<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
AMENDMENT NO. ___
DRUGSTORE.COM, INC.
---------------------------
(Name of Issuer)
COMMON STOCK
--------------------------------------
(Title of Class of Securities)
26224110
---------------------------------------------
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C> <C>
L. Michelle Wilson Scott L. Gelband
Amazon.com, Inc. with a copy to: Perkins Coie LLP
1200 12th Avenue South, Suite 1200 1201 Third Avenue, 40th Floor
Seattle, WA 98144 Seattle, Washington 98101
(206) 266-1000 (206) 583-8888
- ---------------------------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
</TABLE>
August 2, 1999
--------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 Pages)
<PAGE> 2
SCHEDULE 13D
- ---------------------- ----------------------
CUSIP No. 26224110 PAGE 2 OF 13 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Amazon.com, Inc. 91-1646860
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
12,355,745
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY Not Applicable
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 12,355,745
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
Not Applicable
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY AMAZON.COM
12,355,745
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
approximately 27.8%(1)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
- ---------------
(1) This percentage is based on 43,366,681 shares of Common Stock outstanding
as of October 3, 1999, as indicated in drugstore.com's most recent filing
with the Securities and Exchange Commission, plus 1,066,667 shares of
Common Stock issued to Amazon.com in January 2000.
<PAGE> 3
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, $0.001 par value per
share (the "Common Stock"), of drugstore.com, inc., a Delaware corporation. The
principal executive and business office of drugstore.com is located at 13920
South Eastgate Way, Suite 300, Bellevue, Washington 98005.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed by Amazon.com, Inc., a Delaware corporation,
whose principal business is the online retailing of books, music, videos, DVDs,
toys, electronics, home improvement products and software. The address of
Amazon.com's principal executive and business office is 1200 12th Avenue South,
Suite 1200, Seattle, Washington 98144.
The following provides certain information as to the directors and
executive officers of Amazon.com (where no business address is given, the
address is that of Amazon.com's principal executive and business offices stated
in this Item 2):
<TABLE>
<CAPTION>
DIRECTORS:
- --------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
- --------------------------------------------------------------------------------
<S> <C>
Jeffrey P. Bezos Chairman of the Board and Chief Executive
Officer of Amazon.com
P.O. Box 81226
Seattle, WA 98108-1226
- --------------------------------------------------------------------------------
Joseph Galli, Jr. President and Chief Operating Officer of
Amazon.com
P.O. Box 81226
Seattle, WA 98108-1226
- --------------------------------------------------------------------------------
Tom A. Alberg Principal in Madrona Investment Group, L.L.C.
Madrona Investment Partners
1000 Second Avenue, Suite 3700
Seattle, WA 98104
- --------------------------------------------------------------------------------
Scott D. Cook Chairman of the Executive Committee of the
Board of Intuit, Inc.
Intuit, Inc.
2535 Garcia Ave.
Mountain View, CA 94043
- --------------------------------------------------------------------------------
L. John Doerr General Partner
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Patricia Q. Stonesifer President and Chairman of the Bill & Melinda
Gates Foundation
Bill & Melinda Gates Foundation
P.O. Box 23350
Seattle, WA 98102
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS:
- --------------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION AND BUSINESS ADDRESS(1)
- --------------------------------------------------------------------------------
<S> <C>
Jeffrey P. Bezos Chief Executive Officer and Chairman of the
Board
- --------------------------------------------------------------------------------
Joseph Galli, Jr. President and Chief Operating Officer
- --------------------------------------------------------------------------------
Warren Jenson Senior Vice President, Chief Financial Officer
- --------------------------------------------------------------------------------
John D. Risher Senior Vice President, Product Development
- --------------------------------------------------------------------------------
Richard Dalzell Vice President and Chief Information Officer
- --------------------------------------------------------------------------------
Mark Britto Vice President, Strategic Alliances
- --------------------------------------------------------------------------------
Jeff Wilke Vice President and General Manager, Operations
- --------------------------------------------------------------------------------
</TABLE>
(1) The present principal occupation of all executive officers of
Amazon.com is with Amazon.com. The business address of all executive officers is
Amazon.com, Inc., P.O. Box 81226, Seattle, Washington 98108-1226.
During the last five years, neither Amazon.com, nor to the best of its
knowledge, any of its directors or executive officers has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he or she is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws. Each director and executive officer of
Amazon.com is a citizen of the United States of America.
<PAGE> 5
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Before drugstore.com registered the Common Stock pursuant to Section 12
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
Amazon.com acquired 10,733,523 shares of convertible preferred stock of
drugstore.com (the "Preferred Stock"). Amazon.com acquired 5,000,000 shares of
Series A Preferred Stock in August 1998 as consideration for Amazon.com's
obligations under a technology licensing and advertising agreement with
drugstore.com. Amazon.com purchased 3,177,612 shares of Series B Preferred Stock
in October 1998 and December 1998 for $3.35 per share, for an aggregate purchase
price of $10,645,000, which Amazon.com obtained from its working capital.
Amazon.com purchased 2,555,911 shares of Series C Preferred Stock in March 1999
for $7.825 per share, for an aggregate purchase price of $20,000,003, which
Amazon.com obtained from its working capital. The Preferred Stock converted into
Common Stock on a one-to-one basis at the closing of drugstore.com's initial
public offering in July 1999. Concurrent with drugstore.com's initial public
offering, drugstore.com issued 555,555 shares of Common Stock to Amazon.com in a
private placement transaction. Amazon.com obtained the cash consideration of
$9,999,990 for these shares from its working capital. In January 2000,
Amazon.com acquired 1,066,667 shares of Common Stock in a private placement
transaction. Amazon.com obtained the cash consideration of $30,000,009.37 for
these shares from its working capital. None of the funds used to purchase the
shares of Common Stock or Preferred Stock consisted of funds or other
consideration borrowed or otherwise obtained for the purpose of acquiring,
holding, trading or voting the shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
Amazon.com acquired the securities covered by this Schedule 13D as a
strategic investment.
Amazon.com expects to evaluate on an ongoing basis drugstore.com's
financial condition, business operations and prospects, the market price of the
Common Stock, alternative investment opportunities, conditions in the securities
market generally and other factors. Accordingly, Amazon.com reserves the right
to change its plans and intentions at any time. In particular, Amazon.com may,
at any time and from time to time, acquire or dispose of shares of Common Stock
pursuant to public or private offerings or otherwise. To the knowledge of
Amazon.com, each of the directors and officers listed in Item 2 (as applicable)
may make the same evaluation and reserves the same rights.
Other than as discussed above, neither Amazon.com nor, to the best of
Amazon.com's knowledge, any of the individuals named in Item 2 (as applicable),
presently has any plans or proposals that relate to or would result in any of
the actions specified in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
<PAGE> 6
ITEM 5. INTEREST IN SECURITIES OF DRUGSTORE.COM.
(a) As of the date of this Schedule 13D, Amazon.com beneficially owns
12,355,745 shares of Common Stock. Based on 43,366,681 shares of Common Stock
outstanding as of October 3, 1999 plus 1,066,667 shares issued to Amazon.com in
January 2000, Amazon.com's beneficial ownership represents approximately 27.8%
of the total outstanding shares of Common Stock. Amazon.com does not
beneficially own any outstanding shares of Common Stock of drugstore.com other
than these 12,355,745 shares of Common Stock. The table below summarizes the
beneficial ownership of Amazon.com's directors and executive officers:
<TABLE>
<CAPTION>
DIRECTORS:
- --------------------------------------------------------------------------------
SHARES OF DRUGSTORE.COM COMMON STOCK
NAME BENEFICIALLY OWNED
- --------------------------------------------------------------------------------
<S> <C>
Jeffrey P. Bezos --
- --------------------------------------------------------------------------------
Joseph Galli, Jr. --
- --------------------------------------------------------------------------------
Tom A. Alberg --
- --------------------------------------------------------------------------------
Scott D. Cook --
- --------------------------------------------------------------------------------
L. John Doerr(1) 7,033,271
- --------------------------------------------------------------------------------
Patricia Q. Stonesifer --
- --------------------------------------------------------------------------------
Warren Jensen --
- --------------------------------------------------------------------------------
John D. Risher --
- --------------------------------------------------------------------------------
Richard Dalzell --
- --------------------------------------------------------------------------------
Mark Britto --
- --------------------------------------------------------------------------------
Jeff Wilke --
- --------------------------------------------------------------------------------
</TABLE>
(1) Includes 6,313,633 shares held by Kleiner Perkins Caulfield & Byers
VIII, L.P. ("KPCB VIII"), 365,600 shares held by KPCB VIII Founders
Fund, L.P., and 351,538 shares held by KPCB Life Sciences Zaibatsu Fund
II, L.P. and 2,500 shares held by KPCB IX Associates LLC. KPCB VIII and
KPCB VIII Founders Fund, L.P. are wholly controlled by KPCB VIII
Associates, L.P. KPCB Life Sciences Zaibatsu Fund II, L.P. is wholly
controlled by KPCB VII Associates, L.P. As a general partner of each of
KPCB VIII Associates and KPCB VII Associates, L.P., Mr. Doerr may be
deemed to beneficially own the shares controlled by those entities. Mr.
Doerr disclaims beneficial ownership of those shares except to the
extent of his pecuniary interest in the shares.
<PAGE> 7
Amazon.com disclaims beneficial ownership of all shares beneficially
owned by any of its executive officers and directors.
(b) Amazon.com has the sole power to vote and to direct the vote of,
and the sole power to dispose of and to direct the disposition of, all
12,355,745 shares of Common Stock covered by this Schedule 13D. John Doerr has
shared voting power to vote and direct the vote of, and shared power to dispose
of and direct the disposition of, 7,033,271 shares of Common Stock covered by
this Schedule 13D.
(c) Neither Amazon.com nor any of its directors and officers has
effected any transactions in the Common Stock during the past 60 days.
(d) No other person is known to Amazon.com to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of Common Stock beneficially owned by Amazon.com on the date
of this Schedule 13D.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF DRUGSTORE.COM
Under the Fourth Amended and Restated Voting Agreement dated July 9,
1999, Amazon.com may designate two directors on drugstore.com's board of
directors. This right terminates if Amazon.com ceases to beneficially own at
least 5% of the then-outstanding securities of drugstore.com entitled to vote in
an election of directors.
Under the Fourth Amended and Restated Investors' Rights Agreement dated
May 19, 1999 and its Second Addendum dated July 26, 1999 (the "Investors' Rights
Agreement"), Amazon.com has certain registration rights with respect to its
shares of Common Stock. The holders of 33% of the Registrable Securities (as
defined in the Investors' Rights Agreement) of drugstore.com have the right to
require, on two occasions, the registration by drugstore.com under the
Securities Act of 1933, as amended (the "Securities Act"), of the Registrable
Securities. This right, which is exercisable beginning January 27, 2000, is
subject to a minimum aggregate anticipated offering price of $5,000,000.
Amazon.com also has the right to have the Registrable Securities beneficially
owned by Amazon.com included in a registration statement filed by drugstore.com
under the Securities Act, subject to customary exceptions. In addition, the
holders of at least 20% of the Registrable Securities have the right, on two
occasions in each 12-month period, to require drugstore.com to effect a
registration on Form S-3 of the Registrable Securities, subject to a minimum
aggregate anticipated offering price of $500,000. All of the shares of Common
Stock beneficially owned by Amazon.com, other than those acquired in January
2000, are Registrable Securities and constitute approximately 32% of the
Registrable Securities. All registration rights of Amazon.com under the
Investors' Rights Agreement terminate on the earlier of July 30, 2004 or such
time as Amazon.com may sell all of its shares during a three-month period under
Rule 144 under the Exchange Act or other exemption from registration. In
connection with the acquisition of the shares of Common Stock by Amazon.com in
January 2000, drugstore.com agreed to use its reasonable best efforts to amend
the Investors' Rights Agreement to include those shares as Registrable
Securities, subject to certain exceptions.
<PAGE> 8
Under the Investors' Rights Agreement, Amazon.com may not acquire
beneficial ownership of more than 40% of the securities of drugstore.com
entitled to vote in an election of directors, or securities convertible into or
exchangeable for such voting securities, without the consent of a majority of
drugstore.com's board of directors. Amazon.com must notify drugstore.com of any
future acquisition of such voting securities. This standstill agreement
terminates on the earlier of August 10, 2002 or upon a merger, consolidation,
sale of substantially all of drugstore.com's assets or other transaction that
results in drugstore.com's stockholders owning less than 50% of the voting power
of the surviving entity or that disposes of more than 50% of the voting power of
drugstore.com. This agreement is subject to limited exceptions in the event of a
proxy contest, tender offer or exchange offer that may result in a change of
control of drugstore.com.
Under the Investors' Rights Agreement, drugstore.com (or Kleiner
Perkins Caufield & Byers VIII and its affiliated funds, as the permitted
assignee of drugstore.com) has a right of first refusal on any shares of Common
Stock that Amazon.com proposes to sell. If drugstore.com declines to purchase
all of the shares Amazon.com proposes to offer, Kleiner Perkins or its
affiliated funds may elect to purchase all of the offered shares. This right of
first refusal does not apply to Common Stock registered under the Securities
Act, transfers by Amazon.com to a wholly-owned subsidiary, Common Stock sold in
a transaction in which more than 80% of the voting power of drugstore.com is
disposed of, or sales or transfers to a third party of less than 10% of the
Common Stock then beneficially owned by Amazon.com. The right of first refusal
terminates on the earlier of August 10, 2002 or upon a merger, consolidation,
sale of substantially all of drugstore.com's assets or other transaction that
results in drugstore.com's stockholders owning less than 50% of the voting power
of the surviving entity or that disposes of more than 50% of the voting power of
drugstore.com.
Under the Investors' Rights Agreement and a Lock-up Agreement entered
into in connection with drugstore.com's initial public offering, Amazon.com
agreed not to sell, transfer or otherwise dispose of the Common Stock it
beneficially owns until January 22, 2000.
The descriptions of the Investors' Rights Agreement, the Fourth Amended
and Restated Voting Agreement and Lock-up Agreement do not purport to be
complete and are qualified in their entirety by the provisions of these
agreements.
<PAGE> 9
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
4.1 Fourth Amended and Restated Investors Rights Agreement,
dated as of May 18, 1999, by and among drugstore.com, inc.
and certain Investors (incorporated by reference to Exhibit
10.12 to Amendment No. 3 to drugstore.com's Registration
Statement on Form S-1 (file no. 333-78813), filed with the
SEC on July 8, 1999)
4.2 Addendum to Fourth Amended and Restated Investors Rights
Agreement, dated as of June 17, 1999 (incorporated by
reference to Exhibit 10.25 to Amendment No. 2 to
drugstore.com's Registration Statement on Form S-1 (file no.
333-78813), filed with the SEC on June 28, 1999)
4.3 Second Addendum to Fourth Amended and Restated Investors
Rights Agreement, dated July 26, 1999
10.1 Fourth Amended and Restated Voting Agreement, dated as of
July 9, 1999, by and among drugstore.com, inc., Jed. A.
Smith, Peter M. Neupert, and the holders of Series A
Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock
10.2 Lockup Letter Agreement, dated as of May 5, 1999, between
Morgan Stanley & Co. Incorporated and drugstore.com
</TABLE>
<PAGE> 10
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 4, 2000 AMAZON.COM, INC.
/s/ MARK BRITTO
------------------------------------------
By: Mark Britto
Its: Vice President of Strategic Alliances
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
4.1 Fourth Amended and Restated Investors Rights Agreement,
dated as of May 18, 1999, by and among drugstore.com, inc.
and certain Investors (incorporated by reference to Exhibit
10.12 to Amendment No. 3 to drugstore.com's Registration
Statement on Form S-1 (file no. 333-78813), filed with the
SEC on July 8, 1999)
4.2 Addendum to Fourth Amended and Restated Investors Rights
Agreement, dated as of June 17, 1999 (incorporated by
reference to Exhibit 10.25 to Amendment No. 2 to
drugstore.com's Registration Statement on Form S-1 (file no.
333-78813), filed with the SEC on June 28, 1999)
4.3 Second Addendum to Fourth Amended and Restated Investors
Rights Agreement, dated July 26, 1999
10.1 Fourth Amended and Restated Voting Agreement, dated as of
July 9, 1999, by and among drugstore.com, inc., Jed. A.
Smith, Peter M. Neupert, and the holders of Series A
Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock
10.2 Lockup Letter Agreement, dated as of May 5, 1999, between
Morgan Stanley & Co. Incorporated and drugstore.com
</TABLE>
<PAGE> 1
EXHIBIT 4.3
DRUGSTORE.COM, INC.
SECOND ADDENDUM TO
FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Second Addendum (this "Addendum") dated as of July 26, 1999, to
the Fourth Amended and Restated Investors' Rights Agreement dated as of May 18,
1999 (the "Rights Agreement"), by and among drugstore.com, inc., a Delaware
corporation (the "Company") and the parties listed on Exhibit A hereto hereby
adds certain securities to the definition of "registrable securities" under the
Rights Agreement. A prior Addendum to the Rights Agreement dated as of June 17,
1999 remains in full force and effect.
RECITALS
A. The Company and Amazon.com, Inc. ("Amazon.com") have entered into a
letter agreement (the "Letter Agreement"), a copy of which is attached as
Exhibit B hereto, pursuant to which the Company will sell to Amazon.com and
Amazon.com will purchase from the Company $10,000,000 of shares of the Company's
Common Stock in a private placement transaction to be closed concurrently with
the closing of the Company's initial public offering of Common Stock (the
"Amazon Private Placement"). The Company and the Investors party to the Rights
Agreement are willing to grant Amazon.com registration rights with regard to
such shares.
B. On July 9, 1999, the Company's board of directors resolved to
contribute 200,000 shares of Common Stock with registration rights to the
drugstore.com Foundation.
C. Pursuant to Section 5.2 of the Rights Agreement, this Addendum is
being executed by the Company and the holders of at least two-thirds (2/3) of
the Registrable Securities presently outstanding, thereby permitting the Rights
Agreement be amended hereby.
D. Capitalized terms used herein and not defined shall have the
meanings given to them in the Rights Agreement.
AGREEMENT
1. The parties agree that for purposes of Section 1 of the Rights
Agreement, shares of Common Stock of the Company issued to Amazon.com pursuant
to the Amazon Private Placement and shares of Common Stock given to the
drugstore.com Foundation by the Company shall be deemed to be "Registrable
Securities" for all purposes and subject to all conditions of the Rights
Agreement. The drugstore.com Foundation shall become a party to the Rights
Agreement upon execution of this Addendum.
2. Each Investor hereby waives its right of first offer under Section
2.3 of the Rights Agreement with respect to the sale of shares of Common Stock
to Amazon.com in the Amazon Private Placement and the transfer of shares for no
consideration to the drugstore.com Foundation.
3. This Addendum shall become effective upon the closing of the Amazon
Private Placement. Upon such effectiveness:
(a) all references in any document to the Rights Agreement shall be
deemed to be references to the Rights Agreement as modified by this Addendum;
and
<PAGE> 2
(b) except as specifically modified hereby, the Rights Agreement
shall continue in full force and effect in accordance with the provisions
thereof.
4. This Addendum shall automatically terminate if the Amazon Private
Placement is not consummated prior to November 30, 1999. If such termination
occurs, this Addendum shall become void and of no further effect.
5. This Addendum, which shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws, may be executed in counterparts.
[Signature Page Follows]
-2-
<PAGE> 3
EXHIBIT A
INVESTORS
Name and Address
- -------------------------------------------------------------
Rite Aid Corporation
30 Hunter Lane
Camp Hill, PA 17011
General Nutrition Companies, Inc.
300 6th Avenue
Pittsburgh, PA 15222
Vulcan Ventures Incorporated
110th Avenue Northeast, Suite 550
Bellevue, Washington 98004
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 Life Sciences Zaibatsu Fund II, L.P.
2750 Sand Hill Road
Menlo Park, CA 94025
David Whorton
c/o Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Amazon.com, Inc.
1516 2nd Avenue
Seattle, WA 98101
Attn: General Counsel
Peter M. Neupert
13920 SE Eastgate Way, Suite 300
Bellevue, WA 98005
Maveron Equity Partners, L.P.
800 Fifth Avenue, Suite 4100
-1-
<PAGE> 4
Maveron Equity Partners, L.P.
800 Fifth Avenue, Suite 4100
Seattle, WA 98104
Liberty DS, Inc.
8101 Prentice Avenue, Suite 500
Englewood, CO 80111
-2-
<PAGE> 5
The parties have executed this Second Addendum to the Fourth Amended
and Restated Investors' Rights Agreement as of the date first above written.
COMPANY: INVESTORS:
DRUGSTORE.COM, INC., RITE AID CORPORATION,
By: /s/ Peter M. Neupert By: /s/ Martin L. Grass
---------------------- --------------------------------
Peter M. Neupert Name: Martin L. Grass
President Title: Chairman of the Board & CEO
Address: Address:
13920 SE Eastgate Way 30 Hunter Lane
Suite 300 Camp Hill, PA 17011
Bellevue, WA 98005
GENERAL NUTRITION COMPANIES, INC.,
By: /s/ James M. Sander
Name: James M. Sander
Title: VP
Address:
------------------------------------
------------------------------------
VULCAN VENTURES INCORPORATED,
By: /s/ William D. Savoy
----------------------------
Name: William D. Savoy
Title: Vice President
Address:
110 110th Avenue NE, Suite 550
Bellevue, WA 98004
KLEINER PERKINS CAUFIELD & BYERS VIII, L.P.,
By: KPCB VIII Associates, L.P., its General Partner
By: /s/ L. John Doerr
------------------------
a General Partner
Address:
2750 Sand Hill Road
Menlo Park, CA 94025
-3-
<PAGE> 6
KPCB VIII FOUNDERS FUND, L.P.,
By: KPCB VIII Associates, L.P., its General Partner
By: /s/ L. John Doerr
-----------------------
a General Partner
Address:
2750 Sand Hill Road
Menlo Park, CA 94025
KPCB LIFE SCIENCES ZAIBATSU FUND II, L.P.,
By: KPCB VII Associates, L.P., its General Partner
By: /s/ L. John Doerr
-----------------------
a General Partner
Address:
2750 Sand Hill Road
Menlo Park, CA 94025
AMAZON.COM, INC.
By: /s/ Randy Tinsley
-----------------------
Name: Randy Tinsley
Title: V.P. Corporate Development
Address:
1516 2nd Avenue
Seattle, WA 98101
PETER NEUPERT
By: /s/ Peter Neupert
-----------------------
Address:
13920 SE Eastgate Way, Suite 300
Bellevue, WA 98005
DRUGSTORE.COM FOUNDATION
By: /s/ Alesia Pinney
-----------------------
Name: Alesia Pinney
Title: Secretary
Address:
13920 SE Eastgate Way, Suite 300
Bellevue, WA 98005
-4-
<PAGE> 7
MAVERON EQUITY PARTNERS, L.P.
By: /s/ Dan Levitan
-----------------------
Name:
Title:
Address:
800 Fifth Ave., Suite 4100
Seattle, WA 98104
-5-
<PAGE> 1
EXHIBIT 10.1
DRUGSTORE.COM, INC.
FOURTH AMENDED AND RESTATED VOTING AGREEMENT
This Fourth Amended and Restated Voting Agreement (this "Agreement") is
made as of July 9, 1999, by and among drugstore.com, inc., a Delaware
corporation (the "Company"), Jed A. Smith (the "Founder"), Peter M. Neupert
("Neupert") and the holders of shares of Series A Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock listed on Exhibit A (collectively,
the "Investors" and each individually, an "Investor") and terminates and
supersedes in all respects that certain Third Amended and Restated Voting
Agreement dated June 17, 1999, by and among the Company and certain of the
Investors (the "Prior Agreement").
RECITAL
To correctly reflect the intentions of the parties at the time of the execution
of the Prior Agreement and 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
The parties agree as follows:
1. ELECTION OF DIRECTORS. The number of authorized directors of the
Company will initially be set at nine (9). 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 Company's Board of Directors (the "Board") are
to be elected, or wherever 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:
(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
<PAGE> 2
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, Inc. ("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;
(c) One (1) person designated by Vulcan Ventures Incorporated
("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 (the "Vulcan Note") 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 19, 1999);
(d) One (1) person designated by Rite Aid on or after January 1,
2000. Notwithstanding the foregoing, the parties hereto shall not be obligated
to elect any representative of Rite Aid if (x) Rite Aid does not beneficially
own at least 5% of the then-outstanding securities of the Company entitled to
vote for the election of directors of the Company or (y) each of the Main
Agreement dated as of June 17, 1999 between the Company and Rite Aid, the
Governance Agreement dated as of June 17, 1999 between the Company and Rite Aid
("Rite Aid Governance Agreement") and the Pharmacy Supply and Services Agreement
dated as of June 17, 1999 between the Company and Rite Aid shall have
terminated;
(e) 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
(f) 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,
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<PAGE> 3
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.
2. ADDITIONAL REPRESENTATIONS AND COVENANTS.
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 Sixth Amended and
Restated Certificate of Incorporation or Bylaws providing for the election of
more than nine (9) 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
Vulcan Note into equity securities of the Company.
3. TERMINATION.
3.1 TERMINATION EVENTS. (a) This Agreement shall terminate when the
Company shall 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, provided that this subsection shall
not apply to a merger
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<PAGE> 4
effected exclusively for the purpose of changing the domicile of the Company.
(b) The rights and obligations of the Founder, Neupert and the
Investors pursuant to Sections 1(a), 1(b), 1(c), 1(d), 1(e) and 1(f) shall
terminate upon the consummation of an underwritten public offering by the
Company of shares of its Common Stock pursuant to a registration statement filed
under the Securities Act of 1933, 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); provided, however, that on the first business day following
the termination of Amazon.com's rights under Section 1(b) pursuant to this
Section 3.1(b), the Company will cause the Board to nominate, recommend and
solicit proxies (if necessary) for election to the Board of one person
designated by Amazon.com, provided that this obligation shall be deemed
fulfilled in the event an Amazon.com designated director is already sitting on
the Board at such time. Thereafter, in the event of a vacancy in an Amazon.com
Board seat, or in any Board election in which an Amazon.com designated director
is up for re-election, unless a second Amazon.com designated director is then
serving on the Board, the Company will cause the vacancy to be filled with an
Amazon.com designated director or will cause such Amazon.com designated director
to be included on the slate of directors proposed by the Board at such election
and cause the Board to recommend and solicit proxies (if necessary) in favor of
such Amazon.com designated director. Notwithstanding any of the foregoing, the
Company's obligations under this Section 3.1(b) will terminate on the earlier
of:
(i) the date Amazon.com ceases to beneficially own at least 5%
of the then-outstanding shares of Common Stock; and
(ii) termination of this Agreement for any reason including, a
termination pursuant to Section 3.1(a).
(c) The rights and obligations of the Founder, Neupert and the
Investors pursuant to Sections 1(a), 1(c), 1(e) and 1(f) shall terminate when
the Company shall effect any transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company is
disposed of, provided that this subsection shall not apply to any transaction or
series of related transactions effected exclusively for purpose of changing the
domicile of the Company, provided that this subsection shall not apply to a
transaction or series of transactions effected
4
<PAGE> 5
exclusively for the purpose of changing the domicile of the Company.
(d) Notwithstanding the termination of the rights and obligations of
the Founder, Neupert and the Investors pursuant to Section 3.1(b) of this
Agreement, following any such termination Founder, Neupert and the Investors
(but not any transferee of any shares held by the Founder, Neupert and the
Investors) agree to vote or act with respect to their shares so as to elect the
nominee for director who is designated by Amazon.com in accordance with Section
3.1(b) of this Agreement and the nominee for director designated by Rite Aid in
accordance with Section 3.1 of the Rite Aid Governance Agreement.
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.
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 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 (i) any amendment to Section 1(c) or
Section 2.4 shall require the consent of Vulcan, (ii) any amendment to Section
1(d) or Section 3.1 shall require the consent of Rite Aid and (iii) any
amendment to Section 1(b) or Section 3.1 shall require the consent of
Amazon.com. 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
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<PAGE> 6
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.
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.
[Signature Page Follows]
6
<PAGE> 7
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED VOTING AGREEMENT
The parties hereto have executed this Fourth Amended and Restated
Voting Agreement as of the date first written above.
COMPANY: INVESTORS:
DRUGSTORE.COM, INC. RITE AID CORPORATION
By: /s/ Peter M. Neupert By: /s/ Elliot S. Gerson
------------------------ -------------------------
Peter M. Neupert Name: Elliot S. Gerson
President Title: Exec. V. P.
Address: Address:
13920 SE Eastgate Way 30 Hunter Lane
Suite 300 Camp Hill, PA 17011
Bellevue, WA 98005
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10022-3607
Attention: Nancy Lieberman, Esq.
FOUNDER: GENERAL NUTRITION COMPANIES, INC.
By: /s/ Jed Smith By: /s/ James M. Sander
------------------------ -------------------------
Jed Smith Name:
Founder Title: VP
Address: Address:
13920 SE Eastgate Way
Suite 300 VULCAN VENTURES INCORPORATED
Bellevue, WA 98005
By: /s/ William D. Savoy
-------------------------
Name: William D. Savoy
Title: Vice President
Address:
110 110th Avenue Northeast
Suite 550
Bellevue, WA 98004
<PAGE> 8
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED VOTING AGREEMENT
KLEINER PERKINS CAUFIELD & BYERS VIII, L.P.
By: KPCB VIII Associates, L.P., its General Partner
By: /s/ L. John Doerr
------------------------------
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/ L. John Doerr
------------------------------
a General Partner
Address:
2750 Sand Hill Road
Menlo Park, CA 94025
KPCB LIFE SCIENCES ZAIBATSU FUND II,L.P.
By: KPCB VII Associates,L.P., its General Partner
By: /s/ L. John Doerr
------------------------------
a General Partner
Address:
2750 Sand Hill Road
Menlo Park, CA 94025
AMAZON.COM, INC.
By: /s/ Randy Tinsley
------------------------------
Name: Randy Tinsley
Title: V.P. Corporate Development
Address:
1200 12th Avenue S., Suite 1200
Seattle, WA 98144
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<PAGE> 9
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED VOTING AGREEMENT
NEUPERT:
By: /s/ Peter M. Neupert
------------------------------
Peter M. Neupert
Address:
1603 Evergreen Point Road
Bellevue, WA 98004
GENERAL NUTRITION INVESTMENT COMPANY:
By: /s/ James Sander
------------------------------
Name: James Sander
Title: VP
Address:
<PAGE> 10
EXHIBIT A
INVESTORS
Name and Address
- --------------------------------------------------------------------------------
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 Life Sciences Zaibatsu Fund II, L.P.
2750 Sand Hill Road
Menlo Park, CA 94025
Amazon.com, Inc.
1200 12th Avenue, Suite 1200
Seattle, WA 98144
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
Rite Aid Corporation
30 Hunter Lane
Camp Hill, PA 17011
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10022-3607
Attention: Nancy Lieberman, Esq.
General Nutrition Companies, Inc., through its wholly owned subsidiary General
Nutrition Investment Company
300 6th Avenue
Pittsburgh, PA 15222
Attention: General Counsel
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 10.2
drugstore.com, inc.
May 5, 1999
Morgan Stanley & Co. Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Thomas Weisel Partners LLC
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with drugstore.com Inc., a Delaware corporation (the
"Company") providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Morgan Stanley (the "Underwriters"), of shares
(the "SHARES") of the Common Stock, par value $.001 of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 days after the date of the final prospectus,
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
of contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
Morgan Stanley on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
/s/ Jeffrey P. Bezos
-----------------------------------------------
(Name) Chief Executive Officer and Chairman of
Amazon.Com, Inc.
-----------------------------------------------
(Address)
