Exhibit 10(l)
WAL-MART STORES,
INC.
MANAGEMENT INCENTIVE
PLAN
(As amended and restated effective February 1,
2003)
1. GENERAL
1.1. Purpose . The purpose of the Wal-Mart Stores, Inc.
Management Incentive Plan (“MIP”) is to advance the
interests of the shareholders of the Company by providing
performance-based incentives to eligible management
associates.
1.2. Effective Date . The MIP, which was originally called the
Wal-Mart Stores, Inc. Management Incentive Plan of 1998, was
originally effective February 1, 1998. The MIP is hereby amended
and restated, effective for the Fiscal Year beginning February 1,
2003, subject to the approval of the Company’s shareholders,
and shall remain effective for each subsequent Performance Period
until terminated by the Board.
1.3. Compliance with Section 162(m)
.
(a) To the extent awards to Covered
Employees are intended to be “qualified performance-based
compensation” under Section 162(m), the material terms of the
performance goals under which nondiscretionary Incentive Awards are
paid (and any material changes in material terms) shall be
disclosed to and approved by the Company’s shareholders in a
separate vote. Material terms include (i) the eligible employees
specified in Section 3.1, (ii) the Performance Measures pursuant to
which the Performance Goals specified pursuant to Section 2.11 are
set, and (iii) the maximum nondiscretionary Incentive Plan Award
under Section 4.2(b).
(b) Unless sooner required by
Section 4.1(c), material terms shall be redisclosed to and
reapproved every five years by the Company’s shareholders in
a separate vote. If applicable laws change to permit Committee
discretion to alter the governing performance measures without
conditioning deductibility on obtaining shareholder approval (or
reapproval) of any changes, the Committee shall have sole
discretion to make changes without obtaining shareholder approval
or reapproval.
(c) Whenever the Committee
determines that it is advisable to grant or pay Inventive Plan
Awards that do not qualify as “qualified performance-based
compensation,” the Committee may make grants or payments
without satisfying the requirements of Section 162(m).
2. DEFINITIONS
2.1. “ Board ” means the Board of
Directors of the Company.
2.2. “ Committee ” means the
Compensation, Nominating and Governance Committee of the Board, or
other committee designated by the Board as the
“Committee” under the MIP. With respect to Covered
Employees for whom the MIP is intended to provide “qualified
performance-based compensation,” any Committee must consist
of two or more persons each of whom are “outside
directors” within the meaning of Section 162(m). To the
extent the Committee delegates authority pursuant to Section 5.2,
references to the Committee in the MIP shall, as appropriate, be
deemed to refer to the Committee’s delegate.
2.3. “ Company ” means Wal-Mart
Stores, Inc. and any successor thereto that adopts the
Plan.
2.4. “ Covered Employee ” has the
meaning of term under Section 162(m)(3).
2.5. “ Employer ” means the
Company and any Related Affiliate that employs a
Participant.
2.6. “ Fiscal Year ” means the
12-month period beginning on each February 1 and ending on the
following January 31.
2.7. “ Incentive Percentage ”
means the percentage of a Participant’s rate of salary in
effect for the last full payroll period of the Performance Period
to be paid as an Incentive Plan Award if the specified Performance
Goals are achieved. The Committee may establish different Incentive
Percentages for individual Participants or different classes of
Participants, and/or the achievement of different levels of the
Performance Goals. Solely with respect to Covered Employees, for
any Performance Period for which the MIP is intended to provide
“qualified performance-based compensation,” the
Incentive Percentages must be established by the Committee no later
than 90 days after the beginning of the Fiscal Year for which the
Incentive Plan Award pertains (or, in the case of a Performance
Period other than a Fiscal Year, no later than the date 25% of the
Performance Period has elapsed) and while the attainment of the
Performance Goals is substantially uncertain.
2.8. “ Incentive Plan Award ”
means an annual incentive compensation award under the MIP, payment
of which is contingent and based upon the attainment of the
Performance Goals with respect to a Performance Period.
2.9. “ MIP ” means the Wal-Mart
Stores, Inc. Management Incentive Plan, as amended and restated
herein, and as it may be amended from time to time.
2.10. “ Participant ” means an
associate of an Employer participating in the Plan for a
Performance Period as provided in Section 3.1.
2.11. “ Performance Goals ” means
the pre-established objective performance goals established by the
Committee for each Performance Period. Solely with respect to
Covered Employees, for any Performance Period for which the MIP is
intended to provide “qualified performance-based
compensation,” Performance Goals shall be established by the
Committee no later than 90 days after the beginning of the Fiscal
Year to which the Performance Goals pertain (and in the case of a
Performance Period other than a Fiscal Year, no later than the date
25% of the Performance Period has elapsed) and while the attainment
of the Performance Goals is substantially uncertain. The
Performance Goals may be based upon the performance of the Company,
of any Related Affiliate, of a division thereof, or of an
individual Participant, using one or more of the Performance
Measures selected by the Committee. Separate Performance Goals may
be established by the Committee for the Company or a Related
Affiliate, or division thereof, or an individual. The Performance
Goals shall include a threshold Performance Goal under which no
Incentive Plan Awards shall be paid if the threshold goal is not
achieved. With
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respect to Participants who are not Covered
Employees, the Committee may establish other subjective or
objective goals, including individual Performance Goals, which it
deems appropriate. The preceding sentence shall also apply to
Covered Employees with respect to any Incentive Plan Award not
intended at time of grant to be “qualified performance-based
compensation.” Performance Goals may be set at a specific
level, or may be expressed as a relative percentage to the
comparable measure at comparison companies or a defined
index.
2.12. “ Performance Measure ” means
one or more of the following criteria, on which Performance Goals
may be based, subject to Section 4.1(a): (a) earnings (either in
the aggregate or on a per-share basis, reflecting dilution of
shares as the Committee deems appropriate and, if the Committee so
determines, net of or including dividends) before or after interest
and taxes (“EBIT”) or before or after interest, taxes,
depreciation and amortization (“EBITDA”); (b) gross or
net revenue, or changes in annual revenues; (c) cash flow(s)
(including either operating or net cash flows); (d) financial
return ratios; (e) total shareholder return, shareholder return
based on growth measures or the attainment by the shares of a
specified value for a specified period of time, share price or
share price appreciation; (f) earnings growth or growth in earnings
per share; (g) return measures, including return or net return on
assets, net assets, equity, capital or gross sales; (h) adjusted
pre-tax margin; (i) pre-tax profits; (j) operating margins; (k)
operating profits; (l) operating expenses; (m) dividends; (n) net
income or net operating income; (o) growth in operating earnings or
growth in earnings per share; (p) value of assets; (q) market share
or market penetration with respect to specific designated products
or product groups and/or specific geographic areas; (r) aggregate
product price and other product measures; (s) expense or cost
levels, in each case, where applicable, determined either on a
Company-wide basis or in respect of any one or more specified
divisions; (t) reduction of losses, loss ratios or expense ratios;
(u) reduction in fixed costs; (v) operating cost management; (w)
cost of capital; (x) debt reduction; (y) productivity improvements;
(z) average inventory turnover; (aa) satisfaction of specified
business expansion goals or goals relating to acquisitions or
divestitures; (bb) customer satisfaction based on specified
objective goals or a Company-sponsored customer survey; (cc)
employee diversity goals; ; (dd) employee turnover; (ee) specified
objective social goals; or (ff) safety record.
2.13. “ Performance Period ” means
a Fiscal Year or other period of time (which may be longer or
shorter than a Fiscal Year) set by the Committee.
2.14. “ Section 162(m) ” means
section 162(m) of the Internal Revenue Code of 1986, as amended
from time to time, and the regulations thereunder.
2.15. “ Related Affiliate ” means a
business or entity that is, directly or indirectly, controlled by
the Company.
3. PARTICIPATION
3.1. Eligibility . Associates eligible to particip
