Document:

Second Amendment to Employment Agreement

 Exhibit 10.38 
 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT 
 This Second Amendment to Employment Agreement (the
“Amendment”) is entered into as of November 13, 2007 (the “Effective Date”), between Warren F. Bryant (the “Executive”), Longs Drug Stores Corporation (the “Corporation”), and Longs Drug Stores
California, Inc. (“Longs California”). 
 RECITALS 
 WHEREAS, on October 30, 2002, the Executive, the Corporation and Longs California entered into an Employment Agreement, and the agreement was
amended effective March 2, 2004 (as amended, the “Employment Agreement”); and 
 WHEREAS, the parties wish to amend certain
provisions of the Employment Agreement to reflect recent changes affecting the taxation of deferred compensation arrangements under Section 409A of the Internal Revenue Code of 1986, as amended, pursuant to the terms and conditions set forth
below. 
 AGREEMENT 
 NOW
THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereby agree as follows effective as of the Effective Date. Except as otherwise defined herein, capitalized terms shall have the meanings assigned
to them in the Employment Agreement. 
 1. Qualifying Termination. Section 9(a) of the Employment Agreement shall be amended and
restated in its entirety to read as follows: 
 (a) Qualifying Termination. 
 (1) A Qualifying Termination occurs if either (i) the Corporation terminates the Executive’s employment for any reason other
than Cause or Disability; or (ii) the Executive resigns for Good Reason pursuant to Section 9(a)(2). 
 (2) For
purposes of this Agreement, Good Reason means the occurrence of any of the following conditions without the Executive’s written consent (each a “Good Reason Condition”): (i) a material diminution in the Executive’s Base
Compensation, (ii) a material diminution in the Executive’s authority, duties, or responsibilities, or (iii) a material change in the geographic location at which the Executive must perform services pursuant to the Agreement. In order
to resign for Good Reason, the Executive must provide written notice to the Parent or the Corporation, as the case may be, of the existence of the Good Reason Condition within 90 days of the initial existence of such Good Reason Condition. Upon
receipt of such notice of the Good Reason Condition, the Parent or the Corporation will be provided with a period of 30 days during which it may remedy the Good Reason Condition and not be required to provide for the payments and benefits described
herein as a result of such proposed resignation 

 
due to the Good Reason Condition specified in the notice. If the Good Reason Condition is not remedied within the period specified in the preceding sentence,
the Executive may resign for Good Reason based on the Good Reason Condition specified in the notice, provided that such resignation must occur within two years after the initial existence of such Good Reason Condition. 
 (3) For avoidance of doubt, termination of the Executive’s employment by reason of death shall not constitute a Qualifying
Termination. 
 2. Release of Claims. Section 9(f) of the Employment Agreement shall be amended and restated in its entirety to
read as follows: 
 Release of Claims. As a condition to the receipt of the payments and benefits described in this Section 9,
the Executive shall execute, within ninety (90) days after his termination of employment due to a Qualifying Termination, a covenant not to sue and release of all claims arising out of the Executive’s employment or the termination thereof
including, but not limited to, any claim of discrimination under state or federal law in a form that is satisfactory to the Corporation; provided that such release shall not impose restrictions or requirements on the activities of the Executive
beyond those described herein. 
 3. Excise Tax Restoration Payment. The following shall be added to the end of Section 12(e) of
the Employment Agreement: 
 With respect to each payment that is subject to the excise tax imposed by section 4999 of the Code, the related
Excise Tax Restoration Payment shall be paid to the Executive on, or as soon as practicable following, the payment date (and in any event, such Excise Tax Restoration Payment shall be paid to the Executive by the end of the calendar year next
following the calendar year in which the Executive remits the Excise Tax). 
 4. Delay of Payments in Certain Circumstances. The
following shall be added as a new Section 18(n) of the Employment Agreement: 
 Notwithstanding any provision to the contrary in the
Agreement, if the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination
benefits to which Executive is entitled under the Second and Third Parts of this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits
shall not be provided to Executive prior to the earlier of (a) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Corporation (as such term is defined in the
Treasury Regulations issued under Section 409A of the Code) or (b) the date of Executive’s death. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to this
Section 18(n) shall be paid in a lump sum to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein. 
  

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 5. Continuation of Other Terms. Except as set forth herein, all other terms and conditions of the
Employment Agreement shall remain in full force and effect. 
 6. Applicable Law. This Amendment shall be governed by the law of the
State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 
 IN WITNESS WHEREOF, each of the parties has executed this Amendment, in the case of the Corporation by its Lead Director and in the case of Longs California by a duly authorized officer, as of the Effective Date.

  

									
	WARREN F. BRYANT	 		 	LONGS DRUG STORES CORPORATION
					
		 	/s/ Warren F. Bryant	 		 	By:	 	/s/ Murray H. Dashe
		 		 		 		 	Murray H. Dashe
		 		 		 		 	Lead Director
			
		 		 	LONGS DRUG STORES CALIFORNIA, INC.
					
		 		 		 	By:	 	/s/ Linda M. Watt
		 		 		 		 	Linda M. Watt
		 		 		 		 	Senior Vice President—Human
		 		 		 	Its:	 	Resources

  

 3Form of Amendment to Agreement for Termination Benefits in the Event of a Change

 Exhibit 10.39 
 AMENDMENT TO AGREEMENT FOR TERMINATION BENEFITS IN THE EVENT 
 OF A CHANGE IN CORPORATE CONTROL 

 This Amendment to Agreement for Termination Benefits in the Event of a Change in Corporate Control (the “Amendment”) is entered
into as of November 13, 2007 (the “Effective Date”), between «First_Name» «Last_Name» (the “Executive”) and Longs Drug Stores California, Inc. (the “Corporation”). 
 RECITALS 
 WHEREAS, on
«Original_Agreement_Date», the Executive and the Corporation entered into an Agreement for Termination Benefits in the Event of a Change in Corporate Control (the “Agreement”) which provides for severance benefits following an
acquisition of the Corporation upon the occurrence of a “Severance of Employment” (as defined in the Agreement); and 
 WHEREAS,
the parties wish to amend certain provisions of the Agreement to reflect recent changes affecting the taxation of deferred compensation arrangements under Section 409A of the Internal Revenue Code of 1986, as amended, pursuant to the terms and
conditions set forth below. 
 AGREEMENT 
 NOW THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereby agree as follows effective as of the Effective Date. Except as otherwise defined herein, capitalized
terms shall have the meanings assigned to them in the Agreement. 
 1. Severance of Employment. Section I.D of the Agreement shall be
amended to read in its entirety as follows: 
 “Severance of Employment,” as used herein, shall mean the termination of the
Executive’s employment with the Parent Corporation and the Corporation (i) by discharge by the Parent Corporation or the Corporation on or within two (2) years after the date of a Change in Corporate Control; (ii) by resignation
of the Executive on or after, but less than one hundred eighty (180) days after, the date of a Change in Corporate Control due to the occurrence of either a material diminution in the Executive’s base compensation or a material diminution
in the Executive’s authority, duties, or responsibilities, without the Executive’s written consent (each a “Good Reason Condition”); or (iii) by resignation of the Executive at any time within the period commencing one
hundred eighty (180) days after the date of a Change in Corporate Control and ending two (2) years after the date of such Change in Corporate Control. In order for a resignation due to a Good Reason Condition to constitute a Severance of
Employment, the Executive must provide written notice to the Parent Corporation or the Corporation, as the case may be, of the existence of the Good Reason Condition within 90 days of the initial existence of such Good Reason Condition. Upon receipt
of such notice of the Good Reason Condition, the Parent Corporation or the Corporation will be provided with a period of 30 days during which it 

 
may remedy the Good Reason Condition and not be required to provide for the payments and benefits described herein as a result of such proposed resignation
due to the Good Reason Condition specified in the notice. If the Good Reason Condition is not remedied within the period specified in the preceding sentence, the Executive may resign based on the Good Reason Condition specified in the notice within
the period specified in subsection (ii) above. Despite the foregoing, neither of the following will constitute a Severance of Employment: 
 1. The termination of the Executive’s employment by reason of death. 
 2. The discharge
of the Executive by the Corporation for gross and willful misconduct relating to the performance by the Executive of the Executive’s duties at the Corporation, provided that such misconduct is discovered after the date of the Change in
Corporate Control. 
 2. Trust Provision. Section III.D of the Agreement shall be of no further force and effect as of the Effective
Date, and accordingly, the Corporation shall have no obligation to establish a trust with respect to any potential benefits payable to the Executive or to make any contribution to any such trust. 
 3. Excise Tax Restoration Payment. The following shall be added to the end of Section III.G of the Agreement: 
 With respect to each payment that is subject to the Excise Tax, the related Excise Tax Restoration Payment shall be paid to the Executive on, or as soon
as practicable following, the payment date (and in any event, such Excise Tax Restoration Payment shall be paid to the Executive by the end of the calendar year next following the calendar year in which the Executive remits the Excise Tax).

 4. Delay of Payments in Certain Circumstances. The following shall be added as a new Section III.H of the Agreement: 
 Notwithstanding any provision to the contrary in the Agreement, if the Executive is deemed at the time of his separation from service to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which Executive is entitled under this Agreement is required in order to avoid
a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six-month period measured from
the date of the Executive’s “separation from service” (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) with the Corporation and the Parent Corporation or (b) the date of
Executive’s death. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to this Section III.H shall be paid in a lump sum to the Executive, and any remaining payments due under
the Agreement shall be paid as otherwise provided herein. 
 5. Continuation of Other Terms. Except as set forth herein, all other
terms and conditions of the Agreement shall remain in full force and effect. 
  

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 6. Applicable Law. This Amendment shall be governed by the law of the State of California as such
laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 
 IN
WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date. 
  

			
	EXECUTIVE
	
	 
	«First_Name» «Last_Name»
	
	LONGS DRUG STORES CALIFORNIA,
INC.
		
	By:	 	 
		 	Warren F. Bryant
	Its:	 	President and Chief Executive
Officer
		
	By:	 	 
		 	Linda M. Watt
	Its:	 	Senior Vice President—Human
Resources

  

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