LETTER FROM THE CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT AND THE LEAD DIRECTOR

November 2006

Dear Company Employee/Board Member:

Longs Drug Stores Corporation and its subsidiaries (the "Company") are dedicated to conducting its business consistent with the highest standards of business ethics. We have an obligation to our employees, stockholders, customers, suppliers, the communities in which we operate and other business contacts to be honest, fair and forthright in all of our business activities.

As an employee of the Company or a member of our Board of Directors, you are faced every day with a number of business decisions. It is your personal responsibility to uphold the Company’s high standards of business ethics in each and every one of these situations. It is not possible for our Code of Business Conduct and Ethics (the "Code") to address every situation that you may face. If you use your good business judgment and experience, the majority of your business decisions are not likely to raise ethical issues. When you are faced with an ethical issue, we hope that this Code will serve as a guide to help you make the right choice.

Each year we require all Company employees and members of the Board of Directors to certify that they will comply with this Code. Most employees will certify their compliance online through Longs intranet.

We will also ask Directors, officers and supervisors to annually report any actual or potential conflicts of interest and to report certain gifts and entertainment received in the course of business. Potential conflicts of interest and gifts and entertainment will be reported online through Longs intranet. Copies of the forms that are available online appears in Attachment I (Certification Form – Code of Business Conduct and Ethics/Conflict of Interest) and in Attachment II (Gifts and Entertainment Report) of this Code. Attachment III includes a list of contact information for the individuals and departments referenced in this Code.

We encourage you to take this opportunity to review our policies and to discuss any questions you may have with your supervisor or with the Law Department directly. The guidelines set out in this Code are to be followed at all levels of our organization by Members of the Board of Directors, officers and employees. We rely on you to uphold our core values and conduct our business honestly, fairly and with integrity.

Sincerely,

Warren F. Bryant
Chairman of the Board,
Chief Executive Officer and President
Longs Drug Stores Corporation

Murray H. Dashe
Lead Director
Longs Drug Stores Corporation

Introduction

Purpose

This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics, and is intended to qualify as a "code of ethics" within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. This Code should be considered to be a minimum standard. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we adhere to these higher standards.

This Code applies to members of our Board of Directors, officers and employees, wherever they are located and whether they work for the Company on a full or part-time basis. We refer to all persons covered by this Code as "Company employees" or simply "employees." We also refer to our Chairman of the Board, Chief Executive Officer and President, our Executive Vice Presidents, our Senior Vice Presidents, and our Controller as our "Executive Officers." Since members of our Board of Directors are not "employees" of the Company, in cases where the Code describes, refers to, or proscribes conduct which applies to employees but logically would not make sense for non-employee Directors, the description, reference or proscription should not be read as applying to, or governing conduct of, such Board members.

Seeking Help and Information

This Code is not intended to be a comprehensive rulebook and cannot address every situation that you may face. If you are faced with a difficult business decision that is not addressed in this Code, ask yourself the following questions:

  • Is it legal?
  • Is it honest and fair?
  • Is it in the best interests of the Company?
  • How does this make me feel about myself and the Company?
  • Would I feel comfortable if an account of my actions was published with my name in the newspaper?

If you still feel uncomfortable about a situation or have any doubts about whether it is consistent with the Company’s high ethical standards, seek help. We encourage you to contact your supervisor for help first. If your supervisor cannot answer your question or if you do not feel comfortable contacting your supervisor, contact the Law Department.

The Company has also established a Code Hotline that is available 24 hours a day, 7 days a week at 1-877-410-0554. You may choose to remain anonymous and will not be required to reveal your identity in calls to the Code Hotline, although providing your identity may assist the Company in addressing your questions or concerns. See "How to Report Concerns" below for additional information and guidance, and Attachment III for additional contact information.

Reporting Violations of the Code

All employees have a duty to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company. Reporting a known or suspected violation of this Code by others should not be considered an act of disloyalty, but an action to safeguard the reputation and integrity of the Company and its employees.

If you know of or suspect a violation of this Code, immediately report the conduct to your supervisor. Your supervisor will contact the Law Department, which will work with you and your supervisor to investigate your concern. If you do not feel comfortable reporting the conduct to your supervisor or you do not get a satisfactory response, you may contact the Law Department directly. See Attachment III for contact information. The Law Department will work directly with you to investigate your concern. You may also report known or suspected violations of the Code on the Code Hotline that is available 24 hours a day, 7 days a week at 1-877-410-0554. You may choose to remain anonymous and will not be required to reveal your identity in calls to the Code Hotline, although providing your identity may assist the Company in investigating your concern. See "How to Report Concerns" below for additional information and guidance.

It is Company policy that any employee who violates this Code will be subject to appropriate disciplinary action, up to and including termination of employment. This determination will be based upon the facts and circumstances of each particular situation. An employee accused of violating this Code will be given an opportunity to present his or her version of the events at issue prior to any determination of appropriate discipline. Any employee who fails to report known or suspected violations by another employee may also be subject to appropriate discipline. Employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms. The Company may also face substantial fines and penalties and may incur damage to its reputation and standing in the community. Your conduct as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both you and the Company.

Confidentiality and Policy Against Retaliation

All questions and reports of known or suspected violations of the law or this Code will be treated with sensitivity and discretion. Your supervisor, the Law Department and the Company will protect your confidentiality to the extent possible, consistent with law and the Company’s need to investigate your concern. The Company strictly prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. Any person taking retaliatory action against an employee because the employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.

Corrective Action Initiatives

When necessary, the Company implements corrective action initiatives designed to correct any underlying problems that resulted in Code violations.    Corrective action plans are documented and provide structure with timelines aimed at correcting any deficiencies and preventing future violations.    Corrective action initiatives related to Code breaches are monitored by the corporate Compliance Officer to evaluate effectiveness and until fulfillment of their purpose.

Waivers of the Code

Waivers of this Code will not be granted except in extraordinary circumstances and then on a case-by-case basis. Waivers of this Code for employees may be made only by an Executive Officer of the Company. All waivers of this Code shall be reported to the Audit and Finance Committee. Any waiver of this Code for members of our Board of Directors or Executive Officers may be made only by our Board of Directors or the appropriate committee of our Board of Directors and will be promptly disclosed to the public.

Conflicts of Interest

Identifying Conflicts of Interest

A conflict of interest occurs when an employee’s private interest interferes, or appears to interfere, in any way with the interests of the Company as a whole. You should actively avoid any private interest that may influence your ability to act in the interests of the Company or that makes it difficult to perform your work objectively and effectively. The Company is committed to ensuring that ownership, control, and contractual relationships between third-parties and the Company or its employees does not create a conflict of interest, and that such arrangements do not violate federal Anti-kickback Act or other applicable federal or state laws and regulations.

Conflicts of interest with the potential to be material in fact or appearance are prohibited as a matter of Company policy, except as provided below and under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear-cut and easy to define. Should you have any questions, please consult with your supervisor or the Law Department. Any employee, officer or member of the Board of Directors who becomes aware of a conflict or potential conflict should bring it to the attention of the Law Department or follow the procedures described under "Introduction—Reporting Violations of the Code." The following situations are examples of potential conflicts of interest:.

  • Outside Employment. An employee who is employed by, or who serves as a member of a board of directors of, or provides any services to a company that is a material customer, supplier or competitor of the Company must promptly disclose that interest to the Law Department at the time it arises and in the employee’s annual Code of Business Conduct and, if a manager, officer or member of the Board of Directions, in the Ethics/Conflict of Interest Certification Form submitted to the Law Department and Internal Audit.
  • Improper Personal Benefits. No employee may obtain any material (as to him or her) personal benefits or favors because of his or her position with the Company. Please see "Gifts and Entertainment" below for additional guidelines in this area.
  • Financial Interests. An employee that has a significant financial interest (ownership or otherwise) in any company that is a material customer, supplier or competitor of the Company must promptly disclose that interest to the Law Department at the time it arises and in the employee’s annual Code of Business Conduct and Ethics/Conflict of Interest Certification Form submitted to the Law Department and Internal Audit. A "significant financial interest" means (i) ownership of more than 1% of the equity of a material customer, supplier or competitor or (ii) an investment in a material customer, supplier or competitor that represents more than 5% of the total assets of the employee. It shall not be considered a prohibited conflict of interest if an employee has a financial interest that would otherwise be proscribed by this paragraph if such interest existed at the time of the employee’s initial hiring, was disclosed to the Company at the time of such hiring or the date of first publication of this Code and is disclosed annually in the Conflict of Interest Certification Form submitted pursuant to this Code.
  • Loans or Other Financial Transactions. No employee may obtain loans or guarantees of personal obligations from, or enter into any other personal financial transaction with, any company that is a material customer, supplier or competitor of the Company. This guideline does not prohibit arms-length transactions with recognized banks, brokerage firms or other financial institutions.
  • Service on Boards and Committees. No employee should serve on a board of directors or as a trustee or on a committee of any entity (whether profit or not-for-profit) whose interests reasonably could be expected to conflict with those of the Company. Employees must obtain approval from the Law Department before accepting any board or committee position. The Company may revisit its approval of any such position at any time to determine whether service in such position is still appropriate.
  • Actions of Family Members. Longs is appreciative of the support provided by the families of our employees. The Company, in fact, benefits from instances where spouses and/or other family members are all a part of the larger Longs family. Nevertheless, employees should be aware that the actions of family members outside the workplace could give rise to conflicts of interest where they influence an employee’s objectivity in making decisions on behalf of the Company. For example, it may be a conflict of interest if a family member is employed by, or has a significant financial interest in, a company that is a material customer, supplier or competitor of the Company. A conflict of interest arises if a family member obtains loans or guarantees of personal obligations from, or enters into any other personal financial transaction with, any company that is a material customer, supplier or competitor of the Company. Similarly, receipt of improper personal benefits or favors by family members creates a conflict of interest. For purposes of this Code, "family members" or "members of your family" include your spouse, brothers, sisters and parents, in-laws and children whether such relationships are by blood or adoption. A conflict of interest may also arise when management employs family members or relatives . See “Appropriate Workplace Relations Policy, ” available on Longs Human Resources webpage.
  • Medicare Modernization Act (MMA) Conflicts of Interest. Employees should actively avoid any private activity that creates a conflict in any work or Company business related directly or indirectly to federal health programs.  Officers, directors, and managers should ensure that there are not any conflicts of interest arising from personal access to proprietary data that result from Medicare Prescription Drug Plan (PDP) sponsorship. All employees are responsible for ensuring that outside and internal (when in a position to execute contracts) affiliations with vendors, suppliers, or other subcontractors do not violate the federal Anti-Kickback Act or MMA regulations.  Current employees who are also employed or serve as a contractor for outside competing health plans or Medicare sponsors may be in violation of this Code.

 

For purposes of this Code, a company is a “material” customer if the company has made payments to the Company in the past year in excess of 5% of the Company’s gross revenues.  A company is a “material” supplier if the company has received payments from the Company in the past year in excess of $200,000 or 5% of the supplier’s gross revenues, whichever is greater.  A company is a “material” competitor if the company competes in the Company’s line of business and has annual gross revenues from such line of business in excess of $1,000,000,000.  If you are uncertain whether a particular company is a material customer, supplier or competitor, or for questions regarding potential Medicare related conflicts, please contact the Law Department for assistance.

Disclosure of Conflicts of Interest

The Company requires that officers, directors, and employees fully disclose any situations that reasonably could be expected to give rise to a conflict of interest. If you suspect that you have a conflict of interest, or something that others could reasonably perceive as a conflict of interest, you must report it immediately to your supervisor or the Law Department. While such situations are not automatically prohibited, they are not desirable and may only be waived by an Executive Officer of the Company at the request and with the concurrence of the Law Department. Conflicts of interest of members of our Board of Directors or Executive Officers may only be waived by our Board of Directors or the appropriate committee of our Board of Directors and any such waiver will be promptly disclosed to the public.

CORPORATE OPPORTUNITIES

As an employee or a member of our Board of Directors of the Company, you have an obligation to put the interests of the Company ahead of your personal interests and to advance the Company’s legitimate interests when the opportunity to do so arises. If you discover or are presented with a business opportunity through the use of corporate property, information or because of your position with the Company that is in the Company’s line of business, you should first present the business opportunity to the Company before pursuing the opportunity in your individual capacity. No employee or member of our Board of Directors may use corporate property, information or his or her position with the Company for personal gain or may compete with the Company.

As an employee of the Company, you should fully disclose to your supervisor the terms and conditions of each business opportunity covered by this Code that you wish to pursue. Your supervisor will contact the Law Department and the appropriate management personnel to determine whether the Company wishes to pursue the business opportunity. If the Company waives its right to pursue the business opportunity, you may pursue the business opportunity on the same terms and conditions as originally proposed and consistent with the other ethical guidelines set forth in this Code. Business opportunities available to members of our Board of Directors or Executive Officers may only be waived by our Board of Directors or the appropriate committee of our Board of Directors and any such waiver will be promptly disclosed to the public.

CONFIDENTIAL INFORMATION

Employees and members of our Board of Directors have access to a variety of confidential information while working for the Company. Confidential information includes all nonpublic information that might be of use to competitors, or, if disclosed, harmful to the Company or its customers. Whether subject to a confidentiality agreement or not, employees and members of our Board of Directors have a duty to safeguard all confidential information of the Company or third parties with which the Company conducts business, except when disclosure is authorized or legally mandated. An employee’s or Board member’s obligation to protect confidential information continues after he or she leaves the Company. Unauthorized disclosure of confidential information could cause competitive harm to the Company or its customers and could result in legal liability to you and the Company.

When discussing or in possession of confidential information, employees and members of our Board of Directors should always be aware of their surroundings. Employees and members of our Board of Directors are encouraged not to discuss Company business in the presence of others, including other Company employees, who do not have a right or need to know such information. Employees and members of our Board of Directors should be particularly careful in public places, including restaurants, airplanes, trains and public pay phones. Any outside requests for Company information should only be handled by authorized persons. Any questions or concerns regarding whether disclosure of Company information is legally mandated should be promptly referred to the Law Department.

Pharmacy Staff

Employees who are also pharmacy department personnel of the Company and others who have access to sensitive and confidential information, including, but not limited to, private health information of the Company’s customers, have an added responsibility and obligation of maintaining the confidentiality of those customer’s private health information. Those employees shall only use such private health information to provide treatment or healthcare operations, or to perform payment functions. Each pharmacy department personnel shall sign a separate Ethics Statement for Pharmacy Personnel acknowledging their full understanding of and compliance with of such Ethics Statement.

COMPETITION AND FAIR DEALING

The Company competes vigorously, but fairly. All employees are obligated to deal fairly with fellow employees and with the Company’s customers, suppliers, competitors and other third parties. Employees should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation or any other unfair-dealing practice.

Relationships with Customers

Our business success depends upon our ability to foster lasting customer relationships. The Company is committed to dealing with customers fairly, honestly and with integrity. Specifically, you should keep the following guidelines in mind when dealing with customers:

  • Information we supply to customers should be current, accurate, and complete to the best of our knowledge. Employees should not deliberately misrepresent information to customers.
  • Employees should not refuse to sell, service, or maintain products the Company is selling simply because a customer is buying products from another supplier.
  • Customer entertainment should not exceed reasonable and customary business practice. Employees should not provide entertainment or other benefits that could be viewed as an inducement to or a reward for, customer purchase decisions. Please see "Gifts and Entertainment" below for additional guidelines in this area.

Relationships with Suppliers

The Company deals fairly and honestly with its suppliers. This means that our relationships with suppliers are based on price, quality, service and reputation, among other factors. Employees dealing with suppliers should carefully guard their objectivity. Specifically, no employee should accept or solicit any personal benefit from a supplier or potential supplier that might compromise, or appear to compromise, their objective assessment of the supplier’s products and prices. Employees can give or accept promotional items of nominal value or moderately scaled entertainment within the limits of responsible and customary business practice. Please see "Gifts and Entertainment" below for additional guidelines in this area.

Relationships with Competitors

The Company is committed to free and open competition in the marketplace and throughout all business dealings. Employees should avoid all actions that reasonably could be construed as being anti-competitive, monopolistic or otherwise contrary to laws governing competitive practices in the marketplace, including federal and state antitrust laws. Such actions include misappropriation and/or misuse of a competitor’s confidential information or making false statements about the competitor’s business and business practices. For a further discussion of appropriate and inappropriate business conduct with competitors, see "Compliance with Antitrust Laws" below.

GIFTS AND ENTERTAINMENT

While the giving and receiving of gifts in the conduct of an employee’s business activities on behalf of the Company is generally discouraged, occasional and appropriate business gifts and entertainment are permitted. Gifts and entertainment, however, should not compromise, or appear to compromise, your ability to make objective and fair business decisions.

It is your responsibility to use good judgment in this area. As a general rule, you may give or receive gifts or entertainment to or from customers or suppliers only if the gift or entertainment would not be viewed as an inducement to or reward for any particular business decision. Gifts or entertainment whose value exceeds $200 generally should not be accepted or given, should be reported to your supervisor at the time of receipt or when given, and will be required to be reported in the annual Gifts and Entertainment Report submitted to the Law Department and Internal Audit. This Gifts and Entertainment Report is to be submitted annually with the certification of compliance for this Code. All gifts and entertainment expenses should be properly accounted for on expense reports. The following specific examples may be helpful:

  • Meals and Entertainment. You may occasionally accept or give meals, refreshments or other entertainment if:
    • The items are of reasonable (nominal) value;
    • The purpose of the meeting or attendance at the event is business related; and
    • The expenses would be paid by the Company as a reasonable business expense if not paid for by another party.

Entertainment of reasonable value may include food and tickets for sporting and cultural events if they are generally offered to other customers, suppliers or vendors.

  • Advertising and Promotional Materials. You may occasionally accept or give advertising or promotional materials of nominal value.
  • Personal Gifts. You may accept or give personal gifts of reasonable value that are related to recognized special occasions such as a graduation, promotion, new job, wedding, retirement or a holiday. A gift is also acceptable if it is based on a family or personal relationship and unrelated to the business involved between the
  • Gifts Rewarding Service or Accomplishment. You may accept a gift from a civic, charitable or religious organization specifically related to your service or accomplishment.

You should make every effort to refuse or return a gift that is beyond these permissible guidelines. If it would be inappropriate to refuse a gift or you are unable to return a gift, you should promptly report the gift to your supervisor. Your supervisor will bring the gift to the attention of the Law Department, which may require you to donate the gift to an appropriate community organization. If you have any questions about whether it is permissible to accept a gift or something else of value, contact your supervisor or the Law Department for additional guidance.

Gifts and entertainment may not be offered or exchanged under any circumstances to or with any U.S., state or local government officials or employees.  Gifts cannot be given to induce, persuade, or reward Medicare beneficiaries to enroll in the Company’s Medicare PDP.  Any gifts or entertainment given to Medicare beneficiaries must be allocated equally to all without discrimination, must be of nominal value of no more than $15, and cannot be given in cash or cash equivalent forms, including easily convertible gift cards or charitable contributions.   If you have any questions about this policy, contact your supervisor or the Law Department for additional guidance.  For a more detailed discussion of special considerations applicable to dealing with the U.S., state and local governments, see “Interactions with the Government.”

GRANTS OF LOANS, EXTENSIONS OF CREDIT AND ARRANGEMENTS FOR EXTENSIONS OF CREDIT TO DIRECTORS AND EXECUTIVE OFFICERS

Corporation Policy

The Corporation is prohibited by Section 402 of the Sarbanes-Oxley Act of 2002 from directly or indirectly (including through a subsidiary) extending or maintaining credit, arranging for the extension of credit, or renewing an extension of credit, in the form of a personal loan to or for any director or executive officer. This prohibition includes all personal loans and other forms of, or arrangements for the extension of, personal credit. It does not prohibit loans or extensions of credit of a business nature, such as use of a corporate credit card for legitimate business expenses.

The prohibitions of Section 402 are interpreted broadly and can potentially apply to any advancement of funds for personal use. To prevent any inadvertent violation of Section 402, review and approval as set forth below is required for any prospective transaction that may raise issues under Section 402. The review and approval requirement applies to any advancement of funds to a director or executive officer for a non-business purpose.

Review and Approval Procedure

In the event that a grant of any loan or extension of credit of a personal nature (or a grant or extension potentially of a personal nature or a transaction in substance akin or potentially akin to a loan or an extension of credit) by the Corporation (or a subsidiary) to a member of the Corporation’s Board of Directors or executive officer (as designated annually by the Board of Directors as a person required to file Form 4 with the Securities and Exchange Commission) is being contemplated, review and approval is required. In the event that the Corporation (or a subsidiary) contemplates having any involvement in arranging with a financial institution for the grant of a loan or the extension of credit for the benefit of a Director or Executive Officer, review and approval is required. In the case of any contemplated transaction of this nature, all facts and circumstances surrounding the contemplated grant or arrangement must be communicated in writing to the General Counsel (or, in his or her absence, the Audit and Finance Committee of the Board of Directors) as soon as practicable. In such a case, no such grant, extension or arrangement shall be made or entered into without the prior approval of the General Counsel or the Audit and Finance Committee, as the case may be, which approval shall be contemporaneously documented.

Reporting Obligation

Any employee who obtains knowledge that the above-described Corporation Policy and/or Review and Approval Procedure were not followed shall bring the matter to the attention of the General Counsel (or, in his or her, absence the Audit and Finance Committee of the Board of Directors) as soon as practicable.

Board Oversight

The Board of Directors shall review compliance with this policy and, more generally, with Section 402 of the Sarbanes-Oxley Act as part of its annual review of compliance matters.

INTERACTIONS WITH THE GOVERNMENT

The Company conducts business with the US, state and local governments. The Company is committed to conducting its business with all governments and their representatives with the highest standards of business ethics and in compliance with all applicable laws and regulations, including the special requirements that apply to government contracts and government transactions. In your interactions with the government when you are representing or acting on behalf of the Company, you should:

  • Be forthright and candid at all times. No employee should intentionally misstate or omit any material information from any written or oral communication with the government.
  • Exercise extreme care in maintaining records for and allocating costs to government contracts. Costs incurred on one government project should not be charged against another government project.
  • Not offer or exchange any gifts, gratuities or favors with, or pay for meals, entertainment, travel or other similar expenses for, government employees.

If your job responsibilities include interacting with the government, you are expected to understand and comply with the special laws, rules and regulations that apply to your job position. If any doubt exists about whether a course of action is lawful, you should seek advice immediately from your supervisor and the Law Department.

PROTECTION AND USE OF COMPANY ASSETS

All employees and members of our Board of Directors should protect the Company’s assets and ensure their efficient use for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company’s profitability. The use of Company funds or assets, whether or not for personal gain, for any unlawful or improper purpose is strictly prohibited.

To ensure the protection and proper use of the Company’s assets, each employee should:

  • Exercise reasonable care to prevent theft, damage or misuse of Company property.
  • Promptly report the actual or suspected theft, damage or misuse of Company property to a supervisor.
  • Use the Company’s telephone system, other electronic communication services, written materials and other property primarily for business-related purposes and in a manner that does not reflect negatively on the Company or its customers. Any personal use of the Company’s telephone system or other electronic communication services or property, or use for non-Company business, must be incidental, occasional and kept to a minimum.
  • Safeguard all electronic programs, data, communications and written materials from inadvertent access by others.
  • Use Company property only for legitimate business purposes, as authorized in connection with your job responsibilities.

Employees should be aware that Company property includes all data and communications transmitted or received to or by, or contained in, the Company’s electronic or telephonic systems. Company property also includes all written communications. Employees and other users of this property should have no expectation of privacy with respect to these communications and data. To the extent permitted by law, the Company has the ability, and reserves the right, to monitor all electronic and telephonic communication, including e-mail. These communications may also be subject to disclosure to law enforcement or government officials.

COMPANY RECORDS

Accurate and reliable records are crucial to our business. Our records are the basis of our earnings statements, financial reports and other disclosures to the public and are the source of essential data that guides our business decision-making and strategic planning. Company records include, but are not limited to, sales information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.

All Company records must be complete, accurate and reliable in all material respects. There is never a reason to make false or misleading entries. Funds, payments or receipts that are not appropriately disclosed or recorded are inconsistent with our business practices and are prohibited. You are responsible for understanding and complying with our record keeping policy. Ask your supervisor if you have any questions.

Note: The Company has a formal document retention policy that each employee must follow with respect to Company records within such employee’s control. Please contact your supervisor or the Law Department to obtain a copy of this policy.

ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS

As a public company, we are subject to various securities laws, regulations and reporting obligations. Both federal law and our policies require the prompt disclosure of accurate and complete information regarding the Company’s business, financial condition and results of operations. Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company and cause legal liability.

The Company’s senior financial officers and other employees working in the Finance Department have a special responsibility to ensure that all of our financial disclosures are comprehensive, fair, accurate, timely and understandable. These employees must understand and strictly comply with generally accepted accounting principles and all standards, laws and regulations for accounting and financial reporting of transactions, estimates and forecasts.

See "How to Report Concerns" below for additional information and guidance.

POLITICAL CONTRIBUTIONS AND ACTIVITIES

The Company encourages its employees to participate in the political process as individuals and on their own time. However, federal and state contribution and lobbying laws severely limit the contributions the Company can make to political parties or candidates. It is Company policy that Company funds and/or assets not be used to make a political contribution to any political party or candidate, unless prior approval has been given by the Law Department.

The following guidelines are intended to ensure that any political activity you pursue complies with this policy:

  • Contribution of Funds. You may contribute your personal funds to political parties or candidates. The Company will not reimburse you for personal political contributions.
  • Volunteer Activities. You may participate in volunteer political activities during non-work time. You may not participate in political activities during working hours.
  • Use of Company Facilities. The Company’s facilities may not be used for political activities (including fundraisers or other activities related to running for office). The Company may make its facilities available for limited political functions, including speeches by government officials and political candidates, with the approval of the Law Department.
  • Use of Company Name. When you participate in political affairs, you should be careful to make it clear that your views and actions are your own, and not made on behalf of the Company. For instance, Company letterhead should not be used to send out personal letters in connection with political activities.

These guidelines are intended to ensure that any political activity you pursue is done voluntarily and on your own resources and time. Please contact the Law Department if you have any questions about this policy.

COMPLIANCE WITH LAWS AND REGULATIONS

Obeying the law, both in letter and in spirit, is the foundation on which this Company’s ethical standards are built.  Each employee has an obligation to comply with federal laws and the laws of the states, counties and cities in which the Company operates.  We will not tolerate any activity that violates any laws, rules or regulations applicable to the Company.  This includes, without limitation, laws covering bribery and kickbacks, including any related to the False Claims Act, Food Drug and Cosmetic Act, Part D Medicare regulations, beneficiary enticement, Freedom of Information Act, copyrights, trademarks and trade secrets, information privacy, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets, and contractual commitments.  You are expected to understand and comply with all laws, rules and regulations that apply to your job position.  If any doubt exists about whether a course of action is lawful, you should seek advice immediately from your supervisor or the Law Department.

COMPLIANCE WITH ANTITRUST LAWS

Antitrust laws of the US and other countries are designed to protect consumers and competitors against unfair business practices and to promote and preserve competition. Our policy is to compete vigorously and ethically while complying with all antitrust, monopoly, competition or cartel laws in all countries, states or localities in which the Company conducts business.

Actions that Violate US Antitrust Laws

In general, US antitrust laws forbid agreements or actions "in restraint of trade." All employees should be familiar with the general principles of the US antitrust laws. The following is a summary of actions that are violations of US antitrust laws:

  • Price Fixing. The Company may not agree with its competitors to raise, lower or stabilize prices or any element of price, including discounts and credit terms.
  • Limitation of Supply. The Company may not agree with its competitors to limit its production or restrict the supply of its services.
  • Allocation of Business. The Company may not agree with its competitors to divide or allocate markets, territories or customers.
  • Boycott. The Company may not agree with its competitors to refuse to sell or purchase products from third parties. In addition, the Company may not prevent a customer from purchasing or using non-Company products or services.
  • Tying. The Company may not require a customer to purchase a product that it does not want as a condition to the sale of a different product that the customer does wish to purchase.

Meetings with Competitors

Employees should exercise caution in meetings with competitors. Any meeting with a competitor may give rise to the appearance of impropriety. As a result, if you are required to meet with a competitor for any reason, you should obtain the prior approval of the Law Department. You should try to meet with competitors in a closely monitored, controlled environment for a limited period of time. The contents of your meeting should be fully documented. Specifically, you should avoid any communications with a competitor regarding:

  • Prices;
  • Costs;
  • Market share;
  • Allocation of sales territories;
  • Profits and profit margins;
  • Supplier’s terms and conditions;
  • Product or service offerings;
  • Terms and conditions of sale;
  • Production and service facilities or capabilities;
  • Bids for a particular contract or program;
  • Selection, retention or quality of customers; or
  • Distribution methods or channels.

Professional Organizations and Trade Associations

Employees should be cautious when attending meetings of professional organizations and trade associations at which competitors are present. Attending meetings of professional organizations and trade associations is both legal and proper, if such meetings have a legitimate business purpose. At such meetings, you should not discuss the Company’s pricing policy or other competitive terms, plans for new or expanded facilities or any other proprietary, competitively sensitive information. If you have any questions about appropriate conduct or activities, you should contact the Law Department prior to attending a meeting of a professional organization or trade association.

Seeking Help

Violations of antitrust laws carry severe consequences and may expose the Company and employees to substantial civil damages, criminal fines and, in the case of individuals, prison terms. Whenever any doubt exists as to the legality of a particular action or arrangement, it is your responsibility to contact the Law Department promptly for assistance, approval and review.

Compliance with MMA Regulations

In December of 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).  The new federal prescription drug benefit program, called Medicare Part D, took effect January 1, 2006.  RxAmerica, a fully owned subsidiary of Longs Drug Stores Corporation, functions in the capacity of both a Medicare Part D PDP sponsor and a Pharmacy Benefits Manager (PBM) for several MA-PDs (Medicare Advantage Prescription Drug Plans).

The Company is committed to complying with all applicable statutory, regulatory, or other Medicare Part D requirement. The Company is further committed to providing a timely response to any data requests by the Centers for Medicare & Medicaid Services (CMS), Medicare Drug Integrity Contractors (MEDICS), law enforcement, or their designees, as well as fully cooperating with any audits conducted by those entities.  The Company has implemented several Policies and Procedures associated with Part D to ensure compliance with MMA regulations.  Most importantly, company employees should act in an ethical and compliant manner. RxAmerica conducts Part D compliance training with its employees so that they are aware of the risks associated with PDP sponsorship.

RxAmerica’s auditing department conducts external and internal audits aimed at detecting fraud, waste, and abuse as well as potential noncompliance.  Potential cases of fraud, waste, and abuse in the Part D prescription drug program are taken seriously, investigated, and should be reported as described in both this document as well as RxAmerica’s Fraud, Waste, and Abuse Program.

The Company encourages subcontractors involved in Part D operations to adopt and follow a Code that reflects their organization's commitment to ethical behavior and compliance with MMA regulations.  In addition, Part D subcontractors should have processes in place to detect, prevent, and correct any episodes of fraud, waste, or abuse, as well as provide Part D training to their employees.  When necessary, the Company’s Code can be shared with Medicare subcontractors or clients to demonstrate the Company’s commitment to abiding by Part D regulations and ethical practices.

COMPLIANCE WITH INSIDER TRADING LAWS

Company employees and members of our Board of Directors are prohibited from trading in the stock or other securities of Longs Drug Stores Corporation ("Longs Drugs") while in possession of material, nonpublic information about the Company. In addition, Company employees and members of our Board of Directors are prohibited from recommending, "tipping" or suggesting that anyone else buy or sell stock or other securities of Longs Drugs on the basis of material, nonpublic information. Company employees and members of our Board of Directors who obtain material nonpublic information about another company in the course of their employment or service, as applicable, are prohibited from trading in the stock or securities of the other company while in possession of such information or "tipping" others to trade on the basis of such information. Violation of insider trading laws can result in severe fines and criminal penalties, as well as disciplinary action by the Company, up to and including termination of employment.

Information is "nonpublic" if it has not been made generally available to the public by means of a press release or other means of widespread distribution. Information is "material" if a reasonable investor would consider it important in a decision to buy, hold or sell stock or other securities. As a rule of thumb, any information that would affect the value of stock or other securities should be considered material. Examples of information that is generally considered "material" include:

  • Financial results or forecasts, or any information that indicates a company’s financial results may exceed or fall short of forecasts or expectations;
  • Important new products or services;
  • Pending or contemplated acquisitions or dispositions, including mergers, tender offers or joint venture proposals;
  • Possible management changes or changes of control;
  • Pending or contemplated public or private sales of debt or equity securities;
  • Acquisition or loss of a significant customer or contract;
  • Significant write-offs;
  • Initiation or settlement of significant litigation; and
  • Changes in the Company’s auditors or a notification from its auditors that the Company may no longer rely on the auditor’s report.

The Company prohibits members of its Board of Directors, Executive Officers and other "Designated Insiders" from trading in Longs Drugs stock except during a "window period" each quarter. It is a violation of the law to seek to profit from material, nonpublic information by buying or selling Longs Drugs stock (including transferring to or from the Longs Drugs stock fund in the Company’s 401(k) plan), even during a window period and even if you are not a Designated Insider.

If you are not a Designated Insider, you can trade Longs Drugs stock any time you are not in possession of material, nonpublic information. Designated Insiders can trade Longs Drugs stock during any window period if they are not in possession of material, nonpublic information.

The laws against insider trading are specific and complex. Any questions about information you may possess or about any dealings you have had in the Company’s securities should be promptly brought to the attention of the Law Department.

PUBLIC COMMUNICATIONS AND REGULATION FD

Public Communications Generally

The Company places a high value on its credibility and reputation in the community. What is written or said about the Company in the news media and investment community directly impacts our reputation, positively or negatively. Our policy is to provide timely, accurate and complete information in response to public requests (media, analysts, etc.), consistent with our obligations to maintain the confidentiality of competitive and proprietary information and to prevent selective disclosure of market-sensitive financial data. To ensure compliance with this policy, all news media or other public requests for information regarding the Company should be directed to the Company’s Investor Relations Department. The Investor Relations Department will work with you and the appropriate personnel to evaluate and coordinate a response to the request.

Compliance with Regulation FD

In connection with its public communications, the Company is required to comply with a rule under the federal securities laws referred to as Regulation FD (which stands for "fair disclosure"). Regulation FD provides that, when we disclose material, nonpublic information about the Company to securities market professionals or stockholders (where it is reasonably foreseeable that the stockholders will trade on the information); we must also disclose the information to the public. "Securities market professionals" generally include analysts, institutional investors and other investment advisors.

To ensure compliance with Regulation FD, we have designated the following officials as "Company Spokespersons:"

  • Chief Executive Officer
  • Chief Financial Officer
  • General Counsel
  • Vice President, Investor Relations and Corporate Communications.

Only Company Spokespersons, or their appropriate designees, are authorized to disclose information about the Company in response to requests from securities market professionals, stockholders or the press and trade press. If you receive a request for information from any securities market professionals or stockholders, promptly contact the Investor Relations Department to coordinate a response to such request.

Company employees who regularly interact with securities market professionals are specifically covered by Regulation FD and have a special responsibility to understand and comply with Regulation FD. Contact the Law Department if you have any questions about the scope or application of Regulation FD.

THE FOREIGN CORRUPT PRACTICES ACT AND OTHER
LAWS GOVERNING OUR BUSINESS INTERNATIONALLY

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (the "FCPA") prohibits the Company and its employees and agents from offering or giving money or any other item of value to win or retain business or to influence any act or decision of any governmental official, political party, candidate for political office or official of a public international organization. Stated more concisely, the FCPA prohibits the payment of bribes, kickback or other inducements to foreign officials. This prohibition also extends to payments to a sales representative or agent if there is reason to believe that the payment will be used indirectly for a prohibited payment to foreign officials. Violation of the FCPA is a crime that can result in severe fines and criminal penalties, as well as disciplinary action by the Company, up to and including termination of employment.

Certain small facilitation or "grease" payments to foreign officials may be permissible under the FCPA if customary in the country or locality and intended to secure routine governmental action. Governmental action is "routine" if it is ordinarily and commonly performed by a foreign official and does not involve the exercise of discretion. For instance, "routine" functions would include setting up a telephone line or expediting a shipment through customs. To ensure legal compliance, all facilitation payments must receive prior written approval from the Law Department and must be clearly and accurately reported as a business expense.

Other Laws Governing our Business

The Company’s business is subject to various US and international trade control regulations, including licensing, shipping documentation, import documentation and reporting and record retention requirements. This requirement also applies to all samples, products, documents or data that are going to be hand carried during foreign travel.

Employees with significant responsibilities in business we do internationally have an additional responsibility to understand and comply with such applicable laws. These employees are expected to have a working knowledge of the laws and regulations applicable to their job positions. Questions and requests for assistance should be directed to the Law Department.

The Company is also subject to US anti-boycott laws and regulations, which prevent US companies and certain of their subsidiaries from taking action in support of a boycott imposed by a foreign country upon a nation that is friendly with the United States. Boycott laws often change and must be closely monitored. To ensure compliance, any boycott issue must be referred to the Law Department.

ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to providing a safe and healthy working environment for its employees and to avoiding adverse impact and injury to the environment and the communities in which we do business. Company employees must comply with all applicable environmental, health and safety laws, regulations and Company standards. It is your responsibility to understand and comply with the laws, regulations and policies that are relevant to your job. Failure to comply with environmental, health and safety laws and regulations can result in civil and criminal liability against you and the Company, as well as disciplinary action by the Company, up to and including termination of employment. You should contact the Law Department if you have any questions about the laws, regulations and policies that apply to you.

Environment

All Company employees should strive to conserve resources and reduce waste and emissions through recycling and other energy conservation measures. You have a responsibility to promptly report any known or suspected violations of environmental laws or any events that may result in a discharge or emission of hazardous materials. Employees should be particularly alert to the storage, disposal and transportation of waste, and handling of toxic materials and emissions into the land, water or air.

Health and Safety

The Company is committed not only to comply with all relevant health and safety laws, but also to conduct business in a manner that protects the safety of its employees. All employees are required to comply with all applicable health and safety laws, regulations and policies relevant to their jobs. If you have a concern about unsafe conditions or tasks that present a risk of injury to you, please report these concerns immediately to your supervisor or the Human Resources Department.

EMPLOYMENT PRACTICES

The Company pursues fair employment practices in every aspect of its business. The following is intended to be a summary of our employment policies and procedures. Copies of our detailed policies are available from the Human Resources Department. Company employees must comply with all applicable labor and employment laws, including anti-discrimination laws and laws related to freedom of association, privacy and collective bargaining. It is your responsibility to understand and comply with the laws, regulations and policies that are relevant to your job. Failure to comply with labor and employment laws can result in civil and criminal liability against you and the Company, as well as disciplinary action by the Company, up to and including termination of employment. You should contact the Law Department or the Human Resources Department if you have any questions about the laws, regulations and policies that apply to you.

Harassment and Discrimination

The Company is committed to providing equal opportunity and fair treatment to all individuals on the basis of merit, without discrimination because of race, color, religion, national origin, sex (including pregnancy), sexual orientation, age, disability, veteran status or other characteristics protected by law. The Company prohibits harassment in any form, whether physical or verbal and whether committed by supervisors, non-supervisory personnel or non-employees. Harassment may include, but is not limited to, offensive sexual flirtations, unwanted sexual advances or propositions, verbal abuse, sexually or racially degrading words, or the display in the workplace of sexually suggestive objects or pictures.

If you have any complaints about discrimination or harassment, report such conduct to your supervisor or the Human Resources Department. All complaints will be treated with sensitivity and discretion. Your supervisor, the Human Resources Department and the Company will protect your confidentiality to the extent possible, consistent with law and the Company’s need to investigate your concern. Where our investigation uncovers harassment or discrimination, we will take prompt disciplinary action, which may include disciplinary action by the Company, up to and including, termination of employment of the individual who committed the act of discrimination or harassment. The Company strictly prohibits retaliation against an employee who, in good faith, files a compliant.

Any member of management who has reason to believe that an employee has been the victim of harassment or discrimination or who receives a report of alleged harassment or discrimination is required to report it to the Human Resources Department immediately.

Alcohol and Drugs

The Company is committed to maintaining a drug-free work place. All Company employees must comply strictly with Company policies regarding the abuse of alcohol and the possession, sale and use of illegal substances. Drinking alcoholic beverages is prohibited while on duty or on the premises of the Company, except at specified Company-sanctioned events. Possessing, using, selling or offering illegal drugs and other controlled substances is prohibited under all circumstances while on duty or on Company premises. Likewise, you are prohibited from reporting for work, or driving a Company vehicle or any vehicle on Company business, while under the influence of alcohol or any illegal drug or controlled substance.

Violence Prevention and Weapons

The safety and security of Company employees is vitally important. The Company will not tolerate violence or threats of violence in, or related to, the workplace. Employees who experience, witness or otherwise become aware of a violent or potentially violent situation that occurs on the Company’s property or affects the Company’s business must immediately report the situation to their supervisor or the Human Resources Department.

The Company does not permit any individual to have weapons of any kind on Company property or in vehicles, while on the job or off-site while on Company business. This is true even if you have obtained legal permits to carry weapons. The only exception to this policy applies to security personnel who are specifically authorized by Company management to carry weapons.

HOW TO REPORT CONCERNS

If you know or become aware of any employee relations or employee integrity issues (e.g., complaints of discrimination, harassment, falsification of employment and/or Company records, or theft), you may contact your supervisor or the Human Resources Department. In addition, employees may also contact their supervisor or call the Network Hotline at 1-800-241-5689, and an investigation appropriate to the circumstances will be conducted. The Network Hotline is monitored by The Network located in Georgia. Any complaints shall be kept confidential to the extent practical and appropriate under the circumstances.

If you know or become aware of any perceived questionable accounting, internal accounting controls, auditing matters or unethical behavior, you should contact the Accounting Ethics Hotline by leaving a message at 1-866-250-3441, sending an email to comments-ethics@longs.com, or submitting your written concern to the Company’s General Counsel at Longs Drug Stores Corporation, 141 North Civic Drive, Walnut Creek, CA 94596, Attention: William J. Rainey, General Counsel, and an appropriate investigation will be conducted.

If you know or become aware of any alleged unlawful or inappropriate conduct that may violate the Code (e.g., insider trading, conflict of interest, fraud, waste, and abuse, or unauthorized disclosure of confidential information), you should contact the Code Hotline by leaving a message at 1-877-410-0554, sending an email to any of the individuals listed on Attachment III or to comments-code@longs.com, or submitting your written concern to the Company’s General Counsel at Longs Drug Stores Corporation, 141 North Civic Drive, Walnut Creek, CA 94596, Attention: William J. Rainey, General Counsel, and an appropriate investigation will be conducted.

Reports to the Accounting Ethics Hotline and Code Hotline can be made anonymously and all reasonable steps will be taken to keep information confidential pending the outcome of an investigation. Members of the Law Department monitor both the Accounting Ethics Hotline and the Code Hotline, and complaints regarding questionable accounting, internal accounting controls, auditing, alleged violations of the Code or similar matters will be transmitted to the Audit and Finance Committee of the Company’s Board of Directors.

Any employee bringing a complaint of a perceived violation of this Code, or concerning the Company’s accounting or auditing practices, will not be affected in terms and conditions of employment, nor discriminated against or discharged, because of the complaint.

CONCLUSION

This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics.  If you have any questions about these guidelines, please contact your supervisor, the Law Department or the Code Hotline at 1-877-410-0554 or comments@code.longs.com.  We expect members of our Board of Directors and all Company employees, regardless of their level or location, to adhere to these standards as applicable.  Each employee and member of our Board of Directors is separately responsible for his or her actions.  Conduct that violates the law or this Code cannot be justified by claiming that it was ordered by a supervisor or someone in higher-level management or service.  If you engage in conduct prohibited by the law or this Code, you will be deemed to have acted outside the scope of your employment.  Such conduct may subject you to disciplinary action, including verbal or written warnings or reprimands, suspensions, terminations, and financial penalties.

Note: This Code and the matters contained herein are neither a contract of employment nor a guarantee of continuing Company policy. We reserve the right to amend, supplement or discontinue this Code and the matters addressed herein, without prior notice, at any time.

ATTACHMENT I

.

 

LONGS DRUG STORES CORPORATION

 

REPORTING PERIOD

CERTIFICATION FORM – CODE OF BUSINESS CONDUCT AND ETHICS/CONFLICT OF INTEREST
Directors, Officers and Managers:
This form can be completed online through eLite.

 

FY 2007
1/27/06 - 1/25/07

 

 

 

 

 

 

NAME OF REPORTING PERSON:

 

 

DATE:

 

(Print or type)

 

(Check below if appropriate)

TITLE:

 

 

 

 

Member of the Board of Directors

 

 

 

STORE/LOCATION NO.:

 

DISTRICT NO.:

 

 

Executive Officer

 

 

 

This certification form is designed to help members of the Board of Directors, officers, and employees of Longs Drug Stores Corporation and its subsidiaries (the "Company" or "Longs") identify situations that present potential conflicts of interest that may compromise the interests of the Company and benefit a member of the Board of Directors, officer, or employee at the expense of the Company. Indicate whether or not your actions have created a conflict, potential conflict, or appearance of conflict with Longs’ interests by typing an "X" (use the TAB key to position) in the space marked YES or NO below. If your response is yes, describe the conflict or potential conflict in the space provided below.

 

YES

NO

Have you engaged in any employment, investment, and/or business activity outside Longs that could potentially affect your objectivity and independence of judgment or conduct in carrying out your duties and responsibilities to Longs (e.g., working for a competitor, supplier, or customer)?

 

 

Have you accepted any money, gifts, trips, meals and/or other items with a value over $200 from vendors, suppliers, or customers?

 

 

Have you received any commissions, fees, or discounts paid by outside vendors for your personal benefit?

 

 

Do you supervise immediate family members or relatives working in the same store or department where you work?

 

 

Do you have a personal relationship with a subordinate employee?

 

 

Have you disclosed any Company confidential proprietary information outside the normal course of your assigned duties to anyone not employed by Longs? Confidential information includes all non-public information that might be of use to competitors, or, if disclosed, harmful to the Company of its customers (e.g., sales, pricing, gross profit margins) .

 

 

Have you disclosed any material, nonpublic information that could affect the Company's stock price or trading in Company stock? Information is "material" if a reasonable investor would consider it important in a decision to buy, hold, or sell stock or other securities.

 

 

Have you disclosed customer confidential information (e.g., credit card, checking account information, protected health information) outside the normal course of your assigned duties to any third party? Protected health information is information either in electronic, oral or paper format that identifies an individual's physical or mental health condition, the health care that the individual has received, or payment of such care.

 

 

Have you bought or sold Longs stock when you possessed material, non-public information about Longs (e.g., sold Longs stock when you knew earnings would fall short of expectations) but this information had not yet been made generally public via press release of other means of widespread distribution?

 

 

Do you, your spouse, domestic partner, or any other member of your immediate family maintain employment from, serve as a member of the board of directors for, or provide any other services to a customer, supplier, or competitor of the Company? Note: Pharmacy managers must disclose their employment with a competitor of Longs.

 

 

Do you, your spouse, domestic partner, or any other member of your immediate family, either directly or indirectly, have a financial interest in a competitor? Disclose below any stock ownership you have in a competitor to Longs.

 

 

Do you, your spouse, domestic partner, or any other member of your immediate family, either directly or indirectly, have a financial interest in a customer or supplier that you or your subordinates deal directly or indirectly with in the course of your employment with Longs?

 

 

Have you, your spouse, domestic partner, or any other member of your immediate family, either directly or indirectly, engaged in any other conduct that is prohibited or required to be disclosed under the Code of Business Conduct and Ethics?

 

 

Does personal access to proprietary PDP data create any conflict of interests?   Do you maintain any relationships with other Part D sponsors or plans?  Do you maintain any affiliation with any subcontractors involved in Part D operations that could create a conflict of interest, including any potential anti-kickback concerns?

 

 

The Company requires that employees fully disclose any situations that reasonably could be expected to give rise to a conflict of interest. Are you aware of any existing conflicts among your staff that have not been reported? Note: Pharmacy managers must disclose whether any staff pharmacists in the pharmacy are employed with a competitor.

 

 

 

IF YOU RESPONDED YES TO ANY OF THE ABOVE, DESCRIBE POTENTIAL CONFLICTS:

 

 

Are there any situations or circumstances where you believe you have or may have engaged in conduct not permitted or required to be disclosed under the Longs’ Code of Business Conduct and Ethics? If so, please describe:

 

By completing this certification, you are certifying that your responses are accurate and truthful and acknowledging that you have read, understood, and agree to comply width Longs' Code of Business Conduct and Ethics. Failure to respond accurately and truthfully may result in disciplinary action, including termination.

ATTACHMENT II

.

LONGS DRUG STORES CORPORATION

 

REPORTING PERIOD


GIFTS AND ENTERTAINMENT REPORT
Directors, Officers and Managers:
This form can be completed online through eLite.

 

FY 2007
1/27/06 - 1/25/07

 

 

 

 

 

 

NAME OF REPORTING PERSON:

 

 

DATE:

 

(Print or type)

 

(Check below if appropriate)

TITLE:

 

 

 

 

Member of the Board of Directors

 

 

 

STORE/LOCATION NO.:

 

DISTRICT NO.:

 

 

Executive Officer

 

 

 

 

This report is to be maintained during the course of each year and submitted annually with the Code of Business Conduct and Ethics certification to Internal Audit for review. In addition, reports received from members of the Company’s Board of Directors and Executive Officers will be forwarded by Internal Audit to the Audit and Finance Committee of the Company’s Board of Directors.

Date

Description of Gift or Entertainment

Received From

Value

Basis for
Determining Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Use additional page(s) if necessary)

SUBMIT TO INTERNAL AUDIT AT THE END OF EACH FISCAL YEAR WITH THE

CERTIFICATION FORM FOR CODE OF BUSINESS CONDUCT AND ETHICS/CONFLICT OF INTEREST.

ATTACHMENT III

CONTACT LIST

Listed below is the current contact information for the positions or departments referenced in this Code of Business Conduct and Ethics. For details on reporting concerns or filing complaints, please refer to the "How to Report Concerns" Section on page 18 of the Code of Business Conduct and Ethics.

Hotline

Monitored By

Contact Information

Code Hotline
(Code of Conduct Related
Complaints and Hotline)

Law Department
General Office

(877) 410-0554
comments-code@longs.com

Accounting Ethics Hotline
(Accounting Related
Complaints and Hotline)

Law Department
General Office

(866) 250-3441
comments-ethics@longs.com

Network Hotline
(Human Resources Related
Complaints and Hotline)

The Network
Atlanta, Georgia

(800) 241-5689

 

Position

Individual

Contact Information

Chairman of the Board of Directors, President and
Chief Executive Officer

Warren F. Bryant

General Office
(877) 410-0554
wbryant-code@longs.com

Lead Director

Murray H. Dashe

Longs Board of Directors
c/o William J. Rainey, Corporate Secretary
(877) 410-0554
brainey-code@longs.com

General Counsel

William J. Rainey

Law Department
General Office
(877) 410-0554
brainey-code@longs.com

 

Department

Individual

Contact Information

Internal Audit

Susan Alexander
Andrew Wing

Protiviti Consulting
(916) 830-0103 (S. Alexander)
(925) 210-6743 (A. Wing)
salexander99@longs.com

awing99@longs.com

Human Resources Department

Linda M. Watt

Human Resources Department
General Office
(877) 410-0554
lwatt-code@longs.com

District Manager

Varies by District

List on Longs’ Intranet (home.longs.com) under Longs’ Electronic Directory, District Directory