Voting Agreement - drugstore.com inc. and Jed Smith, Peter Neupert, Kleiner Perkins Caufield & Byers, Amazon.com Inc. and Vulcan Ventures Inc.
DRUGSTORE.COM, INC.
SECOND AMENDED AND RESTATED VOTING AGREEMENT
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This Second Amended and Restated Voting Agreement (the "Agreement") is made
as of May 19, 1999, by and among drugstore.com, inc., a Delaware corporation
(the "Company"), Jed Smith (the "Founder"), Peter Neupert ("Neupert") and the
holders of shares of Series A Preferred Stock and Series D Preferred Stock
listed on Exhibit A (collectively, the "Investors" and each individually, an
"Investor") and terminates and supersedes in all respects that certain Amended
and Restated Voting Agreement dated August 10, 1998, by and among the Company
and certain of the Investors (the "Prior Agreement").
RECITALS
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A. Vulcan Ventures Incorporated ("Vulcan") has executed a counterpart
signature page to the Series D Preferred Stock and Convertible Note Purchase
Agreement (the "Purchase Agreement") dated May 19, 1999 pursuant to which the
Company will sell to Vulcan and Vulcan will purchase from the Company Notes
convertible into shares of the Company's Series D Preferred Stock. In
connection with Vulcan's obligations under the Purchase Agreement, the Company,
the Founder, Neupert and the Investors have agreed to enter into this Agreement
for the purpose of setting forth the terms and conditions pursuant to which the
Investors, the Founder and Neupert shall vote their shares of the Company's
voting stock in favor of certain designees to the Company's Board of Directors
(the "Board"). The Company, the Investors, the Founder and Neupert each desire
to facilitate the voting arrangements set forth in this Agreement, and the sale
and purchase of shares of Series D Preferred Stock pursuant to the Purchase
Agreement, by agreeing to the terms and conditions set forth below.
B. Pursuant to Section 4.2 of the Prior Agreement, this Agreement is being
executed by the Company, the Founder, and holders of at least two-thirds (2/3)
of the Company's capital stock held by the Investors who were parties to the
Prior Agreement, thereby permitting the Prior Agreement to be terminated and
superseded by this Agreement.
AGREEMENT
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The parties agree as follows:
1. Election of Directors. The number of authorized directors of the
Company will initially be set at eight (8). At each annual meeting of the
stockholders of the Company, or at any meeting of the stockholders of the
Company at which members of the Board are to be elected, or whenever members of
the Board are to be elected by written consent, the Founder, Neupert and the
Investors agree to vote or act with respect to their shares so as to elect:
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(a) Two (2) persons designated by Kleiner Perkins Caufield & Byers
VIII ("KPCB"). One such designee may be made at KPCB's sole discretion and the
other such designee shall be reasonably acceptable to a majority of the
remaining Board members (excluding the KPCB designees). Such persons shall
initially be John Doerr and Brook Byers. Notwithstanding the foregoing, the
parties hereto shall not be obligated to vote or act to elect any representative
of KPCB if KPCB, together with all of its affiliates, does not hold at least
2,000,000 shares of Series A Preferred Stock (as adjusted for any future stock
splits, stock dividends, recapitalizations and the like);
(b) Two (2) persons designated by Amazon.com. One such designee may
be made at Amazon.com's sole discretion and the other such designee shall be
reasonably acceptable to a majority of the remaining Board members (excluding
the Amazon.com designees). Such persons shall initially be Jeffrey Bezos and
such other designee as may be named at any time by Amazon.com. Notwithstanding
the foregoing, the parties hereto shall not be obligated to vote or act to elect
any representative of Amazon.com if Amazon.com, together with all of its
affiliates, does not hold at least 2,000,000 shares of Series A Preferred Stock
(as adjusted for any future stock splits, stock dividends, recapitalizations and
the like);
(c) One (1) person designated by Vulcan. Such person shall initially
be William Savoy. Notwithstanding the foregoing, the parties hereto shall not
be obligated to vote or act to elect any representative of Vulcan (i) until that
certain convertible Promissory Note, dated May 19, 1999 is converted into shares
of the Company's equity securities and (ii) if Vulcan, together with all of its
affiliates, does not hold at least 2,000,000 shares of Series D Preferred Stock
(as adjusted for any future stock splits, stock dividends, recapitalizations and
the like after May 18, 1999);
(d) Jed Smith, unless the Board has determined by majority vote
(excluding Mr. Smith) that Mr. Smith is no longer a valuable contributor to the
Company and therefore should no longer continue to serve as a director; and
(e) Peter Neupert, unless the Board has determined by majority vote
(excluding Mr. Neupert) that Mr. Neupert is no longer a valuable contributor to
the Company and therefore should no longer continue to serve as a director.
Notwithstanding the provisions of paragraphs (a) and (b) above, at any
time after the date of this Agreement, either KPCB or Amazon.com may (by written
notice to the other party and the Company) withdraw its right to designate two
Board members. In such event, KPCB and Amazon.com shall each cause one of its
designees to resign from the Board; thereafter, KPCB and Amazon.com shall each
have the right to designate one Board member, selected in such party's sole
discretion.
In the event of any termination, removal or resignation of any
director (other than as provided in the previous paragraph), the parties hereto
shall take all actions necessary and appropriate to cause such vacancy to be
filled in the manner by which such director was elected pursuant to the terms of
this Agreement.
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2. Additional Representations and Covenants.
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2.1 No Revocation. The voting agreements contained herein are coupled
with an interest and may not be revoked during the term of this Agreement.
2.2 Change in Number of Directors. The Founder and the Investors will not
vote for any amendment or change to the Company's Fifth Amended and Restated
Certificate of Incorporation or Bylaws providing for the election of more than
eight (8) directors, or any other amendment or change to the Certificate of
Incorporation or Bylaws inconsistent with the terms of this Agreement.
2.3 Legends. Each certificate representing shares of the Company's
capital stock held by the Founder or the Investors or any assignee of the
Founder or Investors shall bear the following legend:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND
AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST
IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO
AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING
AGREEMENT."
2.4 Vulcan Director. The parties hereto agree to take reasonable steps to
fill the vacancy on the Board with the person nominated by Vulcan pursuant to
Section 1(c) as soon as practicable following the conversion of the Note into
equity securities of the Company.
3. Termination.
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3.1 Termination Events. This Agreement shall terminate upon the earlier
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of:
(a) consummation of an underwritten public offering by the Company of
shares of its Common Stock pursuant to a registration statement under the
Securities Act, which results in gross proceeds in excess of $15,000,000 and the
public offering price of which is at least $5.00 per share (appropriately
adjusted for any stock split, dividend, combination or other recapitalization);
or
(b) when the Company shall (A) sell, convey, or otherwise dispose of all or
substantially all of its property or business or merge or consolidate with any
other corporation (other than a wholly-owned subsidiary corporation) where the
stockholders of the Company own less than fifty percent (50%) of the voting
power of the surviving entity after such merger or consolidation or (B) effect
any other transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Company is disposed of,
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provided that this subsection (b) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the Company.
3.2 Removal of Legend. At any time after the termination of this
Agreement in accordance with Section 3.1, any holder of a stock certificate
legended pursuant to Section 2.3 may surrender such certificate to the Company
for removal of the legend, and the Company will duly reissue a new certificate
without the legend.
4. Miscellaneous.
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4.1 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
4.2 Amendments and Waivers. Any term hereof may be amended or waived
only with the written consent of the Company, the Founder, Neupert, and holders
of at least two-thirds (2/3) of the Company's capital stock held by the
Investors (including, in the case of Amazon.com, any wholly-owned subsidiary of
Amazon.com), provided, however, that any amendment to Section 1(c) or Section
2.4 shall require the consent of Vulcan. Any amendment or waiver effected in
accordance with this Section 4.2 shall be binding upon the Company, the
Investors, and any holder of the Founder's shares, and each of their respective
successors and assigns.
4.3 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient on the date of delivery, when
delivered personally or by overnight courier or sent by telegram or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party's address or fax number as set forth on the signature page or on
Exhibit A hereto, or as subsequently modified by written notice.
4.4 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
4.5 Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
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4.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
4.7 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.8 Addition of Investors. Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional shares of its Series A
Preferred Stock pursuant to the Purchase Agreement, any purchaser of such shares
of Series A Preferred Stock may become a party to this Agreement by executing
and delivering an additional counterpart signature page to this Agreement and
shall be deemed an "Investor" hereunder.
[Signature Page Follows]
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The parties hereto have executed this Second Amended and Restated Voting
Agreement as of the date first written above.
COMPANY: INVESTORS:
DRUGSTORE.COM, INC. /s/ Vulcan Ventures
---------------------------------
By: /s/ Peter Neupert Vulcan Ventures Incorporated
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Peter Neupert, President By:
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Fax Number: Name:
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FOUNDER: (print)
/s/ Jed Smith Title:
--------------------------------- --------------------------
Jed Smith Fax Number:
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Address:
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Kleiner Perkins Caufield &
------------------------ Byers VIII, L.P.
Fax Number: By: KPCB VIII Associates, L.P., its
--------------------- General Partner
By: /s/ KPCB VIII Associates
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a General Partner
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
KPCB VIII Founders Fund, L.P.
By: KPCB VIII Associates, L.P.,
its General Partner
By: /s/ KPCB VIII Associates
-----------------------------
a General Partner
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED VOTING AGREEMENT
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KPCB Life Sciences Zaibatsu Fund II, L.P.
By: KPCB VIII Associates, L.P.,
its General Partner
By: /s/ KPCB VIII Associates
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a General Partner
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
Amazon.com, Inc.
By: /s/ Amazon.com, Inc.
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Name:
---------------------------
Title:
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Address: 1516 2nd Avenue
Seattle, WA 98101
NEUPERT:
By: /s/ Peter Neupert
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Peter Neupert
Address: 1603 Evergreen Point Road
Bellevue, WA 98004
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED VOTING AGREEMENT
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EXHIBIT A
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INVESTORS
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Name and Address
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Kleiner Perkins Caufield & Byers VIII
2750 Sand Hill Road
Menlo Park, CA 94025
KPCB VIII Founders Fund, L.P.
2750 Sand Hill Road
Menlo Park, CA 94025
KPCB Information Sciences Zaibatsu Fund II, L.P.
2750 Sand Hill Road
Menlo Park, CA 94025
Amazon.com, Inc.
1516 2nd Avenue
Seattle, WA 98101
Attn: General Counsel
David Whorton
c/o Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Vulcan Ventures Incorporated
110 110th Avenue Northeast, Suite 550
Bellevue, Washington 98004