<PAGE>
As filed with the Securities and Exchange Commission on April 11, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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Lowe's Companies, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 56-0578072
(I.R.S. Employer Identification No.)
(State or other jurisdiction of
incorporation)
P.O. Box 1111
North Wilkesboro, North Carolina 28656
(336) 658-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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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, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Lathan M. Ewers, Jr.
Randall S. Parks
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
(804) 788-8200
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Proposed
Title of each class of Amount maximum maximum Amount of
securities to be to be offering price aggregate offering registration
registered(1) registered(2)(3) per unit(3)(4) price(2)(3)(4)(5) fee(6)
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<S> <C> <C> <C> <C>
Debt securities,
preferred stock (par
value $5.00 per
share), depositary
shares,(7) common
stock (par value $.50
per share), preferred
share purchase
rights(8)
and warrants......... -- -- $1,000,000,000 $264,000
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</TABLE>
(1) This registration statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or
exercise of, as the case may be, the securities registered hereunder and
delayed delivery contracts that may be issued by the registrant under
which the counterparty may be required to purchase debt securities,
preferred stock, depositary shares, preferred share purchase rights,
common stock or warrants. In addition, any of the securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(2) If any debt securities are issued at an original issue discount, then a
greater principal amount shall be issued to result in an aggregate initial
offering price of $1,000,000,000. In no event will the aggregate initial
offering price of debt securities, preferred stock, depositary shares,
preferred share purchase rights, common stock and warrants issued under
this registration statement and not previously registered under the
Securities Act of 1933 exceed $1,000,000,000.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act.
(4) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with, and at the time of, the
issuance by the registrant of the securities registered hereunder.
(5) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion or exercise
of, other securities registered hereunder.
(6) Calculated pursuant to Rule 457(o) of the Rules and Regulations of the
Securities and Exchange Commission under the Securities Act.
(7) Such indeterminate number of depositary shares to be evidenced by
depositary receipts issued pursuant to a deposit agreement. In the event
the registrant elects to offer to the public fractional interests in
shares of the preferred stock registered hereunder, depositary receipts
will be distributed to those persons purchasing the fractional interests,
and the shares will be issued to the depositary bank under the deposit
agreement.
(8) The rights to purchase Participating Cumulative Preferred Stock, Series A,
will be attached to and trade with shares of the common stock.
----------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that the registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act, or until the registration statement shall become effective
on such date as the SEC, acting pursuant to said Section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED , 2000
PROSPECTUS
[Lowe's Logo]
Lowe's Companies, Inc.
$1,000,000,000
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Warrants
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We will provide specific terms of these securities, and the manner in which
they are being offered, in supplements to this prospectus. You should read this
prospectus and any supplement carefully before you invest. We cannot sell any
of these securities unless this prospectus is accompanied by a prospectus
supplement.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
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The information in this prospectus is not complete and may change. We cannot
sell these securities until the registration statement filed with the SEC is
effective. This prospectus is not an offer to sell these securities, and it is
not soliciting an offer to buy these securities, in any state where the offer
or sale is not permitted.
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This prospectus is dated , 2000
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under the shelf process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $1,000,000,000.
This prospectus provides you with a general description of the securities
that we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in the prospectus. The registration statement that we filed with the
SEC includes exhibits that provide more detail on the matters discussed in this
prospectus. You should read this prospectus and the related exhibits filed with
the SEC and any prospectus supplement together with additional information
described under the heading "WHERE YOU CAN FIND MORE INFORMATION."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the
SEC at the SEC's following public reference facilities:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2511
You may also obtain copies of the documents at prescribed rates by writing
to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further
information on the operations of the public reference facilities. Our SEC
filings are also available at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
This prospectus constitutes part of a registration statement on Form S-3
filed by Lowe's under the Securities Act of 1933. As allowed by SEC rules, this
prospectus does not contain all the information you can find in the
registration statement or the exhibits to the registration statement.
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INCORPORATION OF INFORMATION FILED WITH THE SEC
The SEC allows us to "incorporate by reference" in this prospectus the
information we file with the SEC, which means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update and
supersede the information in this prospectus and any information that was
previously incorporated.
The following documents filed by Lowe's with the SEC (file No. 1-7083) are
incorporated herein by reference and made a part hereof: (i) Lowe's Annual
Report on Form 10-K for the fiscal year ended January 29, 1999; (ii) Lowe's
Quarterly Reports on Form 10-Q for the quarters ended April 30, 1999, July 30,
1999 and October 29, 1999; and (iii) the description of Lowe's common stock and
preferred stock purchase rights contained in Lowe's registration statements on
Form 8-A filed under the Securities Exchange Act of 1934, as amended, including
any amendment or report filed for the purpose of updating such description.
You can obtain any of the filings incorporated by reference in this document
through us, or from the SEC through the SEC's web site or at the addresses
listed above. Documents incorporated by reference are available from us without
charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this prospectus. You
can obtain documents incorporated by reference in this prospectus by requesting
them in writing or by telephone from us at the following address:
T. Carson Anderson, IV
Lowe's Companies, Inc.
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
Telephone: (336) 658-4385 or (888) 34LOWES
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of the initial filing of the registration
statement and prior to the time we sell all of the securities offered by this
prospectus:
. reports filed under Section 13(a) and (c) of the Exchange Act;
. definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting; and
. any reports filed under Section 15(d) of the Exchange Act.
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.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making any offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
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WARNING REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus may include "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although we believe that the expectations reflected in
such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to be correct. Some of the things that could cause
our actual results to differ substantially from our expectations are:
. Our sales are dependent upon the general economic health of the country,
the level of repairs, remodeling and additions to existing homes,
commercial building activity, and the availability and cost of financing.
An economic downturn can impact sales because much of our inventory is
purchased for discretionary projects, which can be delayed.
. Our expansion strategy may be impacted by environmental regulations,
local zoning issues and delays, availability and development of land, and
more stringent land use regulations than we have traditionally
experienced.
. Many of our products are commodities whose prices fluctuate erratically
within an economic cycle, a condition true of lumber and plywood.
. Our business is highly competitive, and as we expand to larger markets,
and to the Internet, we may face new forms of competition which do not
exist in some of the markets we have traditionally served.
. The ability to continue our everyday competitive pricing strategy and
provide the products that consumers want depends on our vendors providing
a reliable supply of inventory at competitive prices.
. On a short-term basis, weather may adversely affect sales of product
groups like lawn and garden, lumber, and building materials.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
You should carefully read this prospectus and the documents incorporated by
reference in their entirety. They contain information that you should consider
when making your investment decision.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to
provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. You should assume that
the information appearing in this prospectus, as well as information that we
previously filed with the SEC and incorporated by reference, is accurate as of
the date on the front cover of this prospectus only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
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THE COMPANY
Lowe's Companies, Inc. is the world's second largest home improvement
retailer competing in a highly fragmented $300 billion industry. We serve more
than four million do-it-yourself and commercial business customers weekly
through more than 576 stores in 37 states. At the beginning of 2000, our retail
square footage totaled approximately 57 million square feet. Headquartered in
Wilkesboro, NC, the 54-year-old company employs more than 80,000 people.
Lowe's has been implementing an aggressive store expansion strategy which
has transformed Lowe's from a chain of small stores into a chain of destination
home improvement warehouses. Having built our first 100,000 square foot store
in 1994, Lowe's current prototype store has a 121,000 square foot sales floor
with a lawn and garden center comprising approximately 35,000 additional square
feet. In April 1998, Lowe's announced a major expansion into the western United
States, with plans to build in excess of 100 new stores in certain western
markets over the next three to four years. The first of the western stores
opened in December 1999. In November 1998, Lowe's entered into a merger
agreement with Eagle Hardware & Garden, Inc. (Eagle), an operator of 36 home
improvement centers in the western United States. The acquisition of Eagle was
completed on April 2, 1999. Lowe's 2000 expansion plan calls for opening 95
stores (which includes relocating 17 older, smaller format stores).
Lowe's gives back to the communities it serves through programs and
volunteer involvement. Lowe's contributes regularly to nonprofit organizations
in towns and cities throughout Lowe's territory. Through the "Lowe's Heroes"
programs and Lowe's Home Safety Council, Lowe's provides civic groups help with
public safety projects and shares important home safety and fire prevention
information with neighborhoods across the country.
Lowe's has been a publicly held company since October 10, 1961. Our stock is
listed on the New York Stock Exchange, the Pacific Stock Exchange and the
London Stock Exchange with shares trading under the ticker symbol LOW.
USE OF PROCEEDS
Unless we state otherwise in the applicable prospectus supplement, we will
use the net proceeds from the sale of the securities:
. to finance the purchase of land, buildings and equipment for new and
existing stores,
. to repay indebtedness,
. to repurchase our outstanding securities, including our common stock, and
. for other general corporate purposes.
We may temporarily invest any proceeds that are not immediately applied to
the above purposes in U.S. government or agency obligations, commercial paper,
bank certificates of deposit, or repurchase agreements collateralized by U.S.
government or agency obligations. We may also deposit the proceeds with banks.
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RATIO OF EARNINGS TO FIXED CHARGES
Lowe's historical ratio of earnings to fixed charges is shown in the table
below. "Earnings" consists of income before income taxes and fixed charges.
"Fixed charges" consists of interest on indebtedness (including capitalized
interest) and a share of rental expense deemed to be representative of
interest.
<TABLE>
<CAPTION>
Nine Months Ended Fiscal Years Ended On
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10/29/99 10/30/98 1/28/00 1/29/99 1/30/98 1/31/97 1/31/96
-------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges.......... 6.77 6.25 5.86 5.95 5.79 5.25 5.87
</TABLE>
DESCRIPTION OF OUR DEBT SECURITIES
The following description sets forth general terms and provisions of the
debt securities that we may offer with this prospectus. We will provide
additional terms of the debt securities in a prospectus supplement.
As required by federal law for all publicly offered notes and debentures,
the debt securities that we offer with this prospectus are governed by
documents called "indentures." We will issue senior debt securities under an
Amended and Restated Indenture, dated as of December 1, 1995, between Lowe's
and Bank One, N.A., (formerly known as The First National Bank of Chicago), as
trustee. We refer to this indenture as the "Senior Indenture." We will issue
our subordinated debt securities under the Indenture between Lowe's and The
Bank of New York, as trustee. We refer to this indenture as the "Subordinated
Indenture." As trustees, Bank One and The Bank of New York serve two roles.
First, the trustees can enforce your rights against us should we default on the
debt securities. Second, the trustees assist in administering our obligations
under the debt securities, such as payments of interest.
Below, we describe the indentures and summarize some of their provisions.
However, we have not described every aspect of the debt securities. You should
refer to the actual indentures for a complete description of their provisions
and the definitions of terms used in them. In this prospectus, we provide only
the definitions for some of the more important terms in the indentures. In
addition, we also include references in parentheses to some sections of the
indentures. Whenever we refer to particular sections or defined terms of the
indentures in this prospectus or in the prospectus supplement, we are
incorporating by reference those sections or defined terms into this prospectus
or the prospectus supplement. Unless we state otherwise, the section numbers
refer to the applicable sections for both indentures.
The indentures are exhibits to the registration statement. See "WHERE YOU
CAN FIND MORE INFORMATION" for information on how to obtain a copy of the
indentures for your review.
General Terms of Our Debt Securities.
We may offer with this prospectus up to $1,000,000,000 in aggregate
principal amount of unsecured debt obligations. However, the indentures do not
limit the aggregate principal amount of debt securities that we may issue and
provide that we may issue debt securities from time to time in one or more
series. (Section 301). In addition, neither the indentures nor the debt
securities will limit or otherwise restrict the amount of senior indebtedness
that we or our subsidiaries may incur. "Senior Indebtedness" is defined below
in the subsection "Subordination of Our Subordinated Debt Securities."
Under the Senior Indenture, we have outstanding:
. $100 million of Senior Notes due December 15, 2005,
. $268 million of Medium Term Notes, Series B, at rates ranging from 6.70%
to 7.61% with final maturities ranging from September 1, 2007 to May 15,
2037,
. $300 million of 6 7/8% Debentures due February 15, 2028, and
. $400 million of 6 1/2% Debentures due March 15, 2029.
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We have outstanding under a separate senior indenture an additional $121
million of Medium Term Notes, Series A, at rates ranging from 6.50% to 8.20%
and with final maturities from February 12, 2001 to September 12, 2022.
The senior debt securities will be our unsecured obligations and will rank
on a parity with all of our other unsecured and unsubordinated indebtedness.
The senior debt securities will be subordinated to our secured indebtedness and
that of our subsidiaries and to any unsecured, unsubordinated indebtedness of
our subsidiaries. In other words, if we should default on our debt, we will not
pay on the senior debt securities until we have fully paid off our secured
indebtedness and that of our subsidiaries and any unsecured, unsubordinated
indebtedness of our subsidiaries. At February 25, 2000, we had $198.1 million
of secured indebtedness outstanding and $1,179.1 million of unsecured
indebtedness outstanding. At February 25, 2000, our subsidiaries had $104.6
million of secured unsubordinated indebtedness outstanding.
The subordinated debt securities will be our unsecured obligations and will
be subordinated in right of payment to all senior indebtedness.
The particular terms of each issue of debt securities, as well as any
modifications or additions to the general terms of the indenture applicable to
the issue of debt securities, will be described in the prospectus supplement.
This description will contain all or some of the following as applicable:
. the title of the debt security;
. the aggregate principal amount and denominations;
. the maturity or maturities;
. the price that we will receive from the sale of the debt securities;
. the interest rate or rates, or their method of calculation, to be
established for the debt securities, which rate or rates may vary from
time to time;
. the date or dates on which principal of the debt securities is payable;
. the date or dates from which interest on the debt securities will accrue
and the payment and record date or dates for payments of interest or the
methods by which any such dates will be determined;
. the place or places where principal of, premium, if any, and interest, if
any, on the debt securities is payable;
. the terms of any sinking fund and analogous provisions with respect to
the debt securities;
. the respective redemption and repayment rights, if any, of Lowe's and of
the holders of the debt securities and the related redemption and
repayment prices and any limitations on the redemption or repayment
rights;
. any provisions relating to the conversion or exchange of the debt
securities;
. any addition to or change in the affirmative or negative covenants, if
any, to be imposed upon us relating to any of the debt securities;
. any trustee or fiscal or authenticating or payment agent, issuing and
paying agent, transfer agent or registrar or any other person or entity
to act in connection with the debt securities for or on behalf of the
holders thereof or the Company or an affiliate;
. whether the debt securities are to be issuable initially in temporary
global form and whether any such debt securities are to be issuable in
permanent global form and, if so, whether beneficial owners of interests
in any such permanent global security may exchange the interests for debt
securities of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur;
. the listing of the debt securities on any securities exchange or
inclusion in any other market or quotation or trading system;
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. any other specific terms, conditions and provisions of the debt
securities; and
. the conversion price and other terms of any debt securities that a holder
may convert into our common stock before our redemption, repayment or
repurchase of those convertible debt securities.
Unless the prospectus supplement provides differently, the trustees will pay
the principal of and any premium and interest on the debt securities and will
register the transfer of any debt securities at their offices. However, at our
option, we may distribute interest payments by mailing a check to the address
of each holder of debt securities that appears on the register for the debt
securities. (Sections 305 and 1002).
Unless the prospectus supplement provides differently, we will issue the
debt securities in fully registered form without coupons and in denominations
of $1,000 or any integral multiple of $1,000. There will be no service charge
for any registration of transfer or exchange of the debt securities, although
we may require that purchasers of the debt securities pay any tax or other
governmental charge associated with the registration. (Sections 302 and 305).
We may issue debt securities as Original Issue Discount Securities, as
defined in the indentures, to be sold at a substantial discount below their
principal amount. The prospectus supplement will describe any special federal
income tax and other considerations applicable to these securities.
Covenants Applicable to Our Senior Debt Securities.
Unless stated otherwise in the applicable prospectus supplement, senior debt
securities will have the benefit of the following covenants, and subordinated
debt securities will not. We have defined several capitalized terms used in
this section in the subsection below entitled "Definitions of Key Terms in the
Senior Indenture." Capitalized terms not defined there are defined in the
Senior Indenture.
Restrictions on Debt.
The Senior Indenture provides that as long as we have any senior debt
securities outstanding:
. we will not, and we will not permit any of our subsidiaries to, incur,
issue, assume or guarantee any Debt secured by
--a Mortgage on any Principal Property of Lowe's or any subsidiary; or
--any shares of Capital Stock or Debt of any subsidiary,
unless all outstanding senior debt securities will be secured equally and
ratably with the secured Debt, so long as the secured Debt is secured;
and
. we will not permit any of our subsidiaries to incur, issue, assume or
guarantee any unsecured Debt or to issue any preferred stock, unless the
aggregate amount of all the secured Debt together with the aggregate
preferential amount to which the preferred stock would be entitled on any
involuntary distribution of assets and all Attributable Debt of Lowe's
and our subsidiaries in respect of sale and leaseback transactions would
not exceed 10% of our Consolidated Net Tangible Assets.
This restriction does not apply to the following Debts, which we exclude in
computing Debt for the purpose of the restriction:
. Debt secured by Mortgages on any property acquired, constructed or
improved by Lowe's or any subsidiary after December 1, 1995, which
Mortgages are created or assumed contemporaneously with, or within 30
months after, the acquisition, or completion of the construction or
improvement, or within six months thereafter under a firm commitment for
financing arranged with a lender or investor within the 30-month period,
to secure or provide for the payment of all or any part of the purchase
price of the property or the cost of the construction or improvement
incurred after December 1, 1995 or Mortgages on any property existing at
the time of its acquisition if any such Mortgage does not apply to any
property previously owned by us or any subsidiary other than, in the case
of any such construction or
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improvement, any previously unimproved real property on which the property
so constructed, or the improvement, is located;
. Debt of any corporation existing at the time the corporation is merged
with or into Lowe's or a subsidiary;
. Debt of any corporation existing at the time the corporation becomes a
subsidiary;
. Debt of a subsidiary or of a subsidiary's subsidiary;
. Debt, such as industrial reserve bonds, secured by Mortgages securing
obligations issued by a state, territory or possession of the United
States, or any political subdivision of any of the foregoing, or the
District of Columbia to finance the acquisition of or construction on
property, and on which the interest is not, in the opinion of counsel,
includable in gross income of the holder; and
. the extensions, renewals or replacements of any Debt referred to in the
above clauses.
This restriction does not apply to any issuance of preferred stock by a
subsidiary to Lowe's or another subsidiary, provided that the preferred stock
is thereafter not transferable to any Person other than Lowe's or a subsidiary.
(Senior Indenture, Section 1008).
Restrictions on Sales and Leasebacks.
The Senior Indenture provides that we will not, and we will not permit any
subsidiary to, after December 1, 1995, enter into any transaction involving the
sale and subsequent leasing back of Lowe's or any of its subsidiaries of any
Principal Property, unless, after giving effect to the sale and leaseback
transaction, the aggregate amount of all Attributable Debt with respect to all
such transactions plus all Debt to which Section 1008 of the Senior Indenture
is applicable, would not exceed 10% of Consolidated Net Tangible Assets. This
restriction will not apply to, and there will be excluded in computing
Attributable Debt for the purpose of the restriction, Attributable Debt with
respect to any sale and leaseback transaction if:
. the lease in the transaction is for a period (including renewal rights)
not exceeding three years;
. Lowe's or a subsidiary, within 180 days after the transaction, applies an
amount not less than the greater of the net proceeds of the sale of the
Principal Property leased under the arrangement or the fair market value
of the Principal Property leased at the time of entering into the
arrangement (as determined by the Board of Directors) to, with some
restrictions, the retirement of our Funded Debt ranking on a parity with
or senior to the Senior Debt Securities or the retirement of Funded Debt
of a subsidiary;
. the transaction is entered into before, at the time of, or within 30
months after the later of the acquisition of the Principal Property or
the completion of its construction;
. the lease in the transaction secures or relates to obligations issued by
a state, territory or possession or the United States, or any political
subdivision thereof, or the District of Columbia, to finance the
acquisition of or construction on property, and on which the interest is
not, in the opinion of counsel, includable in the gross income of the
holder; or
. the transaction is entered into between Lowe's and a subsidiary or
between subsidiaries.
(Senior Indenture, Section 1009).
Definitions of Key Terms in the Senior Indenture.
The Senior Indenture defines the following terms used in this subsection:
"Attributable Debt" means, as to any particular lease under which any Person
is at the time liable, at any date as of which the amount thereof is to be
determined, the total net amount of rent required to be paid by the Person
under the lease during the remaining term thereof (excluding any subsequent
renewal or other extension options held by the lessee), discounted from the
respective due dates thereof to the date at the rate of 10% per annum
compounded annually. The net amount of rent required to be paid under any such
lease for any such
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period will be the amount of the rent payable by the lessee with respect to the
period, after excluding amounts required to be paid on account of maintenance
and repairs, insurance, taxes, assessments, water rates and similar charges and
contingent rents (such as those based on sales). In the case of any lease that
is terminable by the lessee upon the payment of a penalty, the net amount will
also include the amount of the penalty, but no rent will be considered as
required to be paid under the lease after the first date upon which it may be
so terminated.
"Capital Stock", as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether the capital stock will be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the corporation.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
(i) all current liabilities and (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, all
as shown on the most recent balance sheet of Lowe's and our consolidated
subsidiaries and computed under generally accepted accounting principles.
"Debt" means loans, notes, bonds, indentures or other similar evidences of
indebtedness for money borrowed.
"Funded Debt" means all indebtedness for money borrowed having a maturity of
more than 12 months from the date as of which the amount thereof is to be
determined or having a maturity of less than 12 months but by its terms being
renewable or extendible beyond 12 months from the date at the option of the
borrower.
"Preferred stock" means any class of our stock that has a preference over
common stock in respect of dividends or of amounts payable in the event of our
voluntary or involuntary liquidation, dissolution or winding up and that is not
mandatorily redeemable or repayable, or redeemable or repayable at the option
of the Holder, otherwise than in shares of common stock or preferred stock of
another class or series or with the proceeds of the sale of common stock or
preferred stock.
"Principal Property" means any building, structure or other facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, used primarily for selling home improvement products or the
manufacturing, warehousing or distributing of the products, owned or leased by
us or any of our subsidiaries. (Senior Indenture, Section 101).
Subordination of Our Subordinated Debt Securities.
Our obligations to make any payment on account of the principal of and
premium, if any, and interest on the subordinated debt securities will be
subordinate and junior in right of payment, to the extent described in the
Subordinated Indenture, to all of our senior indebtedness. (Subordinated
Indenture, Article 14).
If we default in the payment of any principal of or any premium or interest
on any senior indebtedness when it becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, then, unless and until we have cured the default, or it is waived or
ceases to exist, we will not make or agree to make any direct or indirect
payment, in cash, property, securities, by set-off or otherwise, for principal
of or any premium or interest on the subordinated debt securities, or in
respect of any redemption, retirement, purchase or other acquisition of any of
the subordinated debt securities. (Subordinated Indenture, Section 1401).
"Senior Indebtedness" is defined in the Subordinated Indenture as:
. all of our indebtedness for money borrowed or constituting reimbursement
obligations with respect to letters of credit and interest or currency
swap agreements, including indebtedness secured by a mortgage,
conditional sales contract or other lien that is:
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--given to secure all or a part of the purchase price of the property
subject to the mortgage, conditional sales contract or other lien
thereto, whether given to the vendor of the property or to another, or
--existing on property at the time of acquisition thereof;
. all of our indebtedness evidenced by notes, debentures, bonds or other
securities that we sold for money;
. lease obligations, including but not limited to capitalized lease
obligations;
. all indebtedness of others of the kinds described in either of the
preceding first or second clauses and all lease obligations and
obligations of others of the kind described in the preceding third clause
assumed by or guaranteed in any manner by us or in effect guaranteed by
us through an agreement to purchase, contingent or otherwise; and
. all, whether initial or seriatim, renewals, deferrals, increases,
extensions or refundings of and modifications to indebtedness of the
kinds described in any of the preceding first, second or fourth clauses
and all renewals or extensions of leases of the kinds described in either
of the preceding third or fourth clauses; unless, in the case of any
particular indebtedness, lease, renewal, extension or refunding, the
instrument or lease creating or evidencing the same or the assumption or
guarantee of the same expressly provides that the indebtedness, lease,
renewal, extension, deferral, increase, modification or refunding is not
superior in right of payment to the subordinated debt securities or is
expressly subordinated by its terms in right of payment to all of our
other indebtedness, including the subordinated debt securities.
We will first pay in full all senior indebtedness before making any payment
or distribution, whether in cash, securities or other property, to holders of
subordinated debt securities in the event of:
. any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to us, our
creditors or our property;
. any proceeding for our voluntary or involuntary liquidation, dissolution
or other winding up, whether or not involving insolvency or bankruptcy
proceedings;
. any assignment by us for the benefit of creditors; or
. any other marshalling of our assets.
In that event, any payment or distribution on account of the principal of or
any premium or interest on the subordinated debt securities, whether in cash,
securities or other property, other than securities of ours or any other
corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the subordinated debt securities, to
the payment of all senior indebtedness at the time outstanding, and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment, which would otherwise, but for the subordination provisions, be
payable or deliverable in respect of the subordinated debt securities, will be
paid or delivered directly to the holders of senior indebtedness under the
priorities then existing among the holders until all senior indebtedness,
including any interest thereon accruing after the commencement of any such
proceedings has been paid in full.
In the event of a proceeding, after payment in full of all sums owing with
respect to senior indebtedness, the holders of subordinated debt securities,
together with the holders of any of our obligations ranking on a parity with
the subordinated debt securities, will be entitled to be paid from our
remaining assets the amounts at the time due and owing on account of unpaid
principal of and premium, if any, and interest on the subordinated debt
securities and the other obligations before any payment or other distribution,
whether in cash, property or otherwise, will be made on account of any of our
capital stock or obligations ranking junior to the subordinated debt securities
and the other obligations.
If any payment or distribution on account of the principal of or any premium
or interest on the subordinated debt securities of any character, whether in
cash, securities or other property, other than securities
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of ours or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in the subordination provisions with respect to the subordinated debt
securities, to the payment of all senior indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment, or any security is received by the trustee or
any holder of any subordinated debt securities in contravention of any of the
terms of the Subordinated Indenture and before all the senior indebtedness is
paid in full, the payment or distribution or security will be received in trust
for the benefit of, and will be paid over or delivered and transferred to, the
holders of the senior indebtedness at the time outstanding under the priorities
then existing among the holders for application to the payment of all senior
indebtedness remaining unpaid to the extent necessary to pay all the senior
indebtedness in full. (Subordinated Indenture, Section 1401).
By reason of this subordination, in the event of our insolvency, holders of
senior indebtedness may receive more, ratably, and any holders of the
subordinated debt securities having a claim under the subordinated debt
securities may receive less, ratably, than our other creditors. The
subordination will not prevent the occurrence of an event of default of the
subordinated debt securities. "Events of default" are described below in the
subsection "Events of Default."
The Effect of Our Corporate Structure on Our Payment of the Debt Securities.
The debt securities are the obligations of Lowe's exclusively. Because our
operations are currently conducted through subsidiaries, the cash flow and the
consequent ability to service our debt, including the debt securities, are
dependent, in part, upon the earnings of our subsidiaries and the distribution
of those earnings to us or upon loans or other payments of funds by those
subsidiaries to us. Our subsidiaries are separate and distinct legal entities.
They have no obligation, contingent or otherwise, to pay any amounts due on the
debt securities or to make any funds available for our payment of any amounts
due on the debt securities, whether by dividends, loans or other payments. In
addition, our subsidiaries' payments of dividends and making of loans and
advances to us may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and various business
considerations.
Although the Senior Indenture limits the incurrence of the indebtedness, as
described above in the subsection "Covenants Applicable to Our Senior Debt
Securities," the debt securities will be effectively subordinated to all
indebtedness and other liabilities, including current liabilities and
commitments under leases, if any, of our subsidiaries. Any right of ours to
receive assets of any of our subsidiaries upon liquidation or reorganization of
the subsidiary (and the consequent right of the holders of the debt securities
to participate in those assets) will be effectively subordinated to the claims
of that subsidiary's creditors (including trade creditors), except to the
extent that we are recognized as a creditor of the subsidiary, in which case
our claims would still be subordinated to any security interests in the
subsidiary's assets and any of the subsidiary's indebtedness senior to that
which we hold.
No Restriction on Sale or Issuance of Stock of Subsidiaries.
The indentures contain no covenant that we will not sell, transfer or
otherwise dispose of any shares of, or securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, voting stock of any
of our subsidiaries. They also do not prohibit any subsidiary from issuing any
shares of, securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of, the subsidiary's voting stock.
Consolidation, Merger and Sale of Assets.
Without the consent of the holders of any of the outstanding debt
securities, we may consolidate or merge with or into, or convey, transfer or
lease our properties and assets substantially as an entirety, to any
corporation organized under the laws of any domestic jurisdiction, as long as:
. the successor corporation assumes our obligations on the debt securities
and under the indentures;
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. after giving effect to the transaction no event of default, and no event
that, after notice or become an event of default, has occurred and is
continuing; and
. other conditions described in the indentures are met. (Section 801).
Events of Default.
The following are "events of default" with respect to debt securities of any
series:
. default for 30 days in payment when due of any interest on any debt
security of the series or any additional amount payable with respect to
debt securities of the series as specified in the applicable prospectus
supplement;
. default in payment when due of principal, premium, if any, or on
redemption or otherwise, or in the making of a mandatory sinking fund
payment of any debt securities of the series;
. default for 60 days after notice from the applicable trustees or from the
holders of 25% in aggregate principal amount of the debt securities of
the series then outstanding, in the performance of any other agreement in
the debt securities of the series, in the indentures or in any
supplemental indenture or board resolution referred to in the notice
under which the debt securities of the series may have been issued;
. default in the payment of principal when due or resulting in acceleration
of other indebtedness of ours for borrowed money where the aggregate
principal amount with respect to which the default or acceleration has
occurred exceeds $10 million and the acceleration is not rescinded or
annulled within ten days after written notice of the default to us or to
us and the trustee by the holders of 25% in aggregate principal amount of
the debt securities of the series then outstanding, as long as the event
of default will be cured or waived if the default that resulted in the
acceleration of the other indebtedness is cured or waived or the
indebtedness is discharged; and
. events of bankruptcy, insolvency or reorganization of Lowe's more fully
described in the indentures.
(Section 501).
The prospectus supplement will describe any additional events of default
that may be added to the indenture for a particular series of debt securities
(Section 301). No event of default with respect to a particular series of debt
securities issued under the indentures necessarily constitutes an event of
default with respect to any other series of debt securities issued under the
indentures.
The indentures provide that the trustee for any series of debt securities
will, within ninety days after the occurrence of a default with respect to debt
securities of the series, give to the holders of those debt securities notice
of all uncured defaults known to it, provided that:
. except in the case of default in payment on the debt securities of the
series, the trustee may withhold the notice if and so long as it in good
faith determines that withholding the notice is in the interest of the
holders of the debt securities of that series, and
. no notice of a default made in the performance of any covenant or a
breach of any warranty contained in the indentures will be given until at
least 60 days after the occurrence thereof.
"Default" means any event that is, or, after notice or passage of time or both,
would be, an event of default. (Section 602).
If an event of default with respect to debt securities of any series at the
time outstanding occurs and is continuing, either the trustee or the holders of
at least 25% in aggregate principal amount of the outstanding debt securities
of the series may declare the principal amount (or, if the debt securities of
the series are Original Issue Discount Securities, the portion of the principal
amount as may be specified in the terms of the series) of all the debt
securities of the series to be due and payable immediately. At any time after
making a declaration of acceleration with respect to debt securities of any
series, but before obtaining a judgment or decree based on
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acceleration, the holders of a majority in aggregate principal amount of
outstanding debt securities of the series may, in some circumstances, rescind
and annul the acceleration. (Section 502).
The indentures provide that, except for the duty of the trustees in the case
of an event of default to act with the required standard of care, the trustees
will be under no obligation to exercise any of these rights or powers under the
indentures at the request or direction of any of the holders, unless the
holders have offered reasonable indemnity to the trustees. (Sections 601 and
603). Except as limited by the provisions for the indemnification of the
trustees, the holders of a majority in aggregate principal amount of the
outstanding debt securities of each series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustees, or exercising any trust or power conferred on the trustees with
respect to the debt securities of the series. (Section 512).
We are required to furnish annually to the trustees a statement as to our
performance of some of our obligations under the indentures and as to any
default in our performance. (Section 1005).
Global Securities.
We may issue the debt securities of a series as one or more fully registered
global securities. We will deposit the global securities with, or on behalf of,
a depositary bank identified in the prospectus supplement relating to the
series. We will register the global securities in the name of the depositary
bank or its nominee. In such case, one or more global securities will be issued
in a denomination or aggregate denominations equal to the aggregate principal
amount of outstanding debt securities of the series represented by the global
security or securities. Until any global security is exchanged in whole or in
part for debt securities in definitive certificated form, the depositary bank
or its nominee may not transfer the global certificate except to each other,
another nominee or to their successors and except as described in the
applicable prospectus supplement. (Section 303).
The prospectus supplement will describe the specific terms of the depositary
arrangement with respect to a series of debt securities that a global security
will represent. We anticipate that the following provisions will apply to all
depositary arrangements.
Upon the issuance of any global security, and the deposit of the global
security with or on behalf of the depositary bank for the global security, the
depositary bank will credit, on its book-entry registration and transfer
system, the respective principal amounts of the debt securities represented by
the global security to the accounts of institutions, also referred to as
"participants," that have accounts with the depositary bank or its nominee. The
accounts to be credited will be designated by the underwriters or agents
engaging in the distribution or placement of the debt securities or by us, if
we offer and sell the debt securities directly. Ownership of beneficial
interests in the global security will be limited to participants or persons
that may hold interests through participants.
Ownership of beneficial interests by participants in the global security
will be shown by book-keeping entries on, and the transfer of that ownership
interest will be effected only through book-keeping entries to, records
maintained by the depositary bank or its nominee for the global security.
Ownership of beneficial interests in the global security by persons that hold
through participants will be shown by book-keeping entries on, and the transfer
of that ownership interest among or through the participants will be effected
only through book-keeping entries to, records maintained by the participants.
The laws of some jurisdictions require that some of the purchasers of
securities take physical delivery of the securities in definitive certificated
form rather than book-entry form. Such laws may impair the ability to own,
transfer or pledge beneficial interests in any global security.
So long as the depositary bank for a global security or its nominee is the
registered owner of the global security, the depositary bank or the nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by the global security for all purposes under the
indenture. Except as described
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below or otherwise specified in the applicable prospectus supplement, owners of
beneficial interests in a global security:
. will not be entitled to have debt securities of the series represented by
the global security registered in their names,
. will not receive or be entitled to receive physical delivery of debt
securities of the series in definitive certificated form, and
. will not be considered the holders thereof for any purposes under the
indenture.
Accordingly, each person owning a beneficial interest in the global security
must rely on the procedures of the depositary bank and, if the person is not a
participant, on the procedures of the participant through which the person
directly or indirectly owns its interest, to exercise any rights of a holder
under the indenture. The indenture provides that the depositary bank may grant
proxies and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action that
a holder is entitled to give or take under the indenture. (Section 104).
We understand that under existing industry practices, if we request any
action of holders or any owner of a beneficial interest in the global security
desires to give any notice or take any action that a holder is entitled to give
or take under the indenture, the depositary bank for the global security would
authorize the participants holding the relevant beneficial interest to give
notice or take action, and the participants would authorize beneficial owners
owning through the participants to give notice or take action or would
otherwise act upon the instructions of beneficial owners owning through them.
Principal and any premium and interest payments on debt securities
represented by a global security registered in the name of a depositary bank or
its nominee will be made to the depositary bank or its nominee, as the case may
be, as the registered owner of the global security. None of us, the trustee or
any paying agent for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in any global security or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests. (Section 308).
We expect that the depositary bank for any series of debt securities
represented by a global security, upon receipt of any payment of principal,
premium or interest, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the global security as shown on the records of the
depositary bank. We also expect that payments by participants to owners of
beneficial interests in the global security or securities held through the
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in "street name," and will be the responsibility of the
participants.
If the depositary bank for any series of debt securities represented by a
global security is at any time unwilling or unable to continue as depositary
bank and we do not appoint a successor depositary bank within 90 days, we will
issue the debt securities in definitive certificated form in exchange for the
global security. In addition, we may at any time and in our sole discretion
determine not to have the debt securities of a series represented by one or
more global securities and, in the event, will issue debt securities of the
series in definitive certificated form in exchange for the global security
representing the series of debt securities. (Section 305).
Further, at our discretion, an owner of a beneficial interest in a global
security representing debt securities of a series may, on terms acceptable to
us and the depositary bank for the global security, receive debt securities of
the series in definitive certificated form. Debt securities of the series
issued in definitive certificated form will, except as described in the
applicable prospectus supplement, be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form. (Section
305).
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Modification and Waiver of the Indentures.
We and the applicable Trustee may modify or amend the indentures with the
consent of the holders of a majority in principal amount of the debt securities
of all affected series. However, we must have the consent of the holders of all
of the affected outstanding debt securities to:
. change the stated maturity date of the principal of, or any installment
of principal of, or premium, if any, or interest, if any, on, any debt
security;
. reduce the principal, premium, interest or amount payable on redemption
of any debt security;
. change the method of calculation of any premium, interest or amount
payable on redemption of any debt security;
. reduce the amount of principal of a debt security payable on acceleration
of the maturity of the debt security;
. change the place or currency of payment of principal of, or premium or
interest on, any debt security;
. impair a holder's conversion rights;
. impair a holder's right to institute suit for the enforcement of any
payment on or with respect to any debt security; or
. reduce the percentage in principal amount of the debt security, the
consent of whose holders is required for modification or amendment of the
indentures or for waiver of compliance with some of the provisions of the
indentures or for waiver of some of the defaults.
(Sections 901 and 902).
The holders of a majority in principal amount of the debt securities of all
affected series may, on behalf of the holders of all the debt securities,
waive:
. our compliance with some of the restrictive provisions of the indentures,
and
. any past default under the indentures with respect to the debt
securities.
They may not waive:
. a default in the payment of the principal of, or premium or interest on,
any debt security, or
. a provision that, under the indentures, requires the consent of the
holders of all of the affected outstanding debt securities for
modification or amendment.
(Section 513).
Regarding the Trustees.
Bank One, N.A. (formerly known as The First National Bank of Chicago) is the
trustee under the Senior Indenture. Notice to the senior trustee should be
directed to:
Corporate Trust Office
1 Bank One Plaza
Suite IL1-0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration.
The Bank of New York is the trustee under the Subordinated Indenture. Notice
to the subordinated trustee should be directed to:
Corporate Trust Office
101 Barclay Street
New York, New York 10007.
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DESCRIPTION OF OUR PREFERRED STOCK
General.
The following is a summary of some of the important terms of our preferred
stock. You should review the applicable North Carolina law and our Restated
and Amended Charter and Bylaws for a more complete description of our
preferred stock.
Our Charter authorizes us to issue 5,000,000 shares of preferred stock. We
may amend our Charter from time to time to increase the number of authorized
shares of preferred stock. Any amendment requires the approval of the holders
of a majority of the outstanding shares of common stock and the approval of
the holders of a majority of the outstanding shares of all series of preferred
stock voting together as a single class without regard to series. As of the
date of this prospectus, we had no shares of preferred stock outstanding.
The Board of Directors is authorized to designate with respect to each new
series of preferred stock:
. the number of shares in each series;
. the dividend rates and dates of payment;
. voluntary and involuntary liquidation preferences;
. redemption prices;
. whether dividends will be cumulative and, if cumulative, the date or
dates from which they will be cumulative;
. the sinking fund provisions, if any, for redemption or purchase of
shares;
. the rights, if any, and the terms and conditions on which shares can be
converted into or exchanged for, or the rights to purchase, shares of any
other class or series; and
. the voting rights, if any.
We will pay dividends and make distributions in the event of our
liquidation, dissolution or winding up first to holders of our preferred stock
and then to holders of our common stock. The Board of Directors' ability to
issue preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things,
adversely affect the voting powers of holders of common stock and, under some
circumstances, may discourage an attempt by others to gain control of us.
The prospectus supplement relating to each series of the preferred stock
will describe the following terms:
. title and stated value of the series;
. the number of shares in the series;
. the dividend payment dates and the dividend rate or method of
determination or calculation of the terms applicable to the series;
. applicable redemption provisions, if any;
. sinking fund or purchase fund provisions, if any;
. the fixed liquidation price and fixed liquidation premium, if any,
applicable to the series;
. the rate or basis of exchange or conversion into other securities or
method of determination thereof applicable to the series, if any;
. the conversion rights, if any;
. applicable voting rights; and
. any other applicable terms.
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Redemption.
A series of preferred stock may be redeemable, in whole or in part, at our
option. In addition, the series' redemption may be mandatory under a sinking
fund. In each case, the prospectus supplement will describe the terms, times
and redemption policies of the series.
The prospectus supplement relating to a series of preferred stock that is
mandatorily redeemable will specify the number of shares of the series of
preferred stock that we will redeem in each year commencing after a specified
date, at a specified redemption price per share, together with an amount equal
to any accrued and unpaid dividends to the date of redemption.
If we redeem fewer than all the outstanding shares of any series of
preferred stock, whether by mandatory or optional redemption, the selection of
the shares to be redeemed will be determined by lot or pro rata as may be
determined by the Board of Directors or its duly authorized committee, or by
any other method the Board of Directors or its committee determines to be
equitable. From and after the date of redemption, unless we default in
providing for the payment of the redemption price, dividends will cease to
accrue on the shares of preferred stock called for redemption and all rights of
the holders will cease, except their right to receive the redemption price.
Conversion Rights; No Preemptive Rights.
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into shares of
common stock or another series of our preferred stock. The preferred stock will
have no preemptive rights.
Dividend Rights.
The holders of the preferred stock of each series will be entitled to
receive, if and when declared payable by the Board of Directors, out of assets
available therefor, dividends at, but not exceeding, the dividend rate for the
series, which may be fixed or variable, payable at such intervals and on the
dates as described in the Board of Directors' resolution creating the series.
If the intervals and dividend payment dates will vary from time to time for the
series, the resolution will describe the method by which the intervals and the
dates will be determined. Dividends on preferred stock will be paid before any
dividends, other than a dividend payable in common stock, may be paid upon or
set apart for any shares of capital stock ranking junior to the preferred stock
in respect of dividends or liquidation rights, which is referred to in this
prospectus as "stock ranking junior to the preferred stock".
Voting Rights.
Except as indicated below or in the prospectus supplement relating to a
particular series of preferred stock, or except as expressly required by the
laws of the State of North Carolina or other applicable law, the holders of the
preferred stock will not be entitled to vote. Except as indicated in the
prospectus supplement relating to a particular series of preferred stock, each
share will be entitled to one vote on matters on which holders of the series of
the preferred stock are entitled to vote.
However, as more fully described below in the subsection entitled
"Depositary Shares," if we elect to issue depositary shares representing a
fraction of a share of preferred stock, each depositary share will, in effect,
be entitled to a fraction of a vote, rather than a full vote. Because each full
share of any series of preferred stock will be entitled to one vote, the voting
power of the series, on matters on which holders of the series and holders of
other series of preferred stock are entitled to vote as a single class, will
depend on the number of shares in the series, not the aggregate liquidation
preference or initial offering price of the shares of the series of preferred
stock.
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In addition to the foregoing voting rights, under the North Carolina
Business Corporation Act as now in effect, the holders of preferred stock will
have the voting rights described in the above subsection entitled "General"
with respect to amendments to our Charter that would increase the number of
authorized shares of our preferred stock.
Liquidation Rights.
In the event of our liquidation, dissolution or winding up, the holders of
preferred stock will be entitled to receive, for each share thereof, the fixed
liquidation or stated value for the respective series together in all cases
with all dividends accrued or in arrears on the preferred stock, before any
distribution of the assets will be made to the holders of any stock ranking
junior to the preferred stock, such as our common stock. If the assets
distributable among the holders of preferred stock would be insufficient to
permit the payment of the full preferential amounts fixed for all series, then
the distribution will be made among the holders of each series ratably in
proportion to the full preferential amounts to which they are each entitled.
Depositary Shares.
General.
We may, at our option, elect to offer fractional, rather than full, shares
of preferred stock. In the event we exercise the option, we will issue to the
public receipts for depositary shares. Each receipt will represent a fraction
of a share of a particular series of preferred stock as described below and in
the applicable prospectus supplement.
The shares of any series of preferred stock represented by depositary shares
will be deposited under a deposit agreement between us and a bank or trust
company that we select having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000. The deposit
agreement may provide that each owner of a depositary share will be entitled,
in proportion to the applicable fraction of a share of preferred stock
represented by the depositary share, to all the rights and preferences of the
preferred stock represented thereby, including dividend, voting, redemption and
liquidation rights.
The depositary shares will be evidenced by depositary receipts issued under
the deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock. If depositary shares are
issued, copies of the forms of deposit agreement and depositary receipt will be
incorporated by reference in the registration statement of which this
prospectus is a part, and the following summary is qualified in its entirety by
reference to those documents.
Pending the preparation of definitive engraved depositary receipts, the
depositary bank may, upon our written order, issue temporary depositary
receipts substantially identical to, and entitling the holders thereof to all
the rights pertaining to, the definitive depositary receipts but not in
definitive form. Definitive depositary receipts will be prepared thereafter
without unreasonable delay, and temporary depositary receipts will be
exchangeable for definitive depositary receipts at our expense.
Withdrawal of Preferred Stock.
Upon surrender of the depositary receipts to the depositary bank, the owner
of the depositary shares is entitled to delivery of the number of whole shares
of preferred stock represented by the depositary shares. If the depositary
receipts delivered by the holder evidence a number of depositary shares in
excess of the number of depositary shares representing the number of whole
shares of preferred stock to be withdrawn, the depositary bank will deliver to
the holder at the same time a new depositary receipt evidencing the excess
number of depositary shares. The depositary bank will not distribute fractional
shares of preferred stock or cash instead of the fractional shares.
Consequently, a holder of a depositary receipt representing a fractional share
of preferred stock would be able to liquidate his position only by sale to a
third party in a public trading market transaction or otherwise, unless the
depositary shares are redeemed by us or converted by the holder.
19
<PAGE>
Dividends and Other Distributions.
The depositary bank will distribute all cash dividends or other cash
distributions that it receives on the preferred stock to the record holders of
depositary shares relating to the preferred stock in proportion to the number
of the depositary shares owned by the holders.
In the event of a distribution other than in cash, the depositary bank will
distribute property that it receives to the record holders of depositary shares
entitled to the property. However, if the depositary bank determines that it is
not feasible to make the distribution, the depositary bank may, with our
approval, sell the property and distribute the net proceeds from the sale to
the holders.
Redemption of Depositary Shares.
If a series of preferred stock represented by depositary shares is
redeemable, the depositary shares will be redeemed from the proceeds that the
depositary bank receives resulting from the redemption, in whole or in part, of
the series of preferred stock that the depositary bank holds. The redemption
price per depositary share will be equal to the applicable fraction of the
redemption price per share payable with respect to the series of preferred
stock. Whenever we redeem shares of preferred stock held by the depositary
bank, the depositary bank will redeem as of the same redemption date the number
of depositary shares representing the shares of redeemed preferred stock. If
fewer than all of the depositary shares are to be redeemed, the depositary
shares to be redeemed will be selected by lot or pro rata as the depositary
bank may determine.
Voting the Preferred Stock.
Upon receipt of notice of any meeting at which the holders of preferred
stock are entitled to vote, the depositary bank will mail the information
contained in the notice of meeting to the record holders of the depositary
shares relating to the preferred stock. Each record holder of the depositary
shares on the record date, which will be the same date as the record date for
the preferred stock, will be entitled to instruct the depositary bank as to the
exercise of the voting rights pertaining to the amount of preferred stock
represented by the holder's depositary shares. The depositary bank will
endeavor, insofar as practicable, to vote the amount of preferred stock
represented by the depositary shares under the instructions, and we will agree
to take all action that the depositary bank deems necessary to enable the
depositary bank to do so. The depositary bank may abstain from voting shares of
preferred stock to the extent it does not receive specific instructions from
the holders of depositary shares representing the preferred stock.
Amendment and Termination of the Depositary Agreement.
At any time, we may agree with the depositary bank to amend the form of
depositary receipt evidencing the depositary shares and any provision of the
deposit agreement. However, any amendment that materially and adversely alters
the rights of the holders of depositary shares will not be effective unless the
holders of at least a majority of the depositary shares then outstanding has
approved the amendment. We or the depositary bank may terminate the deposit
agreement only if:
. all outstanding depositary shares have been redeemed, or
. there has been a final distribution on the preferred stock in connection
with our liquidation, dissolution or winding up, and the distribution has
been distributed to the holders of depositary receipts.
Charges of Depositary Bank.
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges
of the depositary bank in connection with the initial deposit of the preferred
stock and any redemption of the preferred stock. Holders of depositary receipts
will pay other transfer and other taxes and governmental charges and the other
charges, including any fee for the withdrawal of shares of preferred stock upon
surrender of depositary receipts, as are expressly provided in the deposit
agreement for their accounts.
20
<PAGE>
Miscellaneous.
The depositary bank will forward to holders of depositary receipts all
required reports and communications from us that are delivered to the
depositary bank.
Neither we nor the depositary bank will be liable if we are prevented or
delayed by law or any circumstance beyond our control in performing the
obligations under the deposit agreement. Those obligations will be limited to
performance in good faith of the duties thereunder, and we will not be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preferred stock unless satisfactory indemnity is
furnished. We and the depositary bank may rely upon written advice of counsel
or accountants, or upon information provided by persons presenting preferred
stock for deposit, holders of depositary receipts or other persons believed to
be competent and on documents believed to be genuine.
Resignation and Removal of Depositary Bank.
The depositary bank may resign at any time by delivering to us notice of
its election to do so. We may remove the depositary bank at any time. Any
resignation or removal will take effect upon the appointment of a successor
depositary bank and its acceptance of the appointment. The successor
depositary bank must be appointed within 60 days after delivery of the notice
of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
Miscellaneous.
The preferred stock, when issued in exchange for full consideration, will
be fully paid and nonassessable.
DESCRIPTION OF OUR COMMON STOCK
General.
The following is a summary of some of the terms of our common stock. For a
more complete description of our common stock, you should review the
applicable North Carolina law, our Charter and Bylaws, and the Amended and
Restated Rights Agreement, dated December 2, 1999, between us and Equiserve
Trust Company, N.A., as rights agent.
Our Charter authorizes us to issue 1,400,000,000 shares of common stock. As
of January 28, 2000, we had 382,359,000 shares of common stock outstanding.
Each share of common stock is entitled to one vote on all matters submitted to
a vote of shareholders. Holders of common stock are entitled to receive
dividends when our Board of Directors declares them out of funds legally
available therefor. Dividends may be paid on the common stock only if all
dividends on any outstanding preferred stock have been paid or provided for.
The issued and outstanding shares of common stock are fully paid and
nonassessable. Holders of common stock have no preemptive or conversion
rights, and we may not make further calls or assessments on our common stock.
In the event of our voluntary or involuntary dissolution, liquidation or
winding up, holders of common stock are entitled to receive, pro rata, after
satisfaction in full of the prior rights of creditors and holders of preferred
stock, if any, all of our remaining assets available for distribution.
Directors are elected by a vote of the holders of common stock. Holders of
common stock are not entitled to cumulative voting rights.
Equiserve Trust Company, N.A. of Boston, Massachusetts, acts as the
transfer agent and registrar for the common stock.
21
<PAGE>
Preferred Share Purchase Rights.
In 1998, under our Shareholder Rights Plan, we distributed as a dividend one
right for each outstanding share of common stock. Each right entitles the
holder to buy one one-thousandth of a share of Participating Cumulative
Preferred Stock, Series A, at an exercise price of $152.50, which we may adjust
at a later time.
The rights will become exercisable only if a person or group acquires or
announces a tender offer for 15% or more of our outstanding common stock. When
exercisable, we may issue a share of common stock in exchange for each right
other than those held by the person or group. If a person or group acquires 30%
or more of the outstanding common stock, each right will entitle the holder,
other than the acquiring person, upon payment of the exercise price, to acquire
preferred stock or, at our option, common stock, having a value equal to twice
the right's exercise price. If we are acquired in a merger or other business
combination or if 50% of our earnings power is sold, each right will entitle
the holder, other than the acquiring person, to purchase securities of the
surviving company having a market value equal to twice the exercise price of
the right.
The rights will expire on September 9, 2008, and may be redeemed by us at a
price of $.001 per right at any time before the tenth day after an announcement
that a 15% position has been acquired.
Until a person or group acquires or announces a tender offer for 15% or more
of the common stock:
. the rights will be evidenced by the common stock certificates and will be
transferred with and only with such common stock certificates, and
. the surrender for transfer of any certificate for common stock will also
constitute the transfer of the rights associated with the common stock
represented by such certificate.
Rights may not be transferred, directly or indirectly:
. to any person or group that has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the rights, referred to
as an "acquiring person;"
. to any person in connection with a transaction in which such person
becomes an acquiring person; or
. to any affiliate or associate of an acquiring person.
Any right that is the subject of a purported transfer to an acquiring person
will be null and void.
The rights may have some anti-takeover effects. The rights will cause
substantial dilution to a person or group that acquires more than 15% of the
outstanding shares of our common stock if some events thereafter occur without
the rights having been redeemed. However, the rights should not interfere with
any merger or other business combination approved by the Board of Directors and
the shareholders because the rights are redeemable in some circumstances.
Change of Control Provisions.
Some provisions of our Charter and of North Carolina law govern the rights
of holders of common stock with the intention of affecting any attempted change
of control of Lowe's.
Board of Directors.
Our Charter classifies the Board of Directors into three separate classes,
with the term of one-third of the directors expiring at each annual meeting.
Removal of a director requires the affirmative vote of 70% of outstanding
voting shares. These provisions make it more difficult for holders of our
common stock to gain control of the Board of Directors.
Fair Price Provisions.
Provisions of our Charter, which we will refer to as the "fair price
provisions," limit the ability of an interested shareholder to effect some
transactions involving us. An "interested shareholder" is one who beneficially
owns 20% or more of our outstanding voting shares.
22
<PAGE>
Unless the fair price provisions are satisfied, an interested shareholder
may not engage in a business combination, which includes a merger,
consolidation, share exchange or similar transaction, involving us unless
approved by 70% of our outstanding voting shares. In general, the fair price
provisions require that an interested shareholder pay shareholders the same
amount of cash or the same amount and type of consideration paid by the
interested shareholder when it initially acquired our shares.
The fair price provisions are designed to discourage attempts to acquire
control of us in non-negotiated transactions utilizing two-tier pricing
tactics, which typically involve the accumulation of a substantial block of the
target corporation's stock followed by a merger or other reorganization of the
acquired company on terms determined by the purchaser. Due to the difficulties
of complying with the requirements of the fair price provisions, the fair price
provisions generally may discourage attempts to obtain control of us.
North Carolina Shareholder Protection Act.
The North Carolina Shareholder Protection Act requires the affirmative vote
of 95% of our voting shares to approve a business combination with any person
that beneficially owns 25% of the voting shares of the corporation unless the
"fair price" provisions of the Act are satisfied. The statute's intended effect
is similar to the fair price provisions of our Charter.
DESCRIPTION OF OUR WARRANTS
We may issue warrants for the purchase of preferred stock or common stock.
We may issue the warrants independently or together with any other offered
securities, and they may be attached to or separate from the other securities.
We will issue each series of warrants under a separate warrant agreement
between us and a warrant agent. The warrant agent will act solely as our agent
in connection with the warrants of a series and will not assume any obligation
or relationship of agency or trust for or with any holders or beneficial owners
of warrants.
If we issue warrants, copies of the forms of the warrant agreement and the
certificate evidencing the warrants will be incorporated by reference in the
registration statement of which this prospectus is a part. You should refer to
those documents for a more complete description of the warrants.
The applicable prospectus supplement may describe the following terms of the
warrants:
. the title of the warrants;
. the aggregate number of the warrants;
. the price or prices at which the warrants will be issued;
. the designation, aggregate principal amount and terms of the securities
purchasable upon exercise of the warrants;
. the designation and terms of the offered securities with which the
warrants are issued and the number of the warrants issued with each
security;
. if applicable, the date on and after which the warrants and the related
securities may be separately transferable;
. the price at which the securities purchasable upon exercise of the
warrants may be purchased;
. the date on which the right to exercise the warrants will commence and
the date on which the right will expire;
. the minimum or maximum amount of the warrants that may be exercised at
any one time;
. information with respect to book-entry procedures, if any;
. a discussion of material federal income tax considerations; and
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
23
<PAGE>
PLAN OF DISTRIBUTION OF THE OFFERED SECURITIES
The offered securities may be sold for public offering to underwriters or
dealers, which may be a group of underwriters represented by one or more
managing underwriters, or through the firms or other firms acting alone or
through dealers. We may also sell the offered securities directly or through
agents to investors. The prospectus supplement will contain the names of any
agents, dealers or underwriters involved in the sale of the offered securities
described in this prospectus, the applicable agent's commission, dealer's
purchase price or underwriter's discount and our net proceeds.
The prospectus supplement will describe any underwriting compensation that
we pay to underwriters or agents in connection with the offering of offered
securities and any discounts, concessions or commissions that the underwriters
allow to participating dealers. Underwriters, dealers and agents participating
in the distribution of the offered securities may be deemed to be
"underwriters" within the meaning of the Securities Act. In addition, any
discounts and commissions that the underwriters receive and any profit that
they realize on resale of the offered securities may be deemed to be
underwriting discounts and commissions under the Securities Act.
If any underwriters are utilized in the sale of the offered securities, we
will execute an underwriting agreement with the underwriters at the time an
agreement for the sale is reached. The underwriting agreement will provide that
the obligations of the underwriters are subject to conditions precedent and
that the underwriters with respect to a sale of offered securities will be
obligated to purchase all of the offered securities if any are purchased. In
connection with the sale of offered securities, the underwriters may be deemed
to have received compensation from us in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of offered
securities for whom they may act as agent.
The underwriters may sell offered securities to or through dealers, and the
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent. Under the underwriting agreements, underwriters,
dealers and agents who participate in the distribution of the offered
securities, may be entitled to indemnification by us against some civil
liabilities, including liabilities under the Securities Act or contribution
with respect to payments that the underwriters, dealers or agents may be
required to make. The underwriters of an underwritten offering of offered
securities will be listed in the prospectus supplement relating to an offering
and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be listed on the cover of the prospectus supplement.
If indicated in an applicable prospectus supplement, we will authorize
dealers acting as our agents to solicit offers from some institutions to
purchase our offered securities at the public offering price given in the
prospectus supplement under "Delayed Delivery Contracts" providing for payment
and delivery on the date or dates stated in such prospectus supplement. Each
contract will be for an amount not less than, and the aggregate principal
amount of offered securities sold under the contracts will not be less nor more
than, the respective amounts stated in the prospectus supplement. Institutions
with whom contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in all
cases be subject to our approval. Contracts will not be subject to any
conditions except that:
. the purchase by an institution of the offered securities covered by its
contracts will not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is
subject, and
. if the offered securities are being sold to underwriters, we will have
sold to the underwriters the total principal amount of the offered
securities less the principal amount covered by contracts.
Agents and underwriters will have no responsibility in respect of the delivery
or performance of the contracts.
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<PAGE>
Some of the underwriters and their affiliates may be customers of, engage in
transactions with and perform services for us and our subsidiaries and the
trustees in the ordinary course of business.
The offered securities may or may not be listed on a national securities
exchange or a foreign securities exchange. No assurances can be given that
there will be a market for the offered securities.
LEGAL MATTERS
The validity of the offered securities will be passed upon for us by Hunton
& Williams, Richmond, Virginia.
EXPERTS
The financial statements incorporated in this prospectus by reference from
Lowe's Annual Report on Form 10-K as of January 29, 1999 and for each of the
three years in the period ended January 29, 1999 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
25
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You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making any offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or the
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
About this Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Incorporation of Information Filed With the SEC............................ 3
Warning Regarding Forward-Looking Statements............................... 4
The Company................................................................ 5
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 6
Description of Our Debt Securities......................................... 6
Description of Our Preferred Stock......................................... 17
Description of Our Common Stock............................................ 21
Description of Our Warrants................................................ 23
Plan of Distribution of the Offered Securities............................. 24
Legal Matters.............................................................. 25
Experts.................................................................... 25
</TABLE>
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$1,000,000,000
[LOGO]
Securities
-----------------
PROSPECTUS
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, 2000
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $264,000
Blue Sky fees and expenses......................................... 10,000
Legal fees......................................................... 150,000
Accounting fees.................................................... 50,000
Rating agency fees................................................. 150,000
Trustee fees....................................................... 5,000
Printing, engraving and postage expenses........................... 100,000
Miscellaneous expenses............................................. 21,000
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Total............................................................ $750,000
========
</TABLE>
Item 15. 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 the 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 that are the subject of the proceeding, the person knew
or believed that the 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 the 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 he 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.
II-1
<PAGE>
Item 16. Exhibits
<TABLE>
<C> <S>
4.1 --Amended and Restated Indenture, dated as of December 1, 1995, between
the Company and Bank One, N.A., formerly known as The First National
Bank of Chicago (incorporated herein by reference to Exhibit 4.1 of the
Company's Current Report on Form 8-K dated December 15, 1995)
4.2 --First Supplemental Indenture, dated as of February 23, 1999, to the
Amended and Restated Indenture dated as of December 1, 1995 between the
Company and Bank One, N.A., formerly known as First National Bank of
Chicago (incorporated by reference to Exhibit 10.13 of the Company's
Annual Report on Form 10-K dated April 19, 1999)
4.3 --Form of Subordinated Indenture between the Company and The Bank of New
York (incorporated herein by reference to Exhibit 4.2 of the Company's
Registration Statement on Form S-3 (File No. 333-14257) dated October
16, 1996)
4.4 --Amended and Restated Rights Agreement dated December 2, 1999 between
the Company and Equiserve Trust Company, N.A. as Rights Agent
(incorporated herein by reference to Exhibit 2 of Amendment No. 2 to
the Company's Registration Statement on Form 8-A dated February 14,
2000, as amended by Exhibit 1 of Amendment No. 3 to the Company's
Registration Statement on Form 8-A, dated March 2, 2000)
4.5 --Form of Deposit Agreement*
4.6 --Form of Deposit Receipt*
4.7 --Form of Warrant Agreement*
4.8 --Form of Warrant Certificate*
5 --Opinion of Hunton & Williams
12 --Statement re Computation of Ratios
15 --Letter of Deloitte & Touche LLP re Unaudited Interim Financial
Information
23.1 --Consent of Deloitte & Touche LLP
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company (included
on signature pages)
25.1 --Statement of Eligibility and Qualification on Form T-1 of Bank One,
N.A., as the Trustee, under the Trust Indenture Act of 1939
25.2 --Statement of Eligibility and Qualification on Form T-1 of The Bank of
New York as the Trustee, under the Trust Indenture Act of 1939
(incorporated herein by reference to Exhibit 25.2 of the Company's
Registration Statement on Form S-3 (File No. 333-14257) dated October
16, 1996)
</TABLE>
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* To be filed after effectiveness of this Registration Statement and
incorporated by reference under a Report on Form 8-K.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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
II-2
<PAGE>
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 a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to the information in the registration statement; provided,
however, that the undertakings set forth in subparagraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
(4) 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 section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) 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.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
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 of 1933 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 the indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of the issue.
(6) That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering thereof.
(8) To file an application for the purpose of determining the eligibility of
a trustee to act under subsection (a) of Section 310 of the Trust Indenture Act
of 1939 in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Trust Indenture Act of 1939.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Wilkes, State of North Carolina, on April 11,
2000.
Lowe's Companies, Inc. (Registrant)
/s/ Robert L. Tillman
By: _________________________________
Robert L. Tillman,
Chairman of the Board of
Directors, President,
Chief Executive Officer and
Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on April 11, 2000. Each of the directors and/or officers
of Lowe's Companies, Inc. whose signature appears below hereby appoints Thomas
E. Whiddon, Stephen A. Hellrung and Lathan M. Ewers, Jr., and each of them
severally, as his attorney-in-fact to sign in his name and behalf, in any and
all capacities stated below, and to file with the Securities and Exchange
Commission any and all amendments, including post-effective amendments, to this
registration statement, making such changes in the registration statement as
appropriate, and generally to do all the things in their behalf in their
capacities as officers and directors to enable Lowe's Companies, Inc. to comply
with the provisions of the Securities Act of 1933, and all requirements of the
Securities and Exchange Commission.
<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
Thomas E. Whiddon Officer)
/s/ Kenneth W. Black, Jr. Senior Vice President and Chief
______________________________________ Accounting Officer (Principal
Kenneth W. Black, Jr. Accounting Officer)
/s/ Leonard L. Berry, Ph.D. Director
______________________________________
Leonard L. Berry, Ph.D.
/s/ Peter C. Browning Director
______________________________________
Peter C. Browning
/s/ Carol A. Farmer Director
______________________________________
Carol A. Farmer
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Paul Fulton Director
______________________________________
Paul Fulton
/s/ James F. Halpin Director
______________________________________
James F. Halpin
/s/ Richard K. Lochridge Director
______________________________________
Richard K. Lochridge
/s/ Claudine B. Malone Director
______________________________________
Claudine B. Malone
/s/ Robert G. Schwartz Director
______________________________________
Robert G. Schwartz
/s/ Robert L. Strickland Director
______________________________________
Robert L. Strickland
Director
______________________________________
Kenneth D. Lewis
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page
------- ------- ----
<C> <S> <C>
4.1 --Amended and Restated Indenture, dated as of December 1, 1995,
between the Company and Bank One, N.A., formerly known as The
First National Bank of Chicago (incorporated herein by
reference to Exhibit 4.1 of the Company's Current Report on
Form 8-K dated December 15, 1995)
4.2 --First Supplemental Indenture, dated as of February 23, 1999,
to the Amended and Restated Indenture dated as of December 1,
1995 between the Company and Bank One, N.A., formerly known as
First National Bank of Chicago (incorporated by reference to
Exhibit 10.13 of the Company's Annual Report on Form 10-K
dated April 19, 1999)
4.3 --Form of Subordinated Indenture between the Company and The
Bank of New York (incorporated herein by reference to Exhibit
4.2 of the Company's Registration Statement on Form S-3 (File
No. 333-14257) dated October 16, 1996)
4.4 --Amended and Restated Rights Agreement dated December 2, 1999
between the Company and Equiserve Trust Company, N.A. as
Rights Agent (incorporated herein by reference to Exhibit 2 of
Amendment No. 2 to the Company's Registration Statement on
Form 8-A dated February 14, 2000, as amended by Exhibit 1 of
Amendment No. 3 to the Company's Registration Statement on
Form 8-A, dated March 2, 2000)
4.5 --Form of Deposit Agreement*
4.6 --Form of Deposit Receipt*
4.7 --Form of Warrant Agreement*
4.8 --Form of Warrant Certificate*
5 --Opinion of Hunton & Williams
12 --Statement re Computation of Ratios
15 --Letter of Deloitte & Touche LLP re Unaudited Interim
Financial Information
23.1 --Consent of Deloitte & Touche LLP
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company
(included on signature pages)
25.1 --Statement of Eligibility and Qualification on Form T-1 of
Bank One, N.A., as the Trustee, under the Trust Indenture Act
of 1939
25.2 --Statement of Eligibility and Qualification on Form T-1 of The
Bank of New York as the Trustee, under the Trust Indenture Act
of 1939 (incorporated herein by reference to Exhibit 25.2 of
the Company's Registration Statement on Form S-3 (File No.
333-14257) dated October 16, 1996)
</TABLE>
- --------
* To be filed after effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
<PAGE>
Exhibit 5
Hunton & Williams
951 East Byrd Street
Riverfront Plaza, East Tower
Richmond, VA 23219
April 11, 2000
Lowe's Companies, Inc.
1605 Curtis Bridge Road
Wilkesboro, North Carolina 28697
Shelf Registration Statement on Form S-3
Relating to $1,000,000,000 Issue Amount of Unallocated Securities
Ladies and Gentlemen:
We have acted as counsel to Lowe's Companies, Inc., a North Carolina
corporation (the "Company"), in connection with the registration by the Company
of an aggregate of $1,000,000,000 of its (i) unsecured debt securities ("Debt
Securities"), which may be either senior debt securities ("Senior Debt
Securities") or subordinated debt securities ("Subordinated Debt Securities"),
(ii) shares of preferred stock, par value $5.00 per share ("Preferred Stock"),
which may be issued in the form of depositary shares evidenced by depositary
receipts ("Depositary Shares"), (iii) shares of common stock, par value $.50 per
share ("Common Stock"), and (iv) warrants to purchase shares of Common Stock or
Preferred Stock ("Warrants") on terms to be determined at the time of sale (the
Debt Securities, Preferred Stock, Depositary Shares, Common Stock and Warrants
are referred to collectively as the "Securities"), as set forth in the
Registration Statement on Form S-3 (the "Registration Statement") that is being
filed on the date hereof with the Securities and Exchange Commission (the
"Commission") by the Company pursuant to the Securities Act of 1933, as amended.
The Securities are to be issued in one or more series and are to be sold from
time to time as set forth in the Registration Statement, the Prospectus
contained therein (the "Prospectus") and any amendments or supplements thereto.
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, we are of the opinion that:
1. The Company is duly incorporated, validly existing and in
good standing under the laws of the State of North Carolina; and
2. When (a) the terms of any class or series of the Securities have
been authorized by appropriate corporate action of the Company and (b) the
Securities have been issued and sold upon the terms and conditions set forth in
the Registration Statement, the Prospectus and the applicable supplement to the
Prospectus, and with respect to the Debt Securities, such Debt Securities have
been duly executed, authenticated and delivered in accordance with the
applicable indenture, then (x) the Debt Securities will be validly authorized
and issued and
<PAGE>
Lowe's Companies, Inc.
April 11, 2000
Page 2
binding obligations of the Company and (y) the Preferred Stock and the Common
Stock 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 and to the statement made in reference
to this firm under the caption "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
00779/07667/08322
<PAGE>
Exhibit 12
----------
Lowe's Companies, Inc.
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
For the Nine Months For the Year Ended January
Ended -----------------------------------------------------------
10/29/99 10/30/98 1999 1998 1997 1996 1995
------------------------ -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Before Income Taxes 828,177 629,969 787,366 598,631 487,765 377,415 344,492
Fixed Charges:
Interest Expense 93,690 79,490 104,241 81,908 65,579 56,358 45,259
1/3 Rental Expense 34,395 26,435 36,679 28,182 25,392 23,462 18,260
------------------------ -----------------------------------------------------------
Earnings, as Defined 956,262 735,894 928,286 708,722 578,736 457,235 408,011
Fixed Charges:
Interest Expense 93,690 79,490 104,241 81,908 65,579 56,358 45,259
Capitalized Interest 13,239 11,875 17,580 9,077 8,997 7,319 5,931
1/3 Rental Expense 34,395 26,435 36,679 28,182 25,392 23,462 18,260
------------------------ -----------------------------------------------------------
Fixed Charges 141,324 117,800 158,500 119,167 99,968 87,139 69,450
Fixed Charge Coverage (Ratio
of Earnings to Fixed Charges) 6.77 6.25 5.86 5.95 5.79 5.25 5.87
</TABLE>
<PAGE>
Exhibit 15
April 7, 2000
Lowe's Companies, Inc.
Wilkesboro, North Carolina
We have made a review, in accordance with the standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of Lowe's Companies, Inc. and subsidiaries for the periods
ended April 30, 1999, July 30, 1999, and October 29, 1999, as indicated in our
reports dated May 11, 1999, August 11, 1999 and November 10, 1999, respectively;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended April 30, 1999, July 30,
1999, and October 29, 1999 are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Lowe's Companies, Inc. and subsidiaries on Form S-3 of our report dated February
19, 1999, appearing in and incorporated by reference in the Annual Report on
Form 10-K of Lowe's Companies, Inc. and subsidiaries for the year ended January
29, 1999 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
April 7, 2000
<PAGE>
Exhibit 25.1
------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
----------------------------
Bank One, National Association
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
1 Bank One Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
Bank One, National Association
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670-0126
Attn: Sandra L. Caruba (312) 336-9436
(Name, address and telephone number of agent for service)
-----------------------------
LOWE'S COMPANIES, INC.
(Exact name of obligor as specified in its charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
P. O. Box 1111
North Wilkesboro, North Carolina 28659
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following information as to the
--------------------
trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of Governors
of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
------------------------------
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
----------------
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 7th day of April, 2000.
Bank One, National Association,
Trustee
By /s/ Sandra L. Caruba
--------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of Bank One, National
Association, filed as Exhibit 25 to the Registration Statement on Form S-3 of
Household Finance Corporation filed with the Securities and Exchange Commission
on March 24, 2000 (Registration No. 333-33240).
<PAGE>
Exhibit 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
April 7, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between
Lowe's Companies, Inc. and Bank One, National Association, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
Bank One, National Association
By /s/ Sandra L. Caruba
--------------------
Sandra L. Caruba
Vice President
