UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-14678
ROSS STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of 94-1390387
incorporation or organization) (I.R.S. Employer
Identification No.)
8333 Central Avenue, Newark, California 94560-3433
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (510) 505-4400
Former name, former address N/A
former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No __
The number of shares of Common Stock, with $.01 par value, outstanding
on June 1, 1996 was 25,296,480.
<PAGE> 2
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ROSS STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
($000) May 4, February 3, April 29,
ASSETS 1996 1996 1995
(Unaudited) (Note A) (Unaudited)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $35,036 $23,426 $ 25,093
Accounts receivable 16,883 9,901 8,058
Merchandise inventory 332,623 295,965 320,831
Prepaid expenses and other 13,001 13,474 12,357
_______ _______ _______
Total Current Assets 397,543 342,766 366,339
PROPERTY AND EQUIPMENT
Land and buildings 24,102 24,102 23,932
Fixtures and equipment 152,625 156,811 145,099
Leasehold improvements 122,489 123,829 113,928
Construction-in-progress 17,833 16,808 6,472
______ _______ _______
317,049 321,550 289,431
Less accumulated depreciation and amortization 137,674 140,174 122,285
_______ _______ _______
179,375 181,376 167,146
Other assets 16,979 17,010 18,407
________ ________ ________
$593,897 $541,152 $551,892
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $165,036 $137,653 $145,563
Accrued expenses and other 42,498 42,944 41,868
Accrued payroll and benefits 29,322 30,064 17,959
Income taxes payable 12,137 10,555 4,612
_______ _______ _______
Total Current Liabilities 248,993 221,216 210,002
Long-term debt 19,736 9,806 61,004
Deferred income taxes and other liabilities 18,651 18,614 21,323
STOCKHOLDERS' EQUITY
Capital stock 252 246 246
Additional paid-in capital 148,861 133,409 126,590
Retained earnings 157,404 157,861 132,727
_______ _______ _______
306,517 291,516 259,563
________ ________ ________
$593,897 $541,152 $551,892
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 3
<TABLE>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
Three Months Ended
May 4, April 29,
($000 except per share data, unaudited) 1996 1995
<S> <C> <C>
SALES $370,948 $297,435
COSTS AND EXPENSES
Cost of goods sold and occupancy 264,058 218,618
General, selling and administrative 76,219 64,659
Depreciation and amortization 7,261 6,685
Interest 184 1,029
________ ________
$347,722 $290,991
Earnings before taxes 23,226 6,444
Provision for taxes on earnings 9,290 2,578
_______ _________
Net earnings $13,936 $ 3,866
==============================================================================
Net earnings per share:
Primary $.54 $.16
Fully diluted $.54 $.16
==============================================================================
Weighted average shares outstanding:
Primary 25,647 24,653
Fully diluted 25,808 24,653
==============================================================================
Stores open at end of period 296 278
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 4
<TABLE>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
May 4, April 29,
($000, unaudited) 1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $13,936 $ 3,866
Adjustments to reconcile net earnings to net cash used in
operating activities:
Depreciation and amortization of property and equipment 7,261 6,685
Other amortization 1,515 1,258
Change in current assets and current liabilities:
Merchandise inventory (36,658) (45,648)
Other current assets - net (6,509) (2,899)
Accounts payable 29,119 37,445
Other current liabilities - net 4,013 (3,173)
Other 322 1,320
______ _______
Net cash provided by (used in) operating activities 12,999 (1,146)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (9,334) (10,929)
------- --------
Net cash used in investing activities (9,334) (10,929)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing under line of credit agreement 10,000 15,000
(Repayment) of long-term debt (110) (63)
Issuance of common stock related to stock plans 18,130 116
Repurchase of common stock (18,327) 0
Dividends paid (1,748) (1,466)
________ ________
Net cash provided by financing activities 7,945 13,587
________ ________
NET INCREASE IN CASH 11,610 1,512
Cash
Beginning of year 23,426 23,581
________ ________
End of quarter $35,036 $25,093
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 5
ROSS STORES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended May 4, 1996 and April 29, 1995
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared from the records of the company without audit and,
in the opinion of management, include all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the
financial position at May 4, 1996 and April 29, 1995; the interim
results of operations for the three months ended May 4, 1996 and April
29, 1995; and changes in cash flows for the three months then ended.
The balance sheet at February 3, 1996, presented herein, has been
derived from the audited financial statements of the company for the
fiscal year then ended.
Accounting policies followed by the company are described in Note A to
the audited consolidated financial statements for the fiscal year
ended February 3, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted for purposes of the condensed consolidated interim financial
statements. The condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial
statements, including notes thereto, for the year ended February 3,
1996.
The results of operations for the three month periods herein presented
are not necessarily indicative of the results to be expected for the
full year.
The condensed consolidated financial statements at May 4, 1996 and
April 29, 1995, and for the three months then ended have been
reviewed, prior to filing, by the registrant's independent accountants
whose report covering their review of the financial statements is
included in this report on page 6.
NOTE B - STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURES
Total cash paid for interest and income taxes is as follows:
Three Months Ended
($000, unaudited) May 4, 1996 April 29, 1995
Interest $267 $1,103
Income Taxes $7,709 $2,704
<PAGE> 6
INDEPENDENT AUDITORS' REVIEW REPORT
Board of Directors and Stockholders of Ross Stores, Inc.
Newark, California
We have reviewed the accompanying condensed consolidated balance
sheets of Ross Stores, Inc. (the "Company") as of May 4, 1996 and
April 29, 1995, and the related condensed consolidated statements
of earnings and cash flows for the three-month periods then ended.
These condensed consolidated financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to such condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Ross Stores,
Inc. as of February 3, 1996, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report
dated March 15, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of February 3, 1996 is fairly stated, in all
material respects, in relation to the consolidated balance sheet
from which it has been derived.
Deloitte & Touche LLP
San Francisco, CA
May 24, 1996
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Percentage Of Sales
Three Months Ended
May 4, April 29,
1996 1995
SALES
Sales ($000) $370,948 $297,435
Sales growth 24.7% 12.5%
Comparable store sales growth 14% 0%
COSTS AND EXPENSES
Cost of goods sold and occupancy 71.2% 73.5%
General, selling and administrative 20.5% 21.7%
Depreciation and amortization 2.0% 2.2%
Interest 0% .3%
NET EARNINGS 3.8% 1.3%
Sales
The results of operations for the three months ended May 4, 1996, over
the same period last year, reflect an increase in the level of sales
which was due to the increase in comparable store sales as well as a
greater number of open stores during the current period.
Costs and Expenses
The decline from the prior year in the cost of goods sold and
occupancy percentage for the three month period was primarily due to
(i) an increase in the initial mark-up from purchasing more
opportunistically; (ii) lower markdowns as a percentage of sales; and
(iii) leverage on occupancy costs.
General, selling and administrative expenses as a percentage of sales
also declined from the comparable quarter in the prior year. This
improvement was due to the company's continued focus on strict expense
controls and the leverage realized from the strong comparable store
sales gain of 14%.
Net earnings for the three months ended May 4, 1996, totaled $13.9
million, or $.54 per share, compared to net earnings of $3.9 million,
or $.16 per share, for the three months ended April 29, 1995.
Taxes on Earnings
The company's effective tax rate for the first quarter of 1996 and
1995 was 40%. The rate for both periods reflects the applicable
statutory tax rates.
<PAGE> 8
LIQUIDITY AND CAPITAL RESOURCES
The primary uses of cash, other than for operating expenses, during
the first three months of fiscal 1996 were for (i) purchase of
inventory, (ii) repurchase of the company's common stock, and (iii)
capital expenditures for new stores and improvements to existing
locations.
Total consolidated inventories were up only 3.7% at the end of the
first quarter from last year driven primarily by an increase in the
number of open stores over the prior year. The strength of sales
during the first quarter ended May 4, 1996 produced faster inventory
turnover which in turn increased accounts payable.
The increase in the accounts receivable was due in part to increased
credit card sales which were in line with the higher volume in
business relative to last year. Cash received from stock option
exercises offset the expenditures for the company's stock repurchase
program. The decline in interest expense reflects lower interest
rates and the decline in borrowings resulting primarily from the
higher earnings levels and the items mentioned above.
The company believes it can fund its capital needs for the remainder
of the fiscal year and the current stock repurchase program through
internally generated cash, trade credit, established bank lines and
lease financing.
<PAGE> 9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Incorporated herein by reference to the list of Exhibits
contained in the Exhibit Index which begins on page 10 of this
Report.
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
ROSS STORES, INC.
Registrant
Date: June 17, 1996 /s/John M. Vuko
John M. Vuko, Senior Vice President,
Controller and Principal Accounting
Officer
<PAGE> 10
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3.1 Certificate of Incorporation, as amended, incorporated by
reference to Exhibit 3.1 to the Registration Statement on
Form 8-B (the "Form 8-B") filed September 1, 1989 by Ross
Stores, Inc., a Delaware corporation ("Ross Stores").
3.2 Amended By-laws, dated August 25, 1994, incorporated by
reference to Exhibit 3.2 to the Form 10-Q filed by Ross
Stores for its quarter ended July 30, 1994.
10.1 Agreement of Lease, dated November 24, 1986, for Ross
Stores' corporate headquarters and distribution center in
Newark, CA, incorporated by reference to Exhibit 10.5 to
the Form 8-B.
10.2 Revolving Credit Agreement, dated July 31, 1993, among Ross
Stores, Wells Fargo Bank, National Association, Bank of
America, National Trust and Savings Association, and
Security Pacific National Bank ("Banks"); and Wells Fargo
Bank, National Association, as agent for Banks,
incorporated by reference to Exhibit 10.17 on the Form 10-Q
filed by Ross Stores for its quarter ended July 31, 1993.
10.3 First Amendment to Revolving Credit Agreement, effective on
July 31, 1994, by and among Ross Stores, Banks and Wells
Fargo Bank, National Association, as agent for Banks,
incorporated by reference to Exhibit 10.5 to the Form 10-Q
filed by Ross Stores for its quarter ended July 30, 1994.
10.4 Second Amendment to Revolving Credit Agreement, effective
on June 15, 1995, by and among Ross Stores, Banks and Wells
Fargo Bank, National Association, as agent for Banks,
incorporated by reference to Exhibit 10.4 to the Form 10-Q
filed by Ross Stores for its quarter ended July 29, 1995.
10.5 Credit Agreement, dated as of June 22, 1994, among Ross
Stores, Bank of America National Trust and Savings
Association as Agent, the Industrial Bank of Japan as Co-
Agent and the other financial institutions party thereto,
incorporated by reference to Exhibit 10.6 to the Form 10-Q
filed by Ross Stores for its quarter ended July 30, 1994.
10.6 First Amendment to Credit Agreement, dated as of June 20,
1995, among Ross Stores, Bank of America National Trust and
Savings Association as Agent, the Industrial Bank of Japan
as Co-Agent, incorporated by reference to Exhibit 10.6 to
the Form 10-Q filed by Ross Stores for its quarter ended
July 29, 1995.
MANAGEMENT CONTRACTS AND COMPENSATORY PLANS
(EXHIBITS 10.7 - 10.26)
10.7 Amended and Restated 1992 Stock Option Plan, incorporated
by reference to the appendix to the Proxy Statement filed
by Ross Stores on April 24, 1995 for its Annual
Stockholders Meeting held May 25, 1995 ("1995 Proxy
Statement").
10.8 Third Amended and Restated Ross Stores Employee Stock
Purchase Plan, incorporated by reference to the appendix to
the 1995 Proxy Statement.
<PAGE> 11
Exhibit
Number Exhibit
10.9 Third Amended and Restated Ross Stores 1988 Restricted
Stock Plan, incorporated by reference to the appendix to
the Proxy Statement filed by Ross Stores on April 24, 1996
for its Annual Stockholders Meeting held May 30, 1996
("1996 Proxy Statement").
10.10 1991 Outside Directors Stock Option Plan, incorporated by
reference to the appendix to the 1996 Proxy Statement.
10.11 Ross Stores Executive Medical Plan, incorporated by
reference to Exhibit 10.13 to the 1993 Form 10-K filed by
Ross Stores for its year ended January 29, 1994 ("1993 Form
10-K").
10.12 Third Amended and Restated Ross Stores Executive
Supplemental Retirement Plan, incorporated by reference to
Exhibit 10.14 to the 1993 Form 10-K.
10.13 Ross Stores Non-Qualified Deferred Compensation Plan,
incorporated by reference to Exhibit 10.15 to the 1993 Form
10-K.
10.14 Ross Stores Incentive Compensation Plan, incorporated by
reference to the appendix to the 1996 Proxy Statement.
10.15 Amended and Restated Employment Agreement between Ross
Stores, Inc. and Norman A. Ferber, effective as of June 1,
1995, incorporated by reference to Exhibit 10.17 to the
Form 10-Q filed by Ross Stores for its quarter ended
October 28, 1995.
10.16 Agreement between Ross Stores, Inc. and Norman A. Ferber,
dated August 22, 1995, incorporated by reference to Exhibit
10.18 to the Form 10-Q filed by Ross Stores for its quarter
ended October 28, 1995.
10.17 Employment Agreement between Ross Stores and Melvin A.
Wilmore, effective as of March 15, 1994, incorporated by
reference to Exhibit 10.20 to the Form 10-Q filed by Ross
Stores for its quarter ended April 30, 1994.
10.18 Amendment to Employment and Stock Grant Agreement by and
between Ross Stores and Melvin A. Wilmore, effective as of
March 16, 1995, incorporated by reference to Exhibit 10.20
to the Form 10-Q filed by Ross Stores for its quarter ended
October 28, 1995.
10.19 Second Amendment to Employment Agreement by and between
Ross Stores and Melvin A. Wilmore, effective as of June 1,
1995, incorporated by reference to Exhibit 10.21 to the
Form 10-Q filed by Ross Stores for its quarter ended
October 28, 1995.
10.20 Agreement between Ross Stores, Inc. and Melvin A. Wilmore,
dated August 22, 1995, incorporated by reference to Exhibit
10.22 to the Form 10-Q filed by Ross Stores for its quarter
ended October 28, 1995.
10.21 Employment Agreement between Ross Stores and Michael
Balmuth, effective as of February 1, 1995, incorporated by
reference to Exhibit 10.15 to the Form 10-Q filed by Ross
Stores for its quarter ended April 29, 1995.
<PAGE> 12
Exhibit
Number Exhibit
10.22 Amendment to Employment Agreement between Ross Stores and
Michael Balmuth, effective as of June 1, 1995, incorporated
by reference to Exhibit 10.24 to the Form 10-Q filed by
Ross Stores for its quarter ended October 28, 1995.
10.23 Employment Agreement between Ross Stores and Barry S.
Gluck, effective as of March 1, 1996.
10.24 Employment Agreement between Ross Stores and Irene S.
Jamieson, effective as of March 1, 1996.
10.25 Employment Agreement between Ross Stores and Barbara Levy,
effective as of March 1, 1996.
10.26 Consulting Agreement between Ross Stores and Stuart G.
Moldaw, effective as of March 16, 1995, incorporated by
reference to Exhibit 10.16 to the Form 10-Q filed by Ross
Stores for its quarter ended April 29, 1995.
11 Statement re: Computation of Per Share Earnings.
15 Letter re: Unaudited Interim Financial Information.
27 Financial Data Schedules (submitted for SEC use only).
EXHIBIT 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of March 1, 1996,
by and between Ross Stores, Inc. (the "Company") and Barry S. Gluck.
Mr. Gluck is presently employed by the Company as a Senior Vice
President and General Merchandising Manager ("GMM") and it is now the
intention of the Company and the GMM to enter into a written
employment agreement. Accordingly, the Company and the GMM enter into
this Agreement.
1. Term. The employment of the GMM by the Company will
continue as of the date hereof and end on March 1, 1999, unless
extended or terminated in accordance with this Agreement. During
January 1998, and during January every two years thereafter (2000,
2002, etc.) for so long as the GMM is employed by the Company, upon
the written request of the GMM the Executive Vice President,
Merchandising with input from the Company's Chief Executive Officer
shall consider extending the GMM's employment with the Company. Such
request must be delivered to the Executive Vice President,
Merchandising no later than the December 1st which precedes the
January in which the requested extension will be considered. The
Executive Vice President, Merchandising shall advise the GMM, in
writing, on or before the February 1st following the GMM's written
request, whether the requested extension is approved. The failure of
the Executive Vice President, Merchandising to provide such written
advice shall constitute approval of the GMM's request for extension.
If the GMM's request for an extension is approved, this Agreement
shall be extended two additional years.
2. Position and Duties. The GMM shall continue to serve as a
GMM of the Company with overall responsibility for his assigned
merchandising area. The GMM shall report directly to the Company's
Executive Vice President, Merchandising. The GMM shall devote
substantially all of his working time and efforts to the business and
affairs of the Company. During the term of his employment, the GMM
may engage in outside activities provided those activities do not
conflict with his duties and responsibilities hereunder, and provided
further that the GMM gives written notice to the Board of any
significant outside business activity in which he plans to become
involved, whether or not such activity is pursued for profit. The GMM
may not render services to or invest in any business competitive with
any existing or contemplated business of the Company except with
respect to personal investments in securities, limited partnerships or
similar passive investment interests that are publicly traded subject
to the restrictions set forth in paragraph 9.
3. Place of Performance. The GMM shall be employed at the
Company's New York buying office, except for required travel on the
Company's business.
<PAGE> 2
4. Compensation and Related Matters.
a. Salary. During his employment the Company shall pay the GMM
a monthly salary of $27,500.00, less applicable withholding
($330,000.00 on an annualized basis). This salary shall be payable in
equal installments in accordance with the Company's normal payroll
practices applicable to senior officers. Subject to the first
sentence of this paragraph, the GMM's salary may be adjusted upward
from time to time by the Company in accordance with normal business
practices of the Company.
b. Bonus. During his employment the Company shall continue to
pay the GMM an annual bonus in accordance with the terms of the
existing bonus incentive plan that covers the GMM (or any replacement
plan of substantially equivalent or greater value that may
subsequently be established and in effect at the time for such
action).
c. Expenses. During his employment the GMM shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred
by him in performing services hereunder, including all reasonable
expenses of travel and living while away from home, provided that such
expenses are incurred and accounted for in accordance with the
policies and procedures established by the Company.
d. Other Benefits. The GMM shall be entitled to continue to
participate in all of the Company's employee benefit plans and
arrangements in effect on the date hereof in which the GMM now
participates (including without limitation each pension and retirement
plan and arrangement, supplemental pension and retirement plan,
deferred compensation plan, short-term and long-term incentive plan,
stock option plan, life insurance and health-and-accident plan and
arrangement, medical insurance plan, physical examination program,
dental care plan, accidental death and disability plan, survivor
income plan, relocation plan, financial, tax and legal counseling
programs, and vacation plan). The Company shall not make any changes
in such plans or arrangements which would adversely affect the GMM's
rights or benefits thereunder, unless such change occurs pursuant to a
program applicable to all senior executives of the Company and does
not result in a proportionately greater reduction in the rights of, or
benefits to, the GMM as compared with any other senior executive of
the Company. The GMM shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available
by the Company in the future to its executives and key management
employees, subject to, and on a basis consistent with, the terms,
conditions and overall administration of such plans and arrangements.
Except as otherwise specifically provided herein, nothing paid to the
GMM under any plan or arrangement presently in effect or made
available in the future shall be in lieu of the salary or bonus
payable under subsections (a) and (b).
e. Vacations. The GMM shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of
earned but unused vacation days, determined in accordance with the
Company's vacation plan. The GMM shall also be entitled to all paid
holidays given by the Company to its executives. Unused vacation days
shall not be forfeited once they have been earned and, if still unused
at the time of the GMM's termination of employment with the Company,
shall
<PAGE> 3
be promptly paid to the GMM at their then-current value,
based on the GMM's rate of pay at the time of his termination of
employment.
f. Services Furnished. The Company shall furnish the GMM with
office space and such services as are suitable to the GMM's position
and adequate for the performance of his duties.
5. Confidential Information.
a. The GMM agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed
by the Company, or not engaged to render services to the Company, any
confidential information obtained while in the employ of the Company,
including, without limitation, any of the Company's inventions,
processes, methods of distribution or customers or trade secrets;
provided, however, that this provision shall not preclude the GMM from
use or disclosure of information known generally to the public or from
disclosure required by law or court order.
b. The GMM agrees that upon leaving the Company's employ he
will make himself reasonably available to answer questions from
Company officers regarding his former duties and responsibilities and
the knowledge he obtained in connection therewith. In addition, he
will not take with him, without the prior written consent of any
officer authorized to act in the matter by the Board, any study,
memoranda, drawing, blueprint, specification or other document of the
Company, its subsidiaries, affiliates and divisions, which is of a
confidential nature relating to the Company, its subsidiaries,
affiliates and divisions.
c. The GMM understands and agrees that his obligation pursuant
to this paragraph 5 shall survive the termination of this Agreement
and his termination of employment for any reason under this Agreement.
6. Termination. The GMM's employment may be terminated during
the term of this Agreement only as follows:
a. Death. The GMM's employment shall terminate upon his death.
b. Disability. If, as a result of the GMM's incapacity due to
physical or mental illness, the GMM shall have been absent from his
duties hereunder on a full-time basis for the entire period of six
consecutive months, and within thirty days after written notice of
termination is given by the Company or the GMM (which may occur before
or after the end of such six-month period), the GMM shall not have
returned to the performance of his duties hereunder on a full-time
basis, the GMM's employment shall terminate. A termination of
employment pursuant to this paragraph 6(b) shall be deemed an
involuntary termination for purposes of this Agreement or any plan or
practice of the Company.
<PAGE> 4
c. Cause. The Company may terminate the GMM's employment
for Cause. The Company shall have "Cause" to terminate the GMM's
employment upon (A) the continued failure by the GMM to substantially
perform his duties hereunder (other than a failure resulting from a
disability as defined in subsection (b)) after written notice is
delivered by the Company that specifically identifies the manner in
which the GMM has not substantially performed his duties, or (B) the
engaging by the GMM in knowing, illegal or grossly negligent conduct
which is materially injurious to the Company monetarily or otherwise.
d. Without Cause. The Company may terminate the GMM's
employment at any time without cause. A termination "without cause"
is a termination of the GMM's employment by the Company for any reason
other than those set forth in subsections (a)[Death], (b)[Disability]
or (c)[For Cause] of this paragraph.
e. Termination by the GMM for Good Reason. The GMM may
terminate his employment with the Company for Good Reason which shall
be deemed to occur if he terminates his employment within six months
after (i) written notice of a failure by the Company to comply with
any material provision of this Agreement which failure has not been
cured within ten days after such written notice of noncompliance has
been given by the GMM to the Company, or (ii) a significant
diminishment in the nature or scope of the authority, power, function
or duty attached to the position which the GMM currently maintains
without the express written consent of the GMM.
f. Termination Following Change of Control. The GMM may
terminate his employment with the Company within six months after a
Change of Control, which shall be deemed to have occurred in the event
of: (i) the direct or indirect sale or exchange by the stockholders
of the Company of all or substantially all of the stock of the
Company, in a single or series of related transactions, after which
sale or exchange the stockholders of the Company immediately prior to
such transactions do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
Company; (ii) a merger in which the Company is a party after which
merger the stockholders of the Company do not retain, directly or
indirectly, at least a majority of the beneficial interest in the
voting stock of the surviving company; or (iii) the sale, exchange, or
transfer of all or substantially all of the Company's assets (other
than a sale, exchange, or transfer to one or more corporations where
the stockholders of the Company before such sale, exchange, or
transfer retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the corporation(s) to which
the assets were transferred). Provided, however, that the GMM shall
not be entitled to terminate his employment under this subsection in
the event that the purchaser of the Company, or any successor by
merger, consolidation or otherwise, or the entity to which all or a
significant portion of the Company's assets have been transferred,
shall have expressly assumed in writing all duties and obligations of
the Company under this Agreement.
g. Voluntary Termination. The GMM may voluntarily terminate
his employment with the Company at any time. A termination of
employment by the GMM pursuant to paragraph 6(e)[For Good Reason] or
(f)[Change of Control] shall not be
<PAGE> 5
deemed a voluntary termination by the GMM for purposes of this
Agreement or any plan or practice of the Company but shall be deemed
an involuntary termination.
h. Non-Renewal. If the GMM fails to request an extension of
this Agreement in accordance with paragraph 1, or if the Board shall
fail to approve such request, this Agreement shall automatically
expire at the end of its term. Such expiration shall not entitle the
GMM to any compensation or benefits except as earned by the GMM
through the date of expiration of this Agreement and set forth in
paragraph 8(e). The parties shall have no further obligations to each
other thereafter except as set forth in paragraphs 5 and 11.
7. Notice and Effective Date of Termination.
a. Notice. Any termination of the GMM's employment by the
Company or by the GMM during the term of this Agreement (other than as
a result of death) shall be communicated by written notice of
termination to the other party hereto. Such notice shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the GMM's employment under that
provision.
b. Date of Termination. The date of termination shall be:
(i) if the GMM's employment is terminated by his death, the
date of his death;
(ii) if the GMM's employment is terminated pursuant to paragraph
6(b)[Disability], the date of termination shall be the 31st day
following delivery of the notice of termination;
(iii) if the GMM's employment is terminated for any other
reason by either party, the date on which a notice of termination is
delivered to the other party; and
(iv) if the Agreement expires pursuant to paragraph 6(h)[Non-
Renewal], the parties' employment relationship shall terminate on the
last day of the term of this Agreement without any notice.
8. Compensation and Benefits Upon Termination.
a. Disability, Without Cause or For Good Reason. If the GMM's
employment terminates pursuant to paragraph 6(b)[Disability],
(d)[Without Cause] or (e)[For Good Reason], the Company shall:
(i) Salary: continue to pay the GMM his then-current salary
through the remaining term of this Agreement as defined in paragraph
1;
<PAGE> 6
(ii) Bonus: continue to pay the GMM an annual
bonus(es) throughout such remaining term; each such bonus shall be in
an amount equal to the greater of (A) the GMM's bonus during the year
prior to his termination or (B) the bonus that the GMM would have
earned under the Company's bonus plan in the year that he was
terminated had he remained in its employment; provided, however, that
such post-termination bonuses shall not exceed the lesser of the 100%
targeted amounts for those bonus payments in the prior and then-
current year, and such bonuses shall not be paid until due under the
Company's present bonus plan;
(iii) Stock Options: with respect to any stock options
granted to the GMM by the Company, the GMM shall immediately become
vested in any unvested stock options upon such termination; and
(iv) Restricted Stock: with respect to any restricted stock
granted to the GMM by the Company which has not become vested as of
such termination, the GMM shall immediately become vested in a pro
rata portion of such unvested stock determined on the basis of the
number of full months that have elapsed from the date of grant of such
restricted stock. Such pro rata vesting shall be determined
separately with respect to each portion of any restricted stock grant
that is subject to a different restriction lapse date. That is, for
each portion of any restricted stock grant that is subject to a
different restriction lapse date, the GMM shall immediately become
vested in the number of shares that equals (i) the quantity A divided
by B times C minus (ii) the number of shares that have previously
vested [(A/B x C)-D], where A is the number of full months that have
elapsed from the date of grant to and including the date of
termination, B is the number of months between the date of grant and
the restriction lapse date, C is the number of shares that would
otherwise become vested on that restriction lapse date and D is the
number of shares that have previously vested. As a hypothetical
example, presume the GMM had been granted 30,000 shares of restricted
stock on January 1, 1996, and that the restrictions on that grant
lapse as to 10,000 shares on January 1, 1997, 5,000 shares on January
1, 1998, and 15,000 shares on January 1, 1999. If the GMM's
employment terminated pursuant to paragraph 6(b) on July 1, 1996
(i.e., at a time when no shares had previously vested), the GMM would
immediately become vested under this subsection (iv) in 5,000 of the
shares whose restrictions were to lapse on January 1, 1997, 1,250 of
the shares whose restrictions were to lapse on January 1, 1998, and
2,500 of the shares whose restrictions were to lapse on January 1,
1999.
The Company shall have no further obligations to the GMM as a result
of such termination except as set forth in paragraph 11.
b. For Cause. If the GMM's employment is terminated for cause
as defined in paragraph 6(c)(A)[Failure to Perform], the GMM shall
receive the post-termination compensation and benefits described in
paragraph 8(a)[Compensation and Benefits Upon Disability, Termination
Without Cause or For Good Reason]. If the GMM's employment is
terminated for cause as defined in paragraph 6(c)(B)[Materially
Injurious Conduct], he shall only receive the post-termination
compensation and benefits described in paragraph 8(d)[Compensation and
Benefits Upon Voluntary Termination].
c. Change of Control. Upon a Change of Control (whether or
not the GMM's employment terminates), the GMM shall immediately become
vested in any shares of restricted stock granted to the GMM by the
Company which had not vested prior to the Change of Control. In
addition, if the GMM's employment terminates pursuant to paragraph
6(f)[Change of Control], the Company shall:
(i) Salary: continue to pay the GMM his then-current salary
through the remaining term of this Agreement as defined in paragraph
1;
(ii) Bonus: continue to pay the GMM his annual bonus(es)
throughout such remaining term; each such bonus shall be in an amount
equal to the greater of (A) the GMM's bonus during the year prior to
his termination or (B) the bonus that the GMM would have earned under
the Company's bonus plan in the year that he was terminated had he
remained in its employment; provided, however, that such post-
termination bonuses shall not exceed the lesser of the 100% targeted
amounts for those bonus payments in the prior and then-current year,
and such bonuses shall not be paid until due under the Company's
present bonus plan; and
(iii) Stock Options: with respect to any stock options
granted to the GMM by the Company, the GMM shall immediately become
vested in any unvested stock options upon such termination.
The Company shall reimburse the GMM for any excise taxes paid by the
GMM pursuant to Internal Revenue Code section 4999 as a result of any
"excess parachute payments" that he receives from the Company as
determined under section 280G of said Code. This reimbursement shall
not include any additional amount to cover the GMM's income or other
taxes on such reimbursement. The Company shall have no further
obligations to the GMM as a result of such termination except as set
forth in paragraph 11.
d. Death or Voluntary Termination. If the GMM's employment
terminates pursuant to paragraph 6(a)[Death] or 6(g)[Voluntary
Termination], he (or his designee or his estate) shall be paid his
salary through his termination date and not thereafter. He (or his
designee or his estate) shall not be entitled to any bonus payments
which were not fully earned prior to his termination date, and he (or
his designee or his estate) shall not be entitled to any pro-rated
bonus payment for the year in which his employment terminates. Any
stock options granted to the GMM by the Company will continue to vest
only through the date on which his employment terminates (provided,
however, that if the GMM's employment terminates as a result of his
voluntary termination (but not as a result of his death) within six
months after a Change of Control, the GMM shall immediately become
fully-vested in any unvested stock options previously granted to him
by the Company) and any restricted stock that was granted to the GMM
by the Company that is unvested as of the date on which his employment
terminates will automatically be reacquired by the Company and the GMM
(or his designee or his estate) shall have no further rights with
respect to such restricted stock. The Company shall have no further
obligations to the GMM as a result of the termination of his
employment pursuant to paragraph 6(a)[Death] or 6(g)[Voluntary
Termination] except as set forth in paragraph 11.
<PAGE> 8
e. Non-Renewal. If the Agreement expires as set forth in
paragraph 6(h)[Non-Renewal], the Company shall have no further
obligations to the GMM except as set forth in paragraph 11 and except
that with respect to any restricted stock granted to the GMM by the
Company which has not become vested as of such expiration date, the
GMM shall immediately become vested in a pro rata portion of such
unvested stock determined on the basis of the number of full months
that have elapsed from the date of grant of such restricted stock (as
described more fully in paragraph 8(a)(iv)).
9. Employment and Post-Employment Restrictions. The Company
and GMM acknowledge that the Company has a special interest in and
derives significant benefit from the unique skills and experience of
the GMM. In addition, the GMM will use and have access to some of the
Company's proprietary and valuable Confidential Information during the
course of GMM's employment. Accordingly, except as hereafter noted,
during the term of GMM's employment with the Company and in the event
that GMM's voluntarily terminates his employment with the Company
prior to March 1, 1999, GMM agrees that for a period of three years
following his voluntary termination pursuant to paragraph 6(g), he
shall not provide any labor, work, services or assistance to (whether
as an officer, director, employee, partner, agent, owner, independent
contractor, stockholder or otherwise) Burlington Coat Factory
Warehouse Corporation, Dillard Department Stores, Inc., Filene's
Basement Corp., The Federated Stores, The May Department Stores
Company, The TJX Companies, Inc. and Value City Department Stores,
Inc. as well as all subsidiaries, divisions and/or the surviving
entity of any of the above that do business in the retail industry in
the case of a merger or acquisition. However, this subsection shall
not prohibit GMM from making any investment of 1% or less of the
equity securities of any publicly-traded corporation that is engaged
in any business of the type or character engaged in by the Company.
The preceding sentence shall have no force and effect in the event
that (i) GMM's employment with the Company is terminated (1) by the
Company pursuant to paragraph 6(c)[with Cause], 6(d)[without Cause] or
(2) by GMM pursuant to either paragraph 6(e)[Termination by the
Executive for Good Reason] or paragraph 6(f)[Termination Following
Change of Control] or (ii) the Company fails to approve or grant an
extension of this Agreement in accordance with paragraph 1 hereof.
During the term of GMM's employment with the Company and for a
period of three years following the termination of that employment for
any reason, GMM shall not directly or indirectly solicit any other
employee of the Company to terminate his or her employment with the
Company.
10. Exercise of Stock Options Following Termination. If the
GMM's employment terminates pursuant to paragraph 6(a)[Death] or
(b)[Disability], he (or his estate) may exercise his right to purchase
any vested stock under the stock options granted to him by the Company
for up to one year following the date of his termination, but not
later than the termination date of such options. In all other
instances, he may exercise that right for up to three months following
the date of his termination, but not later than the termination date
of such options. All such purchases must be made by the GMM in
accordance with the applicable stock option plans and agreements
between the parties.
<PAGE> 9
11. Insurance and Indemnity. The Company shall, to the extent
permitted by law, include the GMM during the term of this Agreement
under any directors and officers liability insurance policy maintained
for its directors and officers, with coverage at least as favorable to
the GMM in amount and each other material respect as the coverage of
other directors and officers covered thereby. This obligation to
provide insurance and indemnify the GMM shall survive expiration or
termination of this Agreement with respect to proceedings or
threatened proceedings based on acts or omissions of the GMM occurring
during the GMM's employment with the Company or with any affiliated
company. Such obligations shall be binding upon the Company's
successors and assigns and shall inure to the benefit of the GMM's
heirs and personal representatives.
12. Successors; Binding Agreement. This Agreement and all
rights of the GMM hereunder shall inure to the benefit of and be
enforceable by the GMM's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the GMM should die while any amounts would still be
payable to him hereunder all such amounts shall be paid in accordance
with the terms of this Agreement to the GMM's written designee, or if
there be no such designee, to the GMM's estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when
delivered or (unless otherwise specified) mailed by United States
registered mail, return receipt requested, postage prepaid, addressed
as follows:
If to the GMM: Barry S. Gluck
c/o Ross Stores, Inc.
1372 Broadway, Tenth Floor
New York, NY 10018
If to the Company: Ross Stores, Inc.
8333 Central Avenue
Newark, CA 94560-3433
Attention: Corporate Secretary
or to such other address as any party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
14. Modification or Waiver; Entire Agreement. No provision of
this Agreement may be modified or waived except in a document signed
by the GMM and the chairman of the Compensation Committee of the Board
or such other person as may be designated by the Board. This
Agreement, along with any stock option or restricted stock agreements
between the parties, constitute the entire agreement between the
parties regarding their employment relationship. To the extent that
this Agreement is in any way inconsistent with any prior restricted
stock or stock option agreements entered into after February 17, 1993,
between the parties, this Agreement shall control. No
<PAGE> 10
agreements or representations, oral or otherwise, with respect to the
subject matter hereof have been made by either party which are not set
forth expressly in this Agreement.
15. Governing Law; Severability. The validity, interpretation,
construction and performance of this Agreement shall be governed by
the laws of the State of New York. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
16. Mitigation. In the event the GMM's employment with the
Company terminates for any reason other than death, the GMM shall be
obligated to seek other employment following such termination in order
to mitigate payments that the Company may be required to make to him
or for his benefit hereunder. Such obligation shall not apply during
any period in which the GMM is disabled. If the GMM obtains other
employment during any period in which he is entitled to receive
continued salary or bonus payments under paragraph 8, any salary or
bonus payments earned by the GMM during such period shall reduce the
Company's obligation to pay continued salary and/or bonus payments
under paragraph 8 by the amount of the salary and/or bonus payments so
earned by the GMM.
17. Withholding. All payments required to be made by the
Company hereunder to the GMM or his estate or beneficiaries shall be
subject to the withholding of such amounts as the Company may
reasonably determine it should withhold pursuant to any applicable
law. To the extent permitted, the GMM may provide all or any part of
any necessary withholding by contributing Company stock with value,
determined on the date such withholding is due, equal to the number of
shares contributed multiplied by the closing NASDAQ price on the date
preceding the date the withholding is determined.
18. Arbitration. In the event of any dispute or claim relating
to or arising out of the parties' employment relationship or this
Agreement (including, but not limited to, any claims of breach of
contract, wrongful termination or age, race, sex, disability or other
discrimination), all such disputes shall be fully, finally and
exclusively resolved by binding arbitration conducted by the American
Arbitration Association in Alameda County, California; provided,
however, that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or
misappropriation of the Company's trade secrets or proprietary
information or to any disputes or claims relating to or arising out of
GMM's failure to comply with the requirements of paragraph 9 regarding
Employment and Post-Employment Restrictions.
19. Attorneys' Fees. Each party shall bear its own attorneys'
fees and costs incurred in any action or dispute arising out of this
Agreement.
20. Miscellaneous. No right or interest to, or in, any payments
shall be assignable by the GMM; provided, however, that this provision
shall not preclude GMM from designating in writing one or more
beneficiaries to receive any amount that may be payable after GMM's
death and shall not preclude the legal representative of GMM's estate
from assigning any right hereunder to the person or persons entitled
thereto. This
<PAGE> 11
Agreement shall be binding upon and shall inure to the benefit of the
GMM, his heirs and legal representatives and the Company and its
successors.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement effective as of the date and year first above written.
ROSS STORES, INC.
By: /s/Stephen F. Joyce /s/ Barry S. Gluck
Title: Sr. Vice President, Human Resources Barry S. Gluck
EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of March 1, 1996,
by and between Ross Stores, Inc. (the "Company") and Irene A.
Jamieson. Ms. Jamieson is presently employed by the Company as a
Senior Vice President and General Merchandising Manager ("GMM") and it
is now the intention of the Company and the GMM to enter into a
written employment agreement. Accordingly, the Company and the GMM
enter into this Agreement.
1. Term. The employment of the GMM by the Company will
continue as of the date hereof and end on March 1, 1999, unless
extended or terminated in accordance with this Agreement. During
January 1998, and during January every two years thereafter (2000,
2002, etc.) for so long as the GMM is employed by the Company, upon
the written request of the GMM the Executive Vice President,
Merchandising with input from the Company's Chief Executive Officer
shall consider extending the GMM's employment with the Company. Such
request must be delivered to the Executive Vice President,
Merchandising no later than the December 1st which precedes the
January in which the requested extension will be considered. The
Executive Vice President, Merchandising shall advise the GMM, in
writing, on or before the February 1st following the GMM's written
request, whether the requested extension is approved. The failure of
the Executive Vice President, Merchandising to provide such written
advice shall constitute approval of the GMM's request for extension.
If the GMM's request for an extension is approved, this Agreement
shall be extended two additional years.
2. Position and Duties. The GMM shall continue to serve as a
GMM of the Company with overall responsibility for her assigned
merchandising area. The GMM shall report directly to the Company's
Executive Vice President, Merchandising. The GMM shall devote
substantially all of her working time and efforts to the business and
affairs of the Company. During the term of her employment, the GMM
may engage in outside activities provided those activities do not
conflict with her duties and responsibilities hereunder, and provided
further that the GMM gives written notice to the Board of any
significant outside business activity in which she plans to become
involved, whether or not such activity is pursued for profit. The GMM
may not render services to or invest in any business competitive with
any existing or contemplated business of the Company except with
respect to personal investments in securities, limited partnerships or
similar passive investment interests that are publicly traded subject
to the restrictions set forth in paragraph 9.
3. Place of Performance. The GMM shall be employed at the
Company's New York buying office, except for required travel on the
Company's business.
<PAGE> 2
4. Compensation and Related Matters.
a. Salary. During her employment the Company shall pay the GMM
a monthly salary of $25,833.33, less applicable withholding
($310,000.00 on an annualized basis). This salary shall be payable in
equal installments in accordance with the Company's normal payroll
practices applicable to senior officers. Subject to the first
sentence of this paragraph, the GMM's salary may be adjusted upward
from time to time by the Company in accordance with normal business
practices of the Company.
b. Bonus. During her employment the Company shall continue to
pay the GMM an annual bonus in accordance with the terms of the
existing bonus incentive plan that covers the GMM (or any replacement
plan of substantially equivalent or greater value that may
subsequently be established and in effect at the time for such
action).
c. Expenses. During her employment the GMM shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred
by her in performing services hereunder, including all reasonable
expenses of travel and living while away from home, provided that such
expenses are incurred and accounted for in accordance with the
policies and procedures established by the Company.
d. Other Benefits. The GMM shall be entitled to continue to
participate in all of the Company's employee benefit plans and
arrangements in effect on the date hereof in which the GMM now
participates (including without limitation each pension and retirement
plan and arrangement, supplemental pension and retirement plan,
deferred compensation plan, short-term and long-term incentive plan,
stock option plan, life insurance and health-and-accident plan and
arrangement, medical insurance plan, physical examination program,
dental care plan, accidental death and disability plan, survivor
income plan, relocation plan, financial, tax and legal counseling
programs, and vacation plan). The Company shall not make any changes
in such plans or arrangements which would adversely affect the GMM's
rights or benefits thereunder, unless such change occurs pursuant to a
program applicable to all senior executives of the Company and does
not result in a proportionately greater reduction in the rights of, or
benefits to, the GMM as compared with any other senior executive of
the Company. The GMM shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available
by the Company in the future to its executives and key management
employees, subject to, and on a basis consistent with, the terms,
conditions and overall administration of such plans and arrangements.
Except as otherwise specifically provided herein, nothing paid to the
GMM under any plan or arrangement presently in effect or made
available in the future shall be in lieu of the salary or bonus
payable under subsections (a) and (b).
<PAGE> 3
e. Vacations. The GMM shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of
earned but unused vacation days, determined in accordance with the
Company's vacation plan. The GMM shall also be entitled to all paid
holidays given by the Company to its executives. Unused vacation days
shall not be forfeited once they have been earned and, if still unused
at the time of the GMM's termination of employment with the Company,
shall be promptly paid to the GMM at their then-current value, based
on the GMM's rate of pay at the time of her termination of employment.
f. Services Furnished. The Company shall furnish the GMM with
office space and such services as are suitable to the GMM's position
and adequate for the performance of her duties.
5. Confidential Information.
a. The GMM agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed
by the Company, or not engaged to render services to the Company, any
confidential information obtained while in the employ of the Company,
including, without limitation, any of the Company's inventions,
processes, methods of distribution or customers or trade secrets;
provided, however, that this provision shall not preclude the GMM from
use or disclosure of information known generally to the public or from
disclosure required by law or court order.
b. The GMM agrees that upon leaving the Company's employ she
will make herself reasonably available to answer questions from
Company officers regarding her former duties and responsibilities and
the knowledge she obtained in connection therewith. In addition, she
will not take with her, without the prior written consent of any
officer authorized to act in the matter by the Board, any study,
memoranda, drawing, blueprint, specification or other document of the
Company, its subsidiaries, affiliates and divisions, which is of a
confidential nature relating to the Company, its subsidiaries,
affiliates and divisions.
c. The GMM understands and agrees that her obligation pursuant
to this paragraph 5 shall survive the termination of this Agreement
and her termination of employment for any reason under this Agreement.
6. Termination. The GMM's employment may be terminated during
the term of this Agreement only as follows:
a. Death. The GMM's employment shall terminate upon her death.
<PAGE> 4
b. Disability. If, as a result of the GMM's incapacity due to
physical or mental illness, the GMM shall have been absent from her
duties hereunder on a full-time basis for the entire period of six
consecutive months, and within thirty days after written notice of
termination is given by the Company or the GMM (which may occur before
or after the end of such six-month period), the GMM shall not have
returned to the performance of her duties hereunder on a full-time
basis, the GMM's employment shall terminate. A termination of
employment pursuant to this paragraph 6(b) shall be deemed an
involuntary termination for purposes of this Agreement or any plan or
practice of the Company.
c. Cause. The Company may terminate the GMM's employment for
Cause. The Company shall have "Cause" to terminate the GMM's
employment upon (A) the continued failure by the GMM to substantially
perform her duties hereunder (other than a failure resulting from a
disability as defined in subsection (b)) after written notice is
delivered by the Company that specifically identifies the manner in
which the GMM has not substantially performed her duties, or (B) the
engaging by the GMM in knowing, illegal or grossly negligent conduct
which is materially injurious to the Company monetarily or otherwise.
d. Without Cause. The Company may terminate the GMM's
employment at any time without cause. A termination "without cause"
is a termination of the GMM's employment by the Company for any reason
other than those set forth in subsections (a)[Death], (b)[Disability]
or (c)[For Cause] of this paragraph.
e. Termination by the GMM for Good Reason. The GMM may
terminate her employment with the Company for Good Reason which shall
be deemed to occur if she terminates her employment within six months
after (i) written notice of a failure by the Company to comply with
any material provision of this Agreement which failure has not been
cured within ten days after such written notice of noncompliance has
been given by the GMM to the Company, or (ii) a significant
diminishment in the nature or scope of the authority, power, function
or duty attached to the position which the GMM currently maintains
without the express written consent of the GMM.
f. Termination Following Change of Control. The GMM may
terminate her employment with the Company within six months after a
Change of Control, which shall be deemed to have occurred in the event
of: (i) the direct or indirect sale or exchange by the stockholders
of the Company of all or substantially all of the stock of the
Company, in a single or series of related transactions, after which
sale or exchange the stockholders of the Company immediately prior to
such transactions do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
Company; (ii) a merger in which the Company is a party after which
merger the stockholders of the Company do not retain, directly or
indirectly, at least a majority of the beneficial interest in the
voting stock of the surviving company; or (iii) the sale,
<PAGE> 5
exchange, or transfer of all or substantially all of the Company's
assets (other than a sale, exchange, or transfer to one or more
corporations where the stockholders of the Company before such sale,
exchange, or transfer retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
corporation(s) to which the assets were transferred). Provided,
however, that the GMM shall not be entitled to terminate her
employment under this subsection in the event that the purchaser of
the Company, or any successor by merger, consolidation or otherwise,
or the entity to which all or a significant portion of the Company's
assets have been transferred, shall have expressly assumed in writing
all duties and obligations of the Company under this Agreement.
g. Voluntary Termination. The GMM may voluntarily terminate
her employment with the Company at any time. A termination of
employment by the GMM pursuant to paragraph 6(e)[For Good Reason] or
(f)[Change of Control] shall not be deemed a voluntary termination by
the GMM for purposes of this Agreement or any plan or practice of the
Company but shall be deemed an involuntary termination.
h. Non-Renewal. If the GMM fails to request an extension of
this Agreement in accordance with paragraph 1, or if the Board shall
fail to approve such request, this Agreement shall automatically
expire at the end of its term. Such expiration shall not entitle the
GMM to any compensation or benefits except as earned by the GMM
through the date of expiration of this Agreement and set forth in
paragraph 8(e). The parties shall have no further obligations to each
other thereafter except as set forth in paragraphs 5 and 11.
7. Notice and Effective Date of Termination.
a. Notice. Any termination of the GMM's employment by the
Company or by the GMM during the term of this Agreement (other than as
a result of death) shall be communicated by written notice of
termination to the other party hereto. Such notice shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the GMM's employment under that
provision.
b. Date of Termination. The date of termination shall be:
(i) if the GMM's employment is terminated by her death, the date
of her death;
(ii) if the GMM's employment is terminated pursuant to paragraph
6(b)[Disability], the date of termination shall be the 31st day
following delivery of the notice of termination;
<PAGE> 6
(iii) if the GMM's employment is terminated for any other reason
by either party, the date on which a notice of termination is
delivered to the other party; and
(iv) if the Agreement expires pursuant to paragraph 6(h)[Non-
Renewal], the parties' employment relationship shall terminate on the
last day of the term of this Agreement without any notice.
8. Compensation and Benefits Upon Termination.
a. Disability, Without Cause or For Good Reason. If the GMM's
employment terminates pursuant to paragraph 6(b)[Disability],
(d)[Without Cause] or (e)[For Good Reason], the Company shall:
(i) Salary: continue to pay the GMM her then-current salary
through the remaining term of this Agreement as defined in paragraph
1;
(ii) Bonus: continue to pay the GMM an annual bonus(es)
throughout such remaining term; each such bonus shall be in an amount
equal to the greater of (A) the GMM's bonus during the year prior to
her termination or (B) the bonus that the GMM would have earned under
the Company's bonus plan in the year that she was terminated had she
remained in its employment; provided, however, that such post-
termination bonuses shall not exceed the lesser of the 100% targeted
amounts for those bonus payments in the prior and then-current year,
and such bonuses shall not be paid until due under the Company's
present bonus plan;
(iii) Stock Options: with respect to any stock options granted
to the GMM by the Company, the GMM shall immediately become vested in
any unvested stock options upon such termination; and
(iv) Restricted Stock: with respect to any restricted stock
granted to the GMM by the Company which has not become vested as of
such termination, the GMM shall immediately become vested in a pro
rata portion of such unvested stock determined on the basis of the
number of full months that have elapsed from the date of grant of such
restricted stock. Such pro rata vesting shall be determined
separately with respect to each portion of any restricted stock grant
that is subject to a different restriction lapse date. That is, for
each portion of any restricted stock grant that is subject to a
different restriction lapse date, the GMM shall immediately become
vested in the number of shares that equals (i) the quantity A divided
by B times C minus (ii) the number of shares that have previously
vested [(A/B x C)-D], where A is the number of full months that have
elapsed from the date of grant to and including the date of
termination, B is the number of months between the date of grant and
the restriction lapse date, C is the number of shares that would
otherwise become vested on that restriction lapse date and D is the
number of shares that have previously vested. As a
<PAGE> 7
hypothetical example, presume the GMM had been granted 30,000 shares
of restricted stock on January 1, 1996, and that the restrictions on
that grant lapse as to 10,000 shares on January 1, 1997, 5,000 shares
on January 1, 1998, and 15,000 shares on January 1, 1999. If the
GMM's employment terminated pursuant to paragraph 6(b) on July 1, 1996
(i.e., at a time when no shares had previously vested), the GMM would
immediately become vested under this subsection (iv) in 5,000 of the
shares whose restrictions were to lapse on January 1, 1997, 1,250 of
the shares whose restrictions were to lapse on January 1, 1998, and
2,500 of the shares whose restrictions were to lapse on January 1,
1999.
The Company shall have no further obligations to the GMM as a result
of such termination except as set forth in paragraph 11.
b. For Cause. If the GMM's employment is terminated for cause
as defined in paragraph 6(c)(A)[Failure to Perform], the GMM shall
receive the post-termination compensation and benefits described in
paragraph 8(a)[Compensation and Benefits Upon Disability, Termination
Without Cause or For Good Reason]. If the GMM's employment is
terminated for cause as defined in paragraph 6(c)(B)[Materially
Injurious Conduct], she shall only receive the post-termination
compensation and benefits described in paragraph 8(d)[Compensation and
Benefits Upon Voluntary Termination].
c. Change of Control. Upon a Change of Control (whether or
not the GMM's employment terminates), the GMM shall immediately become
vested in any shares of restricted stock granted to the GMM by the
Company which had not vested prior to the Change of Control. In
addition, if the GMM's employment terminates pursuant to paragraph
6(f)[Change of Control], the Company shall:
(i) Salary: continue to pay the GMM her then-current salary
through the remaining term of this Agreement as defined in paragraph
1;
(ii) Bonus: continue to pay the GMM her annual bonus(es)
throughout such remaining term; each such bonus shall be in an amount
equal to the greater of (A) the GMM's bonus during the year prior to
her termination or (B) the bonus that the GMM would have earned under
the Company's bonus plan in the year that she was terminated had she
remained in its employment; provided, however, that such post-
termination bonuses shall not exceed the lesser of the 100% targeted
amounts for those bonus payments in the prior and then-current year,
and such bonuses shall not be paid until due under the Company's
present bonus plan; and
(iii) Stock Options: with respect to any stock options granted
to the GMM by the Company, the GMM shall immediately become vested in
any unvested stock options upon such termination.
<PAGE> 8
The Company shall reimburse the GMM for any excise taxes paid by the
GMM pursuant to Internal Revenue Code section 4999 as a result of any
"excess parachute payments" that she receives from the Company as
determined under section 280G of said Code. This reimbursement shall
not include any additional amount to cover the GMM's income or other
taxes on such reimbursement. The Company shall have no further
obligations to the GMM as a result of such termination except as set
forth in paragraph 11.
d. Death or Voluntary Termination. If the GMM's employment
terminates pursuant to paragraph 6(a)[Death] or 6(g)[Voluntary
Termination], she (or her designee or her estate) shall be paid her
salary through her termination date and not thereafter. She (or her
designee or her estate) shall not be entitled to any bonus payments
which were not fully earned prior to her termination date, and she (or
her designee or her estate) shall not be entitled to any pro-rated
bonus payment for the year in which her employment terminates. Any
stock options granted to the GMM by the Company will continue to vest
only through the date on which her employment terminates (provided,
however, that if the GMM's employment terminates as a result of her
voluntary termination (but not as a result of her death) within six
months after a Change of Control, the GMM shall immediately become
fully-vested in any unvested stock options previously granted to her
by the Company) and any restricted stock that was granted to the GMM
by the Company that is unvested as of the date on which her employment
terminates will automatically be reacquired by the Company and the GMM
(or her designee or her estate) shall have no further rights with
respect to such restricted stock. The Company shall have no further
obligations to the GMM as a result of the termination of her
employment pursuant to paragraph 6(a)[Death] or 6(g)[Voluntary
Termination] except as set forth in paragraph 11.
e. Non-Renewal. If the Agreement expires as set forth in
paragraph 6(h)[Non-Renewal], the Company shall have no further
obligations to the GMM except as set forth in paragraph 11 and except
that with respect to any restricted stock granted to the GMM by the
Company which has not become vested as of such expiration date, the
GMM shall immediately become vested in a pro rata portion of such
unvested stock determined on the basis of the number of full months
that have elapsed from the date of grant of such restricted stock (as
described more fully in paragraph 8(a)(iv)).
9. Employment and Post-Employment Restrictions. The Company
and GMM acknowledge that the Company has a special interest in and
derives significant benefit from the unique skills and experience of
the GMM. In addition, the GMM will use and have access to some of the
Company's proprietary and valuable Confidential Information during the
course of GMM's employment. Accordingly, except as hereafter noted,
during the term of GMM's employment with the Company and in the event
that the GMM voluntarily terminates her employment with the Company
prior to March 1, 1999, GMM agrees that for a period of three years
following her voluntary termination pursuant to paragraph 6(g), she
shall not provide any labor, work, services or assistance to (whether
as an officer, director, employee, partner, agent, owner, independent
<PAGE> 9
contractor, stockholder or otherwise) Burlington Coat Factory
Warehouse Corporation, Dillard Department Stores, Inc., Filene's
Basement Corp., The Federated Stores, The May Department Stores
Company, The TJX Companies, Inc. and Value City Department Stores,
Inc. as well as all subsidiaries, divisions and/or the surviving
entity of any of the above that do business in the retail industry in
the case of a merger or acquisition. However, this subsection shall
not prohibit GMM from making any investment of 1% or less of the
equity securities of any publicly-traded corporation that is engaged
in any business of the type or character engaged in by the Company.
The preceding sentence shall have no force and effect in the event
that (i) GMM's employment with the Company is terminated (1) by the
Company pursuant to paragraph 6(c)[with Cause], 6(d)[without Cause] or
(2) by GMM pursuant to either paragraph 6(e)[Termination by the
Executive for Good Reason] or paragraph 6(f)[Termination Following
Change of Control] or (ii) the Company fails to approve or grant an
extension of this Agreement in accordance with paragraph 1 hereof.
During the term of GMM's employment with the Company and for a
period of three years following the termination of that employment for
any reason, GMM shall not directly or indirectly solicit any other
employee of the Company to terminate his or her employment with the
Company.
10. Exercise of Stock Options Following Termination. If the
GMM's employment terminates pursuant to paragraph 6(a)[Death] or
(b)[Disability], she (or her estate) may exercise her right to
purchase any vested stock under the stock options granted to her by
the Company for up to one year following the date of her termination,
but not later than the termination date of such options. In all other
instances, she may exercise that right for up to three months
following the date of her termination, but not later than the
termination date of such options. All such purchases must be made by
the GMM in accordance with the applicable stock option plans and
agreements between the parties.
11. Insurance and Indemnity. The Company shall, to the extent
permitted by law, include the GMM during the term of this Agreement
under any directors and officers liability insurance policy maintained
for its directors and officers, with coverage at least as favorable to
the GMM in amount and each other material respect as the coverage of
other directors and officers covered thereby. This obligation to
provide insurance and indemnify the GMM shall survive expiration or
termination of this Agreement with respect to proceedings or
threatened proceedings based on acts or omissions of the GMM occurring
during the GMM's employment with the Company or with any affiliated
company. Such obligations shall be binding upon the Company's
successors and assigns and shall inure to the benefit of the GMM's
heirs and personal representatives.
<PAGE> 10
12. Successors; Binding Agreement. This Agreement and all
rights of the GMM hereunder shall inure to the benefit of and be
enforceable by the GMM's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the GMM should die while any amounts would still be
payable to her hereunder all such amounts shall be paid in accordance
with the terms of this Agreement to the GMM's written designee, or if
there be no such designee, to the GMM's estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when
delivered or (unless otherwise specified) mailed by United States
registered mail, return receipt requested, postage prepaid, addressed
as follows:
If to the GMM: Irene A. Jamieson
c/o Ross Stores, Inc.
1372 Broadway, Tenth Floor
New York, NY 10018
If to the Company: Ross Stores, Inc.
8333 Central Avenue
Newark, CA 94560-3433
Attention: Corporate Secretary
or to such other address as any party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
14. Modification or Waiver; Entire Agreement. No provision of
this Agreement may be modified or waived except in a document signed
by the GMM and the chairman of the Compensation Committee of the Board
or such other person as may be designated by the Board. This
Agreement, along with any stock option or restricted stock agreements
between the parties, constitute the entire agreement between the
parties regarding their employment relationship. To the extent that
this Agreement is in any way inconsistent with any prior restricted
stock or stock option agreements entered into after February 17, 1993,
between the parties, this Agreement shall control. No agreements or
representations, oral or otherwise, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement.
15. Governing Law; Severability. The validity, interpretation,
construction and performance of this Agreement shall be governed by
the laws of the State of New York. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
<PAGE> 11
16. Mitigation. In the event the GMM's employment with the
Company terminates for any reason other than death, the GMM shall be
obligated to seek other employment following such termination in order
to mitigate payments that the Company may be required to make to her
or for her benefit hereunder. Such obligation shall not apply during
any period in which the GMM is disabled. If the GMM obtains other
employment during any period in which she is entitled to receive
continued salary or bonus payments under paragraph 8, any salary or
bonus payments earned by the GMM during such period shall reduce the
Company's obligation to pay continued salary and/or bonus payments
under paragraph 8 by the amount of the salary and/or bonus payments so
earned by the GMM.
17. Withholding. All payments required to be made by the
Company hereunder to the GMM or her estate or beneficiaries shall be
subject to the withholding of such amounts as the Company may
reasonably determine it should withhold pursuant to any applicable
law. To the extent permitted, the GMM may provide all or any part of
any necessary withholding by contributing Company stock with value,
determined on the date such withholding is due, equal to the number of
shares contributed multiplied by the closing NASDAQ price on the date
preceding the date the withholding is determined.
18. Arbitration. In the event of any dispute or claim relating
to or arising out of the parties' employment relationship or this
Agreement (including, but not limited to, any claims of breach of
contract, wrongful termination or age, race, sex, disability or other
discrimination), all such disputes shall be fully, finally and
exclusively resolved by binding arbitration conducted by the American
Arbitration Association in Alameda County, California; provided,
however, that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or
misappropriation of the Company's trade secrets or proprietary
information or to any disputes or claims relating to or arising out of
GMM's failure to comply with the requirements of paragraph 9 regarding
Employment and Post-Employment Restrictions.
19. Attorneys' Fees. Each party shall bear its own attorneys'
fees and costs incurred in any action or dispute arising out of this
Agreement.
20. Miscellaneous. No right or interest to, or in, any payments
shall be assignable by the GMM; provided, however, that this provision
shall not preclude GMM from designating in writing one or more
beneficiaries to receive any amount that may be payable after GMM's
death and shall not preclude the legal representative of GMM's estate
from assigning any right hereunder to the person or persons entitled
thereto. This Agreement shall be binding upon and shall inure to the
benefit of the GMM, her heirs and legal representatives and the
Company and its successors.
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement effective as of the date and year first above written.
ROSS STORES, INC.
By: Michael Balmuth 4/8/96 /s/Irene A. Jamieson
Title: Executive Vice President Irene A. Jamieson
EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of March 1,
1996, by and between Ross Stores, Inc. (the "Company") and
Barbara Levy. Ms. Levy is presently employed by the Company as a
Senior Vice President and General Merchandising Manager ("GMM")
and it is now the intention of the Company and the GMM to enter
into a written employment agreement. Accordingly, the Company
and the GMM enter into this Agreement.
1. Term. The employment of the GMM by the Company will
continue as of the date hereof and end on March 1, 1999, unless
extended or terminated in accordance with this Agreement. During
January 1998, and during January every two years thereafter
(2000, 2002, etc.) for so long as the GMM is employed by the
Company, upon the written request of the GMM the Executive Vice
President, Merchandising with input from the Company's Chief
Executive Officer shall consider extending the GMM's employment
with the Company. Such request must be delivered to the
Executive Vice President, Merchandising no later than the
December 1st which precedes the January in which the requested
extension will be considered. The Executive Vice President,
Merchandising shall advise the GMM, in writing, on or before the
February 1st following the GMM's written request, whether the
requested extension is approved. The failure of the Executive
Vice President, Merchandising to provide such written advice
shall constitute approval of the GMM's request for extension. If
the GMM's request for an extension is approved, this Agreement
shall be extended two additional years.
2. Position and Duties. The GMM shall continue to serve
as a GMM of the Company with overall responsibility for her
assigned merchandising area. The GMM shall report directly to the
Company's Executive Vice President, Merchandising. The GMM shall
devote substantially all of her working time and efforts to the
business and affairs of the Company. During the term of her
employment, the GMM may engage in outside activities provided
those activities do not conflict with her duties and
responsibilities hereunder, and provided further that the GMM
gives written notice to the Board of any significant outside
business activity in which she plans to become involved, whether
or not such activity is pursued for profit. The GMM may not
render services to or invest in any business competitive with any
existing or contemplated business of the Company except with
respect to personal investments in securities, limited
partnerships or similar passive investment interests that are
publicly traded subject to the restrictions set forth in
paragraph 9.
3. Place of Performance. The GMM shall be employed at the
Company's New York buying office, except for required travel on
the Company's business.
4. Compensation and Related Matters.
a. Salary. During her employment the Company shall pay
the GMM a monthly salary of $27,500.00, less applicable
withholding ($330,000.00 on an annualized basis). This salary
shall be payable in equal installments in accordance with the
Company's normal payroll practices applicable to senior officers.
Subject to the first
<PAGE> 2
sentence of this paragraph, the GMM's salary may be adjusted
upward from time to time by the Company in accordance with normal
business practices of the Company.
b. Bonus. During her employment the Company shall
continue to pay the GMM an annual bonus in accordance with the
terms of the existing bonus incentive plan that covers the GMM
(or any replacement plan of substantially equivalent or greater
value that may subsequently be established and in effect at the
time for such action).
c. Expenses. During her employment the GMM shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by her in performing services hereunder,
including all reasonable expenses of travel and living while away
from home, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by
the Company.
d. Other Benefits. The GMM shall be entitled to continue
to participate in all of the Company's employee benefit plans and
arrangements in effect on the date hereof in which the GMM now
participates (including without limitation each pension and
retirement plan and arrangement, supplemental pension and
retirement plan, deferred compensation plan, short-term and
long-term incentive plan, stock option plan, life insurance and
health-and-accident plan and arrangement, medical insurance plan,
physical examination program, dental care plan, accidental death
and disability plan, survivor income plan, relocation plan,
financial, tax and legal counseling programs, and vacation plan).
The Company shall not make any changes in such plans or
arrangements which would adversely affect the GMM's rights or
benefits thereunder, unless such change occurs pursuant to a
program applicable to all senior executives of the Company and
does not result in a proportionately greater reduction in the
rights of, or benefits to, the GMM as compared with any other
senior executive of the Company. The GMM shall be entitled to
participate in or receive benefits under any employee benefit
plan or arrangement made available by the Company in the future
to its executives and key management employees, subject to, and
on a basis consistent with, the terms, conditions and overall
administration of such plans and arrangements. Except as
otherwise specifically provided herein, nothing paid to the GMM
under any plan or arrangement presently in effect or made
available in the future shall be in lieu of the salary or bonus
payable under subsections (a) and (b).
e. Vacations. The GMM shall be entitled to the number of
vacation days in each calendar year, and to compensation in
respect of earned but unused vacation days, determined in
accordance with the Company's vacation plan. The GMM shall also
be entitled to all paid holidays given by the Company to its
executives. Unused vacation days shall not be forfeited once
they have been earned and, if still unused at the time of the
GMM's termination of employment with the Company, shall be
promptly paid to the GMM at their then-current value, based on
the GMM's rate of pay at the time of her termination of
employment.
f. Services Furnished. The Company shall furnish the GMM
with office space and such services as are suitable to the GMM's
position and adequate for the performance of her duties.
<PAGE> 3
5. Confidential Information.
a. The GMM agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not
employed by the Company, or not engaged to render services to the
Company, any confidential information obtained while in the
employ of the Company, including, without limitation, any of the
Company's inventions, processes, methods of distribution or
customers or trade secrets; provided, however, that this
provision shall not preclude the GMM from use or disclosure of
information known generally to the public or from disclosure
required by law or court order.
b. The GMM agrees that upon leaving the Company's employ
she will make herself reasonably available to answer questions
from Company officers regarding her former duties and
responsibilities and the knowledge she obtained in connection
therewith. In addition, she will not take with her, without the
prior written consent of any officer authorized to act in the
matter by the Board, any study, memoranda, drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions.
c. The GMM understands and agrees that her obligation
pursuant to this paragraph 5 shall survive the termination of
this Agreement and her termination of employment for any reason
under this Agreement.
6. Termination. The GMM's employment may be terminated
during the term of this Agreement only as follows:
a. Death. The GMM's employment shall terminate upon her
death.
b. Disability. If, as a result of the GMM's incapacity
due to physical or mental illness, the GMM shall have been absent
from her duties hereunder on a full-time basis for the entire
period of six consecutive months, and within thirty days after
written notice of termination is given by the Company or the GMM
(which may occur before or after the end of such six-month
period), the GMM shall not have returned to the performance of
her duties hereunder on a full-time basis, the GMM's employment
shall terminate. A termination of employment pursuant to this
paragraph 6(b) shall be deemed an involuntary termination for
purposes of this Agreement or any plan or practice of the
Company.
c. Cause. The Company may terminate the GMM's employment
for Cause. The Company shall have "Cause" to terminate the GMM's
employment upon (A) the continued failure by the GMM to
substantially perform her duties hereunder (other than a failure
resulting from a disability as defined in subsection (b)) after
written notice is delivered by the Company that specifically
identifies the manner in which the GMM has not substantially
performed her duties, or (B) the engaging by the GMM in knowing,
illegal or grossly negligent conduct which is materially
injurious to the Company monetarily or otherwise.
<PAGE> 4
d. Without Cause. The Company may terminate the GMM's
employment at any time without cause. A termination "without
cause" is a termination of the GMM's employment by the Company
for any reason other than those set forth in subsections
(a)[Death], (b)[Disability] or (c)[For Cause] of this paragraph.
e. Termination by the GMM for Good Reason. The GMM may
terminate her employment with the Company for Good Reason which
shall be deemed to occur if she terminates her employment within
six months after (i) written notice of a failure by the Company
to comply with any material provision of this Agreement which
failure has not been cured within ten days after such written
notice of noncompliance has been given by the GMM to the Company,
or (ii) a significant diminishment in the nature or scope of the
authority, power, function or duty attached to the position which
the GMM currently maintains without the express written consent
of the GMM.
f. Termination Following Change of Control. The GMM may
terminate her employment with the Company within six months after
a Change of Control, which shall be deemed to have occurred in
the event of: (i) the direct or indirect sale or exchange by
the stockholders of the Company of all or substantially all of
the stock of the Company, in a single or series of related
transactions, after which sale or exchange the stockholders of
the Company immediately prior to such transactions do not retain,
directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Company; (ii) a merger in
which the Company is a party after which merger the stockholders
of the Company do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
surviving company; or (iii) the sale, exchange, or transfer of
all or substantially all of the Company's assets (other than a
sale, exchange, or transfer to one or more corporations where the
stockholders of the Company before such sale, exchange, or
transfer retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the corporation(s)
to which the assets were transferred). Provided, however, that
the GMM shall not be entitled to terminate her employment under
this subsection in the event that the purchaser of the Company,
or any successor by merger, consolidation or otherwise, or the
entity to which all or a significant portion of the Company's
assets have been transferred, shall have expressly assumed in
writing all duties and obligations of the Company under this
Agreement.
g. Voluntary Termination. The GMM may voluntarily
terminate her employment with the Company at any time. A
termination of employment by the GMM pursuant to paragraph
6(e)[For Good Reason] or (f)[Change of Control] shall not be
deemed a voluntary termination by the GMM for purposes of this
Agreement or any plan or practice of the Company but shall be
deemed an involuntary termination.
h. Non-Renewal. If the GMM fails to request an extension
of this Agreement in accordance with paragraph 1, or if the Board
shall fail to approve such request, this Agreement shall
automatically expire at the end of its term. Such expiration
shall not entitle the GMM to any compensation or benefits except
as earned by the GMM through the date of expiration of this
Agreement and set forth in paragraph 8(e). The parties shall
have no further obligations to each other thereafter except as
set forth in paragraphs 5 and 11.
<PAGE> 5
7. Notice and Effective Date of Termination.
a. Notice. Any termination of the GMM's employment by the
Company or by the GMM during the term of this Agreement (other
than as a result of death) shall be communicated by written
notice of termination to the other party hereto. Such notice
shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the GMM's employment under that provision.
b. Date of Termination. The date of termination shall be:
(i) if the GMM's employment is terminated by her death, the
date of her death;
(ii) if the GMM's employment is terminated pursuant to
paragraph 6(b)[Disability], the date of termination shall be the
31st day following delivery of the notice of termination;
(iii) if the GMM's employment is terminated for any other
reason by either party, the date on which a notice of termination
is delivered to the other party; and
(iv) if the Agreement expires pursuant to paragraph 6(h)[Non-
Renewal], the parties' employment relationship shall terminate on
the last day of the term of this Agreement without any notice.
8. Compensation and Benefits Upon Termination.
a. Disability, Without Cause or For Good Reason. If the
GMM's employment terminates pursuant to paragraph
6(b)[Disability], (d)[Without Cause] or (e)[For Good Reason], the
Company shall:
(i) Salary: continue to pay the GMM her then-current
salary through the remaining term of this Agreement as defined in
paragraph 1;
(ii) Bonus: continue to pay the GMM an annual bonus(es)
throughout such remaining term; each such bonus shall be in an
amount equal to the greater of (A) the GMM's bonus during the
year prior to her termination or (B) the bonus that the GMM would
have earned under the Company's bonus plan in the year that she
was terminated had she remained in its employment; provided,
however, that such post-termination bonuses shall not exceed the
lesser of the 100% targeted amounts for those bonus payments in
the prior and then-current year, and such bonuses shall not be
paid until due under the Company's present bonus plan;
<PAGE> 6
(iii) Stock Options: with respect to any stock options
granted to the GMM by the Company, the GMM shall immediately
become vested in any unvested stock options upon such
termination; and
(iv) Restricted Stock: with respect to any restricted
stock granted to the GMM by the Company which has not become
vested as of such termination, the GMM shall immediately become
vested in a pro rata portion of such unvested stock determined on
the basis of the number of full months that have elapsed from the
date of grant of such restricted stock. Such pro rata vesting
shall be determined separately with respect to each portion of
any restricted stock grant that is subject to a different
restriction lapse date. That is, for each portion of any
restricted stock grant that is subject to a different restriction
lapse date, the GMM shall immediately become vested in the number
of shares that equals (i) the quantity A divided by B times C
minus (ii) the number of shares that have previously vested [(A/B
x C)-D], where A is the number of full months that have elapsed
from the date of grant to and including the date of termination,
B is the number of months between the date of grant and the
restriction lapse date, C is the number of shares that would
otherwise become vested on that restriction lapse date and D is
the number of shares that have previously vested. As a
hypothetical example, presume the GMM had been granted 30,000
shares of restricted stock on January 1, 1996, and that the
restrictions on that grant lapse as to 10,000 shares on January
1, 1997, 5,000 shares on January 1, 1998, and 15,000 shares on
January 1, 1999. If the GMM's employment terminated pursuant to
paragraph 6(b) on July 1, 1996 (i.e., at a time when no shares
had previously vested), the GMM would immediately become vested
under this subsection (iv) in 5,000 of the shares whose
restrictions were to lapse on January 1, 1997, 1,250 of the
shares whose restrictions were to lapse on January 1, 1998, and
2,500 of the shares whose restrictions were to lapse on January
1, 1999.
The Company shall have no further obligations to the GMM as a
result of such termination except as set forth in paragraph 11.
b. For Cause. If the GMM's employment is terminated for
cause as defined in paragraph 6(c)(A)[Failure to Perform], the
GMM shall receive the post-termination compensation and benefits
described in paragraph 8(a)[Compensation and Benefits Upon
Disability, Termination Without Cause or For Good Reason]. If
the GMM's employment is terminated for cause as defined in
paragraph 6(c)(B)[Materially Injurious Conduct], she shall only
receive the post-termination compensation and benefits described
in paragraph 8(d)[Compensation and Benefits Upon Voluntary
Termination].
c. Change of Control. Upon a Change of Control (whether
or not the GMM's employment terminates), the GMM shall
immediately become vested in any shares of restricted stock
granted to the GMM by the Company which had not vested prior to
the Change of Control. In addition, if the GMM's employment
terminates pursuant to paragraph 6(f)[Change of Control], the
Company shall:
(i) Salary: continue to pay the GMM her then-current
salary through the remaining term of this Agreement as defined in
paragraph 1;
<PAGE> 7
(ii) Bonus: continue to pay the GMM her annual bonus(es)
throughout such remaining term; each such bonus shall be in an
amount equal to the greater of (A) the GMM's bonus during the
year prior to her termination or (B) the bonus that the GMM would
have earned under the Company's bonus plan in the year that she
was terminated had she remained in its employment; provided,
however, that such post-termination bonuses shall not exceed the
lesser of the 100% targeted amounts for those bonus payments in
the prior and then-current year, and such bonuses shall not be
paid until due under the Company's present bonus plan; and
(iii) Stock Options: with respect to any stock options
granted to the GMM by the Company, the GMM shall immediately
become vested in any unvested stock options upon such
termination.
The Company shall reimburse the GMM for any excise taxes paid by
the GMM pursuant to Internal Revenue Code section 4999 as a
result of any "excess parachute payments" that she receives from
the Company as determined under section 280G of said Code. This
reimbursement shall not include any additional amount to cover
the GMM's income or other taxes on such reimbursement. The
Company shall have no further obligations to the GMM as a result
of such termination except as set forth in paragraph 11.
d. Death or Voluntary Termination. If the GMM's
employment terminates pursuant to paragraph 6(a)[Death] or
6(g)[Voluntary Termination], she (or her designee or her estate)
shall be paid her salary through her termination date and not
thereafter. She (or her designee or her estate) shall not be
entitled to any bonus payments which were not fully earned prior
to her termination date, and she (or her designee or her estate)
shall not be entitled to any pro-rated bonus payment for the year
in which her employment terminates. Any stock options granted to
the GMM by the Company will continue to vest only through the
date on which her employment terminates (provided, however, that
if the GMM's employment terminates as a result of her voluntary
termination (but not as a result of her death) within six months
after a Change of Control, the GMM shall immediately become fully-
vested in any unvested stock options previously granted to her by
the Company) and any restricted stock that was granted to the GMM
by the Company that is unvested as of the date on which her
employment terminates will automatically be reacquired by the
Company and the GMM (or her designee or her estate) shall have no
further rights with respect to such restricted stock. The
Company shall have no further obligations to the GMM as a result
of the termination of her employment pursuant to paragraph
6(a)[Death] or 6(g)[Voluntary Termination] except as set forth in
paragraph 11.
e. Non-Renewal. If the Agreement expires as set forth in
paragraph 6(h)[Non-Renewal], the Company shall have no further
obligations to the GMM except as set forth in paragraph 11 and
except that with respect to any restricted stock granted to the
GMM by the Company which has not become vested as of such
expiration date, the GMM shall immediately become vested in a pro
rata portion of such unvested stock determined on the basis of
the number of full months that have elapsed from the date of
grant of such restricted stock (as described more fully in
paragraph 8(a)(iv)).
<PAGE> 8
9. Employment and Post-Employment Restrictions. The
Company and GMM acknowledge that the Company has a special
interest in and derives significant benefit from the unique
skills and experience of the GMM. In addition, the GMM will use
and have access to some of the Company's proprietary and valuable
Confidential Information during the course of GMM's employment.
Accordingly, except as hereafter noted, during the term of GMM's
employment with the Company and in the event that the GMM
voluntarily terminates her employment with the Company prior to
March 1, 1999, GMM agrees that for a period of three years
following her voluntary termination pursuant to paragraph 6(g),
she shall not provide any labor, work, services or assistance to
(whether as an officer, director, employee, partner, agent,
owner, independent contractor, stockholder or otherwise)
Burlington Coat Factory Warehouse Corporation, Dillard Department
Stores, Inc., Filene's Basement Corp., The Federated Stores, The
May Department Stores Company, The TJX Companies, Inc. and Value
City Department Stores, Inc. as well as all subsidiaries,
divisions and/or the surviving entity of any of the above that do
business in the retail industry in the case of a merger or
acquisition. However, this subsection shall not prohibit GMM
from making any investment of 1% or less of the equity securities
of any publicly-traded corporation that is engaged in any
business of the type or character engaged in by the Company. The
preceding sentence shall have no force and effect in the event
that (i) GMM's employment with the Company is terminated (1) by
the Company pursuant to paragraph 6(c)[with Cause], 6(d)[without
Cause] or (2) by GMM pursuant to either paragraph
6(e)[Termination by the Executive for Good Reason] or paragraph
6(f)[Termination Following Change of Control] or (ii) the Company
fails to approve or grant an extension of this Agreement in
accordance with paragraph 1 hereof.
During the term of GMM's employment with the Company and for
a period of three years following the termination of that
employment for any reason, GMM shall not directly or indirectly
solicit any other employee of the Company to terminate his or her
employment with the Company.
10. Exercise of Stock Options Following Termination. If
the GMM's employment terminates pursuant to paragraph 6(a)[Death]
or (b)[Disability], she (or her estate) may exercise her right to
purchase any vested stock under the stock options granted to her
by the Company for up to one year following the date of her
termination, but not later than the termination date of such
options. In all other instances, she may exercise that right for
up to three months following the date of her termination, but not
later than the termination date of such options. All such
purchases must be made by the GMM in accordance with the
applicable stock option plans and agreements between the parties.
11. Insurance and Indemnity. The Company shall, to the
extent permitted by law, include the GMM during the term of this
Agreement under any directors and officers liability insurance
policy maintained for its directors and officers, with coverage
at least as favorable to the GMM in amount and each other
material respect as the coverage of other directors and officers
covered thereby. This obligation to provide insurance and
indemnify the GMM shall survive expiration or termination of this
Agreement with respect to proceedings or threatened proceedings
based on acts or omissions of the GMM occurring during the GMM's
employment with the Company or
<PAGE> 9
with any affiliated company. Such obligations shall be binding
upon the Company's successors and assigns and shall inure to the
benefit of the GMM's heirs and personal representatives.
12. Successors; Binding Agreement. This Agreement and all
rights of the GMM hereunder shall inure to the benefit of and be
enforceable by the GMM's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the GMM should die while any amounts
would still be payable to her hereunder all such amounts shall be
paid in accordance with the terms of this Agreement to the GMM's
written designee, or if there be no such designee, to the GMM's
estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been
duly given when delivered or (unless otherwise specified) mailed
by United States registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the GMM: Barbara Levy
c/o Ross Stores, Inc.
1372 Broadway, Tenth Floor
New York, NY 10018
If to the Company: Ross Stores, Inc.
8333 Central Avenue
Newark, CA 94560-3433
Attention: Corporate Secretary
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
14. Modification or Waiver; Entire Agreement. No provision
of this Agreement may be modified or waived except in a document
signed by the GMM and the chairman of the Compensation Committee
of the Board or such other person as may be designated by the
Board. This Agreement, along with any stock option or restricted
stock agreements between the parties, constitute the entire
agreement between the parties regarding their employment
relationship. To the extent that this Agreement is in any way
inconsistent with any prior restricted stock or stock option
agreements entered into after February 17, 1993, between the
parties, this Agreement shall control. No agreements or
representations, oral or otherwise, with respect to the subject
matter hereof have been made by either party which are not set
forth expressly in this Agreement.
15. Governing Law; Severability. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of New York. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision of this Agreement.
<PAGE> 10
16. Mitigation. In the event the GMM's employment with the
Company terminates for any reason other than death, the GMM shall
be obligated to seek other employment following such termination
in order to mitigate payments that the Company may be required to
make to her or for her benefit hereunder. Such obligation shall
not apply during any period in which the GMM is disabled. If the
GMM obtains other employment during any period in which she is
entitled to receive continued salary or bonus payments under
paragraph 8, any salary or bonus payments earned by the GMM
during such period shall reduce the Company's obligation to pay
continued salary and/or bonus payments under paragraph 8 by the
amount of the salary and/or bonus payments so earned by the GMM.
17. Withholding. All payments required to be made by the
Company hereunder to the GMM or her estate or beneficiaries shall
be subject to the withholding of such amounts as the Company may
reasonably determine it should withhold pursuant to any
applicable law. To the extent permitted, the GMM may provide all
or any part of any necessary withholding by contributing Company
stock with value, determined on the date such withholding is due,
equal to the number of shares contributed multiplied by the
closing NASDAQ price on the date preceding the date the
withholding is determined.
18. Arbitration. In the event of any dispute or claim
relating to or arising out of the parties' employment
relationship or this Agreement (including, but not limited to,
any claims of breach of contract, wrongful termination or age,
race, sex, disability or other discrimination), all such disputes
shall be fully, finally and exclusively resolved by binding
arbitration conducted by the American Arbitration Association in
Alameda County, California; provided, however, that this
arbitration provision shall not apply to any disputes or claims
relating to or arising out of the misuse or misappropriation of
the Company's trade secrets or proprietary information or to any
disputes or claims relating to or arising out of GMM's failure to
comply with the requirements of paragraph 9 regarding Employment
and Post-Employment Restrictions.
19. Attorneys' Fees. Each party shall bear its own
attorneys' fees and costs incurred in any action or dispute
arising out of this Agreement.
20. Miscellaneous. No right or interest to, or in, any
payments shall be assignable by the GMM; provided, however, that
this provision shall not preclude GMM from designating in writing
one or more beneficiaries to receive any amount that may be
payable after GMM's death and shall not preclude the legal
representative of GMM's estate from assigning any right hereunder
to the person or persons entitled thereto. This Agreement shall
be binding upon and shall inure to the benefit of the GMM, her
heirs and legal representatives and the Company and its
successors.
<PAGE> 11
IN WITNESS WHEREOF, the parties have executed this
Employment Agreement effective as of the date and year first
above written.
ROSS STORES, INC.
By: /s/Stephen F. Joyce /s/Barbara Levy
Title: Sr. Vice President, Human Resources Barbara Levy
EXHIBIT 11
<TABLE>
ROSS STORES, INC.
________________________________________
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Amounts in thousands, except per share amounts)
<CAPTION>
Three Months Ended
May 4, 1996 April 29, 1995
Fully Fully
Primary Diluted Primary Diluted
<S> <C> <C> <C> <C>
Net earnings 13,936 13,936 $3,866 $3,866
====== ====== ====== ======
Weighted average shares outstanding:
Common shares 25,029 25,029 24,532 24,532
Common equivalent shares:
Stock options 618 779 121 121
______ ______ ______ _______
Weighted average common and common
equivalent shares outstanding 25,647 25,808 24,653 24,653
====== ====== ====== ======
Earnings per common and common
equivalent share $.54 $.54 $.16 $.16
</TABLE>
EXHIBIT 15
June 17, 1996
Ross Stores, Inc.
Newark, California
We have made a review, in accordance with standards established by
the American Institute of Certified Public Accountants, of the
unaudited interim condensed consolidated financial statements of
Ross Stores, Inc. for the three-month periods ended May 4, 1996
and April 29, 1995, as indicated in our independent accountants'
report dated May 24, 1996; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our report referred to above, which is included
in your Quarterly Report on Form 10-Q for the quarter ended May 4,
1996 is incorporated by reference in Registration Statements Nos.
33-61373, 33-51916, 33-51896, 33-51898, 33-41415, 33-41413 and 33-
29600 of Ross Stores, Inc. on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is not considered a part
of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
Yours truly,
Deloitte & Touche LLP
San Francisco, CA
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE THREE
MONTHS ENDED MAY 4, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000745732
<NAME> ROSS STORES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> MAY-04-1996
<CASH> 35,036
<SECURITIES> 0
<RECEIVABLES> 16,883
<ALLOWANCES> 0
<INVENTORY> 332,623
<CURRENT-ASSETS> 397,543
<PP&E> 317,049
<DEPRECIATION> 137,674
<TOTAL-ASSETS> 593,897
<CURRENT-LIABILITIES> 248,993
<BONDS> 19,736
0
0
<COMMON> 252
<OTHER-SE> 306,265
<TOTAL-LIABILITY-AND-EQUITY> 593,897
<SALES> 370,948
<TOTAL-REVENUES> 370,948
<CGS> 264,058
<TOTAL-COSTS> 347,722
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 184
<INCOME-PRETAX> 23,226
<INCOME-TAX> 9,290
<INCOME-CONTINUING> 13,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,936
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
