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EXHIBIT 10.1

SEPARATION AGREEMENT

        THIS SEPARATION AGREEMENT (this "Agreement"), is made between Stephen D.
Roath ("Roath") and Longs Drug Stores Corporation and Longs Drug Stores
California, Inc. (collectively, "Longs" or the "Company") and shall become
effective upon the Effective Date set forth in paragraph 18.

RECITALS

        WHEREAS, Roath is an employee and employed by Longs from his hiring date
of June 14, 1964 to the present.

        WHEREAS, Longs recognizes Roath's many contributions to the corporation
and desires to enter into this Agreement.

        NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations set forth below and other good and valuable consideration, the
parties agree as follows:

        1.    Relinquishment of Positions.    Roath has resigned effective
February 26, 2002 from his positions of President and Chief Executive Officer,
and as a director of Longs Drug Stores Corporation. Roath has also resigned
effective February 26, 2002 from his positions of President and Chief Executive
Officer, and as a director of Longs Drug Stores California, Inc.

        2.    Earned Salary and Bonus.    Roath will be paid his earned salary
and accrued vacation through February 26, 2002. Roath will be paid his fourth
quarter fiscal year 2002 bonus on March 15, 2002.

        3.    Payment of Good and Valuable Consideration.    In consideration of
Roath's acceptance of this Agreement and the release contained herein, Longs
will provide the following:

        (a)  Roath shall be paid one million three hundred thirty-seven thousand
dollars ($1,337,000) on the date that is three (3) days after the Effective
Date.

        (b)  Roath shall be paid an amount per month equal to five hundred
dollars ($500) during the period he is eligible for COBRA continuation coverage.
If at the time Roath is no longer eligible to receive continuation coverage
under COBRA, Roath does not have alternative coverage under a subsequent
employer, the Company agrees to pay him an amount equal to seven hundred fifty
dollars ($750) per month until the earlier of (i) the date he secures such
coverage from a subsequent employer and (ii) March 4, 2006.

        (c)  Roath's option to purchase 30,000 shares of Longs Drug Stores
Corporation which was granted to him on November 8, 2000 shall continue to vest
until February 26, 2004 to the extent provided in such option.

        (d)  Any tax obligations of Roath and tax liability therefor, including
any penalties and interest based upon such tax obligation, that arises from the
benefits and payments made to him under this Agreement shall be Roath's
responsibility and liability. Longs will report each payment provided for in
this Section 3 on form W-2 for the tax year in which the payment was made.

        4.    No Other Benefits; No Admission of Liability.    Roath
acknowledges that except as specifically set forth in Sections 2 and 3, Roath
shall not be entitled to any other payments or benefits after February 26, 2002.
Roath also acknowledges that the Agreement for Termination Benefits in the Event
of a Change in Control entered into between Roath and Longs Drug Stores
California, Inc. shall terminate as of February 26, 2002. Notwithstanding the
foregoing, in the event there is a "Change in Control" of Longs as described in
such agreement, the payments set forth in Section 3(a) and 3(b) of this
Agreement that remain unpaid shall be payable within thirty (30) days following
such Change in Control. It is understood and agreed that the furnishing of the
consideration for this Agreement shall

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not be deemed or construed at any time or for any purpose as an admission of
liability by Longs or Roath.

        5.    Indemnification Against Claims.    To the fullest extent provided
by law, Longs agrees to indemnify and hold Roath harmless from any liability,
claim, demand, cost, expense and attorneys' fees incurred by him as a result of
any actions or omissions by him in the course of his employment by the Company
or as a director of the Company.

        6.    Confidentiality and Non-Disclosure.    

        (a)  Unless required or otherwise permitted by law, Roath agrees to keep
confidential and shall not disclose to others, including present or former Longs
employees, any information described below:

(i)Longs' "Confidential Information". As used in this Agreement, "Confidential
Information" includes, but is not limited to the following: (a) weekly sales and
wage data, (b) profitability data, (c) financial planning and forecasting data,
(d) sales reports, including pharmacy prescription and sales volume,
(e) individual store and collective gross profit information, (f) expense data,
(g) return-on-investment data, (h) return-on-asset data, (i) bonus plans and
reports, (j) warehouse distribution costs, (k) information regarding Longs'
NonStop Solutions project and related data, (l) cost-benefit analysis regarding
pharmacy distribution, (m) Longs' PRO program, (n) store and pharmacy inventory
data, (o) pharmacy purchase data, (p) information regarding pharmacy automated
dispensing system(s) and robotic technology, (q) corporate strategic planning
information, (r) pharmacy prescription processing system, (s) computer programs
and know how, (t) business and marketing plans and strategies, and
(u) unpublished financial statements, budgets, projections, prices, costs and
customer lists whether developed before or after the Effective Date;

(ii)Longs' "Trade secrets", as defined under the Uniform Trade Secrets Act,
California Civil Code section 3426.1;

(iii)Any information that affords Longs a competitive advantage in the retail
industry;

(iv)Longs' proprietary information including but not limited to, supplier lists,
product marketing or any other information obtained during his employment with
Longs; and

(v)Information with respect to acquisitions and mergers or sales or other
dispositions of businesses or material assets by, of or with Longs.

        (b)  The provisions of this Section 6 shall not apply to (i) information
which is generally known within the industry or in the public domain prior to
the Effective Date, (ii) information which, not as a result of the disclosure by
Roath, becomes part of the public domain, (iii) information which is available
as a matter of public record and (d) information which is hereafter lawfully
disclosed to Roath by a third party (other than any employees or agents of
Longs).

        (c)  The non-disclosure obligations of this Section 6 shall not apply to
disclosures made by Roath in response to any deposition, interrogatory, request
for documents, subpoena, civil investigative demand or similar legal process
("legally compelled disclosure") provided that Roath complies with the
conditions of this Section 6(c). In the event that Roath is requested or becomes
subject to make a legally compelled disclosure of any of the Confidential
Information, Roath shall first provide Longs with prompt prior written notice of
such requirement so that Longs may seek a protective order or other appropriate
remedy and/or waive compliance with the terms of this Section 6.

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        (d)  Roath agrees that on or before the Effective Date, he shall turn
over to Longs all Company confidential files, records, and other documents. In
addition, Roath shall return all property in his possession owned by Longs.

        7.    Non-Disparagement.    Both Roath and Longs, through its directors
and officers, agree not to make any unfavorable or disparaging remarks about the
other to third parties. However, Roath acknowledges and agrees that the
Company's non-disparagement obligation pursuant to this Agreement shall extend
solely to the actions of Longs' directors and officers. For this purpose,
"Officers" is defined as those persons identified by the Board of Directors as
subject to the reporting requirements of Section 16 of the Securities Exchange
Act of 1934, as amended.

        8.    Cooperation.    Roath agrees to cooperate with Longs, its
attorneys or experts retained by Longs or its attorneys in connection with any
litigation matters involving Longs that are pending on the Effective Date or
that may arise thereafter regarding events prior to the Effective Date. The
Company shall reimburse Roath for all reasonable expenses incurred in connection
with such cooperation and, if such cooperation is required after the date that
is two (2) years after the Effective Date, the Company shall also compensate
Roath for time reasonably spent in connection with such cooperation at an hourly
rate equivalent to his salary in effect at the time of his resignation.

        9.    No Other Claims.    Roath represents and warrants that he has not
filed against Longs or any of its representatives, any claim, complaint, charge
or suit with any federal, state or other agency, court, board, office or other
forum or entity, including without limitation, any application for workers'
compensation benefits. Roath agrees that he will not, at any time hereafter,
file any such claim, complaint, charge or suit based upon circumstances arising
before the Effective Date, other than a claim arising from a breach by the
Company of this Agreement (which shall be subject to Section 11), and if any
agency, court, board, office, forum or other entity assumes jurisdiction of any
such claim, complaint, charge or suit, he will request such entity to withdraw
from the matter. A breach of this Section 9 shall entitle Longs to damages as
provided by law and shall relieve Longs of all obligations to Roath as provided
in this Agreement.

        10.    General Release.    

        (a)  Roath, on behalf of himself and his heirs, executors,
administrators, successors and assigns, does hereby irrevocably and
unconditionally release, acquit and forever discharge Longs and its affiliates
and all of its and their stockholders, directors, officers, employees,
representatives, successors, assigns, agents and attorneys from any and all
charges, complaints, grievances, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys' fees and costs
actually incurred), of whatever kind or nature, known or unknown, suspected or
unsuspected, joint or several ("Claims"), which Roath has had or may hereafter
claim to have had, against Longs by reason of any matter, act, omission, cause
or event whatever that has occurred up to and including the Effective Date other
than those obligations set forth in this Agreement. This release and waiver of
Claims specifically includes, without limitation: (i) all Claims arising from or
relating in any way to any act or failure to act by any employee, officer or
director of Longs, (ii) all Claims arising from or relating in any way to the
employment relationship of Roath with Longs and/or the termination thereof,
including any Claims which have been asserted or could have been asserted
against Longs, and (iii) any and all Claims which might have been asserted by
Roath in any suit, claim, or charge, for or on account of any matter or things
whatsoever that has occurred up to and including the Effective Date, under any
and all laws, constitutions, statutes, orders, regulations, or any other claim
of right(s), including without limitation, any claim under Age Discrimination in
Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964,
as amended (including the amendments of the Civil Rights Act of 1991), the
Employee Retirement Income

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Security Act of 1976, as amended, and the Americans with Disabilities Act, State
antidiscrimination statutes and any Claim in contract or tort.

        (b)  Each of Longs Drug Store Corporation and Longs Drug Stores
California, on behalf of itself and its, successors and assigns, does hereby
irrevocably and unconditionally release, acquit and forever discharge Roath and
his heirs, executors, administrators, successors and assigns from any and all
Claims which Longs has had or may hereafter claim to have had, against Roath by
reason of any matter, act, omission, cause or event whatever that has occurred
up to and including the Effective Date other than the obligations set forth in
this Agreement.

        (c)  For the purpose of implementing a full and complete release and
discharge, each of the parties expressly acknowledges that this Agreement with
the general releases set forth in this Section 10 are intended to include in
their effect, without limitation, all Claims which the parties do not know or
suspect to exist in their favor at the time of execution of this Agreement, and
that this Agreement and such general releases contemplate the extinguishment of
all such Claims. Each of the parties expressly waives and relinquishes all
rights and benefits he or it may have under Section 1542 of the California Civil
Code which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

        11.    Arbitration and Equitable Relief.    

        (a)  Longs and Roath agree that any dispute, controversy or claim
between the parties arising out of or relating to this Agreement, or any breach
or asserted breach thereof, shall be determined and settled exclusively by
arbitration in Walnut Creek, California in accordance with the rules for dispute
resolution of JAMS/ENDISPUTE. Judgment on the award may be entered in any court
of competent jurisdiction, and the parties specifically reserve all rights to
appeal such judgment as if it were rendered in a court-of-law.

        (b)  Provided that the complaining party has given to the other party no
less than one (1) week's prior written notice of the alleged breach, the parties
may apply to any court of competent jurisdiction for a temporary restraining
order, preliminary injunction or other interim or conservatory relief as may be
necessary, without breach of this Agreement and without abridgment of the powers
of the arbitrator. The parties hereby submit themselves to the courts of
California in and for the County of Contra Costa for the purpose of enforcing
this Agreement.

        12.    Binding Agreement.    This Agreement shall be binding upon and
inure to the benefit of Roath and Longs and their respective heirs,
administrators, representatives, executors, successors and assigns. Roath hereby
designates Jane Roath as his beneficiary under this Agreement.

        13.    Attorneys' Fees.    Each party shall bear its own costs and
attorneys' fees incurred in the achieving the settlement and release of the
matters set forth in this Agreement. If one party commences an action against
the other to enforce or interpret the terms of this Agreement, or to obtain a
declaration of rights under this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and expenses incurred in such
action or any appeal or enforcement of such action, in addition to any other
relief to which that party may be entitled under this Agreement.

        14.    Voluntary Participation.    Each of the parties acknowledges that
he or it has read the Agreement, and that he or it enters into this Agreement
freely, voluntarily, without coercion and based on the party's own judgment and
not in reliance upon any representations or promises made by the others, except
those contained in this Agreement.

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        15.    Method of Execution.    This Agreement may be executed in
counterparts and each counterpart shall be deemed a duplicate original.

        16.    Governing Law.    This Agreement is deemed to have been made and
entered into in the State of California and shall in all respects be
interpreted, enforced and governed under the laws of the State of California.
The language of all parts of this Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any party.

        17.    Severability.    The provisions of this Agreement are severable
and should any provision of this Agreement be declared or be determined by any
arbitrator or court to be illegal or invalid, any such provision shall be
stricken, and the validity of the remaining parts, terms or provisions shall not
be affected.

        18.    Older Workers Benefit Protection Act.    Pursuant to the
requirements of the Older Workers Benefit Protection Act, Roath has up to
21 days from February 26, 2002 to consider and sign this Agreement, although
Roath may accept it at any time within those 21 days. Roath hereby acknowledges
that he has consulted an attorney or been advised to consult an attorney about
this Agreement. Once Roath accepts the terms of this Agreement and signs this
Agreement, he has seven days to revoke his acceptance. To revoke this Agreement,
Roath must send to the Secretary of Longs Drug Stores Corporation a written
statement of revocation by registered mail, return receipt requested. If he does
not revoke this Agreement, this Agreement shall become effective on the eighth
day after he signs it (the "Effective Date").

        19.    Entire Agreement.    This Agreement sets forth the entire
agreement between the parties as to the subject matter hereof and supersedes any
and all prior agreements or understandings between the parties written or oral.
No waiver, alteration, or modification of any of the provisions of this
Agreement shall be binding unless in writing and signed by the party against
whom enforcement of the change or modification is sought. Failure or delay on
the part of either party to enforce any right, power, or privilege under this
Agreement shall not be deemed to constitute a waiver thereof.

Date: February 26, 2002       /s/  STEVE ROATH      

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Stephen D. Roath
Date: February 26, 2002
 
 
 
Longs Drug Stores Corporation
 
 
By:
 
/s/  H. R. SOMERSET      

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        Authorized Signatory
Date: February 26, 2002
 
 
 
Longs Drug Stores California, Inc.
 
 
By:
 
/s/  O. D. JONES      

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        Authorized Signatory

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SEPARATION AGREEMENT
RECITALS