<PAGE>
THE HOME DEPOT, INC.
To our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend the Annual Meeting of Stockholders of The Home Depot, Inc.
As shown in the formal notice enclosed, the meeting will be held at
the Cobb Galleria Centre, 2 Galleria Parkway, Atlanta, Georgia 30339, on
Wednesday, May 31, 1995, at 10:00 a.m. At the meeting, in addition to
acting on the matters described in the Proxy Statement, we will give a
current report on the activities of the Company. Stockholders will have an
opportunity at that time to comment on or to inquire about the affairs of
the Company that may be of interest to stockholders generally. If you will
need special assistance at the meeting because of a disability, please
contact Mr. Don Singletary, Vice President-Employee Relations, Home Depot
U.S.A., Inc., 2727 Paces Ferry Road, Atlanta, Georgia 30339-4089. An
interpreter for persons who are hearing impaired will be provided.
The subjects proposed for action at the meeting are the election of
four directors, to approve an amendment to the Senior Officers' Bonus Pool
Plan, to approve two amendments to the Employee Stock Purchase Plan and the
conducting of such other business, including stockholder proposals, as may
properly come before the meeting.
It is important that your shares be represented at this meeting in
order that the presence of a quorum may be assured. Whether or not you plan
to attend the meeting, you are urged to date, sign and mail the enclosed
proxy card in the envelope provided.
Thank you for your support.
Sincerely,
Bernard Marcus
Chairman and
Chief Executive Officer
Arthur M. Blank
President and
Chief Operating Officer
<PAGE>
THE HOME DEPOT, INC.
2727 Paces Ferry Road
Atlanta, Georgia 30339-4089
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 31, 1995
NOTICE is hereby given that the Annual Meeting of Stockholders of The
Home Depot, Inc., a Delaware corporation (the "Company" or "The Home
Depot"), will be held in accordance with its By-Laws at the Cobb Galleria
Centre, 2 Galleria Parkway, Atlanta, Georgia 30339, on Wednesday, May 31,
1995, at 10:00 a.m. for the following purposes:
(1) To elect four (4) directors for terms ending with the 1998 Annual
Meeting of Stockholders and until their successors are elected
and qualified;
(2) To approve an amendment to the Senior Officers' Bonus Pool Plan;
(3) To approve two amendments to the Employee Stock Purchase Plan;
and
(4) To conduct such other business, including stockholder proposals,
as may properly come before the meeting.
The Common Stock of the Company should be represented as fully as
possible at the Annual Meeting. Therefore, it will be appreciated if you
will sign and return the enclosed proxy at your earliest convenience. You
may, of course, change or withdraw your proxy at any time prior to the
voting at the meeting. However, signing and returning the proxy will assure
your representation at the Annual Meeting.
The Board of Directors has fixed the close of business on April 3,
1995, as the record date for the determination of holders of Common Stock
of the Company entitled to notice of, and to vote at, the Annual Meeting
and any adjournments thereof. A list of stockholders entitled to vote at
the meeting will be available for inspection by any stockholder for any
purpose germaine to the meeting during ordinary business hours from May 20
through May 31, 1995 at the corporate offices of the Company.
By Order of the Board of Directors
BERNARD MARCUS
Chairman of the Board of Directors,
Chief Executive Officer and Secretary
Atlanta, Georgia
April 13, 1995
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN,
DATE AND RETURN YOUR PROXY.
<PAGE>
THE HOME DEPOT, INC.
2727 Paces Ferry Road
Atlanta, Georgia 30339-4089
(404) 433-8211
PROXY STATEMENT
SOLICITATION OF PROXIES FOR ANNUAL MEETING
INTRODUCTION
The enclosed proxy is being solicited by the Board of Directors of The
Home Depot for use at the 1995 Annual Meeting of Stockholders of the
Company to be held at 10:00 a.m. on Wednesday, May 31, 1995, at the Cobb
Galleria Centre, 2 Galleria Parkway, Atlanta, Georgia 30339, or at any
adjournments thereof (the "Annual Meeting").
Certain directors, officers and employees of the Company may solicit
proxies by telephone, telegram, mail or personal contact. In addition, the
Company has retained D.F. King & Co., Inc., New York, New York, to assist
in the solicitation of proxies and will pay such firm a fee, estimated not
to exceed $10,000, plus reimbursement of expenses. Arrangements will be
made with brokers, nominees and fiduciaries to send proxies and proxy
material at the Company's expense to their principals. This Proxy Statement
is first being mailed on or about April 13, 1995, to stockholders of record
on April 3, 1995.
The shares held by each stockholder who signs and returns the enclosed
proxy will be counted for purposes of determining the presence of a quorum
at the meeting unless such proxy shall be timely revoked. If the enclosed
form of proxy is executed and returned, it may, nevertheless, be revoked at
any time before it is voted by written notice to the Secretary of the
Company or by a stockholder personally attending and voting his or her
shares at the meeting.
The total number of shares of stock of the Company outstanding and
entitled to vote at the Annual Meeting is 475,254,023, consisting of Common
Stock, par value $.05 per share. Each share of the Company's Common Stock
entitles the holder to one vote with respect to all matters to come before
the meeting, and all of such shares vote as a single class. Only
stockholders of record at the close of business on April 3, 1995, are
entitled to notice of, and to vote at, the Annual Meeting. A majority of
the outstanding shares will constitute a quorum at the meeting. Abstentions
and broker non-votes are counted for purposes of determining the presence
or absence of a quorum for the transaction of business. Abstentions are
counted in tabulations, but not as an affirmative vote, of the votes cast
on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved. A
plurality of the votes cast at the meeting is necessary for the election of
directors. The affirmative vote of the holders of a majority of the votes
cast at the meeting is necessary for approval of an amendment to the Senior
Officers' Bonus Pool Plan, approval of two amendments to the Employee Stock
Purchase Plan and to take action upon one Stockholder proposal. Management
knows of no person who owns beneficially more than five percent of the
outstanding shares of Common Stock of the Company.
The Annual Report to Stockholders of the Company for the fiscal year
ended January 29, 1995, including financial statements (the "Annual
Report"), is being mailed concurrently with this Proxy Statement to all
stockholders of record as of April 3, 1995, except for accounts where the
stockholder had filed a written request to eliminate duplicate reports. In
addition, the Company has provided brokers, dealers, banks, voting trustees
and their nominees, at Company expense, with additional copies of the
Annual Report so that such record holders could supply such material to
beneficial owners as of April 3, 1995. ADDITIONAL COPIES OF THE ANNUAL
REPORT AND THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY
29, 1995, TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (the
"Form 10-K"), BUT WITHOUT EXHIBITS TO THE FORM 10-K, ARE OR WILL BE
AVAILABLE WITHOUT CHARGE, UPON REQUEST. SEE "AVAILABILITY OF FORM 10-K AND
ANNUAL REPORT TO STOCKHOLDERS."
Each properly executed proxy received in time for the meeting will be
voted as specified therein. If a stockholder does not specify otherwise,
the shares represented by his or her proxy will be voted in accordance with
the recommendations by the Board of Directors as follows: FOR the election
of Arthur M. Blank, Milledge A. Hart, III, M. Faye Wilson and Johnnetta B.
Cole to the Board of Directors of the Company; FOR the approval of an
amendment to the Senior Officers' Bonus Pool Plan; FOR the approval of two
amendments to the Employee Stock Purchase Plan and AGAINST the Stockholder
proposal.
1
<PAGE>
COMMON STOCK OWNERSHIP BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table shows information as to "beneficial ownership" of
the Common Stock of the Company, as of January 29, 1995, by each person
known by the Company to be the "beneficial owner" of more than five percent
of such Common Stock, by each present director and nominee of the Company,
by certain executive officers, and by the directors and all executive
officers of the Company as a group (19 persons). The determinations of
"beneficial ownership" of the Company's Common Stock are based upon
responses to Company inquiries which cited Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Such Rule provides that
shares shall be deemed so owned where a person has, either solely or in
conjunction with others, the power to vote or to direct the voting of
shares and/or the power to dispose, or to direct the disposition of shares;
or where a person has the right to acquire any such power within 60 days
after the date such "beneficial ownership" is determined. Except as
disclosed in the notes to the table, each person has sole voting and
investment powers with respect to the whole number of shares shown as
beneficially owned by him or her.
<CAPTION>
Shares of
Name of Beneficial Owner Common Percent
(and Address if "Beneficial Stock of
Ownership" Exceeds 5%) Beneficially Class (1)
Owned
---------------------------------------------------------------
<S> <C> <C>
Bernard Marcus (2) 14,813,543 3.27
Arthur M. Blank (3) 8,270,169 1.82
Kenneth G. Langone (4) 4,600,000 1.01
Milledge A. Hart, III 1,360,489 *
Berry R. Cox 1,100,000 *
Ronald M. Brill (5) 574,166 *
Frank Borman (6) 233,437 *
James W. Inglis (7) 175,798 *
W. Andrew McKenna (8) 128,091 *
Donald R. Keough (9) 9,999 *
M. Faye Wilson (10) 6,000 *
Johnnetta B. Cole (11) 325 *
Directors and Executive Officers as 32,141,147 7.09
a group (12)
-------------------------
* Less than 1%
<FN>
<F1>
(1) Based on 453,365,203 shares outstanding on January 29, 1995.
<F2>
(2) Includes 5,434 shares credited to Mr. Marcus' account under the
Company's Employee Stock Ownership Plan. Includes 21,421 shares held by a
private foundation of which Mr. Marcus may be deemed to have shared voting
and investment powers. Does not include 169,876 shares held by Mr. Marcus'
wife as trustee of a trust for his children of which Mr. Marcus may be
deemed to have shared voting and investment powers. Mr. Marcus disclaims
beneficial ownership of such shares.
<F3>
(3) Includes 5,434 shares credited to Mr. Blank's account under the
Company's Employee Stock Ownership Plan. Does not include 290,739 shares
which are held by others as co-trustees for the children of Mr. Blank. Mr.
Blank disclaims beneficial ownership of such shares. Includes 515,000
shares held by two private charitable trusts of which Mr. Blank has voting
and investment powers.
<F4>
(4) Does not include 1,009 shares held by Mr. Langone's wife of which Mr.
Langone may be deemed to have shared voting and investment powers. Mr.
Langone disclaims beneficial ownership of such shares.
<F5>
(5) Includes 5,434 shares credited to Mr. Brill's account under the
Company's Employee Stock Ownership Plan. Includes 29,600 shares held by
two private charitable trusts of which Mr. Brill has shared voting and
investment powers. Does not include 67,158 shares which are held by his
wife or by his wife as custodian for their children or held by Mr. Brill as
custodian for his children of which Mr. Brill may be deemed to have shared
voting and investment powers. Mr. Brill disclaims beneficial ownership of
such shares. Includes 65,114 shares under stock options which are
exercisable within 60 days.
2
<PAGE>
<F6>
(6) Includes 218,192 shares held by a trust of which Col. Borman and his
wife have shared voting and investment powers. Includes 14,624 shares held
by a private foundation of which Col. Borman has shared voting and
investment powers.
<F7>
(7) Includes 5,434 shares credited to Mr. Inglis' account under the
Company's Employee Stock Ownership Plan. Does not include 22,382 shares
held by a child of Mr. Inglis and 4,800 shares held by Mr. Inglis' wife of
which Mr. Inglis may be deemed to have shared voting and investment powers.
Mr. Inglis disclaims beneficial ownership of such shares. Includes 18,000
shares held by a private foundation of which Mr. Inglis has shared voting
and investment powers and 65,114 shares under stock options which are
exercisable within 60 days.
<F8>
(8) Includes 1,720 shares credited to Mr. McKenna's account under the
Company's Employee Stock Ownership Plan. Includes 98,615 shares under
stock options which are exercisable within 60 days. Does not include 450
shares held by a child of Mr. McKenna of which Mr. McKenna may be deemed to
have shared voting and investment powers. Mr. McKenna disclaims beneficial
ownership of such shares.
<F9>
(9) Does not include 400 shares held by Mr. Keough's wife of which Mr.
Keough may be deemed to have shared voting and investment powers. Mr.
Keough disclaims beneficial ownership of such shares. Includes 3,333
shares under stock options which are exercisable within 60 days.
<F10>
(10) Includes 5,000 shares under stock options which are exercisable within
60 days.
<F11>
(11) Holdings are as of March 15, 1995. Dr. Cole had no shares prior to
such date.
<F12>
(12) Includes 51,974 shares credited to accounts under the Company's
Employee Stock Ownership Plan. Includes 543,522 shares under stock options
which are exercisable within 60 days and does not include certain shares
held by their spouses and held by their spouses as custodian for their
children.
</FN>
</TABLE>
I. ELECTION OF DIRECTORS
AND INFORMATION REGARDING DIRECTORS
The Company's Certificate of Incorporation, as amended, provides that,
"The directors shall be divided into three classes, designated Class I,
Class II and Class III..." The terms of the present Class II directors
shall expire at the Annual Meeting of Stockholders in 1995.
The Board of Directors has nominated three incumbent Class II
directors, Arthur M. Blank, Milledge A. Hart, III and M. Faye Wilson, and
one nominee, Johnnetta B. Cole, who are described below, for election to
the Board of Directors as Class II directors for terms expiring at the
Annual Meeting of Stockholders in 1998. Dr. Cole will be classified as a
Class II director to comply with the Company's Certificate of Incorporation
which provides that "Each class shall consist as nearly as may be possible,
of one-third the total number of directors..." The Board of Directors has
fixed the number of directors at eleven (11) upon the election of directors
at the Annual Meeting.
The following information is provided concerning directors of The Home
Depot and nominees for election as directors. Positions held by executive
officers are for the Company and/or its subsidiaries.
ARTHUR M. BLANK, age 52, has been President, Chief Operating Officer
("COO") and a director of The Home Depot since its inception in 1978; and
is, together with Mr. Bernard Marcus and Mr. Kenneth G. Langone, a
co-founder of the Company. Mr. Blank serves as Chairman of the Board of
Trustees of North Carolina Outward Bound School, a non-profit corporation;
serves on the Board of Trustees of Emory University; serves on the Board of
Councilors of the Carter Center of Emory University; and the Board of
Directors of Cox Enterprises, Inc., Harry's Farmers Market, Inc. and Post
Properties, Inc.
MILLEDGE A. HART, III, age 61, has been a director of the Company
since 1978. Mr. Hart is Chairman of the Board of Hart Group, Inc., a
private management services company. Mr. Hart is also Chairman of the Board
of Rmax, Inc., an insulation manufacturing company, and Axon, Inc., a
residential/commercial service company.
M. FAYE WILSON, age 57, has been a director of the Company since 1992.
Ms. Wilson was Managing Director of Mergers and Acquisitions for Security
Pacific Hoare Govett in London from 1987 until she returned to California
in 1991 as Executive Vice President for Security Pacific Financial Services
Systems, Inc. Since the merger in 1992
3
<PAGE>
between BankAmerica Corporation and Security Pacific Corporation, Ms. Wilson
has been Executive Vice President of Bank of America NT&SA. Since
November 1993, Ms. Wilson also has been Chairman of the Board and
President of Security Pacific Financial Services, Inc.
JOHNNETTA B. COLE, age 58, is President of Spelman College in Atlanta,
Georgia. Dr. Cole has held that position since 1987 and is the first
African-American woman to head Spelman College, a post-secondary
educational institution. Dr. Cole also serves as a member of the Board of
Directors of Coca-Cola Enterprises, Inc., Management Training Corporation,
NationsBank of Georgia and Merck & Co., Inc. Dr. Cole also serves on the
boards of a number of charitable, civic and educational organizations.
If any nominee becomes unwilling or unable to serve, which is not
expected, the proxies are intended to be voted for a substitute person to
be designated by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
OF THE COMPANY VOTE "FOR" THE PROPOSAL TO ELECT ARTHUR M. BLANK, MILLEDGE
A. HART, III, M. FAYE WILSON AND JOHNNETTA B. COLE AS DIRECTORS OF THE
COMPANY TO HOLD OFFICE UNTIL THE 1998 ANNUAL MEETING OF STOCKHOLDERS AND
UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
The following Class I directors were elected at the Annual Meeting of
Stockholders in 1993 and their present terms expire with the Annual Meeting
of Stockholders in 1996:
BERNARD MARCUS, age 65, is one of the co-founders of The Home Depot
and has been its Chairman of the Board of Directors and Chief Executive
Officer ("CEO") since its inception in 1978. He serves on the Board of
Directors of Wachovia Bank of Georgia, N.A., National Service Industries,
Inc. and the New York Stock Exchange, Inc. Mr. Marcus is a member of the
Advisory Board and Board of Directors of the Shepherd Spinal Center in
Atlanta, as well as a Vice President and member of the Board of The City of
Hope, a charitable organization in Duarte, California. Mr. Marcus is also a
member of Emory University's Board of Visitors.
KENNETH G. LANGONE, age 59, is one of the co-founders of The Home
Depot and has been a director of the Company since 1978. For at least the
past five years, Mr. Langone has been Chairman of the Board, Chief
Executive Officer, President and Managing Director of Invemed Associates,
Inc., a New York Stock Exchange member firm engaged in investment banking
and brokerage. Mr. Langone serves on the Board of Directors of Unifi, Inc.,
AutoFinance Group, Inc., Baby Superstore, Inc., GMIS, Inc. and St. Jude
Medical, Inc. Mr. Langone also serves on the boards of a number of
charitable and educational organizations.
DONALD R. KEOUGH, age 68, was President, Chief Operating Officer and a
director of The Coca-Cola Company until his retirement in April 1993. Mr.
Keough has been a director of The Home Depot since January 1993. Mr. Keough
is also Chairman of the Board of Allen & Company Incorporated, a privately
held investment banking firm, and serves on the boards of National Service
Industries, Inc., H. J. Heinz Company, The Washington Post Company and
McDonald's Corporation. Mr. Keough is immediate past Chairman of the Board
of Trustees of the University of Notre Dame and is a trustee of several
other educational institutions. Mr. Keough also serves on the boards of a
number of national charitable and civic organizations.
JAMES W. INGLIS, age 51, has been a director of the Company since 1993
and Executive Vice President Strategic Development of the Company since
April 1994. Mr. Inglis joined the Company in 1983 as a merchandiser, was
shortly thereafter promoted to Senior Merchandiser, and then promoted to
Vice President Merchandising, West Coast in 1985 and Executive Vice
President Merchandising in 1988. Mr. Inglis serves as endowment chairman
for the City of Hope's hardware and home improvement industry group and on
the Board of Directors of the National Kitchen and Bath Association.
The following Class III directors were elected at the Annual Meeting
of Stockholders in 1994 and their present terms expire with the Annual
Meeting of Stockholders in 1997:
FRANK BORMAN, age 67, has been a director of the Company since 1983.
Col. Borman (U.S. Air Force, ret.) retired as the Chairman of the Board and
Chief Executive Officer of Eastern Air Lines, Inc. in 1986. Since 1988,
Col. Borman has served as Chairman of the Board, President and Chief
Executive Officer of Patlex Corporation, and also
4
<PAGE>
since 1993, as Chairman of the Board of Directors of AutoFinance Group, Inc.
(parent company of Patlex Corporation). Col. Borman also serves as a
director of Outboard Marine Corporation, Thermo Instrument Systems, American
Superconductor Corporation and is also a member of the Board of Trustees of
the National Geographic Society.
RONALD M. BRILL, age 51, has been Executive Vice President and Chief
Financial Officer ("CFO") of the Company since March 1993. Mr. Brill joined
The Home Depot as its Controller in 1978, was elected Treasurer in 1980,
Vice President-Finance in 1981, Senior Vice President and CFO in 1984, and
elected as a director in 1987. Mr. Brill serves on the Board of Directors
of AutoFinance Group, Inc.; the Board of Trustees of the Atlanta Jewish
Federation; the Board of Trustees of Woodruff Arts Center; the Board of
Directors of the High Museum of Art; and the Governing Board of Woodward
Academy.
BERRY R. COX, age 41, has been a director of the Company since 1978.
For the past seventeen years, Mr. Cox has been a private investor, with
interests in oil and gas, real estate, and equities.
Each director who is not an employee of the Company is paid for
service on the Board of Directors a retainer at the rate of $30,000 per
annum and an additional $1,000 for each meeting of the Board of Directors
attended. The Home Depot also reimburses each director for reasonable
expenses in attending meetings of the Board of Directors. Directors who are
also employees of the Company are not separately compensated for their
services as directors.
The Home Depot's Board of Directors has the following committees:
(a) The Executive Committee is comprised of Messrs. Marcus, Blank and
Langone. This Committee exercises the authority of the Board of Directors
in accordance with the By-Laws of the Company between meetings of the
Board.
(b) The Audit Committee is comprised of Messrs. Borman, Cox, Hart,
Keough and Ms. Wilson. This Committee was established to oversee the
auditing procedures of the Company, to receive and accept the reports of
the Company's independent certified public accountants, to oversee the
Company's internal systems of accounting and management controls, and to
make recommendations to the full Board of Directors as to the selection and
appointment of auditors for the Company. The Committee held two meetings
during fiscal 1994.
(c) The Stock Option Committee is comprised of Messrs. Marcus, Blank
and Langone. This Committee considers and makes grants of stock options
pursuant to the Company's 1991 Omnibus Stock Option Plan and Employee Stock
Purchase Plan and administers such plans.
(d) The Compensation Committee is comprised of Messrs. Borman, Hart
and Keough. This Committee reviews and recommends to the Board of Directors
the appropriate compensation of directors and executive officers of the
Company. The Committee held one meeting during fiscal 1994.
(e) The Directors' Nominating Committee is comprised of Messrs.
Marcus, Hart and Langone. This Committee is charged with making
recommendations to the full Board for the selection of director nominees.
There is no formal procedure for the submission of stockholder
recommendations. The Committee held one meeting during fiscal 1994.
During fiscal 1994, the Board of Directors of the Company held four
meetings. All directors attended at least 75% of the meetings of the Board
and of the Committees of the Board of which they were members during that
period.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The following persons served as members of the Compensation Committee
of the Board of Directors during the fiscal year ended January 29, 1995:
Frank Borman, Milledge A. Hart, III and Donald R. Keough. None of the
members of the Compensation Committee were employees of the Company.
5
<PAGE>
INSIDER TRANSACTIONS
Kenneth G. Langone, a director of the Company, is Chairman of the
Board and President of Invemed Associates, Inc. ("Invemed"), which provides
investment banking consulting services to the Company under a written
contract which is cancelable by either party upon sixty days written
notice. The contract provides for the Company to pay Invemed an annual
consulting fee of $100,000. The Company contemplates utilizing the
services of and paying a similar amount to Invemed in 1995.
M. Faye Wilson, a director of the Company, is an Executive Officer of
Bank of America NT&SA ("Bank of America"). Bank of America provides a
variety of banking services to the Company, including deposit and cash
management services, letters of credit and capital market products. In
addition, BankAmerica, the parent company of Bank of America, provided a
$100,000,000 loan commitment to The Home Depot as a participating bank
under the $300,000,000 Credit Agreement dated as of November 2, 1994. In
the opinion of management, the banking services, fees and terms of the
credit arrangement are fair and reasonable and as favorable to the Company
as those which could have been obtained from unrelated third parties at the
time of their execution.
II. AMENDMENT TO THE SENIOR OFFICERS' BONUS POOL PLAN
The Senior Officers' Bonus Pool Plan (the "SOBP") was approved by the
stockholders at the 1994 Annual Stockholders Meeting. In fiscal 1994, the
payout ratio was 54 percent and 46 percent as paid to the CEO and COO,
respectively. In order to attain parity between the bonus paid to the CEO
and the COO, the Compensation Committee, a committee of outside directors,
has recommended this amendment the purpose of which is to change the payout
ratio under the SOBP to 50 percent each.
Accordingly, the Board of Directors recommends approval by the
stockholders of the performance goals and the payout ratio contained in the
amended SOBP as adopted by the Compensation Committee. These performance
goals govern the award of annual bonuses to the CEO and COO, the designated
eligible participants. Approval of the performance goals is being
recommended to preserve, for fiscal years 1994 and beyond, The Home Depot's
federal tax deduction for compensation paid to its senior officers, by
complying with new provisions of Section 162(m) of the Internal Revenue
Code of 1986, as amended ("IRC"), enacted as part of the Omnibus Budget
Reconciliation Act of 1993 ("OBRA"). These provisions and the proposed
regulations issued under IRC Section 162(m) by the U.S. Department of the
Treasury could limit the Company's annual federal tax deduction for
compensation paid to its senior officers to $1 million each, unless
compensation in excess of this amount is based on the achievement of
performance goals and eligibility requirements that have been approved by a
committee of outside directors and approved by the stockholders. The SOBP
is intended to be, and the Committee believes that the SOBP qualifies as,
performance-based compensation and accordingly that all sums paid
thereunder should be deductible by the Company. The SOBP allows the CEO
and the COO collectively to earn a bonus equal to 10 percent of the
Company's earnings, subject to an annual maximum established by the
Committee, in excess of a threshold amount as established by the Committee
(the "Earnings Threshold"). The Earnings Threshold for fiscal 1995 is equal
to $604,501,000, which is approximately equal to the Company's net earnings
for fiscal 1994. Monies payable from the SOBP are to be shared by the CEO
and COO at the ratio of 50 percent each. For fiscal 1995, the maximum
amount awardable under the SOBP is $4 million. The two participants in the
SOBP, Messrs. Marcus and Blank, have an interest in the proposal. The
actual benefits to be paid under the SOBP are not presently determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THIS
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED
UNLESS STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
6
<PAGE>
III. AMENDMENTS TO THE EMPLOYEE STOCK PURCHASE PLAN
Since 1982, the Company has maintained an Employee Stock Purchase Plan
(the "ESP Plan") under which shares of the Company's Common Stock may be
offered for purchase by employees of the Company and its subsidiaries under
a payroll deduction arrangement. All persons who are regularly employed by
the Company (and, if the Board of Directors so determines, any subsidiary
or affiliate of the Company) at the date any offering is commenced under
the ESP Plan may participate in the ESP Plan except for any employee who
owns or holds options to purchase more than five percent of the Common
Stock of the Company. The ESP Plan is qualified under Section 423 of
the IRC.
The Board of Directors believes that the ESP Plan is a valuable
benefit offered to its employees. The Board of Directors has approved the
amendments to the ESP Plan ("Plan Amendments") and has recommended that the
Plan Amendments be submitted to the Stockholders at the Annual Meeting for
their approval. If approved, the Plan Amendments will:
(i) modify the ESP Plan's definition of Purchase Price in order
to change the pricing schedule so that the Market Price used to
determine the grant price may be the lower of the Market Price on the
first day or the last day of the Purchase Period, as defined in the
ESP Plan; and
(ii) increase the number of shares available for issuance under
the ESP Plan by 5,000,000 shares. As of March 30, 1995, 2,375,460
shares remain available for issuance under the ESP Plan of which an
estimated 691,900 shares will be issued in April 1995 under ESP Plan
offering XXV and an estimated 832,700 shares will be issued in
November 1995 under ESP Plan offering XXVI, leaving an estimated
balance of 850,860 shares available for future offerings. An increase
of 5,000,000 shares in the number of shares available for issuance
will enable the Company to continue to make offerings under the ESP
Plan.
The Board of Directors believes the approval of the amendments to the
ESP Plan is in the Company's and stockholders' best interests. The full
text of the ESP Plan, restated to incorporate the proposed Plan Amendments,
is set forth as Appendix A to this proxy statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THIS
PROPOSAL TO AMEND THE EMPLOYEE STOCK PURCHASE PLAN. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A
DIFFERENT CHOICE.
IV. STOCKHOLDER PROPOSAL
The National Electrical Benefit Fund, 1125 15th Street, N.W.,
Washington, D.C. 20005, owner of 214,700 shares of Common Stock has given
notice that it intends to present for action at the annual meeting the
following resolution:
"BE IT RESOLVED, that the shareholders of Home Depot, Inc.
("Company") hereby request that the Company's Board of Directors take
the steps necessary to amend the Company's bylaws, effective after the
1995 annual meeting, to provide that the Board of Directors shall
consist of a majority of independent directors. For these purposes,
the definition of independent director shall mean a director who:
- has not been employed nor been an affiliate in an executive
capacity of the Company within the last five years;
- was not, and is not a member of a corporation or firm that
is one of the Company's paid advisers or consultants;
- is not employed by a significant customer, supplier or
provider of professional services;
- has no personal services contract with the Company;
- is not employed by a foundation or university that receives
significant grants or endowments from the Company;
- is not a relative of the management of the Company;
7
<PAGE>
- is not a shareholder who has signed shareholder agreements
legally binding him to vote with management; and
- is not the Chairman of a company on which Home Depot's
Chairman or Chief Executive Officer is also a board member."
The following statement was submitted by the proponent in support of such
resolution:
"The purpose of this proposal is to incorporate within the Board of
Directors a basic standard of independence that we believe will permit
clear and objective decision-making in the best long-term interests of
shareholders. A Board of Directors must formulate corporate policies
and monitor the activities of management in implementing those
policies. Given those functions, we believe that it is in the best
interest of all stockholders if [sic] at least a majority of our
representatives be independent.
The benefits of such independence we think, are well accepted. The
New York Stock Exchange, for instance, requires each of its listed
companies to have at least two members of the board of directors and
all members of the audit committee who meet New York Stock Exchange
standards of independence. We also note studies which reflect that a
majority of directors of publicly-held companies are not employees of
the companies on whose boards they serve. This trend is supported by
The Business Roundtable in its publication Corporate Governance and
American Competitiveness, prepared by a committee of the Roundtable,
which states, in part, that
Board of directors of large publicly-held public
corporations should be composed predominately of
independent directors who do not hold management
responsibilities within the corporation... In order to
underscore their independence, non-management directors
should not be dependent financially on whose boards
they serve.
We urge you to VOTE FOR THIS PROPOSAL. It will be a constructive and
supportive statement by shareholders in favor of improved corporate
governance."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
It is the Company's view that, since its inception, The Home Depot's
Board of Directors has functioned extraordinarily well. Company policy has
been served well in the past and continues to be served by combining the
talents and diverse backgrounds of independent directors with that of our
most senior officers serving on the Board.
No longer in its infancy, The Home Depot has taken a prominent place
in the world today. The Company would not be one of the most successful
and admired companies in the world if it were not for the combination of
talents, knowledge and perspective held by the persons serving on the Board
of Directors. It is without question that the senior officers serving on
the Board bring direct knowledge of Company operations and strategies in
this very competitive industry. Without the presence of senior officers
serving on the Board, the directors would be without direct access to on
the spot information about the Company's operations and strategies. The
Company believes the Board's ability to fulfill its fiduciary obligations
to represent and safeguard the best interests of the stockholders as a
whole would be impaired if the composition of the Board consisted primarily
of independent directors.
The current Board is comprised of 10 members, five of whom meet the
proponent's definition of independent director. The Board, therefore,
would not currently meet the burden of this rule. The Company should have
flexibility in the composition of the Board and not be mandated by a rigid
arbitrary rule.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE ADOPTION OF
THIS STOCKHOLDER PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
8
<PAGE>
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth all cash compensation paid by the
Company and its subsidiaries (for the purposes of this section collectively
referred to as the "Company") to the Chief Executive Officer ("CEO") and
the four most highly compensated executive officers for services rendered
in all capacities during the Company's last three fiscal years:
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
All
Other Securities Other
Annual Underlying Compen-
Name and Compen- Options(1) sation(3)
Principal Fiscal Salary Bonus sation (#) ($)
Position Year ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Bernard Marcus 1994 600,000 2,000,000 4,895 -- 165,829
Chairman of the 1993 600,000 2,080,000 2,216 -- 161,918
Board, CEO, and 1992 584,783 2,080,000 2,216 -- 165,096
Secretary
Arthur M. Blank 1994 600,000 2,000,000 2,915 -- 38,825
Chief Operating 1993 550,000 1,920,000 4,500 -- 24,914
Officer and 1992 534,783 1,920,000 4,500 -- 28,092
President
Ronald M. Brill 1994 435,385 170,000 5,718 27,500 32,818
Executive Vice 1993 404,615 161,212 3,080 2,133 18,907
President, CFO 1992 369,615 156,000 3,080 103,200 22,085
James W. Inglis 1994 446,923 110,000 925 2,500 31,142
Executive Vice 1993 425,384 107,500 1,174 2,133 19,047
President 1992 392,307 134,400 1,174 103,200 22,225
W. Andrew 1994 355,385 180,000 4,567 32,500 30,400
McKenna(2)
President--
Midwest
Division
---------------------------
<FN>
<F1>
(1) Messrs. Marcus and Blank do not participate in the stock option plans.
<F2>
(2) Mr. McKenna became an executive officer upon his election as President
of the Midwest Division on August 17, 1994. Compensation shown is for
services performed for the entire fiscal year including the period prior to
his election. Mr. McKenna was paid a special relocation bonus of $50,000
during the 1994 fiscal year.
<F3>
(3) The Company has had in effect various plans and arrangements which may
not be available generally to all its salaried employees and which provide
for cash or non-cash compensation for one or more of its executive
officers. Certain plans and arrangements are described in the remainder of
this section.
</FN>
</TABLE>
The Company's Employee Stock Ownership Plan and Trust (the "ESOP"),
adopted during fiscal 1988, is a defined contribution and employee stock
ownership plan qualified under the Internal Revenue Code and is available
to all employees pursuant to the ESOP's Eligibility to Participate
provisions. The ESOP is funded solely by contributions from the Company and
generally invests only in Common Stock of the Company. Contributions are
allocated to each participant's account on the basis of his or her
individual compensation as defined in the ESOP. Participants' accounts are
fully vested once seven years of service (as defined in the ESOP) are
completed or employment is terminated by reason of death, disability or
retirement.
The Company's contribution to the ESOP for the fiscal year ended
January 29, 1995 was $12,500,000. Allocations of the Company's Common Stock
for the last fiscal year were valued at $8,234.75 for each of Messrs.
Marcus, Blank, Brill, Inglis and McKenna. All of the executive officers
named above are fully vested with the exception of Mr. McKenna who is 60
percent vested pursuant to the terms of the ESOP.
9
<PAGE>
The Company adopted an ESOP Restoration Plan in fiscal 1994. The
primary purpose of the Plan is to provide certain employees deferred
compensation that they would have received under the ESOP if not for the
maximum compensation limits under the Internal Revenue Code of 1986, as
amended. The ESOP Restoration Plan is an unfunded arrangement under which
separate bookkeeping accounts are maintained for each participant.
Participants' accounts are credited with "stock units" which have a value
equal to the market value of the Company's Common Stock as of the date of
such crediting. All material terms of the Plan including vesting and
distribution are the same as the ESOP. Allocations for the last fiscal
year were $21,765.25 for each of Messrs. Marcus, Blank and Brill;
$19,949.63 for Mr. Inglis and $18,922.44 for Mr. McKenna.
The Company, in fiscal 1994, enabled Messrs. Marcus, Blank, Brill,
Inglis and McKenna to obtain life insurance in the amounts of $8,000,000,
$800,000, $250,000, $250,000, and $250,000, respectively, pursuant to a
"split dollar" plan under which the Company pays the gross annual premium
of $135,829, $8,825, $2,818, $2,958 and $3,243, respectively.
Stock Options
At the Annual Meeting of Stockholders in 1991, the stockholders
approved the 1991 Omnibus Stock Option Plan (the "1991 Plan") providing for
stock options to key employees and newly elected non-employee directors.
The 1991 Plan became effective June 1, 1991 and continues for a ten year
term, except that any options granted under the 1991 Plan will continue to
be effective pursuant to the terms of each grant beyond the expiration of
the 1991 Plan.
All of the Company's stock option plans are administered by the Stock
Option Committee of the Board of Directors. The Stock Option Committee
determines the number of shares granted and the option exercise price, but
such price may not be less than 100 percent of the fair market value of
Common Stock on the grant date.
The following tables reflect certain information with respect to
options granted under the Company's stock option plans to and those
exercised by certain executive officers (excluding Messrs. Marcus [CEO] and
Blank [COO] who do not participate in the stock option plans) for the last
fiscal year:
<TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
% of
Total
Name Number of Options
Securities Granted
Underlying in Exercise
Options Fiscal or Base
Granted Year Price Expiration
(#) (%) ($/Sh) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Ronald M. Brill 27,500 1.38 39.00 02/20/04 674,489 1,709,289
James W. Inglis 2,500 0.12 39.00 02/20/04 61,317 155,390
W. Andrew McKenna 12,500 0.63 39.00 02/20/04 306,586 776,949
20,000 1.00 41.375 08/11/04 520,410 1,318,822
</TABLE>
10
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION VALUES
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options Options
Shares Value at FY-End(#) at FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise(#) (#) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Ronald M. Brill 3,376 110,423 30,356/113,501 556,429/1,841,485
James W. Inglis 3,376 115,909 30,356/88,501 556,429/1,622,735
W. Andrew McKenna -0- -0- 7,132/135,226 113,436/3,689,786
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committees of the Board of Directors
have furnished the following report on executive compensation:
Under the supervision of the Compensation and Stock Option Committees
of the Board of Directors, the Company has developed and implemented
compensation policies, plans and programs ("Compensation Policies") which
seek to structure executive compensation consistent with the Company's
overall business strategy, philosophy and objectives. The Compensation
Policies are intended to embody a "pay-for-performance" philosophy which
rewards executives for long-term strategic management and enhancement of
stockholder value by providing ownership incentives in the Company and a
performance-oriented environment that measures rewards against personal and
Company goals. The Company believes this philosophy attracts, retains and
motivates key executives critical to the long-term success of the Company.
This compensation philosophy is implemented through compensation
packages which include various cash components and non-cash components.
Although no formal analysis of compensation was conducted by the
Compensation Committee, base salaries are generally set somewhat below
competitive levels so that the Company relies to a large degree on annual
and longer term "incentive" compensation.
Beginning in 1994, the Omnibus Budget Reconciliation Act of 1993
("OBRA") limits the deductibility of executive compensation paid by
publicly-held corporations to $1 million per employee subject to various
exceptions, including compensation based on performance goals.
The deductibility limitation does not apply to compensation based on
performance goals where (1) the performance goals are established by a
compensation committee which is comprised solely of two or more outside
directors; (2) the material terms are disclosed to shareholders and
approved by majority vote of the stockholders eligible to vote thereon
before the compensation is paid; and (3) before the compensation is paid,
the compensation committee certifies that the performance goals and other
material terms have been satisfied. Pursuant to OBRA and proposed Internal
Revenue Service ("IRS") regulations adopted thereunder, a director will not
be an outside director if such person, among other things, receives
compensation for personal services in any capacity other than as a
director. The Company has chosen to not immediately seek stockholder
approval and related amendments for potential compensation in excess of $1
million relating to its stock option plan. The Company has until 1997 to
accomplish this pursuant to IRS proposed regulations.
The Compensation Committee of the Board of Directors of the Company
has established a Senior Officers' Bonus Pool Plan ("SOBP") for its Chief
Executive Officer ("CEO") and President ("COO"). The SOBP is intended to
be, and the Committee believes that the SOBP qualifies as,
performance-based compensation and accordingly that all sums paid
thereunder should be deductible by the Company. In order to comply with a
"safe harbor" under proposed regulations adopted under OBRA, the
stockholders approved at the 1994 Annual Meeting of Stockholders, the SOBP
which allows the CEO and the COO collectively to earn a bonus equal to 10
percent of the Company's earnings, sub-
11
<PAGE>
ject to an annual maximum established by the Committee, in excess of a
threshold amount as established by the Committee (the "Earnings Threshold").
The Earnings Threshold for fiscal 1995 is equal to $604,501,000, which is
approximately equal to the Company's net earnings for fiscal 1994. Monies
payable from the SOBP are to be shared by the CEO and COO at the ratio of 50
percent each. The sharing ratio for 1994 was 54 percent and 46 percent.
For fiscal 1995, the maximum amount awardable under the SOBP is $4 million.
Accordingly, under the terms and conditions of the SOBP, the performance goals
have been met in fiscal 1994 and the CEO and COO are each entitled to receive
their respective bonus.
In May 1994, the Compensation Committee received a letter from the
Company's CEO, Mr. Bernard Marcus, in which Mr. Marcus requested that his
performance bonus, under the terms of the SOBP, be reduced from 54 percent
to 50 percent in order to establish parity between the bonus awarded to the
CEO and COO, respectively. Accordingly, the CEO's entitlement was reduced
by $80,000 and the Company's COO, Mr. Arthur Blank, was awarded a special
one-time bonus outside of the SOBP in the amount of $80,000. The SOBP is
being amended and presented to the stockholders for their approval so that
the payout ratio will be the same for the CEO and COO.
The Committee bases its belief that the SOBP is performance-based on,
among other things, the fact that the amount of the Company's earnings in
any year are not capable of being ascertained with certainty at the start
of such year, statements in the proposed IRS regulations that performance
goals need not be based upon an increase or positive result under a
company's business criterion and may include maintaining the status quo or
limiting economic losses and the Committee's belief that achievement of an
earnings threshold which is at least equal to the level of the prior year's
earnings is subject to substantial uncertainty, even in light of the
Company's historical earnings growth. Nevertheless, neither the Company nor
the Committee can give any assurance that the IRS will agree that the SOBP
is performance-based. In the event that the SOBP was deemed by the IRS not
to be performance-based, the Company would have the option to contest such
determination, forego the deduction for sums in excess of the deductible
limit, modify the SOBP for future years or any combination of the
foregoing.
Payments under the SOBP to the CEO and COO comprise approximately 77
percent and 74 percent, respectively, of each of their total cash
compensation in fiscal 1994. From fiscal 1988 until fiscal 1992, the CEO
and COO declined to accept recommendations from the Compensation Committee
for increases to the maximum amount in the SOBP. In the 1992 fiscal year,
the Compensation Committee increased the maximum amount in the SOBP for the
CEO and COO from $2 million to $4 million. The increase in the maximum
amount awardable under the SOBP from prior years was based upon the
Committee's assessment of the CEO's and COO's contributions to the Company
as reflected in the multiple measures of the Company's financial
performance since the last increase in the maximum compensation awardable
under the SOBP including, without limitation, increases in net earnings,
net sales, net earnings per share, total assets and stockholder's equity.
The Committee also considered the Company's market share, geographic
expansion and market penetration and marketing innovations. The Committee
did not assign formal weights to particular measures and the relative
weighing of the importance of such measures was based on the subjective
perception of the individual members of the Committee. The Committee was
also cognizant of the total compensation levels of certain other executives
of similar position in the specialty retail industry and other companies
similar in size.
In setting annual salaries, the Compensation Committee reviews with
the CEO an annual salary plan recommended by the CEO and COO for the
Company's executive officers. The annual salary plan is based on numerous
subjective factors which include performance merit increases and
responsibility levels. The annual salary plans for both the CEO and COO are
established by the Compensation Committee based on available compensation
data, including compensation data for the specialty retail industry and
other companies similar in size, the Committee's assessment of such
officers' past performance and the Committee's expectation of their future
contributions in leading the Company. The Committee does not purport to
scientifically or statistically sample compensation data for other
companies. Accordingly, compensation data for other companies may, but need
not, include companies in the specialty retail group or the S & P 500,
usually is historical in nature, and may be limited to that available from
public sources. To the extent that comparative data is utilized, the
Committee believes a subjective comparison is required to account for the
numerous variables between The Home Depot and other companies and notes
that compensation levels and operating performance of other companies can
be influenced by a variety of factors both within and without the control
of such other companies. Similarly, differences in size, performance and
type of business advise, in the Committee's view, against a mechanistic
compensation approach, purportedly based on objective criteria. While type
of business and broad market indexes may be appropriate measures of
historical company performance, the Committee currently believes neither
grouping should be accorded any special ranking in its compensation
deliberations.
12
<PAGE>
In setting overall compensation, the Committee was cognizant that
certain independent third party performance evaluations reported in the
financial press, and purportedly based on objective criteria, deemed the
CEO undercompensated (only CEOs were studied in the surveys). The Committee
believes similar compensation levels would have been recommended by such
studies with respect to the COO, had such position been studied. Despite
the Committee's assessment that a substantial increase in compensation
could be justified, the Committee has honored the request of the CEO and
COO that their maximum compensation under the SOBP be equalized and that
the majority of their cash compensation continue to be awarded pursuant to
the SOBP.
All executive officers (other than the CEO and COO) participate in the
Company's Corporate Management Bonus Plan ("CMBP") under which they are
eligible to earn a bonus up to 50 percent of their annual base salary
depending on personal performance and the Company's performance relative to
criteria such as gross margin return on investment, return on assets and
sales target levels. Fifty percent (50%) of such bonus may be awarded based
solely on subjective evaluations and the remaining fifty percent (50%) is
based on performance with respect to the objective criteria enumerated
below. During the 1994 fiscal year, based upon these objective and
subjective performance assessments all of the executive officers other than
the CEO and COO were awarded bonuses as reflected in the Summary
Compensation Table contained elsewhere in the proxy statement.
The exact objective criteria employed depend on the officer's
responsibilities and such performance criteria may be computed by various
methods depending on the Committee's assessment of the best match between
job duties and performance criteria. Gross Margin Return On Investment
("GMROI") is calculated by dividing gross margin by net sales and
multiplying the resulting number by net sales divided by average inventory
at cost. Return On Assets is calculated in the same manner as GMROI except
net income before taxes and interest replaces gross margin and total
assets, which is composed of average retail inventory and fixed assets,
replaces inventory. In calculating Return On Assets, for officers with
non-merchandising positions, total assets are defined as average total
assets based on the Company's balance sheet. Minimum bonuses are payable if
100 percent of planned results are achieved and maximum bonuses are paid
upon the achievement of 115 percent of planned results. Bonus payments, as
a percentage of salary, increase on a linear basis for the achievement of
results between 100 percent and 115 percent of planned results although the
slope of line (i.e. relative percentage) varies depending on the placement
within the range and the nature of the officer's duties. Minimum bonuses
based on the application of the foregoing formulas generally are payable in
an amount equal to but not less than six percent of salary assuming 100
percent of planned results are achieved.
The Committee believes that disclosure of actual targets under the
CMBP could adversely affect the Company since, among other things, such
projections are not publicly disclosed and could place the Company at a
competitive disadvantage with respect to hiring and retaining key employees
and could potentially expose the Company to claims by third parties based
on such projections, especially since such projections are not intended as
a predictor of future performance on which the public should rely. The CMBP
is subject to adjustment based on, among other things, adjustments to
scheduled store opening dates and other non-anticipated events, and the
Company may adjust the CMBP, including targets and utilized criteria, at
such time or times as the Company, in its sole discretion, determines that
the original projections or the bases therefor were materially incorrect.
A large portion of the executive officers' total compensation is tied
to stock performance, thus more closely aligning their interests with the
long-term interests of stockholders. This is accomplished through several
stock plans. The Company's 1991 Omnibus Stock Option Plan and its Employee
Stock Purchase Plan are administered by the Stock Option Committee of the
Board of Directors which coordinates its activities with those of the
Compensation Committee. Annually, at the discretion of the Stock Option
Committee, stock options are granted to all executive officers and key
employees, excluding both the CEO and COO, to purchase stock at the then
current market price. The stock option grant size is determined by the
Stock Option Committee and based on the individual's position within the
Company and job performance rating. Individual job performance ratings are
based on performance reviews compiled by one or more of the officers to
whom an officer reports and such officer's perceived relative performance
and abilities when compared with other employees of the Company. Stock
option grants made since fiscal 1991 are exercisable at a rate of 25
percent per year commencing on the first or second year after the date of
grant (depending on the type of stock option granted) with a total stock
option term of ten years. The Company's stock options historically have
been financially rewarding as the Company's stock price has shown dramatic
increases. To the extent that the public market does not, in the
Committee's view, fairly value the Company, the Committee may consider
decreasing the portion of compensation tied to stock performance. The
executive officers, excluding the CEO and COO, may also purchase stock at a
discount through the Employee Stock Purchase Plan. The Company's CEO and
COO have chosen not to participate in the Company's 1991 Omnibus Stock
Option and Employee Stock Purchase Plans due to their already
13
<PAGE>
large stock ownership as shown elsewhere in the proxy statement. Of course,
they have benefited along with other stockholders in the historical increases
in the market value of the Company's common stock. All executive officers
including the CEO and COO participate in the Company's Employee Stock
Ownership Plan and the ESOP Restoration Plan (the "ESOP Plans") whereby
their vested interests increase in value, without any outlay of funds by
the employees, through seniority, increases in the market value of the
Company's common stock and discretionary annual contributions to the ESOP
Plans by the Company. Such discretionary contributions to the ESOP Plans
are determined by the Company's Board of Directors based on the Company's
performance and are typically distributed to the Plan participants,
including participating executive officers, based on a percentage of the
participants' base salary.
The tables included in the proxy statement and accompanying narrative
and footnotes, reflect the decisions covered by the above discussion. The
foregoing report has been furnished by the members of the following
committees:
Compensation Committee: Stock Option Committee:
Frank Borman Bernard Marcus
Milledge A. Hart, III Arthur M. Blank
Donald R. Keough Kenneth G. Langone
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN ON $100 INVESTMENT
AMONG THE HOME DEPOT, S & P 500 AND S & P SPECIALTY RETAIL GROUP
ASSUMING REINVESTMENT OF DIVIDENDS
[GRAPH OMITTED]
<CAPTION>
1/28/90 2/3/91 2/2/92 1/31/93 1/30/94 1/29/95
<S> <C> <C> <C> <C> <C> <C>
The Home $100.00 $176.20 $380.74 $604.87 $488.85 $594.82
Depot
S&P 100.00 111.36 150.95 195.63 188.20 192.99
Specialty
Retail
Group
S&P 500 100.00 150.95 125.47 134.68 150.98 152.56
Index
</TABLE>
14
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP were the auditors of the Company during the
fiscal year ended January 29, 1995. Although the Board of Directors has not
yet selected auditors for the present fiscal year, it is expected that KPMG
Peat Marwick LLP will be chosen. A representative of that firm will be
present at the Annual Meeting with an opportunity to make a statement and
will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholders who desire to submit to the Company proposals for
inclusion in the Company's proxy materials for the 1996 Annual Meeting of
Stockholders of The Home Depot, Inc. must submit such proposals to the
Secretary of the Company by December 13, 1995.
OTHER MATTERS
Management does not intend to present to the Annual Meeting any
business other than the items stated in the "Notice of Annual Meeting of
Stockholders" and knows of no other business to be presented for action at
the meeting. If, however, any other business should properly come before
the meeting or any adjournments thereof, it is intended that all management
proxies will be voted with respect thereto in accordance with the best
judgment of the persons named in the proxies.
AVAILABILITY OF FORM 10-K
AND ANNUAL REPORT TO STOCKHOLDERS
Copies of The Home Depot's Annual Report to Stockholders for the
fiscal year ended January 29, 1995, which includes certain financial
information about the Company, are currently being mailed together with
this Proxy Statement to stockholders. Additional copies of such Annual
Report along with copies of The Home Depot's Annual Report on Form 10-K for
the fiscal year ended January 29, 1995, as filed with the Securities and
Exchange Commission (exclusive of documents incorporated by reference), are
available without charge to stockholders upon written request to
Investor/Public Relations, The Home Depot, Inc., 2727 Paces Ferry Rd.,
Atlanta, Georgia 30339-4089.
15
<PAGE>
APPENDIX A
THE HOME DEPOT, INC.
RESTATED AND AMENDED EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of The Home Depot, Inc. Employee Stock
Purchase Plan (the "Plan") is to encourage and enable eligible
employees of The Home Depot, Inc. (the "Company") to acquire
proprietary interests in the Company through the ownership of Common
Stock of the Company. The Company believes that employees who
participate in the Plan will have a closer identification with the
Company by virtue of their ability as stockholders to participate in
the Company's growth and earnings. It is the intention of the Company
to have the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). Accordingly, the provisions of the Plan shall be construed
so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
2. Definitions. The following words or terms have the following
meanings:
(a) "Plan shall mean this The Home Depot, Inc. Employee Stock
Purchase Plan.
(b) "Company" shall mean The Home Depot, Inc.
(c) "Board of Directors" shall mean Board of Directors of the
Company or the Executive Committee of such Board.
(d) "Shares", "Stock" or "Common Stock" shall mean shares of the
$.05 par value Common Stock of the Company.
(e) "Committee" shall mean the committee of the Board of
Directors of the Company appointed to administer the Plan.
(f) "Subsidiary" shall mean any corporation or affiliate, if the
Company owns or controls, directly or indirectly, more than
a majority of the voting stock of such entity.
(g) "Eligible Employee" shall mean a person regularly employed
by the Company or a Subsidiary on the effective date of any
offering of stock pursuant to the Plan; provided, however,
that no person shall be considered an Eligible Employee
unless he or she is customarily employed by the Company or a
Subsidiary for more than twenty hours per week and more than
five months in a calendar year; and provided further, that
the Board of Directors may exclude the employees of any
specified Subsidiaries from any offering under the Plan.
The term Eligible Employee shall not include any person who
is covered under a collective bargaining agreement if there
is evidence that stock and other retirement benefits were
the subject of good faith bargaining between the
representative of such person and the Company, unless the
collective bargaining agreement specifically provides for
the inclusion of such person under the Plan.
(h) "Annual Pay" shall mean an amount equal to the sum of (i)
the annual basic rate of pay of an Eligible Employee as
determined from the payroll records of the Company or a
Subsidiary on the effective date of an offer of Stock made
pursuant to the Plan, and (ii) the amount paid to the
Eligible Employee by the Company or a Subsidiary under any
incentive compensation or bonus plan during the twelve-month
period immediately preceding the effective date of an offer
of Stock made pursuant to the Plan.
(i) "Market Price" shall mean the closing price of the Company's
Common Stock on the New York Stock Exchange.
(j) "Options" shall mean the right or rights granted to Eligible
Employees to purchase the Company's Common Stock under an
Offering made under the Plan and pursuant to such Eligible
Employees' elections to purchase.
(k) "Purchase Period" shall mean the number of calendar months
during which installment payments for stock purchased under
the Plan shall be made.
A-1
<PAGE>
(l) "Subscription Period" shall mean that period of time
prescribed in any offer of Stock under the Plan beginning on
the first day employees may elect to purchase Shares and
ending on the last day such elections to purchase are
authorized to be received and accepted.
3. Shares Reserved for Plan. The Shares of the Company's Common Stock
to be sold to Eligible Employees under the Plan may, at the election
of the Company, be either treasury shares or shares originally issued
for such purpose. The maximum number of Shares which shall be
reserved and made available for sale under the Plan shall be
22,137,500. The Shares reserved may be issued and sold pursuant to
one or more offerings under the Plan. With respect to each offering,
the Board of Directors, or the Committee will specify the number of
Shares to be made available, the length of the Subscription Period,
the length of the Purchase Period and such other terms and conditions
not inconsistent with the Plan as may be necessary or appropriate. In
no event shall the Subscription Period and the Purchase Period
together exceed 27 months for any offering.
In the event of a subdivision or combination of the Company's
Shares, the maximum number of Shares which may thereafter be issued
and sold under the Plan and the number of Shares under elections to
purchase at the time of such subdivision or combination will be
proportionately increased or decreased, the terms relating to the
price at which Shares under the elections to purchase will be sold
will be appropriately adjusted, and such other action will be taken as
in the opinion of the Board of Directors deems appropriate under the
circumstances. In case of a reclassification or other change in the
Company's Shares, the Board of Directors also will make appropriate
adjustments.
4. Administration of the Plan. The Plan shall be administered by a
Committee consisting of not less than two directors of the Company who
shall be appointed by the Board of Directors. The Committee shall be
vested with full authority to make, administer and interpret such
equitable rules and regulations regarding the Plan or to make
amendments to the Plan itself as it may deem advisable; provided,
however, that no such amendment shall increase the maximum number of
shares available for sale under the Plan, otherwise than as required
to reflect a subdivision or a combination as provided in Article 3
hereof, nor shall any such amendment act to expand the persons
eligible to participate in the Plan beyond the employees of the
Company and Subsidiaries. Any determination, decision, or action of
the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive
and binding upon all Eligible Employees and any and all persons
claiming under or through an Eligible Employee.
The Committee may act by a majority vote at a regular or special
meeting of the Committee or by decision reduced to writing and signed
by a majority of the members of the Committee without holding a formal
meeting, vacancies in the membership of the Committee arising from
death, resignation or other inability to serve shall be filled by the
Board of Directors.
5. Participation in the Plan. Options to purchase the Company's Common
Stock under the Plan shall be granted only to Eligible Employees.
Options to purchase shares shall be granted to all Eligible Employees
of the Company or Subsidiaries whose Eligible Employees are granted
such rights; provided, however, that the Board of Directors may
determine that any offering of Common Stock under the Plan will not be
extended to directors, officers, or highly paid employees of the
Company or Subsidiaries or to those employees whose principal duties
consist of supervising the work of other employees, and provided
further that in no event may an employee be granted an option under
this plan if such employee, immediately after the option is granted,
owns Stock possessing five percent or more of the total combined
voting power or value of all classes of capital stock of the Company
or Subsidiaries.
For the purposes of determining stock ownership and the
limitations to purchase under this section, the rules of Section 425
(d) of the Code shall apply and Stock which the employee may purchase
under all outstanding options shall be treated as Stock owned by the
employee. Any decision relating to include or exclude any executive
officer or director of the Company pursuant to this paragraph shall be
made only by the members of the Board of Directors who are not
executive officers of the Company and who have not participated or
been eligible to participate in this Plan or any similar employee
stock option plan for a period of at least one year prior to such
determination.
A-2
<PAGE>
6. Purchase Price. The purchase price for Shares purchased pursuant to
the Plan (except as otherwise provided herein) shall be the lower of
(a) 85 percent of the Market Price on the first day of the Purchase
Period; or (b) 85 percent of the Market Price on the last day of the
Purchase Period; or if no Shares were traded on such day, on the last
day prior thereto on which Shares were traded.
7. Method of Payment. Payment for Shares purchased pursuant to the
Plan shall be made in installments through payroll deductions, with no
right of prepayment. Each Eligible Employee electing to purchase
Shares will authorize the Company to withhold a designated amount from
his regular weekly, bi-weekly, semimonthly or monthly pay for each
payroll period during the Purchase Period. All such payroll
deductions made for an Eligible Employee shall be credited to his
account under the Plan. At the end of the Purchase Period, each
Eligible Employee shall receive in cash the balance remaining in his
account, if any, after the purchase of the number of Shares covered by
his option to purchase Shares.
8. Employee's Election To Purchase - Grants of Options. In order to
participate in the Plan, an Eligible Employee must sign an election to
purchase Shares on a form provided by the Company stating the Eligible
Employee's desire to purchase Shares under the Plan and showing the
amount which the Eligible Employee elects to have withheld from his
pay for such payroll period during the Purchase Period. The election
to purchase Shares must be delivered on or before the last day of the
Subscription Period to the person or office designated to receive and
accept such elections. Subject to the limitations set forth in
Paragraph 9, each participating Eligible Employee shall be granted an
option to purchase a fixed maximum number of Shares determined by the
following procedure:
Step 1 - Determine the aggregate amount which will be withheld
from the Eligible Employee's pay during the Purchase
Period;
Step 2 - Determine the figure which represents the lower of (a)
85 percent of the Market Price on the first day of the
Purchase Period; or (b) 85 percent of the Market Price
on the last day of the Purchase Period; or if no Shares
were traded on such day, on the last day prior thereto
on which Shares were traded.
Step 3 - Divide the figure determined in Step 1 by the figure
determined in Step 2. This final figure shall be the
fixed maximum number of Shares for which the Eligible
Employee may be granted an option to purchase.
In the event the total maximum number of Shares resulting from
all elections to purchase under any offering of Shares under the Plan
exceeds the number of Shares offered, the Company reserves the right
to reduce the maximum number of Shares which Eligible Employees may
purchase pursuant to their elections to purchase, to allot the Shares
available in such manner as it shall determine, but generally prorata
to subscriptions received and to grant options to purchase only for
such reduced number of Shares.
All Shares included in any offering under the Plan in excess of
the total number of Shares which all Eligible Employees elect to
purchase and all Shares with respect to which elections to purchase
are canceled as provided in Paragraph 12 shall continue to be reserved
for the Plan and shall be available for inclusion in any subsequent
offering under the Plan.
9. Limitations Of Number Of Shares Which May Be Purchased. The
following limitations shall apply with respect to the number of Shares
which may be purchased by each Eligible Employee who elects to
participate in an offering under the Plan;
(a) No Eligible Employee may purchase Shares during any one offering
pursuant to the Plan for an aggregate purchase price (which shall
be computed on an annual basis in the event the Purchase Period
is more or less than 12 months) in excess of 20 percent of his
Annual Pay; and
(b) No Eligible Employee shall be granted an option to purchase
Shares under the Plan if such Eligible Employee immediately after
such option is granted, owns stock or holds options to purchase
stock possessing five percent or more of the total combined
voting power or value of the capital stock of the Company or of
any Subsidiary; and
(c) No Eligible Employee may be granted an option to purchase Shares
which permits his right to purchase Stock under the Plan and all
other stock option plans of the Company and of any Subsidiary
pursuant to Section 423 of the Code to accrue at a rate which
exceeds in any one calendar year $25,000 of the fair market value
of such Stock (determined on the date the option to purchase is
granted).
A-3
<PAGE>
An Eligible Employee may elect to purchase less than the number
of Shares which he is entitled to elect to purchase.
10. Stockholder Rights. Only upon the issuance of Shares to an Eligible
Employee or his agent (and only in respect to such Shares purchased)
shall an Eligible Employee obtain the rights of stockholders,
including, without limitation, the right to vote the shares or receive
dividends or other distributions thereon. The Shares purchased will
be issued as soon as practicable after the last day of the Purchase
Period.
11. Rights To Purchase Shares Not Transferable. An Eligible Employee's
rights under his election to purchase Shares may not be sold, pledged,
assigned or transferred in any manner otherwise than by will or the
laws of descent and distribution. If this provision is violated the
right of the Eligible Employee to purchase Shares shall terminate and
the only right remaining under such Eligible Employee's election to
purchase will be to have paid over to the person entitled thereto the
amount then credited to the Eligible Employee's account.
12. Cancellation of Election to Purchase. An Eligible Employee who has
elected to purchase Shares may cancel his election in its entirety or
may partially cancel his election by reducing the amount which he has
authorized the Company to withhold from his pay for each payroll
period during the Purchase Period. Any such full or partial
cancellation shall be effective upon the delivery by the Eligible
Employee of written notice of cancellation to the office or person
designated to receive elections. Such notice of cancellation must be
so delivered before the close of business on the last business day of
the Purchase Period. If an Eligible Employee partially cancels his
original election by reducing the amount authorized to be withheld
from his pay, he shall continue to make installment payments at the
reduced rate for the remainder of the Purchase Period. Only one
partial cancellation may be made during a Purchase Period.
An Eligible Employee's rights upon the full or partial
cancellation of his election to purchase Shares shall be limited to
the following:
(a) He may receive in cash, as soon as practicable after
delivery of the notice of cancellation, the amount then
credited to his account, except, in the case of a partial
cancellation, he must retain in his account the cumulative
installment payments made through the date of cancellation
until the end of the Purchase Period, or
(b) He may have the amount credited to his account at the time
the cancellation becomes effective applied to the purchase
of the number of shares such amount will then purchase at
the end of the Purchase Period.
13. Leave Of Absence Or Layoff. An Eligible Employee purchasing Stock
under the Plan who is granted a leave of absence (including a military
leave) or is laid off during the Purchase Period may at that time (on
a form provided by the Company) elect one of the following:
(a) He may suspend payments during the leave of absence, or, in the
case of a layoff, he may suspend payments for not more than 90
days, but not in either case beyond the last month of the
Purchase Period, or
(b) He may cancel his election in accordance with Paragraph 12.
If Option (a) is elected, the Eligible Employee at the end of the
suspension period must make up the deficiency in his account either by
immediate lump sum payment or with installment payments so that,
assuming the maximum purchase price per share, payment for the maximum
number of Shares covered by his option will be completed in the last
month of the Purchase Period. If the Eligible Employee elects to make
increased installment payments, he may, nevertheless, at any time make
up his remaining deficiency by a lump sum payment.
If an Eligible Employee does not return to active service upon
the expiration of his leave of absence or within 90 days from the date
of his layoff, his election to purchase shall be deemed to have been
canceled at the time of the leave of absence or layoff.
In no event shall an Eligible Employee be permitted to complete
payment for any Shares after 27 months from the date of the
commencement of the Subscription Period.
A-4
<PAGE>
14. Effect of Failure To Make Payments When Due. If in any payroll
period, for any reason not set forth in Paragraph 13, an Eligible
Employee who has filed an election to purchase Shares under the Plan
has no pay or his pay is insufficient (after other authorized
deductions) to permit deduction of his installment payment, such
payment may be made in cash at the time. If not so made, the Eligible
Employee, when his pay is again sufficient to permit the resumption of
installment payments, must pay in cash the amount of the deficiency in
his account or arrange for uniformly increased installment payments so
that, assuming the maximum purchase price per share, payment for the
maximum number of Shares covered by his option will be completed in
the last month of the Purchase Period. If the Eligible Employee
elects to make increased installment payments, he may, nevertheless,
at any time make up the remaining deficiency by a lump sum payment.
Subject to the above and other provisions of the Plan permitting
postponement, the Company may treat the failure by an Eligible
Employee to make any payment as a cancellation of his election to
purchase shares. Such cancellation will be affected by mailing notice
to him at his last known business or home address. Upon such mailing,
his only right will be to receive in cash the amount credited to his
account.
15. Retirement. If an Eligible Employee officially retires and has an
election to purchase Shares in effect at the time of his retirement,
he may, within three months after the date of his retirement (but in
no event later than the end of the Purchase Period), by delivering
written notice to the office or person designated to receive
elections, elect to:
(a) Complete the remaining installment payments in cash,
(b) Make a lump sum payment in the amount of any deficiency for the
remaining portion of the Purchase Period, or
(c) Cancel his election to purchase Shares in accordance with the
provisions of Paragraph 12.
If no such notice is given within such period, the election will
be deemed canceled as of the date of retirement and the only right of
the Eligible Employee will be to receive in cash the amount credited
to his account.
16. Death. If an Eligible Employee, including a retired Eligible
Employee, dies and has an election to purchase Shares in effect at the
time of his death, the legal representative of the deceased Eligible
Employee may, within three months from the date of death (but in no
event later than the end of the Purchase Period), by delivering
written notice to the office or person designated to received
elections, elect to:
(a) Complete the remaining installment payments in cash,
(b) Make a lump sum payment in the amount of any deficiency for the
remaining portion of the Purchase Period, or
(c) Cancel the election to purchase Shares in accordance with the
provisions of Paragraph 12.
If no such notice is given within such period, the election will
be deemed canceled as of the date of death, and the only right of such
legal representative will be to receive in cash the amount credited to
the deceased Eligible Employee's account.
17. Termination of Employment Other Than For Retirement Or Death. If an
Eligible Employee's employment is terminated for any reason other than
retirement or death prior to the end of the Purchase Period, his
election to purchase shall thereupon be deemed canceled as of the date
on which his employment ended. In such an event, no further payments
under such election will be permitted, and the Eligible Employee's
only right will be to receive in cash the amount credited to his
account.
18. Application of Funds. All funds received by the Company in payment
for Shares purchased under the Plan and held by the Company at any
time may be used for any valid corporate purpose.
19. Governmental Approvals or Consents. The Plan shall not be effective
unless it is approved by the stockholders of the Company within 12
months after the Plan is adopted by the Board of Directors of the
Company. The Plan and any offerings and sales to Eligible Employees
under it are subject to any governmental approvals or consents that
may be or become applicable in connection therewith. The Board of
Directors of the Company may make such changes in the Plan and include
such terms in any offering under the Plan as may be necessary or
desirable, in the opinion of counsel, so that the Plan will comply
with the rules and regulations of any governmental authority and so
that Eligible Employees participating in the Plan will be eligible for
tax benefits under the United States Internal Revenue Code or the laws
of any state.
A-5
[DESCRIPTION]Senior Officers' Bonus Pool Plan, filed pursuant to
Instruction #3, Item #10 to Schedule 14A.
[Not being distrubuted to the stockholders]
<PAGE>
SENIOR OFFICERS' BONUS POOL PLAN
The performance goals contained in the Senior Officers' Bonus Pool Plan (the
"SOBP") as adopted by the Compensation Committee of the Board of Directors of
The Home Depot, Inc. (the "Company"), a committee of outside directors (the
"Committee") will govern the award of annual bonuses to Mr. Bernard Marcus,
Chief Executive Officer of the Company (the "CEO") and Mr. Arthur M. Blank,
Chief Operating Officer of the Company (the "COO"), who are the designated
eligible participants.
Moreover, pursuant to the applicable provisions of the Omnibus Budget
Reconciliation Act of 1993 ("OBRA"), the U.S. Department of the Treasury could
limit the Company's federal tax deduction for compensation paid to its senior
officers to $1 million each, unless compensation in excess of this amount is
based on the achievement of performance goals and eligibility requirements.
The SOBP qualifies as performance-based compensation and all sums paid
thereunder should be deductible by the Company. In 1993, the SOBP allowed the
CEO and the COO collectively to earn a bonus based on 1.25% of the Company's
earnings up to $54 million and 2.0% of earnings above $54 million (before
being adjusted for the bonus pool and income taxes) up to a maximum amount of
$4 million. In order to comply with a "safe harbor" under proposed
regulations adopted under OBRA, the Committee has revised the SOBP to allow
the CEO and the COO collectively to earn a bonus equal to 10% of the Company's
earnings in excess of a threshold amount as established by the Committee (the
"Earnings Threshold"), subject to an annual maximum established by the
Committee. The Earnings Threshold for fiscal 1995 is equal to $604,501,000,
which is approximately equal to the Company's net earnings for fiscal 1994.
Monies payable from the SOBP are to be shared by the CEO and COO at the ratio
of 50% each. For fiscal 1995, the maximum amount awardable under the SOBP
is $4 million; however, the actual benefits to be paid under the SOBP
are not presently determinable.
Prior to awarding any cash bonuses for the 1994 fiscal year and all subsequent
years covered by the SOBP, the Committee will evaluate the performance of the
Company to certify that the performance goals have been met.
<PAGE>
[DESCRIPTION]FORM OF PROXY
PROXY THE HOME DEPOT, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS ON MAY 31, 1995
The undersigned stockholder hereby appoints BERNARD MARCUS,
ARTHUR M. BLANK and RONALD M. BRILL, and each of them, attorneys
and proxies for the undersigned with full power of substitution,
to act and vote, with the powers the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of The
Home Depot, Inc. to be held at the Cobb Galleria Centre, Atlanta,
Georgia, on Wednesday, May 31, 1995, at 10:00 a.m., and any
adjournments thereof, as directed below with respect to the
matters set forth below and with discretionary authority on all
other matters that come before the meeting, all as more fully
described in the Proxy Statement received by the undersigned
stockholder. If no direction is made, the proxy will be voted
"FOR" the election of ARTHUR M. BLANK, MILLEDGE A. HART, III, M.
FAYE WILSON and JOHNNETTA B. COLE, "FOR" the approval of item
number 2, "FOR" the approval of item number 3, "AGAINST" item
number 4, and in accordance with the recommendations of the Board
of Directors.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE.
SEE REVERSE SIDE
<PAGE>
[x]Please mark
votes as in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1. Election of Directors
Nominees: Arthur M. Blank, Milledge A. Hart, III,
M. Faye Wilson and Johnnetta B. Cole
FOR WITHHELD
[ ] [ ]
[ ]______________________________________
For all nominees except as noted above
2. Approval of an Amendment to the Company's performance-based
Senior Officers' Bonus Pool Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of two Amendments to the Company's
Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
ITEM 4.
4. Approval of Stockholder Proposal to amend Bylaws to require
a majority ofIndependent Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE MARK, SIGN AND DATE HEREON AND RETURN
PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as name appears at left.
When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such.
If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Signature: ___________________________ Date: _____________
Signature: ___________________________ Date: _____________
