401(k) Plan. Introduction*

Transcription

1 Introduction* The Lowe s 401(k) Plan (the Plan) is a qualified retirement plan that includes cash deferred arrangement under section 401(k) of the Internal Revenue Code. This Plan allows you to save money for your retirement before paying federal income taxes on the amounts saved. Immediately upon participating, Lowe s Companies, Inc. (Lowe s) will match your savings as follows: The first 3% of compensation you contribute is matched at 100% The next 2% of compensation you contribute is matched at 50% The next 1% of compensation you contribute is matched at 25% Note: All employees hired or rehired prior to November 1, 2012 will be enrolled automatically in the Plan (unless they affirmatively elect not to enroll) and can contribute to the Plan and receive a 100% vested company match 6 months after their first day of employment. Except for employees affirmatively electing not to enroll or electing a different amount to 401(k) Plan contribute, 6 months after their employment begins, all employees will have 1% of their eligible compensation deducted on a pretax basis from each paycheck and deposited into their Plan accounts. Employees hired or rehired on or after November 1, 2012, must affirmatively elect to enroll on the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at Employees can also enroll by calling NOTE: This summary plan description is intended to be an accurate description of the features of the Plan. Please remember, however, that this description does not take the place of the official Plan document, which governs at all times. If you have any questions that are not answered by this summary plan description, or if you would like additional information about the Plan or the Plan administrator, please contact the Plan administrator, care of the Lowe s Financial Security Benefits Department. You can reach the Lowe s Financial Security Benefits Department at The mailing address for the Lowe s Financial Security Benefits Department is: Lowe s Companies, Inc., Mail Code NB2CB, 1000 Lowe s Boulevard, Mooresville, NC Only the Plan administrator is authorized to answer questions about the Plan. part of a prospectus covering securities that have been registered under the Securities Act of

2 In This Section See Page Administrative Information... 3 Eligibility, Enrollment and Contributions... 5 Eligibility... 5 How to Enroll*... 5 Contributions*... 5 Timing of Contributions... 8 Rollovers... 8 Your Account and Investing... 8 Vesting... 8 How to Access/Change Your Account*... 8 Investments*... 8 Voting Shares Dividends Distributions from the Plan Age 59-1/2 Distributions* Year One-Time Withdrawal from ESOP Account* Hardship Withdrawals Other Important Information Federal Income Tax Consequences Beneficiaries Benefit Assignment or Transfer Statement of Rights under ERISA* Resale of Shares Acquired Under The Plan Claims for Benefits Claims Procedure Review of Denied Claim Federal Pension Benefit Insurance Amendment or Termination of Plan Registration Statement and Other Information Available

3 401(k) Plan Administrative Information Administrative Information Name of Plan: Lowe s 401(k) Plan Plan Number: 003 Plan Sponsor: Plan Administrator: Type of Plan: Plan Year: Type of Plan Administration: Plan Trustee: Lowe s Companies, Inc. Mail Code NB2CB 1000 Lowe s Boulevard Mooresville, NC Employer Identification Number (EIN): Administrative Committee of Lowe s Companies, Inc. c/o Lowe s Financial Security Benefits Department 1000 Lowe s Boulevard Mail Code NB2CB Mooresville, NC Employer Identification Number (EIN): The Lowe s 401(k) Plan is a profit sharing and stock bonus plan, with a qualified cash or deferred arrangement under section 401(k) of the Internal Revenue Code, that is designed to invest primarily in employer securities and qualify as an employee stock ownership plan under Section 4957(e)(7) of the Internal Revenue Code. The 12-month period beginning on the first day of the calendar year and ending on the last day of the calendar year. Third party administration Wells Fargo Institutional Retirement and Trust 1525 West WT Harris Blvd. MAC D Charlotte, NC

4 Administrative Information Plan Recordkeeper: Agent for Service of Legal Process: Wells Fargo Institutional Retirement and Trust 1525 West WT Harris Blvd. MAC D Charlotte, NC You can contact the recordkeeper to confirm your account balance, select change investment funds, or select/change your contribution rate online at the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling Administrative Committee of Lowe s Companies, Inc. c/o Gaither Keener, Jr. General Counsel and Secretary 1000 Lowe s Boulevard Mooresville, NC Participating Employers: Allied Trade Group, Inc. (ATG Stores) (EIN: ) Lowe s Companies, Inc. (EIN: ) Lowe s Home Centers, Inc. (EIN: ) Lowe s HIW, Inc. (EIN: ) L G Sourcing, Inc. (EIN: ) Lowe s Home Improvement, LLC (EIN: ) LF, LLC (EIN: ) Marble and Granite Works, LLC (EIN: ) Forward all legal communications to the Administrative Committee of Lowe s Companies, Inc. at the address above. Source of Contributors Employer/employee. Administrative costs, including trustee fees, are paid by Lowe s. Fund management fees are paid by the employee. Benefits are paid in accordance with the Plan document. 4

5 401(k) Plan Eligibility, Enrollment and Contributions The following section describes eligibility requirements for the Plan, how you can enroll and how contributions to the Plan are made. Eligibility If you are an employee of Lowe s or one of the participating employers named in the Administrative Information section of this summary plan description, you will become eligible to participate in the Plan on the first day of the first payroll period that begins on, or next follows, the date which is 6 months after your initial date of employment. If you are an employee of L G Sourcing, Inc., Lowe s Home Improvement, LLC or Allied Trade Group, Inc. (ATG Stores), you will be eligible to participate only if you are employed in the United States or a U.S. citizen employed abroad. Employees designated as At Home Call Center Agents and leased employees are not eligible to participate in the Plan. If you terminate your employment before completing 6 months of service, and you are rehired, you will become eligible on the first day of the payroll period that begins 6 months after the first day of your initial period of employment. If, in the future, you are represented by a union, your right to continue to participate in this Plan will be subject to negotiation. While no group of Lowe s employees has ever selected a union as a bargaining representative, the Plan provides for a loss of eligibility unless continued participation in the Plan is specifically bargained for and agreed to by both the union and Lowe s. A loss of Plan eligibility also could occur if Lowe s unilaterally implemented a collective bargaining offer after reaching an impasse in negotiations with a union. How to Enroll* Approximately 90 days before you are eligible to participate, you will receive notification of your eligibility and instructions on how to enroll. If you were hired or rehired prior to November 1, 2012, unless you decline to enroll, you will be enrolled automatically in the Lowe s 401(k) Plan. If you are enrolled automatically, 1% of your eligible compensation will be deducted on a pre-tax basis from each paycheck and deposited into a Plan account established for you. Further, after automatic enrollment, unless you elect different investment allocations (see Investments below), your contributions will be initially invested in the Vanguard Target Retirement Trust geared to your expected retirement at age 65. You can redirect these account assets into any of the other Plan investment options at any time. For employees hired or rehired on or after November 1, 2012, you must elect to enroll. If you are eligible to participate, you may enroll (or decline to enroll or change your investment allocations) online at the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at You can also enroll by calling Securities Act of Contributions* Your contributions under the Plan are held in an account in your name. After the end of each quarter, a statement detailing your contributions, your Company Matching Contributions and your Company Matching Contributions in the Lowe s Employee Stock Ownership Plan transferred to this Plan (referred to as your ESOP account), if applicable, and any earnings on your account will be made available for you to view, download, and print online at the Plan s web site, accessible through the employee portal at 5

6 Links > 401(k) > 401(k) at Wells Fargo) or directly at Account statements are generally made available on the Plan s web site within 15 days after the end of the calendar quarter. If you wish to receive through the mail a paper copy of your account statement, you may request one through the Plan s web site or by calling You can also check your account balance every day at the Plan s web site or by calling Plan participants who have terminated employment with Lowe s will receive their quarterly account statements in the mail approximately 15 days after the end of the calendar quarter. Your Contributions You may choose the amount you want to save, through convenient payroll deductions contributed to your Plan account. You may contribute between 1% and 50% of your eligible compensation (up to the annual contribution limit set by the Internal Revenue Service) to the Plan on a pretax basis (in whole percentages only). If you were hired or rehired on or before November 1, 2012, unless you decline to enroll or you elect to contribute a different amount, 1% of your eligible compensation will be automatically deducted on a pre-tax basis from your paycheck and deposited into your Plan account. Further, after automatic enrollment, unless you elect different investment allocations (see Investments ), your contributions will be initially invested in the Vanguard Target Retirement Trust geared to your expected retirement at age 65. You can redirect these account assets into any of the other Plan investment options at any time. Your eligible compensation is the total of the salary or wages, overtime premium pay, commissions, and bonuses paid to you during the payroll period. For 2013, the Internal Revenue Service has limited your total annual employee contribution to $17,500 (unless you qualify to make catch-up contributions as explained below). Company Matching Contributions Immediately upon your participation in the Plan, Lowe s will begin matching your contributions based on the percentage of your compensation (up to six percent (6%)) you elect to contribute. Lowe s will match at 100% the first three percent (3%) of your compensation you contribute Lowe s will match at 50% the next two percent (2%) of your compensation you contribute Lowe s will match at 25% the next one percent (1%) of your compensation you contribute. Lowe s does not match contributions over six percent of your compensation. Catch-up Contributions For any Plan Year in which you ll be age 50 or older, you can also contribute up to an additional $5,500 (as determined by the Internal Revenue Service) in that year. If a Plan participant is catch-up eligible (age 50 or above) and exceeds the annual contribution limit for the calendar year ($17,500 for 2013), the employee will continue to make catchup contributions, based on the employee s 401(k) deferral percentage until the employee reaches the catch-up dollar limit ($5,500 for 2013). Thus, the employee s maximum total deferral for Plan year 2013 will be $23,000. Catch-up eligible Plan participants can discontinue or reduce their deferral percentages if they don t want to make catch-up contributions. Catch-up contributions are eligible for Company Match contributions, according to the Plan s Company Match formula. You can change your deferral percentage at any time by accessing the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling Your requested change will be put into effect on the first day of a subsequent payroll period as soon as administratively feasible after your change request is processed. 6

7 401(k) Plan For example: If your eligible compensation equals $20,000 and you elect to contribute 6% of your biweekly pay, your contribution each pay period would be $ The biweekly Company Matching Contribution would be calculated each pay period as follows: Your Contribution Company Match 100% Company Match 50% on first 3% on next 2% Company Match 25% of next 1% Total Contribution $46.15 $23.08 $7.69 $1.92 $78.84 In this example: You would contribute $46.15 every payday. Lowe s would contribute $32.69 every payday. After one year of 401(k) participation, you would have contributed $1, to your 401(k) account. After one year of 401(k) participation, Lowe s would have contributed $ In total, $2, would have been contributed to your 401(k) account, at a cost to you of only $1,199.90! Benefits of Pretax Savings An advantage of participating in the Plan is that your contributions to the Plan are made on a pretax basis. This means your contributions to the Plan are not considered taxable income until you take them out of the Plan. Here s an example that compares the effect of saving on a pretax basis versus after-tax. This example is based on a single employee with a salary of $20,000, claiming one exemption*: 6% After- Tax Savings 6% 401(k) Savings Base Pay $20,000 $20,000 Before-Tax Savings 0 $1,200 Taxable Income $20,000 $18,800 Federal Income Tax $2,569 $2,389 After-Tax Contribution $ the same amount of money as a regular saver. Although the participant in the example will eventually have to pay taxes on the money when he receives it, such as at retirement, he may be in a lower tax bracket and be able to take advantage of certain favorable tax rules. The tax consequences of participating in the Plan are discussed more fully below. Limitations The Internal Revenue Code contains rules limiting the contributions to your account in the Plan. Applying these rules, the Internal Revenue Service sets contribution limits each year. In 2013, the maximum amount you may contribute each year to your Plan account is $17,500 (unless you qualify to make catch-up contributions as explained above). The IRS will adjust this contribution limit in the future to account for increases in the cost of living. Lowe s may reduce or discontinue your salary reduction elections or return excess payroll deduction contributions to you if necessary to comply with the IRS limits. Net Pay $16,231 $16,411 * Based on Tax year 2012 tax tables assuming standard deductions, filing single. This example above reflects a 6% employee contribution rate. Savings may vary with future tax rates. In the above example, the participant who makes pretax contributions to the Plan pays $180 less in taxes while saving 7

8 Timing of Contributions The contributions you make to the Plan are deducted from your paycheck on a pretax basis each pay period. The contributions withheld from your paycheck and the Company Matching contribution will normally be transferred to the Plan s trustee on the same day that you receive your payroll check. Rollovers The Plan will accept an eligible rollover distribution made to the Plan on your behalf from: a qualified plan described in Section 401(a) or 403(a) of the Internal Revenue Code, including after-tax employee contributions; an annuity contract described in Section 403(b) of the Internal Revenue Code, excluding after-tax employee contributions; or an eligible plan under Section 457(b) of the Internal Revenue Code that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. Finally, the Plan will accept a rollover contribution from you of the portion of a distribution from an individual retirement account (IRA) or annuity described in Section 408(a) or 408(b) of the Internal Revenue Code that is eligible to be rolled over and would otherwise be includible in your gross income. After-tax amounts from an IRA and distributions from Roth IRAs cannot be rolled over into the Plan. Rollover amounts may be deposited into the Plan at any time, even before you are eligible to start participating. Such rollover contributions will be maintained in a separate Rollover Account under the Plan. To deposit a rollover amount into the Plan, you must complete a Lowe s rollover form. The Lowe s rollover form, which includes instructions for submitting rollover contributions,is available on the employee portal at (My Home > Lowe s Forms > Wealth Related) and on the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at You can also obtain assistance with rollover contributions by calling the Retirement Service Center at Special note: If the rollover check is made out directly to you (instead of to the Plan), you must deposit the check into an eligible employer plan or an IRA within 60 days from the date on the check to avoid a tax obligation that year on the rollover amount. Lowe s does not match rollover contributions. Your Account and Investing Please review the following important information which describes how your Plan account works, including how vesting works, how to access/make changes to your Plan account, and how investing, voting shares and dividends work. Vesting Vesting refers to the percentage of your account that you own outright. You are always 100% vested in the total amount of your account in the Plan. How to Access/Make Changes to Your Plan Account* You may access your balance and account information, and make changes in your account, at the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling Investments* This investment disclosure statement is required by Section 404(c) of the Employee Retirement Security Act of 1974, as amended (ERISA). Section 404(c) of ERISA requires the Plan to provide you with this information, along with other Securities Act of Securities Act of

9 401(k) Plan information provided separately from this summary plan description, so that you may have sufficient information to make an informed decision regarding investment alternatives available under the Plan. This Plan is intended to be a plan described in Section 404(c) of ERISA and Title 29 of the Code of Federal Regulations Section c-1. This means that the Plan s trustee, the Plan administrator, and other fiduciaries of the Plan (i.e., the persons who control the investment of Plan assets) may be relieved of liability for any investment losses that are the direct and necessary result of investment instructions given by you under the Plan. In other words, the Plan fiduciaries are responsible for choosing what investment options and investment managers are available under the Plan, and you are responsible for choosing how to invest your account among those various options. You must decide what the best investment mix is, given your own situation. The Plan fiduciaries are not responsible for your investment choices. The Plan offers different investment options, and the options may change from time to time. You make the decision on how to invest the amounts in your account. You may elect to invest in one or any combination of the options offered by the Plan. Company Matching contributions are invested just like your contributions. Further, if you are enrolled automatically, unless you elect different investment allocations, your contributions will be initially invested in the Vanguard Target Retirement Trust geared to your expected retirement at age 65. You can redirect your account assets into any of the other Plan investment options at any time. You can separately direct the investment of your Rollover Account. ESOP account contributions are initially invested in Lowe s stock, but you can redirect these account assets at any time. In deciding whether to exercise your right to redirect the investment of your ESOP account assets, you will want to give careful consideration to the information below describing the importance of diversification. All of the investment options under the Plan are available to you if you decide to diversify out of company stock. On any day the stock market is open, you may make transfers among the Plan s investment options at the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at You can also make transfers by calling the Retirement Service Center at All transactions must be entered by 1:00 p.m. Eastern time each business day for the transaction to be processed that day. Transactions entered after this time will be processed the next business day. You can find a listing of available investment options at the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling the Retirement Service Center at The investment strategies of the Plan s investment options, including mutual funds, collective trusts, and separatelymanaged accounts, are subject to change, and future performance cannot be guaranteed. Investment return and principal value will fluctuate, and investment option shares, when redeemed, may be worth more or less than their original cost. As with virtually all investment vehicles, there is no assurance that the fund, trust, or account will achieve its goal. Past performance figures should not be viewed as a representation of future investment performance of the stock market or the fund, trust, or account. For information about a specific investment option, including fees and expenses, refer to the investment literature for that option available under Actions and Investments at the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at By providing this information, Lowe s is not giving tax or investment advice. You should speak to a certified financial planner, tax accountant, or other investment professional before making any investment or retirement decision. The Importance of Diversifying Your Retirement Savings To help achieve long-term retirement security, you should give careful consideration to the benefits of a well balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or other particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. 9

10 In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. Therefore, you should carefully consider the rights described in this Summary Plan Description and how these rights affect the amount of money that you invest in any one particular investment option, particularly Lowe s Stock, through the Plan. It is also important to review periodically your investment portfolio, your investment objectives, and the investment options under the Plan to help insure that your retirement savings will meet your retirement goals. Voting Shares If your account is invested in Lowe s stock or you have Lowe s stock in your ESOP account on the annual record date, you will be entitled to vote the shares of stock in your account. Before each annual shareholder meeting, you will receive the information provided to other shareholders, as well as instructions on how to exercise your voting rights. Dividends If your account is invested in Lowe s stock or you have Lowe s stock in your ESOP account, when dividends are paid on shares of Lowe s stock, the dividends will be reinvested into your account automatically, unless you elect to receive the dividends in cash, in which case you will receive dividend payments automatically through direct deposit into your personal bank account if you have elected direct deposit of your Lowe s pay check. You can elect to have your dividends paid to you in cash at the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling the Retirement Service Center at Your most recent election on file with the Plan s recordkeeper at each quarterly dividend declaration date will be your official dividend election. Distributions from the Plan Approximately 4 weeks after your employment ends, you will be notified in a letter mailed to your home address of your eligibility to take a distribution of your Plan account. Beginning 30 days after your last day of employment with Lowe s, you may request a distribution of your account balance in a lump sum payment (see Lump Sum Distribution below), or you may rollover your distribution to an IRA or another employer s qualified plan (see Rollover ). If, however, your employment ends because you are relocating to work for a subsidiary or affiliate of Lowe s that does not participate in the 401(k) Plan (including a subsidiary or affiliate located outside the United States), you will not be eligible to take a distribution of your account at that time. Except as provided below (see Age 59 ½ Distributions, 20-Year One-Time Withdrawal from ESOP Account, and Hardship Withdrawals ), you will not be eligible to take a distribution of your account until you are no longer employed by any subsidiary or affiliate of Lowe s. While you are working for a non-participating Lowe s subsidiary or affiliate (such as Lowe s Companies Canada, ULC), you will be free to change your investment allocations at any time, but your account will be frozen against contributions and distributions. Your decision regarding the handling of your distribution may have adverse tax consequences and you should consider seeking the advice of a certified financial planner, tax accountant, or other investment professional before making your decision. To request a distribution, visit the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or call the Retirement Service Center at and speak with a Plan representative. Representatives are available to assist you Monday through Friday, 9 a.m. to 5 p.m., Eastern time, on days the stock market is open. When calling, you will need your Social Security number and PIN (initially the last 4 digits of your Social Security number). Securities Act of

11 401(k) Plan Distributions will be based on the value of the investment options or Lowe s stock held in your account on the day your distribution is processed. If your account balance exceeds $5,000 when you terminate employment, your distribution will be deferred until you reach age 62, unless you ask for an earlier distribution. If your account balance does not exceed $5,000 but is greater than $1,000 when you terminate employment, or if your account balance subsequently decreases below $5,000, the total amount of your account will be rolled over to an Individual Retirement Account (IRA) as soon as administratively feasible after you terminate employment, unless you elect otherwise. Unless you elect to take a lump sum distribution or you elect to rollover your account balance to another employer s qualified plan or an IRA, an IRA will be established in your name with Wells Fargo. If your account balance is $1,000 or less your total account balance will be paid to you as soon as administratively possible after your termination date. All distributions will be in cash. However, if some or all of your account is invested in Lowe s stock, you may request to receive that portion of your distribution in stock (you will not receive actual stock certificates, but instead your stock ownership will be reflected in a book entry). This type of distribution is called an in-kind distribution. If you do not specifically request Lowe s stock or an in-kind distribution, your distribution will be in cash. In addition, if your distribution is made within the first 6 months after your termination date, you will not be eligible for Lowe s reemployment for 6 months after your termination date. Forfeitures If, following your termination of employment, the Administrative Committee (or its designee) is unable to locate you after making reasonable efforts to do so, the Administrative Committee may declare your account balance to be forfeited. Forfeited amounts will be applied to reduce Employer Matching Contributions. If the Administrative Committee is able to locate you at a later date, your account balance will be restored. after you have reached age , visit the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at or call the Retirement Service Center at to request your post-age-59-1/2 distribution. In addition to the one-time, in-service distribution option described in the preceding paragraph, if you have reached age and are in active service, and you did not previously elect a withdrawal of your total account under the Lowe s Companies Employees Stock Ownership Plan after reaching age 65, you may elect to withdraw your entire ESOP account in the Plan. Again, this is a one-time, in-service distribution option. You may visit the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or call the Retirement Service Center at and request this post-age-59-1/2 distribution of your ESOP account at any time after you are eligible. 20-Year One-Time Withdrawal from ESOP Account* If you are in active service and have reached the 20th anniversary of your original date of hire (even if you were not continuously employed for 20 years), you are entitled to withdraw up to 50% of your ESOP account. This is a one-time, in-service distribution option. You may visit the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at or or call the Retirement Service Center at and request this distribution of your ESOP account at any time after you are eligible. Age Distributions* If you are in active service after you have reached age , you may elect to withdraw your entire account balance in the Plan. This is a one-time, in-service distribution option. At any time 11

12 Hardship Withdrawals If you have a financial hardship that satisfies the requirements of the Plan, you may request to make a withdrawal from certain of your accounts in the Plan while still actively employed. The reasons under the Plan for which you may request a hardship withdrawal include: Your purchase of your primary residence (excluding mortgage payments); Extraordinary, unreimbursed medical expenses incurred by you, your spouse, or dependents; Tuition, room and board, and related educational fees for the next 12 months of post-secondary education for you, your spouse, children, or dependents; Amounts necessary to prevent your eviction from, or foreclosure on, your primary residence; Funeral expenses for immediate family members; and Repair of damage to your principal residence resulting in a casualty loss. Your hardship withdrawal cannot exceed the amount of your immediate and heavy financial need, including any amounts necessary to pay any federal, state, or local taxes and penalties anticipated to result from the withdrawal. In addition, you may only receive permission to make a hardship withdrawal after you have obtained all distributions (other than hardship withdrawals) that are available to you under the Plan. The minimum hardship withdrawal is $1,000. Only the portion of your account attributable to rollover contributions, the balance in your ESOP diversification account, and your employee contributions will be available for a hardship withdrawal, and the withdrawal will be made from your account in that order. Investment earnings on your employee contributions are not available for hardship withdrawal. In addition, your ESOP account and the portions of your account attributable to Company Matching contributions are not available hardship withdrawals. Hardship Withdrawal request forms are available on the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo) or directly at or or by calling the Retirement Service Center at and speaking with a Plan representative. You will be required to submit documentation for your hardship request including a notarized statement. If your request for a hardship withdrawal is granted, your contributions will be suspended for the next 6 months in the Lowe s 401(k) Plan, the Employee Stock Purchase Plan (ESPP), and any non-qualified deferred compensation plans in which you participate (e.g., Benefit Restoration Plan (BRP), Cash Deferral Plan (CDP)). Additionally, during the 6 months following your hardship withdrawal, you may not exercise any stock options granted to you. Unless you make a change to your 401(k), BRP, or CDP deferral elections during your suspension period, at the end of your suspension period, your salary deferral(s) will resume at the percentage(s) in effect when you took the hardship. Moreover, depending on the date of your hardship distribution, by taking a hardship distribution you may lose the ability to re-enroll in the BRP or CDP for the next plan year. If you were a participant in the ESPP, you will need to enroll during the next ESPP enrollment period following your six month suspension period you will not be automatically enrolled in the ESPP. You may not request a hardship withdrawal after reaching age 59 ½ unless you have previously taken the one-time distribution of your entire account balance available for active employees age 59 ½ and above. Other Important Information The following section describes other important information you should know about the 401(k) Plan. Please review it carefully so that you can make informed decisions. You should be aware that your hardship withdrawal may be subject to an excise tax of 10% in addition to normal taxes if you are under age at the time of the withdrawal. Securities Act of

13 Federal Income Tax Consequences On April 21, 2010, the Internal Revenue Service issued a favorable determination letter for the Plan. In the April 21, 2010 determination letter, the IRS determined that the Plan and related trust agreement satisfy the requirements of Sections 401(a) and 501(a) of the Internal Revenue Code relating to qualification of the Plan and the tax-exempt status of the trust. A copy of the April 21, 2010 IRS determination letter is available on the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo > 401(k) Plan > Plan Information > Plan Resources > Determination Letter) or directly at On January 31, 2013, the Plan submitted to the IRS a timely application for a new determination letter. During the pendency of that application, the IRS s 2010 favorable determination remains in effect. The following discussion summarizes the federal income tax consequences of participation in the Plan. The federal income tax aspects of the Plan are complex, and this explanation is not intended to be a complete description of the federal income tax consequences of Plan participation. For these reasons, you and/or your beneficiary should consult with your personal tax advisor on any questions you may have. Plan Contributions and Earnings Subject to the limitations imposed by the Internal Revenue Code, Lowe s contributions to the Plan are deductible by Lowe s in the year they are made. You are not subject to current federal income taxes on contributions by Lowe s, including contributions made pursuant to your salary deferral elections. These contributions and the earnings on your account balances are not subject to federal income taxes until distributed or withdrawn. Lump Sum Distribution A lump sum distribution is a distribution of your entire interest in the Plan within one taxable year, made as a result of your 401(k) Plan death, disability, or separation from service or after you reach age Termination of your employment with a participating employer in the United States so you can work for a subsidiary or affiliate of Lowe s (such as Lowe s Companies Canada, ULC) that does not participate in the 401(k) Plan does not constitute a separation of service, and you will not be entitled to take a distribution of your account at that time. A lump sum distribution is subject to tax on the sum of the amount of cash received, and the fair market value of the Lowe s stock received, less the net unrealized appreciation (if any) of such stock over its cost. In the case of a distribution that does not qualify as a lump sum distribution, the reportable amount is the amount of cash and the fair market value of any stock received. Rollover If you receive a distribution of your account, you may be able to defer taxes on the distribution by means of a rollover to another qualified employer plan, a 403(a) plan (employer purchased annuity plan), a 457(b) plan (plan sponsored by a state governmental or tax-exempt entity), or an IRA. Amounts that are distributed and that are not rolled over will be subject to tax at ordinary income tax rates. You should consult with your personal tax advisor to determine whether a distribution should be rolled over. A rollover that is not a direct rollover must be completed within 60 days of the distribution from the Plan. Special Taxes If you receive your distribution before you reach age , you may be subject to a 10% premature distribution tax in addition to any other federal income tax. Income Tax Withholding Taxable distributions from the Plan (other than hardship withdrawals) are subject to 20% federal income tax withholding. Hardship withdrawals are subject to 10% income tax withholding unless you elect otherwise. You will be given specific information regarding the application of these rules prior to receiving a distribution from the Plan. Securities Act of Additional Information After you receive a distribution from the Plan, the Plan s trustee will provide you with an IRS Form 1099-R. The Plan s trustee 13

14 will also file this form with the Internal Revenue Service. This form will tell you the taxable amount of your distribution and the amount of any net unrealized appreciation. These forms are typically mailed by January 31 for all distributions made in the previous calendar year. Beneficiaries You should name a beneficiary of your Plan account. You may name a beneficiary on the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at You may change your beneficiary at any time by updating your information on the Plan s web site. If you are married and wish to designate someone other than your spouse as your beneficiary, you will need to download the Beneficiary Designation Form from the Plan s web site. Your spouse will need to sign the Beneficiary Designation Form, and your spouse s signature must be witnessed by a Notary Public. If you named a beneficiary on the Plan s web site at any time after the date the ESOP merged with the Plan, this beneficiary designation will be used in the event of your death to distribute all your Plan account balances, including your ESOP account (if applicable). If you do not name a beneficiary, in case of your death, the beneficiary of your Plan account will automatically be your spouse, if you are married, or your estate, if you are single or divorced. This rule applies to all your Plan accounts including your ESOP account (if applicable). Benefit Assignment or Transfer Your account in the Plan cannot be sold, assigned, or transferred before distribution, except under terms of a Qualified Domestic Relations Order (QDRO) or pursuant to a judgment, order, decree, or settlement agreement entered against you as part of any civil or criminal procedure involving misuse of Plan assets. Before distribution, your benefits under the Plan are not subject to any debts or claims against you except as specified above. The Plan allows for an immediate lump sum payment to an alternate payee under a QDRO even though the participant may not yet be eligible to receive a distribution from the Plan. However, an alternate payee under a QDRO is not eligible to receive a hardship withdrawal, an age distribution, or a 20- year one-time withdrawal from your ESOP account under the Plan. A participant or alternate payee (or prospective alternate payee) may obtain Plan account information as well as a free copy of the Plan s QDRO procedures and a model QDRO by calling the Retirement Service Center at The Plan s QDRO procedures and a model QDRO are also available on the Plan s web site, accessible through the employee portal at Links > 401(k) > 401(k) at Wells Fargo > 401(k) Plan > Plan Information > Plan Resources > QDRO Procedures) or directly at In addition, if you have questions regarding a QDRO, you may call the Retirement Service Center at Statement of Rights under ERISA* The Plan is governed by and subject to the reporting and disclosure, participation and vesting, fiduciary responsibility, and enforcement provisions of ERISA. As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants will be entitled to: Receive information about your Plan and benefits. Examine, without charge, at the Plan administrator s office and at other specified locations, such as work sites, all documents governing the Plan, including insurance contracts, collective bargaining agreements, and a copy of the latest annual report (Form 5500 series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. If you wish to examine any documents governing the Plan, please contact the Plan administrator, care of the Lowe s Financial Security Benefits Department, at Securities Act of

15 Obtain, upon written request to Lowe s, copies of all documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, copies of the latest annual report (Form 5500 series), and updated summary plan description. Lowe s may make a reasonable charge for the copies. To request any documents governing the operation of Plan, please send a written request to Lowe s Financial Security Benefits Department, Lowe s Companies, Inc., Mail Code NB2CB, 1000 Lowe s Boulevard, Mooresville, NC Receive a summary of the Plan s annual financial report. Lowe s is required by law to furnish each participant with a copy of the Plan s summary annual report. The Plan s summary annual report is available on the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo > 401(k) Plan > Plan Information > Plan Resoures > Summary Annual Report) or directly at Obtain a statement telling you the value of your accounts under the Plan. This statement must be provided to you free of charge. The statement may be requested through the Plan s web site, accessible through the employee portal at (My Wealth > Wealth Related Quick Links > 401(k) > 401(k) at Wells Fargo) or directly at or by calling the Retirement Service Center at The Plan is not required to make an account statement available to you free of charge more than once every calendar quarter. Normally you will automatically receive this statement once each quarter via the Plan s web site (unless you have terminated service, in which case you will receive a statement by mail). Prudent Actions by Plan Fiduciaries In addition to creating rights for Plan participants, ERISA imposes duties on the people who are responsible for the operation of the Plan. The people who operate the Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit from the Plan or exercising your rights under ERISA. Enforce Your Rights 401(k) Plan Account distributions under the Plan will normally be made without participants or beneficiaries having to file claims for benefits. However, if you (or your beneficiary) do not receive a distribution to which you (or your beneficiary) believe you (or your beneficiary) are entitled, you (or your beneficiary) may present a claim in writing to the Administrative Committee for any unpaid benefits. If your claim for a pension benefit under the Plan is denied, in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Committee review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive a response to your written request within 30 days, you may file suit in a federal court. In such a case, the court may require Lowe s to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of Lowe s. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court (see Claims for Benefits below). In addition, if you disagree with the Plan s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court. If it should happen that Plan fiduciaries misuse the Plan s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and a fee if, for example, it finds your claim was frivolous. Assistance with Your Questions If you have any questions about the Plan, you should contact the Plan administrator, care of the Lowe s Financial Security Benefits Department, at The mailing address for the Lowe s Financial Security Benefits Department is Lowe s Companies, Inc., Mail Code NB2CB, 1000 Lowe s Boulevard, Mooresville, NC Only the Plan administrator is authorized to answer questions about the Plan. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining 15

16 documents from the Plan administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration ( ) or visiting the Employee Benefits Security Administration s web site, Resale of Shares Acquired Under The Plan Unless you are an affiliate of Lowe s (for example, a director or executive officer), any shares of Lowe s common stock acquired by you under the Plan are freely transferable upon distribution from the Plan. Affiliates of Lowe s may resell such shares upon compliance with the applicable provisions of Rule 144 under the Securities Act of Claims for Benefits As stated previously, distributions from your Plan account will normally be made without any need for you to file a claim for benefits. However, if you do not receive a distribution to which you believe you are entitled, you may file a claim with the Administrative Committee for any unpaid benefits. All questions and claims regarding benefits under this Plan will be decided by the Administrative Committee. The Administrative Committee has the full and exclusive discretion to interpret and administer the Plan and the Plan s trust agreement (including, but not limited to, the full and exclusive discretion to resolve all questions relating to eligibility and to determine the amount of benefits payable under the Plan (including as hardship withdrawals)) and to make rules, regulations, computations, interpretations, and decisions under the Plan. The Committee may allocate any of its responsibilities among its members and may (to the extent permitted by ERISA) delegate any of its rights and responsibilities to any other person or organization. If you wish to file a claim for benefits with the Committee, you must do so in writing, addressed to the Administrative Committee c/o Lowe s Financial Security Benefits Department, at 1000 Lowe s Boulevard, Mail Code NB2CB, Mooresville, NC If documentary evidence is available to support your claim, you must submit that evidence with your claim; or, if the evidence is not in your possession you must indicate in your written claim where the documentary evidence may be located. Please note that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to your claim. Claims Procedure If your claim for benefits is wholly or partially denied, the Administrative Committee will notify you in writing of the denial within 90 days of the date on which the Committee initially received your claim. The Committee is entitled to extend this deadline an additional 90 days if special circumstances so require. If you disagree with the denial, you can appeal the decision by following the review procedures set forth below. You are required to utilize fully and timely the Plan s administrative procedures for reviewing claims as a prerequisite to bringing legal action for benefits in a court of law. In its written notice of the denial of your claim for benefits, the Administrative Committee will advise you of: The specific reason or reasons for denial; The specific provisions of the Plan on which the denial was based; Any additional material or information necessary for you to process your claim and an explanation of why such material or information is necessary; and An explanation of the claims review procedures for the Plan, the time limits under the procedures and a statement regarding your right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal. Securities Act of

17 401(k) Plan Review of Denied Claim If your claim for benefits has been denied, you have the opportunity to file a written request for a full and fair review of your claim by the Administrative Committee, to provide for review all documents relating to your claim, and to submit a written statement regarding your claim. You must file this written request for a review of your claim within 60 days after your receipt of the written notification from the Administrative Committee denying your claim. The Committee usually will make a decision within 60 days after it receives your request for review. However, if there are special circumstances (such as the need to hold a hearing) that require an extension of time for completing its review, the Committee can extend this period for up to an additional 60 days. The Committee s decision on your request for a review will be in writing and will include: The specific reasons for the denial; The specific Plan provisions on which the denial is based; A statement that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to your claim; and A statement of your right to bring an action under Section 502(a) of ERISA. Federal Pension Benefit Insurance The benefits provided by the Plan are not insured by the Pension Benefit Guaranty Association (PBGC). The PBGC insures certain benefits under defined benefit plans in the event of a plan termination. This Plan is a defined contribution plan, and therefore is not insured by the PBGC. Amendment or Termination of Plan Lowe s (and, under certain circumstances, the Administrative Committee) reserves the right to amend or terminate the Plan at any time in the future. No amendment may retroactively reduce your vested rights. If the Plan is terminated and you are affected by the termination, you will remain 100% vested in your account under the Plan. In that event, Lowe s will decide whether your benefits will be distributed immediately or whether distribution of your benefits will be deferred until a later date (for example, until your employment terminates). Registration Statement and Other Information Available Lowe s will make available to participants in the Plan, upon written or oral request and without charge, the documents listed below that are incorporated by reference into the Registration Statement on Form S-8, as amended (the Plan Registration Statement), relating to the Plan and that was filed with the Securities and Exchange Commission. This summary plan description constitutes part of a prospectus covering securities that have been registered under the Securities Act of The following documents are incorporated by reference herein: Lowe s latest annual report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended February 3, Securities Act of Securities Act of

18 The Plan s latest annual report on Form 11-K filed with the Securities and Exchange Commission for the Plan s fiscal year ended December 31, All other reports filed by Lowe s pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) since January 31, The description of common stock contained in Lowe s registration statement filed under Section 12 of the Exchange Act, including all amendments or reports filed for the purpose of updating such description Lowe s Boulevard Mooresville, NC Telephone: Any other reports, proxy statements, and other communications delivered to Lowe s shareholders are also available to you upon request and without charge. If you have elected to invest part of your account balances in Lowe s stock, you will receive these documents automatically. All other documents subsequently filed by Lowe s or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment to the registration statement that indicates that all securities offered have been sold or that de-registers all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed incorporated herein by reference shall be deemed to be modified or superseded for the purpose of this prospectus to the extent that a statement contained herein or in any subsequently filed document that also is, or is deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Lowe s has registered 5,000,000 shares of common stock of Lowe s that may be offered or purchased under this Plan. The price of the securities offered and purchased under this Plan will be the fair market price at the time of purchase by the trustee. The securities offered pursuant to this prospectus have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission, nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Requests for any of the foregoing documents should be directed to: Lowe s Financial Security Benefits Department Lowe s Companies, Inc. Mail Code NB2CB 18