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                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, dated as of the 19th day of September 1999, by and
between Webvan Group, Inc., (the "Company"), and George T. Shaheen, the
undersigned executive (the "Executive").


                                     Recital

        The Company desires to retain the services of Executive, and Executive
desires to be employed by the Company, on the terms and subject to the
conditions set forth in this Agreement;

        NOW, THEREFORE, in consideration of the foregoing recital and the
respective undertakings of the Company and Executive set forth below, the
Company and Executive agree as follows:

        1.     Employment.

               a.   Duties. The Company agrees to employ the Executive as
President and Chief Executive Officer, and the Executive agrees to perform such
reasonable responsibilities and duties as may be required of him by the Company
consistent with that position. Executive's employment with the Company shall
commence on September 19, 1999 ("Employment Commencement Date"). Executive shall
report directly to the Board of Directors of the Company (the "Board").

               b.   Employment At-Will. The Company and the Executive
acknowledge and agree that the Executive's employment is at-will, as defined
under applicable law and may be terminated at any time, with or without Cause.
If the Executive's employment terminates for any reason, the Executive shall not
be entitled to any payments, benefits, damages, awards or compensation other
than as provided in Sections 3 and 4 of this Agreement.

               c.   Board Membership. Upon the Employment Commencement Date,
Executive shall be appointed to the Board. Thereafter during the Executive's
employment with the Company, the Company agrees to nominate Executive for Board
membership when Executive's term as a member of the Board is due to expire.
Subject to continued election to the Board by the Company's stockholders,
Executive shall remain a member of the Board during the period of his employment
with the Company.

               d.   Obligations. During the Executive's employment with the
Company, Executive shall devote his full business efforts and time to the
Company. Executive agrees not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration
without the prior approval of the Board during his employment with the Company;
provided, however, that Executive may serve in any capacity with the civic,
educational or charitable




<PAGE>   2

organization, or as a member of corporate boards of Directors or committees
thereof upon which Executive currently serves, without the approval of the
Board.

        2.     Compensation and Benefits.

               a.   Base Compensation. The Company shall pay the Executive as
compensation for his services an annual base salary of $500,000. Such salary
shall be subject to applicable tax withholding and shall be paid periodically in
accordance with normal Company payroll practices. The annual compensation
specified in this Section 2(a), together with any increases in such compensation
that the Board may, in its sole discretion, approve from time to time, is
referred to in this Agreement as "Base Compensation."

               b.   Bonus. Executive shall be eligible for an annual target
bonus equal to fifty percent (50%) of his Base Compensation upon attainment of
performance goals as determined by the Board after consultation with Executive
(the "Target Bonus"). For the fiscal year in which Executive commenced
employment with the Company, such Target Bonus shall be prorated. The Board
shall have discretion to pay Executive an amount greater than the Target Bonus
for performance exceeding the performance goals and less than the Target Bonus
for performance failing to reach the performance goals. The Target Bonus shall
be paid within ninety (90) days of the end of the Company's fiscal year subject
to Executive being employed at the end of such fiscal year.

               c.   Executive Benefits. Executive shall be eligible to
participate in each employee benefit plan, arrangement, fringe benefit or
perquisite, which is currently available or which becomes available, with the
adoption or maintenance of such plans or arrangements to be in the discretion of
the Company, on terms which are at least as favorable as that enjoyed by any
other officer of the Company, subject in each case to the generally applicable
terms and conditions of the plan or arrangement in question and to the
determination of any committee administering such plan or arrangement.
Notwithstanding the foregoing, Executive (and his dependents, if applicable)
shall not participate in any of the Company's group health plans during such
period of time and to the extent that Executive (and his dependents, if
applicable) receives group health coverage through another group health plan. In
addition, during such time that Executive shall not participate in one or more
of the Company's group health plans, the Company shall pay to Executive monthly
a sum equal to the amount paid by the Company for an employee with one dependent
who participates in that group health plan that carries the highest cost to the
Company.

               d.   Stock Option. The Company shall grant Executive an option
(the "Option") to purchase 15,000,000 shares of the Company's Common Stock
(after adjustment for the September 21, 1999 3 for 2 stock split). The per share
exercise price for the Option shall be equal to $8.00 per share. The term of the
Option shall be ten (10) years. The Option shall be exercisable immediately by
Executive subject to a repurchase right exercisable by the Company at $8 per
share for any unvested shares upon termination of Executive's employment with
the Company, subject to






                                      -2-
<PAGE>   3

the provisions of Sections 3 and 4 of this Agreement. The Option shall vest as
to 3,000,000 shares as of September 19, 1999 and as to 1/48th of the remaining
shares subject to the Option each month thereafter on the 19th of such month
subject to (i) Executive being employed on such dates and (ii) the additional
vesting provisions of Section 3 and 4 of this Agreement. Except as otherwise
provided herein, the Option shall be granted pursuant to, and shall be governed
by, the Company's 1999 Nonstatutory Stock Option Plan and conform to the
Company's standard policies with respect to options.

               e.   Stock Purchase. Executive shall purchase 1,250,000 shares
(after adjustment for the September 21, 1999 3 for 2 stock split) of the
Company's Common Stock upon the Employment Commencement Date for $13,487,500.00,
the fair market value of the shares (the "Stock Purchase"). The Stock Purchase
shall be fully vested on its grant date. Executive shall make adequate provision
for any federal, state, local or foreign tax withholding obligations of the
Company as soon as possible after the execution of this Agreement.

               f.   Stock Purchase Loan. The Company shall provide Executive
with a loan of $6,743,750.00 (the "Loan"), which is fifty percent (50%) of the
fair market value of the Stock Purchase on its purchase date, for purposes of
satisfying the withholding tax obligations of the Stock Purchase and the Signing
Bonus, upon Executive entering into a non-recourse promissory note (the "Note")
and security agreement covering the Stock Purchase (attached hereto as Exhibits
B and C). The Note shall bear interest at an annual rate of 6.16% compounded
semiannually and payable upon payment of the principal. The Note shall have a
maximum term of thirty (30) years. Except as otherwise provided herein, the Loan
shall be governed by the Note.

               g.   Supplemental Retirement Plan.

                    (i) The Company shall establish a non-discretionary
supplemental retirement arrangement (the "Supplemental Retirement Benefit") to
provide annual cash payments to Executive equal to fifty percent (50%) of the
sum of the (i) annual Base Compensation and (ii) Target Bonus. The Supplemental
Retirement Benefit shall be paid upon Executive's termination of employment for
any reason after June 30, 2000 and shall be paid in equal monthly installments
throughout the year. The Supplemental Retirement Benefit is payable to Executive
for the remainder of his life (or to Executive's spouse if predeceased by
Executive for the remainder of his spouse's life). For the period ending
September 19, 2003, the Supplemental Retirement Benefit shall be calculated as
the Base Compensation and Target Bonus provided for in Sections 2(a) and (b)
herein. After September 19, 2003, Executive's annual benefits shall be equal to
the average of Executive's taxable compensation from the Company for the top
three years in the last five years prior to plus the year of termination of
employment with the Company. The Supplemental Retirement Benefit may be reduced,
in the Company's discretion, to the extent that Executive is entitled to any
social security benefit or any other Company-paid retirement benefit earned
while employed with the Company. For an offset which is defined in terms of an
annual benefit, each offset shall be made in the same year with respect to which
the benefit is paid, and for an offset which is defined in terms of an






                                      -3-
<PAGE>   4

account balance, such offset shall be made in the year following the year in
which the benefit is paid. Except as otherwise provided herein, the Supplemental
Retirement Benefit shall be pursuant to and governed by the Supplemental
Retirement Plan attached hereto as Exhibit D.

                    (ii) The Company shall use its best efforts to fund the
retirement obligation to the extent that such funding does not have any material
adverse effect to the Company other than the cash cost of such funding. To the
extent that Executive acquires a right to receive payments pursuant to the
Supplemental Retirement Benefit, such right shall be no greater than the right
of an unsecured creditor of the Company.

               h.   Signing Bonus. The Company shall pay Executive a signing
bonus upon execution of this Agreement and the Stock Purchase Agreement in an
amount equal to Executive's purchase price for the 1,250,000 shares of the
Company's Common Stock pursuant to Section 2(e) of this Agreement.

        3.     Severance Payments.

               a.   Payments upon Termination. If the Executive's employment
terminates as a result of an Involuntary Termination other than for Cause and
the Executive signs a Release of Claims, then the Company shall pay to Executive
two (2) years of Executive's Base Compensation and two (2) years of Executive's
Target Bonus. Such payments shall be made in equal semi-monthly installments
over a period of twenty-four (24) months commencing on the date of Executive's
termination of employment (the "Severance Period") with such amounts payable on
the 15th and the last day of each calendar month during the Severance Period.
Notwithstanding the foregoing, in the event Executive breaches Section 8 of this
Agreement, as of the date the Company's notice is given to Executive of
Executive's breach of Section 8, (i) all payments under this Section 3 (except
for any payments under Sections 3(d) and 3(e)) shall cease, and (ii) the
Severance Period shall end.


               b.   Benefits. In the event the Executive is entitled to
severance benefits pursuant to Section 3(a), then in addition to such severance
benefits, the Executive shall receive continued fringe, pension, welfare and
other benefits coverage as provided to Executive immediately prior to the
Executive's termination to the extent permissible under applicable law (the
"Company-Paid Coverage"). Executive shall not be required to pay any greater
amount to receive such benefits than Executive was paying prior to termination
of employment. If such coverage included the Executive's dependents immediately
prior to the Executive's termination, such dependents shall also be covered to
the extent covered prior to Executive's termination. For this purpose, "welfare
benefits" shall mean benefits providing for coverage or payment in the event of
Executive's death, disability, illness or injury that were provided to Executive
as of the date of Executive's termination of employment, whether taxable or
non-taxable and whether funded through insurance or otherwise. Company-Paid
Coverage shall continue until the earlier of (i) twenty-four (24) months
following the date of the Involuntary Termination, (ii) the end of the Severance
Period or (iii) in the case of continued health coverage, and only to the extent
Executive participates in the Company's group






                                      -4-
<PAGE>   5

health plan or plans immediately prior to the date of his termination of
employment, the date Executive becomes covered under another employer's group
health plan or plans (to the extent covered under such plans). To the extent
permissible under the Company's group health plans in which Executive
participates in prior to his termination of employment, the Executive's rights
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (the "COBRA
Period") shall begin on the earlier of (i) twenty-four (24) months after the
date of Executive's termination of employment with the Company or (ii) the end
of the Severance Period, otherwise the COBRA Period shall begin on the date of
Executive's termination of employment with the Company. The Company shall make a
reasonable effort to structure the delivery of such benefits so that they shall
be non-taxable to Executive to the maximum extent possible under the applicable
tax laws in effect at the time of Executive's termination of employment from the
Company.

               c.   Stock Options. In the event Executive is entitled to
severance benefits pursuant to Section 3(a), Executive shall continue to vest in
and be entitled to exercise all outstanding options during the Severance Period.
The vested portion of the options shall terminate three (3) months after the end
of the Severance Period or twelve (12) months after the end of the Severance
Period if Executive dies during the Severance Period. Any unvested portion of
any options shall terminate at the end of the Severance Period. In addition, any
repurchase rights in favor of the Company with respect to the purchase of
unvested shares of the Company's Common Stock shall continue to lapse during the
Severance Period in accordance with the respective stock option agreement and
the Company may not exercise its repurchase right until the end of the Severance
Period.

               d.   Miscellaneous. In addition, (i) the Company shall pay the
Executive any unpaid Base Compensation or annual bonus due for periods prior to
the date of Executive's termination; (ii) the Company shall pay the Executive
all of the Executive's accrued and unused vacation through the date of
Executive's termination; (iii) following submission of proper expense reports by
the Executive, the Company shall reimburse the Executive for all expenses
reasonably and necessarily incurred by the Executive in connection with the
business of the Company prior to termination; (iv) Executive shall still have
the right to receive contributions and earnings from the Company's 401(k) plan;
and (v) Executive shall still have his rights under any of the Company's
employee benefits plans, policies or arrangements in accordance with the terms
of such plans, policies and arrangements. Any payments described above shall be
made promptly upon termination and within the period of time mandated by
applicable law.

               e.   Voluntary Resignation; Termination for Cause. If the
Executive's employment terminates by reason of Executive's voluntary resignation
which is not treated as an Involuntary Termination or if the Executive is
terminated for Cause, the Executive shall not be entitled to receive severance
payments or other benefits under this Section 3. Notwithstanding any other
provision of this Agreement to the contrary, the Loan for the Stock Purchase and
the Supplemental Retirement Plan pursuant to Sections 2(f) and (g) of this
Agreement shall remain in






                                      -5-
<PAGE>   6

effect pursuant to their terms and shall not be adversely affected by
Executive's termination of employment for any reason or by any other provision
of the Agreement.

               f.   Death or Disability. If the Executive's employment
terminates as a result of his death or Disability, neither the Executive nor, in
the case of death, Executive's beneficiary or estate, shall be entitled to any
compensation, severance payments, or any other benefits under this Section
except as required by law; provided, however, that Executive shall vest in (and
any repurchase rights shall lapse) as to fifty percent (50%) of the unvested
portion of the Option granted pursuant to Section 2(d) of this Agreement and any
future compensatory stock awards, including stock options, granted by the
Company to Executive. Executive shall have twelve (12) months from the date of
such termination of employment for death or Disability to exercise the vested
portion of such options.

               g.   Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided for under Sections 3 or 4 of this
Agreement by seeking other employment or otherwise. Except as otherwise
specifically provided herein, the receipt of any benefit provided for under
Sections 3 or 4 of this Agreement shall not be reduced by any benefit received
by Executive as a result of employment by another employer or by retirement
after termination of Executive's employment with the Company.

        4.     Change of Control Provision.

        If Executive's employment with the Company is terminated as a result of
an Involuntary Termination other than for Cause upon or within thirteen (13)
months after a Change of Control, then Executive shall be entitled to the
following in addition to the amounts described in Sections 2(f), 2(g) and 3(d):

                    (i) three (3) years of Executive's Base Compensation and
Target Bonus payable in a lump sum within thirty (30) days of termination of
Executive's employment with the Company;

                    (ii) any repurchase rights in favor of the Company with
respect to Common Stock of the Company acquired by the Executive shall lapse;

                    (iii) all outstanding stock options granted by the Company
to Executive shall become fully vested and exercisable for such period of time
as provided for in the respective stock option agreements;

                    (iv) continued welfare, pension, fringe and other benefits
as provided in Section 3(b) above, except that such coverage shall be for three
(3) years from the date of termination of Executive's employment with the
Company in all cases.






                                      -6-
<PAGE>   7

        5.     Confidential Information. Executive agrees to sign the Company's
standard Proprietary Information Agreement attached hereto as Exhibit A (as
modified as necessary to avoid a conflict with the provisions of this
Agreement).

        6.     Definitions. As used herein, the terms have the following
meanings:

               a.   Cause. "Cause" means the Executive's termination only upon:
(i) the commission of an act of fraud or embezzlement which results in loss,
damage or injury to the Company, whether directly or indirectly; (ii)
Executive's violation of Section 8 of this Agreement; and (iii) the conviction
or plea of nolo contendere by Executive to criminal charges relating to a
felony, in connection with the performance of the Executive's obligations to the
Company which shall materially adversely affect the Executive's ability to
perform such obligations. Executive shall be terminated for Cause pursuant to
Section 6(a)(i) or 6(a)(ii) only following: (i) written notice from the Board
outlining the actions or omissions which allegedly constitute Cause; (ii)
failure to cure such actions or omissions to the reasonable satisfaction of the
Board within thirty (30) days following the receipt of written notice by
Executive; and (iii) if Executive so requests, an opportunity for Executive to
meet with the Board, accompanied by one or more representatives, if Executive so
chooses, to discuss resolution of the situation without necessitating
termination of employment.

               b.   Change of Control.

                    (i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or

                    (ii) A change in the composition of the Board occurring
within a two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or

                    (iii) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; provided, however, any person who acquired securities of the
Company prior to the occurrence of a merger or






                                      -7-
<PAGE>   8

consolidation in contemplation of such transaction, and who after such
transaction possesses direct or indirect beneficial ownership of at least ten
percent (10%) of the securities of the Company or the surviving entity
immediately following such transaction shall not be included in the group of
shareholders of the Company immediately prior to such transaction; or

                    (iv) The consummation of the sale, lease or other
disposition by the Company of all or substantially all the Company's assets.

               c.   Disability. "Disability" means a mental or physical
impairment which prevents Executive from performing the responsibilities and
duties of his position to the satisfaction of the Board or in the determination
of Executive's physician.

               d.   Involuntary Termination. "Involuntary Termination" shall
mean: (i) termination by the Company of Executive's employment with the Company
for any reason other than Cause; (ii) a significant reduction in Executive's
title, authority, duties or reporting relationships provided, however, that
after a Change of Control, if Executive is still the Chief Executive Officer and
President of the Company and the Company continues to operate as an independent
subsidiary or independent controlled affiliate, then no Involuntary Termination
shall have occurred; (iii) a five percent (5%) or greater reduction in
Executive's Base Compensation or Target Bonus, other than any such reduction
which is part of, and generally consistent with, a general reduction of officer
salaries or cash incentive compensation; (iv) a material reduction by the
Company in the kind or level of employee benefits (other than salary and bonus)
to which Executive is entitled immediately prior to such reduction with the
result that Executive's overall benefits package (other than salary and bonus)
is substantially reduced (other than any such reduction applicable to officers
of the Company generally); (v) any material breach by the Company of any
material provision of this Agreement which continues uncured for 30 days
following notice thereof; or (vi) any relocation of the Company's offices at
which Executive normally works which increases Executive's commute by more than
thirty-five (35) miles; provided that none of the foregoing shall constitute
Involuntary Termination to the extent Executive has agreed thereto expressly in
writing.

               e.   Release of Claims. "Release of Claims" shall mean a waiver
by Executive, in a form substantially similar to that attached hereto as Exhibit
E, of all employment related obligations of and claims and causes of actions
against the Company, except for any of the Company's obligations under this
Agreement, especially Sections 3 and 4.

        7.     Golden Parachute Tax. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and will be subject to
the excise tax imposed by Section 4999 of the Code, then the Executive shall
receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the income,
employment, excise and any other taxes arising from the payments made by the
Company to or for the benefit of Executive pursuant to Section 7(i) above and






                                      -8-
<PAGE>   9

this Section 7(ii) so that Executive shall be fully reimbursed for any excise
tax and any taxes associated with the payments to reimburse Executive for such
excise tax. Unless the Company and the Executive otherwise agree in writing, the
determination of Executive's excise tax liability and the amount required to be
paid under this Section shall be made in writing by a nationally recognized
accounting firm satisfactory to both parties (the "Accountants"). In the event
that the excise tax incurred by Executive is determined by the Internal Revenue
Service to be greater or lesser than the amount so determined by the
Accountants, the Company and the Executive agree to promptly make such
additional payment, including interest and any tax penalties, to the other party
as the Accountants reasonably determine is appropriate to ensure that the net
economic effect to Executive under this Section, on an after-tax basis, is as if
the Code Section 4999 excise tax did not apply to Executive. For purposes of
making the calculations required by this Section, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on interpretations of the Code for which there is a "substantial authority"
tax reporting position. The Company and the Executive shall furnish to the
Accountants such information and documents the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section.

        8.     Covenant Not To Compete.

               a.   For a period beginning on the Employment Commencement Date
and ending twenty-four (24) months after the date on which the Executive ceases
to be employed by the Company for any reason whatsoever, the Executive, directly
or indirectly, whether as owner, sole proprietor, partner, shareholder,
director, member, consultant, agent, founder, co-venturer or otherwise, will not
engage, participate or invest in any business activity anywhere in the world
which develops, manufactures or markets products or performs services which are
competitive with the products or services of the Company at the time of the
Executive's termination, or products or services which the Company has under
development at the time of the Executive's termination; provided, however, that
the Executive, may own as a passive investor, publicly-traded securities of any
corporation which competes with the business of the Company so long as such
securities do not, in the aggregate, constitute more than 2% of any class of
outstanding securities of such corporations.

               b.   The Executive understands that the restrictions set forth in
this Section 8 are intended to protect the Company's interest in its
"proprietary information" (as defined in the Proprietary Information Agreement
attached hereto as Exhibit A) and establish customer relationships in good will,
and agrees that such restrictions are reasonable and appropriate for this
purpose.

               c.   The Executive agrees that it would be difficult to measure
any damages caused by the Company which might result from any breach by the
Executive of the promises set forth in this Section 8, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
the Executive agrees that if the Executive breaches, or proposes to






                                      -9-
<PAGE>   10

breach, any portion of this Section 8, the Company shall be entitled, in
addition all other remedies that it may have, to injunction or other appropriate
equitable relief to restrain any such breach without showing or proving any
actual damage to the Company. In addition, if Executive breaches the promises
set forth in this Section 8, after a termination of employment pursuant to
Section 3(a), upon notice to Executive the Company shall (i) cease all payments
pursuant to Section 3(a), (ii) terminate all benefits pursuant to Section 3(b),
(iii) all outstanding options shall terminate, (iv) the Company shall be
entitled to exercise its repurchase right with respect to any unvested shares;
and (v) the Severance Period shall end.

        9.     Prior Agreements. Executive represents that Executive has not
entered into any agreements, understandings, or arrangements with any person or
entity which would be breached by Executive as a result of, or that would in any
way preclude or prohibit Executive from entering into this Agreement with the
Company or performing any of the duties and responsibilities provided for in
this Agreement.

        10.    Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed given
(i) on the date of delivery, if delivered personally or by facsimile, (ii) one
(1) day after being sent by Federal Express or a similar commercial overnight
service or (iii) three (3) days after mailing, if mailed by first-class mail,
postage prepaid, to the following addresses:

               If to the Executive, at the address set forth below the
Executive's signature at the end hereof.

               If to the Company:

               Webvan Group, Inc.
               1241 E. Hillsdale Blvd., Suite 210
               Foster City, CA  94404-1214
               Attn:  Chairman of the Board

or to such other address as any party hereto may designate by notice given as
herein provided.


        11.    Governing Law. This Employment Agreement shall be governed by and
construed and enforced in accordance with the internal substantive laws, and not
the choice of law rules of California.

        12.    Amendments. This Employment Agreement shall not be changed or
modified in whole or in part except by an instrument in writing signed by each
party hereto.

        13.    Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.






                                      -10-
<PAGE>   11

        14.    Successors.

               a.   Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.

               b.   Executive's Successors. The terms of this Agreement and all
rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successor, heirs, distributees, devisees or legatees.

15. Entire Agreement. This Agreement, the 1999 Nonstatutory Stock Option Plan,
the stock option agreements for the Option thereunder, the Proprietary
Information Agreement, the promissory note and security agreement for the Loan
and any other documents prepared pursuant to this Employment Agreement represent
the entire agreement and understanding between the Company and Executive
concerning Executive's employment relationship with the Company, and supersede
and replace all prior agreements or understandings relating to the subject
matter hereof, and no agreements, representations or understandings (whether
oral or written or whether express or implied) which are not expressly set forth
in this Agreement have been made or entered into by either party with respect to
the relevant matter hereof. In the event of a conflict between the terms of this
Agreement and any document incorporated herein, the terms of this Agreement
shall prevail.

        16.    Mediation. The parties shall make a good faith attempt to resolve
any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach or termination thereof, through mediation. The mediation shall be
conducted within 45 days of either party notifying the other of a dispute or
controversy regarding this Agreement or Executive's employment relationship with
the Company. Unless otherwise provided for by law, the Company and Executive
shall each pay half the costs and expenses of the mediation.

        17.    Arbitration and Equitable Relief.

               a.   In the event that mediation pursuant to Section 16 fails to
resolve a dispute or controversy, and except as provided in Section 17(d) below,
the Company and Executive agree that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof shall be
settled by arbitration to be held in San Mateo County, California, in accordance
with the National Rules for the






                                      -11-
<PAGE>   12

Resolution of Employment Disputes then in effect of the American Arbitration
Association (the "Rules"). The arbitrator may grant injunctions or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.

               b.   The arbitrator[s] shall apply California law to the merits
of any dispute or claim, without reference to rules of conflict of law.
Executive hereby expressly consents to the personal jurisdiction of the state
and federal courts located in California for any action or proceeding arising
from or relating to this Agreement or relating to any arbitration in which the
parties are participants.

               c.   The Company and Executive shall each pay one-half of the
costs and expenses of such arbitration, and shall separately pay its counsel
fees and expenses unless otherwise required by law or determined by the
arbitrator.

               d.   The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.

               e.   Executive understands that nothing in this Section modifies
Executive's at-will status. Either the Company or Executive can terminate the
employment relationship at any time, with or without cause.

               f.   EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES, EXCEPT AS PROVIDED IN SECTION 16 AND SECTION 17(d) OF THIS
SECTION, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:

                    (i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.






                                      -12-
<PAGE>   13

                    (ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE
OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq.;

                    (iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

        18.    Right to Advice of Counsel. Executive acknowledges that he has
had the opportunity to discuss this matter with and obtain the advice of legal
counsel, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement and the tax consequences
thereof, and is knowingly and voluntarily entering into this Agreement.
Executive shall bear all costs of his counsel.

        19.    Withholding. The Company shall be entitled to withhold, or cause
to be withheld, from payment any amount of withholding taxes required by law
with respect to payments made to Executive in connection with his employment
hereunder.

        20.    Counterparts. This Employment Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.

        21.    Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.




















                                      -13-

<PAGE>   14


        IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.



                                        WEBVAN GROUP, INC.



                                        By: ____________________________________


                                        EXECUTIVE:

                                        George T. Shaheen



                                        ________________________________________
                                        (Signature)

                                        c/o Webvan Group, Inc.
                                        1241 East Hillsdale Boulevard, Suite 210
                                        Foster City, CA  94404-1214









                [SIGNATURE PAGE OF SHAHEEN EMPLOYMENT AGREEMENT]





<PAGE>   15


                                    EXHIBIT B

                               SECURITY AGREEMENT


        This Security Agreement is made as of September ____, 1999 between
Webvan Group, Inc., a California corporation ("Pledgee"), and George T. Shaheen
("Pledgor").


                                    Recitals

        Pursuant to Pledgor's receipt of Shares under the Employment Agreement
dated September 19, 1999, between Pledgor and Pledgee (the "Employment
Agreement"), Pledgor has received 1,250,000 shares of Pledgee's Common Stock
(the "Shares"). Pledgor has elected under the terms of the Employment Agreement
to pay the withholding for such shares with a promissory note (the "Note"). The
Note and the obligations thereunder are as set forth in Exhibit C to the
Employment Agreement.

        NOW, THEREFORE, it is agreed as follows:

        1.     Creation and Description of Security Interest. In consideration
of the loan of $6,743,750.00 to Pledgor under the terms of the Employment
Agreement and the Note, Pledgor, pursuant to the California Commercial Code,
hereby pledges as collateral for the Note all of the Shares (herein sometimes
referred to as the "Collateral" or "Pledged Shares") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.

               The Pledged Shares (together with an executed blank stock
assignment, attached hereto as Exhibit B-1, for use in transferring all or a
portion of the Pledged Shares to Pledgee if, as and when required pursuant to
this Security Agreement) shall be held by the Pledgeholder as security for the
repayment of the Note, and any extensions or renewals thereof, and the
Pledgeholder shall not encumber or dispose of such Pledged Shares except in
accordance with the provisions of this Security Agreement.

        2.     Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to Pledgee,
its successors and assigns, as follows:

               (a)  Payment of Indebtedness. Pledgor will pay the principal sum
of the Note secured hereby, together with interest thereon, at the time and in
the manner provided in the Note.






<PAGE>   16

               (b)  Encumbrances. The Pledged Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Pledged Shares without the prior written consent of Pledgee.

               (c)  Margin Regulations. In the event that Pledgee's Common Stock
is now or later becomes margin-listed by the Federal Reserve Board and Pledgee
is classified as a "lender" within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees
to cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.

        3.     Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Pledged Shares.

        4.     Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of Pledgee, all new, substituted and
additional shares or other securities issued by reason of any such change shall
be delivered to and held by the Pledgee under the terms of this Security
Agreement in the same manner as the Pledged Shares. In the event of substitution
of such securities, Pledgor, Pledgee and Pledgeholder shall cooperate and
execute such documents as are reasonable so as to provide for the substitution
of such Collateral and, upon such substitution, references to "Pledged Shares"
in this Security Agreement shall include the substituted shares of capital stock
of Pledgor as a result thereof.

        5.     Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the Pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Pledged Shares.

        6.     Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:

               (a)  Payment of principal or interest on the Note shall be
delinquent for a period of ten (10) days or more; or

               (b)  Pledgor fails to perform any of the covenants contained in
this Security Agreement or the Employment Agreement for a period of ten (10)
days after written notice thereof from Pledgee.

               In the case of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the California
Commercial Code.






                                      -2-
<PAGE>   17

        7.     Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
Pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the Pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note. Notwithstanding the foregoing, a portion of the
Pledged Shares may be released for a sale by Pledgor if the Pledgor enters into
an agreement with Pledgee and a broker to ensure that Pledgee receives the
portion of the sale's proceeds it is entitled to under the Note; provided,
however, that in no event shall more Pledged Shares be released than the
principle and interest then due on the Note.

        8.     Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

        9.     Term. This pledge shall continue until the payment of all
indebtedness secured hereby, at which time the remaining Pledged Shares shall be
promptly delivered to Pledgor, subject to the provisions for prior release of a
portion of the Collateral as provided in paragraph 7 above.

        10.    Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of Default.

        11.    Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.

        12.    Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.

        13.    Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.

        14.    Governing Law. This Security Agreement shall be interpreted and
governed under the internal substantive laws, but not the choice of law rules,
of California.






                                      -3-
<PAGE>   18

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


"PLEDGOR"                               George T. Shaheen


                                        ________________________________________
                                        Signature

                                        ________________________________________
                                        Address

                                        ________________________________________



"PLEDGEE"                               WEBVAN GROUP, INC.
                                        a California corporation


                                        ________________________________________
                                        Signature

                                        ________________________________________
                                        Print Name

                                        ________________________________________
                                        Title



"PLEDGEHOLDER"                          ________________________________________
                                        Secretary of WEBVAN GROUP, INC.



                                        -4-
<PAGE>   19

                                   EXHIBIT B-1

                      ASSIGNMENT SEPARATE FROM CERTIFICATE



        FOR VALUE RECEIVED I, George T. Shaheen, hereby sell, assign and
transfer unto Webvan Group, Inc. ___________________ (__________) shares of the
Common Stock of Webvan Group, Inc., standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint to transfer the said stock on the books of
the within named corporation with full power of substitution in the premises.

        This Stock Assignment may be used only in accordance with the Security
Agreement (the "Agreement") between Webvan Group, Inc. and the undersigned dated
September ___, 1999.



Dated: _______________, _____

                                         Signature:_____________________________















        INSTRUCTIONS: Please do not fill in any blanks other than the signature
line. The purpose of this assignment is to enable Webvan Group, Inc. to exercise
the Repurchase Option, as set forth in the Agreement, without requiring
additional signatures on the part of the Purchaser.






<PAGE>   20
                                    EXHIBIT C

                                      NOTE


$6,743,750                                                 San Mateo, California

                                                           September ___, 1999


        FOR VALUE RECEIVED, George T. Shaheen (the "Borrower") promises to pay
to Webvan Group, Inc., a California corporation (the "Company"), the principal
sum of Six Million Seven Hundred Forty-Three Thousand, Seven Hundred Fifty
Dollars ($6,743,750.00), together with interest on the unpaid principal hereof
from the date hereof at the rate of six and sixteen one-hundredths percent
(6.16%) per annum, compounded semiannually.

        Principal and interest shall be due and payable upon any sale of the
Company's Common stock originally issued to the Borrower regardless of whether
on the date of sale the stock is owned by the Borrower or any person or entity
to whom the Borrower transferred the stock where (i) such transfer was not a
sale at fair market value or (ii) the transferee is affiliated with the Borrower
including, but not limited to, Family Members, (as such term is defined under
Rule 701 promulgated under the Securities and Exchange Act of 1934, as amended),
or any entity, whether a partnership, corporation, limited liability company,
trust, foundation or other entity, controlled by or for the benefit of Family
Members. The amount of the note due and payable upon a stock sale shall equal
ten percent (10%) of the gain from the stock sale computed as follows: (i) in
the case of a sale of stock originally issued upon exercise of an option, the
gain shall equal the sales price of the stock less the exercise price of the
option and (ii) in the case of the stock granted to the Borrower (including the
stock grant pursuant to Section 2(e) of the Employment Agreement between the
Company and Borrower dated September 19, 1999), the gain shall equal the sales
price less the fair market value of such stock on its date of grant. All gains
shall be calculated net of commissions but shall exclude any taxes due on the
sale or the exercise of any option. Payment of principal and interest shall be
made in lawful money of the United States of America.

        The Borrower may at any time prepay all or any portion of the principal
or interest owing hereunder.

        This Note is subject to the terms of the Employment Agreement, dated as
of September 19, 1999. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.

        The holder of this Note shall have full recourse against the Borrower,
and shall not be required to proceed against the collateral securing this Note
in the event of default.




<PAGE>   21

        Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
Borrower.



                                        BORROWER:

                                        George T. Shaheen



                                        ________________________________________
                                        Signature

                                        86 Flood Circle
                                        Atherton, California 94027

                                      -2-

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