10-Q

                                                                       -1-

                                      UNITED STATES
                           SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549

                                        FORM 10-Q
(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the quarterly period ended  October 31, 1995                               
OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the transition period from                      to                          

Commission file number     1-7898                                              

                                 LOWE'S COMPANIES, INC.                 
                (Exact name of registrant as specified in its charter)

                 NORTH CAROLINA                       56-0578072              
       (State or other jurisdiction of    (I.R.S. Employer Identification No.)
        incorporation or organization)

                       PO BOX 1111, NORTH WILKESBORO, NC  28656             
                       (Address of principal executive offices)
                                      (Zip Code)

                                    (910) 651-4000                    
                  (Registrant's telephone number, including area code)

                                         NONE                                
               (Former name, former address and former fiscal year,
                if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
 of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.     Yes  X     No     .

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

            Class                            Outstanding at November 30, 1995
Common Stock, $.50 par value                           160,807,046         
                                                                             
                                       20
                                  TOTAL PAGES


                                      -2-



                               LOWE'S COMPANIES, INC.


                                   - INDEX -


PART I - Financial Information:                               Page No.

        Consolidated Balance Sheets - October 31, 1995
        and January 31, 1995.                                     3

        Consolidated Statements of Current and
        Retained Earnings - three months and nine months
        ended October 31, 1995 and 1994.                          4

        Consolidated Statements of Cash Flows - nine
        months ended October 31, 1995 and 1994.                   5

        Notes to Consolidated Financial Statements.             6-8

        Management's Discussion and Analysis of Results
        of Operations and Financial Condition.                 9-10

        Independent Accountants' Report.                         11



PART II - Other Information                                     12

Item 6 (a) - Exhibits.
		
Item 6 (b) - Reports on Form 8-K.                                   


EXHIBIT INDEX                                                    13

        Exhibit 10   Release and Separation Agreement dated 
                       November 9, 1995, between the Company 
                       and Harry B. Underwood II              14-19

        Exhibit 11     Computation of per share earnings         20






Consolidated Balance Sheets
Lowe's Companies, Inc. and Subsidiary Companies
Dollars in thousands


                                                        October 31,         January 31,
                                                            1995                1995
                                                                      
Assets


     Current assets:

     Cash and cash equivalents                              $47,179            $150,319
     Short-term investments                                  95,906             118,155
     Accounts receivable - net                              144,317             109,214
     Merchandise inventory                                1,364,544           1,132,282
     Other assets                                            53,556              47,198
                                                        ____________        ____________

     Total current assets                                 1,705,502           1,557,168

     Property, less accumulated depreciation              1,723,434           1,397,713
     Long-term investments                                   42,641              83,459
     Other assets                                            52,021              67,652
                                                        ____________        ____________

     Total assets                                        $3,523,598          $3,105,992



Liabilities and Shareholders' Equity


     Current liabilities:

     Current maturities of long-term debt                   $13,636             $26,913
     Short-term notes payable                                91,853               1,903
     Accounts payable                                       713,945             675,436
     Employee retirement plans                               38,779              43,950
     Accrued salaries and wages                              51,808              63,356
     Other current liabilities                              172,174             134,334
                                                        ____________        ____________

     Total current liabilities                            1,082,195             945,892

     Long-term debt, excluding current maturities           748,886             681,184
     Deferred income taxes                                   65,620              49,211
     Accrued store restructuring costs                          151               9,815
                                                        ____________        ____________

     Total liabilities                                    1,896,852           1,686,102
                                                        ____________        ____________
     Shareholders' equity
     Common stock - $.50 par value;
            Issued and Outstanding
         October 31, 199160807046
         January 31, 199159527389                            80,389              79,764
     Capital in excess of par                               593,571             554,838
     Retained earnings                                      958,304             792,891
     Unearned compensation-restricted stock awards           (4,757)             (5,949)
     Unrealized loss on available-for-sale securities,
        net of income taxes of $481 at October 31, 1995
        and $886 at January 31, 1995                           (761)             (1,654)


     Total shareholders' equity                           1,626,746           1,419,890
                                                        ____________        ____________
     Total liabilities and
       shareholders' equity                              $3,523,598          $3,105,992



See accompanying notes to consolidated financial statements.


Consolidated Statements of Current and Retained Earnings
Lowe's Companies, Inc. and Subsidiary Companies
Dollars In Thousands, Except Per Share Data


                                                Quarter Ended                     Nine Months Ended
                                    October 31, 1995     October 31, 1994     October 31,1995    October 31, 1994
Current Earnings                     Amount  Percent     Amount   Percent     Amount   Percent    Amount   Percent
                                                                                  
Net sales                         $1,765,992   100.00 $1,579,005   100.00  $5,378,740   100.00 $4,623,032   100.00

Cost of sales                      1,337,049    75.71  1,197,859    75.86   4,034,115    75.00  3,501,618    75.74

Gross margin                         428,943    24.29    381,146    24.14   1,344,625    25.00  1,121,414    24.26

Expenses:

Selling, general
 and administrative                  284,828    16.13    239,190    15.15     840,969    15.63    685,196    14.82

Store opening costs                   16,322     0.92     10,628     0.67      36,351     0.68     25,366     0.55

Depreciation                          38,867     2.20     28,661     1.82     107,648     2.00     78,824     1.71

Employee retirement plans             11,574     0.66     13,265     0.84      38,301     0.71     37,507     0.81

Interest                               9,145     0.52      5,852     0.37      27,404     0.51     21,580     0.47

Total expenses                       360,736    20.43    297,596    18.85   1,050,673    19.53    848,473    18.36

Pre-tax earnings                      68,207     3.86     83,550     5.29     293,952     5.47    272,941     5.90

Income tax provision                  24,288     1.37     29,359     1.86     106,100     1.98     95,646     2.06

Net earnings                         $43,919     2.49    $54,191     3.43    $187,852     3.49   $177,295     3.84

Shares outstanding
  (weighted average)                 160,766             159,399              160,308             153,439

Earnings per common & common
 equivalent share                      $0.27               $0.34                $1.17               $1.16

Earnings per common share -
 assuming full dilution                $0.27               $0.33                $1.13               $1.11

Retained earnings

Balance at beginning of period      $922,416            $706,782             $792,891            $596,763
Net earnings                          43,919              54,191              187,852             177,295
Cash dividends                        (8,031)             (7,172)             (22,439)            (20,257)
Balance at end of period            $958,304            $753,801             $958,304            $753,801



See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Lowe's Companies, Inc. and Subsidiary Companies
Dollars in Thousands

                                                                      For the nine months
                                                                               ended October 31,
                                                                                  1995        1994
                                                                                     
Cash Flows From Operating Activities:
     Net Earnings                                                                $187,852    $177,295
     Adjustments to Reconcile Net Earnings to Net Cash
       Provided By Operating Activities:
         Depreciation                                                             107,648      78,824
         Amortization of Original Issue Discount                                    2,756       2,399
         Increase in Deferred Income Taxes                                         15,130       8,425
         (Gain) Loss on Disposition/Writedown of Fixed and Other Assets            (1,389)      3,635
         Decrease (Increase) in Operating Assets:
           Accounts Receivable - Net                                              (35,103)   (117,426)
           Merchandise Inventory                                                 (232,262)   (186,308)
           Other Operating Assets                                                  (5,377)     33,696
         Increase (Decrease) in Operating Liabilities:
           Accounts Payable                                                        38,509     129,853
           Employee Retirement Plans                                               32,048      30,503
           Accrued Store Restructuring                                             (7,180)     (7,281)
           Other Operating Liabilities                                             26,828      53,968
     Net Cash Provided by Operating Activities                                    129,460     207,583

Cash Flows from Investing Activities:
     Decrease (Increase) in Investment Assets:
       Short-Term Investments                                                      30,763    (212,043)
       Purchases of Long-Term Investments                                         (24,388)    (19,519)
       Proceeds from Sale/Maturity of Long-Term Investments                        58,065      15,304
       Other Long-Term Assets                                                      (1,092)     (2,358)
     Fixed Assets Acquired                                                       (359,394)   (257,578)
     Proceeds from the Sale of Fixed and Other Long-Term Assets                    19,222      11,640
     Net Cash Used in Investing Activities                                       (276,824)   (464,554)

Cash Flows from Financing Activities:
  Sources:
     Long-Term Debt Borrowings                                                          0         500
     Net Increase in Short-Term Borrowings                                         89,950
     Proceeds from Issuance of Common Stock                                             0     315,814
     Stock Options Exercised                                                           44         961
     Total Financing Sources                                                       89,994     317,275

  Uses:
     Repayment of Long-term Debt                                                  (23,331)    (39,086)
     Net Decrease in Short-Term Borrowings                                                       (363)
     Cash Dividend Payments                                                       (22,439)    (20,257)
     Common Stock Purchased for Retirement                                                        (79)
     Total Financing Uses                                                         (45,770)    (59,785)
     Net Cash Provided by Financing Activities                                     44,224     257,490

  Net Increase (Decrease) in Cash and Cash Equivalents                           (103,140)        519
  Cash and Cash Equivalents, Beginning of Period                                  150,319      73,253
  Cash and Cash Equivalents, End of Period                                        $47,179     $73,772


See accompanying notes to consolidated financial statements.

EX-11

- -12-

	Exhibit 11 - Computation of per share earnings


                           				  Three Months Ended                     Nine Months Ended
				                                October 31                              October 31
                            				  1995          1994                     1995         1994
                                                                            
Earnings per Common & Common Equivalent Share:
Net Earnings                      $43,919    $54,191                   $187,852   $177,295
Weighted Average Shares
     Outstanding                  160,690    159,264                    160,233    153,306
Dilutive Effect of Common 
     Stock Equivalents                 76        135                         75        133
Weighted Average Shares,
     as Adjusted                  160,766    159,399                    160,308    153,439
Earnings per Common &
     Common Equivalent Share         $.27       $.34                      $1.17      $1.16

Earnings per Common Share - Assuming Full Dilution:

Net Earnings                      $43,919    $54,191                   $187,852   $177,295
Interest (After Taxes) on
     Convertible Debt               1,907      1,919                      5,661      5,744
Net Earnings, as Adjusted         $45,826    $56,110                   $193,513   $183,039

Weighted Average Shares
     Outstanding                  160,690    159,264                    160,233    153,306
Dilutive Effect of Common 
     Stock Equivalents                 75        136                         75        136
Shares Added if All Debt
     Converted                     10,898     10,995                     10,898     10,995
Weighted Average Shares,
     as Adjusted                  171,663    170,395                    171,206    164,437
Earnings per Common Share
     - Assuming Full Dilution        $.27       $.33                      $1.13      $1.11

EX-27

 

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EX-10

                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,
                                2
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
                                3
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

                                4
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

                                    5
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.

                                    6
           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