<PAGE> 1
Subject Company: Homegrocer
Email to all Webvan Employees
FROM THE DRIVER'S SEAT
Dear Associates,
As you know, it's been a fast-paced couple of weeks. Today, I'd like to share
with you news on:
o Webvan's national expansion plans for the rest of this year
o Plans to ensure a preeminent customer experience in Seattle
o Our planned merger with Homegrocer.com
WEBVAN CHICAGO BLOWS INTO THE WINDY CITY!
Next Tuesday, August 1 marks another important milestone for Webvan, as
webvan.com begins serving consumers in the Greater Chicago Area. We are
reinventing the way people shop and in the process, we are giving the consumers
in the Chicago area a very precious gift - the gift of time. We will mark the
official launch of Webvan Chicago with a celebration for Associates, the media,
and other guests at our newest distribution center in Carol Stream, Illinois. I
want to congratulate all members of the Webvan Chicago team for the hard work,
and long hours it took to make this launch a reality.
I'll be updating you with more news next week from Chicago.
WEBVAN SET FOR EAST COAST EXPANSION
Webvan plans to expand into three additional new markets in the fourth quarter
of 2000. With a targeted launch date of December 1, Webvan will soon serve
markets in Northern New Jersey, Baltimore, Maryland, and Washington, D.C. The
Baltimore and Washington markets will be served by our distribution center being
built in Glen Burnie, Maryland. Webvan's New Jersey distribution center is well
positioned to extend our reach into markets stretching from Philadelphia to New
York City.
JANUARY 2001 START PLANNED FOR WEBVAN'S SEATTLE OPERATIONS
At Webvan, customers are critical to our company's success. Soon we will be
introducing Webvan to consumers in Seattle, Washington and Portland, Oregon.
Although Webvan was initially planning to open our Kent, Washington distribution
center in October, the original timeframe presented Webvan with some unique
business issues. In addition to the branding issues that an earlier launch would
generate given our recent announcement of a merger agreement with
HomeGrocer.com, we also were facing challenges such as hiring ramp up and
interstate shipping. By moving back the opening of our Seattle distribution
center until January, our goal is to execute a seamless transition of customers
and employees to Webvan, both in Seattle and Portland. This is a very positive
and prudent decision for our business. Mark Mangelsdorf, our Seattle General
Manager, is currently meeting with his team to ensure Seattle success in
January.
PLANNED INTEGRATION WITH HOMEGROCER.COM
Three weeks ago, we announced a merger agreement with HomeGrocer.com. As you
know, this planned merger will provide many important benefits to Associates, as
well as our customers and shareholders. Most important, the combination of these
two companies will strategically enhance our mission to deliver the last mile of
e-commerce.
Since the announcement, a transition team was formed involving representatives
from both Webvan and HomeGrocer.com. The Webvan integration team, headed by
Vivek Joshi, will identify the processes, systems and organizations that will
need to be integrated after the merger is complete and outline a work plan for
both companies to complete the integration following closure of the proposed
merger. As we announced, the merger still requires regulatory clearances from
the government and approvals from the shareholders of both companies. These
approvals are still expected by the end of the third quarter of this year. In
the interim, each company and all employees must continue to operate and make
business decisions independently of one another. Moving forward, I've asked
Vivek to begin communicating with you directly about progress throughout the
transition.
Remember that this proposed merger is about growth. We are creating a company
that is financially stronger with a larger operating footprint and one that can
lure customers from all over the country away from our bricks and mortar
retailer competition. I realize that many of you have questions and concerns and
we are committed to sharing information as soon as possible. We must continue to
provide the superior service that our customers and shareholders expect of us.
Bottom line? We have a business to run, and our success depends on each and
every one of us contributing our best. Becoming the world's premier online
retailer will take all of us working together toward this vision.
Let's remember that we are building a very special company.
Best regards,
GTS
