Lowe's Companies, Inc.
Compensation and Organization Committee Charter
The Compensation and Organization Committee (the "Committee") is established by the Board of Directors (the "Board") of Lowe's Companies, Inc. (the "Company") as an independent and objective committee of the Board. The primary purpose of the Committee is to discharge the responsibilities of the Board relating to compensation, organization and succession planning for the Company's executives. The Committee has overall responsibility for approving and evaluating the officer compensation plans, policies and programs of the Company.
The Compensation Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company's proxy statement.
Composition and Procedure
The Committee shall consist of at least three directors. Each member of the Committee shall qualify as "independent" under the requirements of the New York Stock Exchange and meet the definition of "non-employee director" under Rule 16b-3 under the Securities Exchange Act of 1934, and "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986.
The members of the Committee shall be nominated by the Governance Committee of the Board and appointed by the Board in accordance with the Bylaws of the Company. Members shall serve at the pleasure of the Board and for such term or terms as the Board may determine. The Board shall designate the Chair of the Committee. Except as expressly provided in this Charter, the Bylaws of the Company or the Corporate Governance Guidelines of the Company, the Committee shall fix its own rules of procedure.
The Committee shall meet at such times, and in the manner it determines to be necessary or appropriate, but not less than once each year, and shall report to the Board at the next meeting of the Board following each Committee meeting.
Committee Authority and Responsibilities
The Committee shall have the following authority and responsibilities:
· To review and approve on an annual basis the corporate goals and objectives relevant to compensation for the Chief Executive Officer of the Company.
· To evaluate at least once a year the Chief Executive Officer's performance in light of these established goals and objectives; and, based upon this evaluation, set the Chief Executive Officer's annual compensation, including salary, bonus, incentive and equity compensation.
· In determining the long-term incentive component of the Chief Executive Officer's compensation, to consider the Company's performance and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards given to the Company's Chief Executive Officer in past years.
· To articulate the Company's executive compensation philosophies and policies, participate in compensation program development, and employ consultants as appropriate.
· To review and recommend all compensation actions for the Company's officers (as defined by Rule 16a-1(f) of the Securities Exchange Act) other than the Chief Executive Officer, subject to final Board approval.
· To review general compensation levels and programs for officer and key personnel to assure competitiveness and appropriateness.
· To set performance standards for vesting or payment of short-term and long-term incentive awards.
· To approve annual Management Bonus Incentive Plans and verify target achievement prior to payment at year-end.
· To approve all awards under multi-year incentive plans, including stock options, restricted stock grants, and other incentive arrangements which are authorized under the company's 1997 Incentive Plan or successor plans.
· To designate officers and other key employees who shall be eligible:
o to defer the receipt of base salary or incentive payments awarded under approved incentive plans, and
o to participate in Lowe's Benefit Restoration Plan.
· To maintain awareness of staffing needs which may result from retirements, organizational changes, or other changes in the senior-management structure.
· To assure a succession plan is maintained for the Chief Executive Officer and his staff and is reviewed at least annually.
· To review at least annually the performance and promotion readiness of the members of the Chief Executive Officer's staff.
· To review at least annually the status of the company's Fairness Program, career advancement of diversity candidates, and numbers of diversity candidates in key positions.
· To conduct an annual performance evaluation of the Committee's performance with the assistance of the Governance Committee of the Board.
Delegation to Subcommittee
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
Resources and Authority of the Committee
The Compensation Committee shall have the sole authority to retain and terminate any compensation or human resource consultant that assists in the evaluation of director or executive officer performance or compensation and to approve the firm's fees and other retention terms.