SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ROSS STORES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
____________________________________________________
2) Aggregate number of securities to which transaction applies:
____________________________________________________
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act rule 0-
11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
____________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________
5) Total fee paid:
____________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
the form or schedule and the date of its filing.
1) Amount Previously Paid:
__________________________________________________
2) Form, Schedule or Registration Statement No:
__________________________________________________
3) Filing Party:
__________________________________________________
4) Date Filed:
____________________________________________________
<PAGE> 1
PROXY STATEMENT
1997 ANNUAL STOCKHOLDERS MEETING
ROSS STORES, INC.
8333 Central Avenue
Newark, California 94560
(510) 505-4400
PROXY SOLICITATION
The accompanying Proxy is solicited by the management of
Ross Stores, Inc., a Delaware corporation (the "company"), for
use at the Annual Meeting of Stockholders to be held on
Wednesday, July 16, 1997, at 11:00 a.m. PDT, or any adjournment
thereof, at which stockholders of record at the close of business
on May 30, 1997, shall be entitled to vote. The meeting will be
held at the company's corporate offices located at 8333 Central
Avenue, Newark, California.
The date of this Proxy Statement is June 9, 1997, the date
on which this Proxy Statement and the accompanying Proxy was
first sent or given to stockholders. The Annual Report to
Stockholders for the fiscal year ended February 1, 1997,
including financial statements, is enclosed with this Proxy
Statement.
The purpose of this Proxy Statement is to provide the
company's stockholders with certain information regarding the
company and its management and to provide summaries of the
matters to be voted upon at the Annual Meeting of Stockholders.
The stockholders will be asked to (i) elect two Class II
directors to serve a three-year term and (ii) ratify the
appointment of Deloitte & Touche LLP as the company's independent
certified public accountants for the fiscal year ending January
31, 1998.
The company had outstanding, on May 30, 1997, 49,693,479
shares of common stock, par value $0.01, all of which are
entitled to vote with respect to all matters to be acted upon at
the meeting. Each stockholder is entitled to one vote for each
share of stock held by him or her. The company's Bylaws provide
that a majority of all shares entitled to vote, whether present,
in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. For ten days
prior to the Annual Meeting, the company's stockholder list is
available for viewing by the stockholders for any purpose related
to the Annual Meeting during ordinary business hours at the
company's principal place of business located at 8333 Central
Avenue, Newark, California.
Any Proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is exercised by
filing with the Assistant Secretary of the company an instrument
revoking it, by presenting at the meeting a duly executed Proxy
bearing a later date or by attending the meeting and voting in
person.
<PAGE> 2
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information as of May 2, 1997
(except for the institutional investors as noted in footnote (2))
regarding the ownership of the common stock of the company by
(i) all persons who, to the knowledge of the company, were the
beneficial owners of 5% or more of the outstanding shares of
common stock of the company, (ii) each director and each of the
executive officers named in the Summary Compensation Table, and
(iii) all executive officers and directors of the company as a
group. Common stock is the only issued and outstanding equity
security of the company.
<TABLE>
<CAPTION>
Name of Beneficial Owner and Amount and Nature of Percent of Common
the Directors and Executive Officers Beneficial Ownership<F1> Stock Outstanding
<S> <C> <C>
FMR Corp. 4,837,000<F2> 9.77%
82 Devonshire Street
Boston, MA 94560
Nicholas-Applegate Capital Management 3,529,982<F2> 7.04%
600 West Broadway, 29th Floor
San Diego, CA 92101
First Pacific Advisors 3,350,200<F2> 6.80%
11400 W. Olympic Blvd., Ste. 1200
Los Angeles, CA 90064
Stuart G. Moldaw 679,376<F3> 1.37%
Michael Balmuth 362,363<F4> *
Norman A. Ferber 0 *
George P. Orban 380,704<F5> *
Philip Schlein 6,000<F6> *
Donald H. Seiler 214,420<F7> *
Donna L. Weaver 34,000<F8> *
Melvin A. Wilmore 334,363<F9> *
Barbara Levy 152,824<F10> *
Barry S. Gluck 154,172<F11> *
Irene A. Jamieson 176,022<F12> *
_______________
All executive officers and directors as a 2,705,479<F13> 5.37%
group (14 persons, including the executive
officers and directors named above)
_____
*Less than 1%
<PAGE> 3
<FN>
<F1> To the knowledge of the company, the persons named in the table have
sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them, subject to
community property laws where applicable and the information
contained in the footnotes to this table. All share information
reflects the company's 2:1 stock split in the form of a 100% stock
dividend which was paid on March 5, 1997.
<F2> Information is as of December 31, 1996, pursuant to the Form 13G
filed with the Securities and Exchange Commission, a copy of which
was sent to the company.
<F3> Mr. Moldaw. Includes 676,376 shares held in the name of The SGM and
PIM Trust dated December 22, 1981 of which Mr. Moldaw, a director of
the company, is a trustee. Also includes options to purchase 3,000
shares of the company's common stock exercisable within 60 days of
May 2, 1997.
<F4> Mr. Balmuth. Includes immediately exercisable options to purchase
112,363 shares of the company's common stock. Also includes 250,000
shares of the company's common stock that were granted under the
company's 1988 Restricted Stock Plan and remain subject to vesting.
<F5> Mr. Orban. Includes 336,304 shares held in the name of Orban
Partners and 8,400 shares held indirectly by Mr. Orban for his minor
children. Mr. Orban, a director of the company, is a general
partner and managing partner of Orban Partners. Also includes
options to purchase 36,000 shares of the company's common stock
exercisable within 60 days of May 2, 1997.
<F6> Mr. Schlein. Represents options to purchase 6,000 shares of the
company's common stock exercisable within 60 days of May 2, 1997.
<F6> Mr. Seiler. Includes options to purchase 10,000 shares of the
company's common stock exercisable within 60 days of May 2, 1997.
Excludes 535,396 shares of common stock held by the 1976 Moldaw
Family Trust. Mr. Seiler, a director of the company, is a co-
trustee of the 1976 Moldaw Family Trust and disclaims beneficial
ownership of the shares held by this trust.
<F8> Ms. Weaver. Includes options to purchase 28,000 shares of the
company's common stock exercisable within 60 days of May 2, 1997.
<F9> Mr. Wilmore. Includes immediately exercisable options to purchase
122,363 shares of the company's common stock. Also includes 212,000
shares of the company's common stock that were granted under the
company's 1988 Restricted Stock Plan and remain subject to vesting.
<F10> Ms. Levy. Includes immediately exercisable options to purchase
53,670 shares of the company's common stock. Also includes 78,000
shares of the company's common stock that were granted under the
company's 1988 Restricted Stock Plan and remain subject to vesting.
<F11> Mr. Gluck. Includes immediately exercisable options to purchase
93,038 shares of the company's common stock. Also includes 56,000
shares of the company's common stock that were granted under the
company's 1988 Restricted Stock Plan and remain subject to vesting.
<F12> Ms. Jamieson. Includes immediately exercisable options to purchase
98,392 shares of the company's common stock. Also includes 64,000
shares of the company's common stock that were granted under the
company's 1988 Restricted Stock Plan and remain subject to vesting.
<F13> Includes 716,327 shares subject to outstanding options held by
directors and executive officers which were exercisable at May 2,
1997 or within 60 days thereof. Also includes 712,500 shares of the
company's common stock granted to executive officers under the
company's Restricted Stock Plan, all of which remain subject to
vesting.
</FN>
</TABLE>
<PAGE> 4
INFORMATION REGARDING NOMINEES AND INCUMBENT DIRECTORS
The Certificate of Incorporation and the Bylaws of the
company provide that the number of members of the Board of
Directors of the company (the "Board") may be fixed from time to
time exclusively by the Board and that the directors shall be
divided into three classes as nearly equal in number as possible.
The term of office of each class of directors is three years and
the terms of office of the three classes overlap. The Board of
Directors presently consists of nine members with the Class II
directors having one vacant seat which the Board intends to fill.
The two Class II directors to be elected at the 1997 Annual
Meeting are being elected to hold office until the 2000 Annual
Meeting and until their successors shall have been elected and
qualified. Proxies cannot be voted for more than two nominees.
The following table indicates the name, age, business
experience, principal occupation and term of office of each
nominee and of each director of the company whose term of office
as a director will continue after the Annual Meeting.
Principal Position Director
During Last Five Years Age Since
Nominees for Election as Class II Directors For Terms
Expiring in 2000
Donna L. Weaver Chairman of Weaver, Field & London, 53 1986
Inc., an investor relations and
corporate communications firm.
Director of Crown Vantage, Inc. and
Hancock Fabrics, Inc.
Michael Balmuth Vice Chairman of the Board and 46 1996
Chief Executive Officer of the
company since September 1, 1996;
prior to that Mr. Balmuth was the
company's Executive Vice President,
Merchandising from July, 1993
through August 1996 and its Senior
Vice President Merchandising from
November, 1989 through June, 1993.
Incumbent Class I Directors With Terms Expiring in 1999
Stuart G. Moldaw Consultant to the company. 70 1982
Chairman Emeritus of the company
since March 1993. From August 1982
until March 1993, Chairman of the
Board and, from February 1987 until
January 1988, Chief Executive
Officer of the company. Until
February 1990, general partner of
U.S. Venture Partners. Chairman of
the Board of Gymboree Corporation
and Director of Natural Wonders,
Inc.
George P. Orban Managing partner of Orban Partners, 51 1982
a private investment company, since
May 1984. Chairman of the Board
and Chief Executive Officer of
Egghead, Inc.
Donald H. Seiler Founder and senior partner of 68 1982
Seiler and Company, Certified
Public Accountants. Mr. Seiler is
a Certified Public Accountant.
Director of Mid-Peninsula Bancorp.
<PAGE> 5
Principal Position Director
During Last Five Years Age Since
Incumbent Class III Directors With Terms Expiring in 1998
Philip Schlein General partner of U.S. Venture 62 1987
Partners and USVP-Schlein Marketing
Fund since April 1985. From January
1974 to January 1985, Mr. Schlein
was Chief Executive Officer of
Macy's California. Director of
ReSound Corp.
Norman A. Ferber Consultant to the company. Chairman 48 1987
of the Board since March 1993; Chief
Executive Officer of the company
from March 1993 through August 1996;
President and Chief Executive
Officer from January 1988 to March
1993; President and Chief Operating
Officer from February 1987 to
January 1988. Prior to February
1987, Mr. Ferber was Executive Vice
President, Merchandising, Marketing,
and Distribution of the company.
Melvin A. Wilmore President and Chief Operating 51 1993
Officer of the company since March
1993; from December 1991 to March
1993, Executive Vice President and
Chief Operating Officer. From
October 1989 to December 1991,
President and Chief Operating
Officer of Live Specialty Retail, a
division of LIVE Entertainment, Inc.
From March 1988 to June 1989,
President and General Partner of
Albert's Hosiery and Bodywear.
Director of Egghead, Inc. and
Hechinger Company.
During fiscal 1996, the Board of Directors held six
meetings. No member of the Board of Directors attended fewer
than 75% of the total number of Board and each Committee member
attended 100% of the applicable Committee meetings held during
the year. Mr. Maynard Jenkins became a director of the company on
March 20, 1996; however, due to the potential for conflict of
interest when his employer, Orchard Supply Hardware, was acquired
by Sears, Mr. Jenkins resigned from the company's Board of
Directors and its committees on October 1, 1996. The company has
an Audit Committee, a Compensation Committee and a Nominating
Committee.
Audit Committee. During fiscal 1996, Messrs. Seiler and
Jenkins (until his resignation from the Board) and Ms. Weaver
served as members of the Audit Committee, which held two
meetings. Mr. Seiler is chairman of the Audit Committee. The
functions of the Audit Committee include recommending the
independent accountants to the Board of Directors; reviewing and
approving the planned scope of the annual audit, proposed fee
arrangements and the results of the annual audit; reviewing the
adequacy of accounting and financial controls; and reviewing the
independence of the independent accountants.
Compensation Committee. During fiscal 1996, Messrs. Orban
and Schlein served as members of the Compensation Committee,
which held one meeting in March. Mr. Orban currently is chairman
of the Compensation Committee. The Compensation Committee is
responsible for establishing and administering the policies that
govern the compensation of all executive officers of the company,
including the Chief Executive Officer. The Committee evaluates
the performance of the executive officers and makes
recommendations concerning their cash and equity compensation
levels. The Committee also administers the company's Incentive
Compensation Plan and determines the performance goals under that
Plan. All decisions by the Compensation Committee relating to the
<PAGE> 6
compensation of the company's executive officers are reviewed and
ratified by the full Board of Directors.
Nominating Committee. During fiscal 1996, Messrs. Jenkins
(until his resignation from the Board), Orban, Schlein and Seiler
and Ms. Weaver served as members of the Nominating Committee.
The Nominating Committee is primarily responsible for evaluating
the qualifications of and making recommendations concerning
potential new director nominees to the company's Board of
Directors. Stockholders who wish to submit names of prospective
nominees for consideration by the Nominating Committee should
do so in writing to the office of the Secretary of the company in
accordance with the Bylaws of the company. The last day for
submissions for next year's meeting will be February 9, 1998.
The Nominating Committee held one meeting during fiscal 1996.
Information concerning the executive officers of the company
is set forth in the company's Annual Report on Form 10-K for the
fiscal year ended February 1, 1997.
<PAGE> 7
COMPENSATION AND OTHER TRANSACTIONS
WITH OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table provides certain summary information
concerning compensation paid or accrued by the company to or on
behalf of the company's current and former Chief Executive
Officers and each of the four other most highly compensated
executive officers of the company for the 1996, 1995 and 1994
fiscal years.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
________________________________________________ _________________________________________
Securities
Other Restricted Under- All Other
Annual Stock lying Compen-
Name and Salary<F1> Bonus<F2> Compensation Awards<F3> Options<F4> sation<F5>
Principal Position Year ($) ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Michael Balmuth<F6> 1996 $522,750 $584,000 $0 $542,500 50,000 $6,993
Vice Chairman of the Board & 1995 $427,333 $404,100 $7,980 $788,750 40,000 $7,033
Chief Executive Officer 1994 $359,167 $87,840 $6,050 $396,875 80,000 $7,015
Norman A. Ferber<F6> 1996 $517,833 $761,000 $13,138 $0 0 $328,986
Chairman of the Board & 1995 $544,333 $546,000 $2,305 $0 90,000 $7,173
Former Chief Executive Officer 1994 $513,750 $204,198 $0 $1,587,500 300,000 $4,538
Melvin A. Wilmore 1996 $537,750 $564,000 $2,198 $434,000 50,000 $4,688
President & 1995 $477,333 $489,000 $1,773 $847,500 60,000 $4,625
Chief Operating Officer 1994 $423,750 $142,588 $1,790 $158,750 50,000 $4,538
Barbara Levy 1996 $330,167 $266,800 $2,957 $447,563 24,000 $4,644
Senior Vice President & General 1995 $288,167 $191,400 $466 $146,875 40,000 $4,512
Merchandising Manager 1994 $267,333 $75,774 $4,474 $0 16,000 $4,690
Barry S. Gluck 1996 $332,167 $268,400 $969 $488,250 24,000 $5,875
Senior Vice President & General 1995 $288,167 $191,400 $4,523 $70,500 20,000 $6,356
Merchandising Manager 1994 $266,500 $45,774 $2,597 $317,500 40,000 $5,973
Irene A. Jamieson 1996 $309,500 $267,600 $2,397 $461,125 24,000 $4,650
Senior Vice President & General 1995 $250,000 $190,000 $2,655 $199,750 50,000 $4,533
Merchandising Manager 1994 $202,223 $53,680 $2,177 $47,625 16,000 $4,126
<PAGE> 8
<FN>
<F1> Includes all payments of salary and deferred compensation
consisting of employee contributions to the Ross Stores, Inc.
Employees' Profit Sharing Retirement Plan, a qualified plan
under Sections 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "401(k) Plan") and the Ross Stores, Inc.
Non-Qualified Deferred Compensation Plan (the "Deferred
Compensation Plan"), described in footnote 5 below.
<F2> Includes all payments made to those executive officers listed in
the above Table under the company's Incentive Compensation Plan
as described in the Compensation Committee Report below. The
following bonuses were paid outside of the Incentive
Compensation Plan: (i) Mr. Balmuth: the amount paid in 1996
includes a discretionary bonus of $58,400 which reflects his
change in position; (ii) Ms. Levy: the amount paid in 1994
includes part of her sign-on bonus ($30,000); and (iii) Ms.
Jamieson: the amount paid in 1995 includes a discretionary bonus
of $25,000.
<F3> Under the terms of his Employment Agreement, the 200,000 shares
of common stock granted to Mr. Ferber on March 15, 1994, became
fully vested on September 1, 1996. Under the terms of his
Restricted Stock Agreement, dated March 16, 1995, Mr. Balmuth
was granted 30,000 shares of common stock that vest as follows:
10,000 shares on March 16, 1997 and 20,000 shares on March 16,
1998. Under the terms of his Restricted Stock Agreement, dated
July 28, 1995, Mr. Balmuth was granted 100,000 shares of common
stock that vest as follows: 50,000 shares on February 1, 1996,
20,000 shares on February 1, 1997, and 30,000 shares on February
1, 1998. Under the terms of his Restricted Stock Award, dated
March 19, 1996, Mr. Balmuth was granted 40,000 shares of common
stock, that vest as follows: 20,000 shares each on March 19th of
1998 and 1999. Under the terms of his Restricted Stock
Agreement, dated March 16, 1995, Mr. Wilmore was granted 40,000
shares of common stock, that vest as follows: 20,000 shares each
on March 16th of 1997 and 1998. Under the terms of his
Restricted Stock Grant Agreement, dated July 28, 1995, Mr.
Wilmore was granted 100,000 shares of common stock that vest as
follows: 30,000 shares on February 1, 1996, 20,000 shares on
February 1, 1997 and 50,000 shares on February 1, 1998. Under
the terms of her Restricted Stock Agreement, dated March 16,
1995, Ms. Levy was granted 25,000 shares of common stock that
vest as follows: 20,000 shares on March 16, 1997 and 5,000
shares on March 16, 1998. Under the terms of her Restricted
Stock Agreement, dated March 19, 1996, Ms. Levy was granted
33,000 shares of common stock that vest as follows: 5,000 shares
on March 19, 1998 and 28,000 shares on March 19, 1999. Under
the terms of his Restricted Stock Agreement, dated March 15,
1994, Mr. Gluck was granted 40,000 shares of common stock that
vested as follows: 10,000 shares on March 15, 1996 and 30,000
shares on March 15, 1997. Under the terms of his Restricted
Stock Agreement, dated March 16, 1995, Mr. Gluck was granted
12,000 shares of common stock that vested on March 16, 1997.
Under the terms of his Restricted Stock Agreement, dated March
19, 1996, Mr. Gluck was granted 36,000 shares of common stock
that vest as follows: 18,000 shares each on March 19th of 1998
and 1999. Under the terms of her Restricted Stock Agreement,
dated March 16, 1995, Ms. Jamieson was granted 34,000 shares of
common stock that vest as follows: 14,000 shares on March 16,
1997 and 20,000 shares on March 16, 1998. Under the terms of
her Restricted Stock Agreement, dated March 19, 1996, Ms.
Jamieson was granted 34,000 shares of common stock that vest as
follows: 10,000 shares on March 19, 1998 and 24,000 shares on
March 19, 1999. At February 1, 1997, Mr. Ferber did not hold
any shares of restricted stock; unvested shares of restricted
stock were held by: Mr. Balmuth, 230,000 shares with a market
value of $4,715,000; Mr. Wilmore, 192,000 shares with a market
value of $3,936,000; Ms. Levy, 88,000 shares with a market value
of $1,804,000; Mr. Gluck, 78,000 shares with a market value of
$1,599,000; and Ms. Jamieson, 74,000 shares with a market value
of $1,517,000. Dividends are payable to all holders of
restricted stock at the same rate as paid to all stockholders.
<F4> Share numbers have been restated to reflect the company's 2:1
stock split in the form of a 100% stock dividend which was paid
on March 5, 1997.
<F5> The company's 401(k) Plan provides that eligible employees
generally may contribute by authorizing a pre-tax payroll
deduction of a minimum of 1% and a maximum of 15% of their
yearly compensation. The Deferred Compensation Plan, in
addition to the 401(k) Plan, allows eligible employees to
contribute by authorizing a pre-tax payroll deduction of a
percentage of their salary -- up to 100%. For every dollar that
an eligible employee contributes through payroll withholding
either to the 401(k) Plan or the Deferred Compensation Plan, up
to a maximum of 3% of compensation for both Plans combined, the
company also contributes $1.00. The employer contribution to
the 401(k) Plan vests after the employee's third year of
employment. The employer contribution to the Deferred
Compensation Plan vests immediately. The amounts listed for
1996, 1995, and 1994 for Messrs. Ferber, Balmuth, Wilmore and
Gluck and Ms. Levy and Ms. Jamieson consist of company
contributions made for the account of executive officers under
the company's 401(k) Plan and/or the Deferred Compensation Plan.
In addition, the 1996 amount for Mr. Ferber also includes his
consultant fee and benefits paid pursuant to the terms of his
employment/consultant agreement. This amount is not included in
the "Salary" column. (See "Employment Contracts, Termination of
Employment and Change-In-Control Arrangements" for further
discussion of Mr. Ferber's employment/consultant agreement.)
<PAGE> 9
<F6> Effective September 1, 1996, Mr. Ferber stepped down as the
company's Chief Executive Officer and became a consultant to the
company. Michael Balmuth, the company's former Executive Vice
President, Merchandising, succeeded Mr. Ferber as Chief
Executive Officer. Mr. Ferber continues as Chairman of the
Board.
</FN>
</TABLE>
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information with respect to the
named executive officers concerning the grant of stock options
under the company's 1992 Stock Option Plan during fiscal 1996.
There are no provisions under the terms of this Plan for the
granting of Stock Appreciation Rights (SARs).
<TABLE>
<CAPTION>
Individual Grants
% of Total
Number of Options Potential Realizable
Securities Granted to Exercise or Value at Assumed Annual
Underlying Employees Base Rates of Stock Price Appreciation
Options in Fiscal Price Expiration for Option Term <F4>
Name and Granted Year ($/Sh) Date
Principal Position <F1> <F2> <F1> <F3> 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Michael Balmuth 50,000 3.89% $13.5625 03/19/06 $0 $426,469 $1,080,757
Vice Chairman of the
Board & Chief Executive
Officer
Norman A. Ferber 0 0% n/a n/a $0 $0 $0
Chairman of the Board &
Former Chief Executive
Officer
Melvin A. Wilmore 50,000 3.89% $13.5625 03/19/06 $0 $426,469 $1,080,757
President &
Chief Operating Officer
Barbara Levy 24,000 1.87% $13.5625 03/19/06 $0 $204,705 $518,763
Senior Vice President &
General Merchandising
Manager
Barry S. Gluck 24,000 1.87% $13.5625 03/19/06 $0 $204,705 $518,763
Senior Vice President &
General Merchandising
Manager
Irene A. Jamieson 24,000 1.87% $13.5625 03/19/06 $0 $204,705 $518,763
Senior Vice President &
General Merchandising
Manager
All Stockholders N/A N/A N/A N/A $0 $425,510,235 $1,073,906,784
Named executive N/A N/A N/A N/A 0% 0.35% 0.35%
officers' gain as a
percent of all
stockholders' gain
<PAGE> 11
<FN>
<F1> All options listed in the above table were granted on March 19,
1996, with an exercise price equal to the fair market value of
the company's common stock as determined by the closing price on
the date of grant. The stock option grants made in fiscal 1996
to those executive officers listed above vest monthly in
increments that increase annually over a three year period from
the date of grant. The Board of Directors has the ability to
change the terms of outstanding options. See "Employment
Contracts, Termination of Employment and Change-In-Control
Arrangements".
<F2> A total of 1,286,300 shares were granted in the form of non-
qualified stock options during fiscal 1996 to all participants
in the 1992 Stock Option Plan. No incentive stock options were
granted during 1996.
<F3> All non-qualified stock option grants made under the 1992 Stock
Option Plan are made for a term of ten years from the date of
grant.
<F4> The dollar amounts under these columns are the result of
calculations at 0% and at the assumed 5% and 10% rates mandated
by the Securities and Exchange Commission and, therefore, are
not intended to forecast possible future appreciation, if any,
of the company's stock price. The company did not use an
alternative formula for a grant date valuation, as the company
is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatile
factors. No gain to the optionees is possible without an
increase in stock price, which will benefit all stockholders
commensurably. A zero percent gain in stock price will result
in zero dollars for the optionee. Appreciation in stockholder
value is based on the same rates of appreciation as shown for
those options granted to executive officers and assumes each
outstanding share at April 4, 1996, the last trading day of the
fiscal month, was valued at $13.4688, the closing price of Ross
Stores, Inc.'s common stock.
</FN>
</TABLE>
<PAGE> 12
AGGREGATED OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information with respect to the
named executive officers concerning the exercise of stock options
during the last fiscal year and unexercised options held as of
the end of last fiscal year.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
Number of
Securities
Underlying
Unexercised Value of Unexercised
Options at In-the-Money
Fiscal Year-End Options at
Number of (#) Fiscal Year-End
Shares Exercisable/ ($)
Name and Acquired Value Unexercisable Exercisable/
Principal Position on Exercise Realized<F1> <F2> Unexercisable <F3>
<S> <C> <C> <C> <C>
Michael Balmuth 151,914 $1,028,532 77,086/0 $770,430/0
Vice Chairman of the Board &
Chief Executive Officer
Norman A. Ferber 480,000 $3,696,334 0/0 0/0
Chairman of the Board &
Former Chief Executive Officer
Melvin A. Wilmore 421,110 $2,057,405 80,560/0 $838,601/0
President &
Chief Operating Officer
Barbara Levy 129,108 $640,505 50,892/0 $568,294/0
Senior Vice President & General
Merchandising Manager
Barry S. Gluck 74,000 $635,063 92,038/0 $1,156,865/0
Senior Vice President & General
Merchandising Manager
Irene A. Jamieson 41,636 $361,021 98,364/0 $1,156,574/0
Senior Vice President & General
Merchandising Manager
<FN>
<F1> The value realized on exercise of the stock option is the
difference between the exercise price of the shares exercised
and the fair market value of the shares on the date of exercise.
<F2> All options granted under the terms of the company's 1992 Stock
Option Plan are exercisable in full as of the date of grant, but
any shares acquired are subject to certain vesting restrictions.
Under the terms of the stock option agreements, the company has
the right to repurchase all unvested shares at the optionee's
exercise price. A portion of the exercisable shares shown in
the Table above are unvested and subject to the right of
repurchase by the company if exercised before fully vested.
<F3> The value of unexercised in-the-money options at the end of the
fiscal year is calculated by multiplying the number of
exercisable in-the-money shares by the difference between the
closing price ($20.50) of Ross Stores, Inc.'s common stock on
January 31, 1997 (the last trading date of the fiscal year), as
reported on the NASDAQ National Market and the exercise price
per share of the shares. A portion of the shares subject to
these options are unvested and subject to repurchase provisions
as described in footnote (2) above.
</FN>
</TABLE>
<PAGE> 13
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee"), which consists of two independent outside
directors, establishes and administers the policies that govern
the compensation of all executive officers of the company. The
Committee considers the performance of the executive officers and
makes recommendations concerning their compensation levels. All
decisions by the Committee relating to the compensation of the
company's executive officers are reviewed and approved by the
full Board of Directors. The Board of Directors did not revise
or make any modifications to the Committee's recommendations
concerning executive officer compensation during the last fiscal
year.
Compensation Philosophy
The company's compensation policies aim to align the
financial interests of the company's management with those of its
stockholders. The company's executive compensation philosophy
also seeks to integrate executive pay with the long-term
strategic objectives of the company, recognize individual
initiative and achievements and assist the company in attracting,
motivating and retaining a group of high-performing executives.
Compensation for the company's executive officers, including
those individuals named in the previous Tables, consists of the
following elements: base salary, annual incentive bonus,
restricted stock granted under the 1988 Restricted Stock Plan,
stock options granted under the 1992 Stock Option Plan and other
benefits typically offered to corporate executives. A majority
of the total potential compensation for the company's executive
officers is in the form of annual incentive bonuses and stock
plan awards that may vary in value according to the company's
achievement of its strategic objectives in addition to those
motivational and retentive factors deemed necessary and
appropriate by the Committee. The Committee believes that the
components of the total compensation program for executives
outlined in this report work together to enable the company to
attract, motivate and retain the executive talent necessary to
successfully execute the company's strategies over the long term
in a challenging environment for apparel retailers.
Section 162(m) of the Internal Revenue Code of 1986
It is the Committee's policy to seek to qualify executive
compensation for deductibility under Section 162(m) of the
Internal Revenue Code of 1986 to the extent consistent with the
company's overall objectives in attracting, motivating and
retaining its executives. The Committee has reviewed the
company's executive compensation structure in light of the
current tax law. The Committee believes that compensation
resulting from grants made under the 1992 Stock Option Plan will
be fully deductible when an option is exercised. The Committee
also believes that payments under the Incentive Compensation Plan
will be fully deductible. Grants under the company's 1988
Restricted Stock Plan do not qualify as performance-based
compensation and, therefore, may not be fully deductible to the
extent the vesting of restricted stock, when added to other non-
exempt compensation for a particular executive, exceeds the $1
million limit in any tax year. The Committee has concluded that
amending the Restricted Stock Plan to comply with the
requirements for performance-based compensation under Section
162(m) would weaken the company's efforts to recruit and retain
key executives over the long term.
Executive Officers' 1996 Compensation
Salary. Base salaries for executive officers are initially
determined by competitive requirements to recruit the executive.
Salaries are then reviewed annually with recommended adjustments
made based upon the individual performance of each executive
officer and his/her relative contribution in achieving the
company's strategic goals. During 1996, the average merit
increase in base salaries for all executive officers as a group
was 6.0%.
<PAGE> 14
Annual Incentive Bonus. The company's Incentive
Compensation Plan was adopted by the Board of Directors,
effective May 1987, and is designed to allow management to share
in the company's success based on the company's attainment of
varying levels of pre-tax earnings. At the commencement of each
fiscal year, the Committee determines the incentive awards
payable at varying levels of pre-tax earnings achieved by the
company. Such awards are expressed as a percentage of year-end
base salary and are payable in the form of cash bonuses after
fiscal year-end pursuant to this formula. Potential awards range
from 0% to 100% of executive officers' base salaries, based on
the actual level of pre-tax earnings achieved each year relative
to the targeted goal, as well as the position of the executive
officer.
The Plan for 1996 provided for awards to executive officers
that, at the targeted pre-tax earnings goal, ranged from 33% to
65% of base salary. During fiscal 1996, the company exceeded its
targeted pre-tax earnings goal. Total payments made under the
Plan for fiscal 1996 to all executive officers as a group
represented approximately 82% of their total salaries as a group.
Actual awards over the last three fiscal years have ranged from
16.8% to 100% of the executive officers' base salaries.
Stock Award Programs. The company's stock award programs
consist of the 1988 Restricted Stock Plan ("Restricted Stock
Plan" ) and the 1992 Stock Option Plan ("Option Plan" ). A
majority of the members of the Board are not employees of the
company and are therefore not eligible to receive awards under
either the Restricted Stock Plan or the Option Plan. The
Restricted Stock Plan and the Option Plan were established with
two important objectives: (i) to align the financial interests of
the company's stockholders and the executive officers by
providing incentives that focus management's attention on the
successful long-term strategic management of the business and
appreciation in stockholder value; and (ii) to recruit, motivate
and retain a high-performing group of senior and middle managers.
The Committee makes recommendations to the Board of
Directors concerning the granting of awards to executive officers
from both the Restricted Stock Plan and the Option Plan. The
levels of stock awards granted to executive officers under the
Option Plan are based on the following factors: the executive
officer's position, past and expected future contributions to the
achievement of the company's strategic objectives, existing stock
ownership position and the level of previous stock awards. Each
member of the Committee individually weighs the above factors and
then the Committee reaches a consensus as to what the awards
should be. The levels of stock awards granted to executive
officers under the Restricted Stock Plan are determined primarily
by the retentive value of the grant necessary to retain key
executives over the long term and to protect the company against
outside offers of employment to key individuals, as well as the
factors listed for stock option awards. The officers must
satisfy vesting requirements in order to retain the stock.
All stock option awards are granted with an exercise price
that is the fair market value of the company's common stock on
the date of grant. These awards provide value to the executive
officers only when and to the extent that the value of the
company's common stock appreciates over the value on the date of
grant. All awards made in fiscal 1996 to executive officers
under the Option Plan have a term of ten years and vest monthly
in progressively increasing annual increments over a three year
period. Unless otherwise specified in the stock option
agreement, all options are immediately exercisable, subject to
the company's right to repurchase unvested shares at the
optionee's exercise price.
Chief Executive Officer's 1996 Compensation
A majority of the total potential compensation for the
company's Chief Executive Officer is in the form of an annual
incentive bonus and stock plan awards that may vary in value
according to the company's achievement of its strategic
objectives, in addition to those motivational and retentive
factors deemed necessary and appropriate by the Committee, which
are discussed below. Effective September 1, 1996, Mr. Ferber
stepped down as the company's Chief Executive Officer and became
a consultant to the company. Michael Balmuth, the company's
former Executive Vice President, Merchandising, succeeded Mr.
Ferber as Chief Executive Officer. Mr. Ferber continues as
Chairman of the Board. Both Mr. Ferber's and Mr. Balmuth's 1996
incentive bonus and stock award compensation were earned under
the same plans made available to all executive officers, as
discussed above.
<PAGE> 15
Norman A. Ferber
Salary. Mr. Ferber's base salary as Chief Executive Officer
was established by the terms of his employment agreement entered
into with the company on June 1, 1995 and amended on July 29,
1996. It provided that during fiscal 1996 while Mr. Ferber was
the company's Chief Executive Officer, his annual salary would be
not less than $750,000. Mr. Ferber's 1996 annual base salary of
$761,000 represented an increase of 40% over his 1995 base
salary. (See "Employment Contracts, Termination of Employment
and Change-In-Control Arrangements" for further discussion of Mr.
Ferber's employment/consultant agreement.)
Bonus. The annual incentive bonus portion of Mr. Ferber's
compensation was based on the company's achievement of targeted
pre-tax earnings, as established by the Committee. During fiscal
1996, the company exceeded its targeted pre-tax earnings goal.
Mr. Ferber received an annual bonus of $761,000 for 1996, which
equaled 100% of his annual salary.
Stock Awards. During 1996, Mr. Ferber did not receive any
equity awards.
Michael Balmuth
Salary. Mr. Balmuth's base salary is established by the
terms of his employment agreement entered into with the company
on February 1, 1995, as amended, which extends through
February 3, 2000, unless earlier extended, re-negotiated or
terminated by the parties. It provided for an annual salary of
not less than $575,000. Mr. Balmuth's 1996 annual base salary of
$584,000 reflects the increase due to his promotion to Vice
Chairman and Chief Executive Officer. (See "Employment
Contracts, Termination of Employment and Change-In-Control
Arrangements" for further discussion of Mr. Balmuth's employment
agreement.)
Bonus. The annual incentive bonus portion of Mr. Balmuth's
compensation was based on the company's achievement of targeted
pre-tax earnings, as established by the Committee. During fiscal
1996, the company exceeded its targeted pre-tax earnings goal.
Mr. Balmuth received bonuses totaling $584,000 for 1996, which
equaled 100% of his salary at year-end.
Stock Awards. Mr. Balmuth received awards totaling 120,000
shares of restricted stock during 1996. During 1996, Mr. Balmuth
received options under the Option Plan for 50,000 shares of
common stock with an exercise price of $13.5625, the closing
price on the date of grant. These shares vest monthly in
progressively increasing annual increments over a period of three
years. The equity grants made to Mr. Balmuth were based
primarily on his promotion in September 1996 to the position of
Chief Executive Officer and the equity value deemed necessary, in
the Committee's and Board of Directors' judgment, to ensure
retention of Mr. Balmuth over the vesting period of these shares.
Secondary considerations, all relatively equal in weight, in
determining the size of his 1996 equity grants, were his past and
expected future contributions to the achievement of the company's
strategic objectives and his existing stock ownership position.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE
COMPANY'S BOARD OF DIRECTORS
George P. Orban, Chairman and Philip Schlein
<PAGE> 16
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative
total stockholder returns for the company's common stock over the
last five years with the Standard & Poors 500 Index and the
Standard & Poors Retail Composite Index. The comparison graph
assumes that the value of the investment in Ross Stores common
stock and the comparative indices was $100 on January 31, 1992
and measures the performance of this investment as of the last
trading day in the month of January for each of the following
five years. These measurement dates are based on the historical
month-end data available and may vary slightly from the company's
actual fiscal year end date for each period. Data with respect
to returns for the Standard & Poors indices is not readily
available for periods shorter than one month. The total return
assumes the reinvestment of dividends. The Company began paying
dividends during 1994. The graph is an historical representation
of past performance only and is not necessarily indicative of
future returns to stockholders.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ROSS STORES, INC., S&P 500 AND S&P RETAIL COMPOSITE INDEX
(GRAPH)
1992 1993 1994 1995 1996 1997
ROSS STORES 100 103 62 51 96 199
S&P 500 100 111 125 125 174 220
S&P RETAIL COMPOSITE 100 119 115 107 115 137
<PAGE> 17
Compensation of Directors
During the fiscal year ended February 1, 1997, directors who
were not employees of the company received an annual retainer fee
of $25,000 (paid quarterly), plus $1,000 for attendance at each
Board Meeting and $500 for attendance at each meeting of a
committee of the Board. For the fiscal year ending January 31,
1998, directors who are not employees of the company will receive
an annual retainer of $27,000 (paid quarterly), plus $1,000 for
attendance at each Board Meeting and $500 for attendance at each
meeting of a committee of the Board. If more than one committee
meeting is held on the same day, each committee member receives
payment for only one committee meeting. Travel expenses are
reimbursed. During the term of his employment/consultant
agreement, Mr. Ferber has waived his right to the outside
director's fees. (See " Employment Contracts, Termination of
Employment and Change-In-Control Arrangements" for the discussion
of Mr. Ferber's agreement.)
Directors who are not employees of the company are eligible
to receive stock options automatically granted under the terms of
the company's 1991 Outside Directors Stock Option Plan (the
"Directors Plan"), which is a "formula plan". During the 1996
fiscal year, Messrs. Moldaw, Orban, Schlein and Seiler and Ms.
Weaver each were automatically granted an option to purchase
2,000 shares of common stock under the Directors Plan on March
18, 1996, with an exercise price of $13.6250, which was the
closing price of the company's common stock as reported on the
Nasdaq National Market on such date. Mr. Jenkins was granted
10,000 shares on March 20, 1996 when he became a director of the
company, with an exercise price of $13.5312, which was the
closing price of the company's common stock on that date. The
10,000 shares were canceled upon Mr. Jenkins' resignation. Mr.
Ferber waived his right to receive the initial grant of 10,000
shares. However, Mr. Ferber remains eligible to receive the
2,000 shares granted annually under the Directors Plan
In addition to compensation received as a Board member,
Stuart G. Moldaw, Chairman Emeritus, receives administrative
support and an annual fee of $80,000 for his services as
consultant to the company. The company also pays the annual
premiums of $128,500 on a split dollar life insurance policy,
with a face value of $4 million. In the most recent fiscal year,
$76,030 of the premium was reported as taxable compensation to
Mr. Moldaw and $52,530 of the premium was added to the amount
refundable to the company upon death or cancellation of the
policy. The company also pays the premiums of the executive
medical insurance for Mr. Moldaw and his spouse. (See also
" Certain Transactions.")
Compensation Committee Interlocks and Insider Participation
Mr. Orban and Mr. Schlein served on the Compensation
Committee of the Board of Directors for the past fiscal year.
Mr. Orban is the Chairman of the Compensation Committee and in
January 1997 became Chief Executive Officer of Egghead, Inc., in
addition to being its Chairman of the Board. Melvin A. Wilmore
also serves on the Board of Directors of Egghead, Inc.
Employment Contracts, Termination of Employment and Change-In-
Control Arrangements
Michael Balmuth. The company and Michael Balmuth, Vice
Chairman of the Board and Chief Executive Officer, entered into
an employment agreement as of February 1, 1995, amended June 1,
1995, July 29, 1996 and May 19, 1997, with a term that currently
runs through February 3, 2000 ("Employment Agreement"). Upon
notice from Mr. Balmuth at specified times, the Board will
consider extending the term of the Employment Agreement for
successive two-year periods. The Employment Agreement provides
that Mr. Balmuth will receive an annual salary of not less than
$575,000. In the event (i) Mr. Balmuth's employment
involuntarily terminates due to disability; (ii) the company
terminates his employment without cause and, in certain
instances, for cause; or (iii) he resigns for good reason, Mr.
Balmuth would be entitled to continued payment of his then
current salary, including an annual bonus, through the remaining
term of the Employment Agreement; all stock options held by Mr.
Balmuth would become fully vested; and he would be entitled to
certain restricted stock shares which will be vested pro
<PAGE> 18
rata as of the date of his termination based upon vesting in
equal monthly installments from the date of grant.
In the event there is a change-in-control of the company,
the term of the Employment Agreement shall continue until the
later of (a) the Remaining Term (as defined below) or (b) the
expiration of any extension to the Employment Agreement. Mr.
Balmuth would be entitled to continued payment of his then
current salary and annual bonus. In addition to these payments,
Mr. Balmuth would receive $1,500,000 per year payable with his
salary for two years after the effective date of the change-in-
control ("Remaining Term"). Further, all restricted stock and
stock options held by Mr. Balmuth would become fully vested
(except as described below). Additionally, he would be
reimbursed for any excise taxes paid pursuant to Internal Revenue
Code Section 4999.
Norman A. Ferber. The company and Norman A. Ferber,
Chairman of the Board, entered into an employment agreement on
June 1, 1995 which was amended on July 29, 1996, March 20, 1997
and April 15, 1997 (the "agreement"). The agreement extends
through January 31, 1998 ("Consultancy Termination Date"). Upon
notice from Mr. Ferber, at specified times, the Board will
consider extending the agreement for successive one-year periods.
While Mr. Ferber served as the company's Chief Executive Officer
in fiscal 1996, he received an annual salary of $761,000.
Effective September 1, 1996, Mr. Ferber ceased to be Chief
Executive Officer and an employee of the company and was retained
as a consultant to the company. While he serves as a consultant
to the company, Mr. Ferber shall be paid a consulting fee of
$62,500 per month. At the time that Mr. Ferber became a
consultant to the company, all of his unvested restricted stock
and stock options became fully vested. If, as a result of Mr.
Ferber's status as a consultant to the company, he is (i) subject
to an increased tax liability or (ii) ineligible to participate
in any of the company's employee benefit plans, then the
consulting fees shall be increased so that his tax liability is
the same as when he was an employee and to enable Mr. Ferber to
procure (to the extent available) such benefits at no additional
after tax cost to him.
Under the terms of the agreement, Mr. Ferber shall be paid
an annual bonus of $761,000 under the company's Incentive
Compensation Plan for fiscal 1996 and 1997. Additionally, the
company, or its successor, will continue Mr. Ferber's benefit
program including insurance payments and health care coverage
under the company's benefit plans at no cost to Mr. Ferber until
his death or the date of his 65th birthday, whichever occurs
first.
In the event (i) Mr. Ferber's consultancy involuntarily
terminates due to disability; (ii) the company terminates his
consultancy without cause and, in certain instances, for cause;
or (iii) he resigns for good reason, Mr. Ferber would be entitled
to continued payment of his then current consultant fee,
including an annual bonus, through the Consultancy Termination
Date or any extension thereof; all stock options held by Mr.
Ferber would become fully vested. In the event there is a change-
in-control of the company, Mr. Ferber would be entitled to
continued payment of his then current fee, including an annual
bonus, through the Consultancy Termination Date or any extension
thereof and all stock options held by Mr. Ferber would become
fully vested. In the event that Mr. Ferber provides consulting
services in connection with a change-in-control, he shall receive
a single payment of $1,500,000 upon the consummation of the
transaction even if the consummation is after the expiration or
termination of this agreement. Further, he would be reimbursed
for any excise taxes paid pursuant to Internal Revenue Code
Section 4999.
Melvin A. Wilmore. The company and Melvin A. Wilmore,
President and Chief Operating Officer, entered into an employment
agreement as of March 15, 1994, amended March 16, 1995, June 1,
1995, July 29, 1996 and May 19, 1997, with a term that currently
runs through February 3, 2000 ("Employment Agreement"). Upon
notice from Mr. Wilmore at specified times, the Board will
consider extending the term of the Employment Agreement for
successive two-year periods. The Employment Agreement provides
that Mr. Wilmore will receive an annual salary of not less than
$550,000. In the event (i) Mr. Wilmore's employment
involuntarily terminates due to disability; (ii) the company
terminates his employment without cause and, in certain
instances, for cause; or (iii) he resigns for good reason, Mr. Wilmore
<PAGE> 19
would be entitled to continued payment of his then current
salary, including an annual bonus, through the remaining term of
the Employment Agreement, and all stock options held by Mr.
Wilmore would become fully vested and he would be entitled to
certain restricted stock shares which will be vested pro rata as
of the date of his termination based upon vesting in equal
monthly installments from the date of grant.
In the event there is a change-in-control of the company,
the term of the Employment Agreement shall continue until the
later of (a) the Remaining Term (as defined below) or (b) the
expiration of any extension to the Employment Agreement. Mr.
Wilmore would be entitled to continued payment of his then
current salary and annual bonus. In addition to these payments,
Mr. Wilmore would receive $1,500,000 per year payable with his
salary for two years after the effective date of the change-in-
control ("Remaining Term"). Further, all restricted stock and stock options
held by Mr. Wilmore would become fully vested (except as
described below). Additionally, he would be reimbursed for any
excise taxes paid pursuant to Internal Revenue Code Section 4999.
Barry S. Gluck, Irene A. Jamieson and Barbara Levy. The
company entered into employment agreements with its Senior Vice
Presidents and General Merchandising Managers -- Barry S. Gluck,
Irene A. Jamieson and Barbara Levy on March 1, 1996 and amended
on September 1, 1996. The terms are the same for each employment
agreement, unless otherwise noted. The term of each employment
agreement extends through March 1, 1999. Upon notice from the
officer, at specified times, the Board will consider extending
the term of the agreement for successive two-year periods. The
agreements with Mr. Gluck and Ms. Levy provide that each will
receive an annual salary of not less than $330,000. The
agreement with Ms. Jamieson provides that she will receive an
annual salary of not less than $310,000. In the event (i) the
officer's employment involuntarily terminates due to disability;
(ii) the company terminates his or her employment without cause
and, in certain instances, for cause; or (iii) he or she resigns
for good reason, the officer would be entitled to continued
payment of his or her then current salary, including an annual
bonus, through the remaining term of the employment agreement;
all stock options held by the officer would become fully vested;
and he or she would be entitled to certain restricted stock
shares which are pro rata vested as of the date of his or her
termination over the original vesting period beginning on the
date of grant. In the event there is a change-in-control of the
company, the officer would be entitled to continued payment of
his or her then current salary, including an annual bonus,
through the remaining term of the employment agreement, and all
restricted stock and stock options held by the officer would
become fully vested (except as described below). Additionally,
he or she would be reimbursed for any excise taxes paid pursuant
to Internal Revenue Code Section 4999.
Participants in the 1988 Restricted Stock Plan and 1992
Stock Option Plan. Under the terms of the individual agreements
for all the participants in the company's 1988 Restricted Stock
Plan and 1992 Stock Option Plan, each employee, including
executive officers, is entitled only to those shares vested as of
the date of termination. However, the company's Board of
Directors generally has the discretion to accelerate vesting or
change other terms of an outstanding agreement. In the event of
certain merger or acquisition transactions which result in a
change-in-control of the company, any unvested shares of
restricted stock automatically become vested shares and the
company's Board of Directors must either accelerate vesting of
all outstanding stock options or arrange for the options to be
assumed by the acquiring or successor corporation.
Certain Transactions
On February 5, 1993, the company made a relocation loan of
$300,000 to Mr. Wilmore at an annual interest rate of 0%. The
loan, which is secured by a deed of trust on his home, was
originally due on February 5, 1996. However, on January 25,
1996, the Board approved an extension of the loan for another
three years with an annual interest rate of 5.5%. The amount of
principal outstanding on March 31, 1997 was $300,000.
The company leases two stores, one in Roseville, California
and one in Dublin, California, from entities affiliated with
Stuart G. Moldaw, a current director. The Roseville, California
store is leased from a partnership in which trusts established by
a former director of the company and Stuart G. Moldaw are
<PAGE> 20
partners. Donald H. Seiler, also a director, is a trustee of
these trusts. In fiscal 1996, the company paid $262,500 in rent.
Mr. Moldaw's and his trusts' interests in the partnership total
40.38%. The Dublin, California store is leased from a
partnership in which Mr. Moldaw, trusts established by Mr. Moldaw
and members of his family are limited partners. In fiscal 1996,
the company paid $243,571 in rent. Mr. Moldaw's and his family's
interests in the partnership total 86.89%. The company believes
that the general terms and conditions of the above leases,
including the rental payments by the company, were made at
prevailing market rates.
<PAGE> 21
PROPOSAL 1
ELECTION OF CLASS II DIRECTORS
If elected, each nominee will hold office for a three-year
term or until her or his successor is elected and qualified
unless he or she resigns or his or her office becomes vacant by
death, removal, or other cause in accordance with the Bylaws of
the company. Management knows of no reason why any of these
nominees should be unable or unwilling to serve, but if any
nominee(s) should for any reason be unable or unwilling to serve,
the proxies will be voted for the election of such other
person(s) for the office of director as management may recommend
in the place of such nominee(s).
Vote Required
The plurality of the votes cast by the shares of common
stock present or represented and voting at the Annual Meeting
will determine the election of the directors. Abstentions and
broker non-votes will be counted as present in determining if a
quorum is present but will not affect the election of directors.
The Board of Directors unanimously recommends that the
stockholders vote FOR the two nominees listed under "Information
Regarding Nominees and Incumbent Directors."
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Board of Directors, upon the recommendation of the
company's Audit Committee, has appointed Deloitte & Touche LLP as
the independent certified public accountants for the company for
the fiscal year ending January 31, 1998. Deloitte & Touche LLP,
or its predecessor Touche Ross & Co., has acted in such capacity
since 1982. It is anticipated that a representative of Deloitte
& Touche LLP will be present at the Annual Meeting to respond to
appropriate questions and to make a statement if he or she so
desires.
Vote Required
The affirmative vote of a majority of the shares of common
stock present or represented by proxy and voting at the Annual
Meeting is required for approval of this proposal. Abstentions
and broker non-votes each will be counted as present in
determining if a quorum is present, but will not be counted as
having been voted on this proposal.
The Board of Directors unanimously recommends that the
stockholders vote FOR approval of the ratification of the
appointment of Deloitte & Touche LLP as the company's independent
certified public accountants for the fiscal year ending
January 31, 1998.
<PAGE> 22
PROXY SOLICITATION
The cost of solicitation of Proxies will be borne by the company.
The company has retained Financial Relations Board to assist in
soliciting proxies by mail, telephone and personal interview for
a fee not to exceed $5,000 plus expenses. Management may use the
services of its directors, officers and others to solicit
Proxies, personally or by telephone. Arrangements may also be
made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation material to the beneficial
owners of the stock held of record by such persons, and the
company may reimburse them for reasonable out-of-pocket expenses
incurred by them in so doing.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which
management intends to present or knows that others will present
at the Annual Meeting is as set forth above. If any other matter
or matters are properly brought before the Annual Meeting, or any
adjournment thereof, it is the intention of the persons named in
the accompanying Proxy to vote the Proxy on such matters in
accordance with their best judgment.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the
next annual meeting of stockholders of the company (1) must be
received by the company at its offices at 8333 Central Avenue,
Newark, California 94560 no later than February 9, 1998 and
(2) must satisfy the conditions established by the Securities and
Exchange Commission for stockholder proposals to be included in
the company's Proxy Statement for that meeting.
By Order of the Board of Directors,
/s/Kathleen B. Loughnot
Kathleen B. Loughnot
Assistant Corporate Secretary
Dated: June 9, 1997
<PAGE>
TABLE OF CONTENTS
Page
PROXY SOLICITATION 1
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 2
INFORMATION REGARDING NOMINEES AND INCUMBENT DIRECTORS 4
COMPENSATION AND OTHER TRANSACTIONS WITH OFFICERS AND DIRECTORS 7
Summary Compensation Table 7
Option Grants in Last Fiscal Year 10
Aggregated Option Exercises and Year-End Value Table 12
Compensation Committee Report 13
Stockholder Return Performance Graph 16
Compensation of Directors 17
Compensation Committee Interlocks and Insider Participation 17
Employment Contracts, Termination of Employment and
Change-In-Control Arrangements 17
Certain Transactions 19
PROPOSAL 1 - ELECTION OF CLASS II DIRECTORS 21
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 21
PROXY SOLICITATION 22
TRANSACTION OF OTHER BUSINESS 22
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING 22
<PAGE>
June 9, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Ross Stores' Annual
Meeting of Stockholders which will be held at 11:00 a.m. on
Wednesday, July 16, 1997 at the corporate headquarters located at
8333 Central Avenue, Newark, California. If you will need
special assistance at the meeting, please contact Ms. Catherine
C. Brady, Manager, Legal Affairs, Ross Stores, Inc., 8333 Central
Avenue, Newark, CA 94560-3433 at least 10 days before the
meeting.
Please complete the enclosed proxy card and return it in the
envelope provided for that purpose as soon as possible so that
your shares will be represented and voted at the meeting.
Thank you for your commitment to Ross Stores and for your
cooperation in returning your proxy without delay.
Sincerely,
ROSS STORES, INC.
/s/Michael Balmuth
Michael Balmuth
Vice Chairman of the Board and
Chief Executive Officer
PRINTED ON RECYCLED PAPER
(RECYCLE LOGO)
<PAGE>
ROSS STORES, INC.
Notice of Annual Meeting of Stockholders
To Be Held July 16, 1997
To the Stockholders:
Please take notice that the Annual Meeting of the Stockholders of
Ross Stores, Inc., a Delaware corporation (the "company"), will
be held on Wednesday, July 16, 1997 at 11:00 a.m. PDT, at the
company's corporate headquarters located at 8333 Central Avenue,
Newark, California for the following purposes:
1. To elect two Class II directors for a three-year term.
2. To ratify the appointment of Deloitte & Touche LLP
as the company's independent certified public
accountants for the fiscal year ending January 31, 1998.
3. To transact such other business as may properly come before
the Annual Meeting or any adjournments or postponements
thereof.
Stockholders of record at the close of business on May 30, 1997
are entitled to notice of and to vote at the Annual Meeting and
any adjournments or postponements thereof. For ten days prior to
the Annual Meeting, a complete list of stockholders entitled to
vote at the Annual Meeting will be available for examination by
any stockholder for any purpose related to the Annual Meeting
during ordinary business hours at the principal office of the
company located at 8333 Central Avenue, Newark, California.
By order of the Board of Directors,
Kathleen B. Loughnot, Assistant Corporate Secretary
Dated: June 9, 1997
IMPORTANT: Please fill in, date, sign and mail promptly the
enclosed Proxy in the post-paid envelope provided to assure
that your shares are represented at the meeting. If you
attend the meeting, you may vote in person if you wish to do
so, even though you have sent in your Proxy.
<PAGE>
Front:
PROXY
ROSS STORES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Balmuth and Melvin A.
Wilmore, and either of them, as attorneys of the undersigned with
full power of substitution, to vote all shares of stock which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders of Ross Stores, Inc., to be held on July 16, 1997 at
11:00 a.m. PDT, at the company's corporate offices, 8333 Central
Avenue, Newark, California, and at any continuation or
adjournment thereof, with all powers which the undersigned might
have if personally present at the meeting.
WHERE NO CONTRARY CHOICE IS INDICATED BY THE STOCKHOLDER, THIS
PROXY, WHEN RETURNED, WILL BE VOTED FOR SUCH NOMINEES AND
PROPOSALS AND WITH DISCRETIONARY AUTHORITY UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY MAY
BE REVOKED AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side)
YOUR VOTE IS IMPORTANT TO THE COMPANY
Back:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSALS:
Common X Please mark your votes as indicated in this
example
PROPOSAL 1. Election for a three-year term of two Class II
Directors proposed in the accompanying Proxy
Statement.
Donna L. Weaver Michael Balmuth
FOR all nominees listed (except as marked to
the contrary)
WITHHOLD AUTHORITY to vote for all nominees
listed.
INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name in the space
provided below.
PROPOSAL 2. To ratify the appointment of Deloitte & Touche LLP
as the company's independent certified public
accountants for the fiscal year ending January 31,
1998.
FOR AGAINST ABSTAIN
PROPOSAL 3. To transact such other business as may properly
come before the annual meeting or any adjournments
or postponements thereof.
The undersigned hereby acknowledges receipt of: (a) Notice of
Annual Meeting of Stockholders dated June 9, 1997; (b) the
accompanying Proxy Statement; and (c) the Annual Report to
Stockholders for the fiscal year ended February 1, 1997 and
hereby expressly revokes any and all proxies heretofore given or
executed by the undersigned with respect to the shares of stock
represented by this Proxy and by filing this Proxy with the
Assistant Secretary of the Corporation, gives notice of such
revocation.
Authorized Signature
Dated: , 1997
Please sign exactly as your name(s) appear(s) on your stock
certificate. If shares of stock are held of record in the names
of two or more persons or in the name of husband and wife,
whether as joint tenants or otherwise, both or all of such
persons should sign the Proxy. If shares of stock are held of
record by a corporation, the Proxy should be signed by the
President or Vice President or the Secretary or Assistant
Secretary. Executors or administrators or other fiduciaries who
execute the above Proxy for a deceased stockholder should give
their full titles.
