Offer letter of Ardell D. Albers dated February 27, 2004



 Exhibit 10.1 
  
 February 27, 2004 
  
 Bud Albers 
 13626 202nd Avenue NE 
 Woodinville, WA 98072 
  
 Dear Bud: 
  
 We are delighted to extend you an
offer to be Chief Technology Officer at drugstore.com*, starting on March 22, 2004. 
  
 We are offering you an annual salary of $190,000, which will be paid every two weeks in accordance with the Company’s standard payroll policies. During 2004, you will be eligible for a semi annual performance bonus of 0-25% of your
eligible salary. Executive bonus compensation for subsequent years will be determined by the Board of Directors and CEO. Your compensation package will be reviewed annually. Other company-provided benefits, for which you are eligible, including
health and welfare benefits, will be reviewed with you in detail on your first day of employment. 
  
 At the start of your employment, you will be eligible for an option (the “Option”) to purchase 200,000 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 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*. 
  
 This offer is contingent upon your completion of our standard form Confidentiality and
Inventions Agreement prior to commencing employment, a copy of which is enclosed with this letter. If you have any questions about this agreement, please call us. 
  
 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. 
  
 This offer is 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. 
  
 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/    KAL RAMAN

	 	 
	 Kal Raman
	 	 
	 Chief Executive Officer
	 	 
		
	 Agreed and Accepted: /s/    ARDELL “BUD”
ALBERS                        
	 	 Date: 3/1/04

	                                        
             Bud Albers
	 	 

  

	*	drugstore.com and/or its affiliates and subsidiaries