2003 Committee Charter : WMT

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WAL-MART STORES, INC.
COMPENSATION, NOMINATING AND
GOVERNANCE COMMITTEE CHARTER
Purpose
The general purpose of the Compensation, Nominating and Governance Committee (the
"Committee") is to: (1) discharge the Board's responsibilities relating to the compensation of the
Company's directors, executive officers and associates; and (2) assist the Board in the
implementation of sound corporate governance principles and practices.
With respect to its compensation functions, the Committee's purpose is to:
  • Evaluate and approve executive officer compensation and review and make
    recommendations to the Board with respect to director compensation, including incentive
    or equity-based compensation plans;
  • Produce an annual report on executive officer compensation for inclusion in the
    Company's proxy statement in accordance with applicable rules and regulations; and
  • Monitor and evaluate, at the Committee's discretion, matters relating to the compensation
    and benefits structure of the Company and such other domestic and foreign subsidiaries
    or affiliates, as it deems appropriate.
    The Company strives to provide fair compensation to executive officers based on their
    performance and contribution to the Company and to provide incentives that attract and retain
    key executives, instill a long-term commitment to the Company, and develop a pride and sense
    of Company ownership, all in a manner consistent with shareholder interests. In addition, the
    Company strives to provide fair compensation to directors, taking into consideration
    compensation paid to directors of comparable companies and the specific duties of each director.
    The actions of the Committee should be taken in furtherance of these objectives.
    With respect to its nominating and governance functions, the Committee's purpose is to:
  • Assist the Board by identifying individuals qualified to become Board members, and
    recommend to the Board the director nominees whenever new directors are to be
    appointed or elected, whether at the next annual meeting of shareholders or otherwise;
  • Review the qualifications and independence of the members of the Board and its various
    committees on a periodic basis and make any recommendations to the Board the
    Committee may deem appropriate concerning any recommended changes in the
    composition or membership of the Board, or any of its committees;
  • Develop and recommend to the Board corporate governance principles applicable to the
    Company;
  • Conduct the annual review of the performance of the Board and Company management;
    and
  • Recommend to the Board director nominees for each committee.
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    Membership
    The Committee shall consist of no fewer than three Board members, the number of which shall
    be fixed from time to time by resolution adopted by a majority vote of the full Board. Each
    member of the Committee shall be determined affirmatively by a majority vote of the full Board
    to qualify as independent under the New York Stock Exchange listing standards and the listing
    standards of any other exchange on which the Company's securities are traded, in either case as
    then in effect. In addition, at least two or more of the members shall qualify as "non-employee"
    directors as defined in Rule 16b-3 promulgated by the Securities and Exchange Commission
    under the Securities Exchange Act of 1934 (the "Exchange Act") and "outside" directors as
    defined under Section 162(m) of the Internal Revenue Code of 1986, to the extent each is
    applicable.
    The members of the Committee shall be appointed annually, and vacancies filled or members
    removed by the vote of a majority of the full Board. One member of the Committee shall be
    appointed as its Chairman or Chairwoman ("Chairperson") by majority vote of the full Board.
    Committee members may resign by giving written notice to the Board. A Committee member
    may resign Committee membership without resigning from the Board, but a member shall cease
    automatically to be a member of the Committee upon either ceasing to be a member of the Board
    or ceasing to be "independent" as required above.
    Meetings
    The Committee shall have at least four (4) regularly scheduled meetings annually, but may meet
    as often as necessary to carry out its responsibilities. The Chairperson shall preside at each
    meeting and, in the absence of the Chairperson, one of the other members of the Committee shall
    be designated as the acting chair of the meeting. The Chairperson (or acting chair) may direct
    appropriate members of management and staff to prepare draft agendas and related background
    information for each Committee meeting. The draft agenda shall be reviewed and approved by
    the Committee Chairperson (or acting chair) in advance of distribution to the other Committee
    members. Any background materials, together with the agenda, should be distributed to the
    Committee members in advance of the meeting. All meetings of the Committee shall be held
    pursuant to the By-laws of the Company with regard to notice and waiver thereof, and written
    minutes of each meeting, in the form approved at the immediately following meeting, shall be
    duly filed in the Company records. Reports of meetings of the Committee shall be made to the
    Board at its next regularly scheduled meeting following the Committee meeting accompanied by
    any recommendations to the Board approved by the Committee.
    Committee Authority and Responsibilities
    The basic responsibility of the members of the Committee is to exercise their business judgment
    to act in what they reasonably believe to be in the best interests of the Company and its
    shareholders. In discharging that obligation, members should be entitled to rely on the honesty
    and integrity of the Company's senior executives and its outside advisors and auditors, to the
    fullest extent permitted by law.
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    With respect to its compensation functions, the Committee has the following authority and
    responsibilities:
    1. Sole authority, in its discretion, to retain and terminate any compensation
    consultant used to assist the Committee in the evaluation of director, Chief
    Executive Officer ("CEO"), or executive officer compensation, and shall have the
    sole authority to approve the consultant's fees and other retention terms. The
    Committee shall also have the authority, in its discretion, to obtain advice and
    assistance from internal or external legal, accounting or other advisors.
    2. With respect to the CEO, the Chairman or Chairwoman of the Board, and other
    associates who are directors of the Company ("Inside Directors"), annually
    review and approve corporate goals and objectives relevant to their compensation,
    evaluate their performance in light of those goals and objectives, and based on
    this evaluation, establish their total compensation (subject to the limitations on
    action by certain Committee members pursuant to Item 10 below), including, but
    not limited to (a) the annual base salary level, (b) the annual incentive opportunity
    level, (c) the long-term incentive opportunity level, (d) employment agreements,
    severance arrangements, and change in control agreements/provisions, in each
    case as, when and if appropriate, and (e) any special or supplemental benefits,
    including, but not limited to, perquisites. In determining the long-term incentive
    component of each Inside Director's compensation, the Committee shall consider
    the Company's performance and relative shareholder return, the value of similar
    incentive awards to persons with comparable positions at comparable companies,
    and the awards given to each Inside Director in past years.
    3. Annually review and make recommendations to the Board with respect to the
    compensation of all directors who are not also executive officers of the Company,
    taking into consideration compensation paid to non-officer directors of
    comparable companies and the specific duties of each director.
    4. In consultation with the CEO, annually review and approve the compensation
    (subject to the limitations on action by certain Committee members pursuant to
    Item 10 below) for executive officers of the Company subject to the provisions of
    Section 16 of the Exchange Act other than Inside Directors, including, but not
    limited to (a) the annual base salary level, (b) the annual incentive opportunity
    level, (c) the long-term incentive opportunity level, (d) employment agreements,
    severance arrangements, and change in control agreements/provisions, in each
    case as, when and if appropriate, and (e) any special or supplemental benefits,
    including, but not limited to, perquisites. At the Committee's sole discretion, it
    may submit any of its decisions to the Board for its approval or ratification.
    5. In consultation with the CEO, annually review the compensation for members of
    the Executive Committee of the Company other than those subject to the
    provisions of Section 16 of the Exchange Act, including, but not limited to (a) the
    annual base salary level, (b) the annual incentive opportunity level, (c) the longterm
    incentive opportunity level, (d) employment agreements, severance
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    arrangements, and change in control agreements/provisions, in each case as, when
    and if appropriate, and (e) any special or supplemental benefits, including, but not
    limited to, perquisites, and approve grants and awards in accordance with Item 10
    below, where applicable.
    6. Monitor the Company's compliance with the requirements of the Sarbanes-Oxley
    Act of 2002 and other applicable laws, regulations and rules relating to
    compensation arrangements for directors and executive officers.
    7. Disclose its compensation policies applicable to the Company's executive
    officers; including the specific relationship of corporate performance to executive
    officer compensation, prepare an annual Committee report for the Company's
    annual proxy statement and provide a discussion of compensation of the CEO
    containing such material, in the manner required by Securities and Exchange
    Commission rules and regulations.
    8. Oversee the Company's compliance with the requirement under New York Stock
    Exchange rules that shareholders approve all option plans, with limited
    exceptions.
    9. Periodically review significant issues that relate to employee benefits whether or
    not the employee benefits are governed under the Employee Retirement Income
    Security Act of 1974 ("ERISA") and shall further have such responsibilities as set
    forth from time to time in such plans or programs.
    10. Administer the Company's Stock Option Plan and any incentive program
    providing for performance-based awards under Section 162(m) of the Internal
    Revenue Code with respect to those associates who are described in subsection
    16(a) of the Exchange Act or who are or are expected to be "covered employees,"
    as defined in Section 162(m) of the Internal Revenue Code, approve all such
    grants or awards that are intended to be exempt from the application of either or
    both of such provisions, take such actions in furtherance of the same and shall
    further have such responsibilities as set forth from time to time in such plans or
    programs. For purposes of Section 162(m), the Committee shall include only
    those members qualified as "outside" directors as defined in that section. In
    addition, for purposes of Rule 16b-3, the Committee shall include only those
    members qualified as "non-employee" directors as defined in that rule.
    11. Overall responsibility for the compensation and benefits structure applicable to
    the Company's associates, including, but not limited to incentive compensation
    and equity-based compensation, and shall be the ultimate authority for such
    matters; provided that, at the Committee's sole discretion, it may submit such
    matters as it determines to be appropriate to the Board for the Board's approval or
    ratification.
    12. Review the performance of the Retirement Plans Committee and the trustees of
    the other ERISA benefit plans.
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    13. Review and reassess the adequacy of this Charter annually and recommend any
    proposed changes to the Board for approval.
    14. Annually review and evaluate its own performance with respect to its
    compensation functions.
    With respect to its nominating and governance functions, the Committee has the following
    authority and responsibilities:
    1. Sole authority, in its discretion, to retain or terminate any search firm to be used
    to identify director candidates and shall have sole authority to approve the search
    firm's fees and other retention terms. The Committee shall also have the
    authority, in its discretion, to obtain advice and assistance from internal or
    external legal, accounting or other advisors.
    2. Actively seek individuals qualified to become board members for
    recommendation to the Board.
    3. Apply the criteria set forth in the Director Qualifications Section of the Corporate
    Governance Guidelines to the selection of director nominees.
    4. Recommend to the Board the number of and qualifications for directors, the
    composition of the Board and a slate of nominees for election as directors at the
    Company's annual meeting of shareholders.
    5. Recommend to the Board persons to be appointed as directors in the interval
    between annual meetings of the Company's shareholders, including filling
    vacancies occurring for any reason.
    6. Develop and recommend to the Board standards for determining director
    independence consistent with the requirements of the New York Stock Exchange
    and other applicable laws or regulations and review and assess these standards on
    a periodic ongoing basis.
    7. Review the qualifications and independence of the members of the Board and its
    various committees on a periodic basis and make any recommendations the
    Committee members may deem appropriate from time to time concerning any
    recommended changes in the membership or composition of the Board and its
    committees.
    8. Establish and oversee the Company's director orientation and continuing
    education programs and review and revise those programs as appropriate.
    9. Recommend to the Board such changes to the Board's committee structure and
    committee functions, as the Committee deems advisable.
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    10. Confirm that each standing committee of the Board has a charter in effect, that
    such charter is reviewed at least annually by its committee and that each charter
    complies with all applicable rules and regulations.
    11. Review any proposed amendments to the Company's Articles of Incorporation
    and By-laws and recommend appropriate action to the Board.
    12. Review and assess the Company's compliance with the corporate governance
    requirements established by the New York Stock Exchange, the requirements
    established under the Sarbanes-Oxley Act and other applicable corporate
    governance laws and regulations.
    13. Recommend to the Board such additional actions related to corporate governance
    matters, as the Committee may deem necessary or advisable from time to time.
    14. Review and assess the quality and clarity of the corporate governance information
    provided to the Board and its committees by management and direct management
    as the Committee deems appropriate with respect to such materials.
    15. Oversee the Board's evaluation of senior management.
    16. Develop procedures for and conduct the annual review of the performance of the
    Board, and report annually to the Board with an assessment of the Board's
    performance, to be discussed with the full Board following the end of each fiscal
    year.
    17. Develop and recommend to the Board a set of corporate governance principles
    (the "Corporate Governance Guidelines") applicable to the Company.
    18. Review and reassess the adequacy of the Corporate Governance Guidelines of the
    Company annually and recommend any proposed changes to the Board for
    approval.
    19. Review and establish, for approval by the full Board, succession planning and
    retention practices for executive officers of the Company.
    20. Review the Company's reputation with external constituencies and recommend to
    the Board any proposed changes to the Company's policies, procedures, and
    programs as a result of such review.
    21. Review and reassess the adequacy of this Charter annually and recommend any
    proposed changes to the Board for approval.
    22. Annually review and evaluate its own performance with respect to its nominating
    and governance functions in coordination with the annual review conducted by
    the Committee.
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    23. Establish the standards for and annually review and evaluate each Board
    committee's annual self-performance evaluation and provide a report on such
    evaluations to the Board.
    In addition to the above, the Committee shall perform such other activities consistent with this
    charter, the Company's By-laws and governing law as the Committee or the Board deems
    appropriate.