Exhibit 10.43

September 27, 2002

Mr. Larry Gatta

1312 Abington Way

Mechanicsburg, PA 17050

Dear Larry:

Thank you for your interest in joining Longs Drug Stores California, Inc. It is
a pleasure to confirm our offer of employment for the position of Group Vice
President, Merchandising. This offer is based on the following mutual
understanding:

 

1. You will receive an annual salary of $190,000 payable in equal bi-weekly
amounts of $7307.69 for the first year of employment.

 

2. You will receive during your first year of employment a bonus that is
targeted at 30% of your base annual salary. For the first two fiscal quarters,
this will be guaranteed. Thereafter, any bonus will be based on your individual
as well as the Company’s overall performance.

 

3. You will receive a sign-on bonus in the amount of $50,000, which will be
grossed up for state and federal income tax purposes, payable within 30 days of
your hire. Should you resign from the company within 3 years of your hire date,
you will be required to repay a prorated portion of this bonus.

 

4. You will receive a car allowance in the amount of $710 per month. This is
taxable as income and will be paid to you on the second paycheck of each month.

 

5. You will be granted a non-qualified stock option grant of 9,000 shares at the
end of the third fiscal quarter of this year. These shares will be valued at the
then current price with vesting according to the then current Company vesting
policy.

 

6. You will be reimbursed for reasonable moving expenses based on information
submitted by you to the Company, which will be grossed up for state and federal
income tax purposes where allowable by IRS regulations. All realtor fees
associated with the sale of your Mechanicsburg residence in Pennsylvania will be
reimbursed per current relocation policy.

 

7. You will be eligible for the company’s home purchase program through
relocation should your residence in Mechanicsburg not sell within six months.

 

8. You will be reimbursed for up to six months of reasonable temporary living
expenses based on information submitted by you to the Company in order to assist
you in finding a new residence.

 

9. One month’s salary (not to exceed $15,000) will be paid in advance of your
actual relocation to offset incidental costs associated with your move.

--------------------------------------------------------------------------------

10. You will be reimbursed $500.00 for one month’s COBRA payment to transition
to the Longs Medical Plan. This payment will be made to you within 10 days of
your start date with Longs.

 

11. You will begin to accrue vacation immediately at the rate of three weeks per
year. You may begin to use this vacation time after six months of continuous
employment.

 

12. Longs will have at least limited liability for severance for a one (1) year
initial period of employment. Should initial work arrangements be dissolved the
parties agree as follows:

(a) First, should Longs choose to sever its employment relationship with you in
the first year for any reason (other than “for cause”), company would provide a
cash payment equal to six month’s salary.

(b) Second, should you cause your employment to be terminated by your
resignation or by being discharged for gross and willful misconduct relating to
the performance by you of your duties at the company, no compensation would be
due other than that accrued to that point.

 

13. Information regarding the following programs will be sent to you under
separate cover and are included as part of your overall employment with Longs.

a. Profit sharing, life insurance, long term disability, and 401K plans

b. Available medical insurance coverage options

c. Company car allowance

d. “Termination Benefits in the Event of a Change in Corporate Control”

Larry, we look forward to your favorable response to this letter, as we believe
you will make a fine contribution to Longs Drug Stores California, Inc.

 

Sincerely, LONGS DRUG STORES CALIFORNIA, INC. /s/ Todd J. Vasos Todd Vasos
Senior Vice President, Marketing

I accept your offer of employment as stated in this letter.

 

/s/ Lawrence J. Gatta, Jr.     October 7, 2002 Lawrence J. Gatta     Date