Ross 2007 Annual Report Download - page 62

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60
Note I: Related Party Transactions
The Company has an agreement with its Chairman of the Board of Directors under which the Company pays an annual consulting
fee of $1.1 million in monthly installments through January 2009 and provides for administrative support and health and other
benefits for the individual and his dependents which totaled approximately $0.2 million in fiscal 2007. Subsequent to year-end,
the term of this agreement was extended through January 2012.
The Company also has an agreement with its Chairman Emeritus under which it pays an annual consulting fee of $0.1 million
through March 2008 and provides for administrative support and health benefits for the individual and his spouse which totaled
approximately $0.1 million in fiscal 2007. Subsequent to year-end, the Company agreed to release its interest in a split dollar life
insurance policy to its Chairman Emeritus, including the policy’s residual value of approximately $0.3 million.
Note J: Provision for Litigation Expense and Other Legal Proceedings
Like many California retailers, the Company has been named in class action lawsuits regarding wage and hour claims. In
February 2007 the Orange County Superior Court approved a settlement of the cases involving whether the Company’s assistant
store managers in California were correctly classified as exempt under California Wage Orders. The approved settlement
obligation was paid during the quarter ended May 5, 2007.
Other class action litigation involving allegations that hourly associates have missed meal and/or rest break periods, as well as
allegations of unpaid overtime wages to assistant store managers at all Company stores under federal law, remains pending as of
February 2, 2008.
The Company is also party in various other legal proceedings arising in the normal course of business. Actions filed against the
Company include commercial, customer, and labor and employment-related claims, including lawsuits in which plaintiffs allege
that the Company violated state and/or federal wage and hour and related laws. Actions against the Company are in various
procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties.
In the opinion of management, resolution of the class action litigation and other legal proceedings is not expected to have a
material adverse effect on the Company’s financial condition or results of operations.