11-K: Annual report of employee stock purchase, savings and similar plans
Published on July 28, 1999
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, 1999.
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
Page 1 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Financial Statements and
Supplemental Schedules
Years ended January 31, 1999 and 1998
Contents
Report of Independent Auditors
Audited Financial Statements
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
with Fund Information
Notes to Financial Statements
Supplemental Schedules
Line 27a-Schedule of Assets Held for Investment Purposes
Line 27d-Schedule of Reportable Transactions
Page 2 of 14
Report of Independent Auditors
The Administrative Committee of the
Wal-Mart Stores, Inc. 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets
available for benefits of Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan as of January 31, 1999 and 1998, and
the related statements of changes in net assets available
for benefits with Fund Information for the years 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 audits.
We conducted our audits 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 audits provide 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, 1999 and
1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were 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, 1999, and reportable
transactions for the year then ended, are presented for
purpose of additional analysis and are not a required part
of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management.
The Fund Information in the statements 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 audits
of the financial statements and, in our opinion, are fairly
stated in all material respects in relation to the financial
statements taken as a whole.
Tulsa, Oklahoma
June 16, 1999
Page 3 of 14
[FN]
See accompanying notes.
Page 4 of 15
[FN]
See accompanying notes.
Page 5 of 14
[FN]
See accompanying notes.
Page 6 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements
January 31, 1999 and 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, 1999. 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 as directed by participants
and 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.
Page 7 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
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.
Page 8 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
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 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.
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.
2. Income Tax Status
The Plan has received a letter of determination dated November 26, 1997, from
the IRS stating that the Plan is qualified under Section 401(k) of the
Internal Revenue Code ("IRC") and, therefore, the related Trust is exempt from
taxation. Once qualified, the Plan is required to operate in conformity with
the IRC to maintain its qualification. Company management believes the Plan
is being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related Trust is
tax exempt.
Page 9 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements (continued)
3. 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 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
statements of net assets available for benefits.
4. 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:
January 31
1999
Net assets available for benefits per the
financial statements $580,942
Amounts allocated to withdrawing participants 4,060
Net assets available for benefits per the form 5500 $576,882
Page 10 of 14
Wal-Mart Stores, Inc. 401(k)
Retirement Savings Plan
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500 (continued)
The following is a reconciliation of benefit payments to participants per the
financial statements to the form 5500:
Benefit payments per the financial statements $26,272
Add: Amounts allocated to withdrawing
participants at January 31, 1999 4,060
Benefit payments per the Form 5500 $30,332
Amounts allocated to withdrawing participants are recorded in the Form 5500 for
benefit claims that have been processed and approved for payment prior to
January 31, 1999, but not yet paid as of that date.
5. Year 2000 (Unaudited)
The Plan Sponsor has determined that it will be necessary to take certain
steps in order to ensure that the Plan's information systems are prepared to
handle year 2000 dates. The Plan Sponsor has been evaluating and adjusting
all of its known date-sensitive systems and equipment for year 2000 compliance.
The assessment phase of the year 2000 project is substantially complete.
All third-party service providers have indicated that they will be year 2000
compliant by October 1999. If modification of data processing systems of either
the Plan, the Plan Sponsor, or its service providers are not completed timely,
the year 2000 problem could have a material impact on the operations of the
Plan. Plan management is currently developing a contingency plan which is
expected to be in place by September 1, 1999.
Page 11 of 14
Supplemental Schedules
[FN]
+ Restated to reflect the two-for-one stock split announced March 4,1999, with
date of record of March 19, 1999. The stock split was payable on
April 19, 1999.
* Party-in-interest.
Page 12 of 14
[FN]
There were no category (i) (ii) or (iv) reportable transactions for the year
ended January 31, 1999.
Columns (e) and (f) are not applicable.
*Party-in-interest
Page 13 of 14
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 27, 1999 /s/ Debbie Davis-Campbell
Debbie Davis-Campbell
Administrative Committee
Page 14 of 14