Ross 2006 Annual Report Download - page 61

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Employee Stock Purchase Plan. Under the Employee Stock Purchase Plan, eligible full-time employees participating in the
annual offering period can choose to have up to the lesser of 10% or $21,250 of their annual base earnings withheld to purchase
the Company’s common stock. The purchase price of the stock is the lower of 85% of the market price at the beginning of the
offering period, or end of the offering period. During fiscal 2006, 2005 and 2004, employees purchased approximately 183,000,
190,000 and 198,000 shares, respectively, of the Company’s common stock under the plan at weighted average per share prices
of $24.86, $23.59 and $22.23, respectively. Through February 3, 2007, approximately 8,525,000 shares had been issued under
this plan and 1,475,000 shares remained available for future issuance.
Note I: Related Party Transactions
The Company maintains consulting and benefits agreements with its Chairman of the Board of Directors under which the
Company currently pays annual consulting fee of $1.1 million in monthly installments through January 2009. In addition, these
agreements also provide for administrative support and health and other benefits for the individual and his dependents which
totaled approximately $0.2 million in fiscal 2006.
The Company also maintains a consulting agreement with its Chairman Emeritus under which it pays an annual consulting fee of
$0.1 million through March 2008 and provides administrative support and health benefits for the individual and his spouse which
totaled approximately $0.1 million in fiscal 2006.
The Chairman Emeritus is also the Chairman Emeritus of The Gymboree Corporation, to which the Company paid $0.0 million,
$0.1 million and $1.6 million for children’s apparel purchases at fair market value in fiscal 2006, 2005 and 2004, respectively.
Note J: Provision for Litigation Expense and Other Legal Proceedings
Like many California retailers, the Company has been named in class action lawsuits regarding misclassification of assistant
store managers. In February 2007 the Orange County Superior Court approved a settlement of the cases involving whether
the Company’s assistant store managers in California are correctly classified as exempt under California Wage Orders. The
approved settlement obligation is included in accrued expenses and other in the accompanying consolidated balance sheet as
of February 3, 2007.
Other class action litigation involving allegations that hourly associates have missed meal and/or rest break periods remains
pending as of February 3, 2007. Resolution of these cases is not expected to have a material adverse effect on the Company’s
financial condition or result of operations.
The Company is a 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 these matters is not expected to have a material adverse effect on the Company’s financial condition
or results of operations.