<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 41(a) of
the Securities Exchange Act of 1934
Filed by the Registrant _X_
Filed by a Party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only, (as permitted by Rule
14a-6 (c)(2))
_X_ Definitive Proxy Statement
_X_ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Wal-Mart Stores, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
_X_ No fee required
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
</PAGE>
<PAGE>
WAL-MART STORES, INC.
Bentonville, Arkansas
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 6, 1997
To the Shareholders of Wal-Mart Stores, Inc.:
The 1997 Annual Meeting of Shareholders of Wal-Mart Stores, Inc. will
be held on Friday, June 6, 1997, at 8:30 a.m. in Bud Walton Arena,
University of Arkansas, Fayetteville, Arkansas. Pre-meeting activities
start at 7:30 a.m.
The purposes of the Annual Meeting are:
(1) To elect directors;
(2) To vote on the Wal-Mart Stores, Inc. Director
Compensation Plan;
(3) To vote on a shareholder proposal described on pages 12
to 14 of the Proxy Statement; and
(4) To transact any other business that may properly come
before the meeting.
You must be a shareholder of record at the close of business on
April 8, 1997, to vote at the Annual Meeting. If you plan to attend,
please bring the Admittance Card on the back cover. Regardless of
whether you will attend, please vote by signing and returning the
enclosed proxy. Mailing your completed proxy will not prevent you from
voting in person at the meeting.
Your proxy is solicited by and on behalf of the Board of Directors.
By Order of the Board of Directors
(signature here)
Robert K. Rhoads
Secretary
Bentonville, Arkansas
April 10, 1997
Annual Meeting Admittance Card on Back Cover
</PAGE>
<PAGE>
WAL-MART STORES, INC.
Bentonville, Arkansas
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Wal-Mart Stores,
Inc., a Delaware corporation, for use at the Annual Meeting of
Shareholders. The meeting will be held in Bud Walton Arena, University
of Arkansas, Fayetteville, Arkansas, on Friday, June 6, 1997, at
8:30 a.m. Wal-Mart's mailing address is Bentonville, Arkansas 72716,
and its telephone number is (501) 273-4000.
VOTING PROCEDURES
Your proxy card, ballot, and voting records will not be disclosed
to Wal-Mart unless it is legally necessary, requested by you (and then
disclosure is limited to your vote), or your vote is cast in a
contested proxy solicitation. First Chicago Trust Company of New York
has been appointed independent inspector of the election. First Chicago
is independent and the individual inspectors are not Wal-Mart
employees.
This Proxy Statement will be mailed on or about April 10, 1997.
Wal-Mart has fixed the close of business on April 8, 1997, as the
record date for the meeting. You are entitled to one vote for each
share you own. A quorum (holders of the majority of the outstanding
common stock and present in person or represented by proxy) is required
to hold the meeting. When a quorum is present, the vote of the holders
of a majority of stock present in person or by proxy is required to
elect any director or to approve any other matter.
You may revoke your proxy any time before its exercise. To revoke
your proxy, you may file a written revocation with Wal-Mart's Secretary
or you may sign a proxy bearing a later date. You may also revoke your
proxy by voting in person at the meeting. Properly executed proxies
that are filed before the meeting and not revoked will be voted in
accordance with the directions in them.
Votes withheld from nominees for director, abstentions and broker
non-votes will be counted for purposes of determining whether a quorum
has been reached. Votes withheld from nominees for director and
abstentions on proposals have the same effect as votes against them.
Broker non-votes have no effect on the outcome of the election of
directors or other proposals.
If you hold your shares in your own name rather than through a
broker, you may vote by phone. To vote by phone dial 1-800-OK 2 VOTE
(1-800-652-8683). If you are a Wal-Mart associate who holds shares
through the Profit Sharing Plan or the Associate Stock Purchase Plan,
you may also vote by phone.
This solicitation is made on behalf of the Board of Directors. The
Company pays for the cost of soliciting these proxies. In addition to
solicitation by mail, the Company reimburses brokerage houses and
others for forwarding proxies and proxy material to shareholders.
Unless you indicate otherwise on your proxy card, the persons named
as your proxies will vote your shares FOR all of the nominees for
director, FOR the director compensation plan, and AGAINST the
shareholder proposal.
ITEM 1: ELECTION OF DIRECTORS
Wal-Mart's directors are elected at each annual meeting and hold
office until the next election. Each nominee is presently a director of
Wal-Mart. The persons named in the accompanying form of proxy will vote
the shares it represents for the nominees, unless you instruct
otherwise. The Company expects each nominee to be able to serve. If a
nominee is unable to act as a director, the persons named in the proxy
may vote for any substitute nominee proposed by the Board unless you
withhold authority for them to vote for a substitute.
Following the Annual Meeting, Wal-Mart will have 13 directors.
The Board has authority under Wal-Mart's by-laws to fill vacancies
and to increase or decrease its size between annual meetings.
If you want to recommend a director candidate, please write to
Robert K. Rhoads, Secretary of the Company. You should provide the
recommended candidate's name, biographical information and
qualifications. Wal-Mart's management will forward to the Compensation
and Nominating Committee the most highly qualified candidates for
consideration.
NOMINEES FOR DIRECTOR
Nominees for director are nominated by the Board. They were selected
on the basis of outstanding achievement in their personal careers;
broad experience; wisdom; integrity; ability to make independent,
analytical inquiries; understanding of the business environment; and
willingness to devote adequate time to Board duties. The Board is
committed to diversified membership. The Board will not discriminate on
the basis of race, color, national origin, gender, religion or
disability in selecting nominees.
Name Age Business Experience Since
Paul R. Carter 56 Executive Vice President of Wal-Mart. 1988
Since September 1995, he has served
as President of Wal-Mart Realty. From
1988 to September 1995, he served as
Chief Financial Officer of Wal-Mart.
John A. Cooper, Jr. 58 Chairman of the Board of Cooper 1980
Communities, Inc., which is engaged
in real estate development. He is
also a director of Entergy
Corporation and J.B. Hunt Transport
Services, Inc.
Stephen Friedman 59 Senior Chairman and Limited Partner 1996
of Goldman, Sachs & Co. since
December 1994. From December of 1990
until November 1994, he served as
Co-Chairman or sole Chairman of
Goldman, Sachs & Co. He is also a
director of the Federal National
Mortgage Association.
Stanley C. Gault 71 Chairman of The Goodyear Tire & 1996
Rubber Company from 1991 to June 1996
and Chief Executive Officer of The
Goodyear Tire & Rubber Company from
1991 to January 1996. Mr.Gault served
as Chairman and Chief Executive of
Rubbermaid Incorporated from 1980 to
1991. He is also a director of Avon
Products, Inc., International Paper
Company and The Timken Company.
David D. Glass 61 President and Chief Executive Officer 1977
of Wal-Mart.
Dr. Frederick S. 61 President of Florida A&M University. 1993
Humphries He is also a director of Brinker
International, Inc.
E. Stanley Kroenke* 49 Chairman of The Kroenke Group, which 1995
is engaged in real estate
development, and co-owner of the St.
Louis Rams National Football League
franchise.
Elizabeth A. Sanders 51 Management consultant with The 1993
Sanders Partnership, a retail
consulting firm, since 1990. From
1981 until February 1990, she served
as Vice-President and General Manager
for Nordstrom, Inc. She is also a
director of H.F. Ahmanson & Co.,
Flagstar Companies, Inc., Wellpoint,
Inc. and Wolverine Worldwide, Inc.
Jack C. Shewmaker 59 International consultant, rancher and 1977
retired Wal-Mart executive.
Donald G. Soderquist 63 Vice Chairman and Chief Operating 1980
Officer of Wal-Mart.
Dr. Paula Stern 52 President of The Stern Group, Inc., 1995
an international trade advisory firm,
since 1989. She is a member of the
President's Advisory Committee for
Trade Policy and Negotiations. From
1984 to 1986, she served as
Chairwoman of the U.S. International
Trade Commission. Dr. Stern is also a
director of Harcourt General, Inc.
and Westinghouse Electric Corp., and
she is a nominee for election to the
board of Avon Products, Inc.
John T. Walton* 50 Chairman of Quantum Partners, L.L.C., 1992
which holds investments in technology
companies. From July 1983 to March
1994, Mr. Walton was Chairman of
Corsair Marine, Inc. Since November
1990, he has served as Vice President
of Walton Enterprises II, L.P. He is
also a director of Education
Alternatives, Inc.
S. Robson Walton* 52 Chairman of the Board of Wal-Mart. 1978
*S. Robson Walton and John T. Walton are brothers. E. Stanley Kroenke
is their first cousin by marriage.
STOCK PERFORMANCE GRAPH
This graph shows the yearly percentage change in cumulative total
shareholder return on Wal-Mart stock during the last five fiscal years
ended January 31, 1997. The graph also shows the cumulative total
returns of the S&P 500 Index and the published retail industry index.
The comparison assumes $100 was invested on January 31, 1992, in Wal-
Mart stock and in each of the indices shown and assumes reinvestment of
dividends.
<TABLE>
<CAPTION>
(Graph here)
1/92 1/93 1/94 1/95 1/96 1/97
<S> <C> <C> <C> <C> <C> <C>
Wal-Mart Stores, Inc. 100 121 99 86 77 91
S & P 500 100 111 125 125 174 220
S & P Retail Composite 100 119 115 107 115 137
</TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table: This table shows the compensation during
each of the Company's last three fiscal years of Wal-Mart's Chief
Executive Officer and four other most highly compensated executive
officers based on compensation earned during the fiscal year ended
January 31, 1997.
<TABLE>
<CAPTION>
Annual compensation Long-term compensation
Awards Payouts
Fiscal Other Restricted Number of
year Incentive annual stock securities LTIP All other
Name and ended Salary Payment compensation awards underlying payouts compensation
position Jan. 31, ($)(1) ($)(2) ($)(3) ($) options ($) ($)(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David D. Glass 1997 1,085,000 377,580 71,363 0 135,625 0 40,436
President and Chief 1996 1,035,000 0 66,759 0 66,064 0 40,359
Executive Officer 1995 985,000 0 61,443 0 64,590 0 14,089
Donald G. Soderquist 1997 860,000 299,280 0 0 89,583 0 30,866
Vice Chairman and Chief 1996 830,000 0 0 0 52,979 0 29,119
Operating Officer 1995 790,000 0 0 0 51,803 0 27,949
Joseph S. Hardin, Jr. 1997 560,000 139,440 0 0 58,333 0 20,376
Executive Vice President 1996 537,885 0 0 0 47,126 0 19,415
1995 500,000 0 0 0 29,670 0 17,712
Bob L. Martin 1997 500,000 87,000 23,708 0 52,083 0 18,011
Executive Vice President 1996 450,000 0 0 0 40,000 0 15,886
1995 400,000 0 0 0 23,736 0 14,182
Paul R. Carter 1997 470,000 163,560 36,124 0 48,958 0 17,675
Executive Vice President 1996 470,000 0 34,525 0 27,000 0 22,192
1995 470,000 0 30,758 0 27,738 0 26,946
</TABLE>
[FN]
<F1>
(1) This column includes compensation earned during the fiscal year but
deferred under agreements with Wal-Mart.
<F2>
(2) Incentive payments shown in this column relate to performance under
the Management Incentive Plan during the January 31, 1997, fiscal year
but were paid during the January 31, 1998, fiscal year.
<F3>
(3) These amounts are incentive payments on amounts deferred under the
Officer Deferred Compensation Plan. These amounts do not include the
value of perquisites or other personal benefits because they do not
exceed the lesser of $50,000 or 10% of the total annual salary and
bonus for any named executive officer.
<F4>
(4) "All other compensation" for the fiscal year ended January 31,
1997, includes Company contributions to Wal-Mart's Profit Sharing and
Supplemental Executive Retirement Plans, above-market interest credited
on deferred compensation, and term life insurance premiums paid by Wal-
Mart for the benefit of each officer. These amounts are shown in the
following table:
<TABLE>
<CAPTION>
Profit Life
Sharing SERP Above-market insurance
Name contributions contributions interest premiums
<S> <C> <C> <C> <C>
David D. Glass $5,370 $33,473 $1,515 $78
Donald G. Soderquist $5,370 $25,418 - $78
Joseph S. Hardin, Jr. $5,370 $14,712 $ 216 $78
Bob L. Martin $5,370 $12,461 $ 102 $78
Paul R. Carter $5,370 $11,466 $ 761 $78
</TABLE>
Option Grants for Fiscal Year Ended January 31, 1997: This table shows
all options to acquire shares of Wal-Mart stock granted to the named
executive officers during the fiscal year ended January 31, 1997.
<TABLE>
Individual Grants
<CAPTION>
Percent of
Number of total
securities options
underlying granted to Exercise Grant date
options associates price/share Expiration present
Name granted in fiscal year (1) date value
<S> <C> <C> <C> <C> <C>
David D. Glass 135,625 1.2% $24.00 1/9/07 $1,066,013
Donald G. Soderquist 89,583 0.8% $24.00 1/9/07 $ 704,122
Joseph S. Hardin, Jr. 58,333 0.5% $24.00 1/9/07 $ 458,497
Bob L. Martin 52,083 0.5% $24.00 1/9/07 $ 409,372
Paul R. Carter 48,958 0.4% $24.00 1/9/07 $ 384,810
</TABLE>
- -----
[FN]
<F1>
(1) The exercise price equals the closing price of Wal-Mart stock on the
date of grant. The options are exercisable in seven equal annual
installments beginning one year after grant. They expire ten years after
grant.
<F2>
(2) The fair value of these options at the date of grant was estimated
using a Black-Scholes option pricing model. The following weighted-
average assumptions were used to estimate the value of options: a three
and one-half year expected life of the options; a dividend yield of
0.9%; expected volatility for Wal-Mart stock of 23%; and a risk-free
rate of return of 6.1%.
Option Exercises and Fiscal Year End Option Values: This table shows all
stock options exercised by the named executives during the fiscal year
ended January 31, 1997, and the number and value of options they held at
fiscal year end.
<TABLE>
<CAPTION>
Number of securities Value of unexercised
underlying unexercised in-the-money
Shares Value options at fiscal year end (#) options at fiscal year end($)(2)
acquired on realized
Name exercise ($)(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
David D. Glass - - 414,722 230,442 $5,067,790 $619,856
Donald G. Soderquist - - 201,334 182,630 $1,953,062 453,267
Joseph S. Hardin, Jr. 7,777 99,101 50,794 119,750 $ 107,048 216,764
Bob L. Martin - - 51,190 91,084 $ 209,511 122,660
Paul R. Carter - - 81,748 97,921 $ 564,375 198,039
</TABLE>
- -----
[FN]
<F1>
(1) The value realized equals the difference between the option exercise
price and the closing price of Wal-Mart stock on the date of exercise,
multiplied by the number of shares to which the exercise relates.
<F2>
(2) The value of unexercised in-the-money options equals the difference
between the option exercise price and the closing price of Wal-Mart
stock at fiscal year end, multiplied by the number of shares underlying
the options. The closing price of Wal-Mart stock on January 31, 1997, as
reported on the New York Stock Exchange composite tape was $23.75.
COMPENSATION AND NOMINATING COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Philosophy: Wal-Mart's executive compensation program is
designed to: (1) provide fair compensation to executives based on their
performance and contributions to Wal-Mart; (2) provide incentives to
attract and retain key executives; and (3) instill a long-term
commitment to Wal-Mart and develop pride and a sense of Company
ownership, all in a manner consistent with shareholder interests.
The Compensation and Nominating Committee sets the salaries of David
Glass, the Chief Executive Officer, and Rob Walton, the Chairman. The
Committee approves the salaries of Don Soderquist and Paul Carter, Wal-
Mart executives who serve on the Board of Directors. As part of its
oversight of the Company's compensation programs, the Committee also
reviews the salaries paid to certain other Wal-Mart executives.
The executive officers' compensation package has three main parts:
(1) base salary, which is reviewed annually; (2) equity compensation
consisting of stock options and, for certain executives, restricted
stock; and (3) incentive payments under the Company's Management
Incentive Plan, which may be earned annually depending on the Company's
achievement of performance goals. Wal-Mart has a Deferred Compensation
Plan under which executives may defer compensation, with interest
accruing on amounts deferred. Incentive payments on the amounts deferred
are accrued annually starting 10 years after the initial deferral.
Company executives also participate in the Company's Profit Sharing
Plan, which is a defined contribution retirement plan with its assets
primarily invested in Wal-Mart stock.
Base Salary: Base salaries of Company executives are based on Wal-
Mart's performance for the prior fiscal year and upon a subjective
evaluation of each executive's contribution to that performance. In
evaluating overall Company performance, the primary focus is on
Wal-Mart's financial performance for the year as measured by net income,
total sales, comparable store sales and return on shareholders' equity.
Other criteria, including whether Wal-Mart conducts its operations in
accordance with the business and social standards expected of it by its
associates, shareholders and the communities in which it operates, are
also considered.
Equity Participation: Stock options are generally granted annually in
an effort to link each executive's future compensation to the long-term
financial success of Wal-Mart, as measured by stock performance. Options
are priced at 100% of the stock market value on the day of grant. They
typically vest in equal annual increments, beginning one year from the
date of grant. Options granted on or after November 17, 1995, are
generally exercisable in seven annual installments.
The total number of options awarded to each executive is based on an
option grant dollar amount divided by the option's exercise price. The
option grant dollar amount is the product of the executive's salary
multiplied by the appropriate stock option grant percentage. For
example, if an executive makes $250,000 per year and the percentage
applied is 125%, the option grant dollar amount for the executive is
$312,500. This amount is divided by a stock price on the date of grant.
In this example, $312,500 divided by a stock price of $25 will result in
a grant of an option to purchase 12,500 shares at $25 per share.
The Committee establishes the percentages for, and makes awards of
options to, those persons required to file reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended ("Section 16 persons"). These percentages are based on a sub-
jective evaluation of the performance of each executive without regard
to the number of options held by or previously granted to the executive.
In addition to stock options, certain executives may from time to
time be granted restricted stock under Wal-Mart's Restricted Stock Plan.
Any award of restricted stock to Section 16 persons will be made by the
Committee, which will set the vesting criteria. Awards may be made to
provide incentives to enhance the job performance of certain executives
or to induce them to remain with or to become associated with the
Company. As of the end of the fiscal year, no restricted stock awards
had been made to any Company executive.
Incentive Payments: Incentive payments are made under Wal-Mart's
Management Incentive Plan upon achievement of pre-established
performance criteria. For the 1997 fiscal year, the Committee set two
levels of overall performance objectives for the Company: threshold and
excellent.
Corresponding incentive levels for the 1997 fiscal year were assigned
to participants in the plan by the Committee as percentages of base
salary. These incentive levels are tied directly to the achievement of
specific levels of performance objectives. Incentive percentages
ranging from a low of 15% of base salary at the threshold level to a
high of 45% at the maximum level were payable under the plan to an
executive group including, among others, the Chairman, Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer. For these
officers, performance goals are based on overall corporate performance.
For divisional executives, performance goals are based on a combination
of corporate and divisional performance.
For the fiscal year ended January 31, 1997 corporate pre-tax net
profits exceeded the threshold level set by the Committee but were less
than the maximum level. As a result, incentive payments were made under
the Management Incentive Plan in March of 1997 for performance in the
fiscal year ended January 31, 1997.
Compensation of the Chief Executive Officer: During the fiscal year,
David Glass, Wal-Mart's Chief Executive Officer, received a base salary
of $1,085,000, an increase of 4.8% from the prior fiscal year. He was
also granted an option to purchase 135,625 shares of Wal-Mart stock.
Mr. Glass's salary increase and option grant were based on a subjective
evaluation which considered, in part, Wal-Mart's financial performance
for the fiscal year ended January 31, 1996 (i.e., a 2% increase in net
income; a 13.5% increase in total sales; a 4% increase in comparable
store sales; and a 19.9% return on average shareholders' equity). The
option grant was also based on a subjective evaluation which
considered, in part, the projected financial performance of the Company
for the fiscal year ended January 31, 1997 (i.e., a 12% increase in net
income; a 12% increase in total sales; a 4.9% increase in comparable
store sales; and a 19.2% return on average shareholders' equity). Mr.
Glass also received an incentive payment of $377,580 under Wal-Mart's
Management Incentive Plan. This bonus was based on Wal-Mart's
achievement of certain performance goals established by the Committee.
Deductibility of Compensation: Internal Revenue Code Section 162(m)
provides that compensation in excess of $1 million paid to an executive
officer is not deductible unless it is performance based. Base salary
does not qualify as performance-based compensation under Section
162(m).
Mr. Glass deferred a portion of his compensation during the fiscal
year ended January 31, 1997, so that during the year he actually
received less than $1 million in compensation. Because his salary and
incentive payment for the fiscal year ending on January 31, 1998, will
exceed $1 million, Mr. Glass has volunteered to defer receipt of that
portion of his base salary and incentive payments in excess of $1
million until after his retirement. This allows Wal-Mart to deduct the
deferred portion of his salary and incentive payment when it is paid
after his retirement.
This report is submitted by the Compensation and Nominating Committee:
John A. Cooper, Jr.
Dr. Frederick S. Humphries
John Walton
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended January 31, 1997, none of Wal-Mart's
executive officers served on the board of any entities whose directors
or officers serve on Wal-Mart's Compensation and Nominating Committee.
No current or past executive officers of Wal-Mart serve on the
Committee.
COMPENSATION OF DIRECTORS
During the calendar year ended December 31, 1996, the compensation
paid to outside directors was $24,000 annually, paid in quarterly
increments of $6,000. Directors were also paid $1,500 for every Board
or Board Committee meeting attended and $500 for each telephonic
meeting. Each director was reimbursed for expenses incurred in
attending the meetings. Additionally, each outside director was paid
$1,500 per day, not to exceed 30 days per year, for Board-related work
outside of the scope of his or her regular director duties.
For the calendar year ending December 31, 1997, outside directors
will receive a retainer of $50,000, at least one half of which will be
in the form of Wal-Mart common stock or stock units. Directors are not
paid for meeting attendance. Chairpersons of board committees receive
an additional retainer of $3,000. Compensation of $1,500 per day for
Board-related work is unchanged.
During the fiscal year ended January 31, 1997, Jack Shewmaker
received a consulting fee of $150,000 under a consulting agreement with
Wal-Mart. The agreement with Mr. Shewmaker was initially for a five-
year term from May 1, 1988, to April 30, 1993, but was extended to
April 30, 1998. It provides for payment of an annual consulting fee of
$150,000. The consulting agreement also provides that he will be
nominated for a director's position with Wal-Mart for a term concurrent
with the consulting arrangement. Additionally, Mr. Shewmaker remains
eligible to receive the benefits generally available to Company
executives, and his health insurance costs are paid by the Company.
ADDITIONAL INFORMATION ABOUT
THE BOARD OF DIRECTORS
The Board held four regular meetings and two telephonic meetings
during the year to review significant developments affecting the
Company, engage in strategic planning and act on matters requiring
Board approval. The Board has five committees: the Audit Committee, the
Compensation and Nominating Committee, the Stock Option Committee, the
newly-created Strategic Planning and Finance Committee, and the
Executive Committee. For the 1997 fiscal year, the Audit Committee met
two times, the Stock Option Committee met four times, the Compensation
and Nominating Committee met three times, and the Strategic Planning
and Finance Committee met once. The Executive Committee did not meet,
but acted by written unanimous consents to action during the year.
These committees are described in more detail below.
Audit Committee: This Committee monitors the financial condition of
Wal-Mart, reviews its financial policies and procedures, its internal
accounting controls and the objectivity of its financial reporting and
makes recommendations to the Board concerning the engagement of the
independent auditors. The Committee currently consists of Elizabeth A.
Sanders, Jack Shewmaker and Paula Stern.
Compensation and Nominating Committee: This Committee administers
Wal-Mart's Stock Option and Restricted Stock Plans for executive
officers, sets the interest rate applicable to the Deferred
Compensation Plan, and reviews the salary and benefits structure for
executive officers. This Committee also makes recommendations to the
Board regarding nominees for directors. The Committee currently
consists of John A. Cooper, Jr., Frederick S. Humphries and John
Walton.
Stock Option Committee: This Committee administers Wal-Mart's Stock
Option and Restricted Stock Plans, except with respect to executive
officers. The Committee currently consists of David D. Glass, Donald
G. Soderquist and S. Robson Walton.
Strategic Planning and Finance Committee: This Committee considers
important financial decisions of the Company and engages in long-range
strategic planning. The Committee currently consists of Stanley Gault,
Stephen Friedman and Stan Kroenke.
Executive Committee: This Committee implements policy decisions of
the Board and acts on its behalf between meetings. The Committee
currently consists of Paul R. Carter, David D. Glass, Donald G.
Soderquist and S. Robson Walton.
For the fiscal year ended January 31, 1997, overall attendance at
all Board and committee meetings was over 90%. Each incumbent director
attended at least 75% of the Board meetings and 75% of the meetings of
committees on which he or she served.
INTEREST OF MANAGEMENT IN
CERTAIN TRANSACTIONS
During the fiscal year ended January 31, 1997, Stan Kroenke, a
director, held interests in shopping center developments which leased
space to Wal-Mart for 43 store and Sam's Club locations. Total rents
and maintenance fees paid by Wal-Mart under these leases for the fiscal
year were $25,573,948. Mr. Kroenke's interest in the amounts paid was
$17,968,597. We believe that rents and fees paid for this leased space
are competitive with amounts that would be paid to a third party to
lease similar space.
Additionally, during the fiscal year Wal-Mart paid the
Kroenke/THFUtility Co., a utility company in which Mr. Kroenke has an
ownership interest, $383,600 for utility services provided to two
stores. Mr. Kroenke's interest in the amounts paid was $140,666.
Frank Robson, the brother of Helen R. Walton, a beneficial owner of
more than 5% of Wal-Mart stock, held various ownership interests in
nine store locations leased by Wal-Mart. The Company paid rents and
maintenance fees of $2,688,674 under the leases for the fiscal year
ended January 31, 1997. We believe that the rents and maintenance fees
paid under the leases is competitive with amounts that would be paid to
a third party to lease similar space.
Alice Walton, a beneficial owner of more than 5% of Wal-Mart stock,
has an indirect interest in U.S. Housewares Corporation. A wholly-owned
subsidiary of U.S. Housewares Corporation sold $5,147,186 in consumer
products to the Company during the fiscal year ended January 31, 1997.
We believe that these transactions were competitive with amounts that
would be paid to third parties in similar transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Wal-
Mart's executive officers, directors and persons who own more than 10%
of the Company's stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). These
reports are also filed with the New York and Toronto Stock Exchanges
and the Ontario Securities Commission. A copy of each report is
furnished to Wal-Mart.
SEC regulations require Wal-Mart to identify anyone who filed a
required report late during the most recent fiscal year. Based solely
on review of reports furnished to the Company and written
representations that no other reports were required during the fiscal
year ended January 31, 1997, all Section 16(a) filing requirements met
were except as follows: Tom Coughlin filed one month late a Form 4
showing an acquisition of 1,820 shares by his trust; and Stan Kroenke
filed an amended Form 4 twenty days late showing a sale of 71,900
shares and a Form 4 eight days late showing a sale of 400,000 shares.
EQUITY SECURITIES AND PRINCIPAL HOLDERS OF WAL-MART STOCK
There were 2,265,535,740 shares of Wal-Mart stock issued and
outstanding on March 31, 1997. This table lists the beneficial owners
of 5% or more of Wal-Mart Stock as of March 31, 1997.
<TABLE>
Amount and Nature of Beneficial Ownership
<CAPTION>
Direct or Indirect
with Sole Indirect with
Name and Voting and Shared Voting
Address of Investment and Investment Percent
Beneficial Owner Power Power(1) Total of Class
<S> <C> <C> <C> <C>
Jim C. Walton 4,564,068 871,273,976 875,838,044 38.66
John T. Walton 2,798,016 871,388,068 874,186,084 38.59
Helen R. Walton 1,047,830 871,273,976 872,321,806 38.50
Alice L. Walton 485,260 871,275,668 871,760,928 38.48
S. Robson Walton 329,060(2) 871,289,976 871,619,036 38.47
</TABLE>
- -----
[FN]
<F1>
(1) The shares listed as beneficially owned by each person include
871,273,976 shares held by Walton Enterprises, L.P. Helen R. Walton,
S. Robson Walton, John T. Walton, Jim C. Walton, Alice L. Walton and
two trusts for the benefit of Helen R. Walton are the general partners.
The general partners have the power to sell and vote the shares. The
business address of each partner is P.O. Box 1508, Bentonville,
Arkansas 72712.
<F2>
(2) This number includes 63,273 shares that S. Robson Walton had a
right to acquire within 60 days after March 31, 1997, through the
exercise of stock options. It also includes 26,953 shares held in the
Company's Profit Sharing Plan on behalf of Mr. Walton. He has sole
voting power, but no investment power, with respect to these shares.
Holdings of Officers and Directors: The following table shows the
amount of Wal-Mart stock held by each director, Wal-Mart's Chief
Executive Officer, and the four other most highly compensated officers
on March 31, 1997. It also shows the stock held by all of Wal-Mart's
directors and executive officers as a group on that date.
<TABLE>
Amount and Nature of Beneficial Ownership
<CAPTION>
Direct or Indirect
with Sole Indirect with
Voting and Shared Voting
Name of Investment and Investment Percent
Beneficial Owner Power (1) Power Total of Class
<S> <C> <C> <C>
Paul R. Carter 154,674 369,268 523,942 *
John A. Cooper, Jr. 315,448 41,712 357,160 *
Stephen Friedman 20,000 - 20,000 *
Stanley C. Gault 10,468 - 10,468 *
David D. Glass 2,773,018 92,908 2,865,926 *
Joseph S. Hardin, Jr. 86,139 13,740 99,879 *
Dr. Frederick S. Humphries 300 - 300 *
E. Stanley Kroenke 534,997 31,305,964 31,840,961 1.41
Bob L. Martin 147,680 20,832 168,512 *
Elizabeth A. Sanders 3,234 - 3,234 *
Jack Shewmaker 1,807,050 - 1,807,050 *
Donald G. Soderquist 2,098,327 84,356 2,182,683 *
Dr. Paula Stern 500 - 500 *
S. Robson Walton 329,060 871,289,976(2) 871,619,036 38.47
John T. Walton 2,798,016 871,388,068(2) 874,186,084 38.59
Directors and Executive
Officers as a Group
(23 persons) 12,116,941 903,472,844 915,589,785 40.41
</TABLE>
- -----
[FN]
<F1>
* Less than one percent
<F2>
(1) These amounts include shares that the following persons had a
right to acquire within 60 days after March 31, 1997 through the
exercise of stock options and shares they hold in the Profit Sharing
Plan. These share numbers are shown in the following table:
<TABLE>
<CAPTION>
Stock Shares
options held in
exercisable the Profit
Name within 60 days Sharing Plan
<S> <C> <C>
Paul R. Carter 81,748 37,335
David D. Glass 414,722 91,687
Joseph S. Hardin, Jr. 30,169 30,578
Bob L. Martin 51,190 6,598
Donald G. Soderquist 201,334 34,716
S. Robson Walton 63,273 26,953
Directors and Officers as a Group 997,798 358,372
</TABLE>
<F3>
(2) Amounts shown for S. Robson Walton and John T. Walton in this
column include 871,273,976 shares held by Walton Enterprises, L.P.
ITEM 2: PROPOSAL TO ADOPT THE DIRECTOR COMPENSATION PLAN
On March 6, 1997, the Board approved the Director Compensation Plan,
subject to approval by Wal-Mart's shareholders. The Plan is summarized
below. A complete copy is attached as Exhibit A.
As described on page 8, prior to the Board's approval of the Plan
each director received an annual retainer of $24,000, as well as $1,500
for each Board or Committee meeting attended in person and $500 for
each telephonic meeting. The annual retainer was raised to $50,000 for
the current calendar year. The retainer is payable quarterly. Committee
Chairpersons receive an additional retainer of $3,000. No fees are paid
for meeting attendance.
The proposed Plan requires each director to take at least one-half
of his or her retainer in the form of Wal-Mart stock or deferred stock
units. The stock units are equivalent in value to Wal-Mart stock. The
number of shares of Wal-Mart stock issued or stock units credited to a
director is determined based on the stock price on the last business
day of the quarter. The remainder of the retainer may be taken in
either of these two ways, or it may be taken in cash or deferred in an
interest-bearing account. Upon retirement, a director may elect to
receive deferred amounts in a single lump sum payment or in installment
payments over a ten-year period. The Plan will be administered by the
Compensation and Nominating Committee of the Board of Directors. The
Board urges you to vote for the Director Compensation Plan.
ITEM 3: SHAREHOLDER PROPOSAL
The Company received a shareholder proposal for inclusion in this
Proxy Statement. Included with the proposal is the shareholders'
supporting statement. Wal-Mart has carefully considered the proposal,
together with the supporting statement, and has concluded it cannot
support the proposal for the reasons given.
The following shareholder proposal was received from the General
Board of Pension and Health Benefits of the United Methodist Church,
1201 Davis Avenue, Evanston, IL 60201, and seven other shareholders.
Their names, addresses and the number of shares they hold will be
provided upon request.
Whereas: The public is concerned about the conditions under which
clothing and goods they purchase are produced. The media has made
people aware that many companies are contracting with independent
producers for goods and services outside the United States. A survey
conducted by Marymount University in 1995, indicates 75% of respondents
stated they would avoid shopping in stores if they were aware that
stores sold goods made under sweatshop conditions. Seventy-eight
percent said they would be willing to pay a dollar more for a $20
garment not made in sweatshops.
Disturbing information has surfaced about independent producers with
regard to working conditions, wage levels, use of child labor and abuse
of workers. Our company was faced with this issue when children were
found working for Global Fashions in Honduras sewing clothing for
Kathie Lee Gifford's label. As a result, Wal-Mart took steps to
increase inspections of its suppliers to assess compliance with its
Standards for Vendor Partners.
We believe companies like Wal-Mart must take responsibility for any
human rights abuses in plants where their products are made. On July
16, 1996, Department of Labor Secretary Robert Reich addressed the
Fashion Industry Forum, stating, "The eradication of sweatshops is
everyone's responsibility--from companies to consumers." President
Clinton recently invited companies to join the White House Apparel
Industry Partnership, charging the group to develop tough criteria to
discourage use of sweatshops and provide information to consumers.
Wal-Mart must take meaningful steps to assure shareholders and
consumers that employees who work for their suppliers are guaranteed
basic rights, including freedom of association, healthful working
conditions, a sustainable community wage, and a work environment free
of child labor and abuse.
Our company can be a leader in this effort by enforcing strong
vendor standards. We believe Wal-Mart's announcement at the Fashion
Industry Forum to upgrade inspections and consider implementation of
independent monitoring is a step in the right direction. Through the
use of independent monitoring (as used by The Gap, Inc. in El
Salvador), there can be greater assurance of adherence to Wal-
Mart's vendor standards.
Resolved: Shareholders request the Board of Directors to report,
without confidential information and at reasonable cost, on its
Standards for Vendor Partners, and review compliance mechanisms for
vendors, subcontractors and buying agents in the countries where it
sources. The report should be available to shareholders by September,
1997.
This review should include:
1. Summary of current company policies regarding vendor standards,
including clear definition of workers' rights to organize and required
work hours per week.
2. Policies to implement ongoing adjustment of salaries to ensure
adequate purchasing power and a sustainable community wage.
3. Procedures for internal compliance and external monitoring, in
conjunction with local non-governmental organizations.
4. Insuring that Wal-Mart's vendor standards are translated into the
languages of employees where the company has contracts, and
distribution to employees.
5. Procedures to encourage vendors to raise standards, instead of
terminating its contracts.
WAL-MART'S STATEMENT IN OPPOSITION
Wal-Mart set forth standards for our vendor partners in 1992 that
require the Company's vendors to:
* comply with all applicable laws;
* fairly compensate employees at the higher of legally required
minimum wages or the prevailing industry wages;
* maintain reasonable work hours;
* maintain employment on a voluntary basis;
* base employment on an individual's ability to do the job, not on
the basis of personal characteristics or beliefs;
* maintain a safe, clean and healthy workplace environment; and
* demonstrate a commitment to the environment.
Also in 1992, Wal-Mart established a factory inspection and
certification program. Each year, Wal-Mart's exclusive buying agent
inspects every factory that produces goods for which Wal-Mart is the
importer of record. Last year, more than 3,500 factories all over
the world were inspected. Over 100 factories around the world are
currently barred from producing merchandise for Wal-Mart.
A factory is automatically denied certification and Wal-Mart will
not buy goods produced in that factory if any of the following are
discovered:
* inadequate fire safety equipment;
* locked or blocked fire exits;
* illegal child labor;
* evidence of transshipment of goods (labeling showing an incorrect
country of origin); or
* evidence of forced labor or prison labor.
Certification is also denied if the factory's total score assigned
by the inspector falls below the passing rate. Factories are encouraged
to correct problems identified by the inspectors. The passing score has
been raised since the program began to encourage continual improvement
by factories.
If inspectors discover the problems listed above at a vendor's
factory, Wal-Mart will not place any orders with that vendor for goods
manufactured in that country. If a vendor has any of the violations
listed above in more than one country, Wal-Mart will not do any
business with that vendor.
The Company is proud of its factory inspection program and believes
that much good has been accomplished through the program. Wal-Mart is
making certain changes to the factory inspection program, in part as a
result of discussions with the shareholder proponents. For example, the
Company will require posting of its vendor standards in factories. Wal-
Mart will also have its vendor standards or a summary translated into
certain major languages. Finally, the Company will provide an 800
number so that suspected violations of its vendor standards may be
easily reported.
The proposal asks Wal-Mart to take steps that are the responsibility
of its vendors. Wal-Mart vendors acknowledge their responsibilities in
this area by signing a vendor agreement in which they pledge to comply
with Wal-Mart's vendor standards. The shareholder resolution also asks
Wal-Mart to take steps that are too broad. For example, the
proponents want Wal-Mart to force vendors to raise wages beyond legally
required minimum wages and to pay outside organizations with little or
no factory inspection experience to conduct inspections. The Company
believes that these portions of the proposal would be very costly,
placing the Company at a competitive disadvantage, while having little
real impact. For these reasons, the Board urges you to vote against the
proposal.
INDEPENDENT AUDITORS
Ernst & Young LLP has been selected as the Company's independent
auditors. Ernst & Young and its predecessor, Arthur Young & Company,
have been Wal-Mart's independent auditors since prior to the Company's
initial offering of securities to the public in 1970. Representatives
of Ernst & Young LLP will attend the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and to respond
to appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
If you want to present a proposal at the 1998 Annual Meeting, send
the proposal to Robert K. Rhoads, Secretary of the Company,
Bentonville, Arkansas 72716, by registered, certified, or express mail.
Proposals must be received on or before December 11, 1997.
The Company carefully considers all proposals and suggestions from
shareholders. If a proposal is clearly in the best interests of Wal-
Mart and its shareholders, the Company will implement it without
including it in the proxy statement, unless a shareholder vote is
required by law.
OTHER MATTERS
The Board does not intend to present any items of business other
than those stated in the Notice of Annual Meeting of Shareholders. If
other matters are properly brought before the meeting, the persons
named in the accompanying proxy will vote the shares represented by it
in accordance with their best judgment. Discretionary authority to vote
on other matters is included in the proxy.
By Order of the Board of Directors
(Signature here)
Robert K. Rhoads
Secretary
Bentonville, Arkansas
April 10, 1997
EXHIBIT A
WAL-MART STORES, INC.
DIRECTOR COMPENSATION PLAN
Purpose. This Director Compensation Plan is established to allow the
outside directors of Wal-Mart Stores, Inc. ("Wal-Mart") to participate
in the ownership of Wal-Mart through ownership of shares of the Wal-
Mart common stock or deferred stock units. In addition, the Plan is
intended to allow Wal-Mart's outside directors to defer all or a
portion of their compensation for their service as directors.
Definitions. The following words have the definitions given them below.
"Affiliate" means any corporation, company limited by shares,
partnership, limited liability company, business trust, other entity,
or other business association that is controlled by Wal-Mart.
"Board" means the board of directors of Wal-Mart.
"Business Day" means a day on which Wal-Mart's executive offices in
Bentonville, Arkansas are open for business and on which trading is
conducted on the Exchange.
"Common Stock" means the Common Stock, $0.10 par value per share, of
Wal-Mart.
"Compensation Date" means the last Business Day of each calendar
quarter.
"Deferral Account" means an account maintained in the Special Ledger
for a Director to which cash equivalent amounts allocable to the
Director under this Plan are credited.
"Director" means any director of Wal-Mart who is not an employee of
Wal-Mart or an Affiliate.
"Distribution Date" means the date on which a Director ceases to be
a director of Wal-Mart or on which a Director becomes employed by Wal-
Mart or an Affiliate.
"Fair Market Value" means, as to any particular day, the average of
the highest and lowest prices quoted for a share of Common Stock
trading on the New York Stock Exchange on that day, or if no such
prices were quoted for the shares of Common Stock on the New York
Stock Exchange for that day for any reason, the average of the highest
and lowest prices quoted on the last Business Day on which prices
were quoted. The highest and lowest prices for the shares of Common
Stock shall be those published in the edition of The Wall Street
Journal or any successor publication for the next Business Day.
"First Component" means the portion of the Retainer payable to a
Director that accounts for at least one-half of the Retainer and that
is payable in Shares and may be deferred by crediting Units to a Unit
Account maintained for the Director.
"Interest Rate" means the annual rate at which interest is deemed to
accrue on the amounts credited in a Deferral Account for a Director.
The annual rate shall be set by the Board or a committee of the Board
and may be changed from time to time as necessary to reflect
prevailing interest rates.
"Plan Year" means each 12-month period beginning on each January 1
and ending on each December 31.
"Retainer" means the amount of compensation set by the Board from
time to time as payable to a Director in each Plan Year on the terms
and subject to conditions stated in this Plan, subject to reduction
for any portion thereof that a Director elects to defer as provided in
this Plan.
"Second Component" means the balance of the Retainer payable to a
Director (after reduction for the First Component) and that is (1)
payable in cash or (2) by crediting an amount to a Deferral Account
maintained for the Director.
"Shares" means shares of the Common Stock.
"Special Ledger" means a record established and maintained by Wal-
Mart in which the Deferral Accounts and Units Accounts for the
Directors, if any, and the Units and/or amounts credited to the
accounts are noted.
"Unit Account" shall mean the account maintained in the Special
Ledger for a Director to which Units allocable to the Director under
this Plan are credited.
"Unit" means a credit in a Director Unit Account representing one
Share.
Annual Retainer. During each Plan Year in which a person is a
Director during the existence of this Plan, the Director will be
eligible to receive the Retainer payable as follows:
At least one-half of the Retainer shall be and, at the Directors'
option, up to the full amount of the Retainer (defined above as
the "First Component") will be (1) payable to the Director in
Shares or (2) at the Director's option, deferred by Wal-Mart
crediting Units to a Unit Account maintained for the Director as
provided in this Plan.
The balance of the Retainer (defined above as the "Second
Component") shall be (1) payable in cash or (2) at the Director's
option, deferred by Wal-Mart crediting a Deferral Account
maintained for the Director as provided in this Plan with an
amount that would be otherwise payable to the Director in cash.
The Retainer will be payable in arrears in equal quarterly
installments on each Compensation Date unless deferred as provided
below. Each quarterly installment will consist of one-fourth of the
First Component and one-fourth of the Second Component, if any, for
each Director.
Elections. Each Director who was a Director during the prior Plan
Year must elect by no later than December 31 of the prior Plan Year
how he or she will receive the Retainer. Each Director who becomes
a Director during a Plan Year must elect within 30 days after
becoming a Director how he or she will receive the Retainer. Each
election must be made by the Director filing an election form with
the Secretary of Wal-Mart. If a Director does not file an election
form for each Plan year by the specified date the Director will be
deemed to have elected to receive and defer the Retainer in the
manner elected by the Director in his or her last valid election.
Any person who becomes a Director during a Plan Year and does not
file the required election within 30 days will be deemed to have
elected to receive all of the Retainer in Shares. Any election to
defer a portion of the Retainer made by a person who becomes a
Director during a Plan Year will be valid as to the portion of the
Retainer received after the election is filed with the Secretary of
Wal-Mart. When an election is made for a Plan Year, the Director may
not revoke or change that election.
The Shares. If a Director elects to receive Shares in payment of all
or any part of the Director's Retainer, the number of Shares to be
issued on any Compensation Date shall equal one-fourth of the amount
of the Retainer to be paid in Shares for the Plan Year divided by the
Fair Market Value of a Share on the Compensation Date. Any Shares
issued under this Plan will be registered under the Securities Act of
1933, as amended, and, so long as shares of the Common Stock are
listed for trading on the New York Stock Exchange, will be listed
for trading on the New York Stock Exchange.
The Units. If a Director defers any portion of the Retainer in the
form of Units, then on each Compensation Date, Wal-Mart will credit a
Unit Account maintained for the Director with a number of Units equal
to (1) one-fourth of the dollar amount of the Retainer that the
Director has elected to defer in the form of Units for the Plan Year
divided by (2) the Fair Market Value on the Compensation Date. If the
Common Stock is the subject of a stock dividend, stock split, or a
reverse stock split, the number of Units will be increased or
decreased, as the case may be, in the same proportion as the
outstanding shares of Common Stock. Wal-Mart will credit to the
Director's Unit Account on the date any dividend is paid on the
Common Stock, an additional number of Units equal to (I) the
aggregate amount of the dividend that would be paid on a number of
Shares equal to the number of Units credited to the Director's Unit
Account on the date the dividend is paid divided by (II) the Fair
Market Value on that date.
Deferral Account. If a Director defers receipt of any portion of the
Retainer by having an amount credited to a Deferral Account, then on
each Compensation Date, Wal-Mart will credit to the Director's
Deferral Account an amount equal to one-fourth of the dollar amount
of the Retainer deferred for the Plan Year. On the last day of each
Plan Year, Wal-Mart will also credit the Deferral Account with
interest, calculated at the Interest Rate, on the aggregate amount
credited to the Deferral Account.
Distribution of the Amounts in a Unit Account. Distribution Date
for a former Director, Wal-Mart will issue to the former Director
that number of Shares equal to the number of Units with which the
former Director's Unit Account is credited. The former Director may
elect to receive all of the Shares at one time or in up to
10 annual installments as described below. If the Director has
elected to receive all of the Shares at one time, Wal-Mart will issue
the Shares as soon as practicable after the Distribution Date.
If the former Director has elected to receive the Shares in
installments, a pro rata number of Shares will be issued for each
installment plus additional Shares equal to the Units credited to the
Unit Account respecting dividends paid on the Common Stock since the
last installment was made. Wal-Mart will issue the first installment
of Shares as soon as practicable after the former Director's
Distribution Date. The remaining installments of Shares will be
issued on or about each anniversary of the Director's Distribution
Date.
Distribution of the Amounts in a Deferral Account. After the
Distribution Date for a former Director, Wal-Mart will pay the former
Director cash equal to the amount with which the former Director's
Deferral Account is credited. The former Director may elect to
receive all of the cash at one time or in up to 10 annual
installments as described below. If the former Director has elected
to receive all of the cash at one time, Wal-Mart will pay the cash
to the former Director as soon as practicable after the Distribution
Date.
If the former Director has elected to be paid the cash in
installments, a pro rata portion of the amount credited to the
Deferral Account on the Distribution Date will be paid in each
installment, along with the additional amount credited to the
Deferral Account as interest since the last installment was paid.
Wal-Mart will pay to the former Director the cash to be paid in the
first installment as soon as practicable after the Distribution Date.
The remaining installments of cash shall be paid on or about each
anniversary of the Director's Distribution Date.
Conversion of Accounts. At any time prior to the Distribution Date, a
Director who has a Deferral Account may convert all or any portion of
the Deferral Account into Units credited to a Unit Account. The
number of Units to be credited to the Director's Unit Account
upon the conversion shall equal (1) the amount credited to the
Director's Deferral Account so converted divided by (2) the Fair
Market Value on the date of the Director's election to convert.
At any time prior to the Distribution Date, a Director who has a
Unit Account may convert all or any portion of the Unit Account
into a Deferral Account. The cash amount to be credited to the
Director's Deferral Account upon the conversion shall equal (1) the
number of Units credited to his or her Unit Account so converted
multiplied by (2) the Fair Market Value on the date of the Director's
election to convert.
Any election to convert must be made on a form prescribed by
Wal-Mart and filed with its Secretary. The conversion of a Unit
Account or a Deferral Account shall be deemed to occur on the date
of the Director's election.
Distribution in the Event of a Director's Death. Each Director who
defers any part of the Retainer payable to him or her in any Plan
Year must designate one or more beneficiaries of the Director's
Deferral Account and Unit Account, who may be changed from time to
time. The designation of a beneficiary must be made by filing with
Wal-Mart's Secretary a form prescribed by Wal-Mart. If no
designation of a beneficiary is made, any deferred benefits under
this Plan will be paid to the Director's or former Director's estate.
If a Director dies while in office or a former Director dies during
the installment payment period, Wal-Mart will issue the Shares and
pay the amounts of cash that are issuable and payable to the Director
or former Director at one time as soon as practicable after the death
of the Director or the former Director.
Timing of Election to Receive Deferred Benefits in Installments. If
the Director wants the benefits distributed in installments, the
election to receive payments in installments must be on file for a
period of at least 12 full months prior to the Director ceasing to be
a director of Wal-Mart. The last valid election on file with
Wal-Mart's Secretary for at least 12 full months will be the given
effect by Wal-Mart in distributing the benefits.
Withholding for Taxes. Wal-Mart will withhold the amount of cash and
Shares necessary to satisfy Wal-Mart's obligation to withhold
federal, state, and local income and other taxes on any benefits
received by the Director, the former Director or a beneficiary under
this Plan.
No Transfer of Rights under this Plan. A Director or former Director
shall not have the right to transfer, grant any security interest in
or otherwise encumber rights he or she may have under this Plan,
any Deferral Account or any Unit Account maintained for the Director
or former Director or any interest therein. No right or interest of
a Director or a former Director in a Deferral Account or a Unit
Account shall be subject to any forced or involuntary disposition or
to any charge, liability, or obligation of the Director or former
Director, whether as the direct or indirect result of any action of
the Director or former Director or any action taken in any
proceeding, including any proceeding under any bankruptcy or other
creditors' rights law. Any action attempting to effect any
transaction of that type shall be null, void, and without effect.
Unfunded Plan. This Plan will be unfunded for federal tax purposes.
The Deferral Accounts and the Unit Accounts are entries in the
Special Ledger only and are merely a promise to make payments in the
future. Wal-Mart's obligations under this Plan are unsecured,
general contractual obligations of Wal-Mart.
Amendment and Termination of the Plan. The Board or the Compensation
and Nominating Committee of the Board may amend or terminate this
Plan at any time. An amendment or the termination of this Plan will
not adversely affect the right of a Director, former Director,
or Beneficiary to receive Shares issuable or cash payable at the
effective date of the amendment or termination or any rights that a
Director, former Director, or a Beneficiary has in any Deferral
Account or Unit Account at the effective date of the amendment or
termination. If the Plan is terminated, however, Wal-Mart may, at
its option, accelerate the payment of all deferred and other benefits
payable under this Plan.
Governing Law. This Plan shall be governed by the laws of the State
of Arkansas, except that any matters relating to the internal
governance of Wal-Mart shall be governed by the General Corporation
Law of Delaware. Wal-Mart has right to interpret this Plan, and
any interpretation by Wal-Mart shall be conclusive as to the
meaning of this Plan.
Effective Date and Transition. This Plan amends and restates in full
the Wal-Mart Stores, Inc. Directors Deferred Compensation Plan
adopted on March 7, 1991 and as ratified by the stockholders of
Wal-Mart on June 5, 1992. The effective date of this amendment and
restatement of that Plan shall be January 1, 1997, and the Plan
became operative and in effect on the date, subject only to the
ratification of the Plan by the stockholders of Wal-Mart at
Wal-Mart's 1997 annual stockholders' meeting. The Board has reserved
and authorized for issuance pursuant to the terms and conditions of
this Plan 1,000,000 shares of Common Stock.
(Map Here)
ADMITTANCE SLIP
WAL-MART STORES, INC
Annual Meeting of Shareholders
Place: Bud Walton Arena
University of Arkansas Campus
(parking on North Razorback Drive)
Fayetteville, Arkansas
Time: June 6, 1997, 8:30 A.M. CDST
(Pre-meeting activities at 7:30 A.M.)
Casual Dress Recommended
Please present this slip at the entrance. You may bring guests, but we
reserve the right to limit the number of your guests. Photographs for
use in Company publications will be taken at the Annual Meeting. By
attending, you waive any claim to these photographs. Camcorders or
video taping equipment of any kind are expressly prohibited.
WAL-MART STORES, INC.
BENTONVILLE, AR 72716
501/273-4000
<PAGE>
WAL-MART STORES, INC. PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF THE
SHAREHOLDERS OF WAL-MART STORES, INC. TO BE HELD ON JUNE 6, 1997
I have received the Notice of Annual Meeting of Shareholders to be held
on June 6, 1997, and a Proxy Statement furnished by Wal-Mart's Board of
Directors for the Meeting. I appoint S. ROBSON WALTON and DAVID D. GLASS,
or either of them, as Proxies and Attorneys-in-Fact, with full power of
substitution, to represent me and to vote all shares of Wal-Mart common
stock that I am entitled to vote at the Annual Meeting on June 6, 1997. If
I participate in Wal-Mart Stores, Inc. Profit Sharing Plan, I also direct
the Trustee of the Wal-Mart Stores, Inc. Profit Sharing Trust to vote my
stock which is attributable to my interest in the Plan at the Meeting in
the manner shown on this form as to the following matters and in the
Trustee's discretion on any other matters that come before the Meeting.
RESOLVED, that the following persons are nominated for election to the
Board of Directors of Wal-Mart Stores, Inc., such election to be at the
Annual Meeting of Shareholders on June 6, 1997:
Paul R. Carter, John A. Cooper, Jr., Stephen Friedman, Stanley C. Gault,
David D. Glass, Dr. Frederick S. Humphries, E. Stanley Kroenke,
Elizabeth A. Sanders, Jack C. Shewmaker, Donald G. Soderquist, Dr. Paula
Stern, John T. Walton, S. Robson Walton.
(Change of Address/Comments)
__________________________________
__________________________________
__________________________________
(If you have written in the above space, please mark the corresponding
box on the reverse side of this card)
You are encouraged to specify your choices by marking the appropriate
boxes on the reverse side, but you need not mark any box if you wish to
vote in accordance with the Board of Directors' recommendations. The
Proxy Committee cannot vote your shares unless you sign and return
this card.
FOLD AND DETACH HERE
WAL-MART STORES, INC.
ANNUAL MEETING OF SHAREHOLDERS
June 6, 1997
8:30 a.m. (CDST)
(Pre-meeting activities at 7:30)
Bud Walton Arena
University of Arkansas
Fayetteville, Arkansas
TO MAKE SURE THAT YOUR VOTE ARRIVES AT OUR TABULATOR IN TIME TO BE COUNTED,
YOU MAY WISH TO VOTE BY PHONE.
TO VOTE BY PHONE (touch tone):
1) Have your proxy card handy.
2) Call First Chicago Trust at:
1-800-OK 2 VOTE (1-800-652-8683)
3) Follow the automated instructions.
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X Please mark your vote as in this example.
If this proxy is signed and returned, it will be voted in accordance with
your instructions shown below. If you do not specify how the proxy should
be voted, it will be voted FOR items 1 and 2 and AGAINST item 3.
The Board of Directors recommends a vote FOR:
FOR WITHHELD FOR WITHHELD
1. Election of 2. To approve
Directors the Directors
(see reverse) Compensation Plan
The Board of Directors recommends a vote AGAINST:
FOR WITHHELD
3. To approve the
shareholder
resolution regarding
vendor standards
Change of Address
(see reverse)
IMPORTANT: Please sign Proxy as your name appears. When stock is jointly
held, each joint owner should sign Proxy. When signing as attorney,
executor, administrator, trustee or guardian, please give full title. If
more than one trustee, all should sign. If a corporation, please sign in
full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person(s).
_________________________________
_________________________________
Signature(s) Date
FOLD AND DETACH HERE
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As a Wal-Mart shareholder, you are qualified for membership at SAM'S
Club.
Use this One-Day Trial Membership Card to stock up on name brand
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If you've already joined SAM'S Club, you know what a great value
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Annual membership fee of $25* payable upon joining. One secondary
membership is available for only $10*. *Sales tax additional, where
applicable.
PRE-QUALIFIED FOR MEMBERSHIP
ONE-DAY TRIAL MEMBERSHIP CARD
Shareholder's Name: _____________________________________________
Address:_________________________________________________________
City/State/ZIP: _________________________________________________
Phone: __________________________________________________________
(Sam's Club Member No.: __176941458___________________
Logo here) Expiration Date: __07/31/97_______________
Membership
Warehouse Pay posted warehouse prices. Cash
For Business & Home Discover* or Novus* Cards only (no
checks). You may apply for membership
while visiting any SAM'S Club.
