Ross 2014 Annual Report Download - page 58

The market value of shares of restricted stock and of the stock underlying restricted stock units at the date of grant is amortized
to expense over the vesting period of generally three to five years. The unamortized compensation expense at January 31, 2015
and February 1, 2014 was $87.4 million and $74.9 million, respectively, which is expected to be recognized over a weighted
average remaining period of 1.7 years. Intrinsic value for restricted stock, defined as the closing market value on the last
business day of fiscal year 2014 (or $91.71), was $320.2 million. A total of 6,628,000, 6,986,000, and 7,202,000 shares were
available for new restricted stock awards at the end of fiscal 2014, 2013, and 2012, respectively. During fiscal 2014, 2013, and
2012, shares purchased by the Company for tax withholding totaled 534,000, 496,000, and 505,000 shares, respectively, and
are considered treasury shares which are available for reissuance. As of January 31, 2015 and February 1, 2014, the Company
held 4,888,000 and 4,354,000 shares of treasury stock, respectively.
Performance share awards. The Company has a performance share award program for senior executives. A performance
share award represents a right to receive shares of restricted stock or restricted stock units on a specified settlement date
based on the Company’s attainment of a profitability-based performance goal during the performance period, which is the
Company’s fiscal year. If attained, the restricted stock or units then vest over a service period, generally two to three years from
the date the performance award was granted. The release of shares related to restricted stock units earned is deferred generally
for one year from the date earned. The Company issued approximately 303,000, 240,000, and 280,000 shares in settlement of
the fiscal 2014, 2013, and 2012 awards.
Employee Stock Purchase Plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in
the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share
purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the
stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day
of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount
given on the purchase date.
During fiscal 2014, 2013, and 2012, employees purchased approximately 200,000, 208,000, and 211,000 shares, respectively, of
the Company’s common stock under the plan at weighted average per share prices of $64.35, $57.57, and $50.67, respectively.
Through January 31, 2015, approximately 19,342,000 shares had been issued under this plan and 658,000 shares remained
available for future issuance.
Note I: Related Party Transactions
The Company has a consulting agreement with Norman Ferber, its Chairman Emeritus of the Board of Directors, under which
the Company pays him an annual consulting fee of $1.5 million through May 2018. In addition, the agreement provides for
administrative support and health and other benefits for the individual and his dependents, which totaled approximately $0.3
million in fiscal 2014, 2013, and 2012, along with amounts to cover premiums through May 2018 on a life insurance policy with
a death benefit of $2.0 million. On termination of Mr. Ferber’s consultancy with the Company, the Company will pay Mr. Ferber
$75,000 per year for a period of 10 years.
Robert Ferber, the son of Norman Ferber, is a buyer with the Company. For fiscal 2014, the Company paid Robert Ferber
compensation including salary and bonus of approximately $133,000.
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