As filed with the Securities and Exchange Commission on October 21, 1999
Registration Statement No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
LOWE'S COMPANIES, INC.
(Exact name of Registrant as specified in its Charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(Address of principal executive office, including zip code)
LOWE'S COMPANIES, INC.
DIRECTORS' STOCK OPTION PLAN
(Full title of the Plan)
--------------------
Stephen A. Hellrung
Senior Vice President, General Counsel and Secretary
Lowe's Companies, Inc.
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(336) 658-5445
(Name, address and telephone number including, area code, of agent for service)
With copies to:
Lathan M. Ewers, Jr.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
(804) 788-8269
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share offering price registration fee
================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Common Stock, $.50 par value 250,000 shares(1) $48.4375 (2) $12,109,375(2) $3367
Preferred Share Purchase 250,000 rights N/A N/A N/A
Rights(3)
================================================================================================================
</TABLE>
(1) This Registration Statement covers the maximum number of shares of
common stock of the Registrant which may be issued in connection with the
transactions described herein.
(2) Estimated solely for the purpose of computing the registration fee.
This amount was calculated pursuant to Rule 457(h)(1) on the basis of $48.4375
per share, which was the average of the high and low sales prices of the Common
Stock as reported on the New York Stock Exchange on October 18, 1999.
(3) The Rights to purchase Participating Cumulative Preferred Stock, Series
A, will be attached to and will trade with shares of the Common Stock of the
Company.
- --------------------------------------------------------------------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Securities and Exchange Commission
(the "Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Lowe's Companies, Inc. (the "Company")
with the Commission (file No. 1-7083) are incorporated herein by reference and
made a part hereof: (i) the Company's Annual Report on Form 10-K for the fiscal
year ended January 29, 1999; (ii) the Company's Quarterly Reports on Form 10-Q
for the quarters ended April 30, 1999 and July 30, 1999; and (iii) the
description of the Company's Common Stock (the "Common Stock") contained in the
Company's registration statement on Form 8-A filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including any amendment or report
filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of the Prospectus and prior to the
filing of a post-effective amendment that indicate that all securities offered
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in the Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that is
incorporated by reference herein modifies or supersedes such earlier statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IV of the Company's Bylaws provides that the Company will
indemnify any person as an officer or director of the Company or as an officer,
director, trustee or partner of another corporation, trust, partnership or
employee benefit plan at the request of the Company, against any liability
incurred in connection with any proceeding arising out of such service. To the
extent that such person is successful on the merits or otherwise in defense of
any such proceeding, the Company will indemnify him against expenses actually
and reasonably incurred in such defense. No indemnification is available if, at
the time of the activities which are the subject of the proceeding, such person
knew or believed that such activities were clearly in conflict with the best
interests of the
2
<PAGE>
Company. Further, Section 55-8-51 of the North Carolina Business Corporation Act
provides that a corporation may not indemnify a director in connection with a
proceeding by or in the right of the corporation in which such director was
adjudged liable to the corporation or in connection with any other proceeding
charging improper personal benefit to him, whether or not involving action in
his official capacity, in which is adjudged liable on the basis that personal
benefit was improperly received by him.
The Company maintains an insurance policy for the benefit of directors
and officers insuring them against claims that are made against them by reason
of any wrongful act (as defined) committed in their capacity as directors or
officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No.
4.1 Rights Agreement dated September 8, 1998, between the Company and
Wachovia Bank, N.A., as Rights Agent (Incorporated herein by reference
from Exhibit 4.1 to the Company's Current Report on Form 8-K dated
September 9, 1998).
4.2 Lowe's Companies, Inc. Directors' Stock Option Plan (filed herewith).
5 Opinion of Hunton & Williams as to the legality of the securities being
registered (filed herewith).
23.1 Consent of Hunton & Williams (included in the opinion filed as
Exhibit 5).
23.2 Consent of Deloitte & Touche LLP (filed herewith).
24 Power of Attorney for Officers and Directors (included on page II-5 of
the Statement).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high and of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in
the maximum aggregate offering
3
<PAGE>
price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change in
such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Stephen A.
Hellrung, Senior Vice President, General Counsel and Secretary of Lowe's
Companies, Inc., and Lathan M. Ewers, Jr., of Hunton & Williams, to sign in the
name of each such person, and to file, any amendment, including any
post-effective amendment, to the registration statement and appoints such
persons, to sign on his behalf individually and in each capacity stated below
and to file all amendments and post-effective amendments to the Registration
Statement and Lowe's Companies, Inc. hereby confers like authority to sign and
file on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the North Wilkesboro, North Carolina, on this 22nd day of
October, 1999.
LOWE'S COMPANIES, INC.
(Registrant)
By /s/ Robert L. Tillman
--------------------------------------------
Robert L. Tillman, Chairman of the Board of
Directors, President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on this 22nd day of October, 1999.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Robert L. Tillman Chairman of the Board of Directors, President, Chief
- -------------------------- Executive Officer and
Robert L. Tillman Director (Principal Executive Officer)
/s/ Thomas E. Whiddon Executive Vice President and Chief Financial Officer
- -------------------------- (Principal Financial Officer)
Thomas E. Whiddon
/s/ Kenneth W. Black, Jr. Vice President and Corporate Controller (Principal
- -------------------------- Accounting Officer)
Kenneth W. Black, Jr.
5
<PAGE>
Director
/s/ Leonard L. Berry
- --------------------------
Leonard L. Berry, Ph.D.
Director
/s/ Peter C. Browning
- --------------------------
Peter C. Browning
Director
/s/ Carol A. Farmer
- --------------------------
Carol A. Farmer
Director
/s/ Paul Fulton
- --------------------------
Paul Fulton
Director
/s/ James F. Halpin
- --------------------------
James F. Halpin
Director
/s/ Richard K. Lochridge
- --------------------------
Richard K. Lochridge
Director
/s/ Claudine B. Malone
- --------------------------
Claudine B. Malone
Director
/s/ Robert G. Schwartz
- --------------------------
Robert G. Schwartz
Director
/s/ Robert L. Strickland
- --------------------------
Robert L. Strickland
</TABLE>
6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
EXHIBITS
FILED WITH
REGISTRATION STATEMENT
ON
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
--------------------
LOWE'S COMPANIES, INC.
DIRECTORS' STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
----------- ----------- -------------
<S> <C> <C>
4.1 Rights Agreement dated September 8,
1998, between the Company and
Wachovia Bank & Trust Co., N.A., as
Rights Agent (Incorporated herein by
reference from Exhibit 4.1 of the
Company's current report on Form 8-K
dated September 9, 1998).
4.2 Lowe's Companies, Inc. Directors' Stock
Option Plan (filed herewith)
5.1 Opinion of Hunton & Williams as to
the legality of the securities being
registered (filed herewith).
23.1 Consent of Hunton & Williams
(included in the opinion filed as
Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP (filed
herewith).
24.1 Power of Attorney for Officers and Directors
(included on page 5 of the Registration
Statement).
</TABLE>
Exhibit 4.2
LOWE'S COMPANIES, INC.
DIRECTORS' STOCK OPTION PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..........................................................1
1.01. Acceleration Date...............................................1
1.02. Agreement.......................................................1
1.03. Award Date......................................................1
1.04. Board...........................................................1
1.05. Change in Control...............................................1
1.06. Code............................................................2
1.07. Common Stock....................................................2
1.08. Company.........................................................2
1.09. Expiration Date.................................................2
1.10. Fair Market Value...............................................2
1.11. Option..........................................................2
1.12. Participant.....................................................2
1.13. Plan............................................................3
1.14. Rights Agreement................................................3
1.15. Vesting Date....................................................3
ARTICLE II PURPOSES............................................................3
ARTICLE III ADMINISTRATION.....................................................3
ARTICLE IV ELIGIBILITY.........................................................4
ARTICLE V STOCK SUBJECT TO PLAN................................................4
5.01. Shares Issued...................................................4
5.02. Aggregate Limit.................................................4
5.03. Reallocation of Shares..........................................4
ARTICLE VI OPTION TERMS........................................................4
6.01. Option Price....................................................4
6.02. Maximum Option Period...........................................4
6.03. Exercise........................................................5
6.04. Merger, Dissolution.............................................6
6.05. Minimum Exercise................................................6
6.06. Nontransferability..............................................7
6.07. Limited Transferability.........................................7
i
<PAGE>
6.08. Status..........................................................7
6.09. Payment.........................................................7
6.10. Shareholder Rights..............................................7
ARTICLE VII INDEMNIFICATION....................................................8
ARTICLE VIII ADJUSTMENT UPON CHANGE IN COMMON STOCK............................8
ARTICLE IX COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES...............9
ARTICLE X GENERAL PROVISIONS...................................................9
10.01. Effect on Service..............................................9
10.02. Unfunded Plan..................................................9
10.03. Rules of Construction.........................................10
ARTICLE XI AMENDMENT..........................................................10
ARTICLE XII DURATION OF PLAN..................................................10
ARTICLE XIII EFFECTIVE DATE OF PLAN...........................................10
ii
<PAGE>
ARTICLE I
DEFINITIONS
1.01. ACCELERATION DATE.
Acceleration Date means the earlier of (i) the date that the Board
approves a transaction or series of transactions which, if consummated, would
result in a Change in Control or (ii) the date that an agreement is entered into
with respect to a transaction or series of transactions which, if consummated,
would result in a Change in Control.
1.02. AGREEMENT.
Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the terms
and conditions of an Option granted to such Participant.
1.03. AWARD DATE.
Award Date means the date of the first Board meeting after each annual
meeting of the Company's shareholders during the term of this Plan.
1.04. BOARD.
Board means the Board of Directors of the Company.
1.05. CHANGE IN CONTROL.
Change in Control means that following a Stock Acquisition Date,
directly or indirectly, (i) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(n) of the Rights Agreement), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) any Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(n) of the Rights Agreement),
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation in such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property, (iii) the
Company shall be a party to a statutory share exchange with any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(n) of the Rights Agreement), after which the Company is a Subsidiary
of any other Person, or (iv) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or
<PAGE>
earning power of the Company and its subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(n) of the Rights
Agreement). For purposes of this Plan, the terms "Stock Acquisition Date,"
"Person," and "Subsidiary" shall have the same meaning as assigned to such terms
in the Rights Agreement.
1.06. CODE.
Code means the Internal Revenue Code of 1986, and any amendments
thereto.
1.07. COMMON STOCK.
Common Stock means the common stock of the Company.
1.08. COMPANY.
Company means Lowe's Companies, Inc.
1.09. EXPIRATION DATE.
Expiration Date means, with respect to an Option granted under this
Plan, the date that is seven years after the date on which such Option was
granted.
1.10. FAIR MARKET VALUE.
Fair Market Value means, on any given date, the closing price of a
share of Common Stock as reported on the New York Stock Exchange composite tape
on such date, or if the Common Stock was not traded on the New York Stock
Exchange on such day, then on the next preceding day that the Common Stock was
traded on such exchange, all as reported by such source as the Board may select.
1.11. OPTION.
Option means a stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
1.12. PARTICIPANT.
Participant means a member of the Board who, on the applicable Award
Date, is not employee or officer of the Company.
1.13. PLAN.
Plan means the Lowe's Companies, Inc. Directors' Stock Option Plan.
2
<PAGE>
1.14. RIGHTS AGREEMENT.
Rights Agreement means the Rights Agreement between the Company and
Wachovia Bank and Trust Company dated as of September 9, 1988.
1.15. VESTING DATE
Vesting Date means May 15.
ARTICLE II
PURPOSES
The Plan is intended (i) to assist the Company in recruiting and
retaining directors and (ii) to provide a greater identity of interest between
Participants and shareholders by enabling Participants to participate in the
future success of the Company. The Plan is intended to permit the grant of
Options. The proceeds received by the Company from the sale of Common Stock
pursuant to this Plan shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Board. The Board shall have
authority to grant Options upon such terms (not inconsistent with the provisions
of this Plan) as the Board may consider appropriate. In addition, the Board
shall have complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the Board shall not be
construed as limiting any power or authority of the Board. Any decision made, or
action taken, by the Board in connection with the administration of this Plan
shall be final and conclusive. No member of the Board shall be liable for any
act done in good faith with respect to this Plan or any Agreement or Option. All
expenses of administering this Plan shall be borne by the Company.
3
<PAGE>
ARTICLE IV
ELIGIBILITY
During the term of this Plan, each Participant will be awarded an
Option for 2,000 shares of Common Stock on each Award Date.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01. SHARES ISSUED.
Upon the exercise of any Option the Company may deliver to the
Participant (or the Participant's broker if the Participant so directs), shares
of Common Stock from its authorized but unissued Common Stock.
5.02. AGGREGATE LIMIT.
The maximum aggregate number of shares of Common Stock that may be
issued under this Plan is 250,000 shares, subject to adjustment as provided in
Article VIII.
5.03. REALLOCATION OF SHARES.
If an Option is terminated, in whole or in part, for any reason other
than its exercise, the number of shares of Common Stock allocated to the Option
or portion thereof may be reallocated to other Options to be granted under this
Plan.
ARTICLE VI
OPTION TERMS
6.01. OPTION PRICE.
The price per share for Common Stock purchased on the exercise of an
Option shall be the Fair Market Value on the date the Option is granted.
6.02. MAXIMUM OPTION PERIOD.
An Option granted under this Plan may not be exercised after the
Expiration Date for such Option.
4
<PAGE>
6.03. EXERCISE.
(a) General. Except as provided in Sections 6.03(b) through (f),
an Option granted under this Plan shall become exercisable with respect to 666
of the shares of Common Stock subject to the Option on each of the first and
second Vesting Dates immediately following the date the Option was granted, and
with respect to the remaining 668 shares of Common Stock subject to the Option
on the third Vesting Date following the date the Option was granted. Once an
Option has become exercisable in accordance with the preceding sentence, it
shall continue to be exercisable until the expiration of Participant's rights
under Sections 6.03(b) through (f). Once an Option has become exercisable it may
be exercised in whole at any time or in part from time to time at such times and
in compliance with such requirements as the Board shall determine. An Option
granted under this Plan may be exercised with respect to any number of whole
shares less than the full number for which the Option could be exercised. A
partial exercise of an Option shall not affect the right to exercise the Option
from time to time in accordance with this Plan and the applicable Agreement with
respect to the remaining shares subject to the Option.
(b) Exercise in the Event of Death. An Option granted under this
Plan shall be exercisable for all or part of the number of shares of Common
Stock that the Participant was entitled to purchase pursuant to Section 6.03(a),
reduced by the number of shares for which the Option was previously exercised,
in the event the Participant dies while a member of the Board and prior to the
Expiration Date and prior to the termination of the Participant's rights under
Section 6.03(d) or (e). In that event the Option or Options may be exercised by
Participant's estate, or the person or persons to whom his rights under the
Option or Options shall pass by will or the laws of descent and distribution.
Participant's estate or such persons may exercise the Option or Options during
the remainder of the period preceding the Expiration Date.
(c) Exercise in the Event of Disability. An Option granted under
this Plan shall be exercisable for all or part of the number of shares of Common
Stock that the Participant was entitled to purchase pursuant to Section 6.03(a),
reduced by the number of shares for which the Option was previously exercised,
if the Participant becomes permanently and totally disabled within the meaning
of section 22(e)(3) of the Code ("Permanently and Totally Disabled") while a
member of the Board and prior to the Expiration Date and prior to the
termination of the Participant's rights under Section 6.03(d) or (e). In that
event, the Participant may exercise the Option or Options during the remainder
of the period preceding the Expiration Date or within one year of the date he
ceases to serve on the Board on account of being Permanently and Totally
Disabled, whichever is shorter.
(d) Exercise After Termination of Service. Except as provided in
Sections 6.03(b), (c), and (e), an Option granted under this Plan shall be
exercisable for all or part of the number of shares that the Participant was
entitled to purchase pursuant to paragraph 6.03(a), reduced by the number of
shares for which the Option
5
<PAGE>
was previously exercised, if the Participant ceases to be a member of the Board
prior to the Expiration Date. In that event the Participant may exercise the
Option or Options during the remainder of the period preceding the Expiration
Date or until the date that is three months after the date he ceases to serve on
the Board, whichever is shorter.
(e) Exercise After Retirement. An Option granted under this Plan
shall be exercisable for all or part of the number of shares that the
Participant was entitled to purchase pursuant to Section 6.03(a), reduced by the
number of shares for which the Option was previously exercised, in the event of
the Participant's Retirement prior to the Expiration Date and prior to the
termination of the Participant's rights under Section 6.03(c) or (d). In that
event the Participant may exercise this Option during the remainder of the
period preceding the Expiration Date. For purposes of this Section 6.03(e), the
term "Retirement" shall mean Participant's voluntary termination of service as a
member of the Board on or after the latest of (i) 90 days after Participant has
provided written notice to the Company's Secretary of his decision to retire,
(ii) Participant's attainment of age 60, and (iii) with respect to a particular
Option, the date that is six months after the Award Date on which such Option
was granted.
(f) Exercise in the Event of an Acceleration Date. Notwithstanding
any other provision of this Article VI, all outstanding Options previously
granted under the Plan shall be exercisable, in whole or in part, on an
Acceleration Date and shall remain exercisable thereafter for the periods
specified in Sections 6.03 (b) through (e), or Section 6.04, as applicable.
6.04. MERGER, DISSOLUTION.
Options previously granted under this Plan shall terminate on the
effective date of the dissolution or liquidation of the Company, or of a
reorganization, merger or consolidation of the Company with one or more
corporations in which the Company is not the surviving corporation, or of a
transfer of substantially all of the property or more than fifty percent of the
then outstanding shares of the Company. The preceding sentence to the contrary
notwithstanding, Options shall not terminate to the extent that written
provision is made for their continuance, assumption, or substitution by a
successor employer or its parent or subsidiary in connection with a transaction
described in the preceding sentence.
6.05. MINIMUM EXERCISE.
An Option granted under this Plan may not be exercised for less than
fifty shares of Common Stock unless it is exercised for the full number of
shares that remain subject to the Option.
6
<PAGE>
6.06. NONTRANSFERABILITY.
Except as provided in Section 6.07, each Option granted under this Plan
shall be nontransferable except by will or by the laws of descent and
distribution. Except as provided in Section 6.07, during the lifetime of the
Participant to whom the Option is granted, the Option may be exercised only by
the Participant. No right or interest of a Participant in any Option shall be
liable for, or subject to, any lien, obligation, or liability of such
Participant.
6.07. LIMITED TRANSFERABILITY.
Section 6.06 to the contrary notwithstanding, an Option may be
transferred by a Participant to the Participant's children, grandchildren,
spouse, one or more trusts for the benefit of such family members or a
partnership in which such family members are the only partners, on such terms
and conditions as may be permitted under Securities Exchange Commission Rule
16b-3 as in effect from time to time. The holder of an Option transferred
pursuant to this section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant;
provided, however, that such transferee may not transfer the Option except by
will or the laws of descent and distribution.
6.08. STATUS.
The Board may decide to what extent leaves of absence for governmental
or military service, illness, temporary disability, or other reasons shall not
be deemed interruptions of continuous service on the Board.
6.09. PAYMENT.
Payment of the Option price may be made in cash or a cash equivalent.
Payment of all or part of the Option price may also be made by surrendering
shares of Common Stock to the Company. If Common Stock is used to pay all or
part of the Option price, the sum of the cash and cash equivalent and the Fair
Market Value (determined as of the day preceding the date of exercise) of the
shares surrendered must not be less than the Option price of the shares for
which the Option is being exercised.
6.10. SHAREHOLDER RIGHTS.
No Participant shall have any rights as a shareholder with respect to
shares subject to his Option until the date of exercise of such Option.
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ARTICLE VII
INDEMNIFICATION
A Participant shall be entitled to a payment under this Article VII if
(i) any benefit, payment, accelerated vesting or other right under this Plan
constitutes a "parachute payment" (as defined in Code Section 280G(b)(2)(A), but
without regard to Code Section 280G(b)(2)(A)(ii)), with respect to such
Participant and (ii) the Participant incurs a liability under Code Section 4999.
The amount payable to a Participant described in the preceding sentence shall be
the amount required to indemnify the Participant and hold him harmless from the
application of Code Sections 280G and 4999. To effect this indemnification, the
Company must pay such Participant an amount sufficient to pay the excise tax
imposed on Participant under Code section 4999 with respect to benefits,
payments, accelerated vesting and other rights under this Plan and any other
plan or agreement and any income, self-employment, hospitalization, excise or
other taxes attributable to the indemnification payment. The benefit payable
under this Article VII shall be paid in a single cash sum not later than twenty
days after the date (or extended filing date) on which the tax return reflecting
liability for the Code Section 4999 excise tax is required to be filed with the
Internal Revenue Service. Notwithstanding the foregoing, to the extent the terms
of any other plan or agreement also require that a Participant be indemnified
and held harmless from the application of Code Sections 280G and 4999, any such
indemnification and the amount required to be paid to a Participant under this
Article VII shall be coordinated so that such indemnification is paid only once,
and the Company's obligation under this Article VII shall be satisfied to the
extent of any such other payment.
ARTICLE VIII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum aggregate number of shares that may be issued under the
Plan, and the number of shares as to which Options may be granted under this
Plan as of the applicable Award Date, and the terms of outstanding Options shall
be adjusted as the Board shall determine to be equitably required in the event
that (a) the Company (i) effects one or more stock dividends, stock split-ups,
subdivisions or consolidations of shares or (ii) engages in a transaction to
which Section 424 of the Code applies or (b) there occurs any other event which,
in the judgment of the Board necessitates such action. Any determination made
under this Article VIII by the Board shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to
8
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subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number
of shares as to which Options may be granted or the terms of outstanding
Options.
ARTICLE IX
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, and no
certificates for shares of Common Stock shall be delivered under this Plan
except in compliance with all applicable federal and state laws and regulations
(including, without limitation, withholding tax requirements), any listing
agreement to which the Company is a party, and the rules of all domestic stock
exchanges on which the Company's shares may be listed. The Company shall have
the right to rely on an opinion of its counsel as to such compliance. Any share
certificate issued to evidence Common Stock when an Option is exercised may bear
such legends and statements as the Board may deem advisable to assure compliance
with federal and state laws and regulations. No Option shall be exercisable, no
Common Stock shall be issued, and no certificate for shares shall be delivered
under this Plan until the Company has obtained such consent or approval as the
Board may deem advisable from regulatory bodies having jurisdiction over such
matters.
ARTICLE X
GENERAL PROVISIONS
10.01. EFFECT ON SERVICE.
Neither the adoption of this Plan, its operation, nor any documents
describing or referring to this Plan (or any part thereof), shall confer upon
any individual any right to continue in the service of the Company or in any way
affect any right and power of the Company to terminate the service of any
individual at any time with or without assigning a reason therefor.
10.02. UNFUNDED PLAN.
The Plan, insofar as it provides for grants, shall be unfunded, and the
Company shall not be required to segregate any assets that may at any time be
represented by grants under this Plan. Any liability of the Company to any
person with respect to any grant under this Plan shall be based solely upon any
contractual obligations that may be created pursuant to this Plan. No such
obligation of the
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Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.
10.03. RULES OF CONSTRUCTION.
Headings are given to the articles and sections of this Plan solely as
a convenience to facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any amendment to or
successor of such provision of law.
ARTICLE XI
AMENDMENT
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Common
Stock that may be issued under the Plan (other than an adjustment pursuant to
Article VIII) or (ii) the amendment changes the class of individuals eligible to
become Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Option outstanding at
the time such amendment is made.
ARTICLE XII
DURATION OF PLAN
No Option may be granted under this Plan after the Award Date in 2008.
Options granted before that date shall remain valid in accordance with their
terms.
ARTICLE XIII
EFFECTIVE DATE OF PLAN
Options may be granted under this Plan upon its adoption by the Board,
provided that no Option shall be effective or exercisable unless this Plan is
approved by a majority of the votes cast by the Company's shareholders, voting
either in person or by proxy, at a duly held shareholders' meeting at which a
quorum is present.
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Exhibit 5.1
[LETTERHEAD OF HUNTON & WILLIAMS]
October 21, 1999
Board of Directors
Lowe's Companies, Inc.
1605 Curtis Bridge Road
Wilkesboro, NC 28697
Registration Statement on Form S-8
Relating to Lowe's Companies, Inc. Directors' Stock Option Plan
---------------------------------------------------------------
Ladies and Gentlemen:
We are acting as counsel for Lowe's Companies, Inc. (the "Company") in
connection with the registration under the Securities Act of 1933 of 250,000
shares of its common stock (the "Common Stock"). The Common Stock is to be
issued by the Company to participants in the Lowe's Companies, Inc. Directors'
Stock Option Plan (the "Plan") when such participants exercise their options to
purchase common stock under the Plan. The shares of common stock to be issued
under the Plan are being registered by the Company in a Registration Statement
on Form S-8 (the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission"). In connection with the filing of the
Registration Statement, you have requested our opinion concerning certain
corporate matters.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
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.
<PAGE>
October 21, 1999
Page 2
2. The common stock has been duly authorized and, when the shares
have been issued as described in the Registration Statement, will
be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
----------------------
Hunton & Williams
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Lowe's Companies, Inc., on Form S-8 of our report dated February 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.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
October 21, 1999
