SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported) July 5, 1994
Lowe's Companies, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 0-94 56-578072
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
P.O. Box 1111, North Wilkesboro, North Carolina
28656
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code
(910) 651-4000
Item 5. Other Events
Lowe's Companies, Inc. (the "Company") is filing this Current
Report on Form 8-K so as to file with the Securities and Exchange
Commission certain items that are to be incorporated by reference
into its Registration Statement on Form S-3 (Registration No.
33-51865) in connection with the completion on July 5, 1994, of
the public offering of 10,350,000 shares of the Company's common
stock, par value $.50 per share.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1(a) U.S. Purchase Agreement dated June 27, 1994, among
the Company and Montgomery Securities and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Representatives of the Several
Underwriters
1(b) International Purchase Agreement dated June 27, 1994,
among the Company and Montgomery Securities and Merrill Lynch
International Limited, as Co-lead Managers of the Several
Managers
3(a) Restated and Amended Charter of the Company, amended
as of June 22, 1994
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
LOWE'S COMPANIES, INC.
(Registrant)
Date: July 11, 1994 By:/s/ Richard D. Elledge
Richard D. Elledge
Vice President
EXHIBIT INDEX
Exhibit Number and Description
1(a) U.S. Purchase Agreement dated June 27, 1994, among the
Company and Montgomery Securities and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Representatives of the Several
Underwriters
1(b) International Purchase Agreement dated June 27, 1994,
among the Company and Montgomery Securities and Merrill Lynch
International Limited, as Co-lead Managers of the Several
Managers
3(i) Restated and Amended Charter of the Company, amended as of
June 22, 1994
LOWE'S COMPANIES, INC.
(a North Carolina corporation)
7,200,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: June 27, 1994
LOWE'S COMPANIES, INC.
(a North Carolina corporation)
7,200,000 Shares of Common Stock
(Par Value $.50 Per Share)
U.S. PURCHASE AGREEMENT
June 27, 1994
MONTGOMERY SECURITIES
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
As Representatives of the several U.S. Underwriters
c/o Montgomery Securities
600 Montgomery Street
San Francisco, CA 94111
Ladies and Gentlemen:
Lowe's Companies, Inc., a North Carolina corporation
(the "Company"), proposes to issue and sell to the underwriters
named in Schedule A (the "U.S. Underwriters"), for whom you are
acting as representatives (the "Representatives"), 7,200,000
authorized but unissued shares of the Company's Common Stock, par
value $.50 per share (shares of which class of stock of the
Company are hereinafter referred to as "Common Stock"). Such
shares of Common Stock are to be sold to each U.S. Underwriter,
acting severally and not jointly, in such amounts as are set
forth in Schedule A hereto opposite the name of such U.S.
Underwriter. The Company also grants to the U.S. Underwriters,
severally and not jointly, the option described in Section 2 to
purchase all or any part of 1,080,000 additional shares of Common
Stock to cover over-allotments. The aforesaid 7,200,000 shares
of Common Stock (the "Initial U.S. Shares"), together with all or
any part of the 1,080,000 additional shares of Common Stock
subject to the option described in Section 2 (the "U.S. Option
Shares"), are collectively herein called the "U.S. Shares". The
U.S. Shares and the Rights (as hereinafter defined) are more
fully described in the Prospectuses referred to below.
It is understood that the Company is concurrently
entering into an agreement, dated the date hereof (the
"International Purchase Agreement"), providing for the sale by
the Company of an aggregate of 1,800,000 shares of Common Stock
(the "Initial International Shares") through arrangements with
certain managers outside of the United States (the "Managers"),
for whom Montgomery Securities and Merrill Lynch International
Limited are acting as co-lead managers (the "Co-Lead Managers").
It is further understood that the Company is concurrently
granting the Mangers an option to purchase all or any part of
270,000 additional shares of Common Stock (the "International
Option Shares") to cover over-allotments. The Initial
International Shares and the International Option Shares are
hereinafter collectively referred to as the "International
Shares." The U.S. Shares and the International Shares are
hereinafter collectively referred to as the "Shares."
Each Share will include one-quarter of one preferred
share purchase right (a "Right"). Each Right entitles the holder
thereof to purchase, under certain circumstances, one-thousandth
of a share of the Company's preferred stock (the "Preferred
Stock"). The Rights are to be issued pursuant to a Shareholder
Rights Plan, dated as of September 9, 1988 (the "Rights Plan").
Each reference herein to a "Share" or "Shares" shall include the
Rights associated with such Share or Shares, unless the context
otherwise requires.
The Company understands that the U.S. Underwriters will
simultaneously enter into an agreement with the Managers dated
the date hereof (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the U.S.
Underwriters and the Mangers under the direction of Montgomery
Securities.
You have advised us that you and the other U.S.
Underwriters, acting severally and not jointly, desire to
purchase the U.S. Shares and that you have been authorized by the
other U.S. Underwriters to execute this Agreement on their
behalf.
The initial public offering price per share for the
U.S. Shares shall be $31.50 and the purchase price per share for
the U.S. Shares to be paid by the several U.S. Underwriters shall
be $30.55, representing an amount equal to the initial public
offering price set forth above, less $0.95 per share. The
purchase price per share for the U.S. Shares and to be paid by
the U.S. Underwriters hereunder shall be identical to the
purchase price per share for the International Shares to be paid
by the several Managers under the International Purchase
Agreement.
The Company has prepared and filed with the Securities
and Exchange Commission (the "Commission") a registration
statement on Form S-3 (Registration No. 33-51865), including a
prospectus, relating to certain of its debt securities, preferred
stock, common stock (including the Shares) and preferred Stock
purchase rights (including the Rights) and the offering thereof
from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"). Such
Registration Statement has been declared effective by the
Commission. As provided in Section 3(a), a prospectus supplement
reflecting the terms of the Shares, the terms of the offering
thereof and other matters set forth therein has been prepared and
will be filed pursuant to Rule 424 under the 1933 Act. Two forms
of prospectus supplement are to be used in connection with the
offering and sale of the Shares: one relating to the U.S. Shares
(the "Form of U.S. Prospectus Supplement"); and one relating to
the International Shares (the "Form of International Prospectus
Supplement"). Such prospectus supplements, each in the form
first filed after the date hereof pursuant to Rule 424, are
herein referred to collectively as the "Prospectus Supplements,"
and individually as a "Prospectus Supplement." The Form of U.S.
Prospectus Supplement is identical to the Form of International
Prospectus Supplement, except for the front cover page and the
back cover page and the information contained under the caption
"Underwriting." In addition, the International Prospectus
Supplement contains an additional section entitled "Certain
United States Federal Tax Considerations for Non-U.S. Holders of
Common Stock." Such registration statement, as amended at the
date hereof, including the exhibits thereto and the documents
incorporated by reference therein, is herein called the
"Registration Statement," and the basic prospectus included
therein relating to all offerings of securities under the
Registration Statement, as supplemented by the Form of U.S.
Prospectus Supplement and the Form of International Prospectus
Supplement, are herein called the "U.S. Prospectus" and the
"International Prospectus," respectively, and collectively the
"Prospectuses," and individually, a "Prospectus," except that, if
such basic prospectus is amended or supplemented on or prior to
the date on which the U.S. Prospectus Supplement and the
International Prospectus Supplement are first filed pursuant to
Rule 424, the terms "U.S. Prospectus," "International
Prospectus," and "Prospectuses" and "Prospectus" shall refer to
the basic prospectus as so amended or supplemented and as
supplemented by the U.S. Prospectus Supplement and the
International Prospectus Supplement, as the case may be, in
either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference
therein.
The Company understands that the U.S. Underwriters
propose to make a public offering of the U.S. Shares as soon as
you deem advisable after this Agreement has been executed and
delivered.
Section 1. Representations and Warranties. (a) The
Company represents and warrants to and agrees with each of the
U.S. Underwriters that:
(i) On the original effective date of the Registration
Statement, on the effective date of the most recent post-
effective amendment thereto, if any, and on the date of the
filing by the Company of any annual report on Form 10-K
after the original filing of the Registration Statement, the
Registration Statement complied in all material respects
with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act
Regulations") and did not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; on the date hereof and at the
Closing Time (as defined below), the Registration Statement,
and any amendments thereof, and the Prospectuses, and any
amendments thereof and supplements thereto, comply and will
comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and none of such
documents includes or will include an untrue statement of a
material fact or omits or will omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that
the Company makes no representations or warranties as to
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by or on behalf of any U.S. Underwriter or Manager,
directly or through you or through the Co-Lead Managers,
expressly for use in the Registration Statement or the
Prospectuses.
(ii) The documents incorporated by reference in the
Prospectuses, at the time they were filed with the
Commission, complied in all material respects with the
requirements of the 1934 Act, and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations")
and, when read together and with the other information in
the Prospectuses do not and will not, on the date hereof and
at the Closing Time, contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein not misleading.
(iii) Deloitte & Touche, who have reported upon the
audited financial statements and schedules included or
incorporated by reference in the Registration Statement, are
independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed
and delivered by the Company.
(v) The consolidated financial statements included or
incorporated by reference in the Registration Statement
present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and
the consolidated results of operations and the consolidated
cash flows of the Company and its subsidiaries for the
periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved. The financial statement schedules, if
any, included in the Registration Statement present fairly
the information required to be stated therein. The selected
financial data included or incorporated by reference in the
Prospectuses present fairly the information shown therein
and have been compiled on a basis consistent with that of
the audited consolidated financial statements included or
incorporated by reference in the Registration Statement.
(vi) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of North Carolina with corporate power and authority
under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectuses; and
the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have
a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(vii) Each of Lowe's Home Centers, Inc., a North
Carolina corporation, LF Corporation, a Delaware
corporation, and The Contractor Yard, Inc., a North Carolina
corporation (collectively, the "Significant Subsidiaries";
"subsidiaries" has the meaning set forth in Rule 405 under
the 1933 Act), is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and
authority under such laws to own, lease and operate its
properties and conduct its business; and each Significant
Subsidiary is duly qualified to transact business as a
foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have
a material adverse effect on the Company and its
subsidiaries, considered as one enterprise. All of the
outstanding shares of capital stock of each Significant
Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable and are owned by the
Company, directly or through one or more Significant
Subsidiaries, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
(viii) The Company had at the date indicated a duly
authorized, issued and outstanding capitalization as set
forth in the Prospectuses under the caption
"Capitalization", the Shares conform to the description
thereof contained or incorporated by reference in the
Prospectuses and such description conforms to the rights set
forth in the instruments defining the same.
(ix) The Shares have been duly authorized and, when
issued and paid for in accordance with this Agreement and
the International Purchase Agreement, will be validly
issued, fully paid and nonassessable; no holder thereof will
be subject to personal liability by reason of being such a
holder; such Shares are not subject to the preemptive rights
of any stockholder of the Company; and all corporate action
required to be taken for the authorization, issue and sale
of the Shares has been validly and sufficiently taken.
(x) All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid and nonassessable; no holder thereof is or
will be subject to personal liability by reason of being
such a holder; and none of the outstanding shares of capital
stock of the Company issued since December 19, 1979 was
issued in violation of the preemptive rights of any
stockholder of the Company.
(xi) The Rights associated with the Shares have been
duly authorized and validly reserved for issuance upon the
issuance of the Shares and, when so issued in accordance
with the terms of the Rights Plan, will be validly issued;
the shares of Preferred Stock that may be issued to holders
of Rights pursuant to the Rights Plan have been duly
authorized and validly reserved for issuance upon the
exercise of the Rights and, when issued and delivered in
accordance with the terms of the Rights Plan, will be
validly issued, fully paid and nonassessable and, except as
otherwise set forth in the Prospectuses, the issuance of
such shares of Preferred Stock is not subject to any
preemptive or similar rights; and the Rights and the
Preferred Stock conform to the descriptions thereof
contained in the Prospectuses.
(xii) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein or
contemplated thereby, there has not been (A) any material
adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business,
(B) any transaction entered into by the Company or any
subsidiary, other than in the ordinary course of business,
that is material to the Company and its subsidiaries,
considered as one enterprise, or (C) any dividend (other
than ordinary quarterly dividends declared, paid or made in
the ordinary course of business) or distribution of any kind
declared, paid or made by the Company on its capital stock.
(xiii) Neither the Company nor any Significant
Subsidiary is in default in the performance or observance of
any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a
party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that
would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise. The execution and delivery of
this Agreement and the International Purchase Agreement by
the Company, the issuance and delivery of the Shares and the
Rights, the consummation by the Company of the transactions
contemplated in this Agreement and the International
Purchase Agreement, in the Rights Plan, in the Prospectuses
and in the Registration Statement (except to the extent not
applicable to the offering of the U.S. Shares or the
International Shares) and compliance by the Company with the
terms of this Agreement and the International Purchase
Agreement and the Rights Plan have been duly authorized by
all necessary corporate action on the part of the Company
and do not and will not result in any violation of the
charter or by-laws of the Company or any Significant
Subsidiary, and do not and will not conflict with, or result
in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Significant
Subsidiary under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to
which the Company or any Significant Subsidiary is a party
or by which it may be bound or to which any of its
properties may be subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise) or (B) any existing applicable
law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any
Significant Subsidiary or any of their respective
properties.
(xiv) No authorization, approval, consent or
license of any government, governmental instrumentality or
court, domestic or foreign (other than under the 1933 Act
and the securities or blue sky laws of the various states),
is required for the valid authorization, issuance, sale and
delivery of the Shares and the Rights, or for the execution,
delivery or performance of the Rights Plan by the Company.
(xv) Except as disclosed in the Prospectuses, there is
no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Significant
Subsidiary that is required to be disclosed in the
Prospectuses or that could result in any material adverse
change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, or that
could materially and adversely affect the properties or
assets of the Company and its subsidiaries, considered as
one enterprise, or that could adversely affect the
consummation of the transactions contemplated in this
Agreement and the International Purchase Agreement; the
aggregate of all pending legal or governmental proceedings
that are not described in the Prospectuses to which the
Company or any Significant Subsidiary is a party or which
affect any of their respective properties, including
ordinary routine litigation incidental to the business of
the Company or any Significant Subsidiary, would not have a
material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one
enterprise.
(xvi) There are no contracts or documents of a
character required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits to
the Registration Statement that are not described and filed
as required.
(xvii) The Company and the Significant Subsidiaries
each owns, possesses or has obtained all material
governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations necessary to own
or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted (other
than such licenses, permits, certificates, consents, orders,
approvals and authorizations which, if neither owned,
possessed nor obtained, would not have a material adverse
impact on the business of the Company and its subsidiaries,
considered as one enterprise), and neither the Company nor
any Significant Subsidiary has received any notice of
proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders,
approvals or authorizations.
(xviii) The Company and the Significant Subsidiaries
each owns or possesses, or can acquire on reasonable terms,
adequate patents, patent licenses, trademarks, service marks
and trade names necessary to carry on its business as
presently conducted, and neither the Company nor any
Significant Subsidiary has received any notice of
infringement of or conflict with asserted rights of others
with respect to any patents, patent licenses, trademarks,
service marks or trade names that in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could
materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one
enterprise.
(xix) To the best knowledge of the Company, no
labor problem exists with its employees or with employees of
the Significant Subsidiaries or is imminent that could
adversely affect the Company and its subsidiaries,
considered as one enterprise, and the Company is not aware
of any existing or imminent labor disturbance by the
employees of any of its or the Significant Subsidiaries'
principal suppliers, contractors or customers that could be
expected to materially adversely affect the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xx) The Company has not taken and will not take,
directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Common
Stock.
(xxi) Except as disclosed in the Registration
Statement and except as would not individually or in the
aggregate have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, (A) the Company and the
Significant Subsidiaries are each in compliance with all
applicable Environmental Laws, (B) the Company and the
Significant Subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements,
(C) there are no pending or threatened Environmental Claims
against the Company or any of the Significant Subsidiaries,
and (D) there are no circumstances with respect to any
property or operations of the Company or the Significant
Subsidiaries that could reasonably be anticipated to form
the basis of an Environmental Claim against the Company or
the Significant Subsidiaries.
For purposes of this Agreement, the following terms
shall have the following meanings: "Environmental Law"
means any United States (or other applicable jurisdiction's)
federal, state, local or municipal statute, law, rule,
regulation, ordinance, code, policy or rule of common law
and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent
decree or judgment, relating to the environment, health,
safety or any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any
governmental authority. "Environmental Claims" means any
and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating in any way to any Environmental Law.
(b) Any certificate signed by any officer of the
Company or any Significant Subsidiary and delivered to you or to
counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S.
Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the U.S. Underwriters;
Closing. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein
set forth, the Company agrees to sell to each U.S. Underwriter,
and each U.S. Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share for
the Initial U.S. Shares set forth in the sixth paragraph of this
Agreement, the number of Initial U.S. Shares set forth opposite
the name of such Underwriter in Schedule A, plus any additional
number of Initial U.S. Shares that such U.S. Underwriter may
become obligated to purchase pursuant to Section 11 of this
Agreement.
(b) In addition, on the basis of the representations
and warranties herein contained, and subject to the terms and
conditions herein set forth, the Company hereby grants an option
to the U.S. Underwriters, severally and not jointly, to purchase
up to an additional 1,080,000 U.S. Option Shares at the same
purchase price per share as shall be applicable to the Initial
U.S. Shares. The option hereby granted will expire 30 days after
the date of this Agreement, and may be exercised, in whole or in
part (but not more than once), only for the purpose of covering
over-allotments that may be made in connection with the offering
and distribution of the Initial U.S. Shares upon notice by you to
the Company setting forth the number of U.S. Option Shares as to
which the several U.S. Underwriters are exercising the option,
and the time and date of payment and delivery thereof. Such time
and date of delivery (the "Date of Delivery") shall be determined
by you but shall not be later than seven full business days after
the exercise of such option, nor in any event prior to the
Closing Time. If the option is exercised as to all or any
portion of the U.S. Option Shares, each of the U.S. Underwriters,
acting severally and not jointly, will purchase from the Company
that portion of the aggregate number of U.S. Option Shares being
purchased which the number of Initial U.S. Shares set forth
opposite the name of such U.S. Underwriter bears to the total
number of Initial U.S. Shares (such proportion is hereinafter
referred to as such U.S. Underwriter's "underwriting obligation
proportion"), subject to such adjustments as you, in your
discretion, shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Shares shall be made at the
offices of Shearman & Sterling, 599 Lexington Avenue, New York,
New York 10022, or at such other place as shall be agreed upon by
the Company and you, at 10:00 A.M. on the fifth full business day
after the date of this Agreement (unless postponed pursuant to
Section 11), or at such other time not more than ten full
business days thereafter as you and the Company shall determine
(such date and time of payment and delivery being herein called
the "Closing Time"). In addition, in the event that any or all
of the U.S. Option Shares are purchased by the U.S. Underwriters,
payment of the purchase price for, and delivery of certificates
for, such U.S. Option Shares shall be made at the offices of
Shearman & Sterling set forth above, or at such other place as
the Company and you shall determine, on the Date of Delivery as
specified in the notice from you to the Company. Payment shall
be made to the Company by certified or official bank check or
checks in New York Clearing House or similar next day funds
payable to the order of the Company, against delivery to you for
the respective accounts of the several U.S. Underwriters of
certificates for the U.S. Shares to be purchased by them.
(d) Certificates for the Initial U.S. Shares and U.S.
Option Shares to be purchased by the U.S. Underwriters shall be
in such denominations and registered in such names as you may
request in writing at least two full business days before the
Closing Time or the Date of Delivery, as the case may be. The
certificates for the Initial U.S. Shares and U.S. Option Shares
will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the business day
prior to the Closing Time or the Date of Delivery, as the case
may be.
(e) It is understood that each U.S. Underwriter has
authorized you, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the U.S. Shares
that it has agreed to purchase. You, individually and not as
Representatives, may (but shall not be obligated to) make payment
of the purchase price for the Initial U.S. Shares, or U.S. Option
Shares, to be purchased by any U.S. Underwriter whose check or
checks shall not have been received by the Closing Time or the
Date of Delivery, as the case may be.
(f) The obligations of the Company to sell to each
U.S. Underwriter the Initial U.S. Shares and the U.S. Option
Shares and the several and not joint obligations of the U.S.
Underwriters to purchase and pay for the U.S. Shares, upon the
terms and subject to the conditions contained herein, are subject
to the concurrent closing of the sale of the Initial
International Shares to the Managers pursuant to the
International Purchase Agreement.
Section 3. Certain Covenants of the Company. The
Company covenants with each U.S. Underwriter as follows:
(a) If reasonably requested by you in connection with
the offering of the Shares, the Company will prepare
preliminary prospectus supplements containing such
information as you and the Company deem appropriate, and,
immediately following the execution of this Agreement, the
Company will prepare Prospectus Supplements that comply with
the 1933 Act and the 1933 Act Regulations. The U.S.
Prospectus Supplement shall set forth the number of Shares,
the number of U.S. Shares, the name of each U.S. Underwriter
participating in the offering and the number of U.S. Shares
that each severally has agreed to purchase, the name of each
U.S. Underwriter, if any, acting as representative of the
U.S. Underwriters in connection with the offering, the price
at which the U.S. Shares are to be purchased by the
Underwriters from the Company, any initial public offering
price and any selling concession and reallowance, and such
other information as you and the Company deem appropriate in
connection with the offering of the U.S. Shares; and the
International Prospectus Supplement shall set forth the
number of Shares, the number of International Shares, the
name of each Manager participating in the offering and the
number of International Shares that each severally has
agreed to purchase, the name of each Manager, if any, acting
as co-lead manager in connection with the offering, the
price at which the International Shares are to be purchased
by the Managers from the Company, any initial public
offering price and any selling concession and reallowance,
and such other information as the Co-Lead Managers and the
Company deem appropriate in connection with the offering of
the International Shares. The Company will promptly
transmit copies of the Prospectus Supplements to the
Commission for filing pursuant to Rule 424 under the
1933 Act and will furnish to the U.S. Underwriters as many
copies of any preliminary prospectus supplements and the
Prospectuses as you shall reasonably request.
(b) The Company will comply to the best of its ability
with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Shares as contemplated
in this Agreement, the International Purchase Agreement and
the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with
sales of the Shares any event shall occur or condition exist
as a result of which it is necessary, in the opinion of
counsel for the U.S. Underwriters or counsel for the
Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that such Prospectuses
will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend the
Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to
Section 3(d), such amendment or supplement as may be
necessary to correct such untrue statement or omission or to
make the Registration Statement or such Prospectuses comply
with such requirements.
(c) During the period when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will, subject to Section 3(d), file
promptly all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15(d) of the
1934 Act.
(d) During the period when a Prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will inform you of its intention to file
any amendment to the Registration Statement, any supplement
to the Prospectuses or any document that would as a result
thereof be incorporated by reference in the Prospectuses;
will furnish you with copies of any such amendment,
supplement or other document a reasonable time in advance of
filing; and will not file any such amendment, supplement or
other document in a form to which you or their counsel shall
reasonably object.
(e) During the period when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will notify you immediately, and confirm
the notice in writing, (i) of the effectiveness of any
amendment to the Registration Statement, (ii) of the mailing
or the delivery to the Commission for filing of any
supplement to the Prospectuses or any document that would as
a result thereof be incorporated by reference in the
Prospectuses, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the
Prospectuses or the Prospectus Supplements, (iv) of any
request by the Commission for any amendment to the
Registration Statement or any supplement to the Prospectuses
or for additional information relating thereto or to any
document incorporated by reference in the Prospectuses and
(v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the institution
or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order suspending
such qualification and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you
as many signed copies of the Registration Statement (as
originally filed) and of all amendments thereto, whether
filed before or after the Registration Statement became
effective, copies of all exhibits and documents filed
therewith or incorporated by reference therein (through the
end of the period when a prospectus is required by the
1933 Act to be delivered in connection with sales of the
Shares) and signed copies of all consents and certificates
of experts, as you may reasonably request, and has furnished
or will furnish to you, for each of the U.S. Underwriters,
one conformed copy of the Registration Statement (as
originally filed) and of each amendment thereto (including
documents incorporated by reference into the Prospectuses
but without exhibits).
(g) The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the
Shares for offering and sale under the applicable securities
laws of such states and other jurisdictions as you may
designate and to maintain such qualifications in effect for
a period of not less than one year from the date hereof;
provided, however, that the Company shall not be obligated
to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not
otherwise so subject. The Company will file such statements
and reports as may be required by the laws of each
jurisdiction in which the Shares have been qualified as
above provided. The Company will also supply you with such
information as is necessary for the determination of the
legality of the Shares for investment under the laws of such
jurisdictions as you may request.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than
45 days after the close of the period covered thereby, an
earnings statement of the Company (in form complying with
the provisions of Rule 158 of the 1933 Act Regulations),
covering (i) a period of 12 months beginning after the
effective date of the Registration Statement and covering a
period of 12 months beginning after the effective date of
any post-effective amendment to the Registration Statement
but not later than the first day of the Company's fiscal
quarter next following such respective effective dates and
(ii) a period of 12 months beginning after the date of this
Agreement but not later than the first day of the Company's
fiscal quarter next following the date of this Agreement.
(i) The Company will use its best efforts to cause the
Shares to be duly authorized for listing on the New York,
London and Pacific Stock Exchanges and to be registered
under the 1934 Act.
(j) For a period of five years after the Closing Time,
the Company will furnish to you and, upon request, to each
U.S. Underwriter, copies of all annual reports, quarterly
reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company
to its stockholders or security holders generally.
(k) For a period of 90 days from the date hereof, the
Company will not, without your prior written consent,
directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Common
Stock or securities convertible into Common Stock, other
than to the U.S. Underwriters pursuant to this Agreement and
to the Managers pursuant to the International Purchase
Agreement and other than pursuant to employee benefit plans
(including contributions of Common Stock to the Company's
Employee Stock Ownership Plan), dividend reinvestment plans,
exercise of currently outstanding options and conversion of
the Company's 3% Convertible Subordinated Notes.
(l) The Company has complied and will comply with all
the provisions of Florida H.B. 1771, codified as Section
517.075 of the Florida statutes, and all regulations
promulgated thereunder relating to issuers doing business in
Cuba.
Section 4. Payment of Expenses. The Company will pay
and bear all costs and expenses incident to the performance of
its obligations under this Agreement, including (a) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally
filed and as amended, the preliminary prospectus supplements and
the Prospectuses and any amendments or supplements thereto, and
the cost of furnishing copies thereof in accordance with Section
3 of this Agreement and the International Purchase Agreement, to
the U.S. Underwriters and the Managers, (b) the preparation,
printing and distribution of this Agreement, the International
Purchase Agreement, the Agreement Among Managers, the
Intersyndicate Agreement, the Shares and the Blue Sky Survey,
(c) the delivery of the Shares to the U.S. Underwriters and the
Managers, including any stock transfer taxes payable upon the
sale of the Shares to the U.S. Underwriters and the Managers,
(d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Shares under the
applicable securities laws in accordance with Section 3(g) and
any filing for review of the offering with the National
Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the U.S. Underwriters
in connection therewith and in connection with the Blue Sky
Survey and (f) any fees and expenses incurred in connection with
the listing of the Shares on the New York, London and Pacific
Stock Exchanges.
If this Agreement is terminated by you in accordance
with the provisions of Section 5 or 10(a)(i), the Company shall
reimburse the U.S. Underwriters for all their out-of-pocket
expenses, including the fees and disbursements of counsel for the
U.S. Underwriters.
Section 5. Conditions of U.S. Underwriters'
Obligations. The obligations of the several U.S. Underwriters to
purchase and pay for the U.S. Shares that they have respectively
agreed to purchase pursuant to this Agreement (including any
Option U.S. Shares as to which the option granted in Section 2
has been exercised and the Date of Delivery determined by you is
the same as the Closing Time) are subject to the accuracy of the
representations and warranties of the Company contained herein or
in certificates of any officer of the Company or any Significant
Subsidiary delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to
the following further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or,
to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part
of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the U.S.
Underwriters.
(b) (i) At the Closing Time, you shall have received a
signed opinion of William C. Warden, Jr., General Counsel
for the Company, dated as of the Closing Time, together with
signed or reproduced copies of such opinion for each of the
other U.S. Underwriters, in form and substance satisfactory
to counsel for the U.S. Underwriters, to the effect that:
(A) The Company is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of North Carolina, with
corporate power and authority under such laws to own,
lease and operate its properties and conduct its
business as described in the Prospectuses.
(B) Each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation with corporate power and authority under
such laws to own, lease and operate its properties and
conduct its business.
(C) All of the outstanding shares of capital
stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable,
and no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of
the outstanding shares of capital stock of the Company
was issued in violation of the preemptive rights of any
stockholder of the Company.
(D) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectuses under the heading "Capitalization".
(E) All of the outstanding shares of capital
stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and
non-assessable; all of such shares are owned by the
Company, directly or through one or more Significant
Subsidiaries, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance
of any kind; no holder thereof is subject to personal
liability by reason of being such a holder and none of
such shares was issued in violation of the preemptive
rights of any stockholder of the Significant
Subsidiaries.
(F) The Shares have been duly authorized and
validly issued and are fully paid and non-assessable;
no holder thereof will be subject to personal liability
by reason of being such a holder; and the issuance of
such Shares is not subject to preemptive rights and all
corporate action required to be taken for the
authorization, issue and sale of such Shares has been
validly and sufficiently taken.
(G) The Rights to which holders of Common Stock
are entitled have been duly authorized and validly
issued; the shares of Preferred Stock that may be
issued to holders of Rights pursuant to the Rights Plan
have been duly authorized and validly reserved for
issuance upon the exercise of the Rights; and the
Rights and the Preferred Stock conform to the
descriptions thereof contained in the Prospectuses.
(H) Such counsel does not know of any statutes or
regulations, or any pending or threatened legal or
governmental proceedings, required to be described in
the Prospectuses that are not described as required,
nor of any contracts or documents of a character
required to be described or referred to in the
Registration Statement or the Prospectuses or to be
filed as exhibits to the Registration Statement that
are not described, referred to or filed as required.
(I) To the knowledge of such counsel, no default
exists in the performance or observance of any material
obligation, agreement, covenant or condition contained
in any contract, indenture, loan agreement, note, lease
or other agreement or instrument that is described or
referred to in the Registration Statement or the
Prospectuses or filed as an exhibit to the Registration
Statement.
(J) The execution and delivery of this Agreement
and the International Purchase Agreement by the
Company, the issuance and delivery of the Shares and
the Rights, the consummation by the Company of the
transactions contemplated in this Agreement and the
International Purchase Agreement, in the Prospectuses
and in the Registration Statement (except to the extent
not applicable to the offering of the U.S. Shares and
the International Shares) and compliance by the Company
with the terms of this Agreement and the International
Purchase Agreement do not and will not result in any
violation of the charter or by-laws of the Company or
any Significant Subsidiary, and do not and will not
conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or any Significant Subsidiary under (1) any
contract, indenture, mortgage, loan agreement, note,
lease or any other agreement or instrument known to
such counsel, to which the Company or any Significant
Subsidiary is a party or by which it may be bound or to
which any of its properties may be subject (except for
such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one
enterprise), (2) any existing applicable law, rule or
regulation (other than the securities or blue sky laws
of the various states, as to which such counsel need
express no opinion), or (3) any judgment, order or
decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over
the Company or any Significant Subsidiary or any of
their respective properties.
(K) The descriptions in the Prospectuses of the
statutes, regulations, legal or governmental
proceedings, contracts and other documents therein
described are accurate and fairly summarize the
information required to be shown (except for the
statements made in the International Prospectuses under
"Certain United States Federal Tax Considerations for
Non-U.S. Holders of Common Stock," as to which such
counsel need express no opinion).
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale
of the Shares pursuant to this Agreement as counsel for the
U.S. Underwriters may reasonably request. In giving such
opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State
of North Carolina and the federal law of the United States,
upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the U.S. Underwriters, in which
case the opinion shall state that they believe you and they
are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and the Significant Subsidiaries and
certificates of public officials; provided that such
certificates have been delivered to the U.S. Underwriters.
(ii) At the Closing Time, you shall have received a
signed opinion of Hunton & Williams, counsel for the
Company, dated as of the Closing Time, together with signed
or reproduced copies of such opinion for each of the other
U.S. Underwriters, in form and substance satisfactory to
counsel for the U.S. Underwriters, to the effect that:
(A) The Company is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of North Carolina with
corporate power and authority under such laws to own,
lease and operate its properties and conduct its
business as described in the Prospectuses.
(B) The Shares have been duly authorized and
validly issued, and are fully paid and non-assessable;
no holder thereof will be subject to personal liability
by reason of being such a holder; and the issuance of
such Shares is not subject to preemptive rights.
(C) The Rights to which holders of Common Stock
are entitled have been duly authorized and validly
issued; the shares of Preferred Stock that may be
issued to holders of Rights pursuant to the Rights Plan
have been duly authorized and validly reserved for
issuance upon the exercise of the Rights; and the
Rights and the Preferred Stock conform to the
descriptions thereof contained in the Prospectuses.
(D) The Shares conform in all material respects
as to legal matters to the descriptions thereof in the
Prospectuses.
(E) This Agreement has been duly authorized,
executed and delivered by the Company.
(F) No authorization, approval, consent or
license of any government, governmental instrumentality
or court, domestic or foreign (other than under the
1933 Act and the securities or blue sky laws of the
various states), is required for the valid
authorization, issuance, sale and delivery of the
Shares.
(G) The statements made in the International
Prospectus under "Certain United States Federal Tax
Considerations for Non-U.S. Holders of Common Stock",
to the extent that they constitute matters of law or
legal conclusions, have been reviewed by such counsel
and fairly present the information disclosed therein in
all material respects.
(H) The execution and delivery of this Agreement
and the International Purchase Agreement by the
Company, the issuance and delivery of the Shares and
the Rights, the consummation by the Company of the
transactions contemplated in this Agreement and the
International Purchase Agreement, in the Prospectuses
and in the Registration Statement (except to the extent
not applicable to the offering of the U.S. Shares or
the International Shares) and compliance by the Company
with the terms of this Agreement and the International
Purchase Agreement do not and will not result in any
violation of the charter or by-laws of the Company or
any Significant Subsidiary, and do not and will not
conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or any Significant Subsidiary under any
agreement or instrument under which indebtedness of the
Company or any Significant Subsidiary is outstanding
(except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries,
considered as one enterprise).
(I) The Registration Statement became effective
under the 1933 Act on February 8, 1994; any required
filing of any preliminary prospectus supplement or the
Prospectus Supplement pursuant to Rule 424(b) has been
made in the manner and within the time period required
by Rule 424(b); and, to the best of the knowledge of
such counsel, the Registration Statement is still
effective, no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
are pending or are contemplated under the 1933 Act.
(J) The Registration Statement and the
Prospectuses, excluding the documents incorporated by
reference therein, and each amendment or supplement
thereto (except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), as of their respective effective
or issue dates, appear on their face to have been
appropriately responsive in all material respects to
the requirements of the 1933 Act and the 1933 Act
Regulations.
(K) The documents incorporated by reference in
the Prospectuses (except for the financial statements
and other financial or statistical data included
therein or omitted therefrom, as to which such counsel
need express no opinion, and except to the extent that
any statement therein is modified or superseded in the
Prospectuses), as of the dates they were filed with the
Commission, appear on their face to have been
appropriately responsive in all material respects to
the requirements of the 1934 Act and the 1934 Act
Regulations.
(L) Such counsel have participated in the
preparation of the Registration Statement and the
Prospectuses and are familiar with or have participated
in the preparation of the documents incorporated by
reference in the Prospectuses and no facts have come to
the attention of such counsel to lead them to believe
(1) that the Registration Statement or any amendment
thereto (except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), on the original effective date of
the Registration Statement, on the effective date of
the most recent post-effective amendment thereto, if
any, on the date of the filing of any annual report on
Form 10-K after the filing of the Registration
Statement, on the date of this Agreement, or on the
date any such amendment became effective after the date
of this Agreement, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or (2) that the
Prospectuses or any amendment or supplement thereto
(except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), at the time the Prospectus
Supplements were issued, at the time any such amended
or supplemented prospectuses were issued or at the
Closing Time (or, if any U.S. Option Shares are
purchased, at the Date of Delivery), included or
include an untrue statement of a material fact or
omitted or omit to state a material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading or (3) that the documents incorporated by
reference in the Prospectuses (except for the financial
statements and other financial or statistical data
included therein or omitted therefrom, as to which such
counsel need express no opinion, and except to the
extent that any statement therein is modified or
superseded in the Prospectuses), as of the dates they
were filed with the Commission, included an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading.
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale
of the Shares pursuant to this Agreement as counsel for the
U.S. Underwriters may reasonably request. In giving such
opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the
States of New York and North Carolina and the federal law of
the United States, upon opinions of other counsel, who shall
be counsel satisfactory to counsel for the U.S.
Underwriters, in which case the opinion shall state that
they believe you and they are entitled to so rely. Such
counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the
Company and the Significant Subsidiaries and certificates of
public officials; provided that such certificates have been
delivered to the U.S. Underwriters.
(c) At the Closing Time, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the
U.S. Underwriters, dated as of the Closing Time, together
with signed or reproduced copies of such opinion for each of
the other U.S. Underwriters, to the effect that the opinions
delivered pursuant to Sections 5(b)(i) and 5(b)(ii) hereof
appear on their face to be appropriately responsive to the
requirements of this Agreement except, specifying the same,
to the extent waived by you, and with respect to the
incorporation and legal existence of the Company, the
Shares, this Agreement, the International Purchase
Agreement, the Registration Statement, the Prospectuses, the
documents incorporated by reference and such other related
matters as you may require. In giving such opinion such
counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York
and the federal law of the United States, upon the opinions
of counsel satisfactory to you. Such counsel may also state
that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Significant
Subsidiaries and certificates of public officials; provided
that such certificates have been delivered to the U.S.
Underwriters.
(d) At the Closing Time, (i) the Registration
Statement and the Prospectuses, as they may then be amended
or supplemented, shall contain all statements that are
required to be stated therein under the 1933 Act and the
1933 Act Regulations and in all material respects shall
conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the
Prospectuses, as they may then be amended or supplemented,
shall contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading,
(ii) there shall not have been, since the respective dates
as of which information is given in the Registration
Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the
ordinary course of business, (iii) no action, suit or
proceeding shall be pending or, to the knowledge of the
Company, threatened against the Company or any Significant
Subsidiary that would be required to be set forth in the
Prospectuses other than as set forth therein and no
proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any Significant
Subsidiary before or by any government, governmental
instrumentality or court, domestic or foreign, that could
result in any material adverse change in the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, other than as set forth in the
Prospectuses, (iv) the Company shall have complied with all
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and
(v) the other representations and warranties of the Company
set forth in Section 1(a) shall be accurate as though
expressly made at and as of the Closing Time. At the
Closing Time, you shall have received a certificate of the
President or a Vice President, and the Treasurer or
Controller, of the Company, dated as of the Closing Time, to
such effect.
(e) At the time that this Agreement is executed by the
Company, you shall have received from Deloitte & Touche a
letter, dated such date, in form and substance satisfactory
to you, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters, confirming
that they are independent public accountants with respect to
the Company within the meaning of the 1933 Act and
applicable published 1933 Act Regulations, and stating in
effect that:
(i) in their opinion, the audited financial
statements and the related financial statement
schedules included or incorporated by reference in the
Registration Statement and the Prospectuses comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934
Act and the published rules and regulations thereunder;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted
auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of
the Company for the three month periods ended April 30,
1993 and April 30, 1994, included or incorporated by
reference in the Registration Statement and the
Prospectuses (collectively, the "10-Q Financials"), a
reading of the latest available unaudited interim
consolidated financial statements of the Company, a
reading of the minutes of all meetings of the
stockholders and directors of the Company and its
subsidiaries since February 1, 1994, inquiries of
certain officials of the Company and its subsidiaries
responsible for financial and accounting matters with
respect to the changes in the financial statement items
after April 30, 1994 performed at the request of the
Company, and such other inquiries and procedures as may
be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the 10-Q Financials incorporated by
reference in the Registration Statement and the
Prospectuses do not comply as to form in all
material respects with the accounting requirements
of the 1934 Act and the 1934 Act Regulations
applicable to unaudited financial statements
included in Form 10-Q or are not in conformity
with generally accepted accounting principles
applied on a basis substantially consistent with
that of the audited financial statements included
or incorporated by reference in the Registration
Statement and the Prospectuses;
(B) at May 30, 1994 and at a specified date
not more than five days prior to the date of this
Agreement, there was any change in the common
stock of the Company and its subsidiaries or any
decrease in the consolidated net current assets or
consolidated net assets of the Company and its
subsidiaries or any increase in the long-term debt
of the Company and its subsidiaries, in each case
as compared with amounts shown in the April 30,
1994 unaudited consolidated balance sheet included
in the Registration Statement, except in each case
for changes, decreases or increases that the
Registration Statement discloses have occurred or
may occur; or
(C) for the period from May 1, 1994 to May
31, 1994 and for the period from June 1, 1994 to a
specified date not more than five days prior to
the date of this Agreement, there were any
decreases in consolidated net sales or in the
total or per share amounts of consolidated net
income, in each case as compared with the
comparable period in the preceding year, except in
each case for any decreases that the Registration
Statement discloses have occurred or may occur;
(iii) based upon the procedures set forth in
clause (ii) above and a reading of the consolidated
financial statements and financial statement schedules
included in the Registration Statement and a reading of
the financial statements, from which certain of such
data were derived, nothing has come to their attention
that gives them reason to believe that the consolidated
financial statements and financial statement schedules
included in the Registration Statement do not comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933
Act Regulations;
(iv) in addition to the procedures referred to in
clause (ii) above, they have performed other specified
procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and
financial information appearing in the Registration
Statement, which have previously been specified by you
and which shall be specified in such letter, and have
compared certain of such items with, and have found
such items to be in agreement with, the accounting and
financial records of the Company.
(f) At the Closing Time, you shall have received from
Deloitte & Touche a letter, in form and substance
satisfactory to you and dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter
furnished pursuant to Section 5(e), except that the
specified date referred to shall be a date not more than
five days prior to the Closing Time.
(g) At the Closing Time, counsel for the U.S.
Underwriters shall have been furnished with all such
documents, certificates and opinions as they may reasonably
request for the purpose of enabling them to pass upon the
issuance and sale of the Shares as contemplated in this
Agreement and the matters referred to in Section 5(c) and in
order to evidence the accuracy and completeness of any of
the representations, warranties or statements of the
Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company at or
prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as
contemplated in this Agreement shall be satisfactory in form
and substance to you and to counsel for the U.S.
Underwriters.
(h) The Shares shall have been duly authorized for
listing by the New York, London and Pacific Stock Exchanges
on the date of this Agreement.
If any of the conditions specified in this Section 5
shall not have been fulfilled when and as required by this
Agreement, this Agreement may be terminated by you on notice to
the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other
party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 7, 8 and 9 shall remain
in effect.
Section 6. Conditions to Purchase of U.S. Option
Shares. In the event that the U.S. Underwriters exercise their
option granted in Section 2 hereof to purchase all or any of the
U.S. Option Shares and the Date of Delivery determined by you
pursuant to Section 2 hereof is later than the Closing Time, the
obligations of the several U.S. Underwriters to purchase and pay
for the U.S. Option Shares that they shall have respectively
agreed to purchase pursuant to this Agreement are subject to the
accuracy of the representations and warranties of the Company
herein contained, to the performance by the Company of its
obligations hereunder and to the following further conditions:
(a) The Registration Statement shall remain effective
at the Date of Delivery, and, at the Date of Delivery, no
stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or
shall be pending or, to your knowledge or the knowledge of
the Company, shall be contemplated by the Commission, and
any request on the part of the Commission for additional
information shall have been complied with to the
satisfaction of counsel for the U.S. Underwriters.
(b) At the Date of Delivery, the provisions of
Sections 5(d)(i) through 5(d)(v) shall have been complied
with at and as of the Date of Delivery and, at the Date of
Delivery, you shall have received a certificate of the
President or a Vice President, and the Treasurer or
Controller, of the Company, dated as of the Date of
Delivery, to such effect.
(c) At the Date of Delivery, you shall have received
the favorable opinions of William C. Warden, Jr., General
Counsel of the Company, and Hunton & Williams, counsel for
the Company, together with signed or reproduced copies of
such opinions for each of the other U.S. Underwriters, in
each case in form and substance satisfactory to counsel for
the U.S. Underwriters, dated as of the Date of Delivery,
relating to the U.S. Option Shares and otherwise to the same
effect as the opinions required by Section 5(b)(i) and
5(b)(ii), respectively.
(d) At the Date of Delivery, you shall have received
the favorable opinion of Shearman & Sterling, counsel for
the U.S. Underwriters, dated as of the Date of Delivery,
relating to the U.S. Option Shares and otherwise to the same
effect as the opinion required by Section 5(c).
(e) At the Date of Delivery, you shall have received a
letter from Deloitte & Touche, in form and substance
satisfactory to you and dated as of the Date of Delivery, to
the effect that they reaffirm the statements made in the
letter furnished pursuant to Section 5(e), except that the
specified date referred to shall be a date not more than
five days prior to the Date of Delivery.
(f) At the Date of Delivery, counsel for the U.S.
Underwriters shall have been furnished with all such
documents, certificates and opinions as they may request for
the purpose of enabling them to pass upon the issuance and
sale of the U.S. Option Shares as contemplated in this
Agreement and the matters referred to in Section 6(d) and in
order to evidence the accuracy and completeness of any of
the representations, warranties or statements of the
Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company at or
prior to the Date of Delivery in connection with the
authorization, issuance and sale of the U.S. Option Shares
as contemplated in this Agreement shall be satisfactory in
form and substance to you and to counsel for the U.S.
Underwriters.
Section 7. Indemnification. (a) The Company agrees
to indemnify and hold harmless each U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), including all documents incorporated
therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading
or arising out of an untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus supplement or the Prospectuses (or any amendment
or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including fees and disbursements of counsel chosen
by you), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply
to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any U.S.
Underwriter or Manager through you or the Co-Lead Managers,
respectively, expressly for use in the Registration Statement (or
any amendment thereto) or any preliminary prospectus supplement
or the Prospectuses (or any amendment or supplement thereto).
(b) Each U.S. Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of
its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity agreement in
Section 7(a), as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus supplement or the
Prospectuses (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the
Company by such U.S. Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto) or such
preliminary prospectus supplement or the Prospectuses (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for the fees and expenses of
more than one counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations
or circumstances.
Section 8. Contribution. In order to provide for just
and equitable contribution in circumstances under which the
indemnity provided for in Section 7 is for any reason held to be
unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the U.S. Underwriters
shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and one or more of the U.S.
Underwriters, as incurred, in such proportions that (a) the U.S.
Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover
page of the Prospectuses bears to the initial public offering
price appearing thereon and (b) the Company is responsible for
the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 9. Representations, Warranties and Agreements
to Survive Delivery. The representations, warranties,
indemnities, agreements and other statements of the Company or
its officers set forth in or made pursuant to this Agreement will
remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, any U.S.
Underwriter or any person who controls the Company or any U.S.
Underwriter within the meaning of Section 15 of the 1933 Act and
will survive delivery of and payment for the Shares.
Section 10. Termination of Agreement. (a) You may
terminate this Agreement, by notice to the Company, at any time
at or prior to the Closing Time (i) if there has been, since the
respective dates as of which information is given in the
Prospectus, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which on the financial markets of the
United States is such as to make it, in your judgment,
impracticable to market the Shares or enforce contracts for the
sale of the Shares or (iii) if trading in any securities of the
Company has been suspended by the Commission or the National
Association of Securities Dealers, Inc., or if trading generally
on either the American Stock Exchange or the New York Stock
Exchange or in the over-the-counter market has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by such
exchange or by order of the Commission, the National Association
of Securities Dealers, Inc. or any other governmental authority
or (iv) if a banking moratorium has been declared by either
federal, New York or North Carolina authorities. As used in this
Section 10(a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party, except to the extent provided in Section 4.
Notwithstanding any such termination, the provisions of
Sections 7, 8 and 9 shall remain in effect.
(c) This Agreement may also terminate pursuant to the
provisions of Section 2, with the effect stated in such Section.
Section 11. Default by One or More of the
U.S.Underwriters. If one or more of the U.S. Underwriters shall
fail at the Closing Time to purchase the Initial U.S. Shares that
it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Shares"), you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Shares in
such amounts as may be agreed upon and upon the terms set forth
in this Agreement; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed
10% of the total number of Initial U.S. Shares, the
non-defaulting U.S. Underwriters shall be obligated to
purchase the full amount thereof in the proportions that
their respective Initial U.S. Share underwriting obligation
proportions bear to the underwriting obligations of all
non-defaulting U.S. Underwriters; or
(b) if the number of Defaulted Shares exceeds 10% of
the total number of Initial U.S. Shares, this Agreement
shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve
any defaulting U.S. Underwriter from liability in respect of its
default.
In the event of any such default that does not result
in a termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period
not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectuses or in any other
documents or arrangements. As used herein, the term "U.S.
Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 11.
Section 12. Notices. All notices and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered, mailed or
transmitted by any standard form of telecommunication. Notices
to you or the U.S. Underwriters shall be directed to you, c/o
Montgomery Securities, 600 Montgomery Street, San Francisco,
California 94111, attention of Richard A. Smith; notices to the
Company shall be directed to it at Lowe's Companies, Inc., P.O.
Box 1111, North Wilkesboro, North Carolina 28656, attention of
Harry B. Underwood, Jr.
Section 13. Parties. This Agreement herein set forth
is made solely for the benefit of the several U.S. Underwriters,
the Company and, to the extent expressed, any person who controls
the Company or any of the U.S. Underwriters within the meaning of
Section 15 of the 1933 Act, and the directors of the Company, its
officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns and,
subject to the provisions of Section 11, no other person shall
acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include any
purchaser, as such purchaser, from any of the several U.S.
Underwriters of the Shares. All of the obligations of the U.S.
Underwriters hereunder are several and not joint.
Section 14. Representation of U.S. Underwriters. You
will act for the several U.S. Underwriters in connection with the
transactions contemplated by this Agreement, and any action under
or in respect of this Agreement taken by you as Representatives
will be binding upon all U.S. Underwriters.
Section 15. Governing Law and Time. This Agreement
shall be governed by the laws of the State of New York.
Specified times of the day refer to New York City time.
Section 16. Counterparts. This Agreement may be
executed in one or more counterparts, and when a counterpart has
been executed by each party, all such counterparts taken together
shall constitute one and the same agreement.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us a
counterpart hereof, whereupon this instrument will become a
binding agreement between the Company and the several U.S.
Underwriters in accordance with its terms.
Very truly yours,
LOWE'S COMPANIES, INC.
By:
Name:
Title:
Confirmed and accepted as of
the date first above written:
MONTGOMERY SECURITIES
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: MONTGOMERY SECURITIES
By
Name:
Title:
For themselves and as Representatives of the
other U.S. Underwriters named in Schedule A.
18127/NYL2
SCHEDULE A
U.S. Underwriter Number of
Initial Shares
to Be Purchased
Montgomery Securities 2,105,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 2,105,000
Dean Witter Reynolds Inc. 280,000
Goldman, Sachs & Co. 280,000
Kidder, Peabody & Co. Incorporated 280,000
Lehman Brothers Inc. 280,000
Morgan Stanley & Co. Incorporated 280,000
NatWest Securities Limited 280,000
Salomon Brothers Inc 280,000
William Blair & Company 280,000
Kemper Securities, Inc. 150,000
Morgan Keegan & Company, Inc. 150,000
Tucker Anthony Incorporated 150,000
Wheat, First Securities, Inc. 150,000
Davenport & Co. of Virginia, Inc. 150,000
Total 7,200,000
LOWE'S COMPANIES, INC.
(a North Carolina corporation)
1,800,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: June 27, 1994
LOWE'S COMPANIES, INC.
(a North Carolina corporation)
1,800,000 Shares of Common Stock
(Par Value $.50 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
June 27, 1994
MONTGOMERY SECURITIES
MERRILL LYNCH INTERNATIONAL LIMITED
As Co-Lead Managers of the several Managers
c/o Montgomery Securities
600 Montgomery Street
San Francisco, CA 94111
Ladies and Gentlemen:
Lowe's Companies, Inc., a North Carolina corporation
(the "Company"), proposes to issue and sell to the managers named
in Schedule A (the "Managers"), for whom you are acting as co-
lead managers (the "Co-Lead Managers") 1,800,000 authorized but
unissued shares of the Company's Common Stock, par value $.50 per
share (shares of which class of stock of the Company are
hereinafter referred to as "Common Stock"). Such shares of
Common Stock are to be sold to each Manager, acting severally and
not jointly, in such amounts as are set forth in Schedule A
hereto opposite the name of such Manager. The Company also
grants to the Managers, severally and not jointly, the option
described in Section 2 to purchase all or any part of 270,000
additional shares of Common Stock to cover over-allotments. The
aforesaid 1,800,000 shares of Common Stock (the "Initial
International Shares"), together with all or any part of the
270,000 additional shares of Common Stock subject to the option
described in Section 2 (the "International Option Shares"), are
collectively herein called the "International Shares". The
International Shares and the Rights (as hereinafter defined) are
more fully described in the Prospectuses referred to below.
It is understood that the Company is concurrently
entering into an agreement, dated the date hereof (the "U.S.
Purchase Agreement"), providing for the sale by the Company of an
aggregate of 7,200,000 shares of Common Stock (the "Initial U.S.
Shares") through arrangements with certain underwriters in the
United States (the "U.S. Underwriters"), for whom Montgomery
Securities and Merrill Lynch, Pierce, Fenner & Smith Incorporated
are acting as representatives (the "U.S. Representatives"). It
is further understood that the Company is concurrently granting
the U.S. Underwriters an option to purchase all or any part of
1,080,000 additional shares of Common Stock (the "U.S. Option
Shares") to cover over-allotments. The Initial U.S. Shares and
the U.S. Option Shares are hereinafter collectively referred to
as the "U.S. Shares." The International Shares and the U.S.
Shares are hereinafter collectively referred to as the "Shares."
Each Share will include one-quarter of one preferred
share purchase right (a "Right"). Each Right entitles the holder
thereof to purchase, under certain circumstances, one-thousandth
of a share of the Company's preferred stock (the "Preferred
Stock"). The Rights are to be issued pursuant to a Shareholder
Rights Plan, dated as of September 9, 1988 (the "Rights Plan").
Each reference herein to a "Share" or "Shares" shall include the
Rights associated with such Share or Shares, unless the context
otherwise requires.
The Company understands that the Managers will
simultaneously enter into an agreement with the U.S. Underwriters
dated the date hereof (the "Intersyndicate Agreement") providing
for the coordination of certain transactions among the Managers
and the U.S. Underwriters under the direction of Montgomery
Securities.
You have advised us that you and the other Managers,
acting severally and not jointly, desire to purchase the
International Shares and that you have been authorized by the
other Managers to execute this Agreement on their behalf.
The initial public offering price per share for the
International Shares shall be $31.50 and the purchase price per
share for the International Shares to be paid by the several
Managers shall be $30.55, representing an amount equal to the
initial public offering price set forth above, less $0.95 per
share. The purchase price per share for the International Shares
and to be paid by the Managers hereunder shall be identical to
the purchase price per share for the U.S. Shares to be paid by
the several U.S. Underwriters under the U.S. Purchase Agreement.
The Company has prepared and filed with the Securities
and Exchange Commission (the "Commission") a registration
statement on Form S-3 (Registration No. 33-51865), including a
prospectus, relating to certain of its debt securities, preferred
stock, common stock (including the Shares) and preferred Stock
purchase rights (including the Rights) and the offering thereof
from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"). Such
Registration Statement has been declared effective by the
Commission. As provided in Section 3(a), a prospectus supplement
reflecting the terms of the Shares, the terms of the offering
thereof and other matters set forth therein has been prepared and
will be filed pursuant to Rule 424 under the 1933 Act. Two forms
of prospectus supplement are to be used in connection with the
offering and sale of the Shares: one relating to the U.S. Shares
(the "Form of U.S. Prospectus Supplement"); and one relating to
the International Shares (the "Form of International Prospectus
Supplement"). Such prospectus supplements, each in the form
first filed after the date hereof pursuant to Rule 424, are
herein referred to collectively as the "Prospectus Supplements,"
and individually as a "Prospectus Supplement." The Form of U.S.
Prospectus Supplement is identical to the Form of International
Prospectus Supplement, except for the front cover page and the
back cover page and the information contained under the caption
"Underwriting." In addition, the International Prospectus
Supplement contains an additional section entitled "Certain
United States Federal Tax Considerations for Non-U.S. Holders of
Common Stock." Such registration statement, as amended at the
date hereof, including the exhibits thereto and the documents
incorporated by reference therein, is herein called the
"Registration Statement," and the basic prospectus included
therein relating to all offerings of securities under the
Registration Statement, as supplemented by the Form of U.S.
Prospectus Supplement and the Form of International Prospectus
Supplement, are herein called the "U.S. Prospectus" and the
"International Prospectus," respectively, and collectively the
"Prospectuses," and individually, a "Prospectus," except that, if
such basic prospectus is amended or supplemented on or prior to
the date on which the U.S. Prospectus Supplement and the
International Prospectus Supplement are first filed pursuant to
Rule 424, the terms "U.S. Prospectus," "International
Prospectus," and "Prospectuses" and "Prospectus" shall refer to
the basic prospectus as so amended or supplemented and as
supplemented by the U.S. Prospectus Supplement and the
International Prospectus Supplement, as the case may be, in
either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference
therein.
The Company understands that the Managers propose to
make a public offering of the International Shares as soon as you
deem advisable after this Agreement has been executed and
delivered.
Section 1. Representations and Warranties. (a) The
Company represents and warrants to and agrees with each of the
Managers that:
(i) On the original effective date of the Registration
Statement, on the effective date of the most recent post-
effective amendment thereto, if any, and on the date of the
filing by the Company of any annual report on Form 10-K
after the original filing of the Registration Statement, the
Registration Statement complied in all material respects
with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act
Regulations") and did not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; on the date hereof and at the
Closing Time (as defined below), the Registration Statement,
and any amendments thereof, and the Prospectuses, and any
amendments thereof and supplements thereto, comply and will
comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and none of such
documents includes or will include an untrue statement of a
material fact or omits or will omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that
the Company makes no representations or warranties as to
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by or on behalf of any Manager or U.S. Underwriter,
directly or through you or through the U.S. Representatives,
expressly for use in the Registration Statement or the
Prospectuses.
(ii) The documents incorporated by reference in the
Prospectuses, at the time they were filed with the
Commission, complied in all material respects with the
requirements of the 1934 Act, and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations")
and, when read together and with the other information in
the Prospectuses do not and will not, on the date hereof and
at the Closing Time, contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein not misleading.
(iii) Deloitte & Touche, who have reported upon the
audited financial statements and schedules included or
incorporated by reference in the Registration Statement, are
independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed
and delivered by the Company.
(v) The consolidated financial statements included or
incorporated by reference in the Registration Statement
present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and
the consolidated results of operations and the consolidated
cash flows of the Company and its subsidiaries for the
periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved. The financial statement schedules, if
any, included in the Registration Statement present fairly
the information required to be stated therein. The selected
financial data included or incorporated by reference in the
Prospectuses present fairly the information shown therein
and have been compiled on a basis consistent with that of
the audited consolidated financial statements included or
incorporated by reference in the Registration Statement.
(vi) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of North Carolina with corporate power and authority
under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectuses; and
the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have
a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(vii) Each of Lowe's Home Centers, Inc., a North
Carolina corporation, LF Corporation, a Delaware
corporation, and The Contractor Yard, Inc., a North Carolina
corporation (collectively, the "Significant Subsidiaries";
"subsidiaries" has the meaning set forth in Rule 405 under
the 1933 Act), is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and
authority under such laws to own, lease and operate its
properties and conduct its business; and each Significant
Subsidiary is duly qualified to transact business as a
foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have
a material adverse effect on the Company and its
subsidiaries, considered as one enterprise. All of the
outstanding shares of capital stock of each Significant
Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable and are owned by the
Company, directly or through one or more Significant
Subsidiaries, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
(viii) The Company had at the date indicated a duly
authorized, issued and outstanding capitalization as set
forth in the Prospectuses under the caption
"Capitalization", the Shares conform to the description
thereof contained or incorporated by reference in the
Prospectuses and such description conforms to the rights set
forth in the instruments defining the same.
(ix) The Shares have been duly authorized and, when
issued and paid for in accordance with this Agreement and
the U.S. Purchase Agreement, will be validly issued, fully
paid and nonassessable; no holder thereof will be subject to
personal liability by reason of being such a holder; such
Shares are not subject to the preemptive rights of any
stockholder of the Company; and all corporate action
required to be taken for the authorization, issue and sale
of the Shares has been validly and sufficiently taken.
(x) All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid and nonassessable; no holder thereof is or
will be subject to personal liability by reason of being
such a holder; and none of the outstanding shares of capital
stock of the Company issued since December 19, 1979 was
issued in violation of the preemptive rights of any
stockholder of the Company.
(xi) The Rights associated with the Shares have been
duly authorized and validly reserved for issuance upon the
issuance of the Shares and, when so issued in accordance
with the terms of the Rights Plan, will be validly issued;
the shares of Preferred Stock that may be issued to holders
of Rights pursuant to the Rights Plan have been duly
authorized and validly reserved for issuance upon the
exercise of the Rights and, when issued and delivered in
accordance with the terms of the Rights Plan, will be
validly issued, fully paid and nonassessable and, except as
otherwise set forth in the Prospectuses, the issuance of
such shares of Preferred Stock is not subject to any
preemptive or similar rights; and the Rights and the
Preferred Stock conform to the descriptions thereof
contained in the Prospectuses.
(xii) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein or
contemplated thereby, there has not been (A) any material
adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business,
(B) any transaction entered into by the Company or any
subsidiary, other than in the ordinary course of business,
that is material to the Company and its subsidiaries,
considered as one enterprise, or (C) any dividend (other
than ordinary quarterly dividends declared, paid or made in
the ordinary course of business) or distribution of any kind
declared, paid or made by the Company on its capital stock.
(xiii) Neither the Company nor any Significant
Subsidiary is in default in the performance or observance of
any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a
party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that
would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise. The execution and delivery of
this Agreement and the U.S. Purchase Agreement by the
Company, the issuance and delivery of the Shares and the
Rights, the consummation by the Company of the transactions
contemplated in this Agreement and the U.S. Purchase
Agreement, in the Rights Plan, in the Prospectuses and in
the Registration Statement (except to the extent not
applicable to the offering of the U.S. Shares or the
International Shares) and compliance by the Company with the
terms of this Agreement and the U.S. Purchase Agreement and
the Rights Plan have been duly authorized by all necessary
corporate action on the part of the Company and do not and
will not result in any violation of the charter or by-laws
of the Company or any Significant Subsidiary, and do not and
will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
any Significant Subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any
Significant Subsidiary is a party or by which it may be
bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise)
or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Significant Subsidiary
or any of their respective properties.
(xiv) No authorization, approval, consent or
license of any government, governmental instrumentality or
court, domestic or foreign (other than under the 1933 Act
and the securities or blue sky laws of the various states),
is required for the valid authorization, issuance, sale and
delivery of the Shares and the Rights, or for the execution,
delivery or performance of the Rights Plan by the Company.
(xv) Except as disclosed in the Prospectuses, there is
no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Significant
Subsidiary that is required to be disclosed in the
Prospectuses or that could result in any material adverse
change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, or that
could materially and adversely affect the properties or
assets of the Company and its subsidiaries, considered as
one enterprise, or that could adversely affect the
consummation of the transactions contemplated in this
Agreement and the U.S. Purchase Agreement; the aggregate of
all pending legal or governmental proceedings that are not
described in the Prospectuses to which the Company or any
Significant Subsidiary is a party or which affect any of
their respective properties, including ordinary routine
litigation incidental to the business of the Company or any
Significant Subsidiary, would not have a material adverse
effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise.
(xvi) There are no contracts or documents of a
character required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits to
the Registration Statement that are not described and filed
as required.
(xvii) The Company and the Significant Subsidiaries
each owns, possesses or has obtained all material
governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations necessary to own
or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted (other
than such licenses, permits, certificates, consents, orders,
approvals and authorizations which, if neither owned,
possessed nor obtained, would not have a material adverse
impact on the business of the Company and its subsidiaries,
considered as one enterprise), and neither the Company nor
any Significant Subsidiary has received any notice of
proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders,
approvals or authorizations.
(xviii) The Company and the Significant Subsidiaries
each owns or possesses, or can acquire on reasonable terms,
adequate patents, patent licenses, trademarks, service marks
and trade names necessary to carry on its business as
presently conducted, and neither the Company nor any
Significant Subsidiary has received any notice of
infringement of or conflict with asserted rights of others
with respect to any patents, patent licenses, trademarks,
service marks or trade names that in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could
materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one
enterprise.
(xix) To the best knowledge of the Company, no
labor problem exists with its employees or with employees of
the Significant Subsidiaries or is imminent that could
adversely affect the Company and its subsidiaries,
considered as one enterprise, and the Company is not aware
of any existing or imminent labor disturbance by the
employees of any of its or the Significant Subsidiaries'
principal suppliers, contractors or customers that could be
expected to materially adversely affect the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xx) The Company has not taken and will not take,
directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Common
Stock.
(xxi) Except as disclosed in the Registration
Statement and except as would not individually or in the
aggregate have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, (A) the Company and the
Significant Subsidiaries are each in compliance with all
applicable Environmental Laws, (B) the Company and the
Significant Subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements,
(C) there are no pending or threatened Environmental Claims
against the Company or any of the Significant Subsidiaries,
and (D) there are no circumstances with respect to any
property or operations of the Company or the Significant
Subsidiaries that could reasonably be anticipated to form
the basis of an Environmental Claim against the Company or
the Significant Subsidiaries.
For purposes of this Agreement, the following terms
shall have the following meanings: "Environmental Law"
means any United States (or other applicable jurisdiction's)
federal, state, local or municipal statute, law, rule,
regulation, ordinance, code, policy or rule of common law
and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent
decree or judgment, relating to the environment, health,
safety or any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any
governmental authority. "Environmental Claims" means any
and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating in any way to any Environmental Law.
(b) Any certificate signed by any officer of the
Company or any Significant Subsidiary and delivered to you or to
counsel for the Managers shall be deemed a representation and
warranty by the Company to each Manager as to the matters covered
thereby.
Section 2. Sale and Delivery to the Managers; Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Manager, and each
Manager agrees, severally and not jointly, to purchase from the
Company, at the purchase price per share for the Initial
International Shares set forth in the sixth paragraph of this
Agreement, the number of Initial International Shares set forth
opposite the name of such Underwriter in Schedule A, plus any
additional number of Initial International Shares that such
Manager may become obligated to purchase pursuant to Section 11
of this Agreement.
(b) In addition, on the basis of the representations
and warranties herein contained, and subject to the terms and
conditions herein set forth, the Company hereby grants an option
to the Managers, severally and not jointly, to purchase up to an
additional 270,000 International Option Shares at the same
purchase price per share as shall be applicable to the Initial
International Shares. The option hereby granted will expire 30
days after the date of this Agreement, and may be exercised, in
whole or in part (but not more than once), only for the purpose
of covering over-allotments that may be made in connection with
the offering and distribution of the Initial International Shares
upon notice by you to the Company setting forth the number of
International Option Shares as to which the several Managers are
exercising the option, and the time and date of payment and
delivery thereof. Such time and date of delivery (the "Date of
Delivery") shall be determined by you but shall not be later than
seven full business days after the exercise of such option, nor
in any event prior to the Closing Time. If the option is
exercised as to all or any portion of the International Option
Shares, each of the Managers, acting severally and not jointly,
will purchase from the Company that portion of the aggregate
number of International Option Shares being purchased which the
number of Initial International Shares set forth opposite the
name of such Manager bears to the total number of Initial
International Shares (such proportion is hereinafter referred to
as such Manager's "underwriting obligation proportion"), subject
to such adjustments as you, in your discretion, shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial International Shares shall be made
at the offices of Shearman & Sterling, 599 Lexington Avenue,
New York, New York 10022, or at such other place as shall be
agreed upon by the Company and you, at 10:00 A.M. on the fifth
full business day after the date of this Agreement (unless
postponed pursuant to Section 11), or at such other time not more
than ten full business days thereafter as you and the Company
shall determine (such date and time of payment and delivery being
herein called the "Closing Time"). In addition, in the event
that any or all of the International Option Shares are purchased
by the Managers, payment of the purchase price for, and delivery
of certificates for, such International Option Shares shall be
made at the offices of Shearman & Sterling set forth above, or at
such other place as the Company and you shall determine, on the
Date of Delivery as specified in the notice from you to the
Company. Payment shall be made to the Company by certified or
official bank check or checks in New York Clearing House or
similar next day funds payable to the order of the Company,
against delivery to you for the respective accounts of the
several Managers of certificates for the International Shares to
be purchased by them.
(d) Certificates for the Initial International Shares
and International Option Shares to be purchased by the Managers
shall be in such denominations and registered in such names as
you may request in writing at least two full business days before
the Closing Time or the Date of Delivery, as the case may be.
The certificates for the Initial International Shares and
International Option Shares will be made available in New York
City for examination and packaging by you not later than
10:00 A.M. on the business day prior to the Closing Time or the
Date of Delivery, as the case may be.
(e) It is understood that each Manager has authorized
you, for its account, to accept delivery of, receipt for, and
make payment of the purchase price for, the International Shares
that it has agreed to purchase. You, individually and not as Co-
Lead Managers, may (but shall not be obligated to) make payment
of the purchase price for the Initial International Shares, or
International Option Shares, to be purchased by any Manager whose
check or checks shall not have been received by the Closing Time
or the Date of Delivery, as the case may be.
(f) The obligations of the Company to sell to each
Manager the Initial International Shares and the International
Option Shares and the several and not joint obligations of the
Managers to purchase and pay for the International Shares, upon
the terms and subject to the conditions contained herein, are
subject to the concurrent closing of the sale of the Initial U.S.
Shares to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement.
Section 3. Certain Covenants of the Company. The
Company covenants with each Manager as follows:
(a) If reasonably requested by you in connection with
the offering of the Shares, the Company will prepare
preliminary prospectus supplements containing such
information as you and the Company deem appropriate, and,
immediately following the execution of this Agreement, the
Company will prepare Prospectus Supplements that comply with
the 1933 Act and the 1933 Act Regulations. The U.S.
Prospectus Supplement shall set forth the number of Shares,
the number of U.S. Shares, the name of each U.S. Underwriter
participating in the offering and the number of U.S. Shares
that each severally has agreed to purchase, the name of each
U.S. Underwriter, if any, acting as representative of the
U.S. Underwriters in connection with the offering, the price
at which the U.S. Shares are to be purchased by the
Underwriters from the Company, any initial public offering
price and any selling concession and reallowance, and such
other information as the U.S. Representatives and the
Company deem appropriate in connection with the offering of
the U.S. Shares; and the International Prospectus Supplement
shall set forth the number of Shares, the number of
International Shares, the name of each Manager participating
in the offering and the number of International Shares that
each severally has agreed to purchase, the name of each
Manager, if any, acting as co-lead manager in connection
with the offering, the price at which the International
Shares are to be purchased by the Managers from the Company,
any initial public offering price and any selling concession
and reallowance, and such other information as you and the
Company deem appropriate in connection with the offering of
the International Shares. The Company will promptly
transmit copies of the Prospectus Supplements to the
Commission for filing pursuant to Rule 424 under the
1933 Act and will furnish to the U.S. Underwriters as many
copies of any preliminary prospectus supplements and the
Prospectuses as you shall reasonably request.
(b) The Company will comply to the best of its ability
with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Shares as contemplated
in this Agreement, the U.S. Purchase Agreement and the
Prospectuses. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of
the Shares any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel
for the Managers or counsel for the Company, to amend the
Registration Statement or amend or supplement the
Prospectuses in order that such Prospectuses will not
include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend the
Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to
Section 3(d), such amendment or supplement as may be
necessary to correct such untrue statement or omission or to
make the Registration Statement or such Prospectuses comply
with such requirements.
(c) During the period when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will, subject to Section 3(d), file
promptly all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15(d) of the
1934 Act.
(d) During the period when a Prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will inform you of its intention to file
any amendment to the Registration Statement, any supplement
to the Prospectuses or any document that would as a result
thereof be incorporated by reference in the Prospectuses;
will furnish you with copies of any such amendment,
supplement or other document a reasonable time in advance of
filing; and will not file any such amendment, supplement or
other document in a form to which you or their counsel shall
reasonably object.
(e) During the period when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Shares, the Company will notify you immediately, and confirm
the notice in writing, (i) of the effectiveness of any
amendment to the Registration Statement, (ii) of the mailing
or the delivery to the Commission for filing of any
supplement to the Prospectuses or any document that would as
a result thereof be incorporated by reference in the
Prospectuses, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the
Prospectuses or the Prospectus Supplements, (iv) of any
request by the Commission for any amendment to the
Registration Statement or any supplement to the Prospectuses
or for additional information relating thereto or to any
document incorporated by reference in the Prospectuses and
(v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the institution
or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order suspending
such qualification and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you
as many signed copies of the Registration Statement (as
originally filed) and of all amendments thereto, whether
filed before or after the Registration Statement became
effective, copies of all exhibits and documents filed
therewith or incorporated by reference therein (through the
end of the period when a prospectus is required by the
1933 Act to be delivered in connection with sales of the
Shares) and signed copies of all consents and certificates
of experts, as you may reasonably request, and has furnished
or will furnish to you, for each of the Managers, one
conformed copy of the Registration Statement (as originally
filed) and of each amendment thereto (including documents
incorporated by reference into the Prospectuses but without
exhibits).
(g) The Company will use its best efforts, in
cooperation with the Managers, to qualify the Shares for
offering and sale under the applicable securities laws of
such states and other jurisdictions as you may designate and
to maintain such qualifications in effect for a period of
not less than one year from the date hereof; provided,
however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the
Shares have been qualified as above provided. The Company
will also supply you with such information as is necessary
for the determination of the legality of the Shares for
investment under the laws of such jurisdictions as you may
request.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than
45 days after the close of the period covered thereby, an
earnings statement of the Company (in form complying with
the provisions of Rule 158 of the 1933 Act Regulations),
covering (i) a period of 12 months beginning after the
effective date of the Registration Statement and covering a
period of 12 months beginning after the effective date of
any post-effective amendment to the Registration Statement
but not later than the first day of the Company's fiscal
quarter next following such respective effective dates and
(ii) a period of 12 months beginning after the date of this
Agreement but not later than the first day of the Company's
fiscal quarter next following the date of this Agreement.
(i) The Company will use its best efforts to cause the
Shares to be duly authorized for listing on the New York,
London and Pacific Stock Exchanges and to be registered
under the 1934 Act.
(j) For a period of five years after the Closing Time,
the Company will furnish to you and, upon request, to each
U.S. Underwriter, copies of all annual reports, quarterly
reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company
to its stockholders or security holders generally.
(k) For a period of 90 days from the date hereof, the
Company will not, without your prior written consent,
directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Common
Stock or securities convertible into Common Stock, other
than to the Managers pursuant to this Agreement and to the
U.S. Underwriters pursuant to the U.S. Purchase Agreement
and other than pursuant to employee benefit plans (including
contributions of Common Stock to the Company's Employee
Stock Ownership Plan), dividend reinvestment plans, exercise
of currently outstanding options and conversion of the
Company's 3% Convertible Subordinated Notes.
(l) The Company has complied and will comply with all
the provisions of Florida H.B. 1771, codified as Section
517.075 of the Florida statutes, and all regulations
promulgated thereunder relating to issuers doing business in
Cuba.
Section 4. Payment of Expenses. The Company will pay
and bear all costs and expenses incident to the performance of
its obligations under this Agreement, including (a) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally
filed and as amended, the preliminary prospectus supplements and
the Prospectuses and any amendments or supplements thereto, and
the cost of furnishing copies thereof in accordance with Section
3 of this Agreement and the U.S. Purchase Agreement, to the U.S.
Underwriters and the Managers, (b) the preparation, printing and
distribution of this Agreement, the U.S. Purchase Agreement, the
Agreement Among Managers, the Intersyndicate Agreement, the
Shares and the Blue Sky Survey, (c) the delivery of the Shares to
the U.S. Underwriters and the Managers, including any stock
transfer taxes payable upon the sale of the Shares to the U.S.
Underwriters and the Managers, (d) the fees and disbursements of
the Company's counsel and accountants, (e) the qualification of
the Shares under the applicable securities laws in accordance
with Section 3(g) and any filing for review of the offering with
the National Association of Securities Dealers, Inc., including
filing fees and fees and disbursements of counsel for the
Managers in connection therewith and in connection with the Blue
Sky Survey and (f) any fees and expenses incurred in connection
with the listing of the Shares on the New York, London and
Pacific Stock Exchange.
If this Agreement is terminated by you in accordance
with the provisions of Section 5 or 10(a)(i), the Company shall
reimburse the Managers for all their out-of-pocket expenses,
including the fees and disbursements of counsel for the Managers.
Section 5. Conditions of Managers' Obligations. The
obligations of the several Managers to purchase and pay for the
International Shares that they have respectively agreed to
purchase pursuant to this Agreement (including any Option
International Shares as to which the option granted in Section 2
has been exercised and the Date of Delivery determined by you is
the same as the Closing Time) are subject to the accuracy of the
representations and warranties of the Company contained herein or
in certificates of any officer of the Company or any Significant
Subsidiary delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to
the following further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or,
to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part
of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the
Managers.
(b) (i) At the Closing Time, you shall have received a
signed opinion of William C. Warden, Jr., General Counsel
for the Company, dated as of the Closing Time, together with
signed or reproduced copies of such opinion for each of the
other Managers, in form and substance satisfactory to
counsel for the Managers, to the effect that:
(A) The Company is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of North Carolina, with
corporate power and authority under such laws to own,
lease and operate its properties and conduct its
business as described in the Prospectuses.
(B) Each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation with corporate power and authority under
such laws to own, lease and operate its properties and
conduct its business.
(C) All of the outstanding shares of capital
stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable,
and no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of
the outstanding shares of capital stock of the Company
was issued in violation of the preemptive rights of any
stockholder of the Company.
(D) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectuses under the heading "Capitalization".
(E) All of the outstanding shares of capital
stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and
non-assessable; all of such shares are owned by the
Company, directly or through one or more Significant
Subsidiaries, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance
of any kind; no holder thereof is subject to personal
liability by reason of being such a holder and none of
such shares was issued in violation of the preemptive
rights of any stockholder of the Significant
Subsidiaries.
(F) The Shares have been duly authorized and
validly issued and are fully paid and non-assessable;
no holder thereof will be subject to personal liability
by reason of being such a holder; and the issuance of
such Shares is not subject to preemptive rights and all
corporate action required to be taken for the
authorization, issue and sale of such Shares has been
validly and sufficiently taken.
(G) The Rights to which holders of Common Stock
are entitled have been duly authorized and validly
issued; the shares of Preferred Stock that may be
issued to holders of Rights pursuant to the Rights Plan
have been duly authorized and validly reserved for
issuance upon the exercise of the Rights; and the
Rights and the Preferred Stock conform to the
descriptions thereof contained in the Prospectuses.
(H) Such counsel does not know of any statutes or
regulations, or any pending or threatened legal or
governmental proceedings, required to be described in
the Prospectuses that are not described as required,
nor of any contracts or documents of a character
required to be described or referred to in the
Registration Statement or the Prospectuses or to be
filed as exhibits to the Registration Statement that
are not described, referred to or filed as required.
(I) To the knowledge of such counsel, no default
exists in the performance or observance of any material
obligation, agreement, covenant or condition contained
in any contract, indenture, loan agreement, note, lease
or other agreement or instrument that is described or
referred to in the Registration Statement or the
Prospectuses or filed as an exhibit to the Registration
Statement.
(J) The execution and delivery of this Agreement
and the U.S. Purchase Agreement by the Company, the
issuance and delivery of the Shares and the Rights, the
consummation by the Company of the transactions
contemplated in this Agreement and the U.S. Purchase
Agreement, in the Prospectuses and in the Registration
Statement (except to the extent not applicable to the
offering of the U.S. Shares or International Shares)
and compliance by the Company with the terms of this
Agreement and the U.S. Purchase Agreement do not and
will not result in any violation of the charter or
by-laws of the Company or any Significant Subsidiary,
and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or
constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any
Significant Subsidiary under (1) any contract,
indenture, mortgage, loan agreement, note, lease or any
other agreement or instrument known to such counsel, to
which the Company or any Significant Subsidiary is a
party or by which it may be bound or to which any of
its properties may be subject (except for such
conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse
effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one
enterprise), (2) any existing applicable law, rule or
regulation (other than the securities or blue sky laws
of the various states, as to which such counsel need
express no opinion), or (3) any judgment, order or
decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over
the Company or any Significant Subsidiary or any of
their respective properties.
(K) The descriptions in the Prospectuses of the
statutes, regulations, legal or governmental
proceedings, contracts and other documents therein
described are accurate and fairly summarize the
information required to be shown (except for the
statements made in the International Prospectus under
"Certain United States Federal Tax Considerations for
Non-U.S. Holders of Common Stock," as to which such
counsel need express no opinion).
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale
of the Shares pursuant to this Agreement as counsel for the
Managers may reasonably request. In giving such opinion,
such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of
North Carolina and the federal law of the United States,
upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the Managers, in which case the
opinion shall state that they believe you and they are
entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and the Significant Subsidiaries and
certificates of public officials; provided that such
certificates have been delivered to the Managers.
(ii) At the Closing Time, you shall have received a
signed opinion of Hunton & Williams, counsel for the
Company, dated as of the Closing Time, together with signed
or reproduced copies of such opinion for each of the other
Managers, in form and substance satisfactory to counsel for
the Managers, to the effect that:
(A) The Company is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of North Carolina with
corporate power and authority under such laws to own,
lease and operate its properties and conduct its
business as described in the Prospectuses.
(B) The Shares have been duly authorized and
validly issued, and are fully paid and non-assessable;
no holder thereof will be subject to personal liability
by reason of being such a holder; and the issuance of
such Shares is not subject to preemptive rights.
(C) The Rights to which holders of Common Stock
are entitled have been duly authorized and validly
issued; the shares of Preferred Stock that may be
issued to holders of Rights pursuant to the Rights Plan
have been duly authorized and validly reserved for
issuance upon the exercise of the Rights; and the
Rights and the Preferred Stock conform to the
descriptions thereof contained in the Prospectuses.
(D) The Shares conform in all material respects
as to legal matters to the descriptions thereof in the
Prospectuses.
(E) This Agreement has been duly authorized,
executed and delivered by the Company.
(F) No authorization, approval, consent or
license of any government, governmental instrumentality
or court, domestic or foreign (other than under the
1933 Act and the securities or blue sky laws of the
various states), is required for the valid
authorization, issuance, sale and delivery of the
Shares.
(G) The statements made in the International
Prospectus under "Certain United States Federal Tax
Considerations for Non-U.S. Holders of Common Stock,"
to the extent that they constitute matters of law or
legal conclusions, have been reviewed by such counsel
and fairly present the information disclosed therein in
all material respects.
(H) The execution and delivery of this Agreement
and the U.S. Purchase Agreement by the Company, the
issuance and delivery of the Shares and the Rights, the
consummation by the Company of the transactions
contemplated in this Agreement and the U.S. Purchase
Agreement, in the Prospectuses and in the Registration
Statement (except to the extent not applicable to the
U.S. Shares and the International Shares) and
compliance by the Company with the terms of this
Agreement and the U.S. Purchase Agreement do not and
will not result in any violation of the charter or
by-laws of the Company or any Significant Subsidiary,
and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or
constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any
Significant Subsidiary under any agreement or
instrument under which indebtedness of the Company or
any Significant Subsidiary is outstanding (except for
such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one
enterprise).
(I) The Registration Statement became effective
under the 1933 Act on February 8, 1994; any required
filing of any preliminary prospectus supplement or the
Prospectus Supplement pursuant to Rule 424(b) has been
made in the manner and within the time period required
by Rule 424(b); and, to the best of the knowledge of
such counsel, the Registration Statement is still
effective, no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
are pending or are contemplated under the 1933 Act.
(J) The Registration Statement and the
Prospectuses, excluding the documents incorporated by
reference therein, and each amendment or supplement
thereto (except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), as of their respective effective
or issue dates, appear on their face to have been
appropriately responsive in all material respects to
the requirements of the 1933 Act and the 1933 Act
Regulations.
(K) The documents incorporated by reference in
the Prospectuses (except for the financial statements
and other financial or statistical data included
therein or omitted therefrom, as to which such counsel
need express no opinion, and except to the extent that
any statement therein is modified or superseded in the
Prospectuses), as of the dates they were filed with the
Commission, appear on their face to have been
appropriately responsive in all material respects to
the requirements of the 1934 Act and the 1934 Act
Regulations.
(L) Such counsel have participated in the
preparation of the Registration Statement and the
Prospectuses and are familiar with or have participated
in the preparation of the documents incorporated by
reference in the Prospectuses and no facts have come to
the attention of such counsel to lead them to believe
(1) that the Registration Statement or any amendment
thereto (except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), on the original effective date of
the Registration Statement, on the effective date of
the most recent post-effective amendment thereto, if
any, on the date of the filing of any annual report on
Form 10-K after the filing of the Registration
Statement, on the date of this Agreement, or on the
date any such amendment became effective after the date
of this Agreement, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or (2) that the
Prospectuses or any amendment or supplement thereto
(except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), at the time the Prospectus
Supplements were issued, at the time any such amended
or supplemented prospectuses were issued or at the
Closing Time (or, if any International Option Shares
are purchased, at the Date of Delivery), included or
include an untrue statement of a material fact or
omitted or omit to state a material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading or (3) that the documents incorporated by
reference in the Prospectuses (except for the financial
statements and other financial or statistical data
included therein or omitted therefrom, as to which such
counsel need express no opinion, and except to the
extent that any statement therein is modified or
superseded in the Prospectuses), as of the dates they
were filed with the Commission, included an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading.
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale
of the Shares pursuant to this Agreement as counsel for the
Managers may reasonably request. In giving such opinion,
such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the States of
New York and North Carolina and the federal law of the
United States, upon opinions of other counsel, who shall be
counsel satisfactory to counsel for the Managers, in which
case the opinion shall state that they believe you and they
are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and the Significant Subsidiaries and
certificates of public officials; provided that such
certificates have been delivered to the Managers.
(c) At the Closing Time, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the
Managers, dated as of the Closing Time, together with signed
or reproduced copies of such opinion for each of the other
Managers, to the effect that the opinions delivered pursuant
to Sections 5(b)(i) and 5(b)(ii) hereof appear on their face
to be appropriately responsive to the requirements of this
Agreement except, specifying the same, to the extent waived
by you, and with respect to the incorporation and legal
existence of the Company, the Shares, this Agreement, the
U.S. Purchase Agreement, the Registration Statement, the
Prospectuses, the documents incorporated by reference and
such other related matters as you may require. In giving
such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of
the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to you.
Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the
Company and the Significant Subsidiaries and certificates of
public officials; provided that such certificates have been
delivered to the Managers.
(d) At the Closing Time, (i) the Registration
Statement and the Prospectuses, as they may then be amended
or supplemented, shall contain all statements that are
required to be stated therein under the 1933 Act and the
1933 Act Regulations and in all material respects shall
conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the
Prospectuses, as they may then be amended or supplemented,
shall contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading,
(ii) there shall not have been, since the respective dates
as of which information is given in the Registration
Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the
ordinary course of business, (iii) no action, suit or
proceeding shall be pending or, to the knowledge of the
Company, threatened against the Company or any Significant
Subsidiary that would be required to be set forth in the
Prospectuses other than as set forth therein and no
proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any Significant
Subsidiary before or by any government, governmental
instrumentality or court, domestic or foreign, that could
result in any material adverse change in the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise, other than as set forth in the
Prospectuses, (iv) the Company shall have complied with all
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and
(v) the other representations and warranties of the Company
set forth in Section 1(a) shall be accurate as though
expressly made at and as of the Closing Time. At the
Closing Time, you shall have received a certificate of the
President or a Vice President, and the Treasurer or
Controller, of the Company, dated as of the Closing Time, to
such effect.
(e) At the time that this Agreement is executed by the
Company, you shall have received from Deloitte & Touche a
letter, dated such date, in form and substance satisfactory
to you, together with signed or reproduced copies of such
letter for each of the other Managers, confirming that they
are independent public accountants with respect to the
Company within the meaning of the 1933 Act and applicable
published 1933 Act Regulations, and stating in effect that:
(i) in their opinion, the audited financial
statements and the related financial statement
schedules included or incorporated by reference in the
Registration Statement and the Prospectuses comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934
Act and the published rules and regulations thereunder;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted
auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of
the Company for the three month periods ended April 30,
1993 and April 30, 1994, included or incorporated by
reference in the Registration Statement and the
Prospectuses (collectively, the "10-Q Financials"), a
reading of the latest available unaudited interim
consolidated financial statements of the Company, a
reading of the minutes of all meetings of the
stockholders and directors of the Company and its
subsidiaries since February 1, 1994, inquiries of
certain officials of the Company and its subsidiaries
responsible for financial and accounting matters with
respect to the changes in the financial statement items
after April 30, 1994 performed at the request of the
Company, and such other inquiries and procedures as may
be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the 10-Q Financials incorporated by
reference in the Registration Statement and the
Prospectuses do not comply as to form in all
material respects with the accounting requirements
of the 1934 Act and the 1934 Act Regulations
applicable to unaudited financial statements
included in Form 10-Q or are not in conformity
with generally accepted accounting principles
applied on a basis substantially consistent with
that of the audited financial statements included
or incorporated by reference in the Registration
Statement and the Prospectuses;
(B) at May 30, 1994 and at a specified date
not more than five days prior to the date of this
Agreement, there was any change in the common
stock of the Company and its subsidiaries or any
decrease in the consolidated net current assets or
consolidated net assets of the Company and its
subsidiaries or any increase in the long-term debt
of the Company and its subsidiaries, in each case
as compared with amounts shown in the April 30,
1994 unaudited consolidated balance sheet included
in the Registration Statement, except in each case
for changes, decreases or increases that the
Registration Statement discloses have occurred or
may occur; or
(C) for the period from May 1, 1994 to May
31, 1994 and for the period from June 1, 1994 to a
specified date not more than five days prior to
the date of this Agreement, there were any
decreases in consolidated net sales or in the
total or per share amounts of consolidated net
income, in each case as compared with the
comparable period in the preceding year, except in
each case for any decreases that the Registration
Statement discloses have occurred or may occur;
(iii) based upon the procedures set forth in
clause (ii) above and a reading of the consolidated
financial statements and financial statement schedules
included in the Registration Statement and a reading of
the financial statements, from which certain of such
data were derived, nothing has come to their attention
that gives them reason to believe that the consolidated
financial statements and financial statement schedules
included in the Registration Statement do not comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933
Act Regulations;
(iv) in addition to the procedures referred to in
clause (ii) above, they have performed other specified
procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and
financial information appearing in the Registration
Statement, which have previously been specified by you
and which shall be specified in such letter, and have
compared certain of such items with, and have found
such items to be in agreement with, the accounting and
financial records of the Company.
(f) At the Closing Time, you shall have received from
Deloitte & Touche a letter, in form and substance
satisfactory to you and dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter
furnished pursuant to Section 5(e), except that the
specified date referred to shall be a date not more than
five days prior to the Closing Time.
(g) At the Closing Time, counsel for the Managers
shall have been furnished with all such documents,
certificates and opinions as they may reasonably request for
the purpose of enabling them to pass upon the issuance and
sale of the Shares as contemplated in this Agreement and the
matters referred to in Section 5(c) and in order to evidence
the accuracy and completeness of any of the representations,
warranties or statements of the Company, the performance of
any of the covenants of the Company, or the fulfillment of
any of the conditions herein contained; and all proceedings
taken by the Company at or prior to the Closing Time in
connection with the authorization, issuance and sale of the
Shares as contemplated in this Agreement shall be
satisfactory in form and substance to you and to counsel for
the Managers.
(h) The Shares shall have been duly authorized for
listing by the New York, London and Pacific Stock Exchanges
on the date of this Agreement.
If any of the conditions specified in this Section 5
shall not have been fulfilled when and as required by this
Agreement, this Agreement may be terminated by you on notice to
the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other
party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 7, 8 and 9 shall remain
in effect.
Section 6. Conditions to Purchase of International
Option Shares. In the event that the Managers exercise their
option granted in Section 2 hereof to purchase all or any of the
International Option Shares and the Date of Delivery determined
by you pursuant to Section 2 hereof is later than the Closing
Time, the obligations of the several Managers to purchase and pay
for the International Option Shares that they shall have
respectively agreed to purchase pursuant to this Agreement are
subject to the accuracy of the representations and warranties of
the Company herein contained, to the performance by the Company
of its obligations hereunder and to the following further
conditions:
(a) The Registration Statement shall remain effective
at the Date of Delivery, and, at the Date of Delivery, no
stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or
shall be pending or, to your knowledge or the knowledge of
the Company, shall be contemplated by the Commission, and
any request on the part of the Commission for additional
information shall have been complied with to the
satisfaction of counsel for the Managers.
(b) At the Date of Delivery, the provisions of
Sections 5(d)(i) through 5(d)(v) shall have been complied
with at and as of the Date of Delivery and, at the Date of
Delivery, you shall have received a certificate of the
President or a Vice President, and the Treasurer or
Controller, of the Company, dated as of the Date of
Delivery, to such effect.
(c) At the Date of Delivery, you shall have received
the favorable opinions of William C. Warden, Jr., General
Counsel of the Company, and Hunton & Williams, counsel for
the Company, together with signed or reproduced copies of
such opinions for each of the other Managers, in each case
in form and substance satisfactory to counsel for the
Managers, dated as of the Date of Delivery, relating to the
International Option Shares and otherwise to the same effect
as the opinions required by Section 5(b)(i) and 5(b)(ii),
respectively.
(d) At the Date of Delivery, you shall have received
the favorable opinion of Shearman & Sterling, counsel for
the Managers, dated as of the Date of Delivery, relating to
the International Option Shares and otherwise to the same
effect as the opinion required by Section 5(c).
(e) At the Date of Delivery, you shall have received a
letter from Deloitte & Touche, in form and substance
satisfactory to you and dated as of the Date of Delivery, to
the effect that they reaffirm the statements made in the
letter furnished pursuant to Section 5(e), except that the
specified date referred to shall be a date not more than
five days prior to the Date of Delivery.
(f) At the Date of Delivery, counsel for the Managers
shall have been furnished with all such documents,
certificates and opinions as they may request for the
purpose of enabling them to pass upon the issuance and sale
of the International Option Shares as contemplated in this
Agreement and the matters referred to in Section 6(d) and in
order to evidence the accuracy and completeness of any of
the representations, warranties or statements of the
Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company at or
prior to the Date of Delivery in connection with the
authorization, issuance and sale of the International Option
Shares as contemplated in this Agreement shall be
satisfactory in form and substance to you and to counsel for
the U.S. Underwriters.
Section 7. Indemnification. (a) The Company agrees
to indemnify and hold harmless each Manager and each person, if
any, who controls any Manager within the meaning of Section 15 of
the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), including all documents incorporated
therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading
or arising out of an untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus supplement or the Prospectuses (or any amendment
or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including fees and disbursements of counsel chosen
by you), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply
to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Manager
or U.S. Underwriter through you or the U.S. Representatives,
respectively, expressly for use in the Registration Statement (or
any amendment thereto) or any preliminary prospectus supplement
or the Prospectuses (or any amendment or supplement thereto).
(b) Each Manager severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the
1933 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity agreement in Section 7(a), as
incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any
preliminary prospectus supplement or the Prospectuses (or any
amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by
such Manager through you expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary
prospectus supplement or the Prospectuses (or any amendment or
supplement thereto).
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for the fees and expenses of
more than one counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations
or circumstances.
Section 8. Contribution. In order to provide for just
and equitable contribution in circumstances under which the
indemnity provided for in Section 7 is for any reason held to be
unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Managers shall
contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and one or more of the
Managers, as incurred, in such proportions that (a) the Managers
are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the
Prospectuses bears to the initial public offering price appearing
thereon and (b) the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls a
Manager within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Manager, and each
director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
Section 9. Representations, Warranties and Agreements
to Survive Delivery. The representations, warranties,
indemnities, agreements and other statements of the Company or
its officers set forth in or made pursuant to this Agreement will
remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, any U.S.
Manager or any person who controls the Company or any Manager
within the meaning of Section 15 of the 1933 Act and will survive
delivery of and payment for the Shares.
Section 10. Termination of Agreement. (a) You may
terminate this Agreement, by notice to the Company, at any time
at or prior to the Closing Time (i) if there has been, since the
respective dates as of which information is given in the
Prospectus, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which on the financial markets of the
United States is such as to make it, in your judgment,
impracticable to market the Shares or enforce contracts for the
sale of the Shares or (iii) if trading in any securities of the
Company has been suspended by the Commission or the National
Association of Securities Dealers, Inc., or if trading generally
on either the American Stock Exchange or the New York Stock
Exchange or in the over-the-counter market has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by such
exchange or by order of the Commission, the National Association
of Securities Dealers, Inc. or any other governmental authority
or (iv) if a banking moratorium has been declared by either
federal, New York or North Carolina authorities. As used in this
Section 10(a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party, except to the extent provided in Section 4.
Notwithstanding any such termination, the provisions of
Sections 7, 8 and 9 shall remain in effect.
(c) This Agreement may also terminate pursuant to the
provisions of Section 2, with the effect stated in such Section.
Section 11. Default by One or More of the Managers.
If one or more of the Managers shall fail at the Closing Time to
purchase the Initial International Shares that it or they are
obligated to purchase pursuant to this Agreement (the "Defaulted
Shares"), you shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting
Managers, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Shares in such amounts as may be
agreed upon and upon the terms set forth in this Agreement; if,
however, you have not completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Shares does not exceed
10% of the total number of Initial International Shares, the
non-defaulting Managers shall be obligated to purchase the
full amount thereof in the proportions that their respective
Initial International Share underwriting obligation
proportions bear to the underwriting obligations of all
non-defaulting Managers; or
(b) if the number of Defaulted Shares exceeds 10% of
the total number of Initial International Shares, this
Agreement shall terminate without liability on the part of
any non-defaulting Manager.
No action taken pursuant to this Section shall relieve
any defaulting Manager from liability in respect of its default.
In the event of any such default that does not result
in a termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period
not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectuses or in any other
documents or arrangements. As used herein, the term "Manager"
includes any person substituted for a Manager under this
Section 11.
Section 12. Notices. All notices and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered, mailed or
transmitted by any standard form of telecommunication. Notices
to you or the Managers shall be directed to you, c/o Montgomery
Securities, 600 Montgomery Street, San Francisco, California
94111, attention of Richard A. Smith; notices to the Company
shall be directed to it at Lowe's Companies, Inc., P.O. Box 1111,
North Wilkesboro, North Carolina 28656, attention of Harry B.
Underwood, Jr.
Section 13. Parties. This Agreement herein set forth
is made solely for the benefit of the several Managers, the
Company and, to the extent expressed, any person who controls the
Company or any of the Managers within the meaning of Section 15
of the 1933 Act, and the directors of the Company, its officers
who have signed the Registration Statement, and their respective
executors, administrators, successors and assigns and, subject to
the provisions of Section 11, no other person shall acquire or
have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such
purchaser, from any of the several U.S. Underwriters of the
Shares. All of the obligations of the Managers hereunder are
several and not joint.
Section 14. Representation of Managers. You will act
for the several Managers in connection with the transactions
contemplated by this Agreement, and any action under or in
respect of this Agreement taken by you as Representatives will be
binding upon all Managers.
Section 15. Governing Law and Time. This Agreement
shall be governed by the laws of the State of New York.
Specified times of the day refer to New York City time.
Section 16. Counterparts. This Agreement may be
executed in one or more counterparts, and when a counterpart has
been executed by each party, all such counterparts taken together
shall constitute one and the same agreement.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us a
counterpart hereof, whereupon this instrument will become a
binding agreement between the Company and the several Managers in
accordance with its terms.
Very truly yours,
LOWE'S COMPANIES, INC.
By
Name:
Title:
Confirmed and accepted as of
the date first above written:
MONTGOMERY SECURITIES
MERRILL LYNCH INTERNATIONAL LIMITED
By: MONTGOMERY SECURITIES
By:
Name:
Title:
For themselves and as Co-Lead Managers for the
other Managers named in Schedule A.
SCHEDULE A
Number of
Initial Shares
Manager to be Purchased
Montgomery Securities 400,000
Merrill Lynch International Limited 400,000
Dean Witter Reynolds International Limited 100,000
Goldman, Sachs International 100,000
Kidder, Peabody International plc 100,000
Lehman Brothers International 100,000
Morgan Stanley & Co. International Limited 100,000
NatWest Securities Limited 100,000
Salomon Brothers International Limited 100,000
William Blair & Company 100,000
Kemper Securities, Inc. 50,000
Tucker Anthony Incorporated 50,000
Wheat, First Securities, Inc. 50,000
Davenport & Co. of Virginia, Inc. 50,000
Total
1,800,000
RESTATED AND AMENDED CHARTER
OF
LOWE'S COMPANIES, INC.
The undersigned Corporation, pursuant to action by its
shareholders, hereby executes this Restated and Amended Charter
for the purpose of integrating into one document its original
articles of incorporation and all amendments thereto:
1. Name. The name of the Corporation is Lowe's Companies,
Inc.
2. Duration. The period of duration of the Corporation is
perpetual.
3. Purpose. The purpose for which the Corporation is
organized is to engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Act
of North Carolina.
4. Authorized Stock. The Corporation shall have the
authority to issue 5,000,000 shares of Preferred Stock of a par
value of $5 per share and 120,000,000 shares of Common Stock of a
par value of $.50 per share.
Preferred Stock. Authority is expressly vested in the Board
of Directors to divide the Preferred Stock into series and,
within the following limitations, to fix and determine the
relative rights and preferences as between series so established
and to provide for the issuance thereof. Each series shall be so
designated as to distinguish the shares thereof from the shares
of all other series and classes. All shares of Preferred Stock
shall be identical except as to the following relative rights and
preferences, as to which there may be variations between
different series:
(1) The rate of dividend;
(2) The price at and the terms and conditions on which
shares may be redeemed;
(3) The amount payable upon shares in event of
involuntary liquidation;
(4) The amount payable upon shares in event of
voluntary liquidation;
(5) Sinking fund provisions for the redemption or
purchase of shares;
(6) The terms and conditions on which shares may be
converted if the shares of any series are issued with the
privilege of conversion; and
(7) The terms and conditions on which shares may be
voted in the election of Directors or otherwise, either as a
class or together with other voting securities.
Prior to the issuance of any shares of a series of Preferred
Stock the Board of Directors shall establish such series by
adopting a resolution setting forth the designation of the series
and the preferences, limitations and relative rights thereof to
the extent that variations are permitted by the provisions
hereof.
All series of Preferred Stock shall rank on a parity as to
dividends and assets with all other series according to the
respective dividend rates and amounts distributable upon any
voluntary or involuntary liquidation of the Corporation fixed for
each such series; but all shares of Preferred Stock shall be
preferred over Common Stock as to both dividends and amounts
distributable upon any voluntary or involuntary liquidation of
the Corporation. All shares of any one series shall be
identical.
Common Stock. The holders of Common Stock shall, to the
exclusion of the holders of any other class of stock of the
Corporation, have the sole and full power to vote for the
election of Directors and for all other purposes without
limitation except only (i) as otherwise provided in the
resolutions establishing and designating a particular series of
Preferred Stock and (ii) as otherwise expressly provided by the
then existing statutes of the State of North Carolina. The
holders of Common Stock shall have one vote for each share of
Common Stock held by them.
Subject to the provisions of resolutions establishing and
designating series of Preferred Stock, the holders of shares of
Common Stock shall be entitled to receive dividends if, when and
as declared by the Board of Directors out of funds legally
available therefor and to the net assets remaining after payment
of all liabilities upon voluntary or involuntary liquidation of
the Corporation.
5. Stated Capital. The stated capital of the Corporation
is $18,550,694 as of April 4, 1986, being the date that the Board
of Directors adopted a resolution setting forth this Restated and
Amended Charter for submission to the shareholders for approval.
6. Shareholders' Preemptive Right. No holder of stock of
the Corporation shall have any preemptive right to subscribe for
or purchase any additional or increased stock of the Corporation
of any class, whether now or hereafter authorized, including
treasury stock, or obligations convertible into any class of
stock, or stock of any class convertible into stock of any other
class, or obligations, stock or other securities carrying
warrants or rights to subscribe to stock of the Corporation of
any class, whether now or hereafter authorized, but any and all
shares of stock, bonds, debentures or other securities or
obligations, whether or not convertible into stock or carrying
warrants entitling the holders thereof to subscribe to stock, may
be issued, sold or disposed of from time to time by authority of
the Board of Directors to such persons, firms, corporations or
employee stock ownership plans and for such consideration, as far
as it may be permitted by law, as the Board of Directors shall
from time to time determine.
7. Registered Office. The address of the registered
office of the Corporation in the State of North Carolina is Elkin
Highway, Wilkes County, North Wilkesboro, North Carolina 28659;
and the name of its registered agent at such address is L. G.
Herring.
8. Incorporators. The names and addresses of the original
incorporators of the Corporation are as follows:
NAME ADDRESS
H. C. Buchan, Jr. North Wilkesboro, N.C.
Ruth Lowe Buchan North Wilkesboro, N.C.
Hal E. Church North Wilkesboro, N.C.
9. Board of Directors.
(a) Number, Election & Term of Directors. The number
of Directors shall be set forth in the Bylaws, but in the absence
of such a provision in the Bylaws, the number of Directors of the
Corporation shall be nine, provided that the number of Directors
set forth in the Bylaws cannot be increased by more than two
during any 12 month period except by the affirmative vote of the
holders of at least 70% of the outstanding Voting Shares.
Commencing with the 1986 Annual Meeting of Shareholders, the
Board of Directors shall be divided into three classes, Class I,
Class II and Class III, as nearly equal in number as possible.
At the 1986 Annual Meeting of Shareholders, Directors of the
first class (Class I) shall be elected to hold office for a term
expiring at the 1987 Annual Meeting of Shareholders; Directors of
the second class (Class II) shall be elected to hold office for a
term expiring at the 1988 Annual Meeting of Shareholders; and
Directors of the third class (Class III) shall be elected to hold
office for a term expiring at the 1989 Annual Meeting of
Shareholders. At each Annual Meeting of Shareholders after 1986,
the successors to the class of Directors whose term shall then
expire shall be identified as being of the same class as the
Directors they succeed and elected to hold office for a term
expiring at the third succeeding Annual Meeting of Shareholders.
When the number of Directors is changed, any newly-created
directorships or any decrease in directorships shall be so
apportioned among the classes by the Board of Directors as to
make all classes as nearly equal in number as possible.
(b) Newly-Created Directorships and Vacancies.
Subject to the rights of the holders of Preferred Stock then
outstanding, any vacancy occurring in the Board of Directors,
including a vacancy resulting from an increase by not more than
two in the number of Directors, may be filled by the affirmative
vote of a majority of the remaining Directors though less than a
quorum of the Board of Directors, and Directors so chosen shall
hold office for a term expiring at the Annual Meeting of
Shareholders at which the term of the class to which they have
been elected expires. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any
incumbent Director.
(c) Removal of Directors. Subject to the rights of
the holders of Preferred Stock then outstanding, any Director may
be removed, with or without cause, only by the affirmative vote
of the holders of at least 70% of the outstanding Voting Shares.
(d) Amendment or Repeal. The provisions of this
Article shall not be amended or repealed, nor shall any provision
of this Charter be adopted that is inconsistent with this
Article, unless such action shall have been approved by the
affirmative vote of either:
(i) the holders of at least 70% of the
outstanding Voting Shares; or
(ii) a majority of those Directors who are
Disinterested Directors and the holders of the
requisite number of shares specified under applicable
North Carolina law for the amendment of the charter of
a North Carolina corporation.
(e) Certain Definitions. For purposes of this
Article:
(i) "Disinterested Director" means any member of
the Board of Directors who:
(A) was elected to the Board of Directors at
the 1986 Annual Meeting of Shareholders; or
(B) was recommended for election by a
majority of the Disinterested Directors then on
the Board, or was elected by the Board to fill a
vacancy and received the affirmative vote of a
majority of the Disinterested Directors then on
the Board.
(ii) "Voting Shares" shall mean the outstanding
shares of all classes or series of the Corporation's
stock entitled to vote generally in the election of
Directors.
10. (a) Vote Required for Certain Business Combinations.
(i) Higher Vote for Certain Business
Combinations. In addition to any affirmative vote
required by law or this Charter, and except as
otherwise expressly provided in Section (b) of this
Article:
(A) any merger or consolidation of the
Corporation or any Subsidiary (as hereinafter
defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other Corporation
which immediately before such merger or
consolidation is an Affiliate or Associate (as
hereinafter defined) of an Interested Stockholder;
or
(B) any statutory share exchange in which
any Interested Stockholder or any Affiliate or
Associate of an Interested Stockholder acquires
the issued and outstanding shares of any class of
Capital Stock of the Corporation or a Subsidiary;
or
(C) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one
transaction or a series of transactions during any
12 month period) to or with any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) in
excess of 5% of the Corporation's consolidated
assets as of the date of the most recently
available financial statements; or any guaranty by
the Corporation or any Subsidiary (in one
transaction or a series of transactions during any
12 month period) of indebtedness of any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder in excess of 5% of the
Corporation's consolidated assets as of the date
of the most recently available financial
statements; or any transaction or series of
transactions involving in excess of 5% of the
Corporation's consolidated assets as of the date
of the most recently available financial
statements to which the Corporation or any
Subsidiary and any Interested Stockholder or any
Affiliate or Associate of any Interested
Stockholder is a party; or
(D) the sale or other disposition by the
Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder (in one transaction or a
series of transactions during any 12 month period)
of any securities of the Corporation or any
Subsidiary having an aggregate Fair Market Value
in excess of 5% of the aggregate Fair Market Value
of all outstanding Voting Shares of the
Corporation as of the date on which the Interested
Stockholder became an Interested Stockholder (the
"Determination Date") except pursuant to a share
dividend or the exercise of rights or warrants
distributed or offered on a basis affording
substantially proportionate treatment to all
holders of the same class or series; or
(E) the adoption of any plan or proposal for
the liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested
Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(F) any reclassification of securities
(including any reverse stock split), or
recapitalization of the Corporation, or any merger
or consolidation of the Corporation with any of
its Subsidiaries or any other transaction (whether
or not with or into or otherwise involving an
Interested Stockholder) which has the effect,
directly or indirectly (in one transaction or a
series of transactions during any 12 month
period), of increasing by more than 5% the
percentage of any class of securities of the
Corporation or any Subsidiary directly or
indirectly owned by any Interested Stockholder or
any Affiliate or Associate of any Interested
Stockholder;
shall require the affirmative vote of the holders of at
least 70% of the outstanding Voting Shares. Such
affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(ii) Definition of "Business Combination." The
term "Business Combination" as used in this Article
shall mean any transaction which is referred to in any
one or more of clauses (A) through (F) of paragraph (i)
of this Section (a).
(b) When Higher Vote is Not Required for Certain
Business Combination. The provisions of Section (a) of this
Article shall not be applicable to any particular Business
Combination, and such Business Combination shall require
only such approval as is required by law and any other
provision of these Articles of Incorporation, if
consideration will be paid to the holders of each class or
series of Voting Shares and all of the conditions specified
in either of the following paragraphs (i) or (ii) are met.
(i) Approval by Disinterested Directors. The
Business Combination shall have been approved by a
majority of those persons who are Disinterested
Directors (as hereinafter defined).
(ii) Price and Procedure Requirements.
(A) The aggregate amount of the cash and the
Fair Market Value as of the Valuation Date of
consideration other than cash to be received per
share by holders of each class or series of Voting
Shares in such Business Combination shall be at
least equal to the highest of the following
(taking into account all stock dividends and stock
splits):
(I) (If applicable) the highest per
share price (including any brokerage
commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested
Stockholder for any shares of such class or
series acquired by it (1) within the two year
period (the "Preannouncement Period") ending
at 11:59 p.m., Eastern time, on the date of
the first public announcement of the proposal
of the Business Combination (the
"Announcement Date") or (2) in the
transaction in which it became an Interested
Stockholder, whichever is higher;
(II) the Fair Market Value per share of
such class or series on the Determination
Date or on the day after the Announcement
Date, whichever is higher;
(III) (if applicable) the price per
share equal to the Fair Market Value per
share of such class or series determined
pursuant to paragraph (ii)(A)(II) above,
multiplied by the ratio of (1) the highest
per share price (including any brokerage
commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested
Stockholder for any shares of such class or
series acquired by it within the
Preannouncement Period, to (2) the Fair
Market Value per share of such class or
series on the first day during the
Preannouncement Period upon which the
Interested Stockholder acquired any shares of
such class or series; and
(IV) (if applicable), the highest
preferential amount, if any, per share to
which the holders of such class or series are
entitled in the event of any voluntary or
involuntary dissolution of the Corporation.
(B) The consideration to be received by the
holder of outstanding shares in such Business
Combination shall be in cash or in the same form
as the Interested Stockholder has previously paid
for shares of the same class or series. If the
Interested Stockholder has paid for shares with
varying forms of consideration, the form of
consideration shall be either cash or the form
used to acquire the largest number of shares of
such class or series previously acquired by the
Interested Stockholder.
(C) During such portion of the three year
period preceding the Announcement Date that such
Interested Stockholder has been an Interested
Stockholder, except as approved by a majority of
the Disinterested Directors: (a) there shall have
been no failure to declare and pay at the regular
date therefor any full periodic dividends (whether
or not cumulative) on any outstanding shares of
the Corporation; (b) there shall have been (1) no
reduction in the annual rate of dividends paid on
any class or series of Voting Shares, (except as
necessary to reflect any subdivision of the class
or series) and (2) an increase in such annual rate
of dividends as necessary to reflect any
reclassification (including any reverse stock
split), recapitalization, reorganization or any
similar transaction which has the effect of
reducing the number of outstanding shares of the
class or series; and (c) such Interested
Stockholder shall have not become the beneficial
owner of any additional Voting Shares except as
part of the transaction which results in such
Interested Stockholder becoming an Interested
Stockholder.
(D) During such portion of the three year
period preceding the Announcement Date that such
Interested Stockholder has been an Interested
Stockholder, except as approved by a majority of
the Disinterested Directors, such Interested
Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as
a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance
or any tax credits or other tax advantages
provided by the Corporation, whether in
anticipation of or in connection with such
Business Combination or otherwise.
(E) Except as otherwise approved by a
majority of the Disinterested Directors, a proxy
or information statement describing the proposed
Business Combination and complying with the
requirements of the Securities Exchange Act of
1934 and the rules and regulations thereunder (or
any subsequent provisions replacing such Act,
rules or regulations) shall be mailed to
stockholders of the Corporation at least 20 days
prior to the consummation of such Business
Combination (whether or not such proxy or
information statement is required to be mailed
pursuant to such Act or subsequent provisions).
(c) Certain Definitions.
For the purposes of this Article:
(i) A "person" shall mean any individual, firm,
corporation, partnership, joint venture, or other
entity.
(ii) "Interested Stockholder" shall mean any
person who or which is the beneficial owner, directly
or indirectly, of 20% or more of the outstanding Voting
Shares of the Corporation; provided, however, the term
Interested Stockholder shall not include the
Corporation, any Subsidiary, or any savings, employee
stock ownership or other employee benefit plan of the
Corporation or any Subsidiary, or any fiduciary with
respect to any such plan when acting in such capacity.
For the purposes of determining whether a person is an
Interested Stockholder, the number of shares of Voting
Shares deemed to be outstanding shall include shares deemed
owned through application of paragraph (iii) of this Section
(c) but shall not include any other Voting Shares that may
be issuable pursuant to any contract, arrangement or
understanding, or upon exercise of conversion rights,
exchange rights, warrants or options, or otherwise.
(iii) A person shall be a "beneficial owner" of
any Voting Shares as to which such person and any of
such person's Affiliates or Associates, individually or
in the aggregate, have or share directly, or indirectly
through any contract, arrangement, understanding,
relationship, or otherwise:
(A) voting power, which includes the power
to vote, or to direct the voting of the Voting
Shares;
(B) investment power, which includes the
power to dispose or to direct the disposition of
the Voting Shares;
(C) economic benefit, which includes the
right to receive or control the disposition of
income or liquidation proceeds from the Voting
Shares; or
(D) the right to acquire voting power,
investment power or economic benefit (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any contract,
arrangement or understanding or upon the exercise
of conversion rights, exchange rights, warrants or
options, or otherwise;
provided, that in no case shall a Director of the
Corporation be deemed to be the beneficial owner of
Voting Shares beneficially owned by another Director of
the Corporation solely by reason of actions undertaken
by such persons in their capacity as Directors of the
Corporation,
(iv) "Affiliate" means a person that directly, or
in directly through one or more intermediaries,
controls or is controlled by, or is under common
control with the person specified.
(v) "Associate" means as to any specified
person:
(A) any entity (other than the Corporation
and its Subsidiaries) of which such person is an
Officer, Director or partner or is, directly or
indirectly, the beneficial owner of 10% or more of
the Voting Shares;
(B) any trust or other estate in which such
person has a substantial beneficial interest or as
to which such person serves as trustee or in a
similar fiduciary capacity; or
(C) any relative or spouse of such person,
or any relative of such spouse, who has the same
home as such person or who is an Officer or
Director of the Corporation or any of its
Affiliates.
<PAGE>
(vi) As to any Corporation, "Subsidiary" means
any other Corporation of which it owns directly or
indirectly a majority of the Voting Shares.
(vii) "Disinterested Director" means any member of
the Board of Directors who:
(A) was elected to the Board of Directors of
the Corporation at the 1986 Annual Meeting of
Shareholders; or
(B) was recommended for election by a
majority of the Disinterested Directors then on
the Board, or was elected by the Board to fill a
vacancy and received the affirmative vote of a
majority of the Disinterested Directors then on
the Board.
(viii) "Fair Market Value" means:
(A) in the case of stock the highest closing
sale price during the 30 day period ending at
11:59 p.m., Eastern time, on the date in question
of a share of such stock on the Composite Tape for
New York Stock Exchange Listed Stocks, or, if such
stock is not quoted on the Composite Tape on the
New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United
States securities exchange registered under the
Securities Exchange Act of 1934 on which such
stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid
quotation with respect to a share of such stock
during the 30 day period ending at 11:59 p.m.,
Eastern time, on the date in question on the
National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in
use, or if no such quotations are available, the
Fair Market Value on the date in question of a
share of such stock as determined by a majority of
the Disinterested Directors; and
(B) in the case of property other than cash
or stock, the Fair Market Value of such property
on the date in question as determined by a
majority of the Disinterested Directors.
(ix) "Voting Shares" shall mean the outstanding
shares of all classes or series of the Corporation's
stock entitled to vote generally in the election of
Directors.
(x) "Control" shall mean the possession, directly
or indirectly, through the ownership of voting
securities, by contract, arrangement, understanding,
relationship or otherwise, of the power to direct or
cause the direction of the management and policies of
the person. The beneficial ownership of 20% or more of
the Corporation's Voting Shares shall be deemed to
constitute control.
(d) Certain Determinations.
Directors who are Disinterested Directors of the
Corporation shall have the power and duty to determine
for the purpose of this Article, on the basis of
information known to them after reasonable inquiry, (i)
whether a particular person is an Interested
Stockholder, (ii) the number of Voting Shares
beneficially owned by such person, (iii) whether any
person is an Affiliate or Associate of such person, and
(iv) whether the assets that are the subject of any
Business Combination involving such person have an
aggregate Fair Market Value in excess of 5% of the
Corporation's consolidated assets as of the date of the
most recently available financial statement, or the
securities to be issued or transferred by the
Corporation or any Subsidiary in any Business
Combination involving such person have an aggregate
Fair Market Value in excess of 5% of the aggregate Fair
Market Value of all outstanding Voting Shares of the
Corporation as of the Determination Date.
(e) No Effect on Certain Obligations.
Nothing contained in this Article shall be
construed to relieve any Interested Stockholder or any
Director of the Corporation from any obligation imposed
by law.
(f) Amendment or Repeal.
The provisions of this Article shall not be
amended or repealed, nor shall any provision of these
Articles of Incorporation be adopted that is
inconsistent with this Article, unless such action
shall have been approved by the affirmative vote of
either:
(i) the holders of at least 70% of the
outstanding Voting Shares; or
(ii) a majority of those Directors who are
Disinterested Directors and the holders of the
requisite number of shares specified under
applicable North Carolina law for the amendment of
the charter of a North Carolina corporation.
11. This Restated and Amended Charter was adopted by the
shareholders of the Corporation on the 16th day of June, 1986, in
the manner prescribed by law for adopting a charter amendment;
and it integrates the original Articles of Incorporation and all
amendments thereto.
12. The number of shares of Common Stock (the only class of
stock outstanding) of the Corporation outstanding at the time
shareholders voted was 39,618,225; and the number of shares of
Common Stock entitled to vote was 37,106,438.
13. The number of shares of Common Stock voted for
amendment of the Charter to authorize a class of Preferred Stock
consisting of 5 million shares was 24,999,783; the number of
shares of Common Stock voted against adoption of such proposal
was 5,900,610; and the number of shares of Common Stock
abstaining from voting on such proposal was 1,806,088.
14. The number of shares of Common Stock voted for
amendment of the Charter to provide for classification of the
Board of Directors into three classes and that directors cannot
be removed during their term of office without the affirmative
vote of holders of at least 70% of outstanding shares of Common
Stock was 24,641,126; the number of shares of Common Stock voted
against such proposal was 6,265,258; and the number of shares of
Common Stock abstaining from voting on such proposal was
1,800,097.
15. The number of shares of Common Stock voted for
amendment of the Charter to provide for certain minimum price
procedures or, alternatively, require a higher voting requirement
for certain transactions, was 24,941,586; the number of shares of
Common Stock voted against such proposal was 5,636,077; and the
number of shares of Common Stock abstaining from voting on such
proposal was 2,128,818.
16. The number of shares of Common Stock voted for approval
of a Restated and Amended Charter incorporating those of the
proposals described in paragraphs 13, 14 and 15 which were
approved by shareholders was 26,624,636; the number of shares of
Common Stock voted against such proposal was 4,978,302; and the
number of shares of Common Stock abstaining from voting on such
proposal was 1,103,543.
17. Adoption of the proposals described in paragraphs 13,
14, 15 and 16 did not give rise to (i) dissenter's rights,
because the amendments to the Charter and adoption of the
Restated and Amended Charter do not change the Corporation into a
non-profit corporation or cooperative organization and no shares
of the Corporation that are outstanding are entitled to any
preference as to dividends or liquidation, or (ii) class voting
rights, because the only class of stock outstanding is Common
Stock.<PAGE>
<PAGE> IN WITNESS WHEREOF, this statement is executed by the
__________ president and __________ secretary of the corporation
this 25th day of June, 1986.
LOWE'S COMPANIES, INC.
By /s/ Leonard G. Herring
President
By /s/ Richard D. Elledge
Secretary
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Geraldine Bumgarner, a notary public, hereby certify that
on this 25th day of June, 1986, personally appeared before me
Leonard G. Herring and Richard D. Elledge, each of whom being by
me first duly sworn, declared that he signed the foregoing
document in the capacity indicated, that he was authorized so to
sign, and that the statements therein contained are true.
/s/ Geraldine Bumgarner
Notary Public
My Commission Expires: September 21, 1988
<PAGE>
ARTICLES OF AMENDMENT OF
LOWE'S COMPANIES, INC.
The undersigned corporation hereby executes these Articles
of Amendment for the purpose of amending its charter:
1. The name of the corporation is Lowe's Companies, Inc.
2. The following amendment to the charter of the
corporation was adopted by its shareholders on the 5th day of
November, 1987, in the manner prescribed by law:
By adding the following sub-paragraph:
9.(f) To the full extent that the North Carolina
Business Corporation Act, as it exists on the date that this
Amendment became effective, permits the elimination of the
liability of Directors, a Director of the Company shall not be
liable for monetary damages for breach of his duty as a Director.
3. The number of shares of the corporation outstanding at
the time of such adoption was 39,630,050; and the number of
shares entitled to vote thereon was 39,630,050.
4. The designation and number of outstanding shares of
each class entitled to vote on such amendment as a class were as
follows:
Number of
Class Shares
Common 39,630,050
5. The number of shares voted for such amendment was
30,174,450; and the number of shares voted against such amendment
was 2,775,537. Voting within each class entitled to vote as a
class was as follows:
Number of Shares Voted
Class For Against
Common 30,174,450 2,775,537
6. The amendment herein effected does not give rise to
dissenter's rights to payment for the reason that the only effect
of such amendment is to add an article to the Articles of
Incorporation limiting the liability of Directors of the
Corporation.<PAGE>
<PAGE> IN WITNESS WHEREOF, these articles are signed by the
president and secretary of the corporation this 6th day of
November, 1987.
/s/ Leonard G. Herring
Leonard G. Herring, President
/s/ Richard D. Elledge
Richard D. Elledge, Secretary
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Geraldine Bumgarner, a notary public, hereby certify that
on this 6th day of November, 1987, personally appeared before me
Leonard G. Herring and Richard D. Elledge, each of whom being by
me first duly sworn, declared that he signed the foregoing
document in the capacity indicated, that he was authorized so to
sign, and that the statements therein contained are true.
/s/ Geraldine Bumgarner
Notary Public
My Commission Expires: September 21, 1988
<PAGE>
STATEMENT OF CLASSIFICATION OF SHARES
OF
LOWE'S COMPANIES, INC.
1. The name of the corporation is LOWE'S COMPANIES, INC.
2. On September 9, 1988, pursuant to Sections 55-41 and
55-42 of the North Carolina Business Corporation Act and the
authority conferred upon the Board of Directors by the Restated
and Amended Charter of Corporation, the Board of Directors of the
Corporation duly adopted the following resolutions creating a
series of 160,000 shares of Preferred Stock designated as
Participating Cumulative Preferred Stock, Series A:
RESOLVED, that it is hereby declared to be in the best
interests of the Corporation that a new series of Preferred
Stock be created to consist of 160,000 shares and to be
designated as Participating Cumulative Preferred Stock,
Series A, and to determine the preferences, limitations and
relative rights of the Participating Cumulative Preferred
Stock, Series A, by adopting a Statement of Classification
of Shares of Lowe's Companies, Inc. to read in the form
attached hereto as Appendix I
RESOLVED, that the Statement of Classification of
Shares of the Corporation attached hereto as Appendix I is
hereby adopted and that the appropriate officers of the
Corporation are authorized and directed to prepare and to
file with the North Carolina Secretary of State a Statement
of Classification of Shares of Lowe's Companies, Inc. to
give effect thereto.
3. That Appendix I hereto constitutes the Statement of
Classification of Shares of Lowe's Companies, Inc. referred to in
the foregoing resolutions.
4. That such Statement of Classification of Shares of
Lowe's Companies, Inc. was adopted before the issuance of the
Participating Cumulative Preferred Stock, Series A, by the Board
of Directors of the Corporation on September 9, 1988.
Shareholder action was not required.
Dated: September 9, 1988
LOWE'S COMPANIES, INC.
By: /s/ Robert L. Strickland
Robert L. Strickland
Chairman of the Board
Attest:
/s/ Richard D. Elledge
Secretary
[Corporate Seal]
<PAGE>
Appendix I
The Corporation has designated 160,000 shares of the
authorized but unissued shares of the Corporation's Preferred
Stock, par value $5.00 per share, as Participating Cumulative
Preferred Stock, Series A (hereinafter referred to as "Series A
Preferred Stock"). The terms of the Series A Preferred Stock, in
the respect in which the shares of such series may vary from
shares of any and all other series of Preferred Stock, are as
follows:
(a) Dividends and Distributions.
(1) The holders of shares of Series A
Preferred Stock in preference to the holders of
Common Stock and of any other junior stock, shall
be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally
available therefor, dividends payable quarterly on
the last business day of each April, July, October
and January (each such date being referred to
herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock,
in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $120 or (b)
subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate
per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in
kind) of all non-cash dividends or other
distributions other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by
reclassification or otherwise), declared on the
Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction
of a share of Series A Preferred Stock. In the
event the Corporation shall at any time after
September 9, 1988 (the Rights Declaration Date"),
(i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the out-
standing Common Stock, or (iii) combine the out-
standing Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under
clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(2) The Corporation shall declare a dividend
or distribution on the Series A Preferred Stock as
provided in paragraph (1) above immediately after
it declares a dividend or distribution on the Com-
mon Stock (other than a dividend payable in shares
of Common Stock); provided that, in the event no
dividend or distribution shall have been declared
on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a
dividend of $120 per share on the Series A
Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of
such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the
record date for the first Quarterly Dividend
Payment Date, in which case dividends on such
shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue
is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of
holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an
amount less than the total amount of such
dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-
share basis among all such shares at the time
outstanding. The Board of Directors may fix a
record date for the determination of holders of
shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution
declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the
payment thereof.
(b) Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following
voting rights:
(1) Subject to the provision for adjustment
hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote
of the shareholders of the Corporation. In the
event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a
smaller number of votes per share to which holders
of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(2) Except as otherwise provided herein, in
the Restated and Amended Charter, or under
applicable law, the holders of shares of Series A
Preferred Stock and the holders of shares of
Common Stock shall vote together as one voting
group on all matters submitted to a vote of
stockholders of the Corporation
(3) (i) If at any time dividends on any
shares of Series A Preferred Stock shall be
in arrears in an amount equal to six
quarterly dividends thereon, the occurrence
of such contingency shall mark the beginning
of a period (a "default period") that shall
extend until such time when all accrued and
unpaid dividends for all previous quarterly
dividend periods and for the current
quarterly dividend period on all shares of
Series A preferred Stock then outstanding
shall have been declared and paid or set
apart for payment. During each default
period, all holders of the outstanding shares
of Series A Preferred Stock together with any
other series of Preferred Stock then entitled
to such a vote under the terms of the
Restated and Amended Charter, voting as a
separate voting group, shall be entitled to
elect two members of the Board of Directors
of the Corporation.
(ii) During any default period, such
voting right of the holders of Series A
Preferred Stock may be exercised initially at
a special meeting called pursuant to
subparagraph (iii) of this Subsection (b)(3)
or at any annual meeting of stockholders, and
thereafter at annual meetings of
stockholders, provided that neither such
voting right nor the right of the holders of
any other series of Preferred Stock, if any,
to increase, in certain cases, the authorized
number of Directors shall be exercised unless
the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall
be present in person or by proxy. The
absence of a quorum of the holders of Common
Stock shall not affect the exercise by the
holders of Preferred Stock of such voting
right. At any meeting at which the holders
of Preferred Stock shall exercise such voting
right initially during an existing default
period, they shall have the right, voting as
a separate voting group, to elect Directors
to fill such vacancies, if any, in the Board
of Directors as may then exist up to two (2)
Directors, or if such right is exercised at
an annual meeting, to elect two (2)
Directors. If the number which may be so
elected at any special meeting does not
amount to the required number, the holders of
the Preferred Stock shall have the right to
make such increase in the number of Directors
as shall be necessary to permit the election
by them of the required number. After the
holders of the Preferred Stock shall have
exercised their right to elect Directors in
any default period and during the continuance
of such period, the number of Directors shall
not be increased or decreased except by vote
of the holders of Preferred Stock as herein
provided or pursuant to the rights of any
equity securities ranking senior to or pari
passu with the Series A Preferred Stock.
(iii) Unless the holders of Preferred
Stock shall, during an existing default
period, have previously exercised their right
to elect Directors, the Board of Directors
may order, or any stockholder or stockholders
owning in the aggregate not less than ten
percent (10%) of the total number of shares
of Preferred Stock outstanding, irrespective
of series, may request, the calling of a
special meeting of the holders of Preferred
Stock, which meeting shall thereupon be
called by the Chairman, President, a Vice-
President or the Secretary of the
Corporation. Notice of such meeting and of
any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant
to this paragraph (b)(3)(iii) shall be given
to each holder of record of Preferred Stock
by mailing a copy of such notice to him at
his last address as the same appears on the
books of the Corporation. Such meeting shall
be called for a time not earlier than 10 days
and not later than 60 days after such order
or request. In the event such meeting is not
called within 60 days after such order or
request, such meeting may be called on
similar notice by any stockholder or
stockholders owning in the aggregate not less
than ten percent (10%) of the total number of
shares of Preferred Stock outstanding.
Notwithstanding the provisions of this
paragraph (b)(3)(iii), no such special
meeting shall be called during the period
within 60 days immediately preceding the date
fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders
of Common Stock, and other classes of stock
of the Corporation if applicable, shall
continue to be entitled to elect the whole
number of Directors until the holders of
Preferred Stock shall have exercised their
right to elect two (2) Directors voting as a
separate voting group, after the exercise of
which right (x) the Directors so elected by
the holders of Preferred Stock shall continue
in office until their successors shall have
been elected by such holders or until the
expiration of the default period, and (y) any
vacancy in the Board of Directors may (except
as provided in paragraph (b)(3)(ii)) be
filled by vote of a majority of the remaining
Directors theretofore elected by the voting
group which elected the Director whose office
shall have become vacant. References in this
paragraph (b)(3)(iv) to Directors elected by
a particular voting group shall include
Directors elected by such Directors to fill
vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of
a default period, (x) the right of the
holders of Preferred Stock, as a separate
voting group, to elect Directors shall cease,
(y) the term of any Directors elected by the
holders of Preferred Stock, as a separate
voting group, shall terminate, and (z) the
number of Directors shall be such number as
may be provided for in, or pursuant to, the
Restated and Amended Charter or bylaws
irrespective of any increase made pursuant to
the provisions of paragraph 5(b)(3)(ii) (such
number being subject, however, to change
thereafter in any manner provided by law or
in the Restated and Amended Charter or by-
laws). Any vacancies in the Board of
Directors affected by the provisions of
clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining
Directors, even though less than a quorum.
(4) Except as set forth herein or as
otherwise provided in the Restated and Amended
Charter, holders of Series A Preferred Stock shall
have no special voting rights and their consent
shall not be required (except to the extent they
are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate
action.
(c) Certain Restrictions.
(1) Whenever quarterly dividends or other
dividends or distributions payable on the Series A
Preferred Stock as provided in Subsection (a) are
in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay or set apart for
payment any dividends (other than dividends
payable in shares of any class or classes of
stock of the Corporation ranking junior to
the Series A Preferred Stock) or make any
other distributions on, any class of stock of
the Corporation ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock
and shall not redeem, purchase or otherwise
acquire, directly or indirectly, whether
voluntarily, for a sinking fund, or otherwise
any shares of any class of stock of the
Corporation ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock,
provided that, notwithstanding the foregoing,
the Corporation may at any time redeem,
purchase or otherwise acquire shares of stock
of any such junior class in exchange for, or
out of the net cash proceeds from the
concurrent sale of, other shares of stock of
any such junior class;
(ii) declare or pay dividends on or
make any other distributions on any shares of
stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred
Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity
stock on which dividends are payable or in
arrears in proportion to the total amounts to
which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock
ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for
shares of any stock of the Corporation
ranking junior (either as to dividends or
upon dissolution, liquidation or winding up)
to the Series A Preferred Stock;
(iv) purchase or otherwise acquire for
consideration any shares of Series A
Preferred Stock, or any shares of stock
ranking on a parity with the Series A
Preferred Stock, except in accordance with a
purchase offer made in writing or by
publication (as determined by the Board of
Directors) to all holders of such shares upon
such terms as the Board of Directors, after
consideration of the respective annual
dividend rates and other relative rights and
preferences of the respective series and
classes, shall determine in good faith will
result in fair and equitable treatment among
the respective series or classes.
(2) The Corporation shall not permit any
subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation
could, under Paragraph (1) of Subsection (c),
purchase or otherwise acquire such shares at such
time and in such manner.
(d) Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth
herein.
(e) Liquidation, Dissolution or Windinq Up.
(1) Upon any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred
Stock shall have received $5.00 per share, plus an
amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount
of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of
Series A Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately
adjusted as set forth in subparagraph 3 below to
reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock)
(such number in clause (ii) being hereinafter referred
to as the "Adjustment Number"). Following the payment
of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and
Common Stock, respectively, holders of Series A
Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Series
A Preferred Stock and Common Stock, on a per share
basis, respectively.
(2) In the event, however, that there are not
sufficient assets available to permit payment in full
of the Series A Liquidation Preference and the
liquidation preferences of all other series of
Preferred Stock, if any, then such remaining assets
shall be distributed ratably to the holders of all such
shares in proportion to their respective liquidation
preferences. In the event, however, that there are not
sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common
Stock.
(3) In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment
Number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding
immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(f) Consolidation, Merger, Share Exchange, etc. In
case the Corporation shall enter into any consolidation,
merger, share exchange, combination or other transaction in
which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any
other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to
1,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(g) Redemption. The outstanding shares of Series A
Preferred Stock may be redeemed at the option of the Board
of Directors as a whole, but not in part, at any time, or
from time to time, at a cash price per share equal to (i)
100% of the product of the Adjustment Number times the
Average Market Value (as such term is hereinafter defined)
of the Common Stock, plus (ii) all dividends which on the
redemption date have accrued on the shares to be redeemed
and have not been paid or declared and a sum sufficient for
the payment thereof set apart, without interest. The
"Average Market Value" is the average of the closing sale
prices of a share of the Common Stock during the 30-day
period immediately preceding the date before the redemption
date on the Composite Tape for New York Stock Exchange
Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such
stock is not listed on such exchange, on the principal
United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such
stock is listed, or, if such stock is not listed on any such
exchange, the average of the closing bid quotations with
respect to a share of Common Stock during such 30-day period
on the National Association of Securities Dealers, Inc.
Automated Quotation System or any system then in use, or if
no such quotations are available, the fair market value of a
share of the Common Stock as determined by the Board of
Directors in good faith.
(h) Ranking. The Series A Preferred Stock shall rank
on a parity with any and all other series of Preferred Stock
as to the payment of dividends and the distribution of
assets.
(i) Amendment. The Restated and Amended Charter shall
not be further amended in any manner that would adversely
affect the preferences, rights or powers of the Series A
Preferred Stock without the affirmative vote of the holders
of more than two-thirds of the outstanding shares of the
Series A Preferred Stock, if any, voting separately as one
voting group.
(j) Fractional Shares. Series A Preferred Stock may
be issued in fractions of one one-thousandth of a share (and
integral multiples thereof) which shall entitle the holder,
in proportion to such holders' fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
<PAGE>
ARTICLES OF MERGER
OF
LOWE'S OF OHIO, INC.
INTO
LOWE'S COMPANIES, INC.
The undersigned corporations hereby execute these Articles
of Merger for the purpose of merging the wholly-owned subsidiary
corporation into its parent corporation:
I. The following Plan and Agreement of Merger was duly
approved by the Board of Directors of each of the undersigned
corporations in the manner prescribed by law:
SEE ATTACHED PLAN AND AGREEMENT OF MERGER
II. At the time of the approval of the foregoing Plan and
Agreement of Merger by the Board of Directors of each of the
undersigned corporations the surviving corporation was the owner
of all the outstanding shares of the other corporation; and the
foregoing Plan and Agreement of Merger does not provide for any
changes in the charter of, or the issuance of any shares by, the
surviving corporation.
III. The foregoing Plan and Agreement of Merger was approved
by the sole shareholder of Lowe's of Ohio, Inc. on the 2nd day of
December, 1988.
IV. The merger between the corporations shall be effective
as of the close of business for the corporations on December 31,
1988.
IN WITNESS WHEREOF, these articles are signed by the
President and Secretary of each corporation this 22nd day of
December, 1988 at 11:59 p.m.
LOWE'S OF OHIO, INC.
By: /s/ Leonard G. Herring (SEAL)
LEONARD, G. HERRING, President
ATTEST:
/s/ Richard D. Elledge
RICHARD D. ELLEDGE, Secretary
(CORPORATE SEAL)
LOWE'S COMPANIES, INC.
By: /s/ Leonard G. Herring (SEAL)
LEONARD, G. HERRING, President
ATTEST:
/s/ Richard D. Elledge
RICHARD D. ELLEDGE, Secretary
(CORPORATE SEAL)
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Gaither M. Keener, Jr., a Notary Public, hereby certify
that on this 22nd day of December, 1988, personally appeared
before me LEONARD G. HERRING, President and RICHARD D. ELLEDGE,
Secretary of Lowe's of Ohio, Inc.; each of whom being by me first
duly sworn, declared that he signed the foregoing document in the
capacity indicated, that he was authorized so to sign, and that
the statements therein contained are true.
/s/ Gaither M. Keener, Jr. (SEAL)
NOTARY PUBLIC
My Commission Expires:
April 30, 1991
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Gaither M. Keener, Jr., a Notary Public, hereby certify
that on this 22nd day of December, 1988, personally appeared
before me LEONARD G. HERRING, President and RICHARD D. ELLEDGE,
Secretary of Lowe's Companies, Inc; each of whom being by me
first duly sworn, declared that he signed the foregoing document
in the capacity indicated, that he was authorized so to sign, and
that the statements therein contained are true.
/s/ Gaither M. Keener, Jr. (SEAL)
NOTARY PUBLIC
My Commission Expires:
April 30, 1991
<PAGE>
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER (this "Agreement") is made
as of December 22nd, 1988 by Lowe's Companies, Inc., a North
Carolina corporation (the "Surviving Corporation") and Lowe's of
Ohio, Inc., an Ohio corporation (the "Merging Corporation").
RECITALS:
A. The Merging Corporation is a wholly-owned subsidiary of
the Surviving Corporation, with the Surviving Corporation owning
all 500 issued and outstanding shares of common stock of the
Merging Corporation.
B. The Surviving Corporation and the Merging Corporation
have agreed to reorganize by merging the Merging Corporation into
the Surviving Corporation as provided in this Agreement, with no
change to occur in the Articles of Merger of incorporation of the
Surviving Corporation after the effective date of the merger.
STATEMENT OF AGREEMENT:
In consideration of the mutual covenants contained in this
Agreement, each of the Surviving Corporation and the Merging
Corporation agrees as follows;
ARTICLE 1
Merger into the Surviving Corporation
Section 1.1 Merger. As of the Effective Date (as
hereinafter defined), the Merging Corporation, as a constituent
corporation within the meaning of Section 1701.01 of the Ohio
Revised Code, shall be merged, pursuant to Sections 1701.79 and
1701.80 of the Ohio Revised Code and pursuant to Sections
55-108.1 and 55-111 of the North Carolina General Statutes, into
the Surviving Corporation as the surviving corporation within the
meaning of Section 1701.01 of the Ohio Revised Code and Section
55-110 of the North Carolina General Statutes. The existing
Articles of Merger of incorporation of the Surviving Corporation
shall be the Articles of Merger of incorporation of the Surviving
Corporation until amended in accordance with law.
Section 1.2 Effective Date. The Effective Date shall be
11:59 p.m., Eastern Standard Time, on December 31, 1988.
Section 1.3 Articles and Agreement of Merger. This
Agreement shall serve as the "Articles of Merger" within the
meaning of Section 55-109 of the North Carolina General Statutes,
as well as the "Agreement of Merger" within the meaning of
Sections 1701.79 and 1701.80 of the Ohio Revised Code.
ARTICLE 2
Extinguishment of Constituent Shares
Section 2.1 Extinguishment of Constituent Shares. At the
Effective Date and as a result of the merger of the Merging
Corporation into the Surviving Corporation, the shares of each
outstanding class of capital stock of the Merging Corporation
shall, automatically and without further act of either the
Merging Corporation or any holder of any such share, be
extinguished.
ARTICLE 3
Process; Qualification
Section 3.1 Service of Process. The Surviving Corporation
hereby agrees that it may be served with process in the State of
Ohio in any proceeding for enforcement of any obligation of the
Merging Corporation as well as for enforcement of any obligation
resulting from the merger, and hereby irrevocably appoints the
Secretary of State of the State of Ohio as its agent to accept
service of process in any such proceeding. The address to which
a copy of such process shall be mailed by the Secretary of State
of Ohio is Leonard G. Herring, President, Lowe's Companies, Inc.,
Box 1111, North Wilkesboro, North Carolina 28656-0001.
Section 3.2 Foreign Qualification. The Surviving
Corporation desires to transact business in the State of Ohio as
a foreign corporation. The Surviving Corporation does hereby
irrevocably consent that it may be served with any process in the
State of Ohio by service upon C. T. Corporation Systems, 815
Superior Avenue, North East, Cleveland, Ohio 44144 (the "Named
Agent") and any successor Named Agent that may be appointed
pursuant to Chapter 1703, Ohio Revised Code; and the Surviving
Corporation hereby irrevocably consents to the service of process
upon the Secretary of State of the State of Ohio as its agent to
receive such process in the event that the Named Agent cannot be
found or in any other event as provided in Chapter 1703, Ohio
Revised Code.
ARTICLE 4
Amendment
Section 4.1 Amendment. From time to time and at any time
prior to the Effective Date, this Agreement may be amended by an
agreement in writing authorized by the respective Boards of
Directors of the Surviving Corporation and the Merging
Corporation and executed in the same manner as this Agreement.
ARTICLE 5
Miscellaneous
Section 5.1 Headings. The captions or headings in this
Agreement are for convenience only and in no way define, limit or
describe the scope or intent of any of the provisions of this
Agreement.
Section 5.2 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original
and all of which shall constitute one and the same document.
Section 5.3 Severability. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any
jurisdiction for any reason, such invalidity, illegality or
unenforceability shall not affect the remainder of this
Agreement, and the remainder of this Agreement shall be construed
and enforced as if such invalid, illegal or unenforceable portion
were not contained herein.
Section 5.4 Governing Law. This Agreement shall be
governed by and construed under the laws of the State of North
Carolina.
The Surviving Corporation: The Merging Corporation:
Lowe's Companies, Inc. Lowe's of Ohio, Inc.
By: /s/ Leonard G. Herring By: /s/ Leonard G. Herring
Title: President Title: President
Attest: Attest:
/s/ Richard D. Elledge /s/ Richard D. Elledge
Secretary (Corporate Seal) Secretary (Corporate Seal)
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Gaither M. Keener, Jr., a Notary Public, hereby certify
that on this 22nd day of December, 1988, personally appeared
before me LEONARD G. HERRING, President and RICHARD D. ELLEDGE,
Secretary of Lowe's of Ohio, Inc.; each of whom being by me first
duly sworn, declared that he signed the foregoing document in the
capacity indicated, that he was authorized so to sign, and that
the statements therein contained are true.
/s/ Gaither M. Keener, Jr. (SEAL)
NOTARY PUBLIC
My Commission Expires:
April 30, 1991
STATE OF NORTH CAROLINA
COUNTY OF WILKES
I, Gaither M. Keener, Jr., a Notary Public, hereby certify
that on this 22nd day of December, 1988, personally appeared
before me LEONARD G. HERRING, President and RICHARD D. ELLEDGE,
Secretary of Lowe's Companies, Inc; each of whom being by me
first duly sworn, declared that he signed the foregoing document
in the capacity indicated, that he was authorized so to sign, and
that the statements therein contained are true.
/s/ Gaither M. Keener, Jr. (SEAL)
NOTARY PUBLIC
My Commission Expires:
April 30, 1991
<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED AND AMENDED CHARTER
OF
LOWE'S COMPANIES, INC.
The undersigned corporation hereby submits these Articles of
Amendment for the purpose of amending its Restated and Amended
Charter:
1. The name of the corporation is
LOWE'S COMPANIES, INC.
2. The Restated and Amended Charter is amended as follows:
The first paragraph of Article 4 of the Restated and
Amended Charter is struck out and the following is
substituted
therefor:
4. Authorized Stock. The Corporation shall have
the authority to issue 5,000,000 shares of
Preferred Stock of a par value of $5 per share and
240,000,000 shares of Common Stock of a par value
of $.50 per share.
3. No shares of Preferred Stock are issued and outstanding.
4. Each issued and unissued share of Common Stock, upon the
effectiveness of these Articles of Amendment, shall be
changed into two shares of Common Stock. The Corporation
shall deliver to each record holder of Common Stock on
March 16, 1994, a new certificate representing the number of
additional shares to which such record holder is entitled
pursuant to the foregoing amendment.
5. The foregoing amendment was adopted on the 7th day of March,
1994, by the Board of Directors of the Corporation pursuant
to North Carolina General Statutes 55-10-2(4) without
shareholder action.
6. These Articles of Amendment shall be effective as of 5:00
p.m. on March 16, 1994.
Dated: March 7, 1994 LOWE'S COMPANIES, INC.
By: /s/ Leonard G. Herring
Leonard G. Herring
President and CEO
<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED AND AMENDED CHARTER
OF
LOWE'S COMPANIES, INC.
The undersigned corporation hereby submits these Articles of
Amendment for the purpose of amending its Restated and Amended
Charter:
1. The name of the corporation is LOWE'S COMPANIES, INC.
2. The Restated and Amended Charter is amended as follows:
The first paragraph of Article 4 of the Restated and
Amended Charter is revised as follows:
4. Authorized Stock. The Corporation shall have
the authority to issue 5,000,000 shares of
Preferred Stock of a par value of $5 per share and
700,000,000 shares of Common Stock of a par value
of $.50 per share.
3. The amendment was approved on May 27, 1994 by the
shareholders in the manner prescribed by North Carolina
General Statutes Section 55-10-03.
Dated: June 7, 1994 LOWE'S COMPANIES, INC.
By: /s/ Leonard G. Herring
Leonard G. Herring
President and CEO
