As filed with the Securities and Exchange Commission on April 6, 1999
Registration Statement No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
LOWE'S COMPANIES, INC.
(Exact name of Registrant as specified in its Charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
P. O. Box 1111
North Wilkesboro, North Carolina 28656-0001
(Address of principal executive office, including zip code)
LOWE'S /EAGLE
STOCK OPTION PLAN
(Full title of the Plan)
____________________
Robert L. Tillman
Chairman of the Board, President and Chief Executive Officer
Lowe's Companies, Inc.
P. O. Box 1111
North Wilkesboro, North Carolina 28656-0001
336-658-4000
(Name, address and telephone number including, area code, of agent for
service)
With copies to:
Lathan M. Ewers, Jr. Robert L. Tillman
Hunton & Williams Chairman of the Board, President and
Riverfront Plaza, East Tower Chief Executive Officer
951 East Byrd Street Lowe's Companies, Inc.
Richmond, Virginia 23219-4074 P. O. Box 1111
804-788-8200 North Wilkesboro, North Carolina 28656-0001
336-658-4000
<TABLE>
CALCULATION OF REGISTRATION FEE
<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>
Common Stock, $.50 par value 1,000,000 shares(1) $62.09375(2) $62,093,750(2) $17,262.06
Preferred Share Purchase Rights(3) 1,000,000 rights N/A N/A N/A
(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 $62.09375 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 April 1, 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.
</TABLE>
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 30, 1998; (ii) the Company's Quarterly Report on
Form 10-Q for the quarters ended October 30, 1998, July 31, 1998, and May 1,
1998; (iii) the Company's reports on Form 8-K filed April 5, 1999, February
22, 1999, November 25, 1998, October 9, 1998 and February 20, 1998; and
(iv) the description of the Company's Common Stock (the "Common Stock")
contained in the Company's registration statement on Form 8-A filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
any amendment or report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of the Prospectus and prior to the
filing of a post-effective amendment that indicates that all securities
offered have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in the Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that is
incorporated by reference herein modifies or supersedes such earlier
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article IV of the Company's Bylaws provides that the Company will
indemnify any person as an officer or director of the Company or as an
officer, director, trustee or partner of another corporation, trust,
partnership or employee benefit plan at the request of the Company, against
any liability incurred in connection with any proceeding arising out of such
service. To the extent that such person is successful on the merits or
otherwise in defense of any such proceeding, the Company will indemnify him
against expenses actually and reasonably incurred in such defense. No
indemnification is available if, at the time of the activities which are the
subject of the proceeding, such person knew or believed that such activities
were clearly in conflict with the best interests of the Company. Further,
Section 55-8-51 of the North Carolina Business Corporation Act provides that a
corporation may not indemnify a director in connection with a proceeding by or
in the right of the corporation in which such director was adjudged liable to
the corporation or in connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which is adjudged liable on the basis that personal benefit was
improperly received by him.
The Company maintains an insurance policy for the benefit of directors
and officers insuring them against claims that are made against them by reason
of any wrongful act (as defined) committed in their capacity as directors or
officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No.
4.1 Shareholder Rights Agreement (Incorporated herein by reference to
Exhibit 4.1 of the Company's Report on Form 8-K filed October 9, 1998).
4.2 Lowe's/Eagle Stock Option Plan.
5.1 Opinion of Hunton & Williams as to the legality of the securities being
registered.
15.1 Letter from Deloitte & Touche LLP regarding unaudited interim financial
information.
23.1 Consent of Hunton & Williams (included in the opinion filed as Exhibit
5.1 to the Registration Statement).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney for Officers and Directors (included on page II-5 of
the Registration Statement).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if,in the
aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum
aggregate offering price set forth in the"Calculation
of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change in
such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Robert L.
Tillman, Chairman, President and Chief Executive Officer, Lowe's Companies,
Inc. P. O. Box 1111, North Wilkesboro, North Carolina 28656-0001, and Lathan
M. Ewers, Jr., Esq., Hunton & Williams, Riverfront Plaza, East Tower, 951 East
Byrd Street, Richmond, Virginia 23219-4074, to sign in the name of each such
person, and to file, any amendment, including any post-effective amendment, to
the registration statement and appoints such persons, to sign on his behalf
individually and in each capacity stated below and to file all amendments and
post-effective amendments to the Registration Statement and Lowe's Companies,
Inc. hereby confers like authority to sign and file on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of North Wilkesboro, North Carolina, on this 2nd day
of April, 1999.
LOWE'S COMPANIES, INC.
(Registrant)
By: /s/Robert L. Tillman
Robert L. Tillman, Chairman, 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 2nd day of April, 1999.
Signature Title
By: /s/ Robert L. Tillman Chairman, President, Chief Executive
Robert L. Tillman Officer and Director (Principal
Executive Officer)
By: /s/ Thomas E. Whiddon Executive Vice President and Chief
Thomas E. Whiddon Financial Officer (Principal
Financial Officer)
By: /s/ Kenneth W. Black, Jr. Vice President and Corporate
Kenneth W. Black, Jr. Controller
(Principal Accounting Officer)
By: Director
Leonard G. Herring
By: /s/ Robert L. Strickland Director
Robert L. Strickland
By: /s/ William A. Andres Director
William A. Andres
By: /s/ John M. Belk Director
John M. Belk
By: /s/ Carol A. Farmer Director
Carol A. Farmer
By: /s/ Robert G. Schwartz Director
Robert G. Schwartz
By: /s/ Paul Fulton Director
Paul Fulton
By: /s/ James F. Halpin Director
James F. Halpin
By: /s/ Claudine B. Malone Director
Claudine B. Malone
By: /s/ Leonard L. Berry, Ph. D. Director
Leonard L. Berry, Ph. D.
By: /s/ Peter C. Browning Director
Peter C. Browning
By: /s/ Richard K. Lochridge Director
Richard K. Lochridge
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
EXHIBITS
filed with
REGISTRATION STATEMENT
on
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
____________________
LOWE'S/EAGLE
STOCK OPTION PLAN
(full title of the plan)
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
4.1 Shareholder Rights Agreement
(Incorporated herein by reference
from Exhibit 4.1 of the Company's
report on Form 8-K filed October 9,
1998)
4.2 Lowe's/Eagle Stock Option Plan.
5.1 Opinion of Hunton & Williams as to
the legality of the securities being
registered.
15.1 Letter from Deloitte & Touche LLP
regarding unaudited interim financial
information.
23.1 Consent of Hunton & Williams (included
in the opinion filed as Exhibit 5.1 to
the Registration Statement).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney for Officers and Directors
(included on page II-5 of the Registration
Statement).
Exhibit 4.2
LOWE'S COMPANIES, INC.
LOWE'S/EAGLE STOCK OPTION PLAN
Introduction
Effective April 2, 1999 (the "Effective Date"), Eagle Hardware & Garden,
Inc. ("Eagle") merged with and into Lowe's Companies, Inc. ("Lowe's" or the
"Company"). Options to purchase common stock of Eagle ("Eagle Options") were
granted prior to the Effective Date pursuant to the terms of the Eagle
Hardware & Garden, Inc. 1991 Stock Option Plan. On the Effective Date, the
Eagle Options were converted to options to purchase common stock of Lowe's
("Lowe's Options"). The Lowe's Options are governed by the terms of this
Lowe's/Eagle Stock Option Plan (the "Plan").
The number of shares covered by a Lowe's Option is equal to the number of
shares covered by the converted Eagle Option multiplied by .6400, rounded down
to the nearest whole share. The option price per share under a Lowe's Option
is equal to the option price under the converted Eagle Option divided by
.6400, rounded up to the nearest cent. Additionally, all Lowe's Options
resulting from Eagle Options granted prior to November 22, 1998 are fully
vested and exercisable and will remain exercisable for the remainder of their
ten-year term, regardless of a participant's employment status with Eagle
and/or Lowe's. Lowe's Options resulting from Eagle Options granted after
November 22, 1998, will vest and become exercisable according to the schedule
that was originally established when such Eagle Options were granted. The
remaining terms of the Lowe's Options will be the same as the terms of the
converted Eagle Options.
No options shall be granted under this Plan other than the Lowe's Options
granted on the Effective Date. Only holders of Eagle Options converted to
Lowe's Options on the Effective Date may participate under this Plan. The
maximum aggregate number of shares of Lowe's common stock ("Common Stock")
that may be issued under the Plan is one million (1,000,000) shares.
The Plan is unfunded, and Lowe's will not be required to segregate any
assets that may be represented by grants under the Plan. Any liability of
Lowe's to any person with respect to any grant under the Plan will be based
solely upon any contractual obligations that may be created pursuant to the
Plan. No such obligation of Lowe's will be secured by any pledge of, or other
encumbrance on, any property of Lowe's.
Any reference in this Plan to Eagle shall be interpreted as a reference
to Lowe's. Any reference to the common stock of Eagle shall be interpreted
as a reference to the common stock of Lowe's. This Introduction supersedes
any provision of this Plan that conflicts with this Introduction.
Stock options granted under this Plan that qualify under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), are referred to
in this Plan as "Incentive Stock Options." Incentive Stock Options and stock
options that do not qualify under Section 422 of the Code ("Non-Qualified
Stock Options") granted under this Plan are referred to as "Options." This
Plan shall be effective April 2, 1999.
1. PURPOSES.
The purposes of this Plan are to retain the services of valued key
employees and consultants of the Company, and such other persons as the Plan
Administrator shall select in accordance with Section 3 below, to encourage
such persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of new
employees, consultants and other persons selected by the Plan Administrator.
2. ADMINISTRATION.
This Plan shall be administered by the Board of Directors of the Company
(the "Board"), except that the Board may, in its discretion, establish a
committee composed of members of the Board or other persons to administer this
Plan, which committee (the "Committee") may be an executive, compensation or
other committee, including a separate committee especially created for this
purpose. The Committee shall have such of the powers and authority vested in
the Board hereunder as the Board may delegate to it (including the power and
authority to interpret any provision of this Plan or of any Option). The
members of any such Committee shall serve at the discretion of the Board. The
Board, and/or the Committee if one has been established by the Board, are
referred to in this Plan as the "Plan Administrator." Following registration
of any of the Company's securities under Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), no person shall serve as a
member of the Plan Administrator if his or her service would disqualify this
Plan from eligibility under Securities and Exchange Commission Rule 16b-3, as
amended from time to time, or any successor rule or regulatory requirements;
provided, that the Plan Administrator shall consist of at least the minimum
number of persons required by Securities and Exchange Commission Rule 16b-3,
as amended, or any successor rule or regulatory requirements.
Subject to the provisions of this Plan, and with a view to effecting its
purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (a) construe and interpret this Plan; (b) define the terms used
in this Plan; (c) prescribe, amend and rescind rules and regulations relating
to this Plan; (d) correct any defect, supply any omission or reconcile any
inconsistency in this Plan; (e) determine the individuals to whom Options
shall be granted under this Plan and whether the Option is an Incentive Stock
Option or a Non-Qualified Stock Option; (f) determine the time or times at
which Options shall be granted under this Plan; (g) determine the number of
shares of Common Stock subject to each Option, the exercise price of each
Option, the duration of each Option and the times at which each Option shall
become exercisable; (h) determine all other terms and conditions of Options;
and (i) make all other determinations necessary or advisable for the
administration of this Plan. All decisions, determinations and
interpretations made by the Plan Administrator shall be binding and conclusive
on all participants in this Plan and on their legal representatives, heirs and
beneficiaries.
3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual who, at the time
the Option is granted, is an employee of the Company or any Related
Corporation (as defined below), including employees who are directors of the
Company ("Employees"). Non-Qualified Stock Options may be granted to
Employees and to such other persons other than directors who are not Employees
as the Plan Administrator shall select. Options may be granted in
substitution for outstanding Options of another corporation in connection with
the merger, consolidation, acquisition of property or stock or other
reorganization between such other corporation and the Company or any
subsidiary of the Company. Options also may be granted in exchange for
outstanding Options. Any person to whom an Option is granted under this Plan
is referred to as an "Optionee."
As used in this Plan, the term "Related Corporation," when referring to a
subsidiary corporation, shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "Related Corporation" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time
of granting of the Option, each of the corporations other than the Company
owns stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock of one of the other corporations in such chain.
4. STOCK.
Subject to approval of the Plan by shareholders of the Company, options
to purchase a maximum of 700,000 shares of the Company's authorized but
unissued, or required, common stock may be issued pursuant to the Plan less
any shares issuable upon the exercise of Options granted pursuant to the
Company's Directors' Nonqualified Stock Option Plan; provided, that any shares
of Common Stock received or withheld by the Company as payment for shares of
Common Stock purchased upon exercise of Options pursuant to Section 5(i) below
shall be added to the number of such shares as to which Options may be
granted. The number of shares with respect to which Options may be granted
hereunder is subject to adjustment as set forth in Section 5(m) below. In the
event that any outstanding Option expires or is terminated for any reason, the
shares of Common Stock allocable to the unexercised portion of such Option may
again be subject to an Option to the same Optionee or to a different person
eligible under Section 3 of this Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements
may contain such additional provisions, not inconsistent with this Plan, as
the Plan Administrator in its discretion may deem advisable. All Options also
shall comply with the following requirements:
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common Stock to which
it pertains and whether the Option is intended to be an Incentive Stock Option
or a Non-Qualified Stock Option. In the absence of action to the contrary by
the Plan Administrator in connection with the grant of an Option, all Options
shall be Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (granted under this Plan and all other
Incentive Stock Option plans of the Company, a Related Corporation or a
predecessor corporation) shall not exceed $100,000, or such other limit as may
be prescribed by the Code as it may be amended from time to time. Any Option
which exceeds the annual limit shall not be void but rather shall be a Non-
Qualified Stock Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan Administrator has deemed to
be the effective date of the Option for purposes of this Plan (the "Date of
Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common Stock at which
it is exercisable. The exercise price shall be fixed by the Plan
Administrator at whatever price the Plan Administrator may determine in the
exercise of its sole discretion; provided, that the per share exercise price
for any Option granted following the effective date of registration of any of
the Company's securities under Section 12 of the Securities Exchange Act of
1934 shall not be less than the fair market value per share of the Common
Stock at the Date of Grant as determined by the Plan Administrator in good
faith; provided further, that the per share exercise price for an Incentive
Stock Option shall not be less than the fair market value per share of the
Common Stock at the Date of Grant as determined by the Plan Administrator in
good faith; provided further, that with respect to Incentive Stock Options
granted to greater-than-ten percent (?10%) shareholders of the Company (as
determined with reference to Section 424(d) of the Code), the exercise price
per share shall not be less than one hundred ten percent (110%) of the fair
market value per share of the Common Stock at the Date of Grant; and,
provided, further, that Incentive Stock Options granted in substitution for
outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization,
involving such other corporation and the Company or any subsidiary of the
Company may be granted with an exercise price equal to the exercise price for
the substituted Option of the other corporation, subject to any adjustment
consistent with the terms of the transaction pursuant to which the
substitution is to occur.
(d) Duration of Options.
At the time of the grant of the Option, the Plan Administrator shall
designate, subject to the paragraph 5(g) below, the expiration date of the
Option, which date shall not be later than ten (10) years from the Date of
Grant in the case of Incentive Stock Options; provided, that the expiration
date of any Incentive Stock Option granted to a greater-than-ten percent
(?10%) shareholder of the Company (as determined with reference to
Section 424(d) of the Code) shall not be later than five (5) years from the
Date of Grant. In the absence of action to the contrary by the Plan
Administrator in connection with the grant of a particular Option, and except
in the case of Incentive Stock Options as described above, all Options granted
under this Plan shall expire ten (10) years from the Date of Grant.
(e) Vesting Schedule.
No Option shall be exercisable until it has vested. The vesting schedule
for each Option shall be specified by the Plan Administrator at the time of
grant of the Option; provided, that if no vesting schedule is specified at the
time of grant, the Option shall vest according to the following schedule:
Percentage of
Number of Years Total Option to
Following Date of Grant be Exercisable
1 20%
2 40%
3 60%
4 80%
5 100%
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be accelerated by the
Plan Administrator at such times and in such amounts as it shall determine in
its sole discretion. If an Employee Optionee's employment terminates by
reason of death or Disability (as defined in Section 5(g) below), any Option
held by such Employee Optionee who has been Continuously Employed by the
Company or Related Corporation for a minimum of two (2) years shall become
fully vested and exercisable and may thereafter be exercised during the term
of the Option set forth in Section 5(g) below. "Continuously Employed" shall
mean the absence of any interruption or termination of service. Continuous
Employment with the Company or Related Corporation shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Company or Related Corporation or in the case of
transfers between locations of the Company or between the Company, Related
Corporations or their successors, provided that the Optionee continues to be
an employee of the Company or any Related Corporation. The vesting of Options
also shall be accelerated under the circumstances described in Sections 5(m)
and 5(n) below.
(g) Term of Option.
Vested Options shall terminate, to the extent not previously exercised,
upon the occurrence of the first of the following events: (i) the expiration
of the Option, as designated by the Plan Administrator in accordance with
Section 5(d) above; (ii) the expiration of ninety (90) days from the date of
an Optionee's termination of employment or contractual relationship with the
Company or any Related Corporation for any reason whatsoever other than death
or Disability (as defined below) unless, in the case of a Non-Qualified Stock
Option, the exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iii) the expiration of
one (1) year from (A) the date of death of the Optionee or (B) cessation of an
Optionee's employment or contractual relationship by reason of Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option, the
exercise period is extended by the Plan Administrator until a date not later
than the expiration date of the Option. If an Optionee's employment or
contractual relationship is terminated by death, any Option held by the
Optionee shall be exercisable only by the person or persons to whom such
Optionee's rights under such Option shall pass by the Optionee's will or by
the laws of descent and distribution of the state or county of the Optionee's
domicile at the time of death. "Disability" shall mean that a person is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. The Plan Administrator shall
determine whether an Optionee has incurred a Disability on the basis of
medical evidence acceptable to the Plan Administrator. Upon making a
determination of Disability, the Committee shall, for purposes of the Plan,
determine the date of an Optionee's termination of employment or contractual
relationship.
Unless accelerated in accordance with Section 5(f) above, unvested
Options shall terminate immediately upon termination of employment of the
Optionee by the Company for any reason whatsoever, including death or
Disability.
If, in the case of an Incentive Stock Option, an Optionee's relationship
with the Company changes (e.g., from an Employee to a non-Employee, such as a
consultant), such change shall not constitute a termination of an Optionee's
employment with the Company but rather the Optionee's Incentive Stock Option.
For purposes of this subsection 5(g), transfer of employment between or among
the Company and/or any Related Corporation shall not be deemed to constitute a
termination of employment with the Company or any Related Corporation. For
purposes of this subsection 5(g), employment shall be deemed to continue while
the Optionee is on military leave, sick leave or other bona fide leave of
absence (as determined by the Plan Administrator). The foregoing
notwithstanding, with respect to Incentive Stock Options, employment shall not
be deemed to continue beyond the first ninety (90) days of such leave, unless
the Optionee's re-employment rights are guaranteed by statute or by contract.
(h) Exercise of Options.
Options shall be exercisable, either all or in part, at any time after
vesting, until termination; provided, that after registration of any of the
Company's securities under Section 12 of the Exchange Act, Optionee must
comply with the six (6) month holding period requirements of Section 16(b) of
the Exchange Act and Rule 16b-3 thereunder. If less than all of the shares
included in the vested portion of any Option are purchased, the remainder may
be purchased at any subsequent time prior to the expiration of the Option
term. No portion of any Option for less than fifty (50) shares (as adjusted
pursuant to Section 5(m) below) may be exercised; provided, that if the vested
portion of any Option is less than fifty (50) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares may be issued
pursuant to an Option, and to the extent that an Option covers less than one
share, it is unexercisable. Options or portions thereof may be exercised
by giving to the Company an executed notice of election to exercise, which
notice shall specify the number of shares to be purchased, and be
accompanied by payment in the amount of the aggregate exercise price for
the Common Stock so purchased, which payment shall be in the form
specified in Section 5(i) below. The Company shall not be obligated to
issue, transfer or deliver a certificate of Common Stock to any Optionee,
or to his personal representative, until the aggregate exercise price has been
paid for all shares for which the Option shall have been exercised and
adequate provision has been made by the Optionee for satisfaction of any tax
withholding obligations associated with such exercise. During the lifetime of
an Optionee, Options are exercisable only by the Optionee.
(i) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise price shall be
paid to the Company in cash or by certified or cashier's check. In addition,
upon approval of the Plan Administrator, an Optionee may pay for all or any
portion of the aggregate exercise price by (i) delivering to the Company
shares of Common Stock previously held by such Optionee, (ii) having shares
withheld from the amount of shares of Common Stock to be received by the
Optionee, (iii) delivering an irrevocable subscription agreement obligating
the Optionee to take and pay for the shares of Common Stock to be purchased
within one (1) year of the date of such exercise or (iv) complying with any
other payment mechanisms as the Plan Administrator may approve from time to
time. The shares of Common Stock received or withheld by the Company as
payment for shares of Common Stock purchased upon the exercise of Options
shall have a fair market value at the date of exercise (as determined by the
Plan Administrator) equal to the aggregate exercise price (or portion thereof)
to be paid by the Optionee upon such exercise.
(j) Rights as a Shareholder.
An Optionee shall have no rights as a shareholder with respect to any
shares covered by an Option until such Optionee becomes a record holder of
such shares, irrespective of whether such Optionee has given notice of
exercise. Subject to the provisions of Sections 5(m) and 5(n) hereof, no
rights shall accrue to an Optionee and no adjustments shall be made on account
of dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights declared on, or created in, the
Common Stock for which the record date is prior to the date the Optionee
becomes a record holder of the shares of Common Stock covered by the Option,
irrespective of whether such Optionee has given notice of exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and privileges conferred
by this Plan may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by
applicable laws of descent and distribution, as defined by the Code, or the
Employee Retirement Income Security Act, or the rules and regulations
thereunder, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any Option or of any right or privilege conferred by this
Plan contrary to the provisions hereof, or upon the sale, levy or any
attachment or similar process upon the rights and privileges conferred by this
Plan, such Option shall thereupon terminate and become null and void.
(l) Securities Regulations and Tax Withholding.
(1) Shares shall not be issued with respect to an Option unless
the exercise of such Option and the issuance and delivery of such shares shall
comply with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Exchange Act, as amended, the rules and regulations thereunder and the
requirements of any stock exchange upon which such shares may then be listed,
and such issuance shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of such shares. The
inability of the Company to obtain from any regulatory body the authority
deemed by the Company to be necessary for the lawful issuance and sale of any
shares under this Plan, or the unavailability of an exemption from
registration for the issuance and sale of any shares under this Plan, shall
relieve the Company of any liability with respect to the non-issuance or sale
of such shares.
As a condition to the exercise of an Option, the Plan Administrator
may require the Optionee to represent and warrant in writing at the time of
such exercise that the shares are being purchased only for investment and
without any then-present intention to sell or distribute such shares. At the
option of the Plan Administrator, a stop-transfer order against such shares
may be placed on the stock books and records of the Company, and a legend
indicating that the stock may not be pledged, sold or otherwise transferred
unless an opinion of counsel is provided stating that such transfer is not in
violation of any applicable law or regulation, may be stamped on the
certificates representing such shares in order to assure an exemption from
registration. The Plan Administrator also may require such other
documentation as may from time to time be necessary to comply with federal and
state securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE
REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF
OPTIONS.
(2) As a condition to the exercise of any Option granted under
this Plan, the Optionee shall make such arrangements as the Plan Administrator
may require for the satisfaction of any federal, state or local withholding
tax obligations that may arise in connection with such exercise.
(3) The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Plan Administrator, until the Plan Administrator is
satisfied that the applicable requirements of the federal and state
securities laws and the withholding provisions of the Code have been met.
(m) Stock Dividend, Reorganization or Liquidation.
(1) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor
provision) or any "corporate transaction" described in the regulations
thereunder; (ii) the Company shall declare a dividend payable in, or shall
subdivide or combine, its Common Stock or (iii) any other event with
substantially the same effect shall occur, the Plan Administrator shall, with
respect to each outstanding Option, proportionately adjust the number of
shares of Common Stock and/or the exercise price per share so as to preserve
the rights of the Optionee substantially proportionate to the rights of the
Optionee prior to such event, and to the extent that such action shall include
an increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4 above
shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Plan Administrator,
the Company or the Company's shareholders.
(2) If the Company is liquidated or dissolved, the Plan
Administrator shall allow the holders of any outstanding Options to exercise
all or any part of the unvested portion of the Options held by them; provided,
that such Options must be exercised prior to the effective date of such
liquidation or dissolution. If the Option holders do not exercise their
Options prior to such effective date, each outstanding Option shall terminate
as of the effective date of the liquidation or dissolution.
(3) The foregoing adjustments in the shares subject to Options
shall be made by the Plan Administrator, or by any successor administrator of
this Plan, or by the applicable terms of any assumption or substitution
document.
(4) The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part
of its business or assets.
(n) Change in Control; Declaration of Extraordinary Dividend.
(1) Change in Control. If at any time there is a Change in
Control (as defined below) of the Company, all Options shall accelerate and
Become fully vested and immediately exercisable for the duration of the Option
term. For purposes of this subsection (n)(1), "Change in Control" shall mean
either one of the following: (i) When any "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act (other than a shareholder of the
Company on the date of this Plan, the Company, a Subsidiary or an employee
benefit plan of the Company, including any trustee of such plan acting as
trustee) becomes, after the date of this Plan, the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities; or (ii)
the occurrence of a transaction requiring shareholder approval, and involving
the sale of all or substantially all of the assets of the Company or the
merger of the Company with or into another corporation.
(2) Declaration of Extraordinary Dividend. If at any time the
Company declares an Extraordinary Dividend (as defined below), all Options
Shall accelerate and thereupon become fully vested and immediately exercisable
For the duration of the Option term. For purposes of this subsection (n)(2),
"Extraordinary Dividend" shall mean a cash dividend payable to holders of
record of the Common Stock in an amount in excess of ten percent (10%) of the
then fair market value of the Company's Common Stock. The fair market value
of the Company's Common Stock shall be determined in good faith by the Board
6. EFFECTIVE DATE; TERM.
This Plan shall be effective as of April 2, 1999. Incentive Stock
Options may be granted by the Plan Administrator from time to time thereafter
until ten (10) years after such approval. Non-Qualified Stock Options may be
granted until this Plan is terminated by the Board in its sole discretion.
Termination of this Plan shall not terminate any Option granted prior to
such termination.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the
Optionee to exercise such Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.
The grant of any Options under this Plan shall be exclusively within
the discretion of the Plan Administrator, and nothing contained in this Plan
shall be construed as giving any person any right to participate under this
Plan. The Plan shall not confer on any Optionee any right with respect to
continuation of any employment or contractual relationship with the Company or
any Related Corporation, nor shall it interfere in any way with the Company's
or, where applicable, a Related Corporation's right to terminate any
Optionee's employment or contractual relationship at any time, which right is
hereby reserved.
9. APPLICATION OF FUNDS.
The proceeds received by the Company from sale of Common Stock issued
upon the exercise of Options shall be used for general corporate purposes,
unless otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified
by the Company for all reasonable expenses and liabilities of any type or
nature, including reasonable attorneys' fees, incurred in connection with any
action, suit or proceeding to which they or any of them are a party by reason
of, or in connection with, this Plan or any Option granted under this Plan,
and against all amounts paid by them in settlement thereof (provided that such
settlement is approved by independent legal counsel selected by the Company),
except to the extent that such expenses relate to matters for which it is
adjudged that such Plan Administrator member is liable for willful misconduct;
provided, that within fifteen (15) days after the institution of any such
action, suit or proceeding, the Plan Administrator member involved therein
shall, in writing, notify the Company of such action, suit or proceeding, so
that the Company may have the opportunity to make appropriate arrangements to
prosecute or defend the same.
11. AMENDMENT OF PLAN.
The Plan Administrator may, at any time, modify, amend or terminate this
Plan and Options granted under this Plan, including, without limitation, such
modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; provided, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof; and provided further, that, following registration of any of
the Company's securities under Section 12 of the Exchange Act, the approval of
the holders of a majority of the Company's outstanding shares of voting
capital stock represented at a meeting at which a quorum is present is
required within twelve (12) months before or after the adoption by the Plan
Administrator of any amendment that will permit the granting of Options to a
class of persons other than those currently eligible to receive Options under
this Plan or that would cause this Plan to no longer comply with Securities
and Exchange Commission Rule 16b-3, as amended, or any successor rule or other
regulatory requirements. Without limiting the generality of the foregoing,
the Plan Administrator may modify grants to persons who are eligible to
receive Options under this Plan who are foreign nationals or employed outside
the United States to recognize differences in local law, tax policy or custom.
(continued . . .)
(continued . . .)
12
Exhibit 5.1
[LETTERHEAD OF HUNTON & WILLIAMS]
April 6, 1999
Board of Directors
Lowe's Companies, Inc.
Highway 268 East
North Wilkesboro, North Carolina 28659
Re: Registration Statement on Form S-8
Relating to Lowe's/Eagle 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 1,000,000
shares of its common stock (the "Common Stock"). The Common Stock is to be
issued by the Company to participants in the Lowe's/Eagle 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.
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 hereby 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
(continued . . .)
(continued . . .)
Exhibit 15.1
April 5, 1999
Lowe's Companies, Inc.
North Wilkesboro, North Carolina
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 May 1, 1998 and May 2, 1997 as indicated in our report dated May
12, 1998; July 31, 1998 and August 1, 1997 as indicated in our report dated
August 11, 1998; and October 30, 1998 and October 31, 1997 as indicated in our
report dated November 10, 1998; 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 May 1, 1998, July 31,
1998, and October 30, 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
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
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, 1998,
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 30, 1998.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
April 5, 1999
