[drugstoreogo.gif]

411 108th Ave NE " Bellevue, Washington 98004 " Telephone 425. 372.3200 "
Facsimile 425. 372.3800

 

April 25, 2005

John Helm

110 Valeview Road

Wilton, CT  06897

Dear John:

We are delighted to extend you an offer to be Chief Technology Officer at
drugstore.com*, starting April, 29, 2005. You will report to our CIO, Talat
Sadiq.

We are offering you an annual salary of $210,000, which will be paid every two
weeks in accordance with the Company's standard payroll policies. You will be
eligible for an annual performance bonus of up to 25% of your eligible salary.
Your compensation package will be reviewed annually. Other company-provided
benefits, for which you are eligible, including health and welfare benefits,
will be described for you in detail at your New Hire Orientation meeting. With
respect to vacation accrual, you will accrue 4 weeks of vacation per year.

At the start of your employment, you will be eligible for an option (the
"Option") to purchase 225,000 shares of drugstore.com common stock (the "Option
Shares"). Your Option will be granted by a committee of the board of directors
as soon as practicable after you commence employment. Your vesting commencement
date will be your first day of employment. The exercise price of the Option
Shares will be determined by the committee and will be based upon fair market
value on the Friday after you commence employment. The vesting schedule will be
no less generous than that offered to new employees today (20% vest at 6 months
and the remaining vesting quarterly for the 3.5 years following the initial
vesting date). The Option will be subject to the terms of the Company's 1998
Stock Option Plan and the related Stock Option Agreement between you and
drugstore.com*.

In order to assist you with your relocation to the Seattle area, we will be
providing a $60,000 relocation bonus to you. If during the first year of your
employment with the Company your employment is terminated with Cause or you
voluntarily terminate your employment without Good Reason, you will be required
to repay to drugstore.com a pro-rated portion of your Sign-On Bonus based on the
time remaining in the first year. "Cause" means (a) the willful and repeated
failure to comply with the lawful directions of the Chief Executive Officer, (b)
gross negligence or willful misconduct in the performance of your duties to the
Company, (c) commission of any act of fraud against the Company, (d)
misappropriation of material property of the Company. Good Reason means there is
a Change of Control (as defined below), and (ii) the surviving corporation does
not offer you a position with similar responsibilities. "Change of Control"
shall mean the sale of all or substantially all of the assets of the Company or
the acquisition of the Company by another entity by means of consolidation or
merger after which the then current stockholders of the Company hold less than
50% of the voting power of the surviving corporation; provided that a
reincorporation of the Company shall not be a Change of Control.

This offer is contingent upon your completion of our standard form
Confidentiality and Inventions Agreement and employment application prior to
commencing employment, copies of which are enclosed with this letter. If you
have any questions about this agreement, please call us. This offer is also
contingent upon the successful completion of a background check. The results
must be reviewed and accepted by drugstore.com in accordance with our guidelines
prior to your start date as stated in this offer letter. If the results are
unacceptable, this offer will be rescinded.

Throughout your employment with drugstore.com, you will be an at-will employee.
This means that you may terminate your employment with drugstore.com at any time
with or without cause, and with or without notice. Similarly, drugstore.com may
terminate your employment at any time, with or without cause, and with or
without notice. Your at-will employment status may not be orally altered by any
drugstore.com employee, and may be altered in writing only by the CEO of the
Company.

Congratulations! All of us at drugstore.com are very excited that you're joining
the team and look forward to a beneficial and rewarding relationship. Kindly
indicate your consent to the terms in this offer letter by signing and returning
a copy to us at your earliest convenience.

Sincerely,

/s/ Dawn Lepore

Dawn Lepore

Chief Executive Officer

 

Agreed and Accepted: /s/ John Helm Date: 26 April 2005 John Helm

 

*drugstore.com and/or its affiliates and subsidiaries