RELEASE AND SEPARATION AGREEMENT
THIS AGREEMENT, made and entered into this the 9th day of November,
1995, by and between LOWE'S COMPANIES, INC., a North Carolina
corporation, Party of the First Part, (hereinafter referred to as
"Lowe's") and HARRY B. UNDERWOOD ll, a resident of Forsyth
County, North Carolina, Party of the Second Part, (hereinafter
referred to as "Underwood").
WITNESSETH:
WHEREAS, Underwood was employed by Lowe's as Senior Vice
President and Treasurer (CFO); and
WHEREAS, the parties have agreed to terminate the employment
relationship; and
WHEREAS, the parties have agreed to the terms and provisions
of this Agreement, and the parties desire to reduce their agreement to
writing;
NOW, THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the parties
do hereby agree, covenant, and stipulate as follows:
1. Termination of Employment. Underwood's employment with
Lowe's terminated on Friday, October 13, 1995. Current salary has
been paid through that date.
2. Severance Benefits. Lowe's agrees to make the following
payments (the "Severance Benefits"), as follows:
A. Three Hundred Fifty Thousand Dollars ($350,000.00)
payable in six installments, as follows: (i) $70,000.00 upon the
Effective Date of this Agreement, as hereinafter defined; and
(ii) five monthly installments, in the amount of $56,000.00
each, payable on the fifth day of December, 1995, and on the
fifth day of each successive month thereafter, through and
including the fifth day of April, 1996. Each installment shall
be paid by direct deposit to a bank account designated by
Underwood, and Underwood shall furnish such information and
documentation as is reasonably required by Lowe's to establish such
direct deposit. At Underwood's option, however, the first installment
may be paid by check.
B. Additionally, Lowe's agrees to pay up to an additional
Sixteen Thousand Dollars ($ 16,000.00) in consulting fees (i) for
services to be rendered by Kaplan DeVries, Inc. after October
4, 1995 and/or (ii) by Brewer, Drake, Beam & Morin to
Underwood for up to six (6) months of outplacement services.
Underwood shall have the right, in his reasonable
discretion, todetermine which consulting services he desires to
obtain and how such consulting fees shall be allocated and expended,
subject to the amount limitation set forth herein .
C. The Severance Benefits shall only become payable
after the
expiration of the time periods defined in paragraph 9 entitled
"Right to Revoke Agreement" and upon the full execution of
this Agreement and Underwood not exercising the right to
revoke this Agreement during the revocation period (the
"Effective Date"). Underwood acknowledges that Lowe's shall
withhold from the Severance Benefits all amounts required by the
appropriate taxing authorities and that Lowe's shall issue
the appropriate W-2 tax form to Underwood. Lowe's agrees that
it shall pay the employer's share of all taxes applicable to
the Severance Benefits, including, but not limited to, social
security and Medicare taxes.
3. Noncompetition. In consideration of payment by Lowe's of the
Severance Benefits provided for herein, Underwood does covenant and
agree with Lowe's that Underwood shall not, in any manner whatsoever
for the period defined herein,
compete against Lowe's by consulting for, being employed by, or
providing Confidential Business Information (as hereafter defined)
to the following entities: The Home Depot, Inc.; Hechinger Co.;
Home Quarters Warehouse, Inc.; Builders Square and its parent company,
K-mart Corp.; Payless Cashways, Inc. and its subsidiaries, Furrow
Building Materials, Knox Lumber, Lumberjack Stores, and Somerville
Lumber & Supply Co., Inc.; Waban, Inc.; HomeBase, Inc.; Menard, Inc.;
Wal-mart Stores, Inc.; and/or any affiliates, parent companies, or
subsidiaries of any of these entities that are now or hereafter,
during the term of this Agreement, engaged in a specialty
retail hardware business (hereinafter collectively referred to as
"Competitors"). This covenant of noncompetition shall prohibit the
providing by Underwood of Confidential Business Information,
consultation, advice, or opinion directly (or, with knowledge or
intent, indirectly) to these Competitors. The period of this
noncompetition agreement shall commence on October 5, 1995 and extend
through and include April 5, 1996 (the "Noncompetition Period").
Underwood has not provided, prior to the date of this Agreement, and
shall not provide, during the Noncompetition Period, any Confidential
Business Information to the Competitors. These provisions for
noncompetition shall not prohibit Underwood from being employed by or
consulting for other business entities not named above as Competitors
that might compete with Lowe's.
4. Confidentiality. Underwood acknowledges that during his
employment by Lowe's, he has had access to proprietary business
information, including information concerning the financial affairs,
operating procedures, business plans and policies of Lowe's
("Confidential Business Information"), which Lowe's reasonably and in
good faith considers its trade secrets and which may include, but are
not limited to,
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non-public financial information, business plans, policies and
procedures, expansion schedules or locations, confidential in-house
operational procedures and projectionsof Lowe's. Underwood agrees
that, during the Noncompetition Period, he shall notremove,
disclose, distribute, disseminate, or in any way use any Confidential
Business Information obtained during his employment by Lowe's and
will not, directly (or, with knowledge or intent, indirectly), disclose
any Confidential Business Information to anyone (except pursuant
to legal compulsion), and in particular will not disclose such
to any Competitors. Underwood shall leave at Lowe's and return to
Lowe's any documents, materials, computer disks, papers, or other
information of any nature whatsoever (including both copies and
originals) that may reasonably be considered to be Confidential
Business Information.
Lowe's and Underwood agree to keep the terms and provisions
of this Agreement confidential and shall not divulge the contents of
this Agreement to third persons (other than their legal
representatives), except as necessary to enforce this Agreement or as
necessary to comply with law or regulations, such as the rules
governing the disclosure of such agreements by the securities laws of
the United States or any state thereof. Lowe's and Underwood agree that
any filing of this Agreement by Lowe's with the Securities
Exchange Commission pursuant to its rules and regulations and the
disclosure of this Agreement and certain terms thereof shall not
be deemed a breach of the confidentiality provisions of this
Agreement by either party. Any public knowledge or disclosure that
results from such filing or disclosure required by securities laws
shall not be considered a breach of this Agreement and will not
excuse either party from performance of their obligations under the
terms of this Agreement.
5. Non-lnterference. Underwood agrees that he shall not directly
(or, with knowledge or intent, indirectly) interfere with any of the
relationships of Lowe's with any of its employees, suppliers or
customers, or any governmental entities. Lowe's agrees that it
shall not directly (or, with knowledge or intent, indirectly)
interfere with any relationship of Underwood with any other person.
6. General Release. In consideration of the payment in full
of the Severance Benefits, Underwood hereby irrevocably and
unconditionally releases,
acquits, and forever discharges Lowe's, as well as each of Lowe's
officers, directors, employees, subsidiaries, and agents (Lowe's and
Lowe's officers, directors, employees, subsidiaries and agents being
collectively referred to herein as the "Releasees"), or any of
them, from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies,
damages, actions, causes of action, suits, rights, demands, costs,
losses, debts, and expenses (including attorneys' fees and costs
actually incurred), of any nature whatsoever, in law or equity,
arising out of Underwood's employment with Lowe's or the termination
of Underwood's employment with Lowe's (other than any claim arising
out of the breach by Lowe's
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of the terms of this Agreement), including, without limitation,
all claims asserted or that could be asserted against Lowe's in any
charge and any claims 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 Vll 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, 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 ("Claim" or "Claims"), which
Underwood now has, owns, or holds, or claims to have, own, or hold, or
which Underwood had, owned, or held, or claimed to own at any time
before execution of this Agreement, against any or all of the
Releasees. Notwithstanding the foregoing, however, Underwood
specifically does not release any right to or claim for payment of any
and all vested and nonforfeitable benefits, payments, or stock
rights, including, without limitation, all rights, if any, under
Lowe's ESOP and 401 (k) plans.
7. Consultation with Attorney. Underwood acknowledges that
he has
consulted with his own attorney prior to entering into this Agreement
and that he was afforded sufficient time to undertake such
consultation.
8. Period of Consultation. Underwood acknowledges that Lowe's
provided him a period of at least twenty-one (21) days to consider
this Agreement and to decide whether to accept or reject it.
9. Right to Revoke Agreement. This Agreement will not become
effective or enforceable for a period of seven (7) days from the date
of its acceptance and execution by Underwood as indicated below.
During the seven-day period, Underwood shall have the right to
change his decision and to revoke this Agreement. No money and/or
benefits payable solely by virtue of this Agreement shall be made
during the seven-day revocation period. Upon the completion of such
seven (7) day period without a revocation by Underwood, this
Agreement shall become effective and legally binding on all parties
hereto. The day following the end of such revocation period shall be
deemed to be the "Effective Date" of this Agreement. Lowe's shall
not have the right to revoke this Agreement during the seven-day
period defined in this paragraph .
10. Injunctive Relief. Lowe's and Underwood stipulate and agree
that the provisions of paragraphs 3, 4 and 5 are of material
consideration to Lowe's, and that Lowe's considers that monetary
damages alone are an inadequate remedy
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for any breach by Underwood of the provisions thereof. Underwood
further stipulates and agrees that upon any material breach by
Underwood of the provisions of paragraphs 3, 4 and 5, Lowe's shall
be entitled to injunctive relief against Underwood from a court
having personal jurisdiction of both Lowe's and Underwood. This
paragraph shall not be deemed to limit the legal and equitable
remedies of Lowe's or any claim by Lowe's for damages caused by
Underwood for breach of this Agreement.
11. Death or Disability of Underwood. Lowe's agrees that the
payments described herein shall be due and payable to Underwood
regardless of any subsequent disability of Underwood, and in the
event of Underwood's death, these payments shall be payable to
Underwood's estate, or to the person(s) designated to receive the same
in Underwood's duly-probated will.
12. Default. The parties stipulate and agree that in the
event Lowe's fails to make any payment due under the provisions
of paragraph 2, that Underwood shall give written notice of such
failure to Lowe's, and that Lowe's shall have a period of three (3)
business days from receipt of notice in which to cure such monetary
default. Notice shall be given as follows:
Leonard G. Herring, President
Lowe's Companies, Inc.
P. O. Box 1111
North Wilkesboro, NC
28656 Facsimile: (910)
651-2073
with a copy to:
William C. Warden, Jr.
General Counsel
Lowe's Companies, Inc.
P. O. Box 1111
North Wilkesboro, NC
28656 Facsimile: (910)
651-2073
Any notice sent by United States mail shall be deemed to be delivered upon
the earlier of actual receipt or three (3) days after the mailing
thereof. Any notice sent by facsimile transmission shall be deemed to be
delivered upon actual receipt thereof.
In the event that Lowe's fails to cure such monetary default
within the three business day period following receipt of notice, and if
Underwood is not then in material breach of his obligations under this
Agreement, Underwood shall be entitled to accelerate and call due all of the
remaining payments under this Agreement. This paragraph shall not be deemed
to limit the legal and equitable
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remedies of Underwood or any claim by Underwood for damages caused by Lowe's
for breach of this Agreement.
13. Whole Agreement. This Agreement is the whole and entire
agreement between the parties and may not be amended or altered in any
fashion except in writing executed by the parties.
14. Governing Law. The interpretation and enforcement of this
Agreement shall be governed by the internal laws and judicial decisions of
the State of North Carolina, without regard to any principles of conflicts of
laws.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals the
day and year first above written.
ATTEST: LOWE'S COMPANIES, INC.
By: William C. Warden, Jr. By: Leonard G. Herring, President
Secretary and Cheif Executive
Officer
Harry B. Underwood, II