USA: Wal-Mart rescinds former executive’s retirement deal
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Retailer Wal-Mart stores Inc has retrospectively dismissed Thomas M. Coughlin from its board of drectors and rescinded his retirement agreement.
In a filing to the Securities and Exchange Commission the company said Coughlin had resigned on 25 March 2005 at the company’s request. At the time of his resignation, Coughlin was a member of the board’s Strategic Planning and Finance Committee, Executive Committee, and Stock Option Committee.
“Mr Coughlin is being terminated as an officer of the company for gross misconduct retroactive to January 22, 2005,” Wal-Mart said.
The company’s request for Coughlin’s resignation arose from the results of an internal investigation into the alleged unauthorized use of corporate-owned gift cards and personal reimbursements that appeared to have been obtained through the reporting of false information on third-party invoices and company expense reports, Wal-Mart said Based on the results of the company’s internal investigation, including Coughlin’s response to questions concerning his knowledge of certain transactions, the company promptly reported the results of its investigation to the United States Attorney for the Western District of Arkansas.
During the company’s internal investigation, Coughlin maintained that his use of corporate money and property was related to what Coughlin described as “union activity” for which he was obtaining “reimbursement.” Coughlin declined, however, to provide the company with any details of the alleged “union activity” or the alleged “reimbursements.”
In the company’s ongoing internal investigation, the company found no evidence supporting Mr. Coughlin’s “union activity reimbursement” explanation.
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By GlobalDataThe company delivered a letter to Coughlin’s attorney on 19 April 2005, requesting that Coughlin come forward with any documents or other information that would support his contention that the questioned transactions were ‘reimbursements’ for monies Coughlin spent in connection with union activities. To date, Coughlin has not furnished any such information to the company, it said.
The company entered into a retirement agreement with Coughlin on 22 January 22 2005.
At the recommendation of the company’s legal department and with the advice of outside counsel, on 10 June 2005, the Compensation, Nominating, and Governance Committee of the board authorized management of the company to take appropriate action to rescind the retirement agreement and to take other appropriate legal action in connection therewith. The grounds for rescission are based on Coughlin’s violation of his fiduciary duties to the company and the concealment and failure to disclose to management that, for a period of several years and continuing until at least December 2004, Coughlin had been engaged in a scheme to misappropriate corporate funds and property for his own personal benefit, it said.
In addition, the CNGC determined that Coughlin shall forfeit all outstanding equity awards under the Wal-Mart Stores Inc. Stock Incentive Plan of 1998, as amended, he Coughlin shall forfeit all incentive payments (and related credited earnings thereon) under the Wal-Mart Stores Inc. Officer Deferred Compensation Plan, interest credited to Coughlin’s own deferrals to the Deferred Compensation Plan account shall be reduced by 50% for each Deferred Compensation Plan year, and Coughlin’s Wal-Mart Stores Inc. Supplemental Executive Retirement Plan account shall be recalculated as if no employer contributions and forfeitures were credited to his account on or after 31 January 1996.
On 10 June 2005, the company gave written notice to Coughlin and his attorney that the company is rescinding the retirement agreement in its entirety and revoking the benefits described above.
