11-K: Annual report of employee stock purchase, savings and similar plans
Published on July 30, 1998
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended January 31, 1998.
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______to______.
Commission file number 1-6991
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
WAL-MART STORES, INC., 401(k) RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
WAL-MART STORES, INC.
702 Southwest Eighth Street
Bentonville, Arkansas 72716
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Financial Statements and
Supplemental Schedules
Year ended January 31, 1998
TABLE OF CONTENTS
REPORT OF INDEPENDENT AUDITORS
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits--January 31, 1998
Statement of Changes in Net Assets Available for Benefits With Fund
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Line 27a--Schedule of Assets Held for Investment
Purposes--January 31, 1998
Schedule II: Line 27d--Schedule of Reportable Transactions for
the Year Ended January 31, 1998
Report of Independent Auditors
The Administrative Committee of the
Wal-Mart Stores, Inc. 401(k) Retirement Savings Plan
We have audited the accompanying statement of net assets available for
benefits of Wal-Mart Stores, Inc. 401(k) Retirement Savings Plan as of
January 31, 1998, and the related statement of changes in net assets
available for benefits for the year then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits
of the Plan at January 31, 1998, and the changes in its net assets
available for benefits for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of January 31, 1998,
and reportable transactions for the year then ended, are presented for
purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974, and are not a required part of the basic
financial statements. The Fund Information in the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information
have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a
whole.
June 19, 1998
Tulsa, Oklahoma
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Statement of Net Assets Available for Benefits
January 31, 1998
(In Thousands)
See accompanying notes
Wal-Mart Stores, Inc. 401(k) Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended January 31, 1998
(In Thousands)
See accompanying notes
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements
January 31, 1998
1. Description of the Plan
The following description of the Wal-Mart Stores, Inc. 401(k) Retirement
Savings Plan (the "Plan") provides only general information regarding the
Plan as in effect on January 31, 1998. This document is not part of the
summary plan description of the Plan and is not a document pursuant to
which the Plan is maintained within the meaning of Section 402(a)(1) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended. Participants should refer to the Plan document for a complete
description of the Plan's provisions. To the extent not specifically
prohibited by statute or regulation, Wal-Mart Stores, Inc. ("Wal-Mart" or
the "Company") reserves the right to unilaterally amend, modify, or
terminate the Plan at any time, and such changes may be applied to all
Plan participants and their beneficiaries regardless of whether the
participant is actively working or retired at the time of the change. The
Plan may not be amended, however, to permit any part of the Plan's assets
to be used for any purpose other than for the purpose of paying benefits
to participants and their beneficiaries.
General
The Plan is a defined contribution plan established by the Company on
February 1, 1997. All U.S. associates of the Company who are not covered
by a plan of a related company and have completed at least 1,000 hours of
service in a consecutive 12-month period are eligible to participate in
the Plan. Participation may begin on the first day of the month following
eligibility. The Plan is subject to the provisions of ERISA.
The responsibility for operation and administration of the Plan (except
for investment management and control of assets) is vested in the Plan's
Administrative Committee of the Company ("Administrative Committee").
The trustee function of the Plan is performed by Merrill Lynch Trust
Company of America ("Trustee"). The Trustee receives and holds
contributions made to the Plan in trust and invests those contributions
according to the policies established by the Administrative Committee.
The Trustee makes payouts from the Plan in accordance with the Plan
document. The Trustee is affiliated with Merrill Lynch, Pierce, Fenner &
Smith, Inc., the parent corporation of the Trustee and manager of the
Merrill Lynch Equity Index Trust and the Retirement Preservation Trust,
which are investment options offered under the Plan to participants.
Contributions
All eligible associates participate in the Plan and may elect to
contribute from 1% to 10% of their eligible wages. Whether or not an
associate contributes to the Plan, he or she will receive a portion of
the Company's contribution if they meet certain eligibility requirements.
To be eligible to receive a Company contribution, the associate must
complete at least 1,000 hours of service during the Plan year for which
the contribution is made, and be employed on the last day of that Plan
year (January 31).
At the end of each Plan year, Wal-Mart's contribution (if any) will be
determined for that Plan year. The Company's contribution for each
associate will be a percentage of the associate's eligible wages for the
Plan year. Wal-Mart's contribution is discretionary and can vary from
year to year.
Participants' Accounts
Each participant's account is credited with the participant's
contribution and an allocation of (a) the Company's contribution to the
Plan made on the associate's behalf, and (b) an allocation, as defined,
of Plan earnings. The benefit to which a participant is entitled from the
Plan is dependent on the amount in the participant's account. The
effective date on which participants could make contributions was July 1,
1997.
Company contributions to the Plan are invested in accordance with the
investment elections made by each participant for deposit in his or her
account.
Vesting
Participants are immediately vested in all contributions to their
accounts, plus actual earnings thereon.
Payment of Benefits and Withdrawals
The normal form of payment upon a participant's separation from the
Company is a lump-sum payment in cash for the balance of the
participant's account. Participants may also elect to receive a single
lump-sum payment in whole shares of Company stock, with
partial or fractional shares paid in cash. To the extent the
participant's account is not invested in Company stock, the account
balance will automatically be distributed in cash. Participants may also
elect to rollover their account balance into a different tax-qualified
retirement plan or individual retirement account upon separation from the
Company. The Plan permits withdrawals of participants' salary reduction
contributions and rollover contributions only in amounts necessary to
satisfy financial hardship as defined by the Internal Revenue Service
("IRS").
Plan Termination
While there is no intention to do so, the Company may discontinue the
Plan by giving written notice, subject to the provisions of ERISA. In the
event of a complete or partial termination of this Plan or a complete
discontinuance of contributions to it, the accounts of the Participants
shall be fully and immediately vested and nonforfeitable. The Trust shall
remain in effect (unless it is specifically terminated) and the Trust
assets shall be administered in the manner provided by the terms of the
Trust and distributed as soon as administratively feasible.
Income Tax Status
The Plan has received a letter of determination dated November 26, 1997,
from the Internal Revenue Service ("IRS") which states that the Plan is
in compliance with Section 401(k) of the Internal Revenue Code ("IRC")
and, therefore, the related Trust is not subject to tax under present
income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. In the opinion of
the Company's management, the Plan as of January 31, 1998 continues to be
in compliance with Section 401(k), and continues to be entitled to an
exemption from federal income taxation under Section 401(k); thus, no
provision for federal income taxes has been made in the accompanying
financial statements.
Year 2000 Issue (unaudited)
The Company has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting
critical data processing systems. The project also includes determining
whether third-party service providers have reasonable plans in place to
become year 2000 compliant. The Company currently expects the project to
be substantially complete by early 1999. The Company does not expect this
project to have a significant effect on Plan operations.
Investment Options
Participant investment choices include five core funds, three investment
models, and Wal-Mart stock. The associate may change their selections at
any time throughout the year.
The five core funds are:
Merrill Lynch Retirement Preservation Trust (Stable Value
Fund)-A common collective trust that seeks to preserve
principal by investing mainly in a wide variety of guaranteed
investment contracts and in obligations of U.S. government and
U.S. government agency securities.
PIMCO Total Return Fund (Fixed Income Bond Fund)-A registered
investment company that seeks to provide income in the form of
interest and dividends.
Merrill Lynch Equity Index Trust (Large Company Stock Fund)- A
common collective trust that seeks to approximate the S&P 500
Index by investing in stocks of larger companies that make up
the S&P 500.
Putnam New Opportunities Fund (Mid-Sized Company Stock Fund)- A
registered investment company that seeks to provide growth by
investing in stocks of mid-sized companies.
Ivy International Fund (International Stock Fund)- A registered
investment company that seeks to provide growth by investing in
stocks of international companies.
In addition to the core funds, the Plan participant may select from three
investment models, which are comprised of a combination of the core
funds. The investment models are as follows:
Conservative to Moderate Investment Model-The model invests 40%
of its assets in the stock funds, 50% in the bond fund, and 10%
in the Stable Value Fund.
Moderate Investment Model-This model invests 70% of its assets
in the stock funds, 25% in the bond fund, and 5% in the Stable
Value Fund.
Aggressive Investment Model-This model invests 80% of its
assets in the stock funds, 10% in the bond fund, and 10% in the
Stable Value Fund.
2. Summary of Accounting Policies
The financial statements of the Plan are prepared under the accrual
method of accounting.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires Plan management to use estimates
and assumptions that affect the accompanying financial statements and
notes. Actual results could differ from these estimates.
Investments in registered investment companies and Wal-Mart common stock
are stated at fair market value determined from publicly stated price
information. Investments in common and collective trust funds are stated
at the fair value of the underlying assets determined by the Trustee.
Purchases and sales are recorded on a trade-date basis. Interest income
is recorded on the accrual basis. Dividends are recorded on the ex-
dividend date.
Investments greater than 5% of net assets are separately identified in
the statement of net assets available for benefits.
3. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to Form 5500:
Supplemental Schedules
Schedule 1:
Page 1 of 1
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Line 27a-Schedule of Assets Held for Investment Purposes
January 31, 1998
[FN]
*Party-in-interest
Schedule II:
Page 1 of 1
Wal-Mart Stores, Inc.
401(k) Retirement Savings Plan
Line 27d-Schedule of Reportable Transactions
Year ended January 31, 1998
[FN]
*Party-in-interest
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act
of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
WAL-MART STORES, INC.,
401(k) RETIREMENT SAVINGS PLAN
Date: July 30, 1998 /s/ Debbie Davis-Campbell
Debbie Davis-Campbell
Administrative Committee