Document:

Letter dated December 31, 2008

 Exhibit 10.1 
 

 
 411 108th Ave NE • Suite 1400 • Bellevue, Washington 98004 • Telephone 425.372.3200 • Facsimile 425.372.3800 
 January 26, 2009 
 Dawn Lepore 
 drugstore.com, inc. 
 411 108th Avenue NE, Suite 1400 
 Bellevue, WA 98004 
 Dear Dawn: 
 The offer letter dated December 31, 2008,
entered into between you and the Company is amended and restated effective as of January 26, 2009, as follows. 
 On behalf of drugstore.com,
inc. (the “Company”), we are pleased that you continue to serve as the Company’s President and Chief Executive Officer and Chairman of the Board on the terms set forth in this letter. The terms of this letter are intended to supersede
those set forth in your offer letter dated September 21, 2004 (the “2004 Offer Letter”), the offer letter dated December 28, 2006 (the “2006 Offer Letter”) and the offer letter dated December 31, 2008 (the
“2008 Offer Letter”) with respect to your employment, salary and benefits going forward, but except as specifically set forth herein they are not intended to supersede or modify the terms of the Sign-On Bonus, the Time-Based Options or the
Performance-Based Options set forth in the 2004 Offer Letter and the 2006 Option set forth in your 2006 Offer Letter. You will continue to report directly to the Company’s board of directors. 
 You will continue to be eligible for an annual salary of $500,000, along with the Company’s standard employee benefits for Company executives, and
you will be entitled to five (5) weeks of vacation each year. Your salary will continue to be paid in accordance with the Company’s standard payroll policies. In addition, you will continue to be eligible to receive an annual target bonus
in an amount ranging from 50% to 150% of your annual salary, based on the achievement of pre-determined performance objectives. The performance objectives will be determined by mutual agreement between you and the board of directors or its
designated committee. Your compensation package will be reviewed annually by the Company’s board of directors. Payment of your compensation will be subject to the Company’s satisfaction of applicable tax withholding requirements.

 If during your employment with the Company there is a Change of Control (as defined below), notwithstanding anything to the contrary in
the 2004 Offer Letter, the 2006 Offer Letter, or the 2008 Offer Letter, the Time-Based Options, the Performance-Based Options and the 2006 Option will immediately become fully vested and exercisable. “Change of Control” shall mean
(a) the sale, lease or other disposition of all or substantially all of the assets of the Company, (b) the acquisition of beneficial ownership of more than 50% of the total voting power represented by the Company’s then outstanding
voting securities by any person or group of related persons (other than by any affiliate controlled by the Company or any benefit plan sponsored or maintained by the Company or a subsidiary of the Company), (c) the acquisition of the Company by
another entity by means of merger, consolidation or similar transaction after which the stockholders of the Company immediately prior to the occurrence of such merger, consolidation or similar transaction hold less than 50% of the total voting power
of the surviving controlling entity, or (d) a change in the composition of the Board such that during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board (together with any new
directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office, who were either directors at the beginning of

			
	

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such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board then in
office; provided that a reincorporation of the Company shall not be a Change of Control. 
 In the event that the benefits payable under the
2004 Offer Letter, the 2006 Offer Letter and the 2008 Offer Letter, this letter or otherwise upon or following a Change of Control constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code (the
“Code”) or any comparable successor provisions, and would otherwise be subject to the excise tax imposed by Section 4999 of the Code or any comparable successor provisions (the “Excise Tax”), your benefits will be either
(a) provided to you in full, or (b) provided to you as to such lesser extent that would result in no portion of such benefits being subject to the Excise Tax, whichever amount would result in your receipt of the greatest amount of benefits
on an after-tax basis, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, notwithstanding that all or some portion of these benefits may be taxable under
the Excise Tax. Unless you and the Company otherwise agree in writing, any determination required under this paragraph will be made in writing in good faith by a nationally recognized accounting firm which is then serving as the Company’s
independent auditors (the “Accountants”). Any reduction of benefits hereunder shall occur in the following order: (1) reduction of cash payments; (2) reduction of vesting acceleration of equity awards; and (3) reduction of
other benefits paid or provided to you. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant for your equity awards. If two or more
equity awards are granted on the same date, each award will be reduced on a pro-rata basis. For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority. You and the Company will furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this paragraph. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this paragraph. 
 If, notwithstanding any reduction described in this and the preceding paragraph, the Internal Revenue Service (“IRS”) determines that you are
liable for the Excise Tax as a result of the receipt of the payment of benefits as described above, then you will be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that you
challenge the final IRS determination, a final judicial determination, a portion of the payment equal to the “Repayment Amount.” The Repayment Amount with respect to the payment of benefits will be the smallest such amount, if any, as will
be required to be paid to the Company so that your net after-tax proceeds with respect to any payment of benefits (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such payment) will be maximized. The
Repayment Amount with respect to the payment of benefits will be zero if a Repayment Amount of more than zero would not result in your net after-tax proceeds with respect to the payment of such benefits being maximized. If the Excise Tax is not
eliminated pursuant to this and the preceding paragraph, you will pay the Excise Tax. Notwithstanding any other provision of this and the preceding paragraph, if (a) there is a reduction in the payment of benefits as described in this and the
preceding paragraph, (b) the IRS later determines that you are liable for the Excise Tax, the payment of which would result in the maximization of your net after-tax proceeds (calculated as if your benefits had not previously been reduced), and
(c) you pay the Excise Tax, then the Company will pay to you those benefits which were reduced pursuant to this paragraph contemporaneously or as soon as administratively possible after you pay the Excise Tax so that your net after-tax proceeds
with respect to the payment of benefits are maximized. 

			
	

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 If your employment is
terminated by the Company without Cause or you resign your employment for Good Reason, you will be offered a severance package that includes the equivalent of two years of annual salary and two years of target bonus at the levels in effect at the
time of such termination without Cause or for Good Reason, paid in accordance with the Company’s standard payroll policies. In addition, you will receive twelve additional months of vesting credit under the 2006 Option and any other
subsequently-granted options for which vesting is exclusively based on your continued service to the Company. Except as described above, such options will not otherwise vest. 
 Notwithstanding anything to the contrary in this offer letter, no severance payable to you, if any, pursuant to this offer letter, when considered
together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) shall be payable until you have a
“separation from service” within the meaning of Section 409A. 
 Notwithstanding anything to the contrary in this offer
letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), the Deferred Compensation Separation Benefits that are payable within the first six
(6) months following your termination of employment will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your termination of employment. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your termination but prior to the
six (6) month anniversary of your termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Compensation
Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. These provisions are intended to comply with the requirements of Section 409A so that none of the Deferred Compensation
Separation Benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. 
 Your entitlement to this severance package is subject to your execution of an effective release of claims substantially in the form attached hereto,
except as the parties may otherwise agree or except as required by law provided that such release of claims is effective within sixty (60) days following the termination date or such earlier date as required by the release of claims (such
deadline, the “Release Deadline”), and your continuing compliance with the Company’s proprietary information and inventions agreement. No severance pursuant to this offer letter will be paid or provided until the release of claims
becomes effective. If your Release Deadline is on or before December 15 of the calendar year in which your “separation from service” (within the meaning of Section 409A occurs, any portion of the severance payments provided
hereunder that would be considered “Deferred Compensation Separation Benefits” (as defined above) will be made to you on or before December 31 of that calendar year or, if later, (i) such time as required by the payment schedule
applicable to each payment or benefit as set forth herein, or (ii) such time as required below. If your Release Deadline is after December 15 of the calendar year in which your “separation from service” (within the meaning of
Section 409A) occurs, any portion of the severance payments provided hereunder that would be considered Deferred Compensation Separation Benefits will be made to you on the first payroll date to occur during the calendar year following the
calendar year in which such separation from service occurs, or, if later, (i) the first payroll date following the Release Deadline, (ii) such time as required by the payment schedule applicable to each payment or benefit, or
(iii) such time as required by Section 409A. 

			
	

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 “Cause”
means (a) your willful or negligent failure to comply with the lawful directions of the Company’s Board of Directors, (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 that results in an injury to the Company other than a de minimus injury to the Company, or (d) misappropriation of material property of the Company to the material detriment of the Company.

 For purposes of this letter agreement, “Good Reason” means your resignation within thirty (30) days following the
expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without your consent: (a) the refusal of the Company to pay or cause to be paid to you your annual salary or any annual bonus
after they have been earned; (b) the material reduction of your annual salary without your consent; (c) the material reduction of your target bonus range unaccompanied by any corresponding upward adjustment in any other form of incentive
compensation by the Company to you without your consent; (d) a material diminution in your authority, responsibilities, duties as President and Chief Executive Officer (but not as Chairman of the Board of Directors) without your consent;
(e) the material relocation of your primary work place for the Company (currently Bellevue, Washington) to a location more than thirty-five (35) miles from its current location without your consent; (f) the failure of the Company to
nominate you to serve as a director at each annual stockholder meeting while you are serving as the President and Chief Executive Officer of the Company; or (g) a material reduction in the kind or level of the benefits or perquisites for which
you are eligible without your consent, unless the reduction is applicable to substantially all other Company executive officers; provided that the events described in clauses (a), (b), (c), (d), (e), (f), or (g) above shall constitute Good
Reason only if the Company fails to cure such event within a reasonable time (not to exceed fifteen (15) business days) after receipt from you of written notice of the event which constitutes Good Reason; provided, further, that “Good
Reason” shall cease to exist for an event on the 90th day following its initial existence, unless you have given the Company written notice thereof prior to such date. 
 If you are terminated for Cause or your employment with the Company terminates for any other reason other than Good Reason or termination by the Company
without Cause, you will not receive any severance benefits. 
 If the Company adopts any other severance policy, plan, program, or
arrangement applicable to employees for which you are eligible for benefits, any amounts paid or benefits provided to you under this offer letter in connection with your termination of employment will be reduced by the value of any payments or
delivery of benefits by the Company to you on account of your termination of employment under any such policy, plan, program or arrangement maintained by the Company. For avoidance of confusion, you should be aware that at the present time, the
Company has no such other severance policy, plan, program or arrangement for which you would be eligible for benefits. Furthermore, to the extent that any federal, state or local laws require the Company to give advance notice or make a payment of
any kind to you because of your involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, change of control, or any other similar event or reason, the amounts paid or benefits provided to you under
this offer letter will be reduced by any amounts so received as required by applicable law. 
 Following your termination of employment for
any reason, you (or upon your death or permanent and total disability, you, your legal representative, or your beneficiary, as applicable) will have until the earliest of (i) one year from the date of such termination, (ii) ) ten
(10) years from the date of grant, or (iii) the end of the original option term, in which to exercise the vested and outstanding portion of the 2006 

			
	

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Option and any options granted thereafter (the “Vested Options”), provided that to the extent not exercised on or prior to the date of your
termination of employment, your Vested Options will terminate according to the following schedule: (a) 25% of your Vested Options will terminate three (3) months following your termination, (b) 25% of your Vested Options will
terminate six (6) months following your termination, (c) 25% of your Vested Options will terminate nine (9) months following your termination, and (d) 25% of your Vested Options will terminate twelve (12) months following
your termination. Any Vested Options exercised during this one-year period will be deemed to be those Vested Options with the nearest expiration date, unless you specify in writing a different application. None of your options will continue to vest
following your termination and in no event will you be able to exercise an option after the expiration of the term of the option as set forth in the applicable agreement governing such option. 
 The Company will continue to indemnify you and provide you with coverage under its D&O insurance policy with respect to your service as an officer
and director of the Company to the same extent provided to the Company’s other officers and directors. 
 Since your employment is
“at will,” your employment at drugstore.com may be terminated by you or drugstore.com at any time for any reason or no reason with or without Cause or notice. 
 The terms of this letter may only be changed by written agreement, although the Company may from time to time, in its sole discretion, adjust the salaries and benefits paid to you and its other employees. This letter
will be governed by the laws of the State of Washington, without regard to its conflict of laws provisions. 
 We are pleased to offer you
these modifications to your employment relationship with drugstore.com in recognition of the considerable benefit to the Company that your work has yielded to now. We are very excited about continuing the very beneficial and rewarding relationship
we have experienced to date. 
 Should you have any questions with regard to any of the items indicated above, please contact Robert
Hargadon, the Company’s Vice President, Human Resources. Kindly indicate your consent to the terms contained in this offer letter by signing and returning a copy to us by January 30, 2009. 

			
	

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 Sincerely, 
 drugstore.com, inc. 
  

			
		
	By:	 	/s/ William Savoy
	Title:	 	Director

  

	
	Agreed to and accepted:
	
	/s/ Dawn Lepore
	
	January 30, 2009
	DateForm of Change in Control Agreement for Certain Officers

 Exhibit 10.2 
 DRUGSTORE.COM, INC. 
 CHANGE IN CONTROL AGREEMENT 
 This Change in Control Agreement (the “Agreement”) is made and entered into by and between _________ (“Executive”) and drugstore.com,
inc. (the “Company”), effective as of ________, 2009 (the “Effective Date”). 
 RECITALS 
 1. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change in control. The
Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined herein) of the
Company. 
 2. The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive
to continue his or her employment and to motivate Executive to maximize the value of the Company upon a Change in Control for the benefit of its stockholders. 
 3. The Board believes that it is imperative to provide Executive with certain severance benefits upon Executive’s termination of employment following a Change in Control. These benefits will provide Executive
with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change in Control. 
 4. Certain capitalized terms used in the Agreement are defined in Section 6 below. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: 
 1. Term of Agreement. This Agreement will terminate upon the date that all of the obligations of the parties hereto with respect to this Agreement
have been satisfied. 
 2. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will
continue to be at-will, as defined under applicable law. 

 3. Severance Benefits. 
 (a) Involuntary Termination Following a Change in Control. If upon or within twelve (12) months following a Change in Control
(i) Executive terminates his or her employment with the Company (or any parent, subsidiary or successor of the Company) for Good Reason (as defined herein) or (ii) the Company (or any parent, subsidiary or successor of the Company)
terminates Executive’s employment without Cause (as defined herein), and Executive signs and does not revoke the release of claims as required by Section 4, Executive will receive the following severance benefits from the Company:

 (i) Severance Payment. Executive will receive a single lump sum severance payment (less applicable withholding
taxes) in an amount equal to twelve (12) months of Executive’s annual salary (the “Severance Period”) determined at a rate equal to the greater of (A) Executive’s annual salary as in effect immediately prior to the
Change in Control, or (B) Executive’s Base Salary (as defined herein).  
 (ii) Bonus Payment.
Executive will receive a lump sum cash payment (less applicable withholding taxes) in an amount equal to one hundred percent (100%) of Executive’s target annual incentive for the year of the Change in Control. 
 (iii) Benefits. The Company agrees to pay for health continuation coverage premiums for Executive at the same level of health
coverage and benefits as in effect for on the day immediately preceding the date of termination; provided, however, that (1) Executive constitutes a qualified beneficiary, as defined in Section 4980(B)(g)(1) of the Internal Revenue Code of
1986, as amended (the “Code”); and (2) Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA.
The Company will pay such COBRA premiums to provide for continuation benefits on behalf of the Executive through the Severance Period. Executive will thereafter be responsible for the payment of COBRA premiums (including, without limitation, all
administrative expenses) for the remaining COBRA period. 
 (b) Timing of Severance Payments. Unless otherwise required
pursuant to Section 10 of this Agreement, the Company will pay the cash severance payments to which Executive is entitled under this Agreement in a lump sum as soon as practicable following the date of termination, provided, however, that such
payment will be delayed to the extent required by Section 4 and/or Section 10 of this Agreement. Except to the extent payment is delayed pursuant to Section 9(b), all cash severance payments under this Agreement will be paid no later
than March 15 of the year following the year in which the termination occurs. 
  

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 (c) Voluntary Resignation; Termination For Cause. If Executive’s employment
with the Company terminates (i) voluntarily by Executive (other than for Good Reason) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be
established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Equity Award agreement. 
 (d) Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or
Executive’s employment terminates due to his or her death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance
and benefits plans and practices or pursuant to other written agreements with the Company, including, without limitation, any Equity Award agreement. 
 (e) Termination Apart from Change in Control. In the event Executive’s employment is terminated for any reason, either prior to the occurrence of a Change in Control or after the twelve (12) month
period following a Change in Control, then Executive will be entitled to receive severance and any other benefits only as may then be established under the Company’s existing written severance and benefits plans and practices or pursuant to
other written agreements with the Company, including, without limitation, any Equity Award agreement. 
 (f) Exclusive
Remedy. In the event of a termination of Executive’s employment upon or within twelve (12) months following a Change in Control, the provisions of this Section 3 are intended to be and are exclusive and in lieu of any other rights
or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement. Executive will be entitled to no benefits, compensation or other payments or rights upon termination of
employment following a Change in Control other than those benefits expressly set forth in this Section 3, except as may be provided in any Equity Award agreement. 
 4. Conditions to Receipt of Severance. 
 (a) Release of Claims Agreement. The receipt of any severance or other benefits pursuant to Section 3 will be subject to Executive signing and not revoking a release of claims agreement in a form reasonably acceptable to the
Company, and such release becoming effective and irrevocable within sixty (60) days of Executive’s termination or such earlier deadline required by the release (such deadline, the “Release Deadline”). No severance or other
benefits will be paid or provided until the release of claims agreement becomes effective and irrevocable, and any severance amounts or benefits otherwise payable between the date of Executive’s termination and the date such release becomes
effective shall be paid on the effective date of such release. Notwithstanding the foregoing, and subject to the release becoming effective and irrevocable by the Release Deadline, any severance payments or benefits under this Agreement that would
be considered Deferred Compensation Separation Benefits (as defined in Section 10(b)) shall be paid on the sixtieth (60th) day following
Executive’s “separation from service” within the meaning of Section 409A of the Code, or, if later, such time as required by Section 10(b). If the release does not become effective by the Release Deadline, Executive will
forfeit all rights to severance payments and benefits under this Agreement. 
  

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 (b) Other Requirement. Executive’s receipt of any payments or benefits under
Section 3 will be subject to Executive continuing to comply with the terms of any form of confidential information agreement. 
 (c) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment. 

5. Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive
(i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s
severance benefits under Section 3 will be either: 
 (a) delivered in full, or 
 (b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under
Section 4999 of the Code, 
 whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise
tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of
the Code. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by the Company’s independent public accountants immediately prior to a Change in Control or a
“Big Four” national accounting firm selected by the Company (the “Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required
by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The
Company and Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company will bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 5. Any reduction in payments and/or benefits required by this Section 5 shall occur in the following order: (1) reduction of cash payments; (2) reduction of vesting
acceleration of Equity Awards; and (3) reduction of other benefits paid or provided to Executive. In the event that acceleration of vesting of Equity Awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant for Executive’s Equity Awards. If two or more Equity Awards are granted on the same date, each Equity Award will be reduced on a pro-rata basis. In no event will Executive exercise any discretion with respect to the
ordering of any reduction of payments or benefits pursuant to this Section 5. 
  

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 6. Definition of Terms. The following terms referred to in this Agreement will have the following
meanings: 
 (a) Base Salary. For purposes of determining the severance payment under this Agreement, “Base
Salary” will mean Executive’s annual salary as in effect on the last day of the calendar year immediately prior to the year in which the Change in Control occurs. 
 (b) Cause. For purposes of this Agreement, “Cause” will mean: 
 (i) Any act of personal dishonesty taken by Executive in connection with Executive’s responsibilities as an employee [and intended to
result in substantial personal enrichment of Executive]; 
 (ii) Executive’s conviction of, or plea of nolo
contendere to, a felony; 
 (iii) Executive’s gross misconduct; 
 (iv) Executive’s continued failure to perform the duties and responsibilities of Executive’s position after there has been
delivered to Executive a written demand for performance from the Company which describes the basis for the belief that Executive has not substantially performed such duties and responsibilities and that Executive has not corrected such failure
within two (2) weeks of such written demand. 
 (c) Change in Control. For purposes of this Agreement,
“Change in Control” shall have the same meaning as defined in the Company’s 2008 Equity Incentive Plan. 
 (d)
Disability. For purposes of this Agreement, “Disability” shall have the same meaning as that term is defined in the Company’s 2008 Equity Incentive Plan. Notwithstanding the foregoing however, should the Company maintain a
long-term disability plan at any time during Executive’s employment with the Company, a determination of Disability under such plan shall also be considered a “Disability” for purposes of this Agreement. 
 (e) Good Reason. For purposes of this Agreement and any Equity Award agreement, “Good Reason” means the occurrence of any
of the following, without Executive’s express written consent: 
 (i) A material reduction of Executive’s authority,
duties or responsibilities; 
 (ii) A material reduction in Executive’s base compensation; 
 (iii) A material change in the geographic location at which Executive must perform his or her services; provided that in no instance will
the relocation of Executive to a facility or a location of fifty (50) miles or less from Executive’s then current office location be deemed material for purposes of this Agreement; 
 provided, however, that before Executive may resign for Good Reason, (A) Executive must provide the Company with written notice within ninety (90) days
of the initial event that Executive believes constitutes “Good Reason” specifically identifying the facts and circumstances claimed to constitute the grounds for Executive’s resignation for Good Reason and the proposed termination
date (which 

  

 -5- 

 
will not be more than forty-five (45) days after the giving of written notice hereunder by Executive to the Company), and (B) the Company must have
an opportunity of at least thirty (30) days following delivery of such notice to cure the Good Reason condition and the Company must have failed to cure such Good Reason condition. 
 Executive specifically acknowledges and agrees that the definition of “Good Reason” in this Section 6(e) shall operate with respect to all rights to severance and/or accelerated vesting of any Equity
Award paid upon a termination upon or after a Change in Control and shall supersede and replace in its entirety any other definitions of “Good Reason,” “Involuntary Termination,” or other similar terms that may exist in any other
employment agreement, offer letter, severance plan or policy, Equity Award agreement or Company stock incentive plan document. 
 7.
Successors. 
 (a) The Company’s Successors. Any successor to the Company (whether direct or indirect and
whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will 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” will include any successor to the
Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 7(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 Executive hereunder will inure to the benefit of,
and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
 8. Notice. 
 (a) General. Notices and all other communications contemplated by
this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices will
be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the
attention of its President. 
 (b) Notice of Termination. Any termination by the Company for Cause or by Executive for
Good Reason or as a result of a voluntary resignation will be communicated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement. Such notice will indicate the specific termination
provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date. The failure by Executive to
include in the notice any fact or circumstance which contributes to a showing of Good Reason will not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his or her rights hereunder.

  

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 9. Arbitration. The Company and Executive each agree that any and all disputes arising out of the
terms of this Agreement, Executive’s employment by the Company, Executive’s service as an officer or director of the Company, or Executive’s compensation and benefits, their interpretation and any of the matters herein released, will
be subject to binding arbitration. In the event of a dispute, the parties (or their legal representatives) will promptly confer to select a single arbitrator mutually acceptable to both parties. If the parties cannot agree on an arbitrator, then the
moving party may file a demand for arbitration with the Judicial Arbitration and Mediation Services (“JAMS”) in King County, Washington, who will be selected and appointed consistent with the Employment Arbitration Rules and Procedures of
JAMS (the “JAMS Rules”), except that such arbitrator must have the qualifications set forth in this paragraph. Any arbitration will be conducted in a manner consistent with the JAMS Rules, supplemented by the Washington Rules of Civil
Procedure. The parties further agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The parties hereby agree to waive their right to have
any dispute between them resolved in a court of law by a judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the parties and the
subject matter of their dispute relating to Executive’s obligations under this Agreement and the Company’s form of confidential information agreement. 
 10. Code Section 409A. 
 (a) Any amount paid under this Agreement that satisfies
the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the regulations issued under Section 409A of the Code (the “Treasury Regulations”) shall not constitute Deferred Compensation
Separation Benefits for purposes of Section 10(b) below, and consequently shall be paid to Executive promptly following termination as required by Section 3 of this Agreement. It is intended that all cash severance payments under this
Agreement, if any, satisfy the short-term deferral rule. 
 (b) Notwithstanding anything to the contrary in this Agreement, no
Deferred Compensation Separation Benefits (as defined in this Section 10(b)) will become payable under this Agreement until Executive has a “separation from service” within the meaning of Section 409A of the Code, and any
proposed or final regulations and guidance promulgated thereunder (“Section 409A”). Further, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s separation from service
(other than due to Executive’s death), and the severance payable to Executive, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits, are considered deferred compensation under
Section 409A (together, the “Deferred Compensation Separation Benefits”), such Deferred Compensation Separation Payments that are otherwise payable within the first six (6) months following Executive’s termination of
employment will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following his or her separation from service but prior to the six
(6) month 

  

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anniversary of his or her separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit
payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. 
 (c) Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not
exceed the Section 409A Limit (as defined below) shall not constitute Deferred Compensation Separation Benefits for purposes of Section 10(b) above. For purposes of this Section 10(c), “Section 409A Limit” will mean two
(2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding the Executive’s taxable year of Executive’s separation from
service as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1); or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s
separation from service occurs. 
 (d) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and
Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual
payment to Executive under Section 409A. 
 11. Miscellaneous Provisions. 
 (a) Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will
be considered a waiver of any other condition or provision or of the same condition or provision at another time. 
 (b)
Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement. 
 (c) Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Washington (with the exception of its conflict of laws provisions).

 (d) Integration. This Agreement, together with the form of confidential information agreement and the standard forms
of Equity Award agreement that describe Executive’s outstanding Equity Awards (other than as such Equity Award agreements have been revised pursuant to this Agreement), represents the entire agreement and understanding between the parties

  

 -8- 

 
as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. With respect to Equity Awards granted on or
after the date of this Agreement, the acceleration of vesting provisions provided herein will apply to such Equity Awards except to the extent otherwise explicitly provided in the applicable Equity Award agreement. No waiver, alteration, or
modification of any of the provisions of this Agreement will be binding unless in a writing and signed by duly authorized representatives of the parties hereto. In entering into this Agreement, no party has relied on or made any representation,
warranty, inducement, promise, or understanding that is not in this Agreement. To the extent that any provisions of this Agreement conflict with those of any other agreement between the Executive and the Company, the terms in this Agreement will
prevail. 
 (e) Severability. In the event that any provision or any portion of any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision or portion of provision. The remainder of this Agreement shall be interpreted so as
best to effect the intent of the Company and Executive. 
 (f) Withholding. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment taxes. 
 (g) Counterparts. This Agreement
may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 
  

 -9- 

 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the day and year set forth below. 
 Executive understands and acknowledges that the definition of “Good
Reason” contained in this Agreement shall supersede any and all such similar definitions contained in employment agreements, offer letters, severance policies and plans and Equity Award agreements to the extent such other agreements provide for
benefits contingent on a Change in Control, and that by executing this Agreement, Executive acknowledges such other arrangements have been amended accordingly. 
  

									
	COMPANY	 		 	DRUGSTORE.COM, INC.
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 
					
	EXECUTIVE	 		 		 	By:	 	 
					
		 		 		 	Title:	 	 

  

 -10-

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