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 outstanding stock awards 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 percent. 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, worth $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, D.C., the company said it concluded that it now has 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."
Taylor could not be immediately reached for comment.
Coughlin has denied any wrongdoing and has maintained that his use of corporate money and property was related to what he described as "union activity" for which he was obtaining "reimbursement."