TERMINATION AGREEMENT & RELEASE

             This is an Agreement between Home Depot U.S.A., Inc. (the
“Company”) and Mark R. Baker (the “Executive”).

             WHEREAS, the Executive intends to resign from the Company; and,

             WHEREAS, the Company and the Executive intend the terms and
conditions of this Agreement to govern all issues related to the Executive’s
employment and resignation from the Company; and,

             WHEREAS, the Executive acknowledges that he has been given a
reasonable period of time, up to and including twenty-one (21) days, to consider
the terms of this Agreement; and,

             WHEREAS, the Company advised the Executive in writing to consult
with a lawyer before signing this Agreement; and,

             WHEREAS, the Executive has represented and hereby reaffirms that he
has disclosed to the Company any information in his possession concerning any
conduct involving the Company or its affiliates that he has any reason to
believe involves any false claims to the United States or is or may be unlawful
or violates Company policy in any material respect; and,

             WHEREAS, the Executive acknowledges that the consideration provided
him under this Agreement is sufficient to support the releases provided by him
under this Agreement; and,

             WHEREAS, the Executive represents that he has not filed any
charges, claims or lawsuits against the Company involving any aspect of his
employment which have not been terminated as of the date of this Agreement; and,

             WHEREAS, the Executive understands that the Company regards the
representations by him as material and that the Company is relying on these
representations in entering into this  Agreement,

NOW, THEREFORE, the Company and the Executive agree as follows:

1.          Employment Status and Termination Date.  The Executive shall
continue as an active employee of the Company through August 31, 2001. 
Executive shall then be placed on a paid Leave of Absence (“LOA”) commencing on
September 1, 2001 and extending through the earlier of either (a) August 31,
2002 or (b) Executive’s acceptance of employment outside the Company.  If
Executive accepts other employment, the paid LOA will end immediately and
Executive will be placed on an unpaid LOA, without pay or benefits, until August
31, 2002.  Executive’s last day of employment (“Termination Date”) will be
August 31, 2002, or as otherwise provided in paragraph 10 below.  Executive will
notify the Company, in writing, as soon as he has accepted employment outside
the Company.  Executive shall not accrue any vacation days or credit subsequent
to August 31, 2001.

2.          Annual Salary.  Executive shall continue at his current salary level
during the paid LOA.

3.          Annual Bonus.  Executive shall be paid a bonus for the Company’s
2001 fiscal year ending in 2002, equal to 100% of his current annual salary,
such payment to be paid at the same time as the Company normally pays its other
executive officers their bonuses.  This bonus payment will be contingent upon
Executive executing an additional release, the same as set forth in paragraph 7
below, covering the period between the Effective Date of this Agreement through
August 31, 2001.

Executive shall not be entitled to any bonus for the Company’s 2002 fiscal year
ending in 2003.

4.          Benefits.  The Executive will be eligible to continue to participate
in the Company’s employee benefit plans and programs during the paid LOA. 
Provided that Executive does not breach any of the terms of this Agreement, the
Company agrees that as of June 29, 2001, the $170,000 of the original
outstanding principal balance and any related accrued interest thereon that
Executive owes the Company under the Promissory Note dated December 29, 2000,
shall be forgiven and forever discharged.  The Company shall reimburse Executive
for any federal and state taxes paid by him due to the cancellation of such
indebtedness, on a fully tax grossed-up basis.

5.          Stock Options. All of Executive’s outstanding, non-vested stock
options will vest in accordance with the terms of the original grant except that
none of such options shall vest after the Termination Date.  All of Executive’s
vested stock options must be exercised within 90 days of the Termination Date. 
Executive shall not be eligible to receive any stock option grants subsequent to
August 31, 2001.

6.          Outplacement Services.  The Company shall provide outplacement
services for the Executive during the paid LOA.  Such services shall be provided
through an agency selected by the Company.  Services shall include the
reasonable costs of office space, use of equipment, such as a personal computer,
copier, phone, fax machine, and administrative support.

7.          Release of Claims. The Executive and his heirs, assigns, and agents
release, waive and discharge the Company and its past and present directors,
officers, employees, subsidiaries, affiliates, and agents from each and every
claim, action or right of any sort, known or unknown, arising on or before the
Effective Date.

(a)         The foregoing release includes, but is not limited to, any claim of
discrimination on the basis of race, sex, religion, marital status, sexual
orientation, national origin, handicap or disability, age, veteran status,
special disabled veteran status, or citizenship status; any other claim based on
a statutory prohibition; any claim arising out of or related to an express or
implied employment contract, any other contract affecting terms and conditions
of employment, or a covenant of good faith and fair dealing.

(b)        The Executive represents that he understands the foregoing release,
that rights and claims under the Age Discrimination in Employment Act of 1967,
as amended, are among the rights and claims against the Company he is releasing,
and that he understands that he is not presently releasing any rights or claims
arising after the Effective Date.

(c)         The Executive further agrees never to sue the Company or cause the
Company to be sued regarding any matter within the scope of the above release.
If the Executive violates this release by suing the Company or causing the
Company to be sued, the Company may recover all damages as allowed by law,
including all costs and expenses of defending against the suit incurred by the
Company and reasonable attorneys’ fees.

The Company releases, waives, and discharges Executive from each and every
claim, action or right of any sort, arising on or before the Effective Date and
based upon facts presently known to the Executive Vice President, Human
Resources.

8.          Confidential Information.  The Executive acknowledges that, in
connection with his employment at the Company, he obtained knowledge about
confidential and proprietary information, or trade secrets of the Company,
including but not limited to lists of customers and vendors, technical
information about Company products, strategic plans of company businesses and
price information (hereinafter the “Information”). Executive agrees, either
prior to or following the Effective Date, not to use, publish or otherwise
disclose any Information to others, including but not limited to a subsequent
employer or competitor to the Company. If the Executive has any question
regarding what data or information would be considered by the Company to be
information subject to this provision, the Executive agrees to contact the
Executive Vice President, Human Resources for written clarification.

9.          Non-Competition and Non-Solicitation.

(a)         The Executive agrees that he will not, prior to August 31, 2004,
enter into or maintain an employment or contractual relationship, either
directly or indirectly, to provide services to any company or entity engaged in
any way in a business that competes directly or indirectly with the Company
without the prior written consent of the Company.  Businesses that compete with
the Company specifically include, but are not limited to, the following entities
and each of their subsidiaries affiliates, assigns, or successors in interest: 
Lowe’s Companies, Inc. (including, but not limited to, Eagle Hardware and
Garden); Hechinger Investment Company, Inc. (including, but not limited to, Home
Quarters, Hechinger, and Builder’s Square); Payless Cashways, Inc.; Dekor; Sears
(including, but not limited to, Orchard Supply and Hardware Company); Wal-Mart;
Home Base, Inc; and Menard, Inc.

(b)        To the extent that any relationship or employment prior to August 31,
2004 is covered by the above non-compete provision, Executive agrees to request
permission from the Executive Vice President, Human Resources of the Company
prior to entering any such relationship or employment. The Company may approve
or not approve of the relationship or employment at its absolute discretion.

(c)         The Executive agrees that prior to August 31, 2004, he will not
directly or indirectly solicit any person who is an employee of the Company to
terminate his or her relationship with the Company without prior written
approval from the Executive Vice President, Human Resources of the Company.

10.        Breach by Executive.  The Company’s obligations to the Executive
under this Agreement, including the loan forgiveness set forth in paragraph 5
above, are contingent on Executive’s performance of his obligations under this
Agreement. Any material breach by Executive of this Agreement will result in the
immediate cancellation of all Executive’s stock options and the immediate
termination of Executive’s employment, as well as entitle the Company to all its
other remedies in law or equity.  In the event of such breach, Executive would
also be required to repay the $170,000 principal balance of the Promissory Note
dated December 29, 2000, plus interest accrued from June 29, 2000, calculated in
accordance with the terms of the Promissory Note.

11.        Executive Availability.  The Executive agrees to make himself
reasonably available to the Company to respond to requests by the Company for
information pertaining to or relating to the Company and/or the Company’s
affiliates, subsidiaries, agents, officers, directors or employees which may be
within the knowledge of the Executive. Executive will cooperate fully with the
Company in connection with any and all existing or future litigations or
investigations brought by or against the Company or any of its past or present
affiliates, agents, officers, directors or employees, whether administrative,
civil or criminal in nature, in which and to the extent the Company deems the
Executive’s cooperation necessary. The Company will reimburse the Executive for
reasonable out-of-pocket expenses incurred as a result of such cooperation.
Nothing herein shall prevent the Executive from communicating with or
participating in any government investigation.

12.        Non Disparagement.  The Executive agrees, subject to any obligations
he may have under applicable law, that he will notmake or cause to be made any
statements that disparage, are inimical to, or damage the reputation of the
Company or any of its past or present affiliates, subsidiaries, agents,
officers, directors or employees. In the event such a communication is made to
anyone, including but not limited to the media, public interest groups and
publishing companies, it will be considered a material breach of the terms of
this Agreement and the Executive will be required to reimburse the Company for
any and all compensation and benefits paid under the terms of this Agreement and
all commitments to make additional payments to the Executive will be null and
void.

13.        Insider Trading.  The Executive acknowledges that prior to the
Termination Date, he remains subject to the restrictions of the Company’s
Insider Trading Policy.  After the Termination Date, the Insider Trading Policy
will no longer apply to the Executive.  However, the Executive acknowledges that
through his employment with the Company he may have learned material, non-public
information regarding the Company.  The federal securities laws prohibit trading
by persons while aware of material, non-public information.  The Executive
should seek advice of his legal counsel prior to conducting any transactions in
the Company’s stock if the Executive thinks he may possess such information.

14.        Future Employment. The Executive agrees and acknowledges that the
Company, its affiliates, or subsidiaries are not obligated to offer employment
to the Executive (or to accept services or the performance of work from the
Executive directly or indirectly) now or in the future.

15.        Severability of Provisions. In the event that any provision in this
Agreement is determined to be legally invalid or unenforceable by any court of
competent jurisdiction, and cannot be modified to be enforceable, the affected
provision shall be stricken from the Agreement, and the remaining terms of the
Agreement and its enforceability shall remain unaffected.

16.        Right to Revoke this Agreement. The Executive may revoke this
Agreement in writing within seven days of signing it. The Agreement will not
take effect until the Effective Date. If the Executive revokes this Agreement,
all of its provisions shall be void and unenforceable.

17.        Effective Date. The Effective Date shall be the day after the end of
the revocation period described in Section 16.

18.        Confidentiality. The Executive shall keep strictly confidential all
the terms and conditions, including amounts, in this Agreement and shall not
disclose them to any person other than the Executive’s spouse, the Executive’s
legal or financial advisor, or U.S. governmental officials who seek such
information in the course of their official duties, unless compelled by law to
do so. If a person not a party to this Agreement requests or demands, by
subpoena or otherwise, that the Executive disclose or produce this Agreement or
any terms or conditions thereof, the Executive shall immediately notify the
Company and shall give the Company an opportunity to respond to such notice
before taking any action or making any decision in connection with such request
or subpoena.

19.        Survival of Provisions.  Paragraphs 8, 9, 11, and 18 shall survive
the term of this Agreement.

20.        Entire Agreement. This Agreement constitutes the entire understanding
between the parties. The parties have not relied on any oral statements that are
not included in this Agreement. Any modifications to this Agreement must be in
writing and signed by the Executive and an authorized employee or agent of the
Company.

21.        This Agreement shall be construed, interpreted and applied in
accordance with the law of the State of Delaware, without giving effect to the
choice of law provisions thereof.

 

Home Depot U.S.A., Inc.   By /s/ Dennis M. Donovan   6/13/01    

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    Dennis M. Donovan   Date     Executive Vice President         Human
Resources                   /s/ Mark R. Baker   6/13/01    

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    Mark R. Baker   Date     Executive