<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 transaction 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 5, 1998
The 1998 Annual Meeting of Shareholders of Wal-Mart Stores, Inc.
will be held on Friday, June 5, 1998, 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. Stock Incentive Plan of
1998;
(3) To vote on the Wal-Mart Stores, Inc. Management Incentive Plan
of 1998;
(4) To vote on a shareholder proposal described on pages 11 to 12
of the Proxy Statement; and
(5) 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, 1998, to vote at the Annual Meeting. If you plan to attend,
please bring the Admittance Slip on the back cover. Regardless of
whether you will attend, please vote by signing, dating 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, 1998
Annual Meeting Admittance Slip 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 5,
1998, 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, 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, 1998.
Wal-Mart has fixed the close of business on April 8, 1998, 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, must be present in person or represented by proxy to
hold the meeting. 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 at 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). Wal-Mart associates who hold shares through the
Profit Sharing Plan, 401(k) Plan or the Associate Stock Purchase Plan
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 Wal-Mart Stores, Inc. Stock Incentive Plan of
1998, FOR the Wal-Mart Stores, Inc. Management Incentive Plan of 1998,
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. All nominees except Roland
Hernandez and Jose Villarreal are presently directors 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 15 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, providing 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.
</PAGE> 1
<PAGE>
NOMINEES FOR DIRECTOR
Nominees for director are nominated by the Board. They were
selected on the basis of outstanding achievement in their 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. All nominees have held the
positions shown for at least five years unless otherwise noted.
Director
Name Age Business Experience Since
Jeronimo Arango 72 Chairman of the Board of Cifra, 1997
S.A. de C.V., the largest retailer
in Mexico.
John A. Cooper, Jr. 59 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 60 Limited Partner of Goldman, Sachs 1996
& Co. since 1994 and Senior Chairman
and Limited Partner of Goldman, Sachs
& Co. from December 1994 to April
1998. Senior advisor to Marsh & McLennan
Risk Capital Corp. since April 1998.
From December 1990 until November 1994,
he served as Co-Chairman or sole
Chairman of Goldman, Sachs & Co. He
is also a director of the Fannie Mae.
Stanley C. Gault 72 Chairman of the Goodyear Tire & 1996
Rubber Company from June 1991 to June
1996 and Chief Executive Officer of
the Goodyear Tire & Rubber Company
from June 1991 to January 1996. Mr.
Gault previously served as Chairman
and Chief Executive Officer of
Rubbermaid Incorporated. He is also
a director of Avon Products, Inc.,
and The Timken Company.
David D. Glass 62 President and Chief Executive 1977
Officer of Wal-Mart.
Roland A. Hernandez 40 President and Chief Executive New
Officer of Telemundo Group, Inc., a
Spanish-language television network,
from March 1995 to the present. He
was previously the President of
Interspan Communications, Inc. He
is also a director of Beneficial
Corporation.
Dr. Frederick S. 62 President of Florida A&M University. 1993
Humphries He is also a director of Brinker
International, Inc.
E. Stanley Kroenke* 50 Chairman of The Kroenke Group, 1995
which is engaged in real estate
development, and co-owner of the
St. Louis Rams National Football
League franchise.
Elizabeth A. Sanders 52 Management consultant with The 1993
Sanders Partnership, a retail
consulting firm, since 1990.
She was previously a Vice-President
and General Manager for Nordstrom,
Inc. She is also a director of
Advantica Restaurant Group, Inc.,
H.F. Ahmanson & Co., Wellpoint, Inc.,
and Wolverine Worldwide, Inc.
Jack C. Shewmaker 60 International consultant, rancher 1977
and retired Wal-Mart executive.
Donald G. Soderquist 64 Vice Chairman and Chief Operating 1980
Officer of Wal-Mart.
Dr. Paula Stern 53 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. She
previously served as Chairwoman of the
U.S. International Trade Commission.
Dr. Stern is also a director of Avon
Products, Inc., Columbia Broadcasting
System, Inc., and Harcourt General, Inc.
Jose H. Villarreal 44 Partner in the San Antonio offices of New
the law firm of Akin, Gump, Strauss,
Hauer & Feld, L.L.P., from July 1994
to the present. He was previously a
partner with the law firm of McGinnis,
Lochridge & Kilgore, L.L.P. He is
also a director of the Fannie Mae.
John T. Walton* 51 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.
S. Robson Walton* 53 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.
</PAGE> 2
<PAGE>
STOCK PERFORMANCE CHART
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, 1998. The graph also shows the cumulative
total returns of the S&P 500 Index and the published retail industry
index. The comparison assumes $100 was invested on January 31, 1993,
in Wal-Mart stock and in each of the indices shown and assumes
reinvestment of dividends.
<TABLE>
<CAPTION>
(Graph here)
1/94 1/95 1/96 1/97 1/98
<S> <C> <C> <C> <C> <C>
Wal-Mart Stores, Inc. 82 71 64 75 127
S & P 500 113 113 157 199 252
S & P Retail Composite 96 89 96 115 170
</TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table: This table shows the compensation during
each of the Company's last three fiscal years paid to Wal-Mart's Chief
Executive Officer and four other most highly compensated executive
officers based on compensation earned during the fiscal year ended
January 31, 1998.
<TABLE>
<CAPTION>
Annual compensation Long-term compensation
Fiscal Other Restricted Number of
Year Incentive annual stock securities All other
Name and ended Salary Payment compensation awards underlying compensation
position Jan. 31, ($)(1) (2) ($)(3) ($)(4) options ($)(5)
<S> <C> <C> <C> <C> <C> <C> <C>
David D. Glass 1998 1,163,846 1,102,000 80,678 2,000,000 87,136 221,023
President and Chief 1997 1,085,000 377,580 71,363 0 135,625 40,436
Executive Officer 1996 1,035,000 0 66,759 0 66,064 40,359
Donald G. Soderquist 1998 906,000 755,700 0 1,750,000 57,340 51,352
Vice Chairman and 1997 860,000 299,280 0 0 89,583 30,866
Chief Operating Officer 1996 830,000 0 0 0 52,979 29,119
Bob L. Martin 1998 549,827 495,000 14,514 1,500,000 37,559 43,541
Executive Vice President 1997 500,000 87,000 23,708 0 52,083 18,011
and President of the 1996 450,000 0 0 0 40,000 15,886
International Division
H. Lee Scott, Jr. 1998 489,615 453,750 0 1,500,000 50,000 27,452
Executive Vice President 1997 390,000 138,645 0 0 40,625 14,174
and President of the 1996 370,000 0 0 0 30,000 12,587
Wal-Mart Stores Division
Thomas M. Coughlin 1998 487,923 453,750 21,623 1,500,000 34,429 57,809
Executive Vice President 1997 420,000 149,310 35,930 0 43,750 17,690
and Chief Operating Officer 1996 405,000 0 9,984 0 30,000 14,715
of the Wal-Mart Stores
Division
</TABLE>
[FN]
<F1>
(1) This column includes compensation earned during the fiscal year,
but deferred. The salary level shown for David Glass differs slightly
from the amount shown in the Compensation and Nominating Committee's
report because of a change in Wal-Mart's compensation year from a
fiscal year end to a March 31 year end.
<F2>
(2) Incentive payments in this column relate to performance under the
Management Incentive Plan during the January 31, 1997 and 1998 fiscal
years but were paid during the January 31, 1998 and 1999 fiscal years,
respectively.
</PAGE> 3
<PAGE>
<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) Restricted stock shares were awarded during the fiscal year ended
January 31, 1998. The fair market value on the date of grant was $24
per share. Awards were made to Messrs. Glass, Soderquist, Martin,
Scott, and Coughlin in the amounts of 83,333, 72,917, 62,500, 62,500,
and 62,500 shares, respectively. Dividends are paid on the restricted
stock. The awards generally vest in three equal increments-three
years from the date of grant, seven years from the date of grant, and
upon attainment of age 65.
<F5>
(5) "All other compensation" for the fiscal year ended January 31,
1998, includes Company contributions to Wal-Mart's Profit Sharing,
Supplemental Executive Retirement and 401(k) 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 401(k) Above-market Insurance
Name contributions contributions contributions interest premiums
<S> <C> <C> <C> <C> <C>
David D. Glass $3,200 $57,496 $3,200 $157,047 $80
Donald G. Soderquist $3,200 $43,039 $3,200 $1,833 $80
Bob L. Martin $3,200 $19,381 $3,200 $17,680 $80
H. Lee Scott, Jr. $3,200 $18,680 $3,200 $2,292 $80
Thomas M. Coughlin $3,200 $19,326 $3,200 $32,003 $80
</TABLE>
Option Grants for Fiscal Year Ended January 31, 1998: 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, 1998.
<TABLE>
<CAPTION>
Individual Grants
Number of Percent of
securities total options
underlying granted to Exercise Grant date
options associates in price/share Expiration present value
Name granted fiscal year (1) date (2)
<S> <C> <C> <C> <C> <C>
David D. Glass 87,136 1.66% $39.9375 01/14/08 $1,210,319
Donald G. Soderquist 57,340 1.09% $39.9375 01/14/08 $796,453
Bob L. Martin 37,559 0.71% $39.9375 01/14/08 $521,695
H. Lee Scott, Jr. 50,000 0.95% $39.9375 01/14/08 $694,500
Thomas M. Coughlin 34,429 0.65% $39.9375 01/14/08 $478,219
</TABLE>
[FN]
<F1>
(1) The exercise price equals the closing price of Wal-Mart stock on
the date of grant. The options are exercisable in seven equal annual
installments beginning one year after grant. They expire ten years
after grant.
<F2>
(2) The fair value of these options at the date of grant was estimated
using a Black-Scholes option pricing model. The following
weighted-average assumptions were used to estimate the value of
options: a 5.78 year expected life of the options; a dividend yield of
0.69%; expected volatility for Wal-Mart stock of 0.262%; and a risk-
free rate of return of 5.81%.
Option Exercises and Fiscal Year End Option Values: This table shows
all stock options exercised by the named executives during the fiscal
year ended January 31, 1998, and the number and value of options they
held at fiscal year end.
<TABLE>
<CAPTION>
Number of securities Value of unexercised
Shares Value underlying unexercised in-the-money
acquired on realized options at fiscal year end (#) options at fiscal year end ($)(2)
Name exercise ($)(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
David D. Glass 160,000 4,670,000 330,102 377,823 7,691,125 4,733,156
Donald G. Soderquist 55,560 1,836,952 200,838 274,489 4,231,758 3,541,612
Bob L. Martin 0 0 76,321 155,595 1,368,751 1,878,434
H. Lee Scott, Jr. 0 0 48,883 135,480 916,345 1,367,011
Thomas M. Coughlin 29,015 328,223 21,885 129,361 399,329 1,531,298
</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 Friday,
January 30, 1998, as reported in the Wall Street Journal, was $39 13/16.
</PAGE> 4
<PAGE>
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 set the salaries of
David Glass, the Chief Executive Officer, and Rob Walton, the
Chairman. The Committee approved the salaries of Don Soderquist and
Paul Carter, Wal-Mart executives who served on the Board of Directors
during the fiscal year. As a part of its oversight of the Company's
compensation programs, the Committee also reviewed 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 pre-established 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,
and in the Company's 401(k) Plan.
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, return on assets and
shareholders' equity. Other criteria, including whether Wal-Mart
conducts its operations in accordance with the business and social
standards expected 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 executives' 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
generally 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 $50 will result in a grant of an option to
purchase 6,250 shares at $50 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 subjective 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. During the fiscal year, David Glass
received 83,333 shares of restricted stock.
Incentive Payments: Incentive payments are made under Wal-
Mart's Management Incentive Plan upon achievement of pre-established
performance criteria. For the 1998 fiscal year, the Committee set
three levels of overall performance objectives for the Company:
threshold, business plan and maximum.
Corresponding incentive levels for the 1998 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 95% 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, 1998, corporate pre-tax
profits exceeded the maximum level set by the Committee. As a result,
incentive payments were made under the Management Incentive Plan in
March of 1998 for performance in the fiscal year ended January 31,
1998.
Compensation of the Chief Executive Officer: During the fiscal
year, David Glass, Wal-Mart's Chief Executive Officer, received a base
salary of $1,160,000, an increase of 6.9% from the prior fiscal year.
He was also granted an option to purchase 87,136 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, 1997 (i.e., an 11.5%
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). 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, 1998 (i.e., a 15.4%
increase in net income; a 12.5%
</PAGE> 5
<PAGE>
increase in total sales; a 6.1% increase in comparable store sales;
and a 19.8% return on average shareholders' equity). Mr. Glass also
received an incentive payment of $1,102,000 under Wal-Mart's Management
Incentive Plan. This bonus was based on Wal-Mart's achievement of the
performance goals established by the Committee and was paid in the
current fiscal year but relates to performance in the fiscal year ended
January 31, 1998.
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, 1998, 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,
1999, 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, 1998, 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, 1997, the
compensation paid to outside directors was $50,000, paid in quarterly
increments of $12,500. At least one-half of the retainer is taken in
Wal-Mart stock or stock units. Chairpersons of board committees
receive an additional retainer of $3,000. 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.
Directors are not paid for meeting attendance. Each director was
reimbursed for expenses incurred in attending the meetings.
During the fiscal year ended January 31, 1998, Jack Shewmaker
received a 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 provided for payment of an annual consulting fee of
$150,000. The consulting agreement also provided that he will be
nominated for a director's position with Wal-Mart for a term
concurrent with the consulting arrangement. Mr. Shewmaker also
remained eligible to receive benefits generally available to Company
executives, and his health insurance costs were paid by the Company
during the term of the consulting agreement.
ADDITIONAL INFORMATION ABOUT
THE BOARD OF DIRECTORS
The Board held four regular meetings and four 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 Strategic Planning and Finance Committee, and the Executive
Committee. For the 1998 fiscal year, the Audit Committee met five
times, the Stock Option Committee met twice, the Compensation and
Nominating Committee met six times, and the Strategic Planning and
Finance Committee met four times. 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
Section 16 persons, 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
Section 16 persons. 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, 1998, 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, 1998, Stan Kroenke, a
director, held interests in shopping center developments which leased
space to Wal-Mart for 44 store
</PAGE> 6
<PAGE>
and Sam's Club locations. Total rents and maintenance fees paid by
Wal-Mart under these leases for the fiscal year were $29,093,428.
Mr. Kroenke's interest in the amounts paid was $18,612,392. 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/THF Utility Co., a utility company in which Mr. Kroenke has an
ownership interest, $383,796 for utility services provided to two
stores. Mr. Kroenke's interest in the amounts paid was $140,725. Wal-
Mart also paid $107,431 in expenses related to signs and other items
at ten stores. Mr. Kroenke's interest in the amounts paid was
$64,608.
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 $2,570,176 under the leases for the
fiscal year ended January 31, 1998. We believe that the rents and
maintenance fees paid under the leases are 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 $5,284,000
in consumer products to the Company during the fiscal year ended
January 31, 1998. Ms. Walton also has an indirect interest in
Loadhandler Industries Inc., which had sales of $46,229 to the Company
during the fiscal year. Additionally, Loadhandler had invoiced the
Company for $697,080, which had not been paid as of the Company's
fiscal year end. We believe that these transactions were competitive
with amounts that would be paid to third parties in similar
transactions.
Subsequent to the fiscal year end, Wal-Mart's Board of
Directors approved an agreement between the Company and Walton
Enterprises, L.P., providing that the Company will register on behalf
of Walton Enterprises up to 25 million shares of Wal-Mart stock. No
registration statement has been filed yet, but Walton Enterprises has
agreed to reimburse the Company for the registration fee and all other
expenses connected to the performance of the Agreement and the filing
of the Registration Statement.
Stephen Friedman, a director of the Company, is a limited
partner of Goldman, Sachs & Co. ("Goldman"). Goldman and its
subsidiaries have provided investment banking and related financial
services to the Company during fiscal 1998 and are expected to provide
similar services to the Company during fiscal 1999.
Jose Villarreal, a director nominee, is a partner of the law
firm Akin, Gump, Strauss, Hauer & Feld, L.L.P. The firm rendered
legal services to the Company in fiscal 1998 and is expected to render
services in fiscal 1999.
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 Stock Exchange. 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, 1998, all Section 16(a) filing requirements
were met except that Thomas M. Coughlin inadvertently failed to
include the ownership of 33,340 shares of Wal-Mart stock held by a
family trust and an individual retirement account in his initial
report of beneficial ownership of stock. In addition, Mr. Coughlin
inadvertently omitted to report two exempt acquisitions of Wal-Mart
stock in a timely monthly report and one exempt acquisition in each of
fiscal year 1996 and 1997 in his year end reports for those years.
These omissions were corrected in amended reports.
Amount and Nature of Beneficial Ownership (1)
There were 2,239,826,615 shares of Wal-Mart stock issued and
outstanding on March 31, 1998. The following table lists the
beneficial owners of 5% or more of Wal-Mart Stock as of March 31,
1998.
<TABLE>
<CAPTION>
Direct or
Indirect with Indirect with
Name and Sole Voting Shared Voting
Address of and Investment and Investment Percent
Beneficial Owner Power Power Total of Class
<S> <C> <C> <C> <C>
Alice L. Walton (2) 485,260 871,275,668 871,760,928 38.92%
Helen R. Walton (2) 840,330 871,273,976 872,114,306 38.94%
Jim C. Walton (2) 4,564,068 871,273,976 875,838,044 39.10%
John T. Walton (2) 2,456,005 871,388,068 873,844,073 39.01%
S. Robson Walton (2), (3) 145,280 871,492,954 871,638,234 38.91%
FMR Corp. (4) 138,561,002 (5) 14,750 138,575,752 6.19%
</TABLE>
[FN]
<F1>
(1) The information shown is as of March 31, 1998, with the exception
of FMR Corp., for which the share ownership information presented is
as of December 31, 1997.
<F2>
(2) 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.
<F3>
(3) The number includes 83,992 shares that S. Robson Walton had a
right to acquire within 60 days after March 31, 1998, through the
exercise of stock options. It also includes 25,432 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.
</PAGE> 7
<PAGE>
<F4>
(4) The address of FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109.
<F5>
(5) As of December 31, 1997, (a) FMR Corp. had sole dispositive power
over these shares and sole voting power with respect to 9,039,094 of
these shares, (b) Edward C. Johnson 3d, Chairman of FMR Corp., and
Abigail P. Johnson, a Director of FMR Corp., each had sole dispositive
power over these shares, and (c) these shares represented (i)
126,075,308 shares beneficially owned by Fidelity Management &
Research Company, a wholly owned subsidiary of FMR Corp., as a result
of acting as investment adviser to various investment companies, (ii)
11,781,794 shares beneficially owned by Fidelity Management Trust
Company, a wholly owned subsidiary of FMR Corp., as a result of
serving as investment manager of certain institutional accounts, and
(iii) 679,300 shares beneficially owned by Fidelity International
Limited, a company which may be deemed controlled by Edward C. Johnson
3d and immediate family members through the ownership of approximately
40% of its voting stock, as a result of acting as investment adviser
to various investment companies and certain institutional investors.
Information relating to the stockholder is based on the stockholder's
Schedule 13G, dated February 14, 1998.
Holdings of Officers and Directors: This table shows the amount of
Wal-Mart stock held by each director, director nominee, Wal-Mart's
Chief Executive Officer, and the four other most highly compensated
officers on March 31, 1998. 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 of Wal-Mart Stock
<CAPTION>
Direct or Indirect Indirect with
with Sole Voting and Shared Voting and Percent
Name of Beneficial Owner Investment Power (1) Investment Power Total of Class
<S> <C> <C> <C> <C>
Jeronimo Arango (2) 1,020 0 1,020 *
Paul R. Carter (2) 133,870 305,579 439,449 *
John A. Cooper, Jr. 215,543 41,712 257,255 *
Thomas M. Coughlin 102,452 75,080 177,532 *
Stephen Friedman 20,000 0 20,000 *
Stanley C. Gault 10,468 0 10,468 *
David D. Glass 2,561,279 0 2,561,279 *
Roland A. Hernandez 0 0 0 *
Dr. Frederick S. Humphries 400 0 400 *
E. Stanley Kroenke 534,997 30,930,964 31,465,961 1.40%
Bob L. Martin 171,896 20,832 192,728 *
Elizabeth A. Sanders 3,234 0 3,234 *
H. Lee Scott, Jr. 160,043 1,574 161,617 *
Jack Shewmaker 1,807,050 0 1,807,050 *
Donald G. Soderquist 2,063,152 84,356 2,147,508 *
Dr. Paula Stern 500 0 500 *
Jose H. Villarreal 0 0 0 *
S. Robson Walton (3) 145,280 871,492,954 871,638,234 38.91%
John T. Walton (3) 2,456,005 871,388,068 873,844,073 39.01%
Directors and Executive Officers 11,190,226 903,095,515 914,285,741 40.80%
as a Group (26 persons) (2)
</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, 1998, 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 options exercisable Shares held in the
Name within 60 days Profit Sharing Plan
<S> <C> <C>
Paul R. Carter 98,324 0
Thomas M. Coughlin 21,885 17,255
David D. Glass 330,102 85,197
Bob L. Martin 76,321 6,179
H. Lee Scott, Jr. 48,883 11,140
Donald G. Soderquist 200,838 32,439
S. Robson Walton 83,992 25,432
Directors and Officers as a Group 992,818 268,888
</TABLE>
<F3>
(2) Jeronimo Arango, Paul Carter and one of Wal-Mart's executive
officers each own shares of the common stock of Cifra S.A. de C.V., a
majority-owned subsidiary of Wal-Mart. The Company does not have
information regarding the number of shares owned by Mr. Arango, but
believes him to be a substantial shareholder of Cifra stock. Mr.
Carter owned 8,431 Cifra Series "V" shares, while another of Wal-
Mart's executive officers owned 2,456 Cifra Series "V" shares at March
31 through American Depository Receipts. As of March 31, 1998, Cifra
had 4,021,185,724 Series "V" shares and 787,814,276 Series "C" shares
issued and outstanding.
<F4>
(3) Amounts shown for S. Robson Walton and John T. Walton in this
column include 871,273,976 shares held by Walton Enterprises, L.P.
</PAGE> 8
<PAGE>
ITEM 2: PROPOSAL TO ADOPT
WAL-MART STORES, INC.
STOCK INCENTIVE PLAN OF 1998
Wal-Mart's Board of Directors proposes adoption of the Wal-Mart
Stores, Inc. Stock Incentive Plan of 1998 (Attachment A), which is
being presented to the shareholders for approval. The Plan increases
Wal-Mart's ability to compete with other companies for superior talent
and enhances the Company's ability to retain associates and directors.
The Plan is being submitted to the shareholders for approval to
comply with Section 162(m) of the Internal Revenue Code. Section 162(m)
prohibits a company from taking a federal income tax deduction for
compensation paid in excess of $1 million to an associate defined in
the provision as a "covered employee." This limit on deductibility
does not apply to compensation that is "qualified performance-based
compensation" so long as certain criteria, including shareholder
approval of the plan under which the compensation is paid, are met.
Under the Plan, incentive and non-qualified stock options, stock
appreciation rights, stock value equivalent awards and shares of
restricted stock may be granted to any associate of Wal-Mart and its
affiliates. Awards relating to no more than 1,600,000 shares and
share equivalents may be granted to any covered employee in any year.
At March 31, 1998, there were over 8,000 associates and directors
eligible to participate in the Plan. Eighty million shares of Wal-
Mart stock have been reserved for issuance under the Plan. The
closing price of Wal-Mart stock on April 3, 1998, as reported in the
Wall Street Journal, was $51 1/2. The Plan replaces Wal-Mart's
existing Stock Option and Restricted Stock Plans. The Board of
Directors urges you to vote for the Plan.
Administration. The Plan is administered by the Compensation and
Nominating Committee, which is authorized to interpret the Plan and to
establish rules and procedures governing the Plan. In addition, the
Committee is authorized to determine the types and amounts of awards
to be granted, establish the terms and conditions of awards, and amend
the terms or waive the conditions of any award. The Committee may
delegate its administrative duties under the Plan to one or more
administrators, except with respect to awards to Section 16 persons
and awards to "covered employees" designed to satisfy section 162(m)
of the Internal Revenue Code.
Stock Options. Stock options granted to participants will be non-
qualified stock options unless designated as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code.
Generally, the exercise price of an incentive stock option may not be
less than the fair market value of the Wal-Mart stock on the date of
grant. In the case of non-qualified stock options, the exercise
price shall be determined by the Committee in its sole discretion.
Stock options are exercisable in whole or in part at such time or
times as may be determined by the Committee, except that incentive
stock options generally may not be exercised after the expiration of
10 years from the date granted. The type of consideration by which
the exercise price of stock options may be paid shall be determined by
the Committee, except that options intended to comply with Section
162(m) will have an exercise price of no less than the fair market
value of Wal-Mart stock on the date of grant.
Restricted Stock. The Committee may award restricted stock under
the Plan and determine the restrictions on the stock. If the
restrictions are not met, all or a portion of the shares of restricted
stock will be forfeited to Wal-Mart, together with any non-cash
proceeds received with respect to those shares. While any restriction
applies to a recipient's shares of restricted stock, the recipient
will be entitled to (i) retain all dividends paid on the restricted
stock (without repayment to Wal-Mart upon any forfeiture of shares of
the stock), (ii) receive any non-cash proceeds from a stock split,
reverse stock split or recapitalization of Wal-Mart, which non-cash
proceeds shall automatically become restricted stock subject to the
restrictions then existing, and (iii) vote the restricted stock. Also
while any restriction applies, a recipient may not sell, assign,
transfer or grant any security interest in his or her restricted
stock. Unless otherwise provided in the award, if a recipient ceases
to be a Wal-Mart associate before the restrictions lapse, all shares
of restricted stock will automatically be forfeited to Wal-Mart. The
aggregate shares of restricted stock that may be awarded under the
Plan is limited to 20% of the shares of Wal-Mart stock reserved for
issuance under the Plan.
Stock Appreciation Rights and Stock Value Equivalent Awards. The
Committee may grant stock appreciation rights under the Plan which
entitle recipients to receive payment upon exercise after vesting
equal to (i) the excess of the fair market value of a share of Wal-
Mart stock on the date of exercise over the fair market value of a
share of Wal-Mart stock on the date of grant or (ii) a price
determined by the Committee, multiplied by the number of share
equivalents covered by the stock appreciation rights exercised. The
Committee may also grant stock value equivalent awards entitling
recipients to receive payment upon election after vesting equal to the
fair market value of Wal-Mart stock on the date of election multiplied
by the share equivalents covered by the election. The Committee will
establish the period over which the stock appreciation rights vest.
Payment by Wal-Mart upon the exercise of a stock appreciation right
may, at the Committee's discretion, be made in cash, in shares of Wal-
Mart stock, or a combination.
</PAGE> 9
<PAGE>
Changes Affecting Stock. In the event of a stock split, reverse
stock split, stock dividend, or combination or reclassification of Wal-
Mart stock, or a merger or other transaction resulting in a change in
the number of shares without the receipt of consideration by Wal-Mart,
the number of shares of Wal-Mart stock reserved under the Plan, the
number of shares covered by outstanding awards and restricted stock,
and the price per share covered by any outstanding awards shall be
adjusted proportionately as determined by the Committee.
Amendment and Termination of the Plan. The Committee may amend
or terminate the Plan without the consent of stockholders or
participants, except to the extent the action is required to be
approved by Wal-Mart's stockholders in connection with having any
outstanding awards comply with the requirements of Section 162(m) of
the Internal Revenue Code.
Federal Income Tax Consequences. The following general information
is based upon current statutes, regulations and interpretations and
does not purport to be complete.
Under existing federal income tax law, grant of an option generally
creates no tax consequences for the recipient or Wal-Mart. When a non-
qualified stock option is exercised, the recipient generally realizes
ordinary income equal to the excess of the fair market value of the
shares acquired over the exercise price. Wal-Mart generally will be
entitled to a deduction in the year the option is exercised equal to
the amount the employee is required to treat as ordinary income. An
optionee's basis for federal income tax purposes in the shares so
acquired equals the fair market value of the shares on the date of
exercise. The holding period for determining whether gain or loss is
short-term or long-term generally begins on the date the recipient
acquires the shares.
A recipient generally has no taxable income upon exercising an
incentive stock option, but the exercise may subject the recipient to
the alternative minimum tax. A recipient will recognize capital gain
or loss in the amount of the difference between the exercise price and
the sale price on the sale or exchange of shares, provided that the
recipient does not dispose of the shares within two years from the
date of grant and one year from the date of exercise of the incentive
stock option. A recipient disposing of such shares before the
expiration of these holding periods will recognize ordinary income
equal to the lesser of (i) the difference between the option price and
the fair market value of the shares on the date of exercise, or (ii)
the total amount of gain realized. The remaining gain or loss is
generally treated as short term or long term gain or loss, depending
on how long the shares are held. Wal-Mart receives a deduction
relating to incentive stock options only where the recipient disposes
of the shares acquired pursuant to the option prior to the expiration
of the holding periods.
A restricted stock award is not currently taxable income to a
recipient so long as the stock is subject to a substantial risk of
forfeiture and cannot be transferred free of forfeiture. The
recipient will generally be taxed on compensation income equal to the
fair market value of the shares on the date the restrictions lapse.
Stock appreciation rights and stock value equivalent awards will be
taxable to the recipient, and Wal-Mart will be entitled to a
deduction, upon the recipient electing to receive a payment under the
award.
ITEM 3: PROPOSAL TO ADOPT WAL-MART STORES, INC.
MANAGEMENT INCENTIVE PLAN OF 1998
Wal-Mart's Board of Directors proposes adoption of the Wal-Mart
Stores, Inc. Management Incentive Plan of 1998 (Attachment B), which
is being presented to the shareholders for approval. The purpose of
the Plan is to motivate and reward Company management, including
executive officers, for profit improvement by setting goals related to
profitability. Participation in the Plan is limited to officers and
other management associates who have the potential to contribute
significantly to Wal-Mart's success. At March 31, 1998, approximately
8,000 associates were eligible to participate in the Plan. The Plan
is being submitted to the shareholders for approval to comply with
Section 162(m) of the Internal Revenue Code. Section 162(m) prohibits
a company from taking a federal income tax deduction for compensation
paid in excess of $1 million to an associate defined in the provision
as a "covered employee." This limit on deductibility does not apply
to compensation that is "qualified performance-based compensation" so
long as certain criteria, including shareholder approval of the plan
under which such compensation is paid, are met.
Under the Plan, objective annual performance goals for the Company
and its divisions will be established at the beginning of each fiscal
year by the Compensation and Nominating Committee. The performance
goals will be based on any one or more of the following measures
selected by the Committee: (i) earnings, (ii) revenues, (iii)
operating or net cash flows, (iv) financial return ratios, (v) total
shareholder return, (vi) market share, and (vii) pre-tax profits. The
performance goals will have a "threshold goal" so that if the goal is
not achieved, no incentive award will be paid. The Committee will be
responsible for determining whether the performance goals have been
met. The Committee may establish other goals, including subjective
goals, with respect to associates who are not "covered employees." In
addition, the Committee will establish at the beginning of each fiscal
year the payout percentages of the various participants' salaries
eligible to be paid out as incentive awards in the event the
performance goals are achieved. No "covered employee" may receive an
incentive award greater than two-tenths of one percent
</PAGE> 10
<PAGE>
of Wal-Mart's net income for the fiscal year. The Board of Directors
urges you to vote for the Plan.
ITEM 4: SHAREHOLDER PROPOSAL REGARDING ENVIRONMENTAL PRINCIPLES
The following shareholder proposal was received from the Sisters of
St. Francis of Assisi, 3221 South Lake Drive, St. Francis, WI 53235-
3799, and five other shareholders. Their names, addresses and the
number of shares they hold will be provided upon request.
WHEREAS WE BELIEVE: Responsible implementation of a sound, credible
environmental policy increases long-term shareholder value by raising
efficiency, decreasing clean-up costs, reducing litigation, and
enhancing public image and product attractiveness;
Adherence to public standards for environmental performance gives a
company greater public credibility than standards created by industry
alone. For maximum credibility and usefulness, such standards should
specifically meet the concerns of investors and other stakeholders;
Companies are increasingly being expected by investors to do
meaningful, regular, comprehensive and impartial environmental
reports. Standardized environmental reports enable investors to
compare performance over time. They also attract investment from
investors seeking companies which are environmentally responsible and
which minimize the risk of environmental liability.
WHEREAS: The Coalition for Environmentally Responsible Economies
(CERES) - which includes shareholders of this Company; public interest
representatives, and environmental experts - consulted with
corporations to produce the CERES Principles as comprehensive public
standards for both environmental performance and reporting. Scores of
companies, including Bank America, Baxter International, Bethlehem
Steel, General Motors, H. B. Fuller, ITT Industries, Pennsylvania
Power and Light, Polaroid, and Sun [Sunoco], have endorsed these
principles to demonstrate their commitment to public environmental
accountability and standardized reporting. Fortune 500 endorsers say
that the benefits of working with CERES are public credibility, direct
access to major environmental and shareholder organizations,
leadership in designing the rapidly advancing standardization of
environmental disclosure, and measurable value-added for the company's
environmental initiatives;
A company endorsing the CERES Principles commits to work toward:
1. Protection of the biosphere
2. Sustainable natural resource use
3. Waste reduction and disposal
4. Energy conservation
5. Risk reduction
6. Safe products/services
7. Environmental restoration
8. Informing the public
9. Management commitment
10. Audits and reports
[Materials on the CERES Principles and CERES Report Form are
obtainable from CERES, 711 Atlantic Avenue, Boston MA 02110, tel: 617-
451-0927, fax: 617-482-2028].
CERES is distinguished from other initiatives for corporate
environmental responsibility by being (1) a successful model of
shareholder relations; (2) a leader in public accountability through
standardized environmental reporting; and (3) a catalyst for
significant and measurable environmental improvement within firms.
RESOLVED: Shareholders request the Company to endorse the CERES
Principles as a part of its commitment to be publicly accountable for
its environmental impact.
SUPPORTING STATEMENT: Many investors support this resolution.
Those sponsoring similar resolutions at various companies have
portfolios totaling $75 billion. Furthermore, the number of public
pension funds and foundations supporting this resolution increases
every year. We believe the CERES Principles exceed the European
Community regulation for voluntary participation in verified and
publicly-reported eco-management and auditing, and that they also
exceed the requirements for ISO 14000.
Your vote FOR this resolution will encourage both scrutiny of our
Company's environmental policies and reports and adherence to goals
supported by management and shareholders alike. We believe the CERES
Principles will protect both your investment and your environment.
WAL-MART'S STATEMENT IN OPPOSITION
The Board of Directors believes that adoption of this proposal would
unduly burden Wal-Mart and its shareholders while adding nothing to
Wal-Mart's environmental efforts. Adoption of the CERES principles
would require a lengthy and complex annual report and additional
administrative costs for programs that already exist within Wal-Mart.
Recycling and Reducing Waste: Recycling is a high priority at Wal-
Mart. Wal-Mart has established recycling programs for cardboard,
plastics, aluminum cans, car batteries, used motor oil, fluorescent
light bulbs, paint, and paper products. In addition to recycling, Wal-
Mart has programs to reduce waste. We encourage vendors to reduce
packaging to minimize excessive waste. Any waste that is generated is
sorted for recycling and donation. Waste that cannot be recycled or
donated is crushed in a compactor to minimize space in our landfills.
</PAGE> 11
<PAGE>
Wal-Mart Uses Energy Wisely: Wal-Mart's stores have advanced energy
management systems to regulate and reduce energy use. The energy
management system controls lighting, heating, cooling, and
refrigeration in each store. Store and exit signs use special light
bulbs that reduce energy use. Many stores have skylights that allow
sunlight to light the stores. Wal-Mart is dedicated to reducing
energy use.
Safety is the Way We Do Business: We strive to provide a safe
shopping experience for our customers and a safe place to work for our
associates. Every associate is involved in the safety effort and each
store has a safety team. Wal-Mart sets goals that exceed government
requirements. We take great pride in knowing that our efforts help
ensure the safety of our customers, vendors, and associates.
Wal-Mart Lends a Helping Hand: Wal-Mart gives money to environmental
programs. By issuing environmental grants, Wal-Mart is helping to
restore and improve our environment. Associates volunteer their time
to help with many of these programs.
Getting the Word Out: Wal-Mart publishes information regarding its
environmental programs on the Internet. There are signs in every
store showing our commitment to recycling and environmentally safe
products. Our volunteer efforts in the communities have helped spread
the word about our positive and pro-active efforts to promote
environmental programs. One way we encourage others to become
involved in environmental programs is through our television
commercials that tell positive environmental stories.
Sharing a Common Goal: Every associate at Wal-Mart is required to
follow recycling guidelines. Our associates volunteer their time to
help others in the community. Managers review each store's progress
and work with associates to set and accomplish new goals. We all work
together as a team with the same goal.
Wal-Mart's long tradition of sensitivity to environmental efforts was
highlighted in 1993 when we received the United Nation's Earth Summit
Award for our first environmentally sensitive store in Lawrence,
Kansas. We are innovators in exploring, refining and implementing new
programs to enhance our energy efficiency, reduce packaging, and
encourage recycling.
Our environmental efforts are guided, not only by the Company's
management, but also by its Environmental Advisory Board, which was
created in 1989. National experts, as well as representatives of our
vendors, serve on the Environmental Advisory Board and work with us to
set new goals and explore new programs.
Wal-Mart believes that these programs support its four environmental
commitments to: (1) provide environmentally improved products to our
customers, (2) support educational programs for children, (3) seek
better ways to build and operate Wal-Mart stores and offices, and (4)
support and encourage local community environmental activities.
Wal-Mart already practices many of the principles suggested by this
proposal. We work to sustain natural resources, reduce waste, promote
safety and safe products, protect the environment, and inform the
public about our efforts. The Board of Directors does not believe any
benefit to the environment would result from this additional
administrative effort and cost. For these reasons, the Board urges you
to vote against the proposal.
SUBMISSION OF SHAREHOLDER PROPOSALS
If you want to present a proposal at the 1999 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 16, 1998.
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.
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.
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, 1998
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ATTACHMENT A
WAL-MART STORES, INC.
STOCK INCENTIVE PLAN OF 1998
1.1 Purpose. Wal-Mart Stores, Inc. ("Wal-Mart") believes it is
important to provide incentives to Wal-Mart's Associates and its Non-
Associate Directors through participation in the ownership of Wal-Mart
and otherwise. This Wal-Mart Stores, Inc. Stock Incentive Plan of
1998 (the "Plan") is established to provide incentives to certain
Associates and the Non-Associate Directors to enhance their job
performance, to motivate them to remain or become associated with Wal-
Mart and its Affiliates, and to increase the success of Wal-Mart. The
Plan is not limited to executive officers or directors of Wal-Mart,
but will be available to provide incentives to any Associate that the
Committee believes has made or may make a significant contribution to
Wal-Mart or an Affiliate of Wal-Mart.
DEFINITIONS
2.1 "Affiliate" means any corporation, company limited by shares,
partnership, limited liability company, business trust, other entity
or other business association that is now or hereafter controlled by
Wal-Mart.
2.2 "Associate" means any person employed by Wal-Mart or any
Affiliate.
2.3 "Board" means the Board of Directors of Wal-Mart.
2.4 "Cause" means, in the context of termination of an Associate's
employment, the Associate's commission of any act deemed inimical to
the best interest of Wal-Mart or any Affiliate or failure to perform
satisfactorily his or her assigned duties, each as determined in the
sole discretion of the Committee.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
2.6 "Committee" means (1) as to Associates who are Section 16 Persons
and as to Performance Based Awards, the Compensation and Nominating
Committee of the Board and (2) as to all other Associates, the
committee appointed by the Board to administer the Plan or a
particular feature of the Plan.
2.7 "Continuous Status as an Associate" means the absence of any
interruption or termination of the employment relationship between an
Associate and Wal-Mart or an Affiliate. Continuous Status as an
Associate shall not be considered interrupted in the case of: (i)
sick leave; (ii) military leave; or (iii) any other leave of absence
approved by Wal-Mart, provided that leave does not exceed one year,
unless re-employment upon the expiration of that leave is guaranteed
by contract or law or unless provided otherwise by a policy of Wal-
Mart.
2.8 "Delaware Law" means the Delaware General Corporation Law, as
amended.
2.9 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations adopted thereunder.
2.10 "Fair Market Value" means, as of any date, the closing sales
price for a Share (a) on the NYSE on that date as noted in the Wall
Street Journal (or if no trading in Shares occurred on that date, on
the last day on which Shares were traded on the NYSE) or (b) if the
Shares are not listed for trading on the NYSE, the value of a Share as
determined in good faith by Committee.
2.11 "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Code Section 422.
2.12 "Non-Associate Director" means a director of Wal-Mart who is not
an Associate.
2.13 "Nonqualified Option" means an Option not intended to qualify as
an Incentive Stock Option.
2.14 "Notification" means the agreement or other document governing
any grant of Restricted Stock or Stock Appreciation Rights.
2.15 "NYSE" means the New York Stock Exchange or any successor
organization thereto.
2.16 "Option" means a stock option to acquire a certain number of the
Subject Shares granted pursuant to the Plan.
2.17 "Option Notification" means the agreement or other document
governing any Incentive Stock Option or Nonqualified Option granted
under the Plan.
2.18 "Optioned Stock" means the Shares subject to an Option.
2.19 "Optionee" means an Associate or other person who receives an
Option.
2.20 "Parent/Subsidiary Corporation" means a "parent corporation"
(within the meaning of Code Section 424(e)) or a "subsidiary
corporation" (within the meaning of Code Section 424(f)) of Wal-Mart.
2.21 "Performance Based Award" means a Plan Award that the Committee
designates as a "Performance Based Award" and that is granted to a
"covered employee" (as defined in Code Section 162(m)(3)) or to an
Associate that the Committee determines might become a "covered
employee."
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<PAGE>
2.22 "Plan" means this Wal-Mart Stores, Inc. Stock Incentive Plan of
1998, as amended from time to time.
2.23 "Plan Award" means any Option, Restricted Stock Award or Stock
Appreciation Right.
2.24 "Recipient" means an Associate or Non-Associate Director who has
received a Plan Award.
2.25 "Restricted Stock" means Shares awarded to a Recipient pursuant
to a Restricted Stock Award that are subject to a Restriction and all
non-cash proceeds of those Shares that are subject to a Restriction.
2.26 "Restricted Stock Award" means the award of Shares subject to
one or more Restrictions under the Restricted Stock feature of the
Plan and the terms and conditions of that award.
2.27 "Restriction" means the contractual condition(s) contained in a
Restricted Stock Award that if not met will result in the forfeiture
to Wal-Mart of some or all of the Shares issued to the Recipient
pursuant to that Restricted Stock Award and the non-cash proceeds of
those Shares.
2.28 "Section 16 Person" means any Associate who is required to file
reports under Section 16 of the Exchange Act and the Non-Associate
Directors.
2.29 "Securities Act" means the Securities Act of 1933, as amended
and the rules and regulations adopted thereunder.
2.30 "Shares" means shares of the Common Stock, $.10 par value per
share, of Wal-Mart.
2.31 "Stock Appreciation Right" means a right granted to a Recipient
pursuant to the Stock Appreciation Rights feature of the Plan.
2.32 "Subject Shares" means the 80,000,000 Shares reserved for
issuance under the Plan.
SHARES SUBJECT TO THE PLAN
3.1 The Subject Shares may be authorized, but unissued, Shares or
treasury Shares held by Wal-Mart or an Affiliate. Shares reserved for
issuance pursuant to an Option that expires, is forfeited or otherwise
is no longer exercisable or that are reacquired by Wal-Mart pursuant
to the terms of the Plan or a Plan Award, may be the subject of a new
Plan Award. No fractional shares may be issued under the Plan. If a
stock split, reverse stock split, stock dividend or other combination
occurs as to the Shares, the number of Shares reserved for issuance
pursuant to the Plan shall be proportionally increased or decreased,
as the case may be.
ADMINISTRATION
4.1 The Committee will administer the Plan and will grant all Plan
Awards. The Plan and Plan Awards to Section 16 Persons shall be
administered by the Committee in compliance with Rule 16b-3 adopted
under the Exchange Act ("Rule 16b-3"). With respect to Performance
Based Awards, the Plan shall be administered by a committee of the
Board comprised solely of two or more outside directors, as defined in
Code Section 162(m)(4)(C).
4.2 The Committee shall have these duties as to the Plan:
(a) to establish rules, procedures, and forms governing the Plan;
(b) to interpret and apply the provisions of the Plan and any Plan
Award;
(c) to recommend amendments of the Plan to the Board;
(d) to determine those Associates and Non-Associate Directors who
will be Recipients and what Plan Awards will be made to them;
(e) to set the terms and conditions of any Plan Award;
(f) to determine the Fair Market Value of the Shares; and
(g) to amend the terms of any Plan Award or to waive any conditions or
obligations of a Recipient under or with respect to any Plan Award.
4.3 Except for the administration of Performance Based Awards and
matters under the Plan affected by Section 16 of the Exchange Act and
the rules adopted thereunder, the Committee may delegate its duties
under the Plan to one or more administrators, who may be Associates of
Wal-Mart.
4.4 If the Committee intends that a Plan Award qualify for the
performance-based compensation exception under Code Section
162(m)(4)(C), the Committee will exercise its discretion to qualify
the Plan Award for that exception. All actions taken or
determinations made by the Committee, in good faith, with respect to
the Plan, a Plan Award or any Notification shall not be subject to
review by anyone, but shall be final, binding and conclusive upon all
persons interested in the Plan or any Plan Award.
PARTICIPATION
5.1 All Associates whom the Committee determines have the potential
to contribute significantly to the success of the Company, as well as
Non-Associate Directors, may participate in the Plan, although
</PAGE> 14
<PAGE>
Non-Associate Directors may not receive Incentive Stock Options. An
Associate or Non-Associate Director may be granted one or more Plan
Awards, unless prohibited by applicable law and subject to the
limitations under Code Section 422 with respect to Incentive Stock
Options.
STOCK OPTIONS
6.1 Term of Options. Wal-Mart may grant Options covering the Subject
Shares to Associates or Non-Associate Directors. The term of each
Option shall be the term stated in the Option Notification; provided,
however, that in the case of an Incentive Stock Option, the term shall
be no more than 10 years from the date of grant unless the Incentive
Stock Option is granted to an Optionee who, at the time of the grant,
owns stock representing more than 10% of the voting power of all
classes of stock of Wal-Mart or any Parent/Subsidiary Corporation, in
which case the term may not exceed 5 years from the date of grant.
Each Option shall be a Nonqualified Option unless designated otherwise
in the Option Notification. Notwithstanding the designation of an
Option, if the aggregate Fair Market Value of Shares subject to
Incentive Stock Options that are exercisable for the first time by an
Optionee during a calendar year exceeds $100,000 (whether due to
acceleration of exercisability, miscalculation or error), the excess
Options shall be treated as Nonqualified Options.
6.2 Option Exercise Price and Consideration. The per Share exercise
price of an Option shall be determined by the Committee in its
discretion, except that the per Share exercise price for an Incentive
Stock Option shall be 100% of the Fair Market Value of a Share on the
date of grant unless the Associate to whom the Incentive Stock Option
is granted owns stock representing more than 10% of the voting power
of all classes of stock of Wal-Mart or any Parent/Subsidiary
Corporation at the time of the grant, in which case the per Share
exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant. The type of consideration in which the
exercise price of an Option is to be paid shall be determined by the
Committee in its discretion, and, in the case of an Incentive Stock
Option, shall be determined at the time of grant.
6.3 Exercise of Options. An Option shall be deemed to be exercised
when the person entitled to exercise the Option gives notice of
exercise to Wal-Mart in accordance with the Option's terms and Wal-
Mart receives full payment for the Shares as to which the Option is
exercised.
6.4 Termination of Employment. If an Optionee's Continuous Status as
an Associate is terminated, the Optionee may, subject to Wal-Mart's
right to terminate the Associate for Cause, exercise Options vested as
of the termination date to the extent set out in Optionee's Option
Notification. Incentive Stock Options may be exercised only within 60
days (or other period of time determined by the Committee at the time
of grant of the Option and not exceeding 3 months) after the date of
the termination (but in no event later than the expiration date of the
term of that Option as set forth in the Option Notification), and only
to the extent that Optionee was entitled to exercise the Incentive
Stock Option at the date of that termination. To the extent the
Optionee is not entitled to or does not exercise an Option at the date
of that termination or within the time specified herein or in the
Option Notification, the Option shall terminate. During a period for
which the Optionee is subject to administrative suspension from
employment, the Optionee's right to exercise Options will be
suspended.
6.5 Disability of Optionee. Notwithstanding the provisions of the
immediately preceding paragraph, in the case of an Optionee's
Incentive Stock Option, if the Optionee's Continuous Status as an
Associate is terminated as a result of his or her total and permanent
disability (as defined in Code Section 22(e)(3)), Optionee may, but
only within 12 months from the date of that termination (but in no
event later than the expiration date of the term of that Option as set
forth in the Option Notification), exercise an Incentive Stock Option
to the extent otherwise entitled to exercise it at the date of that
termination. To the extent the Optionee is not entitled to exercise
an Incentive Stock Option at the date of termination, or if Optionee
does not exercise that Incentive Stock Option to the extent so
entitled within the time specified herein, the Incentive Stock Option
shall terminate.
6.6 Reload Options. If an Optionee exercises an Option (the
"Original Option") while the Optionee is an Associate or a Non-
Associate Director by paying all or a portion of the exercise price of
the Shares subject to the Original Option by tendering to Wal-Mart
Shares owned by that person, an Option to purchase the number of
Shares used for this purpose by the Associate or the Non Associate
Director, as the case may be (the "Reload Option") may, at the
Committee's discretion, be granted to the Associate, as a part of the
Original Option, as evidenced in the Optionee's Option Notification.
The Reload Option may be exercised at any time during the term of the
Original Option, under the terms and conditions, and subject to any
limitations as may be placed on that exercisability in the
Notification.
</PAGE> 15
<PAGE>
6.7 Non-transferability of Options. An Option may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any
manner except by testamentary devise or by the laws of descent or
distribution or in those circumstances expressly permitted by the
Committee.
RESTRICTED STOCK
7.1 Grant of Restricted Stock Awards. Wal-Mart may make Restricted
Stock Awards to those Associates or Non-Associate Directors the
Committee may determine in its sole discretion. Restricted Stock
Awards may be made with respect to up to an aggregate of 16,000,000
Subject Shares. Each Restricted Stock Award shall have those terms
and conditions that are expressly set forth in, or are required by,
the Plan and any other terms and conditions as the Committee making
the Restricted Stock Award may determine in its discretion.
7.2 Dividend Receipt; Voting. While any Restriction applies to any
Recipient's Restricted Stock, (i) the Recipient shall receive the
dividends paid on the Restricted Stock and shall not be required to
return those dividends to Wal-Mart in the event of the forfeiture of
the Restricted Stock, (ii) the Recipient shall receive the proceeds of
the Restricted Stock in any stock split, reverse stock split,
recapitalization, or other change in the capital structure of Wal-
Mart, which proceeds shall automatically and without need for any
other action become Restricted Stock and be subject to all
Restrictions then existing as to the Recipient's Restricted Stock and
(iii) the Recipient shall be entitled to vote the Restricted Stock
during the Restriction period.
7.3 Issuance of Restricted Stock. The Restricted Stock will be
issued to each Recipient subject to the understanding that while any
Restriction applies to the Restricted Stock, the Recipient shall not
have the right to sell, transfer, assign, convey, pledge, hypothecate,
grant any security interest in or mortgage on, or otherwise dispose of
or encumber any shares of Restricted Stock or any interest therein.
As a result of the retention of rights in the Restricted Stock by Wal-
Mart, except as required by any law, neither any shares of the
Restricted Stock nor any interest therein shall be subject in any
manner to any forced or involuntary sale, transfer, conveyance,
pledge, hypothecation, encumbrance, or other disposition or to any
charge, liability, debt, or obligation of the Recipient, whether as
the direct or indirect result of any action of the Recipient 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 void.
7.4 Forfeiture. Unless expressly provided for in the Restricted
Stock Award made to a Recipient, any Restricted Stock held by the
Recipient at the time the Recipient ceases to be an Associate for any
reason shall be forfeited by the Recipient to Wal-Mart and
automatically re-conveyed to Wal-Mart.
7.5 Withholding. The Committee may withhold any amounts or Shares
necessary to collect any withholding taxes with respect to any
Restricted Stock Award or upon the fulfillment of the Restriction in
that Restricted Stock Award.
7.6 Compliance with Law. The making of Restricted Stock Awards and
issuance of any Restricted Stock is subject to compliance by Wal-Mart
with all applicable laws. Wal-Mart need not issue or transfer
Restricted Stock pursuant to the Plan unless Wal-Mart's legal counsel
has approved all legal matters in connection with the issuance and
delivery of the Restricted Stock.
7.7 Evidence of Share Ownership. The Restricted Stock will be book-
entry shares only unless the Committee decides to issue certificates
to evidence shares of the Restricted Stock. Any stock certificate(s)
representing the Restricted Stock issued to a Recipient that is so
issued shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO THE WAL-MART STORES, INC. STOCK INCENTIVE PLAN OF 1998 (THE "PLAN")
AND ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON THEIR TRANSFER AND TO
FORFEITURE TO WAL-MART STORES, INC. IF CERTAIN CONDITIONS ARE NOT MET.
THOSE RESTRICTIONS AND CONDITIONS ARE SET FORTH IN THE PLAN AND IN THE
RESTRICTED STOCK AWARD PURSUANT TO WHICH THOSE SHARES WERE ISSUED TO
THE REGISTERED HOLDER THEREOF.
Wal-Mart will place stop-transfer instructions with respect to all
Restricted Stock on its stock transfer records.
7.8 Deferral of Restricted Stock. In the discretion of the
Committee, any Recipient of Restricted Stock who is eligible to
participate in the Wal-Mart Officer Deferred Compensation Plan may
defer his or her Restricted Stock by electing to: (1) assign some or
all of the Restricted Stock to Wal-Mart and to have an amount equal to
the Fair Market Value of the Restricted Stock assigned on the date of
the assignment credited to the benefit of the Recipient and deferred
pursuant to and in accordance with the terms of the Wal-Mart Officer
Deferred Compensation Plan, provided that any amounts deferred under this
</PAGE> 16
<PAGE>
provision and that plan shall not be considered in determining
any incentive payments to be made to the Recipient under Section 4.2
of the Wal-Mart Officer Deferred Compensation Plan; or (2) transfer
some or all of the Restricted Stock to Wal-Mart in trust for the
benefit of the Recipient under terms that will permit the deferral of
recognition of gain or income by the Recipient for federal income tax
purposes in connection with the receipt of the Restricted Stock. A
Recipient must make the election by no later than April 1 of the year
prior to the year in which the conditions in each of the Restrictions
relating to the release of that Restricted Stock from those
Restrictions would be met. Each election must be made by the
Recipient filing an election form with Wal-Mart. Once an election is
made, the Recipient may not revoke or change that election.
If the Shares are the subject of a stock dividend, stock split, or a
reverse stock split, the products of such action with respect to the
Restricted Stock held for a Recipient in escrow shall be held in
escrow on the same terms as the Restricted Stock. Wal-Mart will
credit to the Recipient's account on the date any dividend is paid on
Shares the amount of the dividend paid on the Restricted Stock held in
escrow on that date. The dividends credited to the account shall bear
interest at a rate per annum equal to the rate of interest paid on the
amounts of compensation deferred under the Wal-Mart Officer Deferred
Compensation Plan.
Shares of Restricted Stock held by Wal-Mart pursuant to the terms of
this deferral provision, along with the cash amount credited to the
account of the Recipient in respect of dividends, shall be paid out
to: (1) the Recipient only upon the termination of the Recipient's
Continuous Status as an Associate or, in the case of a Non-Associate
Director, the Recipient ceasing to be a director of Wal-Mart or upon
any demonstration that the Recipient is the subject of any hardship
pursuant to rules the Committee may establish employment; or (2) the
Recipient's named beneficiaries upon the death of the Recipient.
STOCK APPRECIATION RIGHTS AND
STOCK VALUE EQUIVALENT AWARDS
8.1 Grant. Wal-Mart may grant Stock Appreciation Rights and Stock
Value Equivalent Awards to Associates or Non-Associate Directors on
any terms and conditions the Committee deems desirable. A Recipient
granted a Stock Appreciation Right will be entitled to receive on the
date on which the Recipient properly elects to receive a payment in
respect of his or her Stock Appreciation Rights an amount equal to (i)
the excess of the Fair Market Value of a Share on that date over the
Fair Market Value of a Share on the date of grant of the Recipient's
Stock Appreciation Right, (ii) a predetermined amount that is less
than that excess or (iii) any other amount as may be set by the
Committee, multiplied by the number of Share equivalents as to which
the Recipient elects to receive the payment. A Recipient granted a
Stock Value Equivalent Award will be entitled to receive on the date
on which the Recipient properly elects to receive a payment in respect
of his or her Stock Value Equivalent Award an amount equal to the Fair
Market Value on that date multiplied by the number of Share
equivalents as to which the Recipient elects to receive the payment.
8.2 Award Vesting. The Committee shall establish the conditions
pursuant to which, and the period over which, the rights of the
Recipient in Stock Appreciation Rights or a Stock Value Equivalent
Award will fully or partially vest and the Recipient will be entitled
to elect to receive any payment under his or her Plan Award.
8.3 Election to Receive Payments. A Recipient may elect to receive a
payment to which the Recipient is entitled under the Plan Award by
giving notice of such election to the Committee in accordance with the
rules established by the Committee.
8.4 Payments to Recipients. Subject to the terms and conditions of
the Plan Award granting the Stock Appreciation Right or the Stock
Value Equivalent Award, a payment to a Recipient with respect to Stock
Appreciation Rights or a Stock Value Equivalent Award may be made (i)
in cash or by check, (ii) in Shares having an aggregate Fair Market
Value on the date on which the Recipient elects to receive the payment
equal to the amount of the payment to be made under the Plan Award or
(iii) any combination of cash and Shares, as the Committee shall
determine in its sole discretion. The Committee may elect to make
this determination either at the time the Plan Award is granted, or
with respect to payments contemplated in clauses (i) and (ii) above,
at the time the Recipient makes his or her election to receive a
payment with respect to the Plan Award. The Committee shall not make
any payment in Shares if such payment would result in any adverse tax
or other legal effect as to this Plan or Wal-Mart.
MISCELLANEOUS
9.1 Issuance of Stock Certificates; Book-Entry. If a Recipient has
the right to the issuance of any Shares pursuant to any Plan Award,
Wal-Mart shall issue or cause to be issued a stock certificate or a
book-entry crediting shares to the Recipient's account promptly upon
the exercise of the Plan Award or the right arising under the Plan
Award.
9.2 Section 162(m) Matters. The Compensation and Nominating Committee
of the Board may grant Plan Awards that provide for the rights
thereunder to accrue based on performance-based criteria and that
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is intended to qualify for the performance-based exception under Code
Section 162(m)(4)(C). In granting any Performance Based Award, the
Compensation Committee shall comply fully with the regulations
promulgated with respect to Code Section 162(m); provided, however,
that no Recipient who is a "covered employee" as defined in Code
Section 162(m)(3) shall receive grants of Plan Awards with respect to
more than 1,600,000 Shares and Share equivalents in any one fiscal
year of Wal-Mart, subject to adjustment as provided in the paragraph
captioned "Adjustments upon Changes in Capitalization or Mergers"
below. Nothing in the Plan shall be construed to prevent the issuance
of Plan Awards to any "covered employees" that are not Performance
Based Awards if the Committee so elects.
9.3 Termination of Employment. Except as otherwise expressly set
forth in the Plan, the Committee shall determine the effect of the
termination of a Recipient's employment, a Recipient's disability or
death or a Non-Associate Director's ceasing to be a director of Wal-
Mart during any applicable vesting period contained in a Plan Award
made to the Recipient. During a period for which the Recipient is
subject to administrative suspension, a Recipient's right to exercise
any rights under any Plan Award or the vesting of any rights under any
Plan Award shall be suspended.
9.4 Termination for Cause. Notwithstanding anything to the contrary
contained in the Plan, any Recipient whose Continuous Status as an
Associate or Non-Associate Director is terminated by Wal-Mart for
Cause shall forfeit all Plan Awards and Restricted Stock granted under
the Plan, whether or not vested or otherwise exercisable.
9.5 Death of Recipient. If a Recipient dies, the Recipient's Award
may be exercised, in accordance with its terms or as allowed by law,
by the Recipient's estate or by a person who acquired the right to
exercise the Award by bequest or inheritance, but only to the extent
the Recipient was otherwise entitled to exercise the Award at the date
of the Recipient's death and only if exercised within 12 months after
the Recipient's death. To the extent the Award was unvested at the
date of death, the Award shall terminate.
9.6 Limitations on Liability and Award Obligations. Receiving a Plan
Award or being the owner of any Option, Restricted Stock Award or
Stock Appreciation Right shall not:
(a) give a Recipient any rights except as expressly set forth in the
Plan or in the Plan Award and except as a stockholder of Wal-Mart as
set forth herein as to the Restricted Stock only;
(b) as to Shares issuable on the exercise of Options or Stock
Appreciation Rights payable in Shares, until the issuance (as
evidenced by the appropriate entry on the books of Wal-Mart of a duly
authorized transfer agent of Wal-Mart) of the Shares issued upon
exercise of an Option or Stock Appreciation Right, give the Recipient
the right to vote, or receive dividends on, the Shares to be issued
upon exercise or any other rights as a stockholder with respect to the
Optioned Stock or those Shares, notwithstanding the exercise of the
Option or Stock Appreciation Right;
(c) be considered a contract of employment or give the Recipient any
right to continued employment, or to hold any position, with Wal-Mart
or any Affiliate;
(d) create any fiduciary or other obligation of Wal-Mart or any
Affiliate to take any action or provide to the Recipient any
assistance or dedicate or permit the use of any assets of Wal-Mart or
any Affiliate that would permit the Recipient to be able to attain any
performance criteria stated in the Recipient's Plan Award;
(e) create any trust, fiduciary or other duty or obligation of Wal-
Mart or any Affiliate to engage in any particular business, continue
to engage in any particular business, engage in any particular
business practices or sell any particular product or products; or
(f) create any obligation of Wal-Mart or any Affiliate that shall be
greater than the obligations of Wal-Mart or that Affiliate to any
general unsecured creditor of Wal-Mart or the Affiliate.
If Wal-Mart or an Affiliate terminates a Recipient's employment with
Wal-Mart or the Affiliate, the potential value of any Plan Award or
Restricted Stock that must be returned to Wal-Mart will not be an
element of any damages that the Recipient may have for any termination
of employment or other relationship in violation of any contractual or
other rights the Recipient may have.
9.7 No Liability of Committee Members. Wal-Mart shall indemnify and
hold harmless each member of the Committee and each other officer,
director and Associate of Wal-Mart or any Affiliate that has any duty
or power relating to the administration of the Plan against any
liability, obligation, cost or expense incurred by that person arising
out of any act or omission to act in connection with the Plan or any
Plan Award if he or she acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interest of Wal-Mart.
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9.8 Adjustments upon Changes in Capitalization or Merger. Subject to
any required action by the Wal-Mart stockholders, the number of Shares
covered by each Plan Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Plan Awards
have yet been granted or which have been returned to the Plan upon
cancellation or expiration of a Plan Award, as well as the price per
Share covered by any outstanding Plan Award that includes in its terms
a price per Share, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of the Common Stock of Wal-
Mart resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock of Wal-
Mart, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by Wal-Mart. That
adjustment shall be made by the Committee, whose determination shall
be final, binding and conclusive as to every person interested under
this plan. Except as expressly provided herein, no issuance by Wal-
Mart of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of
Shares subject to a Plan Award.
9.9 Notification. Options, Restricted Stock Awards and Stock
Appreciation Rights shall be evidenced by Notifications or other award
documents in the form approved by the Committee.
9.10 Amendment and Termination of the Plan. The Board may amend or
terminate the Plan at any time without the approval of the Recipients
or any other person, except to the extent any action of that type is
required to be approved by the stockholders of Wal-Mart in connection
with any outstanding Performance Based Awards.
9.11 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Arkansas, except that any
matters relating to the internal governance of Wal-Mart shall be
governed by the Delaware Law.
9.12 Superseding Existing Plans. Effective Date and Transition. The
Plan supersedes the Wal-Mart Stores, Inc. Stock Option Plan of 1994,
as amended, and the Wal-Mart Stores, Inc. 1997 Restricted Stock Plan.
This Plan was approved by the Board on, and shall be effective as of,
March 5, 1998, subject only to the approval of the Plan by the holders
of a majority of the outstanding Shares at Wal-Mart's 1998 annual
stockholders' meeting.
ATTACHMENT B
WAL-MART STORES, INC.
MANAGEMENT INCENTIVE PLAN OF 1998
GENERAL
1.1. Purpose. The purpose of the Wal-Mart Stores, Inc. Management
Incentive Plan of 1998 ("MIP") is to advance the interests of the
shareholders of Wal-Mart Stores, Inc. by providing performance-based
incentives to eligible management associates.
1.2. Effective Date. The MIP shall be effective for the Fiscal Year
beginning February 1, 1998, subject to the approval of the Company's
shareholders, and shall remain effective for each subsequent Fiscal
Year until terminated by the Board.
1.3. Nature of MIP. With respect to individuals who are Covered
Employees, the MIP is intended to provide "qualified performance-based
compensation," as such term is defined in Treas. Reg. 1.162-27(e), to
the extent deemed appropriate by the Committee at the time Performance
Goals are established for a Fiscal Year. Nothing herein shall be
construed as preventing the MIP from providing both "qualified
performance-based compensation" and nonqualified compensation for the
same Fiscal Year in the manner permitted under Code Section 162(m).
The MIP shall be administered and construed in a manner consistent
with Code Section 162(m) and regulations thereunder for any Fiscal
Year in which the MIP is intended to provide "qualified performance-
based compensation."
1.4. MIP Not Funded. Incentive Plan Awards shall be made solely from
the general assets of Wal-Mart Stores, Inc. or a Related Affiliate, to
the extent such payments or benefits are attributable to services with
a Related Affiliate participating in the MIP. To the extent any
person acquires a right to receive payments from Wal-Mart Stores, Inc.
or a Related Affiliate under the MIP, the right is no greater than the
right of any other unsecured general creditor.
DEFINITIONS
2.1. "Board" means the Board of Directors of Wal-Mart Stores, Inc.
2.2. "Committee" means the Compensation and Nominating Committee of
the Board, or such other committee designated by the Board as the
"Committee" under the MIP. The Board may appoint different Committees
with respect to Covered Employees and non-Covered Employees. With
respect to Covered Employees, any such Committee
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<PAGE>
must consist of two or more persons each of whom are "outside directors"
within the meaning of Code Section 162(m).
2.3. "Company" means Wal-Mart Stores, Inc. and each Related Affiliate
designated by the Committee as a participating employer in the MIP.
2.4. "Covered Employee" has the meaning of such term under Code
Section 162(m)(3).
2.5. "Incentive Percentage" means the pre-established award formula
established by the Committee for each Fiscal Year which specifies a
percentage of a Participant's rate of salary in effect for the last
full payroll period of the Fiscal Year to be paid as an Incentive Plan
Award. The Committee may establish different Incentive Percentages
for individual Participants or different classes of Participants,
and/or the achievement levels of the Performance Goals. Solely with
respect to Covered Employees, for any Fiscal Year for which the MIP is
intended to provide "qualified performance-based compensation," the
Incentive Percentages applicable to the Covered Employees must be
established by the Committee no later than 90 days after the beginning
of the Fiscal Year for which the Incentive Plan Award pertains.
2.6. "Incentive Plan Award" means the annual incentive compensation
award granted under the MIP which is contingent and based upon the
attainment of the Performance Goals with respect to a Fiscal Year.
2.7. "Participant" means an associate of the Company participating in
the Plan as provided in the "Participation" section of the MIP.
2.8. "Performance Goals" means the pre-established objective
performance goals established by the Committee for each Fiscal Year.
Solely with respect to Covered Employees, for any Fiscal Year for
which the MIP is intended to provide "qualified performance-based
compensation," Performance Goals applicable to the Covered Employees
must be established by the Committee no later than 90 days after the
beginning of the Fiscal Year to which the Performance Goals pertain.
The Performance Goals may be based upon the performance of the Company
or any Related Company, or division thereof, using one or more of the
following operating performance measures selected by the Committee:
(a) earnings; (b) revenue; (c) operating or net cash flows; (d)
financial return ratios; (e) total shareholder return; (f) market
share; or (g) pre-tax profits. Separate Performance Goals may be
established by the Committee for the Company or a Related Affiliate,
or division thereof. The Performance Goals shall include a threshold
Performance Goal under which no Incentive Plan Awards shall be paid if
the threshold goal is not achieved. With respect to Participants who
are not Covered Employees, the Committee may establish such other
subjective or objective goals, including individual Performance Goals,
which it deems appropriate. The preceding sentence shall also apply
to Covered Employees with respect to any Incentive Plan Award not
intended at time of grant to be "qualified performance-based
compensation." Performance Goals may be set at a specific level, or
may be expressed as a relative percentage to the comparable measure at
comparison companies or a defined index.
2.9. "Fiscal Year" means the 12-month period beginning on each
February 1 and ending on the following January 31.
2.10. "Related Affiliate" means a business or entity that is,
directly or indirectly, controlled by Wal-Mart Stores, Inc.
PARTICIPATION
3.1. Eligibility. Associates eligible to participate in the MIP shall
consist of officers and other management associates of the Company
whom the Committee determines have the potential to contribute
significantly to the success of the Company and its Related
Affiliates. For each Fiscal Year the Committee shall determine which
of such officers and other management associates shall participate in
the MIP. For any Fiscal Year for which "qualified performance-based
compensation" is to be provided, the Committee shall designate the
individual or classes of Covered Employees for such compensation no
later than the 90th day of such Fiscal Year.
Unless determined otherwise by the Committee, Company associates
shall not be eligible to participate in the MIP for any period they
are participating in any other incentive program maintained by the
Company or any other Related Affiliate. At any time, including during
a Fiscal Year, the Committee may add additional classes or delete
classes of associates for participation in the Plan as it deems
appropriate, except that no such change may be made to the extent it
would result in a loss of deductibility under Code Section 162(m) for
any "qualified performance-based compensation."
INCENTIVE PLAN AWARDS
4.1. Determination of Incentive Plan Awards.
(a) The Committee shall, promptly after the date on which the
necessary financial, individual or other
</PAGE> 20
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information for a particular Fiscal Year becomes available, certify:
(i) the degree to which each of the Performance Goals have been
attained; and (ii) with respect to each qualifying Participant
who is a Covered Employee, the amount of the Incentive Plan Award,
if any, payable to such Participant. The Committee or its designee
shall likewise certify the amount of the Incentive Plan Award,
if any, payable with respect to a qualifying Participant who is
not a Covered Employee. Any such determination by the Committee
or its designee shall be final and conclusive on all parties,
but shall be based on such objective information or financial data
as is relevant to the Performance Goal. Performance Goals shall,
to the extent applicable, be based upon generally accepted accounting
principles. The Committee may rely conclusively on any such
information provided by the Company's certified public accountant.
(b) Unless the Committee provides otherwise when establishing the
Performance Goal, if the Company fails to achieve its threshold
Performance Goal, no Incentive Plan Award shall be paid even if any
applicable threshold division Performance Goal has been achieved.
Similarly, unless provided otherwise by the Committee when
establishing the Performance Goal, if the Company fails to achieve its
threshold Performance Goal, no Incentive Plan Award shall be paid even
if any individual Performance Goal has been satisfied. Participants
whose Incentive Plan Award is based the attainment of Company
Performance Goals and division/individual Performance Goals shall earn
the Company portion of the Incentive Plan Award if the Company attains
its Performance Goals, even if the division/individual Performance
Goals are not achieved.
4.2. Eligibility and Amount of Incentive Plan Award.
(a) To be eligible for payment of any Incentive Plan Award, the
Participant must: (i) be employed by the Company on the last day of
the Fiscal Year to which the award pertains, unless termination is due
to the Participant's death; (ii) have performed the Participant's
duties to the satisfaction of the Committee; (iii) have not engaged in
any act deemed by the Committee to be inimical to the best interest of
the Company or a Related Affiliate; and (iv) otherwise complied with
Company policies at all times prior to the date the Incentive Plan
Award is actually paid. No Incentive Plan Award shall be paid to any
Participant who does not satisfy each of the above.
(b) The Incentive Plan Award shall be determined by multiplying the
Incentive Percentage applicable to the Participant by the
Participant's rate of base salary in effect for the last full payroll
period of the Fiscal Year to which the Incentive Plan Award pertains.
In no event, however, will an Incentive Plan Award for a Covered
Employee exceed two-tenths of one percent (0.20%) of the Company's net
income for the Fiscal Year. In the event of a Participant's death,
the Incentive Plan Award shall be prorated based upon the number of
full payroll periods worked in a MIP position for such Fiscal Year.
The Committee shall have the discretion and authority to make
adjustments to any Incentive Plan Award in circumstances where: (i) a
Participant leaves the Company and is rehired as a Participant; (ii) a
Participant is hired, promoted or transferred into a position eligible
for MIP participation; (iii) a Participant transfers between eligible
MIP positions with different Incentive Percentages or Performance
Goals; (iv) a Participant transfers to a position not eligible to
participate in the MIP; (v) a Participant becomes eligible for an
incentive from another incentive plan maintained by the Company or
Related Affiliate; (vi) a Participant is on a leave of absence; and
(vii) such similar circumstances deemed appropriate by the Committee,
consistent with the purpose and terms of the MIP.
4.3. Payment of Award. Incentive Plan Awards will be paid in cash by
April 15 following the applicable Fiscal Year to which the award
pertains. If, however, the Participant is on administrative
suspension at the time payment would otherwise be made, payment shall
be delayed until the matter is resolved by the Company. No payment in
that event shall be made if the Committee determines the qualification
requirements of Section 4.2.(a) have not been satisfied by the
Participant.
ADMINISTRATION
5.1. Administration. The MIP shall be administered by the Committee.
Subject to the provisions of the MIP, the Committee shall have full
discretionary authority to administer and interpret the MIP, to
exercise all powers either specifically granted to it under the MIP or
as are necessary or advisable in the administration of the MIP, to
prescribe, amend and rescind rules and regulations relating to the MIP,
and to make all other determinations necessary or advisable for the
administration of the MIP, all of which shall be binding on all persons,
including the Company, the Participants (or any person claiming
</PAGE> 21
<PAGE>
any rights under the MIP from or through any Participant),
and any stockholder of the Company. A majority of the Committee shall
constitute a quorum, and the Committee shall act pursuant to a
majority vote or by unanimous written consent. No member of the Board
or the Committee shall be liable for any action taken or determination
made in good faith with respect to the MIP or any Incentive Plan Award
paid hereunder.
5.2. Delegation. The Committee may delegate its responsibilities for
administering the MIP to one or more persons as the Committee deems
necessary. However, the Committee may not delegate its
responsibilities under the Plan relating to any Covered Employee where
such delegation is prohibited under Code Section 162(m) pertaining to
"qualified performance-based compensation."
MISCELLANEOUS
6.1. Amendment and Termination. The Board reserves the right to
alter, amend, suspend or terminate the MIP in whole or in part at any
time. With respect to Covered Employees, any such amendment shall
comply with Code Section 162(m).
6.2. No Guarantee. While a discretionary Incentive Plan Award may
have been paid in the past, whether such payments will be made in the
future will depend upon various factors, such as the Company's
financial condition and performance. There is no guarantee that the
Company will pay any such incentive. The Committee may, in its sole
discretion, reduce, eliminate or increase, any Incentive Plan Award,
except that the amount of any Incentive Plan Award intended to be
"qualified performance-based compensation" may not be increased above
the amount established for the Performance Goal and Incentive
Percentage. The Company may withhold an Incentive Plan Award, or
portions thereof, for any reason including gross misconduct (e.g.,
theft, dishonesty/compromised integrity, fraud, harassment, etc.) or
any actions deemed to be inimical to the best interests of the Company
by the Committee.
6.3. Tax Withholding. The Company shall have the right to deduct from
all payments made under the MIP any federal, state or local taxes
required by law to be withheld with respect to such payments.
6.4. Governing Law. The Plan and all rights to an Incentive Plan
Award hereunder shall be construed in accordance with and 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
corporate laws of the State of Delaware.
6.5. Assignment or Pledge. No rights under the MIP, contingent or
otherwise, shall be assignable or subject to any encumbrance, pledge
or charge of any nature.
6.6. Employment. Neither the adoption of the MIP nor its operation
shall in any way affect the rights and power of the Company or any
Related Affiliate to dismiss or discharge any Participants.
6.7. Death. In the event of a Participant's death prior to the
payment of any Incentive Plan Award to which the Participant is
otherwise entitled, payment shall be made to the Participant's then-
effective beneficiary or beneficiaries under the Company-paid group
term life arrangement.
6.8. Rights to Payments. No absolute right to any Incentive Plan
Award shall be considered as having accrued to any Participant prior
to the close of the Fiscal Year with respect to which the award is
made. No Participant shall have any enforceable right to receive any
Incentive Plan Award made with respect to a Fiscal Year or to retain
any payment made with respect thereto if for any reason the
requirements of Section 4.2(a) are not satisfied.
6.9. Prior Plans. The MIP supersedes and replaces the Wal-Mart Stores,
Inc. Home Office Management Incentive Plans effective February 1, 1998.
</PAGE> 22
<PAGE>
(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 5, 1998, 8:30 A.M. CDST
(Pre-meeting activities at 7:30 A.M.)
Casual dress is 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>
<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 5, 1998
I have received the Notice of Annual Meeting of Shareholders to be
held on June 5, 1998, 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 5, 1998.
If I participate in the Wal-Mart Stores, Inc. Profit Sharing Plan or if
I have a portion of my interest in the 401(k) Plan invested in Wal-Mart
stock, I also direct the Trustee(s) of the respective Trust(s) to vote
my stock which is attributable to my interest in each of the Plan(s) at
the Meeting in the manner shown on this form as to the following matters
and in the discretion of the Trustee(s) 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 5, 1998:
1. Jeronimo Arango, 2. John A. Cooper, Jr., 3. Stephen Friedman, 4. Stanley
C. Gault, 5. David D. Glass, 6. Roland A. Hernandez, 7. Dr. Frederick S.
Humphries, 8. E. Stanley Kroenke, 9. Elizabeth A. Sanders, 10. Jack C.
Shewmaker, 11. Donald G. Soderquist, 12. Dr. Paula Stern, 13. Jose H.
Villarreal, 14. John T. Walton, 15. 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 5, 1998
8:30 a.m. (CDST)
(Pre-meeting activities at 7:30 a.m.)
Bud Walton Arena
University of Arkansas
Fayetteville, Arkansas
</PAGE>
<PAGE>
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, 2, and 3 and AGAINST item 4.
The Board of Directors recommends a vote FOR:
FOR WITHHELD
1. Election of Directors (see reverse)
FOR, except vote withheld from the following nominee(s):
_______________________________________________________
FOR WITHHELD ABSTAIN
2. To approve the Wal-Mart Stores, Inc.
Stock Incentive Plan of 1998
3. To approve the Wal-Mart Stores, Inc.
Management Incentive Plan of 1998
The Board of Directors recommends a vote AGAINST:
FOR WITHHELD ABSTAIN
4. To approve a shareholder resolution
regarding environmental principles
Change of Address
(see reverse)
Signature _________________________ Date __________
NOTE: Please sign exactly as your name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
FOLD AND DETACH HERE
Control Number
Wal-Mart Stores, Inc. encourages you to take advantage of a convenient
way to vote your shares. If you hold your shares in your own name rather
than through a broker, you can vote your shares electronically by telephone.
This eliminates the need to return the proxy card.
To vote your shares electronically you must use the control number
printed above, just below the perforation. The series of numbers that
appear above must be used to access the system.
To vote over the telephone: On a touch-tone telephone call 1-800-OK2-VOTE
(1-800-652-8683) 24 hours a day 7 days a week.
Your electronic vote authorizes the named proxies in the same manner as
if you marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for
you to mail back your proxy card.
Stock Up at SAM'S Club
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 merchandise
for your business or home, all at low, warehouse prices.
If you've already joined SAM'S Club, you know what a great value membership
represents and you may want to pass this Trial Membership along to a friend
or colleague.
Annual membership fee of $35* payable upon joining. Fee includes one
secondary membership. *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: ___176980225_______________
LOGO here) Qualifying Code: ___1027_____________
Membeship Warehouse 5% upcharge applies when using this
FOR BUSINESS OR HOME card (not applicable in Elmsford, NY).
Cash, Discover or Novus Cards only
(no checks). You may apply for
membership while visiting any SAM'S Club.
</PAGE>
