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Wal-Mart Halts Benefits for Former Officer

June 11, 2005|From Times Wire Services

Wal-Mart Stores Inc. disclosed late Friday that it was rescinding the retirement agreement for its former vice chairman, Tom Coughlin, who resigned from the board in March amid allegations of improper spending. The move will cause him to forfeit millions of dollars in benefits.

A filing with the Securities and Exchange Commission included a letter to Coughlin's attorney, dated Friday, in which Wal-Mart also said it was terminating Coughlin as an officer retroactively for "gross misconduct."

Coughlin, who retired as an officer late last year but remained on the board until March 25, is to forfeit all stock awards outstanding and all incentive payments under his retirement pact, the filing said.

In addition, interest credited to Coughlin's own deferrals to the deferred compensation plan account is to be reduced by 50%. His supplemental executive retirement account will be recalculated as if no employer contributions were credited on or after Jan. 31, 1996, the filing said.

In April, Wal-Mart said it had frozen millions of dollars in benefits for Coughlin.

According to the regulatory filing, Wal-Mart suspended Coughlin's vesting of 186,407 shares of restricted stock, valued at $9.77 million at the end of the company's last fiscal year, and 302,503 stock options exercisable within 60 days pending further investigation into Coughlin's actions.

In April, the company also confirmed that a federal grand jury was reviewing allegations of misspending.

In the letter to Coughlin's attorney, William W. Taylor III, who is based in Washington, the company said it concluded that it had grounds to take action.

The company said the reasons included Coughlin's violation of fiduciary duties, and it accused him of "a scheme to misappropriate corporate funds and property for his own personal benefit."

Separately, a former Wal-Mart Stores Inc. employee filed a lawsuit with the Labor Department on Friday claiming that the retailer violated whistle-blower rules when it fired him, the second such lawsuit against Wal-Mart in a month.

Rickey Armstrong, who was a quality auditor for Wal-Mart, alleges that he was fired after complaining that personnel used company resources for their personal benefit and for the benefit of friends and family.

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Associated Press and Bloomberg News were used in compiling this report.

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