM SCHEDULED TO EXPIRE IN 1999
Mr. Thomas L. Parkinson, age 38, is a co-founder of the Company and has been
its Executive Vice President--Chief Technology Officer and a director since its
founding in 1989. He has had primary responsibility for directing consumer
product development and technology research and development since the Company's
founding and he is the principal architect of Peapod's software. Prior to
founding the Company in 1989, Mr. Parkinson was a co-founder of Resource
Control Systems ("RCS"), a UNIX relational database company. Before RCS, he
held various field sales and sales management positions with Procter & Gamble
Co. Thomas Parkinson is the brother of Andrew Parkinson, the Company's
Chairman, President and Chief Executive Officer.
Mr. Seth L. Pierrepont, age 47, has been a director of the Company since
1992. Mr. Pierrepont also served as the Company's Director of Marketing during
1993. He is President of Sage Venture Management Incorporated ("Sage"), a
private investment and advisory services firm specializing in developing
businesses. Prior to founding Sage in 1990, Mr. Pierrepont was a Managing
Director of Continental Illinois Venture Corporation.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS VOTES "FOR" THE NOMINEES
FOR CLASS II DIRECTORS.
2
<PAGE>
Other Directors
The following persons are currently directors of the Company whose terms
will continue after the Annual Meeting.
CLASS III DIRECTORS--TERM SCHEDULED TO EXPIRE IN 2000
Mr. Trygve E. Myhren, age 62, became a director in 1995. He is president of
Myhren Media, Inc., which invests in and advises media, telecommunications and
consumer products companies. He was President and Chief Operating Officer and
a director of The Providence Journal Company, a diversified media firm, from
1990 to 1996. From 1992 to 1995, he also served as President and Chief
Executive Officer of King Broadcasting Company, a subsidiary of The Providence
Journal Company. From 1975 until 1988, Mr. Myhren was employed by American
Television and Communications Corporation, the cable television subsidiary of
Time, Inc. (now Time/Warner Cable), and he served as Chairman and Chief
Executive Officer from 1981 to 1988. Mr. Myhren was a member of the board of
the National Cable Television Association from 1981 to 1991 and served as its
Chairman in 1986 and 1987. Mr. Myhren currently serves on the Boards of J.D.
Edwards, Inc., Verio, Inc., Founders Funds and Advanced Marketing Services,
Inc.
Mr. Robert S. Goodale, age 65, became a director in 1998. He is currently a
fellow at the Institute at Mars Hill College. From 1993 to 1997, he served as
the Deputy Secretary of the North Carolina Department of Commerce. Mr. Goodale
has previously served as President of Sunstate Dairy and Foods Company,
Finevest Foods, Inc. and Harris Teeter, Inc.
CLASS I DIRECTORS--TERM SCHEDULED TO EXPIRE IN 2001
Mr. Andrew B. Parkinson, age 41, is a co-founder of the Company and has
been its Chairman, President and Chief Executive Officer since its founding in
1989. Prior to the founding of the Company, Mr. Parkinson held various brand
and product management positions with Kraft Foods, Inc. and Procter & Gamble
Co. Andrew Parkinson is the brother of Thomas Parkinson, the Company's
Executive Vice President--Chief Technology Officer and a director.
Mr. Tasso H. Coin, age 63, has been a director of the Company since 1992.
He is President of Tasso H. Coin Investment Development Company, a private
investment and advisory firm specializing in services for growth companies. He
is also a director of Extended Care Information Network, Inc., an internet-
based health care information services company. Mr. Coin was a founder of the
Chicago law firm now known as Cowen, Crowley, Nord & Staub and co-founder of
AmBank Financial Services Inc., a bank holding company.
Mr. Mark VanStekelenburg, age 48, became a director in 1998. He is
currently self-employed as an investor. From 1992 through January 1998, he
served as the President and Chief Executive Officer of Rykoff-Sexton,
Inc./U.S. Foodservice, Inc., a food service distributor and manufacturer. In
1995, he was elected Chairman of the Board of Directors, a position he held
until he retired from the company in 1998. Prior to coming to Rykoff-Sexton in
1991, he served as President and Chief Executive Officer of G.V.A., Inc., the
food service division of Royal Ahold n.v., the largest food retailer in the
Netherlands. His experience in the food distribution and retail business also
includes terms as the President of Torro Supermarkets, General Manager and
Chief Operating Officer of Makro U.S.A. and General Manager of Korti Discount
Stores.
Meetings and Committees
The Board of Directors of the Company held five meetings during fiscal
1998. Each meeting was attended by all directors in office at the respective
time of such meeting.
The Board of Directors does not presently have a formal nominating
committee.
3
<PAGE>
The Audit Committee recommends the firm to be appointed as independent
accountants to audit financial statements and to perform services related to
the audit, reviews the scope and results of the audit with the independent
accountants, reviews with management and the independent accountants the
Company's year-end operating results and considers the adequacy of the internal
accounting procedures. The Audit Committee currently consists of Messrs. Seth
L. Pierrepont (Chairman), Tasso H. Coin and Robert S. Goodale. The Audit
Committee held two meetings in fiscal 1998, which were attended by all members
of the Audit Committee appointed at the respective times of such meetings.
The Compensation Committee, which currently consists of Messrs. Trygve E.
Myhren (Chairman), Tasso H. Coin and Mark VanStekelenburg, reviews and approves
the compensation arrangements for all officers and other senior level
employees, and administers and takes such other actions as may be required in
connection with certain compensation and incentive plans of the Company
(including the grant of stock options). The Compensation Committee also
recommends fees to be paid to members of the Board of Directors. The
Compensation Committee held nine meetings in fiscal 1998, which were attended
by all members of the Compensation Committee appointed at the respective times
of such meetings.
The Company's By-Laws require that the Compensation Committee and the Audit
Committee consist solely of non-employee directors.
Compensation of Directors
Non-employee directors receive compensation of $1,000 per in-person meeting
of the Board of Directors, $500 per telephonic meeting of the Board of
Directors lasting more than one hour, $750 per in-person meeting of committees
of the Board of Directors and $375 per telephonic meeting of committees of the
Board of Directors lasting more than one hour. Non-employee directors also
receive a stipend of $10,000 per year, of which $2,500 is payable at the
beginning of each quarter. Directors who are officers or employees of the
Company receive no compensation for serving as directors. All directors are
reimbursed for reasonable and necessary expenditures incurred in connection
with attendance at meetings of the Board of Directors and meetings of
committees of the Board of Directors.
Under the Company's 1997 Long-Term Incentive Plan (the "1997 Plan"), non-
employee directors may be granted nonqualified options to purchase shares of
Common Stock at the discretion of the Compensation Committee to advance the
interests of the Company by retaining well-qualified directors. On the date on
which a person is first elected or begins to serve as a non-employee director,
each such non-employee director will be granted a nonqualified option to
purchase 15,000 shares of Common Stock under the Company's 1997 Plan. Also,
under the 1997 Plan, on the date of each annual meeting of the Company, each
non-employee director will be granted an option to purchase 5,000 shares of
Common Stock. Finally, the Company's 1997 Plan provides that the per share
exercise price of all such options is or will be no less than the fair market
value of the Common Stock on the date of grant. One-third of such options vest
or will vest on each of the first, second and third anniversaries of the date
of grant, except with respect to the grant of options in connection with an
annual meeting as described above, which options will become exercisable in
full as of the date immediately preceding the date of the Company's next annual
meeting following the annual meeting on which such option was granted.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the executive
officers of the Company.
Andrew B. Parkinson, age 41, is a co-founder of the Company and has been its
Chairman, President and Chief Executive Officer since its founding in 1989. See
"Election of Directors."
John C. Walden, age 39, has served as the Company's Chief Operating Officer
since 1997. He is responsible for the general development and execution of the
Company's operating strategies and plans. He joined the
4
<PAGE>
Company in 1996 as Executive Vice President--Finance and Business Development.
Prior to joining Peapod, Mr. Walden was Director, Media Ventures for Ameritech
Corporation where he effected and managed investments in internet companies.
Mr. Walden served as a director of Peapod in 1995 as Ameritech Corporation's
designee. From 1990 to 1994, he held a variety of executive management
positions with Storage Technology Corporation, a computer storage system
manufacturer, and a predecessor, XL/Datacomp, Inc., a computer distribution
company, including Vice President and General Manager, Vice President--
Corporate Development and Strategy and General Counsel.
Thomas L. Parkinson, age 38, is a co-founder of the Company and has been
its Executive Vice President--Chief Technology Officer and a director since
its founding in 1989. See "Election of Directors."
Timothy M. Dorgan, age 46, joined the Company in 1994 in his current role,
Executive Vice President--Marketing. Mr. Dorgan is responsible for the overall
development and management of the Company's marketing activities, including
interactive marketing services. Prior to joining Peapod, from 1992 to 1994,
Mr. Dorgan served as President of Ketchum Advertising-Chicago, a multinational
advertising agency. From 1987 to 1992, Mr. Dorgan was President and Chief
Operating Officer of Noble & Associates, an advertising and marketing services
firm specializing in food products.
John A. Furton, age 34, is a co-founder of the Company and serves as Senior
Vice President--Chief Information Officer. He joined the Company in 1990.
Currently, he is responsible for all enterprise technology development,
including fulfillment and logistics, merchandising and administrative and
financial systems, as well as the Company's data center and network
operations. Additionally, Mr. Furton is responsible for the Company's market
development activities, which include structuring and managing its external
business relationships with supermarkets and other merchandising partners.
Prior to this, Mr. Furton was Vice President of Operations, where he managed
order fulfillment services. Prior to joining the Company, from 1986 to 1990,
Mr. Furton held various positions in information systems consulting with Kraft
Foods, Inc. and Michigan Bell Telephone Company.
Carl E. Alguire, age 41, currently serves as Senior Vice President--
Fulfillment Operations. He joined the Company in 1994 as Regional Vice
President and served in that capacity until 1997. Prior to joining the
Company, from 1989 to 1994, Mr. Alguire was Vice President of
Expressline/Mercury Delivery, Inc. where he was responsible for all daily
operations of Cleveland's largest rush delivery company. He also founded and
ran a $3.5 million general and grocery delivery business, and held the
position of grocery store manager for Fisher Foods, Inc.
Dan Rabinowitz, age 36, currently serves as Vice President--Chief Financial
Officer. He joined the Company in 1995 as Director of Finance and served in
that capacity until February 1998. At that time, he became the Company's Vice
President--Financial Planning & Control and Treasurer. Prior to joining the
Company, Mr. Rabinowitz served as Associate Director for Geneva Capital
Markets, a middle markets mergers and acquisitions firm from 1993 through
1995, and Director of Finance at Technology Solutions Company from 1991
through 1993.
William J. Christopher, age 41, currently serves as Vice President--Member
Services. He joined the Company in 1996 as Director--Member Services and
served in that capacity until 1997. Prior to joining the Company, from 1991 to
1996, Mr. Christopher held various general management positions at McMaster-
Carr Supply.
Michael P. Brennan, age 35, currently serves as Vice President--Product
Management. He joined the Company in 1997 as Director--Grocery Formats and
served in that capacity until 1998. Prior to joining the Company, from 1990 to
1996, Mr. Brennan held various positions culminating at Principal for the
management consulting firm A.T. Kearney.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
Summary Compensation. The following summary compensation table sets forth
certain information concerning compensation for services rendered in all
capacities awarded to, earned by, or paid to the Company's Chief Executive
Officer and each of the Company's other four most highly compensated executive
officers (the "Named Executives") during the years ended December 31, 1996,
1997 and 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation Awards
----------------- ---------------------
Year Restricted Shares
Ended Stock Underlying
Name and Principal Position Dec. 31 Salary Bonus Awards Options(1)
- --------------------------- ------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Andrew B. Parkinson 1998 $140,000 $ 21,315 $ -- 25,000
Chairman, President and 1997 $140,000 $ 28,235 $ -- 60,000
Chief Executive Officer 1996 $120,000 $ 26,700 $ -- 10,000
John C. Walden 1998 $154,500 $ 28,343 $ -- 158,728
Chief Operating Officer 1997 $154,500 $137,746 $ -- 122,000
1996 $147,115 $130,725 $ -- 10,000
Thomas L. Parkinson 1998 $140,000 $ 33,922 $ -- 25,000
Executive Vice President-- 1997 $140,000 $ 30,723 $ -- 60,000
Chief Technology Officer and
Director 1996 $120,000 $ 27,330 $ -- 10,000
Timothy M. Dorgan 1998 $121,900 $ 38,000 $ -- 122,635
Executive Vice President-- 1997 $121,900 $ 21,336 $ -- 125,000
Marketing 1996 $115,000 $ 17,466 $ -- 15,000
John A. Furton 1998 $118,450 $ 21,525 $ -- 89,266
Senior Vice President-- 1997 $118,450 $ 16,586 $ -- 60,000
Chief Information Officer 1996 $104,375 $ 16,301 $ -- 10,000
</TABLE>
- --------
(1) Amounts represent new options, repriced options and replacement options to
purchase shares of Common Stock granted during fiscal years 1998, 1997 and
1996. New options granted in fiscal years 1998, 1997 and 1996 were as
follows: Mr. A. Parkinson, 25,000, 60,000 and 10,000, respectively; Mr.
Walden, 12,500, 120,000 and 10,000, respectively; Mr. T. Parkinson, 25,000,
60,000 and 10,000, respectively; Mr. Dorgan, 12,500, 125,000 and 15,000,
respectively; and Mr. Furton, 12,500, 60,000 and 10,000, respectively.
6
<PAGE>
General Information Regarding Options. The following tables show information
regarding stock options held by the Named Executives.
Option Grants in Fiscal 1998
<TABLE>
<CAPTION>
% of
Total
Options Potential Potential
Number of Securities Underlying Granted to Exercise Expiration Realizable Realizable
Name Options Granted Employees Price Date 5% 10%
---- ------------------------------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Andrew B. Parkinson..... New Grants 12,500 (1) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
12,500 (2) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
John C. Walden.......... New Grant 12,500 (1) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
Repriced Options 100,000 (3) 7.42% $7.875 06/11/05 $215,059 $600,961
2,000 (5) 0.15% $7.875 09/10/05 $ 4,301 $ 12,019
Replacement Options 21,014 (4) 1.56% $7.125 11/20/04 $ 60,953 $142,046
1,881 (4) 0.14% $8.625 11/20/04 $ 5,518 $ 12,518
10,000 (4) 0.74% $8.625 06/01/05 $ 35,112 $ 81,827
11,333 (4) 0.84% $8.625 01/01/06 $ 39,793 $ 92,734
Thomas L. Parkinson..... New Grants 12,500 (1) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
12,500 (2) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
Timothy M. Dorgan....... New Grant 12,500 (1) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
Repriced Options 100,000 (3) 7.42% $7.875 06/11/05 $215,059 $600,961
Replacement Options 10,135 (4) 0.75% $8.000 10/30/03 $ 22,401 $ 49,500
John A. Furton.......... New Grant 12,500 (1) 0.93% $6.000 12/15/06 $ 35,809 $ 85,769
Repriced Options 50,000 (3) 3.71% $7.875 06/11/05 $107,530 $300,480
Replacement Options 8,225 (4) 0.61% $7.500 12/31/02 $ 13,294 $ 28,629
16,000 (4) 1.19% $7.500 01/01/03 $ 25,861 $ 55,692
2,541 (4) 0.19% $7.500 12/31/03 $ 5,265 $ 11,635
</TABLE>
- --------
(1) These stock options vest with respect to 1/4th of the options on the first
anniversary of the date of grant, and thereafter with respect to 1/48th on
the last day of each month and are exerciseable until the eighth
anniversary of the date of grant.
(2) These stock options vest with respect to 1/48th on the last day of each
month and are exerciseable until the eighth anniversary of the date of
grant.
(3) These stock options represent the repriced options that vest according to
the schedule of the original stock options. The original stock options vest
with respect to 1/4th of the options on the first anniversary of the date
of grant, and thereafter with respect to 1/48th on the last day of each
month and are exerciseable until the eighth anniversary of the date of
grant.
(4) These stock options are fully vested.
(5) These stock options represent repriced options which are fully vested.
Option Exercises in Fiscal 1998 and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Options as of Option Value as of
Shares December 31, 1998 December 31, 1998 (1)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew B. Parkinson..... -- $ -- 142,928 65,792 $613,979 $ 23,713
John C. Walden.......... 63,486 $264,995 81,894 117,501 $ 5,020 $126,205
Thomas L. Parkinson..... -- $ -- 152,716 65,792 $648,839 $ 23,713
Timothy M. Dorgan....... 19,697 $113,258 93,945 102,501 $120,885 $ 53,272
John A. Furton.......... 119,094 $692,450 60,662 53,293 $ 25,192 $ 13,550
</TABLE>
- --------
(1) Represents the aggregate dollar value of in-the-money, unexercised options
held at the end of the year, based on the difference between the exercise
price and $6.8125, the closing price for the Common Stock as of December
31, 1998, the last trading day in fiscal 1998, as reported for Nasdaq
National Market Issues in The Wall Street Journal.
7
<PAGE>
Report on Repricing of Options by the Compensation Committee
In connection with the Company's Initial Public Offering, the Compensation
Committee granted options to purchase an aggregate of 350,000 shares of Common
Stock to the executive officers at that time and in addition, approved the
granting to key employees of options to purchase an aggregate of 460,000
shares of Common Stock. In light of the fact that the exercise price of the
stock options granted at the time of the Initial Public Offering was
significantly higher than the market price of Common Stock subsequent to the
grant date, the Compensation Committee determined that such stock options did
not have the intended effect of enhancing the Company's ability to attract and
retain executives in competition with technology and growth-oriented
companies. Consequently, after careful consideration and deliberation over a
period of time, the Compensation Committee passed a resolution on May 1, 1998
by which the exercise price of 637,464 options held by certain nondirector
executive officers, senior managers and other employees was reduced from
$16.00 to $7.875 per share, which reflects 110 percent of the market value of
the shares as of the date of the resolution. Furthermore, the repriced options
were subject to a prohibition on exercise for six months after the date of the
repricing.
The Company has not repriced options in the past ten years except as
described above. The following table sets forth certain information concerning
the repricing of options held by any executive officer during the last ten
fiscal years. The exercise price of options held by directors of the Company
did not change.
THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
Trygve E. Myhren (Chairman)
Tasso H. Coin
Mark VanStekelenburg
8
<PAGE>
10-Year Option Repricings
<TABLE>
<CAPTION>
Length of
Number of Market Original
Securities Price Of Exercise Option Term
Underlying Stock At Price At New Remaining At
Options Time Of Time Of Exercise Date of
Name Date Repriced Repricing Repricing Price Repricing(1)
---- ------ ---------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Andrew B. Parkinson..... -- -- -- -- -- --
Chairman, President
and Chief Executive
Officer
John C. Walden.......... 5/1/98 102,000 $7.125 $16.00 $7.875 7 years
Chief Operating Officer
Thomas L. Parkinson..... -- -- -- -- -- --
Executive Vice
President--Chief
Technology Officer and
Director
Timothy M. Dorgan....... 5/1/98 100,000 $7.125 $16.00 $7.875 7 years
Executive Vice
President--Marketing
John A. Furton.......... 5/1/98 50,000 $7.125 $16.00 $7.875 7 years
Senior Vice President--
Chief
Information Officer
Carl E. Alguire......... 5/1/98 35,000 $7.125 $16.00 $7.875 7 years
Senior Vice President--
Fulfillment Operations
Dan Rabinowitz.......... 5/1/98 20,000 $7.125 $16.00 $7.875 7 years
Vice President--Chief
Financial Officer
William J. Christopher.. 5/1/98 5,000 $7.125 $16.00 $7.875 7 years
Vice President--Member
Services
Michael P. Brennan...... 5/1/98 5,000 $7.125 $16.00 $7.875 7 years
Vice President--Product
Management
</TABLE>
- --------
(1) The original term of the options that were repriced was eight years.
Employment Agreements
The Company has employment agreements and severance agreements with each of
the Named Executives. The agreements set forth compensation arrangements,
including base salaries and minimum targets for annual bonuses. The agreements
expire in 2002, and are renewable thereafter for one-year terms. The Company
may terminate a Named Executive's employment with or without "cause," as
defined in such agreements, and a Named Executive may terminate his employment
for any reason, including "good reason," as defined in such agreements. Upon
termination by the Company without "cause," or termination by the employee for
"good reason," such Named Executive is entitled to severance payments equal to
his base salary and bonus for 18 months. In the event there is a "change in
control," as defined in the severance agreements, prior to such termination,
the Named Executive is entitled to a lump sum severance payment equal to his
base salary and bonus for two years, and the vesting of all of such Named
Executive's stock options will be accelerated so that all such stock options
become immediately exercisable. The current annual salary rates under the
employment agreements for the Company's Named Executives are as follows: Mr.
A. Parkinson, $140,000; Mr. Walden, $154,500; Mr. T. Parkinson, $140,000; Mr.
Dorgan, $121,900; and Mr. Furton, $118,450. Under the terms of the agreements,
annual salaries may not be reduced; however, increases in annual salaries are
at the discretion of the Board of Directors. The Company also has agreements
with the Named Executives containing confidentiality,
9
<PAGE>
non-competition and non-solicitation provisions between the Company and such
employees for the terms set forth in each agreement.
Management Bonus Plan
Each of the Named Executives is eligible to receive an annual bonus based
on the achievement of individual and corporate goals. Awards are determined by
the Compensation Committee.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
All compensation decisions for the Chief Executive Officer and each of the
other Named Executives are currently made by the Compensation Committee of the
Board of Directors. The Compensation Committee consists of Messrs. Trygve E.
Myhren (Chairman), Tasso H. Coin and Mark VanStekelenburg. Each member of the
Compensation Committee is a non-employee director who has not previously been
an officer or employee of the Company.
Compensation Report by the Compensation Committee
This report is submitted by the Compensation Committee of the Board of
Directors.
Compensation Policies. The Compensation Committee sets the compensation of
the Chief Executive Officer and also sets the compensation of the other
executive officers and all vice presidents, taking into consideration the
recommendations of the Chief Executive Officer. All other employees'
compensation is set by the Chief Executive Officer subject to the review of
the Compensation Committee. The Compensation Committee also administers the
Company's stock-based compensation plans. The Compensation Committee consists
of three non-employee directors.
The philosophy of the Compensation Committee and the Company is to provide
competitive salaries as well as competitive incentives designed to:
. Attract and retain well qualified executives necessary to the Company's
long-term success;
. Provide incentives for achievement of short-term individual, business
unit and corporate goals;
. Provide incentives for achievement of long-term business unit and
corporate goals; and
. Align the interests of management with those of the stockholders to
encourage the achievement of continuing increases in stockholder value.
The compensation mix reflects a balance of annual base salary payments,
annual incentive bonus payments, long-term stock based incentives and other
competitive executive benefits. Incentive compensation has historically been
determined on an annual basis. Beginning in 1998, the Compensation Committee
also began to take into account quarterly performance of the Chief Executive
Officer and other executive officers.
Base. It is the Compensation Committee's policy to establish base salaries
and provide benefit packages at competitive levels in order to attract and
retain well qualified executives. Base salaries of senior executives are based
on several factors including an assessment of the position and particular
responsibilities of such officer, the performance of the Company, comparable
companies, the economy in general and such other factors as the Compensation
Committee may deem relevant. The 1998 average base salary of senior executives
did not increase over the previous year's level.
Annual Bonus Plan. The annual bonus plan in effect for 1998 was designed to
provide incentives and rewards for achievement of short-term individual goals
as well as business unit and Company goals by giving salaried employees the
opportunity for bonuses based on individual performance, the performance of
the business
10
<PAGE>
unit to which the employee is assigned, and the Company's performance. In the
case of executive officers, the bonus is based on the achievement of
individual performance goals (25-50% weighting) and the performance of the
Company and/or the applicable business unit (50-75%). Individual performance
goals are tailored to each individual's position and duties and vary in terms
of number, scope and substance among the eligible employees. Individual
performance goals for employees are established by management and then
reviewed with the employee. The performance goals for each business unit and
the Company as a whole relate to the achievement of predetermined financial or
operating factors. Company and business unit quarterly goals are established
before the start of each fiscal year and are reviewed and approved by the
Compensation Committee. Awards under the annual bonus plan are based on a
percentage of earned salary. Bonuses are conditioned on achieving minimum or
"threshold" goals. During 1998, bonuses were paid out for employee's
achievement of individual performance goals, certain business unit operating
results and total Company performance.
Long-Term Stock-Based Incentives. Stock option awards are designed to
encourage long-term commitment to the Company by participating executives,
more closely align executive and stockholder interests and reward executives
and other key employees for building stockholder value. The Compensation
Committee recognizes that the Company competes for executives with other
technology and growth-oriented companies and believes that stock ownership by
management is a critical element of compensation. Stock-based awards have been
granted by the Company to executives and other key employees since the
Company's inception.
Stock options are granted at the fair market value price of the Common
Stock on the date of grant, are subject to vesting over time and only have
future value for the employees if the stock price appreciates from the date of
grant. Factors influencing stock-based grants to employees include performance
of the Company, relative levels of responsibility, contributions to the
business of the Company and competitiveness with other technology and growth-
oriented companies. As of December 31, 1998, approximately 60% of full-time
employees held stock options.
To encourage stock ownership by executives, replacement stock options
("Replacement Options") are granted, at the executive's election,
simultaneously with the exercise of the original stock option. Replacement
Options are intended to encourage an executive to exercise a stock option
earlier than might otherwise occur, thereby encouraging increased share
ownership by the executive. Replacement Options are granted when an executive
exercises an option by surrendering (or attesting to) currently owned shares
to purchase the shares subject to the option as well as to satisfy tax
withholding obligations related to the exercise of the option. The number of
shares with respect to which Replacement Options are granted is equal to the
number of shares so surrendered. Replacement Options are subject to the same
terms and conditions as the original options, including the expiration date,
except that the option price of a Replacement Option is the fair market value
on the date of its grant rather than the option price of the original option,
and Replacement Options are exercisable at the time of the award.
Section 162(m) of the Internal Revenue Code of 1986. Section 162(m) of the
Internal Revenue Code of 1986 (the "Code") generally limits to $1 million the
amount that a publicly held corporation is allowed each year to deduct for the
compensation paid to each of the corporation's chief executive officer and the
corporation's four most highly compensated officers other than the chief
executive officer, subject to certain exceptions. One such exception is
"qualified performance-based" compensation. Compensation attributable to a
stock option or a stock appreciation right is "qualified performance-based
compensation" if all of the following conditions are satisfied: (i) the grant
or award is made by a compensation committee consisting solely of two or more
"outside directors"; (ii) the plan under which the option or right is granted
states the maximum number of shares with respect to which options or rights
may be granted during a specified period to any individual; (iii) under the
terms of the option or right, the amount of compensation the employee could
receive is based solely upon an increase in the value of the stock after the
date of grant or award; and (iv) the material terms of the plan under which
the option or right is granted are disclosed to the publicly held
corporation's stockholders and approved by them before any compensation under
the plan is paid. The Compensation Committee consists solely of "outside
directors," as defined for purposes of Section 162(m) of the Code. The
Company's stock-based
11
<PAGE>
incentive plan was approved by the stockholders of the Company prior to the
Initial Public Offering. Due to these and other reasons, the Company does not
believe that the $1 million deduction limitation should have any effect on the
Company in the near future. If the $1 million deduction limitation is expected
to have any effect on the Company in the future, the Company will consider ways
to maximize the deductibility of executive compensation, while retaining the
discretion the Company deems necessary to compensate executive officers in a
manner commensurate with performance and the competitive environment for
executive talent.
Benefits. Benefits offered to key executives are largely those that are
offered to the general employee population, such as group health and life
insurance coverage and participation in the Peapod, Inc. Employee Stock
Purchase Plan. Benefits are not tied directly to corporate performance.
Chief Executive Officer. The Chief Executive Officer's Compensation is based
upon the policies and objectives discussed above. Mr. Andrew Parkinson's annual
base salary was $140,000 at the end of 1998, which represents no increase over
1997 levels. Mr. Parkinson received a bonus of $21,315 based on 1998
performance. Going forward, 100% of Mr. Parkinson's bonus opportunity will be
based on target financial and operating results of the Company established at
the beginning of the fiscal year.
In December 1998, Mr. Parkinson was granted options to purchase 25,000
shares of Common Stock (at an exercise price of $6.00 per share) based on 1998
performance. See "Summary Compensation Table."
The Compensation Committee believes that the Company's executive
compensation policies and programs serve the interests of the Company and its
stockholders.
THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
Trygve E. Myhren (Chairman)
Tasso H. Coin
Mark VanStekelenburg
12
<PAGE>
Performance Graph
The rules of the Securities and Exchange Commission ("SEC") require each
public company to include a performance graph comparing the cumulative total
stockholder return on such company's common stock for the five preceding fiscal
years, or such shorter period as the registrant's class of securities has been
registered with the SEC, with the cumulative total returns of a broad equity
market index and a peer group or similar index. The Common Stock began trading
on the Nasdaq Stock Market under the symbol "PPOD" on June 10, 1997.
Accordingly, the performance graph included in this Proxy Statement shows the
period from June 10, 1997 through December 31, 1998.
The following chart graphs the performance of the cumulative total return to
stockholders (stock price appreciation plus dividends) between June 10, 1997
and December 31, 1998 in comparison to The Nasdaq Composite Index and the
Hambrecht & Quist Technology Index (the "Technology Index") comprised of
securities of technology companies traded on the Nasdaq Stock Market, the New
York Stock Exchange and the American Stock Exchange.
COMPARISON OF CUMULATIVE TOTAL RETURN
Among Peapod, Inc., The Nasdaq Stock Market--U.S. Index
and the Technology Index
<TABLE>
<CAPTION>
6/10/97 12/31/97 12/31/98
------- -------- --------
<S> <C> <C> <C>
Peapod, Inc........................................... $100.00 $ 40.63 $ 42.58
The Nasdaq Stock Market--U.S. Index................... $100.00 $112.75 $158.49
Technology Index...................................... $100.00 $106.41 $165.52
</TABLE>
Assumes $100.00 invested on June 10, 1997 in Peapod, Inc. Common Stock, The
Nasdaq Stock Market-U.S. Index and the Technology Index. Cumulative total
return assumes reinvestment of dividends.
13
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 31, 1999 by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each of the
Named Executives and (iv) all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
Amount of
Beneficial Percent of
Name of Beneficial Owner(1) Ownership Class(2)
- --------------------------- ---------- ----------
<S> <C> <C>
Tribune National Marketing Company
435 North Michigan Avenue
Chicago, Illinois 60611................................. 1,808,115 10.5%
Tasso H. Coin (3)+....................................... 247,403 1.4%
Timothy M. Dorgan (4)+................................... 124,881 *
John A. Furton (5)+...................................... 205,311 1.2%
Robert S. Goodale (6)+................................... 11,000 *
Trygve E. Myhren (7)+.................................... 55,988 *
Andrew B. Parkinson (8)+................................. 1,041,180 6.0%
Thomas L. Parkinson (9)+................................. 1,135,601 6.6%
Seth L. Pierrepont (10)+................................. 414,619 2.4%
Mark VanStekelenburg (11)+............................... 7,100 *
John C. Walden (12)+..................................... 70,908 *
All executive officers and directors as a group (14
persons)................................................ 3,424,398 19.8%
</TABLE>
- --------
+The mailing address of each of these individuals is c/o Peapod, Inc., 9933
Woods Drive, Skokie, Illinois 60077.
(1) The information presented in this table is based solely on information
contained in Schedule 13Gs filed by the beneficial owners with the
Securities and Exchange Commission or information furnished to the
Company. Except as set forth in the footnotes to this table, the persons
named in the table above have sole voting and investment power with
respect to all shares shown as beneficially owned by them.
(2) Number of shares deemed outstanding includes 17,296,590 shares outstanding
as of March 31, 1999 and any shares subject to options held by the person
or entity in question that are currently exercisable or will become
exercisable within 60 days. Percentages of less than 1% are indicated by
an asterisk.
(3) Includes 10,000 shares owned by Mr. Coin's wife. Mr. Coin disclaims
beneficial ownership of such shares. Includes 11,667 shares of Common
Stock issuable pursuant to options that are exercisable within 60 days.
(4) Includes 109,779 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(5) Includes 66,496 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(6) Includes 10,000 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(7) Includes 11,667 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(8) Includes 150,845 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(9) Includes 61,425 shares held for the benefit of the minor children of Mr.
Andrew B. Parkinson. Mr. Thomas L. Parkinson disclaims beneficial
ownership of such shares. Also includes 2,961 shares owned by his minor
son and 160,633 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
(10) Includes 215,819 shares of Common Stock issuable pursuant to options that
are exercisable by Mr. Pierrepont or Sage Venture Management Incorporated
within 60 days. Excludes an aggregate of 42,833 shares held by various
trusts for the benefit of his children, with respect to which shares Mr.
Pierrepont disclaims beneficial ownership.
(11) Includes 3,100 shares held for the benefit of his minor children. Mr.
VanStekelenburg shares voting and dispositive power with respect to these
shares with his wife.
(12) Includes 25,896 shares of Common Stock issuable pursuant to options that
are exercisable within 60 days.
14
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder require the Company's directors and executive
officers and persons who are deemed to own more than ten percent of the Common
Stock (collectively, the "Reporting Persons"), to file certain reports
("Section 16 Reports") with the SEC with respect to their beneficial ownership
of Common Stock. The Reporting Persons are also required to furnish the Company
with copies of all Section 16 Reports they file.
Based solely on a review of the forms it has received and on written
representations from certain Reporting Persons that no such forms were required
for them, the Company believes that during fiscal 1998 all Section 16 filing
requirements applicable to its directors, executive officers and greater than
10% beneficial owners were complied with by such persons except with respect to
the following: each of Messrs. Alguire, Myhren, A. Parkinson, T. Parkinson,
Pierrepont and VanStekelenberg inadvertently failed to report timely a
transaction or transactions on Form 4, and each of Messrs. Brennan and
Christopher inadvertently failed to file timely a report on Form 3.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Registration Rights
The Company has granted to Messrs. Andrew and Thomas Parkinson and to
certain stockholders (the "Holders") certain rights (the "Registration Rights")
to require the Company to take action to register under the Securities Act of
1933, as amended (the "Securities Act"), the sale of shares of Common Stock
(the "Registrable Shares") held by them. The number of such registrations which
the Company is obligated to effect is limited to four registrations in the
aggregate. Such Registration Rights, as well as rights granted to Mr. Tasso
Coin, a director of the Company (the "Piggyback Rights"), provide that in the
event the Company proposes to register any of its securities under the
Securities Act at any time or times, subject to certain limitations, the
Company will use its best efforts to include the Registrable Shares and a pro
rata portion of Mr. Coin's shares in such registration upon the request of the
Holders or Mr. Coin. The Company is generally required to bear the expenses of
all such registrations, except underwriting discounts and commissions.
Other
The Liquidation. Peapod Liquidating Corp., a Delaware corporation ("PLC"),
the general partner of the Company's predecessor, was liquidated on January 21,
1998. The 3,106,293 shares of the Common Stock of the Company owned by PLC were
distributed to the shareholders of PLC in proportion to their relative
ownership interests in PLC.
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG LLP, who served as the Company's independent public
accountants for the last fiscal year, are expected to be present at the Annual
Meeting and will have an opportunity to make a statement and to respond to
appropriate questions raised by stockholders at the Annual Meeting or submitted
in writing prior thereto.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials for
the 2000 Annual Meeting of Stockholders, any stockholder proposal must be
addressed to Peapod, Inc., 9933 Woods Drive, Skokie, Illinois 60077, Attention:
Secretary, and must be received no later than December 11, 1999.
15
<PAGE>
The Company's By-laws set forth additional requirements and procedures
regarding the submission by stockholders of matters for consideration at an
annual meeting of stockholders. A stockholder proposal or nomination intended
to be bought before the 2000 Annual Meeting must be received by the Secretary
in writing on or before January 10, 2000. A nomination or proposal that does
not comply with such requirements and procedures will be disregarded.
EXPENSES OF SOLICITATION
Your proxy is solicited by the Board of Directors and its agents and the
cost of solicitation will be paid by the Company. Officers, directors and
regular employees of the Company, acting on its behalf, may also solicit
proxies by telephone, facsimile transmission or personal interview. The
Company will, at its expense, request brokers and other custodians, nominees
and fiduciaries to forward proxy soliciting material to the beneficial owners
of shares of record by such persons.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY (WITHOUT EXHIBITS) OF ITS
ANNUAL REPORT ON FORM 10-K (THE "REPORT") FOR THE FISCAL YEAR ENDED DECEMBER
31, 1998, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, UPON
THE WRITTEN REQUEST OF ANY STOCKHOLDER AS OF THE RECORD DATE. THE COMPANY WILL
PROVIDE COPIES OF THE EXHIBITS TO THE REPORT UPON PAYMENT OF A REASONABLE FEE
THAT WILL NOT EXCEED THE COMPANY'S REASONABLE EXPENSES INCURRED IN CONNECTION
THEREWITH. REQUESTS FOR SUCH MATERIALS SHOULD BE DIRECTED TO PEAPOD, INC.,
9933 WOODS DRIVE, SKOKIE, ILLINOIS 60077, TELEPHONE (847) 583-9400, ATTENTION:
MELODY BASSO.
OTHER BUSINESS
It is not anticipated that any matter will be considered by the
stockholders other than those set forth above, but if other matters are
properly brought before the Annual Meeting, the persons named in the proxy
will vote in accordance with their best judgment.
By order of the Board of Directors,
/s/ Andrew B. Parkinson
ANDREW B. PARKINSON
Chairman, President and Chief
Executive Officer
ALL STOCKHOLDERS ARE URGED TO SIGN, DATE
AND MAIL THEIR PROXIES PROMPTLY.
16
<PAGE>
PEAPOD, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Andrew B. Parkinson and John C. Walden, or
either of them, the attorney or attorneys and proxy or proxies of the
undersigned with full power of substitution to attend the 1999 Annual Meeting of
Stockholders of Peapod, Inc. (the "Company") to be held at the Hyatt Regency
Hotel, 5 Embarcadero Center, San Francisco, California at 10:00 a.m., California
time on May 12, 1999 and at any adjournment thereof, to vote all shares of stock
of the Company that the undersigned shall be entitled to vote. Said proxies are
instructed to vote on the matters set forth in the proxy statement as specified
on the reverse. The Board of Directors recommends a vote FOR all of the nominees
listed on the reverse.
. FOLD AND DETACH HERE .
<PAGE>
[X] Please mark your votes as in this example. 2179
This proxy, when properly signed and dated, will be voted in the manner
directed by the undersigned Stockholder. If no direction is made, this proxy
will be voted FOR all nominees stated below.
1. Election of Directors
FOR WITHHELD
[_] [_]
Class II - Term to Expire at 2002 Annual Meeting
Thomas L. Parkinson
Seth L. Pierrepont
(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name in the blank space below.)
- -------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark here if you plan to attend the meeting. [_]
Please sign exactly as name appears to the left. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If a corporation, please sign in
full corporate name by authorized officer. If a partnership, please sign in
partnership name by authorized person. If more than one trustee, all should
sign. This proxy may be revoked any time prior to its exercise.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SIGNATURE(S) DATE
. FOLD AND DETACH HERE .
