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In re Wal-Mart Stores, Inc. Shareholder Derivative Litigation

United States District Court, W.D. Arkansas, Texarkana Division

March 31, 2015

IN RE WAL-MART STORES, INC. SHAREHOLDER DERIVATIVE LITIGATION. This Document Relates to: ALL ACTIONS

ORDER

SUSAN O. HICKEY, District Judge.

Before the Court is a Motion to Dismiss Case for Failure to Establish Demand Futility filed by Nominal Defendant Wal-Mart and the Individual Defendants.[1] ECF No. 109. Plaintiffs have filed a response. ECF No. 114. Defendants[2] have filed a reply. ECF No. 115. The Court has reviewed the memoranda and various supplements submitted by the parties. ECF Nos. 110, 116, 119, 121, 122, 124, 125, 127, 128, 129, 131, 132, 133, 134, 135, and 136. For the reasons set forth below, the Court will grant the motion filed by Defendants.

I. BACKGROUND

The following facts are drawn from allegations contained in Plaintiff's Consolidated Verified Shareholder Derivative Complaint ("Complaint"). ECF No. 16. The Court notes that, in this Order, page number references from ECF documents refer to the page number found in the ECF heading at the top of the filed ECF document.

Wal-Mart, a multinational retail company, is a Delaware corporation headquartered in Bentonville, Arkansas. Wal-Mart de Mexico ("Walmex") is Wal-Mart's largest and most profitable subsidiary. When the fiscal year 2012 ended, Walmex had generated approximately 28% of Wal-Mart's net sales.

At the time the Amended Complaint was filed in May 2012, Wal-Mart's board of directors ("the Board") was made up of the following fifteen members (collectively referred to as "Director Defendants"):

• H. Lee Scott has served as director since 1999. He was Wal-Mart's President and CEO from January 2000 through January 31, 2009. He continued as Executive Officer of Wal-Mart and as Chairman of the Board's Executive Committee until his retirement on January 31, 2011.
• Michael T. Duke has served as a director since November 2008. He is currently President and CEO of Wal-Mart. He has served on the Board's Executive Committee since 2008. He has also served as the Vice Chairman with responsibility for Wal-Mart International and as Executive Vice President and President and CEO of Wal-Mart U.S.
• S. Robson Walton has served as a director since 1978 and as Chairman of the Board since 1992. He has served on the Board's Executive Committee since 2005. Prior to becoming Chairman of the Board in 1992, he held a variety of positions with Wal-Mart, including Senior Vice President, Corporate Secretary, General Counsel, and Vice Chairman. He is the son of Wal-Mart's founder, Sam Walton.
• Jim C. Walton has served as a director since September 28, 2005. He has served on the Board's Strategic Planning and Finance Committee since 2005. He is also the son of Sam Walton.
• James W. Breyer has served as a director since 2001. He has served on the Board's Strategic Planning and Finance Committee since 2005.
• Michelle Burns has served as a director since 2003. She served on the Board's Audit Committee between 2003 and February 20, 2006, and on the Compensation, Nominating and Governance Committee during 2007. She has served on the Strategic Planning and Finance Committee since 2007.
• Christopher J. Williams has served as a director since 2004. He has served on the Board's Audit Committee since March 4, 2005, and has been the Chairman of the Audit Committee since 2008.
• Douglas N. Daft has served as a director since January 2005. He has served on the Board's Compensation, Nominating and Governance Committee since 2005.
• Linda S. Wolf has served as a director of Wal-Mart since June 2005. She has served on the Board's Compensation, Nominating and Governance Committee since 2006.
• Gregory B. Penner has served as a director since 2008. He served on the Board's Strategic Planning and Finance Committee in 2009. From 2002 to 2005, he served as Wal-Mart's Senior Vice President and Chief Financial Officer-Japan. He is the son-in-law of S. Robson Walton.
• Aida M. Alvarez has served as a director since 2006 and a member of the Board's Audit Committee since 2007.
• James I. Cash has served as a director and a member of the Board's Audit ...

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