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EXHIBIT 10.3
FOURTH AMENDED AND RESTATED
ROSS STORES, INC.
EMPLOYEE STOCK PURCHASE PLAN
AMENDED EFFECTIVE MARCH 16, 2000
1. PURPOSE. The Fourth Amended and Restated Ross Stores, Inc.
Employee Stock Purchase Plan (the "Plan") is established to provide eligible
employees of Ross Stores, Inc. ("Ross") and any current or future parent or
subsidiary corporation of Ross (collectively referred to as the "Company")
with an opportunity to acquire a proprietary interest in the Company by the
purchase of common stock of Ross. For purposes of this Plan, a parent
corporation and a subsidiary corporation shall be as defined in section
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"). It is intended that the Plan shall qualify as an "employee stock
purchase plan" under section 423 of the Code (including any future amendments
or replacements of such section), and the Plan shall be so construed. Any
term not expressly defined in the Plan but defined for purposes of section
423 of the Code shall have the same definition herein.
2. ADMINISTRATION. The Plan shall be administered by the Board
of Directors of Ross (the "Board") and/or by a management committee duly
appointed by the Board having such powers as shall be specified by the Board.
Any subsequent references to the Board shall mean the committee if it has
been appointed. All questions of interpretation of the Plan or of any option
granted pursuant to the Plan (an "Option") shall be determined by the Board
and shall be final and binding upon all persons having an interest in the
Plan and/or any Option. Subject to the provisions of the Plan, the Board
shall determine all of the relevant terms and conditions of Options granted
pursuant to the Plan; PROVIDED, HOWEVER, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of section 423(b)(5) of the Code. All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.
3. SHARE RESERVE. Subject to the provisions of Section 14
relating to adjustments upon changes in securities, the maximum number of
shares which may be issued under the Plan shall be 5,000,000 shares of Ross
common stock (the "Shares"). In the event that any Option for any reason
expires or is terminated, the Shares allocable to the unexercised portion of
such Option may again be subjected to an Option.
4. ELIGIBILITY. Any employee of the Company is eligible to
participate in the Plan except the following:
(a) employees who are customarily employed by the
Company for less than twenty (20) hours a week;
(b) employees who have not completed six (6) months of
continuous employment with the Company as of the commencement of an Offering
Period.
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<PAGE> (c) employees whose customary employment is
for not more than five (5) months in any calendar year; and
(d) employees who own or hold options to purchase or
who, as a result of participation in this Plan, would own or hold options to
purchase, stock of a corporation which comprises part of the Company
possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of such corporation within the meaning of
section 423(b)(3) of the Code.
5. OFFERING DATES.
(a) OFFERING PERIODS. Except as otherwise set forth
below, the Plan shall be implemented by two separate series of offerings (any
one of which shall be referred to hereinafter as an "Offering"). One series
of Offerings shall involve sequential Offerings of twelve (12) months in
duration (an "Annual Offering Period"). An Annual Offering Period shall
commence on the first day of January of each year and end on the last day of
December of the same year. The second series of Offerings shall involve
Offerings of six (6) months in duration (a "Half-Year Offering Period"). A
Half-Year Offering Period shall commence on the first day of July of each
year and end on the last day of December of the same year. The first
Half-Year Offering Period shall commence on July 1, 1989. An employee is
eligible to participate in a given Half-Year Offering Period only if (i) the
eligibility requirements set forth in paragraph 4 above are satisfied prior
to or as of the beginning of such Half-Year Offering Period, and (ii) the
employee is not participating in the Annual Offering Period for that calendar
year (due to ineligibility or an election not to participate in such Annual
Offering Period). (Unless otherwise specified, the term "Offering Period" as
used herein shall refer to either an Annual Offering Period or a Half-Year
Offering Period.) Notwithstanding the foregoing, the Board may establish a
different term for one or more Offerings and/or different commencing and/or
ending dates for such Offerings; PROVIDED, HOWEVER, that such different terms
shall comply with the provisions of section 423(b)(7) of the Code. An
employee who becomes eligible to participate in the Plan after an Offering
Period has commenced shall not be eligible to participate in such Offering
but may participate in any subsequent Offering provided such employee is
still eligible to participate in the Plan as of the commencement of any such
subsequent Offering. The first day of an Offering Period shall be the
"Offering Date" for such Offering Period. In the event the first and/or last
day of an Offering Period is not a business day, the Company shall specify
the business day that will be deemed the first or last day, as the case may
be, of the Offering Period.
(b) GOVERNMENTAL APPROVAL; STOCKHOLDER APPROVAL.
Notwithstanding any other provision of the Plan to the contrary, any Option
granted pursuant to the Plan shall be subject to (i) obtaining all necessary
governmental approvals and/or qualifications of the sale and/or issuance of
the Options and/or the Shares; and (ii) obtaining any necessary stockholder
approval of the Plan.
6. PARTICIPATION IN THE PLAN.
(a) INITIAL PARTICIPATION. An eligible employee shall
become a Participant on the first Offering Date after satisfying the
eligibility requirements and delivering to the Company's payroll office at
such time prior to such Offering Date as may be established by the
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Company (the "Enrollment Date") a subscription agreement indicating the
employee's election to participate and authorizing payroll deductions. An
eligible employee who does not deliver a subscription agreement to the
Company's payroll office prior to the applicable Enrollment Date for the
first Offering Period after becoming eligible to participate in the Plan
shall not participate in the Plan for that Offering Period or for any
subsequent Offering Period unless such employee subsequently enrolls in the
Plan by filing a subscription agreement with the Company prior to the
applicable Enrollment Date for such subsequent Offering Period.
(b) CONTINUED PARTICIPATION. Subject to satisfying the
eligibility requirements for a particular Offering Period, a Participant shall
automatically participate in each succeeding Annual Offering Period until such
time as such Participant withdraws from the Plan pursuant to paragraph 11 or
terminates employment as provided in paragraph 12. A Participant is not required
to file any additional subscription agreements for subsequent Annual Offering
Periods in order to continue participation in the Plan.
7. RIGHT TO PURCHASE SHARES.
(a) Except as set forth below, as of the first day of an
Offering Period (the "Offering Date") for an Annual Offering Period, each
Participant in such Offering Period shall be granted an Option consisting of the
right to purchase that number of whole Shares arrived at by dividing twenty-five
thousand dollars ($25,000) by one hundred percent (100%) of the Fair Market
Value of the Shares on the Offering Date, and as of the Offering Date for a
Half-Year Offering Period, each Participant in such Offering Period shall be
granted an Option consisting of the right to purchase that number of whole
Shares arrived at by dividing twelve thousand five hundred dollars ($12,500) by
one hundred percent (100%) of the Fair Market Value of the Shares on the
Offering Date.
(b) "Fair Market Value" means the value of a security,
as determined in good faith by the Board. Unless otherwise provided herein,
if the security is listed on any established stock exchange or traded on the
Nasdaq National Market system or the Nasdaq SmallCap Market, the Fair Market
Value of the security shall be the closing sales price (rounded up where
necessary to the nearest whole cent) for such security (or the closing bid if
no sales were reported) as quoted on such exchange or market (or the exchange
or market with the greatest volume of trading in the relevant security of the
Company) on the trading day which is coincident with the relevant
determination date, as reported in THE WALL STREET JOURNAL or such other
source as the Board deems reliable.
8. PURCHASE PRICE. The purchase price at which Shares may be
acquired in an Offering pursuant to the exercise of all or any portion of an
Option granted under the Plan (the "Offering Exercise Price") shall be set by
the Board; PROVIDED, HOWEVER, that the purchase price shall not be less than
eighty-five percent (85%) of the lesser of (a) the Fair Market Value of the
Shares on the Offering Date of such Offering Period, or (b) the Fair Market
Value of the Shares at the time of exercise of the Option. Unless otherwise
provided by the Board prior to the commencement of an Offering Period, the
Offering Exercise Price shall be eighty-five percent (85%) of the lesser of
(a) the Fair Market Value of the Shares on the Offering Date of such Offering
Period or (b) the Fair Market Value of the Shares at the time of exercise of
the Option.
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9. PAYMENT OF PURCHASE PRICE. Shares which are acquired
pursuant to the exercise of all or any portion of an Option may be paid for
only by means of payroll deductions accumulated during the Offering Period.
Except as set forth below, the amount of Compensation to be withheld from a
Participant's Compensation during each pay period shall be determined by the
Participant's subscription agreement. For purposes of the Plan, a
Participant's "Compensation" with respect to an Offering shall include all
amounts paid in cash and includable as "wages" subject to tax under section
3101(a) of the Code without applying the dollar limitation of section 3121(a)
of the code; PROVIDED, HOWEVER, Compensation shall not include amounts paid
as annual bonuses under the Company's Management Incentive Compensation
Program. Accordingly, Compensation shall include salaries, commission,
overtime and bonuses other than bonuses paid as annual bonuses under the
Company's Management Incentive Compensation Program. "Compensation" shall not
include reimbursements of expenses, allowances or any amount deemed received
without the actual transfer of cash or any amounts directly or indirectly
paid pursuant to the Plan or any other stock purchase or stock option plan.
(a) During an Offering Period, a Participant may elect
to decrease (including to zero) the amount withheld from his or her
Compensation by filing an amended subscription agreement with the Company on
or before the "Change Notice Date." The "Change Notice Date" shall initially
be the seventh (7th) day prior to the end of the first pay period for which
such election is to be effective; however, the Company may change such Change
Notice Date from time to time.
(b) The amount of payroll withholding with respect to
the Plan for any Participant during any pay period shall not exceed ten
percent (10%) of the Participant's Compensation for such pay period.
(c) Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the
Offering Period unless sooner altered or terminated as provided in the Plan.
(d) Individual accounts shall be maintained for each
Participant. All payroll deductions from a Participant's Compensation shall
be credited to such account and shall be deposited with the general funds of
the Company. All payroll deductions received or held by the Company may be
used by the Company for any corporate purpose.
(e) Interest shall not be paid on sums withheld from a
Participant's Compensation.
(f) On the last day of an Offering Period, each
Participant who has not withdrawn from the Offering or whose participation in
the Offering has not terminated on or before such last day shall
automatically acquire pursuant to the exercise of the Participant's Option
the number of whole Shares arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Offering by the Offering
Exercise Price; PROVIDED, HOWEVER, in no event shall the number of Shares
purchased by the Participant exceed the number of Shares subject to the
Participant's Option.
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(g) Any cash balance remaining in the Participant's
account shall be refunded to the Participant as soon as practical after the
last day of the Offering Period. In the event the cash to be returned to a
Participant pursuant to the preceding sentence is an amount less than the
amount necessary to purchase a whole Share, the Company may establish
procedures whereby such cash is maintained in the Participant's account and
applied toward the purchase of Shares in the subsequent Offering.
(h) At the time the Option is exercised, in whole or
in part, or at the time some or all of the Shares are disposed of, the
Company shall withhold from the Participant's Compensation, or the
Participant shall otherwise make adequate provision for, an amount equal to
the federal, state, local and foreign tax withholding obligations of the
Company, if any, which arise upon exercise of the Option or disposition of
Shares, respectively.
(i) No Shares shall be purchased on behalf of a
Participant whose participation in the Offering or the Plan has terminated on
or before the date of exercise.
(j) The Company may, from time to time, establish (i)
a minimum required withholding amount for participation in any Offering which
shall not exceed one percent (1%) of the Participant's Compensation, (ii)
limitations on the frequency and/or number of changes in the amount withheld
during an Offering, (iii) an exchange ratio applicable to amounts withheld in
a currency other than U.S. dollars, and/or (iv) such other limitations or
procedures as deemed advisable by the Company in the Company's sole
discretion which are consistent with the Plan and in accordance with the
requirements of section 423 of the Code.
(k) Any portion of a Participant's Option remaining
unexercised after the end of the Offering Period to which such Option relates
shall expire immediately upon the end of such Offering Period. Any Shares
subject to the unexercised portion of an Option at the end of an Offering
Period shall be returned to the Plan's share reserve.
10. LIMITATIONS ON PURCHASE OF SHARES; RIGHTS AS A STOCKHOLDER.
(a) FAIR MARKET VALUE LIMITATION. No Participant shall
be entitled to purchase Shares under the Plan (or any other employee stock
purchase plan which is intended to meet the requirements of section 423 of
the Code sponsored by Ross, a parent corporation of Ross as defined in
section 424(e) of the Code or a subsidiary corporation of Ross as defined in
section 424(f) of the Code) at a rate which exceeds $25,000 in Fair Market
Value, determined as of the Offering Date for each Offering Period (or such
other limit as may be imposed by the Code), for each calendar year in which
the Participant participates in the Plan (or any other employee stock
purchase plan described in this sentence).
(b) PRO RATA ALLOCATION. In the event the number of
Shares which might be purchased by all Participants in the Plan exceeds the
number of Shares available in the Plan, the Company shall make a pro rata
allocation of the remaining Shares in as uniform a manner as shall be
practicable and as the Company shall determine to be equitable.
(c) RIGHTS AS A STOCKHOLDER AND EMPLOYEE. A
Participant shall have no rights as a stockholder by virtue of the
Participant's participation in the Plan until the date of the issuance of a
stock certificate(s) for the shares being purchased pursuant to the exercise
of the
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Participant's Option. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to the date
such stock certificate(s) are issued. Nothing herein shall confer upon a
Participant any right to continue in the employ of the Company or interfere
in any way with any right of the Company to terminate the Participant's
employment at any time.
11. WITHDRAWAL.
(a) WITHDRAWAL FROM AN OFFERING. A Participant may
withdraw from an Offering by signing and delivering to the Company's payroll
office, a written notice of withdrawal on a form provided by the Company for
such purpose. Such withdrawal may be elected at any time prior to the end of
an Offering Period. Unless otherwise indicated, withdrawal from an Offering
shall not result in a withdrawal from the Plan or any succeeding Annual
Offering Period herein. A Participant is prohibited from again participating
in an Offering upon withdrawal from such Offering at any time.
(b) RETURN OF PAYROLL DEDUCTIONS. Upon withdrawal from
an Offering, the withdrawn Participant's accumulated payroll deductions shall
be returned as soon as practicable after the withdrawal, without the payment
of any interest, to the Participant and all of the Participant's rights in
the Offering shall terminate. Such accumulated payroll deductions may not be
applied to any other Offering under the Plan.
(c) WITHDRAWAL FROM THE PLAN. A Participant may
withdraw from the Plan by signing a written notice of withdrawal on a form
provided by the Company for such purpose and delivering such notice to the
Company's payroll office. In the event a Participant voluntarily elects to
withdraw from the Plan, the Participant may not resume participation in the
Plan during the same Offering Period, but may participate in any subsequent
Offering under the Plan by filing a new subscription agreement in the same
manner as set forth above for initial participation in the Plan.
12. TERMINATION OF EMPLOYMENT. Termination of a Participant's
employment with the Company for any reason, including retirement or death or
the failure of a Participant to remain an employee eligible to participate in
the Plan, shall terminate the Participant's participation in the Plan
immediately. In such event, the payroll deductions credited to the
Participant's account shall, as soon as practicable, be returned to the
Participant or, in the case of the Participant's death, to the Participant's
legal representative, and all of the Participant's rights under the Plan
shall terminate. Interest shall not be paid on sums returned to a Participant
pursuant to this paragraph 12. A Participant whose participation has been so
terminated may again become eligible to participate in the Plan by again
satisfying the requirements of paragraph 4.
13. REPAYMENT OF PAYROLL DEDUCTIONS. In the event a
Participant's rights in the Plan or any Offering therein are terminated, the
Company shall deliver as soon as practicable to the Participant any payroll
deductions credited to the Participant's account with respect to the Plan or
any such Offering. Interest shall not be paid on sums returned to a
Participant pursuant to this paragraph 13.
14. ADJUSTMENTS UPON CHANGES IN SECURITIES.
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(a) If any change is made in the Shares subject to the
Plan, or subject to any Option, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the receipt
of consideration by the Company), the Plan will be appropriately adjusted in
the type of security and the maximum number of Shares subject to the Plan
pursuant to Section 3 and the outstanding Options will be appropriately
adjusted in the type of security, number of shares, and purchase limits of
such outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
that does not involve the receipt of consideration by the Company.)
(b) Effective for all Offerings beginning on or after
July 1, 2000, in the event of a Change in Control, then, as determined by the
Board in its sole discretion (i) any surviving or acquiring corporation may
assume outstanding Options or substitute similar Options for those under the
Plan, (ii) such Options may continue in full force and effect, or (iii) the
Participants' accumulated payroll deductions may be used to purchase Shares
immediately prior to the effective date of the Change in Control transaction
and the Participants' Options under the ongoing Offering(s) terminated. In
the event that no affirmative determination is made by the Board pursuant to
the preceding sentence, then alternative (iii) shall apply automatically.
(c) "Change in Control" means the occurrence of any of
the following events:
(i) A dissolution or liquidation of the Company.
(ii) A sale, lease or other disposition of
all or substantially all of the assets of the Company.
(iii) A merger, reverse merger, consolidation or
reorganization of the Company with or into another corporation or other legal
person, or any other capital reorganization in which more than fifty percent
(50%) of the shares of the Company entitled to vote are exchanged.
15. NON-TRANSFERABILITY. An Option may not be transferred in
any manner otherwise than by will or the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the
Participant.
16. REPORTS. Each Participant who exercised all or part of his
or her Option for an Offering Period shall receive as soon as practicable
after the last day of such Offering Period a report of such Participant's
account setting forth the total payroll deductions accumulated, the number of
Shares purchased and the remaining cash balance to be refunded or retained in
the Participant's account pursuant to paragraph 9(g), if any.
17. COVENANTS OF THE COMPANY.
(a) During the terms of the Options granted under the
Plan, the Company shall ensure that the amount of Shares required to satisfy
such Options are available.
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(b) The Company shall seek to obtain from each
federal, state, foreign or other regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and
sell Shares upon exercise of the Options granted under the Plan. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of Shares under the Plan, the
Company shall be relieved from any liability for failure to issue and sell
Shares upon exercise of such Options unless and until such authority is
obtained.
18. USE OF PROCEEDS FROM SHARES. Proceeds from the sale of
Shares pursuant to Options granted under the Plan shall constitute general
funds of the Company.
19. PLAN TERM. This Plan shall continue until terminated by the
Board or until all of the Shares reserved for issuance under the Plan have
been issued, whichever shall first occur.
20. AMENDMENT OR TERMINATION OF THE PLAN. The Board may at any
time amend or terminate the Plan, except that such termination cannot affect
Options previously granted under the Plan, nor may any amendment make any
change in an Option previously granted under the Plan which would adversely
affect the right of any Participant (except as may be necessary to qualify
the Plan as an employee stock purchase plan pursuant to section 423 of the
Code), nor may any amendment be made without approval of the stockholders of
the Company within twelve (12) months of the adoption of such amendment if
such amendment would authorize the sale of more shares than are authorized
for issuance under the Plan or would change the designation of corporations
whose employees may be offered Options under the Plan. To the extent
permitted by governing law, the Board authorizes the Senior Vice President of
Human Resources to adopt amendments to the Plan.
IN WITNESS WHEREOF, the undersigned Senior Vice President of Human
Resources of the Company certifies that the foregoing Fourth Amended and
Restated Ross Stores, Inc. Employee Stock Purchase Plan was duly adopted by
the Board of Directors of the Company on March 16, 1992, amended on March 16,
1995 and amended on March 16, 2000.
/s/ Ivy Council
Ivy Council
Senior Vice President, Human Resources
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