LOWE'S COMPANIES

CASH DEFERRAL PLAN

 

Section 1. Nature of the Plan.

The purpose of this Plan is to permit eligible employees to voluntarily defer a portion of their base salary, management bonus, and certain other bonuses on a tax-deferred basis, and to have such deferred amounts credited with earnings, generally using the same investment choices as are available from time to time under the Lowe's Companies Benefit Restoration Plan. The Plan is intended to be unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees, within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The plan is adopted effective for base salary and management bonuses payable in the Company's fiscal year that begins January 31, 2004.

Section 2. Definitions.

In this Plan, whenever the context so indicates, the singular or plural number and the masculine, feminine or neuter gender shall be deemed to include the other and the terms "he," "his" and "him" shall refer to a Participant. Unless otherwise indicated, section references shall be to this Plan. Where the following terms appear hereafter in this Plan, they shall have the meanings indicated below:

401(k) Plan - The Lowe's Companies 401(k) Plan, a stock bonus and profit sharing plan which constitutes a cash or deferred arrangement under Section 401(k) of the Code.

Account - The account established and maintained for bookkeeping purposes to reflect the interest of a Participant in the Plan. Each Account shall reflect Employee Deferrals by the Participants, as well as additions, withdrawals, and adjustments to the Account (including adjustments for appreciation and depreciation in the deemed investments). The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant or Beneficiary under the Plan.

Base Pay - The base pay paid to a Participant by the Company in the Plan Year, plus the amount (if any) of (i) Salary Deferral Contributions made on his behalf under the 401(k) Plan, (ii) salary reductions for the Medical Coverage Benefit under the Lowe's Companies Flexible Benefit Plan, (iii) any base pay that is required to be deferred because it exceeds the amount deductible by the Company under Section 162(m) of the Code; and (iv) any base pay that is deferred under this or any other plan of non-qualified deferred compensation that is adopted and maintained by the Company.

Beneficiary - The person (or persons) designated by the Participant to receive benefits under the Plan in the event of a Participant's death. If a Participant fails to make such designation, the Participant's Beneficiary shall be deemed to be his surviving spouse, or if none, his estate.

Benefit Restoration Plan  - The Lowe's Companies Benefit Restoration Plan (or BRP), a non-qualified deferred compensation plan that restores benefits to eligible employees that cannot be received under the 401(k) Plan because of limitations under the Code.

Code - The Internal Revenue Code of 1986, as amended.

Committee - The Administrative Committee of the 401(k) Plan appointed by the Board of Directors of the Company, which has been given authority by the Board of Directors to designate Participants and to administer the Plan.

Company - Lowe's Companies, Inc, a North Carolina corporation, and its direct or indirect wholly-owned subsidiaries (including wholly-owned limited liability companies).

Deferral Election - The Participant's irrevocable election under the Plan to defer Base Pay, Management Bonus, or a Signing/Retention Bonus for a given Plan Year.

Employee Deferral - The employee pre-tax deferrals made under this Plan.

ERISA - Public Law 93 406, popularly known as the "Employee Retirement Income Security Act of 1974", as amended.
 

Management Bonus - The annual bonus, if any, that is earned by a Participant for a fiscal year and is typically paid in March following the close of the fiscal year.

Participant - Any employee or former employee who has met the applicable eligibility requirements of Section 3 and who has not yet received a complete distribution of his Account.

Plan - The Lowe's Companies Cash Deferral Plan, as set forth herein, and as it may be amended from time to time.

Plan Year - The 52/53-week period ending on Friday closest to January 31st of each year (and coinciding with the fiscal year of the Company).

Signing/Retention Bonus - A signing or retention bonus negotiated by the Company and a person who once hired will be eligible to participate in the Plan.

Trust - The Lowe's Companies, Inc. Benefit Security Trust, as amended from time to time. The Trust is a so-called "rabbi trust" that serves as the funding vehicle for the Plan and the Benefit Restoration Plan.

Section 3. Eligibility and Participation.

An employee shall be eligible to participate in the Plan as of the date he is designated by the Committee for eligibility, either individually or as a member of a class of employees. Until determined otherwise by the Committee, the employees who are eligible to become Participants for a given Plan Year are those employees of the Company who are director level or above. Notwithstanding the foregoing, a person who would otherwise become eligible to participate in this Plan as a result of promotion within the Company shall not be eligible to participate in the Plan until the first day of the Plan Year following the date such promotion becomes effective.

 

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