LOWESCOMPANIES EMPLOYEESTOCK PURCHASE PLAN- STOCKOPTIONS FOR EVERYONE AsAmended and Restated Effective December 1, 2008 TABLEOF CONTENTS

 

 

 

1.01           Administrator ........................................................................................................................................................................................................1

1.02           Affiliate ...................................................................................................................................................................................................................1

1.03           Board ......................................................................................................................................................................................................................1

1.04           Change in Control ................................................................................................................................................................................................1

1.05           Code ...................................................................................................................................................................................................................... 2

1.06           Common Stock ......................................................................................................................................................................................................2

1.07           Company ................................................................................................................................................................................................................2

1.08           Compensation. ......................................................................................................................................................................................................2

1.09           Control Change Date ............................................................................................................................................................................................3

1.10           Date of Exercise .....................................................................................................................................................................................................3

1.11           Date of Grant ..........................................................................................................................................................................................................3

1.12           Election Date ..........................................................................................................................................................................................................3

1.13           Eligible Employee ..................................................................................................................................................................................................3

1.14           Enrollment Form .....................................................................................................................................................................................................3

1.15           Enrollment Period ..................................................................................................................................................................................................3

1.16           Exchange Act .........................................................................................................................................................................................................3

1.17           Fair Market Value ...................................................................................................................................................................................................3

1.18           Five Percent Shareholder .....................................................................................................................................................................................4

1.19           Offering Period .......................................................................................................................................................................................................4

1.20           Option ......................................................................................................................................................................................................................4

1.21           Participant ...............................................................................................................................................................................................................4

1.22           Plan ..........................................................................................................................................................................................................................4

 

 

 

 

 

 

 

 

5.01           Enrollment Form .....................................................................................................................................................................................................5

5.02           Participant’s Account ..........................................................................................................................................................................................5

 

 

6.01           Number of Shares .................................................................................................................................................................................................5

6.02           Option Price ...........................................................................................................................................................................................................6

 

 

7.01           Automatic Exercise ...............................................................................................................................................................................................6

7.02           Change in Control .................................................................................................................................................................................................6

7.03           Nontransferability .................................................................................................................................................................................................6

7.04           Employee Status ....................................................................................................................................................................................................7

7.05           Delivery of Shares .................................................................................................................................................................................................7

7.06           Vesting ....................................................................................................................................................................................................................7

 

 

 

 

8.01           Generally ...............................................................................................................................................................................................................7

8.02           Subsequent Participation ...................................................................................................................................................................................7

 

 

9.01           Aggregate Limit ...................................................................................................................................................................................................7

9.02           Reallocation of Shares ........................................................................................................................................................................................8

 

 

 

 

 

 

12.01               Effect on Employment and Service ............................................................................................................................................................8

12.02               Unfunded Plan ..............................................................................................................................................................................................9

12.03               Rules of Construction ..................................................................................................................................................................................9

 

 

 

 

 

 

 

1.01                      Administrator.

Administrator means the Lowe’s Companies, Inc. Administrative Committee.

1.02                      Affiliate.

Affiliate means any “parent corporation” or “subsidiary corporation” (within the meaning of Section 424 of the Code) of the Company, including a corporation that becomes an Affiliate after the adoption of this Plan, that the Administrator designates as a participating employer in the Plan.

1.03                      Board.

Board means the Board of Directors of the Company or any committee of such Board of Directors to which, and to the extent, the Board of Directors of the Company has delegated some or all of its power, authority, duties or responsibilities with respect to the Plan.

1.04                      Change in Control.

Change in Control means the occurrence of any one of the following events:

(i)

individuals who constitute the Board as of December 1, 2008 (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director after the Effective Date and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest (as described in Rule 14a-11 under the Exchange Act) (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Section 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director;

(ii)

any person becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this paragraph (ii) shall not be deemed to be a Change in Control of the Company by virtue of any of the following acquisitions: (A) an acquisition directly by or from the Company or any Affiliate; (B) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, (C) an acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) an acquisition pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii)); or

(iii)

the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s

 

 

assets to an entity that is not an affiliate of the Company (a “Sale”), unless immediately following such Reorganization or Sale: (A) more than 60% of the total voting power of (x) the corporation resulting from such Reorganization or the corporation which has acquired all or substantially all of the assets of the Company (in either case, the “Surviving Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by the Company Voting Securities that were outstanding immediately prior to such Reorganization or Sale (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Reorganization or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Reorganization or Sale, (B) no person (other than (x) the Company, (y) any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation, or (z) a person who immediately prior to the Reorganization or Sale was the beneficial owner of 25% or more of the outstanding Company Voting Securities) is the beneficial owner, directly or indirectly, of 25% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Reorganization or Sale were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization or Sale (any Reorganization or Sale which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”).

1.05                      Code.

Code means the Internal Revenue Code of 1986, and any amendments thereto.

1.06                      Common Stock.

Common Stock means the common stock of the Company.

1.07                      Company.

Company means Lowe’s Companies, Inc.

1.08                      Compensation.

Compensation means, as to payroll periods ending during an Offering Period, (a) in the case of an employee who is classified as a full-time employee under the payroll procedures of the Company or an Affiliate and who works at least 80 hours in a payroll period, the employee’s base salary or wages for the biweekly payroll period based on 80 hours of work during the payroll period, (b) in the case of an employee who is classified as a full-time employee under the payroll procedures of the Company or an Affiliate and who works less than 80 hours in a payroll period, the employee’s actual base salary or wages for the biweekly payroll period, (c) in the case of an employee who is not classified as a full-time employee under the payroll procedures of the Company or an Affiliate and who works at least 40 hours in a payroll period, the employee’s base salary or wages for the biweekly payroll period based on 40 hours of work during the payroll period and (d) in the case of an employee who is not classified as a full-time employee under the payroll procedures of the Company or an Affiliate and who works less than 40 hours in a payroll period, the employee’s actual base salary or wages for the biweekly payroll period.

 

1.09                      Control Change Date.

Control Change Date means the date on which a Change in Control occurs.  If a Change in Control occurs on account of a series of transactions, the “Control Change Date” is the date of the last of such transactions.

1.10                      Date of Exercise.

Date of Exercise shall be concurrent with the applicable Date of Grant.

1.11                      Date of Grant.

Date of Grant means each (a) November 30 next following the June 1 beginning of each Offering Period, and (b) May 31 next following the December 1 beginning of each Offering Period.

1.12                      Election Date.

Election Date means the last business day of the Enrollment Period.

1.13                      Eligible Employee.

Eligible Employee means (a) an employee of the Company or an Affiliate who is classified as a full-time employee under the payroll procedures of the Company or Affiliate and (b) an employee of the Company or an Affiliate who is not classified as a full-time employee under the payroll procedures of the Company or Affiliate and who has completed at least twelve months of continuous employment with the Company and its Affiliates.  The preceding sentence to the contrary notwithstanding, an individual who is a Five Percent Shareholder is not an Eligible Employee.

1.14                      Enrollment Form.

Enrollment Form means a form, prescribed by the Administrator, that a Participant uses to authorize a reduction in his Compensation in accordance with Article V.  The form prescribed by the Administrator may be an electronic, web-based form.

1.15                      Enrollment Period.

Enrollment Period means (a) the month of May in the case of the Offering Period beginning on June 1 and (b) the month of November in the case of the Offering period beginning on December 1.

1.16                      Exchange Act.

Exchange Act means the Securities Exchange Act of 1934, as amended.

1.17                      Fair Market Value.

Fair Market Value means, on any given date, the reported “closing” price of a share of Common Stock on the primary exchange on which shares of the Common Stock are listed.  If, on any given date, no share of Common Stock is traded on an established stock exchange, then Fair Market Value shall be determined with reference to the next preceding day that the Common Stock was so traded.

 

 

1.18                      Five Percent Shareholder.

Five Percent Shareholder means any individual who, immediately after the grant of an Option owns or would be deemed to own more than five percent of the total combined voting power or value of all classes of stock of the Company or of an Affiliate.  For this purpose, (i) an individual shall be considered to own any stock owned (directly or indirectly) by or for his brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to own proportionately any stock owned (directly or indirectly) by or for a corporation, partnership, estate or trust of which such individual is a shareholder, partner or beneficiary, and (ii) stock of the Company or an Affiliate that an individual may purchase under outstanding options (whether or not granted under this Plan) shall be treated as stock owned by the individual.

1.19	Offering Period.

Offering Period means each six-month period during the term of the Plan (i) beginning on June 1 and ending on November 30, and (ii) beginning on December 1 and ending on May 31.

1.20                      Option.

Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock in accordance with, and subject to, the terms and conditions prescribed by the Plan.

1.21                      Participant.

Participant means an Eligible Employee, including an Eligible Employee who is a member of the Board, who satisfies the requirements of Article IV and who elects to receive an Option.

1.22                      Plan.

Plan means the Lowe’s Companies Employee Stock Purchase Plan - Stock Options for Everyone.

The Plan is intended to assist the Company and its Affiliates in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and its Affiliates and to associate their interests with those of the Company and its shareholders.  The Plan is intended to permit the grant of Options qualifying under Section 423 of the Code.  No Option shall be invalid for failure to qualify under Section 423 of the Code.  The proceeds received by the Company from the sale of Common Stock pursuant to this Plan shall be used for general corporate purposes.

The Plan shall be administered by the Administrator.  The Administrator shall have complete authority to interpret all provisions of this Plan; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan.  The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator.  Any decision made, or action taken, by the Administrator in connection with the administration of this Plan shall be final and conclusive.  The Administrator shall not be liable for any act done in good faith with respect to this Plan or any Option.  All expenses of administering this Plan shall be borne by the Company.

 

The Administrator, in its discretion, may delegate to one or more agents all or part of the Administrator’s authority and duties.  The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s agent that were consistent with the terms of the Plan.

Each person who is or will be an Eligible Employee as of the first day of each Offering Period may elect to participate in the Plan by completing an Enrollment Form in accordance with Section 5.01 and returning it to the Administrator on or before the Election Date.

5.01                      Enrollment Form.

(a)

An Eligible Employee who satisfies the requirements of Article IV becomes a Participant for an Offering Period by completing an Enrollment Form and returning it to the Administrator on or before the Election Date.  The Participant’s Enrollment Form shall authorize deductions from his or her Compensation for purposes of the Plan and shall specify a percentage or a dollar amount of Compensation to be deducted; provided, however, that the percentage shall be in multiples of one percent and shall be at least one percent but not more than twenty percent and the aggregate deductions during any Offering Period shall not exceed $10,625.

(b)	A Participant may not contribute to, or otherwise accumulate funds under, the Plan except by Compensation deductions in accordance with his or her Enrollment Form.

(c)

A Participant’s Enrollment Form becomes operative on the Election Date.  An Enrollment Form may be amended or revoked before the Election Date.  Once an Enrollment Form becomes operative it will continue in effect, and may not be amended, until the earlier of the Date of Exercise, the Participant’s termination of employment or the Participant’s withdrawal from the Plan in accordance with Section 8.01.

5.02                      Participant’s Account.

A recordkeeping account shall be established for each Participant.  All amounts deducted from a Participant’s Compensation pursuant to his or her Enrollment Form shall be credited to his or her account.  No interest will be paid or credited to the account of any Participant.

6.01                      Number of Shares.

(a)

Each Eligible Employee who is a Participant on the Date of Grant shall be granted an Option as of the Date of Grant.  The number of shares of Common Stock subject to such Option shall be the number of whole shares determined by dividing the option price into the balance credited to the Participant’s account as of the Date of Exercise.  Notwithstanding the preceding sentence, no Participant will be granted an Option as of any Date of Grant for more than a number of shares of Common Stock determined by dividing $12,500 by the Fair Market Value on the Date of Grant.

 

 

(b)	An Option covering a fractional share will not be granted under the Plan.  Any amount remaining to the credit of the Participant’s account after the exercise of an Option shall be returned to the Participant.

6.02                      Option Price.

The price per share for Common Stock purchased on the exercise of an Option shall be eighty-five percent (85%) of the Fair Market Value on the Date of Exercise.

7.01                      Automatic Exercise.

Subject to the provisions of Articles VIII, IX and XI, each Option shall be exercised automatically as of the Date of Grant for the number of whole shares of Common Stock that may be purchased at the option price for that Option with the balance returned to the Participant.

7.02                      Change in Control.

(a)

Notwithstanding any other provision of this Plan, in the event of a Change in Control the Board may prescribe that (i) the Date of Exercise for all outstanding Options shall be the Control Change Date (in which case the option price per share shall be the Fair Market Value on the Control Change Date), (ii) all outstanding Options shall be canceled as of the Control Change Date and each Participant shall be entitled to a payment per share (in cash or other property as determined by the Board), equal to the Fair Market Value of the number of shares of Common Stock that would have been issued to the Participant if the Option had been exercised under the preceding clause (i) or (iii) a substitute option shall be granted for each outstanding Option in accordance with Section 424 of the Code.

(b)

A Participant shall be entitled to a payment under this Plan if (i) any benefit, payment, accelerated vesting or other right under this Plan constitutes a “parachute payment” (as defined in Code section 280G(b)(2)(A), but without regard to Code section 280G(b)(2)(A)(ii)), with respect to such Participant and (ii) the Participant incurs a liability under Code section 4999.  The amount payable to a Participant described in the preceding sentence shall be the amount required to indemnify the Participant and hold him harmless from the application of Code sections 280G and 4999.  To effect this indemnification, the Company must pay such Participant an amount sufficient to pay the excise tax imposed on Participant under Code section 4999 with respect to benefits, payments, accelerated vesting and other rights under this Plan and any other plan or agreement and any income, employment, hospitalization, excise or other taxes attributable to the indemnification payment.  The benefit payable under this Section 7.02(b) shall be paid in a single cash sum not later than twenty days after the date (or extended filing date) on which the tax return reflecting liability for the Code section 4999 excise tax is required to be filed with the Internal Revenue Service.

7.03                      Nontransferability.

Each Option granted under this Plan shall be nontransferable.  During the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant.  No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant.

 

 

7.04                      Employee Status.

For purposes of determining whether an individual is employed by the Company or an Affiliate, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment.

7.05                      Delivery of Shares.

Subject to the provisions of Articles IX and XI, the Company shall deliver, to a broker designated by the Administrator, the shares of Common Stock acquired by each Participant during an Offering Period.  Such shares acquired by a Participant shall be delivered to the Participant as promptly as possible following the Participant’s request to such broker or, upon the Participant’s direction, the broker shall sell such shares of Common Stock and deliver the net sales proceeds to the Participant.

7.06                      Vesting.

A Participant’s interest in the Common Stock purchased upon the exercise of an Option shall be immediately vested and nonforfeitable.

8.01                      Generally.

A Participant may revoke his or her Enrollment Form for an Offering Period and withdraw from Participation in the Plan for that Offering Period by giving written or electronic notice authorized by the Administrator to that effect to the Administrator at any time before the Date of Exercise.  In that event, all of the payroll deductions credited to his or her account will be paid to the Participant promptly after receipt of the notice of withdrawal and no further payroll deductions will be made from his or her Compensation for that Offering Period.  A Participant shall be deemed to have elected to withdraw from the Plan in accordance with this Section 8.01 if he or she ceases to be an employee of the Company and its Affiliates for any reason.

8.02                      Subsequent Participation.

A Participant who has withdrawn his participation in the Plan under Section 8.01 may submit a new Enrollment Form to the Administrator and resume participation in the Plan for any later Offering Period, provided that he or she satisfies the requirements of Article IV and the Administrator receives his or her Enrollment Form on or before the Election Date.

9.01                      Aggregate Limit.

The maximum aggregate number of shares of Common Stock that may be issued under this Plan pursuant to the exercise of Options is 45,000,000 shares.  The maximum aggregate number of shares that may be issued under this Plan shall be subject to adjustment as provided in Article X.

 

9.02                      Reallocation of Shares.

If an Option is terminated, in whole or in part, for any reason other than its exercise, the number of shares of Common Stock allocated to the Option or portion thereof shall be reallocated to other Options to be granted under this Plan.

The maximum number of shares as to which Options may be granted under this Plan and the terms of outstanding Options shall be adjusted as the Board shall determine to be equitably required in the event that (a) the Company (i) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Section 424 of the Code applies or (b) there occurs any other event which, in the judgment of the Board necessitates such action.  Any determination made under this Article X by the Board shall be final and conclusive.

The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Options may be granted or the terms of outstanding Options.

No Option shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed.  The Company shall have the right to rely on an opinion of its counsel as to such compliance.  Any share certificate issued to evidence Common Stock for which an Option is exercised may bear such legends and statements as the Administrator may deem advisable to assure compliance with federal and state laws and regulations.  No Option shall be exercisable, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Administrator may deem advisable from regulatory bodies having jurisdiction over such matters.

12.01                      Effect on Employment and Service.

Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any individual any right to continue in the employ of the Company or an Affiliate or in any way affect any right and power of the Company or an Affiliate to terminate the employment of any individual at any time with or without assigning a reason therefor.