WAL-MART STORES, INC.
OFFICER DEFERRED COMPENSATION PLAN
Effective Date: February 1, 1996
TABLE OF CONTENTS
Page
ARTICLE I
GENERAL................................................ 1
1.1 Purpose...................................... 1
1.2 Effective Date -- Applicability to Prior
Deferred Compensation Agreements............. 1
1.3 Nature of Plan............................... 1
ARTICLE II
DEFINITIONS............................................ 2
2.1 Definitions.................................. 2
ARTICLE III
DEFERRED COMPENSATION AND BONUSES -- ESTABLISHMENT OF
ACCOUNTS............................................... 5
3.1 Deferred Compensation........................ 5
3.2 Deferred Bonuses............................. 5
3.3 Establishment of Accounts.................... 6
3.4 Nature of Accounts........................... 6
3.5 Annual Valuation of Accounts................. 6
ARTICLE IV
ADDITIONS TO ACCOUNTS -- CREDITED EARNINGS AND INCENTIVE
PAYMENTS............................................... 7
4.1 Credited Annual Earnings..................... 7
4.2 Incentive Payments........................... 7
ARTICLE V
PAYMENT OF PLAN BENEFITS............................... 11
5.1 Distribution Restrictions.................... 11
5.2 Termination Benefits......................... 11
5.3 Retirement, Early Retirement, and Disability
Benefits..................................... 12
5.4 Death Benefits............................... 13
5.5 Designation of Beneficiary................... 15
5.6 Form of Distribution......................... 15
5.7 Reductions Arising from a Participant's Gross
Misconduct................................... 16
5.8 Distributions for Unforeseeable Emergencies.. 16
ARTICLE VI
ADMINISTRATION......................................... 18
6.1 General...................................... 18
ARTICLE VII
CLAIMS PROCEDURE....................................... 19
7.1 General...................................... 19
7.2 Appeals Procedure............................ 19
ARTICLE VIII
MISCELLANEOUS PROVISIONS............................... 20
8.1 Amendment, Suspension or Termination of Plan. 20
8.2 Non-Alienability............................. 20
8.3 No Employment Rights......................... 20
8.4 No Right to Bonus............................ 20
8.5 Withholding and Employment Taxes............. 20
8.6 Income and Excise Taxes...................... 21
8.7 Successors and Assigns....................... 21
8.8 Governing Law................................ 21
WAL-MART STORES, INC.
OFFICER DEFERRED COMPENSATION PLAN
ARTICLE I
GENERAL
1.1 Purpose
The purpose of the Wal-Mart Stores, Inc. Officer Deferred
Compensation Plan ("Plan") is to: (a) attract and retain the
valuable services of certain officers; (b) recognize, reward, and
encourage contributions by such officers to the success of Wal-
Mart Stores, Inc. ("Wal-Mart"); and (c) enable such officers to
defer certain compensation and bonuses and to be credited with
earnings and Incentive Payments with respect to such amounts.
1.2 Effective Date -- Applicability to Prior Deferred
Compensation Agreements.
This Plan is effective February 1, 1996 with respect to
compensation and bonuses deferred (and credited earnings thereon)
under the Plan on or after February 1, 1996.
In addition, prior to February 1, 1995, certain Eligible
Officers entered into deferred compensation agreements ("Prior
Agreements") with Wal-Mart containing terms similar to those
contained in this Plan. Except as expressly provided in Sections
5.5 and 5.6 below, effective February 1, 1996 the Prior
Agreements are amended and restated in the form of this Plan and
thereafter the terms of this Plan will govern all benefits
previously governed by the Prior Agreements.
1.3 Nature of Plan.
The Plan is intended to be (and will be administered as) an
unfunded employee pension plan benefiting a select group of
management or highly compensated employees under the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA").
It is intended that the Plan be "unfunded" for federal tax
purposes and for purposes of Title I of ERISA. Any and all
payments to a Participant under the Plan will be made solely from
Wal-Mart's general assets. A Participant's interests under the
Plan do not represent or create a claim against specific assets
of Wal-Mart or any Related Affiliate. Nothing herein shall be
deemed to create a trust of any kind or create any fiduciary
relationship between Wal-Mart, any Related Affiliate or the
Committee, and a Participant, the Participant's beneficiary or
any other person. To the extent any person acquires a right to
receive payments from Wal-Mart under this Plan, such right is no
greater than the right of any other unsecured general creditor of
Wal-Mart.
ARTICLE II
DEFINITIONS
2.1 Definitions.
Whenever used in this Plan, the following words and phrases
have the meaning set forth below unless the context plainly
requires a different meaning:
(a) Account means the bookkeeping account established
by Wal-Mart to reflect a Participant's Deferred
Compensation, Deferred Bonuses, Incentive Payments, and
credited earnings thereon.
(b) Code means the Internal Revenue Code of 1986, as
amended from time to time.
(c) Committee means the Executive Committee of the Wal-
Mart Stores, Inc. Board of Directors.
(d) Deferred Bonuses means the amount deferred from
bonuses payable to a Participant under the Wal-Mart Stores,
Inc. Management Incentive Plan for Officers.
(e) Deferred Compensation means: (1) the compensation
deferred by a Participant under Section 3.1 below; and (2)
amounts deferred by a Participant under a Prior Agree
ment(s).
(f) Disability means a Total and Permanent Disability
as from time to time defined in the Wal-Mart Stores, Inc.
Profit Sharing Plan. A Participant must establish to the
satisfaction of the Committee that a Disability exists. A
Participant shall be treated as having a Disability only if
such illness or injury results in the Participant's
Termination of Employment.
(g) Early Retirement means a Participant's Termination
of Employment on or after the date the Participant has been
continuously employed with Wal-Mart or a Related Affiliate
twenty (20) or more years.
(h) Eligible Officer means an individual who is a
corporate officer of Wal-Mart and who holds the title of
Vice President or above, Treasurer, Controller, or an
officer title of similar rank as determined by the
Committee. In addition, Eligible Officer shall include a
divisional officer of Wal-Mart and who holds the title of
Vice President or above or an officer title of similar rank
as determined by the Committee. Notwithstanding the
preceding sentences, the term "Eligible Officer" shall not
include an individual who entered into a Prior Agreement
with Wal-Mart unless such individual consents to
participation in the Plan on the terms and conditions herein
set forth.
(i) Fiscal Year means the twelve (12)-month period
commencing on February 1 and ending on January 31.
(j) A Participant is deemed to have engaged in Gross
Misconduct if the Committee determines that the Participant
has engaged in conduct inimical to the best interests of Wal-
Mart or any Related Affiliate. Examples of conduct inimical
to the best interests of Wal-Mart or its Related Affiliates
include, without limitation, disclosure of confidential
information in violation of Wal-Mart's Statement of Ethics,
theft, the commission of a felony or a crime of moral
turpitude, gross misconduct or similar serious offenses.
(k) Incentive Payments means the amounts credited to a
Participant's Account: (1) in accordance with Section 4.2
below; and (2) a Participant's Prior Agreement(s).
(l) Participant means any Eligible Officer who defers
compensation or bonuses under the Plan. An individual
remains a Participant in the Plan until the Participant's
Plan benefits have been fully distributed.
(m) Related Affiliates means a business or entity that
is, directly or indirectly, eighty percent (80%) or more
owned by Wal-Mart.
(n) Retirement means a Participant's Termination of
Employment on or after the Participant's attainment of age
fifty-five (55).
(o) Termination of Employment means a Participant
ceasing to be actively employed by Wal-Mart and its Related
Affiliates. Termination of Employment does not include the
transfer of a Participant from the employ of Wal-Mart to a
Related Affiliate or vice versa, or a transfer between Wal-
Mart's Related Affiliates.
(p) Unforeseeable Emergency means a severe financial
hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or a
Participant's dependent (as defined in Code Section 152(a)),
the loss of the Participant's property due to casualty, or
other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant. An Unforeseeable Emergency does not exist to
the extent such hardship is or may be relieved:
(1) through reimbursement or compensation by
insurance or otherwise;
(2) by liquidation of the Participant's assets,
to the extent the liquidation of such assets would
itself not cause severe financial hardship; or
(3) by cessation of deferrals under this Plan.
The need to send a Participant's child to college or the
desire to purchase a home does not constitute an
Unforeseeable Emergency. The existence of an Unforeseeable
Emergency will be determined by the Committee, in its sole
discretion, based upon the Participant's facts and
circumstance and in accordance with restrictions imposed by
the Code or guidance thereunder.
(q) Valuation Date means the January 31 of each Fiscal
Year.
ARTICLE III
DEFERRED COMPENSATION AND BONUSES --
ESTABLISHMENT OF ACCOUNTS
3.1 Deferred Compensation.
Prior to each Fiscal Year, each Eligible Officer may elect
to defer all or a portion of the Eligible Officer's base
compensation to be paid by Wal-Mart for such Fiscal Year.
Amounts deferred (the "Deferred Compensation") will be deferred
pro ratably for each payroll period of the Fiscal Year. All
deferral elections made under this Section 3.1 must be: (a) made
on forms approved by the Committee; and (b) filed with Wal-Mart
no later than the January 31 preceding the Fiscal Year for which
the deferral election is to be effective. Once made for a Fiscal
Year, a deferral election may not be revoked, changed or
modified. Notwithstanding the preceding sentence, in the event
an Eligible Officer ceases to be employed as an Eligible Officer,
such former Eligible Officer's deferral election shall
automatically cease with respect to compensation earned on or
after the individual ceases to be an Eligible Officer. A
deferral election for one (1) Fiscal Year will not automatically
be given effect for a subsequent Fiscal Year, so that if
deferrals are desired for a subsequent Fiscal Year, a separate
election must be made by the Eligible Officer for such Fiscal
Year.
3.2 Deferred Bonuses.
Prior to each Fiscal Year, each Eligible Officer may elect
to defer all or a portion of the Eligible Officer's bonus (if
any) for such Fiscal Year under the Wal-Mart Stores, Inc.
Management Incentive Plan for Officers. All bonus deferral
elections made under this Section 3.2 must be: (a) made on forms
approved by the Committee; and (b) filed with Wal-Mart no later
than the January 31 preceding the Fiscal Year in which falls the
period of service for which such bonus (if any) is payable,
regardless of the Fiscal Year in which such bonus is paid. Once
made for a Fiscal Year, a bonus deferral election may not be
revoked, changed or modified. Notwithstanding the preceding
sentence, in the event an Eligible Officer ceases to be employed
as an Eligible Officer, such former Eligible Officer's bonus
deferral election shall automatically cease with respect to that
portion of a bonus earned on or after the date the individual
ceases to be an Eligible Officer. For this purpose, the portion
of a bonus earned on or after ceasing to be an Eligible Officer
shall be determined by multiplying the bonus by a fraction, the
numerator of which is the number of calendar days in such Fiscal
Year in which the individual ceased to be an Eligible Officer,
and the denominator of which is the total calendar days in such
Fiscal Year. A bonus deferral election for one (1) Fiscal Year
will not automatically be given effect for a subsequent Fiscal
Year, so that if deferrals are desired for a subsequent Fiscal
Year, a separate election must be made by the Eligible Officer
for such Fiscal Year.
3.3 Establishment of Accounts.
The Deferred Compensation, Deferred Bonuses, and Incentive
Payments will be credited to a bookkeeping account ("Account")
established by Wal-Mart on behalf of each Participant. The
Deferred Compensation will be credited to the Participant's
Account as of the last day of the Fiscal Year during which the
Deferred Compensation would otherwise be payable to the
Participant. The Deferred Bonus will be credited to the
Participant's Account as of the February 1 following the Fiscal
Year in which falls the period of service for which such bonus is
payable. The Incentive Payments will be credited to the
Participant's Account as of the last day of the Fiscal Year
specified in Section 4.2 or the Participant's Prior Agreement(s).
A Participant's Account, including earnings credited thereto,
will be maintained by Wal-Mart until all of the Plan
Participant's benefits have been paid in full.
3.4 Nature of Accounts.
Each Participant's Account will be used solely as a
measuring device to determine the amount to be paid a Participant
under this Plan. The Accounts do not constitute, nor will they
be treated as, property or a trust fund of any kind. All amounts
at any time attributable to a Participant's Account will be, and
remain, the sole property of Wal-Mart. A Participant's rights
hereunder are limited to the right to receive Plan benefits as
provided herein. The Plan represents an unsecured promise by Wal-
Mart to pay the benefits provided by the Plan.
3.5 Annual Valuation of Accounts.
Each Participant's Account will be valued annually as of
each Valuation Date. The value of an Account as of any
applicable Valuation Date is the sum of the Account value as of
the immediately preceding Valuation Date, the Deferred
Compensation and Incentive Payments allocated as of the
applicable Valuation Date, the Deferred Bonuses allocated as of
the February 1 following the preceding Valuation Date, and the
equivalent of interest credited to the Account under Section 4.1
as of the applicable Valuation Date, less any distributions for
Unforeseeable Emergencies since the preceding Valuation Date but
on or before the applicable Valuation Date.
ARTICLE IV
ADDITIONS TO ACCOUNTS -- CREDITED EARNINGS
AND INCENTIVE PAYMENTS
4.1 Credited Annual Earnings.
For each Fiscal Year a Participant's Account will be
credited with the equivalent of interest at the per annum rate
established for such Fiscal Year by the Compensation Committee of
the Wal-Mart Board of Directors. The per annum rate may be
increased or decreased for any Fiscal Year to reflect changes in
prevailing interest rates, as determined at the sole discretion
of the Compensation Committee. Except for a Fiscal Year in which
a Participant receives a distribution due to an Unforeseeable
Emergency, the amount to be credited to a Participant's Account
as of any Valuation Date is the sum of: (a) the applicable per
annum rate multiplied by the Participant's Account value as of
the immediately preceding Valuation Date; and (b) fifty percent
(50%) of the applicable per annum rate multiplied by the sum of
(1) the Participant's Deferred Compensation for the Fiscal Year
ending on the Valuation Date and (2) the Participant's Deferred
Bonuses allocated on the February 1 of the Fiscal Year ending on
the Valuation Date.
For a Fiscal Year in which a Participant receives a distri-
bution due to an Unforeseeable Emergency, the amount to be
credited to the Participant's Account as of the applicable
Valuation Date is the sum of: (a) an equivalent amount of pro
rata interest on the Participant's Account value as of the
preceding Valuation Date based upon the number of full calendar
months in the Fiscal Year which the Account was not reduced due
to the distribution; (b) an equivalent amount of pro rata
interest on the Account value immediately after the distribution
based upon the number of calendar months in the Fiscal Year in
which the Participant's Account was reduced; and (c) fifty
percent (50%) of the applicable per annum rate multiplied by the
sum of (1) the Participant's Deferred Compensation for the Fiscal
Year ending on the Valuation Date and (2) the Participant's
Deferred Bonuses allocated on the February 1 of the Fiscal Year
ending on the Valuation Date.
4.2 Incentive Payments.
The Incentive Payments described below will be credited to a
Participant's Account. Incentive Payments awarded and credited
to a Participant's Account under a Prior Agreement (such
Incentive Payments were previously referred to as "incentive
bonuses" under the Prior Agreements), and credited interest
thereon, will remain credited to a Participant's Account
hereunder as of January 31, 1996. Thereafter, a Participant's
entitlement to an Incentive Payment will be governed by this
Section 4.2, including any Incentive Payment which may be awarded
with respect to recognized Deferred Compensation (and credited
earnings thereon) deferred under a Prior Agreement. Incentive
Payments hereunder shall not duplicate any Incentive Payment
awarded and credited under a Prior Agreement as of January 31,
1996.
(a) The Incentive Payments provided in this Section
apply to a Participant's recognized Deferred Compensation
for a Fiscal Year and credited Plan earnings thereon. Incen-
tive Payments are separately awarded based upon a
Participant's recognized Deferred Compensation for a given
Fiscal Year and credited Plan earnings thereon.
(b) The amount of an Incentive Payment is based on the
Participant's recognized Deferred Compensation for a Fiscal
Year, plus credited Plan earnings on such sums through and
including the Incentive Payment award date. The amount by
which a Participant's Deferred Compensation for a Fiscal
Year exceeds twenty percent (20%) of the Participant's base
compensation will not be recognized in computing an
Incentive Payment. Base compensation for this purpose means
the Participant's annual base rate of compensation for such
Fiscal Year. Credited Plan earnings on such nonrecognized
Deferred Compensation are likewise not taken into account in
determining the amount of an Incentive Payment. In
addition, a Participant's Deferred Bonuses or credited Plan
earnings thereon are not taken into account in computing the
Participant's Incentive Payments.
(c) If a Participant remains continuously employed
with Wal-Mart or its Related Affiliates for a period of ten
(10) consecutive full Fiscal Years, beginning with the
February 1 of the first Fiscal Year in which the Participant
had a Deferred Compensation election in effect under this
Plan or a Prior Agreement, and ending with the January 31 of
the tenth (10th) Fiscal Year of such period, an Incentive
Payment will be credited to the Participant's Account as of
the January 31 of such tenth (10th) Fiscal Year. The
Incentive Payment will be equal to twenty percent (20%) of
the Participant's recognized Deferred Compensation for ten
(10), but not less than five (5), Fiscal Years (i.e., the
first six (6) Fiscal Years of such ten (10)-year period),
plus credited Plan earnings thereon through the award date.
For each full Fiscal Year thereafter in which the
Participant remains continuously employed with Wal-Mart or
its Related Affiliates, an Incentive Payment will be
credited to the Participant's Account as of the January 31
of such Fiscal Year. Such Incentive Payment will be equal
to twenty percent (20%) of the Participant's recognized
Deferred Compensation for the first Fiscal Year of the five
(5)- consecutive Fiscal Year period ending on the January 31
award date, plus credited Plan earnings thereon through the
award date.
(d) If a Participant remains continuously employed
with Wal-Mart or its Related Affiliates for a period of
fifteen (15) consecutive full Fiscal Years, beginning with
the February 1 of the first Fiscal Year in which the
Participant had a Deferred Compensation election in effect
under this Plan or a Prior Agreement, and ending with the
January 31 of the fifteenth (15th) Fiscal Year of such
period, an Incentive Payment will be credited to the
Participant's Account as of the January 31 of such fifteenth
(15th) Fiscal Year. The Incentive Payment will be equal to
ten percent (10%) of the Participant's recognized Deferred
Compensation for fifteen (15), but not less than ten (10),
Fiscal Years (i.e., the first six (6) Fiscal Years of such
fifteen (15)-year period), plus credited Plan earnings
thereon through the award date. For each full Fiscal Year
thereafter in which the Participant remains continuously
employed with Wal-Mart or its Related Affiliates, an
Incentive Payment will be credited to the Participant's
Account as of the January 31 of such Fiscal Year. Such
Incentive Payment will be equal to ten percent (10%) of the
Participant's recognized Deferred Compensation for the first
Fiscal Year of a ten (10)-consecutive Fiscal Year period
ending on the January 31 award date, plus credited Plan
earnings thereon through the award date. The Incentive
Payments provided in this Section 4.2(d) shall not take into
account Incentive Payments credited under Section 4.2(c) or
credited Plan earnings thereon.
(e) The Incentive Payments provided in this Section
4.2(e) only apply if a Participant has been a Participant
under the Plan (or a Prior Agreement) for five (5) or more
full Fiscal Years and if the Participant incurs a
Retirement, Early Retirement, death or Disability before
satisfaction of the ten (10)- or fifteen (15)-year periods
described in Sections 4.2 (c) and (d) above. In that event,
only the Incentive Payment next to be credited (i.e., twenty
percent (20%) or ten percent (10%)) will be credited to the
Participant's Account as provided in this Section 4.2(e).
In the event the Participant had not yet been awarded or
credited with a twenty percent (20%) Incentive Payment under
Section 4.2(c), the Incentive Payment provided by this
Section 4.2(e) will be based upon the ratio of (1) the
number of full Fiscal Years worked since and including the
first Fiscal Year in which the Participant had a Deferred
Compensation election in effect under this Plan or a Prior
Agreement, to (2) ten (10), multiplied by twenty percent
(20%). Such Incentive Payment will be based upon recognized
amounts for the Fiscal Years which would otherwise have been
considered in calculating the Participant's first Incentive
Payment under Section 4.2(c). If the Participant has been
awarded a twenty percent (20%) Incentive Payment provided in
Section 4.2 (c), the Incentive Payment provided by this
Section 4.2(e) will be based upon the ratio of (1) the
number of full Fiscal Years worked since the award date of
the initial twenty percent (20%) Incentive Payment, to (2)
five (5), multiplied by ten percent (10%). Such Incentive
Payment will be based upon recognized amounts for the Fiscal
Years which would otherwise have been considered in
calculating the Participant's first Incentive Payment under
Section 4.2(d). The Incentive Payment provided under this
Section 4.2(e) will be determined and credited to the
Participant's Account as of the date the Participant's Plan
benefits are distributed in a lump sum payment. If,
however, a Participant's benefits are to be distributed in
installments, the amounts provided under this Section 4.2(e)
will be determined and credited to the Participant's Account
as of the Valuation Date on which installments are based.
ARTICLE V
PAYMENT OF PLAN BENEFITS
5.1 Distribution Restrictions.
Except in the event of a Participant's Unforeseeable Emergency,
Plan benefits will not be payable to a Participant prior to the
earliest occurrence of the Participant's Retirement, Early
Retirement, Termination of Employment, Disability or death.
5.2 Termination Benefits.
(a) General.
In the event of a Participant's Termination of Employment for
reasons other than the Participant's Retirement, Early Retirement,
Disability or death, the Participant's Plan benefits will be
distributed in a lump sum within sixty (60) days after the end of the
calendar month in which the Termination of Employment occurs.
(b) Termination on Last Business Day of Fiscal Year.
If the Participant's Termination of Employment occurs on the
last business day (excluding for this purpose, Saturday and Sunday)
of a Fiscal Year, the lump sum amount will be the sum of: (a) the
value of the Participant's Account, as determined under Section 3.5,
as of the Valuation Date coincident with or immediately following the
Participant's Termination of Employment; (b) the Participant's
Deferred Bonus allocated as of the February 1 following such
Valuation Date; and (c) a pro rata amount of interest equivalent
(determined at the per annum rate in effect for the Fiscal Year in
which distribution occurs) on the sum of the amounts determined in
(a) and (b) through the date of distribution based upon the number of
calendar days since such Valuation Date.
(c) Termination on Other Than Last Business Day of Fiscal
Year.
If the Participant's Termination of Employment occurs on a date
other than the last business day (excluding for this purpose,
Saturday and Sunday) of a Fiscal Year, the lump sum amount will equal
the sum of: (a) the value of the Participant's Account as of the
Valuation Date immediately preceding Termination of Employment; (b) a
pro rata amount of interest equivalent (determined at the per annum
rate in effect for a Fiscal Year under Section 4.1) on the
Participant's Account value as of such immediately preceding
Valuation Date based upon the number of calendar days since such
Valuation Date through the date of distribution; (c) the sum of the
Participant's Deferred Compensation for the Fiscal Year in which
Termination of Employment occurs and the Participant's Deferred Bonus
allocated as of the February 1 of the Fiscal year in which
Termination of Employment occurs; and (d) a pro rata amount of
interest equivalent (determined at one-half (1/2) the per annum rate
in effect for a Fiscal Year under Section 4.1) on the amount
determined in (c) based upon the number of calendar days since the
Valuation Date immediately preceding Termination of Employment
through date of distribution.
(d) Death.
In the event of a Participant's death before payment of the
amounts provided by this Section 5.2, such amounts will be paid in a
lump sum to the Participant's beneficiary designated under Section
5.5 at the time provided herein.
5.3 Retirement, Early Retirement, and Disability Benefits.
(a) General.
In the event of a Participant's Termination of Employment due to
the Participant's Retirement, Early Retirement or Disability, the
Participant's Plan benefits will be distributed in a lump sum or in
substantially equal annual installments over a period not to exceed
fifteen (15) years, in accordance with the Participant's distribution
election given effect under the provisions of Section 5.6 below.
(b) Lump Sum Distributions.
If distribution is to be made in the form of a lump sum, the
Participant's Plan benefits will be distributed within sixty (60)
days after the end of the calendar month in which the Retirement,
Early Retirement or Disability occurs. If the Participant's
Retirement, Early Retirement or Disability occurs on the last
business day (excluding for this purpose Saturday and Sunday) of a
Fiscal Year, the lump sum amount will be the sum of: (1) the value
of the Participant's Account, as determined under Section 3.5, as of
the Valuation Date coincident with or immediately following the
Participant's Retirement, Early Retirement or Disability; (2) the
Participant's Deferred Bonus allocated as of the February 1 following
such Valuation Date; (3) a pro rata amount of interest equivalent
(determined at the per annum rate in effect for the Fiscal Year in
which distribution occurs) on the sum of the amounts determined in
(1) and (2) through the date of distribution based upon the number of
calendar days since such Valuation Date; and (4) the Participant's
Incentive Payment (if any) as provided in Section 4.2(e).
If the Participant's Retirement, Early Retirement or Disability
occurs on a date other than the last business day (excluding for this
purpose Saturday and Sunday) of a Fiscal Year, the lump sum amount
will equal the sum of: (1) the value of the Participant's Account as
of the Valuation Date immediately preceding Retirement, Early
Retirement or Disability; (2) a pro rata amount of interest
equivalent (determined at the per annum rate in effect for a Fiscal
Year under Section 4.1) on the Participant's Account value as of such
immediately preceding Valuation Date based upon the number of
calendar days since such Valuation Date through the date of
distribution; (3) the Participant's Deferred Compensation for the
Fiscal Year in which Retirement, Early Retirement or Disability
occurs and the Participant's Deferred Bonus allocated as of the
February 1 of the Fiscal Year in which Retirement, Early Retirement
or Disability occurs; (4) the Participant's Incentive Payment (if
any) as provided in Section 4.2(e); and (5) a pro rata amount of
interest equivalent (determined at one-half (1/2) the per annum rate
in effect for a Fiscal Year under Section 4.1) on the amount deter-
mined in (3) based upon the number of calendar days since the
Valuation Date immediately preceding Retirement, Early Retirement or
Disability through the date of distribution.
(c) Installment Distributions.
If distribution is to be made in the form of annual install-
ments, the Participant's installments will be based upon the value of
the Participant's Account, as determined under Section 3.5, as of the
Valuation Date coincident with or immediately following the
Participant's Retirement, Early Retirement or Disability, plus any
Deferred Bonus allocated as of the following February 1. The Plan
benefits determined above will be paid in equal annual installments
in an amount which would fully amortize a loan equal to such Plan
benefits over the period covered by the installment period (such
period commencing on the February 1 following the Valuation Date the
Participant's Account is valued under this Section), with interest
calculated at the per annum rate in effect for the Fiscal Year in
which the Participant's Retirement, Early Retirement or Disability
occurs. The first installment will be paid on the second January 31
coincident with or following the Participant's Retirement, Early
Retirement or Disability, and continue on each successive January 31
until the Participant's benefits are distributed in full.
(d) Death.
In the event of a Participant's death before full payment of
Plan benefits under this Section 5.3, payment shall be made (or
continue to be made) to the Participant's beneficiary designated
under Section 5.5 in the same form as elected by the Participant for
distribution of Retirement, Early Retirement or Disability benefits.
5.4 Death Benefits.
(a) General.
In the event of a Participant's Termination of Employment due to
the Participant's death, the Participant's Plan benefits will be
distributed in a lump sum or in substantially equal annual
installments over a period not to exceed fifteen (15) years, in
accordance with the Participant's distribution election given effect
under the provisions of Section 5.6 below. Amounts will be
distributed to the beneficiary designated under 5.5 below.
(b) Lump Sum Distributions.
If distribution is to be made in the form of a lump sum, the
Participant's Plan benefits will be distributed within sixty (60)
days after the end of the calendar month in which the Participant's
death occurs. If the Participant's death occurs on the last business
day (excluding for this purpose Saturday and Sunday) of a Fiscal
Year, the lump sum amount will be the sum of: (1) the value of the
Participant's Account, as determined under Section 3.5, as of the
Valuation Date coincident with or immediately following the
Participant's death; (2) the Participant's Deferred Bonus allocated
as of the February 1 following such Valuation Date; (3) a pro rata
amount of interest equivalent (determined at the per annum rate in
effect for the Fiscal Year in which distribution occurs) on the sum
of the amounts determined in (1) and (2) through the date of
distribution based upon the number of calendar days since such
Valuation Date; and (4) the Participant's Incentive Payment (if any)
as provided in Section 4.2(e).
If the Participant's death occurs on a date other the last
business day (excluding for this purpose Saturday and Sunday) of a
Fiscal Year, the lump sum amount will equal the sum of: (1) the
value of the Participant's Account as of the Valuation Date immedi-
ately preceding the Participant's death; (2) a pro rata amount of
interest equivalent (determined at the per annum rate in effect for a
Fiscal Year on the Participant's Account value as of the immediately
preceding Valuation Date based upon the number of full calendar days
since such Valuation Date through date of distribution; (3) the
Participant's Deferred Compensation for the Fiscal Year in which the
Participant's death occurs and the Participant's Deferred Bonus
allocated as of the February 1 of the Fiscal Year in which the
Participant's death occurs; (4) the Participant's Incentive Payment
(if any) as provided in Section 4.2(e); and (5) a pro rata amount of
interest equivalent (determined at one-half (1/2) the per annum rate
in effect for a Fiscal Year on the amount determined in (3) based
upon the number of calendar days since the Valuation Date immediately
preceding the Participant's death through the date of distribution.
(c) Installment Distributions.
If distribution is to be made in the form of annual install
ments, the installments will be based upon the value of the
Participant's Account, as determined under Section 3.5, as of the
Valuation Date coincident with or immediately following the
Participant's death, plus any Deferred Bonus allocated as of the
following February 1. The Plan benefits determined above will be
paid in equal annual installments in an amount which would fully
amortize a loan equal to such Plan benefits over the period covered
by the installment period (such period commencing on the February 1
following the Valuation Date the Participant's Account is valued
under this Section), with interest calculated at the per annum rate
in effect for the Fiscal Year in which the Participant's death
occurs. The first installment will be paid on the second January 31
coincident with or following the Participant's death, and continue on
each successive January 31 until the Participant's benefits are
distributed in full.
5.5 Designation of Beneficiary.
A Participant may, by written instrument delivered to Wal-Mart
on forms prescribed by the Committee, designate primary and
contingent beneficiaries to receive any benefit payments which may be
payable under this Plan following the Participant's death, and may
designate the proportions in which such beneficiaries are to receive
such payments. A Participant may change such designations from time
to time and the last written designation filed with Wal-Mart prior to
the Participant's death will control. In the event no beneficiary is
designated, or if the designated beneficiary predeceases the
Participant, payment shall be payable to the Participant's estate.
For this purpose, a Participant's most recent written beneficiary
designation properly filed under a Prior Agreement shall continue to
be given effect until otherwise modified in accordance with the
provisions of this Section.
5.6 Form of Distribution.
If a Participant's Termination of Employment is due to the
Participant's Retirement, Early Retirement, Disability or death, at
the Participant's election distribution may be made in a lump sum or
in substantially equal annual installments over a period not to
exceed fifteen (15) years. A Participant may file a distribution
election with Wal-Mart on forms prescribed by the Committee. A
distribution election, once given effect under this Section 5.6, will
apply to the Participant's total Plan benefits. A Participant may,
however, file a separate election for death benefits payable under
Section 5.4. To be given effect under this Section 5.6, any
distribution election for benefits payable under Section 5.3 must
have been filed with Wal-Mart at least twenty-four (24) full calendar
months before the occurrence of an event entitling the Participant to
a distribution thereunder. If a Participant's distribution election
has not been on file with Wal-Mart for the full twenty-four (24)-
month period, it will not be recognized or given effect by the Plan.
In that event, distribution will be made in accordance with the
Participant's most recent distribution election which was filed with
Wal-Mart at least twenty-four (24) months prior to the Participant's
Retirement, Early Retirement, or Disability. The twenty-four (24)
month period provided above shall not apply to amounts payable under
Section 5.4. For purposes of this Section 5.6, a Participant's last
distribution election filed with Wal-Mart under a Prior Agreement
will be given effect for the Participant's total Plan benefits until
superseded or amended by the Participant in accordance with the
provisions of this Section, except that death benefits under Section
5.4 will be paid in a lump sum unless an affirmative election to the
contrary is filed by the Participant. If the Participant has not
been a Participant in the Plan for at least twenty-four (24) months
prior to the Participant's Retirement, Early Retirement, or Disabili-
ty, the Participant's initial distribution election filed with Wal-
Mart will be given effect.
5.7 Reductions Arising from a Participant's Gross Misconduct.
A Participant's Plan benefits are contingent upon the Partici-
pant not engaging in Gross Misconduct while employed with Wal-Mart or
any Related Affiliate, or during such additional period as provided
in Wal-Mart's Statement of Ethics. Notwithstanding anything herein
to the contrary, in the event the Committee determines that the
Participant has engaged in Gross Misconduct during the prescribed
period: (a) the Participant shall forfeit all Incentive Payments,
and credited Plan earnings thereon; and (b) earnings credited to the
Participant's Account derived from Deferred Compensation and Deferred
Bonuses shall be recalculated for each Fiscal Year to reflect the
amount which would otherwise have been credited if the applicable per
annum rate were fifty percent (50%) of the per annum rate in effect
for such Fiscal Year. Under no circumstances will a Participant
forfeit any portion of the Participant's Deferred Compensation or
Deferred Bonuses. Any payments received hereunder by a Participant
(or the Participant's beneficiary) are contingent upon the Partici-
pant not engaging (or not having engaged) in Gross Misconduct while
employed with Wal-Mart or any Related Affiliate, or during such
additional period as provided in Wal-Mart's Statement of Business
Ethics. If the Committee determines, after payment of amounts
hereunder, that the Participant has engaged in Gross Misconduct
during the prescribed period, the Participant (or the Participant's
beneficiary) shall repay to Wal-Mart any amount in excess of that to
which the Participant is entitled under this Section 5.7.
5.8 Distributions for Unforeseeable Emergencies.
In the event of an Unforeseeable Emergency, the Committee, in
its sole and absolute discretion and upon written application of such
Participant, may direct immediate distribution of all or a portion of
the Participant's Plan benefits. The Committee will permit
distribution because of an Unforeseeable Emergency only to the extent
reasonably needed to satisfy the emergency need.
Notwithstanding anything herein to the contrary, the provisions
of this paragraph apply in the event a Participant receives a
distribution under this Section 5.8, the Participant's Termination of
Employment for any reason occurs on a date other than the last
business day of a Fiscal Year (excluding for this purpose Saturday or
Sunday), and the Participant's benefits hereunder for any reason are
paid in the same Fiscal Year in which the Participant received a
distribution for Unforeseeable Emergencies under this Section 5.8.
In that event, the Participant's lump sum amount calculated under
Sections 5.2, 5.3, or 5.4 will be reduced by the amount distributed
under this Section 5.8 and the applicable interest equivalent will be
calculated in a manner consistent with Section 4.1.
ARTICLE VI
ADMINISTRATION
6.1 General.
The Committee is responsible for the administration of the Plan
and is granted the following rights and duties:
(a) The Committee shall have the exclusive duty, authority
and discretion to interpret and construe the provisions of the
Plan, to determine eligibility for and the amount of any benefit
payable under the Plan, and to decide any dispute which may rise
regarding the rights of Participants (or their beneficiaries)
under this Plan;
(b) The Committee shall have the sole and complete
authority to adopt, alter, and repeal such administrative rules,
regulations, and practices governing the operation of the Plan
as it shall from time to time deem advisable;
(c) The Committee may appoint a person or persons to
assist the Committee in the day-to-day administration of the
Plan;
(d) The decision of the Committee in matters pertaining to
this Plan shall be final, binding, and conclusive upon Wal-Mart,
the Participant, the Participant's beneficiary, and upon any
person affected by such decision, subject to the claims
procedure set forth in Article VII; and
(e) In any matter relating solely to a Committee member's
individual rights or benefits under this Plan, such Committee
member shall not participate in any Committee proceeding
pertaining to, or vote on, such matter.
ARTICLE VII
CLAIMS PROCEDURE
7.1 General.
Any claim for benefits under the Plan must be filed by the
Participant or beneficiary ("claimant") in writing with the Committee
or its delegate. If a claim for a Plan benefit is wholly or
partially denied, notice of the decision will be furnished to the
claimant by the Committee or its delegate within a reasonable period
of time, not to exceed sixty (60) days, after receipt of the claim by
the Committee or its delegate. Any claimant who is denied a claim
for benefits will be furnished written notice setting forth:
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent Plan provision
upon which the denial is based;
(c) a description of any additional material or informa-
tion necessary for the claimant to perfect the claim; and
(d) an explanation of the Plan's claim review procedure.
7.2 Appeals Procedure.
To appeal a denial of a claim, a claimant or the claimant's duly
authorized representative:
(a) may request a review by written application to the
Committee not later than sixty (60) days after receipt by the
claimant of the written notification of denial of a claim;
(b) may review pertinent documents; and
(c) may submit issues and comments in writing.
A decision on review of a denied claim will be made by the
Committee not later than sixty (60) days after receipt of a request
for review, unless special circumstances require an extension of time
for processing, in which case a decision will be rendered within a
reasonable period of time, but not later than one hundred twenty
(120) days after receipt of a request for review. The decision on
review will be in writing and shall include the specific reasons for
the denial and the specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Amendment, Suspension or Termination of Plan.
Wal-Mart, by action of the Executive Committee its Board of
Directors, reserves the right to amend, suspend or to terminate the
Plan in any manner that it deems advisable. Notwithstanding the
preceding sentence, the Plan may not be amended, suspended or
terminated to cause a Participant to forfeit the Participant's then-
existing Account.
8.2 Non-Alienability.
The rights of a Participant to the payment of benefits as
provided in the Plan may not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or anticipation.
No Participant may borrow against the Participant's interest in the
Plan. No interest or amounts payable under the Plan may be subject
in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, whether voluntary or involuntary, including but not
limited to, any liability which is for alimony or other payments for
the support of a spouse or former spouse, or for any other relative
of any Participant.
8.3 No Employment Rights.
Nothing contained herein shall be construed as conferring upon
the Participant the right to continue in the employ of Wal-Mart or
any of its related affiliates as an officer or in any other capacity.
8.4 No Right to Bonus.
Nothing contained herein shall be construed as conferring upon
the Participant the right to receive a bonus from the Wal-Mart
Stores, Inc. Management Incentive Plan for Officers. A Participant's
entitlement to such a bonus is governed solely by the provisions of
that plan.
8.5 Withholding and Employment Taxes.
To the extent required by law, Wal-Mart will withhold from a
Participant's current compensation or from Plan distributions, as the
case may be, such taxes as are required to be withheld for federal,
state or local government purposes.
8.6 Income and Excise Taxes.
The Participant (or the Participant's beneficiaries or estate)
is solely responsible for the payment of all federal, state and local
income and excise taxes resulting from the Participant's
participation in this Plan.
8.7 Successors and Assigns.
The provisions of this Plan are binding upon and inure to the
benefit of Wal-Mart, its successors and assigns, and the Participant,
the Participant's beneficiaries, heirs, and legal representatives.
8.8 Governing Law.
This Plan shall be subject to and construed in accordance with
the laws of the State of Arkansas to the extent not preempted by
federal law.