8

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 3rd 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 and Chief Operating Officer of the Wal-Mart Stores Division,

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 and Chief Operating Officer of

the Wal-Mart Stores Division, 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

(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 July 31, 1998, Wal-Mart will award to the

Associate a Special Stock Option Grant equivalent to 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 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 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 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.

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.

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 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 /s/Thomas M. Coughlin
S. Robson Walton Thomas M. Coughlin
Chairman of the Board Executive Vice President and
Chief Operating Officer
of the Wal-Mart Stores Division


September 3, 1998 September 3,1998
Date Date