NATURAL STONE & TILE PLR RESET VENDOR FORUM

1. NATURAL STONE & TILE PLR RESET VENDOR FORUM Reset Dates Phase:1 June 4-8, 2012 (Reset#12467) Phase 2: July 2-6, 2012 (Reset#12468) Phase 3: August 6-10, 2012 (Reset#12470)

2. Agenda • Reset timelines • Forecasting & Replenishment • Signage & display board requirements & approval process • Flyer/advertising support • Drop items exit strategy • Store associate training • Whatever/Whenever

3. Reset timelinesPhase 1 (June 4-8) CURRENT New releases/ Promo pod Marble threshold NEW Essentials Designer mosaics New releases/ Promo pod Clearance Zone (June-August) FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

4. Reset timelinesPhase 2 (July 2-6) CURRENT New releases/ Promo pod NEW Designer mosaics Essentials Natural Stone Porcelain /Ceramic tile New releases/ Promo pod Porc /Ceramic tile Fashion rug Clearance Zone (June-August) FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

5. Reset timelinesPhase 3 (August 6-10) CURRENT New releases/ Promo pod NEW Designer mosaics Essentials Natural Stone Porcelain /Ceramic tile New releases/ Promo pod Specialty tile Porc /Ceramic tile Clearance Zone (June-August) FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

6. Forecasting & Replenishment

7. Forecasting • Deseasonalized Demand (DD) • Weekly rate of sale for an item at a store, based historical trends and statistical model. Updated weekly for every store/item • Base Index (BI) • Weekly contribution of that week to the average week; grouped together they form a profile Forecast = DD * BI + Override • 3 Types of Forecasts • Demand – The quantity forecasted to be sold in the stores each week. • Order- Fcst purchase order quantities expected to be placed in the week specified. • Shipment- Fcst purchase order quantities we expect the vendor to ship in the week specified.

8. Weekly Vendor Forecast • Sales forecast available to all vendors; order forecast available for product flowing through RDC’s • Allows vendors to pull sales, purchase order and shipment forecasts on a weekly basis by RDC • Updated every week • There is a 26 week and 52 week view of the forecast that you can access on Lowes Link. • Full Webcast Training that all vendors should go thru.

9. Channel Flow and Inventory Replenishment FTL vs LTL Based on the volume we will purchase from you weekly drives whether we should order as FTL or LTL. The initial forecast is what drives if we order as FTL or LTL. After 2 to 3 months we will review the business again using the actual’s to ensure the right decision was made. Channel • 1XD = cross dock. This means that you will receive one PO per week with a ship too location of our Milton DC #1469. • OXD = Stocked at DC. This means that you will receive one PO per week with a ship too location of our Milton DC #1469. We will hold a limited amount of stock in the DC to handle store demand. • With both the OXD or 1XD channels we would order in pallets but we may ship out to store in cases. Inventory We will not be holding more than 4 to 6 weeks of supply in our network. Due to the unknown sales potential of these new programs our expectation is that the vendor holds 12 weeks of forecast in their facility to react to demand.

10. Vendor Compliance • On-Time Shipment: • 95% Requirement on Total Orders, no more than 2 days early or late • 100% Requirement on New Store, New DC, Reset, Remerchandising, One-time and Promotional Orders • Quantity Fill Rate: • 98% Requirement on Total Monthly Orders • 100% Requirement on New Store, New DC, Reset, Remerchandising, One-time and Promotional Orders • Bar coding and Packaging Requirements: • 100% Accuracy Requirement • Core Carrier Compliance: • 100% Accuracy Requirement

11. Signage & Display boards

12. 102”Wing rackDesigner mosaics POG/ 3 bays • Display/Signage components: • Slider • Product display board • Product info card • Storyboard (front panels only) Before After

13. Designer Mosaics Wing rack POGDisplay/Signage requirements WING RACK PRODUCT DISPLAY BOARD DON’T FORGET TO FILL OUT THE WING RACK PRODUCT SPEC SHEET (1 per item) Lowe’s price label • Dimensions:14.5”WX15 7/16”H / Live area: 12”Wx12”H • Source: Urban Stone • Qty: 1 per item (Mosaic or Mosaic/Subway combo)

14. Designer Mosaics Wing rack POGDisplay/Signage requirements WING RACK PRODUCT CARD Item description: Line 1: Product name Line 2: sq.ft for item 3 reasons to buy item Feature #1 : Material Feature #2 : Where to use Feature #3 :Additional info/romance Item in use shot Lowe’s item# Brand Feature logo • Dimensions:14.5”WX15 7/16”H • Source: Pratt • Qty: 1 per item

15. Z Wall POG’s/ 15 baysNatural Stone/ Porc Ceramic Tile Specialty tile • Display/Signage components: • Z Wall product roomscene • Z Wall Product display board • C Channel card Before After After

16. Z Wall POG’sDisplay/Signage requirements Z WALL PRODUCT DISPLAY BOARD DON’T FORGET TO FILL OUT THE Z WALL PRODUCT DISPLAY BOARD SPEC SHEET/ INCLUDING MAPEI GROUT INFO (1 per z wall board) • Source:Product display: Urban Stone / Roomscene: Pratt • Qty: 8 set per bay

17. Z Wall POG’sDisplay/Signage requirements Z WALL C CHANNEL CARD Brand Item description Product name and tile size 3 reasons to buy item Feature #1 : Material Feature #2 : Where to use Feature #3 :Additional info/romance Item in use shot (same in use shot as Z Wall roomscene) QR code or feature logo Lowe’s item# • Dimensions: 12”W X5”H • Source: Pratt • Qty: 8 sets per bay (complementing each Z Wall board)

18. ContactsDisplay/Signage requirements Wing rack & Z Wall product display boards Wing rack & Z Wall spec sheets Urban Stone Art Att: Angelo Rao 7835 Hwy 50 Unit 10 Vaughan, ON L4L 1A5 arao@bellnet.ca 416-768-1001 Layout review/approval: jf.pelletier@lowes.com 416-730-7329 Technical requests: canadase@lowes.com Wing rack product cards/ C channel cards Z Wall roomscenes

19. Flyer/Advertising support

20. Advertising- Flyer • Sell copy which: • ‘romances’ the product • provides brief product description • - provides consumer benefits (‘why buys’) Current and stylish in use image image Individual product image Silhouette -ideally other angles available Romance the product: This floor and wall tile combination emulates Roman themes beautifully and is easily used in checkerboard patterns while maintaining the elegance of the tile design Brief product description: 12X12 Navelli Ambrato Porcelain floor tile sold individually or in 9sq.ft carton Consumer benefit (‘why buys’): Easy to clean Stain resistant <0.5% moisture absorption Image requirements: minimum 150 dpi IMAGES & SELL COPY TO BE PROVIDED ON CD FORMAT

21. ContactsFlyer/Advertising support Item in use image/roomscene Individual product image (silouhette) Item sell copy CD Ship to address Lowe’s Canada Att: Darin Delvechio 5160 Yonge Steet Suite 200 Toronto, ON M2N 6L9 Questions: darin.c.delvechio@lowes.com

22. Drop itemsExit strategy

23. Drop itemsExit strategy • Replenishment – Turn off • All drop import vendor items+ • All domestic vendor items with WOS>30 • _________________________ • Total: 108 items (58% of drops) • All other drop items to be turned off 12 weeks prior to reset (by phase) • Markdown • Now->up to 45 days prior to reset: EDLP • Less than 45 days to reset: Markdown optimization: 25%-75% off Drop items inventory As of 03/13/2012