LDG

LONGS DRUG STORES CORPORATION

ARTICLES OF RESTATEMENT


Longs Drug Stores Corporation, a Maryland corporation, having its principal
office in Baltimore City, Maryland (which is hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby restated by setting
forth every charter provision currently in effect and omitting only provisions
required or permitted to be omitted by the Maryland General Corporation Law, so
that the Charter, as so restated, shall read as follows:

ARTICLES OF INCORPORATION

OF

LONGS DRUG STORES CORPORATION


FIRST: THE UNDERSIGNED, R.W. Smith, Jr., whose address is 36 South
Charles Street
, Baltimore, Maryland 21201
, being at least eighteen years of age,
as incorporator, does hereby form a corporation under and by virtue of the
General Laws of the State of Maryland.

SECOND: The name of the corporation (which is hereinafter call the
"Corporation")is:

Longs Drug Stores Corporation

THIRD: (a) The purposes for which and any of which the Corporation is
formed and the business and objects to be carried on and promoted by it are:

(1) To own and operate drug and general merchandise stores.

(2) To engage in any one or more businesses or transactions, or
to acquire all or any portion of any entity engaged in any one or more
businesses or transactions which the Board of Directors may from time to time
authorize or approve, whether or not related to the business described elsewhere
in this Article or to any other business at the time or theretofore engaged in
by the Corporation.

(b) The foregoing enumerated purposes and objects shall be in no way
limited or restricted by reference to, or inference from, the terms of any other
clause of this or any other Article of the Charter of the Corporation, and each
shall be regarded as independent; and they are intended to be and shall be
construed as powers as well as purposes and objects of the Corporation and shall
be in addition to and not in limitation of the general powers of corporations
under the General Laws of the State of Maryland.

FOURTH: The present address of the principal office of the Corporation in
this State is c/o The Corporation Trust Company, 32 South Street, Baltimore,
Maryland 21202
.

FIFTH: The name and address of the resident agent of the Corporation are
CT


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Corporation System, 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a Maryland corporation.

SIXTH: The total number of shares of stock of all classes which the
Corporation has authority to issue is 150,000,000 shares, having an aggregate
par value of $75,000,000, of which 120,000,000 shares of the par value of $.50
per share amounting in aggregate par value of $60,000,000 shall be Common Stock,
and 30,000,000 shares of the par value of $.50 per share amounting in aggregate
par value to $15,000,000 shall be Preferred Stock, of which 300,000 shares of
such Preferred Stock are further classified as Series A Junior Participating
Preferred Stock.

SEVENTH: The following is a description of the preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the Common Stock, the
Preferred Stock and the Series A Junior Participating Preferred Stock of the
Corporation.

COMMON STOCK

(1) The Common Stock shall not be subject to classification or
reclassification by the Board of Directors, and shall have the rights and terms
hereinafter specified, subject to the terms of any other stock provided in the
Charter pursuant to classification or reclassification by the Board of Directors
or otherwise in accordance with law.

(2) Each share of Common Stock shall have one vote, and, except as
otherwise provided in respect of any Preferred Stock, the exclusive voting power
for all purposes shall be vested in the holders of the Common Stock.

(3) Subject to the provisions of law and any preferences of any Preferred
Stock, dividends may be paid on the Common Stock of the Corporation at such time
and in such amounts as the Board of Directors may deem advisable.

(4) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Common Stock
shall be entitled, after payment or provision for payment of the debts and other
liabilities of the Corporation and the amount to which the holders of any
Preferred Stock shall be entitled, to share ratably in the remaining net assets
of the Corporation.

PREFERRED STOCK

(5) The Board of Directors shall have authority to classify and reclassify
any unissued shares of the Preferred Stock from time to time by setting or
changing in any one or more respects the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of the Preferred Stock;
provided, that the Board of Directors shall not classify or reclassify any of
such shares into shares of the Common Stock, or into any class or series of
stock (i) which is not prior to the Common Stock either as to dividends or upon
liquidation and (ii) which is not limited in some respect either as to dividends
or upon liquidation. Subject to the foregoing, the power of the Board of
Directors to classify and reclassify any of the shares of Preferred Stock shall
include, without limitation, subject to the provisions of the Charter, authority
to classify or reclassify any unissued shares of such stock into a class or
classes of preferred stock, preference stock, special stock or other stock, and
to divide and classify shares of any class into one or more series of such
class, by determining, fixing or altering one or more of the following:


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(a) The distinctive designation of such class or series and the
number of shares to constitute such class or series; provided that, unless
otherwise prohibited by the terms of such class or series or any other class or
series, the number of shares of any class or series may be decreased by the
Board of Directors in connection with any classification or reclassification of
unissued shares and the number of shares of such class or series may be
increased by the Board of Directors in connection with any such classification
or reclassification, and any shares of any class or series which have been
redeemed, purchased, otherwise acquired or converted into shares of Common Stock
or any other class or series shall remain part of the authorized Preferred Stock
and be subject to classification and reclassification as provided in this
Section.

(b) Whether or not and, if so, the rates, amounts and times at which,
and the conditions under which dividends shall be payable on shares of such
class or series, whether any such dividends shall rank senior or junior to or on
a parity with the dividends payable on any other class or series of Preferred
Stock, and the status of any such dividends as cumulative, cumulative to a
limited extent or non-cumulative and as participating or non-participating.

(c) Whether or not shares of such class or series shall have voting
rights, in addition to any voting rights provided by law and, if so, the terms
of such voting rights.

(d) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and conditions thereof,
including provision for adjustment of the conversion or exchange rate in such
events or at such times as the Board of Directors shall determine.

(e) Whether or not shares of such class or series shall be subject to
redemption and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates; and whether or not there shall be
any sinking fund or purchase amount in respect thereof, and if so, the terms
thereof.

(f) The rights of the holders of shares of such class or series upon
the liquidation, dissolution or winding up of the affairs of, or upon any
distribution of the assets of, the Corporation, which rights may vary depending
upon whether such liquidation, dissolution or winding up is voluntary or
involuntary and, if voluntary, may vary at different dates, and whether such
rights shall rank senior or junior to or on a parity with such rights of any
other class or series of Preferred Stock.

(g) Whether or not there shall be any limitations applicable, while
shares of such class or series are outstanding, upon the payment of dividends or
making of distributions on, or the acquisition of, or the use of moneys for
purchase or redemption of, any stock of the Corporation, or upon any other
action of the Corporation, including action under this Section, and, if so, the
terms and conditions thereof.

(h) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such class or
series, not inconsistent with law and the Charter of the Corporation.

(6) For the purpose hereof and of any articles supplementary to the
Charter providing for the classification or reclassification of any shares of
Preferred Stock or of any other Charter document of the Corporation (unless
stated otherwise in any such articles or document), any class or series of stock
of the Corporation shall be deemed to rank:


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(a) prior to another class of series either as to dividends or upon
liquidation, if the holders of such class or series shall be entitled to
the receipt of dividends or of amounts distributable on liquidation,
dissolution or winding up, as the case may be, in preference or priority to
holders of such other class or series;

(b) on a parity with another class or series either as to dividends
or upon liquidation, whether or not the dividend rates, dividend payment dates,
or redemption or liquidation price per share thereof be different from those of
such other class or series; if the holders of such class or series of stock
shall be entitled to receipt of dividends or amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in proportion to
their respective dividend rates or redemption or liquidation prices, without
preference or priority over the holders of such other class or series; and

(c) junior to another class or series either as to dividends or upon
liquidation, if the rights of the holders of such class or series shall be
subject to or subordinate to the rights of the holders of such other class or
series in respect of the receipt of dividends or the amounts distributable upon
liquidation, dissolution or winding up, as the case may be.

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Adopted by Articles Supplementary filed September 16, 1996)

(7) The number of shares constituting the Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock") shall initially be 300,000,
subject to increase or decrease by action of the Board of Directors effectuated
by Articles Supplementary.

(8) (a) The holders of shares of Series A Preferred Stock, in preference
to the holders of Common Stock and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the
15th day of January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to, subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock of the Corporation or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In
the event the Corporation shall at any time after September 16, 1996 declare or
pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares "of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in subparagraph (a) of this subparagraph
(8) immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).


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(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.

(9) The holders of shares of Series A Preferred Stock shall have the
following voting rights:

(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the date
hereof declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case
the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of shares of the
Corporation.

(c) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock and
any other capital stock of the Corporation having general voting rights as set
forth herein) for taking any corporate action.

(10) (a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in subparagraph (8) of this
Article SEVENTH are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:

(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;


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(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or

(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under subparagraph (a) of
this subparagraph (10), purchase or otherwise acquire such shares at such time
and in such manner.

(11) Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
classified again and reissued as part of a new series or class of Preferred
Stock to be created by the Board of Directors pursuant to its power contained in
the Charter, subject to the conditions and restrictions on issuance set forth
herein.

(12) Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received one hundred dollars ($100.00) per share,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of Common Stock, or (b) to the holders of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
the date hereof declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount of which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of


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shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

(13) In case the Corporation shall enter into any consolidation, merger,
combination, statutory share exchange or other transaction in which the shares
of Common Stock arc exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the date hereof declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.

(14) The shares of Series A Preferred Stock shall not be redeemable.

(15) The Series A Preferred Stock shall rank junior with to respect to
payment of dividends and on liquidation to all other Preferred Stock of the
Corporation unless the terms of any other Preferred Stock specifically provide
that it shall rank junior to, or on a parity with, the Series A Preferred Stock.

(16) This Charter shall not be amended in any manner that would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.

EIGHTH: The number of directors of the Corporation shall be three, which
number may be increased or decreased pursuant to the By-Laws of the Corporation,
but shall never be less than the minimum number permitted by the General Laws of
the State of Maryland now or hereafter in force. The number of directors at the
time of the adoption of this restated Charter was thirteen, whose names are as
follows:

Robert M. Long
Stephen D. Roath
Ronald A. Plomgren
Richard M. Brooks
William G. Combs
David G. DeSchane
Edward E. Johnston
Mary S. Metz
Gerald H. Saito
Harold R. Somerset
Donald L. Sorby
Thomas R. Sweeney
Frederick E. Trotter

NINTH: Beginning with the election of directors in 1985, the Board of
Directors shall


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be divided into three classes, Class 1, Class 11 and Class 111. Each such class
shall consist, as nearly as possible, of the one-third of the total number of
directors, and any remaining directors shall be included within such class or
classes as the Board of Directors shall designate. At the annual meeting of
stockholders in 1985, Class I directors shall be elected for a one-year term,
Class 11 Directors for a two-year term, and Class III directors for a three-year
term. At each succeeding annual meeting of stockholders beginning in 1986,
successors to the class of directors whose term expires at that annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible. A
director shall hold office, subject to any removal, death, resignation, or
retirement until the annual meeting for the year in which his term expires and
until his successor shall be elected and qualify.

To the extent that any holders of any class or series of stock other than
Common Stock issued by the Corporation shall have the separate right, voting as
a class or series, to elect directors, the directors elected by such class or
series shall be deemed to constitute an additional class of directors and shall
have a term of office for one year or such other period as may be designated by
the provisions of such class or series providing such separate voting rights to
the holders of such class or series of stock, and any such class of directors
shall be in addition to the classes designated above.

TENTH: The following provisions arc hereby adopted for the purposes of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:

(1) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into shares of
its stock of any class or classes, whether now or hereafter authorized, for such
consideration as may be deemed advisable by the Board of Directors and without
any action by the stockholders.

(2) No holder of any stock or any other securities of the Corporation,
whether now or hereafter authorized, shall have any preemptive right to
subscribe for or purchase any stock or any other securities of the Corporation
other than such, if any, as the Board of Directors, in its sole discretion, may
determine and at such price or prices and upon such other terms as the Board of
Directors, in its sole discretion, may fix; and any stock or other securities
which the Board of Directors may determine to offer for subscription may, as the
Board of Directors in its sole discretion shall determine, be offered to the
holders of any class, series or type of stock or other securities at the time
outstanding to the exclusion of the holders of any or all other classes, series
or types of stock or other securities at the time outstanding.

(3) The By-laws of the Corporation may be adopted, amended or repealed by
the affirmative vote of two-thirds (2/3) of the votes entitled to be cast by the
outstanding shares of voting stock of the Corporation, voting together as a
single voting group. The By-laws may also be adopted, amended or repealed by
the affirmative vote of a majority of the members of the Board of Directors.

(4) Unless the By-laws otherwise provide, any officer or employee of the
Corporation (other than a director) may be removed at any time with or without
cause by the Board of Directors or by any committee or superior officer upon
whom such power of removal may be conferred by the By-laws or by authority of
the Board of Directors.

(5) Any director of the Corporation may be removed with cause by the
affirmative vote of a majority of all the votes entitled to be cast for the
election of directors, but no director may be


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removed by the stockholders without cause.

(6) The Corporation shall indemnify (a) its directors to the full extent
provided by the general laws of the State of Maryland now or hereafter in force,
including the advance of expenses under the procedures provided by such laws;
(b) its officers to the same extent it shall indemnify directors; and (c) its
officers who are not directors to such further extent as shall be authorized by
the Board of Directors and be consistent with law. The foregoing shall not
limit the authority of the Corporation to indemnify other employees and agents
consistent with law.

(7) The Corporation reserves the right from time to time to make any
amendments of its Charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly set
forth in its Charter, of any of its outstanding stock by classification,
reclassification or otherwise but no such amendment which changes such terms or
contract rights of any of its outstanding stock shall be valid unless such
amendment shall have been authorized by not less than a majority of the
aggregate number of the votes entitled to be cast by shares outstanding and
entitled thereon. Notwithstanding any provision of the law requiring any
amendment of the Charter to be authorized by the vote of any designated
proportion of the Common Stock or of each class of other stock, or otherwise to
be taken or authorized by vote of the stockholders, such action shall be
effective and valid if taken or authorized by the affirmative vote of not less
than a majority of the aggregate number of votes entitled to be cast by shares
outstanding and entitled to vote thereon, except that the amendment of Articles
NINTH and ELEVENTH hereof and Paragraphs (3), (5), (6), and (7) of this Article
TENTH shall require the affirmative vote of the holders of not less than
two-thirds of the aggregate number of votes entitled to be cast by shares
outstanding and entitled to vote thereon and an amendment of Article TWELFTH or
any Article or Paragraph of the Corporation's Charter which expressly sets forth
a requirement for amendment thereof shall require the affirmative vote required
thereby, and except that this provision shall not apply where the law of
Maryland does not permit the Charter to reduce or vary the vote required for a
particular matter.

(8) To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no director or officer of this Corporation shall
be personally liable to the Corporation or its stockholders for money damages.
No amendment of the Charter of the Corporation or repeal of any of its
provisions shall limit or eliminate the benefits provided to directors and
officers under this provision with respect to any act or omission which occurred
prior to such amendment or repeal.

ELEVENTH: The Board of Directors shall base the response of the Corporation
to any "Acquisition Proposal" on the Board of Directors' evaluation of what is
in the best interest of the Corporation. In evaluating what is in the best
interest of the Corporation, the Board of Directors shall consider:

(1) The best interest of the stockholders. For this purpose, the Board
shall consider, among other factors, not only the consideration offered in the
Acquisition Proposal, in relation to the then current market price of the
Corporation's stock, but also in relation to the current value of the
Corporation in a freely negotiated transaction and in relation to the Board of
Directors' then estimate of the future value of the Corporation as an
independent entity; and

(2) Such other factors as the Board of Directors determines to be
relevant, including, among other factors, the social, legal and economic effects
upon employees, suppliers, customers and the business of the Corporation and its
subsidiaries and on the communities in which the Corporation and its
subsidiaries operate or are located.


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"Acquisition Proposal" means any proposal for the consolidation or merger
of the Corporation with another corporation, any share exchange involving the
Corporation's outstanding capital stock, any liquidation or dissolution of the
Corporation, any transfer of all or a material portion of the assets of the
Corporation, and any tender offer or exchange offer for any of the Corporation's
outstanding stock.

TWELFTH: (1) In addition to any vote otherwise required by law or this
Charter, a business combination shall be recommended by the Board of Directors
and approved by the affirmative vote of at least:

(a) Eighty (80) percent of the votes entitled to be cast by
outstanding shares of voting stock of the Corporation, voting together as a
single voting group; and

(b) Two-thirds (2/3) of the votes entitled to be cast by holders of
voting stock other than voting stock held by the interested stockholder who is
(or whose affiliate is) a party to the business combination or an affiliate or
associate of the interested stockholder, voting together as a single voting
group.

(2) The following definitions shall apply to this Article:

(a) "Affiliate," including the term "affiliated person," means a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, a specified
person.

(b) "Associate" when used to indicate a relationship with any person,
means:

(i) Any corporation or organization (other than the Corporation
or a subsidiary of the Corporation) of which such person is an officer,
director, or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities;

(ii) Any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar fiduciary capacity; and

(iii) Any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person or who is a director or
officer of the Corporation or any of its affiliates.

(c) "Beneficial owner," when used with respect to any voting stock,
means a person:

(i) That, individually or with any of its affiliates or
associates, beneficially owns voting stock, directly or indirectly; or

(ii) That, individually or with any of its affiliates or
associates, has:

(a) The right to acquire voting stock (whether such right
is exercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; or

(b) The right to vote voting stock pursuant to any
agreement, arrangement, or understanding; or


<PAGE>

(iii) That has any agreement, arrangement, or understanding
for the purpose of acquiring, holding, voting or disposing of voting stock with
any other person that beneficially owns, or whose affiliates or associates
beneficially own, directly or indirectly, such shares of voting stock.

(d) "Business combination" means:

(i) Unless the merger, consolidation, or share exchange does not
alter the contract rights of the stock as expressly set forth in the Charter or
change or convert in whole or in part the outstanding shares of stock of the
Corporation, any merger, consolidation, or share exchange of the Corporation or
any subsidiary with (a) any interested stockholder or (b) any other corporation
(whether or not itself ail interested stockholder) which is, or after the
merger, consolidation, or share exchange would be, an affiliate of an interested
stockholder that was an interested stockholder prior to the transaction;

(ii) Any sale, lease, transfer or other disposition, other than
in the ordinary course of business, in one transaction or a series of
transactions in any 12-month period, to any interested stockholder (other than
the Corporation or any of its subsidiaries) of any assets of the Corporation or
any subsidiary having, measured at the time the transaction or transactions arc
approved by the Board of Directors of the Corporation, an aggregate book value
as of the end of the Corporation's most recently ended fiscal quarter of 10
percent or more of the total market value of the outstanding stock of the
Corporation or of its net worth as of the end of its most recently ended fiscal
quarter;

(iii) The issuance or transfer by the Corporation, or any
subsidiary, in one transaction or a series of transactions, of any equity
securities of the Corporation or any subsidiary which have an aggregate market
value of 5 percent or more of the total market value of the outstanding stock of
the Corporation to any interested stockholder or any affiliate of any interested
stockholder (other than the Corporation or any of its subsidiaries) except
pursuant to the exercise of warrants or rights to purchase securities offered
pro rata to all holders of the Corporation's voting stock or any other method
affording substantially proportionate treatment to the holders of voting stock;

(iv) The adoption of any plan or proposal for the liquidation or
dissolution of the Corporation in which anything other than cash will be
received by an interested stockholder or any affiliate of any interested
stockholder; or

(v) Any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger,
consolidation, or share exchange of the Corporation with any of its subsidiaries
which has the effect, directly or indirectly, in one transaction or a series of
transactions, of increasing by 5 percent or more of the total number of
outstanding shares, the proportionate amount of the outstanding shares of any
class of equity securities of the Corporation or any subsidiary which is
directly or indirectly owned by any interested stockholder or any affiliate or
any interested stockholder.

(e) "Control," including the terms "controlling," "controlled by" and
"under common control with," means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or
otherwise. The beneficial ownership of 10 percent or more of the votes entitled
to be cast by a corporation's voting stock creates a presumption of control.


<PAGE>

(f) "Equity security" means:

(i) Any stock or similar security, certificate of interest, or
participation in any profit sharing agreement, voting trust certificate, or
certificates of deposit for an equity security;

(ii) Any security convertible, with or without consideration,
into an equity security, or any warrant or other security carrying any right to
subscribe to or purchase an equity security; or

(iii) Any put, call, straddle, or other option or privilege
of buying an equity security from or selling all equity security to another
without being bound to do so.

(g) "Interested stockholder" means any person (other than (i) the
Corporation, (ii) any Subsidiary, any profit sharing, employee stock ownership
or other employee ownership, savings, retirement or benefit plan of the
Corporation or any Subsidiary, (iii) the hereinafter designated members of the
Long family: J. M. Long, T. J. Long, V. M. Long and R. M. Long, (iv) any of the
said designated members of the Long family acting as trustee, personal
representative, attorney-in-fact, proxy-holder or other representative or agent,
or (v) any trustee, personal representative, attorney-in-fact, proxy-holder or
other representative or agent acting for the person or the estate of one or more
of the said designated members of the Long family) that:

(i) (a) Is the beneficial owner, directly or indirectly, of 10
percent or more of the voting power of the outstanding voting stock of the
Corporation; or

(b) Is an affiliate of the Corporation and at any time
within the 2 year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10 percent or more of the voting
power of the then outstanding voting stock of the Corporation.

(ii) For the purpose of determining whether a person is an
interested stockholder, the number of shares of voting stock deemed to be
outstanding shall include shares deemed owned by the person as a beneficial
owner but may not include any other shares of voting stock which may be issuable
pursuant to any agreement, arrangement, or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.

(h) "Market Value" means:

(i) In the case of stock, the highest closing sale price during
the 30-day period immediately prior to the date in question of a share of such
stock oil the composite tape for New York Stock Exchange-listed stocks, or, if
such stock is not quoted on the composite tape, oil the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of such
stock during the 30 day period preceding the date in question on the National
Association of Securities Dealers, Inc. automated quotations system or any
system then in use, or, if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
board of directors of the corporation in good faith; and

(ii) In the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by the board
of directors of the corporation in


<PAGE>

good faith.

(i) "Subsidiary" means any corporation of which voting stock having a
majority of the votes entitled to be cast is owned, directly or indirectly, by
the Corporation.

(j) "Voting Stock" means shares of capital stock of a corporation
entitled to vote generally in the election of directors.

(3) (a) For purposes of Section (3)(b) of this Article:

(i) "Announcement date" means the first general public
announcement of the proposal or intention to make a proposal of the business
combination or its first communication generally to stockholders of the
Corporation, whichever is earlier;

(ii) "Determination date" means the date on which an interested
stockholder first became an interested stockholder; and

(iii) "Valuation date" means:

(a) For a business combination voted upon by stockholders,
the later of the day prior to the date of the stockholders vote or the day 20
days prior to the consummation of the business combination; and

(b) For a business combination not voted upon by
stockholders, the date of the consummation of the business combination.

(b) The vote required by Section (1) of this Article does not apply
to a business combination if each of the following conditions is met:

(i) The aggregate amount of the cash and the market value as of
the valuation date of consideration other than cash to be received per share by
holders of Common Stock in such business combination is at least equal to the
highest of the following:

(a) The highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the interested
stockholder for any shares of Common Stock of the same class or series acquired
by it:

1. Within the 2 year period immediately prior to the
announcement date of the proposal of the business combination; or
2. In the transaction in which it became an
interested stockholder, whichever is higher; or

(b) The market value per share of Common Stock of the same
class or series on the announcement date or on the determination date, whichever
is higher; or

(c) The price per share equal to the market value per share
of Common Stock of the same class or series determined pursuant to subparagraph
(b) of this paragraph, multiplied by the faction of.

1. The highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
interested stockholder for any shares of Common Stock of the same class or
series acquired by it within the 2-year period


<PAGE>

immediately prior to the announcement date, over

2. The market value per share of Common Stock of the
same class or series on the first day in such 2 year period on which the
interested stockholder acquired any shares of Common Stock.

(ii) The aggregate amount of the cash and the market value as of
the valuation date of consideration other than cash to be received per share by
holders of shares of any class or series of outstanding stock other than Common
Stock is at least equal to the highest of the following (whether or not the
interested stockholder has previously acquired any shares of a particular class
or series of stock);

(a) The highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealer's fees) paid by the interested
stockholder for any shares of such class of stock acquired by it:

1. Within the 2 year period immediately prior to the
announcement date of the proposal of the business combination; or

2. In the transaction in which it became an
interested stockholder, whichever is higher; or

(b) The highest preferential amount per share to which the
holders of shares of such class of stock are entitled in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; or

(c) The market value per share of such class of stock on
the announcement date or on the determination date, whichever is higher; or

(d) The price per share equal to the market value per share
of such class of stock determined pursuant to subparagraph (c) of this
paragraph, multiplied by the fraction of:

1. The highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
interested stockholder for any shares of any class of voting stock acquired by
it within the 2-year period immediately prior to the announcement date; over

2. The market value per share of the same class of
voting stock on the first day in such 2-year period on which the interested
stockholder acquired any shares of the same class of voting stock.

(iii) The consideration to be received by holders of any
class or series of outstanding stock is to be in cash or in the same form as the
interested stockholder has previously paid for shares of the same class or
series of stock. If the interested stockholder has paid for shares of any class
of stock with varying forms of consideration, the form of consideration for such
class of stock shall be either cash or the form used to acquire the largest
number of shares of such class or series of stock previously acquired by it.

(iv) (a) After the interested stockholder has become an
interested stockholder and prior to the consummation of such business
combination:


<PAGE>

1. There shall have been no failure to declare and
pay at the regular date therefor any full periodic dividends (whether or not
cumulative) on any outstanding Preferred Stock of the Corporation;

2. There shall have been:

A. No reduction in thee annual rate of dividends
paid on any class or series of stock of the Corporation that is not Preferred
Stock (except as necessary to reflect any subdivision of the stock); and

B. An increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the stock; and

3. The interested stockholder did not become the
beneficial owner of any additional shares of stock of the Corporation except as
part of the transaction which resulted in such interested stockholder becoming
an interested stockholder or by virtue of proportionate stock splits or stock
dividends.

(b) The provisions of sub-subparagraphs I and 2 of
subparagraph (a) do not apply if no interested stockholder or an affiliate or
associate of the interested stockholder voted as a director of the Corporation
in a manner inconsistent with such sub-subparagraphs and the interested
stockholder, within 10 days after any act or failure to act inconsistent with
such sub-subparagraphs, notifies the Board of Directors of the Corporation in
writing that the interested stockholder disapproves thereof and requests in good
faith that the Board of Directors rectify such act or failure to act.

(v) After the interested stockholder has become an interested
stockholder, the interested stockholder may not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation or any of its subsidiaries,
whether in anticipation of or in connection with such business combination or
otherwise.

(c) The requirements of Section (1) of this Article do not apply to
business combinations that specifically, generally, or generally by types, as to
specifically identified or unidentified existing or future interested
stockholders or their affiliates, have been approved or exempted therefrom by
resolution of the Board of Directors of the Corporation at any time prior to the
time that the interested stockholder first became an interested stockholders

Unless by its terms a resolution adopted under this subsection is made
irrevocable, it may be altered or repeated by the Board of Directors, but this
shall not affect any business combinations that have been consummated, or are
the subject of an existing agreement entered into, prior to the alteration or
repeal.

Notwithstanding any other provision of law, the provisions of this Article
TWELFTH may be amended or repealed only by the affirmative vote of (a) eighty
percent (80%) of the votes entitled to be cast by outstanding shares of voting
stock of the Corporation, voting together as a single voting group; and (b)
two-thirds (2/3) of the votes entitled to be cast by holders of voting stock
held by interested stockholders or an affiliate or associate of any interested
stockholder, voting together as a single voting group.


<PAGE>

The provisions of this Article TWELFTH are in addition to (and not in lieu
of) any other requirements of law or this Charter.

THIRTEENTH: The duration of the Corporation shall be perpetual.

SECOND: This restatement does not increase the authorized stock of the
Corporation.

THIRD: The foregoing restatement of the Charter of the Corporation has
been approved by the Board of Directors of the Corporation.

IN WITNESS WHEREOF, Longs Drug Stores Corporation has caused these presents
to be signed in its name and on its behalf by its Chairman of the Board and
Chief Executive Officer and witnessed by its Secretary on , 1997.

WITNESS: LONGS DRUG STORES CORPORATION


- ------------------------------ By
Secretary ------------------------------
Chairman of the Board
and Chief Executive Office

 

 

 

 

 

 

 

LONGS DRUG STORES CORPORATION

ARTICLES OF AMENDMENT

Longs Drug Stores Corporation, a Maryland corporation, hereby certifies to the State Department of Assessments and Taxation of Maryland that:

Articles Ninth and Tenth(7) of the corporation’s Articles of Restatement are hereby amended to read in their entirety as follows:

ARTICLE NINTH: (1) Beginning with the election of directors in 1985, the Board of Directors shall be divided into three classes, Class I, Class II and Class III. Each such class shall consist, as nearly as possible, of one-third of the total number of directors, and any remaining directors shall be included within such class or classes as the Board of Directors shall designate. At the annual meeting of stockholders in 1985, Class I directors shall be elected for a one-year term, Class II Directors for a two-year term, and Class III directors for a three-year term. At each succeeding annual meeting of stockholders beginning in 1986, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. Beginning with the annual meeting of stockholders in 2007, and at each succeeding annual meeting of stockholders thereafter, successors to the class of directors whose term expires at that annual meeting shall be elected for a one-year term, so that following the annual meeting of stockholders in 2009 the Board shall no longer be divided into classes. A director shall hold office, subject to any removal, death, resignation, or retirement until the annual meeting for the year in which his term expires and until his successor shall be elected and qualify.

(2) To the extent that any holders of any class or series of stock other than Common Stock issued by the Corporation shall have the separate right, voting as a class or series, to elect directors, the directors elected by such class or series shall be deemed to constitute an additional class of directors and shall have a term of office for one year or such other period as may be designated by the provisions of such class or series providing such separate voting rights to the holders of such class or series of stock, and any such class of directors shall be in addition to the classes designated above.

ARTICLE TENTH: (7) The Corporation reserves the right from time to time to make any amendments of its Charter which may now or hereafter be authorized by law, including any amendments changing the terms or contract rights, as expressly set forth in its Charter, of any of its outstanding stock by classification, reclassification or otherwise but no such amendment which changes such terms or contract rights of any of its outstanding stock shall be valid unless


such amendment shall have been authorized by not less than a majority of the aggregate number of the votes entitled to be cast by shares outstanding and entitled thereon. Notwithstanding any provision of the law requiring any amendment of the Charter to be authorized by the vote of any designated proportion of the Common Stock or of each class of other stock, or otherwise to be taken or authorized by vote of the stockholders, such action shall be effective and valid if taken or authorized by the affirmative vote of not less than a majority of the aggregate number of votes entitled to be cast by shares outstanding and entitled to vote thereon, except that the amendment of Articles NINTH Paragraph (2) and ELEVENTH hereof and Paragraphs (3), (5), (6), and (7) of this Article TENTH shall require the affirmative vote of the holders of not less than two-thirds of the aggregate number of votes entitled to be cast by shares outstanding and entitled to vote thereon and an amendment of Article TWELFTH or any Article or Paragraph of the Corporation’s Charter which expressly sets forth a requirement for amendment thereof shall require the affirmative vote required thereby, and except that this provision shall not apply where the law of Maryland does not permit the Charter to reduce or vary the vote required for a particular matter.

This amendment of the corporation’s Articles of Restatement has been approved by the directors and shareholders.

[Signature Page Follows]


We the undersigned President and Secretary swear under penalties of perjury that the foregoing is a corporate act.

 

 

 

 

 

 

 

 

 

/s/ William J. Rainey

 

 

 

/s/ Warren F. Bryant

William J. Rainey, Secretary

 

 

 

Warren F. Bryant, President