September 15, 2007

Mr. S. Robson Walton
Chairman of the Board
Mr. William S. Simon
CEO, Wal-Mart U.S.
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville, AR 72716

Dear Messers, Walton and Simon:

Thank you for your interest in our firm and for meeting with us on September 8th to discuss how we can assist you in analyzing certain aspects of Wal-Mart U.S. based operations. This letter serves as confirmation of our discussions and the agreements made between us at the meeting.

Background 1, 2, 6
Wal-Mart is considered one the largest global retailer with $419 billion in annual revenues and more than 2.2 million employees throughout the world. Wal-Mart is successful in its consumer commitment to offer “Every Day Low Prices” (EDLP) thanks to its aggressive cost management concepts. Wal-Mart also serves as a leader on social issues. Their focus on global responsibility has made worldwide changes in how products are procured, packaged and shipped.

Wal-Mart’s U.S. business unit is the largest of the three reportable business segments and operates in a very unique environment, supporting the largest economy in the world, the United States of America. U.S. segment revenues and gross profit margin have been stagnant over the last year and the company has implemented a four-point plan to improve comparable store sales.

The U.S. reporting unit has been working through several class action lawsuits that could have a tremendous impact against future financial standings if Wal-Mart does not prevail. In particular, a class action suit has been filed for time and wage infringements, alleging that employees are not being compensated for time worked and that they are being denied adequate work breaks during shifts.

Wal-Mart’s U.S. position has always been to refuse collective bargaining agreements. As foreign operations grow, unionization is common and management is receiving great pressure in the U.S. to reconsider its position.

Management is concerned with all of these issues and their impact on U.S. operations. As such, you have asked us to assist Wal-Mart in assessing the success of the four-point plan, to determine if improvements need to be implemented at the store level to ensure policies and procedures are upheld at the lowest levels, and to determine if unionization in the U.S. should be considered to support continued operational success of the U.S. segment.

Objectives of the Operational Review

Based upon our preliminary review and our discussions with your and your personnel, we believe that the objectives of the operational review would be to:

1. Determine if unionization would enable Wal-Mart to better leverage expenses 2. Review the U.S. financial data as of Q3 2012 against the four-point plan to determine if plan goals are being met. If plan goals are not being met, the factors impeding success will be identified so that the plan may be appropriately modified or other action taken to achieve the objectives. 3. Determine if all stores are adhering to the corporate policies on recording time worked and state or federally mandated work breaks.

Scope of our Engagement 3
Based on our discussions with you, as well as our preliminary review of Wal-Mart’s operations, we have identified the following areas for our concentration in the review of your company’s operations: 1. Unionization * Personnel in all areas of functionality at the non-corporate level: understand and review retention success of non-unionized Wal-Mart staff in comparison to comparable unionized operations to determine if employee stability can be improved upon; compare compensation expectations between Wal-Mart’s existing structure and comparable unionized operations to determine if complete compensation (inclusive of benefits) can create a cost savings; and review Wal-Mart’s historical workman’s compensation and other injury related claims against comparable unionized operational experiences to determine if unionization can aid in improving work place safety. * Operations: compare streamlined functionality in all staff areas to determine if unionization can improve upon productivity.
2. U.S. Net Sales * Financial Planning and Analysis/Budgeting:
Review actual financial performance for Q1 through Q3 2012 against the performance plan put in place by management to reinforce company’s EDLP guarantee to it’s customers; review of merchandising and presentation adjustments to identify areas of improvement, neutrality, or failure in increasing net sales.

3. Timekeeping and Work Breaks * Personnel and Operations at the retail level based upon a sampling of 50% of the work sites (2,250 sites):
Review current corporate policies and procedures related to time keeping policies to ensure they are unambiguous and in alignment with federal, state and local statutes. Review historical time keeping and break practices at each operational site; and review current time keeping and break activities over specified periods of time at each operational site to identify areas of potential weakness in individual store implementation of the policies.

If our findings reveal significant areas of concern that are beyond the anticipated scope of this engagement, we will immediately meet with Executive Leadership to discuss our concerns and possible next steps including, but not limited to an adjustment in the scope of the assignment.

Although we do anticipate reviewing financial and other information as a part of our operational audit, at no time are we engaging in any activities meant to validate financial information and will therefore not be rendering an opinion or attestation of such.

All work will be performed in a professional and confidential manner. Our company shall maintain all appropriate work papers in support of all findings and recommendations.

Our Approach
We have identified the anticipated, high-level steps necessary to conduct an audit in the areas identified in the Scope section above: 1. Review of all of your policies and procedures to help us determine the effectiveness of those procedures to help improve your operational procedures. This will include examination of both operating and non-operating procedures. 2. We will interview several management/supervisory personnel as well as operating personnel to aid in taking individual concerns into consideration of overall concerns and facts. We will interview a proportionate number of personnel in both management/supervisory and operating areas. Each employee that we interview will also receive a questionnaire for their responses. Any findings that we discover through the interview process will be discussed with you through written reports for consideration in our final analysis. 3. Detailed operational review of those items noted earlier in this letter. We will perform sufficient procedures for each of these areas to determine the present condition of each area, how to make improvements, and where your organization should be in each area. 4. Develop and present findings and recommendations. Both findings and recommendations will be presented in both oral and written form for you and your management’s review. 5. Provide assistance in the implementation of any of the recommendations presented as part of our report. Recommendations that can be implemented during our operational review can be done then and any additional recommendations we will assist with under your direction.

Participation
Mr. Brian White, the President of our firm, as well as the other four partners of the firm, will all be obliged to making sure that all of the technical conduct and successful completion of the operational review of your company. This firm along with the partners is all qualified to perform the task required on this operational review. Mr. White will assign corporate partners of our firm to lead the various audit teams in key areas of this audit; Inga Brown, Bob Green, and Mary Black. All partners will be responsible for the performance of the work steps as described in the Our Approach Section.
As discussed, the participation and open support of Wal-Mart’s key executives as well as that of assigned staff will be critical to a successful audit. We anticipate that the Wal-Mart corporate leadership team will consist of President and Chief Executive Officer, Michael T. Duke, along with the Senior Vice President and Controller, Steven P. Whaley, and William S. Simon, Executive Vice President, President and Chief Executive Officer, Wal-Mart U.S., (the “Executive Leadership) and that these individuals will assign appropriate Wal-Mart staff to interface directly with our staff level auditors. Although we are asking for their cooperation, we do not anticipate that participation at the Executive Leadership level will be required other than for the resolution of issues or for status reporting. However, at the Wal-Mart staff level, we will anticipate daily interaction for some audit tasks. In the event where this level of support is needed, we will work with Wal-Mart management to minimized the disruption of daily duties and coordinate the timing to further mitigate disruption of daily operational working requirements. Below is our anticipated working relationship chart at the executive level.

Wal-Mart
Review Project Team
President – Program Lead
Brian White

President and CEO
Michael T. Duke
Wal-Mart

Partner – Unionization Study
Inga Brown

SVP & Controller
Steven P. Whaley
Wal-Mart

Partner – U.S. Net Sales Study
Bob Green

EVP & President, U.S. Ops
William S. Simone
Wal-Mart

Partner – Timekeeping Study
Mary Black

Reporting
As noted previously, our firm takes a very proactive approach to operational audits of this nature and we stress communication between our senior audit staff, our working audit staff and the customer’s Executive Leadership, management and staff level support. At the start of each engagement, we meet with Executive Leadership and any supporting staff to kickoff the effort. In the case of the time keeping audit, since we will be required to visit each site, we will have a kick-of meeting at each site. The goal of these meetings is to meet the participants, ensure that everybody understands and agrees to the audit goals, and to identify and resolve any operational issues that might impede a successful effort.
Within 7 calendar days of the kick-off meeting, an audit program will be provided to Executive Management and their identified leads so that a schedule and appropriate expectations may be set. From there, we will provide weekly status reports to Executive Leadership that provide a summary of the activities during the reporting period including, but not limited to progress made against plan during the reporting period, areas where further facilitation by Executive Leadership is needed, and any remediation plans in the event that our audit schedule slips.
Once a month, our partners and our Program Lead will meet with Wal-Mart’s Executive Leadership to discuss the status reports and any concerns that we, or Wal-Mart may have. We will maintain minutes of these meetings and distribute them to the participants (or other Wal-Mart designees) within 5 business days after the conclusion of each meeting.
Should issues of concern arise during the course of the audit that might alter our scope, that identify areas of legal concern, or that prevent us from performing our duties, Wal-Mart’s Executive Leadership will be notified immediately and a meeting convened to determine next steps. We will maintain minutes of these meetings and distribute them to appropriate participants and their designees within 5 business days after the conclusion of each meeting.
Within 14 business days of the conclusion of our Unionization and Net Sales audits, we will provide a report to Executive Leadership that identifies our findings and any appropriate recommendations. We will then schedule a meeting to discuss our findings and answer any questions Wal-Mart may have.
For the time keeping audit, we will provide a report within 14 calendar days after the conclusion of each site review that identifies our findings and any appropriate recommendations. Unless issues are identified that increase a legal or financial risk to Wal-Mart, we will discuss the findings of these site level reports during our monthly meetings.

Benefits of the Audit 4,5

Once we complete our audit we will develop a report for Executive Leadership that explains our findings in the three areas of engagement and any recommendations for improvement. Depending on what we find during our audit we will be able to provide Wal-Mart with the following benefits:

Unionization: * Learn the financial effects unionization may have on Wal-Mart’s net operating income * Learn how employee perceptions affect work life, moral and the quality of work * Learn what motivates Wal-Mart employees and what motivates them to work (e.g., benefits, rewards, recognition programs) * Determine if operational and cost saving improvements can be improved upon * Identify areas where more training could lead to increased knowledge and job awareness making a more productive and efficient employee

Net Sales: * Analysis of financial statements and other records to improve management’s understanding of their indicators so that more informed decisions can be made to improve overall financial health and meet plan goals * Uncover possible fraud or other illegal activities within the organization * Identify discrepancies and/or inaccurate information within the records * Reduce potential exposure to legal and tax issues * Improve internal controls * Determine status of current activities against the improvement plan so that adjustments can be made in a timely manner to mitigate missed goals * We will work with Executive Management to develop mitigation plans as appropriate

Timekeeping and Work Breaks * Determine problem areas within the organization * We will work with Executive Management to develop mitigation plans as appropriate * Reinforce and strengthen internal control * Help to uncover possible fraud or other illegal activities within your organization. * Deter employee fraud and theft * Uncover discrepancies and/or inaccurate information within the organizations records * Limit future exposure to legal and tax issues * Help management become more informed, allowing for better and more efficient and effective decision-making on management’s part * Identify areas were more training efforts would lead to increased knowledge and job awareness making for a more efficient employee

These are just some of the benefits of the audit we would perform for Wal-Mart. Once completed, these key factors could help to improve productivity, employee morale and your organizations bottom line, while protecting your assets and limiting your liability.

Time and Cost 6

Based upon our extensive experience with these types of reviews, our preliminary understanding of your goals and the documentation provided by Wal-Mart to date, we estimate for each operational review as follows. Please refer to Attachment 1 – Budget Estimates for a breakdown of these costs. All costs are quoted in U.S. dollars.

Unionization:

The estimated level of effort is expected to be approximately 269 man-hours with a cost range of $40,000 to $45,000.

Net Sales:

The estimated level of effort is expected to be approximately 237 man-hours with a cost range of $35,000 to $40,000.

Timekeeping and Work Breaks

The estimated level of effort is expected to be approximately 580,516 man-hours to review 2,250 sites and to review the corporate policies and procedures on time keeping and break requirements against all applicable statutes. The cost range is anticipated to be between $81,500,000 and $90,000,000 for the entire effort.

All costs will be billed on a time and materials basis for actual work performed only. We will be reimbursed for all travel and normal costs associated with travel (e.g., hotels, meals, flights, rental cars, tolls, mileage) at actual cost plus our current G&A rate of 10%. We will be reimbursed for all materials and out-of-pocket expenses at actual cost plus our current G&A rate of 10%. Should any extraordinary expenses arise, we will coordinate with Executive Leadership prior to incurring such cost.

Conclusion

We appreciate the opportunity to work with Wal-Mart and look forward to a productive relationship. As planned, once the Purchase Order and this Agreement are executed, we will schedule the kick-off meetings and begin work. If you have any questions or concerns, please feel free to reach out to me immediately.

Sincerely,

Brian White
President

ACCEPTED AND AGREED

By: _____________________________

Title: ___________________________

Date: ___________________________

ATTACHMENT 1 – BUDGET ESTIMATES

Budget Estimate - U.S. Net Sales Review | Wal-Mart, Inc. | | | | | | | | | | | | | | | | | | | LEVEL OF EFFORT ESTIMATE (in man-hours) | U.S. Net Sales Review | | | | | | | | | President | Partner | Sr. Staff | Jr. Staff | Admin Support | Total | Review Area | | | | | | | 1. Corporate Level | | | | | | | - Review of sales plan | 0 | 5 | 15 | 15 | 2 | 37 | - Product Analysis | 0 | 5 | 10 | 20 | 2 | 37 | 2. Operations | | | | | | | -Productivity Analysis | 0 | 5 | 10 | 25 | 2 | 42 | | | | | | | | | Total Review Time | 0 | 15 | 35 | 60 | 6 | 116 | | | | | | | | | Other Review Functions | | | | | | | Prepare Work Program | 2 | 4 | 4 | 2 | 2 | 14 | Review Results | 5 | 10 | 15 | 5 | 0 | 35 | Develop Findings | 2 | 8 | 15 | 0 | 5 | 30 | Meetings | | 4 | 6 | 2 | 0 | 0 | 12 | Written Reports | 2 | 4 | 10 | 6 | 8 | 30 | | | | | | | | | Total Other Time | 15 | 32 | 46 | 13 | 15 | 121 | | | | | | | | | Grand Total of Time | 15 | 47 | 81 | 73 | 21 | 237 | | | | | | | | | Standard Billing Rate | $250 | $250 | $150 | $80 | $50 | | | | | | | | | | Total Estimated Fees | $3,750 | $11,750 | $12,150 | $5,840 | $1,050 | $34,540 | Contingency @ 10% | | | | | | $3,454 | | | | | | | | | Estimated Grand Total | | | | | | $37,994 | | | | | | | | | Estimated Fee Range: | | $35,000 | to | $40,000 | | |

Resources 1. http://articles.businessinsider.com/2010-09-20/news/30081785_1_minimum-wage-real-wages-employees 2. Walmart 2011 Annual Report 3. http://smallbusiness.chron.com/advantages-unionized-workplace-15286.html 4. http://www.auditing.arollo.com/benefits.html 5. http://www.fairfaxcounty.gov/audit/benefits.htm 6. http://stock.walmart.com/investor-faqs