WAL-MART STORES, INC. RESTRICTED STOCK PLAN
Purpose. Wal-Mart Stores, Inc. ("Wal-Mart") believes it is important to
provide incentives to Wal-Mart's Associates through participation in the
ownership of Wal-Mart. This Restricted Stock Plan (the "Plan") is established
to provide incentives to those Associates receiving Awards under this Plan to
enhance their job performance, 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 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. When used in the Plan, the following words have the definitions
given to them below.
"Affiliate" means any corporation, company limited by shares, partnership,
limited liability company, business trust, other entity, or other business
association that is controlled by Wal-Mart.
"Associate" means any individual who is employed by Wal-Mart or one of its
Affiliates.
"Award" means the award of Restricted Stock under this Plan and the terms and
conditions on which that award is made.
"Board of Directors" means the Board of Directors of Wal-Mart.
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
"Committee" means (1) as to Associates who are Section 16 Persons, the
Compensation Committee and 2) as to all other Associates, the committee that
administers the Wal-Mart Stores, Inc. Stock Option Plan of 1994 or any
successor stock option plan for persons other than Section 16 Persons.
"Compensation Committee" means the Compensation and Nominating Committee of the
Board of Directors.
"Dividend Plan" means the Wal-Mart Stores, Inc. Dividend Reinvestment Plan.
"Recipient" means an Associate who has received an Award.
"Restricted Stock" means Shares awarded to a Recipient under this Plan that
remain subject to a Restriction and all non-cash proceeds of such Shares that
become and remain subject to a Restriction.
"Restriction" means the contractual condition(s) contained in an 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 such Award and the non-cash proceeds of
such Shares.
"Section 16 Person" means any Associate who is required to file reports under
Section 16 of the Securities Exchange Act of 1934, as amended.
"Shares" means shares of the Common Stock, $.10 par value per share, of
Wal-Mart.
Shares Subject to the Plan.Wal-Mart has reserved a total of 10,000,000 Shares
for issuance under the Plan. These Shares may be authorized, but unissued
Shares, or treasury Shares held by Wal-Mart or an Affiliate. Any Shares
previously awarded to Recipient that have been forfeited to Wal-Mart may be
awarded again under the Plan. No fractional shares may be issued under the
Plan. If a stock split occurs with respect to the Shares, the number of
Shares reserved for issuance pursuant to the Plan shall be proportionately
increased. If a reverse stock split occurs with respect to the Shares, the
number of Shares reserved for issuance pursuant to the Plan shall be
proportionately decreased.
Administration. The Committee will administer the Plan and make Awards. The
Committee shall have these duties as to the Plan:
(1) to establish any rules, procedures, and written forms that will govern
the Plan and assist in the Plan's general administration;
(2) when a situation is not expressly addressed by the Plan, to interpret
the Plan's pertinent provisions and apply them to the situation;
(3) when a situation is not expressly addressed by the terms of an Award or
those terms are subject to interpretation, to interpret the pertinent terms
of that Award and apply them to the situation;
(4) to assist in the resolution of any dispute arising about the Plan or an
Award;
(5) to recommend amendments of the Plan to the Board of Directors;
(6) to determine those Associates to whom Awards will be made;
(7) to set the terms and conditions of those Awards;
(8) to amend the terms of an Award;
(9) to waive any conditions or obligations of a Recipient under or with
respect to an Award; and
(10) to administer the terms of each Award made and monitor the compliance of
the Recipient with the terms and conditions of the Award.
The Committee may act at its discretion in the discharge of the foregoing
duties. The Committee will not have the right to amend the terms or
conditions of any Award without the consent of the Recipient if the amendment
would affect the terms and conditions of the Award in a materially adverse
manner unless the Committee has expressly retained the right to do so in the
terms and conditions of the Award. Subject to the foregoing, the Committee
may amend any Award under which a Recipient still holds Restricted Stock if
the Committee determines such amendment is in the best interests of Wal-Mart.
If an Award is intended to qualify for the performance-based compensation
exception under Section 162(m)(4)(C) of the Code, the Compensation Committee
will exercise its discretion to qualify the Award for such exception.
The Awards.
(1) Wal-Mart, acting through the Committee and consistent with the purposes of
this Plan, may make Awards to such Associates as the Committee may determine
in its sole discretion.
(2) Each Award shall have those terms and conditions of Awards that are
expressly set forth in, or are required, by this Plan and such other terms
and conditions as the Committee making the Award may determine in its
discretion.
(3) During the Restriction period as to any Recipient's Restricted Stock,
the Recipient shall receive the dividends paid on the Restricted Stock and
shall not be required to return such dividends to Wal-Mart in the event of
the forfeiture of the Restricted Stock. In addition, during the Restriction
period as to any Recipient's Restricted Stock, 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 the Restriction then existing as to the
Recipient's Restricted Stock. Such Restriction will thereafter apply
proportionately to all of the Recipient's Restricted Stock, including such
proceeds.
(4) The Recipient shall be entitled to vote the Restricted Stock during the
Restriction period.
(5) The Restricted Stock will be issued to each Recipient subject to the
understanding that, during the Restriction period, 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 such
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 such transaction shall be null, void, and without effect.
(6) Unless expressly provided for in the Award made to a Recipient, any
Restricted Stock held by a Recipient at the time the Recipient ceases to be
an Associate for any reason whatsoever shall be forfeited by the Recipient to
Wal-Mart and automatically re-conveyed to Wal-Mart.
(7) The Committee may withhold any amounts necessary to collect any
withholding taxes with respect to any Award or upon the fulfillment of the
Restriction in such Award. These provisions may include, at the discretion
of the Committee, the withholding of shares of the Restricted Stock granted
in the Award to provide for payment of the withholding amount.
(8) The making of 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.
(9) Once the conditions in a Restriction are met as to any shares of
Restricted Stock held by a Recipient, those Shares shall be free of all of
the terms and conditions of the related Award and the Recipient shall be
entitled to hold and dispose of the Shares free of any and all restrictions,
except any restrictions on the transfer or disposition of such Shares as are
imposed by applicable law.
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 or certificates representing the
Restricted Stock issued to a Recipient (each a "Certificate") 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. RESTRICTED STOCK PLAN (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. SUCH RESTRICTIONS AND CONDITIONS ARE SET
FORTH IN THE PLAN AND IN THE AWARD PURSUANT TO WHICH SUCH 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. Any Certificate issued will be held in
escrow by the Committee for the mutual benefit of the Recipient and Wal-Mart
in accordance with such rules for such escrow as the Committee may establish
pending the fulfillment of the Restriction and compliance with the other
terms and conditions of the Award. If any shares of Restricted Stock are
forfeited in accordance with the terms and conditions of the Award and this
Plan, the forfeited shares of Restricted Stock shall be automatically
re-conveyed to Wal-Mart. Any Certificate representing the forfeited shares of
Restricted Stock shall be canceled. The Recipient must deliver to the
Committee a stock power, executed in blank, relating to the shares of the
Restricted Stock at the time the Award is granted and the Restricted Stock
issued. Such a stock power must be given to the Committee as to any
Certificate issued to a Recipient.
Section 162(m)(4)(C) Matters. The Compensation Committee may grant an Award
that provides for a Restriction as to Restricted Stock that is based on
performance-based criteria and that is intended to qualify for the
performance-based exception under Section 162(m)(4)(C) of the Code (a "162
Award"). In granting any 162 Award, the Compensation Committee shall comply
fully with the regulations promulgated with respect to Section 162(m) of the
Code.
Limitations of Wal-Mart's and the Affiliates' Liability and Obligations.
Receiving an Award or being the owner of Restricted Stock shall not:
(a) give the Recipient any rights except as expressly set forth in this Plan or
in the Award and except as a stockholder of Wal-Mart with respect to the
Restricted Stock alone;
(b) 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;
(c) 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 Award;
(d) create any trust or any 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
(e) create any obligation of Wal-Mart or any Affiliate that shall be greater
than the obligations of Wal-Mart or such Affiliate to any general unsecured
creditor of Wal-Mart or the Affiliate.
The entry into, the change of, or a discontinuation of a particular business,
line of business, business practice, or transaction shall not be, and shall
not be deemed to be, an amendment or termination of this Plan or any Award.
If Wal-Mart or an Affiliate terminates a Recipient's employment or other
position with Wal-Mart or the Affiliate, the potential value of any
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.
No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of this Plan, any Award granted hereunder, or any
agreement or other instrument entered into or executed by the Committee
member in his or her capacity as a member of the Committee nor as a result of
any mistake of judgment made in good faith. Wal-Mart shall indemnify and
hold harmless each member of the Committees and each other officer and
director of Wal-Mart or any Affiliate that has any duty or power relating to
the administration of this Plan against any liability, obligation, cost or
expense incurred by such person arising out of any act or omission to act in
connection with the Plan or any Award unless that act or omission to act
constitutes gross negligence, malfeasance, bad faith or fraud of such person.
Amendment and Termination of the Plan. The Board of Directors may amend or
terminate this Plan at any time without the approval of the Recipients or any
other person, except to the extent any such action is required to be approved
by the stockholders of Wal-Mart in connection with any outstanding or future
162 Awards. No Award as to which Restricted Stock remains outstanding at the
time of any amendment or termination of the Plan will be affected by such
amendment or termination.
Governing Law. This 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 General
Corporation Law of Delaware.