<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
Longs Drug Stores Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Longs Drug Stores Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NOTICE OF 1994 ANNUAL MEETING OF SHAREHOLDERS
[LONGS DRUG STORES CORPORATION LOGO]
The Annual Meeting of Shareholders of Longs Drug Stores Corporation will be
held at the Regional Center for the Arts, 1601 Civic Drive, Walnut Creek,
California, on Tuesday, May 17, 1994, at 11:00 a.m., for the purposes of (1)
electing four directors; (2) voting on a proposal to approve the 1995 Long-Term
Incentive Plan; and (3) transacting such other business as may properly be
brought before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on Tuesday, April 5,
1994, will be entitled to vote at the meeting.
If you are unable to be present, you are requested to vote your shares by
signing the enclosed proxy and returning it in the envelope provided.
Walnut Creek, California
April 15, 1994
ORLO D. JONES
Secretary
<PAGE>
[LONGS DRUG STORES CORPORATION LOGO]
EXECUTIVE OFFICES
141 NORTH CIVIC DRIVE
WALNUT CREEK, CALIFORNIA 94596
PROXY STATEMENT
The following information is submitted concerning the enclosed proxy and the
matters to be acted upon at the Annual Meeting of Shareholders of Longs Drug
Stores Corporation (the "Company") to be held on May 17, 1994, or any
adjournment thereof, pursuant to the Notice of said meeting.
The approximate date on which this Proxy Statement and form of proxy are
first being sent or given to shareholders is April 15, 1994.
INFORMATION CONCERNING PROXY
The proxy is solicited on behalf of the Board of Directors of the Company.
It may be revoked at any time before its exercise by filing with the Secretary
of the Company a written revocation or a duly executed proxy bearing a later
date. It may also be revoked by attendance at the meeting and election to vote
in person.
D.F. King & Co., Inc. has been engaged to assist in the solicitation of
proxies from brokers, banks, institutions, and other shareholders for an
anticipated fee of approximately $5,000, plus out-of-pocket costs and expenses.
Certain directors, officers, and regular employees of the Company may solicit
proxies by mail, telephone, telegraph, or personal interview. The entire cost of
solicitation of proxies will be borne by the Company.
As of April 5, 1994, the Company had 20,850,197 shares of Common Stock
outstanding. Only shareholders of record at the close of business on April 5,
1994, will be entitled to notice of, and to vote at, the Annual Meeting. Each
share is entitled to one vote. A plurality of all the votes cast at the meeting,
with a quorum present, is sufficient to elect a director and a plurality of all
votes cast is required for approval of the 1995 Long-Term Incentive Plan.
Abstentions and broker non-votes will not be considered votes cast for the
foregoing purposes.
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS
The following table presents the number of shares of the Company's Common
Stock owned beneficially as of April 5, 1994, by each director and nominee, each
of the five most highly compensated executive officers for the fiscal year ended
January 27, 1994, and all directors and executive officers as a group, and by
all other persons known by the Company to beneficially own more than 5% of the
Company's Common Stock.
1
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
--------------------------------
NAME(2) COMMON STOCK % OF CLASS
- --------------------------------------------------------------- ----------------- -------------
<S> <C> <C>
R.M. Long...................................................... 2,079,931(3) 10.0%
V.M. Long...................................................... 1,996,073(5) 9.6%
Thomas J. Long Foundation...................................... 1,758,007(4) 8.4%
J.M. Long Foundation........................................... 658,550(7) 3.2%
Ariel Capital Management, Inc.................................. 2,522,295(6) 12.1%
B. Brandon..................................................... 19,791 *
R. Brooks...................................................... 2,100 *
W. Combs....................................................... 8,540 *
D. DeSchane.................................................... 22,500 *
E. Johnston.................................................... 500 *
O. Jones....................................................... 12,026 *
M. Metz........................................................ 130 *
R. Plomgren.................................................... 42,481(8) *
S. Roath....................................................... 31,040 *
H. Somerset.................................................... 100 *
T. Sweeney..................................................... 44,563 *
F. Trotter..................................................... 300 *
All directors and executive officers as a group
(16 persons)................................................. 4,731,340(9)(11) 22.7%
Employees' Profit Sharing Plan and
Variable Investment Plan..................................... 3,267,187 15.7%
<FN>
- ------------------------
* Less than 1%.
(1) Participants in the Employees' Profit Sharing Plan and the Variable
Investment Plan have the right to direct the trustee as to the voting of
the shares of the Company's Common Stock that have been allocated to their
respective stock accounts, and as such have voting power with respect
thereto. The beneficial ownership of each individual included in this
table who is a participant in the plans includes the shares held in that
person's stock accounts under the plans. The aggregate number of shares so
included for all such individuals is 26,861, and the maximum so included
for any individual is 8,341. See note 10 below. Beneficial ownership also
includes the shares of restricted stock held by executive officers in
respect of which shares the executive officers have voting power. See note
1 to the Summary Compensation Table below for the shares of restricted
stock held by the listed executive officers. The persons named in this
table have sole voting and investment powers with respect to the shares
indicated, except as otherwise noted and subject to community property
laws, where applicable.
(2) Except as otherwise noted, the address for all beneficial owners of more
than five percent of the Company's stock is P.O. Box 5222, Walnut Creek,
California 94596.
(3) Includes 122,664 shares held in fiduciary capacity for family members and
other relatives for which R.M. Long has sole voting and investment power
and 43,313 shares held in fiduciary capacity for family members for which
R.M. Long has shared voting and investment power with E. Long. Excludes
7,456 shares held by family members. R.M. Long disclaims beneficial
ownership of all shares referenced above. Also includes 1,500,000 shares
held in fiduciary capacity for which R.M. Long has sole voting power and
shared investment power with V.M. Long.
(4) T. Sweeney & W. Combs, with others serve as co-trustees of the Thomas J.
Long Foundation, and therefore share investment and voting power over
these 1,758,007 shares. These shares do not appear separately in the table
for any of these individuals and each of them disclaims beneficial
ownership thereof.
(5) Includes 1,500,000 shares as to which V.M. Long shares investment power
with R.M. Long. Such shares appear in the table for both V.M. Long and
R.M. Long.
(6) The address of Ariel Capital Management, Inc., is 307 N. Michigan Avenue,
Chicago, Illinois 60601.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(7) Four of the five co-trustees of the J.M. Long Foundation include R.M.
Long, W. Combs, O. Jones, and S. Roath and they therefore share, with all
co-trustees, investment and voting power over these 658,550 shares. These
shares do not appear separately in the table for any of these individuals
and each of them disclaims beneficial ownership thereof.
(8) Does not include certain shares held by the Employees' Profit Sharing Plan
and the Variable Investment Plan in respect of which Mr. Plomgren may have
shared voting power by virtue of his membership on the Policy Committee of
such plans, and of which he disclaims beneficial ownership. See note 10
below.
(9) Includes the 1,758,077 shares held by the Thomas J. Long Foundation and
the 658,550 shares held by the J.M. Long Foundation because certain of the
trustees of each entity are directors or executive officers of the
Company.
(10) Bank of America National Trust and Savings Association is the trustee of
the Employees' Profit Sharing Plan and the Variable Investment Plan. The
Policy Committee for both of the plans has the authority to direct the
trustee as to the voting of allocated whole shares of the Company's Common
Stock for which no voting instructions are timely received from the
participant, the aggregate number of fractional shares allocated to
participants' accounts and all unallocated shares. As such, the members of
the Policy Committee may be deemed to have shared voting power with
respect to such shares. On April 5, 1994, the aggregate number of such
fractional and unallocated shares in the plans was 376,284.
(11) Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (SEC). Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on
its review of the copies of such forms received by it, the Company
believes that, for the period April 7, 1993 through April 5, 1994, all
filing requirements applicable to its officers, directors, and greater
than ten-percent beneficial owners were complied with, except that a Form
4 covering the sale of 1,000 shares was filed late by Mr. D.W. Wilson, who
did report the transaction in his year-end report on Form 5, which was
timely filed.
</TABLE>
ITEM I. ELECTION OF DIRECTORS
The Board of Directors consists of eleven members, the maximum authorized
membership, divided into three classes. Four directors, as set forth below, are
to be elected at the Annual Meeting. The remaining seven directors will continue
to serve as set forth below. The proxy holders will vote the proxies received by
them for the following four nominees for the terms set below and until their
successors are duly elected and qualified (unless authorization to vote for
election of directors has been withheld). The four nominees receiving the
greatest number of votes will be elected as directors of the Company. The
Company is unaware of any nominee who would be unavailable to serve if elected.
In the event that any nominee shall be unable to serve, the proxies will be
voted by the proxy holders for such other person as may be designated by the
Board of Directors.
The following sets forth information as to each nominee for election at this
meeting and each director continuing in office, including their ages, present
principal occupations and those held during the last five years, directorships
in other publicly held corporations, membership in committees of the Board of
Directors, and the year in which each first became a director of the Company.
All occupations listed refer to the Company unless otherwise stated.
NOMINEES FOR ELECTION AT THIS MEETING:
(TERMS TO EXPIRE MAY 1997)
S.D. Roath, 53, President and Director. Prior to becoming President he
was Executive Vice President. He has been a Director of the Company since
1979.
E.E. Johnston, 76, Insurance Consultant; and Director. Mr. Johnston
chairs the Audit Committee and is a member of the Stock Investment
Committee, the Nominating Committee, and the Stock Bonus and Compensation
Review Committee. He has been a Director of the Company since 1980.
3
<PAGE>
T.R. Sweeney, 55, Retired Vice President and District Manager of the
Company; and Director. He has been a Director of the Company since 1978.
M.S. Metz, Ph.D., 56, Dean, U.C. Berkeley Extension, and Director. Prior
thereto she was a Consultant and President of Mills College. Dr. Metz is a
Director of Pacific Gas and Electric Company, Union Bank, and Pacific
Telesis Group. Dr. Metz is a member of the Audit Committee and the Stock
Bonus and Compensation Review Committee. She has been a Director of the
Company since 1991.
DIRECTORS WHOSE PRESENT TERMS EXPIRE MAY 1995:
R.M. Long, 55, Chairman of the Board, Chief Executive Officer, and
Director. Prior thereto he was President and Chief Executive Officer. Mr.
Long chairs the Nominating Committee. He has been a Director of the Company
since 1968.
R.A. Plomgren, 60, Senior Vice President -- Development and Director. He
has been a Director of the Company since 1972.
F.E. Trotter, 63, President, F.E. Trotter, Inc.; and Director. Prior
thereto he was Trustee of the Estate of James Campbell. Mr. Trotter is a
Director of Bancorp Hawaii, Inc., Bank of Hawaii, Hawaii Bancorp Leasing,
and Maui Land and Pineapple Co. Mr. Trotter is a member of the Audit
Committee. He has been a Director of the Company since 1989.
H.R. Somerset, 58, Business Consultant and Director. Prior thereto he
was President and Chief Executive Officer, California and Hawaiian Sugar
Company; prior thereto he was Executive Vice President and Chief Operating
Officer of California and Hawaiian Sugar Company. Mr. Somerset is a member
of the Audit Committee, the Stock Bonus and Compensation Review Committee,
and the Stock Investment Committee. He has been a Director of the Company
since 1992.
DIRECTORS WHOSE PRESENT TERMS EXPIRE MAY 1996:
W.G. Combs, 63, Vice President -- Administration, Treasurer, and
Director. He has been a Director of the Company since 1980.
R.M. Brooks, 65, Financial Consultant; and Director. Prior thereto he
was President and Chief Executive Officer of SFA Management Corporation. Mr.
Brooks is a Director of BEI Electronics, Inc., and Granite Construction,
Inc. Mr. Brooks chairs the Stock Bonus and Compensation Review Committee and
the Stock Investment Committee, and is a member of the Audit Committee and
the Nominating Committee. He has been a Director of the Company since 1988.
D.G. DeSchane, 69, Retired Vice President and District Manager of the
Company; and Director. Mr. DeSchane is a member of the Stock Bonus and
Compensation Review Committee. He has been a Director of the Company since
1990.
THE BOARD OF DIRECTORS
During the fiscal year ended January 27, 1994, the Board of Directors met
five times. During the fiscal year, each director attended more than 75% of all
meetings of the Board and the Committees upon which they served.
COMMITTEES OF THE BOARD
The Audit Committee is composed entirely of non-employee directors. The
current Committee members are E.E. Johnston (Chairman), H.R. Somerset, F.E.
Trotter, M.S. Metz, and R.M. Brooks. The Audit Committee's primary functions are
to monitor the Company's accounting, financial reporting, and control
procedures, and to recommend the independent certified public accountants to be
selected by the Company. The Committee met two times during the fiscal year
ended January 27, 1994.
The Stock Bonus and Compensation Review Committee establishes compensation
for the Company's senior executive officers and administers the Company's stock
option plans and the Company's long term
4
<PAGE>
incentive plans. The current Committee members are R.M. Brooks (Chairman), D.G.
DeSchane, E.E. Johnston, M.S. Metz, and H.R. Somerset. The Committee met two
times during the fiscal year ended January 27, 1994.
The Nominating Committee recommends to the Board of Directors candidates for
directors of the Company. The Committee will consider qualified candidates
including those submitted by shareholders. Shareholder recommendations may be
submitted to the Secretary in accordance with the Company's By-Laws. The
Committee did not meet during the fiscal year ended January 27, 1994. The
current Committee members are R.M. Long (Chairman), R.M. Brooks, and E.E.
Johnston.
The Stock Investment Committee is responsible for advising the Trustee of
the Employees' Profit Sharing Plan ("Profit Sharing Plan") and Variable
Investment Plan regarding the price and other terms and conditions of block
purchases of the Company's stock. The Committee met four times during the fiscal
year ended January 27, 1994. The current Committee members are R.M. Brooks
(Chairman), H.R. Somerset, and E.E. Johnston.
EXECUTIVE COMPENSATION
The table below sets forth the compensation earned by the following persons
during the fiscal years ended January 27, 1994, January 28, 1993, and January
30, 1992, for services rendered in all capacities to the Company and its
subsidiaries: (i) the chief executive officer (CEO) of the Company, and (ii) the
four other most highly compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ---------------
OTHER ANNUAL RESTRICTED ALL OTHER
FISCAL COMPENSATION STOCK COMPENSATION(2)
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) AWARD(S)(1)($) ($)
- ----------------------------------- ------ ---------- -------- ------------ --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
R.M. Long--CEO & Chairman of the 1994 $ 103,000 $282,610 $ 2,242 $ 3,115
Board 1993 100,000 306,570 2,395 2,926
1992 100,000 321,130 2,090 3,713
S.D. Roath--President 1994 $ 92,700 $252,330 $ 2,242 $ 3,115
1993 90,000 273,184 2,395 2,926
1992 70,000 263,800 2,090 181,875 3,713
R.A. Plomgren--Senior Vice 1994 $ 82,400 $171,590 $ 2,242 $ 3,115
President-- Development 1993 80,000 186,130 2,395 2,926
1992 70,000 183,500 2,090 3,713
O.D. Jones--Senior Vice 1994 $ 82,400 $131,200 $ 2,242 $ 3,115
President--Properties 1993 80,000 142,330 2,395 2,926
1992 70,000 137,630 2,090 3,713
B.M. Brandon--Senior Vice 1994 $ 72,100 $121,120 $ 2,242 $ 3,115
President 1993 70,000 131,390 2,395 2,926
1992 62,308 131,300 2,090 3,713
- -----------------------------------------------------------------------------------------------------
<FN>
- --------------------------
(1) The number and value (based on the last reported sale price on January 27,
1994), of the aggregate restricted stock holdings of the named executive
officers at the end of fiscal 1994 were: R.M. Long, 2,500 shares ($83,750);
S.D. Roath, 7,500 shares ($251,250); R.A. Plomgren, 2,500 shares ($83,750);
O.D. Jones, 2,500 shares ($83,750); and B.M. Brandon, 3,000 shares
($100,500). Dividends paid on restricted shares are retained by the Company
and, when the restricted shares vest, the retained dividends thereon, plus
interest earned from the Company's investment of dividends, are paid to the
recipient.
(2) Comprised entirely of Company contributions for the indicated year that
were allocated to the named executive officer's account in the Employee's
Profit Sharing Plan.
</TABLE>
5
<PAGE>
AGGREGATED OPTIONS/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE REALIZED FY-END 94 FY-END 94
<S> <C> <C> <C> <C>
S.D. Roath--President........................ 1,000 $ 10,440(a) -- --
<FN>
- ------------------------
(a) Based on the difference between the exercise price of $22.1875 per share
and the market price on the date of exercise.
</TABLE>
DIRECTORS' COMPENSATION
Directors who are employees of the Company or any subsidiary of the Company
receive no additional compensation for their services as directors. Each other
member of the Board is paid an annual retainer of $26,000.00 plus a fee of
$900.00 for each Board meeting attended. Each director who is not an employee of
the Company or any subsidiary of the Company receives $900.00 for each Committee
meeting attended. Each Committee Chairman receives an additional annual fee of
$4,000.00 for each such position held.
TERMINATION AGREEMENTS
The Subsidiary has entered into Agreements with the officers identified in
the table under the caption "Executive Compensation" on page 5, and 296 other
officers and key employees of the Subsidiary which provide for severance
payments to such officers and employees in the event of their discharge by the
Subsidiary at any time within two years after the date of an Uninvited Change in
Control (as defined) or a resignation of the executive or employee at any time
within the period commencing 180 days and ending two years after an Uninvited
Change in Control. The severance benefits payable to the executive or employee
would be equal to three times the annual average income of the executive or
employee during the five taxable years preceding the date of termination of
employment. For purposes of the Agreements, Uninvited Change in Control means
any change in the ownership or effective control of the Company or any
subsidiary or the ownership of a substantial portion of the assets of the
Company or any subsidiary, which change is not approved by a majority of the
directors of the Company who have been in office at least six months prior to
the date of such change.
If an Uninvited Change in Control had occurred on December 31, 1993, and all
executives and other employees covered by the Agreements had been discharged by
the Company, Messrs. R.M. Long, S.D. Roath, R.A. Plomgren, O.D. Jones and B.M.
Brandon would have been entitled to receive $1,244,163, $1,005,297, $760,902,
$616,056, and $555,825, respectively. All other officers and employees covered
by the Agreements would have been entitled to receive $61,553,553.
REPORT OF THE STOCK BONUS
AND COMPENSATION REVIEW COMMITTEE
The Stock Bonus and Compensation Review Committee consists of five members
of the Board, none of whom is an employee of the Company. One member, D. G.
DeSchane, who retired in 1988, is a former officer of the Company and T. J.
Long, a member of the Committee prior to his death in April, 1993, was an
officer until retiring in 1975. The purpose of the Committee is to establish
compensation for the Company's executive officers and to administer the
Company's long-term incentive plans.
In compensating executives, including the Chief Executive Officer, the
Company's policy has been to employ a straightforward compensation program under
which a significant portion of compensation is tied to the Company's
performance. Given the stability of the senior management team, the Committee
believes that this approach provides an appropriate incentive to senior
management to continually strive to increase long-term profitability. The
Committee recognizes that management compensation is a key ingredient in
attracting and retaining capable leadership and that the compensation program
must afford management the opportunity to earn a level of compensation that they
will find acceptable.
6
<PAGE>
The major components of executive compensation consist of base salary,
bonus, and awards under the Company's equity plans. Salaries for executive
officers are set at levels that the Committee believes, based on its study of
comparative industry data, are relatively low for the senior management of
large, publicly traded retail businesses. The companies surveyed for the sake of
this comparison have included virtually all of the peer group companies included
in the chart appearing under "Performance Graph" below, and certain additional
grocery and general merchandise retailers, although the precise group of
companies surveyed may vary slightly from year to year. Base annual salaries for
executive officers in the fiscal year ended January 27, 1994, ranged from 67,000
to $103,000.
The more significant component of cash compensation is the Company's bonus
program. Under this program the Committee establishes an applicable percentage
of the Company's operating income before provisions ("OIBP") for each executive
officer at the beginning of each year. OIBP is, essentially, earnings before
taxes, profit sharing contributions, senior officer bonuses, and any required
LIFO adjustment. The bonus program is designed to produce cash compensation
(i.e. salary and bonus) that the committee believes, based on the survey
described in the preceding paragraph, is in the lower end of the range of annual
compensation for senior management in large, publicly traded retail businesses
if the Company achieves target levels of OIBP. The applicable percentages are
arrived at on the basis of the percentage of budgeted OIBP necessary to reach
the target range. A cash bonus is paid quarterly to the officer in the amount of
his applicable percentage of OIBP for that quarter. Bonuses for executive
officers in the fiscal year ended January 27, 1994, ranged from $106,000 to
$283,000. These bonuses accounted for approximately 60-65% of total cash
compensation for Senior Vice Presidents and 73% of total cash compensation for
the Chairman and Chief Executive Officer and the President. The Committee has
not established limits on the percentage of cash compensation that may consist
of these bonuses.
The third component of executive compensation is the periodic granting of
equity based awards under the Company's Long-Term Incentive Plan of 1987 and,
assuming approval by the shareholders, the 1995 Long-Term Incentive Plan. Awards
under these plans can include restricted stock, stock options, performance
shares and stock appreciation rights and can be made to key employees, including
executive officers, key general office employees and the top three managers in
most stores. Prior awards to executive officers under the 1987 plan have had
five year vesting periods. These plans are intended to provide compensation that
will be an incentive to key employees to enhance the profitable growth of the
Company and the value of its common stock. While the range of award sizes among
participants has been relatively modest, the difference in size of awards under
the plans has been based primarily on the general level of responsibility of the
recipient. The Committee may also consider subjective factors on a case by case
basis as it believes to be in the Company's best interests. Awards made under
the 1987 plan have been a relatively small component of executive officer
compensation. Since the adoption of the 1987 plan, through the end of fiscal
1994 awards totaling 5,000 shares of restricted stock have been made to the
Chief Executive Officer and each other executive officer other than the
President, to whom an aggregate of 10,000 shares of restricted stock has been
awarded. Approximately 250,000 additional shares of restricted stock have been
granted to the other recipients under the 1987 plan. No awards have been made
under the 1995 plan.
The compensation of the Company's Chief Executive Officer for fiscal 1994
has been established in accordance with the foregoing procedures. For fiscal
1994 the Chief Executive Officer's compensation consisted of his base salary,
constituting approximately 27% of annual compensation, and bonus. The base
salary included an increase of three percent over the prior year, as this salary
had not been increased since 1988. The bonus declined from the prior year as his
percentage of OIBP (applicable percentage) was set at the same level as in the
prior year and OIBP declined from fiscal 1993 to fiscal 1994.
<TABLE>
<S> <C>
R. M. Brooks (Chairman) D. G. DeSchane
E. E. Johnston H. R. Somerset
M. S. Metz
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Stock Bonus and Compensation Review Committee consists of five members
of the Board, none of whom is an employee of the Company. One member, D. G.
DeSchane, who retired in 1988, is a former
7
<PAGE>
officer of the Company and T. J. Long, a member of the Committee prior to his
death in April, 1993, was an officer until retiring in 1975. The other members
of the committee are R.M. Brooks, E.E. Johnston, M.S. Metz and H.R. Somerset.
PERFORMANCE GRAPH
The graph below indicates the cumulative total shareholder return, including
reinvestment of dividends, over the last five fiscal years. The stock price
performance shown is not necessarily indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
LONGS DRUG STORES, S&P 500 INDEX, AND NATIONAL ASSOCIATION OF
CHAIN DRUG STORES ("NACDS") PEER GROUP INDEX AND PEER GROUP.
<TABLE>
<CAPTION>
NACDS PEER
X AXIS NAME GROUP S&P 500 LONGS DRUG
- ------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
JAN 89............................... 100.00 100.00 100.00
JAN 90............................... 107.21 114.45 115.69
JAN 91............................... 131.47 124.07 143.42
JAN 92............................... 165.90 152.23 158.67
JAN 93............................... 172.89 168.33 148.11
JAN 94............................... 173.03 190.01 135.51
</TABLE>
* The peer groups used for 1993 and 1994 differ slightly in their
composition, as further explained in the paragraph following the
graph.
At the time of its preparation of its 1993 proxy statement, the NACDS Peer
Group Index had not been finally established. Therefore, in the corresponding
graph in its fiscal 1993 Proxy Statement the Company used a Peer Group comprised
of the following companies, which the Company had anticipated would be the
companies included in the NACDS Index, Arbor Drugs, Inc.; Big B, Inc.; Drug
Emporium, Inc.; Fay's Incorporated; Genovese Drug Stores, Inc.; Hook-SupeRx,
Inc.; Longs Drug Stores; Medicine Shoppe; Perry Drug Stores, Inc.; Revco D.S.,
Inc.; Rite Aid Corp.; and Walgreen Co. The NACDS Index has now become available
and includes one company (F&M Distributors) not in the Peer Group Index used by
the Company in fiscal 1993 and does not include one company included in the 1993
Peer Group Index (Medicine Shoppe). Rounding to the nearest dollar, the returns
indicated in the NACDS Index and the 1993 Peer Group Index are identical over
the five year period shown in the graph.
ITEM 2. 1995 LONG-TERM INCENTIVE PLAN-SUMMARY
GENERAL
The 1995 Long-Term Incentive Plan ("Plan") is an equity based plan of the
Company designed to attract and retain the employment of able persons and to
strengthen the commitment of such persons to the Company by providing them with
equity or equity based ownership.
The Plan is substantially similar to the Company's Long-Term Incentive Plan
of 1987 approved by shareholders in May 1986. The 1987 plan allowed for the
grant of an aggregate of 400,000 shares or share based awards, and as of the end
of fiscal 1994, 108,000 shares remained available for future grant under that
plan (exclusive of outstanding unvested shares of restricted stock that could
revert to the Company for use under the plan if vesting conditions are not
satisfied).
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DESCRIPTION OF PLAN
ADMINISTRATION.
The Plan will be administered by a Committee of two or more members of the
Board of Directors of the Company appointed by the Board. The Board of Directors
has delegated administration to the Stock Bonus and Compensation Review
Committee of the Board, none of the members of which is eligible to participate
in the Plan. Among other things, the Committee will have the discretion to
select the form and timing of awards under the Plan and the eligible employees
to whom awards are made. The Committee also has the authority, subject to the
terms of the Plan, to adopt rules and regulations to administer the Plan and to
interpret the Plan.
ELIGIBILITY. Officers, including executive officers, and key employees of
the Company and its subsidiaries are eligible to receive awards under the Plan.
The Plan does not limit key employee status to any particular class or classes
of employees. Directors who are not employees are not eligible to participate in
the Plan.
LIMITS. An aggregate of 700,000 shares may be made subject to awards under
the Plan. If an award lapses or rights to the award otherwise terminate, the
shares subject to such award will be available for future awards under the Plan.
The closing price of the Company's common stock on the New York Stock Exchange
on April 5, 1994, was $33.00 per share. The Plan prohibits the making of
additional awards after 10 years have expired following shareholder approval of
the Plan.
AWARDS. Awards under the Plan may be made in the form of restricted stock,
stock options, stock appreciation rights and performance shares.
Restricted stock awards are awards of shares made without consideration from
the recipient. The Committee will establish a restriction period of not less
than one year from the date of an award of restricted stock, which period may
phase in over a period of time after the first year. If the recipient is
discharged or terminates employment during the restriction period without the
consent of the Company, shares still subject to the restriction period will be
returned to the Company. For termination upon normal retirement (as defined in
the Plan), death or disability or with the prior written consent of the Company,
a prorated portion of the restricted shares will be released to the recipient,
based on the time served between the award and such termination. Dividends on
restricted stock may, at the discretion of the Committee, be paid currently to
the recipient or held by the Company until the restriction period expires. In
the latter case, the Committee may allow interest to be paid on the withheld
dividends.
Stock options granted under the Plan may be either incentive stock options
or non-qualified options. In either case, the exercise price of the option may
not be less than the fair market value of the underlying shares as of the date
of grant. Options become exercisable during the course of a vesting period
established by the Committee at the date of grant. If employment is terminated
during the vesting period, unvested options will expire; vested options may
remain outstanding for periods of as long as two years following termination,
depending on the circumstances of the termination and the type of option. An
option may not in any event be exercisable for more than ten years following the
date of grant.
Incentive stock options are subject to certain additional restrictions,
including that the exercise price of options granted to a holder of ten percent
or more of the Company's common stock must be equal to at least 110% of the fair
market value; the aggregate fair market value of stock with respect to which
incentive stock options first become exercisable in any year may not exceed
$100,000 (any additional shares first becoming exercisable in a year will be
treated as a non-qualified stock option); and such options must expire within 90
days of termination of employment, other than termination due to death or
disability.
A stock appreciation right ("SAR") allows the holder, upon exercise, to
receive, at the Committee's election, cash or common stock equal to the amount
of the value of the Company's common stock at the date of exercise less the
purchase price specified in the SAR. The purchase price may not be less than the
fair market value of the common stock at the date of issue of the SAR. SARs will
become vested over periods of time established by the Committee and shall have
such other terms, including forfeiture provisions, as are established by the
Committee. SARs may be granted in tandem with an option granted under the Plan
or
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may be granted independently. SARs granted in tandem with an option will only be
exercisable when the accompanying option is exercisable. No SAR may remain
exercisable for a period of more than ten years from the date of its grant. The
holder of a SAR has no voting, dividend or other rights of a shareholder.
Performance shares awards are credited to an account maintained for the
recipient. An award period is established with respect to each grant, and the
amount of performance shares earned over the period is based on the Company's
performance in terms of its return on equity over the award period or such other
criteria as may be established by the Committee at the time of the award. If
return on equity is used as the performance measure, a minimum of a 10% return
over the award period must be achieved for the recipient to earn 100% of the
awarded shares and a minimum of a 7% return over the award period must be
achieved for the recipient to earn any awarded shares. The payout on performance
shares is equal to the fair market value of the common stock at the end of the
award period times the number of performance shares earned. The Committee may
establish a fair market value for each award period for the purpose of
restricting the payment of award shares, and in no event may the fair market
value used at the end of the award period exceed 200% of the fair market value
at the beginning of the period. If the recipient is discharged or terminates
employment during an award period without the consent of the Company, the
performance shares are forfeited. For termination upon normal retirement, death
or disability or with the prior written consent of the Company, a prorated
portion of the award shares will be paid out at the end of the award period.
Payouts are made in cash or common stock of the Company, with stock valued at
the current market value at the date of issuance. A recipient of performance
shares has no voting, dividend or other rights of a shareholder until shares of
common stock are actually issued in payment of an award.
The Committee has the authority to accelerate the restriction, vesting or
award period of awards made under the Plan in the event of a public tender offer
for the common stock of the Company or of a proposal to merge, consolidate or
otherwise combine with the Company.
TRANSFERABILITY. Interests of participants in the Plan are not
transferable, except in the event of a participant's death and except that any
award other than an incentive stock option may be transferred pursuant to a
qualified domestic relations order.
AMENDMENTS AND TERMINATION. The Board of Directors of the Company may
terminate the Plan or, with the consent of the affected participant, cancel or
reduce an outstanding award if it determines that certain aspects of the award
are not in the best interests of the Company. The Board of Directors may amend
the Plan at any time, provided that any amendment of the Plan shall be subject
to approval of the Company's shareholders to the extent required by applicable
laws, regulations or rules. The Company intends that the Plan will qualify as an
employee benefit plan exempt from the provisions of the reporting and short
swing profit recapture provisions of section 16 of the Securities Exchange Act
of 1934 under Rule 16b-3. Rule 16b-3 requires that any amendment that materially
increases the benefits accruing to participants, that materially increases the
number of securities that may be issued under the Plan or that materially
modifies the requirements for eligibility under the Plan must be approved by the
shareholders.
FEDERAL INCOME TAX CONSEQUENCES.
A recipient of restricted stock will recognize ordinary income in an amount
equal to the fair market value of the shares on the measurement date, and the
amount of ordinary income recognized by the recipient generally is deductible by
the Company in the year that the income is recognized. The measurement date will
be the date on which the restriction period terminates, unless the recipient
elects to have the income determined and recognized as of the date of issuance.
Dividends paid during the restriction period will be treated as follows. If
the above-described election has been made, cash dividends paid during the
restriction period but retained by the Company until the expiration of the
restriction period will be taxable dividend income to the employee as of the end
of the restriction period; if the Committee allows cash dividends to be paid out
to participants during the restriction period, the dividends paid will
constitute dividend income to the employee when received. In either case, the
Company will not be entitled to any deduction. If the above described election
has not been made, cash dividends paid during the restriction period but
retained by the Company until the end of the restriction period will be taxable
compensation income to the employee as of the end of the restriction period, and
the Company generally will be entitled to a deduction for compensation paid in
the same amount and at that
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same time. If instead, dividends are paid to the recipient throughout the
restriction period, then the employee will have taxable compensation income when
each dividend is received, and the Company generally will be entitled to a
deduction for compensation as each dividend is paid.
The grant of an incentive stock option should have no tax effect on the
Company or the optionee to whom it is granted, and there generally is no tax
upon exercise of the option. The excess of the fair market value of the shares
over the option price at the time of exercise of an incentive stock option may
subject the recipient to alternative minimum tax. If an optionee does not
dispose of shares acquired upon exercise of the option within two years of the
date of granting the option, nor within one year after exercise of the option,
any gain realized by the optionee on the subsequent sale of such shares
generally is treated as a long-term capital gain for federal income tax
purposes. If the shares are sold or otherwise disposed of prior to the
expiration of such periods, the lesser of (a) the fair market value of the stock
at the date of exercise less the exercise price and (b) the gain realized on
disposition of the stock is treated as compensation to the optionee taxable as
ordinary income. The excess gain, if any, generally is treated as capital gain
which will be short-term or long-term capital gain depending upon the length of
time the shares were held. The Company generally is allowed a deduction for tax
purposes only to the extent, and at the time, that the optionee is treated as
receiving compensation income by reason of the optionee's early disposition of
shares.
The grant of a non-qualified stock option or of a stock appreciation right
also should have no tax effect on the Company or the recipient of the grant.
Generally, the spread between the exercise price and the market value of the
Company's common stock on the date of exercise of a non-qualified option or
stock appreciation right is taxable as ordinary income to the optionee. To the
extent the optionee so realizes ordinary income the Company generally has a
corresponding deduction.
The grant of performance share awards has no tax effect on the Company or
the recipient at the time of the grant. The recipient of any cash payment or
shares issued pursuant to the terms of a performance share award generally will
recognize ordinary income in an amount equal to the amount of such cash and the
fair market value of such shares as of the date of issuance. The amount of
ordinary income recognized by the recipient generally is deductible by the
Company in the year that the income is recognized.
Compensation deductions by the Company in connection with certain awards
under the Plan to certain executives may be subject to the recently enacted
$1,000,000 limitation on deductible compensation. In addition, if by reason of a
change in control of the Company the vesting of any awards under the Plan is
accelerated, the value of the acceleration will be added to other payments made
to certain Plan participants that are contingent on the change in control in
determining whether the participant has received an excess parachute payment. If
any benefit under the Plan received by a participant would constitute an excess
parachute payment, an excise tax would be imposed on the participant, and the
Company would not receive a deduction for that amount.
PRIOR AWARDS.
The Plan does not require that awards, or that awards of any specific size
or type, be made to any particular person or persons. By way of background,
during the fiscal year ended January 27, 1994, 11,700 shares of restricted stock
were awarded under the 1987 plan to certain key employees. None of the
recipients of these awards was an executive officer or director of the Company.
These awards had a value of $429,975, based on the average of the high and low
sale prices on the day the awards were approved.
The foregoing summary of the principle provisions of the Plan is qualified
in its entirety by reference to the full text of the Plan annexed as Exhibit A
to this Proxy Statement.
FINANCIAL STATEMENTS
The Annual Report of the Company, including financial statements for the
fiscal year ended January 27, 1994, is being mailed to all shareholders
concurrently with the mailing of this Proxy Statement. A copy of the Company's
Form 10-K for such fiscal year may be obtained without charge by writing to
Longs Drug Stores Corporation, Attention: Corporate Treasurer, 141 North Civic
Drive, Walnut Creek, California 94596.
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CERTIFIED PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche was engaged as certified public accountants
for the fiscal year ended January 27, 1994. The Board of Directors, on
recommendation of its Audit Committee, has retained the firm for the current
fiscal year. Representatives of Deloitte & Touche are expected to be present at
the Annual Meeting. They will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
SHAREHOLDER'S PROPOSALS FOR 1995 ANNUAL MEETING
Under the rules of the Securities Exchange Commission, in order for a
shareholder's proposal to be considered for inclusion in the Company's Proxy
Statement for the 1995 Annual Meeting of Shareholders, such proposal must be
received at the Company's Executive Offices at 141 North Civic Drive, Post
Office Box 5222, Walnut Creek, California 94596, no later than the close of
business on December 16, 1994.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
business other than that described above to be presented for action at the
meeting, but it is intended that all proxies will be exercised upon any other
matters and proposals that may properly come before the meeting or any
adjournment thereof, in accordance with the direction of the persons named
therein.
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EXHIBIT A
LONGS DRUG STORES CORPORATION
1995 LONG-TERM INCENTIVE PLAN
1. PURPOSE
The purpose of the 1995 Long-Term Incentive Plan is to provide a means
through which Longs Drug Stores Corporation, a Maryland Corporation, and its
Subsidiaries, may attract and retain the employment of able persons and to
provide a means whereby such persons can acquire and maintain stock ownership
thereby strengthening their commitment to the welfare of the Company. A further
purpose of the Plan is to provide key employees with incentive and reward
opportunities designed to enhance the profitable growth of the Company.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
a. "Award" means, individually or collectively, any Option, Stock
Appreciation Right (SAR), Restricted Stock Award or Performance Share Award.
b. "Award Period" means a period of not less than three years and
relates to Performance Share Awards.
c. "Board" means the Board of Directors of the Company.
d. "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to such section and any
regulations under such section.
e. "Committee" means the committee of the Board appointed to administer
the Plan as referred to in Section 4.
f. "Company" means Longs Drug Stores Corporation.
g. "Date of Grant" means the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
h. "Eligible Employee" means any person who satisfies the requirements
of Section 6.
i. "Fair Market Value" means the fair market value of Stock, to be
determined as follows:
(1) For Options and SARs, it shall be the average of the highest
price and the lowest price at which the Stock shall have been sold
regular way on the New York Stock Exchange -- Composite Transactions
(hereafter "NYSE") on a specified date.
(2) For Performance Share Awards, it shall be the average of the
reported closing prices of the Stock on the NYSE for 30 consecutive
trading days prior to the "Valuation Date." The "Valuation Date" for the
purpose of granting Performance Share Awards shall be the first day of
the year in which the Award is made. The "Valuation Date" for the purpose
of Performance Share Payments shall be the first business day following
the end of the Award Period.
j. "Holder" means a person who has been granted an Option, an SAR, a
Restricted Stock Award, or a Performance Share Award.
k. "Normal Retirement" means Termination by resignation of employment
with the Company and any Subsidiary after attaining age 65 or by resignation
of employment with the Company and any Subsidiary after attaining age 60 if
the Committee determines that such resignation constitutes a Normal
Retirement for purposes of this Plan.
l. "Option" means an Award granted under Section 7 of the Plan.
m. "Performance Share" means an Award granted under Section 9 of the
Plan.
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n. "Plan" means this 1995 Long-Term Incentive Plan.
o. "Restricted Stock Award" means an Award granted under Section 10 of
the Plan.
p. "ROE" means return on average shareholders' equity which is defined
as the Company's consolidated net earnings, before extraordinary items,
divided by the average of the shareholders' equity at the beginning and end
of the year, as set forth in the Company's consolidated statement of
earnings and balance sheet for such year. The Committee may, at its sole
discretion, include or exclude any extraordinary or unusual items in
calculation of ROE. "Average ROE" means, with respect to any one Award
Period, the sum of the ROE's achieved in each of the years of the Award
Period divided by the number of years in the Award Period.
q. "SEC" means the Securities and Exchange Commission.
r. "Stock" means Common Shares of the Company and, after substitution,
such other stock as shall be substituted therefor as provided in Section 12.
s. "Stock Appreciation Right" (SAR) means an Award granted under
Section 8, whether or not granted in conjunction with an Option.
t. "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.
u. "Termination" means, with respect to any person, ceasing to be an
employee of the Company or any Subsidiary, other than by death.
v. "Uninvited Change in Corporate Control" means any change in (i) the
ownership or effective control of the Company or any Subsidiary, or (ii) the
ownership of a substantial portion of the assets of the Company or any
Subsidiary, which is not approved by a majority of the directors of the
Company who have been in office at least six (6) months prior to the date of
such change.
3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL
This Plan shall become effective as of the date of approval of this Plan by
a majority of the shareholders of the Company present or otherwise represented
and entitled to vote at a duly convened meeting of shareholders. Subject to the
provisions of Section 13, Awards may be made as provided herein for a period of
10 years from the date this Plan is so approved by the shareholders. The Plan
shall continue in effect until all matters relating to the payment of Awards and
administration of the Plan have been settled.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which shall consist of two
or more members of the Board and shall be appointed by the Board. A majority of
the Committee shall constitute a quorum.
Subject to the provisions of the Plan, the Committee shall have exclusive
power to:
a. Select the persons to participate in the Plan.
b. Determine the Awards to be made to each person selected.
c. Determine the time or times when Awards will be made.
d. Determine the conditions (including performance requirements) to
which the Awards may be subject.
e. Prescribe the form or forms evidencing Awards.
The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any Awards granted pursuant thereto and all decisions and determinations by
the Committee with respect to the Plan shall be final, binding, and conclusive
on all parties.
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5. GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK AWARDS, AND
PERFORMANCE SHARE AWARDS; SHARES SUBJECT TO THE PLAN
The Committee may, from time to time, grant Awards to one or more persons
determined by it to be eligible for participation in the Plan in accordance with
the provisions of Section 6; provided however that:
a. TOTAL SHARES. Subject to Section 12, the aggregate number of shares
of Stock made subject to Awards may not exceed 700,000.
b. USE OF SHARES. Such shares shall be deemed to have been used in
payment of Performance Shares and SARs whether actually delivered or the
Fair Market Value equivalent of such shares is paid in cash. To the extent
that an Award lapses or the rights of its Holder terminate, any shares of
Stock subject to such Award shall again be available for the grant of an
Award.
c. ELIGIBLE SHARES. Stock delivered by the Company in settlement under
the Plan may be authorized and unissued Stock or Stock held in the treasury
of the Company or may be purchased on the open market or by private
purchase.
6. ELIGIBILITY
Officers and key employees of the Company or a Subsidiary who, in the
opinion of the Committee, are mainly responsible for the continued growth and
development and financial success of the business of the Company or any
Subsidiary shall be eligible to be granted Awards under the Plan.
7. STOCK OPTIONS
One or more Options can be granted to any Eligible Employee. Options may be
granted as Incentive Stock Options ("ISOs") and nonqualified stock options and
shall be subject to the following conditions:
a. OPTION PRICE. The option price per share of Stock shall be set by
the grant but shall in no instance be less than Fair Market Value at the
Date of Grant.
b. FORM OF PAYMENT. At the time of the exercise of the Option, the
option price shall be payable in cash and/or shares of Stock valued at the
Fair Market Value at the time the Option is exercised, and at the discretion
of and on terms acceptable to the Committee, by a note signed by the Holder
payable to the Company providing for simple interest at a rate to be
stipulated by the Committee.
c. OTHER TERMS AND CONDITIONS. Each Option shall become exercisable in
cumulative installments in such manner and within such period or periods,
not to exceed 10 years from its Date of Grant, as set forth in the Stock
Option Agreement. No Option shall be exercisable after the expiration of ten
years from the date it is granted. Except as set forth below, an Option
shall terminate in the event of the Holder's Termination or death.
Unless limited to shorter periods by the Stock Option Agreement, in the
event of a Termination, the Holder shall have the right to exercise the Option
for the following periods after such Termination, but only to the extent that
the Option was exercisable at the date of the Termination and does not otherwise
expire by its terms.
(1) In the event of Normal Retirement, two years after the date of
Termination.
(2) In the event of (a) discharge by the Company or any Subsidiary
(except for theft or proven dishonesty) within two years from the date of
an Uninvited Change in Corporate Control, or (b) resignation of the
Holder within the period commencing 180 days from the date of an
Uninvited Change in Corporate Control and ending two years from the date
of an Uninvited Change in Corporate Control, one year after the date of
Termination.
(3) In the event of the Holder's Termination (except as provided in
Section 7c(2) hereof) with the prior written consent of the Company or
any Subsidiary, three (3) months after the date of such resignation. Such
prior written consent may be given only by the Chief Executive Officer of
the
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Company or any Subsidiary or any such officer delegated by the Chief
Executive Officer (other than the resigning person) and must specify that
it is given for the purpose of the Holder's exercise of the Option.
(4) In the event of (a) discharge by the Company or any Subsidiary
with or without cause (except as provided in Section 7c(2), hereof), or
(b) resignation without the prior written consent of the Company or any
Subsidiary, on the date of such discharge or resignation.
In the event of Holder's death prior to Termination, or within three months
of a Normal Retirement, the Option may be exercised for a period of one year
after the date of Holder's death or, if shorter, the remaining term of the
Option.
d. SPECIAL RULES GOVERNING INCENTIVE STOCK OPTIONS
(ISOS). Notwithstanding the foregoing, any ISO granted under the Plan shall
be subject to such terms and conditions not inconsistent with the Plan as
the Committee shall impose, including the following:
(1) No individual will be granted an ISO if that individual owns
stock of the Company or any of its Subsidiaries possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, unless the option price shall not be
less than 110% of the Fair Market Value of such stock on the date such
Option is granted and the Option by its terms is not exercisable more
than five years from the date it is granted;
(2) The aggregate Fair Market Value (determined at the time the ISO
is granted) of the stock with respect to which ISOs are exercisable for
the first time by any Holder during any calendar year (under all
incentive stock option plans of the Company) shall not exceed $100,000;
provided, however, that all or any portion of an Option which cannot be
exercised as an ISO because of such limitation shall be treated as a
nonqualified stock option; and
(3) An ISO will not be exercisable after 90 days after Termination,
unless Termination is due to the Holder's being disabled in which event
the ISO will cease to be exercisable one year after Termination. An ISO
will not be exercisable after one year after the death of the Holder.
e. STOCK OPTION AGREEMENT. Each Option granted under the Plan shall be
evidenced by a "Stock Option Agreement" between the Company and the Holder
of the Option containing provisions not inconsistent with the Plan as
determined by the Committee, and shall be subject to the following
additional terms and conditions:
(1) Any Option or portion thereof that is exercisable shall be
exercisable for the full amount or for any part thereof, except as
otherwise determined by the Stock Option Agreement.
(2) Each Option shall cease to be exercisable, as to any share, when
the Holder purchases the share or exercises a related SAR or when the
Option lapses.
(3) Leaves of absence, approved by the Company or a Subsidiary, shall
not constitute the termination of employment of the Holder.
f. EXPIRED OPTIONS. If any Options awarded under the Plan shall be
forfeited, cancelled, or not exercised in full, the Stock subject to such
Options may again be awarded under the Plan.
g. TENDER OFFER OR MERGER. Notwithstanding any other provision, in the
event of a public tender offer for all or any portion of the Stock or in the
event that a proposal to merge, consolidate, or otherwise combine with, or
sell all or a substantial portion of the assets of the Company or a
Subsidiary to, another company is submitted for shareholder approval, the
Committee may in its sole discretion declare previously granted options to
be immediately exercisable.
8. STOCK APPRECIATION RIGHTS
Any Option granted under the Plan may include an SAR, either at the time of
grant or by amendment. SARs may also be granted to an Eligible Employee
independent of any prior or contemporaneous Option
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grant and shall be exercisable as provided therein without regard to any Option.
In addition to such terms and conditions not inconsistent with the Plan as the
Committee shall impose, SARs shall be subject to the following terms:
a. RIGHT TO EXERCISE. An SAR granted with an Option shall be
exercisable to the extent and only to the extent the Option is exercisable.
An SAR not included in an Option shall have a "purchase price" ascribed
thereto by the Committee in granting such SAR, which shall not be less than
the Fair Market Value of the Stock on the Date of Grant.
b. PAYMENT. An exercisable SAR shall entitle the Holder to surrender
unexercised the SAR or the Option in which it is included, as the case may
be, or any portion thereof, and, to receive in exchange therefore that
number of shares of Stock having an aggregate Fair Market Value, as
hereinafter defined, equal to the excess of the Fair Market Value of one
share over the purchase price per share specified in such SAR or Option
times the number of shares called for by the SAR or Option, or portion
thereof, which is so surrendered. The Committee shall be entitled to elect
to settle the Company's obligation arising out of the exercise of an SAR by
the payment of cash or partially by the payment of cash and partially by the
delivery of shares, the total value of which shall be in either case equal
to the aggregate Fair Market Value of the shares it would otherwise be
obligated to deliver. The Committee shall also have the right to place such
limitations and restrictions on the obligation to make such cash payments or
deliver shares under SARs as it, in its sole discretion, deems to be in the
best interest of the Company. The Fair Market Value for SAR exercise
purposes of shares shall be determined on the basis of prices on the trading
day next preceding the date on which the SAR is exercised. To the extent
that an SAR included in an Option is exercised, such Option shall be deemed
to have been exercised, and shall not be deemed to have lapsed.
c. SPECIAL RULES GOVERNING SARS. An SAR not included in an Option
shall be evidenced by an agreement between the Company and the Holder in a
form approved by the Committee. Any SAR granted under the Plan shall be
subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose, including the following:
(1) The SAR will lapse no later than the underlying Option for SARs
accompanying an Option or, for freestanding SARs, no later than 10 years
from its Date of Grant;
(2) An SAR accompanying an Option may be exercised only when the Fair
Market Value of the Stock exceeds the option price of the Stock subject
to the SAR.
(3) Such terms as the Committee determines are necessary or desirable
to qualify the SAR under Rule 16b-3 as promulgated by the SEC under the
Securities Exchange Act of 1934 for those Holders to whom such
qualification is relevant.
d. OTHER LIMITATIONS. Such other limitations as the Committee shall
impose.
9. PERFORMANCE SHARES
One or more Awards of Performance Shares may be made to an Eligible
Employee. Performance Shares shall be credited to a Performance Share account to
be maintained for each such Holder. Each Performance Share shall be deemed to be
the equivalent of one share of Stock of the Company. The Award of Performance
Shares under the Plan shall not entitle the Holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value of the Performance
Shares in a Holder's Performance Share account at the time of Award or the time
of payment shall be the Fair Market Value at any such time of an equivalent
number of shares of the Stock (subject to the limitation provided in Section
9c).
If any Performance Shares awarded under the Plan shall be forfeited,
cancelled, or not paid out in full, such Performance Shares may again be awarded
under the Plan. Shares of Stock delivered upon payment of Performance Shares may
be either treasury shares, shares purchased for the account of the participant
or authorized and unissued shares, or any combination thereof.
A-5
<PAGE>
a. AWARD GRANTS. Grants of Performance Shares may be made by the
Committee in any fiscal year during the term of the Plan. Such shares will
be paid out in full or in part on the basis of the Company's performance in
terms of (i) ROE over the Award Period following the beginning of the
Company's fiscal year in which the Award is made as hereinafter set forth or
(ii) such other criteria as determined by the Committee. In determining the
size of Awards, the Committee shall take into account a Holder's
responsibility level, performance, potential, cash compensation level, and
the Fair Market Value of the Company's Stock at the time of Awards, as well
as such other considerations as it deems appropriate.
In the event a Holder terminates employment during an Award Period, payout
would be as follows:
(1) Normal Retirement:
Payout would be at the end of the Award Period and prorated for
service during the period.
(2) Resignation or discharge:
For resignation with the prior written consent of the Company or a
Subsidiary, the payout would be at the end of the Award Period and
prorated for service during the period. For resignation other than
with such consent (and not constituting Normal Retirement) or for
discharge with or without cause, the Award would be completely
forfeited.
(3) Death or Disability:
Payout would be at the end of the Award Period and prorated for
service during the period.
The Committee shall not, over the entire Plan period, grant to any single
Holder more than 15% of the maximum number of Performance Shares which may be
granted under the Plan. Awards cancelled or portions of Awards not paid out in
full for any single Holder shall not be included for purposes of this
limitation.
Grants of Performance Shares shall be deemed to have been on January 1 of
the year in which grants are made.
b. RIGHT TO PAYMENT OF PERFORMANCE SHARES. Following the end of the
Award Period, the Holder of a Performance Share shall be entitled to receive
payment of an amount based on the achievement of the performance measures
for such Award Period, as determined by the Committee. The Committee shall
have the right to establish Average ROE requirements; provided, however,
that to the extent that the performance measure is ROE over the Award
Period, such requirements shall not reduce below ten percent (10%) the
Average ROE necessary to earn one hundred percent (100%) of the Award and
that any such reduction shall be made only during the first half of each
Award Period and shall not exceed 4 percentage points in total, and in no
event shall payments be permitted for an Average ROE of less than 7 percent.
c. FORM AND TIMING OF PAYMENT. No payment of Performance Shares shall
be made prior to the end of an Award Period. Payment therefore shall be made
as soon as practicable after the receipt of audited financial statements
relating to the last year of such period. The Committee may establish for
each Award Period a Fair Market Value for purposes of payments of
Performance Shares but in no event shall it exceed by more than two hundred
percent (200%) the Fair Market Value at the time of granting of such
Performance Shares.
The payment to which a Holder shall be entitled at the end of an Award
Period shall be a dollar amount equal to the Fair Market Value at the Valuation
Date (as defined in Section 2i(2) hereof) of the number of shares of Stock equal
to the number of Performance Shares earned and payable to him in accordance with
Section 9b. Payment shall normally be made one-half in cash and one-half in
Stock; however, the Committee may authorize payment in such other combinations
of cash and Stock or all in cash or all in Stock, as it deems appropriate.
Issuance of Stock shall be subject to the authorization of the Board.
A-6
<PAGE>
The number of shares of Stock to be paid in lieu of cash will be determined
by dividing the portion of the payment not paid in cash by:
(1) The price per share of Stock (the average of the highest price
and the lowest price at which the Stock shall have been sold regular way
on the NYSE) on the date on which the shares are issued; or
(2) The price per share paid for shares purchased for a Holder's
account should the Board of Directors determine to authorize the purchase
of shares on behalf of a holder.
d. TENDER OFFER OR MERGER. Notwithstanding any other provision of the
Plan, in the event of any public tender offer for all or any portion of the
Stock or in the event that a proposal to merge, consolidate or otherwise
combine with, or sell all or a substantial portion of the assets of the
Company or a Subsidiary to, another company is submitted for shareholder
approval, the Committee may in its sole discretion declare any Award Period
ended as of a specific date and accelerate full payments of such awards
accordingly. For awards based on ROE, the Committee shall determine an
Average ROE for the reduced Award Period and may estimate ROE for any
periods for which annual reports are not yet available.
10. RESTRICTED STOCK AWARDS
a. RESTRICTION PERIOD TO BE ESTABLISHED BY THE COMMITTEE. One or more
Awards of Restricted Stock may be made to an Eligible Employee. At the time
a Restricted Stock Award is made, the Committee shall establish a period of
time (the "Restriction Period") applicable to such Award which shall be not
less than one (1) year. Each Restricted Stock Award may have a different
Restriction Period, at the discretion of the Committee. In the event of a
public tender offer for all or any portion of the Stock or in the event that
any proposal to merge, consolidate or otherwise combine with, or sell all or
a substantial portion of the assets of the Company or a Subsidiary to,
another company is submitted for approval, the Committee may in its sole
discretion change or eliminate the Restriction Period. Except as permitted
above or pursuant to Section 12, the Restriction Period applicable to a
particular Restricted Stock Award shall not be changed.
b. OTHER TERMS AND CONDITIONS. Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the
name of the Holder of such Restricted Stock Award. The Holder shall have the
right to enjoy all shareholder rights during the Restriction Period with the
exception that:
(1) The Holder shall not be entitled to delivery of the stock
certificate until the Restriction Period shall have expired.
(2) The Company may either issue shares subject to such restrictive
legends and/or stop-transfer instructions as it deems appropriate or
provide for retention of custody of the Stock during the Restriction
Period.
(3) A breach of the terms and conditions established by the Committee
pursuant to the Restricted Stock Award shall cause a forfeiture of the
Restricted Stock Award, and any dividends withheld thereon.
(4) Cash and stock dividends may be either currently paid or withheld
by the Company for the Holder's account until the Restriction Period
expires. At the discretion of the Committee, interest may be paid on the
amount of cash dividends withheld, including cash dividends on stock
dividends, at a rate and subject to such terms as determined by the
Committee.
A-7
<PAGE>
c. FORFEITURE PROVISIONS. In the event a Holder terminates employment
during a Restriction Period, an Award would be forfeited as follows:
(1) Normal Retirement:
The Award would be prorated for service during the period and would
be received as soon as practicable following retirement.
(2) Resignation or discharge:
For resignation with the prior written consent of the Company or a
Subsidiary, the Award would be prorated for service during the period
and received as soon as practicable following resignation. For
resignation other than with such consent (and not constituting Normal
Retirement) or for discharge with or without cause, the Award would
be completely forfeited.
(3) Death or Disability:
The Award would be prorated for service during the period and
received as soon as practicable following death or disability.
Dividends withheld by the Company on Restricted Stock that is forfeited
shall be retained by the Company.
d. PAYMENT FOR RESTRICTED STOCK. A Holder shall not be required to
make any payment for Stock received pursuant to a Restricted Stock Award.
11. GENERAL
a. GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by
governmental agencies as may be required. The Company shall be under no
obligation to register under the Securities Act of 1933, as amended ("Act")
any of the shares of stock paid under the Plan. If the shares paid under the
Plan may in certain circumstances be exempt from registration under the Act,
the Company may restrict the transfer of such shares in such manner as it
deems advisable to ensure the availability of any such exemption.
b. TAX WITHHOLDING. The Company or a Subsidiary, as appropriate, shall
have the right to deduct from all Awards paid in cash any federal, state or
local taxes as required by law to be withheld with respect to such cash
payments. In the case of Awards paid in Stock, the employee or other person
receiving such Stock may be required to pay to the Company or a Subsidiary,
as appropriate, the amount of any such taxes which the Company or Subsidiary
is required to withhold with respect to such Stock.
c. CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No employee or other person
shall have any claim or right to be granted an Award under the Plan. Neither
this Plan nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employ of the Company or a
Subsidiary or limit the right of the Company or any Subsidiary to terminate
an employee at anytime, with or without cause. A holder of any right
hereunder to receive cash or Stock in respect of any Award shall have no
rights other than those of a general creditor of the Company. Awards
represent unfunded and unsecured obligations of the Company, subject to the
terms and conditions of the applicable Award.
d. BENEFICIARIES. Any payment of Awards due under this Plan to a
deceased Holder shall be paid to the beneficiary duly designated by the
Holder in accordance with the Company's practices. If no such beneficiary
has been designated or survives the Holder, payment shall be made to the
Holder's legal representative. A beneficiary designation may be changed or
revoked by a Holder at any time provided the change or revocation is filed
with the Committee.
e. NONTRANSFERABILITY. A person's rights and interests under the Plan,
including any Award previously made to such person or any amounts payable
under the Plan, may not be assigned, pledged, or transferred except, in the
event of an employee's death, to a designated beneficiary as provided in the
A-8
<PAGE>
Plan, or in the absence of such designation, by will or the laws of descent
and distribution, or, for any Award other than an ISO (or an SAR granted in
tandem with an ISO), pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder.
f. INDEMNIFICATION. Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless by the
Company from and against any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by him in satisfaction of
judgment in any such action, suit, or proceeding against him. He shall give
the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
g. RELIANCE ON REPORTS. Each member of the Committee and each member
of the Board shall be fully justified in relying or acting in good faith
upon any report made by the independent public accountant of the Company and
its Subsidiaries and upon any other information furnished in connection with
the Plan by any person or persons other than himself. In no event shall any
person who is or shall have been a member of the Committee or of the Board
be liable for any determination made or other action taken or any omission
to act in reliance upon any such report or information or for any action
taken, including the furnishing of information, or failure to act, if in
good faith.
h. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Company or any Subsidiary.
i. EXPENSES. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
j. PRONOUNS. Masculine pronouns and other words of masculine gender
shall refer to both men and women.
k. TITLES AND HEADINGS. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
12. CHANGES IN CAPITAL STRUCTURE
Options, SARs, Restricted Stock Awards, Performance Share Awards and any
agreements evidencing such Awards shall be subject to adjustment by the
Committee as to the number and price per share of Stock or other considerations
subject to such Awards in the event of changes in the outstanding Stock by
reason of stock dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Awards. In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.
13. AMENDMENTS AND TERMINATION
The Board may at any time terminate the Plan or, with the express written
consent of an individual participant, cancel or reduce or otherwise alter his
outstanding Awards thereunder if, in its judgment, the tax, accounting, or other
effects of the Plan or potential payouts thereunder would not be in the best
interest of the Company. The Board may, at any time, or from time to time, amend
or suspend and, if suspended, reinstate, the Plan in whole or in part, provided,
however, that any amendment of the Plan shall be subject to the approval of the
Company's shareholders to the extent required by applicable laws, regulations or
rules.
A-9
<PAGE>
14. CLAIMS PROCEDURES
Claims for benefits under the Plan shall be filed in writing with the
Committee on forms supplied by the Committee. Written notice of the disposition
of a claim shall be furnished to the claimant within 90 days after the claim is
filed. If the claim is denied, the notice of disposition shall set forth the
specific reasons for the denial, citations to the pertinent provisions of the
Plan, and, where appropriate, an explanation as to how the claimant can perfect
the claim. If the claimant wishes further consideration of his or her claim, the
claimant may appeal a denied claim to the Committee (or to a person designated
by the Committee) for further review. Such appeal shall be filed in writing with
the Committee on a form supplied by the Committee, together with a written
statement of the claimant's position, no later than 90 days following receipt by
the claimant of written notice of the denial of his or her claim. If the
claimant so requests, the Committee shall schedule a hearing. A decision on
review shall be made after a full and fair review of the claim and shall be
delivered in writing to the claimant no later than 60 days after the Committee's
receipt of the notice of appeal, unless special circumstances (including the
need to hold a hearing) require an extension of time for processing the appeal,
in which case a written decision on review shall be delivered to the claimant as
soon as possible but not later than 120 days after the Committee's receipt of
the appeal notice. The claimant shall be notified in writing of any such
extension of time. The written decision on review shall include specific reasons
for the decision, written in a manner calculated to be understood by the
claimant, and shall specifically refer to the pertinent Plan provisions on which
it is based. All determinations of the Committee shall be final and binding on
Participants and their beneficiaries.
A-10
<PAGE>
PROXY CARD PROXY CARD
LONGS DRUG STORES CORPORATION
141 NORTH CIVIC DRIVE, WALNUT CREEK, CALIFORNIA
ANNUAL MEETING OF SHAREHOLDERS--MAY 17, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints R.M. LONG, S.D. ROATH, R.A. PLOMGREN and each of them
proxies for the undersigned, with the powers the undersigned would possess if
personally present and with full power of substitution to act and to vote, as
designated below, all the shares of the undersigned in Longs Drug Stores
Corporation, at the Annual Meeting of its Shareholders to be held on Tuesday,
May 17, 1994, at 11:00 A.M., and at any adjournment thereof.
See Reverse Side
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES NAMED IN
PROPOSAL 1 AND IN FAVOR OF PROPOSAL 2.
/x/ Please mark your choices like this
- ------------------------
Common
1. ELECTION OF DIRECTORS as listed below
(except as marked to the contrary below)
FOR / / WITHHOLD AUTHORITY / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.)
E.E. Johnston M.S. Metz S.D. Roath T.R. Sweeney
2. Approval of 1995 Long-Term Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting, or any adjournment
thereof, including matters which the Board of Directors do not at this time
know are to be presented at the meeting.
I PLAN TO ATTEND MEETING / /
Please sign exactly as name appears below. If the stock is of record in the
names of two or more persons, one of them may sign the proxy. A proxy executed
by a corporation or a partnership should be signed in its name by an authorized
person. Executors, administrators, guardians, conservators, and custodians
should so indicate when signing.
DATED: ,1994
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature of shareholder
- --------------------------------------------------------------------------------
Signature of shareholder
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
PROXY CARD PROXY CARD
LONGS DRUG STORES CORPORATION
141 NORTH CIVIC DRIVE, WALNUT CREEK, CALIFORNIA
ANNUAL MEETING OF SHAREHOLDERS--MAY 17, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints R.M. LONG, S.D. ROATH, R.A. PLOMGREN and each of them
proxies for the undersigned, with the powers the undersigned would possess if
personally present and with full power of substitution to act and to vote, as
designated below, all the shares of the undersigned in Longs Drug Stores
Corporation, at the Annual Meeting of its Shareholders to be held on Tuesday,
May 17, 1994, at 11:00 A.M., and at any adjournment thereof.
See Reverse Side
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES NAMED IN
PROPOSAL 1 AND IN FAVOR OF PROPOSAL 2.
/x/ Please mark your choices like this
- ------------------------ ------------------------
PROFIT SHARING V.I.P.
1. ELECTION OF DIRECTORS as listed below
(except as marked to the contrary below)
FOR / / WITHHOLD AUTHORITY / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.)
E.E. Johnston M.S. Metz S.D. Roath T.R. Sweeney
2. Approval of 1995 Long-Term Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting, or any adjournment
thereof, including matters which the Board of Directors do not at this time
know are to be presented at the meeting.
I PLAN TO ATTEND MEETING / /
Please sign exactly as name appears below. If the stock is of record in the
names of two or more persons, one of them may sign the proxy. A proxy executed
by a corporation or a partnership should be signed in its name by an authorized
person. Executors, administrators, guardians, conservators, and custodians
should so indicate when signing.
DATED: ,1994
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature of shareholder
- --------------------------------------------------------------------------------
Signature of shareholder
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
PROXY CARD PROXY CARD
LONGS DRUG STORES CORPORATION
141 NORTH CIVIC DRIVE, WALNUT CREEK, CALIFORNIA
ANNUAL MEETING OF SHAREHOLDERS-MAY 17, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints R.M. LONG, S.D. ROATH, R.A. PLOMGREN and each of them
proxies for the undersigned, with the powers the undersigned would possess if
personally present and with full power of substitution to act and to vote, as
designated below, all the shares of the undersigned in Longs Drug Stores
Corporation, at the Annual Meeting of its Shareholders to be held on Tuesday,
May 17, 1994, at 11:00 A.M., and at any adjournment thereof.
See Reverse Side
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES NAMED IN
PROPOSAL 1 AND IN FAVOR OF PROPOSAL 2.
/x/ Please mark your choices like this
- ------------------------
RESTRICTED STOCK AWARD
1. ELECTION OF DIRECTORS as listed below
(except as marked to the contrary below)
FOR / / WITHHOLD AUTHORITY / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name below.)
E.E. Johnston M.S. Metz S.D. Roath T.R. Sweeney
2. Approval of 1995 Long-Term Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting, or any adjournment
thereof, including matters which the Board of Directors do not at this time
know are to be presented at the meeting.
I PLAN TO ATTEND MEETING / /
Please sign exactly as name appears below. If the stock is of record in the
names of two or more persons, one of them may sign the proxy. A proxy executed
by a corporation or a partnership should be signed in its name by an authorized
person. Executors, administrators, guardians, conservators, and custodians
should so indicate when signing.
DATED: , 1994
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature of shareholder
- --------------------------------------------------------------------------------
Signature of shareholder
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
