As filed with the Securities and Exchange Commission on
August 29, 1997
Registration Statement No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
LOWE'S COMPANIES, INC.
(Exact name of Registrant as specified in its Charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. Employer
Identification Number)
incorporation or organization)
P. O Box 1111
North Wilkesboro, North Carolina 28656-0001
(Address of principal executive office, including zip code)
LOWE'S COMPANIES, INC.
1997 INCENTIVE PLAN
(Full title of the Plan)
____________________
Robert L. Tillman
President and Chief Executive Officer
Lowe's Companies, Inc.
P. O. Box 1111
North Wilkesboro, North Carolina 28656-0001
910-658-4000
(Name, address and telephone number including, area code, of age
nt for service)
With copies to:
Lathan M. Ewers, Jr. Robert L. Tillman
Hunton & Williams President and Chief Executive Officer
Riverfront Plaza, East Tower Lowe's Companies, Inc.
951 East Byrd Street P. O. Box 1111
Richmond, Virginia 23219-4074 North Wilkesboro, North
Carolina 28656-0001
804-788-8200 910-658-4000
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount to maximum maximum Amount of
securities be offering aggregate registration
to be registered price offering fee
registered 5,000,000 per share price)
Common Stock, share(1) $34.4063(2) $172,031,500(2) $52,131
$.50 par value
per share
Preferred Share 5,000,000 N/A N/A N/A
Purchase rights
Rights(3)
(1) This Registration Statement covers the maximum number
of shares of common stock of the Registrant which may be issued
in connection with the transactions described herein.
(2) Estimated solely for the purpose of computing the
registration fee. This amount was calculated pursuant to Rule
457(h)(1) on the basis of $34.4063 per share, which was the
average of the high and low sales prices of the Common Stock as
reported on the New York Stock Exchange on August 22, 1997.
(3) The Rights to purchase Participating Cumulative
Preferred Stock, Series A, will be attached to and will trade
with shares of the Common Stock of the Company.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Securities and Exchange
Commission (the "Commission").
Item 2. Registrant Information and Employee Plan Annual
Information.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Lowe's Companies, Inc. (the
"Company") with the Commission (file No. 1-7083) are incorporated
herein by reference and made a part hereof: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended January 31,
1997; (ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1997; and (iii) the description of the
Company's Common Stock (the "Common Stock") contained in the
Company's registration statement on Form 8-A filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
the Prospectus and prior to the filing of a post-effective
amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in the Prospectus
and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that
is incorporated by reference herein modifies or supersedes such
earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of the Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article IV of the Company's Bylaws provides that the Company
will indemnify any person as an officer or director of the
Company or as an officer, director, trustee or partner of another
corporation, trust, partnership or employee benefit plan at the
request of the Company, against any liability incurred in
connection with any proceeding arising out of such service. To
the extent that such person is successful on the merits or
otherwise in defense of any such proceeding, the Company will
indemnify him against expenses actually and reasonably incurred
in such defense. No indemnification is available if, at the time
of the activities which are the subject of the proceeding, such
person knew or believed that such activities were clearly in
conflict with the best interests of the Company. Further,
Section 55-8-51 of the North Carolina Business Corporation Act
provides that a corporation may not indemnify a director in
connection with a proceeding by or in the right of the
corporation in which such director was adjudged liable to the
corporation or in connection with any other proceeding charging
improper personal benefit to him, whether or not involving action
in his official capacity, in which is adjudged liable on the
basis that personal benefit was improperly received by him.
The Company maintains an insurance policy for the benefit of
directors and officers insuring them against claims that are made
against them by reason of any wrongful act (as defined) committed
in their capacity as directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No.
4.1 Rights Agreement dated September 9, 1988, between the
Company and Wachovia Bank & Trust Co., N.A., as Rights
Agent (Incorporated herein by reference from Exhibit
4.1 of the Company's Current Report on Form 8-K dated
September 9, 1988).
4.2 Lowe's Companies, Inc. 1997 Incentive Plan.
5 Opinion of Hunton & Williams as to the legality of the
securities being registered.
23.1 Consent of Hunton & Williams (included in the opinion
filed as Exhibit 5 to the Registration Statement).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney for Officers and Directors (included on
page II-5 of the Registration Statement).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or
sales are made, a post-effective amendment to this registration
statement;
(i) To include any prospectus
required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus
any facts or events arising after the
effective date of the registration statement
(or the most recent post-effective amendment
thereof) which, individually or in the
aggregate, represent a fundamental change in
the information set forth in the registration
statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar value
of securities offered would not exceed that
which was registered) and any deviation from
the low or high and of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than 20 percent change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in the
registration statement or any material change
in such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
2. That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes
Robert L. Tillman, President and Chief Executive Officer, Lowe's
Companies, Inc. P. O. Box 1111, North Wilkesboro, North Carolina
28656-0001, and Lathan M. Ewers, Jr., Esq., Hunton & Williams,
Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond,
Virginia 23219-4074, to sign in the name of each such person, and
to file, any amendment, including any post-effective amendment,
to the registration statement and appoints such persons, to sign
on his behalf individually and in each capacity stated below and
to file all amendments and post-effective amendments to the
Registration Statement and Lowe's Companies, Inc. hereby confers
like authority to sign and file on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
North Wilkesboro, North Carolina, on this 1st day of August,
1997.
LOWE'S COMPANIES, INC.
(Registrant)
By /s/ Robert L. Tillman
Robert L. Tillman,
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act, this
registration statement has been signed by the following persons
in the capacities indicated on this 1st day of August, 1997.
Signature Title
By /s/ Robert L. Stickland Chairman of the Board of
Robert L. Strickland Directors and Director
By /s/ Robert L. Tillman President, Chief Executive
Robert L. Tillman Officer and Director
(Principal Executive Officer)
By /s/ Thomas E. Whiddon Executive Vice President and
Thomas E. Whiddon Chief Financial Officer
(Principal Financial Officer)
By /s/ Richard D. Elledge Senior Vice President, Chief
Richard D. Elledge Accounting Officer, and
Assistant Secretary (Principal
Accounting Officer)
By /s/ Leonard G. Herring Director
Leonard G. Herring
By Director
William A. Andres
By /s/ John M. Belk Director
John M. Belk
By /s/ Carol A. Farmer Director
Carol A. Farmer
By /s/ Robert G. Schwartz Director
Robert G. Schwartz
By /s/ Paul Fulton Director
Paul Fulton
By Director
James F. Halpin
By /s/ Claudine B. Malone Director
Claudine B. Malone
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
EXHIBITS
filed with
REGISTRATION STATEMENT
on
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
____________________
LOWE'S COMPANIES, INC.
1997 INCENTIVE PLAN
(full title of the plan)
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
4.1 Rights Agreement dated
September 9, 1988,
between the Company and
Wachovia Bank & Trust
Co., N.A., as Rights
Agent (Incorporated
herein by reference from
Exhibit 4.1 of the
Company's current report
on Form 8-K dated
September 9, 1988).
4.2 Lowe's Companies, Inc.
1997 Incentive Plan.
5 Opinion of Hunton &
Williams as to the
legality of the
securities being
registered.
23.1 Consent of Hunton &
Williams (included in the
opinion filed as Exhibit
5 to the Registration
Statement).
23.2 Consent of Deloitte &
Touche LLP.
24 Power of Attorney for
Officers and Directors
(included on page II-5 of
the Registration
Statement).
DOCSOPEN\RICHMOND\02720\23797\000206\18wk01!.DOC
Document #: 58196
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Lowe's Companies, Inc. on Form S-8 of our report
dated February 20, 1997, appearing in and incorporated by
reference in the Annual Report on Form 10-K of Lowe's Companies,
Inc. for the year ended January 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Charlote, North Carolina
August 26, 1997
Exhibit
4.2
LOWE'S COMPANIES, INC.
1997 INCENTIVE PLAN
<PAGE>
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . 1
1.01. Acceleration Date. . . . . . . . . . . . 1
1.02. Administrator. . . . . . . . . . . . . . 1
1.03. Affiliate. . . . . . . . . . . . . . . . 1
1.04. Agreement. . . . . . . . . . . . . . . . 1
1.05. Board. . . . . . . . . . . . . . . . . . 1
1.06. Change in Control. . . . . . . . . . . . 1
1.07. Code . . . . . . . . . . . . . . . . . . 2
1.08. Committee. . . . . . . . . . . . . . . . 2
1.09. Common Stock . . . . . . . . . . . . . . 2
1.10. Company. . . . . . . . . . . . . . . . . 3
1.11. Control Change Date. . . . . . . . . . . 3
1.12. Corresponding SAR. . . . . . . . . . . . 3
1.13. Exchange Act . . . . . . . . . . . . . . 3
1.14. Fair Market Value. . . . . . . . . . . . 3
1.15. Initial Value. . . . . . . . . . . . . . 3
1.16. Incentive Award. . . . . . . . . . . . . 3
1.17. Option . . . . . . . . . . . . . . . . . 3
1.18. Participant. . . . . . . . . . . . . . . 4
1.19. Performance Shares . . . . . . . . . . . 4
1.20. Plan . . . . . . . . . . . . . . . . . . 4
1.21. Rights Agreement . . . . . . . . . . . . 4
1.22. SAR. . . . . . . . . . . . . . . . . . . 4
1.23. Stock Award. . . . . . . . . . . . . . . 5
ARTICLE II PURPOSES. . . . . . . . . . . . . . . . . . 5
ARTICLE III ADMINISTRATION . . . . . . . . . . . . . . 5
ARTICLE IV ELIGIBILITY . . . . . . . . . . . . . . . . 7
ARTICLE V STOCK SUBJECT TO PLAN
5.01. Shares Issued. . . . . . . . . . . . . . 7
5.02. Aggregate Limit. . . . . . . . . . . . . 8
5.03. Reallocation of Shares . . . . . . . . . 8
ARTICLE VI OPTIONS
6.01. Award. . . . . . . . . . . . . . . . . . 9
6.02. Option Price . . . . . . . . . . . . . . 9
6.03. Maximum Option Period. . . . . . . . . . 9
6.04. Nontransferability . . . . . . . . . . . 10
6.05. Transferable Options . . . . . . . . . . 10
6.06. Employee Status. . . . . . . . . . . . . 11
6.07. Merger, Dissolution, etc . . . . . . . . 11
6.08. Exercise . . . . . . . . . . . . . . . . 11
6.09. Payment. . . . . . . . . . . . . . . . . 12
6.10. Shareholder Rights.. . . . . . . . . . . 12
6.11. Disposition of Stock . . . . . . . . . . 13
ARTICLE VII SARS
7.01. Award. . . . . . . . . . . . . . . . . . 13
7.02. Maximum SAR Period.. . . . . . . . . . . 13
7.03. Nontransferability.. . . . . . . . . . . 14
7.04. Transferable SARs. . . . . . . . . . . . 14
7.05. Exercise . . . . . . . . . . . . . . . . 15
7.06. Employee Status. . . . . . . . . . . . . 15
7.07. Settlement.. . . . . . . . . . . . . . . 16
7.08. Shareholder Rights.. . . . . . . . . . . 16
ARTICLE VIII STOCK AWARDS
8.01. Award. . . . . . . . . . . . . . . . . . 16
8.02. Vesting. . . . . . . . . . . . . . . . . 16
8.03. Performance Objectives.. . . . . . . . . 17
8.04. Employee Status. . . . . . . . . . . . . 17
8.05. Change in Control. . . . . . . . . . . . 17
8.06. Shareholder Rights.. . . . . . . . . . . 18
ARTICLE IX PERFORMANCE SHARE AWARDS
9.01. Award. . . . . . . . . . . . . . . . . . 18
9.02. Earning the Award. . . . . . . . . . . . 19
9.03. Payment. . . . . . . . . . . . . . . . . 19
9.04. Shareholder Rights . . . . . . . . . . . 19
9.05. Nontransferability . . . . . . . . . . . 20
9.06. Transferable Performance Shares. . . . . 20
9.07. Employee Status. . . . . . . . . . . . . 20
9.08. Change In Control. . . . . . . . . . . . 21
ARTICLE X INCENTIVE AWARDS
10.01. Award.. . . . . . . . . . . . . . . . . 21
10.02. Terms and Conditions. . . . . . . . . . 21
10.03. Nontransferability. . . . . . . . . . . 22
10.04. Transferable Incentive Awards . . . . . 22
10.05. Employee Status . . . . . . . . . . . . 23
10.06. Change in Control . . . . . . . . . . . 23
10.07. Shareholder Rights. . . . . . . . . . . 23
ARTICLE XI INDEMNIFICATION . . . . . . . . . . . . . . 23
ARTICLE XII ADJUSTMENT UPON CHANGE IN COMMON STOCK . . 24
ARTICLE XIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY
BODIES 26
ARTICLE XIV GENERAL PROVISIONS . . . . . . . . . . . . 27
14.01. Effect on Employment and Service. . . . 27
14.02. Unfunded Plan.. . . . . . . . . . . . . 27
14.03. Rules of Construction.. . . . . . . . . 27
ARTICLE XV AMENDMENT . . . . . . . . . . . . . . . . . 28
ARTICLE XVI DURATION OF PLAN . . . . . . . . . . . . . 29
ARTICLE XVII EFFECTIVE DATE OF PLAN. . . . . . . . . . 29
<PAGE>
LOWE'S COMPANIES, INC.
1997 INCENTIVE PLAN
ARTICLE I
DEFINITIONS
1.01. Acceleration Date means the earlier of (i) the date
that the Board approves a transaction or series of transactions
which, if consummated, would result in a Change in Control or
(ii) the date that an agreement is entered into with respect to a
transaction or series of transactions which, if consummated,
would result in a Change in Control.
1.02. Administrator means the Committee and any delegate of
the Committee that is appointed in accordance with Article III.
1.03. Affiliate means any "subsidiary" or "parent"
corporation (within the meaning of Section 424 of the Code) of
the Company.
1.04. Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a
Participant specifying the terms and conditions of a Stock Award,
an award of Performance Shares, an Incentive Award or an Option
or SAR granted to such Participant.
1.05. Board means the Board of Directors of the Company.
1.06. Change in Control means that following a Stock
Acquisition Date, directly or indirectly, (i) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in transaction that complies
with Section 11(n) of the Rights Agreement), and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) any Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(n)
of the Rights Agreement), shall consolidate with, or merge with
or into, the Company, and the Company shall be the continuing or
surviving corporation in such consolidation or merger and, in
connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or
cash or any other property, (iii) the Company shall be a party to
a statutory share exchange with any other Person (other than a
Subsidiary of the Company in a transaction that complies with
Section 11(n) of the Rights Agreement), after which the Company
is a Subsidiary of any other Person, or (iv) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and it
subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(n) of the
Rights Agreement). For purposes of this Plan, the terms "Stock
Acquisition Date," "Person," and "Subsidiary" shall have the same
meaning as assigned to such terms in the Rights Agreement.
1.07. Code means the Internal Revenue Code of 1986, and any
amendments thereto.
1.08. Committee means the Compensation Committee of the
Board.
1.09. Common Stock means the common stock of the Company.
1.10. Company means Lowe's Companies, Inc.
1.11. Control Change Date means the date on which a Change in
Control occurs. If a Change in Control occurs on account of a
series of transactions, the "Control Change Date" is the date of
the last of such transactions.
1.12. Corresponding SAR means an SAR that is granted in
relation to a particular Option and that can be exercised only
upon the surrender to the Company, unexercised, of that portion
of the Option to which the SAR relates.
1.13. Exchange Act means the Securities Exchange Act of 1934,
as amended and as in effect on the date of this Agreement.
1.14. Fair Market Value means, on any given date, the closing
price of a share of Common Stock as reported on the New York
Stock Exchange composite tape on such date, or if the Common
Stock was not traded on the New York Stock Exchange on such day,
then on the next preceding day that the Common Stock was traded
on such exchange, all as reported by such source as the
Administrator may select.
1.15. Initial Value means, with respect to an SAR, the Fair
Market Value of one share of Common Stock on the date of grant.
1.16. Incentive Award means an award which, subject to such
terms and conditions as may be prescribed by the Administrator,
entitles the Participant to receive a cash payment from the
Company or an Affiliate.
1.17. Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common
Stock at the price set forth in an Agreement.
1.18. Participant means an employee of the Company or an
Affiliate, including an employee who is a member of the Board,
who satisfies the requirements of Article IV and is selected by
the Administrator to receive a Stock Award, an award of
Performance Shares, an Option, an SAR, an Incentive Award or a
combination thereof.
1.19. Performance Shares means an award, in the amount
determined by the Administrator and specified in an Agreement,
stated with reference to a specified number of shares of Common
Stock, that in accordance with the terms of an Agreement entitles
the holder to receive a payment for each specified share equal to
the Fair Market Value of Common Stock on the date of payment.
1.20. Plan means the Lowe's Companies, Inc. 1997 Incentive
Plan.
1.21. Rights Agreement means the Rights Agreement between the
Company and Wachovia Bank and Trust Company dated as of September
9, 1988.
1.22. SAR means a stock appreciation right that in accordance
with the terms of an Agreement entitles the holder to receive,
with respect to each share of Common Stock encompassed by the
exercise of such SAR, the amount determined by the Administrator
and specified in an Agreement. In the absence of such a
determination, the holder shall be entitled to receive, with
respect to each share of Common Stock encompassed by the exercise
of such SAR, the excess of the Fair Market Value on the date of
exercise over the Initial Value. References to "SARs" include
both Corresponding SARs and SARs granted independently of
Options, unless the context requires otherwise.
1.23. Stock Award means Common Stock awarded to a Participant
under Article VIII.
ARTICLE II
PURPOSES
The Plan is intended to assist the Company and its
Affiliates in recruiting and retaining individuals with ability
and initiative by enabling such persons to participate in the
future success of the Company and its Affiliates and to associate
their interests with those of the Company and its shareholders.
The Plan is intended to permit the grant of both Options
qualifying under Section 422 of the Code ("incentive stock
options") and Options not so qualifying, and the grant of SARs,
Stock Awards, Performance Shares and Incentive Awards. No Option
that is intended to be an incentive stock option shall be invalid
for failure to qualify as an incentive stock option. The
proceeds received by the Company from the sale of Common Stock
pursuant to this Plan shall be used for general corporate
purposes.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Administrator. The
Administrator shall have authority to grant Stock Awards,
Performance Shares, Incentive Awards, Options and SARs upon such
terms (not inconsistent with the provisions of this Plan), as the
Administrator may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan), on the
exercisability of all or any part of an Option or SAR or on the
transferability or forfeitability of a Stock Award, an award of
Performance Shares or an Incentive Award. Notwithstanding any
such conditions, the Administrator may, in its discretion,
accelerate the time at which any Option or SAR may be exercised,
or the time at which a Stock Award may become transferable or
nonforfeitable or the time at which an Incentive Award or an
award of Performance Shares may be settled. In addition, the
Administrator shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the
administration of the Plan; and to make all other determinations
necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the
Administrator shall not be construed as limiting any power or
authority of the Administrator. Any decision made, or action
taken, by the Administrator or in connection with the
administration of this Plan shall be final and conclusive.
Neither the Administrator nor any member of the Committee shall
be liable for any act done in good faith with respect to this
Plan or any Agreement, Option, SAR, Stock Award or Incentive
Award or award of Performance Shares. All expenses of
administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or
more officers of the Company or the Executive Committee of the
Board, all or part of the Committee's authority and duties with
respect to grants and awards to individuals who are not subject
to the reporting and other provisions of Section 16 of the
Exchange Act. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any
prior actions of the Committee's delegate or delegates that were
consistent with the terms of the Plan.
ARTICLE IV
ELIGIBILITY
Any employee of the Company or an Affiliate (including a
corporation that becomes an Affiliate after the adoption of this
Plan), is eligible to participate in this 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. Directors of the Company who are employees of
the Company or an Affiliate may be selected to participate in
this Plan.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01. Shares Issued. Upon the award of shares of Common
Stock pursuant to a Stock Award or in settlement of an award of
Performance Shares, the Company may issue shares of Common Stock
from its authorized but unissued Common Stock. Upon the exercise
of any Option or SAR the Company may deliver to the Participant
(or the Participant's broker if the Participant so directs),
shares of Common Stock from its authorized but unissued Common
Stock.
5.02. Aggregate Limit. The maximum aggregate number of
shares of Common Stock that may be issued under this Plan
pursuant to the exercise of SARs and Options and the grant of
Stock Awards and the settlement of Performance Shares is
5,000,000 shares. The maximum aggregate number of shares that
may be issued under this Plan as Stock Awards and in settlement
of Performance Shares is 1,650,000 shares. The maximum aggregate
number of shares that may be issued under this Plan and the
maximum number of shares that may be issued as Stock Awards and
in settlement of Performance Shares shall be subject to
adjustment as provided in Article XII.
5.03. Reallocation of Shares. If an Option is terminated, in
whole or in part, for any reason other than its exercise or the
exercise of a Corresponding SAR that is settled with Common
Stock, the number of shares of Common Stock allocated to the
Option or portion thereof may be reallocated to other Options,
SARs, Performance Shares and Stock Awards to be granted under
this Plan. If an SAR is terminated, in whole or in part, for any
reason other than its exercise that is settled with Common Stock
or the exercise of a related Option, the number of shares of
Common Stock allocated to the SAR or portion thereof may be
reallocated to other Options, SARs, Performance Shares and Stock
Awards to be granted under this Plan. If an award of Performance
Shares is terminated, in whole or in part, for any reason other
than its settlement with Common Stock, the number of shares of
Common Stock allocated to the Performance Shares or portion
thereof may be reallocated to other options, SARs, Performance
Shares and Stock Awards to be granted under this Plan. If a
Stock Award is forfeited, in whole or in part, for any reason,
the number of shares of Common Stock allocated to the Stock Award
or portion thereof may be reallocated to other Options, SARs,
Performance Shares and Stock Awards to be granted under this
Plan.
ARTICLE VI
OPTIONS
6.01. Award. In accordance with the provisions of Article
IV, the Administrator will designate each individual to whom an
Option is to be granted and will specify the number of shares of
Common Stock covered by such awards; provided, however, that no
individual may be granted Options in any calendar year covering
more than 300,000 shares of Common Stock.
6.02. Option Price. The price per share for Common Stock
purchased on the exercise of an Option shall be determined by the
Administrator on the date of grant, but shall not be less than
the Fair Market Value on the date the Option is granted.
6.03.Maximum Option Period. The maximum period in which an
Option may be exercised shall be determined by the Administrator
on the date of grant, except that no Option that is an incentive
stock option shall be exercisable after the expiration of ten
years from the date such Option was granted. The terms of any
Option that is an incentive stock option may provide that it is
exercisable for a period less than such maximum period.
6.04. Nontransferability. Except as provided in Section
6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and
distribution. In the event of any transfer of an Option (by the
Participant or his transferee), the Option and any Corresponding
SAR that relates to such Option must be transferred to the same
person or persons or entity or entities. During the lifetime of
the Participant to whom the Option is granted, the Option may be
exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any
lien, obligation, or liability of such Participant.
6.05. Transferable Options. Section 6.04 to the contrary
notwithstanding, if the Agreement provides, an Option that is not
an incentive stock option may be transferred by a Participant to
the Participant's children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in
which such family members are the only partners, on such terms
and conditions as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. The holder
of an Option transferred pursuant to this section shall be bound
by the same terms and conditions that governed the Option during
the period that it was held by the Participant; provided,
however, that such transferee may not transfer the Option except
by will or the laws of descent and distribution. In the event of
any transfer of an Option (by the Participant or his transferee),
the Option and any Corresponding SAR that relates to such Option
must be transferred to the same person or persons or entity or
entities.
6.06. Employee Status. For purposes of determining the
applicability of Section 422 of the Code (relating to incentive
stock options), or in the event that the terms of any Option
provide that it may be exercised only during employment or within
a specified period of time after termination of employment, the
Administrator may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability,
or other reasons shall not be deemed interruptions of continuous
employment.
6.07. Merger, Dissolution, etc. Options previously granted
under the Plan shall terminate upon the effective date of the
dissolution or liquidation of the Company, or of a
reorganization, merger or consolidation of the Company with one
or more corporations in which the Company is not the surviving
corporation, or of a transfer of substantially all of the
property or more than fifty percent of the then outstanding
shares of the Company. The preceding sentence to the contrary
notwithstanding, options shall not terminate to the extent that
written provision is made for their continuance, assumption, or
substitution by a successor employer or its parent or subsidiary
in connection with a transaction described in the preceding
sentence.
6.08. Exercise. All outstanding Options previously granted
under the Plan shall be exercisable, in whole or in part, on an
Acceleration Date and shall remain exercisable thereafter in
accordance with the terms of this Plan and the applicable
Agreement. Subject to the preceding sentence and the other
provisions of this Plan and the applicable Agreement, an Option
may be exercised in whole at any time or in part from time to
time at such times and in compliance with such requirements as
the Administrator shall determine; provided, however, that
incentive stock options (granted under the Plan and all plans of
the Company and its Affiliates) may not be first exercisable in a
calendar year for stock having a Fair Market (determined as of
the date an Option is granted) exceeding $100,000. An Option
granted under this Plan may be exercised with respect to any
number of whole shares less than the full number for which the
Option could be exercised. A partial exercise of an Option shall
not affect the right to exercise the Option from time to time in
accordance with this Plan and the applicable Agreement with
respect to the remaining shares subject to the Option. The
exercise of an Option shall result in the termination of any
Corresponding SAR to the extent of the number of shares with
respect to which the Option is exercised.
6.09. Payment. Unless otherwise provided by the Agreement,
payment of the Option price shall be made in cash or a cash
equivalent acceptable to the Administrator. If the Agreement
provides, payment of all or part of the Option price may be made
by surrendering shares of Common Stock to the Company. If Common
Stock is used to pay all or part of the Option price, the sum of
the cash and cash equivalent and the Fair Market Value
(determined as of the day preceding the date of exercise) of the
shares surrendered must not be less than the Option price of the
shares for which the Option is being exercised.
6.10. Shareholder Rights. No Participant shall have any
rights as a shareholder with respect to shares subject to his
Option until the date of exercise of such Option.
6.11. Disposition of Stock. A Participant shall notify the
Company of any sale or other disposition of Common Stock acquired
pursuant to an Option that was an incentive stock option if such
sale or disposition occurs (i) within two years of the grant of
an Option or (ii) within one year of the issuance of the Common
Stock to the Participant. Such notice shall be in writing and
directed to the Secretary of the Company.
ARTICLE VII
SARS
7.01. Award. In accordance with the provisions of Article
IV, the Administrator will designate each individual to whom SARs
are to be granted and will specify the number of shares covered
by such awards; provided, however, that no individual may be
granted SARs in any calendar year covering more than 300,000
shares. For purposes of the preceding sentence, an Option and
Corresponding SAR shall be treated as a single award. In
addition no Participant may be granted Corresponding SARs (under
all incentive stock option plans of the Company and its
Affiliates) that are related to incentive stock options which are
first exercisable in any calendar year for stock having an
aggregate Fair Market Value (determined as of the date the
related Option is granted) that exceeds $100,000.
7.02. Maximum SAR Period. The term of each SAR shall be
determined by the Administrator on the date of grant, except that
no Corresponding SAR that is related to an incentive stock option
shall have a term of more than ten years from the date such
related Option was granted. The terms of any Corresponding SAR
that is related to an incentive stock option may provide that it
has a term that is less than such maximum period.
7.03. Nontransferability. Except as provided in Section
7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In
the event of any such transfer, a Corresponding SAR and the
related Option must be transferred to the same person or persons
or entity or entities. During the lifetime of the Participant to
whom the SAR is granted, the SAR may be exercised only by the
Participant. No right or interest of a Participant in any SAR
shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.
7.04. Transferable SARs. Section 7.03 to the contrary
notwithstanding, if the Agreement provides, an SAR, other than a
Corresponding SAR that is related to an incentive stock option,
may be transferred by a Participant to the Participant's
children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such
family members are the only partners, on such terms and
conditions as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. The holder
of an SAR transferred pursuant to this section shall be bound by
the same terms and conditions that governed the SAR during the
period that it was held by the Participant; provided, however,
that such transferee may not transfer the SAR except by will or
the laws of descent and distribution. In the event of any
transfer of a Corresponding SAR (by the Participant or his
transferee), the Corresponding SAR and the related Option must be
transferred to the same person or person or entity or entities.
7.05. Exercise. All outstanding SARs previously granted
under the Plan shall be exercisable, in whole or in part, on an
Acceleration Date and shall remain exercisable thereafter in
accordance with the terms of the Plan and the applicable
Agreement. Subject to the preceding sentence and the other
provisions of this Plan and the applicable Agreement, an SAR may
be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the
Administrator shall determine; provided, however, that a
Corresponding SAR that is related to an incentive stock option
may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the
option price of the related Option. An SAR granted under this
Plan may be exercised with respect to any number of whole shares
less than the full number for which the SAR could be exercised.
A partial exercise of an SAR shall not affect the right to
exercise the SAR from time to time in accordance with this Plan
and the applicable Agreement with respect to the remaining shares
subject to the SAR. The exercise of a Corresponding SAR shall
result in the termination of the related Option to the extent of
the number of shares with respect to which the SAR is exercised.
7.06. Employee Status. If the terms of any SAR provide that
it may be exercised only during employment or within a specified
period of time after termination of employment, the Administrator
may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability or other reasons
shall not be deemed interruptions of continuous employment.
7.07. Settlement. At the Administrator's discretion, the
amount payable as a result of the exercise of an SAR may be
settled in cash, Common Stock, or a combination of cash and
Common Stock. No fractional share will be deliverable upon the
exercise of an SAR but a cash payment will be made in lieu
thereof.
7.08. Shareholder Rights. No Participant shall, as a result
of receiving an SAR award, have any rights as a shareholder of
the Company or any Affiliate until the date that the SAR is
exercised and then only to the extent that the SAR is settled by
the issuance of Common Stock.
ARTICLE VIII
STOCK AWARDS
8.01. Award. In accordance with the provisions of Article
IV, the Administrator will designate each individual to whom a
Stock Award is to be made and will specify the number of shares
of Common Stock covered by such awards; provided, however, that
no Participant may receive Stock Awards in any calendar year for
more than 100,000 shares of Common Stock.
8.02. Vesting. A Participant's rights in a Stock Award shall
be forfeitable or otherwise restricted for a period of time or
subject to such conditions as may be set forth in the Agreement.
The period of restriction shall be at least three years;
provided, however, that the minimum period of restriction shall
be at least one year in the case of a Stock Award that will
become transferable and nonforfeitable on account of the
satisfaction of performance objectives prescribed by the
Administrator.
8.03. Performance Objectives. In accordance with Section
8.02, the Administrator may prescribe that Stock Awards will
become vested or transferable or both based on objectives stated
with respect to the Company's FIFO pre-tax earnings, the
Company's FIFO pre-tax earnings in relation to non-cash beginning
assets (beginning assets less beginning cash and short term
investments), or the Company's, an Affiliate's or an operating
unit's return on equity, earnings per share, total earnings,
earnings growth, return on capital, return on assets, or Fair
Market Value or such other measures as may be selected by the
Administrator. If the Administrator, on the date of award,
prescribes that a Stock Award shall become nonforfeitable and
transferable only upon the attainment of performance objectives
stated with respect to one or more of the foregoing criteria, the
shares subject to such Stock Award shall become nonforfeitable
and transferable only to the extent that the Administrator
certifies that such objectives have been achieved.
8.04. Employee Status. In the event that the terms of any
Stock Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified
period of employment, the Administrator may decide in each case
to what extent leaves of absence for governmental or military
service, illness, temporary disability, or other reasons shall
not be deemed interruptions of continuous employment.
8.05. Change in Control. Sections 8.02 and 8.03 to the
contrary notwithstanding, each outstanding Stock Award shall be
transferable and nonforfeitable as of a Control Change Date.
8.06. Shareholder Rights. Prior to their forfeiture (in
accordance with the applicable Agreement and while the shares of
Common Stock granted pursuant to the Stock Award may be forfeited
or are nontransferable), a Participant will have all rights of a
shareholder with respect to a Stock Award, including the right to
receive dividends and vote the shares; provided, however, that
during such period (i) a Participant may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of shares of
Common Stock granted pursuant to a Stock Award, (ii) the Company
shall retain custody of the certificates evidencing shares of
Common Stock granted pursuant to a Stock Award, and (iii) the
Participant will deliver to the Company a stock power, endorsed
in blank, with respect to each Stock Award. The limitations set
forth in the preceding sentence shall not apply after the shares
of Common Stock granted under the Stock Award are transferable
and are no longer forfeitable.
ARTICLE IX
PERFORMANCE SHARE AWARDS
9.01. Award. In accordance with the provisions of Article
IV, the Administrator will designate each individual to whom an
award of Performance Shares is to be made and will specify the
number of shares of Common Stock covered by such awards;
provided, however, that no Participant may receive an award of
Performance Shares in any calendar year for more than 100,000
shares of Common Stock.
9.02. Earning the Award. The Administrator, on the date of
the grant of an award, shall prescribe that the Performance
Shares, or portion thereof, will be earned, and the Participant
will be entitled to receive payment pursuant to the award of
Performance Shares, only upon the satisfaction of performance
objectives and such other criteria as may be prescribed by the
Administrator during a performance measurement period of at least
one year. The performance objectives may be stated with respect
to the Company's FIFO pre-tax earnings, the Company's FIFO
pre-tax earnings in relation to non-cash beginning assets
(beginning assets less beginning cash and short-term
investments), or the Company's, an Affiliate's or an operating
unit's return on equity, earnings per share, total earnings,
earnings growth, return on capital, return on assets, Fair Market
Value or such other measures as may be selected by the
Administrator. No payments will be made with respect to
Performance Shares unless, and then only to the extent that, the
Administrator certifies that such objectives have been achieved.
9.03. Payment. In the discretion of the Administrator, the
amount payable when an award of Performance Shares is earned may
be settled in cash, by the issuance of Common Stock or a
combination of cash and Common Stock. A fractional share shall
not be deliverable when an award of Performance Shares is earned,
but a cash payment will be made in lieu thereof.
9.04. Shareholder Rights. No Participant shall, as a result
of receiving an award of Performance Shares, have any rights as a
shareholder until and to the extent that the award of Performance
Shares is earned and settled by the issuance of Common Stock.
After an award of Performance Shares is earned, if settled
completely or partially in Common Stock, a Participant will have
all the rights of a shareholder with respect to such Common
Stock.
9.05. Nontransferability. Except as provided in Section
9.06, Performance Shares granted under this Plan shall be
nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in any
Performance Shares shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
9.06. Transferable Performance Shares. Section 9.05 to the
contrary notwithstanding, if the Agreement provides, an award of
Performance Shares may be transferred by a Participant to the
Participant's children, grandchildren, spouse, one or more trusts
for the benefit of such family members or a partnership in which
such family members are the only partners, on such terms and
conditions as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. The holder
of Performance Shares transferred pursuant to this section shall
be bound by the same terms and conditions that governed the
Performance Shares during the period that they were held by the
Participant; provided, however that such transferee may not
transfer Performance Shares except by will or the laws of descent
and distribution.
9.07. Employee Status. In the event that the terms of any
Performance Share award provide that no payment will be made
unless the Participant completes a stated period of employment,
the Administrator may decide to what extent leaves of absence for
government or military service, illness, temporary disability, or
other reasons shall not be deemed interruptions of continuous
employment.
9.08. Change In Control. Section 9.02 to the contrary
notwithstanding, each outstanding Performance Share shall be
earned in its entirety as of a Control Change Date.
ARTICLE X
INCENTIVE AWARDS
10.01. Award. The Administrator shall designate Participants
to whom Incentive Awards are made. All Incentive Awards shall be
finally determined exclusively by the Administrator under the
procedures established by the Administrator; provided, however,
that no Participant may receive an Incentive Award payment in any
calendar year that exceeds the lesser of (i) $2,000,000 and (ii)
200% of the Participant's base salary (prior to any salary
reduction or deferral elections) as of the date of grant of the
Incentive Award.
10.02. Terms and Conditions. The Administrator, at the time
an Incentive Award is made, shall specify the terms and
conditions which govern the award. Such terms and conditions
shall prescribe that the Incentive Award shall be earned only
upon, and to the extent that, performance objectives are
satisfied. The performance objectives may be stated with respect
to the Company's FIFO pre-tax earnings, the Company's FIFO
pre-tax earnings in relation to non-cash beginning assets
(beginning assets less beginning cash and short term
investments), or that the Company, an Affiliate or an operating
unit, achieves objectives based on return on equity, earnings per
share, total earnings, earnings growth, return on capital, return
on assets, Fair Market Value or such other measures as may be
selected by the Administrator. Such terms and conditions also
may include other limitations on the payment of Incentive Awards
including, by way of example and not of limitation, requirements
that the Participant complete a specified period of employment
with the Company or an Affiliate. The Administrator, at the time
an Incentive Award is made, shall also specify when amounts shall
be payable under the Incentive Award and whether amounts shall be
payable in the event of the Participant's death, disability, or
retirement.
10.03. Nontransferability. Except as provided in Section
10.04, Incentive Awards granted under this Plan shall be
nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in an
Incentive Award shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
10.04. Transferable Incentive Awards. Section 10.03 to the
contrary notwithstanding, if the Agreement provides, an Incentive
Award may be transferred by a Participant to the Participant's
children, grandchildren, spouse, one or more trusts for the
benefit of such family members or to a partnership in which such
family members are the only partners, on such terms and
conditions as may be permitted by Securities Exchange Commission
Rule 16b-3 as in effect from time to time. The holder of an
Incentive Award transferred pursuant to this section shall be
bound by the same terms and conditions that governed the
Incentive Award during the period that it was held by the
Participant; provided, however, that such transferee may not
transfer the Incentive Award except by will or the laws of
descent and distribution.
10.05. Employee Status. If the terms of an Incentive Award
provide that a payment will be made thereunder only if the
Participant completes a stated period of employment, the
Administrator may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability
or other reasons shall not be deemed interruptions of continuous
employment.
10.06. Change in Control. Section 10.02 to the contrary
notwithstanding, each Incentive Award shall be earned in its
entirety as of a Control Change Date.
10.07. Shareholder Rights. No Participant shall, as a result
of receiving an Incentive Award, have any rights as a shareholder
of the Company or any Affiliate on account of such award.
ARTICLE XI
INDEMNIFICATION
A Participant shall be entitled to a payment under this
Article XI if (i) any benefit, payment, accelerated vesting or
other right under this Plan constitutes a "parachute payment" (as
defined in Code section 280G(b)(2)(A), but without regard to Code
section 280G(b)(2)(A)(ii)), with respect to such Participant and
(ii) the Participant incurs a liability under Code section 4999.
The amount payable to a Participant described in the preceding
sentence shall be the amount required to indemnify the
Participant and hold him harmless from the application of Code
sections 280G and 4999. To effect this indemnification, the
Company must pay such Participant an amount sufficient to pay the
excise tax imposed on Participant under code section 4999 with
respect to benefits, payments, accelerated vesting and other
rights under this Plan and any other plan or agreement and any
income, employment, hospitalization, excise or other taxes
attributable to the indemnification payment. The benefit payable
under this Article XI shall be paid in a single cash sum not
later than twenty days after the date (or extended filing date)
on which the tax return reflecting liability for the Code section
4999 excise tax is required to be filed with the Internal Revenue
Service.
ARTICLE XII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares as to which Options, SARs,
Performance Shares and Stock Awards may be granted under this
Plan, the terms of outstanding Stock Awards, Options, Performance
Shares, Incentive Awards, and SARs, and the per individual
limitations on the number of shares or for which Options, SARs,
Performance Shares, and Stock Awards may be granted shall be
adjusted as the Committee shall determine to be equitably
required in the event that (a) the Company (i) effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or (ii) engages in a transaction to
which Section 424 of the Code applies or (b) there occurs any
other event which, in the judgment of the Committee necessitates
such action. Any determination made under this Article XII by
the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, for
cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall
not affect, and no adjustment by reason thereof shall be made
with respect to, the maximum number of shares as to which
Options, SARs, Performance Shares and Stock Awards may be
granted, the per individual limitations on the number of shares
for which Options, SARs, Performance Shares and Stock Awards may
be granted or the terms of outstanding Stock Awards, Options,
Performance Shares, Incentive Awards or SARs.
The Committee may make Stock Awards and may grant Options,
SARs, Performance Shares, and Incentive Awards in substitution
for performance shares, phantom shares, stock awards, stock
options, stock appreciation rights, or similar awards held by an
individual who becomes an employee of the Company or an Affiliate
in connection with a transaction described in the first paragraph
of this Article XII. Notwithstanding any provision of the Plan
(other than the limitation of Section 5.02), the terms of such
substituted Stock Awards or Option, SAR, Performance Shares or
Incentive Award grants shall be as the Committee, in its
discretion, determines is appropriate.
ARTICLE XIII
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall
be issued, no certificates for shares of Common Stock shall be
delivered, and no payment shall be made under this Plan except in
compliance with all applicable federal and state laws and
regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a
party, and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company shall have the right
to rely on an opinion of its counsel as to such compliance. Any
share certificate issued to evidence Common Stock when a Stock
Award is granted, a Performance Share is settled or for which an
Option or SAR is exercised may bear such legends and statements
as the Administrator may deem advisable to assure compliance with
federal and state laws and regulations. No Option or SAR shall
be exercisable, no Stock Award or Performance Share shall be
granted, no Common Stock shall be issued, no certificate for
shares shall be delivered, and no payment shall be made under
this Plan until the Company has obtained such consent or approval
as the Administrator may deem advisable from regulatory bodies
having jurisdiction over such matters.
ARTICLE XIV
GENERAL PROVISIONS
14.01. Effect on Employment and Service. Neither the adoption
of this Plan, its operation, nor any documents describing or
referring to this Plan (or any part thereof), shall confer upon
any individual any right to continue in the employ or service of
the Company or an Affiliate or in any way affect any right and
power of the Company or an Affiliate to terminate the employment
or service of any individual at any time with or without
assigning a reason therefor.
14.02. Unfunded Plan. The Plan, insofar as it provides for
grants, shall be unfunded, and the Company shall not be required
to segregate any assets that may at any time be represented by
grants under this Plan. Any liability of the Company to any
person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created
pursuant to this Plan. No such obligation of the Company shall
be deemed to be secured by any pledge of, or other encumbrance
on, any property of the Company.
14.03. Rules of Construction. Headings are given to the
articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law.
ARTICLE XV
AMENDMENT
The Board may amend or terminate this Plan from time to
time; provided, however, that no amendment may become effective
until shareholder approval is obtained if (i) the amendment
increases the aggregate number of shares of Common Stock that may
be issued under the Plan, (ii) the amendment changes the class of
individuals eligible to become Participants, (iii) the amendment
would materially increase the benefits under any outstanding
Option, SAR, Stock Award, Performance Share award or Incentive
Award or (iv) the amendment affects the terms of any outstanding
Option, SAR, Stock Award, Performance Share award or Incentive
Award in a manner that, to a material extent, makes it more
likely that a benefit will be earned, paid or retained under such
grant or award. No amendment shall, without a Participant's
consent, adversely affect any rights of such Participant under
any outstanding Stock Award, Performance Share award, Option, SAR
or Incentive Award outstanding at the time such amendment is
made.
ARTICLE XVI
DURATION OF PLAN
No Stock Award, Performance Share award, Option, SAR or
Incentive Award may be granted under this Plan after January 31,
2007. Stock Awards, Performance Shares awards, Options, SARs and
Incentive Awards granted before that date shall remain valid in
accordance with their terms.
ARTICLE XVII
EFFECTIVE DATE OF PLAN
Options, SARs, Performance Shares and Incentive Awards may
be granted under this Plan upon its adoption by the Board,
provided that no Option, SAR, Performance Shares or Incentive
Award shall be effective or exercisable unless this Plan is
approved by a majority of the votes cast by the Company's
shareholders, voting either in person or by proxy, at a duly held
shareholders' meeting at which a quorum is present. Stock Awards
may be granted under this Plan upon the later of its adoption by
the Board or its approval by shareholders in accordance with the
preceding sentence.
<PAGE>
t:\lowes\exhibits\97plan
Exhibit 5
File No.23797.206
(804) 788-8402
August 30, 1997
The Board of Directors
Lowe's Companies, Inc.
Highway 268 East
North Wilkesboro, NC 28659-0001
Lowe's Companies, Inc.
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Lowe's Companies, Inc., a
North Carolina corporation (the "Company"), in connection with
the filing of a registration statement under the Securities Act
of 1933, as amended, with respect to 5,000,000 shares of the
Company's Common Stock (the "Shares"), to be offered pursuant to
the Lowe's Companies, Inc. 1997 Stock Incentive Plan (the
"Plan").
In rendering this opinion, we have relied upon, among
other things, our examination of the Plan and of such records of
the Company and certificates of its officers and of public
officials as we have deemed necessary. In connection with the
filing of such registration statement, we are of the opinion
that:
1. The Company is duly incorporated, validly existing
and in good standing under the laws of the State of North
Carolina ; and
2. The Shares have been duly authorized and, when
issued in accordance with the terms of the Plan and the
applicable Agreements (as defined in the Plan), will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with
the Securities and Exchange Commission as an exhibit to such
registration statement.
Very truly yours,
/s/ Hunton & Williams
Hunton & Williams
