<Page>
Exhibit 3.15
[SEAL]
STATE OF NORTH CAROLINA
DEPARTMENT OF THE SECRETARY OF STATE
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
I, ELAINE F. MARSHALL, Secretary of State of the State of North Carolina, do
hereby certify the following and hereto attached to be a true copy of
ARTICLES OF RESTATEMENT
OF
EDC DRUG STORES, INC.
the original of which was filed in this office on the 10th day of
February, 1995.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at the City of Raleigh, this 23rd day of July, 2004
[SEAL]
/s/ Elaine F. Marshall
Secretary of State
<Page>
FILED
9:00 AM
FEB 10 1995
EFFECTIVE_________
RUFUS L EDMISTEN
SECRETARY OF STATE
NORTH CAROLINA
ARTICLES OF RESTATEMENT
OF
KERR DRUG STORES, INC.
Pursuant to Section 55-10-07 of the General Statutes of North Carolina, the
undersigned corporation hereby submits the following for the purpose of
restating its Articles of Incorporation.
1. The name of the corporation is Kerr Drug Stores, Inc.
2. The text of the Restated Articles of Incorporation is attached.
3. These Restated Articles of Incorporation contain an amendment
requiring shareholder approval, and shareholder approval was obtained
as required by Chapter 55 of the North Carolina General Statutes.
4. These Articles will be effective upon filing.
This the 10 day of February, 1995.
KERR DRUG STORES, INC.
By: /s/ R. W. Hannan
---------------------------
R. W. Hannan, President
<Page>
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
KERR DRUG STORES, INC.
The undersigned corporation hereby executes these Amended and Restated
Articles of Incorporation for the purpose of amending and integrating into one
document its original Articles of Incorporation and all past and current
amendments thereto:
1. The name of the corporation shall be Kerr Drug Stores, Inc.
2. The authorized capital of the corporation shall be One Thousand
Dollars ($1,000.00) and the aggregate number of shares which the corporation
shall have authority to issue is One Thousand (1,000) shares of common stock
with a par value of One Dollar ($1.00) per share.
3. The street address, mailing address and county of the registered
office of the corporation in North Carolina are 225 Hillsborough Street,
Raleigh, Wake County, North Carolina 27603; and the name of the initial
registered agent at such address is C T Corporation System.
4. Shareholders of the corporation shall have no preemptive rights.
5. Shareholders of the corporation shall not be entitled to cumulate
their votes for directors.
6. A director of the corporation shall not be personally liable for
monetary damages for breach of any duty as a director except and only to the
extent applicable law restricts the effectiveness of this provision. Any repeal
or modification of this article shall be prospective only and shall not diminish
the rights or expand the personal liability of a director of the corporation
with respect to any act or omission occurring prior to the time of such repeal
or modification.
This the 10 day of February, 1995.
KERR DRUG STORES, INC.
By: /s/ R. W. Hannan
---------------------------
R. W. Hannan, President
Page 1 of 1
<Page>
[SEAL]
STATE OF NORTH CAROLINA
DEPARTMENT OF THE SECRETARY OF STATE
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
I, ELAINE F. MARSHALL, Secretary of State of the State of North Carolina, do
hereby certify the following and hereto attached to be a true copy of
ARTICLES OF AMENDMENT
OF
EDC DRUG STORES, INC.
the original of which was filed in this office on the 12th day of June, 1997.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at the City of Raleigh, this 23rd day of July, 2004
[SEAL]
/s/ Elaine F. Marshall
Secretary of State
<Page>
FILED
3:42 PM
JUN 12 1997
EFFECTIVE_________
ELAINE F MARSHALL
SECRETARY OF STATE
NORTH CAROLINA
ARTICLES OF AMENDMENT
OF
KERR DRUG STORES, INC.
The undersigned corporation hereby submits these Articles of Amendment
for the purpose of amending its Articles of Incorporation.
1. The name of the corporation is Kerr Drug Stores, Inc.
2. Article 1 of the Articles of Incorporation of the corporation is
hereby amended as follows:
1. The name of the corporation shall be EDC Drug Stores, Inc.
3. Shareholder approval of the foregoing Amendment was obtained on
the 10th day of June, 1997 as required by the North Carolina Business
Corporation Act.
This 11th day of June, 1997
Kerr Drug Stores, Inc.
By: /s/ R. W. Hannan
-----------------
Name: R. W. Hannan
Title: Vice Chairman
<Page>
[SEAL]
STATE OF NORTH CAROLINA
DEPARTMENT OF THE SECRETARY OF STATE
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
I, ELAINE F. MARSHALL, Secretary of State of the State of North Carolina, do
hereby certify the following and hereto attached to be a true copy of
ARTICLES OF MERGER
OF
EDC DRUG STORES, INC.
the original of which was filed in this office on the 28th day of
December, 1999.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at the City of Raleigh, this 23rd day of July, 2004
[SEAL]
/s/ Elaine F. Marshall
Secretary of State
<Page>
CORP ID # 0080028
FILED
10:00 AM
DEC 28 1999
11:59 PM
Effective 12-31-99
ELAINE F MARSHALL
SECRETARY OF STATE
NORTH CAROLINA
STATE OF NORTH CAROLINA
DEPARTMENT OF THE SECRETARY OF STATE
ARTICLES OF MERGER
FOREIGN AND DOMESTIC BUSINESS CORPORATION
Pursuant to Sections 55-11-04 and 55-11-05 of the General Statutes of North
Carolina, the [ILLEGIBLE] does hereby submit the following Articles of Merger as
the surviving corporation in a merger between a domestic business corporation
and one or more foreign business corporations.
1. The name of the surviving corporation is EDC DRUG STORES, INC. a
corporation organized under the laws of THE STATE OF NORTH CAROLINA; the
name of the merged corporation is EDC ACQUISITION CORPORATION; a
corporation organized under the laws of THE STATE OF DELAWARE.
2. Attached is a copy of the Plan of Merger that was duly approved in the
manner prescribed by law by each of the corporations participating in the
merger.
3. With respect to the surviving corporation (CHECK EITHER A OR B, AS
APPLICABLE):
a. /X/ Shareholder approval was not required for the merger.
b. / / Shareholder approval was required for the merger and the plan of
merger was approved by the shareholders as required by Chapter 55 of
the North Carolina General Statutes.
4. With respect to the merged corporation (CHECK EITHER A OR B, AS
APPLICABLE):
a. /X/ Shareholder approval was not required for the merger.
b. / / Shareholder approval was required for the merger, and the plan of
merger was approved by the shareholders as required by Chapter 55 of
the North Carolina General Statutes.
5. The merger is permitted by the law of the state or country of incorporation
or organization of each foreign entity which is a party.
6. Each foreign entity which is a party has complied or shall comply with the
applicable laws of its state or country of incorporation or organization.
7. These articles will be effective upon filing, unless a delayed date and/or
time is specified: 11:59 P.M. DECEMBER 31, 1999
This is the 17th day of December, 1999.
EDC DRUG STORES, INC.
/s/ Jeffrey J. Vawrinek
-----------------------
Jeffrey J. Vawrinek
Assistant Secretary
Notes:
1. Filing fee is $50. This document and one exact or conformed copy of these
articles must be filed with the Secretary of State.
2. Certificate(s) of Merger must be registered pursuant to the requirements of
N.C. G.S. Section 47-18.1
October 1998 Form B-12
CORPORATIONS DIVISION P. 0. BOX 29622 RALEIGH, NC 27626-0525
<Page>
EXHIBIT 1
PLAN OF MERGER
AGREEMENT OF MERGER made this 31st day of December 1999, between EDC Drug
Stores, Inc., a North Carolina corporation and EDC Acquisition Corporation, a
Delaware corporation.
WHEREAS, EDC Drug Stores, Inc. has an authorized capital stock consisting
of 1,000 shares of common stock, par value $1.00 per share, of which 10 shares
have been duly issued and are now outstanding; and
WHEREAS, EDC Acquisition Corporation has an authorized capital stock
consisting of 1,000 shares of common stock, par value $1.00 per share, of which
10 shares have been duly issued and are now outstanding; and
WHEREAS, the Board of Directors of EDC Drug Stores, Inc., and EDC
Acquisition Corporation, respectively, deem it advisable and in the best
interests of the corporations and their respective shareholders that EDC
Acquisition Corporation merge with and into EDC Drug Stores, Inc., under and
pursuant to the provisions of the General Corporation Law of the State of
Delaware and of the Business Corporation Act of the State of North Carolina.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and of the mutual benefits hereby provided, it is agreed by and
between the parties hereto as follows:
1. CONSTITUENTS. The names of the constituent corporations are EDC Drug
Stores, Inc., a North Carolina corporation ("EDC Drug Stores") and EDC
Acquisition Corporation, a Delaware corporation ("EDC Acquisition"). EDC
Acquisition was formed under the name "Kerr Acquisition Corporation", and EDC
Drug Stores was formed under the name "Kerr Drug Stores, Inc." EDC Drug Stores
shall be the corporation surviving the merger.
2. CAPITAL STOCK. EDC Drug Stores has 10 shares of voting common stock
outstanding. EDC Acquisition has 10 shares of voting common stock outstanding.
3. MERGER. Upon the terms set forth herein, EDC Acquisition shall be
merged with and into EDC Drug Stores (the "Merger").
4. EFFECTIVE TIME. The Merger shall be effective at 11:59 p.m. Eastern
Time on December 31, 1999, the time of such effectiveness being hereinafter
called the Effective Time.
<Page>
5. SURVIVING CORPORATION. EDC Drug Stores shall survive the Merger and
shall continue to be governed by the laws of the State of North Carolina, but
the separate corporate existence of EDC Acquisition shall cease forthwith at the
Effective Time.
6. AUTHORIZED CAPITAL. The authorized capital stock of EDC Drug Stores
following the Effective Time shall be 1,000 shares of Common Stock, par value
$.01 per share, unless and until the same shall be changed in accordance with
the laws of the State of Delaware.
7. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of EDC
Drug Stores shall be the Certificate of Incorporation of EDC Drug Stores
following the Effective Time.
8. BYLAWS. The Bylaws of EDC Drug Stores as they exist at the Effective
Time shall be the Bylaws of EDC Drug Stores following the Effective Time.
9. BOARD OF DIRECTORS AND OFFICERS. The members of the Board of Directors
and the officers of EDC Drug Stores immediately after the Effective Time shall
be those persons who were the members of the Board of Directors and the
officers, respectively, of EDC Drug Stores immediately prior to the Effective
Time, and such persons shall serve in such offices, respectively, for the terms
provided by law or in the Bylaws, or until their respective successors are
elected and qualified.
10. CONVERSION OF OUTSTANDING STOCK. At the Effective Time, each of the
issued and outstanding shares of common stock of EDC Acquisition shall be
cancelled and each of the issued and outstanding shares of Common Stock of EDC
Drug Stores shall remain outstanding.
11. RIGHTS AND LIABILITIES OF SURVIVING CORPORATION. At and after the
Effective Time of the merger, EDC Drug Stores shall succeed to and possess,
without further act or deed, all of the estate, rights, privileges, powers, and
franchises, both public and private, and all of the property, real, personal,
and mixed, of each of the parties hereto; all debts due to EDC Acquisition shall
be vested in EDC Drug Stores; all claims, demands, property, rights, privileges,
powers and franchises and every other interest of either of the parties hereto
shall be as effectively the property of EDC Drug Stores as they were of the
respective parties hereto; the title to any real estate vested by deed or
otherwise in EDC Acquisition shall not revert or be in any way impaired by
reason of the merger, but shall be vested in EDC Drug Stores; all rights of
creditors and all liens upon any property of either of the parties hereto shall
be preserved unimpaired, and all debts, liabilities, and duties of the
respective parties hereto shall thenceforth attach to EDC Drug Stores and may be
enforced against it to the same extent as if such debts, liabilities, and duties
had been incurred or contracted by it.
2
<Page>
12. SERVICE OF PROCESS ON SURVIVING CORPORATION. EDC Drug Stores agrees
that it may be served with process in the State of Delaware in any proceeding
for enforcement of any obligation of EDC Acquisition as well as for the
enforcement of any obligation of EDC Drug Stores arising from the merger,
including any suit or other proceeding to enforce the right of any stockholder
as determined in appraisal proceedings pursuant to the provisions of the General
Corporation Law of Delaware and designates the Secretary of State of the State
of Delaware as agent upon whom process against EDC Acquisition may be served.
13. PLAN OF LIQUIDATION. It is the intent of the parties to this Plan of
Merger that this transaction be treated pursuant to the terms of Section 332 of
Internal Revenue Code of 1986, as amended, to be carried out in the manner, on
the terms and subject to the conditions herein set forth.
IN WITNESS WHEREOF each of the parties hereto has caused this Plan of
Merger to be executed by its President and attested by its Secretary.
ATTEST: EDC ACQUISITION CORPORATION
By: /s/ Robert E. Lewis By: /s/ Francis A. Newman
-------------------------------- -------------------------------
Name: Robert E. Lewis Name: Francis A. Newman
Its: Secretary Its: President
ATTEST: EDC DRUG STORES, INC.
By: /s/ Robert E. Lewis By: /s/ Francis A. Newman
-------------------------------- -------------------------------
Name: Robert E. Lewis Name: Francis A. Newman
Its: Secretary Its: President
<Page>
[SEAL]
STATE OF NORTH CAROLINA
DEPARTMENT OF THE SECRETARY OF STATE
TO ALL WHOM THESE PRESENTS SHALL COME, GREETINGS:
I, ELAINE F. MARSHALL, Secretary of State of the State of North Carolina, do
hereby certify the following and hereto attached to be a true copy of
ARTICLES OF MERGER
OF
EDC DRUG STORES, INC.
the original of which was filed in this office on the 10th day of
February, 1995.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at the City of Raleigh, this 23rd day of July, 2004
[SEAL]
/s/ Elaine F. Marshall
Secretary of State
<Page>
FILED
9:00 AM
FEB 10 1995
EFFECTIVE_________
RUFUS L EDMISTEN
SECRETARY OF STATE
NORTH CAROLINA
ARTICLES OF MERGER
OF
ALPHA ACQUISITION CORPORATION
a North Carolina Corporation
INTO
KERR DRUG STORES, INC.
a North Carolina Corporation
Kerr Drug Stores, Inc., a corporation organized under the laws of North
Carolina (the "Surviving Corporation"), hereby submits these Articles of Merger
for the purpose of merging Alpha Acquisition Corporation, a corporation
organized under the laws of North Carolina (the "Merging Corporation"), into the
Surviving Corporation.
1. With respect to each corporation which is a party to the merger:
(a) The Plan of Merger attached hereto and made a part hereof as
EXHIBIT A was duly approved on and as of 2-10-95, 1995 by the sole
shareholder of the Merging Corporation, as required by the North Carolina
Business Corporation Act.
(b) The Plan of Merger attached hereto and made a part hereof as
EXHIBIT A was duly approved on and as of January 20, 1995 by the
shareholders of the Surviving Corporation, as required by the North
Carolina Business Corporation Act.
2. These Articles of Merger shall become effective upon filing with the
North Carolina Secretary of State.
Dated: February 10, 1995
KERR DRUG STORES, INC.
By: /s/ Johnny B. Kerr
-------------------------
Name: Johnny B. Kerr
Title: President
Page 1 of 1
<Page>
EXHIBIT A
PLAN OF MERGER
OF
ALPHA ACQUISITION CORPORATION
(a North Carolina Corporation)
INTO
KERR DRUG STORES, INC.
(a North Carolina Corporation)
RECITALS
A. ALPHA ACQUISITION CORPORATION ("Alpha") is a corporation duly organized,
validly existing and in good standing under the laws of the State of North
Carolina, having issued and outstanding 10 shares of common stock, par value
$1.00 per share (the "Alpha Stock").
B. KERR DRUG STORES, INC. ("Kerr") is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina,
having issued and outstanding 692,271 shares of common stock, par value $1.00
per share (the "Kerr Stock").
C. The Board of Directors of Alpha has adopted resolutions approving this
Plan of Merger (the "Plan") in accordance with the North Carolina Business
Corporation Act (the "NCBCA") and directing that this plan be submitted to the
sole shareholder of Alpha for adoption.
D. The Board of Directors of Kerr has adopted resolutions approving the
Plan in accordance with the NCBCA and directing that this plan be submitted to
the shareholders of Kerr for adoption (individually, a "Kerr Shareholder" and,
collectively, the "Kerr Shareholders").
E. Alpha, Kerr and certain Kerr Shareholders holding at least eighty-five
percent (85%) of the issued and outstanding shares of Kerr Stock are parties to
that certain Acquisition and Merger Agreement dated as of January 9, 1995 (the
"Merger Agreement"), pursuant to which such parties agreed to cause the merger
of Alpha with and into Kerr pursuant to the Plan. Any Kerr Shareholder may
obtain a copy of the Merger Agreement by contacting Kerr at the following
address:
Page 1 of 13
<Page>
8380 Capital Boulevard
Raleigh, North Carolina 27604
Attn: Mr. Donald L. Cvetko,
Vice President
ARTICLE I. THE MERGER; TERMS OF MERGER.
SECTION 1.01. PARTIES TO MERGER. Alpha and Kerr shall effect a merger by
which Alpha shall merge with and into Kerr with Kerr being the surviving
corporation (the "Merger"), pursuant to Article 11 of the NCBCA in accordance
with and subject to the terms and conditions of this Plan.
SECTION 1.02. MERGER. At the Effective Time (as defined in Section 4.01
hereof), by virtue of the filing with the Secretary of State of North Carolina
of the Articles of Merger and this Plan of Merger and without any action on the
part of the holder thereof:
(a) ALPHA'S SHARES. Each issued and outstanding share of Alpha stock
shall be converted into and become a fully paid and nonassessable share of
Kerr Stock. Each certificate representing outstanding shares of Alpha Stock
shall at the Effective Time represent an equal number of shares of Kerr
Stock.
(b) KERR SHARES. Each issued and outstanding share of Kerr Stock
issued and outstanding immediately prior to the Effective Time, other than
Dissenting Shares (as defined in subsection (i)(B) below) and treasury
shares, shall be converted (in the manner provided in this Section 1.02)
into the right to receive fully paid and nonassessable shares of common
stock of $.50 par value of J.C. Penney Company, Inc., a Delaware
corporation ("Penney Shares"). The number of Penney Shares that each share
of Kerr Stock shall convert into shall be determined as follows:
(i) DEFINITIONS. For purposes of this Plan, the following terms
shall have the meanings set forth below:
(A) "Agent" shall have the meaning for such term set forth
in Article III hereof).
(B) "Dissenting Shareholder" shall mean each Kerr
Shareholder who, as of the Effective Time, has taken all actions
required by the NCBCA to have been taken by such shareholder as
of the Effective Time to exercise dissenters' rights with respect
to this Plan and the Merger.
(C) "Escrow Agent" shall mean Chemical Bank which will
serve as escrow agent under the Escrow Agreement.
Page 2 of 13
<Page>
(D) "Escrow Agreement" shall mean the Escrow Agreement to
be executed at or prior to the Effective Time by the Agent,
Alpha, Kerr and the Escrow Agent. Any Kerr Shareholder may obtain
a copy of the Escrow Agreement by contacting Kerr at the
following address:
8380 Capital Boulevard
Raleigh, North Carolina 27604
Attn: Mr. Donald L. Cvetko,
Vice President
(E) "Exchange Agent" shall mean Chemical Bank which will
serve as exchange agent.
(ii) VALUATION OF PENNEY SHARES. For the purposes of this Plan,
Penney Shares shall be valued (the "Average Value") as follows: The
per share value of the Penney Shares shall be the arithmetic average
(computed to three decimal places) of the per share closing price of
Penney Shares on the New York Stock Exchange Composite Tape for the
ten (10) days preceding but not including January 21, 1995 on which
the New York Stock Exchange was open for trading.
(iii) LIMITS ON NUMBER OF PENNEY SHARES. The aggregate number of
Penney Shares into which all shares of Kerr Stock will convert shall
be within both of the following limits: (i) No more than 1,764,705
Penney Shares shall be required in the aggregate for all shares of
Kerr Stock and (ii) no fewer than 1,428,571 Penney Shares shall be
required in the aggregate. Because the parties have calculated the
foregoing limitations based upon the assumption that all of the shares
of Kerr Stock issued and outstanding immediately prior to the
Effective Time will be converted in the Merger, such limitations shall
be appropriately adjusted by written agreement of Alpha and Agent in
the event that there are Dissenting Shareholders.
(iv) CONVERSION RATE. Based on and subject to the foregoing
provisions of subsection (iii), each share of Kerr Stock issued and
outstanding immediately prior to the Effective Time shall convert into
up to the number of Penney Shares determined as follows: Each Kerr
Share shall be multiplied by an exchange number (determined to three
decimal places), the NUMERATOR of which will be equal to (A) the
amount of $75,000,000 divided by (B) the number of issued and
outstanding shares of Kerr Stock immediately prior to the Effective
Time (determined to three decimal points) and the DENOMINATOR of which
will be the Average Value. All or part of such Penney Shares shall be
disbursed to the holders of the Kerr Stock pursuant to subsections (d)
and (e) below.
Page 3 of 13
<Page>
(v) FRACTIONAL SHARES. No fractional Penney Shares shall be
issued to Kerr Shareholders as a result of the foregoing conversion.
In lieu thereof, a Kerr Shareholder that would otherwise have received
a fractional shall receive a cash payment in an amount equal to the
fractional Penney Share that the Kerr Shareholder would have received
multiplied by the Average Value. In the event that any fractional
Penney Shares are required to be delivered to the Exchange Agent by
the Escrow Agent, or by the Exchange Agent to the Kerr Shareholders,
Alpha has agreed to cause any such fractional Penney Shares to be
purchased with cash at the Average Value per share in order to provide
the Escrow Agent with cash for such cash payments in lieu of
fractional Penney Shares.
(c) DISSENTING SHAREHOLDERS. Notwithstanding any provision of this
Plan to the contrary, Kerr Stock held by Dissenting Shareholders shall not
convert into or represent a right to receive Penney Shares (or cash
payments in lieu of fractional Penney Shares). In lieu thereof, the
Dissenting Shareholder shall be entitled only to such rights as are granted
by the NCBCA; PROVIDED, HOWEVER that any Dissenting Shareholder that after
the Effective Time has withdrawn or lost his, her or its right to appraisal
pursuant to the NCBCA, then such shareholder's Kerr Stock shall be deemed
to have been converted at the Effective Time into Penney Shares (in the
manner provided in this Section 1.02).
(d) ESCROW AGENT. On the Closing Date, Alpha shall cause to be issued
by book entry to the Escrow Agent, to be held and disbursed as provided in
the Escrow Agreement, duly authorized whole Penney Shares having an Average
Value in the aggregate of at least $3,000,000. The Penney Shares shall be
held by the Escrow Agent and disbursed to Kerr, as the surviving
corporation, and/or to the Exchange Agent, on behalf of the Kerr
Shareholders, in accordance with the terms of the Escrow Agreement.
(e) EXCHANGE AGENT.
(i) At the Effective Time, Alpha shall cause to be issued by
book entry to the Exchange Agent for the Kerr Shareholders duly
authorized whole Penney Shares issuable in connection with the Merger
(other than those Penney Shares issued by book entry hereunder to the
Escrow Agent) plus an amount of cash equal to the aggregate amount
(except with respect to the Penney Shares held in escrow) payable in
lieu of fractional shares, to be held by the Exchange Agent and
disbursed in accordance with this subsection (e) (such Penney Shares
and cash amounts in lieu of fractional Penney Shares, and subsequent
Penney Shares and cash amounts in lieu of fractional Penney Shares, if
any, made
Page 4 of 13
<Page>
available to it by the Escrow Agent pursuant to the terms of the
Escrow Agreement, shall hereinafter collectively be referred to as the
"Merger Fund"). While held by the Exchange Agent, Penney Shares shall
be voted and tendered (in connection with a tender offer related to
Penney or a similar transaction) by the Kerr Shareholders who are
entitled to receive them.
(ii) As soon as is reasonably practicable after the Effective
Time, the Exchange Agent shall make available to each record holder
(other than the Dissenting Shareholders) who, immediately prior to the
Effective Time, was a holder of an outstanding certificate or
certificates which immediately prior to the Effective Time represented
shares of Kerr Stock owned by such Kerr Shareholder (the "Certificate"
or "Certificates"), a form of letter of transmittal and instructions
for use in effecting the surrender of the Certificates for conversion
thereof. Delivery shall be effected, and risk of loss and title to the
certificates shall pass, only upon proper delivery of the certificates
to the Exchange Agent and the form of letter of transmittal shall so
reflect. Upon surrender to the Exchange Agent of such a Certificate(s)
by a Kerr Shareholder representing all of such shareholder's shares of
Kerr Stock, together with such letter of transmittal duly executed,
the holder of such Certificate shall be entitled to receive from the
Exchange Agent in exchange therefor (A) a certificate (properly
issued, executed and countersigned, as appropriate) representing that
number of whole Penney Shares to which such holder of Kerr Stock shall
have become entitled pursuant to the provisions of subsection (b),
except for the Penney Shares that, at that time, continue to be
deposited under subsection (d) with the Escrow Agent or which were
disbursed to Kerr, as the surviving company, under the Escrow
Agreement, (B) as to any fractional Penney Share, a check representing
the cash in lieu of fractional shares to which such Kerr Shareholder
shall be entitled pursuant to subsection (b), (C) the right to receive
pursuant to (iii) below such Penney Shares and cash, if any, that may
be disbursed to the Exchange Agent by the Escrow Agent, and (D) any
Penney Dividends received by the Exchange Agent with respect to any
Penney Shares held by the Exchange Agent on behalf of such Kerr
Shareholder.
(iii) If at any time or from time to time the Escrow Agent
disburses Penney Shares and cash in lieu of fractional Penney Shares
and other amounts or instruments to the Exchange Agent in accordance
with the Escrow Agreement, then immediately following each such
disbursement, the Exchange Agent shall make available to each Kerr
Shareholder (or his, her or its
Page 5 of 13
<Page>
transferees pursuant to (v) below) who surrendered his, her or its
Certificates pursuant to (ii) above (A) a certificate properly issued,
executed and countersigned, as appropriate representing the number, if
any, of Penney shares included in such disbursement by the Escrow
Agent to which such Kerr Shareholder shall be entitled, (B) a check
representing cash in lieu of fractional Penney Shares included in such
disbursement to which such Kerr Shareholder is entitled and (C) a
check representing cash Penney Dividends (as defined in the Escrow
Agreement), if any, and other appropriate instruments representing
non-cash Penney Dividends, if any, paid or distributed with respect to
any of the Penney Shares included in such disbursement to which such
Kerr Shareholder is entitled. If at the time the Escrow Agent
disburses Penney Shares, cash or other instruments to the Exchange
Agent, the Kerr Shareholder entitled thereto has not surrendered to
the Exchange Agent the Certificate(s) and transmittal letters referred
to in subparagraph (ii) above, the Exchange Agent shall hold such
Penney Shares, cash and/or instruments until such time as the Kerr
Shareholder complies with such subsection (ii).
(iv) No interest will be paid or accrued on any cash payable upon
the surrender of the Certificates, except as otherwise provided in the
Escrow Agreement.
(v) If any portion of the consideration to be received pursuant
to subsection (b) upon exchange of a Certificate(s) (whether Penney
Shares, a check representing cash for a fractional Penney Share or
cash for cash Penney Dividends or appropriate instruments with respect
to other Penney Dividends) is to be issued or paid to a person other
than the person in whose name the Certificate(s) surrendered in
exchange therefor is registered, it shall be a condition of such
issuance and payment that the Certificate(s) so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that
the person requesting such exchange shall pay in advance any transfer
or other taxes required by reason of the issuance of any such
consideration to such other person, or establish to the satisfaction
of the Exchange Agent that such tax has been paid or that no such tax
is applicable.
(vi) From the Effective Time until surrender in accordance with
the provisions of this subsection (e), each Certificate shall
represent for all purposes only the right, subject to the terms of the
Escrow Agreement, to receive the consideration provided in subsection
(b). All exchanges and payments in respect of shares of Kerr Stock
that are made in accordance with the terms hereof shall be deemed to
have been made
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in full satisfaction of all rights pertaining to such securities.
(vii) In the case of any lost, mislaid, stolen or destroyed
Certificate, the holder thereof may be required, as a condition
precedent to delivery to such holder of the consideration described in
this Section 1.02, to deliver to Kerr, as the surviving corporation, a
bond in such reasonable sum or a satisfactory indemnity agreement as
Kerr may direct as indemnity against any claim that may be made
against the Exchange Agent or Kerr with respect to the Certificate
alleged to have been lost, mislaid, stolen or destroyed.
(viii) After the Effective Time, there shall be no transfers on
the stock transfer books of Kerr of the shares of Kerr Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to Kerr for transfer, they
shall be cancelled and exchanged for the consideration described in
this Section 1.02.
(ix) None of Penney, the Exchange Agent or any party hereto
shall be liable to any shareholder of Kerr for any amount that is paid
or delivered to: (A) A public official or public body pursuant to any
applicable abandoned property, escheat or similar law or (B) Kerr, as
the surviving corporation, by the Escrow Agent.
ARTICLE II. ACQUISITION AND MERGER AGREEMENT;
INDEMNITY CLAIMS BY MERGING CORPORATION.
SECTION 2.01. ACQUISITION AGREEMENT; MERGING CORPORATION INDEMNITY CLAIMS.
In addition to the terms and conditions set forth in this Plan, the Merger is
also subject to the terms and conditions contained in the Merger Agreement.
Pursuant to the Merger Agreement, various representations, warranties,
covenants, and agreements were made to and for the benefit of Alpha relating and
pertaining to Kerr and other matters referred to therein. Any breach of such
representations, warranties, covenants, and/or agreements could give rise to a
claim by Kerr, as the surviving corporation, (herein, an "Indemnity Claim") in
accordance with, but subject to, the limitations provided in the Merger
Agreement.
SECTION 2.02. USE OF ESCROW FUND. The aggregate number of Penney Shares
deposited with the Escrow Agent pursuant to Section 1.02(d) hereof (which
aggregate amount is to be deposited with the Escrow Agent pursuant to the Merger
Agreement) (collectively, the "Escrow Fund") shall be used to provide a
nonexclusive source of funds from which Indemnity Claims by Kerr, as the
surviving corporation, against the Kerr Shareholders can be satisfied. In
connection therewith, the Escrow Fund shall be held and disbursed
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by the Escrow Agent subject to the terms and conditions of the Escrow Agreement.
SECTION 2.03. DISBURSEMENT OF ESCROW FUND. If and to the extent the Escrow
Fund is not disbursed to Kerr, as the surviving corporation, such unused amount
of the Escrow Fund shall be disbursed by the Escrow Agent to the Exchange Agent
(for the account of the Kerr Shareholders, other than a Dissenting Shareholder)
at the times and in the manner set forth in the Escrow Agreement and the Merger
Agreement.
SECTION 2.04. RESOLUTION OF INDEMNITY CLAIMS. The manner in which Indemnity
Claims are made by Alpha, resolved, disputed, and/or satisfied, and the manner
in which disbursements of all or any portion of the Escrow Fund may be made in
connection therewith, are subject to all of the terms and conditions of the
Merger Agreement and the Escrow Agreement.
ARTICLE III. THE AGENT.
SECTION 3.01. SHAREHOLDERS' AGENT. As a condition precedent to Alpha's
agreement to enter into and consummate the Merger with Kerr, Alpha has required
that, at all applicable times, one person act as the duly authorized agent for
and on behalf of the Kerr Shareholders (other than the Dissenting Shareholders)
to expedite the manner in which the Merger can be completed and Indemnity Claims
processed thereafter. Banks D. Kerr (who is currently a significant shareholder
and Chairman of the Surviving Corporation) ("Mr. B. D. Kerr") and any successor
to Mr. B. D. Kerr identified in Section 3.07 hereof (who are currently officers
and shareholders of Kerr) have agreed to act for and on behalf of the Kerr
Shareholders (other than the Dissenting Shareholders) pursuant to the provisions
of this Plan and, when serving as agent hereunder, are individually referred to
herein as the "Agent."
SECTION 3.02. AUTHORIZATION.
(a) Subject to the terms and conditions hereof, the Agent shall be
the duly authorized agent and attorney-in-fact for each Kerr Shareholder
(other than the Dissenting Shareholders) under and pursuant to this Plan
and the Merger Agreement and shall be authorized to take any and all
action, for and on behalf of such Kerr Shareholder, in order to (i) subject
to the provisions hereof regarding the manner in which deliveries are to be
made, complete the Merger pursuant to this Plan, (ii) exercise, for and on
behalf of such Kerr Shareholder, such rights, powers and privileges under
and/or with respect to this Plan as are specifically authorized or
delegated to such Kerr Shareholder by the terms and conditions hereof,
(iii) after the consummation of the Merger, to make any and all decisions
and determinations in connection with and/or pertaining to Indemnity Claims
pursued by or on behalf of
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Kerr pursuant to the Merger Agreement, and (iv) to take any and all such
further actions as are reasonably incidental thereto including, without
limitation, those powers specifically authorized pursuant to the provisions
of Sections 3.03 and 3.04 hereof.
(b) Each Agent identified herein, by signing this Plan, hereby agrees
to act as an Agent subject to the terms and conditions herein contained.
SECTION 3.03. AGENT'S DUTIES. Without limiting the generality of Section
3.02 hereof, the Agent, on each Kerr Shareholder's (other than a Dissenting
Shareholder) behalf, agrees to perform the following duties:
(a) Execute and deliver the Escrow Agreement and take any and all
action authorized thereby or required pursuant thereto;
(b) Execute and deliver any and all agreements, documents,
instruments, certificates, or other writings required by Kerr or Alpha in
connection with the Merger (such agreements, documents, instruments,
certificates, and writings shall, together with the Escrow Agreement, be
collectively referred to herein as the "Merger Documents");
(c) Take any and all action in connection with Indemnity Claims, as
more fully set forth in Section 3.04 hereof, and accept service of process,
for and on behalf of each Kerr Shareholder (other than a Dissenting
Shareholder), in connection therewith;
(d) Receive any and all notices, requests, instructions, documents,
and other communications provided with respect to the Merger and take any
and all action deemed necessary and/or appropriate by the Agent in
connection therewith; and
(e) Execute and deliver any and all amendments, modifications,
supplements, restatements, and/or waivers to the Merger Agreement and any
or all of the Merger Documents which, in the Agent's reasonable opinion,
are necessary and/or appropriate; PROVIDED, HOWEVER, the Agent shall not
agree, in connection with any of the foregoing, to alter the manner or
formula for conversion of shares of Kerr Stock into Penney Shares pursuant
to this Plan without the consent of the Kerr Shareholders (other than a
Dissenting Shareholder); and PROVIDED FURTHER that the immediately
preceding proviso shall not limit in any manner the authority and power of
the Agent to handle any and all Indemnity Claims of Kerr.
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SECTION 3.04. INDEMNITY CLAIMS; INDEMNITY PROCEDURES.
(a) Without limiting the generality of Sections 3.02 and 3.03 hereof,
the Agent shall take any and all action deemed necessary or appropriate by
the Agent in connection with Indemnity Claims including, without
limitation, (i) determining whether to take any and all investigative and
other action to determine whether Indemnity Claims are valid and the taking
of any such action, (ii) determining whether to engage counsel and other
professionals to assist in any determination by the Agent pursuant to the
immediately preceding clause (i) and engaging any such counsel, (iii)
making all decisions relating to Indemnity Claims including, without
limitation, whether to settle, compromise, defend, or take other
appropriate action against or with respect to Indemnity Claims or whether
to accept or reject any offer to settle or compromise Indemnity Claims,
(iv) conducting all negotiations, discussions, and litigation proceedings
with Alpha and/or Kerr in connection with Indemnity Claims, (v) executing
and delivering any and all agreements, documents, and instruments
(including, without limitation, settlement agreements, releases and
notifications and certifications required or permitted by the Escrow
Agreement) in connection with any of the foregoing, all of which shall,
immediately upon execution thereof by the Agent and without any action on
the part of the Kerr Shareholders, be binding upon all of the Kerr
Shareholders (other than the Dissenting Shareholders), and (vi) extending
the term of the Escrow Agreement if such extension is appropriate in the
Agent's opinion.
(b) All proceedings relating to Indemnity Claims shall be conducted
solely and exclusively between representatives of Alpha and/or Kerr and the
Agent (or the Agent's counsel and representatives) and no Kerr Shareholder
shall participate in or be involved or interfere with any such dealings
described herein unless and until such time, if any, that Alpha and/or Kerr
elects to deal directly with such Kerr Shareholder.
SECTION 3.05. COMPENSATION; NATURE OF AGENT'S DUTIES. The Agent has agreed
to serve without compensation for such services hereunder. The Agent shall have
no duties or responsibilities except those expressly set forth in this Plan. In
connection with all matters relating hereto, the Agent shall be entitled to rely
exclusively on the Agent's counsel and other advisors and shall have no
liability to the Kerr Shareholders for any action taken or omitted in reliance
on such counsel and other advisors. Nothing herein contained, express or
implied, is intended to or shall be so construed as to impose upon the Agent any
duties or responsibilities in respect of the Merger except as expressly set
forth herein. The Agent does not assume and shall not be deemed to have assumed
any duty or obligation of any Kerr Shareholder (other than himself) under the
Merger Documents. Notwithstanding anything contained herein to the contrary, the
Agent shall not be
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liable for any action taken or omitted by the Agent hereunder, except for
actions which constitute gross negligence, fraud, or willful misconduct, and no
Kerr Shareholder shall be permitted to sue or bring any claim or action against
the Agent except for good faith claims and actions which allege gross
negligence, fraud, or willful misconduct.
SECTION 3.06. DURABILITY. The designation of Agent herein contained shall
not be affected by lapse of time or by the subsequent disability, incapacity or
death of any Kerr Shareholder, but shall continue and shall remain in full force
and effect.
SECTION 3.07. SUCCESSOR AGENT; EXPIRATION.
(a) If Mr. B. D. Kerr dies, becomes mentally incapacitated, or
resigns during the term hereof, the designation set forth in Section 3.02
hereof shall automatically expire as of the sooner of the date of his
death, the onset of his incapacity, or his resignation, as the case may be.
(b) If Mr. B. D. Kerr's designation pursuant hereto expires pursuant
to Section 3.07(a) hereof, Donald L. Cvetko ("Mr. D. L. Cvetko") shall
automatically become the Agent. Mr. D. L. Cvetko's term as Agent shall
automatically expire as of the sooner of the date of his death, the onset
of his mental incapacity or his resignation, as the case may be. If Mr. D.
L. Cvetko's appointment as Agent expires, Johnny B. Kerr ("Mr. J. B. Kerr")
shall automatically become the Agent hereunder. Mr. J. B. Kerr's term as
Agent shall automatically expire as of the sooner of the date of his death,
the onset of his mental incapacity or his resignation, as the case may be.
If Mr. J. B. Kerr's appointment expires, those then surviving individuals
who were members of the Board of Directors of the Company immediately
preceding the Effective Time shall by a majority vote select an independent
third party to act as Agent which decision shall be subject to the approval
of those Kerr Shareholders who or which, on the day immediately prior to
the Merger, owned a majority of the issued and outstanding shares of Kerr
Stock immediately prior to the Effective Time (such approval may not be
unreasonably withheld or delayed). Mr. D. L. Cvetko, Mr. J. B. Kerr, or any
successor Agent shall be the Agent for all purposes hereof until his, her
or its term as Agent hereunder expires.
(c) Notwithstanding anything contained herein to the contrary, no
person shall be the Agent hereunder on that date which is two (2) years
after the Effective Time unless there are unresolved Indemnity Claims in
which event an Agent shall continue to serve until all such Indemnity
Claims have been resolved.
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SECTION 3.08. RIGHT TO INTERPLEAD. Notwithstanding any other provision of
this Plan, if any dispute or difference arises between any Kerr Shareholder and
the Agent or if any conflicting demand shall be made upon the Agent, the Agent
may but shall not be required to determine the same or take any action thereon.
Rather, the Agent may await settlement of the controversy by appropriate legal
proceedings; or the Agent may, by written notice, require the parties to enter
binding arbitration or litigation to determine such matter; or the Agent may
file suit in interpleader with the proper court in Wake County, North Carolina
for the purpose of having the respective rights of the parties adjudicated.
ARTICLE IV. MISCELLANEOUS.
SECTION 4.01. FILING AND EFFECTIVE TIME. Articles of Merger, and such
other documents and instruments as are required by, and complying in all
respects with, the NCBCA shall be delivered to the appropriate state officials
for filing after all of the conditions to the consummation of the transactions
described in the Merger Agreement have been met and/or waived. The Merger shall
become effective upon filing with the North Carolina Secretary of State (the
"Effective Time").
SECTION 4.02. ARTICLES AND BYLAWS; DIRECTORS AND OFFICERS.
(a) The Articles of Incorporation of Kerr and the Bylaws of Alpha in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation and Bylaws of Kerr, as the surviving corporation, following
the Effective Time.
(b) At the Effective Time, the officers and directors of Alpha in
office immediately prior to the Effective Time shall be the officers and
directors of Kerr, as the surviving corporation. Each such director and
officer shall hold office until his or her resignation or removal, in
accordance with the Articles of Incorporation and Bylaws of Kerr, as the
surviving corporation, and applicable law.
SECTION 4.03. CONDITION TO MERGER. The consummation of the Merger is
subject to the satisfaction of the condition, prior to the Effective Time, that
the Merger shall have received the requisite approval of the directors and
shareholders of Alpha and Kerr pursuant to the NCBCA and the articles of
incorporation and bylaws of Kerr and Alpha. It is also subject to the condition
that the conditions to the consummation of the transactions described in the
Merger Agreement have been met and/or waived.
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SECTION 4.04. AMENDMENT. The parties hereto, by mutual consent of their
respective Boards of Directors, may amend, modify or supplement this Plan prior
to the Effective Time; provided, that no amendment shall be made subsequent to
the adoption of this Plan which changes this plan in a way which, in the
judgment of the Board of Directors of Kerr, would have a material adverse effect
on the Kerr Shareholders, unless such amendment is approved by the Kerr
Shareholders.
SECTION 4.05. TERMINATION. Notwithstanding shareholder approval of this
Plan, this Plan may be terminated at any time prior to the Effective Time by
Alpha or Kerr pursuant to a resolution approved by its Board of Directors.
KERR DRUG STORES, INC., a North
Carolina corporation
By /s/ Banks D. Kerr
-------------------------------
Name: Banks D. Kerr
Title: Chairman and Chief Executive Officer
Attest: /s/ Debra K. Woody
-----------------------------
[SEAL] Name: Debra K. Woody
Title: Secretary
ALPHA ACQUISITION CORPORATION, a
North Carolina corporation
By /s/ R. W. Hannan
-------------------------------
Name: R. W. Hannan
Title: President
Attest: /s/ Ben D. Campbell
-----------------------------
[SEAL] Name: Ben D. Campbell
-----------------------------
Title: Assistant Secretary
-----------------------------
AGREED FOR THE PURPOSES OF ARTICLE III HEREOF
/s/ Banks D. Kerr
- -----------------------------------
Banks D. Kerr, Agent
/s/ D. L. Cvetko
- -----------------------------------
D. L. Cvetko, Successor Agent
/s/ J. B. Kerr
- -----------------------------------
J. B. Kerr, Second Successor Agent
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