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AMENDED AND
RESTATED
RETIREMENT BENEFIT PACKAGE AGREEMENT
RETIREMENT BENEFIT PACKAGE AGREEMENT
This Amended and Restated Retirement
Benefit Package Agreement (the “Retirement Agreement”) made and entered into on January 6,
2010 by and between Ross Stores, Inc. (“Ross”) and Norman A.
Ferber (“Ferber”), amends and restates the Retirement
Benefit Package Agreement entered into by Ross and Ferber effective as of
February 1, 2000, as amended on May 31, 2001 (the “Prior Agreement”). In recognition of Ferber’s past
valued services as Ross’ Chief Executive Officer, Ross desires to give Ferber
the following “Retirement Benefit Package.” The retirement benefits provided
under this Retirement Agreement shall be payable without regard to the provision
of any additional services by Ferber.
1. Continued Benefits.
1.1 Benefit Plans.
(a) Until the death of both Ferber and his
spouse, (1) Ferber and his “Immediate Family” (defined as Ferber, Ferber's spouse and
Ferber's children under the age of twenty one and children twenty one or older
if living at home or at college) shall be entitled to continue to participate
(at no cost to them) in the following Ross employee benefit plans, in effect on
the date hereof, in which Ferber now participates: executive medical, dental,
vision and mental health insurance; group life insurance; accidental death and
dismemberment insurance; business travel insurance; group excess personal
liability; and matching of Ferber's 401(k); and (2) subject to the last sentence
of this Section 1.1(a), Ross shall not make any changes in such plans or
arrangements that would adversely affect Ferber's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all senior
executives of Ross, including Ross' Chief Executive Officer, and does not result
in a proportionately greater reduction in the rights of, or benefits to, Ferber
as compared with any other senior executive of Ross. Ferber shall be entitled to
participate in or receive benefits under any employee benefit plan or
arrangement made available by Ross in the future to its executives and key
management employees, subject to, and on a basis consistent with, the terms,
conditions and overall administration of such plans and arrangements.
Notwithstanding the foregoing, the medical, dental and vision benefits provided
under this Section 1.1(a) shall be provided at a minimum level of coverage equal
to the greater of (i) the level of coverage provided to Ferber in 2009 (which
coverage shall include, without limitation, the benefits set forth on Part II of
the attached Exhibit A) or (ii) the level of coverage provided
to Ross’ Chief Executive Officer during the year such coverage is
provided.
(b) In order to implement the applicable
provisions of Section 1.1(a), Ferber and Ross agree that (1) in lieu of Ross
itself providing group life insurance and accidental death and dismemberment
insurance coverage for Ferber, Ross will continue to pay directly to Ferber an
amount representing the proportionate cost of providing equivalent life
insurance and accidental death and dismemberment insurance to Ferber under Ross'
existing executive life insurance program, along with an amount equal to the
additional tax on such benefits to Ferber, as reflected on Part I of the
attached Exhibit A, and (2) in lieu of Ferber participating
directly in Ross' existing 401(k) matching program, Ross will continue to pay
directly to Ferber an amount representing the 401(k) matching payment otherwise
payable to Ross’ senior executives (including, without limitation, Ross’ Chief Executive Officer) under the
terms of Ross' then current 401(k) matching program, as reflected on the
attached Exhibit A. During the term of the Amended and
Restated Independent Contractor Consultancy Agreement between Ross and Ferber
dated the date hereof (the “Consultancy Agreement”), such payments shall be paid to Ferber
on a pro rata basis each month on the same date the monthly installment of the
annual consulting fee provided for in the Consultancy Agreement is paid and,
following the termination of the Consultancy Agreement for any reason other than
Ferber’s death, shall be paid in a single lump sum on the date the payment
provided for in Section 1.4 is paid.
(c) Ross shall provide all benefits described in this Section 1.1 at no cost
to Ferber and his Immediate Family and shall reimburse Ferber and his Immediate
Family for any and all taxes associated with Ferber's continued receipt of such
benefits, including taxes based on any cash payment paid to them as
reimbursement for such taxes.
(d) If for any reason, Ferber becomes ineligible to participate in any of
Ross’ employee benefit plans provided for in Section 1.1(a) (and not addressed
in Section 1.1(b)), Ross shall reimburse Ferber for the cost of continuing these
benefits, including all taxes associated with such and taxes based on any cash
payment paid to Ferber as reimbursement for such taxes.
1.2 Discount Cards. Until Ferber’s death, Ferber and all
members of his Immediate Family shall be entitled to Ross discount
cards.
1.3 Estate Planning. Until Ferber’s death, Ferber shall be
reimbursed by Ross, or any successor to Ross, on an annual basis, for any estate
planning fees or expenses actually incurred by Ferber, up to a maximum annual
reimbursement equal to that provided to the Chief Executive Officer of Ross, or
any successor to Ross, but in no event less than $20,000. Ross shall also
reimburse Ferber for all federal and state income taxes that may be payable by
him as a result of the foregoing reimbursement.
1.4 Annual Payments. Upon the termination of the Consultancy
Agreement for any reason other than Ferber’s death, Ross shall pay Ferber
annually the amount of $75,000 for a period of ten (10) years with the first
such payment to be made in the year in which the Consultancy Agreement so
terminates and each annual payment made on February 10th (or, if February
10th is not a
business day, the immediately following business day) of each year during this
ten-year period.
2. Secretary. Ross agrees to provide Ferber with a
full-time secretary for so long as Ferber serves as a member of Ross’ Board of Directors, including the
services of his present secretary for so long as she is able and willing to
serve.
3. Change of Control. For purposes of this Retirement
Agreement, in the event of a Change of Control, “Ross” shall include any other entity that is a
successor to Ross and the provisions of this Retirement Agreement shall continue
to be binding on and shall be performed by such successor, if any, for the
benefit of Ferber and his heirs and successors. Further, in the event of any
such Change of Control, the “senior executives” referred to in Section 1 of this
Retirement Agreement shall mean the senior executives who are members of the
successor entity’s executive committee, or equivalent; or if there is no such
committee, who hold the most senior rank in the successor entity (in each case,
including the successor entity’s Chief Executive Officer). For purposes of this
Retirement Agreement, a “Change of
Control” shall be deemed to have occurred if:
(a) Any person or group (within the meaning of Rule 13d-3 of the rules and
regulations promulgated under the Securities Exchange Act of 1934, as amended),
shall acquire, in or a series of transactions, whether through sale of stock or
merger, ownership of stock of Ross that possesses more than 50% of the total
fair market value or total voting power of the stock of Ross or any successor to
Ross; or
(b) A merger in which Ross is a party, after which merger the stockholders of
Ross do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the surviving company;
or
(c) The sale, exchange, or transfer of all or substantially all of Ross’
assets (other than a sale, exchange, or transfer to one or more corporations
where the stockholders of Ross before and after such sale, exchange, or
transfer, directly or indirectly, are the beneficial owners of at least a
majority of the voting stock of the corporation(s) to which the assets were
transferred).
4. General Provisions.
4.1 Amendment;
Modification. This
Retirement Agreement may be amended or modified only with the written consent of
Ferber and the Board of Directors of Ross, or its designated representative. No
oral waiver, amendment or modification will be effective under any circumstances
whatsoever
4.2 Successors and Assigns. This Retirement Agreement and all
rights of Ferber hereunder shall inure to the benefit of and be enforceable by
Ferber’s personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. In addition, the
promises and obligations contained herein will be binding on the successors and
assigns of Ross.
4.3 Entire Agreement. This Retirement Agreement constitutes
the entire agreement between the parties relating to this subject matter and
supersedes all prior or contemporaneous oral or written agreements concerning
such subject matter, including the Prior Agreement.
4.4 Notice. For the purposes of this Retirement
Agreement, notices, demands and all other communications provided for in the
Retirement Agreement shall be in writing and shall be deemed to have been duly
given when delivered or (unless otherwise specified) mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
| If to Ferber: | Norman A. Ferber | |
| 459 Hamilton Avenue | ||
| Palo Alto, CA 94301 |
| If to Ross: | Ross Stores, Inc. | |
| 4440 Rosewood Drive | ||
| Pleasanton, CA 94588 | ||
| Attention: General Counsel |
or to such other
address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
4.5 Arbitration. In the event of any dispute or claim
relating to or arising out of this Retirement Agreement, all such disputes shall
be fully, finally and exclusively resolved by binding arbitration conducted by
the American Arbitration Association in Alameda County, California.
4.6 Attorney’s Fees. Ross agrees to pay for Ferber’s
reasonable attorney’s fees incurred in the negotiation of terms of the
Retirement Agreement.
IN WITNESS WHEREOF, the parties have
executed this Agreement on the date first above written.
| ROSS STORES, INC. | NORMAN A. FERBER | ||
| By: | /s/ Michael Balmuth | /s/ Norman A. Ferber | |
| Michael Balmuth | Chairman of the Board, Ross Stores, Inc. | ||
| Vice Chairman and CEO | |||
| Date: | 1/6/10 | Date: | 1/6/10 |
EXHIBIT
A TO AMENDED AND RESTATED
RETIREMENT BENEFIT PACKAGE AGREEMENT
RETIREMENT BENEFIT PACKAGE AGREEMENT
| Annual Total | Gross-Up | ||||||||||
| Cost | (44.85%) | Ross Cost | |||||||||
| Part 1 | |||||||||||
| Executive Medical - Family Coverage | $ | 41,244.60 | $ | - | $ | 41,244.60 | |||||
| Executive Dental - Family Coverage | $ | 5,108.40 | $ | - | $ | 5,108.40 | |||||
| Executive Vision - Family Coverage | $ | 2,499.00 | $ | - | $ | 2,499.00 | |||||
| 2009 401k Match on max comp (4% of $245k) | $ | 9,800.00 | $ | - | $ | 9,800.00 | |||||
| Group Life Insurance ($1m) | $ | 3,612.00 | $ | 2,937.41 | $ | 6,549.41 | |||||
| Group Acc Death & Dis Insurance ($1m) | $ | 276.00 | $ | 224.45 | $ | 500.45 | |||||
| Life Insurance - $2M Premium | $ | 8,150.00 | $ | 6,627.88 | $ | 14,777.88 | |||||
| Estate/Tax Planning Reimbursement (up to $20k) | $ | 20,000.00 | $ | 16,264.73 | $ | 36,264.73 | |||||
| Total | $ | 90,690 | $ | 26,054.48 | $ | 116,744 | |||||
| Part 2 | Executive Medical | |
| Plan covers 100% of all necessary medical expenses in the Aetna Network of providers or | ||
| Plan covers 100% of all necessary medical expenses after $300 annual deductible per family member if the provider is not in the Aetna network of Physicians | ||
| No co-payments or prescription costs and no limit on how much treatment is covered | ||
| Plan covers EAP program with annual cost = $13.08 | ||
| Executive Dental | ||
| Plan covers 100% of all necessary dental expenses whether or not the dentist is in network (Metlife) | ||
| Annual maximum per family member is $7,500 | ||
| Lifetime maximum per family member for orthodontia is $10,000 | ||
| Executive Vision | ||
| Plan covers 100% of all medically necessary expenses whether or not the optometrist is in network (VSP) | ||
| Maximum of $500 per frame | ||
| Non-prescription sunglasses are not covered | ||