<PAGE>
                                                                   EXHIBIT 10.37



                              THE HOME DEPOT, INC.
                         NONEMPLOYEE DIRECTORS' DEFERRED
                             STOCK COMPENSATION PLAN

                                    ARTICLE I
                                  INTRODUCTION

         I.1      ESTABLISHMENT. The Home Depot, Inc. (the "Company") hereby
establishes The Home Depot, Inc. Nonemployee Directors' Deferred Stock
Compensation Plan (the "Plan") for those directors of the Company who are not
employees of the Company. The Plan allows Nonemployee Directors to defer the
receipt of cash compensation and to receive such deferred compensation in the
form of Shares of Common Stock of the Company.

         I.2      PURPOSE. The Plan is intended to advance the interests of the
Company and its Stockholders by providing a means to attract and retain
qualified persons to serve as Nonemployee Directors and to promote ownership by
Nonemployee Directors of a greater proprietary interest in the Company, thereby
aligning such Directors' interests more closely with the interests of
Stockholders of the Company.

         I.3      EFFECTIVE DATE. The Plan shall become effective upon approval
by the Stockholders of the Company at the Company's 1997 Annual Meeting of
Stockholders.

                                   ARTICLE II
                                   DEFINITIONS

         II.1     "ANNUAL MEETING" means the Annual Meeting of Stockholders of
the Company.

         II.2     "ANNUAL MEETING DATE" means the date of the Annual Meeting.

         II.3     "BOARD" means the Board of Directors of the Company.

         II.4     "COMMITTEE" means the Board or a committee appointed to
administer the Plan under Article IV.

         II.5     "COMPANY" means The Home Depot, Inc., a Delaware corporation,
or any successor thereto.

         II.6     "DEFERRAL DATE" means the date Fees would otherwise have been
paid to the Participant.

         II.7     "DEFERRAL ELECTION" means a written election to defer Fees
under the Plan.

         II.8     "DIRECTOR" means any individual who is a member of the Board.

         II.9     "EFFECTIVE DATE" means May 28, 1997, the date of the Company's
1997 Annual Meeting.


<PAGE>

         II.10    "FAIR MARKET VALUE" means the closing price for the Shares
reported on a consolidated basis on the New York Stock Exchange on the relevant
date or, if there were no sales on such date, the closing price on the nearest
preceding date on which sales occurred.

         II.11    "FEES" means all or part of any retainer or meeting fees
payable in cash to a Nonemployee Director in his or her capacity as a Director.
Fees shall not include any expenses paid directly or through reimbursement.

         II.12    "NONEMPLOYEE DIRECTOR" means a Director who is not, as of an
Annual Meeting Date, an employee of the Company or any of its subsidiaries or
affiliates. For purposes of the Plan, an employee is an individual whose wages
are subject to the withholding of federal income tax under Section 3401 of the
Internal Revenue Code of 1986, as amended.

         II.13    "PARTICIPANT" means a Nonemployee Director who defers Fees
under Article VI of the Plan.

         II.14    "SECRETARY" means the Secretary or any Assistant Secretary of
the Company.

         II.15    "SHARES" means shares of the Common Stock of the Company, par
value $.05 per share. B-1 35

         II.16    "STOCK UNITS" means the credits to a Participant's Stock Unit
Account under Article VI of the Plan, each of which represents the right to
receive one Share upon settlement of the Stock Unit Account.

         II.17    "STOCK UNIT ACCOUNT" means the bookkeeping account established
by the Company pursuant to Section 6.5.

         II.18    "TERMINATION OF SERVICE" means termination of service as a
Director for any reason.

                                   ARTICLE III
                         SHARES AVAILABLE UNDER THE PLAN

         Subject to adjustment as provided in Article X, the maximum number of
Shares that may be distributed in settlement of Stock Unit Accounts under the
Plan shall be 500,000. Such Shares may include authorized but unissued Shares,
Treasury Shares or Shares that have been reacquired by the Company.

                                   ARTICLE IV
                                 ADMINISTRATION

         The Plan shall be administered by the Board or such other committee as
may be designated by the Board. The Committee shall have the authority to make
all determinations it deems necessary or advisable for administering the Plan,
subject to the express provisions of the


<PAGE>

Plan. Notwithstanding the foregoing, no Director who is a Participant under the
Plan shall participate in any determination relating solely or primarily to his
or her own Shares, Stock Units or Stock Unit Account.

                                    ARTICLE V
                                   ELIGIBILITY

         Each person who is a Nonemployee Director on a Deferral Date shall be
eligible to defer Fees payable on such date in accordance with Article VI of the
Plan. If any Nonemployee Director subsequently becomes an employee of the
Company or any of its subsidiaries, but does not incur a Termination of Service,
such Director shall continue as a Participant with respect to Fees previously
deferred, but shall cease eligibility with respect to all future Fees, if any,
earned while an employee.

                                   ARTICLE VI
                   DEFERRAL ELECTIONS IN LIEU OF CASH PAYMENTS

         VI.1     GENERAL RULE. Each Nonemployee Director may, in lieu of
receipt of Fees, defer any or all of such Fees in accordance with this Article
VI, provided that such Nonemployee Director is eligible under Article V of the
Plan to defer such Fees at the date any such Fees are otherwise payable.

         VI.2     TIMING OF ELECTION. Each Nonemployee Director who is serving
on the Board on the Effective Date may make a Deferral Election at any time
prior to the Effective Date. Any person who is not then serving as a Nonemployee
Director may make a Deferral Election before the first date on which he or she
is entitled to receive Fees. A Nonemployee Director who does not make a Deferral
Election when first eligible to do so may make a Deferral Election at any time
before the first day of any subsequent calendar year.

         VI.3     EFFECT AND DURATION OF ELECTION. A Deferral Election shall
apply to Fees payable after the date such election is made and shall be deemed
to be continuing and applicable to all Fees payable in subsequent calendar
years, unless the Participant revokes or modifies such election by filing a new
election form before the first day of any subsequent calendar year, effective
for all Fees payable on and after the first day of such calendar year. B-2 36

         VI.4     FORM OF ELECTION. A Deferral Election shall be made in a
manner satisfactory to the Committee. Generally, a Deferral Election shall be
made by completing and filing the specified election form with the Secretary or
his or her designee within the period described in Section 6.2 or Section 6.3.

         VI.5     ESTABLISHMENT OF STOCK UNIT ACCOUNT. The Company shall
establish a Stock Unit Account for each Participant. All Fees deferred pursuant
to this Article VI shall be credited to the Participant's Stock Unit Account as
of the Deferral Date and converted to Stock Units. The number of Stock Units
credited to a Participant's Stock Unit Account as of a Deferral Date shall equal
the amount of the deferred Fees divided by the Fair Market Value of a Share on
such Deferral Date, with fractional units calculated to three decimal places.
Fractional Stock Units


<PAGE>

shall be credited cumulatively, but any fractional Stock Unit in a Participant's
Stock Unit Account at the time of a distribution under Article VII shall be
converted into cash equal to the Fair Market Value of a corresponding fractional
Share on the date of distribution.

         VI.6     CREDITING OF DIVIDEND EQUIVALENTS. As of each dividend payment
date with respect to Shares, each Participant shall have credited to his or her
Stock Unit Account a dollar amount equal to the amount of cash dividends that
would have been paid on the number of Shares equal to the number of Stock Units
credited to the Participant's Stock Unit Account as of the close of business on
the record date for such dividend. Such dollar amount shall then be converted
into a number of Stock Units equal to the number of whole and fractional Shares
that could have been purchased with such dollar amount at Fair Market Value on
the dividend payment date.

                                   ARTICLE VII
                            SETTLEMENT OF STOCK UNITS

         VII.1    TIMING OF PAYMENT. A Participant shall receive or begin
receiving a distribution of his or her Stock Unit Account in the manner
described in Section 7.2 either (i) on or as soon as administratively feasible
after the first day of the second calendar month immediately following the month
in which the Participant incurs a Termination of Service, or (ii) if the
Participant has made an election to defer payment in accordance with this
Section, on or as soon as administratively feasible after January 1 of the year
immediately following the date on which the Participant incurs a Termination of
Service. A Participant must deliver an election to defer the distribution or
commencement of distribution to the Secretary or his or her designee at least 5
months before the date on which the Participant incurs a Termination of Service.

         VII.2    PAYMENT OPTIONS. A Deferral Election filed under Article VI
shall specify whether the Participant's Stock Unit Account is to be settled by
delivering to the Participant the number of Shares equal to the number of whole
Stock Units then credited to the Participant's Stock Unit Account, in either (i)
a lump sum, or (ii) substantially equal annual installments over a period not to
exceed 5 years. Any fractional Stock Unit credited to a Participant's Stock Unit
Account at the time of a distribution shall be paid in cash at the time of such
distribution. A Participant may change the manner in which his or her Stock Unit
Account is distributed by delivering a new election form to the Secretary or his
or her designee at least 5 months before the date on which the Participant
incurs a Termination of Service.

         VII.3    PAYMENT UPON DEATH OF A PARTICIPANT. If a Participant dies
before the entire balance of his or her Stock Unit Account has been distributed,
the balance of the Participant's Stock Unit Account shall be paid, in a lump sum
as soon as administratively feasible after the Participant's death, to the
beneficiary designated by the Participant under Article IX.

         VII.4    CONTINUATION OF DIVIDEND EQUIVALENTS. If payment of Stock
Units is deferred pursuant to Section 7.2, the Participant's Stock Unit Account
shall continue to be credited with dividend equivalents as provided in Section
6.6 until the entire balance of the Participant's Stock Unit Account has been
distributed. B-3 37


<PAGE>

                                  ARTICLE VIII
                                 UNFUNDED STATUS

         VIII.1   GENERAL. The interest of each Participant in any Fees deferred
under the Plan (and any Stock Units or Stock Unit Account relating thereto)
shall be that of a general creditor of the Company. Stock Unit Accounts, and
Stock Units credited thereto, shall at all times be maintained by the Company as
bookkeeping entries evidencing unfunded and unsecured general obligations of the
Company. Except as provided in Section 8.2, no money or other assets shall be
set aside for any Participant.

         VIII.2   TRUST. To the extent determined by the Board, the Company may
transfer funds necessary to fund all or part of the payments under the Plan to a
trust; provided, the assets held in such trust shall remain at all times subject
to the claims of the general creditors of the Company. No Participant or
beneficiary shall have any interest in the assets held in such trust or in the
general assets of the Company other than as a general, unsecured creditor.
Accordingly, the Company shall not grant a security interest in the assets held
by the trust in favor of any Participant, beneficiary or creditor.

                                   ARTICLE IX
                           DESIGNATION OF BENEFICIARY

         Each Participant may designate, on a form provided by the Committee,
one or more beneficiaries to receive payment of the Participant's Stock Unit
Account in the event of such Participant's death. The Company may rely upon the
beneficiary designation last filed with the Committee, provided that such form
was executed by the Participant or his or her legal representative and filed
with the Committee prior to the Participant's death. If a Participant has not
designated a beneficiary, or if the designated beneficiary is not surviving when
a payment is to be made to such person under the Plan, the beneficiary with
respect to such payment shall be the Participant's surviving spouse, or if there
is no surviving spouse, the Participant's estate.

                                    ARTICLE X
                              ADJUSTMENT PROVISIONS

         In the event any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, exchange of Shares or other
securities of the Company, stock split or reverse split, or similar corporate
transaction or event affects Shares such that an adjustment is determined by the
Board or Committee to be appropriate to prevent dilution or enlargement of
Participants' rights under the Plan, then the Board or Committee shall, in a
manner that is proportionate to the change to the Shares and is otherwise
equitable, adjust the number or kind of Shares to be delivered upon settlement
of Stock Unit Accounts under Article VII.


<PAGE>

                                   ARTICLE XI
                               GENERAL PROVISIONS

         XI.1     NO STOCKHOLDER RIGHTS CONFERRED. Nothing contained in the Plan
will confer upon any Participant or beneficiary any rights of a Stockholder of
the Company, unless and until Shares are in fact issued or transferred to such
Participant or beneficiary in accordance with Article VII.

         XI.2     CHANGES TO THE PLAN. The Board may amend, alter, suspend,
discontinue, extend, or terminate the Plan without the consent of Stockholders
or Participants; provided, no action taken without the consent of an affected
Participant may materially impair the rights of such Participant with respect to
any Stock Units credited to his or her Stock Unit Account at the time of such
change or termination.

         XI.3     COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company will not be
obligated to issue or deliver Shares in connection with the Plan in a
transaction subject to the registration requirements of the Securities Act of
1933, as amended, or any other federal or state securities law, any requirement
under any listing agreement between the Company and any national securities
exchange or automated quotation system or any other laws, B-4 38 regulations, or
contractual obligations of the Company, until the Company is satisfied that such
laws, regulations and other obligations of the Company have been complied with
in full. Certificates representing Shares delivered under the Plan will be
subject to such restrictions as may be applicable under such laws, regulations
and other obligations of the Company.

         XI.4     LIMITATIONS ON TRANSFERABILITY. Stock Units and any other
right under the Plan will not be transferable by descent and distribution (or to
a designated beneficiary in the event of a Participant's death). Stock Units and
other rights under the Plan may not be pledged, mortgaged, hypothecated or
otherwise encumbered, and shall not be subject to the claims of creditors of any
Participant.

         XI.5     GOVERNING LAW. The validity, construction and effect of the
Plan and any agreement hereunder will be determined in accordance with (i) the
Delaware General Corporation Law, and (ii) to the extent applicable, other laws
(including those governing contracts) of the State of Georgia.

         XI.6     PLAN TERMINATION. Unless earlier terminated by action of the
Board, the Plan will remain in effect until such time as no Shares remain
available for delivery under the Plan and the Company has no further rights or
obligations under the Plan.