Employment Offer Letter - Drugstore.com Inc. and Peter Neupert


 
May 21, 2001

Peter Neupert
13121 NE 38/th/ Place
Bellevue, WA 98005

Dear Peter:

     On behalf of drugstore.com (the "Company"), we are pleased to confirm your
appointment to the position of Chairman of the Board effective April 26, 2001.
You will continue to be an employee of the Company, reporting directly to the
Company's Board of Directors. This letter supercedes and replaces the Employment
Offer letter between you and the Company dated June 29, 1998 (the "Original
Offer Letter").

     Your annual salary will be $125,000 and you will continue to be eligible
for the Company's standard employee benefits. Your salary will be paid bimonthly
in equal installments in accordance with the Company's standard payroll
policies. Your salary will be reviewed annually by the Company's Board of
Directors.

     You were granted a one-time right to purchase up to 1,260,000 shares of the
Company's Common Stock (the "Shares") at a purchase price of $.04 per share. The
Shares were, and will continue to be, subject to repurchase by the Company at
your original purchase price (the "Repurchase Right") within one year following
termination of your employment with the Company. Except as otherwise set forth
below, the Repurchase Right will lapse over the term of your employment: (i)
with respect to 1/4th of the Shares on the date of purchase; (ii) with respect
to the balance of the Shares, the repurchase right will lapse one (1) year after
your start date at the rate of 1/48th of the Shares per month at the close of
each month while you remain employed with the Company, over the remainder of the
four (4) year vesting term.

     If during your employment with the Company (i) there is a Change of Control
(as defined below), and (ii) you are not offered a position with similar
responsibilities (at the same or greater base salary and bonus potential) by the
surviving corporation, the Company's Repurchase Right will immediately lapse
with respect to all of the Shares. You agree that you will not consider your
responsibilities to be dissimilar solely because the acquiring company combines
and operates warehousing, distribution and other similar operations. "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.

     All of us at the Company look forward to continuing a beneficial and
rewarding relationship. Nevertheless, your employment at drugstore.com may be
terminated by you or drugstore.com at any time for any reason with or without
cause or notice.

     Should you have any questions with regard to any of the items indicated
above, please call Alesia Pinney. Kindly indicate your consent to the terms
contained in this offer letter by signing and returning a copy to us by May 25,
2001.

Sincerely,

drugstore.com, inc.



Kal Raman
President and Chief Executive Officer

Agreed to and accepted:


_________________________                Date:  May __ 2001
Peter Neupert