LOWES COMPANIES INC
EXHIBIT 10.2 - RETIREMENT AGREEMENT - ROBERT L. TILLMAN
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<TYPE>EX-10
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<FILENAME>exhibit102.htm
<DESCRIPTION>EXHIBIT 10.2 - RETIREMENT AGREEMENT - ROBERT L. TILLMAN
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<p align="right" style="margin-top: 0; margin-bottom: 0"><b>Exhibit 10.2</b></p>
<p align="right" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="center" style="margin-top: 0; margin-bottom: 0"><b>RETIREMENT
AGREEMENT</b></p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
THIS RETIREMENT AGREEMENT (this &quot;Agreement&quot;), is made and entered into as of the
third day of December, 2004, by and between LOWE'S COMPANIES, INC. a North
Carolina corporation (the &quot;Company&quot;), and ROBERT L. TILLMAN (the &quot;Executive&quot;).<br>
&nbsp;</p>
<p align="center" style="margin-top: 0; margin-bottom: 0">W I T N E S S E T H:</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
WHEREAS,&nbsp; the Executive is employed as the Chief Executive Officer and
serves as the Chairman of the Board of Directors of the Company; and</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
WHEREAS, the Company and the Executive have negotiated and agreed on the terms
of this Agreement providing for his retirement as an employee and director of
the Company and for the ongoing obligations of the parties following the
Executive's retirement.</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
NOW, THEREFORE, the parties hereby agree as follows:</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
1. <u>Continued Service; Retirement</u>. The Executive shall continue to serve
as the Chief Executive Officer and as Chairman of the Board of Directors of the
Company through January 28, 2005 (the &quot;Retirement Date&quot;), at which time his
resignation as Chief Executive Officer, a director and Chairman of the Board of
Directors of the Company shall be effective, and he shall retire and relinquish
all positions and responsibilities with the Company and its subsidiaries and
affiliates..</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
2. <u>Obligations of the Company</u>.</p>
<blockquote>
  <p align="left" style="margin-top: 0; margin-bottom: 0">(a) <u>Salary and
  Benefits</u>. For his service to the Company through the Retirement Date, the
  Executive shall continue to receive his current regular base salary and
  participate in all of the Company's incentive compensation and benefit plans
  and programs and shall receive any and all payments and benefits earned up to
  and through the Retirement Date. Not in limitation of the immediately
  preceding sentence, the Company shall pay to the Executive the &quot;Incentive
  Award&quot; he earns under the Lowe's 2001 Incentive Plan (as such term is defined
  in such plan) for the 2004 fiscal year of the Company ending on the Retirement
  Date, based on the extent to which the performance objectives for such fiscal
  year are satisfied, at its normal payment time in March 2005, and the
  &quot;Baseline Matching&quot; and &quot;Performance Matching&quot; contributions and credits to
  the Executive's accounts under the Lowe's 401(k) Plan and the Lowe's Companies
  Benefit Restoration Plan (as such terms are defined in such plans) shall be
  based on the total compensation earned by the Executive for such fiscal year,
  including the Incentive Award paid in March 2005. All payments contemplated
  under this Paragraph 2(a) shall be made to the Executive on the same date such
  amounts are paid to then active employees of the Company, and the Executive's
  right to receive such amounts shall not be affected regardless of whether such
  payments are made before or after the Retirement Date.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0">(b) <u>Health Care
  Coverage</u>. The Company shall reimburse the Executive for the cost of the
  continued medical coverage under the Company's group medical plan the
  Executive and his wife are entitled to receive under Section 601 et seq. of
  ERISA (&quot;COBRA&quot;) for the eighteen (18) month period following the Retirement
  Date. After the Executive has exhausted his COBRA coverage, the Company shall
  reimburse the Executive for the premium for a conversion policy issued through
  Blue Cross/Blue Shield for the Executive and his wife until such time that the
  Executive or his wife become eligible for Medicare coverage. After the
  Executive and his wife become eligible for Medicare, the Company shall pay the
  cost of a Medicare supplement policy that in combination with Medicare
  maintains coverage that is substantially equivalent to the coverage in effect
  on the Retirement Date. These benefits will continue for the benefit of the
  Executive's wife in event the Executive predeceases her.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (c) <u>Outstanding Equity Compensation Awards</u>. </p>
  <blockquote>
    <p align="left" style="margin-top: 0; margin-bottom: 0">(i) The award
    agreements for all stock options granted to the Executive prior to March 1,
    2003 are amended to provide that such stock options will vest in accordance
    with the vesting schedule previously established and not lapse and remain
    exercisable until the respective expiration dates set forth in the award
    agreements. The parties acknowledge and agree that this modification to any
    stock options intended to constitute &quot;incentive stock options&quot; under the
    Internal Revenue Code is a &quot;material modification&quot; of the options which will
    cause such options to convert to non-qualified stock options for federal
    income tax purposes. </p>
    <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
    (ii) The award agreements for the stock options granted to the Executive on
    March 1, 2003 currently provide that such stock options will continue to
    vest in accordance with the previously established vesting schedule and
    remain exercisable until the expiration date set forth in such agreements.</p>
    <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
    (iii) The Executive's retirement in accordance with the terms and provisions
    of this Agreement shall constitute a &quot;Board Approved Retirement&quot; for
    purposes of the deferred stock units granted to the Executive on March 1,
    2003 and the stock options and restricted stock granted to the Executive on
    March 1, 2004. Accordingly, the Executive shall become fully vested in all
    such awards on the Retirement Date.</p>
  </blockquote>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (d) <u>Other Benefits</u>. The Executive is a participant in the benefit plans
  listed on Exhibit A attached hereto. This Agreement shall not change the terms
  of such plans or the benefits earned by or due to the Executive thereunder for
  services rendered to the Company through the Retirement Date. The benefits
  earned by or due to the Executive in accordance with the terms of such plans
  shall be paid or provided by the Company or such plans (as the case may be)
  when due, and the full payment and provision of such benefits shall discharge
  fully all obligations of the Company and such plans with respect to the
  Executive's benefits under such plans.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (e) <u>Office Space and Secretarial Support</u>. The Company shall reimburse
  the Executive for the cost of relocating his office from the Company premises
  and maintaining his new office from and after the Retirement Date. The Company
  shall also provide secretarial and administrative support to the Executive for
  the two (2) year period commencing on the Retirement Date.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (f) <u>Home Purchase and Reimbursement of Relocation Expenses</u>. The
  Executive may elect to cause the Company to purchase his principal residence
  near Mooresville, North Carolina at any time during the five (5) year period
  commencing on the Retirement Date. The purchase price shall be equal to the
  Executive's cost basis in such residence, including the cost of any
  improvements the Executive has made to it. The Company shall reimburse the
  Executive for all reasonable expenses related to moving his household from
  Mooresville, North Carolina to a location of his choice, irrespective of
  whether the Executive elects to cause the Company to purchase his residence.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (g) <u>Continuation of Indemnification</u>. The Company agrees that if the
  Executive is made a party, or is threatened to be made a party, to any action,
  suit or proceeding, whether civil, criminal, administrative or investigative
  (a &quot;Proceeding&quot;), by reason of the fact that the Executive was a director,
  officer or employee of the Company or was serving at the request of the
  Company as director, officer, member, employee or agent of another
  corporation, partnership, joint venture, trust or other enterprise, including
  service with respect to employee benefit plans, the Executive shall be
  indemnified and held harmless by the Company to the fullest extent permitted
  or authorized by the Company's articles of incorporation and bylaws and such
  indemnification shall continue to the Executive even though the Executive has
  ceased to be a director, member, employee or agent of the Company or other
  entity and shall inure to the benefit of the Executive's heirs, executors and
  administrators. The Company shall advance to the Executive all reasonable
  costs and expenses incurred by the Executive in connection with a Proceeding
  within twenty (20) days after receipt by the Company of a written request for
  such advance. Such request, however, must include an undertaking by the
  Executive to repay the amount of such advance if it shall ultimately be
  determined that the Executive is not entitled to be indemnified against such
  costs and expenses. The Company further agrees to continue and maintain a
  directors' and officers' liability insurance policy covering the Executive to
  the same extent as the Company's directors and officers are covered until such
  time as suits against the Executive are no longer permitted by law.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (h) <u>Transition Expenses</u>. As soon as administratively feasible after the
  date of this Agreement, the Company shall pay the Executive the sum of $10,000
  to assist with the legal, personal financial planning and other costs incurred
  by the Executive in connection with the negotiation of this Agreement and the
  planning for his retirement.</p>
</blockquote>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
3. <u>Obligations of the Executive</u>.</p>
<blockquote>
  <p align="left" style="margin-top: 0; margin-bottom: 0">(a) <u>Office Relocation</u>.
  Not later than the Retirement Date, the Executive will relocate his office
  from the Company premises. The Executive shall be entitled to remove all or
  any part of the property located in his office from the Company premises
  without reimbursement or payment to the Company.</p>
  <p align="left" style="margin-top: 0; margin-bottom: 0"><br>
  (b) <u>General Release</u>. The Executive covenants and agrees that the
  Executive hereby irrevocably and unconditionally releases, acquits and forever
  discharges the Company, as well as each of the Company's officers, directors,
  employees, subsidiaries, and agents (the Company and the Company's officers,
  directors, employees, subsidiaries and agents being collectively referred to
  herein as the &quot;Releasees&quot;), or any of them, from any and all charges,
  complaints, claims, liabilities, obligations, promises, demands, costs,
  losses, debts, and expenses (including attorneys' fees and costs actually
  incurred), of any nature whatsoever, in law or equity, arising out of the
  Executive's employment with the Company or the termination of the Executive's
  employment with the Company (other than any claim arising out of the breach by
  the Company of the terms of this Agreement), including, without limitation,
  all claims asserted or that could be asserted by the Executive against the
  Company in any litigation arising from summonses and complaints filed in
  federal, state or municipal court asserting any claim arising from any alleged
  violation by the Releasees of any federal, state, or local statutes,
  ordinances, or common law, including, but not limited to, the Age
  Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
  as amended, the Equal Pay Act, the Americans with Disabilities Act, the Fair
  Labor Standards Act, the Employee Retirement Income Security Act of 1974, the
  Rehabilitation Act of 1973, the Civil Rights Act of 1991, the Family and
  Medical Leave Act, the Civil Rights Act of 1866, and any other employment
  discrimination laws, as well as any other claims based on constitutional,
  statutory, common law, or regulatory grounds, as well as any claims based on
  theories of retaliation, wrongful or constructive discharge, breach of
  contract or implied covenant, fraud, misrepresentation, intentional and/or
  negligent infliction of emotional distress, or defamation, which the Executive
  now has, owns, or holds, or claims to have, own, or hold, or which the
  Executive had, owned, or held, or claimed to have, own or hold at any time
  before execution of this Agreement, against any or all of the Releasees;
  provided, however, that the foregoing release shall not apply to any claims
  which the Executive may have for the payments or provision of the benefits
  under this Agreement.</p>
</blockquote>
<p align="left" style="margin-top: 0; margin-bottom: 0">4. <u>Tax Withholding and Reporting</u>.
The Company shall be entitled to withhold from the benefits and payments
described herein all income and employment taxes required to be withheld by
applicable law.</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
5. <u>Governing Law</u>. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
6. <u>Notices</u>. Any notice or other communications to be given hereunder
shall be deemed to have been given or delivered when delivered by hand to the
individuals named below or when deposited in the United States mail, registered
or certified, with proper postage and registration or certification fees
prepaid, addressed to the parties as follows (or to such other address as one
party shall give the other in the manner provided herein):</p>
<blockquote>
  <p align="left" style="margin-top: 0; margin-bottom: 0">If to the Company, to:</p>
  <blockquote>
    <p align="left" style="margin-top: 0; margin-bottom: 0">Lowe's Companies,
    Inc.<br>
    1000 Lowe's Boulevard<br>
    Mooresville, North Carolina 28117<br>
    Attention:  Secretary and General Counsel</p>
  </blockquote>
  <p align="left" style="margin-top: 0; margin-bottom: 0">If to the Executive,
  to:</p>
  <blockquote>
    <p align="left" style="margin-top: 0; margin-bottom: 0">Mr. Robert L.
    Tillman<br>
    1000 Lowe's Boulevard<br>
    Mooresville, North Carolina 28117<br>
&nbsp;</p>
  </blockquote>
</blockquote>
<p align="left" style="margin-top: 0; margin-bottom: 0">7. <u>Entire Agreement</u>.
This Agreement constitutes the entire agreement between the parties pertaining
to the subject matter contained herein and supersedes any and all prior and
contemporaneous agreements, representations, promises, inducements and
understandings of the parties. This written Agreement cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. Moreover, this written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of the Company
and the Executive. </p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
8. <u>Right to Revoke Agreement</u>. Following the Executive's execution and
delivery of this Agreement to the Company, the Executive shall have a seven-day
period in which to revoke this Agreement as provided in the Age Discrimination
in Employment Act (&quot;ADEA&quot;) (referred to as &quot;Revocation Period&quot;). During the
Revocation Period, the Executive may exercise this right by delivering written
notice of revocation to the Company at the address shown in paragraph 6 above.
The Company shall not have the right to revoke this Agreement during the
Revocation Period.</p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.</p>
<p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
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    /s/ Robert L. Tillman</td>
  </tr>
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<p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="left" style="margin-top: 0; margin-bottom: 0">Robert L. Tillman<br>
<br>
LOWE'S COMPANIES, INC.<br>
<br>
&nbsp;</p>
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    <td width="7%" style="border-style: none; border-width: medium">By:</td>
    <td width="93%" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;/s/
    Robert A. Niblock</td>
  </tr>
  <tr>
    <td width="7%" style="border-style: none; border-width: medium">&nbsp;</td>
    <td width="93%" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-bottom-style: none; border-bottom-width: medium">
    Robert A. Niblock, President</td>
  </tr>
</table>
<p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
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    <td width="7%" style="border-style: none; border-width: medium" height="18">
    By:</td>
    <td width="93%" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" height="18">&nbsp;/s/
    Paul Fulton</td>
  </tr>
  <tr>
    <td width="7%" style="border-style: none; border-width: medium" height="54">&nbsp;</td>
    <td width="93%" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-bottom-style: none; border-bottom-width: medium" height="55" valign="top">
    <p style="margin-top: 0; margin-bottom: 0">Paul Fulton, Chairman</p>
    <p style="margin-top: 0; margin-bottom: 0">Compensation and Organization
    Committee</td>
  </tr>
</table>
<p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="right" style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="right" style="margin-top: 0; margin-bottom: 0"><br>
<br>
<u>
<b>Exhibit A</b></u></p>
<p align="center" style="margin-top: 0; margin-bottom: 0"><br>
<u>
<b>BENEFIT PLANS</b></u></p>
<p align="left" style="margin-top: 0; margin-bottom: 0"><br>
<br>
1. Lowe's 401(k) Plan<br>
2. Lowe's Welfare Plan<br>
3. Lowe's Companies employee Stock Purchase Plan - Stock Options for Everyone<br>
4. Lowe's Companies Benefit Restoration Plan<br>
5. Lowe's Companies, Inc. Deferred Compensation Program<br>
6. Lowe's Companies Cash Deferral Plan<br>
&nbsp;</p>

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