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7 Eleven Inc – ‘DEFR14A’ on 3/27/03

On:  Thursday, 3/27/03, at 4:21pm ET   ·   Effective:  3/27/03   ·   Accession #:  930661-3-1251   ·   File #:  1-06987

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/27/03  7 Eleven Inc                      DEFR14A     3/27/03    1:839K                                   Donnelley RR & So… Co/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFR14A     Revised Definitive Proxy Statement                  HTML    404K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 1)

Filed by the Registrant ¨

Filed by a Party other than the Registrant ¨ 

Check the appropriate box:

7-Eleven, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

7-Eleven, Inc.

2711 North Haskell Avenue · Box 711 · Dallas, Texas 75221-0711

March 24, 2003

Dear 7-Eleven Shareholder:

We invite you to attend our Annual Meeting of Shareholders on Wednesday, April 23, 2003. The meeting will begin at 9:30 a.m., Central Daylight Time, in the Joe C. Thompson Conference Center located on the ground floor of our headquarters at Cityplace Center, 2711 North Haskell Avenue, Dallas, Texas.

If you are planning to attend the meeting in person, please mark the appropriate space on the enclosed proxy card. We have included a map of Cityplace Center on the back cover of the attached proxy statement. The map shows the entrances to the Cityplace Center parking garage.

This booklet contains the formal Notice of Annual Meeting and the proxy statement. The proxy statement tells you about the proposals being presented to the shareholders at this meeting and provides other important information about the procedures for the meeting.

At this meeting, you will be voting on the election of 11 directors; the ratification of the Board of Directors’ selection of our independent accountants; an amendment to the Company’s 1995 Stock Incentive Plan; and an amendment to the Company’s Stock Compensation Plan for Non-Employee Directors.

Our Board of Directors unanimously recommends that you vote FOR each of the persons nominated for election as a director, FOR the ratification of our independent accountants, FOR the amendment to the Company’s 1995 Stock Incentive Plan, and FOR the amendment to the Company’s Stock Compensation Plan for Non-Employee Directors.

We have enclosed a copy of our 2002 Annual Report with your proxy statement and Notice of Annual Meeting. We appreciate your continued interest in 7-Eleven.

Please complete, sign and mail the enclosed proxy card as soon as possible so your vote will be counted at the meeting.

Sincerely,

James W. Keyes

President and Chief Executive Officer and Director

7-Eleven, Inc.

2711 North Haskell Avenue

Dallas, Texas 75204-2906

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 23, 2003

To the Shareholders of 7-Eleven, Inc.:

The Annual Meeting of Shareholders of 7-Eleven, Inc. will be held on Wednesday, April 23, 2003, at 9:30 a.m., Central Daylight Time, in the Joe C. Thompson Conference Center on the ground floor at Cityplace Center, 2711 North Haskell Avenue, Dallas, Texas, for the following purposes:

Only shareholders of record at the close of business Friday, February 28, 2003, will be entitled to receive notice of, and to vote at, the meeting.

The proxy statement contains further information about each of the matters to be considered.

We invite you to attend the meeting. Whether or not you plan to attend, please date and sign the accompanying proxy card exactly as your name appears on it, indicating your votes by marking the appropriate boxes, and return the proxy card promptly in the enclosed envelope.

By order of the Board of Directors,

Bryan F. Smith, Jr.

Secretary

Dallas, Texas

March 24, 2003

IF YOU PLAN TO ATTEND THE MEETING, PLEASE CHECK

THE APPROPRIATE BOX ON THE PROXY CARD

7-Eleven, Inc.

2711 North Haskell Avenue

Dallas, Texas 75204

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

April 23, 2003

Date first sent or given to security holders: March 31, 2003

GENERAL INFORMATION

Solicitation and Revocability of Proxies

Our Board of Directors is soliciting your proxy for the Annual Meeting of Shareholders to be held April 23, 2003, and at any adjournments of the meeting. Our officers and directors who held office during the last fiscal year and who have been proposed for re-election for this fiscal year, as well as their nominees and associates, have no interest, direct or indirect, in the matters to be voted upon, other than election to office and as specifically disclosed in this proxy statement.

Our Board of Directors requests you to sign and return the proxy promptly, whether or not you plan to attend the meeting. Unless you revoke your proxy or indicate a contrary instruction on the proxy, your properly executed proxy will grant authority to vote, and it will be voted for the election of 11 directors; for ratification of the appointment of the accounting firm of PricewaterhouseCoopers LLP to be our independent accountants for 2003; for the proposed amendment to the 7-Eleven, Inc. 1995 Stock Incentive Plan; and for the proposed amendment to the 7-Eleven, Inc. Stock Compensation Plan for Non-Employee Directors.

You may revoke a previously submitted proxy by giving us written notice at any time before the meeting or by advising the Inspector of Election at the meeting; however, your presence at the meeting will not automatically revoke your proxy. In addition, if you revoke your proxy during the meeting, it will not affect any votes taken before you revoke your proxy. By signing the proxy, you grant discretionary authority to vote upon matters which may properly come before the meeting from the floor or at such a late date as to prohibit additional notice. We are not aware of any matters to be presented other than those described in this proxy statement, except approval of the minutes of the 2002 Annual Meeting of Shareholders.

We bear the cost of soliciting the proxies. We have retained Innisfree M&A Incorporated, New York, New York, to assist in the solicitation, at a cost not to exceed $6,500, plus reimbursement of reasonable out-of-pocket expenses. In addition, we will reimburse brokers or other persons holding stock in their names or in the names of their nominees for charges and expenses incurred in forwarding proxies and proxy material to the beneficial owners. Our officers and regular employees may also solicit, without additional compensation, by mail, telephone, telegraph or in person.

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Shares Outstanding and Voting Rights

Our common stock is our only class of voting securities outstanding. Shareholders of record as of the close of business February 28, 2003, are entitled to notice of, and to vote at, the meeting. At the record date there were 104,986,071 shares of common stock, $.0001 par value, outstanding and entitled to vote. There were 1,875 record holders on the record date. Each outstanding share is entitled to one vote.

With respect to the election of directors, each director must be elected by a plurality of the votes cast by the holders of shares entitled to vote. All other matters to be voted upon must be approved by the affirmative vote of the holders of a majority of the shares entitled to vote.

We do not permit cumulative voting for the election of directors or on any other matter. In addition, your abstention from voting and broker non-votes will be counted toward determining the presence of a quorum but will not be included in determining the number of votes “for” the election of directors and will not be counted “for” or “against” any other item being voted upon.

INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

The Board of Directors has set the number of directors to be elected at this meeting at 11, which shall constitute the entire board of directors. Each director shall be elected to hold office until the next Annual Meeting of Shareholders or his earlier death, removal or resignation, or until his successor is duly elected and qualified.

Although there is currently no agreement that controls the composition of the Board of Directors, the fact that IYG Holding Co. owns more than 70% of our outstanding common stock (see “Security Ownership of Certain Persons” below) means that IYG Holding Co. can control the composition of our Board of Directors. The nominees for election as directors for 2003 have been nominated by resolution adopted by the current Board of Directors.

Meetings and Committees of the Board of Directors

During 2002, our Board of Directors held five regular meetings.

The Board of Directors has an Audit Committee. Mr. Jay W. Chai served as Chairman of the Committee, and Mr. Gary J. Fernandes and Mr. Lewis E. Platt served as members, throughout 2002.

The Audit Committee met eight times during 2002. The functions of the Audit Committee include:

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The Board plans to amend the current charter of the Audit Committee after the New York Stock Exchange’s proposed new listing requirements become final. The current charter of the Audit Committee is attached to this proxy statement as Appendix A.

At the end of 1999, the SEC and the NYSE adopted new rules relating to Audit Committees. Under these rules, members of the Committee must be financially literate. As required by these rules, our Board of Directors, exercising its business judgment in interpreting the term “financially literate,” has determined that each member of the Audit Committee is financially literate.

In addition, the current NYSE rules require that at least one member of our Audit Committee have accounting or related financial management expertise, as our Board of Directors interprets this qualification in its business judgment. Our Board of Directors has determined that each member of the Committee has served as either a Chief Executive Officer or a Chief Financial Officer of a large corporate entity with responsibility for financial management and decision-making and therefore has the necessary accounting or related financial management expertise.

The NYSE rules also require members of the Audit Committee to be independent, which the current rules define as having no relationship to the Company that may interfere with the exercise of their independence from management and the Company. Our Board of Directors, in the exercise of its business judgment and consistent with NYSE rules, has determined that each member of the Company’s Audit Committee meets the NYSE’s standard for independence.

The Board of Directors has a Compensation and Benefits Committee, of which Mr. Platt serves as Chairman. Mr. Platt, Mr. Fernandes, and Mr. Yoshitami Arai served on the Committee throughout 2002. In September 2002, the Board appointed Mr. Chai as an additional Committee member. For a description of the functions of the Committee see “Compensation of Directors and Executive Officers,” below.

The Board of Directors also has a Nominating Committee. In anticipation of the forthcoming revisions to the NYSE’s listing requirements, in September 2002 the Board changed the name of the Committee to the “Nominating/Corporate Governance Committee” and reconstituted the Committee to include only independent directors. From January 2002 to September 2002, Mr. Toshifumi Suzuki served as Chairman of the Committee, and Mr. Kazuo Otsuka and Mr. James W. Keyes served as members. In September 2002, the Board appointed Mr. Platt as Chairman of the Committee and Messrs. Chai and Fernandes as the other members of the Committee.

3

The Nominating/Corporate Governance Committee did not meet during 2002; however, the Committee met in January 2003, at which time the Committee approved a recommendation to the full Board regarding the slate of directors to serve during the ensuing year. If security holders wish to recommend a nominee for service on our Board of Directors, they should send a written recommendation to 7-Eleven, Inc., 2711 N. Haskell Ave., Dallas, Texas 75204, Attention: Corporate Secretary.

The Board of Directors also has appointed a Special Committee, chaired by Mr. Fernandes, in connection with certain additional licensing arrangements that we are considering in the People’s Republic of China. Messrs. Platt and Chai also serve on the Special Committee. For more information about the Special Committee’s activities during 2002, please see the discussion entitled “Expansion in China” on pages 36 and 37.

During 2002, each of the current directors attended more than 75% of the combined meetings of the Board of Directors and committees of which such director is a member.

Report of Audit Committee

At their meeting on March 17, 2003, members of our Audit Committee unanimously approved the following report to shareholders:

As members of the Audit Committee of the Board of Directors of 7-Eleven, Inc., we have reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2002.

We have discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, by the Auditing Standards Board of the American Institute of Certified Public Accountants.

We have received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standard No. 1, Independence Discussions with Audit Committees, as amended by the Independence Standards Board, and have discussed with the auditors the auditors’ independence.

Based on the reviews and discussions referred to above, we have recommended to the Board of Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

We have also considered whether the provision of services by PricewaterhouseCoopers LLP not related to the audit of the financial statements referred to above and to the reviews of the interim financial statements included in the Company’s Forms 10-Q for the quarters ended March 31, 2002, June 30, 2002, and September 30, 2002, is compatible with maintaining the independence of PricewaterhouseCoopers LLP.

Jay Chai, Chairman

Gary Fernandes

Lewis E. Platt

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Compensation of Directors

The compensation for members of the Board of Directors has been established by resolution adopted by the Board. The annual fee for a director who is not employed by us, Ito-Yokado Co., Ltd. or Seven-Eleven Japan Co., Ltd. has been set at $30,000 a year, plus $1,000 for attendance at each regular or special meeting of the Board or of any Board committee, including meetings held by means of conference telephone or similar communications equipment. We do not compensate directors for signing any consents in lieu of meetings. The annual fee for a director who is an employee of Ito-Yokado or of Seven-Eleven Japan has been set at $18,000 a year. The Chairman of the Audit Committee and the Chairman of the Compensation and Benefits Committee each receive an additional fee of $5,000 annually.

During 1998, the Board approved and adopted the Stock Compensation Plan for Non-Employee Directors. Under this plan, a non-employee director can elect to receive all, none or a portion of his director’s fees in shares of our common stock instead of in cash. Shares are valued as of the closing price on the last trading day of the calendar quarter during which the fees were earned and are issued shortly thereafter. Directors who are our employees receive only their compensation as an employee; they receive no directors’ fees for their service on the Board or any Board committee.

The Board has approved an amendment to the Stock Compensation Plan for Non-Employee Directors, subject to approval by our shareholders. The amendment would permit the award of stock options and restricted stock to our independent directors. If our shareholders approve the amendment, the Board intends to issue to each independent director an annual grant of 6,000 stock options and 2,000 shares of restricted stock. The size of these grants is subject to such future adjustments as the Board may deem appropriate. For more information about the proposed amendment, see Proposal 4, below.

In addition, as described on page 7, Mr. Ashida is paid $11,500 per month, including any director’s fees to which he would otherwise be entitled, under an Independent Consultant’s Agreement entered into on July 1, 1991, and amended in 1995, pursuant to which he serves as liaison with the Board of Directors. Mr. Asakura is one of our Senior Vice Presidents and receives compensation from us for his service as one of our directors and officers under an agreement entered into in 1997 concerning his service (see “Proposal 1. Election of Directors—Information About Nominees,” below, for additional details concerning Mr. Ashida’s and Mr. Asakura’s compensation).

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PROPOSAL 1. ELECTION OF DIRECTORS

Information About Nominees

As a preliminary matter, we wish to note that two longstanding members of our Board have elected to retire at the end of their current terms of service: Mr. Masatoshi Ito, who has served as a director and as Chairman of the Board since 1991; and Mr. Clark J. Matthews, II, who has served as a director from 1981 to 1987 and from 1991 to the present, and who, since retiring from his position as our president and chief executive officer in 2000, has served as Co-Vice Chairman of the Board.

The following biographical information includes the names, ages and year first elected a director, the principal occupation or employment, as of March 15, 2003, of each person nominated for service on the Board during the ensuing year, including all positions and offices with 7-Eleven, and the principal directorships held by such persons in non-7-Eleven companies. Also included is information about compensation paid to certain of our directors.

TOSHIFUMI SUZUKI has served as our Vice Chairman of the Board and as a Director since March 1991. He has served as President and Chief Executive Officer of Ito-Yokado Co., Ltd. since October 1992, as a Director since 1971, and in various other capacities since 1963.  Mr. Suzuki has served as a Director of Seven-Eleven Japan Co., Ltd., since 1973, its Chairman of the Board and Chief Executive Officer since October 1992 and in various other capacities since 1965. Since 1984, Mr. Suzuki has served as Statutory Auditor of Robinson’s Japan Co., Ltd. He has served as Chairman of the Board of Daikuma Co., Ltd. from 1985 to 2002, President of Seven-Eleven (Hawaii), Inc. since 1989; Chairman of 7dream.com Co., Ltd. since 2000 and President and Director of IYG Holding Co. since 1990. Since 1993, Mr. Suzuki has served as President of York Insurance Co., Ltd. In addition, since 2001 Mr. Suzuki has served as Chairman of IY Card Service Co., Ltd.

JAMES W. KEYES was elected Director in April 1997 and has served as our President and Chief Executive Officer since May 2000. From May 1998 to April 2000 he served as our Executive Vice President and Chief Operating Officer. Mr. Keyes also served as our Chief Financial Officer from May 1996 to April 1998 and in various other capacities since 1985.

6

YOSHITAMI ARAI was elected Director in March 1991. Mr. Arai has been the Chairman of the Board of Systems International Incorporated, a consulting firm for international joint ventures, licensing and investment arrangements, since 1977, and served as its President from 1970 to 1977. He has been Chairman of Catalina Pacific Media L.L.C. since 1996. In addition, Mr. Arai is a Director of Catalina Marketing Japan K.K., Entry Strategies Inc., Industrial Suppliers S.A. and Pacific Media K.K. Mr. Arai is Chairman of JAIC-Shinrai Capital L.L.C. Mr. Arai is a member of the Pacific Basin Economic Council, APEC Business Advisory Council and other international nonprofit organizations. Since 1996, he has served as Senior Advisor to the Welsh Development Agency, a British government organization.

MASAAKI ASAKURA was elected Director in April 1997 and has served as our Senior Vice President since May 1998. He previously served as Vice President from May 1997 to April 1998. Mr. Asakura served as the General Manager and Overseas Liaison, Planning Department, for Seven-Eleven Japan Co., Ltd., from 1995 to 1997 and in various other capacities since 1976.

TIMOTHY N. ASHIDA was elected Director in March 1991. Since 1972 he has served as the President of A.K.K. Associates, Inc., a consulting firm based in Glendale, California, for Japanese/American investments. Mr. Ashida has also served as a Director of Seven-Eleven Japan Co., Ltd., since 1991. Mr. Ashida has entered into an Independent Consultant’s Agreement with us pursuant to which he is paid $11,500 per month to serve as liaison with our Board of Directors. This fee is inclusive of any director’s fees to which he would otherwise be entitled.

JAY W. CHAI was elected Director in March 1991. He served as Chairman of the Board and Chief Executive Officer of ITOCHU International Inc. from April 1991 to his retirement in June 2001. Prior to his retirement, Mr. Chai held several other positions with ITOCHU International. He also has served as a Director of ITOCHU International from 1983 to 2001. From 2000 to June 2001, Mr. Chai served as Vice Chairman of ITOCHU Corporation, a Japanese trading company. Mr. Chai served as Executive Vice President of ITOCHU Corporation from 1993 to 2000 and in various other capacities since 1986. Mr. Chai also served as a Director of Isuzu Motors Limited from 1984 to 2002.

GARY J. FERNANDES was elected Director in April 1991. He currently serves as a director of webMethods, Inc. and Anacomp, Inc. From January 2000 to June 2001, Mr. Fernandes served as Chief Executive Officer of GroceryWorks.com, an Internet-based home shopping service. Since 2000, Mr. Fernandes has served as Chairman of GroceryWorks. In addition, Mr. Fernandes was a partner in Convergent Partners, Ltd., a venture capital partnership, from January to December 1999. Mr. Fernandes has held the positions of Vice Chairman, Senior Vice President and Director of Electronic Data Systems Corporation, an information technology service company, from 1996 to 1998, 1984 to 1996 and 1981 to 1998, respectively. From 1995 to 1998 he served as Chairman of A.T. Kearney, Inc. He is Governor of the Boys and Girls Clubs of America and Director of the Boys and Girls Clubs of Greater Dallas, Inc.

MASAAKI KAMATA was elected Director in March 1991. He has held several positions with Seven-Eleven Japan Co., Ltd., including Director since 1978 and Vice Chairman since 1997. Since 1989 he has served as Director, and since 1992 as President, of Seven-Eleven (Hawaii), Inc. Mr. Kamata has served as Director and Treasurer of IYG Holding Co. since 1990. He has served as a director of IY Card Service Co., Ltd. since 2001 and as Chairman of Union Lease Co., Ltd. since 2001.

KAZUO OTSUKA was elected Director in March 1991. Since 1986 he has served as General Manager, Corporate Development, for Ito-Yokado Co., Ltd. Since 2000, Mr. Otsuka has served as Statutory Auditor of Seven-Eleven Japan Co., Ltd. He has served as Assistant Secretary of IYG Holding Co. since 1990.

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LEWIS E. PLATT was elected Director in June 2001. Mr. Platt served as President and Chief Executive Officer of Hewlett-Packard Company from November 1992 to July 1999, and as a Director and Chairman from September 1993 to his retirement in December 1999. Mr. Platt has also served as Chief Executive Officer and as a Director of Kendall-Jackson Wine Estates Limited from January 2000 to June 2001. In 1995, he was appointed by President Clinton to the Advisory Committee on Trade Policy Negotiations. He also serves on the Wharton School Board of Overseers and as a Trustee of the David and Lucille Packard Foundation. In addition, Mr. Platt has served as a Director of The Boeing Company since 1999.

NOBUTAKE SATO was elected Director in March 1991. Mr. Sato has held several positions with Ito-Yokado Co., Ltd., including Director since 1977 and Executive Vice President since 1993. He has served Ito-Yokado in various other capacities since 1964. He serves on the board of directors of several companies, including Denny’s Japan Co., Ltd. since 1973, Maryann Co., Ltd. since 1982, Oshman’s Japan Co., Ltd. since 1984 and Marudai Co., Ltd. since 1989. Mr. Sato was appointed President of Urawa Building Co., Ltd. in 1985, of Nitsu Systems Kaihatsu Co., Ltd. in 1986 and of Waiaru Kiahatsu Co., Ltd. in 1988 and still serves in those positions. He has been Chairman of York Benimaru Co., Ltd. since 2000 and President of Shiba Park Publishing Co., Ltd. since 1995. Mr. Sato has served as Director and Vice President of IYG Holding Co. since 1990 and as Statutory Auditor of IY Card Service Co., Ltd. since 2001. In addition, he has served as a Director of IY Bank Co., Ltd. since 2001.

Our Board of Directors has recommended each of the nominees presented for election. All nominees are currently members of the Board of Directors. Each nominee has consented to serve as a director if elected. If any nominee becomes unavailable for any reason or should a vacancy occur before the election, proxies may be voted for a substitute nominee. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.

The Board of Directors recommends a vote FOR the election of each of the nominees, which requires the affirmative vote of a majority of the shares represented and entitled to vote at the meeting. Votes will be tabulated by an inspector of election. An abstention from voting or a broker non-vote will be tabulated as a vote withheld on the election, and will be included in computing the number of shares present for purposes of determining the presence of a quorum for the shareholders’ meeting and whether nominees have received the vote of a majority of the shares present at the meeting.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

At February 28, 2003, the record date for the Annual Meeting, we were aware of the following beneficial owners of 5% or more (as determined under the applicable SEC rules) of the outstanding shares of our common stock, which is our only class of voting security. As of the record date, 104,986,071 shares of our common stock were issued and outstanding. The following table, however, in accordance with the applicable requirements, includes certain shares which Ito-Yokado and Seven-Eleven Japan have the power to acquire within the next 60 days, but which are not currently outstanding.

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The percentage ownership shown in this table and the table that follows is calculated as required by Rule 13d-3(d)(1) under the Exchange Act. IYG Holding Co. currently owns 72.5% of our outstanding common stock. Ito-Yokado and Seven-Eleven Japan do not directly own any shares of our common stock.

Security Ownership of Management

The following table and the footnotes that follow show the beneficial ownership of our common stock as of February 28, 2003, as required by SEC rules and regulations, by each director and each person nominated for director, by the Chief Executive Officer and our next four most highly compensated executive officers and by all our executive officers and directors as a group.

10

11

Director of IYG Holding Co. and Chief Financial Officer of Ito-Yokado. See “Security Ownership of Certain Beneficial Owners,” above.

Section 16(a) Reporting

Section 16(a) of the Exchange Act, requires our directors, executive officers and holders of more than 10% of our common stock to file with the Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We believe that during the fiscal year ended December 31, 2002, our executive officers, directors and holders of more than 10% of our common stock complied with all Section 16(a) filing requirements. In making this statement, we have relied upon the written representations of our directors and executive officers.

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PROPOSAL 2. RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS

The Board of Directors, upon the recommendation of the Audit Committee, has appointed PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) to be our independent accountants for 2003. Although not legally required to do so, upon the recommendation of the Audit Committee, our Board is submitting to the shareholders for ratification at this meeting the appointment of PricewaterhouseCoopers as our independent accountants for 2003. We expect that our shareholders will approve this proposal, but if the proposal is not approved, our Board will revisit its decision to appoint PricewaterhouseCoopers as our independent accountants for 2003.

The services provided to us by PricewaterhouseCoopers in 2003 will include, in addition to performing our audit, audits of certain domestic and foreign subsidiaries and related companies and those of various employee benefit plans; review of quarterly reports; issuance of letters to underwriters in connection with registration statements, if any, we may file with the SEC and consultation on accounting, financial reporting, tax and related matters.

PricewaterhouseCoopers, a nationally known firm, has no direct or indirect interest in our company. The firm of Coopers & Lybrand L.L.P., predecessor to PricewaterhouseCoopers, was originally appointed as our independent accountants in 1992.

Representatives of PricewaterhouseCoopers will be at the meeting, will have an opportunity to make a statement, and will be available to respond to questions.

A summary of fees that PricewaterhouseCoopers has charged us for audit- and non-audit related services during 2002 follows:

The Board of Directors recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP to be our independent accountants, which requires the affirmative vote of a majority of the shares represented and entitled to vote at the meeting. Votes will be tabulated by an inspector of election. An abstention from voting and broker non-votes will be included in computing the number of shares present for purposes of determining the presence of a quorum for the shareholders meeting and whether the affirmative vote of a majority of the shares present at the meeting has been received, but will not be counted as a vote either “for”or “against” ratification.

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PROPOSAL 3. APPROVAL OF AMENDMENT TO THE 1995 STOCK INCENTIVE PLAN

Background

The 1995 Incentive Plan (the “Incentive Plan”) provides for equity-based awards to key employees of the Company. The Company may grant incentive stock options (“Incentive Stock Options”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), stock options other than Incentive Stock Options (“nonqualified stock options” and together with Incentive Stock Options, “Stock Options”), stock appreciation rights (“SARs”), shares of restricted stock (“Restricted Stock”), restricted stock units (“Restricted Stock Units”), performance shares (“Performance Shares”), bonus stock (“Bonus Stock”) and other stock-based awards (collectively, “Incentive Awards”) to eligible participants in the Incentive Plan.

The maximum number of shares of Common Stock initially reserved for issuance under the Incentive Plan was 8,200,000 (as adjusted for one-for-five reverse stock split that became effective on May 1, 2000). Of the approximately 8.2 million shares of Common Stock available for issuance under the Incentive Plan, more than 8.1 million shares have been issued or reserved for issuance pursuant to outstanding Incentive Awards, leaving fewer than 100,000 shares of Common Stock available for future Incentive Awards.

Proposal

The Company proposes to amend the Incentive Plan to increase the number of shares of Common Stock available for issuance of Incentive Awards by 3 million shares for a total of 11.2 million shares. The additional 3 million shares of Common Stock would be available for all types of Incentive Awards.

The amendment would permit the Company to continue to grant Incentive Awards under the Incentive Plan. The continued success of the Company depends on its ability to attract and retain employees who are highly qualified and motivated. The Board of Directors believes that the Incentive Plan promotes this objective by giving participants an opportunity to share in the success of the Company through equity ownership. The Incentive Plan is also designed to align the interests of the Company’s employees with those of its shareholders by providing participants with appropriate incentives to build shareholder value.

Summary of the 1995 Stock Incentive Plan

The following summary description of the Incentive Plan is qualified in its entirety by reference to the Incentive Plan, a copy of which as proposed to be amended is attached hereto as Appendix B and incorporated herein by reference. Terms with their initial letter capitalized that are used in this description and not specifically defined herein shall have the same meaning given such terms in the Incentive Plan.

General Information

The types of awards that may be granted under the Incentive Plan include Incentive Stock Options, (ii) nonqualified stock options, (iii) SARs, (iv) shares of Restricted Stock, (v) Restricted Stock Units, (vi) Performance Shares, (vii) Bonus Stock and (viii) other stock-based awards.

Administration

The Incentive Plan is currently administered by the Company’s Compensation and Benefits Committee, which is appointed by the Board, unless any member of such committee fails to qualify as

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both a “Non-Employee Director” under Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”) and an “Outside Director” under Section 162(m) of the Code. If the members of the Compensation and Benefit Committee do not qualify to administer the Incentive Plan under these regulations, the Board or the Committee shall appoint a sub-committee comprised of directors who do qualify. The committee that at any time administers the Incentive Plan is referred to as the “Committee.” The members of the Committee (through the date of this Annual Meeting of Shareholders, as permitted by the regulations under Section 162(m) of the Exchange Act) are Mr. Lewis E. Platt, Mr. Gary J. Fernandes, Mr. Yoshitami Arai and Mr. Jay W. Chai. Committee members will serve in such capacity until their resignation or removal at any time.

Under the Incentive Plan, the Committee will have wide discretion and flexibility, thus enabling the Committee to administer the Incentive Plan in the manner that it determines, from time to time, is in the best interests of the Company. The Committee also will have authority to interpret the Incentive Plan, to determine the terms and provisions of Incentive Awards, and to make all other determinations necessary or advisable for administration of the Incentive Plan.

Shares Subject to the Incentive Plan

Subject to certain exceptions set forth in the Incentive Plan, the aggregate number of shares of the Company’s Common Stock that may be the subject of Incentive Awards under the Incentive Plan is 8,200,000. The maximum number of shares that may be awarded to any one individual pursuant to Incentive Awards under the Incentive Plan, subject to certain adjustments as described below, is 2,000,000 shares. If the amendment to increase the number of shares reserved for issuance is approved, the total number of shares of common stock reserved for issuance pursuant to the Incentive Plan will be 11,200,000, and a total of approximately 3,100,000 shares will be available for future issuance under the Incentive Plan. Shares acquired as a result of Incentive Awards under the Incentive Plan have been registered under the Securities Act of 1933.

Eligibility

Employees eligible to participate in the Incentive Plan will be designated by the Committee and will be chosen from among those employees determined to be Key Employees. “Key Employees” are those employees of the Company and its Subsidiaries determined by the Committee to have a direct and significant impact on the performance of the Company. The Company’s executive officers are among the employees who are eligible to receive Incentive Awards under the Incentive Plan. As of the date of this proxy statement, approximately 100 persons, including five of our executive officers and Mr. Keyes, who serves as both an executive officer and a director of the Company, will be eligible to participate in the Incentive Plan.

Terms and Conditions of Incentive Awards

Stock Options. The purchase price of Common Stock under each Stock Option granted pursuant to the Incentive Plan will be determined by the Committee; provided, however, that the exercise price for Common Stock subject to a Stock Option will not be less than 100% of the fair market value of the Common Stock on the date of grant of such Stock Option. The aggregate fair market value (determined at the time an Incentive Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an employee during any calendar year (under all stock option plans of the Company) will not exceed $100,000, or such other amount as may be prescribed under the Code or applicable regulations and rulings from time to time.

Stock Options may be exercised as determined by the Committee, but in no event later than ten years from the date of grant.

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Options awarded under the Incentive Plan will be exercisable at such times and subject to such restrictions and conditions (including without limitation, restrictions based on the passage of time or the achievement of certain performance goals) as the Committee shall determine in its discretion. However, an option generally may not be exercisable until at least one year following the date of grant. Upon the exercise of a Stock Option, the participant must pay the purchase price in full either in cash, a cash equivalent acceptable to the Committee, or a combination of cash and its equivalent acceptable to the Committee. The purchase price may be paid, with the approval of the Committee, by assigning and delivering to the Company shares of Common Stock or a combination of cash and such shares equal in value to the exercise price.

In addition, at the request of a participant and to the extent permitted by applicable law, the Committee may approve arrangements with a brokerage firm under which such brokerage firm, on behalf of the participant, will pay the exercise price of the Stock Options being exercised to the Company, and the Company will promptly deliver to such firm the shares acquired upon such exercise. Participants will not be entitled to receive any fractional shares of Common Stock upon the exercise of Stock Options granted under the Incentive Plan.

All shares of Common Stock issuable upon the exercise of Stock Options may, in the discretion of the Committee, be subject to restrictions on transfer and other features similar to those applicable to awards of Restricted Stock and Restricted Stock Units.

Stock Appreciation Rights. A Stock Appreciation Right (“SAR”) may be granted either in tandem with or independent of a Stock Option. An SAR is the right to receive an amount equal to the excess of the fair market value of a share of the Company’s Common Stock on the date of exercise over the fair market value of a share of Common Stock on the date of grant (in the case of SARs granted independent of a Stock Option) or the exercise price of the related Stock Option (in the case of an SAR granted in tandem with a Stock Option).

An SAR granted in tandem with a Stock Option may require the holder, upon exercise, to surrender the related Stock Option or any portion thereof to the extent unexercised, with respect to the number of shares as to which such SAR is exercised, and to receive payment as described above. The surrendered Stock Option will then cease to be exercisable. A tandem SAR will be exercisable or transferable only to the extent that the related Stock Option is exercisable or transferable.

An SAR granted independent of a Stock Option will be exercisable as determined by the Committee. An independent SAR will entitle the holder, upon exercise, to receive payment as described above. The Committee may limit the amount payable upon exercise of any tandem or independent SAR. Any such limitation will be specified at the time the SAR is granted.

Payment upon the exercise of SARs will be made, at the discretion of the Committee, in cash, in shares of Common Stock, or a combination of cash and shares of Common Stock.

Performance Shares. A Performance Share Award is an award, payable in cash or stock, based on performance goals which may be established by the Committee and the value of which shall be paid to the Participant, if the performance goals, as set forth in the applicable Award Agreement, are satisfied.

Restricted Stock and Restricted Stock Unit Awards. A Restricted Stock Award is the grant of shares of Common Stock or the right to purchase Common Stock at a price determined by the Committee, which is nontransferable and subject to substantial risk of forfeiture until specific conditions are met. A Restricted Stock Unit is a fixed or variable dollar denominated right to acquire Common Stock, which may or may not be subject to restrictions. Certificates evidencing Restricted Stock Awards will bear a

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legend making reference to the restrictions imposed. The restrictions will lapse in accordance with a schedule or other conditions determined by the Committee. During the restriction period, the holder of a Restricted Stock Award may, in the discretion of the Committee, be given certain rights as a shareholder, including the right to vote the stock subject to the Restricted Stock Award and/or receive dividends with respect thereto.

Bonus Stock Awards. Bonus Stock Awards are awards of shares of Common Stock granted to participants without cash consideration which may be subject to restrictions on transfer or other features similar to those applicable to awards of Restricted Stock and Restricted Stock Units.

Other Stock-Based Awards. The Committee shall also have the authority to grant participants other Stock Awards which can be in the form of shares of Common Stock or units with the terms and conditions of such Awards to be as specified in the Award Agreement.

Acceleration of Vesting and Exercisability

Each Award Agreement shall provide for the effect of a termination of employment due to death, Disability, Early Retirement, Normal Retirement or Divestiture on the vesting, exercisability and termination of such Award, and the effect, if any, of a change of control on such Award.

Award Agreement

The terms of any Incentive Awards under the Incentive Plan are determined by the Committee. Each Award is evidenced by a written agreement between the Company and the person to whom the Incentive Award is made. The Award Agreement specifies the details of the award, the expiration date, if applicable, the number of shares or other units to which the Incentive Award pertains, any conditions to the exercise of the Incentive Award and such other terms and conditions as the Committee, in its discretion, shall determine.

Adjustment Provisions

The terms of an Incentive Award and the maximum number of shares of Common Stock authorized for issuance under the Incentive Plan will be adjusted if the Company subdivides as a whole the number of shares of Common Stock then outstanding into a greater number of shares of Common Stock (such as in a stock split) or consolidates as a whole the number of shares of Common Stock then outstanding into a lesser number of shares of Common Stock (such as in a reverse stock split). In addition, if the Common Stock is subdivided or consolidated into one or more different kinds of securities, the holders of Incentive Awards will be entitled to purchase or receive (in lieu of the shares of Common Stock originally subject to the Incentive Award) the kinds of securities into which the Common Stock is subdivided or consolidated.

Upon a “change in control” of the Company and in the discretion of the Committee, (1) all outstanding Stock Appreciation Rights and Stock Options may become immediately and fully vested and exercisable in full, and (2) the restriction period on any Restricted Stock Award may be accelerated and the restrictions will expire.

In general under the Incentive Plan, a “change in control” of the Company occurs in any of four situations: (1) a person other than the Company, certain affiliated companies or benefit plans, or a company with the same ownership as the Company, acquires 50% or more of the voting power of the Company’s outstanding voting securities; (2) a person described in clause (1) announces a tender offer for 50% or more of the Company’s outstanding voting securities and the Board does not oppose the tender offer; (3) the Company merges or consolidates with another corporation or partnership, or the

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Company’s shareholders approve such a merger or consolidation, other than mergers or consolidations in which the Company’s voting securities are converted into securities having the majority of voting power in the surviving company; or (4) the Company liquidates or sells all or substantially all its assets, or the Company’s shareholders approve such a liquidation or sale, except sales to corporations having substantially the same ownership as the Company.

Amendment and Termination of the Incentive Plan

No Incentive Award may be granted under the Incentive Plan after December 31, 2005. The Board may, insofar as permitted by law, with respect to any shares which, at the time, are not subject to Incentive Awards, suspend or discontinue the Incentive Plan.

The Board or the Committee may amend, suspend, or terminate the Incentive Plan or any portion thereof at any time, provided that no amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement, including without limitations the rules and regulations of the New York Stock Exchange.

The Incentive Plan is intended to comply with the requirements of Section 162(m) of the Code to the extent required to cause Stock Options and Stock Appreciation Rights to be classified as “performance-based compensation” under Section 162(m)(4)(C) of the Code. However, regulations under Section 162(m) of the Code, when finalized, and interpretations of Section 162(m) and such regulations, could require certain amendments to the Incentive Plan to accomplish this classification. To the extent amendments to the Incentive Plan are required, the Board or the Committee may adopt such amendments that it determines are necessary but will not solicit shareholder approval of such amendments unless shareholder approval is required under Section 162(m) of the Code or other applicable law.

Federal Income Tax Consequences

A participant receiving nonqualified stock options or SARs will not recognize taxable income at the time the nonqualified stock option or SAR is granted. At the time the nonqualified stock option or SAR is exercised, the participant will recognize ordinary taxable income in an amount equal to the excess of the fair market value of the Company’s Common Stock on the date of exercise over the exercise price (or fair market value of the Common Stock at the time of grant of SARs granted independent of Stock Options). The Company will be entitled to a concurrent deduction equal to the ordinary income recognized by the participant, to the extent such amount constitutes an ordinary and necessary business expense and provided that the Company satisfies any federal income tax withholding requirements.

An employee granted an Incentive Stock Option will not recognize taxable income at the time of grant or, subject to certain conditions, at the time of exercise. The excess of the fair market value of the Common Stock received over the option price is an item of tax preference income potentially subject to the alternative minimum tax. If Common Stock acquired upon exercise of an Incentive Stock Option is held for a minimum of two years from the date of grant and one year from the date of exercise, the gain or loss (in an amount equal to the difference between the sales price and the exercise price) upon disposition of the Common Stock will be treated as long-term capital gain or loss, and the Company will not be entitled to any corresponding deduction.

If the holding period requirements are not met, the disposition of shares will be treated as disqualifying the shares from Incentive Stock Option treatment, and the employee will recognize ordinary income in an amount equal to the lesser of (i) the excess of the fair market value of Common Stock on the date of exercise over the exercise price or (ii) the amount realized on the sale of such Common Stock over the exercise price. Any gain realized by the employee in excess of such ordinary income will be

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long-term or short-term capital gain, depending on the holding period of the shares. If the shares are sold for an amount less than the exercise price, such loss will be treated as a long-term or short-term capital loss depending on the holding period for such shares. In the event of a disqualifying disposition, the Company will be entitled to a deduction equal to the ordinary income recognized by the Participant, to the extent such amount constitutes an ordinary and necessary business expense.

An employee receiving a Restricted Stock Award will not recognize taxable income at the time of grant, provided that the Restricted Stock is not transferable and is subject to a substantial risk of forfeiture within the meaning of Section 83(a) of the Code (“Restrictions”). At the time the Restrictions lapse, the employee will recognize ordinary taxable income equal to the difference between the fair market value of the Common Stock at the time the Restrictions lapse and the price paid by the employee for such Common Stock. Any dividends received by the employee before the termination of Restrictions will be taxed as ordinary income. The Company will be entitled to a deduction equal to the ordinary income reported by the employee, provided the Company satisfies any federal income tax withholding requirements. Upon the disposition of the Common Stock, the employee will recognize capital gain or loss equal to the difference between the fair market value of the Common Stock at the time the Restrictions lapse and the amount realized upon the disposition of the Common Stock. Such capital gain or loss will be long-term or short-term depending on whether the participant held the Common Stock for more than one year.

An employee may elect to report and recognize income at the time of grant or purchase of Restricted Stock by filing an election under Section 83(b) of the Code (a “Section 83(b) Election”). If the employee makes a Section 83(b) Election, the Company will be entitled to a deduction equal to the ordinary income reported by the employee in the year of the election, provided the Company satisfies any federal income tax withholding requirements. Dividends paid by the Company before and after the Restrictions lapse will not be deductible by the Company. Upon the disposition of the Common Stock, the employee will recognize capital gain or loss equal to the difference between the amount realized and the sum of the income recognized by the employee as a result of the Section 83(b) Election and any amounts paid by the employee for the Restricted Stock. Such capital gain or loss will be long-term or short-term depending on the Participant’s holding period.

Special rules may apply with respect to employees subject to Section 16(b) of the Exchange Act. Other than in the case of an Incentive Stock Option held in accordance with the specified holding period requirements, the amount and timing of the recognition of income by an employee subject to Section 16(b) (and the concurrent deduction by the Company) on the exercise of a Stock Option or SAR generally will be based on the fair market value of the shares received when the restrictions of Section 16(b) lapse, unless the employee elects otherwise by making a Section 83(b) Election.

Options Granted

The Committee has granted options exercisable for approximately 8 million shares of Common Stock under the Incentive Plan to a total of more than 100 employees, including all officers. An Award Agreement was provided to each grantee which contained the provisions relating to the vesting and exercisability of the options. The Award Agreement also contains conditions relating to treatment of the option upon an employee’s death, Disability, Early Retirement, Normal Retirement or Divestiture from the Company.

The options granted will become exercisable over a five-year period, at 20% per year beginning one year after the date of grant and expire ten years from the date of grant, or upon such other terms as the Committee may determine. Options may be exercised by giving written notice of exercise to the Company specifying the number of full shares of Common Stock being purchased and tendering payment

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of the option exercise price to the Company. The option price due upon exercise of any option granted pursuant to the Incentive Plan shall be paid to the Company either in full in cash or by tendering previously acquired shares of Common Stock, or in part in cash and part in stock. As of the date of this proxy statement, the market value of the securities underlying the total number of shares authorized under the Plan (including those proposed to be added to the pool of shares available for grant by this amendment to the Plan) was approximately $87 million, approximately $23 million of which is attributable to the shares proposed to be added by this amendment.

The Board of Directors recommends a vote FOR the approval of the amendment to the 7-Eleven, Inc. 1995 Stock Incentive Plan, which requires the affirmative vote of a majority of the shares represented and entitled to vote at the meeting. Votes will be tabulated by an inspector of election. An abstention from voting and broker non-votes will be included in computing the number of shares present for purposes of determining the presence of a quorum for the shareholders’ meeting and whether the affirmative vote of a majority of the shares present at the meeting has been received, but will not be counted as a vote either “for” or “against” the approval of the proposed amendment to the 7-Eleven, Inc. 1995 Stock Incentive Plan.

PROPOSAL 4.     APPROVAL OF AMENDMENT TO THE 7-ELEVEN, INC. STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

Background

The 7-Eleven Stock Compensation Plan for Non-Employee Directors (the “Plan”) was adopted in 1998 and currently gives non-employee directors of the Company, which are defined under the Plan as those directors of the Company who are not employees of the Company or any of its subsidiaries (“Non-Employee Directors”), the option to receive all, none or a portion of their directors’ fees in shares of Common Stock instead of in cash.

Proposal

The Company proposes to amend the Plan to permit the award of shares of restricted stock and stock options to independent directors, which are defined under the Plan as directors of the Company who are not employees of the Company or any parent, subsidiary or affiliate of the Company (“Independent Directors”). The Board believes that the proposed amendment will further the objectives of the Plan by enabling the Independent Directors of the Company to receive restricted stock, which will be defined under the Plan as shares of Common Stock that cannot be sold, assigned, transferred, pledged, or otherwise encumbered until the first day of the month following the date that the Independent Director ceases to serve as a director of the Company (“Restricted Stock”), or options to acquire Common Stock (together with Restricted Stock, the “Awards”) as part of their compensation as directors. The continued success of the Company depends on its ability to attract and retain directors who are highly qualified and motivated. The achievement of this goal will be furthered by amending the Plan to allow the Company to grant Restricted Stock and options to acquire Common Stock to Independent Directors pursuant to the Plan.

Approximately four of the 11 members nominated for service on the Board during the ensuing year will be eligible to receive Awards under the Plan. A total of 240,000 shares of Common Stock have been reserved for issuance under the terms of the Plan, of which approximately one-third have been awarded to directors from the inception of the Plan to the present.

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The Board intends to issue each of the Independent Directors an annual grant of 2,000 shares of Restricted Stock and options to acquire 6,000 shares of Common Stock. The size of these grants is subject to such future adjustments as the Board may deem appropriate.

Summary of the Plan

The following summary description of the material features of the Plan as proposed to be amended is qualified in its entirety by reference to the Plan, a copy of which is attached hereto as Appendix C and incorporated herein by reference. Terms with their initial letter capitalized that are used in this description and not specifically defined herein shall have the same meaning given such terms in the Plan.

Purpose of the Plan

The purpose of the Plan is to provide a variety of ways for Non-Employee Directors of the Company, including Independent Directors, to acquire shares of the Company’s Common Stock without having to purchase such shares in the public securities market. The Company believes that it is in the best interests of the shareholders for the directors to increase their ownership of Common Stock and equity equivalents of the Company.

Under the Plan, Non-Employee Directors can elect to receive all, none or a portion of their directors’ fees in shares of Common Stock, instead of in cash (the “Stock in Lieu of Cash Option”), and the Company may also grant Awards to Independent Directors as part of their directors’ fees. A Non-Employee Director electing to participate in the Stock in Lieu of Cash Option portion of the Plan shall submit an Election Agreement to the Company each calendar quarter. In the Election Agreement, the Non-Employee Director will designate what percentage of his or her director’s fee, if any, that he desires to receive in shares of Common Stock instead of in cash. The shares of Common Stock will be issued to the Non-Employee Directors after the end of the calendar quarter during which the directors’ fees are earned. The Common Stock will be valued at the closing price on the last day of the calendar quarter for which the fees are earned. The shares of Common Stock issued cannot be sold or transferred for at least six months following the date of issuance.

In addition, the Board will have the ability to grant Restricted Stock and options to acquire Common Stock to the Independent Directors.

Administration of the Plan

The Plan shall be administered by the Board, which may delegate authority to a committee; however, such committee shall have no authority to (a) determine how many shares shall be given to any Non-Employee Director or (b) determine eligibility to participate in the Plan. Such committee may be authorized to interpret the Plan and to prescribe, amend and rescind such rules and regulations relating to the Plan, as may be deemed advisable to protect the interests of the Company in connection with the operation of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan.

Eligibility and Participation

Each Non-Employee Director shall be eligible to participate in the Plan, but only Independent Directors shall be eligible to receive grants of options to acquire Common Stock or Restricted Stock under the Plan. Participation in the Stock in Lieu of Cash Option provision of the Plan shall be voluntary and a Non-Employee Director who elects to participate in the Stock in Lieu of Cash Option shall complete an Election Agreement which shall be filed with the Secretary of the Company, specifying the

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amount (either “all,” “none,” a specific percentage or specific dollar amount) of such director’s fees that the Non-Employee Director wants to receive in shares of Common Stock instead of cash. As of the date of this proxy statement, nine of the 11 directors nominated to serve for the ensuing year are Non-Employee Directors and are therefore eligible under the Plan to receive all or a portion of their directors’ fees in stock. In addition, four of the 11 directors nominated to serve for the ensuing year are Independent Directors, as defined by the Plan, and will therefore be eligible to receive Awards.

Election to Receive Stock

The Election Agreement must be filed with the Secretary of the Company prior to the beginning of the calendar quarter to which the election relates and will only be applicable to Director’s Fees earned after the effective date of the election. Once an Election Agreement is filed, it will remain in effect for subsequent calendar quarters until the Non-Employee Director amends it (by filing a new Election Agreement) or revokes it, by either (a) filing a new Election Agreement or (b) filing a statement of revocation with the Secretary of the Company advising that the Non-Employee Director no longer wants to receive Common Stock in payment of his Director’s Fees.

Stock and Option Issuances

The number of shares of Common Stock to be issued to Non-Employee Directors of the Company who elect to receive at least a portion of their directors’ fees in shares of Common Stock shall be equal to the number of shares of Common Stock that could be purchased at the Closing Price of Common Stock on the last day of the calendar quarter during which the Director’s Fees were earned with the dollar amount of the Director’s Fees that are being paid in Common Stock.

The Board is empowered to determine the number and amount of any Awards granted to the Independent Directors pursuant to the Plan.

Deferral of Receipt of Common Stock

A Non-Employee Director may choose to defer receipt of any Common Stock to be received pursuant to the Stock of Lieu of Cash Option under the Plan until the earlier of the following dates: (a) the first of the month following the date that the Non-Employee Director’s service as a Director ends; or (b) a specific date selected by the Non-Employee Director, which may not be earlier than the January 1 immediately following the first full calendar year after the date the Non-Employee Director makes the election to defer receipt of any Common Stock under the Plan.

In order to defer receipt of any Common Stock to be received pursuant to the Stock of Lieu of Cash Option, the Non-Employee Director must complete a Deferral Agreement furnished by the Secretary of the Company or his designee and return the completed form to the Company. The Non-Employee Director may terminate or amend the deferral agreement at any time by providing written notice to the Company, but the termination or amendment shall be deemed effective only with respect to compensation earned in the quarters following the date of such termination or amendment.

Certificate for Shares of Common Stock; Restriction on Transfer

In the case of shares of Common Stock issued pursuant to the Stock in Lieu of Cash Option, a certificate representing the appropriate number of shares of Common Stock shall be issued in the name of the Non-Employee Director, individually, or upon his request, in the name of another person or entity to which he has assigned his Director’s Fees, and shall be delivered within ten days after the end of the calendar quarter for which the Director’s Fees are being paid. The certificate so issued shall contain a restrictive legend stating that the shares represented by the certificate cannot be transferred for

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six months following the date of issuance of the certificate, unless the restriction is waived by the Company or unless the director has elected a longer period of restriction under a Deferral Agreement. The restriction shall automatically lapse at the end of the six-month period or such longer period as the Director may have elected under a Deferral Agreement.

In the case of shares of Restricted Stock issued pursuant to the Plan, a certificate representing the appropriate number of shares of Restricted Stock shall be issued in the name of the Independent Director, individually, or upon his or her request, in the name of another person or entity to which he has assigned his Restricted Stock, and shall be delivered within ten days of the grant of the Restricted Stock. The certificate so issued shall contain a restrictive legend stating that the shares represented by the certificate have been issued pursuant to the Plan and cannot be transferred until the first day of the month following the date that the Independent Director ceases to serve as a director of the Company, unless the restriction is waived by the Company.

Under current law, if any shares are issued under the Plan to a person or entity other than the individual Non-Employee Director, such shares are not eligible to be registered on Form S-8; therefore, any shares so issued shall be unregistered and may not be sold or transferred except pursuant to a valid exemption from registration (for example, in compliance with all the applicable provisions of Rule 144 under the Securities Act).

Stock Subject to the Plan

Up to an aggregate of 240,000 shares of Common Stock are authorized for issuance under the Plan in accordance with the provisions of the Plan. Shares of Common Stock that are issued shall be fully paid and non-assessable. No fractional shares shall be issued, and to the extent that the calculation of the number of shares to be issued to a Non-Employee Director under the Plan shall result in a fractional share, the number of shares to be issued to the Non-Employee Director shall be rounded up to the next whole share. The Company shall at all times during the term of the Plan retain as authorized and unissued Common Stock at least the number of shares from time to time as may be issued under the provisions of the Plan or otherwise assure itself of its ability to perform its obligations under the Plan. Shares of Common Stock issued pursuant to the Plan may be shares of original issuance or treasury shares or a combination of the foregoing, as the Board, in its discretion, shall from time to time determine.

Adjustments upon Changes in Common Stock

(a) Upon the issuance of a certificate representing shares of Common Stock to a Non-Employee Director, the Non-Employee Director shall become the owner thereof for all purposes and shall have all rights as a shareholder, including voting rights and the right to receive dividends and distributions and shall be subject to any stock splits and other similar actions, with respect to such shares, subject to the restrictions of the Plan and any restrictions imposed by law. If the Company shall pay or declare a dividend or make a distribution of any kind, whether due to a reorganization, recapitalization, or otherwise, or declare a stock split or take other similar action with respect to the shares of Common Stock, then the Company shall pay or make such dividend or other distribution or take such other action with respect to the shares owned by the Non-Employee Director. In the event the Company shall effect a split of the Common Stock or declare a dividend payable in Common Stock, or in the event the outstanding Common Stock shall be combined into a smaller number of shares or are in any way subject to a modification or changed during the time after Director’s Fees subject to the Plan are earned but before the shares are issued, then the number of shares of Common Stock that shall be issued to the Non-Employee Director shall be increased or decreased proportionately or shall be exchanged or modified as if they had been issued just prior to the record date for the event requiring the change or modification; and

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(b) in the event of a reclassification of the Common Stock not covered by the foregoing, or in the event of a liquidation or reorganization (including a merger, consolidation, or sale of assets) of the Company, the Board shall make an appropriate adjustment in the number of shares of Common Stock then subject to issuance under the Plan. The Board shall make such adjustments, if any, as it may deem appropriate in the number and kind of shares that are authorized for issuance or are issuable pursuant to the Plan.

Designation of Beneficiary

Each Non-Employee Director who participates in the Plan shall name a beneficiary to receive any shares due him at the time of his death, with the right to change such beneficiary at any time. In case of a failure to designate a beneficiary or the death of the designated beneficiary without a designated successor, such shares shall be issued to the estate of the Non-Employee Director.

Amendment or Termination of Plan

The Board may at any time suspend, terminate, amend, or modify the Plan. The Plan shall continue until the earliest of the following to occur: (a) December 31, 2008; (b) the date on which all shares reserved for issuance under the Plan have been issued; or (c) the date the Plan is terminated by a resolution of the Board.

Tax Effects of Participation in the Plan

Based on existing law, which is subject to change, the Plan is not a “qualified” plan as defined in Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Any stock received by a Non-Employee Director under the Plan will be reported by the Company as compensation to the Non-Employee Director when received by him.

The Board of Directors recommends a vote FOR the approval of the amendment to the 7-Eleven, Inc. Stock Compensation Plan for Non-Employee Directors, which requires the affirmative vote of a majority of the shares represented and entitled to vote at the meeting. Votes will be tabulated by an inspector of election. An abstention from voting and broker non-votes will be included in computing the number of shares present for purposes of determining the presence of a quorum for the shareholders’ meeting and whether the affirmative vote of a majority of the shares present at the meeting has been received, but will not be counted as a vote either “for” or “against” the approval of the amendment to the 7-Eleven, Inc. Stock Compensation Plan for Non-Employee Directors. This is functionally equivalent to a vote against the proposal.

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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Executive Officers’ Compensation

The functions of our Compensation and Benefits Committee include:

Our executive officers, as well as all other management personnel, receive annual compensation consisting of (1) base salary and (2) variable pay under our Annual Performance Incentive plan. The amount paid under our Annual Performance Incentive plan is based upon the employee’s or officer’s base salary, pay grade and the achievement of certain pre-established performance criteria each year, as more fully described in the Report of the Compensation and Benefits Committee, pages 30 to 33.

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The following table shows the compensation paid or earned during 2002 by our Chief Executive Officer and our next four most highly compensated executive officers.

SUMMARY COMPENSATION TABLE

(i) Mr. Gade resigned as an officer of the Company effective January 31, 2003. See “Arrangements Related to Termination of Employment,” below. For each of the four named executive officers who remained in the Company’s employ in February 2003, the month during which the Annual Performance Incentive for 2002 was paid, approximately one-third of the amount listed in the “Bonus” column above was paid in restricted stock units, each convertible to one share of the Company’s common stock on the first of the month following the officer’s retirement. See “Report of the Compensation Committee on Executive Compensation,” below.

(ii) No “Other Annual Compensation” is shown because the total amounts paid for perquisites in 2000, 2001 and 2002 to the five named executive officers did not exceed the lesser of $50,000 or 10% of the named executive officer’s salary and bonus for such years.

(iii) The amounts shown for 2002 include (a) the amount of any Company contribution to the executive officer’s account in the 7-Eleven, Inc. Employees’ Savings and Profit Sharing Plan (the “Savings and Profit Sharing Plan”), a Section 401(k) defined contribution plan with more than 20,000 participants, which for 2002 was as follows: $6,142 for Messrs. Keyes and Smith, $5,801 for Mr. Rose and $3,369 for Mr. Gade; (b) the amount of any contribution to the executive officer’s account under the Company’s Supplemental Executive Retirement Plan, which for 2002 was as follows: $10,000 for Mr. Gade, $6,000 for Messrs. Smith and Rose and $4,000 for Mr. Keyes; and (c) for each executive officer, the full premiums paid for basic term life insurance under our group plan for all employees, which for 2002 were as follows: $1,934 for Mr. Keyes, $1,215 for Mr. Moneypenny, $1,117 for Mr. Smith; $1,053 for Mr. Rose and $1,278 for Mr. Gade.

(iv) Mr. Moneypenny’s employment with the Company commenced on February 1, 2002.

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Option/SAR Grants in 2002 Fiscal Year

In 1995 our Board of Directors unanimously approved the adoption of the 1995 Stock Incentive Plan, which was approved by our shareholders in 1996. Pursuant to the Stock Incentive Plan, during 2002 the Compensation and Benefits Committee approved approximately 100 awards of nonqualified stock options and the full Board approved grants to each of the named executive officers. In the aggregate, these grants permit participants to purchase a total of 1,449,300 shares of our common stock. The options include a standard vesting period of five years.

The following table provides information on the number of options granted during 2001, the exercise price and expiration date of the options and our calculation of the options’ present value as of the date of grant.

Option Grants in 2002 Fiscal Year

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values

The following table provides information on the number of options outstanding under the 1995 Stock Incentive Plan, as well as the value of unexercised options, both exercisable and unexercisable, under the plan.

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AGGREGATED OPTION/SAR EXERCISES IN 2002 FISCAL YEAR

AND 2002 YEAR-END OPTION/SAR VALUES

Defined Benefit or Actuarial Plan Disclosure

We do not maintain a defined benefit pension plan for our employees. We do maintain an Executive Protection Plan, covering approximately 120 executives, including each of the named executive officers. This plan provides three benefits: (1) a pre-retirement death benefit, payable in a lump sum to an executive’s designated beneficiary if the executive dies before retirement, equal to 200% of the executive’s “annual compensation,” as determined for plan purposes; (2) a retirement income benefit, payable in annual installments for life following an executive’s retirement at age 60 (or later), each installment equal to 15% of the executive’s “annual compensation,” as determined for plan purposes (if the executive retires after reaching age 50 but before age 60, a reduced benefit is payable; similarly, if an executive selects the “joint and survivor” option under the plan, the amount of the annual installment is reduced to reflect the potential increase in the payout period); and (3) disability income in excess of the amount provided under our group long-term and short-term disability plans. If the executive becomes disabled while a participant in this plan, the total amount paid to the executive as disability benefits, assuming the executive is covered under our group disability plans, will equal 80% of the executive’s “annual compensation” prior to the disability. We fund the benefits under the plan through certain life insurance policies and our general assets.

Under the plan’s provisions, the “annual compensation” on which benefits are calculated for all participants, including each of the named executive officers, is based upon the executive’s annualized base salary, plus the target Annual Performance Incentive for the executive’s salary grade, at the time we prepare the executive’s benefits statement. From time to time, we may update the benefits statements to reflect increases in our executives’ compensation.

The annual installment of salary continuation for each named executive officer, assuming retirement at or after age 60 and no adjustments to annual compensation between 2002 and retirement, would be as follows: Mr. Keyes—$108,000; Mr. Moneypenny – $84,375; Mr. Smith—$65,250; and Mr. Rose -

28

$61,988. As noted below under “Arrangements Related to Termination of Employment,” Mr. Gade resigned from the Company as of January 31, 2003, before achieving 10 years of continuous employment with the Company, and therefore is ineligible for retirement benefits under the plan. The plan allows the executive to select a “joint and survivor” benefit for the annual installments of salary continuation. If the executive selects this option, we reduce the amount of the annual installments to reflect the potential increase in the payout period.

Under the plan, normal retirement age is 60; however, if an executive retires between the ages of 50 and 60, a reduced benefit is payable under the plan. At age 50, the benefit is 50% of what would have been paid at age 60; the benefit increases to 55% at age 51 and increases 5% per year up to age 60.

Arrangements Related to Termination of Employment

As of January 31, 2003, Michael J. Gade, one of the named executive officers, resigned from the Company. At the time of his resignation, Mr. Gade was serving as the Company’s Senior Vice President, Merchandising. Pursuant to an agreement with the Company, Mr. Gade has received certain benefits upon his separation, including cash payments totaling approximately $300,000, plus payment for his accrued but unused vacation time. In addition, Mr. Gade was permitted to retain the 10,000 shares of restricted stock that the Board granted to him during 2002, and the restrictions against transfer of the stock were deemed to have lapsed as of his separation. With regard to stock options issued to Mr. Gade under the 1995 Stock Incentive Plan, all unvested options lapsed as of his separation, while the vested options remain exercisable for one year following his separation.

Directors’ Compensation

For information about compensation of the Board of Directors, see “Information About The Board of Directors and Committees of the Board—Compensation of Directors,” page 5.

Compensation Committee Interlocks and Insider Participation

The members of the Board’s Compensation and Benefits Committee are independent from the Company and free from any interlocking relationships as defined by the SEC.

29

BOARD COMPENSATION COMMITTEE REPORT

ON EXECUTIVE COMPENSATION

The functions of the Compensation and Benefits Committee include:

The members of the Committee are:

The Committee seeks to provide an appropriate level of base salary to the Company’s executive officers and to supplement the executives’ base salaries with two types of benefits:

Beginning in November 2001, the Committee undertook a comprehensive review of the Company’s executive compensation program. At the Committee’s request, the Company’s human resources department and Towers Perrin, an independent compensation consulting firm, assisted in this review.

During 2002, the Committee finalized and unanimously approved recommendations with respect to base salary increases, a revised annual performance incentive and a new long-term incentive for the Company’s top five executive officers. The Board approved the Committee’s recommendations in April 2002, and in subsequent months the Committee has worked to finalize the specific performance-based measures associated with the long-term incentive plan.

30

Base salary

The Committee has recognized that the overall compensation for the Company’s chief executive officer, including base salary, is significantly below the market levels for companies of comparable size. The Committee plans to take steps to close this gap over the next several years.

For 2002, the Committee recommended, and the Board approved, an increase of $95,000 to the annualized base salary of the Company’s president and chief executive officer, James W. Keyes. The increase raised Mr. Keyes’s annualized base salary to $570,000, effective April 1, 2002. In recommending this increase, the Committee also considered (i) overall financial, strategic and operational company performance; (ii) individual performance; and (iii) certain additional factors within the Committee’s discretion. These factors were not independently assigned specific weights.

One-time grant of restricted stock

Also in recognition of the extent to which the chief executive officer’s base salary has remained below market levels, in April 2002 the Committee recommended, and the full Board approved, a one-time grant to Mr. Keyes of 100,000 shares of restricted stock. The restrictions against transfer of this stock lapse ratably on the first through fourth anniversaries of the date of grant.

Annual Performance Incentive plan

The key portion of an executive officer’s variable pay at 7-Eleven is the Company’s Annual Performance Incentive plan. The API plan rewards executive officers and other managers by paying a percentage of the manager’s base salary based upon the Company’s operating earnings for the year. As part of the Committee’s efforts to increase the competitiveness of Mr. Keyes’s overall compensation, the Committee recommended, and the Board approved, an increase in Mr. Keyes’s API potential. Effective April 2002, Mr. Keyes’s API potential increased from 60% of his base salary to 75%. Under the API plan, Mr. Keyes’s award for 2002 would have been:

In an effort to increase stock ownership by the company’s executive officers, the Committee agreed that the top five most highly compensated officers would be paid a portion of their API in restricted stock units: (i) one-quarter of the first 150% of the executive’s targeted API potential and (ii) all of the API awarded above 150% of the executive’s targeted API potential. Each restricted stock unit is convertible into one share of the Company’s common stock on the first of the month following the executive’s retirement.

31

1995 Stock Incentive Plan

The 1995 Stock Incentive Plan permits the Company to award a variety of stock-based incentives, including options, stock units, restricted stock, phantom stock and stock appreciation rights. The Company’s executive officers and other key employees have received grants of options under the plan each year beginning in 1995. About 6.6 million shares of the Company’s authorized but unissued common stock are now subject to outstanding options under the plan.

The option exercise prices under the plan for awards granted from the inception of the Plan through 2002, rounded to the nearest cent, are as follows:

In April 2002, the full Board of Directors approved the Committee’s recommendations for the annual option grants to the five most highly compensated officers. The full Board also ratified the Committee’s 2002 option grants to the rest of the participants in the plan.

Long-term incentive

The long-term incentive is designed to reward the Company’s executive officers for successful performance over successive three-year periods, the first of which began in 2002. The Committee intends to issue restricted stock units under the 1995 Stock Incentive Plan (or any replacement plan) based on the Company’s achievement of specific measures of financial and operational success as approved by the Committee.

Other executive benefits

The Company also offers an Executive Protection Plan for its executive officers and certain other key employees. The plan is described more fully on pages 28 to 29 of this proxy statement.

In February 1998, the Company adopted the Supplemental Executive Retirement Plan for Eligible Employees to assist the Company’s executive officers and other key employees in planning for retirement. Participants may defer up to 12% of their income into their plan account until their retirement or another date the participant selects. The deferred amounts earn interest, set each December at 120% of the federal long-term rate for compounding annually. The Company has the option to match a portion of the participant’s deferrals to the plan. The Company match may approximate the sum that federal nondiscrimination testing requirements prevent the employee from receiving under the 7-Eleven, Inc. Employees’ Savings and Profit Sharing Plan. For 2002, the Company elected to match a portion of

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deferrals made by executives under the plan during that year. The amount of the Company match is included in the footnotes to the executive compensation table on page 26 of this proxy statement.

Two additional benefit programs complete the compensation package for the Company’s executives. 7-Eleven’s Executive Physical Program pays the cost of a comprehensive annual physical examination for the Company’s executive officers and other covered executives. The Company’s Executive Car Allowance Program provides a monthly payment intended to cover or subsidize an executive’s use of an automobile.

Stock Ownership Guidelines

During 2002, the Committee adopted stock ownership guidelines applicable to executive officers at and above the level of senior vice president. The guidelines are designed to increase these officers’ equity stake in the Company and more closely align their interests with those of our shareholders. The guidelines range from three to five times annual base salary. The Committee expects that over the next several years, as the Company’s executives earn additional equity-based compensation, the executives’ ownership levels will approach those contained in the guidelines.

Lewis E. Platt, Chairman

Yoshitami Arai

Jay W. Chai

Gary J. Fernandes

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PERFORMANCE GRAPH

The Performance Graph, below, shows the value, at year-end 1998, 1999, 2000, 2001 and 2002, of a $100 investment in our common stock on January 1, 1998. Also shown are the values, assuming $100 invested in the New York Stock Exchange Market Index and a peer group index selected by us consisting of three publicly traded convenience store companies (Casey’s General Stores, Inc., The Pantry Inc. and Uni-Marts, Inc.) and two food retailers (The Kroger Co. and Safeway, Inc.), also beginning on January 1, 1998, and at year-end 1998, 1999, 2000, 2001 and 2002.

We may decide, in future years, to change the composition of the peer group if we believe that better comparative data is available.

Assumes $100 Invested on January 1, 1998

Assumes Dividend Reinvested

Fiscal Year-End December 31

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Commercial Paper

We have a commercial paper program under which we can issue up to $650 million depending upon our needs. The commercial paper facility is unconditionally guaranteed by Ito-Yokado.

SEJ Notes

In January 2003, we entered into a note purchase agreement with Seven-Eleven Japan that authorizes us to issue and sell to SEJ up to $400 million aggregate principal amount of Senior Subordinated Notes due January 27, 2010 (the “Notes”). We will use the proceeds from the sale of the Notes for general corporate purposes and to retire our outstanding senior subordinated debentures. We will issue the Notes, and SEJ will purchase them, in multiple tranches through December 31, 2003.

Interest on the Notes is calculated for each tranche on its issuance date and is set by a formula tied to the United States Treasury Rate and Japanese government bond rates. We are required to repay the Notes in eight equal semi-annual installments beginning in July 2006 and ending January 2010. We are required to pay interest on the unpaid balance of the Notes semi-annually beginning in 2003. On January 10, 2003, we received $100 million from SEJ under the note purchase agreement, which will be subject to an interest rate of 3.41%.

Recapitalization

On March 1, 2000, IYG Holding Co. signed a Subscription Agreement to purchase an additional 22,736,842 newly issued shares of our common stock for $540.0 million. The purchase closed on March 16, 2000. As a result of the purchase, as of the record date of February 28, 2003, IYG Holding Co. owned approximately 72.5% of our outstanding common stock. IYG Holding Co. is jointly owned by Ito-Yokado and Seven-Eleven Japan.

QUIDS

In November 1995, we issued $300 million principal amount of Convertible Quarterly Income Debt Securities due 2010 to Ito-Yokado ($153 million) and Seven-Eleven Japan ($147 million). These debt securities have an interest rate of 4.5%. In February 1998, we issued an additional $80 million principal amount of Convertible Quarterly Income Debt Securities due 2013, also with an interest rate of 4.5% to Ito-Yokado ($40.8 million) and Seven-Eleven Japan ($39.2 million). Interest on both series of debt securities is payable quarterly, and for 2001, we paid aggregate interest to Ito-Yokado of $8,721,000 and to Seven-Eleven Japan of $8,379,000 on both series of debt securities.

We may defer the interest payments for up to 20 consecutive quarters, but we currently intend to make interest payments as they come due. In addition, the debt securities issued in 1995 are convertible into a total of 14,422,383 shares of our common stock at a conversion price of $20.80 per share and the debt securities issued in 1998 are convertible into a total of 6,501,686 shares of our common stock, at a conversion price of $12.3045 per share, at which time, if certain conditions with regard to the closing price of our common stock are met, these debt securities mandatorily convert into shares of our common stock.

35

Seven-Eleven Japan

As of December 31, 2002, our largest area licensee, Seven-Eleven Japan, operated 9,447 7-Eleven^® stores in Japan under an area license agreement entered into in 1973. In 1988, we entered into a yen-denominated financing arrangement pursuant to which we pledged the royalty stream from Seven-Eleven Japan as collateral for the financing until the earlier of twenty years or the date the indebtedness is paid in full. In 1998, we anticipated that the payments would be satisfied earlier than the 20-year term. We then entered into an additional yen-denominated financing related to subsequent royalties. As we have previously disclosed, pursuant to our amended agreement, royalties from Seven-Eleven Japan began to be paid at a reduced percentage beginning in August 2002. In 2002, royalties paid to us by Seven-Eleven Japan totaled approximately $43.2 million.

Seven-Eleven (Hawaii), Inc.

Our area licensee in Hawaii, Seven-Eleven (Hawaii), Inc., is a subsidiary of Seven-Eleven Japan, and, as of December 31, 2002, operated 53 stores in Hawaii. During 2002, Seven-Eleven (Hawaii), Inc. paid us approximately $90,000 in connection with the area license arrangement.

Expansion In China

During the third quarter of 2001, we announced plans to expand the development and operation of 7-Eleven stores in the People’s Republic of China through licensing arrangements. There are currently approximately 450 7-Eleven stores in Hong Kong and 75 7-Eleven stores in the south China province of Guangdong. Those stores are operated by subsidiaries of Dairy Farm International Ltd. pursuant to a licensing arrangement.

Subject to obtaining the approvals referenced below, we are evaluating the possibility of entering into a licensing arrangement for at least one additional market area in China with a joint venture that includes Seven-Eleven Japan, President Chain Store Corporation and a local Chinese participant. President Chain Store Corporation is our current licensee in Taiwan, where it operates approximately 2,925 7-Eleven stores, and Seven-Eleven Japan is our current licensee in Japan, where it operates approximately 9,500 7-Eleven stores. We have focused on the possibility of negotiating a licensing arrangement with SEJ and President Chain Store Corporation because of their financial strength, business experience in China and proven ability to develop and operate 7-Eleven stores.

We have not negotiated the final terms and conditions of the proposed licensing agreement. We anticipate that the final license agreement will include the payment of a one-time licensing fee, a store development schedule and obligation and a royalty on sales at the licensed stores. Based upon the development experience of Dairy Farm in Guangdong and our own preliminary projections for the development of additional stores in China, we do not expect that the licensing of additional market areas in China will have any material impact on our royalty revenue for several years.

Because we are considering entering into a licensing arrangement with a joint venture that includes SEJ, which together with Ito-Yokado owns 72.5% of our common stock, our board of directors has appointed a special committee comprised of three independent directors to review and consider the proposed licensing arrangement for approval. Our board has authorized the special committee to retain whatever external resources are necessary to obtain objective advice regarding the proposed licensing arrangement.

The Special Committee met four times in 2002. Following the Committee’s evaluation of potential joint venture partners based on criteria that the Committee has deemed important to the joint

36

venture’s success, during the third quarter of 2002 the Special Committee approved SEJ and President Chain Store Corporation as the foreign partners in the Chinese joint venture, with SEJ holding a controlling interest in the venture.

Chinese law requires that one or more Chinese entities collectively have at least a 35% ownership interest in the joint venture. During the third quarter of 2002, the Special Committee gave conditional approval to two Chinese partners to be included in the joint venture: Beijing Shoulian Commercial Group Co. Ltd. and China National Sugar & Alcohol Group. During the fourth quarter of 2002, the conditions to the approval of the Chinese partners were satisfied, and a draft of a Letter of Intent was approved. The Letter of Intent is currently being reviewed by Seven-Eleven Japan, President Chain Store Corporation and the Chinese partners.

The Special Committee’s approval of all partners to the joint venture is subject to the Committee’s receipt and review of certain additional documentation relating to the joint venture partners and to the Committee’s approval of the final terms of the license agreement that we will negotiated with the joint venture.

Profit Sharing Plan

As of December 31, 2002, the 7-Eleven, Inc. Employees’ Savings and Profit Sharing Plan owned one store leased to the Company under a capital lease and 422 stores leased to the Company under operating leases at rentals which, in the opinion of management, approximated market rates at the inception date of each lease. In addition, in 2000, 2001 and 2002, there were 24, 71 and 50 leases, respectively, that either expired or, as a result of properties that were sold by the Profit Sharing Plan to third parties, were canceled or assigned to the new owner. Also, the Company exercised its right of first refusal and purchased 19 and 2 and 7 properties from the Profit Sharing Plan in 2000, 2001 and 2002, respectively, for an aggregate purchase price of $9.2 million, $748,000 and $2.5 million in the respective years.

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SHAREHOLDER PROPOSALS

If you want to present a proposal and have it included in the proxy statement for our 2004 Annual Meeting of Shareholders, which is expected to be held during April or May 2004, you must send your proposal to us at our principal office, 2711 North Haskell Avenue, Dallas, Texas 75204, Attn: Office of the Secretary. We must receive a proposal by December 1, 2003, for the proposal to be considered, and the proposal must comply with the then-current rules of the SEC relating to shareholder proposals.

FINANCIAL AND OTHER INFORMATION/

WHERE YOU CAN FIND MORE INFORMATION

Our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available on our website, www.7-Eleven.com. Our other SEC filings, including our proxy statement, are available to the public over the Internet at the SEC’s website, www.sec.gov. You may also read and copy any document we file at the SEC’s public reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.

The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this proxy, and information we file later with the SEC will automatically update and supersede this information. We incorporate by reference our Annual Report on Form 10-K for the year ended December 31, 2002.

You may request a copy of these filings at no cost, by writing or telephoning us at the following address: Vice President, Investor Relations, 7-Eleven, Inc., 2711 North Haskell Ave., Dallas, Texas 75204. Telephone (214) 828-7011.

Our Annual Report for the year ended December 31, 2002, is being mailed to shareholders with this proxy statement, but the Annual Report is not incorporated in this proxy statement and is not deemed to be part of the proxy soliciting material.

OTHER BUSINESS

We do not know of any other matters that will be presented at this meeting. However, if other business does come before the meeting, each person named in the proxy will vote such proxy in accordance with his or her respective judgment on such matters. Minutes of the last Annual Meeting of Shareholders will be approved. Management’s reports will be heard and received. Even though you hear the reports and approve the minutes, it does not mean that you approve or disapprove of the matters contained in the reports or minutes.

INDEMNIFICATION

Pursuant to our Articles of Incorporation and Bylaws and the Texas Business Corporation Act, from time to time we have indemnified certain current and former officers and directors in connection with pending litigation as well as with other actions they may have taken while serving as directors or officers.

38

APPENDIX A

7-Eleven, Inc. Audit Committee – Charter

A-1

A-2

A-3

APPENDIX C

7-ELEVEN, INC.

AMENDED AND RESTATED

STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

(EFFECTIVE AS OF APRIL 23, 2003)

For purposes of the Plan, the following terms shall have the indicated meanings:

C-1

C-2

C-3

C-4

C-5

C-6

C-7

C-8

C-9

Proxy - 7-Eleven, Inc.

Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of Shareholders - April 23, 2003

By signing this card, I appoint James W. Keyes, Bryan F. Smith, Jr. and David T. Fenton, and each of them (acting by majority, or if only one be present, then by that one alone) as my true and lawful agents and proxies, with full power of substitution and revocation, to vote as designated on the reverse side of this card, all the common stock of 7-Eleven, Inc. I have power to vote, with all powers I would possess if personally present, at the Annual Meeting of Shareholders of 7-Eleven, Inc. to be held on April 23, 2003, and at any adjournments of the meeting.

Unless otherwise marked, this proxy will be voted FOR the election of nominees named in Proposal No. 1 (election of directors), FOR Proposal No. 2 (ratification of the Board’s selection of PricewaterhouseCoopers, LLP, as 7-Eleven, Inc.’s independent accountants for 2003), FOR Proposal No. 3 (proposed amendment to the 7-Eleven, Inc. 1995 Stock Incentive Plan) and FOR Proposal No. 4 (proposed amendment to the 7 Eleven, Inc. Stock Compensation Plan for Non-Employee Directors). The proxy holders will use their discretion with respect to any other matter that is properly brought before the meeting, as referred to in Item No. 5.

PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE).

Holder Account Number

x Mark this box with an X if you have made

     changes to your name or address details above.

Annual Meeting Proxy Card

A  Election of Directors

1. The Board of Directors recommends a vote FOR the listed nominees.

B  Issues

The Board of Directors recommends a vote FOR the following proposals.

C  Authorized Signatures - Sign Here - This section must be completed for your instructions to be executed.

Date and sign exactly as your name appears above (or on this proxy card). Joint owners should each sign. When signing as administrator, executor, trustee, attorney, guardian, corporate officer, or in any capacity other than individually, please give your full title and indicate the capacity in which you are signing. By signing below, you acknowledge receiving a copy of 7-Eleven’s 2002 Annual Report and the accompanying Notice and Proxy Statement.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘DEFR14A’ Filing		Date		Other Filings
		1/27/10
		12/31/08
		12/31/05
		12/31/03		10-K
		12/1/03
		4/23/03		DEF 14A
		4/1/03
		3/31/03		10-Q,  8-K
Filed on / Effective on:		3/27/03
		3/24/03		DEF 14A
		3/17/03
		3/15/03
		2/28/03
		1/31/03
		1/10/03
		12/31/02		10-K
		9/30/02		10-Q
		6/30/02		10-Q
		4/24/02		DEF 14A
		4/1/02
		3/31/02		10-Q
		2/1/02
		5/1/00
		3/16/00
		3/1/00
		10/1/98
		1/1/98
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