Sample Business Contracts

Employment Agreement - drugstore.com inc. and Kal Raman

Employment Forms

Employment Contract. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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May 21, 2001

Kal Raman

Dear Kal:

     On behalf of drugstore.com, inc. (the "Company"), we are pleased to confirm
your appointment to the position of President and Chief Executive Officer
effective April 26, 2001. You will report directly to the Company's Board of
Directors.

     You will receive an annual salary of $350,000, along with the Company's
standard employee benefits. Your salary will be paid in accordance with the
Company's standard payroll policies. You will be eligible to receive a bonus of
up to $350,000 annually, based upon the Company's performance. The exact bonus
formula will be determined by mutual agreement with you. In addition, you will
receive a $75,000 signing bonus upon your acceptance of this letter. You will
also receive a $25,000 bonus after one year, assuming your continued employment
with the Company. Your compensation package will be reviewed annually by the
Company's Board of Directors.

     You will be granted an option (the "Option") to purchase 1,000,000 shares
of drugstore.com, inc. common stock. The exercise price will be equal to the
fair market value of such shares on April 26, 2001, which was $1.53 per share.
The options will vest in equal monthly installments over a three-year period.
Vesting will depend upon your continued employment with the Company. 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.

     All of us at the Company are very excited about your promotion and 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.

     This letter supercedes and replaces the Employment Offer Letter between you
and the Company dated July 28, 1998. The terms of this offer 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.

     Should you have any questions with regard to any of the items indicated
above, please contact 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.


/s/ Peter Neupert
--------------------------
Peter Neupert
Chairman


Agreed to and accepted:

/s/ Kal Raman                                   Date:  May __, 2001
--------------------------
Kal Raman