<PAGE>
As filed with the Securities and Exchange Commission on July 19, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
NORTH CAROLINA 5211 56-0578072
(State or other jurisdiction of incorporation) (Primary Standard Industrial (I.R.S. Employer Identification No.)
Classification Code Number)
</TABLE>
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(336) 658-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
STEPHEN A. HELLRUNG
Senior Vice President, General Counsel and Secretary
Lowe's Companies, Inc.
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(336) 658-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
LATHAN M. EWERS, JR.
RANDALL S. PARKS
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.[_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Amount to be Maximum Offering Maximum Aggregate Amount of
Securities to be Registered Registered(1) Price Per Unit Offering Price Registration Fee
--------------------------- ------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
6 1/2% Debentures due March 15, $400,000,000 N/A N/A $ 111,200
2029
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(1) The Registration Statement covers the maximum principal amount of debentures
of the Registrant which may be issued in connection with the transaction
described herein.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 19, 1999
PROSPECTUS
OFFER FOR
ALL OUTSTANDING 6 1/2% DEBENTURES DUE MARCH 15, 2029
IN EXCHANGE FOR
REGISTERED 6 1/2% DEBENTURES DUE MARCH 15, 2029
OF
LOWE'S COMPANIES, INC.
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON AUGUST __, 1999
THE REGISTERED DEBENTURES
The terms of the registered debentures are substantially identical to
the old debentures that we issued on February 23, 1999, except for certain
transfer restrictions, registration rights and special interest provisions which
apply only to the old debentures.
Interest on the registered debentures is payable semi-annually on each
March 15 and September 15, beginning on September 15, 1999.
The registered debentures are unsecured obligations of Lowe's and will
rank equally to each other and to all our existing and future unsecured and
unsubordinated indebtedness. The registered debentures will be effectively
subordinated to any of our secured indebtedness and to any unsubordinated
indebtedness of our subsidiaries.
MATERIAL TERMS OF THE EXCHANGE OFFER
. Expires at 5:00 p.m., New York City time, on August __, 1999, unless
extended.
. Not subject to any conditions other than:
(1) the exchange offer will not violate applicable law or any
applicable interpretation of the staff of the Securities and
Exchange Commission;
(2) no legal proceeding challenging the exchange offer has been
instituted or threatened; and
(3) the old debentures have been properly tendered.
. All outstanding old debentures that are validly tendered and not
validly withdrawn will be exchanged to an equal principal amount of
debentures which are registered under the Securities Act of 1933, as
amended.
. The exchange of old debentures for registered debentures will not be
a taxable exchange for U.S. federal income tax purposes.
. We will not receive any proceeds from the exchange offer.
. Tenders of old debentures may be withdrawn at any time prior to the
expiration of the exchange offer.
CONSIDER CAREFULLY THE "RISK FACTORS" BEGINNING ON PAGE 13 OF THIS PROSPECTUS.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved the debentures to be distributed in the Exchange Offer,
nor have these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this prospectus is July __, 1999
<PAGE>
TABLE OF CONTENTS
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Page
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<S> <C>
WHERE YOU CAN FIND MORE INFORMATION........................................................................... 1
INCORPORATION OF INFORMATION FILED WITH THE SEC............................................................... 1
WARNING REGARDING FORWARD-LOOKING STATEMENTS.................................................................. 3
SUMMARY DESCRIPTION OF THE REGISTERED DEBENTURES.............................................................. 11
SUMMARY DESCRIPTION OF INDENTURE PROVISIONS APPLICABLE TO THE REGISTERED DEBENTURES........................... 12
RISK FACTORS.................................................................................................. 13
THE EXCHANGE OFFER............................................................................................ 15
REGISTRATION RIGHTS AGREEMENT................................................................................. 22
DESCRIPTION OF THE REGISTERED DEBENTURES...................................................................... 24
THE INDENTURE................................................................................................. 27
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER.................................. 35
PLAN OF DISTRIBUTION.......................................................................................... 35
VALIDITY OF THE REGISTERED DEBENTURES......................................................................... 36
EXPERTS....................................................................................................... 36
</TABLE>
(i)
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other information with the Securities and
Exchange Commission. You may read and copy the reports and other information
that we file with the SEC at their public reference facilities at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549. You may also obtain information
about us from the following regional offices of the SEC: Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60601-2511. Copies of these
materials can be obtained from the Public Reference Section of the SEC in
Washington, D.C. 20549 at prescribed rates. Our filings with the SEC are
available to the public on the SEC's Internet home page at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-4 with
respect to our registered 6 1/2% debentures due March 15, 2029. This prospectus,
which is a part of the registration statement, omits certain information
included in the registration statement. Statements made in this prospectus as to
the contents of any contract, agreement or other document are only summaries and
are not complete. We refer you to these exhibits for a more complete description
of the matter involved. Each statement regarding the exhibits is qualified by
the actual documents.
The indenture governing the outstanding debentures provides that we will
furnish to the holders of the debentures copies of such information, documents
and other reports and such summaries thereof as are required to be filed by us
under the Trust Indenture Act, at the times and in the manner provided pursuant
to the Act, provided that any information, documents or reports required to be
filed with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, shall be filed with the Trustee within 15 days after such filings
are required to be made with the SEC.
INCORPORATION OF INFORMATION FILED WITH THE SEC
We are "incorporating by reference" certain information that we have filed
with the SEC, which means:
. incorporated documents are considered part of this prospectus;
. we are disclosing important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update and
supersede this prospectus.
We incorporate by reference the documents listed below that we filed with
the SEC under the Securities Exchange Act of 1934:
. Annual Report on Form 10-K for the year ended January 29, 1999; and
. Quarterly Report on Form 10-Q for the quarter ended April 30, 1999.
We also incorporate by reference each of the following documents that we
may file with the SEC after the date of this prospectus:
. Registration statements filed under Section 12 of the Exchange Act;
. Reports filed under Sections 13(a) and (c) of the Exchange Act;
. Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting;
and
. Any reports filed under Section 15(d) of the Exchange Act.
<PAGE>
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address:
Lowe's Companies, Inc.
Attention: Treasurer
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(336) 658-4000 or (888) 34LOWES
_______________________________
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WARNING REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the registration statements, reports, proxy statements
and other information that we have filed with the SEC, which we incorporate by
reference in this prospectus, may include "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although we believe that comments reflected in
such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to be correct. Possible risks and uncertainties
regarding these statements include, but are not limited to:
. general economic trends;
. availability and development of real estate for expansion;
. fluctuation in prices of commodities;
. the nature of competition;
. reliable supply of inventory; and
. weather conditions.
We have based these forward-looking statements largely on our expectations
as well as assumptions that we have made and information currently available to
our management. When used in this prospectus, the words "anticipate," "believe,"
"estimate," "expect" and similar expressions, as they relate to us or our
management, are intended to identify forward-looking statements. Forward-looking
statements are subject to a number or risks and uncertainties, certain of which
are beyond our control. Actual results could differ materially from those
anticipated in this prospectus. Furthermore, in light of these risks and
uncertainties, the forward-looking events and circumstances discussed in this
prospectus might not transpire.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
You should carefully read this prospectus in its entirety. It contains
information that you should consider when making your investment decision.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the initial purchasers have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. You should assume that the information appearing in this prospectus, as well
as information that we previously filed with the SEC and incorporated by
reference, is accurate as of the date on the front cover of this prospectus
only. Our business, financial condition, results of operations and prospects may
have changed since that date.
______________________
3
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus, but does
not contain all information that may be important to you. This prospectus
includes or incorporates by reference specific terms of the exchange offer, as
well as information regarding our business and detailed financial data. We
encourage you to read the detailed information and financial statements
appearing elsewhere or incorporated by reference in this prospectus. Except if
the context requires otherwise, references in this prospectus to "we," "us,"
"our," "Lowe's" or "Company" refer to Lowe's Companies, Inc., a North Carolina
corporation, and its subsidiaries. The term "old debentures" refers to the 6
1/2% debentures due March 15, 2029 that were issued on February 23, 1999 to
qualified institutional buyers in a Rule 144A private placement. The term
"registered debentures" refers to the registered 6 1/2% debentures due March 15,
2029 offered pursuant to this prospectus.
THE EXCHANGE OFFER
On February 23, 1999 we completed the private offering of an aggregate
principal amount of $400,000,000 of old debentures. We entered into a
registration rights agreement with the initial purchasers in which we agreed,
among other things, to deliver to you this prospectus and to offer to exchange
your old debentures for registered debentures with substantially identical
terms. If the exchange offer is not completed within 30 days of the effective
date of the registration statement of which this prospectus is a part, then
special interest, in addition to the base interest that would otherwise accrue
on the debentures, shall accrue at an additional per annum rate of 0.25% for the
first 90 days after that date. The interest rate shall increase 0.25% for each
90 day period that this requirement is not satisfied, provided that the
aggregate increase in the annual interest rate cannot exceed 0.50%. You should
read the discussion under the heading "Description of the Registered Debentures"
for further information regarding the registered debentures.
We believe the registered debentures issued in the exchange offer may be
resold by you without compliance with the registration and prospectus delivery
provisions of the Securities Act, subject to certain conditions. You should read
the discussion under the heading "The Exchange Offer" for further information
regarding the exchange offer and resale of the registered debentures.
THE COMPANY
We are a leading specialty retailer of products and services for home
improvement, home decor, home repair and remodeling and home construction
markets. Our principal customer groups are do-it-yourself retail and commercial
business customers. As of June 28, 1999, we operated 532 stores with 49.9
million square feet of sales floor in 37 states located principally in the South
Atlantic, South Central and Midwest regions of the United States. We have
recently completed the acquisition of Eagle Hardware & Garden, Inc., a home
center retailer that currently operates 41 warehouse/home improvement centers in
10 Western states. We are the world's second largest home center retailer. Our
principal executive offices are located at 1605 Curtis Bridge Road, Wilkesboro,
North Carolina 28697, and our telephone number is (336) 658-4000.
4
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SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The exchange offer relates to the exchange of up to $400,000,000 aggregate
principal amount of old debentures for an equal aggregate principal amount of
registered debentures. The registered debentures will be obligations of ours
entitled to the benefits of the indenture governing the old debentures. The form
and terms of the registered debentures are identical in all material respects to
the form and terms of the old debentures with three exceptions. First, the
registered debentures are registered under the Securities Act, and therefore are
not entitled to the benefits of the registration rights granted under the
registration rights agreement executed as part of the private offering of the
old debentures among us and the initial purchasers. Second, holders of
registered debentures will not be entitled to contingent increases in the
interest rates on the registered debentures. Third, the registered debentures
will not bear legends restricting their transfer.
Registration Rights..................... You are entitled to exchange your old
debentures for registered debentures
with substantially identical terms.
The exchange offer is intended to
satisfy these rights. After the
exchange offer is complete, you will
not be entitled to any exchange or
registration rights with respect to
the old debentures except in certain
limited circumstances.
Under the registration rights
agreement, we have agreed to:
. file a registration statement
within 150 days after the issue
date of the old debentures enabling
holders to exchange the privately
placed old debentures for publicly
registered debentures with
identical terms.
. use our best efforts to cause the
registration statement to become
effective within 180 days after the
issue date of the old debentures.
. consummate the exchange offer
within 30 days after the effective
date of our registration statement,
and use our best efforts to file a
shelf registration statement for
the resale of the old debentures if
we cannot effect an exchange offer
within the time periods listed
above and under certain other
circumstances.
We have complied with the first two of
these conditions. The interest rate on
the debentures will increase if we do
not comply with our remaining
obligation to complete this exchange
offer. See "Registration Rights
Agreement -- Special Interest".
The Exchange Offer...................... We are offering to exchange each
$1,000 principal amount of the
registered debentures for each $1,000
principal amount of our old debentures
issued in a
5
<PAGE>
private offering on February 23, 1999.
To be exchanged, old debentures must
be properly tendered and accepted.
All old debentures that are validly
tendered and not validly withdrawn
will be exchanged.
Resale of the Registered Debentures..... Based on interpretations by the SEC
set forth in no action letters issued
to third parties, including "Exxon
Capital Holdings Corporation"
(available May 13, 1988), "Morgan
Stanley & Co., Incorporated"
(available June 5, 1991), "Mary Kay
Cosmetics, Inc." (available June 5,
1991) and "Warnaco, Inc." (available
October 11, 1991), we think the
registered debentures issued in the
exchange offer may be offered for
sale, resold and otherwise transferred
by you without compliance with the
registration and prospectus delivery
provisions of the Securities Act if:
. the registered debentures issued in
the exchange offer are being
offered by you in the ordinary
course of your business;
. you are not participating, do not
intend to participate, and do not
have any arrangement or
understanding with any person to
participate in a distribution of
the registered debentures issued to
you in the offer;
. you are not a broker-dealer who
purchased such outstanding old
debentures directly from us for
resale pursuant to Rule 144A or
under an available exemption under
the Securities Act; and
. you are not an "affiliate" of ours
as defined in Section 405 of the
Securities Act.
If our belief is inaccurate and you
transfer any registered debentures
issued to you in the exchange offer
without delivering a prospectus
meeting the requirements of the
Securities Act or without an exemption
from registration of your old
debentures from such requirements, you
may incur liability under the
Securities Act. We do not assume or
indemnify you against such liability.
Each broker-dealer that is issued
registered debentures in the exchange
offer for its own account in exchange
for old debentures which were acquired
by such broker-dealer as a result of
market-making or other trading
activities must acknowledge it will
deliver a prospectus
6
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meeting the requirements of the
Securities Act in connection with any
resale of the registered debentures
issued in the exchange offer. The
Letter of Transmittal states that by
so acknowledging and by delivery of a
prospectus, such broker-dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of
the Securities Act. A broker-dealer
may use this prospectus for an offer
to resell, resale or other retransfer
of registered debentures issued to it
in the exchange offer. We have agreed
to use best efforts to make this
prospectus and any amendment or
supplement to the prospectus available
to any such broker-dealer for use in
connection with such resales for 180
days.
We believe that no registered holder
of the outstanding old debentures is
an affiliate of ours. The exchange
offer is not being made to, nor will
surrender for exchange be accepted
from, holders of outstanding old
debentures in any jurisdiction in
which this exchange offer or the
acceptance thereof would violate the
securities or blue sky laws of such
jurisdiction.
Expiration Date........................ The exchange offer will expire at 5:00
p.m., New York City time, on August
__, 1999, unless we decide to extend
the expiration date.
Accrued Interest on the Registered
Debentures and the Old Debentures..... The old debentures and the registered
debentures will bear interest from
February 23, 1999. Old debentures that
are accepted for exchange will cease
earning interest from the date of
completion of the exchange offer.
Holders who exchange their old
debentures for registered debentures
will receive the same interest payment
on September 15, 1999 (the first
payment date for both the old
debentures and registered debentures)
that they would have received if they
had not accepted the exchange offer.
Termination of the
Exchange Offer........................ We may terminate the exchange offer if
our ability to conduct the exchange
offer is materially impaired due to
any legal or governmental action, new
law, statute, rule or regulation or
any interpretation of the SEC staff of
any existing law, statute, rule or
regulation. We do not expect any of
these conditions to occur, although we
cannot guarantee you that such
conditions will not occur. If we fail
to consummate the exchange offer,
holders of old debentures will have
certain rights against us under the
registration rights agreement executed
as
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part of the offering of the old
debentures.
Procedures for Tendering
Old Debentures....................... If you are a holder of an old
debenture and you wish to tender your
old debenture for exchange pursuant to
the exchange offer, you must transmit
to The First National Bank of Chicago,
as exchange agent, on or prior to the
closing date:
. a properly completed and duly
executed Letter of Transmittal in
the form that accompanies this
prospectus, or a facsimile of the
Letter of Transmittal, including
all other documents required by the
Letter of Transmittal, to the
exchange agent at the address set
forth on the cover page of the
Letter of Transmittal; or
. a timely confirmation of book-entry
transfer of your old debentures
into the exchange agent's account
at the Depositary Trust Company, or
DTC, pursuant to the procedure for
book-entry transfers described in
this prospectus under the heading
"The Exchange Offer --Procedure for
Tendering Old Debentures." The
confirmation must be received by
the exchange agent on or prior to
the expiration date; or
. the documents necessary for
compliance with the guaranteed
delivery procedures described
below.
By executing the Letter of
Transmittal, each holder will
represent among other things:
. the registered debentures will be
held in the ordinary course of
business of the person receiving
such debentures whether or not such
person is the holder;
. neither the holder nor any other
person has an arrangement or
understanding with any person to
participate in the distribution of
the old debentures; and
. neither the holder nor any other
person is our "affiliate," as that
term is defined in Section 405 of
the Securities Act.
Special Procedures for
Beneficial Owners.................... If you are the beneficial owner of old
debentures and your name does not
appear on a security position listing
of DTC as the holder of old debentures
or if you are a beneficial owner of
old debentures registered in the name
of a broker, dealer, commercial bank,
trust
8
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company or other nominee and you
wish to tender old debentures in the
exchange offer, you should promptly
contact the nominee in whose name your
old debentures are registered and
instruct the nominee to tender on your
behalf. The transfer of record
ownership may take considerable time.
Guaranteed Delivery Procedures......... If you wish to tender your old
debentures and time will not permit
the required documents to reach the
exchange agent by the expiration date,
the procedure for book-entry transfer
cannot be completed on time or
certificates for registered old
debentures cannot be delivered on
time, you may exchange old debentures
pursuant to the procedures described
in this prospectus under the heading
"The Exchange Offer -- Guaranteed
Delivery Procedures."
Withdrawal Rights...................... You may withdraw the tender of your
old debentures at any time prior to
5:00 p.m., New York City time, on the
August __, 1999 unless your old
debentures were previously accepted
for exchange.
Acceptance of Old Debentures and
Delivery of Registered Debentures..... Subject to certain conditions
described more fully under the "The
Exchange Offer," we will accept for
exchange any and all old debentures
which are properly tendered in the
exchange offer prior to 5:00 p.m., New
York City time, on August __, 1999.
The registered debentures issued
pursuant to the exchange offer will be
delivered promptly following the
closing date.
Certain U.S. Federal Income
Tax Consequences...................... An exchange of old debentures for
registered debentures will not be
taxable to the holders. See "Material
United States Federal Income Tax
Consequences of the Exchange Offer."
Use of Proceeds........................ We will not receive any proceeds from
the issuance of registered debentures
in the exchange offer.
Exchange Agent......................... The First National Bank of Chicago is
serving as exchange agent in
connection with the exchange offer.
The exchange agent can be reached at
Corporate Trust Office, One First
National Plaza, Suite 0126, Chicago,
Illinois, 60670-0126, Attention:
Corporate Trust Administrator. For
more information with respect to the
exchange offer, the telephone number
for the exchange agent is (630) 351-
1238 and the facsimile number is (312)
407-1708.
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CONSEQUENCES OF NOT EXCHANGING OLD DEBENTURES
If you do not exchange your old debentures in the exchange offer, your old
debentures will continue to be subject to the restrictions on transfer set forth
in the legend on the certificate for your old debentures. In general, you may
offer or sell your old debentures only if they are registered under, offered or
sold pursuant to an exemption from, or offered or sold in a transaction not
subject to, the Securities Act and applicable state securities laws. After the
exchange offer is completed, we will not be required, and we do not intend, to
register the old debentures under the Securities Act.
10
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SUMMARY DESCRIPTION OF THE REGISTERED DEBENTURES
Following is a brief summary of certain terms of the registered debentures.
For a more complete description of the terms of the registered debentures, see
"Description of the Registered Debentures" in this prospectus.
Terms of the Registered Debentures:
Aggregate Principal Amount..................... $400,000,000
Interest Rate.................................. 6 1/2% per year
Maturity Date.................................. March 15, 2029
Interest Payment Dates......................... March 15 and September 15 of
each year, beginning September
15, 1999
Interest Calculations.......................... Based on 360-day year of twelve
30-day months
Ranking........................................ The registered debentures will
rank equally with all of our
other senior indebtedness
Redemption or Sinking Fund..................... None
Form of Registered Debenture................... Global security
Settlement and Payment......................... Same-day -- immediately
available funds
Secondary Trading Payments..................... Same day -- immediately
available funds
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SUMMARY DESCRIPTION OF INDENTURE PROVISIONS APPLICABLE TO THE REGISTERED
DEBENTURES
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Limit on Debt.................................. The indenture does not limit the amount of debt that
we may issue or provide holders any protection should
we be involved in a highly leveraged transaction.
Certain Covenants.............................. The indenture contains covenants that, among other
things, will limit our ability to:
. incur, issue, assume or guarantee certain secured
indebtedness, and
. engage in certain sale and leaseback transactions.
The covenants also limit the ability of our
subsidiaries to incur, issue, assume or guarantee
additional indebtedness of any kind or to engage in
sale and leaseback transactions.
These covenants are subject to important exceptions
and qualifications, which are described under the
heading "The Indenture" in this prospectus.
Events of Default.............................. Each of the following is an event of default under
the indenture:
. Our failure for 30 days to pay when due interest
on the registered debentures;
. Our failure to pay principal or premium, if any,
on the registered debentures when due;
. Our failure to perform covenants with respect to
the registered debentures for 60 days after receipt
of notice of default;
. Default in the payment of principal or
acceleration of at least $10.0 million in aggregate
principal amount of our debt or the debt of our
subsidiaries after receipt of notice of such default
or acceleration; and
. Certain events of bankruptcy, insolvency or
reorganization of us or our subsidiaries.
Remedies....................................... If an event of default occurs, the trustee under the
indenture or holders of at least 25% in aggregate
principal amount of outstanding debentures may
declare the principal and accrued interest
immediately due and payable.
</TABLE>
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RISK FACTORS
You should consider carefully the following risks and all of the
information set forth in this prospectus before tendering your old debentures in
the exchange offer and making an investment in the registered debentures. The
risk factors set forth below (other than "-- Consequences of Not Exchanging Old
Debentures") are applicable to the old debentures as well as the registered
debentures.
Consequences of Not Exchanging Old Debentures
If you do not exchange your old debentures for the registered debentures in
the exchange offer, you will continue to be subject to the restrictions on
transfer described in the legend on your old debentures. The restrictions on
transfer of your old debentures arise because we issued the old debentures in a
transaction not subject to the registration requirements of the Securities Act
and applicable state securities laws. In general, you may only offer or sell
the old debentures if they are registered under the Securities Act and
applicable state securities laws, or offered and sold pursuant to an exemption
from such requirements. If you are still holding any old debentures after the
expiration date and the exchange offer has been consummated, you will not be
entitled to have such old debentures registered under the Securities Act or to
any similar rights under the registration rights agreement (subject to limited
exceptions, if applicable). After the exchange offer is completed, we will not
be required, and we do not intend, to register the old debentures under the
Securities Act. In addition, if you exchange your old debentures in the
exchange offer for the purpose of participating in a distribution of the
registered debentures, you may be deemed to have received restricted securities
and, if so, will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. To the extent old debentures are tendered and accepted in the
exchange offer, the trading market, if any, for the old debentures would be
adversely affected.
Holders are Responsible for Compliance with Exchange Offer Procedures
We will issue the registered debentures in exchange for the old debentures
only after we have timely received your old debentures, along with a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, if you want to tender your old debentures in exchange for
registered debentures, you should allow sufficient time to ensure timely
delivery. Neither we nor the exchange agent is under any duty to give
notification of defects or irregularities in the tender of old debentures for
exchange. The exchange offer will expire at 5:00 p.m., New York City time, on
August __, 1999, or on a later extended date and time as we may decide.
The registered debentures and any old debentures which remain outstanding
after the exchange offer will vote together as a single class for purposes of
determining whether the required percentage of holders have taken certain
actions or exercised certain rights under the indenture.
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Requirements for Transfer of Registered Debentures
Based on interpretations by the SEC staff set forth in no-action letters
issued to third parties, we believe that you may offer for resale, resell and
otherwise transfer the registered debentures without compliance with the
registration and prospectus delivery provisions of the Securities Act, subject
to certain limitations. These limitations include (i) that you are not an
"affiliate" of ours within the meaning of Rule 405 under the Securities Act,
(ii) that you acquire your registered debentures in the ordinary course of your
business and (iii) that you have no arrangement with any person to participate
in the distribution of such registered debentures. However, we have not
submitted a no-action letter to the SEC regarding this exchange offer and we
cannot assure you that the SEC would make a similar determination with respect
to this exchange offer. If you are an affiliate of ours, are engaged in or
intend to engage in or have any arrangement or understanding with respect to a
distribution of the registered debentures to be acquired pursuant to the
exchange offer, you will be subject to additional limitations. See "The
Exchange Offer -- Resale of the Registered Debentures."
Restrictions Imposed by the Indenture
The indenture relating to the debentures contains covenants that restrict
our ability to:
. incur additional indebtedness; or
. enter into certain sales and leasebacks transactions.
We cannot assure you that these restrictions will not adversely affect our
ability to finance our future operations or capital needs or engage in other
business activities that may be in our interest.
Lack of Public Market for the registered debentures; Restrictions on Resale
There is no existing trading market for the registered debentures, and we
cannot assure you regarding the future development of a market for the
registered debentures, or the ability of the holders of the registered
debentures to sell their registered debentures, or the price at which such
holders may be able to sell their registered debentures. If such a market were
to develop, the registered debentures could trade at prices that may be higher
or lower than the initial offering price of the old debentures depending on many
factors, including prevailing interest rates, our operating results and the
market for similar securities. Each of the initial purchasers has advised us
that it intends to make a market in the registered debentures. The initial
purchasers are not obligated to do so, however, and any market making with
respect to the registered debentures may be discontinued at any time without
notice. Therefore, we cannot assure you as to the liquidity of any trading
market for the registered debentures or that an active trading market for the
registered debentures will develop. We do not intend to apply for listing of
the old debentures or, if issued, the registered debentures, on any securities
exchange or for quotation through the National Association of Securities Dealers
Automated Quotation System.
Historically, the market for investment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of such
securities. We cannot assure you that the market for the registered debentures
will not be subject to similar disruptions. Any such disruptions may have an
adverse effect on holders of the registered debentures.
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THE EXCHANGE OFFER
Pursuant to a registration rights agreement between us and the initial
purchasers of the old debentures, we agreed:
(1) to file a registration statement on or prior to 150 days after the
closing of the offering of the old debentures with respect to an offer
to exchange the old debentures for a new issue of debentures, with
terms substantially the same as those of the old debentures but
registered under the Securities Act,
(2) to use our best efforts to cause the registration statement to be
declared effective by the SEC on or prior to 180 days after the
closing of the old debentures offering, and
(3) to use our best efforts to consummate the exchange offer and to issue
the registered debentures within 30 days after the registration
statement is declared effective.
The registration rights agreement provides that, in the event that we fail
to file the registration statement within 150 days after the closing date, to
have the registration statement declared effective within 180 days after the
closing date, or to consummate the exchange offer within 30 days of the
effectiveness of the registration statement, we will be required to pay
additional interest on the old debentures over and above the regular interest on
the old debentures. Upon consummation of this exchange offer, the provisions
for additional interest on the old debentures shall cease.
The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of old debentures in any jurisdiction in which the
exchange offer or acceptance of the exchange offer would violate the securities
or blue sky laws of such jurisdiction.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal, we will accept for exchange old debentures
that are properly tendered on or prior to the expiration date and not withdrawn.
The expiration date is 5:00 p.m., New York City time, on August __, 1999, or, if
we have extended the period of time for the exchange offer, the latest time and
date to which the exchange offer is extended.
As of the date of this prospectus, $400,000,000 aggregate principal amount
of the old debentures was outstanding. This prospectus, together with the
Letter of Transmittal, is first being sent on or about the date set forth on the
cover page to all holders of old debentures at the addresses set forth in the
securities register with respect to old debentures maintained by DTC. Our
obligation to accept old debentures for exchange pursuant to the exchange offer
is subject to certain conditions set forth below. See "-- Conditions to
Exchange Offer."
We expressly reserve the right, at any time or from time to time, to extend
the period during which the exchange offer is open, and thereby delay acceptance
for exchange of any old debentures, by mailing written notice of such extension
to the holders as described below. During any extension, all old debentures
previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. Any old debentures not accepted for exchange for
any reason will be returned without expense to the holder as promptly as
practicable after the expiration or termination of the exchange offer.
Old debentures tendered in the exchange offer must be $1,000 in principal
amount or any integral multiple thereof.
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We will mail written notice of any extension, amendment, non-acceptance or
termination to the holders of the old debentures as promptly as practicable,
such notice to be mailed to the holders of record of the old debentures no later
than 9:00 a.m. New York City time, on the next business day after the previously
scheduled expiration date or other event giving rise to such notice requirement.
Procedures for Tendering Old Debentures
Letter of Transmittal. The tender to us of old debentures by a holder as
set forth below and the acceptance of the tender by us will constitute a binding
agreement between the tendering holder and us upon the terms and subject to the
conditions set forth in this prospectus and in the Letter of Transmittal.
Except as set forth below, a holder who wishes to tender old debentures for
exchange must transmit a properly completed and executed Letter of Transmittal,
together with all other documents required by such Letter of Transmittal, to the
exchange agent at the address set forth below under "-- Exchange Agent" on or
prior to the expiration date.
Other Documents. In addition,
. the exchange agent must receive certificates for the old debentures
along with the Letter of Transmittal, or
. the exchange agent must receive prior to the expiration date a timely
confirmation of a book-entry transfer of the old debentures, if such
procedure is available, into the exchange agent's account at the DTC
pursuant to the procedure for book-entry transfer described below, or
. the holder must comply with the guaranteed delivery procedures described
in "--Guaranteed Delivery Procedures," below.
================================================================================
The method of delivery of old debentures, Letters of Transmittal and all other
required documents is at the election and risk of the holders. If the delivery
is by mail, it is recommended that registered mail, properly insured, with
return receipt requested, be used in all cases. Sufficient time should be
allowed to assure timely delivery. No Letters of Transmittal or old debentures
should be sent to us.
================================================================================
Signatures. Signatures on a Letter of Transmittal or a notice of
withdrawal, must be guaranteed unless the old debentures surrendered for
exchange pursuant thereto are tendered (1) by a registered holder of the old
debentures who has not completed the box entitled "Special Issuance
Instructions" on the Letter of Transmittal or (2) for the account of an eligible
institution, which is defined as a bank, stockbroker, national securities
exchange, registered securities association, savings and loan association or
credit union with membership in a signature medallion program pursuant to
Exchange Act Rule 17Ad-15. If signatures on a Letter of Transmittal or a notice
of withdrawal are required to be guaranteed, the guarantees must be by a firm
that is an eligible guarantor institution. If old debentures are registered in
the name of a person other than the person signing the Letter of Transmittal,
the old debentures surrendered for exchange must be endorsed by, or be
accompanied by, a written instrument or instruments of transfer or exchange, in
satisfactory form as determined by us, duly executed by the registered holder,
with the signature guaranteed by an eligible institution.
Powers of Attorney. If the Letter of Transmittal is signed by a person or
persons other than the registered holder or holders of old debentures, the old
debentures must be endorsed or accompanied by
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<PAGE>
appropriate powers of attorney, in either case signed exactly as the name or
names of the registered holder or holders that appear on the old debentures.
Representatives, Trustees, Guardians, Etc. If the Letter of Transmittal or
any old debentures or powers of attorney are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and unless waived by us, proper evidence satisfactory to
us of their authority to so act must be submitted with the Letter of
Transmittal.
Required Acknowledgments; Resales by Broker-Dealers. By tendering old
debentures, each holder, other than a broker-dealer, must acknowledge that it is
not engaged in, and does not intend to engage in, a distribution of registered
debentures. If any holder of old debentures is an "affiliate" of ours, as
defined in Rule 405 under the Securities Act, or is engaged in or intends to
engage in or has any arrangement with any person to participate in the
distribution of the registered debentures to be acquired pursuant to the
exchange offer, the holder:
. could not rely on the applicable interpretations of the SEC staff, and
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives registered debentures for its own account
in exchange for old debentures must acknowledge that the old debentures were
acquired by the broker-dealer as a result of market-making activities or other
trading activities and that it will deliver a prospectus in connection with any
resale of the registered debentures. Any such broker-dealer may be deemed to be
an "underwriter" under the Securities Act. See "Plan of Distribution." The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
Acceptance of Old Debentures for Exchange; Delivery of Registered Debentures
The Company will accept, promptly after the expiration date, all old
debentures properly tendered and will issue the registered debentures promptly
after acceptance of the old debentures. For each old debenture accepted for
exchange, the holder of the old debenture will receive a registered debenture
having a principal amount equal to that of the surrendered old debenture. The
registered debentures will bear interest from the most recent date on which
interest has been paid on the old debentures or, if no interest has been paid,
from February 23, 1999. Accordingly, if the relevant record date for interest
payment occurs after the completion of the exchange offer, registered holders of
registered debentures on the record date will receive interest accruing from the
most recent date that interest has been paid or, if no interest has been paid,
from February 23, 1999. If, however, the relevant record date for interest
payment occurs prior to the completion of the exchange offer, registered holders
of old debentures on the record date will receive interest accruing from the
most recent date that interest has been paid or, if no interest has been paid,
from February 23, 1999. Old debentures accepted for exchange will cease to
accrue interest from and after the date of completion of the exchange offer,
except as set forth in the immediately preceding sentence. Holders of old
debentures whose old debentures are accepted for exchange will not receive any
payment in respect of interest on the old debentures otherwise payable on any
interest payment date the record date for which occurs on or after completion of
the exchange offer.
In all cases, issuance of registered debentures for old debentures that are
accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of:
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<PAGE>
. certificates for the old debentures or a timely book-entry confirmation
of the transfer of the old debentures into the exchange agent's account
at the book-entry transfer facility;
. a properly completed and duly executed Letter of Transmittal; and
. all other required documents.
If any tendered old debentures are not accepted for any reason set forth in
the terms and conditions of the exchange offer or if certificates representing
old debentures are submitted for a greater principal amount than the holder
desires to exchange, certificates representing the unaccepted or non-exchanged
old debentures will be returned without expense to the tendering holder thereof.
In the case of old debentures tendered by book-entry transfer into the exchange
agent's account at the book-entry transfer facility pursuant to the book-entry
transfer procedures described below, the non-exchanged old debentures will be
credited to an account maintained with the book-entry transfer facility.
All questions as to the validity, form, eligibility and acceptance of old
debentures tendered for exchange will be determined by us in our sole
discretion, which determination shall be final and binding. We reserve the
absolute right to reject any and all tenders of any particular old debentures
not properly tendered or not to accept any particular old debentures if
acceptance might, in the judgment of us or our counsel, be unlawful. We also
reserve the absolute right in our sole discretion to waive any defects or
irregularities or conditions of the exchange offer as to any particular old
debentures either before or after the expiration date, including the right to
waive the ineligibility of any holder who seeks to tender old debentures in the
exchange offer. The interpretation of the terms and conditions of the exchange
offer as to any particular old debentures either before or after the expiration
date by us shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of old debentures for
exchange must be cured within a reasonable period of time that we shall
determine. Neither us, the exchange agent nor any other person shall be
required to give notice of any defect or irregularity regarding any tender of
old debentures for exchange, nor shall any of the above incur any liability for
failure to give notice.
The exchange agent has established an account with respect to the old
debentures at DTC for purposes of the exchange offer and any financial
institution that is a participant in DTC's systems may make book-entry delivery
of old debentures by causing DTC to transfer the old debentures into the
exchange agent's account at DTC in accordance with DTC's procedures for
transfer.
================================================================================
Although delivery of old debentures may be effected through book-entry transfer
at DTC, the Letter of Transmittal or a facsimile thereof, with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received by the exchange agent at the address set forth below
under "Exchange Agent" on or prior to the expiration date, or the guaranteed
delivery procedures described below must be complied with.
================================================================================
Guaranteed Delivery Procedures
If a registered holder of old debentures desires to tender the old
debentures and the old debentures are not immediately available, or time will
not permit the holder's old debentures or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if:
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. the tender is made through an eligible institution;
. prior to the expiration date, the exchange agent receives from the
eligible institution a properly completed and duly executed Letter of
Transmittal or a facsimile thereof and Notice of Guaranteed Delivery,
substantially in the form provided by us by telegram, telex, facsimile
transmission, mail or hand delivery, setting forth the name and address
of the holder of old debentures and the amount of old debentures
tendered, stating that the tender is being made thereby and guaranteeing
that within five New York Stock Exchange ("NYSE") trading days after the
date of execution of the Notice of Guaranteed Delivery, the certificates
for all old debentures will be physically tendered in proper form for
transfer, or a book-entry confirmation, as the case may be, and any
other documents required by the Letter of Transmittal will be deposited
by the eligible institution with the exchange agent; and
. the certificates for all old debentures, in proper form for transfer, or
a book-entry confirmation, as the case may be, and all other documents
required by the Letter of Transmittal, are received by the exchange act
within five NYSE trading days after the date of execution of the Notice
of Guaranteed Delivery.
Withdrawal Rights
Tenders of old debentures may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the expiration date. For a withdrawal to be effective, a
written or facsimile notice of withdrawal must be received by the exchange agent
at the address set forth below under "-- Exchange Agent." Any notice of
withdrawal must specify the name of the person having tendered the old
debentures to be withdrawn, identify the old debentures to be withdrawn
(including the principal amounts of such old debentures), and (where
certificates for old debentures have been transmitted) specify the name in which
such old debentures are registered, if different from that of the withdrawing
holder.
If certificates for old debentures have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless the holder is an
eligible institution. If old debentures have been tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at the book-entry transfer facility to be
credited with the withdrawn old debentures and otherwise comply with the
procedures of the facility. All questions as to the validity, form and
eligibility of the notices will be determined by us and our determination shall
be final and binding on all parties. Certificates for any old debentures so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the exchange offer. Any old debentures that have been tendered for
exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to the holder. In the case of old debentures
tendered by book-entry transfer into the exchange agent's account at DTC
pursuant to the book-entry transfer procedures described above, the old
debentures will be credited to an account maintained with DTC for the old
debentures. Properly withdrawn old debentures may be retendered by following
one of the procedures described under "-- Procedures for Tendering Old
Debentures," at any time on or prior to the expiration date.
Conditions to Exchange Offer
Notwithstanding any other provision of the exchange offer, we are not
required to accept for exchange, or to issue registered debentures in exchange
for, any old debentures and may terminate or
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<PAGE>
amend the exchange offer if, at any time before the acceptance of such old
debentures in exchange or the exchange of the registered debentures for such old
debentures, we determine that the exchange offer violates applicable law, any
applicable interpretation of the staff of the SEC or any order of any
governmental agency or court of competent jurisdiction.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our sole
discretion. Our failure to exercise any of the foregoing rights at any time
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Exchange Agent
All executed Letters of Transmittal should be directed to the exchange
agent at the address set forth below. Questions and requests for assistance,
requests for additional copies of this prospectus or of the Letter of
Transmittal and requests for Notices of Guaranteed Delivery should be directed
to the exchange agent, addressed as follows:
By Registered or Certified Mail:
The First National Bank of Chicago
Corporate Trust Administration
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attn: D. Fanning
By Overnight Courier:
The First National Bank of Chicago
Corporate Trust Administration
One North State Street, Suite 0126
Chicago, Illinois 60670-0126
Attn: D. Fanning
By Hand:
First Chicago Trust Co. of New York
14 Wall Street, 8th Floor
New York, New York 10005
Attn: Frank Ballantine
Confirm by Telephone:
Ms. Donna Fanning
(630) 351-1238
================================================================================
Delivery of the Letter of Transmittal to an address other than as set forth
above or transmission or instructions via facsimile other than as set forth
above does not constitute a valid delivery of the Letter of Transmittal.
================================================================================
Fees and Expenses
We will not make any payment to brokers-dealers or others soliciting
acceptances of the exchange offer.
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Transfer Taxes
Holders who tender old debentures for exchange will not be obligated to pay
any transfer tax in connection therewith, except that holders who instruct us to
register registered debentures in the name of, or request that old debentures
not tendered or not accepted in the exchange offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax.
Appraisal Rights
Holders of old debentures will not have dissenters' rights or appraisal
rights in connection with the exchange offer.
Resale of the Registered Debentures
Based on interpretations by the SEC staff issued to third parties,
registered debentures issued in exchange for old debentures may be offered for
resale, resold or otherwise transferred by holders thereof without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that:
. the registered debentures are acquired in the ordinary course of the
holders' business,
. the holders have no arrangement with any person to participate in the
distribution of the registered debentures, and
. the holder is not an "affiliate" of us as defined in Rule 405 under the
Securities Act.
Each holder, other than a broker-dealer, must acknowledge that it is not
engaged in, and does not intend to engage in, a distribution of registered
debentures. This analysis is based upon the SEC's position in no-action letters
issued regarding other transactions that were substantially similar to this
exchange offer. Although the SEC has not indicated that it has changed its
position on this issue, we have not sought our own interpretive letter from the
SEC. There is no assurance that the SEC would make a similar determination with
respect to the resale of our registered debentures. See "Risk Factors --
Requirements for Transfer of Registered Debentures."
If any holder is an affiliate of ours, or if any holder is engaged in or
intends to engage in or has any arrangement or understanding with respect to the
distribution of the registered debentures to be acquired pursuant to the
exchange offer, the holder
. can not rely on the applicable interpretations of the SEC staff; and
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives registered debentures for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus meeting the requirements under the Securities Act in connection with
any resale of registered debentures. The Letter of Transmittal states that by
so acknowledging and delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of registered debentures
where the old debentures exchanged for such registered debentures were acquired
by such
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broker-dealer as a result of market-making activities or other trading
activities. We have agreed to use our best efforts to make this prospectus
available for a period not to exceed 180 days to any participating broker-dealer
for use in connection with any such resale. See "Plan of Distribution." However,
to comply with the securities laws of certain jurisdictions, if applicable, the
registered debentures may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available.
REGISTRATION RIGHTS AGREEMENT
The summary herein of certain provisions of the registration rights
agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the registration rights agreement , a
copy of which is filed as an exhibit to the registration statement of which this
prospectus is a part.
We entered into a registration rights agreement with the initial purchasers
on or prior to the date the old debentures were issued, pursuant to which we
agreed, for the benefit of the holders of the debentures, that we would, at our
own expense, (1) file an exchange offer registration statement with the SEC to
exchange the old debentures for registered debentures having substantially
identical terms in all material respects to the old debentures (except that the
registered debentures would not contain terms with respect to transfer
restrictions or interest rate increases as described herein) within 150 calendar
days after the date of issuance of the old debentures, (2) use our reasonable
best efforts to cause the exchange offer registration statement to be declared
effective by the SEC under the Securities Act, within 180 calendar days after
the date of issuance of the old debentures and (3) use our reasonable best
efforts to consummate the exchange offer within 30 calendar days after the date
of effectiveness of the exchange offer registration statement. Upon the exchange
offer registration statement being declared effective by the SEC, we will offer
the registered debentures in exchange for surrender of the old debentures. We
will keep the exchange offer open for at least 30 days (or longer if required by
applicable law) after the date that notice of the exchange offer is mailed to
holders of the old debentures. For each old debenture surrendered to us pursuant
to the exchange offer, the holder who surrendered such old debenture will
receive a registered debenture having a principal amount equal to that of the
old debenture. Interest on each registered debenture will accrue from the last
interest payment date on which interest was paid on the old debenture
surrendered in exchange therefor or, if no interest has been paid on such
debenture, from the original issue date of such old debenture.
Under existing interpretations of the Securities Act by the staff of the
SEC contained in several no-action letters to third parties, and subject to the
immediately following sentence, we believe that the registered debentures would
generally be freely transferable by holders thereof after the exchange offer
without further registration under the Securities Act, subject to the
representations required to be made by each holder of debentures, as set forth
below. However, any purchaser of old debentures who is one of our "affiliates,"
or who intends to participate in the exchange offer for the purpose of
distributing the registered debentures, (i) will not be able to rely on the
interpretation of the staff of the SEC, (ii) will not be able to tender its old
debentures in the exchange offer, and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or transfer of the old debentures unless such sale or transfer is made
pursuant to an exemption from such requirements.
In addition, in connection with any resales of registered debentures, any
participating broker-dealer that acquired the registered debentures for its own
account as a result of market-making or other trading activities must deliver a
prospectus meeting the requirements of the Securities Act. The SEC has taken
the position that participating broker-dealers may fulfill their prospectus
delivery requirements with respect to the registered debentures (other than a
resale of an unsold allotment from the original sale
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of the old debentures) by delivering the prospectus contained in the exchange
offer registration statement. We will agree to make available for a period of up
to 180 calendar days after consummation of the exchange offer a prospectus
meeting the requirements of the Securities Act to any participating broker-
dealer and any other persons, if any, with similar prospectus delivery
requirements, for use in connection with any resale of registered debentures. A
participating broker-dealer or any other person that delivers such a prospectus
to purchasers in connection with such resales will be subject to the civil
liability provisions under the Securities Act and will be bound by the
provisions of the registration rights agreement.
Each of you who holds the old debentures who wishes to exchange old
debentures for registered debentures in the exchange offer will be required to
make certain representations, including representations that (1) any registered
debentures to be received by you will be acquired in the ordinary course of your
business, (2) you have no arrangement or understanding with any person to
participate in the distribution of the registered debentures, (3) you are not an
"affiliate," as defined in Rule 405 under the Securities Act, of ours or, if you
are our affiliate, you will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, and (4) you are not
acting on behalf of any person who could not truthfully make the foregoing
representations.
Shelf Registration Statement
In the event that (1) any changes in law or the applicable interpretations
of the staff of the SEC do not permit us to effect the exchange offer, (2) for
any other reason the exchange offer is not consummated within 210 days after the
date the old debentures were issued, (3) under certain circumstances, if the
initial purchasers shall so request or (4) any of you, as holders of old
debentures (other than the initial purchasers), is not eligible to participate
in the exchange offer, we will, at our expense, (a) as promptly as practicable,
file with the SEC a shelf registration statement covering resales of the old
debentures, (b) use our reasonable best efforts to cause the shelf registration
statement to be declared effective under the Securities Act as promptly as
practicable, but in no event later than the 210th day after the date the old
debentures were issued and (c) use our reasonable best efforts to keep effective
the shelf registration statement until the earlier of two years after the date
of issuance of the old debentures or such shorter period ending when all old
debentures covered by the shelf registration statement have been sold in the
manner set forth and as contemplated in the shelf registration statement or all
of the old debentures become eligible for resale pursuant to Rule 144 under the
Securities Act without volume restrictions, if any. We will, in the event of the
filing of the shelf registration statement, provide to each of you as a holder
of the old debentures copies of the prospectus that is a part of the shelf
registration statement, notify you when the shelf registration statement has
become effective, and take certain other actions as are required to permit
unrestricted resales of the Debentures. As a holder of old debentures that sells
old debentures pursuant to the shelf registration statement, you generally will
be required to be named as a selling security holder in the related prospectus
and to deliver a prospectus to purchasers, you will be subject to the civil
liability provisions under the Securities Act in connection with such sales, and
you will be bound by the provisions of the registration rights agreement that
are applicable to such a holder. In addition, you as a holder of the old
debentures will be required to deliver information to be used in connection with
the shelf registration statement and to provide comments on the shelf
registration statement within the time periods set forth in the registration
rights agreement in order to have your old debentures included in the shelf
registration statement and to benefit from the provisions regarding liquidated
damages set forth in the following paragraph.
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Special Interest
In the event that either (a) the exchange offer registration statement is
not filed with the SEC on or prior to the 150/th/ calendar day following the
date of issuance of the old debentures, (b) the exchange offer registration
statement has not been declared effective on or prior to the 180th calendar day
following the date of issuance of the old debentures, (c) the exchange offer is
not consummated on or prior to the 30th calendar day following the date of
effectiveness of the exchange offer registration statement or (d) if required, a
shelf registration statement is not declared effective on or prior to the 210th
calendar day following the date of issuance of the old debentures, the interest
rate borne by the old debentures shall be increased by 0.25% per year following
the 150-day period in the case of clause (a) above, following such 180-day
period in the case of clause (b) above, following the 30-day period in the case
of clause (c) above or following the 210-day period in the case of clause (d)
above, which rate will be increased by an additional 0.25% per year for each 90-
day period that any additional interest continues to accrue; provided that the
aggregate increase in such annual interest rate may in no event exceed 0.50%.
Upon (w) the filing of the exchange offer registration statement after the 150-
day period described in clause (a) above, (x) the effectiveness of the exchange
offer registration statement after the 180-day period described in clause (b)
above, (y) the consummation of the exchange offer after the 30-day period
described in clause (d) above, the interest rate borne by the old debentures
from the date of such filing, effectiveness or consummation, as the case may be,
will be reduced to the original interest rate if we are otherwise in compliance
with this paragraph; provided, however, that if, after any such reduction in
interest rate, a different event specified in clause (a), (b) (c), or (d) above
occurs, the interest rate may a gain be increased pursuant to the foregoing
provisions. However, in certain circumstances, we will not be required to keep
the shelf registration statement effective for up to two periods not to exceed
an aggregate of 90 days in any consecutive 365-day period.
Default
"Default" means the occurrence of any of the following events:
. the exchange offer is not consummated on or before the deadline, which
is 30 days after the registration statement becomes effective and in no
event later than September 21, 1999;
. we fail to file the registration statement with the SEC by July 23,
1999;
. the SEC does not declare the registration statement effective by August
22, 1999; or
. the shelf registration statement, if required, is not declared effective
within 210 days of the closing or ceases to be effective or useable for
its intended purposes.
Indemnification
We agree in the registration rights agreement to indemnify selling holders
against certain liabilities, including certain liabilities under the Securities
Act.
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DESCRIPTION OF THE REGISTERED DEBENTURES
The Debentures
We issued the old debentures to the initial purchasers on February 23,
1999. The initial purchasers sold the old debentures to "qualified institutional
buyers," as defined in Rule 144A under the Securities Act. The terms of the
registered debentures are substantially identical to the terms of the old
debentures. However, the registered debentures are not subject to transfer
restrictions or registration rights unless held by certain broker-dealers,
affiliates of ours, or certain other persons. See "The Exchange Offer-- Resale
of the Registered Debentures." We do not plan to list the registered debentures
on any securities exchange or seek quotation on any automated quotation system.
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The following chart summarizes the basic terms of the registered
debentures:
Principal Amount at Maturity.................. $400,000,000
Maturity Date:................................ March 15, 2029
Interest Payments Dates:...................... The registered debentures will
bear interest at the rate of 6
1/2% compounded semi-annually on
September 15 and March 15 of
each year, commencing on
September 15, 1999.
Collateral and Ranking:....................... The registered debentures are
unsecured obligations of ours
and will rank equally to each
other, and to all existing and
future senior unsecured
indebtedness and will rank
senior in right of payment to
all existing and future
subordinated indebtedness.
Global Debenture:............................. The registered debentures will
be issued as a single, global
debenture that will be deposited
with DTC. Individual holders
will not receive certificates
for the registered debentures,
except in certain limited
circumstances.
Payment Procedures:........................... We will make all payments on the
registered debentures (including
principal, premium, if any,
interest and special interest,
if any) in immediately available
same day funds, at the Lowe's
office or agency maintained for
such purpose, which office or
agency shall be maintained in
the Borough of Manhattan, The
City of New York, except that:
. Payments on registered
debentures represented by the
global debenture will be
payable by wire transfer to
the accounts specified by the
holder of interest in such
global debenture.
. Payments on certificated
debentures, if any, will be
payable by wire transfer to
the accounts specified by the
holders or, if no such
account is specified, by
mailing a check to each
holder's registered address.
We have filed the registration statement to comply with its obligation
under the registration rights agreement to register the issuance of the
registered debentures. See "Registration Rights Agreement."
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THE INDENTURE
General
The registered debentures are to be issued under an Amended and Restated
Indenture, dated as of December 1, 1995, as supplemented and amended by a First
Supplemental Indenture, dated as of February 23, 1999, between us and The First
National Bank of Chicago, as trustee. Collectively, the Amended and Restated
Indenture and the First Supplemental Indenture are called the Indenture.
The registered debentures will be issued in fully registered book-entry
form without coupons and in denominations of $1,000 and integral multiples
thereof. We do not intend to apply for the listing of the debentures on a
national securities exchange. No service charge will be made for the
registration or exchange of the registered debentures, but we may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Indenture, Sections 302 and 305).
The following is a summary of certain terms of the registered debentures
and certain provisions of the indenture and is subject to the detailed
provisions of the indenture, to which we refer you for a more complete
description. Whenever we refer to particular Sections, Articles or defined terms
of the indenture, we intend to incorporate herein by reference such Sections,
Articles or defined terms.
The registered debentures will be unsecured senior obligations of ours,
will mature March 15, 2029, will be limited to $400.0 million aggregate
principal amount and will bear interest at the rate of 6 1/2% per year from the
date of issuance, payable semiannually on each March 15 and September 15,
commencing September 15, 1999, to the persons in whose names the registered
debentures are registered at the close of business on March 1 immediately
preceding each March 15 or the September 1 immediately preceding each September
15. We will compute interest on the registered debentures on the basis of a 360-
day year composed of twelve 30-day months. We expect that payments of principal
and interest to owners of book-entry interests (as described below) will be made
in accordance with the procedures of DTC and its participants in effect from
time to time. DTC shall act as the depositary, as described in the Indenture.
The registered debentures are not redeemable prior to maturity.
The Indenture does not limit the aggregate principal amount of debt
securities that may be issued thereunder and provides that debt securities may
be issued thereunder from time to time in one or more series. (Indenture,
Section 301). In addition to the old debentures, we have outstanding under the
Indenture $100.0 million of Senior Notes due December 15, 2005, $268.0 million
of Medium Term Notes, Series B, at rates ranging from 6.70% to 7.61% with final
maturities ranging from September 1, 2007 to May 15, 2037, and $300.0 million of
67/8% Debentures due February 15, 2028. We have outstanding under a separate
indenture an additional $214.0 million of Medium Term Notes, Series A, at rates
ranging from 6.50% to 8.20% and with final maturities from August 4, 1999 to
January 11, 2023 (the Series A and Series B Medium Term Notes are referred to
collectively as the "Medium Term Notes"). Neither the indenture nor the
registered debentures will limit or otherwise restrict the amount of
indebtedness that we may incur.
The registered debentures will be unsecured obligations of our Company and
will rank on a parity with all of the other indebtedness outstanding under the
indenture, the Medium Term Notes and all of our other unsecured and
unsubordinated indebtedness. The registered debentures will be effectively
subordinated to any of our secured indebtedness and to any unsubordinated
indebtedness of our subsidiaries. At July 2, 1999, we had $185.6 million of
secured indebtedness outstanding, and we had $1,272.3 million of unsecured
indebtedness outstanding. At July 2, 1999, our subsidiaries had $182.4 million
of unsubordinated indebtedness outstanding.
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Certain Covenants Applicable to Debentures
The registered debentures will have the benefit of the following covenants
in the indenture. Certain capitalized terms used in this section are defined
below under "Certain Definitions." Other capitalized terms not otherwise defined
in these sections have the meanings ascribed to them in the indenture.
Restrictions on Debt. The indenture provides that we will not, and will not
permit any Subsidiary to incur, issue, assume or guarantee any Debt secured by a
Mortgage on any Principal Property of our Company or any Subsidiary or any
shares of Capital Stock or Debt of any Subsidiary, without effectively providing
that the Securities of each series of debt securities issued under the indenture
then Outstanding (together with, if we shall so determine, any other Debt of our
Company or such Subsidiary then existing or thereafter created that is not
subordinate to the Securities of each series then Outstanding) will be secured
equally and ratably with (or, at our option, prior to) such secured Debt. So
long as such secured Debt shall be so secured, and will not permit any
Subsidiary to incur, issue, assume or guarantee any unsecured Debt or to issue
any Preferred Stock, in each instance unless the aggregate amount of all such
secured Debt, together with the aggregate preferential amount to which such
Preferred Stock would be entitled on any involuntary distribution of assets and
all Attributable Debt of our Company and its Subsidiaries in respect of sale and
leaseback transactions, would not exceed 10% of Consolidated Net Tangible
Assets.
This restriction does not apply to, and there shall be excluded in
computing Debt for the purpose of such restriction: (a) Debt secured by
Mortgages on any property acquired, constructed or improved by our Company or
any Subsidiary after the first date on which a debt security is authenticated by
the trustee under the indenture, which Mortgages are created or assumed
contemporaneously with, or within 30 months after, such acquisition, or
completion of such construction or improvement, or within six months thereafter
pursuant to a firm commitment for financing arranged with a lender or investor
within such 30-month period, to secure or provide for the payment of all or any
part of the purchase price of such property or the cost of such construction or
improvement incurred after the first date on which a debt security is
authenticated by the trustee under the indenture or Mortgages on any property
existing at the time of the acquisition thereof if any such Mortgage does not
apply to any property previously owned by our Company or any Subsidiary other
than, in the case of any such construction or improvement, any previously
unimproved real property on which the property so constructed, or the
improvement, is located; (b) Debt of any corporation existing at the time such
corporation is merged with or into our Company or a Subsidiary; (c) Debt of any
corporation existing at the time such corporation becomes a Subsidiary; (d) Debt
of a Subsidiary to our Company or to another Subsidiary; (e) Debt secured by
Mortgages securing obligations issued by a state, territory or possession of the
United States, or any political subdivision of any of the foregoing, or the
District of Columbia to finance the acquisition of or construction on property,
and on which the interest is not, in the opinion of counsel, includable in gross
income of the holder; and (f) certain extensions, renewals or replacements of
any Debt referred to in the foregoing clauses (a) through (e) inclusive. This
restriction does not apply to any issuance of Preferred Stock by a Subsidiary to
our Company or another Subsidiary, provided that such Preferred Stock is
thereafter not transferable to any Person other than our Company or a
Subsidiary. (Indenture, Section 1008).
Restrictions on Sales and Leasebacks. The indenture provides that we will
not, and will not permit any Subsidiary to, after the first date on which a debt
security is authenticated by the trustee under the indenture, enter into any
sale and leaseback transaction involving any Principal Property that has been or
is to be sold or transferred, unless, after giving effect thereto, the aggregate
amount of all Attributable Debt with respect to such transactions plus all Debt
to which Section 1008 of the indenture
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is applicable, would not exceed 10% of Consolidated Net Tangible Assets. This
restriction will not apply to, and there shall be excluded in computing
Attributable Debt for the purpose of such restriction, Attributable Debt with
respect to any sale and leaseback transaction if: (a) the lease in such
transaction is for a period (including renewal rights) not exceeding three
years; (b) our Company or a Subsidiary, within 180 days after such transaction,
applies an amount not less than the greater of the net proceeds of the sale of
the Principal Property leased pursuant to such arrangement or the fair market
value of the Principal Property so leased at the time of entering into such
arrangement (as determined by the Board of Directors) to, subject to certain
restrictions, the retirement of our Funded Debt ranking on a parity with or
senior to debt securities issued under the indenture or the retirement of Funded
Debt of a Subsidiary; (c) such transaction is entered into prior to, at the time
of, or within 30 months after the later of the acquisition of the Principal
Property or the completion of the construction thereon; (d) the lease in such
transaction secures or relates to obligations issued by a state, territory or
possession of the United States, or any political subdivision thereof, or the
District of Columbia, to finance the acquisition of or construction on property,
and on which the interest is not, in the opinion of counsel, includable in the
gross income of the holder; or (e) such transaction is entered into between our
Company and a Subsidiary or between Subsidiaries. (Indenture, Section 1009).
Certain Definitions. The indenture defines the following terms used in
this section:
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof (excluding any subsequent
renewal or other extension options held by the lessee), discounted from the
respective due dates thereof to such date at the rate of 10% per annum
compounded annually. The net amount of rent required to be paid under any such
lease for any such period shall be the amount of the rent payable by the lessee
with respect to such period, after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges and contingent rents (such as those based on sales). In the
case of any lease that is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
"Capital Stock," as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (1) all current liabilities and (2) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of our Company
and its consolidated subsidiaries and computed in accordance with generally
accepted accounting principles.
"Debt" means loans, notes, bonds, indentures or other similar evidences of
indebtedness for money borrowed.
"Funded Debt" means all indebtedness for money borrowed having a maturity
of more than 12 months from the date as of which the amount thereof is to be
determined or having a maturity of less than
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12 months but by its terms being renewable or extendible beyond 12 months from
such date at the option of the borrower.
"Preferred Stock" means any stock of any class of our Company that has a
preference over Common Stock in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of our Company and that is not mandatorily redeemable or repayable, or
redeemable or repayable at the option of the holder, otherwise than in shares of
Common Stock or Preferred Stock of another class or series or with the proceeds
of the sale of Common Stock or Preferred Stock.
"Principal Property" means any building, structure or other facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, used primarily for selling home improvement products or the
manufacturing, warehousing or distributing of such products, owned or leased by
our Company or any Subsidiary of our Company. (Indenture, Section 101).
Effect of Corporate Structure
The registered debentures are our obligations exclusively. Because our
operations are currently conducted through subsidiaries, the cash flow and the
consequent ability to service our debt, including the registered debentures, are
dependent, in part, upon the earnings of our subsidiaries and the distribution
of those earnings to us or upon loans or other payments of funds by our
subsidiaries to us. Our subsidiaries are separate and distinct legal entities
and have no obligation, contingent or otherwise, to pay any amounts due pursuant
to the registered debentures or to make any funds available therefor, whether by
dividends, loans or other payments. In addition, the payment of dividends and
the making of loans and advances to us by our subsidiaries may be subject to
statutory or contractual restrictions, are contingent upon the earnings of those
subsidiaries and are subject to various business considerations.
Although the indenture limits the incurrence of such indebtedness, as
described above under " -- Certain Covenants Applicable to Debentures --
Restrictions on Debt," the registered debentures will be effectively
subordinated to all indebtedness and other liabilities, including current
liabilities and commitments under leases, if any, of our subsidiaries. Any right
that we have to receive assets of any of our subsidiaries upon liquidation or
reorganization of the subsidiary (and the consequent right of the holders of the
debentures to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that we ourselves are recognized as a creditor of such subsidiary, in
which case our claims would still be subordinated to any security interests in
the assets of such subsidiary and any indebtedness of such subsidiary senior to
that that we hold.
No Restriction on Sale or Issuance of Stock of Subsidiaries
The indenture contains no covenant that we will not sell, transfer or
otherwise dispose of any shares of, or securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, voting stock of any
of its subsidiaries, nor does it prohibit any subsidiary from issuing any shares
of, or securities convertible into, or options, warrants or rights to subscribe
for or purchase shares of, voting stock of such subsidiary.
Consolidation, Merger and Sale of Assets
We, without the consent of the holder or holders of any outstanding debt
securities issued under the indenture, may consolidate or merge with or into, or
convey, transfer or lease our properties and assets substantially in their
entirety, to any corporation organized under the laws of any domestic
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jurisdiction, provided that the successor corporation assumes our obligations on
the debt securities and under the indenture and that after giving effect to the
transaction no Event of Default, and no event that, after notice or lapse of
time would become an Event of Default, has occurred and is continuing, and that
certain other conditions are met. (Indenture, Section 801).
Events of Default
The following will be Events of Default under the indenture:
(1) Our failure for 30 days to pay when due interest on the registered
debentures,
(2) Our failure to pay principal or premium, if any, on the registered
debentures when due,
(3) Our failure to perform covenants with respect to the registered
debentures for 60 days after receipt of notice of default,
(4) Default in the payment of principal or acceleration of at least $10.0
million in aggregate principal amount of debt of our Company or
subsidiaries after receipt of notice of such default or acceleration,
and
(5) Certain events of bankruptcy, insolvency or reorganization of our
Company or subsidiaries.
Subject to the provisions of the indenture relating to the duties of the
trustee in case an Event of Default occurs and is continuing, the trustee will
be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of registered
debentures issued under the indenture, unless such holders have offered to the
trustee reasonable indemnity. Subject to such provisions for the indemnification
of the trustee and certain other conditions provided in the indenture, the
holders of a majority in aggregate principal amount of the outstanding
debentures of any issue will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the trustee with
respect to such issue of debentures or exercising any trust or power conferred
on the trustee with respect to such issue of debentures. (Indenture, Section
512).
If an Event of Default (other than an Event of Default of the type
described in clause (5) above occurs, the principal of and any accrued interest
on the registered debentures then outstanding will become immediately due and
payable; provided, however, that after such acceleration, but before a judgment
or decree based on acceleration, the holders of a majority in aggregate
principal amount of registered debentures of such issue may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal, have been cured or waived
as provided in the indenture. (Indenture, Section 502). For information as to
waiver of defaults, see " -- Modification and Waiver."
No holder of any debenture will have any right to institute any proceeding
with respect to the indenture or for any remedy thereunder, unless such holder
has previously given to the trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount of the debentures of such issue have made written request, and offered
reasonable indemnity, to the trustee to institute such proceeding as trustee,
and the trustee has not received from the holders of a majority in aggregate
principal amount of debentures of such issue a direction inconsistent with such
request. However, such limitations do not apply to a suit instituted by a holder
of a registered debenture for enforcement of payment of the principal of, and
premium, if any, or interest on such registered debenture on or after the
respective due dates expressed in such debenture.
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We shall furnish to the trustee annually a statement as to the performance
by us of certain of our obligations under the indenture and as to any default in
such performance. (Indenture, Section 1005).
Modification and Waiver
Modifications and amendments of the indenture with respect to any issue of
debentures may be made by us and the trustee with the consent of the holders of
a majority in aggregate principal amount of the debt securities of all affected
series; provided, however, that no such modification or amendment may, without
the consent of the holder of each such outstanding debt security affected
thereby:
(1) change the stated maturity date of the principal of, or any
installment of principal of, or premium if any, or interest on, any
such debt security:
(2) reduce the principal amount of, or the premium, if any, or interest
on, any such debt security;
(3) change the place or currency of payment of principal of, or premium,
if any or interest on, any such debt security;
(4) impair the right to institute suit for the enforcement of any payment
on or with respect to any debt security;
(5) reduce the percentage in principal amount of the debt security of such
issue necessary to modify or amend the indenture;
(6) reduce the percentage of aggregate principal amount of the debt
security, the consent of whose holders is required for modification or
amendment of the indenture or for waiver of compliance with certain
provisions of the indenture or for waiver of certain defaults
thereunder; or
(7) impair the rights of any holder of debt securities to conversion
rights.
The holders of a majority in aggregate principal amount of the debentures
of any issue may waive compliance with certain restrictive provisions of the
indenture with respect to such issue of debentures. The holders of a majority in
aggregate principal amount of the debentures of any issue may waive any past
default under the indenture with respect to such issue of debentures, except a
default in the payment of principal or premium, if any, or interest.
Same-Day Funds Settlement and Payment
We will make all payments of principal and interest in respect of
registered debentures in book-entry form in immediately available funds to the
accounts specified in DTC.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the
registered debentures will trade in DTC's Same-Day Funds Settlement System until
maturity or until the registered debentures are issued in certificated form, and
secondary market trading activity in the registered debentures will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the registered debentures.
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Concerning the Trustee
The First National Bank of Chicago is the trustee under the indenture. We
may maintain deposit accounts or conduct other banking transactions with the
trustee in the ordinary course of business. Notice to the trustee should be
directed to The First National Bank of Chicago, Corporate Trust Administration,
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention:
D. Fanning.
Form, Denomination, Transfer, Exchange and Book-Entry Procedures
registered debentures will be issued in fully registered book-entry form
without interest coupons and in denominations of $1,000 and integral multiples
thereof. The registered debentures generally will be represented by one or more
fully-registered global securities, which shall be called collectively the
global debenture. Notwithstanding the foregoing, old debentures held in
certificated form will be exchanged solely for registered debentures in
certificated form, as discussed below. The global debenture will be deposited
upon issuance with DTC and registered in the name of Cede & Co. Except as set
forth below, the global debenture may be transferred, in whole and not in part,
only to another nominee of DTC or to a successor of DTC or its nominee.
A holder may transfer registered debentures in accordance with the
indenture. The Registrar and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and we may
require a holder to pay any taxes and fees required by law or permitted by the
indenture. We are not required to transfer or exchange any registered debentures
selected for redemption. Also, we are not required to transfer or exchange a
registered debenture for a period of 15 days before a selection of registered
debentures to be redeemed.
The registered holder of a registered debenture will be treated as the
owner of such registered debenture for all purposes.
Global Debentures and Book-Entry System
The certificates representing the registered debentures will be issued in
the form or one or more permanent global certificates in definitive fully
registered form and will be deposited with, or on behalf of, DTC and registered
in the name of Cede & Co., as the nominee of DTC. Except as described below, the
registered debentures will not be issued in definitive form. Unless and until
they are exchanged in whole or in part for the individual registered debentures
represented thereby, any interests in the global debentures may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or by DTC or any nominee of DTC to a successor
depositary or any nominee of such successor.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities and
Exchange Act of 1934, as amended. DTC holds securities that its participants
pledge, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its direct participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks
33
<PAGE>
and trust companies that clear through or maintain a custodial relationship with
a direct participant, either directly or indirectly. The rules applicable to DTC
and its participants are on file with the SEC.
Upon the issuance of the global debentures, and the deposit of such global
debentures with or on behalf of DTC, DTC will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
registered debentures represented by such global debentures to the accounts of
participants that have accounts with DTC or its nominee. The accounts to be
credited will be designated by the underwrites or agents engaging in the
distribution or placement of the registered debentures. Ownership of beneficial
interests in such global debentures will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such global debentures will be shown by book-keeping entries
on, and the transfer of that ownership interest will be effected only through
book-keeping entries to, records maintained by DTC or its nominee for such
global debentures. Ownership of beneficial interests in such global debentures
by persons that hold through participants will be shown by book-keeping entries
on, and the transfer of that ownership interest among or through such
participants will be effected only through book-keeping entries to, records
maintained by such participants. The laws of some jurisdictions require that
certain purchasers take physical delivery of such securities in definitive
certificated form rather than book-entry form. Such laws may impair the ability
to own, transfer or pledge beneficial interests in the global debentures.
So long as DTC or its nominee is the registered owner of such global
debentures, DTC or such nominee, as the case may be, will be considered the sole
owner of holder of the registered debentures represented by the global
debentures for all purposes under the indenture. Except as set forth below,
owners of beneficial interests in the global debentures will not be entitled to
have registered debentures represented by such global debentures registered in
their names, will not receive or be entitled to receive physical delivery of
registered debentures in definitive certificated form, and will not be
considered the holders thereof for any purposes under the indenture.
Accordingly, each person owning a beneficial interest in global debentures must
rely on the procedures of DTC and, if such person is not a participant, on the
procedures of the Participant through which such person directly or indirectly
owns its interest, to exercise any rights of a holder under the indenture. The
indenture provides that DTC may grant proxies and otherwise authorize
participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action that a holder is entitled to give or
take under the indenture. (Indenture, Section 104). We understand that under
existing industry practices, if we request any action of holders or any owner of
a beneficial interest in the global debentures desires to give any notice or
take any action that a holder is entitled to give or take under the indenture,
DTC would authorize the participants holding the relevant beneficial interest to
give such notice or take such action, and such participants would authorize
beneficial owners owning through such participants to give such notice or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
Principal and any premium and interest payments on the registered
debentures represented by the global debentures registered in the name of DTC or
its nominee will be made to DTC or its nominee, as the case may be, as the
registered owner of the global debentures. Neither we, the trustee nor any
paying agent for the registered debentures will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global debentures or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Indenture, Section 308).
We expect that DTC, upon receipt of any payment of principal, premium or
interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such global debentures as shown on the records of DTC. We also expect
that payments by participants to owners of beneficial interests in such global
debentures held
34
<PAGE>
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the responsibility of such
participants.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by us within 90 days, we will issue the
registered debentures in definitive certificated form in exchange for such
global debentures. In addition, we may at any time and in our sole discretion
determine not to have the registered debentures represented by one or more
global debentures and, in such event, will issue the registered debentures in
definitive certificated form in exchange for global debentures. (Indenture,
Section 305).
Further, an owner of a beneficial interest in the global debentures may, on
terms acceptable to us and DTC, receive registered debentures in definitive
certificated form, if we so specify. In any such instance, an owner of
beneficial interest in the global debentures will be entitled to have registered
debentures equal in principal amount to such beneficial interest registered in
its name and will be entitled to physical delivery of such registered debentures
in definitive certificated form. Registered debentures so issued in definitive
certificated form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form. (Indenture, Section
305).
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
EXCHANGE OFFER
The following summarizes the material federal income tax consequences of
the exchange of old debentures for registered debentures. This summary is based
on current law, which is subject to change at any time, possibly with
retroactive effect. In addition, this summary does not address the tax
consequences of the exchange under applicable state, local or foreign laws.
The exchange of old debentures for registered debentures pursuant to the
exchange offer will not result in any United States federal income tax
consequences to holders. When a holder exchanges an old debenture for a
registered debenture pursuant to the exchange offer, the holder will have the
same adjusted basis and holding period for the registered debenture as for the
old debenture immediately before the exchange.
Each holder should consult his own tax advisor as to the particular tax
consequences to it of exchanging old debentures for registered debentures,
including the applicability and effect of any state, local or foreign tax laws.
PLAN OF DISTRIBUTION
Each broker-dealer that receives registered debentures for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such registered debentures. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of registered debentures received
in exchange for old debentures where such old debentures were acquired as a
result of market-making activities or other trading activities. We have agreed
that we will, for a period of 180 days after the consummation of the exchange
offer, make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale.
We will not receive any proceeds from the sale of registered debentures by
broker-dealers. Registered debentures received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated
35
<PAGE>
transactions, through the writing of options on the registered debentures or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
registered debentures. Any broker-dealer that resells registered debentures that
were received by it for its own account pursuant to the exchange offer and any
broker or dealer that participates in a distribution of such registered
debentures may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of registered debentures and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the consummation of the exchange offer, we
will promptly send additional copies of the prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such document
in the Letter of Transmittal. We have agreed to pay all expenses incident to
the exchange offer other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the registered debentures, including
any broker-dealers, against certain liabilities, including liabilities under the
Securities Act.
Following consummation of the exchange offer, we may, in our sole
discretion, commence one or more additional exchange offers to holders of old
debentures who did not exchange their old debentures for registered debentures
in the exchange offer on terms which may differ from those contained in the
registration rights agreement. This prospectus, as it may be amended or
supplemented from time to time, may be used by us in connection with any such
additional exchange offers. Such additional exchange offers will take place
from time to time until all outstanding old debentures have been exchanged for
registered debentures pursuant to the terms and conditions contained herein.
VALIDITY OF THE REGISTERED DEBENTURES
The validity of the registered debentures will be passed upon for us by
Hunton & Williams, Richmond, Virginia.
EXPERTS
The consolidated financial statements that we have incorporated by
reference in this prospectus and elsewhere in the registration statement from
our Annual Report on Form 10-K for the year ended January 29, 1999, have been
audited by Deloitte & Touche LLP, independent public accountants, as indicated
in their report with respect thereto, and are incorporated by reference in
reliance upon the authority of said firm as experts in accounting and auditing.
36
<PAGE>
[LOGO]
Lowe's Companies, Inc.
OFFER FOR
ALL OUTSTANDING 6 1/2% DEBENTURES DUE MARCH 15, 2029
IN EXCHANGE FOR
REGISTERED 6 1/2% DEBENTURES DUE MARCH 15, 2029
_______________________________
PROSPECTUS
_______________________________
July __, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Under the NCBCA, a corporation, through its articles of incorporation or
bylaws or by contract or resolution, may eliminate or limit a director's
personal liability to the corporation or its shareholders for any monetary
damages for breach of duty, except for (1) acts or omissions that the director
at the time of such breach knew or believed were clearly in conflict with the
best interests of the corporation, (2) unlawful distributions, (3) any
transaction from which the director derived an improper personal benefit or (4)
a proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation. The Registrant's Charter provides that to
the fullest extent permitted by the NCBCA, a director of the Registrant shall
not be personally liable to the Registrant, its shareholders or otherwise for
monetary damages for breach of his or her duty as a director.
Article IV of the Registrant's Bylaws provides that the Registrant will
indemnify any person as an officer or director of the Registrant or serving in
such capacity at the request of the Registrant for another corporation,
partnership, joint venture, trust of other enterprise to the fullest extent
permitted by law, against any liability incurred in connection with any
proceeding arising out of such service. Such indemnification extends to
expenses reasonably incurred in defending such liabilities and payments made in
satisfaction of judgments or reasonable settlements of such actions. No
indemnification is available if (1) at the time of the activities that are the
subject of the proceeding, such person knew or believed that such activities
were clearly in conflict with the best interests of the Registrant; (2) such
person derived an improper personal benefit; or (3) such liability arose with
respect to voting for unlawful distributions.
The Registrant 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 21. Exhibits and Financial Data Schedules
The following is a list of all the exhibits filed herewith or incorporated
by reference as part of the Registration Statement.
Exhibit
Number Description
- ------ -----------
1.1 Registration Rights Agreement, dated as of February 23, 1999, by and
among Lowe's, Merrill Lynch & Co., Goldman, Sachs & Co. and Lehman
Brothers, Inc.
4.1 Amended and Restated Indenture, dated December 1, 1995, by and among
Lowe's and The First National Bank of Chicago (filed as an exhibit to
the Company's Form 8-K dated December 15, 1995 and incorporated by
reference herein).
4.2 Supplemental Indenture relating to the debentures, dated as of
February 23, 1999, by and among Lowe's and The First National Bank of
Chicago.
4.3 Form of new 6 1/2% Debenture due March 15, 2029.
5.1 Opinion of Hunton & Williams, as to the legality of the securities.
15.1 Letter re unaudited interim financial information.
23.1 Consent of Hunton & Williams (included in Exhibit 5.1).
II-1
<PAGE>
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (included in the signature pages to this
Registration Statement).
99.1 Form of Letter of Transmittal, with respect to the exchange of the old
debentures and registered debentures.
99.2 Form of Notice of Guaranteed Delivery, with respect to the old
debentures and registered debentures.
99.3 Form of Instructions to Registered Holders and/or Book-Entry Transfer
Facility Participants from Beneficial Owners, with respect to the old
debentures and registered debentures.
Item 22. Undertakings
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (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.
(b) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(c) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (b) immediately preceding, or (ii) that purports to meet
the requirements of Sections 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, 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.
(d) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
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;
(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.
II-2
<PAGE>
(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.
(e) 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 foregoing provisions, 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.
(f) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(g) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of North Wilkesboro, State
of North Carolina, on July 19, 1999.
LOWE'S COMPANIES, INC.
(Registrant)
By: /s/ Marshall A. Croom
---------------------------
Marshall A. Croom
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacity indicated on July 19, 1999. Each of the
undersigned officers and directors of the registrant hereby constitutes Thomas
E. Whiddon, Stephen A. Hellrung and Lathan M. Ewers, any of whom may act, his
true and lawful attorneys-in-fact with full power to sign for him and in his
name in the capacities indicated below and to file any and all amendments to the
registration statement filed herewith, making such changes in the registration
statement as the registrant deems appropriate, and generally to do all such
things in his name and behalf in his capacity as an officer and director to
enable the registrant to comply with the provisions of the Securities Act of
1933 and all requirements of the Securities and Exchange Commission.
Signature Title
--------- -----
/s/ Robert L. Tillman Chairman, President, Chief Executive
- ------------------------------ Officer and Director
Robert L. Tillman (Principal Executive Officer)
/s/ Thomas E. Whiddon Executive Vice President and Chief
- ------------------------------ Financial Officer
Thomas E. Whiddon (Principal Financial Officer)
/s/ Kenneth W. Black, Jr Vice President and Corporate Controller
- ------------------------------ (Principal Accounting Officer)
Kenneth W. Black, Jr.
/s/ Leonard L. Berry, Ph.D Director
- ------------------------------
Leonard L. Berry, Ph.D.
II-4
<PAGE>
/s/ Peter C. Browning Director
- ------------------------------
Peter C. Browning
/s/ Carol A. Farmer Director
- ------------------------------
Carol A. Farmer
/s/ Paul Fulton Director
- ------------------------------
Paul Fulton
/s/ James F. Halpin Director
- ------------------------------
James F. Halpin
/s/ Richard K. Lochridge Director
- ------------------------------
Richard K. Lochridge
/s/ Claudine B. Malone Director
- ------------------------------
Claudine B. Malone
/s/ Robert G. Schwartz Director
- ------------------------------
Robert G. Schwartz
/s/ Robert L. Strickland Director
- ------------------------------
Robert L. Strickland
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
1.1 Registration Rights Agreement, dated as of February 23, 1999, by and
among Lowe's, Merrill Lynch & Co., Goldman, Sachs & Co. and Lehman
Brothers, Inc.
4.1 Amended and Restated Indenture, dated December 1, 1995, by and among
Lowe's and The First National Bank of Chicago (filed as an exhibit
to the Company's Form 8-K dated December 15, 1995 and incorporated
by reference herein).
4.2 Supplemental Indenture relating to the debentures, dated as of
February 23, 1999, by and among Lowe's and The First National Bank
of Chicago.
4.3 Form of new 6 1/2% Debenture due March 15, 2029.
5.1 Opinion of Hunton & Williams, as to the legality of the securities.
15.1 Letter re unaudited interim financial information.
23.1 Consent of Hunton & Williams (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (included in the signature pages to this
Registration Statement).
99.1 Form of Letter of Transmittal, with respect to the exchange of the
old debentures and registered debentures.
99.2 Form of Notice of Guaranteed Delivery, with respect to the old
debentures and registered debentures.
99.3 Form of Instructions to Registered Holders from Beneficial Owners
and/or Book-Entry Transfer Facility Participants, with respect to
the old debentures and registered debentures.
II-6
<PAGE>
EXHIBIT 1.1
[Conformed Copy]
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of February 23, 1999
among
LOWE'S COMPANIES, INC.
and
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.,
as the Initial Purchasers
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of February 23, 1999, by and among LOWE'S COMPANIES, INC., a
North Carolina corporation (the "Company"), and MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, GOLDMAN, SACHS & CO., and LEHMAN BROTHERS INC.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated
February 18, 1999 by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $400,000,000 aggregate principal amount of the Company's 6 1/2%
Debentures due March 15, 2029 (the "Debentures"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the Initial Purchasers' obligations thereunder, the Company has
agreed to provide to the Initial Purchasers and their respective direct and
indirect transferees and assigns the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
-----------
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
--------
to time, and the rules and regulations of the SEC promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
--------
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Closing Time" shall mean the Closing Time as defined in the Purchase
------------
Agreement.
"Company" shall have the meaning set forth in the preamble and also
-------
includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
----------
depositary appointed by the Company; provided, however, that any such
depositary must at all times have an address in the Borough of Manhattan,
in The City of New York.
"Exchange Debentures" shall mean the 6 1/2% Debentures Due 2029 issued
-------------------
by the Company under the Indenture, containing terms identical to the
Debentures (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the
<PAGE>
2
Debentures or, if no such interest has been paid, from the Closing Time,
(ii) the transfer restrictions thereon shall be eliminated and (iii)
certain provisions relating to an increase in the stated rate of interest
thereon shall be eliminated) to be offered to Holders of Registrable
Debentures in exchange for Registrable Debentures pursuant to the Exchange
Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
--------------
Exchange Debentures for Registrable Debentures pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
---------------------------
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
-------------------------------------
registration statement on Form S-4 (or, if applicable, on another
appropriate form), pursuant to which registration statement the Company
shall offer to exchange the Registrable Debentures for Exchange Debentures,
and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Holders" shall mean the Initial Purchasers, for so long as they own
-------
any Registrable Debentures, and each of their respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Debentures under the Indenture.
"Indenture" shall mean the Amended and Restated Indenture dated as of
---------
December 1, 1995 by and between the Company and The First National Bank of
Chicago, as trustee, as amended by the First Supplemental Indenture dated
as of February 23, 1999, between the Company and the Trustee, in each case
relating to the Debentures and the Exchange Debentures and as the same may
be amended and supplemented from time to time in accordance with the terms
thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
------------------
of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
----------------
aggregate principal amount of Registrable Debentures outstanding; provided
that whenever the consent or approval of Holders of a specified percentage
of Registrable Debentures is required hereunder, Registrable Debentures
held by the Company or any of its affiliates (as such term is defined in
Rule 405 under the 1933 Act) (other than the Initial Purchasers or
subsequent holders of Registrable Debentures if such subsequent holders are
deemed to be such affiliates solely by reason of their holding of such
Registrable Debentures)
<PAGE>
3
shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"Participating Broker-Dealer" shall have the meaning set forth in
---------------------------
Section 3(f).
"Person" shall mean an individual, partnership, joint venture, limited
------
liability company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Debentures covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
------------------
of this Agreement.
"Registrable Debentures" shall mean the Debentures; provided, however,
----------------------
that the Debentures shall cease to be Registrable Debentures when (i) a
Registration Statement with respect to such Debentures shall have been
declared effective under the 1933 Act and such Debentures shall have been
disposed of pursuant to such Registration Statement, (ii) such Debentures
shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii) such
Debentures shall have ceased to be outstanding or (iv) such Debentures have
been exchanged for Exchange Debentures upon consummation of the Exchange
Offer.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or NASD registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws and compliance
with the rules of the NASD (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with state or other
securities or blue sky qualification of any of the Exchange Debentures or
Registrable Debentures), (iii) all expenses of any Persons in preparing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales agreements, certificates representing the Exchange
<PAGE>
4
Debentures and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and expenses incurred in connection with the listing, if any, of any of the
Exchange Debentures or such Registrable Debentures, covered by a Shelf
Registration Statement, as applicable, on any securities exchange or
exchanges, (vi) all fees and disbursements relating to the qualification of
the Indenture under applicable securities laws, (vii) the fees and
disbursements of counsel for the Company and the fees and expenses of the
independent public accountants of the Company, including the expenses of
any special audits or "cold comfort" letters required by or incident to
such performance and compliance, (viii) the fees and expenses of a
"qualified independent underwriter" as defined by Conduct Rule 2720 of the
NASD (if required by the NASD rules) in connection with the offering of the
Registrable Debentures, and (ix) the reasonable fees and expenses of the
Trustee, any registrar, any depositary and paying agent, including their
respective counsel, and any escrow agent or custodian and (x) in the case
of an underwritten offering, any fees and disbursements of the underwriter
customarily required to be paid by issuers or sellers of such securities
and the fees and expenses of any special experts retained by the Company in
connection with any Registration Statement but excluding (except as
otherwise provided herein) fees of counsel to the underwriters or the
Holders and underwriting discounts and commissions and any transfer taxes,
if any, relating to the sale or disposition of Registrable Debentures by a
Holder.
"Registration Statement" shall mean any registration statement of the
----------------------
Company relating to any offering of the Exchange Debentures or Registrable
Debentures pursuant to the provisions of this Agreement, and all amendments
and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
---
"Shelf Registration" shall mean a registration effected pursuant to
------------------
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
----------------------------
statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Debentures on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
<PAGE>
5
"Trustee" shall mean the trustee under the Indenture.
-------
2. Registration Under the 1933 Act. (a) Exchange Offer
------------------------------- --------------
Registration. To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company shall (A) file with the SEC
within 150 calendar days after the Closing Time an Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange all of
the Registrable Debentures for Exchange Debentures, (B) use its best efforts to
cause such Exchange Offer Registration Statement to be declared effective by the
SEC within 180 calendar days after the Closing Time, (C) use its best efforts to
cause such Registration Statement to remain effective until the closing of the
Exchange Offer and (D) use its reasonable best efforts to consummate the
Exchange Offer within 30 calendar days after the effective date of the Exchange
Offer Registration Statement. The Exchange Debentures will be issued under the
Indenture. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Exchange Offer, it being the objective
of such Exchange Offer to enable each Holder (other than Participating Broker-
Dealers (as defined in Section 3(f)) eligible and electing to exchange
Registrable Debentures for Exchange Debentures (assuming that such Holder is not
an affiliate of the Company within the meaning of Rule 405 under the 1933 Act,
acquires the Exchange Debentures in the ordinary course of such Holder's
business and has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Debentures) to trade such Exchange Debentures from and after their receipt
without any limitations or restrictions under the 1933 Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20 business days
(or longer if required by applicable federal and state securities laws)
after the date notice thereof is mailed to the Holders;
(iii) use the services of the Depositary for the Exchange Offer with
respect to Debentures evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Debentures at
any time prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open, by sending to
the institution specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the
<PAGE>
6
principal amount of Registrable Debentures delivered for exchange, and a
statement that such Holder is withdrawing its election to have such
Debentures exchanged; and
(v) otherwise comply in all respects with all applicable federal and
state securities laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Debentures duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Debentures so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange
Debentures to each Holder of Registrable Debentures equal in principal
amount to the principal amount of the Registrable Debentures of such Holder
so accepted for exchange.
Interest on each Exchange Debenture will accrue from the last date on
which interest was paid on the Registrable Debentures surrendered in exchange
therefor or, if no interest has been paid on the Registrable Debentures, from
the Closing Time. The Exchange Offer shall not be subject to any conditions,
other than (i) that the Exchange Offer, or the making of any exchange by a
Holder, does not violate applicable law or any applicable interpretation of the
staff of the SEC, (ii) that no action or proceeding shall have been instituted
or threatened in any court or before any governmental agency with respect to the
Exchange Offer which, in the Company's judgment, would impair the ability of the
Company to proceed with the Exchange Offer, (iii) that no law, rule or
regulation or applicable interpretations of the staff of the SEC has been issued
or promulgated which, in the good faith determination of the Company, does not
permit the Company to effect the Exchange Offer and (iv) that the Holders tender
the Registrable Debentures to the Company in accordance with the Exchange Offer.
Each Holder of Registrable Debentures (other than Participating Broker-Dealers)
who wishes to exchange such Registrable Debentures for Exchange Debentures in
the Exchange Offer shall have represented that (i) it is not an affiliate (as
defined in Rule 405 under the 1933 Act) of the Company, (ii) any Exchange
Debentures to be received by it will be acquired in the ordinary course of
business, (iii) at the time of the commencement of the Exchange Offer, it has no
arrangement with any Person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Debentures and (iv) it shall have made
such other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available. To the extent permitted by law,
the Company shall inform the Initial Purchasers of the names and addresses of
the Holders to whom the
<PAGE>
7
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Debentures in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law or
------------------
applicable interpretations thereof by the Staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer is not consummated on or
prior to the 210th calendar day following the Closing Time, or (iii) if any
Holder (other than an Initial Purchaser) is not eligible to participate in the
Exchange Offer or elects to participate in the Exchange Offer but does not
receive fully tradeable Exchange Debentures pursuant to the Exchange Offer or
(iv) upon the written request of any of the Initial Purchasers following the
consummation of the Exchange Offer, if such Initial Purchaser shall hold
Registrable Debentures that it acquired directly from the Company and if such
Initial Purchaser is not permitted, in the opinion of counsel to such Initial
Purchaser, pursuant to applicable law or applicable interpretation of the Staff
of the SEC to participate in the Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, file with the SEC a Shelf
Registration Statement relating to the offer and sale of the Registrable
Debentures by the Holders from time to time in accordance with the methods
of distribution elected by the Majority Holders of such Registrable
Debentures and set forth in such Shelf Registration Statement;
(B) use its best efforts to cause such Shelf Registration Statement
to be declared effective by the SEC as promptly as practicable, but in no
event later than the 210th calendar day after the Closing Time (or within
60 days of a request of any Initial Purchaser); provided that, with respect
to Exchange Debentures received by a broker-dealer in exchange for any
securities that were acquired by such broker-dealer as a result of market
making or other trading activities, the Company may, if permitted by
current interpretations by the staff of the SEC, file a post-effective
amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as applicable,
in satisfaction of its obligations under this paragraph (A) solely with
respect to broker-dealers who acquired their Securities as a result of
market making or other trading activities, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration
Statement. In the event that the Company is required to file a Shelf
Registration Statement upon the request of any Holder (other than an
Initial Purchaser) not eligible to participate in the Exchange Offer
pursuant to clause (iii) above or upon the request of any Initial Purchaser
pursuant to clause (iv) above, the Company shall file and use its best
efforts to have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Debentures and a Shelf Registration Statement (which may be a
combined
<PAGE>
8
Registration Statement with the Exchange Offer Registration Statement) with
respect to offers and sales of Registrable Debentures held by such Holder
or such Initial Purchaser, as applicable, after completion of the Exchange
Offer;
(C) use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required, in order to
permit the Prospectus forming part thereof to be usable by Holders for a
period of two years after its effective date or such shorter period which
will terminate when all of the Registrable Debentures covered by the Shelf
Registration Statement (i) have been sold pursuant to the Shelf
Registration Statement, (ii) cease to be outstanding or (iii) become
eligible for resale pursuant to Rule 144 under the 1934 Act without volume
restrictions; and
(D) notwithstanding any other provisions hereof, use its best efforts
to ensure that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming a part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Shelf Registration
Statement, and any supplement to such Prospectus (as amended or
supplemented from time to time), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements, in light of the circumstances under which they were made,
not misleading.
The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement if reasonably requested by the Majority Holders
with respect to information relating to the Holders and otherwise as required by
Section 3(b) below, to use all reasonable efforts to cause any such amendment to
become effective and such Shelf Registration Statement to become usable as soon
as practicable thereafter and to furnish to the Holders of Registrable
Debentures copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
--------
connection with the registration pursuant to Section 2(a) and 2(b) and, in the
case of any Shelf Registration Statement, will reimburse the Holders or the
Initial Purchasers for the reasonable fees and disbursements of one counsel (in
addition to any local counsel) designated in writing by the Majority Holders to
act as counsel for the Holders of the Registrable Debentures in connection
therewith. Each Holder shall pay all expenses of its counsel other than as set
forth in the preceding sentence, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Debentures pursuant to the Shelf Registration Statement.
<PAGE>
9
(d) Effective Registration Statement. (i) The Company shall be
--------------------------------
deemed not to have used its best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite periods set forth herein
if the Company voluntarily takes any action that could reasonably be expected to
result in any such Registration Statement not being declared effective or
remaining effective or in the Holders of Registrable Debentures covered thereby
not being able to exchange or offer and sell such Registrable Debentures during
that period unless (A) such action is required by applicable law or (B) such
action is taken by the Company in good faith and for valid business reasons (but
not including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets or a material corporate transaction or
event so long as the Company promptly complies with the requirements of Section
3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
shall not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Debentures pursuant to a Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement shall be deemed not to have been effective during the
period of such interference, until the offering of Registrable Debentures
pursuant to such Registration Statement may legally resume.
(iii) During any 365-day period, the Company may suspend the
availability of a Shelf Registration Statement and the use of the related
Prospectus, as provided in Section 3(e)(vi) and the last paragraph of Section 3
hereof, for up to two periods of up to 45 consecutive days (except for the
consecutive 45-day period immediately prior to maturity of the Debentures), but
no more than an aggregate 90 days during any 365-day period, if any event shall
occur (A) as set forth in Section 2(d)(i) or (B) as a result of which it shall
be necessary, in the good faith determination of the board of directors of the
Company, to amend the Shelf Registration Statement or amend or supplement any
prospectus or prospectus supplement thereunder in order that each such document
not include any untrue statement of fact or omit to state a material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
(e) Increase in Interest Rate. In the event that (i) the Exchange
-------------------------
Offer Registration Statement is not filed with the SEC on or prior to the 150th
calendar day following the date hereof, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 180th calendar day
following the date hereof, (iii) the Exchange Offer is not consummated on or
prior to the 30/th/ calendar day following the date of effectiveness of the
Exchange Offer Registration Statement, or (iv) if required, a Shelf Registration
Statement with respect to the Registrable Debentures is not declared effective
on or prior to the 210/th/ calendar
<PAGE>
10
day following the Closing Time, the per annum interest rate borne by the
Registrable Debentures shall be increased by one-quarter of one percent (0.25%)
per annum following such 150-day period in the case of clause (i) above,
following such 210-day period in the case of clause (ii) above, following such
30-day period in the case of clause (iii) above, or following such 210-day
period in the case of (iv) above, which rate will be increased by an additional
quarter of one percent (0.25%) per annum for each 90-day period that any
additional interest continues to accrue; provided that the aggregate increase in
such annual interest rate may in no event exceed one-half of one percent (0.50%)
per annum. Upon (w) the filing of the Exchange Offer Registration Statement
after the 150-day period described in clause (i) above, (x) the effectiveness of
the Exchange Offer Registration Statement after the 180-day period described in
clause (ii) above, (y) the consummation of the Exchange Offer after the 30-day
period described in clause (iii) above, or (z) the effectiveness of a Shelf
Registration Statement after the 210-day period described in clause (iv) above,
the interest rate borne by the Debentures from the date of such filing,
effectiveness or consummation, as the case may be, shall be reduced to the
original interest rate if the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, a different event specified in clause (i), (ii), (iii) or (iv) above
occurs, the interest rate shall again be increased pursuant to the foregoing
provisions.
(f) Specific Enforcement. Without limiting the remedies available to
--------------------
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2(a) and
2(b) hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Sections 2(a) and 2(b).
3. Registration Procedures. In connection with the obligations of
-----------------------
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement, within the
time periods specified in Section 2, on the appropriate form under the 1933
Act, which registration statement (i) shall be filed on a form selected by
the Company and shall, in the case of a Shelf Registration Statement, be
available for the sale of the Registrable Debentures by the selling Holders
thereof and (ii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
all financial statements required by the SEC to be filed therewith, and use
its best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof;
<PAGE>
11
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the 1933 Act; and comply with the provisions of the 1933 Act with
respect to the disposition of all Debentures covered by each Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Debentures, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Debentures is
being filed and advising such Holders that the distribution of Registrable
Debentures will be made in accordance with the method elected by the
Majority Holders; (ii) furnish to each Holder of Registrable Debentures, to
counsel for the Initial Purchasers, to counsel for the Holders and to each
underwriter of an underwritten offering of Registrable Debentures, if any,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder or underwriter may reasonably request,
including financial statements and schedules and, if the Holder so
requests, all exhibits (including those incorporated by reference) in order
to facilitate the public sale or other disposition of the Registrable
Debentures; and (iii) subject to the last paragraph of this Section 3,
hereby consent to the use of the Prospectus, including each preliminary
Prospectus, or any amendment or supplement thereto by each of the selling
Holders of Registrable Debentures in connection with the offering and sale
of the Registrable Debentures covered by the Prospectus or any amendment or
supplement thereto;
(d) use its best efforts to register or qualify the Registrable
Debentures under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Debentures covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Debentures shall reasonably request by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with
the Holders in connection with any filings required to be made with the
NASD, keep each such registration or qualification effective during the
period such Registration Statement is required to be effective and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Debentures owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(d) or (ii) take
any action which would subject it to general service of process or taxation
in any such jurisdiction if it is not then so subject;
<PAGE>
12
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Debentures promptly and, if requested by such Holder, confirm
such advice in writing promptly (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Debentures covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to such offering cease to be
true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Debentures for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, (vi) of
the happening of any event or the discovery of any facts during the period
a Shelf Registration Statement is effective (including as contemplated in
Section 2(d)(iii) hereof) which (A) is contemplated in Section 2(d)(i) or
(B) makes any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading and (vii) of any
determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate;
(f) (A) in the case of an Exchange Offer, (i) include in the Exchange
Offer Registration Statement a "Plan of Distribution" section covering the
use of the Prospectus included in the Exchange Offer Registration Statement
by broker-dealers who have exchanged their Registrable Debentures for
Exchange Debentures for the resale of such Exchange Debentures, (ii)
furnish to each broker-dealer who desires to participate in the Exchange
Offer, without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such broker-dealer
may reasonably request, (iii) include in the Exchange Offer Registration
Statement a statement that any broker-dealer who holds Registrable
Debentures acquired for its own account as a result of market-making
activities or other trading activities (a "Participating Broker-Dealer"),
and who receives Exchange Debentures for Registrable Debentures pursuant to
the Exchange Offer, may be a statutory underwriter and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Debentures, (iv) subject to the last paragraph of
this Section 3, hereby consent to the use
<PAGE>
13
of the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto, by any broker-dealer in connection
with the sale or transfer of the Exchange Debentures covered by the
Prospectus or any amendment or supplement thereto, and (v) include in the
transmittal letter or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer the following
provision:
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Debentures. If the undersigned is a broker-
dealer that will receive Exchange Debentures for its own account in
exchange for Registrable Debentures, it represents that the
Registrable Debentures to be exchanged for Exchange Debentures were
acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale
of such Exchange Debentures pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act;"
(B) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to cause to
be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be Merrill Lynch,
Pierce, Fenner & Smith Incorporated, unless it elects not to act as
such representative) any "cold comfort" letters with respect to the
Prospectus in the form existing on the last date for which exchanges
are accepted pursuant to the Exchange Offer and with respect to each
subsequent amendment or supplement, if any, effected during the period
specified in clause (C) below;
(C) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to maintain
the effectiveness of the Exchange Offer Registration Statement for a
period of 120 days following the closing of the Exchange Offer or such
shorter period which will terminate when the Participating Broker-
Dealers have completed all resales subject to applicable prospectus
delivery requirements; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as
would otherwise be contemplated by Section 3(b) hereof, or take any
other
<PAGE>
14
action as a result of this Section 3(f), for a period exceeding
120 days after the last date for which exchanges are accepted pursuant
to the Exchange Offer (as such period may be extended by the Company)
and Participating Broker-Dealers shall not be authorized by the
Company to, and shall not, deliver such Prospectus after such period
in connection with resales contemplated by this Section 3;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Debentures copies of any request by
the SEC or any state securities authority for amendments or supplements to
a Registration Statement and Prospectus or for additional information;
(h) make every effort to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement as soon as practicable and
provide immediate notice to each Holder of the withdrawal of any such
order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Debentures, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Debentures to facilitate the timely preparation and
delivery of certificates representing Registrable Debentures to be sold and
not bearing any restrictive legends; and cause such Registrable Debentures
to be in such denominations (consistent with the provisions of the
Indenture) in a form eligible for deposit with the Depositary and
registered in such names as the selling Holders or the underwriters, if
any, may reasonably request in writing at least one business day prior to
the closing of any sale of Registrable Debentures;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Section
3(e)(vi) hereof, use its best efforts to prepare a supplement or post-
effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Debentures, such Prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
agrees to notify each Holder to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event, and each Holder
hereby
<PAGE>
15
agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission. At
such time as such public disclosure is otherwise made or the Company
determines that such disclosure is not necessary, in each case to correct
any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably
request;
(l) obtain CUSIP numbers for all Exchange Debentures, or
Registrable Debentures, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Debentures or Registrable Debentures, as the
case may be, in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of
the Exchange Debentures, or Registrable Debentures, as the case may be,
(ii) cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its best
efforts to cause the Trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions (including those reasonably requested by the holders of
a majority in principal amount of the Registrable Debentures being sold) in
order to expedite or facilitate the disposition of such Registrable
Debentures and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an underwritten
registration, in a manner that is reasonable and customary:
(i) make such representations and warranties to the Holders of
such Registrable Debentures and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
such Holders and underwriters;
(ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any,
and the Holders of a majority in principal amount of the Registrable
Debentures being sold) addressed to each selling Holder and the
underwriters, if any, covering the matters customarily
<PAGE>
16
covered in opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably requested by
such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the
underwriters, if any, and will use best efforts to have such letters
addressed to the selling Holders of Registrable Debentures, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in
connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Debentures, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into in the case
of an underwritten offering, cause the same to set forth
indemnification provisions and procedures substantially equivalent to
the indemnification provisions and procedures set forth in Section 5
hereof with respect to the underwriters and all other parties to be
indemnified pursuant to Section 5 hereof; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings.
The above shall be done at (i) the effectiveness of such Registration
Statement (and, if appropriate, each post-effective amendment thereto) and
(ii) each closing under any underwriting or similar agreement as and to the
extent required thereunder. In the case of any underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Debentures of such underwritten offering at least 30 days prior to the
filing of a prospectus supplement for such underwritten offering. Such
notice shall (x) offer each such Holder the right to participate in such
underwritten offering, (y) specify a date, which shall be no earlier than
10 days following the date of such notice, by which such Holder must inform
the Company of its intent to participate in such underwritten offering and
(z) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available for inspection
by representatives of the Holders of the Registrable Debentures and any
underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any U.S.
<PAGE>
17
counsel or accountant retained by such Holders or underwriters, all
financial and other records, pertinent corporate documents and properties
of the Company reasonably requested by any such Persons, and cause the
respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such
representative, underwriter, special counsel or accountant in connection
with a Registration Statement;
(p) (i) in the case of an Exchange Offer, a reasonable time prior to
the filing of any Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer Registration
Statement or amendment or supplement to a Prospectus, provide copies of
such document to the Initial Purchasers, and make such changes in any such
document prior to the filing thereof as the Initial Purchasers or their
counsel may reasonably request; (ii) in the case of a Shelf Registration, a
reasonable time prior to filing any Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to such Shelf Registration
Statement or amendment or supplement to such Prospectus, provide copies of
such document to the Holders of Registrable Debentures, to the Initial
Purchasers, to counsel on behalf of the Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Debentures, if any,
and make such changes in any such document prior to the filing thereof as
counsel to the Initial Purchasers or any underwriter may reasonably
request; and (iii) cause the representatives of the Company to be available
for discussion of such document as shall be reasonably requested by the
Holders of Registrable Debentures, the Initial Purchasers on behalf of such
Holders or any underwriter, and shall not at any time make any filing of
any such document of which such Holders, the Initial Purchasers on behalf
of such Holders, their counsel or any underwriter shall not have previously
been advised and furnished a copy or to which such Holders, the Initial
Purchasers on behalf of such Holders, their counsel or any underwriter
shall reasonably object within a reasonable time period;
(q) in the case of a Shelf Registration, use its best efforts to cause
all Registrable Debentures to be listed on any securities exchange on which
similar debt securities issued by the Company are then listed if requested
by the Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Debentures, if any;
(r) in the case of a Shelf Registration, use its best efforts to cause
the Registrable Debentures to be rated with the appropriate rating
agencies, if so requested by the holders of a majority in principal amount
of Registrable Debentures or by the underwriter or underwriters of an
underwritten offering, unless the Registrable Debentures are already so
rated;
<PAGE>
18
(s) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the 1933 Act
and Rule 158 thereunder; and
(t) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter and its counsel.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Debentures to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Debentures as the Company may from time to time reasonably request.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
or the discovery of any facts, each of the kind described in Sections 2(d)(i)
and 3(e)(ii)-(vii) hereof, such Holder will forthwith discontinue disposition of
Registrable Debentures pursuant to a Registration Statement until such Holder's
receipt of (i) the copies of the supplemented or amended Prospectus contemplated
by Section 3(k) hereof or (ii) written notice from the Company that the Shelf
Registration Statement is once again effective and that no supplement or
amendment is required. If so directed by the Company, such Holder will deliver
to the Company (at the Company's expense) all copies in its possession, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Debentures current at the time of receipt of such
notice.
If the Company shall give any such notice to suspend the disposition
of Registrable Debentures pursuant to a Shelf Registration Statement as a result
of the happening of any event or the discovery of any facts, each of the kind
described in Sections 2(d)(i) and 3(e)(vi) hereof, the Company shall be deemed
to have used its best efforts to keep the Shelf Registration Statement effective
during such period of suspension; provided that (i) such period of suspension
shall not exceed the time periods provided in Section 2(d)(iii) hereof and (ii)
the Company shall, if necessary, use its best efforts to file and have declared
effective (if an amendment) as soon as practicable an amendment or supplement to
the Shelf Registration Statement and shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
4. Underwritten Registrations. If any of the Registrable Debentures
--------------------------
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by
<PAGE>
19
the Majority Holders of such Registrable Debentures included in such offering
and shall be reasonably acceptable to the Company.
No Holder of Registrable Debentures may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Debentures on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of Registrable Debentures and each
Person, if any, who controls any of such parties within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) pursuant to which Exchange Debentures or
Registrable Debentures were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
an untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
5(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred (including
the reasonable fees and disbursements of one counsel chosen by an
indemnified party or, in the case of the Holders, by a majority of the
Holders), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement
<PAGE>
20
or omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 5(a);
provided, however, that this indemnity shall not apply to any loss, liability,
claim, damage or expense to the extent (A) arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by and relating to
any Initial Purchaser through the Representative, or by and relating to any
Holder or underwriter who participates in an offering of Registrable Debentures,
in each case expressly for use in the Registration Statement (or any amendment
or supplement thereto) or the Prospectus (or any amendment or supplement
thereto), or (B) resulting from the use of the Prospectus during a period when
the use of the Prospectus has been suspended in accordance with Sections
2(d)(i), 2(d)(iii), Section 3(e)(vi) and the last paragraph of Section 3 hereof;
provided, in each case, that Holders received prior notice of such suspension.
(b) In the case of a Shelf Registration, each Holder severally agrees
to indemnify and hold harmless the Company, each Initial Purchaser, each
underwriter who participates in an offering of Registrable Debentures and the
other selling Holders and each Person, if any, who controls the Company, any
Initial Purchaser, any underwriter or any other selling Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 5(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Holder, expressly for use
in the Registration Statement (or any amendment thereto), or the Prospectus (or
any amendment or supplement thereto); provided, however, that no such Holder
shall be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Debentures pursuant to such
Shelf Registration Statement.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to either paragraph (a) or (b)
above, such Person (the "indemnified party") shall give notice as promptly as
reasonably practicable to each Person against whom such indemnity may be sought
(the "indemnifying party"), but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 5(a) hereof, counsel to the indemnified parties shall be selected by the
Representative if such indemnified parties include the Initial Purchasers (or,
in the case of the Holders only, by a majority of the Holders), and, in the case
of parties indemnified pursuant to Section 5(b) hereof, counsel to the
indemnified parties shall be selected
<PAGE>
21
by the Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 5 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement. The
indemnified party shall promptly reimburse the indemnifying party for all
amounts advanced to it pursuant to this Section 5(d) hereof (unless it is
entitled to such amounts under Section 5(e) hereof) if it shall be finally
judicially determined that such indemnified party was not entitled to
indemnification hereunder and such loss, liability, claim, damage or expense
arose out of (i) an untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in the
Registration Statements (or any amendment thereto), a preliminary prospectus or
the final Prospectus (or any amendment or supplement thereto) or (ii) a
fraudulent misrepresentation (within the meaning of Section 11 of the 1933 Act)
by the indemnified party.
(e) If the indemnification provided for in this Section 5 is for any
reason held to be unavailable or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the
<PAGE>
22
relative fault of such indemnifying party or parties on the one hand, and such
indemnified party or parties on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative fault of the Company, the Initial Purchasers and the Holders,
respectively, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Initial Purchasers or the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Initial Purchasers and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 5(e)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity, and the Holders were treated as one entity, for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 5(e). The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5(e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by an governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5(e), each Person, if any, who controls
an Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as the
------------- ----------------------
Company is subject to the reporting requirements of Section 13 or 15 of the 1934
Act, the Company covenants that it will file the reports required to be filed by
it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder, that if it ceases to be so required to file such
reports, it will upon the request of any Holder of Registrable Debentures (i)
make publicly available or cause to be made publicly available such information
as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver or cause to be delivered such information to a prospective purchaser as
is necessary to permit sales pursuant to
<PAGE>
23
Rule 144A under the 1933 Act and it will take such further action as any Holder
of Registrable Debentures may reasonably request, and (iii) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable
Debentures without registration under the 1933 Act within the limitation of the
exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may be
amended from time to time, or (z) any similar rules or regulations hereafter
adopted by the SEC. Upon the written request of any Holder of Registrable
Debentures, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Debentures in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Debentures affected by such amendment, modification, supplement,
waiver or departure.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to
a Holder (other than an Initial Purchaser), at the most current address set
forth on the records of the Registrar under the Indenture, (ii) if to an Initial
Purchaser, at the most current address given by such Initial Purchaser to the
Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is the address set forth in the Purchase
Agreement; and (iii) if to the Company, initially at the address set forth in
the Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
<PAGE>
24
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Debentures
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Debentures, in any
manner, whether by operation of law or otherwise, such Registrable Debentures
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Debentures, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
LOWE'S COMPANIES, INC.
By: Marshall A. Croom
------------------
Name: Marshall A. Croom
Title: Assistant Treasurer
Attest:
By: William C. Warden, Jr.
----------------------
Name: William C. Warden, Jr.
Title: Executive Vice President and
Secretary
Confirmed and Accepted,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: Lani Martin
------------
Name: Lani Martin
Title: Vice President
<PAGE>
[Conformed Copy]
EXHIBIT 4.2
First Supplemental Indenture
Dated as of February 23, 1999
LOWE'S COMPANIES, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
_______________
First Supplemental Indenture to the
Amended and Restated Indenture
dated as of December 1, 1995
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of February 23, 1999 (herein called
the "Supplemental Indenture"), between Lowe's Companies, Inc., a corporation
duly organized and existing under the laws of the State of North Carolina
(herein called the "Company"), having its principal office at Highway 268 East,
North Wilkesboro, North Carolina 28656, and The First National Bank of Chicago,
a national banking association duly organized and existing under the laws of the
United States, as Trustee (herein called the "Trustee"),
Witnesseth:
Whereas, the Company has heretofore executed and delivered to the Trustee
an Amended and Restated Indenture, dated as of December 1, 1995 (as supplemented
and amended from time to time, the "Indenture"), providing for the issuance from
time to time of its unsecured unsubordinated debentures, notes or other
evidences of indebtedness (herein called the "Securities"), to be issued in one
or more series as provided in the Indenture; and
Whereas, it is provided in Section 901 of the Indenture that without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee may enter into indentures supplemental thereto (1) to add to, change
or eliminate any of the provisions of the Indenture in respect of one or more
series of Securities, provided that any such addition, change or elimination (i)
shall neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Security with
respect to such provision or (ii) shall become effective only when there is no
such Security Outstanding, (2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) and (3) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 of the Indenture; and
Whereas, the Company desires to supplement and amend the Indenture to allow
for the issuance of Securities to be initially sold within the United States to
U.S. Persons that are Qualified Institutional Buyers and issued in the form of
one or more Restricted Global Securities deposited with the Trustee, as
custodian for the Depositary, and registered in the name of a nominee of the
Depositary; and
Whereas, the Company desires to set forth the terms and form of a
Restricted Global Security to be sold within the United States to Qualified
Institutional Buyers pursuant to Rule 144A to be known as the Company's 6 1/2%
Debentures Due March 15, 2029, in an aggregate principal amount of FOUR HUNDRED
MILLION DOLLARS ($400,000,000) (herein called the "Rule 144A 6 1/2%
Debentures"); and
<PAGE>
2
Whereas, the Rule 144A 6 1/2% Debentures and the certificate of
authentication to be borne by the Rule 144A 6 1/2% Debentures are to be
substantially in the form set forth in Exhibit A hereto; and
Now, Therefore, for consideration, the adequacy and sufficiency of which
are hereby acknowledged by the parties hereto, each party agrees as follows, for
the benefit of the other parties and for the equal and proportionate benefit of
all Holders of the Securities, as follows:
ARTICLE ONE
Amendments
Section 101. Article One of the Indenture shall be amended by inserting in
Section 101 the following new terms with the following definitions in the
appropriate alphabetic positions:
"Closing Time" means, with respect to the Rule 144A 6 1/2% Debentures,
February 23, 1999, the date of initial issuance of the Securities issued
hereunder.
"Exchange Certificate" means a certificate substantially in the form
of Exhibit C hereto, as such form may be revised or modified with respect
to any series of Securities by a Board Resolution or indenture supplemental
hereto creating such series.
"Exchange Securities" means Securities that are issued and exchanged
for any series of Restricted Securities in accordance with an Exchange
Offer, as provided for in a registration rights agreement related to such
series and this Indenture, containing substantially identical terms as such
series of Restricted Securities, except that (i) such Exchange Securities
shall not contain terms with respect to transfer restrictions and shall be
registered under the Securities Act and (ii) certain provisions relating to
an increase in the stated rate of interest thereon shall be eliminated.
Exchange Offer" means an offer by the Company to Holders of any series
of Restricted Securities to exchange all of such Restricted Securities for
Exchange Securities, as provided for in a related registration rights
agreement.
"Qualified Institutional Buyer" means a "qualified institutional
buyer" as such term is defined in Rule 144A.
"Registration Rights Agreement" means, with respect to the Rule 144A 6
1/2% Debentures, the Registration Rights Agreement dated as of February 23,
1999, among the Company and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co. and Lehman Brothers Inc.,
as initial purchasers.
<PAGE>
3
"Restricted Global Security" means Securities initially sold within
the United States in reliance on Rule 144A.
"Restricted Physical Security" means any Restricted Security in
permanent certificated form.
"Restricted Security" means any Security issued pursuant to an
exemption from the Securities Act and bearing a Restrictive Legend.
"Restrictive Legend" has the meaning set forth in Section 204.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A 6 1/2% Debenture" has the meaning set forth in Section 201.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Shelf Registration Statement" means, with respect to any series of
Restricted Securities, the Shelf Registration Statement specified in the
registration rights agreement related to such series.
"Transfer Certificate" means a certificate substantially in the form
of Exhibit B hereto and to be attached as Annex A to the Form of Rule 144A
6 1/2% Debenture, as such form may be varied or modified with respect to
any series of Securities by a Board Resolution or indenture supplemental
hereto.
Section 102. Article Two of the Indenture shall be amended by adding to the
end of Section 203 the following:
"Securities offered and sold in reliance on Rule 144A under the
Securities Act may be issued in the form of one or more permanent global
Securities in substantially the form set forth in Exhibit A and containing
the legend set forth in Section 204 (each, a "Restricted Global Security"),
deposited with the Depositary or with the Trustee, as custodian for the
Depositary or its nominee, duly executed by the Company and authenticated
by the Trustee as herein provided. The aggregate principal amount of a
Restricted Global Security may from time to time be increased or decreased
by adjustments made on the records of the Depositary or the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Restricted Securities issued pursuant to Sections 305 and 312 in
exchange for or upon transfer of beneficial interests in a Restricted
Global Security may be in the form of Restricted Physical Securities
containing the Restrictive Legend as set forth in Section
<PAGE>
4
204 (a "Restricted Physical Security") until such time as the conditions
set forth in Section 204 are satisfied, in substantially the form set forth
in Exhibit A, as provided in Section 312.
Exchange Securities shall be issued in substantially the form set
forth in Exhibit A, but without any Restrictive Legend."
Section 103. Article Two of the Indenture shall be amended by adding to
the end of such Article the following:
"Section 204. Restrictive Legends.
Unless and until (i) a Restricted Security is sold pursuant to an
effective Shelf Registration Statement or (ii) a Restricted Security is
exchanged for an Exchange Security in an Exchange Offer pursuant to an
effective Exchange Offer Registration Statement, in each case pursuant to
an applicable registration rights agreement, each Restricted Global
Security and Restricted Physical Security shall bear the following legend
set forth below (the "Restrictive Legend") on the face thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACQUISITION
HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")) OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE
TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION
S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144 UNDER THE SECURITIES ACT AND ANY
SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF
THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
<PAGE>
5
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y)
SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A INSIDE THE UNITED STATES, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE
904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER
AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT."
Section 104. Article Three of the Indenture shall be amended by adding the
following to the end of Section 305:
<PAGE>
6
"Any Physical Security delivered in exchange for an interest in the
Global Security pursuant to this Section shall bear the Restrictive Legend
unless such exchange is made on or after (i) a Restricted Security is sold
under an effective Shelf Registration Statement, (ii) a Restricted Security
is exchanged for an Exchange Security in an Exchange Offer under an
effective Exchange Offer Registration Statement or (iii) two years after
the later of the original issue date of a Restricted Security and the last
date on which the Company or any affiliate of the Company was the owner of
such Restricted Security (the "Resale Restriction Termination Date") and
except as otherwise provided in Section 312."
Section 105. Article Three of the Indenture shall be amended by adding the
following to the end of such Article:
"Section 312. Transfer Provisions.
Unless and until (i) a Restricted Security is sold pursuant to an
effective Shelf Registration Statement, or (ii) a Restricted Security is
exchanged for an Exchange Security in an Exchange Offer under an effective
Exchange Offer Registration Statement, the following provisions shall
apply:
(a) The provisions of this Section 312 shall apply to all transfers
involving any Restricted Physical Security and any beneficial interest in
any Restricted Global Security.
(b) As used in this Section 312 only, "delivery" of a certificate by
a transferee or transferor means the delivery to the Security Registrar by
such transferee or transferor of the applicable certificate duly completed;
"holding" includes both possession of a Physical Security and ownership of
a beneficial interest in a Global Security, as the context requires;
"transferring" a Global Security means transferring that portion of the
principal amount of the transferor's beneficial interest therein that the
transferor has notified the Security Registrar that it has agreed to
transfer; and "transferring" a Physical Security means transferring that
portion of the principal amount thereof that the transferor has notified
the Security Registrar that it has agreed to transfer.
As used in this Indenture, "Exchange Certificate" means a certificate
substantially in the form set forth as Exhibit C; and "Non-Registration
Opinion and Supporting Evidence" means a written opinion of counsel
reasonably acceptable to the Company to the effect that, and such other
certification or information as the Company may reasonably require to
confirm that, the proposed transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of
the Securities Act.
<PAGE>
7
(c) An Exchange Certificate, if not actually delivered, shall be
deemed delivered if (i) (A) the transferor advises the Company and the
Trustee in writing that the relevant offer and sale were made in accordance
with the provisions of Rule 144A (or, in the case of a transfer of a
Restricted Physical Security, the transferor checks the box provided on
such Security to that effect) and (B) the transferee advises the Company
and the Trustee in writing that (x) it and, if applicable, each account for
which it is acting in connection with the relevant transfer, is a
"Qualified Institutional Buyer," (y) it is aware that the transfer of
Restricted Securities to it is being made in reliance on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A and
(z) prior to the proposed date of transfer it has been given the
opportunity to obtain from the Company the information referred to in Rule
144A(d)(4), and has either declined such opportunity or has received such
information (or, in the case of a transfer of a Restricted Physical
Security, the transferee signs the certification provided on the such
Security to that effect); or (ii) the transferor holds the Restricted
Global Security and is transferring to a transferee that shall take
delivery in the form of the Restricted Global Security.
(d) If the proposed transferor holds:
(1) a Restricted Physical Security which is surrendered to the
Security Registrar, and the proposed transferee or transferor, as
applicable:
(A) delivers (or is deemed to have delivered pursuant to
clause (c) above) an Exchange Certificate and the proposed
transferee requests delivery in the form of a Restricted Physical
Security, then the Security Registrar shall (x) register such
transfer in the name of such transferee and record the date
thereof in its books and records, (y) cancel such surrendered
Restricted Physical Security and (z) deliver a new Restricted
Physical Security to such transferee duly registered in the name
of such transferee in principal amount equal to the principal
amount being transferred of such surrendered Restricted Physical
Security; or
(B) delivers (or is deemed to have delivered pursuant to
clause (c) above) an Exchange Certificate and the proposed
transferee is or is acting through a Participant and requests
that the proposed transferee receive a beneficial interest in the
Restricted Global Security, then the Security Registrar shall (x)
cancel such surrendered Restricted Physical Security, (y) record
an increase in the principal amount of the Global Security equal
to the principal amount being transferred of such surrendered
Restricted Physical Security and (z) notify the Depositary in
accordance with the procedures of the Depositary that it has
effected such transfer.
<PAGE>
8
In any of the cases described in this Section 312(d)(1), the
Security Registrar shall deliver to the transferor a new Restricted
Physical Security in principal amount equal to the principal amount
not being transferred of such surrendered Restricted Physical
Security, as applicable.
(2) a beneficial interest in the Global Security, and the
proposed transferee or transferor, as applicable:
(A) delivers (or is deemed to have delivered pursuant to
clause (c) above) an Exchange Certificate and the proposed
transferee requests delivery in the form of a Restricted Physical
Security, then the Security Registrar shall (w) register such
transfer in the name of such transferee and record the date
thereof in its books and records, (x) record a decrease in the
principal amount of the Restricted Global Security in an amount
equal to the beneficial interest therein being transferred, (y)
deliver a new Restricted Physical Security to such transferee
duly registered in the name of such transferee in principal
amount equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary
that it has effected such transfer; or
(B) delivers (or is deemed to have delivered pursuant to
clause (c) above) an Exchange Certificate and the proposed
transferee is or is acting through a Participant and requests
that the proposed transferee receive a beneficial interest in the
Restricted Global Security, then the transfer shall be effected
in accordance with the procedures of the Depositary therefor.
(e) In any case in which the Security Registrar is required to
deliver a Restricted Physical Security to a transferee or transferor, the
Company shall execute, and the Trustee shall authenticate and make
available for delivery, such Restricted Physical Security.
(f) Any transferee entitled to receive a Restricted Physical Security
may request that the principal amount thereof be evidenced by one or more
Restricted Physical Securities in any authorized denomination or
denominations and the Security Registrar shall comply with such request if
all other transfer restrictions are satisfied.
(g) The Security Registrar shall effect and record, upon receipt of a
written request from the Company so to do, a transfer not otherwise
permitted by Section 312(d), such recording to be done in accordance with
the otherwise applicable provisions of Section 312(d), upon the furnishing
by the proposed transferor or transferee of a Non-Registration Opinion and
Supporting Evidence.
<PAGE>
9
(h) By its acceptance of any Security bearing the Restrictive Legend,
each Holder of such Security acknowledges the restrictions on transfer of
such Security set forth in this Indenture and in the Restrictive Legend and
agrees that it shall transfer such Security only as provided in this
Indenture. The Security Registrar shall not register a transfer of any
Security unless such transfer complies with the restrictions with respect
thereto set forth in this Indenture. The Security Registrar shall not be
required to determine (but may rely upon a determination made by the
Company) the sufficiency of any such certifications, legal opinions or
other information.
(i) Upon the transfer, exchange or replacement of Securities not
bearing the Restrictive Legend, the Security Registrar shall deliver
Securities that do not bear the Restrictive Legend. Upon the transfer,
exchange or replacement of Securities bearing the Restrictive Legend, the
Security Registrar shall deliver only Securities that bear the Restrictive
Legend unless (i) the requested transfer is at least two years after the
original issue date of the Restricted Security (with respect to any
Restricted Physical Security), (ii) there is delivered to the Security
Registrar an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with
the provisions of the Securities Act or (iii) such Securities are exchanged
for Exchange Securities pursuant to an Exchange Offer.
Section 313. CUSIP Numbers.
The Company may use "CUSIP" numbers (if then generally in use) in
issuing the Securities and, if so, the Trustee shall use "CUSIP" numbers in
notices to Holders as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any
notice and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers."
Section 106. Article Seven of the Indenture shall be amended by adding the
following paragraph immediately following the paragraph contained in Section
704:
"The Company will take all actions necessary to permit resales of any
Securities issued pursuant to Rule 144A of the Securities Act including,
without limitation, furnishing upon request of a Holder of such Security to
such Holder and a prospective purchaser designated by such Holder financial
and other information of the Company required to be delivered under Rule
144A(d)(4) of the Securities Act if at the time of such
<PAGE>
10
request the Company is not a reporting company under Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended."
Section 107. The Indenture shall be amended by adding an exhibit titled
"Exhibit B" immediately following Exhibit A of the Indenture. Exhibit B shall
be the form of Transfer Certificate attached as Exhibit B hereto.
Section 108. The Indenture shall be amended by adding an exhibit titled
"Exhibit C" immediately following Exhibit B of the Indenture. Exhibit C shall
be the form of Exchange Certificate attached as Exhibit C hereto.
Section 109. The Indenture shall be amended by adding an exhibit titled
"Exhibit D" immediately following Exhibit C of the Indenture. Exhibit D shall
be in the Form of Transfer attached as Exhibit D hereto.
ARTICLE TWO
Provisions for the Rule 144A 6 1/2% Debentures
Section 201. There shall be a series of Securities entitled "6 1/2%
Debentures Due March 15, 2029" (herein designated the "Rule 144A 6 1/2%
Debentures"). The form of the Rule 144A 6 1/2% Debentures and the Trustee's
certificate of authentication to be borne thereby shall be substantially in the
forms set forth in Exhibit A hereto and shall be executed, authenticated and
delivered in accordance with the provisions of, and shall in all respects be
subject to, all of the terms, conditions and covenants of the Indenture and this
Supplemental Indenture. The aggregate principal amount of the Rule 144A 6 1/2%
Debentures that may be executed by the Company and authenticated by the Trustee
hereunder shall be limited to FOUR HUNDRED MILLION DOLLARS ($400,000,000).
Section 202. In accordance with the terms and conditions of the Indenture,
the Company may issue and sell the Rule 144A 6 1/2% Debentures inside the United
States without registration under the Securities Act in reliance on Rule 144A
thereunder.
Section 203. The Rule 144A 6 1/2% Debentures shall be represented
initially by permanent global debentures in definitive, fully registered form
without interest coupons (the "Restricted Global Security"). Each Restricted
--------------------------
Global Security shall be registered in the name of a nominee of the Depositary
and deposited on behalf of the purchasers of the Rule 144A 6 1/2% Debentures
represented thereby with a custodian for the Depositary for credit to the
respective accounts of the purchasers (or to such other accounts as they may
direct). Except as set forth below, each Restricted Global Security shall be in
the form of the Rule 144A 6 1/2% Debenture
<PAGE>
11
attached hereto is Exhibit A and may be transferred, in whole and not in part,
only to another nominee of the Depositary or to a successor of the Depositary or
its nominee.
Section 204. (a) Each Restricted Global Security, or any Rule 144A 6 1/2%
Debenture that may be issued in exchange for an interest in a Restricted Global
Security, shall be dated as provided in Section 303 of the Indenture, shall
mature on March 15, 2029 and shall bear interest at the rate of 6 1/2% per annum
from February 23, 1999, payable semiannually on March 15 and September 15 in
each year, commencing with September 15, 1999, until payment of the principal
amount shall have been made or duly provided for. The Record Dates with respect
to the interest payment dates for the Rule 144A 6 1/2% Debentures shall be March
1 and September 1 (whether or not a business day), respectively. The holder of
record of a Rule 144A 6 1/2% Debenture on any Record Date for the payment of
interest shall be entitled to receive the interest payable on such interest
payment date.
(b) Both principal of and interest on the Rule 144A 6 1/2% Debentures
shall be payable at the office of the Company in the Borough of Manhattan, The
City of New York, New York or the City of North Wilkesboro, North Carolina or at
any other office of the Company maintained by the Company for such purpose;
provided that interest may be payable, at the option of the Company, by check
mailed to the registered address of the person entitled thereto as such address
shall appear on the registry books of the Company. On each interest payment date
the Trustee shall pay to the registered holder interest accrued in respect of
such Rule 144A 6 1/2% Debenture. Payment of principal on a Rule 144A 6 1/2%
Debenture shall be paid to the registered holder or upon his order only upon
presentation and surrender for payment of such Rule 144A 6 1/2% Debenture on or
after the payment date at the office of the Company in the Borough of Manhattan,
The City of New York, New York or the City of North Wilkesboro, North Carolina
or at any other office of the Company maintained by the Company for such
purpose.
(c) The Rule 144A 6 1/2% Debentures shall not be convertible into or
exchangeable for equity securities of the Company.
(d) The Rule 144A 6 1/2% Debentures shall not be subject to any sinking
fund.
(e) The Company shall not have any redemption or repayment rights with
respect to the Rule 144A 6 1/2% Debentures.
(f) The Rule 144A 6 1/2% Debentures shall not be included for listing on
any national securities exchange.
Section 205. (a) So long as a nominee of the Depositary is the registered
owner of any Restricted Global Security, such nominee shall be considered the
sole owner and holder of the Rule 144A 6 1/2% Debentures represented by such
Restricted Global Security under the Indenture, as supplemented and amended
hereby. Except as herein provided, owners of beneficial interests
<PAGE>
12
in any Restricted Global Security shall not be entitled to have Rule 144A 6 1/2%
Debentures represented by the such Restricted Global Security registered in
their names, shall not receive or be entitled to receive physical delivery of
Rule 144A 6 1/2% Debentures in certificated form and shall not be considered the
owners or holders thereof under the Indenture.
(b) Neither the Company nor the Trustee shall have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in any Restricted Global Security, or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
ARTICLE THREE
Miscellaneous
Section 301. Capitalized terms used but not defined herein shall have the
respective meanings set forth in the Indenture.
Section 302. Except as supplemented and amended hereby, the Indenture is
in all respects ratified and confirmed, and all of the terms, provisions and
conditions thereof shall be and remain in full force and effect, and this
Supplemental Indenture and all its provisions shall be deemed a part thereof.
Section 303. In case any provision in this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 304. If any provision of this Supplemental Indenture limits,
qualifies or conflicts with any other provision hereof or of the Indenture which
provision is required to be included in the Indenture by any of the provisions
of the Trust Indenture Act, such required provision shall control.
Section 305. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAWS AND RULES OF SAID STATE.
Section 306. This Supplemental Indenture has been simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument.
Delivery by telecopier of an executed signature page hereto shall be effective
as delivery of a manually executed counterpart hereof.
<PAGE>
13
Section 307. This Supplemental Indenture shall be deemed to have been
executed on the date of the acknowledgment thereof by the officer of the Trustee
who signed it on behalf of the Trustee.
<PAGE>
In Witness Whereof, the Company and the Trustee have caused their names to
be signed hereto by their respective officers thereunto duly authorized and
their respective corporate seals, duly attested, to be hereunto affixed, all as
of the day and year first above written.
[Corporate Seal] Lowe's Companies, Inc.
Attest: William C. Warden Jr. By: Marshall A. Croom
-------------------------- ---------------------------------
Name: Marshall A. Croom
Title: Assistant Treasurer
[Corporate Seal] The First National Bank of Chicago,
Trustee
Attest:___________________________ By: Somsri Helmer
---------------------------------
Name: Somsri Helmer
Title: Trust Officer
<PAGE>
State of North Carolina: )
) ss.:
County of Wilkes: )
On this 23/rd/ day of February, 1999, before me personally came Marshall A.
Croom, to me known, who, being by me duly sworn, did depose and say he is a duly
elected or appointed, qualified and serving officer of LOWE'S COMPANIES, INC.,
one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument bearing the name of said corporation is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like authority.
[Notarial Seal]
Cynthia Reins
--------------------------------------
Notary Public, State of North Carolina
No.
Qualified in the County of Wilkes
Commission Expires
State of Illinois: )
) ss.:
County of Cook: )
On this 23rd day of February, 1999, before me personally came Somsri
Helmer, to me known, who, being by me duly sworn, did depose and say that he/she
resides at 4250 N. Marine Dr., Chicago, IL 60613; that he/she is a duly elected
or appointed, qualified and serving officer of THE FIRST NATIONAL BANK OF
CHICAGO, one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument bearing the name of said corporation is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like authority.
[Notarial Seal]
Maria C. Birrueta
---------------------------------
Notary Public, State of Illinois
No.
Qualified in the County of Cook
Commission Expires
<PAGE>
EXHIBIT A
[Form of Debentures]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Lowe's Companies,
---
Inc. or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or to such other
entity or in such other name as is requested by an authorized representative of
DTC (and any payment hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Security shall be limited to transfers in whole, but
not in part, to nominees of Cede & Co. or to a successor thereof or such
successor's nominee and transfers of portions of this Global Security shall be
limited to transfers made in accordance with the restrictions set forth in
Section 303 of the Indenture referred to in this Global Security.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACQUISITION HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF
REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT AND ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST
DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE UNITED
<PAGE>
A-2
STATES, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER AGENT AND THE
REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
A-3
LOWE'S COMPANIES, INC.
6 1/2% DEBENTURES
Due March 15, 2029
CUSIP No. 548661AJ6
No. _____
$________________________
Original Principal Amount
Lowe's Companies, Inc., a corporation duly organized and existing under the
laws of the State of North Carolina (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of ________________________________________ ($ )
on March 15, 2029, at the office or agency of the Company referred to below,
in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts, and to pay
interest thereon in like coin or currency from February 23, 1999, or from the
most recent Interest Payment Date on which interest has been paid or duly
provided for, semi-annually in arrears on March 15 and September 15 in each
year, commencing September 15, 1999, at the rate of 6 1/2% per annum, until the
principal hereof is paid or made available for payment, and (to the extent
lawful) to pay interest at the same rate per annum on any overdue principal and
premium and on any overdue installment of interest until paid.
Interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date, as provided in the Indenture, shall be paid to the Person
in whose name this Debenture (or one or more predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Person in whose name this Debenture is registered on such Regular
Record Date and may either be paid to the Person in whose name this Debenture is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to the Person in whose name this Debenture is registered not less than ten
days prior to such Special Record Date, or be paid at any time in any other
lawful manner, all as more fully provided in the Indenture.
This Debenture is a "book-entry" debenture and is being registered in the
name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), a
clearing agency. Subject to the terms of the Amended and Restated Indenture,
dated as of December 1, 1995 (as supplemented
<PAGE>
A-4
by the First Supplemental Indenture dated as of February 23, 1999 and as
supplemented and amended from time to time, the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"), this
Debenture will be held by a clearing agency or its nominee, and beneficial
interests will be held by beneficial owners through the book-entry facilities of
such clearing agency or its nominee in minimum denominations of $1,000 and
increments of $1,000 in excess thereof.
The statements set forth in the restrictive legend above are an integral
part of the terms of this Debenture and by acceptance hereof each holder of this
Debenture agrees to be subject to and bound by the terms and provisions set
forth in such legend.
As long as this Debenture is registered in the name of DTC or its nominee,
the Trustee will make payments of principal of and interest on this Debenture by
wire transfer of immediately available funds to DTC or its nominee.
Notwithstanding the above, the final payment on this Debenture will be made
after due notice by the Trustee of the pendency of such payment and only upon
presentation and surrender of this Debenture at its principal corporate trust
office or such other offices or agencies appointed by the Trustee for that
purpose and such other locations provided in the Indenture.
Payments of principal of (and premium, if any) and interest on this
Debenture will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payments of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
This Debenture is one of a duly authorized issue of debentures of the
Company, designated 6 1/2% Debentures due March 15, 2029 (the "Debentures"),
limited in aggregate principal amount at any time Outstanding to FOUR HUNDRED
MILLION DOLLARS ($400,000,000) which may be issued under the First Supplemental
Indenture. Reference is hereby made to the Indenture, the First Supplemental
Indenture and all indentures supplemental thereto for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Debentures, and
the terms upon which the Debentures are, and are to be, authenticated and
delivered. All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Holder of this Debenture is entitled to the benefits of the
Registration Rights Agreement, dated as of February 23, 1999 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that (i) the Company fails to file an Exchange Offer
Registration Statement with respect to the Debentures with the Commission on or
prior to the 150/th/ calendar day following the Closing Time, (ii) the
Commission does not
<PAGE>
A-5
declare such Exchange Offer Registration Statement effective on or prior to the
180/th/ calendar day following the Closing Time, (iii) the Exchange Offer is not
consummated on or prior to the 30/th/ calendar day following the effective date
of the Exchange Offer Registration Statement or (iv) if required, a Shelf
Registration Statement with respect to the Debentures is not declared effective
by the Commission on or prior to the 210/th/ calendar day following the Closing
Time (each, a "Registration Default"), the per annum interest rate borne by the
Debentures shall be increased by one-quarter of one percent (0.25%) per annum
from the end of the applicable period giving rise to such Registration Default.
The interest rate borne by the Debentures will be increased by an additional on
quarter of one percent (0.25%) per annum for each subsequent 90-day period (or
portion thereof) during which any such Registration Default continues up to a
maximum aggregate increase in the annual interest rate of one-half of one
percent (0.50%) per annum. Following the cure of all Registration Defaults, the
interest rate borne by the Debentures shall be reduced to the original interest
rate borne by the Debentures. All accrued additional interest shall be paid to
Holders by the Company in the same manner as interest is paid pursuant to the
Indenture. All terms used in this Debenture that are defined in the Registration
Rights Agreement shall have the meanings assigned to them in the Registration
Rights Agreement.
The Debentures do not have the benefit of any sinking fund obligations and
shall not be redeemable at the option of the Company or repayable at the option
of the Holder prior to maturity.
If an Event of Default shall occur and be continuing, the principal of all
the Debentures may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company under this Debenture and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain
conditions set forth in the Indenture, which provisions apply to this Debenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures under the Indenture at
any time by the Company, the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Debentures at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Debentures at the
time Outstanding, on behalf of the Holders of all Debentures, to waive
compliance by the Company with certain provisions of the Indenture and certain
past Defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon such
Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer thereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Debenture.
<PAGE>
A-6
No reference herein to the Indenture and provision of this Debenture or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations on transfer
of this Debenture by DTC or its nominee, the transfer of this Debenture is
registrable in the Security Register, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City of New York, duly endorsed by, or accompanied by the
written instrument of transfer attached hereto duly executed by the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Debentures, of authorized denominations and for the same aggregate principal
amount, shall be issued to the designated transferee or transferees.
The Debentures are issuable only in fully registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Debentures are exchangeable for a like aggregate principal amount of Debentures
of different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company, or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and none of the Company,
the Trustee or any such agent shall be affected by notice to the contrary.
Interest on this Debenture shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Company shall furnish to any Holder of record of Debentures, upon
written request and without charge, a copy of the Indenture.
The Indenture and this Debenture each shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
<PAGE>
A-7
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Debenture shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
A-8
In Witness Whereof, Lowe's Companies, Inc. has caused this Debenture to be
signed, manually or in facsimile, by a duly elected or appointed, qualified and
serving officer and has caused a facsimile of its corporate seal to be imprinted
hereon, attested by the manual or facsimile signature of a duly elected or
appointed, qualified and serving officer.
Lowe's Companies, Inc.
By....................................
Name:
Title:
Dated: February ___, 1999
[Seal]
Attest:...................................
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES OF THE SERIES DESIGNATED THEREIN REFERRED TO
IN THE WITHIN-MENTIONED INDENTURE.
The First National Bank of Chicago,
as Trustee
By......................................
Authorized Officer
<PAGE>
EXHIBIT B
Annex A
[FORM OF TRANSFER CERTIFICATE]
Lowe's Companies, Inc. (the "Company")
The First National Bank of Chicago,
as Trustee (the "Trustee")
Re: 6 1/2% Debentures Due March 15, 2029
----------------------------------------
Reference is hereby made to the Amended and Restated Indenture, dated as of
December 1, 1995 (as supplemented by the First Supplemental Indenture dated as
of February 23, 1999, and as supplemented and amended from time to time, the
"Indenture"), between the Company and the Trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
Other terms shall have the meanings given to them in Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act").
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type name and address of transferee, including ZIP code)
_________________________________________________________________
(Taxpayer Identification Number of transferee)
the within Debenture and all rights thereunder, hereby irrevocably constituting
and appointing ____________________ attorney-in-fact to transfer said Debenture
on the books of the Company with full power of substitution in the premises.
In connection with any transfer of this Debenture occurring prior to
the date that is the earlier of the date of an effective Shelf Registration
Statement or the Resale Restriction Termination Date, the undersigned confirms
that without utilizing any general solicitation or general advertising:
<PAGE>
B-2
[Check One]
---------
____ Such Debenture is being transferred in accordance with (i) the transfer
restrictions set forth in the Indenture and the Debentures and (ii) Rule
144A under the Securities Act to a Transferee that the Transferor
reasonably believes is purchasing the Debentures for its own account or an
account with respect to which the Transferee exercises sole investment
discretion, and the Transferee and any such account is a "Qualified
Institutional Buyer" within the meaning of Rule 144A, and such Transferee
is aware that the sale to it is being made in reliance upon Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any state of the United
States or any other jurisdiction.
or
--
____ Such Debenture is being transferred pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder upon
provision of an opinion of counsel and such other evidence acceptable to
the Company that such offer, sale, pledge or transfer is in compliance with
the Securities Act and other applicable laws, in each case in a form
satisfactory to the Company.
or
--
____ Such Debenture is being transferred in a transaction other than in
accordance with the above upon provision of a legal opinion and other
evidence requested by the Company in form and substance satisfactory to the
Company, to the effect that the proposed transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Debenture in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 312 of the Indenture
shall have been satisfied.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Initial Purchaser named in the Offering
Memorandum distributed by the Company in connection with the sale of the
Debentures.
<PAGE>
B-3
You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
[Insert Name of Transferor]
By:______________________________________
Name:
Title:
Dated: ____________________
(N.B.: The signature to this assignment must correspond
with the name as written upon the face of the within-
mentioned instrument in every particular, without
alteration or any change whatsoever)
TO BE COMPLETED BY PURCHASER IF THE FIRST OPTION ABOVE IS CHECKED.
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
- -------
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
The undersigned represents and warrants that it is purchasing this
Debenture for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:________________________ ______________________________________________
(NOTICE: To be executed by an executive
officer)
<PAGE>
B-4
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payment shall be made, by wire transfer or otherwise, in immediately
available funds, to _____________________, for the account of
______________________, account number ___________, or, if mailed, by check to
_____________________. Applicable reports and statements should be mailed to
_____________________. This information is provided by _____________________,
the assignee named above, or _____________________, as its agent.
<PAGE>
EXHIBIT C
FORM OF EXCHANGE CERTIFICATE
Lowe's Companies, Inc. (the "Company")
The First National Bank of Chicago,
as Trustee (the "Trustee")
Re: Lowe's Companies, Inc. 6 1/2% Debentures
Due March 15, 2029 (the "Debentures")
-----------------------------------------
Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated Indenture, dated
as of December 1, 1995 (as supplemented by the First Supplemental Indenture
dated as of February 23, 1999 and as further supplemented and amended from time
to time, the "Indenture"), between the Company and the Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture. Other terms shall have the meanings given to them in Rule 144A ("Rule
144A") under the Securities Act of 1933, as amended (the "Securities Act").
In connection with our proposed sale of $______________ aggregate principal
amount of Debentures, we confirm that such sale has been effected pursuant to
and in accordance with Rule 144A. We are aware that the transfer of Debentures
to us is being made in reliance on the exemption from the provisions of Section
5 of the Securities Act provided by Rule 144A. Prior to the date of this
Certificate, we have been given the opportunity to obtain from the Company the
information referred to in Rule 144A(d)(4), and have either declined such
opportunity or have received such information.
Each of you is entitled to rely upon this Certificate and is irrevocably
authorized to produce this Certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.
Very truly yours,
[Name of PURCHASER]
By:________________________________
Name:
Title:
Address:
Date of this Certificate: _________
<PAGE>
EXHIBIT D
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby transfers to
(PRINT NAME AND ADDRESS OF TRANSFEREE)
U.S.$_______________ principal amount of this Security, and all rights with
respect thereto, and irrevocably constitutes and appoints____________________
as attorney to transfer this Security on the books kept for registration
thereof, with full power of substitution.
Dated ___________________ ____________________________
Certifying signature
Signed: ______________________
Note:
(i) The signature on this transfer form must correspond to the name
as it appears on the face of this Security.
(ii) A representative of the holder of the Security should state the
capacity in which he or she signs (e.g., executor).
(iii) The signature of the person effecting the transfer shall
conform to any list of duly authorized specimen signatures supplied by the
registered holder or shall be certified by a bank which is a member of the
Security Transfer Agent Medallion Program or in such other manner as the
paying agent, acting in its capacity as transfer agent or the Trustee,
acting in its capacity as Trustee, may require.
<PAGE>
EXHIBIT 4.3
[FORM OF DEBENTURE]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Lowe's Companies,
---
Inc. or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or to such other
entity or in such other name as is requested by an authorized representative of
DTC (and any payment hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Security shall be limited to transfers in whole, but
not in part, to nominees of Cede & Co. or to a successor thereof or such
successor's nominee and transfers of portions of this Global Security shall be
limited to transfers made in accordance with the restrictions set forth in
Section 303 of the Indenture referred to in this Global Security.
<PAGE>
A-2
LOWE'S COMPANIES, INC.
6 1/2% DEBENTURES
Due March 15, 2029 (REGISTERED)
CUSIP No. _________
No. _____
$________________________
Original Principal Amount
Lowe's Companies, Inc., a corporation duly organized and existing under the
laws of the State of North Carolina (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of _________________________________________________________
($ ) on March 15, 2029, at the office or agency of the Company referred
to below, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts, and
to pay interest thereon in like coin or currency from February 23, 1999, or from
the most recent Interest Payment Date on which interest has been paid or duly
provided for, semi-annually in arrears on March 15 and September 15 in each
year, commencing September 15, 1999, at the rate of 6 1/2% per annum, until the
principal hereof is paid or made available for payment, and (to the extent
lawful) to pay interest at the same rate per annum on any overdue principal and
premium and on any overdue installment of interest until paid.
Interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date, as provided in the Indenture, shall be paid to the Person
in whose name this Debenture (or one or more predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Person in whose name this Debenture is registered on such Regular
Record Date and may either be paid to the Person in whose name this Debenture is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to the Person in whose name this Debenture is registered not less than ten
days prior to such Special Record Date, or be paid at any time in any other
lawful manner, all as more fully provided in the Indenture.
This Debenture is a "book-entry" debenture and is being registered in the
name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), a
clearing agency. Subject to the terms of the Amended and Restated Indenture,
dated as of December 1, 1995 (as supplemented by the First Supplemental
Indenture dated as of February 23, 1999, and as supplemented and
<PAGE>
A-3
amended from time to time, the "Indenture"), between the Company and The First
National Bank of Chicago, as trustee (the "Trustee"), this Debenture will be
held by a clearing agency or its nominee, and beneficial interests will be held
by beneficial owners through the book-entry facilities of such clearing agency
or its nominee in minimum denominations of $1,000 and increments of $1,000 in
excess thereof.
As long as this Debenture is registered in the name of DTC or its nominee,
the Trustee will make payments of principal of and interest on this Debenture by
wire transfer of immediately available funds to DTC or its nominee.
Notwithstanding the above, the final payment on this Debenture will be made
after due notice by the Trustee of the pendency of such payment and only upon
presentation and surrender of this Debenture at its principal corporate trust
office or such other offices or agencies appointed by the Trustee for that
purpose and such other locations provided in the Indenture.
Payments of principal of (and premium, if any) and interest on this
Debenture will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payments of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
This Debenture is one of a duly authorized issue of debentures of the
Company, designated 6 1/2% Debentures due March 15, 2029 (Registered) (the
"Debentures"), limited in aggregate principal amount at any time Outstanding to
FOUR HUNDRED MILLION DOLLARS ($400,000,000) which may be issued under the First
Supplemental Indenture. Reference is hereby made to the Indenture, the First
Supplemental Indenture and all indentures supplemental thereto for a statement
of the respective rights, limitations of rights, duties, obligations and
immunities thereunder of the Company, the Trustee and the Holders of the
Debentures, and the terms upon which the Debentures are, and are to be,
authenticated and delivered. All terms used in this Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
The Debentures do not have the benefit of any sinking fund obligations and
shall not be redeemable at the option of the Company or repayable at the option
of the Holder prior to maturity.
If an Event of Default shall occur and be continuing, the principal of all
the Debentures may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company under this Debenture and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance
<PAGE>
A-4
by the Company with certain conditions set forth in the Indenture, which
provisions apply to this Debenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Debentures at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Debentures at the
time Outstanding, on behalf of the Holders of all Debentures, to waive
compliance by the Company with certain provisions of the Indenture and certain
past Defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon such
Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer thereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and provisions of this Debenture or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations on transfer
of this Debenture by DTC or its nominee, the transfer of this Debenture is
registrable in the Security Register, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City of New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Register, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Debentures, of authorized denominations and for
the same aggregate principal amount, shall be issued to the designated
transferee or transferees.
The Debentures are issuable only in fully registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Debentures are exchangeable for a like aggregate principal amount of Debentures
of different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company, or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be
<PAGE>
A-5
overdue, and none of the Company, the Trustee or any such agent shall be
affected by notice to the contrary.
Interest on this Debenture shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Company shall furnish to any Holder of record of Debentures, upon
written request and without charge, a copy of the Indenture.
The Indenture and this Debenture each shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Debenture shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
A-6
IN WITNESS WHEREOF, LOWE'S COMPANIES, INC. has caused this Debenture to be
signed, manually or in facsimile, by a duly elected or appointed, qualified and
serving officer and has caused a facsimile of its corporate seal to be imprinted
hereon, attested by the manual or facsimile signature of a duly elected or
appointed, qualified and serving officer.
LOWE'S COMPANIES, INC.
By_________________________________________
Name:
Title:
Dated: _________ ___, 1999
[SEAL]
Attest:_________________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES OF THE SERIES DESIGNATED THEREIN REFERRED TO
IN THE WITHIN-MENTIONED INDENTURE.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By_________________________________________
Authorized Officer
<PAGE>
[LETTERHEAD OF HUNTON & WILLIAMS APPEARS HERE]
Exhibit 5.1
July 19, 1999
Board of Directors
Lowe's Companies, Inc.
1605 Curtis Bridge Road
North Wilkesboro, North Carolina 28697
Registration Statement on Form S-4 for Exchange of Outstanding 6 1/2%
----------------------------------------------------------------------
Debentures Due March 15, 2029 for Registered 6 1/2% Debentures Due
-------------------------------------------------------------------
March 15, 2029
--------------
Ladies and Gentlemen:
We are acting as counsel for Lowe's Companies, Inc. (the "Company") in
connection with the registration of $400.0 million aggregate principal amount of
6 1/2% Debentures due March 15, 2029 (the "Registered Debentures"). The
Registered Debentures are to be issued by the Company in exchange for an equal
amount of unregistered 6 1/2% Debentures due March 15, 2029 (the "Old
Debentures"), issued on February 23, 1999 in a private placement pursuant to
Rule 144A under the Securities Act of 1933. The Old Debentures and Registered
Debentures are governed by an Amended and Restated Indenture between the Company
and The First National Bank of Chicago, as trustee ("Trustee"), dated December
1, 1995 and a Supplemental Indenture between the Company and Trustee dated as of
February 23, 1999 (collectively, the "Indenture"). The issuance of the
Registered Debentures in exchange for the Old Debentures is more fully described
in the Registration Statement on Form S-4 (the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") on July 19, 1999.
In connection with the filing of the Registration Statement, you have requested
our opinion concerning certain corporate matters.
In rendering the following opinions, we have relied, as to factual matters,
upon certificates of executive officers of the Company and a certificate issued
by the Secretary of State of North Carolina. We have assumed the authenticity
of all documents submitted to us as originals, the conformity to originals of
documents submitted as certified or photostatic copies, and the genuineness of
signatures not witnessed by us.
We are members of the North Carolina and New York Bars and we do not
purport to express an opinion on any laws other than those of the States of
North Carolina and New York and the United States of America.
<PAGE>
[LETTERHEAD OF HUNTON & WILLIAMS APPEARS HERE]
Based upon the foregoing and the further qualifications stated below, we are of
the opinion that:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of North Carolina.
2. The Indenture has been duly authorized by the Company and constitutes
a valid and legally binding obligation of the Company.
3. The Registered Debentures have been duly authorized by all necessary
corporate action of the Company and, when executed by the Company,
authenticated and delivered by the Trustee, and issued in accordance
with the Indenture and as described in the Registration Statement, the
Registered Debentures will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture
and will be enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general application
relating to or affecting the enforcement of creditors' rights and to
general equity principles.
We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement and to the references to us included therein. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required by Section 7 of the Securities Act of 1933 or the
rules and regulations promulgated thereunder by the Commission.
Very truly yours,
/s/ Hunton & Williams
<PAGE>
EXHIBIT 15.1
[DELOITTE & TOUCHE LLP LETTERHEAD]
July 19, 1999
Lowe's Companies, Inc.
Post Office Box 1111
North Wilkesboro, NC 28656
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Lowe's Companies, Inc. and subsidiaries for the periods ended
April 30, 1999 and May 1, 1998, as indicated in our reports dated May 11, 1999
and May 12, 1998, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended April 30, 1999 and May 1,
1998, are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
<PAGE>
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-4 of our report dated February 19, 1999
appearing and incorporated by reference in the Annual Report on Form 10-K of
Lowe's Companies, Inc. and subsidiaries for the year ended January 29, 1999, and
to the reference to us under the heading "Experts" in such Prospectus.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
July 19, 1999
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
LOWE'S COMPANIES, INC.
To Tender 6 1/2% Debentures due March 15, 2029
In Exchange for Registered 6 1/2% Debentures due March 15, 2029
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON AUGUST __, 1999,
UNLESS THE OFFER IS EXTENDED
- -------------------------------------------------------------------------------
To The First National Bank of Chicago (the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile Transmission By Overnight Mail or Hand:
The First National Bank of Chicago (for Eligible Institutions Only): The First National Bank of Chicago
Corporate Trust Administration The First National Bank of Chicago Corporate Trust Administration
One North State Street (312) 407- 1708 One North State Street
Chicago, Illinois 60670-0126 Attention: Donna Fanning Chicago, Illinois 60670-0126
Attention: Donna Fanning Attention: Donna Fanning
or
14 Wall Street, 8th Floor
New York, New York 10005
Attn: Frank Ballantine
</TABLE>
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the one listed
above will not constitute a valid delivery. The instructions accompanying this
Letter of Transmittal should be read carefully before this Letter of Transmittal
is completed.
The undersigned hereby acknowledges receipt of the Prospectus dated July __,
1999 (the "Prospectus") of Lowe's Companies, Inc. (the "Company") and this
Letter of Transmittal (the "Letter of Transmittal"), which together constitute
the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount
of its 6 1/2% Debentures due March 15, 2029 (the "Registered Debentures"), which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement of which the Prospectus
is a part, for each $1,000 principal amount of its outstanding 6 1/2% Debentures
due March 15, 2029 (the "Old Debentures"). The terms of the Registered
Debentures are identical in all material respects (including principal amount,
interest rate and maturity) to the terms of the Old Debentures for which they
may be exchanged pursuant to the Exchange Offer, except that (i) the Registered
Debentures have been registered under the Securities Act and, therefore, will
not bear legends restricting the transfer thereof and (ii) holders of Registered
Debentures will not be entitled to certain rights of holders of Old Debentures
under the Registration Rights Agreement. The term "Expiration Date" shall mean
5:00 p.m., New York City time, on August __, 1999, unless the Company, in its
sole discretion, extends the Exchange Offer, in which case the term shall mean
the latest date and time to which the Exchange Offer is extended. Capitalized
terms used but not defined herein have the meaning given to them in the
Prospectus.
Holders who wish to tender their Old Debentures must, at a minimum, fill in
the necessary account information in the table below entitled "Account
Information" (the "Account Information Table"), complete columns (1) through (3)
in the table below entitled "Description of Old Debentures Tendered" (the
"Description Table"), complete and sign in the box below entitled "Registered
Holder(s) of Old Debentures Sign Here" and complete the Substitute Form W-9. If
a holder wishes to tender less than all of such Old Debentures delivered to the
Exchange Agent, column (4) of the Description Table must be completed in full.
See Instruction 3.
Holders of Old Debentures that are tendering by book-entry transfer to the
Exchange Agent's account at The Depository Trust Company ("DTC") can execute the
exchange through the DTC Automated Tender Offer Program ("ATOP"), for which the
transaction will be eligible. DTC participants that are accepting the exchange
should transmit their acceptance to DTC, which will edit and verify the
acceptance and execute a book-entry delivery to the Exchange Agent's account at
DTC. DTC will then send an Agent's Message to the Exchange Agent for its
acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of
the exchange as to execution and delivery of a Letter of Transmittal by the
participant identified in the Agent's Message. DTC participants may also accept
the exchange by submitting a notice of guaranteed delivery through ATOP.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned agree to take with respect to
the Exchange Offer. Holders who wish to tender their Old Debentures must
complete this Letter of Transmittal in its entirety.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING
INSTRUCTIONS, AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS
INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND
REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS
LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT OR THE COMPANY. SEE
INSTRUCTION 9.
<PAGE>
List below the Old Debentures to which this Letter of Transmittal relates.
If the space indicated below is inadequate, the Certificate Numbers and
Principal Amounts should be listed on a separately signed schedule affixed
hereto.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD DEBENTURES TENDERED
- -----------------------------------------------------------------------------------------------------------------------
(3) (4)
Aggregate Principal Principal Amount
(1) (2) Amount Tendered
Name(s) and Address(es) of Registered Holder(s) Registration Represented by (if less than
(Please fill in) Numbers* Old Debentures** all)**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
full aggregate principal amount represented by such Old Debentures. All
tenders must be in integral multiples of $1,000.
This Letter of Transmittal is to be used (i) if certificates of Old
Debentures are to be forwarded herewith, (ii) if delivery of Old Debentures is
to be made by book-entry transfer to an account maintained by the Exchange Agent
at DTC, pursuant to the procedures set forth in "The Exchange Offer--Procedures
for Tendering Old Debentures" in the Prospectus or (iii) if tender of the Old
Debentures is to be made according to the guaranteed delivery procedures
described in the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures." See Instruction 2. Delivery of documents to a book-entry
transfer facility does not constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Old Debentures are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered holder.
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
[_] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-
ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution___________________________________________________
If delivered by book-entry transfer:
Account Number_______________________ Transaction Code Number_________________
Holders whose Old Debentures are not immediately available or who cannot deliver
their Old Debentures and all other documents required hereby to the Exchange
Agent on or prior to the Expiration Date must tender their Old Debentures
according to the guaranteed delivery procedure set forth in the Prospectus under
the caption "The Exchange Offer--Guaranteed Delivery Procedures." See
Instruction 2.
[_] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)____________________________________________________
Name of Eligible Institution that Guaranteed Delivery___________________________
If delivered by book-entry transfer:
Account Number________________________ Transaction Code Number__________________
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name______________________________ Address_______________________________
- --------------------------------------------------------------------------------
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Old
Debentures indicated above in exchange for a like principal amount of the
Registered Debentures. Subject to, and effective upon, the acceptance for
exchange of such Old Debentures tendered hereby, the undersigned hereby
exchanges, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Old Debentures as are being tendered
hereby, including all rights to accrued and unpaid interest thereon as of the
Expiration Date and any and all claims in respect of or arising or having arisen
as a result of the undersigned's status as a holder of, all Old Debentures
tendered hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent the true and lawful agent and attorney-in-fact of the
undersigned (with full knowledge that said Exchange Agent acts as the agent of
the Company in connection with the Exchange Offer) to cause the Old Debentures
to be assigned, transferred and exchanged. The undersigned represents and
warrants that (a) it has full power and authority to tender, exchange, assign
and transfer the Old Debentures and to acquire Registered Debentures issuable
upon the exchange of such tendered Old Debentures; and (b) when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Old Debentures, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim.
The undersigned is the registered owner of all tendered Old Debentures and
the undersigned represents that it has received from each beneficial owner of
tendered Old Debentures ("Beneficial Owners") a duly completed and executed form
of "Instructions to Registered Holder and/or Book-Entry Transfer Facility
Participant from Beneficial Owner" accompanying this Letter of Transmittal,
instructing the undersigned to take the action described in this Letter of
Transmittal.
The undersigned understands that, subject to the terms and conditions of the
Exchange Offer, Old Debentures properly tendered and not withdrawn will be
exchanged for Registered Debentures. If any amount of tendered Old Debentures
is not exchanged for any reason, or if certificates are submitted that evidence
a greater principal amount of Old Debentures than the principal amount to be
tendered, such unexchanged Old Debentures or Old Debentures for untendered
amounts, as the case may be, will be returned, without expense, to the
undersigned, either to the book-entry transfer facility account from which
tender was effected or to the address below if Old Debentures were tendered in
physical form.
The undersigned hereby represents to the Company that (i) the Registered
Debentures acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of the person receiving such Registered Debentures,
whether or not such person is the undersigned, and (ii) neither the undersigned
nor any such other person has an arrangement or understanding with any person to
participate in the distribution of such Registered Debentures. If the
undersigned or the person receiving the Registered Debentures covered hereby is
a broker-dealer that is receiving the Registered Debentures for its own account
in exchange for Old Debentures that were acquired as a result of market-making
activities or other trading activities, the undersigned acknowledges that it or
such other person will deliver a prospectus in connection with any resale of
such Registered Debentures; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. The undersigned and any
such other person acknowledge that, if they are participating in the Exchange
Offer for the purpose of distributing the Registered Debentures, (i) they cannot
rely on the position of the staff of the Securities and Exchange Commission
enunciated in Exxon Capital Holdings Corporation (available May 13, 1988),
Morgan Stanley & Co., Incorporated (available June 5, 1991) or similar no-action
letters and, in the absence of an exemption therefrom, must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with the resale transaction and (ii) failure to comply with such
requirements in such instance could result in the undersigned or any such other
person incurring liability under the Securities Act for which such persons are
not indemnified by the Company. If the undersigned or the person receiving the
Registered Debentures covered by this letter is an affiliate (as defined under
Rule 405 of the Securities Act) of the Company, the undersigned represents to
the Company that the undersigned understands and acknowledges that such
Registered Debentures may not be offered for resale, resold or otherwise
transferred by the undersigned or such other person without registration under
the Securities Act or an exemption therefrom.
The undersigned also warrants that it will upon request, execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable, to complete the exchange, assignment and transfer of
tendered Old Debentures or transfer ownership of such Old Debentures on the
account books maintained by a book-entry transfer facility. The undersigned
further agrees that acceptance of any tendered Old Debentures by the Company and
the issuance of Registered Debentures in exchange therefor shall constitute
performance in full by the Company of its obligations under the Registration
Rights Agreement and that the Company shall have no further obligations or
liabilities thereunder for the registration of the Old Debentures or the
Registered Debentures.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer--Conditions to Exchange Offer."
The undersigned recognizes that as a result of these conditions (which may be
waived, in whole or in part, by the Company), as more particularly set forth in
the Prospectus, the Company may not be, required to exchange any of the Old
Debentures tendered hereby and, in such event, the Old Debentures not exchanged
will be returned to the undersigned at the address shown below the signature of
the undersigned.
TENDERS OF OLD DEBENTURES MADE PURSUANT TO THE EXCHANGE OFFER MAY NOT BE
WITHDRAWN AFTER 5.00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. A
PURPORTED NOTICE OF WITHDRAWAL WILL BE EFFECTIVE ONLY IF DELIVERED TO THE
EXCHANGE AGENT IN ACCORDANCE WITH THE SPECIFIC PROCEDURES SET FORTH IN THE
PROSPECTUS UNDER THE HEADING "THE EXCHANGE OFFER--WITHDRAWAL RIGHTS."
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Old Debentures may be withdrawn at any
time prior to the Expiration Date only in accordance with the procedures set
forth in the Instructions contained in the Letter of Transmittal and the
Prospectus.
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all Registered Debentures delivered in exchange
for tendered Old Debentures, and any Old Debentures delivered herewith but not
exchanged, will be registered in the name of the undersigned and shall be
delivered to the undersigned, at the address shown below the signature of the
undersigned. If an Exchange Note is to be issued to a person other than the
person(s) signing this Letter of Transmittal, or if the Exchange Note is to be
mailed to someone other than the person(s) signing this Letter of Transmittal or
to the person(s) signing this Letter of Transmittal at an address different than
the address shown on this Letter of Transmittal, the appropriate boxes of this
Letter of Transmittal should be completed. If Old Debentures are surrendered by
Holder(s) that have completed either the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, signature(s) on this Letter of Transmittal must be guaranteed by
an Eligible Institution (defined in Instruction 2).
<PAGE>
Special Registration Instructions
To be completed ONLY if the Registered Debentures and any Old Debentures
delivered herewith but not exchanged are to be issued in the name of someone
other than the undersigned or are to be returned by credit to an account
maintained by a book-entry transfer facility.
Issue Registered Debentures and any Old Debentures delivered herewith but not
exchanged to:
Name_____________________________________________
Address:_________________________________________
_________________________________________
(Please print or type)
Credit Registered Debentures and any Old Debentures delivered herewith but not
exchanged to the following book-entry transfer facility account:
_________________________________________________
(Name of book-entry transfer facility)
_________________________________________________
(Account number)
Registered Holder(s) of Old Debentures Sign Here
(In addition, complete Substitute Form W-9 Below)
X_______________________________________________
X_______________________________________________
(Signature(s) of Registered Holder(s))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Old Debentures or on a security position listing as the owner of the Old
Debentures or by person(s) authorized to become registered holder(s) by properly
completed bond powers transmitted herewith. If signature is by attorney-in-fact,
trustee, executor, administrator, guardian, officer of a corporation or other
person acting in a fiduciary capacity, please provide the following information
(Please print or type):
Name and Capacity (full title):________________________________________
Address (including zip code):__________________________________________
Area Code and Telephone Number:________________________________________
Dated:___________________________________
Signature Guarantee (If required -- See Instruction 4)
Authorized Signature:__________________________________________________
(Signature of Representative of Signature Guarantor)
Name and Title:________________________________________________________
Name of Firm:__________________________________________________________
Area Code and Telephone Number:________________________________________
(Please print or type)
Dated:_____________________________________
Special Delivery Instructions
To be completed ONLY if the Registered Debentures and any Old Debentures
delivered herewith but not exchanged are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown under
"Description of Old Debentures Tendered."
Mail Registered Debentures and any Old Debentures delivered herewith but not
exchanged to:
Name_______________________________________
Address:___________________________________
___________________________________
(Please print or type)
<PAGE>
EXHIBIT 99.2
LOWE'S COMPANIES, INC.
NOTICE OF GUARANTEED DELIVERY
(Not to be used for Signature Guarantee)
As set forth in the Prospectus dated July, 1999 (the "Prospectus") in the
section entitled "The Exchange Offer -- Procedures for Tendering Old Debentures"
and in the accompanying Letter of Transmittal (the "Letter of Transmittal") and
Instruction 2 thereto, this form or one substantially equivalent hereto must be
used to accept the Exchange Offer if certificates representing 6 1/2% Debentures
due March 15, 2029 of Lowe's Companies, Inc. (the "Old Debentures") are not
immediately available or time will not permit such holder's Old Debentures or
other required documents to reach the Exchange Agent, or complete the procedures
for book-entry transfer, prior to the Expiration Date (as defined in the
Prospectus) of the Exchange Offer. This form may be delivered by hand or sent by
overnight courier, facsimile transmission or registered or certified mail to the
Exchange Agent and must be received by the Exchange Agent prior to 5:00 p.m.,
New York City time on August __, 1999.
To The First National Bank of Chicago
(the "Exchange Agent")
By Registered or Certified Mail: By Overnight Mail or Hand:
The First National Bank of Chicago The First National Bank of Chicago
Corporate Trust Administration Corporate Trust Administration
One North State Street One North State Street
Chicago, Illinois 60670-0126 Chicago, Illinois 60670-0126
Attention: Donna Fanning Attention: Donna Fanning
or
14 Wall Street, 8th Floor
New York, New York 10005
Attention: Frank Ballantine
By Facsimile Transmission
(for Eligible Institutions Only):
The First National Bank of Chicago
(312) 407-1708
Attention: Donna Fanning
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE
A VALID DELIVERY
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to Lowe's Companies, Inc. the principal
amount of the Old Debentures listed below, upon the terms of and subject to the
conditions set forth in the Prospectus and the related Letter of Transmittal and
the instructions thereto (which together constitute the "Exchange Offer"),
receipt of which is hereby acknowledged, pursuant to the guaranteed delivery
procedures set forth in the Prospectus, as follows:
Aggregate Principal Principal Amount
Amount Represented Tendered (must be in integral
Certificate Nos. by Certificate(s) multiples of $1,000)
---------------- ---------------- --------------------
----------------------- --------------------- -----------------------------
----------------------- --------------------- -----------------------------
----------------------- --------------------- -----------------------------
----------------------- --------------------- -----------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Old Debentures or on a security
position listing as the owner of Old Debentures, or by person(s) authorized to
become Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery.
- ------------------------------------------
The Book-Entry Transfer Facility Account
Number (if the Old Debentures will be
tendered by book-entry transfer)
- ------------------------------------------
- ------------------------------------------
Sign Here
- ------------------------------------------
Account Number
- ------------------------------------------
Principal Amount Tendered
(must be in integral multiples of $1,000)
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Number and Street or P.O. Box
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City, State, Zip Code
- ------------------------------------------
Signature(s)
Dated: ___________, 1999
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GUARANTEE OF DELIVERY
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office in the United States, or otherwise an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, guarantees that, within three (3)
New York Stock Exchange trading days from the date of this Notice of Guaranteed
Delivery, a properly completed and validly executed Letter of Transmittal (or a
facsimile thereof), together with Old Debentures tendered hereby in proper form
for transfer (or confirmation of the book-entry transfer of such Old Debentures
into the Exchange Agent's account at The Depository Trust Company pursuant to
the procedures for book-entry transfer set forth in the Prospectus under the
caption "The Exchange Offer--Procedures for Tendering Old Debentures') and all
other required documents will be deposited by the undersigned with the Exchange
Agent at its address set forth above.
The institution that completes this form must communicate the guarantee to the
Exchange Agent and must deliver the Letter of Transmittal and Old Debentures to
the Exchange Agent within the time period shown herein. Failure to do so could
result in a financial loss to the undersigned.
- ----------------------------------- ------------------------------------
Name of Firm Authorized Signature
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Address Title
- ----------------------------------- Name -------------------------------
Name Please Type or Print
- ----------------------------------- Name -------------------------------
Zip Code Name
- ----------------------------------- Date -------------------------------
Area Code and Tel. No.
NOTE: DO NOT SEND CERTIFICATES REPRESENTING OLD DEBENTURES WITH THIS
FORM. CERTIFICATES REPRESENTING OLD DEBENTURES SHOULD BE SENT ONLY
WITH A LETTER OF TRANSMITTAL.
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<PAGE>
EXHIBIT 99.3
INSTRUCTIONS
TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
LOWE'S COMPANIES, INC.
6 1/2% DEBENTURES DUE MARCH 15, 2029
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated July
__, 1999 (the "Prospectus") of Lowe's Companies, Inc., a North Carolina
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meanings ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 6 1/2% Debentures due March 15, 2029 (the "Old
Debentures") held by you for the account of the undersigned.
The aggregate face amount of the Old Debentures held by you for the account
of the undersigned is (fill in amount):
$_________________ of the 6 1/2% Debentures due March 15, 2029
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[_] TO TENDER the following Old Debentures held by you for the account of
the undersigned (INSERT PRINCIPAL AMOUNT OF OLD DEBENTURES TO BE
TENDERED, IF ANY): $_________________
[_] NOT TO TENDER any Old Debentures held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Debentures held by you for
the account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representations and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations that (i) the
undersigned's principal residence is in the state of __________ (FILL IN STATE),
(ii) the undersigned is acquiring the Registered Debentures in the ordinary
course of business of the undersigned, (iii) the undersigned is not
participating, does not participate, and has no arrangement or understanding
with any person to participate in the distribution of the Registered Debentures,
(iv) the undersigned acknowledges that any person participating in the Exchange
Offer for the purpose of distributing the Registered Debentures must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Securities Act"), in connection with a secondary resale
transaction of the Registered Debentures acquired by such person and cannot rely
on the position of the Staff of the Securities and Exchange Commission set forth
in no-action letters that are discussed in the section of the Prospectus
entitled "The Exchange Offer -- Resale of the Registered Debentures," and (v)
the undersigned is not an "affiliate," as defined in Rule 405 under the
Securities Act, of the Company; (b) to agree, on behalf of the undersigned, as
set forth in the Letter of Transmittal; and (c) to take such other action as
necessary under the Prospectus or the Letter of Transmittal to effect the valid
tender of such Old Debentures.
[_] Check this box if the Beneficial Owner of the Old Debentures is a
Participating Broker-Dealer and such Participating Broker-Dealer
acquired the Old Debentures for its own account as a result of market-
making activities or other trading activities.
<PAGE>
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SIGN HERE
Name of beneficial owner(s): _________________________________________________
Signature(s): ________________________________________________________________
Name (please print): _________________________________________________________
Address: _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Telephone number: ____________________________________________________________
Taxpayer Identification or Social Security Number: ___________________________
Date: ________________________________________________________________________
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