Ross Stores (ROST)

Item 1.01 Entry into a Material Definitive Agreement.

Effective October 2, 2006, the Company entered into a First Amendment to the Employment Agreement between the Company and Barry Gluck, Executive Vice President of Merchandising, Marketing and Planning and Allocation for the Company (the “Amendment”). 

The Amendment provides that Mr. Gluck will retire from his current position effective March 1, 2007 or such earlier date as determined by the Company’s Chief Executive Officer with at least 30 days notice (the “Retirement Date”). Following the Retirement Date, Mr. Gluck will serve as an independent contractor consultant to the Company for up to two (2) days per week, as reasonably requested by the Company, until February 29, 2008 (the “Consulting Period”). 

Compensation and Related Matters.  The Amendment provides Mr. Gluck with the following compensation and related benefits:

Salary and Bonus.  While he remains an employee, Mr. Gluck will continue to receive his full salary (not less than his current salary of $600,000 per year).  During the Consulting Period, Mr. Gluck will be paid a consulting fee at a rate equal to his salary in effect on the Retirement Date.  Mr. Gluck will be eligible to receive a full year’s bonus for the Company’s fiscal year 2006, calculated and paid under the then-existing bonus plan for senior executives of the Company. 

Equity Compensation.  All stock options granted to Mr. Gluck by the Company will continue to vest in accordance with their existing terms until March 1, 2007, at which time unvested options will terminate.  Vested options will remain exercisable until February 29, 2008.  The restricted stock award granted to Mr. Gluck on March 20, 2003 will vest in full on March 20, 2007.  The restricted stock award granted to Mr. Gluck on March 23, 2004 will vest 50% on March 1, 2007; the remaining 50% will be forfeited.

Benefits.  The Company will pay for health care coverage for Mr. Gluck and his eligible dependents for a period of sixty (60) months following the Retirement Date.  The Company will also continue Mr. Gluck’s Company-provided life insurance and estate planning benefits through the Consulting Period.

The Company is permitted to defer payments of compensation and benefits to Mr. Gluck to the extent determined necessary to avoid excise or penalty tax consequences.

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Item 1.01 Entry into a Material Definitive Agreement.

On February 14, 2006, the Company entered into a Sixth Amendment to the Independent Contractor Consultancy Agreement between the Company and Norman A. Ferber, the Company’s Chairman of the Board of Directors.  The new amendment is effective February 1, 2006 and extends the term of Mr. Ferber’s consultancy for three years, until January 31, 2009.  The amendment renews the terms and benefits previously provided, including an annual consulting fee of $1,100,000, payable for the full term of the agreement, except in the event of specified terminations for cause.  The new amendment provides that in the event of Mr. Ferber’s death, the consulting agreement will immediately terminate and no further fees will be owed by the Company.  Mr. Ferber will receive a one-time payment of $23,282 (after gross up to cover estimated taxes) for reimbursement of estimated premiums for him to purchase a life insurance policy with a death benefit in the amount of $2,000,000 during the three year term of the agreement.

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Item 1.01     Entry into a Material Definitive Agreement.

On October 6, 2005, the Company entered into a First Amendment to the existing employment agreement with Lisa Panattoni, regarding her promotion from Senior Vice President, General Merchandise Manager to the position of Executive Vice President, Merchandising. 

As amended, the employment agreement extends through March 31, 2009.  The agreement provides that Ms. Panattoni will receive an annual salary of not less than $560,000.  In the event that (i) Ms. Panattoni’s employment involuntarily terminates due to disability; (ii) the Company terminates her employment without cause; or (iii) she resigns for good reason, she would be entitled to continued payment of her then current salary, including an annual bonus, through the remaining term of the employment agreement, and all stock options she holds would become fully vested.  She would also be entitled to certain restricted shares which would be vested pro rata as of the date of her termination.

In the event there is a change in control of the Company, the term of Ms. Panattoni’s employment agreement will continue until the later of (a) the Remaining Term (as defined below) or (b) the expiration of any extension to the employment agreement.  She would be entitled to continued payment of her then current salary and annual bonus.  In addition to these payments, she would receive $750,000 per year payable with her salary for two years after the effective date of the change in control (“Remaining Term”).  Further, all restricted stock she holds would become fully vested. All unvested stock options would either be assumed by the acquiring or successor corporation or become fully vested.  If within one year following a change in control of the Company, her employment is terminated either by the Company without cause or because she resigns for good reason, she would be entitled to a continuation of her then current salary and annual bonus payments for not less than two years.  In addition, she would be entitled to continuation of health and estate planning benefits for two years following her termination.  Additionally, in both of the above situations, she would be reimbursed for any excise taxes she pays pursuant to Internal Revenue Code Section 4999. 

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Item 1.01 Entry into a Material Definitive Agreement.

Second Amendment to Employment Agreement of Michael Balmuth

On May 18, 2005, Ross Stores, Inc. (the “Company”) entered into a Second Amendment to the employment agreement with Michael Balmuth, the Company’s Vice Chairman of the Board, President and Chief Executive Officer (the “Second Amendment”).  Mr. Balmuth and the Company had previously entered into an Employment Agreement effective May 31, 2001 and a First Amendment to the Employment Agreement effective January 30, 2003 (together, the original Agreement and First Amendment to the Employment Agreement are the “Original Agreement”).

The Second Amendment (a) extends the term of Mr. Balmuth’s employment to January 29, 2009, subject to further extension or termination as provided therein, (b) establishes his position as Vice Chairman of the Board, President and Chief Executive Officer of the Company, (c) establishes his base salary at $938,000 per year, subject to adjustment as provided therein, (d) provides for payment to Mr. Balmuth each year of an amount sufficient to cover the total premiums on certain life insurance policies on Mr. Balmuth’s life with an aggregate face value of $12 million, plus the amount necessary to cover any federal, state and local income tax liability of Mr. Balmuth attributable to the premium amounts, and (e) adds provisions pertaining to compliance with Section 409A of the Internal Revenue Code (concerning the treatment of nonqualified deferred compensation plans), including provision for further modifications to be made at the election of Mr. Balmuth to the extent he determines that compliance with Section 409A will benefit him, and provision for payment of interest to Mr. Balmuth on the principal amount of any payments or benefits for which payment is delayed to a date six months or more following the date of termination of Mr. Balmuth’s employment.  The Second Amendment also provides that Mr. Balmuth is solely responsible for any additional tax or interest imposed by Section 409A as a result of his failure to elect any modification to his employment agreement.

Other terms and conditions of the Original Agreement were left unchanged.  A description of the terms of the Original Agreement can be found under the heading “Employment Contracts, Termination of Employment and Change in Control Arrangements” in the Company’s definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, filed with the SEC on April 14, 2005.

Amendment to Standard Terms of Options for Non-employee Directors

On May 17, 2005, the Compensation Committee of the Company’s Board of Directors approved an amendment to the Company’s 2004 Equity Incentive Plan, to provide that options granted on or after May 19, 2005 to non-employee directors will remain exercisable (by the director or the director’s guardian or legal representative) for sixty months after the date on which the director resigns from service on the Board of Directors, or (if shorter) until the option expiration date, if such resignation constitutes retirement, which is defined as resignation after attaining the age of 55 and after at least ten years of service as a member of the Board of Directors.

Item 1.01 Entry into a Material Definitive Agreement.

On April 1, 2005, the Company entered into a Second Amendment to the Independent Contractor Consultancy Agreement between the Company and Stuart Moldaw, the Company’s Chairman Emeritus and member of the Board of Directors.  The new amendment is effective April 1, 2005 and extends the term of Mr. Moldaw’s consultancy until March 31, 2008, with the same terms and benefits previously provided, including an annual consulting fee of $100,000.

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