Exhibit 10.1

 

RETIREMENT AGREEMENT

 

This Retirement Agreement (“Agreement”) is made and entered into the 22nd day of
January, 2005, between Thomas M. Coughlin (“Associate”), a resident of Benton
County, Arkansas, and Wal-Mart Stores, Inc., a Delaware corporation, its
subsidiaries and affiliates (collectively “Wal-Mart”).

 

In consideration of the mutual covenants contained in this Agreement, and other
lawful consideration recited herein, the parties agree as follows:

 

1. Retirement Date. The Associate will retire from employment with Wal-Mart on
January 24, 2005 (the “Retirement Date”). Associate will remain as a member of
the Board of Directors of Wal-Mart until the end of his current term, which
expires on the day of the Company’s Annual Shareholders’ Meeting to be held in
June 2005.

 

2. Retirement Benefits. Wal-Mart will provide the following benefits to the
Associate, subject to Associate’s compliance with the terms hereof:

 

(a) Transition Payments. The Associate reaffirms his obligations as set forth in
the Special Stock Option Grant, Post-Termination Agreement and Covenant Not to
Compete, between Wal-Mart and Associate, dated September 3, 1998 (the
“Non-Compete Agreement”). Provided that Associate complies with the terms of the
Non-Compete Agreement, Associate will receive the transition payments described
in the Non-Compete Agreement between Wal-Mart and the Associate, which shall be
based on the Associate’s current annual base salary of One Million Forty
Thousand Dollars ($1,040,000.00). A copy of the Non-Compete Agreement is
attached hereto as Exhibit A and incorporated herein by reference. All other
terms and conditions of the Non-Compete Agreement will remain in full force and
effect.

 

(b) Unvested Stock Benefits.

 

(i) Restricted Stock Awards. Wal-Mart and Associate acknowledge that Associate
currently has unvested restricted stock grants representing 242,774 shares of
Wal-Mart common stock (the “Unvested Restricted Stock Awards”) granted to him
under the Wal-Mart Stores, Inc. Stock Incentive Plan of 1998, as amended January
15, 2004, and the Wal-Mart Stores, Inc. 1997 Restricted Stock Plan (collectively
the “Plan”) and under the restricted stock awards (the “Awards”), as described
on Exhibit B. The parties further acknowledge that, by their current terms, the
Unvested Restricted Stock Awards expire upon Associate’s retirement from
Wal-Mart. As additional consideration for this Agreement, and subject to the
execution and delivery by Associate to Wal-Mart of the Mutual General Release
described in Section 3 below and subject to the other terms and conditions of
this Agreement, the Plan and the Awards, Wal-Mart and Associate agree and
acknowledge that the applicable terms of the Awards are hereby amended such
that, as amended, the Awards shall, and hereafter do, provide as follows:

 

(A) 186,407 shares of the Unvested Restricted Stock Awards (the “Non-

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Forfeited Shares”) shall not be forfeited as a result of the Associate’s
retirement from Wal-Mart, as set forth on Exhibit B hereto. 56,367 shares of the
Unvested Restricted Stock Awards shall be forfeited as of the Retirement Date.

 

(B) Subject to the provisions of subparagraph (D) below, the Non-Forfeited
Shares shall vest over a five-year post-retirement period (the “Post-Retirement
Vesting Period”) as follows:

 

Vesting Date

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   Non-Forfeited
Shares Vesting

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   Percentage of Non-
Forfeited Shares Vesting

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January 24, 2008

   37,281    20 %

January 24, 2009

   37,281    20 %

January 24, 2010

   37,281    20 %

January 24, 2011

   37,281    20 %

January 24, 2012

   37,283    20 %

 

(C) As soon as practicable after each Vesting Date above, the number of
corresponding Non-Forfeited Shares listed above as vesting on such Vesting Date
(net of any such shares retained by Wal-Mart to satisfy federal or state
withholding tax obligations) shall be delivered to Associate free and clear of
all restrictions.

 

(D) All unvested Non-Forfeited Shares shall be subject to immediate forfeiture
by Associate in the event Associate, directly or indirectly:

 

(i) owns, manages, operates, finances, joins, controls, advises, consults with,
renders services to, has a current or future interest in, participates in the
ownership, management, operation, financing, or control of, or becomes employed
by or connected in any manner with, any Competing Business (as defined below);

 

(ii) solicits for employment, hires, or offers employment to, or otherwise aids
or assists any person or entity, other than Wal-Mart, its subsidiaries or
affiliates, in soliciting for employment, hiring, or offering employment to, any
employee of Wal-Mart; or

 

(iii) breaches or otherwise fails to comply with any of the covenants or
agreements contained in or provided for under Sections 3, 4, 5 or 6 of this
Agreement.

 

The term “Competing Business” shall mean any general or specialty retail,
wholesale, or merchandising business that sells goods or merchandise of the
types sold by Wal-Mart at retail or wholesale to consumers or businesses that
(i) is located within the

 

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United States or any other country in which Wal-Mart or its affiliates either
operate a store or are known to the Associate to have plans to open or acquire
an operation within twenty-four months following the Retirement Date, and (ii)
that has gross annual sales volume or revenues attributable to its retail or
wholesale operations in excess of U.S. $2 billion or is reasonably expected to
have gross sales volume or revenues of more than U.S. $2 billion in either its
current fiscal year or in the first fiscal year of such business commencing
after the Retirement Date. “Competing Business” as of the date of this Agreement
shall include, but is not limited to, such entities as Target, Costco, K-Mart,
Home Depot, Dollar General, Family Dollar, Kohls, Hudson’s Bay Company,
Carrefour, HEB, Fred Meyers, Tesco, Metro, Lowes, BJ’s Wholesale Company, Best
Buy, PetsMart, Kroger, Circuit City, Rite Aid, Walgreens, ShopKo, Pamida,
Safeway, Meijer, Winn Dixie, A&P, Toys R Us, Staples, Sears, and The Limited.
Ownership of less than the greater of $25,000 or 1% of any class of equity or
debt security of a Competing Business will not be deemed ownership or
participation in ownership of a Competing Business for purposes of this
Agreement. The provisions of this subparagraph 2(b)(i)(D) shall amend and
replace the non-competition provisions contained in the Awards.

 

Notwithstanding the foregoing, the Chief Executive Officer and Chairman of the
Board of Directors of Wal-Mart shall have the discretion to approve a request by
the Associate to serve on the Board of Directors of an entity that would
otherwise constitute a Competing Business within the meaning of this Agreement;
provided however, such approval must be executed in writing by the Chief
Executive Officer and Chairman of the Board of Wal-Mart and delivered to the
Associate.

 

(E) Unless previously forfeited pursuant to subparagraph (D) of this Section
2(b)(i), all unvested Non-Forfeited Shares shall immediately vest upon
Associate’s death. Non-Forfeited Shares shall not vest upon any disability of
Associate.

 

(F) This Section 2(b)(i) shall constitute a valid and binding amendment to the
applicable Awards. Wal-Mart acknowledges that its Compensation Committee has
approved of the amendments to the Awards as contained herein.

 

(G) In the event of any inconsistencies between this Agreement and the Awards,
this Agreement shall govern.

 

(H) The Associate acknowledges that upon retirement he would not otherwise be
entitled to receive the benefits contained in this Section 2(b)(i), and that
such benefits are in addition to, and are in excess of, any consideration the
Associate would have received on his retirement.

 

(ii) Unvested Stock Options. Nothing contained in this Agreement shall be
construed as amending unvested stock options granted to Associate under the Plan
or otherwise. Wal-Mart and Associate agree and acknowledge that any unvested
stock option grants to Associate will be forfeited in accordance with their
terms on the Retirement Date.

 

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(c) MIP Payout. The Associate will be eligible to receive a final payment in
March 2005 under the terms of Wal-Mart’s Management Incentive Plan (“MIP”), such
payment to be pro rated to the Retirement Date.

 

(d) Medical and Dental Benefits. The Associate will be eligible under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) to continue his present
group medical and dental coverage, if any, for up to eighteen (18) months from
the Retirement Date (the “COBRA Period”), to the extent provided by and subject
to the terms of COBRA. Upon the expiration of the COBRA Period, and conditional
upon the Associate’s continuing compliance with the covenants contained in
Sections 2, 3, 4, 5 and 6 of this Agreement, Wal-Mart will provide the Associate
and his spouse, Cynthia Coughlin, with medical and dental coverage, in each
case, until the earlier to occur of the Associate’s or Cynthia Coughlin’s: (i)
65th birthday, (ii) death, or (iii) the date he or she otherwise becomes
eligible to receive Medicare benefits. Wal-Mart will also provide Associate’s
son, Michael Coughlin, with medical and dental coverage until he reaches
twenty-three (23) years of age. Such medical and dental coverage shall be
comparable to the coverage the Associate, Cynthia Coughlin, and Michael Coughlin
would have received from Wal-Mart had they continued to be participants in
Wal-Mart’s group medical and dental plans (subject to applicable deductibles,
co-payments and other limitations contained in such group plans); provided that,
the Associate, Cynthia Coughlin, and Michael Coughlin shall recognize in income,
as may be required under applicable tax law, the cost of such coverage and bear
responsibility for any tax liability.

 

(e) Other Payments and Benefits. The Associate will receive the other payments
and benefits previously earned and vested under existing benefit plans as of the
Retirement Date. A separate Retirement Information Work Sheet which describes
those benefits has been delivered to Associate. The Associate’s participation in
all other benefit programs will end on the Retirement Date.

 

3. Mutual General Release. The Associate will execute a Mutual General Release
of Wal-Mart in the form attached hereto and incorporated herein by reference as
Exhibit C.

 

4. Cooperation. Due to his position as Vice Chairman of the Board of Wal-Mart,
and as the senior operational officer of the U.S. operations of the Wal-Mart
Stores Division and Sam’s Club Division of Wal-Mart, the Associate may from time
to time after the Retirement Date be called upon to testify or provide
information to Wal-Mart in connection with employment-related and other legal
proceedings involving Wal-Mart. The Associate will provide reasonable assistance
to and will cooperate with and support Wal-Mart in connection with any
litigation, arbitration, or judicial or non-judicial administrative proceeding
that may exist or may subsequently arise regarding events as to which the
Associate has knowledge by virtue of his position with Wal-Mart. Wal-Mart will
compensate the Associate for reasonable travel expenses and other expenses
incidental to any such cooperation provided to Wal-Mart at its request, and will
pay the Associate Five Hundred Dollars ($500.00) for each hour spent providing
such support to Wal-Mart.

 

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5. Confidential Information. The Associate agrees that he will not at any time
directly or indirectly use or disclose any confidential information obtained
during the course of his employment with Wal-Mart, except when previously
authorized by Wal-Mart in writing. “Confidential Information” means information
designated as such by Wal-Mart pertaining to the business of Wal-Mart, and
includes, without limitation, trade secrets obtained by the Associate during the
course of, or as a result of, his employment with Wal-Mart, including, without
limitation, information regarding processes, suppliers (including the terms,
conditions or other business arrangements with suppliers), advertising and
marketing plans and strategies, profit margins, seasonal plans, goals,
objectives, projections, compilations and analyses regarding Wal-Mart’s
business, trade secrets, salary, staffing, compensation, promotion, diversity
objectives and other employment-related data, and any know-how, techniques,
practices or non-public technical information regarding the business of
Wal-Mart. However, “Confidential Information” shall not include: (1) information
that is in the public domain at the time of its disclosure to the Associate, or
if not in the public domain at the time of its disclosure to the Associate,
which enters into the public domain through no involvement of the Associate
after its disclosure to the Associate, or (2) information that the Associate
receives from a third-party who is under no obligation of confidentiality to
Wal-Mart. On the Retirement Date, the Associate shall return to Wal-Mart all
documentation, programs, software, equipment, statistics, and other written
(including information stored electronically) business materials of or
concerning Wal-Mart, including all Confidential Information of Wal-Mart in
Associate’s possession. The Associate acknowledges that the obligations set out
herein with respect to Confidential Information will remain in effect for a
period of seven (7) years following the date of this Agreement, or until such
time as the Confidential Information becomes public other than through
publication by the Associate.

 

6. Public Statements. The Associate agrees that all public statements by or
attributable to him regarding Wal-Mart, any past, present or future plans or
business activities of Wal-Mart, or any officers, directors, employees or
affiliates of Wal-Mart will be coordinated in advance through Wal-Mart’s
Corporate Affairs Department.

 

7. Associate Consent. The Associate acknowledges that Wal-Mart has informed him
that he may take up to twenty-one (21) days from receipt of this Agreement to
consider this Agreement before signing it. He further understands that he is not
required to wait the full twenty-one (21) day period before signing, and
understands that he may sign and return the Agreement at any time prior to the
expiration of twenty-one (21) days. The Associate also understands that he may
revoke this Agreement at any time in the seven (7) days following its execution,
and this Agreement will not become effective or enforceable until this seven (7)
day revocation period has expired. The Associate acknowledges that no benefits
or rights will inure to Associate under Section 2(b) or (c) of this Agreement
until each of the following has occurred: (i) the revocation period has expired
without revocation by Associate and (ii) this Agreement and the Mutual General
Release described in Section 3 above have been executed by Associate and
delivered to Wal-Mart.

 

8. Statement of Ethics. The Associate acknowledges that he has read and
understands Wal-Mart’s Statement of Ethics (PD-10) and agrees to abide by the
provisions thereof to the extent applicable to former Wal-Mart associates. A
copy of the Statement of Ethics is attached hereto as Exhibit D and incorporated
herein by reference.

 

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9. Advice of Counsel. The Associate acknowledges that he has been advised to
consider this Agreement carefully and to review it with legal counsel of his
choice. The Associate also acknowledges that he understands the provisions of
this Agreement and has been given the opportunity to seek independent legal
advice before signing this Agreement.

 

10. Miscellaneous.

 

  (a) Entire Agreement. This Agreement and the exhibits hereto contain the
entire agreement and understanding of the parties, and no prior statements by
either party will be binding unless contained in this Agreement or the exhibits
hereto; provided however, that nothing contained herein shall in any way limit
Associate’s obligations and Wal-Mart’s contractual rights under the Non-Compete
Agreement.

 

  (b) Conflict with Exhibits. If the terms and provisions of this Agreement
conflict with the terms and provisions of any exhibit to this Agreement, the
terms and provisions of this Agreement will govern.

 

  (c) Severability. If any portion or provision of this Agreement is found to be
unenforceable or invalid, the parties agree that the remainder of this Agreement
will remain in full force and effect. The parties will negotiate in good faith
to give such unenforceable or invalid provisions the effect the parties
intended.

 

  (d) Section Titles. Section titles are for informational purposes only and are
not to be considered in construing this Agreement.

 

  (e) Successors and Assigns. The parties acknowledge that this Agreement will
be binding on and inure to the benefit of their respective successors, assigns
and heirs.

 

  (f) Governing Law. This Agreement will be construed by and governed in
accordance with the laws of the State of Arkansas, except as to matters relating
to the issuance of Wal-Mart stock and the internal corporate governance of
Wal-Mart, as to which the General Corporation Law of the State of Delaware shall
govern.

 

  (g) Dispute Resolution. The Associate and Wal-Mart agree that they will first
attempt to resolve any disputes arising under this Retirement Agreement through
good faith negotiations and that any unresolved disputes shall be litigated, if
necessary, in the U.S. District Court for the Western District of Arkansas or
the state courts located in Benton County, Arkansas.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the undersigned have set their hands the day and year first
written above.

 

WAL-MART STORES, INC.

  THOMAS M. COUGHLIN

By:

  

/s / Thomas D. Hyde

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/s/ Thomas M. Coughlin

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Name:

   Thomas D. Hyde        

Title:

   Executive Vice President, Legal and   Date:   January 22, 2005      Corporate
Affairs and Corporate              Secretary        

Date:

   January 22, 2005        

 

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Exhibit A

To

Retirement Agreement

 

Special Stock Option Grant, Post-Termination Agreement

And Covenant Not To Compete

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SPECIAL STOCK OPTION GRANT, POST-TERMINATION

AGREEMENT AND COVENANT NOT TO COMPETE

 

This Special Stock Option Grant, Post-Termination Agreement, and Covenant Not to
Compete is entered into this 3d day of September, 1998 by and between Wal-Mart
Stores, Inc. (hereinafter “Wal-Mart”) and Thomas M. Coughlin (hereinafter “the
Associate”). The parties agree as follows:

 

1. ACKNOWLEDGMENTS. As part of this Agreement, the parties specifically
acknowledge that

 

(A) Wal-Mart is a major retail operation, with stores located throughout the
United States and in certain foreign locations;

 

(B) the Associate presently holds a position as Executive Vice President –
Operations of Wal-Mart, and is a key executive as defined by the Executive
Committee;

 

(C) as an essential part of its business, Wal-Mart has cultivated long term
customer and vendor relationships and goodwill, which are difficult to develop
and maintain, which require a significant investment of time, effort, and
expense, and which can suffer significantly upon the departure of key
executives;

 

(D) in the development of its business, Wal-Mart has also expended a significant
amount of time, money, and effort in developing and maintaining confidential,
proprietary, and trade secret information which, if disclosed or misused, could
harm Wal-Mart’s business and its competitive position in the retail marketplace;

 

(E) as Executive Vice President - Operations, the Associate has access to
confidential and proprietary trade secret information and other confidential
information, including business plans and strategies, that would be of
considerable value to Wal-Mart’s competitors; and

 

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(F) Wal-Mart is entitled to take appropriate steps to ensure (i) that its
Associates do not make use of confidential information gained during the course
of their employment with Wal-Mart and (ii) that no individual associate or
competing entity gains an unfair competitive advantage over Wal-Mart.

 

2. SPECIAL STOCK OPTION GRANT. If the Associate executes this Agreement on or
before March 31, 1998, Wal-Mart will award to the Associate a Special Stock
Option Grant equivalent to a One Hundred Percent (100%) of the Associate’s base
salary in effect on the date of this Agreement. The Special Stock Option Grant
will be in addition to any other stock options, restricted stock, stock grants,
or similar entitlements that the employee may receive, or may previously have
received, under any other plan or program maintained by Wal-Mart. The Special
Stock Option Grant will vest in seven equal annual installments commencing one
(1) year from the date of the grant, and shall in all regards be governed by the
terms of the Wal-Mart Stores, Inc. Stock Option Plan.

 

3. TRANSITION PAYMENTS. In the event that Wal-Mart should initiate the
termination of the Associate’s employment, Wal-Mart will, for a period of two
(2) years from the effective date of such termination (“the Transition Period”),
continue to pay the Associate his or her base salary at the rate in effect on
the date of termination, subject to such withholding as may be required by law
and subject to the following conditions and offsets:

 

(A) Transition Payments will not be payable if the Associate is terminated as
the result of a violation of Wal-Mart policy;

 

(B) In the event that the Associate is demoted or reassigned so that he or she
ceases to be a key executive as defined or determined by the Executive
Committee, the Associate will no longer be bound by the Covenant Not to Compete
set forth in Paragraph 4 below and will cease to be eligible for any of the
benefits or payments (e.g., Transition Payments) provided by this Agreement. In
addition, it is understood that, upon ceasing to be a key executive, the
Associate would forfeit the stock options

 

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granted by this Agreement, but only to the extent that those options have not
vested as of the date of demotion or reassignment;

 

(C) No Transition Payments will be payable if the Associate voluntarily resigns
or retires from his or her employment with Wal-Mart;

 

(D) Given the availability of other programs designed to provide financial
protection in such circumstances, Transition Payments will not be payable under
this Agreement in the event of the Associate’s death or disability. If the
Associate should die during the Transition Period, Transition Payments will
cease at that time, and his or her heirs will have no entitlement to the
continuation of such payments. Transition Payments will not be affected by the
disability of the Associate during the Transition Period.

 

(E) Transition Payments will be offset by any amounts that the Associate may
earn during the Transition Period by virtue of self-employment or employment
with, or involvement in, an entity other than a Competing Business as defined in
Paragraph 4(B) below. Violation by the Associate of his obligations under
Paragraph 4 or Paragraph 5 below, or any other act that is materially harmful to
Wal-Mart’s business interests, during the Transition Period will result in the
immediate termination of Transition Payments in addition to any other remedies
that may be available to Wal-Mart;

 

F) Transition Payments will be payable on such regularly scheduled paydays as
may be adopted and instituted by Wal-Mart for its other salaried employees.

 

G) Receipt of Transition Payments will not entitle the Associate to participate
during the Transition Period in any of the other incentive, stock option, profit
sharing, or other associate benefit plans or programs maintained by Wal-Mart,
and the Associate shall be entitled to participate in such plans or programs
only to the extent that the terms of the plan or program provide for
participation by

 

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former associates. Such participation, if any, shall be governed by the terms of
the applicable plan or program.

 

4. COVENANT NOT TO COMPETE. In exchange for the Special Stock Option Grant set
forth in Paragraph 2, for his or her inclusion in the Transition Payment program
set forth in Paragraph 3, and for other good and valuable consideration, the
Associate agrees, promises, and covenants as follows:

 

(A) For a period of two (2) years from the date on which his or her employment
with Wal-Mart terminates, and regardless of the cause or reason for such
termination, the Associate will not directly or indirectly

 

(i) own, manage, operate, finance, join, control, advise, consult, render
services to, have a current or future interest in, or participate in the
ownership, management, operation, financing, or control of, or be employed by or
connected in any manner with, any Competing Business as defined below in
Paragraph 4(B); or

 

(ii) solicit for employment, hire or offer employment to, or otherwise aid or
assist any person or entity other than Wal-Mart in soliciting for employment,
hiring, or offering employment to, any employee of Wal-Mart or any of its
affiliates;

 

(B) For purposes of this Agreement, the term “Competing Business” shall include
any general or specialty retail, wholesale, or merchandising business that sells
goods or merchandise of the types sold by Wal-Mart at retail to consumers that
(i) is located within the United States or any other country in which Wal-Mart
or its affiliates either operate a store or are known to the Associate to have
plans to open or acquire an operation within the next twenty-four (24) months,
and (ii) that has gross annual sales volume or revenues attributable to its
retail operations in excess of U.S. $2 billion or is reasonably expected to have
gross sales volume or revenues of more than U.S. $2 billion in either the
current fiscal

 

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year or the next following fiscal year. “Competing Business” as of the date of
this Agreement shall specifically include, but is not limited to, such entities
as Target/Dayton Hudson, Costco, K-Mart, Home Depot, Dollar General, Family
Dollar, Kohls, Hudson Bay Company, Carrefour, HEB, and Fred Meyers.

 

(C) Ownership of an investment of less than the greater of $25,000 or 1% of any
class of equity or debt security of a Competing Business will not be deemed
ownership or participation in ownership of a Competing Business for purposes of
this Agreement.

 

(D) The covenant not to compete contained in this Paragraph 4 shall be binding
upon the Associate, and shall remain in full force and effect, regardless of
whether the Associate qualifies, or continues to remain eligible, for the
Transition Payments described in Paragraph 3 above. Termination of the
Transition Payments pursuant to Paragraph 3 will not release the Associate from
his or her obligations under this Paragraph 4.

 

5. PRESERVATION OF CONFIDENTIAL INFORMATION. The Associate agrees that he or she
will not at any time, directly or indirectly, use or disclose any Confidential
Information obtained during the course of his or her employment with Wal-Mart
except as may be authorized by Wal-Mart. “Confidential Information” shall
include any non-public information pertaining to Wal-Mart’s business, and shall
include information obtained by the Associate during the course of, or as a
result of, his or her employment with Wal-Mart, including, without limitation,
information regarding Wal-Mart’s processes, suppliers (including the terms,
conditions, or other business arrangements with such suppliers), advertising and
marketing plans and strategies, profit margins, seasonal plans, goals,
objectives and projections, compilations, analyses, and projections regarding
Wal-Mart’s business, trade secrets, salary, staffing, compensation, and other
employment data, and any “know-how,” techniques, practice or any technical
information not of a published nature regarding Wal-Mart’s business.

 

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6. REMEDIES FOR BREACH. The parties shall each be entitled to pursue all legal
and equitable rights and remedies to secure performance of their respective
obligations and duties under this Agreement, and enforcement of one or more of
these rights and remedies will not preclude the parties from pursuing any other
rights and remedies. The Associate acknowledges that a breach of the provisions
of Paragraph 4 or Paragraph 5 above could result in substantial and irreparable
damage to Wal-Mart’s business, and that the restrictions contained in Paragraphs
4 and 5 are a reasonable attempt by Wal-Mart to protect its rights and to
safeguard its confidential information. The Associate expressly agrees that upon
a breach or a threatened breach by the Associate of the provisions of Paragraph
4 or Paragraph 5, Wal-Mart will be entitled to injunctive relief to restrain
such violation, and the Associate hereby expressly consents to the entry of such
temporary, preliminary, and/or permanent injunctive relief as may be necessary
to enjoin the violation of Paragraph 4 or Paragraph 5. The parties further agree
that any action relating to the interpretation, validity, or enforcement of this
Agreement shall be brought in the appropriate state or federal court
encompassing Benton County, Arkansas, and the parties hereby expressly consent
to the jurisdiction of such courts. The Associate further agrees that in any
claim or action involving the execution, interpretation, validity, or
enforcement of this Agreement, he or she will seek satisfaction exclusively from
the assets of Wal-Mart, and will hold harmless all of Wal-Mart’s individual
directors, officers, employees, and representatives.

 

7. SEVERABILITY. In the event that a court of competent jurisdiction shall
determine that any portion of this Agreement is invalid or otherwise
unenforceable, the parties agree that the remaining portions of the Agreement
shall remain in full force and effect. The parties also expressly agree that if
any portion of the covenant not to compete set forth in Paragraph 4 shall be
deemed unenforceable, then the Agreement shall automatically be deemed to have
been amended to incorporate such terms as will render the covenant enforceable
to the maximum extent permitted by law.

 

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8. NATURE OF THE RELATIONSHIP. Nothing contained in this Agreement shall be
deemed or construed to constitute a contract of employment for a definite term.
The parties acknowledge that the Associate is not employed by Wal-Mart for a
definite term, and that either party may sever the employment relationship at
any time and for any reason not otherwise prohibited by law.

 

9. ENTIRE AGREEMENT. This document contains the entire understanding and
agreement between the Associate and Wal-Mart regarding the subject matter of
this Agreement. This Agreement supersedes and replaces any and all prior
understandings or agreements between the parties regarding this subject, and no
representations or statements by either party shall be deemed binding unless
contained herein.

 

10. MODIFICATION. This Agreement may not be amended, modified, or altered except
in a writing signed by both parties or their designated representatives.

 

11. SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit of, and
will be binding upon, Wal-Mart, its successors and assigns, and on the Associate
and his or her heirs, successors, and assigns. No rights or obligations under
this Agreement may be assigned to any other person without the express written
consent of all parties hereto.

 

12. COUNTERPARTS. This Agreement may be executed in counterparts, in which case
each of the two counterparts will be deemed to be an original and the final
counterpart will be deemed to have been executed in Bentonville, Arkansas.

 

13. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arkansas.

 

14. STATEMENT OF UNDERSTANDING. By signing below, the Associate acknowledges (a)
that he or she has received a copy of this Agreement, (b) that he or she has
read the Agreement carefully before signing it, (c) that he or she has had ample
opportunity to ask questions concerning the

 

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Agreement and has had the opportunity to discuss the Agreement with legal
counsel of his or her own choosing, and (d) that he or she understands his or
her rights and obligations under this Agreement, and enters into this Agreement
voluntarily.

 

WAL-MART STORES, INC.

 

By:

 

/s / S. Robson Walton

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/s / Thomas M. Coughlin

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S. Robson Walton

 

Thomas M. Coughlin

       

Chairman of the Board

           

9/3/98

 

9/3/98

       

Date

 

Date

   

 

8

--------------------------------------------------------------------------------

Exhibit B

To

Retirement Agreement

 

RESTRICTED STOCK AWARDS

 

Plan

--------------------------------------------------------------------------------

   Award

--------------------------------------------------------------------------------

  

Unvested Restricted

Stock Awards

--------------------------------------------------------------------------------

  

Non-

Forfeited
Shares

--------------------------------------------------------------------------------

   Grant Date

--------------------------------------------------------------------------------

   Shares

--------------------------------------------------------------------------------

   #

--------------------------------------------------------------------------------

   Old Vesting Date

--------------------------------------------------------------------------------

  

1997 Restricted Stock Plan

   2/21/97    125,000    41,668    6/28/14    41,668

1998 Incentive Stock Plan

   8/12/98    62,500    15,626
31,250    8/12/05
6/28/14    15,626
31,250

1998 Incentive Stock Plan

   3/1/00    32,609    8,153
16,304    3/1/05
6/28/14    8,153
16,304

1998 Incentive Stock Plan

   3/1/00    20,469    4,094    3/4/05    4,094

1998 Incentive Stock Plan

   3/8/01    17,258    4,314
8,629    3/8/06
6/28/14    4,314
8,629

1998 Incentive Stock Plan

   3/7/02    35,842    8,961
8,961
17,920    3/7/05
3/7/07
6/28/14    8,961
8,961
17,920

1998 Incentive Stock Plan

   1/9/03    38,521    9,630
9,630
19,261    1/9/06
1/9/08
6/28/14    9,630
9,630
1,267

1998 Incentive Stock Plan

   1/5/04    38,373    9,593
9,593
19,187    1/5/07
1/5/09
6/28/14                    

--------------------------------------------------------------------------------

                         242,774         186,407               

--------------------------------------------------------------------------------

       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Exhibit C

To

Retirement Agreement

 

Mutual General Release

--------------------------------------------------------------------------------

Mutual General Release

 

This Mutual General Release (“Release”) is made and delivered in accordance with
that certain Retirement Agreement (“Agreement”), dated January 22, 2005, between
Thomas C. Coughlin (“Associate”), a resident of Benton County, Arkansas, and
Wal-Mart Stores, Inc., a Delaware corporation, its subsidiaries and affiliates
(collectively “Wal-Mart”). This Release should be read in conjunction with the
Agreement and construed in a manner consistent with the Agreement.

 

  1. Mutual Release. The Associate and Wal-Mart hereby release, acquit and
forever discharge each other and (to the extent applicable) their respective
directors, officers, shareholders, employees, successors and assigns, of and
from any and all liability for claims, causes of actions, demands, damages,
attorneys fees, expenses, compensation, or other costs or losses of any nature
whatsoever, whether known or unknown, which the Associate or Wal-Mart may have
arising out of or in any way related to the Associate’s employment with
Wal-Mart, including, but not limited to, claims for wages, back pay, front pay,
promotion or reinstatement opportunities. This release does not, however,
preclude the Associate or Wal-Mart from pursuing a claim for breach of the
Agreement or the Non-Compete Agreement.

 

The Associate also releases any and all claims he may have that arose prior to
the date of this Release, and hereby specifically waives and releases all claims
under Title VII of The Civil Rights Act of 1964, as amended, The Civil Rights
Act of 1991, as amended, The American With Disabilities Act, as amended, The Age
Discrimination in Employment Act, as amended, The Consolidated Omnibus
Reconciliation Act (COBRA), as amended, The Family and Medical Leave Act, as
amended, The Employment Retirement Income Security Act of 1974 (ERISA), as
amended, and any and all local, state or federal statutes, ordinances or
regulations, as well as all claims arising under federal, state, or local law
involving wrongful discharge, intentional infliction of emotional distress, the
tort of outrage, or any other claims of any nature whatsoever.

 

  2.

Associate Consent. The Associate acknowledges that Wal-Mart has informed him he
may take up to twenty-one (21) days from his receipt of this Release to consider
it before signing it. He further understands that he is not required to wait the
full twenty-one day (21) period before signing, and understands that he may sign
and return this Release at any time prior to the expiration of the twenty-one
day period. The Associate also understands that he may revoke this Release at
any time in the seven (7) days following its execution, and that this Release
will not become effective or enforceable until this seven (7) day revocation
period has expired. The Associate acknowledges that no benefits or rights will
inure to Associate under Section 2(b) of the Agreement until each of the
following has occurred: (i) the revocation period has expired without revocation
by Associate and (ii) the Agreement and this Release have been executed by
Associate and delivered to Wal-Mart. The Associate further acknowledges that he
has been

--------------------------------------------------------------------------------

 

advised to consider this Release carefully, and to review it with legal counsel
of his choice.

 

THOMAS M. COUGHLIN   WAL-MART STORES, INC.

/s/ Thomas M. Coughlin

--------------------------------------------------------------------------------

  By:          

/s/ Thomas D. Hyde

--------------------------------------------------------------------------------

    Name:          

Thomas D. Hyde

   

Title:

         

Executive Vice President, Legal and

Corporate Affairs and Corporate Secretary

Date: January 22, 2005

  Date:          

January 22, 2005

 

2

--------------------------------------------------------------------------------

Exhibit D

To

Retirement Agreement

 

Statement of Ethics

--------------------------------------------------------------------------------

LOGO [g70390image006.jpg]

 

Statement of

 

Ethics

(Number PD-10)

 

As revised on January 1, 2005

--------------------------------------------------------------------------------

A MESSAGE FROM OUR CHAIRMAN AND PRESIDENT & CEO

 

January 1, 2005

 

Dear Associates:

 

Our Company is committed to maintaining an environment in which our Associates
are proud to work, our suppliers and other business partners know that they are
being dealt with fairly, and our shareholders can invest with confidence. In
furtherance of these goals, we have updated our Company’s Statement of Ethics to
take into account recent changes in laws and regulations.

 

This revised Statement of Ethics applies to all of our Associates worldwide as
well as the members of our Board of Directors. It is critical that you read this
Statement of Ethics carefully. As in the past, we ask that each of you make a
special commitment to comply with the principles and policies set forth or
referred to in this Statement of Ethics.

 

Wal-Mart’s business was built upon a foundation of honesty, respect, fairness
and integrity. We must each strive to preserve that foundation by bringing these
values to our job every day. To that end, we must all follow the Statement of
Ethics. However, because this statement cannot possibly describe every practice
or principle related to honest and ethical conduct, it is also our
responsibility to apply common sense, together with a desire simply to do the
right thing, in making business and personal decisions where no stated guideline
exists.

 

The Open Door allows each of us to be heard on any issue. Where ethics are
concerned, our Company goes a step further. You are expected to raise any
questions or concerns regarding business ethics.

 

We are all privileged to work for one of the most successful companies in the
world. In order to sustain that success for future generations, it is our
responsibility to preserve and strengthen the core ethical beliefs upon which
our Company was founded. We are relying on each of you to help us fulfill this
important responsibility.

 

LOGO [g70390image002.jpg]

--------------------------------------------------------------------------------

 

LOGO [g70390image004.jpg]

--------------------------------------------------------------------------------

S. Robson Walton

Chairman of the Board

 

H. Lee Scott, Jr.

President & CEO

--------------------------------------------------------------------------------

OUR THREE BASIC BELIEFS

 

When Sam Walton founded Wal-Mart Stores, Inc. (“Wal-Mart”), he established the
“Three Basic Beliefs” to which we remain firmly committed:

 

  •   Respect for the Individual

 

  •   Service to our Customers

 

  •   Strive for Excellence

 

The Three Basic Beliefs go hand in hand with the integrity and ethical conduct
that is the foundation of our business.

 

GUIDING ETHICAL PRINCIPLES

 

As Wal-Mart Associates and Directors, we must:

 

•      Follow the law at all times;

 

•      Be honest and fair;

 

•      Never manipulate, misrepresent, abuse or conceal information;

 

•      Avoid conflicts of interest between work and personal affairs;

 

•      Never discriminate against anyone;

 

•      Never act unethically - even if someone else instructs you to do so;

 

•      Never ask someone to act unethically;

 

•      Seek assistance if you have questions about this Statement of Ethics or
if you face an ethical dilemma;

 

•      Cooperate with any investigation of a possible ethics violation; and

 

Report ethics violations or suspected violations.

 

This Statement of Ethics provides an introduction to the responsibilities of all
Associates, along with an overview of certain important policies. This Statement
of Ethics is an important part of employment with Wal-Mart, but is not intended
to create an express or implied contract of employment in and of itself. The
policies of Wal-Mart may be modified at our sole discretion, without notice, at
any time. Employment with Wal-Mart is on an at-will basis, where permitted by
law, meaning Associates are free to resign at any time for any or for no reason
and Wal-Mart may terminate an Associate at any time for any or for no reason.

 

i

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CONTENTS

 

     PAGE

--------------------------------------------------------------------------------

Using the Statement of Ethics

   1

Introduction

   2

Who Is Covered by the Statement of Ethics

   2

What Law Applies

   2

Associate Responsibilities

   2

Additional Responsibilities for Management Associates

   3

Discipline for Violations

   4

Waivers

   4

When You Have an Ethics Concern

   5

How to Raise an Ethics Concern

   5

What Happens When an Ethics Concern is Raised

   6

Company Policies

   7

Responsibilities to Our Company and Shareholders

   7

Duties to Shareholders

   7

Financial Integrity

   7

Conflicts of Interest

   8

Gifts and Gratuities

   9

Confidential Information

   9

Trade Secrets

   10

Insider Trading

   11

Wal-Mart Assets

   12

Media Statements

   12

Responsibilities to Our Fellow Associates

   13

Dignity and Respect

   13

Non-Discrimination

   13

Harassment and Inappropriate Conduct

   13

Wage and Hour

   14

Immigration

   15

Privacy

   15

Fraternization

   16

Alcohol and Drug Abuse

   16

Responsibilities to Suppliers, Competitors, Customers, Communities and
Governmental Authorities

   17

Relations with Suppliers

   17

Improper Payments

   18

Environmental, Health and Safety

   18

 

ii

--------------------------------------------------------------------------------

Antitrust

   19

USA PATRIOT Act

   20

Governmental Dealings

   21

Political Activities

   22

Responsibilities Regarding International Business Practices

   23

Bribes, Kickbacks, or Payoffs

   23

International Trade

   23

Restrictive Trade Practices & Boycotts

   25

Important Contact Information

   26

 

OTHER POLICIES

 

The following Wal-Mart policies are referred to in this Statement of Ethics and
are available on the Wal-Mart “Pipeline” or “Wire” or may be obtained from your
supervisor:

 

Alcohol and Drug Abuse Policy (PD-16)

Code of Ethics for the CEO and Senior Financial Officers

Company Equipment Usage Policy (PD-54)

Competition Policy (OP-13)

Conflict of Interest Policy (PD-13)

Fraternization Policy (PD-22)

Government Relations Policy (CA-15)

Harassment/Inappropriate Conduct Policy (PD-19)

HIPAA Privacy Policy (PD-59)

Insider Trading Policy (CR-01)

International Anti-Corruption Policy (CR-02)

Personal Computers Policy (I1-03)

Public Relations Policy (CA-10)

Risk Management Resource Manual

Use of Computer Modems and Internet Usage and Security Policy (I1-06)

Working Off the Clock Policy (PD-43)

Workplace Violence Policy (PD-48)

 

Certain national or local policies correspond to the policies in the list above
and any conflicts with the listed policies are to be resolved in favor of the
national or local policies. Nevertheless, all conflicts are to be resolved in
favor of this Statement of Ethics to the extent permissible under local law.

 

iii

--------------------------------------------------------------------------------

Using the Statement of Ethics

 

This Statement of Ethics introduces you to specific principles and policies
covering key ethics issues. It will identify risk areas that you may encounter
in your job and help you determine what to do if you have a question or concern.
The Guiding Ethical Principles contained at the beginning of this Statement of
Ethics provide you with a general guide for appropriate business conduct.
However, no code of ethics or statement of ethical principles can spell out the
proper conduct for every situation. In the final analysis, you must rely on your
own good judgment and sense of ethical behavior to make sure that you are always
doing the “right thing.”

 

How the Statement of Ethics is Organized

 

  1. Inside the front cover is a letter from Rob Walton, our Chairman, and Lee
Scott, our President and CEO, which addresses the importance of Wal-Mart’s
commitment to ethics.

 

  2. On the next page are our Guiding Ethical Principles, which provide a quick
reference to a set of general guidelines for appropriate behavior.

 

  3. The Introduction section explains your responsibility to comply with this
Statement of Ethics and to report concerns about possible violations of law or
policy.

 

  4. The section entitled “When You Have an Ethics Concern” tells you how to
report an ethics matter, including a way to report a matter confidentially and
anonymously. It also describes what happens once you raise an ethics concern.

 

  5. Several Wal-Mart policies are summarized in this Statement of Ethics. Each
summary consists of an overview of the policy and helpful hints for handling
situations that may arise. The policies are set forth in greater detail on the
“Pipeline” or “Wire.”

 

  6. This Statement of Ethics will, in many instances, refer to the applicable
United States policy. If you are an Associate working in another country, your
country’s management may adopt similar, more specific policies that relate to
these issues. You must read and familiarize yourself with your country’s
specific policies that relate to your job.

 

1

--------------------------------------------------------------------------------

Introduction

 

Who Is Covered by the Statement of Ethics

 

Wal-Mart Associates and Directors. This Statement of Ethics applies to all
Associates worldwide and all members of the Board of Directors of Wal-Mart. It
also applies to the Associates and Directors of all controlled subsidiaries,
i.e. where Wal-Mart owns more than 50% of the stock or equity of the subsidiary.

 

Third parties. Wal-Mart expects its suppliers, consultants, law firms, public
relations firms, contractors and other service providers to act ethically and in
a manner consistent with this Statement of Ethics. If you hire a service
provider, you should take reasonable steps to ensure that the service provider
has a reputation for integrity and ethical conduct and that the service provider
is acting in a manner that reflects the highest ethical standards.

 

What Law Applies

 

Wal-Mart conducts business in many countries around the world. Our Associates
are citizens of many countries and, as a result, our operations are subject to
many different laws, customs and cultures.

 

Wal-Mart is committed to the highest ethical standards in the conduct of our
business worldwide as set forth in the Guiding Ethical Principles. The number of
laws and regulations around the world affecting Wal-Mart increases and becomes
more complex each year. To the extent feasible, this Statement of Ethics will be
modified to conform to changes in laws and customs. In some instances the laws
of two or more countries will conflict. When you encounter a conflict, you
should consult with Wal-Mart’s Ethics Office (or, for countries other than the
U.S., the local Wal-Mart Ethics Committee) to understand how to resolve that
conflict.

 

If any requirement of this Statement of Ethics violates or conflicts with the
laws of a particular country, the requirement shall not apply in that country.

 

 

Associate Responsibilities

 

The following basic obligations apply to all Associates:

 

  •   Follow the law at all times! If you see any other Associate violating the
law, or if you are asked to do something by another Associate that does, or you
believe may, violate the law, report it immediately.

 

  •   Read and understand the Guiding Ethical Principles and apply them in your
job every day.

 

  •   Learn the policies that apply to your job. No one expects you to memorize
every policy. But, you should have a basic understanding of issues covered by
each policy, and you should learn which policies apply to your job. Check the
Wal-Mart “Pipeline” or “Wire”

 

2

--------------------------------------------------------------------------------

or ask your supervisor for the complete and latest text of the policies that
relate to your job.

 

  •   Seek assistance from your supervisor, the Ethics Office, or other Wal-Mart
resources when you have questions about the application of this Statement of
Ethics or other policies.

 

  •   Immediately raise any concern that you or others may have about possible
violations of this Statement of Ethics or any Wal-Mart policy, or about a
possible request or act that you believe might violate this Statement of Ethics
or a Wal-Mart policy.

 

  •   Understand the ways to raise ethics concerns. You may raise them with a
Wal-Mart supervisor, or, if you prefer, through a confidential, anonymous
hotline or by contacting the Ethics Office directly. The ways to raise concerns
are described in more detail below. If you raise an ethics concern and the issue
is not resolved, you should raise it through another channel.

 

  •   Cooperate with Wal-Mart investigations into concerns about violations of
this Statement of Ethics or a Wal-Mart policy.

 

Wal-Mart prohibits any Associate from retaliating against anyone who in good
faith raises or helps to resolve an ethics concern.

 

 

Additional Responsibilities for Management Associates

 

If you are a management Associate, you should monitor ethics compliance.
Supervision of ethics is as important as supervision of performance. You should
do the following to ensure that our Company maintains the highest ethical
standards:

 

  •   When an ethics issue comes to your attention, you are encouraged to
contact the Ethics Office for assistance.

 

  •   Meet with your direct reports as a group periodically to review the
Guiding Ethical Principles and this Statement of Ethics.

 

  •   Where there is a conflict between ethics and business objectives, ethics
must always come first.

 

  •   Lead by example and train your Associates to be ethical in all dealings
and to avoid even the appearance of unethical conduct.

 

  •   If an ethics issue arises with one of your Associates, make sure other
Associates are not making the same mistake.

 

  •   Ensure open communication by encouraging Associates in your department or
division to ask questions concerning ethics matters.

 

3

--------------------------------------------------------------------------------

  •   Encourage self-reporting of ethics violations. If an Associate voluntarily
reports that he or she was involved in an ethics violation, such self-reporting
may be considered when determining the appropriate disciplinary action to be
taken.

 

  •   Never cover up or ignore an ethics problem. Address ethics matters in a
timely manner and seek guidance if necessary.

 

  •   Appreciate Associates who raise ethics issues.

 

  •   Never retaliate against anyone for raising an ethics issue, assisting in
an ethics investigation or participating or assisting in any proceeding relating
to an alleged violation of any applicable government regulations, laws or rules
or an alleged fraud against shareholders.

 

Discipline for Violations

 

Appropriate disciplinary action, up to and including termination, may be taken
against any Associate whose conduct violates this Statement of Ethics or
applicable laws and regulations, including the Guiding Ethical Principles.
Self-reporting of ethics violations is encouraged and may be considered when
determining the appropriate disciplinary action to be taken.

 

Also, anyone who knowingly makes a false report of an alleged ethics violation
could be subject to disciplinary action.

 

Waivers

 

Any Associate (other than executive officers) may request from the Ethics Office
a waiver of the applicability of this Statement of Ethics. Ethics waiver
requests must be submitted in writing to the Ethics Office by the Associate and
must set forth the relevant facts and circumstances supporting the requested
waiver. The Ethics Office will respond in writing to the Associate.

 

For members of the Board of Directors and executive officers, requests for
waivers of the Statement of Ethics will only be considered by the Audit
Committee or by the full Board of Directors, as the Board of Directors
determines. Members of the Board of Directors and the Chief Executive Officer
must submit their own waiver requests in writing. Written requests must set
forth the relevant facts and circumstances supporting the waiver. After receipt
and review of the request, the Audit Committee or the Board of Directors will
respond in writing to the requester. Any waivers of this Statement of Ethics
granted in favor of members of the Board of Directors or executive officers will
be promptly disclosed to shareholders.

 

All waiver requests must be approved in advance of the conduct for which
approval is sought.

 

4

--------------------------------------------------------------------------------

When You Have an Ethics Concern

 

One of the most important responsibilities Wal-Mart Associates have is the
obligation to raise a concern about a possible violation of Wal-Mart policy or
the law. If you are reluctant to raise these concerns, you should remember that
you can cause harm to our Company and our fellow Associates if you remain silent
when you have an ethics or policy concern. In fact, all Associates are required
to report any known or suspected violations of the law, applicable regulations
or this Statement of Ethics or any other Wal-Mart policy.

 

How to Raise an Ethics Concern

 

You may report ethics concerns or possible violations of this Statement of
Ethics or other Wal-Mart policies by any of the following methods:

 

  •   Use the Open Door. The Open Door is the most direct way to voice any
concern to a supervisor. If you believe your immediate supervisor is involved in
misconduct, report the misconduct to the next level of management believed not
to be involved or use one of the other reporting channels described below.

 

-or-

 

  •   Contact the Ethics Office.

 

  •   Phone. Wal-Mart has an Ethics Hotline, which allows you to report a
violation on a confidential and anonymous basis.

 

  •   United States, Canada or Puerto Rico: 1-800-WMETHIC (1-800-963-8442).

 

  •   All other locations: Toll-free number posted in each country.

 

  •   Email. Ethics@wal-mart.com.

 

  •   Mail.     Wal-Mart Stores, Inc.

      Attn: Ethics Office

      702 SW 8th Street

      Bentonville, AR 72716-0860

 

  No Associate who in good faith reports a suspected violation will be subject
to retaliation for having made the report.

 

 

5

--------------------------------------------------------------------------------

What Happens When an Ethics Concern is Raised

 

The Ethics Office has oversight responsibility for possible ethics violations
which are reported through the Ethics Hotline or which are otherwise forwarded
to the Ethics Office. If the reported matter relates to a systemic accounting
issue, the Ethics Office will forward the matter to the Internal Audit
Department, which will coordinate and oversee the investigation and resolution
of the matter. The Ethics Office and Internal Audit Department will operate
under the review and supervision of the Audit Committee of the Board of
Directors. Guidance on resolution of ethics matters will be sought from the
Wal-Mart Legal Department, as necessary. The Ethics Office and Internal Audit
Department will maintain logs of ethics matters under their supervision that
track the receipt, investigation and resolution of each matter, and will prepare
periodic summary reports for senior management and the Audit Committee of the
Board of Directors.

 

The following diagram outlines the process for handling an ethics concern:

 

LOGO [g70390703900.jpg]

 

 

6

--------------------------------------------------------------------------------

Company Policies

 

Responsibilities to Our Company and Shareholders

 

Duties to Shareholders

 

Wal-Mart is committed to advancing the long-term interests of its shareholders
and to protecting and improving the value of their investment by observing the
highest standards of ethical and legal conduct in all business dealings.
Wal-Mart will provide full, fair, accurate, timely and understandable disclosure
in the reports and documents it files with the Securities and Exchange
Commission, as well as in its other public communications. Wal-Mart will also
conduct its operations in accordance with accepted principles of good corporate
governance.

 

Financial Integrity

 

Wal-Mart requires honest and accurate recording and reporting of financial
information in order to make responsible business decisions. All financial
books, records and accounts must accurately reflect transactions and events and
conform to generally accepted accounting principles and to Wal-Mart’s system of
internal controls. No Wal-Mart document or record may be falsified for any
reason, and no undisclosed or unrecorded accounts of Wal-Mart’s funds or assets
may be established for any purpose.

 

Wal-Mart has a separate “Code of Ethics for the CEO and Senior Financial
Officers” that imposes additional responsibilities on those persons regarding
financial integrity. Any amendments or waivers with respect to such code of
ethics may only be approved by the Audit Committee of the Board of Directors and
will be promptly disclosed to shareholders as required by applicable securities
laws.

 

Things to Remember!

 

•      Watch for financial results that seem inconsistent with underlying
performance or transactions with no clear business purpose.

 

•      Answer all inquiries from Wal-Mart’s management, internal and external
auditors and internal investigators accurately and completely. Do not suppress
or withhold relevant information.

 

•      Retain documents in accordance with applicable laws, regulations or court
orders and in compliance with all internal retention policies and directives.

 

•      Wal-Mart is required by law to retain all complaints received regarding
accounting, internal audit controls, or auditing matters. Complaints regarding
these subjects must be forwarded immediately to the Internal Audit Department.

 

•      Never sign a document that you believe to be inaccurate or untruthful.

 

•      Be alert for any attempts to circumvent internal controls.

 

•      Follow Wal-Mart directions and guidelines for product pricing, markups
and markdowns.

 

 

7

--------------------------------------------------------------------------------

Conflicts of Interest

 

You have a responsibility to avoid situations and relationships that involve
actual or possible conflicts of interest. The appearance of a conflict may be
just as damaging to Wal-Mart’s reputation as an actual conflict. A conflict
situation can arise if you take actions or have interests that are inconsistent
with the interests of Wal-Mart or that may interfere with your ability to
perform your job effectively on behalf of the Company. Situations or
transactions that create the appearance or perception that you cannot carry out
your duties and responsibilities with integrity and impartiality should be
avoided.

 

You are responsible for advancing Wal-Mart’s business interests when the
opportunity to do so arises. You may not take any opportunities or use any
confidential information for your benefit, or for the benefit of your immediate
family members, that you discover or obtain through your employment with
Wal-Mart. Immediate family members include (whether by birth, adoption, marriage
or Domestic Partnership or Civil Union, if recognized by your state or other
local law) your spouse, children, parents, siblings, mothers and fathers-in-law,
sons and daughters-in-law and brothers and sisters-in-law. Refer to the
Conflicts of Interest Policy, PD-13, for specific state information.

 

You may also not use your position with Wal-Mart or any of Wal-Mart’s resources,
property or information for your, or your immediate family members’, personal
gain or benefit.

 

Finally, you may not compete with Wal-Mart in any way during your employment
with Wal-Mart.

 

A detailed Conflict of Interest Policy, PD-13, is located on the “Pipeline” or
“Wire,” where available. Where no “Pipeline” or “Wire” is available, the
applicable Conflicts of Interest Policy can be obtained from the local Legal
Department or People Division.

 

Things to Remember!

 

•      It is your responsibility to disclose to your immediate supervisor any
situation that you believe creates or could create a conflict of interest.

 

•      Supervisors are encouraged to then bring the matter to the attention of
the Ethics Office who will determine how to proceed.

 

•      When in doubt, disclose the facts and get advice before acting.

 

 

Certain Wal-Mart senior officers are subject to an additional conflicts of
interest policy known as the “Transaction Review Policy.”

 

8

--------------------------------------------------------------------------------

Gifts and Gratuities

 

You may not request, encourage or accept a gift or gratuity from a supplier,
potential supplier or any person who you believe may seek to influence any
business decision or transaction involving Wal-Mart. The same rule applies to
Departments. Suppliers may not donate items to Wal-Mart for the purpose of
raising funds for charities or non-profit organizations. Also, Associates may
not accept a gift or gratuity from a customer for work performed by the
Associate in a store or club, except as allowed by local or national policy.

 

Examples of gifts or gratuities include the following:

 

  •   “free goods”

 

  •   tickets to sporting or entertainment events

 

  •   kickbacks in the form of money or merchandise

 

  •   discontinued or no-longer-used samples

 

  •   supplier-paid trips

 

  •   liquor or meals

 

  •   tips

 

  •   personal services or favors

 

Things to Remember!

 

•      Any gift or gratuity received from a supplier must be returned with an
explanation of this policy.

 

•      Where return is impractical, any gift that is not returned becomes the
property of Wal-Mart.

 

•      Any offer of a gift or gratuity must be reported to your supervisor.

 

 

Confidential Information

 

Your position within Wal-Mart may give you access to confidential information
about our business, customers, suppliers and other organizations with which we
do business. Associates must always keep this information strictly confidential.
You should consider all information gained through your employment as
confidential Wal-Mart information. Accessing or attempting to access
confidential or personal information for non-business related purposes is
strictly prohibited. You must return all confidential Wal-Mart information (if
in physical form) to Wal-Mart along with any other Wal-Mart property in your
possession upon termination of employment.

 

9

--------------------------------------------------------------------------------

Things to Remember!

 

•      Do not disclose confidential information to anyone outside the Company
without the express written approval of the People Department (in the case of
information about an Associate) or the Legal Department (in all other cases).

 

•      Disclose confidential information to other Associates only for legitimate
business purposes.

 

•      Handle all confidential information with care to avoid inadvertent or
careless disclosure.

 

•      Secure or password protect all files or records containing confidential
information as necessary to protect the confidentiality of that information.

 

•      For information regarding protected health information refer to
Wal-Mart’s HIPAA Privacy Policy, PD-59, or the corresponding national or local
policy.

 

 

Trade Secrets

 

Wal-Mart has invested in the development of systems, processes, products,
know-how and technology that have made us a leader in the retail industry and
give us a competitive edge. We call this information, know-how and technology
our “trade secrets.” All trade secrets must be kept confidential and secure. In
addition to protecting our own trade secrets, it is our policy to respect the
trade secrets of others. No Associate may reveal the trade secrets of the
companies with which we conduct business. Associates should also keep the trade
secrets of their former employers confidential. Wal-Mart will not tolerate the
violation of confidentiality or secrecy agreements or the improper acquisition
of protected information.

 

Things to Remember!

 

•      Always protect and maintain the confidentiality of our trade secrets.

 

•      If you have a question as to whether information is a trade secret, ask
your supervisor.

 

•      If your supervisor has questions, he or she should contact the Legal
Department.

 

•      Any creations or inventions that you make as a Wal-Mart Associate are the
property of Wal-Mart, where permitted by law. In furtherance of this policy, you
may be required to sign an invention disclosure that gives ownership of any such
creations or inventions to Wal-Mart.

 

 

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Insider Trading

 

It is illegal to buy or sell stock or other securities on the basis of material,
nonpublic (i.e. inside) information. It is also illegal to communicate (or
“tip”) inside information to others so that they may buy or sell stock or other
securities. If you are aware of material, nonpublic information about Wal-Mart
or any other company, including our suppliers or business partners, you are
prohibited from trading (directly or indirectly) or tipping others to trade in
the stock or other securities of that company. These same restrictions apply to
any person who lives in your household or who is financially dependent upon you.

 

Inside information is any non-public information that a reasonable investor is
likely to consider important in making an investment decision. Common examples
of inside information include:

 

  •   Projections of future earnings or loss.

 

  •   News of a significant or pending merger, acquisition or tender offer.

 

  •   News of a significant sale of assets or the disposition of a subsidiary.

 

  •   Changes in dividend policy, the declaration of a stock split, or the
offering of additional securities.

 

  •   Changes in management.

 

  •   Significant new products or discoveries.

 

  •   Impending bankruptcy or financial liquidity problems.

 

  •   The gain or loss of a significant supplier or customer.

 

  •   The possible awarding or cancellation of a significant contract to either
Wal-Mart or to a supplier.

 

Things to Remember!

 

•      Never buy or sell the stock or other securities of any company while you
have inside information about that company.

 

•      Never recommend that anyone buy or sell the stock or other securities of
any company while you have inside information about that company.

 

•      Do not disclose inside information about Wal-Mart to anyone outside of
Wal-Mart (including your family members), unless such disclosure has been
approved by the Legal Department, and only after the Legal Department has
informed you that adequate steps have been taken to prevent misuse of the
information.

 

•      Disclose inside information within Wal-Mart only on a “need-to-know”
basis.

 

•      For more information, refer to the Company’s Insider Trading Policy,
CR-01.

 

 

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Wal-Mart Assets

 

Wal-Mart property should be used only for Wal-Mart business and should not be
used for any type of personal gain. You are responsible for maintaining Wal-Mart
property under your control and should take reasonable steps to protect Wal-Mart
property from theft, misuse, loss, damage or sabotage.

 

Associates have no expectation of privacy as to the use of Wal-Mart
communication tools, and Wal-Mart has the right to and does monitor your
communications tools, including their content, and your usage of such tools.

 

Things to Remember!

 

•      You should only use Wal-Mart communication tools in accordance with the
policies listed below.

 

•      Do not connect a modem to any computer in Wal-Mart’s Home Office without
the approval of an Information Systems Division Vice President.

 

•      Do not use Wal-Mart letterhead when writing letters regarding personal or
non-business matters.

 

•      Safeguard all physical, financial, and other company assets. Do not use a
company vehicle for unauthorized personal use without reimbursing Wal-Mart for
the expense.

 

 

For more information, refer to the following, or the corresponding national or
local policies:

 

  •   Company Equipment Usage Policy, PD-54.

 

  •   Personal Computers Policy, I1-03.

 

  •   Use of Computer Modems and Internet Usage and Security Policy, I1-06.

 

Media Statements

 

You may not make any statement (written or verbal) on behalf of Wal-Mart to
media, news publications, trade publications or any other source without prior
approval from the Corporate Affairs Department (and, with respect to statements
about financial matters, the Finance Department). For more information, see
Wal-Mart’s Public Relations Policy, CA-10.

 

Things to Remember!

 

•      Direct any request to make any statement on Wal-Mart’s behalf to the
Corporate Affairs Department.

 

•      Do not respond to an inquiry yourself without prior approval from the
Corporate Affairs Department.

 

 

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Responsibilities to Our Fellow Associates

 

Dignity and Respect

 

Wal-Mart Associates should treat each other with dignity and respect. We should
be fair and courteous in all of our interactions in the workplace. The policies
in this section are an extension of Sam Walton’s basic belief of “Respect for
the Individual.”

 

Non-Discrimination

 

Wal-Mart is committed to ensuring that our Associates represent the diversity of
our customers and the communities we serve. Wal-Mart will not tolerate
discrimination in employment on the basis of race, color, age, sex, sexual
orientation, religion, disability, ethnicity, national origin, veteran status,
marital status or any other legally-protected status. Any such discrimination
against a customer or supplier is also strictly prohibited.

 

Things to Remember!

 

•      Review your own decisions to ensure that merit and business
considerations, instead of prejudice, stereotyping or bias, drive your actions.

 

•      Do not allow race, color, age, sex, sexual orientation, religion,
disability, ethnicity, national origin, veteran status or marital status to be a
factor in hiring, evaluation, promotion, compensation or other
employment-related decisions.

 

•      Immediately report any suspected acts of discrimination by or against any
Associate, customer or supplier.

 

 

Harassment and Inappropriate Conduct

 

Harassment of any type, whether directed at a co-worker, supplier, customer or
anyone doing business with Wal-Mart, will not be tolerated. Harassment is
broadly defined and includes conduct which negatively interferes with work
performance, diminishes the dignity of any person or which creates an
intimidating, hostile or otherwise offensive work environment.

 

Verbal, visual or physical conduct of a sexual nature is inappropriate in the
work place and may be unlawful sexual harassment. Examples include:

 

  •   Sexual advances, requests for sexual favors, foul language, off-color
jokes, remarks about a person’s body or sexual activities;

 

  •   Displaying sexually suggestive pictures or objects, suggestive looks or
leering, or suggestive communication in any form; or

 

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  •   Inappropriate touching.

 

Additionally, Wal-Mart will not tolerate violent acts or threats of violence on
Wal-Mart property or while engaged in Wal-Mart business.

 

Things to Remember!

 

•      Do not make insulting or offensive remarks. If one of your comments or
jokes offends someone else, it may be seen as harassing.

 

•      If you are upset by a person’s choice of words, speak up and tell that
person. Explain why the comments offend you, and ask the person to stop.

 

•      Avoid making jokes or comments or using nicknames if you question their
appropriateness.

 

•      Do not make sexual advances to another Associate or person with whom you
work.

 

•      Do not show favoritism on performance evaluations or in other actions
based on personal relationships.

 

•      Immediately report any act of Harassment or Inappropriate Conduct.

 

•      For additional information refer to the Harassment/Inappropriate Conduct
Policy, PD-19, and the Workplace Violence Policy, PD-48, or the corresponding
national or local policies.

 

 

Wage and Hour

 

It is a violation of law and Wal-Mart policy for you to work without
compensation or for a supervisor (hourly or salaried) to request that you work
without compensation. You should never perform any work for Wal-Mart without
compensation.

 

Things to Remember!

 

•      If you are an hourly Associate, you must clock in prior to beginning work
and clock out for meal periods and at the end of your scheduled shift when you
are no longer performing work for Wal-Mart.

 

•      Immediately report any request by any supervisor that you or another
Associate work without compensation.

 

•      For additional information, refer to the Working Off the Clock Policy,
PD-43, or the corresponding national or local policy.

 

 

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Immigration

 

You may not hire, recruit, or refer for a fee, anyone not legally authorized to
work in the country in which employment is sought. Wal-Mart is required to
inspect, verify, and document the identity and employment authorization of every
new Associate.

 

Things to Remember!

 

•      All persons hired by Wal-Mart, must provide proper documentation and
verification of their authorization to work in the country where they are to be
employed.

 

•      In complying with immigration laws, it is important to follow Wal-Mart’s
prohibition against employment discrimination on the basis of national origin or
possible citizenship status.

 

•      Wal-Mart requires that all employment agencies, contractors and others
doing business with Wal-Mart fully comply with all immigration laws.

 

 

Privacy

 

Wal-Mart is committed to protecting the privacy of Associates in accordance with
applicable laws. Only Associates who are authorized and who have a work-related
reason may access company personnel and medical records. Personnel and medical
records should contain only employment-related information. All matters relating
to employment and termination are confidential. Outside inquiries must be
directed to the Legal Department.

 

Wal-Mart is also committed to protecting personal information that we maintain
on individual consumers. You must follow Wal-Mart practices and procedures for
maintaining the privacy of this information.

 

Things to Remember!

 

•      If you are asked by any outside person, group or agency to provide access
to records maintained by Wal-Mart, you must first discuss the request with the
Legal Department.

 

•      If you are in a Wal-Mart business subject to special privacy rules or
procedures (e.g., pharmacy or vision centers, Wal-Mart.com or benefits
administration), read and understand the current Wal-Mart privacy policies or
procedures for your business and understand how it applies to your job.

 

•      Wal-Mart maintains a privacy policy for our customers and members which
is located on our corporate website at www.wal-martstores.com.

 

•      Additional information regarding health information privacy issues is
available in the Wal-Mart HIPAA Privacy Policy, PD-59, or the corresponding
national or local policy.

 

 

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Fraternization

 

Wal-Mart Associates are expected to conduct themselves in a manner that promotes
respect, trust, safety, and efficiency in the workplace. You may not date or
become romantically involved with another Associate if you can influence that
Associate’s terms and conditions of employment or if that Associate can
influence the terms and conditions of your employment.

 

Specific examples of prohibited conduct are contained in the Fraternization
Policy, PD-22, or the corresponding national or local policy.

 

Alcohol and Drug Abuse

 

Wal-Mart is committed to a drug and alcohol free work environment and maintains
a strict Alcohol and Drug Abuse Policy.

 

Where permitted by law, Wal-Mart requires all job applicants to be drug screened
as part of the post-offer hiring process. Any applicant who tests positive for
illegal drug use will not be hired. Where permitted by law, you may also be
required to submit to drug testing prior to promotion to a management position,
following certain on-the-job injuries or if there is a reasonable basis to
suspect you are under the influence of drugs.

 

Things to Remember!

 

•      Seek professional help if you have a problem with substance abuse before
it adversely affects you personally or professionally.

 

•      For additional information refer to the Alcohol and Drug Abuse Policy,
PD-16, or the corresponding national or local policy.

 

 

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Responsibilities to Suppliers, Competitors, Customers, Communities and
Governmental Authorities

 

Relations with Suppliers

 

Wal-Mart bases its relationships with suppliers on lawful, efficient and fair
business practices. The selection of suppliers must be made on the basis of
objective criteria, including quality, price, delivery, adherence to schedules,
product suitability, maintenance of adequate sources of supply and Wal-Mart’s
purchasing practices and procedures. You must treat Wal-Mart suppliers with
respect, fairness and honesty and not take undue advantage of a supplier by
using Wal-Mart’s business influence. We also expect our suppliers to follow all
applicable legal requirements in their business practices.

 

You should not approach a supplier or potential supplier about providing
employment for your immediate family members. Immediate family members include
(whether by birth, adoption, marriage or Domestic Partnership or Civil Union, if
recognized by your state or other local law) your spouse, children, parents,
siblings, mothers and fathers-in-law and brothers and sisters-in-law.

 

Wal-Mart will not do business with former Associates for a period of five (5)
years after the Associate’s separation from Wal-Mart if a conflict of interest
exists between the Associate’s former position at Wal-Mart and the Associate’s
new position with a supplier. For example, if you leave the employment of
Wal-Mart and go to work for a supplier, you may not be allowed to work on or
service the Wal-Mart account on behalf of the supplier during this five-year
restricted period. The People Director for each Division will review inquiries
and determine whether a conflict exists when a former Associate proposes to go,
or has gone, to work for a supplier.

 

Things to Remember!

 

•      Avoid conflicts of interest in supplier selection, such as directing
business to a supplier owned or managed by a relative or a friend.

 

•      Associates who are involved in proposals, bid preparations or contract
negotiations must be certain that all statements, communications and
representations are accurate and truthful.

 

•      Do not have social or other relationships with suppliers, if such
relationship would create the appearance of impropriety or give the perception
that business influence is being exerted.

 

•      If you believe that you may be perceived to have an inappropriately close
relationship with a supplier or appear to be exerting business influence, you
should inform your supervisor. If your supervisor has questions, he or she
should contact the Ethics Office.

 

•      Be watchful for suppliers who violate worker safety, environmental or
other legal requirements and promptly report any such activities to your
supervisor or the Ethics Office.

 

 

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Improper Payments

 

You should not offer anything of value, directly or through third persons, to
anyone (including governmental authorities) to obtain an improper advantage in
selling goods and services, conducting financial transactions, or presenting the
Company’s interests. All countries prohibit bribery of their own public
officials, and many also prohibit the bribery of officials of other countries.
Wal-Mart’s policy goes beyond these legal requirements and prohibits improper
payments in all activities, both with governments and in the private sector.

 

Things to Remember!

 

•      Never give, offer, or authorize the offer of anything of value to a
customer, supplier or government official to obtain any improper advantage.

 

•      Never offer a business courtesy (such as a gift, contribution or
entertainment) in circumstances that would create an appearance of impropriety.

 

•      Gifts to foreign officials are covered under the U.S. Foreign Corrupt
Practices Act (see the International Business Practices Section of this
Statement of Ethics) and corresponding laws in most other countries where
Wal-Mart has operations.

 

 

Environmental, Health and Safety

 

Wal-Mart is committed to the health, safety and the protection of the
environment and to conducting our business in compliance with all environmental
health and safety laws. Our policy is to conduct our business in a socially
responsible and ethical manner that protects the environment and the health and
safety of our customers and Associates.

 

As an Associate of Wal-Mart, you must:

 

  •   Always comply with all relevant environmental, health and safety laws.

 

  •   Reduce waste and appropriately dispose of toxic or hazardous materials.

 

  •   Respect the environmental rights and interests of our neighbors and the
communities in which our stores and clubs are located.

 

  •   Create and maintain a safe working environment.

 

  •   Help prevent accidents and injuries to our customers and Associates.

 

  •   Avoid unsafe activities and conditions, including blocking fire exits,
improper shelving of inventory and obstructing aisles.

 

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  •   Follow all company policies and directives relating to the environment and
the health and safety of our customers and Associates.

 

Things to Remember!

 

•      Follow all company directives, policies and procedures related to
compliance with environmental, health and safety laws.

 

•      Immediately report any suspected violations of environmental law or
health and safety laws such as the Occupational Safety and Health Act (“OSHA”),
which is applicable to U.S. Associates.

 

•      OSHA guidelines and procedures can be found in Wal-Mart’s Risk Control
Resource Manual and on the “Pipeline” or “Wire.” Where the “Pipeline” or “Wire”
is not available, the applicable environmental and health and safety laws may be
obtained from the Legal Department.

 

 

Antitrust

 

Antitrust laws protect free enterprise by ensuring vigorous competition. These
laws prohibit activities that restrain trade. Wal-Mart is committed to doing its
part to preserve free enterprise by requiring that all Associates follow all
applicable antitrust laws.

 

In general, antitrust laws prohibit:

 

  •   Any agreement with a competitor, customer or supplier that unreasonably
restrains Wal-Mart’s activities;

 

  •   Agreements or other conduct that unreasonably restrains Wal-Mart’s
competitors, customers or suppliers from doing something they might otherwise do
in the normal course of their business; and

 

  •   Agreements or other conduct that has the purpose or effect of excluding
Wal-Mart or our competitors, customers, or suppliers from a market or a part of
a market.

 

The following are examples of activities that should be avoided under the
antitrust laws:

 

  •   Agreements with competitors with respect to price, terms of sale, costs,
profits, profit margins or the division or allocation of markets, territories,
or customers;

 

  •   Exchanging any unpublished information concerning prices, terms of sale or
any other competitive information with a competitor;

 

  •  

Knowingly inducing a supplier to give a lower price or better terms to Wal-Mart
than to a competitor of Wal-Mart, unless either: (1) it is based on actual
differences in cost of manufacture, sale or distribution or (2) you believe
another supplier will

 

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       offer the same goods at a lower price and you express that belief to the
supplier (without specifically identifying the other supplier or the amount it
is likely to bid);

 

  •   Tie-in sales, where the supplier refuses to sell product A to Wal-Mart
unless Wal-Mart also buys product B, are illegal. Exclusive agreements to sell
particular items may also be illegal in some circumstances; and

 

  •   Agreements to boycott a third party. It is not illegal for Wal-Mart to
decide that it will not do business with other companies, but you should never
discuss with others Wal-Mart’s intention to do or not do business with such
companies.

 

Various laws may also prohibit other types of activities, such as selling below
cost, refusals to deal and certain trade association activities. For more
information, see the Company’s Competition Policy, OP-13.

 

Things to Remember!

 

•      Develop Wal-Mart strategies and make all business decisions
independently, without consultation with any Wal-Mart competitor.

 

•      If you are in a situation where others discuss topics that raise
antitrust concerns, explain that Wal-Mart does not engage in such conversations.

 

•      If the discussion continues, remove yourself from the conversation and
immediately report the incident.

 

•      Avoid giving to, accepting from or discussing with a competitor any
unpublished information concerning prices, terms and conditions of sale or any
other competitive information.

 

•      Antitrust violations can have severe consequences for individuals,
including imprisonment, and can result in major financial penalties and
embarrassment for Wal-Mart.

 

•      If you have questions about any of the issues discussed in this section
of the Statement of Ethics, you should contact the Legal Department.

 

 

USA PATRIOT Act

 

Wal-Mart is committed to complying fully with all applicable money laundering
laws throughout the world, including the USA PATRIOT Act. You must comply with
all applicable laws prohibiting money laundering and that require reporting of
cash or other suspicious transactions.

 

You should be alert to the following activities:

 

  •   The types of payments that have become associated with money laundering
(e.g., multiple money orders of travelers checks or large amounts of cash);

 

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  •   A customer or other third party who is reluctant to provide complete
information, provides false or suspicious information, or is anxious to avoid
reporting or record-keeping requirements;

 

  •   Unusually favorable payment terms or unusual fund transfers to or from
foreign countries unrelated to the transaction; and

 

  •   Structuring a transaction to avoid requirements (e.g., multiple
transactions below the reportable threshold amounts).

 

Things to Remember!

 

•      Be on the look-out for warning signs or suspicious activities that might
indicate money laundering.

 

•      Follow Wal-Mart’s rules concerning acceptable forms of payment,
including, if applicable to your job, all procedures related to compliance with
the USA PATRIOT Act and similar legislation in other countries. For further
guidance on this topic, please consult with your local Legal Department.

 

 

Governmental Dealings

 

You may not enter into any contract with any federal governmental entity
involving the sale of products or services without written approval from the
General Counsel and a member of the Executive Committee of Wal-Mart. Outside of
the U.S., government contracts require prior review by the local Legal
Department and the appropriate level of senior management.

 

Things to Remember!

 

•      Immediately report all inquires from government entities or investigators
to the appropriate level of management.

 

•      You must be truthful and accurate in all dealings with government
officials and agencies.

 

•      Inquiries from government investigators must be answered accurately and
completely, and relevant information may not be suppressed or otherwise
withheld.

 

 

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Political Activities

 

Wal-Mart encourages you to participate in the political process outside of work
and during non-work time. You may use your money to make lawful contributions to
political parties, candidates or political action committees. Under no
circumstances may Wal-Mart reimburse you for political activities.

 

No political contribution of Wal-Mart funds or use of Wal-Mart property,
services or other assets for political purposes may be made without the prior
approval of the Government Relations Department. Indirect expenditures on behalf
of a candidate or an elected official, such as travel on corporate aircraft or
use of telephones, e-mail, and other corporate equipment, are subject to the
same prohibitions.

 

Things to Remember!

 

•      Except as required by law or allowed by Wal-Mart policy, Associates may
not use their work time or other Associates’ work time for political activities.

 

•      Wal-Mart will not reimburse Associates for tickets for personal
attendance at any political fundraising event, even if business is discussed at
the event.

 

•      Except as required by law, you should not use your job title or Wal-Mart
affiliation in connection with the support, endorsement or testimonial of a
political candidate or organization without approval from the Government
Relations Department.

 

•      For additional information refer to the Government Relations Policy,
CA-15, or the corresponding national or local policy.

 

 

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Responsibilities Regarding International Business Practices

 

Wal-Mart is subject to several international anti-corruption laws, such as the
U.S. Foreign Corrupt Practices Act, which seek to curb dishonesty in
international dealings. Due to the nature and number of possible international
ethical concerns, Associates who conduct Wal-Mart business internationally
should have an understanding of the laws governing international trade beyond
the principles found in this Statement of Ethics and should fully comply with
the laws applicable to their job.

 

Toward this end, Wal-Mart has adopted a comprehensive International
Anti-Corruption Policy, CR-02.

 

Bribes, Kickbacks, Or Payoffs

 

The U.S. Foreign Corrupt Practices Act, other U.S. laws, and similar laws of
other countries, prohibit you, on behalf of Wal-Mart, from directly or
indirectly making, promising, authorizing or offering anything of value to a
government official or employee, political party, or any candidate for political
office. A governmental official includes any person acting in an official
capacity on behalf of a government, agency, department or instrumentality, such
as a business with government ownership (e.g., a national oil company).

 

Things to Remember!

 

•      Local practice or custom in a foreign country does not excuse compliance
with the Foreign Corrupt Practices Act. If you have questions, contact the Legal
Department before you act.

 

•      For additional information see the International Anti-Corruption Policy,
CR-01.

 

 

International Trade

 

Many countries regulate international trade restrictions, such as imports,
exports and international financial transactions. For example, all goods
imported into the United States must pass through Customs where a duty must be
paid, unless an exemption applies. Most other countries may have similar
requirements.

 

You should be alert to the following activities:

 

  •   Prices that do not reflect the full value of imported goods or the amounts
of any payments to or for the benefit of an exporter;

 

  •   Transfer prices between related parties that fail to cover all costs and
profits;

 

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  •   Inaccurate or incomplete invoice description of imported goods or the
country of origin; and

 

  •   Entry of goods under a preferential duty program (e.g., NAFTA) without
supportive procedures that assure compliance with program requirements.

 

Governments administer a variety of embargoes and sanctions programs against a
number of countries, as well as nationals of those countries, because of
activities deemed contrary to their interests and the interests of their allies.
Transactions with certain designated individuals and organizations, such as
terrorist organizations, narcotics traffickers and weapons proliferators, are
also prohibited even though those individuals or organizations may not be
associated with any particular country’s embargo. Severe civil and/or criminal
penalties may be levied against companies or individuals that violate export
controls. Always consult with the Legal Department prior to entering into
international trade negotiations or transactions.

 

Things to Remember!

 

•      Follow all relevant international trade control regulations, including
licensing, shipping documentation, duty requirements, import/export
documentation, and reporting and record retention requirements of all countries
in which you conduct business.

 

•      Understand which party to an international trade transaction is
responsible for the accuracy of trade documentation and ensure that Wal-Mart has
properly discharged its obligations in the transaction.

 

•      You are responsible for knowing with whom you are dealing when it comes
to international trade.

 

•      In some circumstances, you will need to obtain approval before you can
send proposal information to a foreign customer. No proposal to sell or to
export products can be made until there is satisfactory information regarding
the end-use, end-user and the country of ultimate destination.

 

•      Make sure that the appropriate export control authorization is in place
before you act.

 

•      Sending technical data, or hardware or software, or having technical
discussions with Associates of Wal-Mart who are in foreign offices may require
appropriate authorization prior to export. Check in advance with the Legal
Department.

 

•      You must not do anything that would facilitate business with any
generally embargoed country.

 

 

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Restrictive Trade Practices & Boycotts

 

Wal-Mart will not participate in any activity intended to restrain trade or
promote a boycott of customers or suppliers located in a particular country
where such boycott would be in violation of applicable law. If you learn of a
boycott request or a related information request, you must report it immediately
to the Legal Department.

 

Things to Remember!

 

•      Be careful when retaining agents to represent Wal-Mart’s interests.
Consultants, agents, sales representatives, distributors or contractors must
comply with this policy.

 

 

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RESOURCE FOR ETHICS REPORTING OR QUESTIONS

 

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Wal-Mart Ethics Hotline

 

 

United States, Canada, Puerto Rico:   1-800-WMETHIC    

(1-800-963-8442)

 

All Other Locations: See toll-free number posted in each country.

 

Confidential and Anonymous

 

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Wal-Mart Ethics Office

 

Wal-Mart Stores, Inc.

Attn: Ethics Office

702 S.W. 8th Street

Bentonville, Arkansas, 72716-0860

 

Ethics@wal-mart.com

 

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