LOWES COMPANIES INC, DEF 14A, 1994-04-25

LOWES COMPANIES INC
DEF 14A, 1994-04-25
LUMBER & OTHER BUILDING MATERIALS DEALERS

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/X/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

Lowe's Companies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)

Faye Wyatt
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

(4) Proposed maximum aggregate value of transaction:

Set forth the amount on which the filing fee is calculated and state how it
was determined.

/X/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

$125.

(2) Form, Schedule or Registration Statement No.:

Preliminary Proxy Statement

(3) Filing Party:

Hunton & Williams, Richmond, Va.

(4) Date Filed:

April 1, 1994
<PAGE> 2

LOWE'S COMPANIES, INC.

P.O. BOX 1111

NORTH WILKESBORO, NC 28656

Dear Lowe's Shareholder:

As stated in the attached Proxy Statement, Lowe's 1994 Annual Meeting will
be held on Friday, May 27 at 10:00 a.m. at our corporate headquarters in North
Wilkesboro, North Carolina. The business of this year's meeting is to elect four
Class II Directors for a term of three years, to approve an increase in
authorized Common Stock to 700 million shares, to approve amendments to our 1985
Stock Option Plan which, among other things, increases the number of shares
covered by the plan by 1,000,000 shares, to approve a Directors' Stock Incentive
Plan and the issuance of up to 25,000 shares under such plan, and to approve the
appointment of Deloitte & Touche as our independent auditors for Fiscal 1994. As
in the past, the meeting will include a report on Lowe's activities for the
fiscal year ended January 31, 1994 and there will be an opportunity for comments
and questions from the shareholders.

Whether or not you plan to attend the meeting, it is important that you be
represented and that your shares be voted. Accordingly, after reviewing the
Proxy Statement, we ask you to complete, sign and date the proxy card and return
it as soon as possible in the postage-paid envelope provided. Early return of
your proxy will permit us to avoid the expense of soliciting the votes of
shareholders who are late sending in their proxy cards.

Fiscal 1993 was a record year for Lowe's Companies, Inc., and we hope
shareholders are as pleased with that performance as are Lowe's Directors,
management and associates. We do not plan to rest on this performance but
instead build on it for exciting developments in the future.

Sincerely,

Robert L. Strickland Leonard G. Herring
Chairman of the Board President & CEO

April 27, 1994
<PAGE> 3

LOWE'S COMPANIES, INC.

P. O. BOX 1111

NORTH WILKESBORO, NC 28656

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

MAY 27, 1994

The Annual Meeting of Shareholders of Lowe's Companies, Inc. (the
"Company") will be held at the Company's corporate headquarters, Highway 268
East, North Wilkesboro, North Carolina, on Friday, May 27, 1994, at 10:00 a.m.
to consider and act upon the following proposals:

1. To elect four Class II Directors for a term of three years;

2. To approve an amendment to the Company's Restated and Amended
Charter to increase authorized Common Stock to 700 million shares;

3. To approve amendments to the Company's 1985 Stock Option Plan to
increase the shares available for issuance under the Plan by
1,000,000 shares, to authorize the grant of stock appreciation
rights, stock awards and incentive awards, and to extend the term
of the Plan to January 30, 2004;

4. To approve the Directors' Stock Incentive Plan and to authorize the
issuance of up to 25,000 shares of Common Stock under the
Directors' Stock Incentive Plan;

5. To approve the appointment of Deloitte & Touche as independent
certified public accountants for the fiscal year ending January 31,
1995; and

6. To transact such other business as may be properly brought before
the Annual Meeting.

Shareholders of record at the close of business on April 8, 1994, are
entitled to notice of and to vote at the meeting. All properly executed proxies
delivered pursuant to this solicitation will be voted at the meeting in
accordance with instructions, if any. If two or more proxies are submitted by
the same shareholder, the proxy bearing the later date will revoke the prior
proxy. Any proxy delivered before the meeting may be revoked by attending the
meeting and voting in person.

You are cordially invited to attend and we look forward to seeing you at
the meeting.

Sincerely,

Robert L. Strickland Leonard G. Herring
Chairman of the Board President & CEO

North Wilkesboro, North Carolina
April 27, 1994

IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE DATE AND SIGN THE PROXY AND
MAIL AT ONCE IN THE ENCLOSED ENVELOPE.
<PAGE> 4

LOWE'S COMPANIES, INC.

P. O. BOX 1111

NORTH WILKESBORO, NORTH CAROLINA 28656

910/651-4000

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

MAY 27, 1994

This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Lowe's Companies, Inc. (the "Company") of proxies
to be voted at the Annual Meeting of Shareholders to be held at the Company's
corporate headquarters, Highway 268 East, North Wilkesboro, North Carolina, on
Friday, May 27, 1994, at 10:00 a.m. It is anticipated that this Proxy Statement
and the enclosed form of proxy will be sent to shareholders on April 27, 1994.

Only shareholders of record at the close of business on April 8, 1994, are
entitled to notice of and to vote at the meeting or any adjournment thereof. On
April 8, 1994, there were 148,210,288 shares of Common Stock of the Company
outstanding and entitled to vote. Shareholders are entitled to one vote for each
share held on all matters to come before the meeting.

The shares represented by a proxy will be voted as directed unless the
proxy is revoked. Any proxy may be revoked before it is exercised by filing with
the Secretary of the Company an instrument revoking the proxy or a proxy bearing
a later date. A proxy is revoked if the person who executed the proxy is present
at the meeting and elects to vote in person.

IMPORTANT NOTE: On March 16, 1994, the Company's Common Stock was split two
for one. All per share information in this Proxy Statement has been adjusted to
reflect the two-for-one stock split effective March 16, 1994.

ELECTION OF CLASS II DIRECTORS

There are currently nine members of the Board of Directors, which is
divided into three classes, with one class to be elected each year for a
three-year term. The term of Class II Directors is expiring at the 1994 Annual
Meeting. Because a new nominee is being presented to shareholders for election,
the Board of Directors is being expanded to ten members and Class II is being
expanded to four members. The four nominees listed below have been nominated by
the Board of Directors, as recommended by the Executive Committee, to a
three-year term as Class II Directors. If elected, each Class II nominee will
serve three consecutive years with his/her term expiring in 1997 or until a
successor is elected and qualifies. The election of each nominee requires the
affirmative vote of the holders of a plurality of the shares of Common Stock
cast in the election of Directors. Votes that are withheld and shares held in
street name that are not voted in the election of Directors ("broker non-votes")
will not be included in determining the number of votes cast, although such
shares will be counted for purposes of determining a quorum. Unless authority to
vote in the election of Directors is withheld, it is the intention of the
persons named as Proxies to vote FOR the four nominees named below, all of whom,
except Carol A. Farmer, currently serve as Directors. If at the time of the
meeting any of these nominees shall become unavailable for election as a
Director for any reason, which is not expected to occur, the persons named as
Proxies will vote for such substitute nominee or nominees, if any, as shall be
designated by the Board of Directors.

<PAGE> 5

INFORMATION CONCERNING NEW CLASS II NOMINEE

New Nominee for Election for Three-Year Term (Class II Director to serve until
the 1997 Annual Meeting)

2
<PAGE> 6

INFORMATION CONCERNING INCUMBENT CLASS II NOMINEES

Incumbent Nominees for Election for Three-Year Term (Class II Directors to serve
until the 1997 Annual Meeting)

<TABLE>
<CAPTION>
DIRECTOR BUSINESS EXPERIENCE, DIRECTORSHIPS, AND
NAME AND AGE SINCE POSITIONS WITHIN THE LAST FIVE YEARS
- ---------------------------- -------- ---------------------------------------------------------
<S> <C> <C>
Leonard G. Herring, 66...... 1956 President and Chief Executive Officer since 1978,
- ---------------------- Chairman of Non-Employee Directors' Stock Option
- ---------------------- Committee, Member of Executive Committee and
- ---------------------- Government/Legal Affairs Committee of the Company. Other
- ---------------------- directorships: First Union Corporation, Charlotte, N.C.,
- ---------------------- since 1986.
- ----------------------
- ----------------------
- ----------------------
- ----------------------
Robert G. Schwartz, 66...... 1973 Chairman of Compensation/Employee Stock Option Committee,
- ---------------------- Member of Audit Committee and Committee of Outside
- ---------------------- Directors of the Company. Director of Metropolitan Life
- ---------------------- Insurance Company, New York, N.Y., since 1980, having
- ---------------------- previously served as Chairman of the Board (1983-1993),
- ---------------------- President and Chief Executive Officer (1989-1993) of that
- ---------------------- company. (Mr. Schwartz retired in March, 1993.) Other
- ---------------------- directorships: Potlatch Corporation, San Francisco,
- ---------------------- Calif., since 1973; Comsat Corporation, Washington, D.C.,
- ---------------------- since 1986; Mobil Corporation, New York, N.Y., since
1987; The Reader's Digest Association, Inc.,
Pleasantville, N.Y., since 1989; Consolidated Edison
Company of New York, New York, N.Y., since 1989; CS First
Boston, Inc., New York, N.Y., since 1989; Lone Star
Industries, Inc., Stanford, Conn., since 1994.

Jack C. Shewmaker, 56....... 1985 Member of Compensation/Employee Stock Option Committee,
- ---------------------- Executive Committee and Committee of Outside Directors of
- ---------------------- the Company. Director of Wal-Mart Stores, Inc. (Discount
- ---------------------- Retail Chain), Bentonville, Ark., since 1977, having
- ---------------------- previously served as Vice Chairman of the Board
- ---------------------- (1984-1988), President and Chief Operating Officer
- ---------------------- (1978-1984) of that company. (Mr. Shewmaker retired in
- ---------------------- February, 1988.) Other directorships: Vons Companies,
- ---------------------- Inc., El Monte, Calif., since 1988.
- ----------------------
</TABLE>

3
<PAGE> 7

INFORMATION CONCERNING CONTINUING DIRECTORS

The Directors whose terms expire after 1994 are:

Class III Directors, term expiring in 1995

<TABLE>
<CAPTION>
DIRECTOR BUSINESS EXPERIENCE, DIRECTORSHIPS, AND
NAME AND AGE SINCE POSITIONS WITHIN THE LAST FIVE YEARS
- ---------------------------- -------- ---------------------------------------------------------
<S> <C> <C>
Gordon E. Cadwgan, 80....... 1961 Chairman of Audit Committee, Member of Compensation/
- ---------------------- Employee Stock Option Committee, Executive Committee and
- ---------------------- Committee of Outside Directors of the Company. Trustee
- ---------------------- and Financial Consultant, affiliated with Tucker Anthony,
- ---------------------- Inc., Boston, Mass., since 1979. Other directorships:
- ---------------------- Third Century Fund, Inc., Providence, R.I., since 1981.
- ----------------------
- ----------------------
- ----------------------
- ----------------------
Petro Kulynych, 72.......... 1952 Member of Audit Committee, Executive Committee and
- ---------------------- Government/Legal Affairs Committee of the Company, having
- ---------------------- previously served as Managing Director (1978-1983). (Mr.
- ---------------------- Kulynych retired in December, 1983.) Other directorships:
- ---------------------- Local Board, Wachovia Bank of North Carolina, N.A., North
- ---------------------- Wilkesboro, N.C., since 1988; Carolina Motor Club, Inc.
- ----------------------
- ----------------------
- ----------------------
- ----------------------
Russell B. Long, 75......... 1987 Chairman of Government/Legal Affairs Committee, Member of
- ---------------------- Compensation/Employee Stock Option Committee and
- ---------------------- Committee of Outside Directors of the Company. Partner,
- ---------------------- Long Law Firm (Attorneys-at-Law), Washington, D.C., since
- ---------------------- 1988. Other directorships: Catalyst Vidalia Corp.,
- ---------------------- Vidalia, La., since 1989; The New York Stock Exchange,
- ---------------------- Inc., New York, N.Y., since 1987. Other: United States
- ---------------------- Senator 1948-1987; Member, Senate Finance Committee
- ---------------------- 1952-1987 (Chairman 1965-1981).
- ----------------------
</TABLE>

4
<PAGE> 8

Class I Directors, term expiring in 1996

John M. Belk, 74............ 1986 Member of Audit Committee, Compensation/Employee Stock
- ---------------------- Option Committee and Committee of Outside Directors of
- ---------------------- the Company. Chairman of the Board, Belk Stores Services,
- ---------------------- Inc. (Retail Department Stores), Charlotte, N.C., since
- ---------------------- 1980. Other directorships: Coca-Cola Bottling Company
- ---------------------- Consolidated, Charlotte, N.C., since 1972; Chaparral
- ---------------------- Steel, Midlothian, Tex., since 1987.
- ----------------------
- ----------------------
- ----------------------
Robert L. Strickland, 63.... 1961 Chairman of the Board since 1978, Chairman of Executive
- ---------------------- Committee, Member of Government/Legal Affairs Committee
- ---------------------- and Non-Employee Directors' Stock Option Committee of the
- ---------------------- Company. Other directorships: Summit Communications,
- ---------------------- Atlanta, Ga., since 1987; T. Rowe Price Associates, Inc.,
- ---------------------- Baltimore, Md., since 1991.
- ----------------------
- ----------------------
- ----------------------
- ----------------------
</TABLE>

5
<PAGE> 9

INFORMATION ABOUT THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD

COMPENSATION OF DIRECTORS -- STANDARD ARRANGEMENTS. Employee Directors
receive no Director or Committee compensation. Directors (other than Founding
Directors) who were not otherwise employed by the Company were paid, during
Fiscal 1993, an annual retainer of $20,000. Non-employee Founding Directors were
paid a retainer of $40,000 each (Gordon E. Cadwgan and Petro Kulynych are
non-employee Founding Directors.) Committee members were paid an additional
$5,000 for serving as a member of a permanent committee with Committee Chairmen
having been paid an additional $10,000. The maximum amount paid during Fiscal
1993 to any one Director (pursuant to the terms of the Company's Director
Compensation Plan) was $45,000 except for Mr. Cadwgan who received an additional
$1,400 (plus expenses) for serving as a Director on the Board of one of the
Company's wholly owned subsidiaries.

COMPENSATION OF DIRECTORS -- OTHER ARRANGEMENTS. The Director compensation
arrangement also provides that once a Founding Director elects to retire, such
Director will be compensated for life at an annual rate equal to 50% of the most
recent basic annual Director fee paid to any Founding Director.

In 1989, the Company's shareholders approved the Lowe's Companies, Inc.
1989 Non-Employee Directors' Stock Option Plan. Under this Plan, each outside
Director was granted annually an immediately exercisable stock option to
purchase 4,000 shares of Common Stock at the first Directors' Meeting following
the Annual Meeting in 1989, 1990, 1991, 1992 and 1993. The option price equals
the shares' fair market value on the date of grant. In accordance with a formula
set forth in the option agreement, the Company makes a federal income tax
deposit on behalf of Directors who exercise options. Two hundred thousand shares
of Common Stock were reserved under the Plan for the granting of options, of
which options covering 140,000 shares have been granted. During 1993, options
covering 28,000 shares were granted at a price of $18.875 per share and
exercisable for 10 years covering 4,000 shares each for non-employee Directors
Andres, Belk, Cadwgan, Kulynych, Long, Schwartz and Shewmaker. No additional
options may be granted under this Plan.

During Fiscal 1993, Mr. Cadwgan exercised options for 8,000 shares and
realized a net gain on the shares of $118,624 (representing the difference
between the market value at the date of exercise and the option exercise price).
Mr. Shewmaker exercised options for 20,000 shares and realized a net gain on the
shares of $309,500 (representing the difference between the market value at the
date of exercise and the option exercise price). In accordance with the
provisions of the option agreements between Messrs. Cadwgan and Shewmaker and
the Company, the Company applied part of the gross proceeds of the option
exercise price to make federal income tax deposits on behalf of Messrs. Cadwgan
($55,694) and Shewmaker ($158,606).

BOARD OF DIRECTORS -- During Fiscal 1993, the Board of Directors held five
meetings. The Board has five standing committees which met the number of times
set forth in parentheses: Executive (3), Audit (4), Compensation/Employee Stock
Option (3), Government/Legal Affairs (0) and Outside Directors (0). All
Directors attended at least 75% of the meetings of the Board and committees on
which they served with the exception of Senator Long who attended 63% of such
meetings.

AUDIT COMMITTEE -- The Company's Audit Committee consists of five
non-employee Directors: Gordon E. Cadwgan (Chairman), William A. Andres, John M.
Belk, Petro Kulynych and Robert G. Schwartz. The Audit Committee meets
independently with the internal auditing staff, with representatives of the
Company's independent accountants and with representatives of senior management.
The Committee reviews the general scope of the Company's annual audit and the
fee charged by the independent accountants, determines the duties and
responsibilities of the internal auditors, reviews audit results and other
matters

6
<PAGE> 10

relating to internal control. In addition, the Audit Committee recommends
annually the engagement of the Company's independent accountants.

COMPENSATION/EMPLOYEE STOCK OPTION COMMITTEE -- The Company's
Compensation/Employee Stock Option Committee consists of six non-employee
Directors: Robert G. Schwartz (Chairman), William A. Andres, John M. Belk,
Gordon E. Cadwgan, Russell B. Long and Jack C. Shewmaker. This Committee reviews
and sets, at least annually, the compensation of Directors who are employees of
the Company; reviews the compensation of all other employees whose annual salary
and bonus opportunities exceed a certain level; reviews and approves all annual
bonus plans; reviews and approves all forms of compensation which exceed one
year in duration, including employee stock option and deferred compensation
awards; administers and interprets all provisions of any compensation, employee
stock option or stock appreciation rights plans approved by the Board; and
grants options pursuant to the terms of any employee stock option or stock
appreciation rights plan.

EXECUTIVE COMMITTEE -- The Company's Executive Committee consists of five
Directors: Robert L. Strickland (Chairman), Gordon E. Cadwgan, Leonard G.
Herring, Petro Kulynych and Jack C. Shewmaker. The Executive Committee exercises
all of the powers of the Board of Directors between Board meetings, except as
otherwise limited by law. In addition, this Committee functions as a nominating
committee by recommending nominees for election as Directors of the Company.
This Committee considers nominees recommended by shareholders. Any such
recommendation should be submitted in writing to the Secretary of the Company no
later than 120 days prior to the date of mailing the proxy materials for each
annual meeting (generally, not later than the end of November preceding the
annual meeting). Such recommendation should include information that will enable
the Committee to evaluate the qualifications of the proposed nominee.

GOVERNMENT/LEGAL AFFAIRS COMMITTEE -- The Government/Legal Affairs
Committee of the Company consists of four members: Russell B. Long (Chairman),
Leonard G. Herring, Petro Kulynych and Robert L. Strickland. This Committee
assists the Board of Directors with the Company's relationships with federal,
state and local governments. The Committee also assists the Board and management
in responding to and initiating legislative proposals at all three governmental
levels.

COMMITTEE OF OUTSIDE DIRECTORS -- The Company also has a Committee of
Outside Directors which consists of six non-employee Directors: William A.
Andres (Chairman), John M. Belk, Gordon E. Cadwgan, Russell B. Long, Robert G.
Schwartz and Jack C. Shewmaker. This Committee, performs, at the direction of
the Board of Directors, special projects appropriately assigned to outside
directors.

7
<PAGE> 11

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the beneficial ownership as of April 8, 1994,
except as noted, of Common Stock of each incumbent Director of the Company, each
nominee for election as a Director of the Company, each shareholder known to the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, and Directors and Executive Officers as a group:

<TABLE>
<CAPTION>
NAME OR NUMBER PERCENT
OF PERSONS IN GROUP NUMBER OF SHARES(1) OF CLASS
--------------------------------------------------- ------------------- --------
<S> <C> <C>
William A. Andres 34,000 *
John M. Belk 32,000 *
Gordon E. Cadwgan 105,476 *
Carol A. Farmer 300 *
Leonard G. Herring 1,859,610(2) 1.255
Petro Kulynych 2,234,060(3) 1.507
Russell B. Long 76,400 *
R. Michael Rouleau 30,000 *
Robert G. Schwartz 40,000(4) *
Jack C. Shewmaker 21,600 *
Robert L. Strickland 1,374,410(5) *
Robert L. Tillman 93,078 *
Harry B. Underwood II 76,060 *
Incumbent Directors, Director Nominees
and Executive Officers as a Group (20 in total) 6,090,624(6) 4.106
Lowe's Companies Employee Stock
Ownership Trust
P.O. Box 1111
North Wilkesboro, NC 28656 29,924,660(6) 20.191
FMR Corp.
82 Devonshire Street
Boston, MA 02109 19,824,472(7) 13.376
Loomis, Sayles & Company, Incorporated
One Financial Center
Boston, MA 02111 7,728,448(7) 5.215
</TABLE>

- ---------------

* Less than 1%.
(1) Includes shares that may be acquired within 60 days under the Company's
Stock Option Plans as follows: Mr. Andres 20,000 shares; Mr. Belk 20,000
shares; Mr. Cadwgan 8,000 shares; Mr. Herring 10,000 shares; Mr. Kulynych
20,000 shares; Mr. Schwartz 20,000 shares; Mr. Strickland 20,000 shares;
Mr. Underwood 16,000 shares; with aggregate shares for all Executive
Officers and Directors as a group (19) being 134,000.
(2) Includes 81,300 shares of shared voting and investment power.

8
<PAGE> 12

(3) Includes 82,000 shares of shared voting and investment power. Also includes
1,420,000 shares in a self-directed individual retirement account.
(4) Does not include 33,400 shares beneficially owned by Metropolitan Life
Insurance Company of which Mr. Schwartz currently serves on the Board of
Directors. (Mr. Schwartz retired as Chairman of the Board, President and
Chief Executive Officer of Metropolitan Life Insurance Company in March,
1993.)
(5) Includes 164,000 shares of shared voting and investment power.
(6) Shares allocated to participants' ESOP accounts are voted by the
participants, via proxy solicitations from Wachovia Bank of North Carolina,
N.A. (the "Trustee"). The ESOP's Management Committee directs the Trustee
in the manner in which shares not allocated to participants' accounts are
to be voted. The Management Committee has 18 members, including Messrs.
Herring, Strickland, Rouleau, Tillman and Underwood. At April 8, 1994,
there were 292,896 unallocated shares.
(7) Shares held at December 31, 1993.

Based solely on its review of the forms required to be filed by Section
16(a) of the Securities Exchange Act of 1934 that have been received by the
Company and written representations from certain reporting persons that no
annual statements on Form 5 were required, the Company believes that all filing
requirements under Section 16(a) applicable to its Officers, Directors and
beneficial owners of more than 10% of its Common Stock have been complied with.

9
<PAGE> 13

COMPENSATION OF EXECUTIVE OFFICERS

The following table discloses compensation received by the Company's Chief
Executive Officer and the four remaining most highly paid Executive Officers for
the three fiscal years ended January 31, 1994:

SUMMARY COMPENSATION TABLE(1)

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------
-------------------------------------
(B) (E) (F) (G)
(A) ------------- (C) (D) --------------- ------------- ---------------
- -------------------------- FISCAL YEAR -------- -------- OTHER ANNUAL STOCK OPTIONS ALL OTHER
NAME & PRINCIPAL POSITION ENDED JAN. 31 SALARY BONUS COMPENSATION(2) (IN SHARES) COMPENSATION(3)
- -------------------------- ------------- -------- -------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Leonard G. Herring........ 1994 $535,000 $373,750 $ 173,523 0 $19,500
President & CEO 1993 $495,000 $253,500 $ 146,397 0 $30,000
1992 $430,000 $ 0 $ 79,269 0 $28,889
Robert L. Strickland...... 1994 $497,500 $341,250 $ 157,961 0 $19,500
Chairman of the Board 1993 $470,000 $240,500 $ 137,950 0 $30,000
1992 $410,000 $ 0 $ 74,652 0 $28,889
Robert L. Tillman......... 1994 $321,000 $180,000 $ 82,910 0 $19,500
Executive Vice 1993 $281,381 $147,010 $ 65,235 0 $30,000
President-Merchandising 1992 $245,000 $ 0 $ 25,278 0 $28,889
R. Michael Rouleau........ 1994 $321,000 $180,000 $ 0 0 $16,298
Executive Vice 1993 $149,998 $ 75,210 $ 0 30,000 $ 0
President-Store 1992(4) NA NA NA NA NA
Operations
Harry B. Underwood II..... 1994 $203,846 $118,500 $ 43,160 0 $19,500
Senior Vice President & 1993 $195,537 $114,000 $ 38,812 0 $30,000
Treasurer (Chief 1992 $190,000 $ 0 $ 14,220 0 $25,275
Financial Officer)
</TABLE>

- ---------------

(1) Does not include awards made on January 31, 1994 for the fiscal year ending
January 31, 1995 described in the New Plan Benefit Table included in this
Proxy Statement
(2) All amounts shown are payments from the Company's Benefit Restoration Plan
(3) Amounts shown are 1993 contributions made by the Company to the Employee
Stock Ownership Plan
(4) Mr. Rouleau was employed August 1, 1992; consequently, no compensation was
paid during the fiscal year ended January 31, 1992.

OPTION GRANTS IN LAST FISCAL YEAR

No options were granted to the named Executive Officers during Fiscal 1993.

10
<PAGE> 14

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table provides information on option exercises in Fiscal 1993
by the named Executive Officers and the value of such Officers' unexercised
options at January 31, 1994. All outstanding options were exercisable at that
date.

<TABLE>
<CAPTION>
(A) (B) (C) (C1)(OPTIONAL) (D1) (D2) (E1) (E2) (E3)
- ------------------ ----------- ----------- -------------- ----------- ------------- --------- ------------- -------------
VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END ($)
($30.50 ON 1/31/94)
---------------------------------------
NUMBER OF UNEXERCISED
SHARES ANNUALIZED OPTIONS AT FY-END (#) EXERCISABLE
ACQUIRED ON VALUE VALUE -------------------------- ------------------------
NAME EXERCISE(#) REALIZED($) REALIZED ($) EXERCISABLE UNEXERCISABLE AGGREGATE ANNUALIZED(4) UNEXERCISABLE
- ------------------ ----------- ----------- -------------- ----------- ------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard G.
Herring(1)...... 24,000 $ 441,875 $ 89,123 10,000 0 $ 241,250 $ 51,882 $ 0
Robert L.
Strickland...... 0 $ 0 $ 0 20,000 0 $ 482,500 $ 103,763 $ 0
Robert L.
Tillman(2)...... 8,000 $ 124,000 $ 22,262 16,000 0 $ 386,000 $ 83,011 $ 0
R. Michael
Rouleau......... 0 $ 0 $ 0 30,000 0 $ 609,375 $ 491,431 $ 0
Harry B. Underwood
II(3)........... 12,000 $ 285,750 $ 47,310 16,000 0 $ 386,000 $ 83,011 $ 0
</TABLE>

- ---------------

(1) Mr. Herring exercised two grants during Fiscal 1993. One grant of 14,000
shares was held for 5.45 years with an option price of $4.0625 and a market
price of $18.4375 at date of exercise. The second grant of 10,000 shares was
held for 4.61 years and had an option price of $6.375 and a market price of
$30.4375 at date of exercise. In accordance with a formula set forth in the
agreement evidencing the second grant, the Company applied part of the
proceeds of the option exercise price to make income tax deposits on behalf
of Mr. Herring ($58,610), which are not reflected in the table above. The
annualized value realized indicates the value accrued for each year the
option grants were held. The annualized value was determined by dividing the
Value Realized for each option by the number of years each option was held.
(2) The grant exercised by Mr. Tillman was held for 5.57 years; the option price
was $4.0625 and the market price at exercise was $19.5625. The annualized
value realized indicates the value accrued for each year the option grant
was held. The annualized value was determined by dividing the Value Realized
by the 5.57 years the option was held.
(3) The grant exercised by Mr. Underwood was held for 6.04 years; the option
price was $4.0625 and the market price at exercise was $27.875. The
annualized value realized indicates the value accrued for each year the
option was held. The annualized value was determined by dividing the Value
Realized by the 6.04 years the option was held.
(4) This column shows the annualized value of the unexercised in-the-money
options which had not been exercised at fiscal year end.

LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR

There were no awards under the Company's Long-Term Incentive Plan for the
fiscal year ended January 31, 1994.

11
<PAGE> 15

REPORT OF THE COMPENSATION/EMPLOYEE STOCK OPTION COMMITTEE

This report by the Executive Compensation Committee is required by rules of
the Securities and Exchange Commission. It is not to be deemed incorporated by
reference by any general statement which incorporates by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, and it is not to be otherwise deemed filed under either
such Act.

The Compensation/Employee Stock Option Committee (the "Committee") of the
Board of Directors is comprised of six of the Company's non-employee Directors
and is responsible for administering the Company's Executive Compensation
Program for all executives at a compensation level set by the Company's Bylaws.
In carrying out its responsibilities, the Committee:

- Articulates the Company's executive compensation philosophies and
policies to executive management, participates in compensation program
development, and has final authority for approval of plans and programs
except where shareholder approval is required;

- Monitors and approves on-going base salary and incentive compensation
programs for executive management, including participation, performance
goals and criteria, interpretation of provisions and determination of
award payouts;

- Reviews and approves base salary increase recommendations for Executive
Officers of the Company; and

- Initiates all compensation actions for the President and Chief Executive
Officer and the Chairman of the Board, subject to final Board approval.

The Committee has retained a national consulting firm to be a source of
on-going advice to both the Committee and management, but to report to the
Committee.

EXECUTIVE COMPENSATION PRINCIPLES

The Company's Executive Compensation Program has been designed to establish
a strong linkage between the creation of shareholder value and the compensation
earned by its senior executives. It is the intention of the Committee that all
compensation paid under the Executive Compensation Program of the Company will
be tax deductible to the Company in the year paid to the executive. The
fundamental objectives of the Program are to:

- Align executive compensation with the Company's mission, values and
business strategies;

- Attract, motivate, retain and reward the executives whose leadership and
performance are critical to the Company's success in enhancing shareholder
value; and

- Provide compensation which is commensurate with the Company's performance
and the contributions made by executives toward this performance.

The Program is intended to provide compensation which is competitive with
comparable companies in the retailing industry (with particular emphasis on
specialty hardgoods retailers and major U.S. retailers) when the Company is
meeting its targeted financial goals. At the same time, the Program seeks to
provide above average compensation when the Company's targeted goals are
exceeded, and below average compensation when targeted performance goals are not
achieved.

12
<PAGE> 16

The Program provides for larger portions of total compensation to vary on
the basis of Company performance for higher levels of executives (i.e., the most
senior Executive Officers have more of their total compensation at risk on the
basis of Company performance than do lower levels of executives). All Executive
Officers participate in the same direct compensation programs as the other
executives of the Company, with the only differences being the degree of
compensation risk and the overall magnitude of the potential awards.

The Committee believes that Executive Officers of the Company should be
encouraged to own significant holdings of the Company's Common Stock to align
their interests with those of the Company's shareholders. Through the operation
of the Company's Employee Stock Ownership Plan, the Employee Savings and
Investment Plan and the proposed 1994 Incentive Plan, vehicles are provided to
enable executives to acquire Company Stock, subject to regulatory limitations.

ELEMENTS IN THE EXECUTIVE COMPENSATION PROGRAM

The Company's Executive Compensation Program is comprised of the following
elements:

Base Salary

Salaries for Executive Officers are established on the basis of the
qualifications and experience of the executive, the nature of the job
responsibilities and salaries for competitive positions in the retailing
industry.

Executive Officers' base salaries are reviewed annually and are approved by
the Committee. Salaries of Executive Officers are compared with those of
comparable executive positions in the retailing industry throughout the United
States. The Committee uses the median level of base salary as a guideline, in
conjunction with the executive's performance and qualifications, for
establishing salary levels.

Management Bonus Program

All Executive Officers participate in the Company's Management Bonus
Program. This Plan provides award opportunities which can be earned upon
achievement by the Company of pre-set annual financial goals. Based on the
annual business plan developed by management, the Committee establishes
financial goals for each fiscal year as well as the award opportunities provided
to each participant and the relationship between the performance goals and the
award opportunities.

Under the Plan, no bonuses are paid if performance is below the threshold
level of corporate profitability set by the Committee at the beginning of the
year. If the threshold level is achieved, a minimum bonus payment is earned,
typically 25% of the stated bonus opportunity for the executive. Additional
bonus amounts are earned on a proportionate scale up to 100% of the stated bonus
opportunity if pre-set financial goals are met. Designated senior managers and
executives can earn a bonus premium ranging from 27% to 43% of stated bonus
opportunity if financial goals are exceeded. The maximum bonus, including bonus
premium, which can be earned by any executive of the Company for 1994 is 70% of
base annual salary.

No bonuses were paid under the Plan for performance in the fiscal year
ended January 31, 1992 because the Company's financial results did not meet the
Plan's minimum requirements.

Maximum bonuses were paid under the Plan for the fiscal years ended January
31, 1993 and January 31, 1994 because the Company's financial results exceeded
the performance goals which the Committee had established for the year.

13
<PAGE> 17

Stock Appreciation Incentive Plan

The Stock Appreciation Incentive Plan is a "phantom stock" incentive plan
which provides participating executives with the opportunity to earn cash
incentive awards based on the Company's stock price appreciation during a
defined performance cycle. Each participant is granted a specified number of
units (reflecting the nature and magnitude of the executive's position and
competitive marketplace long-term incentive compensation opportunities). The
amount of award earned by the participant for the performance cycle is equal to
the difference between the price of the Company's Common Stock at the beginning
of the cycle and the two-month average stock price as measured at the end of the
period, multiplied by the number of units granted to the participant. The amount
of incentive compensation which can be paid to any participant for a performance
cycle is limited to $6,250 per 1,000 units.

At the end of the performance cycle that began February 1, 1991 and ended
January 31, 1994, a total of 671,112 Plan units had been granted and remained
outstanding to 82 executives, including Messrs. Tillman and Underwood (32,000
and 24,000 units, respectively). The Company's stock price at the beginning of
the performance cycle was $6.28 per share and $29.875 per share during the Final
Valuation period at the end of the cycle, resulting in maximum payments under
terms of the Plan. Messrs. Herring, Rouleau and Strickland have not been granted
units under the Plan. No grants were made under the Plan during the year ended
January 31, 1994.

The term of the Stock Appreciation Incentive Plan has expired and no
further awards may be made under the Plan.

1985 Stock Option Plan

The 1985 Stock Option Plan allows the Committee to make grants of
non-qualified stock options and/or incentive stock options. The Committee is
empowered to set the option price on any grant (with the requirement that the
option price on any incentive stock options cannot be less than the market price
of the Company's Common Stock on the date on which the incentive stock option is
granted). Non-qualified stock options may be granted at market price, below
market price or above market price, as of the date the options are granted. All
stock options which have been granted under the Plan measure performance and
create compensation solely on the basis of the appreciation in the price of the
Company's Common Stock above the fair market value on the date of the grant.

All options under the Plan must be granted prior to March 25, 1995, and no
option may have a term exceeding ten years. Four million shares of the Company's
Common Stock were originally authorized for grants under the Plan. Of that
amount, options covering 2,814,000 shares had been granted by January 31, 1994
and 154,220 shares continued to be outstanding and unexercised on that date.

1994 Incentive Plan

On January 31, 1994, the Board of Directors voted to amend and restate the
1985 Stock Option Plan as the 1994 Incentive Plan. The 1994 Incentive Plan is
submitted for shareholder approval in this Proxy and described herein.

The purpose of the 1994 Incentive Plan is to enable the Company to attract,
motivate, retain and reward the executives whose leadership and performance are
critical to the Company's success in enhancing shareholder value, to place
further emphasis on executive ownership of Company Stock, to continue

14
<PAGE> 18

previously established incentive compensation practices under a single plan and
to assure deductibility of executive compensation.

Benefit Restoration Plan

The Benefit Restoration Plan was adopted by the Company in May 1990, to
provide qualifying executives with benefits equivalent to those received by all
other employees under the Company's basic qualified employee benefit plans.
Qualifying executives are those executives whose annual additions and other
benefits, as normally provided to all participants under those qualified plans,
would be curtailed by the effect of Internal Revenue Code restrictions, and who
are selected by the Committee to participate in the Plan. The Benefit
Restoration Plan benefits are determined annually. Participating executives may
elect annually to defer benefits or to receive a current cash payment.

Other Compensation

The Company's Executive Officers participate in the various qualified and
non-qualified employee benefit plans sponsored by the Company. The Company makes
only nominal use of perquisites in compensating its Executive Officers.

THE CEO'S COMPENSATION IN THE FISCAL YEAR ENDED JANUARY 31, 1994

Effective August 1, 1993, the Committee increased Mr. Herring's annual base
salary from $495,000 to $575,000. This increase of 16% was the first salary
increase received by Mr. Herring since February 1, 1992. The Committee based its
determination on the combination of the progress made by the Company in
establishing and implementing its new retailing strategies, the operating
performance of the Company, Mr. Herring's leadership and the assessment that his
prior base salary was below market in comparison to those of other Chief
Executive Officers of similarly situated companies.

The Committee authorized payment to Mr. Herring of an annual bonus of
$373,750 under the 1993 Management Bonus Program. The Committee determined Mr.
Herring's bonus solely on the basis of the Company's earnings performance versus
the goals for such performance which the Committee established at the beginning
of the year. Inasmuch as the Company's performance for the year exceeded the
pre-set goals, Mr. Herring earned his maximum award opportunity.

Mr. Herring did not receive any grants under either the 1985 Stock Option
Plan or under the Stock Appreciation Incentive Plan during the fiscal year ended
January 31, 1994. Furthermore, Mr. Herring was not a participant in the
1991-1994 performance cycle of the Stock Appreciation Incentive Plan. Subject to
shareholder approval of the 1994 Incentive Plan, the Committee granted Mr.
Herring three STAR Awards of 5,000 Units each with terms of one year, two years
and three years, with a Beginning Valuation of $30.50 per Unit. The maximum
appreciation has been set at $2.50 per Unit for the one-year award, $5.00 per
Unit for the two-year award, and $7.50 per Unit for the three-year award. The
Committee also approved, subject to shareholder approval of the 1994 Incentive
Plan, the grant to Mr. Herring of 10,000 Performance Accelerated Restricted
Stock (PARS) shares as of January 31, 1994 which will vest after seven years,
but provide for accelerated vesting if certain performance measures are met
after three years and/or five years.

Mr. Herring received a Benefit Restoration Plan payment of $173,523 and a
Company contribution under the Employee Stock Ownership Plan of $19,500 (such
amount was equal to 13% of $150,000, the maximum salary which can be taken into
account for benefit plan contributions) for the fiscal year ended January 31,
1994. The Committee believes that the payments described herein were necessary
to maintain the competi-

15
<PAGE> 19

tiveness of Mr. Herring's compensation package in comparison to those of other
Chief Executive Officers of similarly situated companies.

* * *

The Committee believes that the Company's Executive Compensation Program
has been strongly linked to the Company's performance and the enhancement of
shareholder value. The Committee intends to continually evaluate the Company's
compensation philosophies and plans to ensure that they are appropriately
configured to align the interests of executives and shareholders, and to ensure
that the Company can attract, motivate and retain talented management personnel.

Robert G. Schwartz, Chairman
William A. Andres
John M. Belk
Gordon E. Cadwgan
Russell B. Long
Jack C. Shewmaker

16
<PAGE> 20

PERFORMANCE GRAPH

The following graph compares the total returns (assuming reinvestment of
dividends) of the Company's Common Stock, the S&P 500 Index and the S&P Retail
Index. The graph assumes $100 invested on January 31, 1989, in the Company's
Common Stock and each of the indices.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN OF LOWE'S,
THE S&P 500, AND THE S&P RETAIL INDEX

<TABLE>
<CAPTION>
MEASUREMENT PERIOD LOWE'S S&P 500 S&P RETAIL
(FISCAL YEAR COVERED) $575.26 $187.68 INDEX $232.13
<S> <C> <C> <C>
JAN. '89 100 100 100
JAN. '90 121.29 114.37 116.49
JAN. '91 115.78 123.75 133.84
JAN. '92 189.31 151.40 180.72
JAN. '93 258.50 166.88 237.54
JAN. '94 575.26 187.68 232.13
</TABLE>

Note: All data as of January 31.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BANKING AND FINANCIAL TRANSACTIONS. During Fiscal 1993, the Company paid
all outstanding indebtedness ($676,825) to Metropolitan Life Insurance Company.
Robert G. Schwartz, a Director of the Company, serves on the Board of Directors
of Metropolitan Life Insurance Company. (Mr. Schwartz retired as Chairman of the
Board, President and Chief Executive Officer of Metropolitan Life Insurance
Company in March, 1993.)

At January 31, 1994, the Company and certain subsidiaries of the Company
were indebted to First Union National Bank, a subsidiary of First Union
Corporation, in the amount of $17,108,411 at annual interest rates varying from
72% of the Bank's prime rate as in effect from time to time to a maximum of 12%
with maturities

17
<PAGE> 21

in 1994. Also at January 31, 1994, the Company and certain subsidiaries of the
Company were indebted to various Industrial Development Boards for which First
Union National Bank acts as a collecting agent. The amount at January 31, 1994,
was $2,395,834 at annual interest rates varying from 70.0% to 75.8% of First
Union's prime rate as in effect from time to time with maturities ranging from
1994 through 2000. The Company has a line of credit agreement with First Union
National Bank which provides for short-term unsecured borrowings of up to $30
million. At January 31, 1994, there were no amounts outstanding under this
credit arrangement. The applicable interest rate for this credit arrangement is
the lesser of the Bank's certificate of deposit rate plus 50 basis points, the
Bank's prime rate, the LIBOR rate plus 37.5 basis points, or a rate negotiated
with the Bank. Under this arrangement, the Company pays an annual fee of 12.5
basis points on the $30 million line of credit. The amount of fees paid during
Fiscal 1993 was $37,500. The Company also has an arrangement with First Union
National Bank for a $45 million line of credit for the purpose of issuing
letters of credit and bankers acceptances. Other than a commission fee on
letters of credit issued under this arrangement, there are no fees charged for
maintaining this line of credit. In addition, First Union National Bank extends
a $15 million line of credit to a nonaffiliated entity that purchases, on an
on-going basis, an undivided interest in Company accounts receivable which are
generated in the normal course of business. Leonard G. Herring, President and a
Director of the Company, is a member of the Board of Directors of First Union
Corporation.

Except as discussed above and under "COMPENSATION OF DIRECTORS -- STANDARD
ARRANGEMENTS", to the knowledge of management, no Director, Officer, or
associate of any Director or Officer had any material interest, direct or
indirect, in any material transaction during the year ended January 31, 1994,
nor in any proposed transaction in which the Company was or will be a party. The
Company believes the terms of the transactions described above are comparable to
terms available for similar transactions with entities unaffiliated with its
Directors and Officers.

APPROVAL OF CHARTER AMENDMENT TO
INCREASE AUTHORIZED COMMON STOCK

The Board of Directors has recommended an amendment of the Company's
Restated and Amended Charter, in the form below, to increase authorized Common
Stock, $.50 par value, to 700,000,000 shares. As of April 8, 1994, the Company
had 148,210,288 shares of Common Stock outstanding. The amendment would effect
no change in the currently authorized 5,000,000 shares of Preferred Stock, $5
par value.

The amendment will permit future dividends and splits of the Common Stock.
While the Board of Directors has no present plans to declare a stock split
(since the Common Stock was only recently split two-for-one on March 16, 1994)
the Board, nonetheless, believes it advisable to have the ability to declare a
stock split when circumstances warrant. Currently, there are insufficient
authorized but unissued shares to declare a two-for-one stock split in the form
of a dividend.

Adoption of the proposal to increase authorized Common Stock to 700,000,000
shares requires the affirmative vote of an absolute majority of outstanding
shares of Common Stock.

If authorized, additional Common Stock will be available for possible
future financings of, or acquisitions by, the Company and for general corporate
purposes without any legal requirement that further shareholder authorization
for the issuance be obtained. The Company has no present plans for the issuance
of any Common Stock other than the issuance of shares in the Company's 1985
Stock Option Plan, the Non-Employee Directors Plan and Employee Stock Ownership
Plan and the proposed Directors' Stock Incentive Plan and 1994 Incentive Plan,
all as described in this Proxy Statement. The Board of Directors has approved

18
<PAGE> 22

funding the Fiscal 1993 contribution to the Employee Stock Ownership Plan with
previously unissued Common Stock during 1994.

Shareholders should be aware that the issuance of any additional shares of
Common Stock could cause a dilution of voting rights and net income and net book
value per share of Common Stock; prior to issuance, of course, they have no such
effect. The Company, however, would receive consideration for any additional
shares of Common Stock issued, thereby reducing or eliminating the economic
effect to each stockholder of such dilution.

Another possible effect of the increase in the number of authorized shares
of Common Stock would be to enable the Directors to render more difficult or to
discourage an attempt to gain control of the Company by means of a merger,
tender offer, proxy contest or otherwise, and thereby protect current
management. The Board of Directors would have available additional shares of
Common Stock with which to effect a sale of shares or a merger or similar
transaction in which the number of outstanding shares of Common Stock would be
increased, thereby diluting the voting interest of the party attempting to gain
control of the Company. Consequently, the Board of Directors, through the
issuance of additional shares of Common Stock, could discourage a tender offer
or other takeover attempt that might be favored by a majority of shareholders.

The proposed amendment to the Restated and Amended Charter consists of
revising the first paragraph of Article 4 to read as follows (change
underlined):

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.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO
THE COMPANY'S RESTATED AND AMENDED CHARTER TO INCREASE AUTHORIZED COMMON STOCK
TO 700,000,000 SHARES.

APPROVAL OF AMENDMENTS TO
THE 1985 STOCK OPTION PLAN

The Board proposes that shareholders approve several amendments to the 1985
Stock Option Plan (the "1985 Plan"). The amendments were adopted by the Board,
subject to the approval of shareholders, on January 31, 1994 and further
amended, subject to shareholder approval, on March 7, 1994. The amendments (i)
increase the number of shares available for issuance under the 1985 Plan, (ii)
authorize the grant of stock appreciation rights, Stock Awards and Incentive
Awards and (iii) extend the term of the 1985 Plan. To reflect these proposed
amendments, the name of the 1985 Stock Option Plan will be changed to the "1994
Incentive Plan" (the "1994 Plan").

The approval of the amendments requires the affirmative vote of the holders
of a majority of the shares of Common Stock present or represented by properly
executed and delivered proxies at the meeting. Abstentions and Broker Shares
voted as to any matter at the meeting will be included in determining the number
of votes present or represented at the meeting with respect to determining the
vote on the amendments. Broker Shares that are not voted on any matter at the
meeting will not be included in determining the number of shares present or
represented at the meeting with respect to determining the vote on the
amendments.

For many years the Company has provided stock-based compensation
opportunities for executives and Directors. The 1985 Plan was adopted by the
Board on March 25, 1985 and approved by shareholders on May 31, 1985. The Board
believes that the 1985 Plan has served its purpose of promoting a greater
identity of

19
<PAGE> 23

interest between participants and shareholders and that stock-based compensation
and incentive opportunities should be continued under the 1985 Plan, as amended
to become the 1994 Plan.

The following paragraphs summarize the principal features of the 1994 Plan.
This summary is subject, in all respects, to the terms of the 1994 Plan. The
Company will provide promptly, upon request and without charge, a copy of the
full text of the 1994 Plan to each person to whom a copy of this Proxy Statement
is delivered. Requests should be directed to: William C. Warden, Jr., Senior
Vice President, General Counsel and Secretary, Lowe's Companies, Inc., P.O. Box
1111, North Wilkesboro, North Carolina 28656-0001 (Telephone 910-651-4497).

SUMMARY OF THE 1994 PLAN

PURPOSE. The Board believes that the 1994 Plan will benefit the Company by
(i) assisting it in recruiting and retaining employees with ability and
initiative, (ii) providing greater incentive for employees of the Company and
its affiliates, and (iii) associating the interests of employees with those of
the Company, its affiliates and its shareholders through opportunities for
increased stock ownership and performance-based compensation. A maximum of
5,000,000 shares of Common Stock (after taking into account shares previously
issued under the 1985 Plan) may be issued under the 1994 Plan. No more than
1,000,000 shares may be issued as Stock Awards (as described below). After
giving effect to the two-for-one stock split, this represents an increase of
1,000,000 shares over the number previously authorized under the 1985 Plan. If
the 1994 Plan is approved by shareholders, a total of 2,332,640 shares will
remain available for awards thereunder.

ADMINISTRATION. The Compensation/Employee Stock Option Committee of the
Board (the "Compensation Committee") will administer the 1994 Plan. The
Compensation Committee may delegate its authority to administer the 1994 Plan to
one or more officers of the Company. The Compensation Committee, however, may
not delegate its authority with respect to individuals who are subject to
Section 16 of the Securities Exchange Act of 1934. As used in this summary, the
term "Administrator" means the Compensation Committee and any delegate, as
appropriate.

ELIGIBILITY. Each employee of the Company and its affiliates is eligible
to participate in the 1994 Plan if the Administrator, in its sole discretion,
determines that such person has contributed significantly or can be expected to
contribute significantly to the profits or growth of the Company or an affiliate
("Participants"). No person may participate in the 1994 Plan while he is a
member of the Compensation Committee. The Administrator may, from time to time,
grant stock options, stock appreciation rights ("STARs"), Stock Awards and
Incentive Awards to Participants.

OPTIONS. Options granted under the 1994 Plan may be incentive stock
options ("ISOs") or non-qualified stock options. A stock option entitles the
Participant to purchase shares of Common Stock from the Company at the option
price. The Administrator will specify the number of shares subject to each
option; provided, however, that no Participant may be granted options in any
calendar year covering more than 40,000 shares of Common Stock. The option price
will be determined by the Administrator at the time the option is granted, but
in the case of an ISO the price cannot be less than the shares' fair market
value on the date of grant. The maximum term of each option will be determined
by the Administrator at the time the option is granted but cannot exceed ten
years in the case of an ISO. The option price may be paid in cash or a cash
equivalent, by surrendering shares of Common Stock, or with a combination of
cash, cash equivalent and Common Stock. The 1994 Plan will allow the grant of
options that qualify as "performance based compensation" under the Internal
Revenue Code's limitation on the deductibility of executive compensation.

20
<PAGE> 24

STARS. STAR awards are denominated in Units, which are comparable to a
share of Common Stock for purposes of determining the amount payable under a
STAR award. The number of Units subject to each STAR award will be determined by
the Administrator on the date of grant; provided, however, that no Participant
may be granted STARs in any calendar year covering more than 30,000 Units. STARs
entitle the Participant to receive the excess of the Final Value of each STAR
Unit over the fair market value of a share of Common Stock on the first day of
the STAR performance period; provided, however, that the Administrator may
establish a limit on the amount payable with respect to each STAR Unit. The
Final Value is the average closing price of a share of Common Stock during the
last month of the STAR performance period. The STAR performance period is
prescribed by the Administrator on the date of grant and will be either one, two
or three years. The amount payable under a STAR award will be paid in cash
within ninety days of the end of the STAR performance period.

The STAR award provisions of the 1994 Plan continue the incentive
compensation opportunity previously provided under the Stock Appreciation
Incentive Plan (described elsewhere in this Proxy Statement) which has expired.
STAR awards are included under the 1994 Plan to ensure that benefits qualify as
"performance based compensation" under the Internal Revenue Code's limitation on
the deductibility of executive compensation.

STOCK AWARDS. Participants also may be awarded shares of Common Stock
pursuant to a Stock Award. The number of shares subject to each Stock Award will
be determined by the Administrator on the date of grant; provided, however, that
no Participant may receive Stock Awards in any calendar year covering more than
30,000 shares of Common Stock. The Administrator, in its discretion, may
prescribe that a Participant's rights in a Stock Award will be nontransferable
or forfeitable or both unless certain conditions are satisfied. The 1994 Plan
provides that performance objectives may be stated as goals based on the
Company's earnings per share, return on assets, the fair market value of the
Common Stock, or the Company's average annual FIFO pre-tax earnings relative to
beginning non-cash assets. For this purpose, "beginning non-cash assets" means
the Company's total assets at the beginning of the fiscal year, exclusive of
cash and short-term investments.

INCENTIVE AWARDS. Participants also may receive Incentive Awards under the
1994 Plan. An Incentive Award entitles a Participant to receive a cash payment
based on goals stated with reference to the Company's annual FIFO net before tax
(NBT) earnings. The Administrator will determine each Participant's Incentive
Award opportunity; provided, however, that no Participant may receive Incentive
Award payments in any calendar year that exceed 75% of the Participant's base
salary (prior to any salary reduction or deferral election) as of February 1 of
the performance year.

The Incentive Award provisions of the 1994 Plan continue the incentive
compensation opportunity heretofore provided under the Management Bonus Program
(described in the Compensation Committee Report included in this Proxy
Statement). Incentive Awards are included under the 1994 Plan to ensure that
benefits qualify as "performance based compensation" under the Internal Revenue
Code's limitation on the deductibility of executive compensation.

CHANGE IN CONTROL. The 1994 Plan provides that outstanding STARs will be
payable and outstanding Stock Awards will be transferable and vested in the
event of a Change in Control. The 1994 Plan defines the term "Change in Control"
with reference to the Company's Rights Agreement with Wachovia Bank and Trust
Company. The 1994 Plan limits such payments, when taken into account with all
other benefits, to the amount allowed under the Internal Revenue Code's "golden
parachute" rules. Amounts will be payable under Incentive Awards following a
Change in Control only to the extent that the performance objectives are

21
<PAGE> 25

achieved. Outstanding options will terminate in the event of a reorganization,
merger or consolidation of the Company with another corporation if the Company
is not the surviving corporation.

DURATION OF 1994 PLAN. No option, STAR, Stock Award, Performance Share, or
Incentive Award may be granted under the Plan after January 30, 2004. The Board
may sooner terminate the 1994 Plan without further action by the shareholders.
The Board also may amend the 1994 Plan except that no amendment that increases
the number of shares of Common Stock that may be issued under the 1994 Plan or
changes the class of individuals eligible to participate in the 1994 Plan will
become effective until the amendment is approved by shareholders.

The following table illustrates the benefits available under the 1994 Plan
with respect to awards approved by the Directors on January 31, 1994, subject to
shareholder approval of the 1994 Plan.

NEW PLAN BENEFITS
1994 INCENTIVE PLAN(1)

<TABLE>
<CAPTION>
INCENTIVE AWARDS(4)
STAR AWARDS(2) STOCK AWARDS(3) --------------------------------------
-------------------------------------- --------------------- NBT FIFO NBT FIFO NBT FIFO
MAXIMUM NUMBER DOLLAR NUMBER EARNINGS EARNINGS EARNINGS
NAME AND POSITION DOLLARS/UNIT OF UNITS VALUE(5) OF SHARES MINIMUM PLAN BASE PLAN MAXIMUM PLAN
- --------------------------- ------------ ------------------------ ---------- --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leonard G. Herring $ 2.50 5,000 (1-year period) $ 300,500 10,000 $ 79,063 $ 316,250 $ 402,500
President and CEO $ 5.00 5,000 (2-year period)
$ 7.50 5,000 (3-year period)
Robert L. Strickland $ 2.50 5,000 (1-year period) $ 300,500 10,000 $ 72,188 $ 288,750 $ 367,500
Chairman of the Board $ 5.00 5,000 (2-year period)
$ 7.50 5,000 (3-year period)
Robert L. Tillman $ 2.50 4,000 (1-year period) $ 183,000 6,000 $ 36,563 $ 146,250 $ 195,000
Executive Vice President- $ 5.00 4,000 (2-year period)
Merchandising $ 7.50 4,000 (3-year period)

R. Michael Rouleau $ 2.50 4,000 (1-year period) $ 183,000 6,000 $ 36,563 $ 146,250 $ 195,000
Executive Vice President- $ 5.00 4,000 (2-year period)
Store Operations $ 7.50 4,000 (3-year period)
Harry B. Underwood II $ 2.50 3,000 (1-year period) $ 152,500 5,000 $ 24,750 $ 99,000 $ 132,000
Senior Vice President- $ 5.00 3,000 (2-year period)
and Treasurer $ 7.50 3,000 (3-year period)
Executive Group (11 people) $ 2.50 36,000 (1-year period) $1,738,500 57,000 $ 326,050 $1,338,200 $1,811,130
$ 5.00 36,000 (2-year period)
$ 7.50 36,000 (3-year period)
Non-Executive 0 $ 0 0 $ 0 $ 0 $ 0
Director Group
Non-Executive Officer $ 2.50 256,300 (1-year period) $1,037,000 34,000 $1,295,863 $5,183,450 $5,932,410
Employee Group(6) $ 5.00 256,300 (2-year period)
$ 7.50 256,300 (3-year period)
</TABLE>

- ---------------

(1) The New Plan Benefits table illustrates the STAR Awards, Stock Awards and
Incentive Awards under the 1994 Plan that were made on January 31, 1994,
subject to shareholder approval.
(2) The STAR Awards have one, two and three-year performance periods and will
pay the difference between the Final Value and the Beginning Value. The
Beginning Value is $30.50, the fair market value of the Common Stock on
January 31, 1994. The amount payable with respect to each STAR Unit is
capped as shown in the table. Except in the case of the participant's death
or disability, STAR Units will

22
<PAGE> 26

be forfeited if the participant's employment is terminated for any reason
or the participant is demoted before the end of the STAR performance
period.
(3) The Stock Awards are nontransferable and subject to forfeiture for seven
years. However, 50% of the shares may become transferable and vested as of
the third anniversary of the grant and all of the shares may become
transferable and vested as of the fifth anniversary of the grant if the
Company's average annual FIFO pre-tax earnings relative to Beginning
Non-Cash Assets for the three or five-year period attains levels prescribed
by the Compensation Committee. "Beginning Non-Cash Assets" means the
Company's total assets at the beginning of each fiscal year, exclusive of
cash and short-term investments. Except in the case of death or disability,
shares that have not previously vested will be forfeited upon the
participant's termination of employment for any reason.
(4) The Incentive Awards provide an opportunity to earn a cash benefit based on
the Company's FIFO pre-tax earnings for the fiscal year ending January 31,
1995. The earnings targets for payment of Incentive Awards in Fiscal 1994
were set by the Compensation Committee on March 7, 1994.
(5) Shares of Common Stock will not be issued under the Stock Awards before the
1994 Plan is approved by shareholders. The value of the Stock Awards shown
in the table is the fair market value of the Common Stock ($30.50) on
January 31, 1994.
(6) In this group 107 people received STAR Awards; 23 received Stock Awards, and
318 received Incentive Awards.

Except as shown in the table with respect to the January 31, 1994, STAR, Stock
Award and Incentive Award grants, neither the number of individuals who will be
selected to participate in the 1994 Plan nor the type or size of awards that
will be approved by the Administrator can be determined. The Company is also
unable to determine the number of individuals who would have participated in the
1994 Plan or the type or size of awards that would have been made in 1993 had
the plan amendments been in effect in 1993.

FEDERAL INCOME TAX CONSEQUENCES

No income is recognized by a Participant at the time an option is granted.
If the option is an ISO, no income will be recognized upon the Participant's
exercise of the option (although the exercise can affect the Participant's
alternative minimum tax liability). Income is recognized by a Participant when
he disposes of shares acquired under an ISO. The exercise of a non-qualified
stock option generally is a taxable event that requires the Participant to
recognize, as ordinary income, the difference between the shares' fair market
value and the option price.

The Participant will recognize income on account of a Stock Award on the
first day that the shares are either transferable or not subject to a
substantial risk of forfeiture. The amount of income recognized by the
Participant is equal to the fair market value of the Common Stock received on
that date.

The employer (either the Company or an affiliate) will be entitled to claim
a federal income tax deduction on account of the exercise of a non-qualified
stock option, the settlement of a STAR or Incentive Award, or the vesting of a
Stock Award. The amount of the deduction is equal to the ordinary income
recognized by the Participant. The employer will not be entitled to a federal
income tax deduction on account of the grant or exercise of an ISO. The employer
may claim a federal income tax deduction on account of certain dispositions of
Common Stock acquired upon the exercise of an ISO.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE AMENDMENTS TO THE 1985
PLAN.

23
<PAGE> 27

APPROVAL OF THE DIRECTORS' STOCK INCENTIVE PLAN

The Board proposes that shareholders approve the Directors' Stock Incentive
Plan (the "Directors' Stock Plan"). The Directors' Stock Plan was adopted by the
Board of Directors, subject to approval by the shareholders. The approval of the
Directors' Stock Plan requires the affirmative vote of the holders of a majority
of the shares of Common Stock present or represented by properly executed and
delivered proxies at the meeting. Abstentions and Broker Shares voted as to any
matter at the meeting will be included in determining the number of votes
present or represented at the meeting with respect to determining the vote on
the Directors' Stock Plan. Broker Shares that are not voted on any matter at the
meeting will not be included in determining the number of shares present or
represented at the meeting with respect to determining the vote on the
Directors' Stock Plan.

The following paragraphs summarize the principal features of the Directors'
Stock Plan. This summary is subject, in all respects, to the terms of the
Directors' Stock Plan. The Company will provide promptly upon request and
without charge, a copy of the full text of the Directors' Stock Plan to each
person to whom a copy of this Proxy Statement is delivered. Requests should be
directed to: William C. Warden, Jr., Senior Vice President, General Counsel and
Secretary, Lowe's Companies, Inc., P. O. Box 1111, North Wilkesboro, North
Carolina 28656-0001 (Telephone 910-651-4497).

SUMMARY OF DIRECTORS' STOCK PLAN

The Board believes that the Directors' Stock Plan will assist in the
recruitment and retention of Directors and benefit the Company by promoting a
greater identity of interest between the eligible Directors and shareholders by
enabling eligible Directors to participate in the Company's success through
ownership of Common Stock.

The Directors' Stock Plan provides for each eligible Director to receive an
annual award of 500 shares of Common Stock. The Directors' Stock Plan does not
affect the cash retainer or committee fees otherwise payable to Directors.

No Director who is an employee of the Company or an affiliate is eligible
to participate in the Directors' Stock Plan. The Company's Board currently
consists of seven Directors who will be eligible to participate in the
Directors' Stock Plan. Eight Directors will be eligible to participate in the
Directors' Stock Plan if the Director nominees are elected to the Board.

The Directors' Stock Plan provides that at the first Board meeting
following each annual meeting of shareholders, the Company shall issue each
eligible Director 500 shares of Common Stock. Up to 25,000 shares of Common
Stock may be issued under the Directors' Stock Plan.

The first issuance of Common Stock pursuant to the Directors' Stock Plan
will occur at the first Board meeting following the 1994 Annual Meeting, if
requisite shareholder approval is obtained. The last issuance of Common Stock
pursuant to the Directors' Stock Plan will occur at the first Board meeting
following the 1998 Annual Meeting.

The shares of Common Stock awarded under the Directors' Stock Plan are
nonforfeitable and the participating Directors will be immediately and fully
vested in Common Stock issued under the Directors' Stock Plan. Subject only to
such limitations on transfer as may be specified by applicable securities laws,
Directors may sell shares issued under the Directors' Stock Plan at any time.
The number of shares of Common Stock issuable to each eligible Director and the
maximum aggregate number of shares that may be

24
<PAGE> 28

issued under the Directors' Stock Plan will be adjusted to reflect stock
dividends, stock splits, consolidations or other changes in the Company's
capitalization.

The Directors' Stock Plan provides that the Board may amend or terminate
the Plan, but the Plan may not be amended more than once within a six-month
period other than to conform to changes in the Internal Revenue Code or the
Employee Retirement Income Security Act. An amendment will not become effective
without shareholder approval if the amendment changes the eligibility
requirements or increases the benefits that may be provided under the Directors'
Stock Plan.

If the Directors' Stock Plan had been in effect during 1993, 3,500 shares
would have been issued to Directors eligible to participate in the Directors'
Stock Plan. Each eligible Director would have received Common Stock with a fair
market value of $18.875 per share, based on the fair market value of Common
Stock on May 28, 1993. No shares would have been awarded to the Executive
Officers named in the compensation table, to the executive group, or to the
non-executive officer employee group.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE DIRECTORS' STOCK
INCENTIVE PLAN.

RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Upon the recommendation of the Audit Committee of the Board, the Board of
Directors has appointed, subject to ratification by shareholders, Deloitte &
Touche as the firm of independent certified public accountants to audit the
financial statements of the Company and its subsidiaries for the fiscal year
ending January 31, 1995. Deloitte & Touche has served as independent auditors
for the Company since 1982.

While the Board of Directors is not required to seek shareholder
ratification of the Board's appointment of the Company's independent certified
public accountants, it has been Board policy for many years to do so.

Representatives of Deloitte & Touche have been invited to and are expected
to attend the Annual Meeting with the opportunity to make statements if they so
desire and to be available to respond to appropriate questions from
shareholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT OF
DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.

GENERAL

The cost of solicitations of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, by
telephone, by telegraph or by certain employees of the Company. The Company may
reimburse brokers or other persons holding stock in their names or in the names
of nominees for their expense in sending proxy material to principals and
obtaining their proxies. Also the Company has engaged the proxy soliciting firm
of D.F. King & Co., Inc. at an anticipated cost of $7,000 (plus handling fees).

25
<PAGE> 29

Where a choice is specified with respect to any matter to come before the
meeting, the shares represented by the proxy will be voted in accordance with
such specifications.

Where a choice is not so specified, the shares represented by the proxy
will be voted FOR the proposals set forth in the Notice of Annual Meeting, Proxy
Statement and Proxy Card.

Management is not aware that any matters other than those specified herein
will be presented for action at the meeting, but if any other matters do
properly come before the meeting, the persons named as Proxies will vote upon
such matters in accordance with their best judgment.

In the election of Directors, a specification to withhold authority to vote
for the slate of management nominees will not constitute an authorization to
vote for any other nominee.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the 1995 Annual
Meeting must be received by the Board of Directors for consideration for
inclusion in the Proxy Statement and form of proxy relating to that meeting on
or before December 28, 1994.

ANNUAL REPORT

The Annual Report to shareholders accompanies this Proxy Statement. The
Company's report to the Securities and Exchange Commission on Form 10-K for the
fiscal year ended January 31, 1994, is available from the Company at its home
office address furnished in the Notice of Annual Meeting of Shareholders.

North Wilkesboro, North Carolina
April 27, 1994

26
<PAGE> 30
<TABLE>
<CAPTION>
LOWE'S COMPANIES, INC.
P. O. BOX 1111, NORTH WILKESBORO, NC 28656

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Robert E. Black, Jr. and Dwight E. Pardue, Sr. as Proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock of Lowe's
Companies, Inc. held of record by the undersigned on April 8, 1994, at the Annual Meeting of Shareholders to be held on May 27,
1994, or any adjournment thereof. MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4 AND 5.
<S> <C> <C> <C>
1. ELECTION OF CLASS II DIRECTORS NOTE: Make marks in one section ONLY -- Voting in Section A will

SECTION A -- to vote for all Class II Director Nominees as a group, mark in this section
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY for all nominees listed below
- ------------------------------------------------------------------------------------------------------------------------------
SECTION B -- to vote for Class II Director Nominees individually, mark in this section
/ / FOR / / WITHHOLD AUTHORITY Carol A. Farmer / / FOR / / WITHHOLD AUTHORITY Robert G. Schwartz
/ / FOR / / WITHHOLD AUTHORITY Leonard G. Herring / / FOR / / WITHHOLD AUTHORITY Jack C. Shewmaker

2. PROPOSAL TO APPROVE an amendment to the Company's Restated and Amended
Charter to increase authorized Common Stock to 700 million shares.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE amendments to the Company's 1985 Stock Option Plan
to increase the shares available for issuance under the Plan by
1,000,000 shares, to authorize stock appreciation rights, stock awards
and incentive awards, and to extend the term of the Plan to January 30,
2004.
/ / FOR / / AGAINST / / ABSTAIN
4. PROPOSAL TO APPROVE the Directors' Stock Incentive Plan and to authorize
the issuance of up to 25,000 shares of Common Stock under the Directors'
Stock Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
(continued and to be signed on reverse side)

5. PROPOSAL TO APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE as the independent certified public accountants of the Company for
the fiscal year ending January 31, 1995
/ / FOR / / AGAINST / / ABSTAIN
---------------------------------------------
6. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4 AND 5.

Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.

DATED , 1994

--------------------------------
Signature

--------------------------------
Signature if held jointly

Please mark, sign, date and
return the proxy card promptly
using the enclosed envelope.

</TABLE>
<PAGE> 31
DIFFERENCES BETWEEN THE ELECTRONIC FILING AND THE PRINTED BOOK

On pages 2 through 5 of the printed book, photographs of the Board of
Directors appear, while the electronic filing replaces each photograph with
several dashed lines.