(e) On October 2, 2009, the compensation committee of the board of directors of drugstore.com, inc. granted an award of 36,728 shares of restricted stock to Dawn Lepore, our president and chief executive officer, subject to the terms and conditions of our 2008 equity incentive plan and our standard restricted stock agreement for awards to Ms. Lepore. Our 2008 equity incentive plan was approved by our board of directors on March 10, 2008 and by our shareholders on March 5, 2009.

Ms. Lepore's shares of restricted stock will vest over four (4) years in eight
(8) equal installments on each six-month anniversary of the grant date. Consistent with the terms of Ms. Lepore's previous equity awards, all unvested shares will vest in the event of a change in control (as defined in the 2008 equity incentive plan). In addition, if we terminate her employment without cause (as defined in Ms. Lepore's restricted stock agreement) or if she terminates her employment for good reason (as defined in her agreement), she will receive twelve (12) additional months of vesting credit with respect to her restricted stock.

The committee also granted Ms. Lepore a stock-settled stock appreciation right with respect to 594,650 shares, subject to the terms of our 2008 equity incentive plan and our standard stock appreciation right agreement for awards to Ms. Lepore.

Ms. Lepore's right will vest over a four-year period with 20% of the total number of options vesting six months from the date of grant and the remaining options vesting in equal installments at the end of each calendar quarter thereafter until all shares subject to the right are fully vested.

The committee also granted restricted stock awards to our other executive officers, as follows:

          Executive Officer                              Shares Awarded
          Robert P. Potter                                   12,243
          Vice President, Chief Accounting Officer
          Tracy Wright                                       12,963
          Vice President, Chief Finance Officer
          Yukio Morikubo                                     16,384
          Vice President, Strategy and General Counsel
          Robert Hargadon                                    13,683
          Vice President, Human Resources

These restricted stock awards are subject to the terms and conditions of our 2008 plan and standard restricted stock agreements and will vest over four
(4) years in eight (8) equal installments on each six-month anniversary of the grant date. In addition, if within twelve (12) months following a change in control, we terminate the executive officer's employment without cause or the executive officer terminates his or her employment for good reason, all unvested shares of the restricted stock will immediately vest.

          Executive Officer                              Rights Awarded
          Robert P. Potter                                  104,630
          Vice President, Chief Accounting Officer
          Tracy Wright                                      111,111
          Vice President, Chief Finance Officer
          Yukio Morikubo                                    140,432
          Vice President, Strategy and General Counsel
          Robert Hargadon                                   117,284
          Vice President, Human Resources

These rights are subject to the terms of our 2008 equity incentive plan and our standard stock appreciation right agreement and will vest over a four-year period with 20% of the shares subject to the right vesting six months from the date of grant and the remaining right vesting in equal installments at the end of each calendar quarter thereafter until all shares subject to the right are fully vested.