In the event there is a change in control of the Company, the term of Mr. Cribb’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.  He would be entitled to continued payment of his then current salary and annual bonus.  In addition to these payments, he would receive $500,040 per year payable with his salary for two years after the effective date of the change in control (“Remaining Term”).  Further, all restricted stock he 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, his employment is terminated either by the Company without cause or because he resigns for good reason, he would be entitled to a continuation of his then current salary and annual bonus payments for not less than two years.  In addition, he would be entitled to continuation of health and estate planning benefits for two years following his termination.  Additionally, in both of the above situations, he would be reimbursed for any excise taxes he pays pursuant to Internal Revenue Code Section 4999. 

Although the Company has not yet entered into a definitive agreement, the Company anticipates that as a result of his appointment as Executive Vice President and Chief Operations Officer, Mr. Cribb’s employment agreement will be revised to reflect his new title and duties, to extend its term through March 2009, to increase his salary to $560,000 per year, and to make corresponding changes in his compensation upon termination or change in control, and that he will be granted an additional stock option to purchase approximately 58,557 shares, and an additional grant of approximately 27,885 shares of restricted stock, with vesting and other terms consistent with the Company’s standard terms.

Michael B. O’Sullivan.  Mr. O’Sullivan, 40, joined Ross in September 2003 as Senior Vice President, Strategic Planning and Marketing.  From 1991 to 2003, Mr. O’Sullivan was a partner with Bain & Company, providing consulting advice to retail, consumer goods, financial services, and private equity clients.

The Company entered into an employment agreement with Mr. O’Sullivan on September 8, 2003.  The employment agreement extends through September 8, 2006.  The agreement provides that Mr. O’Sullivan will receive an annual salary of not less than $450,000.  In the event that (i) Mr. O’Sullivan’s employment involuntarily terminates due to disability; (ii) the Company terminates his employment without cause; or (iii) he resigns for good reason, he would be entitled to continued payment of his then current salary, including an annual bonus, through the remaining term of the employment agreement, and all stock options he holds would become fully vested.  He would also be entitled to certain restricted shares which would be vested pro rata as of the date of his termination.

In the event there is a change in control of the Company, the term of Mr. O’Sullivan’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.  He would be entitled to continued payment of his then current salary and annual bonus.  In addition to these payments, he would receive $500,040 per year payable with his salary for two years after the effective date of the change in control (“Remaining Term”).  Further, all restricted stock he 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, his employment is terminated either by the Company without cause or because he resigns for good reason, he would be entitled to a continuation of his then current salary and annual bonus payments for not less than two years.  In addition, he would be entitled to continuation of health and estate planning benefits for two years following his termination.  Additionally, in both of the above situations, he would be reimbursed for any excise taxes he pays pursuant to Internal Revenue Code Section 4999. 

Although the Company has not yet entered into a definitive agreement, the Company anticipates that as a result of his appointment as Executive Vice President and Chief Administrative Officer, Mr. O’Sullivan’s employment agreement will be revised to reflect his new title and duties, to extend its term through March 2009, to provide a $500,000 relocation bonus and other relocation benefits, to increase his salary to $560,000 per year, and to make corresponding changes in his compensation upon termination or change in control, and that he will be granted an additional stock option to purchase approximately 58,557 shares, and an additional grant of approximately 34,856 shares of restricted stock, with vesting and other terms consistent with the Company’s standard terms. 

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