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Employment Agreement - Peapod Inc. and Thomas L. Parkinson

                              EMPLOYMENT AGREEMENT

          Employment Agreement (the "Agreement") dated as of June 9, 1997
between Thomas L. Parkinson (the "Executive") and Peapod, Inc., a Delaware
corporation (the "Company" or "Employer"). The Company's principal office is
located at 1033 University Place, Suite 375, Evanston, Illinois 60201.

          WHEREAS, the Company desires to continue to employ the Executive as
its Executive Vice President-Chief Technology Officer, and the Executive desires
to continue such employment, for the term and upon the other conditions
hereinafter set forth; and

          WHEREAS, concurrently herewith, the Executive and the Company are
entering into a Severance Agreement (the "Severance Agreement") providing for
certain substantial severance benefits.

          NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the Executive and the Company hereby agree as follows:

                                   ARTICLE I

          Section 1.01.  Position; Term; Responsibilities.  The Company shall
employ the Executive as its Executive Vice President-Chief Technology Officer
for a term commencing on the date hereof (the "Commencement Date") and ending on
the fifth anniversary of the Commencement Date (subject to automatic extension
as provided in Section 1.03, the "Employment Period").  Subject to the powers,
authorities and responsibilities vested in the Board of Directors (including any
committees thereof, the "Board") of the Company and the Chief Executive Officer
of the Company (the "Company CEO"), the Executive shall oversee the technology
development and implementation activities of the Company and have the
responsibility and authority for the formulation and execution of the policies
relating to, and the administration of, such activities.  The Executive shall
hold the title of Executive Vice President-Chief Technology Officer or such
other or additional title as is not inconsistent with the aforementioned
responsibilities and shall report to the Company CEO.  The Executive shall also
perform such other executive and admini strative duties for the Company and its
subsidiaries and affiliates

(not inconsistent with the position of Executive Vice President-Chief Technology
Officer), as may from time to time be authorized or directed by the Company CEO.
The Executive agrees to be employed by the Company in all such capacities, as
such capacities may be amended from time to time by written agreement between
Employer and the Executive, for the Employment Period, subject to all the
covenants and conditions hereinafter set forth.

          Section l.02.  Duties.  During the Employment Period, the Executive
shall perform faithfully the duties assigned to him hereunder to the best of his
abilities and devote his full and undivided business time and attention to the
transaction of the Company's business and not engage in any other business
activities except with the approval of the Company CEO.  The previous sentence
shall not preclude the Executive from participating in the affairs of any
governmental, educational or other charitable institution so long as the Board
does not determine in good faith that such activities unreasonably interfere
with the business of the Company or the performance by Executive of his duties

          Section 1.03.  Automatic Extension of Employment Term; Termination.

          (a)  The Employment Term shall be automatically extended for
successive one-year periods on the fifth anniversary of the Commencement Date
and each succeeding anniversary unless either party has delivered notice to the
contrary (a "Non-Extension Notice") to the other party not less than one year
prior to such anniversary.

          (b)  The term of this Agreement shall be the Employment Term (as
extended as provided in Section 1.03); provided that, the Company and the
Executive each shall have the right to terminate this Agreement at any time
during the Employment Term, subject to the rights and obligations of such
parties as set forth in the Severance Agreement.

                                   ARTICLE II

          Section 2.01.  Base Compensation.  As compensation for his services
hereunder, the Company shall pay to the Executive during the Employment Period a
minimum annual salary of $140,000 (the "Base Salary"), less required or
authorized deductions, payable in installments in accordance with the Company's
normal payment schedule for senior management of the Company. The Executive's
salary may be increased from time to time above the Base Salary required by this
Section 2.01 at the discretion of the Board.


          Section 2.02.  Bonus Plan.  The Executive shall be entitled to
participate in a management bonus plan as modified by the Board from time to
time.  Such plan shall, at a minimum, provide for an opportunity for the
Executive to earn a cash bonus on an annual basis of up to 30% of the
Executive's Base Salary received for the year as to which such bonus is earned
(the "Target Bonus"), based on the meeting of performance goals (such as
individual, departmental or Company-wide goals) as may be set from time to time
by the Board in its absolute discretion (i.e., the Executive shall be entitled
to receive a cash bonus with respect to such year of 30% of Base Salary if the
levels of such performance goals are fully achieved for such year).  This
Section 2.02 shall not limit the Board's ability to establish management bonus
plans providing for a greater Target Bonus for the Executive or to provide a
cash bonus for the Executive in any given year that is greater than the Target

          Section 2.03.  Employee Benefits.  The Executive shall be entitled to
participate in incentive compensation plans of the Company that are applicable
to the Executive during the Employment period and shall be eligible for payments
consistent with the terms of such plans.  Upon satisfaction of any eligibility
requirements, during the Employment Period, the Executive shall be entitled to
participate in such employee benefit plans and to receive such other fringe
benefits as are from time to time made generally available to the senior
management of the Company; provided that if a severance benefit is payable to
the Executive pursuant to Section 2.05, such benefit shall be paid in lieu of
any benefit otherwise payable to Executive pursuant to any Company severance
plan unless such plan expressly provides that payments thereunder will be made
in addition to the severance payments provided hereunder.  As of the date
hereof, such plans include a 401(k) plan, automobile allowance program, life
insurance program and long-term disability plan.  Nothing herein shall be
construed to require the Company to establish, or shall preclude the Company, in
its absolute discretion, from changing or amending, in whole or in part, or
revoking, any one or more of such employee benefit plans or programs without
notice.  In addition, the Executive shall be entitled to take time off for
vacation or illness in accordance with the Company's policies with respect
thereto established from time to time with respect to the Company's senior

          Section 2.04.  Expense Reimbursements.  The Company shall reimburse
the Executive for all proper expenses incurred by Executive in the performance
of Executive's duties hereunder in accordance with the policies and procedures 
estblished by the Board.

          Section 2.05.  Severance Benefits; Severance Agreement. Concurrently
herewith, the Executive and Peapod are entering into 


the Severance Agreement which provides certain substantial severance benefits
for the Executive in the event of termination of the Executive's employment with
the Company.  The Executive shall be entitled to the benefits of such Severance
Agreement as if the provisions thereof were set forth fully herein.

                                  ARTICLE III
                    Noncompetition; Confidential Information

          Section 3.01.  Noncompetition; Non-Solicitation.  As a condition to
the Executive's employment hereunder and to the Company's obligations hereunder,
the Executive agrees to enter into, concurrently with his execution of this
Agreement, an "Employee Nonsolicitation and Noncompete Agreement" in the form
attached hereto as Exhibit A, and the Executive agrees to comply fully with all
of the terms and provisions of such "Employee Nonsolicitation and Noncompete
Agreement" as if such terms and provisions were fully set forth in this
Agreement.  The covenants contained in such "Employee Nonsolicitation and
Noncompete Agreement" shall survive the conclusion of the Executive's employment
by the Company as set forth therein.

                                   ARTICLE IV

          Section 4.01.  Notices.  Any notice or request required or permitted
to be given hereunder shall be sufficient if in writing and delivered personally
or sent by registered or certified mail, return receipt requested, as follows:
if to the Executive, to the address of Executive as set forth in the records of
the Company, and if to the Company, to its address hereinabove set forth, 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.

          Section 4.02.  Authority; No Conflict.  The Executive represents and
warrants to the Company that the Executive has full 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 the Executive will not conflict with or
result in a breach of the terms, conditions or provisions of any agreement,
restriction or obligation by which the Executive is bound.

          Section 4.03.  Assignment and Succession.  The 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.  The


Executive acknowledges that the services he renders pursuant to this Agreement
are unique and personal. Accordingly, the Executive may not assign any of the
Executive's rights contained in this Agreement or delegate any of his duties
hereunder. 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.

          Section 4.04.  Headings.  The Article, Section paragraph and
subparagraph headings are for convenience of reference only and shall not define
or limit the provisions hereof.

          Section 4.05.  Applicable Law.  This Agreement shall at all times be
governed by and construed, interpreted and enforced in accordance with the
internal laws (as opposed to conflict of laws provisions) of the State of

          Section 4.06.  Severability.  Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law.  In the event that any 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.

          Section 4.07.  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.

          Section 4.08.  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 Employments Disputes, to
the extent not inconsistent with this provision.  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 under the Employee Nonsolicitation and Noncompete
Agreement required hereunder to be executed by the Executive.

          Section 4.09.  Entire Agreement.  This Agreement, together with the
"Employee Nonsolicitation and Noncompete Agreement" and the Severance Agreement,
contain the entire agreement of the parties relating to the subject matter
hereof including, but not limited to, any previous written agreements concerning
Executive's employment with Employer.  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.


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

                                PEAPOD, INC.

                                   Andrew B. Parkinson
                                     Chairman, President and Chief
                                     Executive Officer

                                THOMAS L. PARKINSON

                                Thomas L. Parkinson


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