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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark one)

X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---  SECURITIES EXCHANGE ACT OF 1934 
FOR THE FISCAL YEAR ENDED JANUARY 29, 2000

OR

TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES 
---  EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to _______

Commission file number 0-14678

ROSS STORES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE                                       94-1390387
(State or other jurisdiction                        (I.R.S. Employer 
of incorporation or organization)                 Identification No.)

8333 CENTRAL AVENUE, NEWARK, CALIFORNIA                  94560-3433
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code       (510) 505-4400

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:

Name of each exchange
Title of each class                               on which registered
----------------------------                      ------------------------------
COMMON STOCK, PAR VALUE $.01                                 N/A

Indicate by check mark whether the registrant has (1) filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes  X  No
---    ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K. ____

The aggregate market value of the voting common stock held by non-affiliates 
of the Registrant as of March 31, 2000 was $1,987,006,175. Shares of voting 
stock held by each director and executive officer and each person who on that 
date owned 10% or more of the outstanding voting stock have been excluded in 
that such persons may be deemed to be affiliates. This determination of 
affiliate status is not necessarily a conclusive determination for other 
purposes.

The number of shares of Common Stock, with $.01 par value, outstanding on 
March 31, 2000 was 84,290,457.

Documents incorporated by reference:
Portions of the Proxy Statement for Registrant's 2000 Annual Meeting of
Stockholders, which will be filed on or before May 10, 2000, are
incorporated herein by reference into Part III.

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1

PART I

ITEM 1.         BUSINESS

Ross Stores, Inc. ("Ross" or "company") operates a chain of 
off-price retail apparel and home accessories stores, which target value 
conscious men and women between the ages of 25 and 54 in middle-to-upper 
middle income households. The decisions of the company, from merchandising, 
purchasing and pricing, to the location of its stores, are aimed at this 
customer base. The company offers brand name and designer merchandise at low 
everyday prices, generally 20% to 60% below regular prices of most department 
and specialty stores. The company believes it derives a competitive advantage 
by offering a wide assortment of quality brand-name merchandise within each 
of its merchandise categories in an attractive easy-to-shop environment.

Ross' mission is to offer competitive values to its target customer 
by focusing on the following key strategic objectives:

-    Achieve an appropriate level of recognizable brands and labels at strong 
discounts throughout the store;

-    Meet customer needs on a more regional basis;

-    Deliver an in-store shopping experience that reflects the expectations 
of the off-price customer; and

-    Manage real estate growth to maintain leadership or achieve parity with 
the competition in key markets.

The original Ross Stores, Inc. was incorporated in California in 
1957. In August 1982, the company was purchased by some of its then current 
directors and stockholders. The six stores acquired were completely 
refurbished in the company's off-price format and stocked with new 
merchandise. In June 1989 the company reincorporated in the state of Delaware.

MERCHANDISING, PURCHASING AND PRICING

Ross seeks to provide its customers with a wide assortment of first 
quality, in-season, name-brand apparel, accessories and footwear for the 
entire family at everyday savings of 20% to 60% from regular department and 
specialty store prices, as well as similar savings on fragrances, gift items 
for the home, bed and bath merchandise and accessories. Although not a 
fashion leader, the company sells recognizable branded merchandise that is 
current and fashionable in each category. New merchandise typically is 
received five times each week at the company's 378 stores. The company's 
buyers review their merchandise assortments on a weekly basis, enabling them 
to respond to merchandise trends and purchasing opportunities in the market. 
The company's merchandising strategy is reflected in its advertising, which 
emphasizes a strong value message --Ross' customers will find great savings 
everyday on a broad assortment of name-brand merchandise.

MERCHANDISING. The Ross merchandising strategy incorporates a 
combination of off-price buying techniques to purchase both in-season and 
past-season merchandise. The company's emphasis on nationally advertised name 
brands reflects management's conviction that brand-name merchandise sold at 
compelling discounts will continue to be an important determinant of its 
success. Ross generally leaves the brand-name label on the merchandise it 
sells.

The company has established a merchandise assortment which it 
believes is attractive to its target customer group. Although Ross offers 
fewer classifications of merchandise than most department stores, the company 
generally offers a large selection of brand names within each classification 
with a wide assortment of vendors, prices, colors, styles and fabrics within 
each size or item. Over the past several years, the company has diversified 
its merchandise offerings by adding new product categories such as maternity, 
small sporting goods and exercise equipment, small electronics, tabletop 
lamps, small furnishings, educational toys and games, luggage, gourmet food 
and cookware, and fine jewelry in select stores. For fiscal 1999, the overall 
merchandise sales mix was approximately 94% first quality merchandise and 6% 
irregulars. The respective departments accounted for total sales in fiscal 
1999 approximately as follows: Ladies 34%, Men's 21%, Home Accents and Bed 
and Bath 16%, Fine Jewelry, Accessories, Hosiery, Lingerie and Fragrances 
12%, Shoes 8% and Children's 9%.

2

PURCHASING. The company continues to expand its network of vendors 
and manufacturers and believes it has adequate sources of first quality 
merchandise to meet its requirements. The company purchases the vast majority 
of its merchandise directly from manufacturers and has not experienced any 
difficulty in obtaining sufficient inventory.

The company believes that its ability to effectively execute certain 
off-price buying strategies is a key factor in its business. Ross buyers use 
a number of methods that enable the company to offer customers name-brand 
merchandise at strong everyday discounts relative to department and specialty 
stores. By purchasing later in the merchandise buying cycle than department 
and specialty stores, Ross is able to take advantage of imbalances in 
manufacturer-projected supplies of merchandise.

Unlike most department and specialty stores, Ross does not require 
that manufacturers provide promotional and markdown allowances, return 
privileges, split shipments, drop shipments to stores or delayed deliveries 
of merchandise. For most orders, the manufacturer only makes one delivery to 
one of the company's two distribution centers. These flexible requirements 
further enable the company's buyers to obtain significant discounts on 
in-season purchases.

The company has increased its emphasis in recent years on 
opportunistic purchases created by manufacturer overruns and canceled orders 
both during and at the end of a season. These buys are referred to as 
"closeout" or "packaway" purchases. Closeouts can be shipped to stores in 
season. Closeouts allow the company to get in season goods in its stores at 
lower prices. Packaway merchandise is purchased with the intent that it will 
be stored in the company's warehouses until the beginning of the next selling 
season. Packaway purchases are an effective method of increasing the 
percentage of prestige and national brands at competitive savings within the 
merchandise assortments. Packaway merchandise is mainly fashion basics and, 
therefore, not usually affected by shifts in fashion trends.

Throughout the 1990s, Ross gradually increased the amount of 
packaway inventories. In 1999, the company continued its emphasis on these 
important resources in response to compelling opportunities available in the 
marketplace. Packaway accounted for approximately 44% of total inventories as 
of January 29, 2000, compared to 44% at the end of the prior year. It is 
management's belief that the stronger discounts the company is able to offer 
on packaway merchandise are a key driver of Ross' business. In-store 
inventories at the end of fiscal 1999 were even with the prior year, and 
total consolidated inventories were up 7% mainly due to a greater number of 
stores in operation compared to the prior year.

The company is developing enhanced systems and processes for 
regionalized merchandise buying and allocation. The goal is to fine tune the 
merchandise mix and raise sales productivity in markets that are performing 
below the company average. Full implementation is scheduled for completion in 
2001.

Ross' buying offices are located in New York City and Los Angeles, 
the nation's two largest apparel markets. These strategic locations allow 
buyers to be in the market on a daily basis, sourcing opportunities and 
negotiating purchases with vendors and manufacturers. These locations also 
enable the company's buyers to strengthen vendor relationships -- a key 
determinant in the success of its off-price buying strategies.

The company's buyers have an average of 10 years of experience, 
including experience with other retailers such as Bloomingdale's, Burlington 
Coat Factory, Dayton Hudson, Foot Locker, Lechters, Lord & Taylor, Macy's, 
Marshalls, Nordstrom's, Robinson's/May, Sterns, T.J. Maxx and Value City. In 
keeping with its strategy, over the past several years the company has more 
than tripled the size of its merchandising staff. Management believes that 
this increase enables its merchants to spend even more time in the market 
which, in turn, should strengthen the company's ability to procure the most 
desirable brands at competitive discounts.

This combination of off-price buying strategies enables the company 
to purchase merchandise at net prices that are lower than prices paid by 
department and specialty stores.

PRICING. The company's policy is to sell brand-name merchandise that 
can generally be priced at 20% to 60% less than most department and specialty 
store regular prices. The Ross pricing policy is to affix a ticket displaying 
the company's selling price as well as the estimated comparable selling price 
for that item in department and/or specialty stores.

3

The Ross pricing strategy differs from that of a department or 
specialty store. Ross purchases its merchandise at lower prices and marks it 
up less than a department or specialty store. This strategy enables Ross to 
offer customers consistently low prices. Specified departments in the store 
are reviewed weekly for possible markdowns based on the rate of sale and the 
end of fashion seasons to promote faster turnover of inventory and accelerate 
the flow of fresh merchandise.

THE ROSS STORE

As of January 29, 2000, the company operated 378 stores. They are 
conveniently located in predominantly community and neighborhood strip 
shopping centers in heavily populated urban and suburban areas. Where the 
size of the market permits, the company clusters stores to maximize economies 
of scale in advertising, distribution and management.

The company believes a key element of its success is its organized, 
attractive, easy-to-shop in-store environment, which allows customers to shop 
at their own pace. The Ross store is designed for customer convenience in its 
merchandise presentation, dressing rooms, checkout and merchandise return 
areas. The Ross store's sales area is based on a prototype single floor 
design with a racetrack aisle layout. A customer can locate desired 
departments by signs displayed just below the ceiling of each department. 
Ross encourages its customers to select among sizes and prices through 
prominent category and sizing markers, promoting a self-service atmosphere. 
At most stores, shopping carts and/or baskets are available at the entrance 
for customer convenience. All cash registers are centrally located at store 
entrances for customer ease and efficient staffing.

The company minimizes transaction time for the customer at the 
checkout counter by using electronic systems for scanning each ticket at the 
point of sale and authorizing credit for personal checks and credit cards in 
a matter of seconds. Approximately 40% of payments are made with credit 
cards. Ross provides cash or credit card refunds on all merchandise returned 
with a receipt within 30 days. Merchandise returns having a receipt older 
than 30 days are exchanged or credited with a Ross Credit Voucher at the 
price on the receipt.

OPERATING COSTS

Consistent with the other aspects of its business strategy, Ross 
strives to keep operating costs as low as possible. Among the factors which 
have enabled the company to operate at low costs are:

-        Labor costs that generally are lower than full-price department and 
specialty stores due to (i) a store design that creates a 
self-selection retail format and (ii) the utilization of labor 
saving technologies.

-        Economies of scale with respect to general and administrative costs 
as a result of centralized merchandising, marketing and purchasing 
decisions.

-        Model store layout criteria which facilitate conversion of existing 
buildings to the Ross format.

-        A fully-integrated, on-line management information system which 
enables the company to respond quickly when making purchasing, 
merchandising and pricing decisions.

DISTRIBUTION

The company has two distribution centers -- one located in Newark, 
California (approximately 494,000 square feet) and the second located in 
Carlisle, Pennsylvania (approximately 424,000 square feet). Having a 
distribution center on each coast enhances cost efficiencies per unit and 
decreases turn-around time in getting the merchandise from the vendors to the 
stores. Shipments are made by contract carriers to the stores about five 
times a week depending on location.

The company believes that its two distribution centers, combined 
with utilization of third party processors, can provide adequate processing 
capacity to support store growth through fiscal 2001. The company is 
currently planning for a new distribution center facility, which is expected 
to be operational sometime during 2002.

4

CONTROL SYSTEMS

The company's management information system fully integrates data 
from significant phases of its operations and is a key element in the 
company's planning, purchasing, store allocation and pricing decisions. The 
system enables Ross to respond to changes in the retail market and to 
increase speed and accuracy in its merchandise distribution.

Data from the current and last fiscal year can be monitored on 
levels ranging from merchandise classification units to overall totals for 
the company. Merchandise is tracked by the system from the creation of its 
purchase order, through its receipt at the distribution center, through the 
distribution planning process, and ultimately to the point of sale.

ADVERTISING

The company relies primarily on television advertising to 
communicate its merchandise offerings of quality, brand name product at low 
everyday prices. This strategy reflects the company's belief that television 
is the most efficient and cost effective medium for communicating everyday 
savings on a wide selection of brand-name bargains for both the family and 
home.

TRADEMARKS

The trademark for Ross Dress For Less(R) has been registered with 
the United States Patent and Trademark Office.

EMPLOYEES

On January 29, 2000, the company had approximately 20,700 employees 
which includes an estimated 13,000 part-time employees. Additionally, the 
company hires temporary employees -- especially during the peak seasons. The 
company's employees are non-union. Management of the company considers the 
relationship between the company and its employees to be good.

COMPETITION

The company believes the principal competitive factors in the 
off-price retail apparel and home accessories industry are offering large 
discounts on name-brand merchandise appealing to its target customer and 
consistently providing a store environment that is convenient and easy to 
shop. To execute this concept, the company has strengthened its buying 
organization and developed a merchandise allocation system to distribute 
product based on regional factors, as well as other systems and procedures to 
maximize cost efficiencies and leverage expenses in an effort to mitigate 
competitive pressures on gross margin. The company believes that it is well 
positioned to compete on the basis of each of these factors.

Nevertheless, the national apparel retail market is highly 
fragmented. Ross faces intense competition for business from department 
stores, specialty stores, discount stores, other off-price retailers and 
manufacturer-owned outlet stores, many of which are units of large national 
or regional chains that have substantially greater resources than Ross. The 
retail apparel business may become even more competitive in the future.

ITEM 2.         PROPERTIES

STORES

From August 1982 to January 29, 2000, the company expanded from six 
stores in California to 378 stores in 17 states: Arizona, California, 
Colorado, Florida, Hawaii, Idaho, Maryland, Nevada, New Jersey, New Mexico, 
Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia and Washington. All 
stores are leased, with the exception of one location.

5

During fiscal 1999, the company opened 34 new Ross `Dress For Less' 
stores and closed five existing locations. The average new Ross store in 1999 
was approximately 31,200 square feet, yielding about 24,400 square feet of 
selling space. As of January 29, 2000, the company's 378 stores generally 
ranged in size from about 24,000 to 35,000 gross square feet and had an 
average of 22,600 square feet of selling space.

During the fiscal year ended January 29, 2000, no one store 
accounted for more than 1% of the company's sales. The company carries 
earthquake insurance on its corporate headquarters, both distribution centers 
and on its stores in California.

The company's real estate strategy is to open additional stores 
mainly in existing market areas, to increase its market penetration and 
reduce overhead and advertising expenses as a percentage of sales in each 
market. Important considerations in evaluating a new market are the 
availability of potential sites, demographic characteristics, competition and 
population density of the market. In fiscal 2000, the company plans to focus 
its new store growth primarily in existing markets. In addition, management 
continues to consider opportunistic real estate acquisitions.

Where possible, the company has obtained sites in existing buildings 
requiring minimal alterations. This has allowed Ross to establish stores in 
new locations in a relatively short period of time at reasonable costs in a 
given market. To date, the company has been able to secure leases in suitable 
locations for its stores. At January 29, 2000, the majority of the company's 
stores had unexpired original lease terms ranging from three to ten years 
with three to four renewal options of five years each. The average unexpired 
original lease term of its leased stores is five years, or 20 years if 
renewal options are included. (See Note C of Notes to Consolidated Financial 
Statements.) Most of the company's store leases contain a provision for 
percentage rental payments after a specified sales level has been achieved.

DISTRIBUTION CENTERS

In June 1998, the company purchased its Newark, California 
distribution center (approximately 494,000 square feet) for $24.6 million. 
The Newark facility is also the company's corporate headquarters. The company 
also owns its distribution center in Carlisle, Pennsylvania (approximately 
424,000 square feet). Having a processing distribution center on each coast 
enhances cost efficiencies per unit and decreases turn-around time in getting 
the merchandise from the vendors to the stores. Shipments are made by 
contract carriers to the stores about five times a week depending on location.

The company believes that its two processing distribution centers, 
combined with utilization of third party processors, can provide adequate 
processing capacity to support store growth through fiscal 2001. The company 
is currently planning for a new distribution center facility, which is 
expected to be operational sometime during 2002.

In September 1997, the company entered into a five-year lease for an 
approximately 214,500 square foot warehouse in Newark, California. In 
February 1998, the company entered into a three-year lease for an 
approximately 239,000 square foot warehouse in Carlisle, Pennsylvania. In 
August 1998, the company leased an additional 246,000 square foot warehouse 
in Carlisle, Pennsylvania, for a 42-month term. In November 1998, the company 
entered into a five-year lease for an additional 97,000 square foot warehouse 
in Newark, California. All of these properties store the company's packaway 
inventory. In August 1999, Ross leased for a 50-month term a 32,000 square 
foot warehouse on ten acres in Newark, California. This location is primarily 
used for the storage of certain supplies and equipment.

6

ITEM 3.         LEGAL PROCEEDINGS

The company has been named in a class action lawsuit filed on July 
8, 1999 in California Superior Court in San Bernardino County. The complaint 
alleges that the company's California store managers and assistant store 
managers were incorrectly classified as exempt employees from overtime laws 
of the State of California. After responsive pleadings were filed by the 
company, a preliminary understanding to resolve the class action lawsuit was 
announced by the company on February 3, 2000. As a result, the company 
recorded a non-recurring pre-tax charge of $9.0 million in the fourth quarter 
of fiscal 1999 relating to this matter. When terms are completed, the company 
expects to execute a settlement agreement, without any admission of 
wrongdoing, which will be subject to judicial approval. (See Note G of Notes 
to Consolidated Financial Statements).

The company is a party to routine litigation incident to its 
business. Management believes that none of these routine legal proceedings 
will have a material adverse effect on the company's financial condition or 
results of operations.

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following list sets forth the names and ages of all executive 
officers of the company, indicating each person's principal occupation or 
employment during at least the past five years. The term of office is at the 
pleasure of the Board of Directors.

NAME                     AGE                  POSITION

Michael A. Balmuth             49       Vice Chairman and Chief Executive Officer

John G. Call                   41       Senior  Vice  President,  Chief  Financial  Officer  and  Corporate
Secretary

Ivy D. Council                 43       Senior Vice President, Human Resources

James S. Fassio                45       Senior  Vice  President,  Property  Development,  Construction  and
Store Design

Barry S. Gluck                 47       Senior Vice President and General Merchandising Manager

Michael Hamilton               54       Senior Vice President, Store Operations

Irene Jamieson                 49       Senior Vice President and General Merchandising Manager

Megan Jamieson                 38       Senior Vice President, Strategic Planning

Barbara Levy                   45       Senior Vice President and General Merchandising Manager

Michael L. Wilson              46       Senior Vice President, Distribution and Transportation

-----------------------------

7

Mr. Balmuth joined the Board of Directors as Vice Chairman and 
became Chief Executive Officer in September 1996. Prior to that, he served as 
the company's Executive Vice President, Merchandising since July 1993 and 
Senior Vice President and General Merchandising Manager since November 1989. 
Before joining Ross, he was Senior Vice President and General Merchandising 
Manager at Bon Marche in Seattle from September 1988 through November 1989. 
From April 1986 to September 1988, he served as Executive Vice President and 
General Merchandising Manager for Karen Austin Petites.

Mr. Call has served as Senior Vice President, Chief Financial 
Officer and Corporate Secretary since June 1997. From June 1993 until joining 
Ross in 1997, Mr. Call was Senior Vice President, Chief Financial Officer, 
Secretary and Treasurer of Friedman's Inc. For five years prior to joining 
Friedman's in June 1993, Mr. Call held various positions with Ernst & Young 
LLP, most recently as a Senior Manager in the San Francisco office.

Ms. Council has served as Senior Vice President, Human Resources 
since March 1998. Prior to that, she served as the company's Vice President 
of Human Resources, Compensation, Payroll, Distribution and Risk 
Management/Benefits since August 1997 and as the company's Vice President, 
Human Resources of Stores since March 1992. She joined the company in January 
1989 as Director of Management and Organizational Development.

Mr. Fassio has served as Senior Vice President, Property 
Development, Construction and Store Design since March 1991. He joined the 
company in June 1988 as Vice President of Real Estate. Prior to joining Ross, 
Mr. Fassio was Vice President, Real Estate and Construction at Craftmart and 
Property Director of Safeway Stores, Inc.

Mr. Gluck has served as Senior Vice President and General 
Merchandising Manager since August 1993. He joined the company in February 
1989 as Vice President and Divisional Merchandising Manager. Prior to joining 
Ross, Mr. Gluck served as General Merchandising Manager, Vice President for 
Today's Man from May 1987 to February 1989. From March 1982 to April 1987, he 
was Vice President, Divisional Merchandising Manager, Men's, Children and 
Luggage of Macy's Atlanta.

Mr. Hamilton has served as Senior Vice President, Store Operations 
since March 1999. From October 1996 to March 1999, he was Executive Vice 
President, Operations for Hill's Department Stores. From April 1993 to 
October 1996, he served as Executive Vice President, Stores for Venture 
Stores. Prior to that, he held various executive and managerial positions at 
Venture Stores.

Ms. Irene Jamieson has served as Senior Vice President and General 
Merchandising Manager since January 1995. From December 1992 to January 1995, 
she served as Vice President and Divisional Merchandising Manager. Prior to 
joining Ross, Ms. Jamieson served as Vice President and Divisional 
Merchandising Manager of the Home Store for Lord & Taylor from September 1983 
to December 1992.

Ms. Megan Jamieson has served as Senior Vice President, Strategic 
Planning since February 1999. From January 1997 to February 1999, she served 
as Director of Strategy for Sears, Roebuck and Co.'s full-line store 
division. Prior to Sears, she was a case team leader with the consulting firm 
Bain & Co.

Ms. Levy has served as Senior Vice President and General 
Merchandising Manager since May 1993. Prior to joining Ross, Ms. Levy was 
with R. H. Macy & Co., Inc. most recently as Senior Vice President and 
General Merchandising Manager from January 1992 to April 1993 and before that 
as their Regional Director - Stores from May 1989 to January 1992 and from 
August 1985 to May 1989 as their Divisional Merchandising Manager - Better 
Sportswear.

Mr. Wilson has served as Senior Vice President, Distribution and 
Transportation since May 1999. From July 1996 to May 1999, he was President 
of Distribution Fulfillment Services, Inc., a division of the Spiegel Group, 
and from October 1991 to July 1996, he served in various distribution 
management positions with the Spiegel Group. Prior to joining the Spiegel 
Group, he held the position of Division Vice President/Merchandise Processing 
for Rich's Department Stores. Prior to 1991, he held various operating 
positions within the transportation, third party distribution and retail 
distribution environment, with companies that included McLean Trucking, 
Ivey's Department Stores and Distribution Marking Services Inc.

8

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

GENERAL INFORMATION. See the information set forth under the caption 
"Quarterly Financial Data (Unaudited)" under Note H of Notes to Consolidated 
Financial Statements in Item 8 of this document which is incorporated herein 
by reference. The company's stock is traded on the Nasdaq National Market 
tier of The Nasdaq Stock MarketSM under the symbol ROST. There were 830 
stockholders of record as of March 31, 2000 and the closing stock price on 
that date was $24.0625 per share.

CASH DIVIDENDS. During fiscal 1999 and 1998, the company paid a 
quarterly cash dividend of $0.0325 and $0.0275, respectively, per common 
share. On January 27, 2000, the Board of Directors increased the quarterly 
dividend to $0.0375 per common share.

9

ITEM 6.  SELECTED FINANCIAL DATA

--------------------------------------------------------------------------------------------------------------------------------

($000, except per share data)                     1999            1998           1997            1996          1995(2)
---------------------------------------------------------------------------------------------------------------------------

OPERATIONS

Sales                                          $2,468,638        $2,182,361     $1,988,692     $1,689,810     $1,426,397
Cost of goods sold and occupancy                1,702,342         1,513,889      1,388,098      1,194,136      1,031,455
PERCENT OF SALES                      69.0%             69.4%          69.8%          70.7%          72.3%
General, selling and administrative               472,822           415,284        374,119        332,439        293,051
PERCENT OF SALES                      19.2%             19.0%          18.8%          19.7%          20.5%
Depreciation and amortization                      38,317            33,514         30,951         28,754         27,033
Interest (income) expense                           (322)               259          (265)          (360)          2,737
Provision for litigation expense(1)                 9,000

Earnings before taxes(1)                          246,479           219,415        195,789        134,841         72,121
PERCENT OF SALES(1)                   10.0%             10.1%           9.8%           8.0%           5.1%
Provision for taxes on earnings                    96,373            85,572         78,315         53,936         28,849
Net earnings(1)                                   150,106           133,843        117,474         80,905         43,272
PERCENT OF SALES1                      6.1%              6.1%           5.9%           4.8%           3.0%
Diluted earnings per share(1,3)                     $1.64             $1.40          $1.17           $.79           $.44
Cash dividends declared per
common share(3)                       $.135             $.115          $.095          $.075          $.063

---------------------------------------------------------------------------------------------------------------------------
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1  Fiscal 1999 includes a non-recurring pre-tax charge of $9.0 million, or 
$.06 per share, related to litigation. See Note G of Notes to 
Consolidated Financial Statements.
2  Fiscal 1995 is a 53-week year; all other fiscal years have 52 weeks.
3  All per share information is adjusted to reflect the effect of the 
two-for-one stock splits effected in the form of 100% stock dividends 
paid on September 22, 1999 and March 5, 1997.

----------------------------------------------------------------------------------------------------------------------------

10

SELECTED FINANCIAL DATA

----------------------------------------------------------------------------------------------------------------------

($000, except per share data)               1999            1998           1997          1996         1995(2)
-----------------------------------------------------------------------------------------------------------------

FINANCIAL POSITION

Merchandise inventory                        $500,494        $466,460      $418,825      $373,689     $295,965
Property and equipment, net                   273,164         248,712       204,721       192,647      181,376
Total assets                                  947,678         870,306       737,953       659,478      541,152
Return on average assets(1)                       17%             17%           17%           13%           8%
Working capital                               190,724         170,795       174,678       134,802      121,692
Current ratio                                   1.5:1           1.4:1         1.5:1         1.4:1        1.6:1
Total debt                                          0               0             0             0        9,806
Total debt as a percent of              
total capitalization                           0%              0%            0%            0%           3%
Stockholders' equity                          473,431         424,703       380,681       328,843      291,516
Return on average
stockholders' equity(1)                       33%             33%           33%           26%          16%
Book value per common share
outstanding at year-end(3)                  $5.33           $4.59         $3.97         $3.33        $2.96

OPERATING STATISTICS

Number of stores opened                            34              26            17            21           21
Number of stores closed                             5               2             1             4            4
Number of stores at year-end                      378             349           325           309          292
Comparable store sales increase
(52-week basis)                                6%              3%           10%           13%           2%
Sales per square foot of selling        
space (52-week basis)(4)                     $300            $290          $285          $259         $230
Square feet of selling space            
at year-end (000)                           8,544           7,817         7,172         6,677        6,276
Number of employees at
year-end                                   20,718          20,081        17,039        14,853       11,935
Number of common stockholders           
of record at year-end                         827             818           813           826        1,022

-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

1  Fiscal 1999 includes a non-recurring pre-tax charge of $9.0 million, or 
$.06 per share, related to litigation. See Note G of Notes to 
Consolidated Financial Statements.
2  Fiscal 1995 is a 53-week year; all other fiscal years have 52 weeks.
3  All per share information is adjusted to reflect the effect of the 
two-for-one stock splits effected in the form of 100% stock dividends 
paid on September 22, 1999 and March 5, 1997.
4  Based on average annual selling square footage.

----------------------------------------------------------------------------------------------------------------------

11

ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

The fiscal  years ended  January 29, 2000,  January 30, 1999 and January 31, 
1998 are referred to as 1999,  1998 and 1997, respectively.

RESULTS OF OPERATIONS

----------------------------------------------------------------------------------------------------------------------------------
Year Ended            Year Ended           Year Ended
January 29, 2000      January 30, 1999     January 31, 1998
----------------------------------------------------------------------------------------------------------------------------------

SALES
Sales ($000)                                                         $2,468,638            $2,182,361           $1,988,692
Sales growth                                                                13%                   10%                  18%
Comparable store sales growth                                                6%                    3%                  10%

COST AND EXPENSES (AS A PERCENT OF SALES)
Cost of goods sold and occupancy                                         69.0%                 69.4%                69.8%
General, selling and administrative                                      19.2%                 19.0%                18.8%
Depreciation and amortization                                             1.6%                  1.5%                 1.6%
Interest (income) expense                                                 (0%)                    0%                 (0%)
Provision for litigation expense                                          0.4%                         

----------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS                                                                    6.1%                  6.1%                 5.9%
----------------------------------------------------------------------------------------------------------------------------------

STORES. Total stores open at the end of 1999, 1998 and 1997 were 378, 349 and 
325, respectively. During 1999, the company opened 34 new stores and closed 
five stores. During 1998, the company opened 26 new stores and closed two 
stores. During 1997, the company opened 17 new stores and closed one store.

SALES. The increases in sales for 1999, 1998 and 1997 were due to a greater 
number of stores in operation and an increase in comparable store sales. The 
company anticipates that the competitive climate for apparel and off-price 
retailers will continue in 2000. Management expects to address that challenge 
by continuing to strengthen the merchandise organization, diversifying the 
merchandise mix, and more fully developing the organization and systems to 
strengthen regional merchandise offerings. Although the company's existing 
strategies and store expansion program contributed to sales and earnings 
gains in 1999, 1998 and 1997, there can be no assurance that these strategies 
will result in a continuation of revenue and profit growth.

COST OF GOODS SOLD AND OCCUPANCY. The reduction in the cost of goods sold and 
occupancy ratio in 1999 resulted primarily from an increase in the initial 
mark-up from purchasing more opportunistically, leverage on occupancy costs 
and lower markdowns as a percentage of sales. The reduction in the cost of 
goods sold and occupancy ratio in 1998 resulted primarily from an increase in 
the initial mark-up from purchasing more opportunistically and leverage on 
occupancy costs. There can be no assurance that the improvements experienced 
in 1999 and 1998 will continue in future years.

GENERAL, SELLING AND ADMINISTRATIVE EXPENSES. During 1999, general, selling 
and administrative expenses as a percentage of sales increased primarily due 
to higher benefit costs, credit card fees and management incentive plan 
expenses. During 1998, general, selling and administrative expenses as a 
percentage of sales increased primarily due to costs associated with the 
company's year 2000 remediation efforts.

The largest component of general, selling and administrative expenses is 
payroll. The total number of employees, including both full- and part-time, 
at year-end 1999, 1998 and 1997, was approximately 20,700, 20,100 and 17,000, 
respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization as a percentage 
of sales have remained relatively constant over the last three years, due 
primarily to the consistent level of fixed assets in each store.

12

PROVISION FOR LITIGATION EXPENSE. The company has reached a preliminary 
understanding to resolve a class action complaint alleging store managers and 
assistant managers in California are incorrectly classified as exempt from 
state overtime laws. As a result, in 1999 the company recorded a 
non-recurring pre-tax charge of $9.0 million relating to this matter. When 
terms are completed, the company expects to execute a settlement agreement, 
without any admission of wrongdoing, which will be subject to subsequent 
judicial approval. See Note G of Notes to Consolidated Financial Statements.

TAXES ON EARNINGS. The company's effective rate for 1999, 1998 and 1997 was 
39%, 39% and 40%, respectively, which represents the applicable federal and 
state statutory rates reduced by the federal benefit received for state 
taxes. During 2000, the company expects its effective tax rate to remain at 
approximately 39%. Additionally, the increase in income taxes paid in 1999 
and the decrease in income taxes paid in 1998 from 1997 resulted primarily 
from an increase in pre-tax earnings and timing differences in the payment of 
taxes between the years.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES. During 1999, 1998 and 1997, liquidity and 
capital requirements were provided by cash flows from operations, bank credit 
facilities and trade credit. The company's store sites, certain warehouses 
and buying offices are leased and, except for certain leasehold improvements 
and equipment, do not represent long-term capital investments. Commitments 
related to operating leases are described in Note C of Notes to Consolidated 
Financial Statements. The company owns its distribution center and corporate 
headquarters in Newark, California, and its distribution center in Carlisle, 
Pennsylvania. Short-term trade credit represents a significant source of 
financing for investments in merchandise inventory. Trade credit arises from 
customary trade practices with the company's vendors. Management regularly 
reviews the adequacy of credit available to the company from all sources and 
has been able to maintain adequate lines to meet the capital and liquidity 
requirements of the company.

During 1999, the primary uses of cash, other than for operating expenditures, 
were for merchandise inventory, property and equipment to open 34 new stores, 
the relocation, remodeling or expansion of 14 stores, the repurchase in the 
open market of $120.0 million of the company's common stock, and quarterly 
cash dividend payments. During 1998, the primary uses of cash, other than for 
operating expenditures, were for merchandise inventory, property and 
equipment to open 26 new stores, the relocation, remodeling or expansion of 
20 stores, the repurchase in the open market of $110.0 million of the 
company's common stock, the purchase of the company's Newark, California, 
distribution center and corporate headquarters for $24.6 million, and 
quarterly cash dividend payments. During 1997, the primary uses of cash, 
other than for operating expenditures, were for merchandise inventory, 
property and equipment to open 17 new stores, the relocation or remodeling of 
six stores, the repurchase in the open market of $98.1 million of the 
company's common stock and quarterly cash dividend payments. In 1999, 1998 
and 1997, the company spent approximately $74.0 million, $78.5 million and 
$33.3 million, respectively, for capital expenditures, net of leased 
equipment, that included fixtures and leasehold improvements to open new 
stores; relocate, remodel or expand existing stores; purchase previously 
leased equipment; and various other expenditures for existing stores and the 
central office.

The company currently anticipates opening approximately 30 stores, net of 
closures, in 2000 and an additional 35 to 40 stores, net of closures, in 
2001. The company anticipates that this growth will be financed primarily 
from cash flows from operating activities and available credit facilities.

In January 2000, a 15% increase in the quarterly cash dividend payment from 
$.0325 to $.0375 per common share was declared by the company's Board of 
Directors, payable on or about April 3, 2000. The Board of Directors declared 
quarterly cash dividends of $.0325 per common share in January, May, August 
and November 1999 and $.0275 per common share in January, May, August and 
November 1998. The company uses cash flows from operating activities and 
available credit facilities to fund dividend payments.

In January 2000, the company announced that the Board of Directors authorized 
a new stock repurchase program of up to $300.0 million over the next two 
years. The company anticipates funding this new program through cash flows 
from operating activities and available credit facilities. The company 
repurchased a total of $120.0 million and $110.0 million of common stock in 
1999 and 1998, respectively.

The company has available under its principal bank credit agreement a $160.0 
million revolving credit facility and a $30.0 million credit facility, the 
latter solely for the issuance of letters of credit, both of which expire in 
September 2002.

13

Additionally, the company has uncommitted short-term bank lines of credit 
that at January 29, 2000 totaled $45.0 million. At year-end 1999, 1998 and 
1997, there were no outstanding balances under any credit facility. For 
additional information relating to these obligations, refer to Note B of 
Notes to Consolidated Financial Statements.

Working capital was $190.7 million at the end of 1999, compared to $170.8 
million at the end of 1998 and $174.7 million at the end of 1997. At year-end 
1999, 1998 and 1997, the company's current ratios were 1.5:1, 1.4:1 and 
1.5:1, respectively.

The company's primary source of liquidity is the sale of its merchandise 
inventory. Management regularly reviews the age and condition of the 
merchandise and is able to maintain current inventory in its stores through 
the replenishment processes and liquidation of non-current merchandise 
through markdowns and clearances.

In 1999, cash flows decreased primarily due to a lower accounts payable 
balance as a percentage of inventory. In 1998, cash flows increased mainly 
due to a higher accounts payable balance as a percentage of inventory at 
year-end. The company had no amounts outstanding on its line of credit at 
year-end 1999 or 1998.

The company estimates that cash flows from operations, bank credit lines and 
trade credit are adequate to meet operating cash needs as well as to provide 
for the two year stock repurchase program of up to $300.0 million during 2000 
and 2001, dividend payments and planned capital additions during the upcoming 
year.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998 and June 1999, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards. No. 133 (SFAS 133), "Accounting 
for Derivative Instruments and Hedging Activities" and Statement of Financial 
Accounting Standards No. 137 (SFAS 137), "Deferral of the Effective Date of 
SFAS 133," respectively. SFAS 133 and SFAS 137 require the recognition of all 
derivatives as either assets or liabilities in the statement of financial 
position, and to measure those instruments at fair value, and are effective 
for all fiscal years beginning after June 15, 2000 with earlier adoption 
encouraged. The company does not believe that implementation of SFAS 133 and 
137 will have a material impact on its financial position and results of 
operations.

FORWARD-LOOKING STATEMENTS AND FACTORS AFFECTING FUTURE PERFORMANCE

This report includes a number of forward-looking statements, which reflect 
the company's current beliefs and estimates with respect to future events and 
the company's future financial performance, operations and competitive 
strengths. The words "expect," "anticipate," "estimate," "believe", "looking 
ahead," "forecast," "plan" and similar expressions identify forward-looking 
statements.

The company's continued success depends, in part, upon its ability to 
increase sales at existing locations, to open new stores and to operate 
stores on a profitable basis. There can be no assurance that the company's 
existing strategies and store expansion program will result in a continuation 
of revenue and profit growth. Future economic and industry trends that could 
potentially impact revenue and profitability remain difficult to predict.

As a result, the forward-looking statements that are contained herein are 
subject to certain risks and uncertainties that could cause the company's 
actual results to differ materially from historical results or current 
expectations. These factors include, without limitation, ongoing competitive 
pressures in the apparel industry, obtaining acceptable store locations, the 
company's ability to continue to purchase attractive name-brand merchandise 
at desirable discounts, successful implementation of the company's 
merchandise diversification strategy, the company's ability to successfully 
extend its geographic reach, unseasonable weather trends, changes in the 
level of consumer spending on or preferences in apparel or home-related 
merchandise, the company's ability to complete the two-year $300 million 
repurchase program in 2000 and 2001 at purchase prices that result in 
accretion to earnings per share in line with planned expectations, and 
greater than planned costs, including higher settlement costs than 
anticipated in the company's preliminary understanding to resolve a class 
action complaint alleging store managers and assistant managers in California 
are incorrectly classified as exempt from state overtime laws. In addition, 
the company's corporate headquarters, one of its distribution centers and 42% 
of its stores are located in California. Therefore, a downturn in the 
California economy or a major natural disaster there could significantly 
affect the company's operating results and financial condition.

14

In addition to the above factors, the apparel industry is highly seasonal. 
The combined sales of the company for the third and fourth (holiday) fiscal 
quarters are historically higher than the combined sales for the first two 
fiscal quarters. The company has realized a significant portion of its 
profits in each fiscal year during the fourth quarter. If intensified price 
competition, lower than anticipated consumer demand or other factors were to 
occur during the third and fourth quarters, and in particular during the 
fourth quarter, the company's fiscal year results could be adversely affected.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management believes that the market risk associated with the company's 
ownership of market-risk sensitive financial instruments (including interest 
rate risk and equity price risk) as of January 29, 2000 is not material.

15

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

CONSOLIDATED BALANCE SHEETS

JANUARY 29,       January 30,
($000, except share and per share data)                                   2000              1999
-------------------------------------------------------------- ----------------  ----------------

ASSETS

CURRENT ASSETS

Cash and cash equivalents                                       $79,329           $80,083
Accounts receivable                                              15,689            11,566
Merchandise inventory                                           500,494           466,460
Prepaid expenses and other                                       17,682            15,825
----------------  ----------------
Total Current Assets                                     613,194           573,934

PROPERTY AND EQUIPMENT

Land and buildings                                               49,919            48,789
Fixtures and equipment                                          262,022           217,629
Leasehold improvements                                          161,571           142,716
Construction-in-progress                                         26,040            32,023
----------------  ----------------
499,552           441,157
Less accumulated depreciation and amortization                  226,388           192,445
----------------  ----------------
273,164           248,712

Deferred income taxes and other long-term assets                        61,320            47,660
----------------  ----------------
Total Assets                                                          $947,678          $870,306

-------------------------------------------------------------- ----------------  ----------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable                                               $254,293          $248,103
Accrued expenses and other                                      102,178            95,059
Accrued payroll and benefits                                     48,283            40,885
Income taxes payable                                             17,716            19,092
----------------  ----------------
Total Current Liabilities                                422,470           403,139

Long-term liabilities                                            51,777            42,464

STOCKHOLDERS' EQUITY

Common stock, par value $.01 per share
Authorized 170,000,000 shares
Issued and outstanding 88,774,000 and
92,499,000 shares                                          888               925
Additional paid-in capital                                      234,635           215,368
Retained earnings                                               237,908           208,410
----------------  ----------------
473,431           424,703
----------------  ----------------
Total Liabilities and Stockholders' Equity                            $947,678          $870,306

============================================================== ================  ================

The accompanying notes are an integral part of these
consolidated financial statements.

16

CONSOLIDATED STATEMENTS OF EARNINGS

YEAR ENDED        Year Ended        Year Ended
JANUARY 29,       January 30,        January 31,
($000, except per share data)                                                    2000              1999               1998
------------------------------------------------------------------- ------------------  -----------------  ---------------

SALES                                                                      $2,468,638        $2,182,361        $1,988,692

COSTS AND EXPENSES

Cost of goods sold and occupancy                                     1,702,342         1,513,889         1,388,098
General, selling and administrative                                    472,822           415,284           374,119
Depreciation and amortization                                           38,317            33,514            30,951
Interest (income) expense                                                (322)               259             (265)
Provision for litigation expense                                         9,000                       
------------------  -----------------  ---------------
2,222,159         1,962,946         1,792,903
------------------  -----------------  ---------------

Earnings before taxes                                                         246,479           219,415           195,789
Provision for taxes on earnings                                                96,373            85,572            78,315
------------------  -----------------  ---------------
Net earnings                                                                 $150,106          $133,843          $117,474
------------------  -----------------  ---------------

------------------------------------------------------------------- ------------------  -----------------  ---------------

EARNINGS PER SHARE

Basic                                                                    $1.66             $1.42             $1.20
Diluted                                                                  $1.64             $1.40             $1.17

------------------------------------------------------------------- ------------------  -----------------  ---------------

WEIGHTED AVERAGE SHARES OUTSTANDING (000)

Basic                                                                   90,416            94,071            97,856
Diluted                                                                 91,671            95,700           100,003

=================================================================== ==================  =================  ===============

The accompanying notes are an integral part of these consolidated
financial statements.

17

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock         Additional
--------------------------   Paid-In        Retained
(000, except share data)                      Shares       Amount       Capital        Earnings        Total
------------------------------------------ -----------  -----------  -------------  -------------  ------------

BALANCE AT FEBRUARY 1, 1997                    98,666         $987       $163,672       $164,184      $328,843
Common stock issued under stock
plans, including tax benefit               3,167           31         41,703                       41,734
Common stock repurchased                      (6,000)         (60)       (10,292)       (87,794)      (98,146)
Net earnings                                                                             117,474       117,474
Dividends declared                                                                       (9,224)       (9,224)
-----------  -----------  -------------  -------------  ------------
BALANCE AT JANUARY 31, 1998                    95,833          958        195,083        184,640       380,681
Common stock issued under stock
plans, including tax benefit               2,301           23         30,874                       30,897
Common stock repurchased                      (5,635)         (56)       (10,589)       (99,353)     (109,998)
Net earnings                                                                             133,843       133,843
Dividends declared                                                                      (10,720)      (10,720)
-----------  -----------  -------------  -------------  ------------
BALANCE AT JANUARY 30, 1999                    92,499          925        215,368        208,410       424,703
Common stock issued under stock
plans, including tax benefit               1,711           17         30,690                       30,707
Common stock repurchased                      (5,436)         (54)       (11,423)      (108,523)     (120,000)
Net earnings                                                                             150,106       150,106
Dividends declared                                                                      (12,085)      (12,085)
-----------  -----------  -------------  -------------  ------------
BALANCE AT JANUARY 29, 2000                    88,774         $888       $234,635       $237,908      $473,431

======================================================  ===========  =============  =============  ============

The accompanying notes are an integral part of these consolidated
financial statements.

18

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED        Year Ended        Year Ended
JANUARY 29,       January 30,       January 31,
($000)                                                                       2000              1999              1998
----------------------------------------------------------------- ----------------  ----------------  ----------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings                                                           $150,106            $133,843          $117,474
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization of property and
equipment                                                       38,317              33,514            30,951
Other amortization                                                   9,870               9,734             8,527
Deferred income taxes                                              (5,296)             (4,411)           (1,732)
Change in assets and liabilities:
Merchandise inventory                                             (34,034)            (47,635)          (45,135)
Other current assets - net                                         (5,979)             (4,161)           (2,110)
Accounts payable                                                     5,867              45,735            17,481
Other current liabilities - net                                     21,609              31,101          (10,379)
Other                                                                2,906               2,780             2,685
----------------  ----------------  ----------------
Net cash provided by operating activities                          183,366             200,500           117,762
----------------  ----------------  ----------------

----------------------------------------------------------------- ----------------  ----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment                                    (74,012)            (78,452)          (33,322)
----------------  ----------------  ----------------
Net cash used in investing activities                             (74,012)            (78,452)          (33,322)
----------------  ----------------  ----------------

----------------------------------------------------------------- ----------------  ----------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt                                                   0                   0                 0
Issuance of common stock related to stock plans                          21,654              22,014            34,106
Repurchase of common stock                                            (120,000)           (109,998)          (98,146)
Dividends paid                                                         (11,762)            (10,350)           (8,808)
----------------  ----------------  ----------------
Net cash used in financing activities                            (110,108)            (98,334)          (72,848)
----------------  ----------------  ----------------
Net (decrease) increase in cash and cash equivalents                      (754)              23,714            11,592
Cash and cash equivalents:
Beginning of year                                                   80,083              56,369            44,777
----------------  ----------------  ----------------
End of year                                                        $79,329             $80,083           $56,369
----------------  ----------------  ----------------

----------------------------------------------------------------- ----------------  ----------------  ----------------

SUPPLEMENTAL CASH FLOW DISCLOSURES

Interest paid                                                               $610             $1,082              $537
Income taxes paid                                                        $94,101            $62,779           $85,529

================================================================= ================  ================  ================

The accompanying notes are an integral part of these consolidated
financial statements.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fiscal years ended January 29, 2000, January 30, 1999 and January 31, 
1998 are referred to as 1999, 1998 and 1997, respectively.

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS. The company is an off-price retailer of first quality, branded 
apparel, shoes and accessories for the entire family, as well as gift items, 
linens and other home-related merchandise. At January 29, 2000, the company 
operated 378 stores. The company's headquarters, one distribution center, 
three warehouses and 42% of its stores are located in California.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include 
the accounts of all subsidiaries. Intercompany transactions and accounts have 
been eliminated. Certain reclassifications have been made in the 1998 and 
1997 financial statements to conform to the 1999 presentation.

USE OF ACCOUNTING ESTIMATES. The preparation of financial statements in 
conformity with generally accepted accounting principles requires management 
to make estimates and assumptions that affect the reported amounts of assets 
and liabilities and disclosures of contingent assets and liabilities at the 
date of the financial statements and the reported amounts of revenues and 
expenses during the reporting period. Actual results could differ from those 
estimates.

CASH EQUIVALENTS. Cash equivalents are highly liquid, fixed income 
instruments purchased with a maturity of three months or less.

REVENUE RECOGNITION. The company recognizes revenue at the point of sale, net 
of actual returns, and maintains a provision for estimated future returns.

MERCHANDISE INVENTORY. Merchandise inventory is stated at the lower of 
weighted average cost or market.

STORE PRE-OPENING.  Store pre-opening costs are expensed in the period 
incurred.

ADVERTISING.  Advertising costs are expensed in the period incurred.

DEFERRED RENT. Many of the company's leases signed since 1988 contain fixed 
escalations of the minimum annual lease payments during the original term of 
the lease. For these leases, the company recognizes rental expense on a 
straight-line basis and records the difference between the average rental 
amount charged to expense and the amount payable under the lease as deferred 
rent. At the end of 1999 and 1998, the balance of deferred rent was $12.2 
million and $11.1 million, respectively, and is included in long-term 
liabilities.

PROPERTY AND EQUIPMENT. Property and equipment are stated at cost. 
Depreciation is calculated using the straight-line method over the estimated 
useful life of the asset, typically ranging from five to 12 years for 
equipment and 20 to 40 years for real property. The cost of leasehold 
improvements is amortized over the useful life of the asset or the applicable 
lease term, whichever is less. Computer hardware and software costs are 
included in fixtures and equipment and are amortized over their estimated 
useful life of five years.

INTANGIBLE ASSETS. Included in other long-term assets are lease rights and 
interests, consisting of payments made to acquire store leases, which are 
amortized over the remaining applicable life of the lease. Also included in 
other long-term assets is the excess of cost over the acquired net assets, 
which is amortized on a straight-line basis over a period of 40 years.

IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets and certain identifiable 
intangibles, including goodwill, held and used by the company, are reviewed 
for impairment whenever events or changes in circumstances indicate that the 
carrying amount of an asset may not be recoverable. Based on the company's 
review as of January 29, 2000 and January 30, 1999, no adjustments were 
recognized to the carrying value of such assets.

20

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying value of cash and 
cash equivalents, accounts receivable, accounts payable and long-term debt 
approximates their estimated fair value.

EFFECTS OF INFLATION AND OTHER CHANGES IN PRICES. The effects of inflation 
and other changes in prices are not material to the company's financial 
position and results of operations.

STOCK-BASED COMPENSATION. The company accounts for stock-based awards to 
employees using the intrinsic value method prescribed by Accounting 
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."

TAXES ON EARNINGS. Income taxes are accounted for under an asset and 
liability approach that requires the recognition of deferred tax assets and 
liabilities for the expected future tax consequences of events that have been 
recognized in the company's financial statements or tax returns. In 
estimating future tax consequences, the company generally considers all 
expected future events other than changes in the tax law or rates.

STOCK DIVIDEND. All share and per share information has been adjusted to 
reflect the effect of the company's two-for-one stock splits effected in the 
form of 100% stock dividends paid on September 22, 1999 and March 5, 1997.

EARNINGS PER SHARE (EPS). Basic EPS excludes dilution and is computed by 
dividing net income by the weighted average number of common shares 
outstanding for the period. Diluted EPS reflects the potential dilution that 
could occur if options to issue common stock were exercised into common 
stock. There were no other securities that could potentially dilute basic EPS 
in the future that were excluded from the calculation of diluted EPS because 
their effect would have been antidilutive in the periods presented.

The following is a reconciliation of the number of shares (denominator) used 
in the basic and diluted EPS computations (shares in thousands):

------------------------------ -------------  -----------------  --------------
Effect of
Basic        Dilutive Stock        Diluted
EPS            Options              EPS
------------------------------ -------------  -----------------  --------------

1999                                                              
Shares                           90,416              1,255          91,671
Amount                            $1.66             $(.02)           $1.64
1998                                                              
Shares                           94,071              1,629          95,700
Amount                            $1.42             $(.02)           $1.40
1997
Shares                           97,856              2,147         100,003
Amount                            $1.20             $(.03)           $1.17
------------------------------ -------------  -----------------  --------------

SEGMENT REPORTING. The company accounts for its operations as one operating 
segment. The company's operations include only activities related to the sale 
of apparel and home accessories through similar stores throughout the United 
States and therefore comprise only one segment.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. In June 1998 and June 1999, 
the Financial Accounting Standards Board issued Statement of Financial 
Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative 
Instruments and Hedging Activities" and Statement of Financial Accounting 
Standards No. 137 (SFAS 137), "Deferral of the Effective Date of SFAS 133," 
respectively. SFAS 133 and SFAS 137 require the recognition of all 
derivatives as either assets or liabilities in the statement of financial 
position, and to measure those instruments at fair value, and are effective 
for all fiscal years beginning after June 15, 2000 with earlier adoption 
encouraged. The company does not believe that implementation of SFAS 133 and 
SFAS 137 will have a material impact on its financial position and results of 
operations.

21

NOTE B: LONG-TERM DEBT

The company had no outstanding debt at year-end 1999 and 1998. The weighted 
average interest rates on borrowings during 1999, 1998 and 1997 were 5.5%, 
5.8% and 5.8%, respectively.

BANK CREDIT FACILITIES. The company has available under its principal credit 
agreement a $160.0 million revolving credit facility and a $30.0 million 
credit facility, the latter solely for the issuance of letters of credit, 
both of which expire in September 2002. Interest is payable upon borrowing 
maturity but no less than quarterly. At year-end 1999 and 1998, the company 
had $20.3 million and $15.6 million, respectively, in outstanding letters of 
credit. Borrowing under the credit facilities is subject to the company's 
maintaining certain interest rate coverage and leverage ratios. As of January 
29, 2000, the company was in compliance with these bank covenants.

In addition, the company has $45.0 million in uncommitted short-term bank 
lines of credit. When utilized, interest is payable monthly.

Included in accounts payable are checks outstanding of approximately $40.2 
million and $44.1 million at year-end 1999 and 1998, respectively. The 
company can utilize its revolving line of credit to cover payment of these 
checks as they clear the bank; however, no balances were outstanding under 
the revolving credit line at year-end 1999 and 1998. The company's cash 
balances, net of the checks outstanding at year-end 1999 and 1998, were $39.1 
million and $36.0 million, respectively.

NOTE C: LEASES

In June 1998, the company purchased its Newark, California, distribution 
center and corporate headquarters for $24.6 million with funding provided by 
cash generated by operations and bank borrowings under the company's existing 
credit agreement. The company also leases five separate warehouse facilities 
in both Newark, California and Carlisle, Pennsylvania, with operating leases 
expiring in various years through 2003. These five leased facilities are 
being used primarily to store packaway merchandise. In addition, the company 
leases its store sites, selected computer and related equipment, and certain 
distribution center equipment under operating leases with original, 
noncancelable terms that in general range from three to fifteen years, 
expiring through 2015. Store leases typically contain provisions for three to 
four renewal options of five years each. Most store leases also provide for 
minimum annual rentals, with provisions for additional rent based on 
percentage of sales and for payment of certain expenses.

The aggregate future minimum annual lease payments under leases in effect at 
year-end 1999 are as follows:

---------------------------------------------
($000)                               AMOUNTS
---------------------------------------------

2000                                $128,073
2001                                 122,523
2002                                 108,503
2003                                  96,201
2004                                  83,124
Later years                          303,190
---------------------------------------------
TOTAL                               $841,614
---------------------------------------------

Total rent expense for all operating leases is as follows:

------------------------------------------------------------------------------
($000)                                       1999          1998          1997
------------------------------------------------------------------------------

Minimum rentals                          $118,089      $106,696      $100,109
------------------------------------------------------------------------------

------------------------------------ ------------- ------------- -------------

22

NOTE D: TAXES ON EARNINGS

The provision for taxes consists of the following:

------------------------------------------------------------------------------
($000)                                       1999          1998          1997
------------------------------------------------------------------------------

CURRENT
Federal                              $85,952       $75,847       $65,754
State                                 15,717        14,136        14,294
-----------------------------------------
101,669        89,983        80,048

DEFERRED
Federal                              (5,081)       (4,107)       (1,693)
State                                  (215)         (304)          (40)
-----------------------------------------
(5,296)       (4,411)       (1,733)
-----------------------------------------
TOTAL                                     $96,373       $85,572       $78,315

------------------------------------ ------------- ------------- -------------

In 1999, 1998 and 1997, the company realized tax benefits of $9.2 million, 
$10.9 million and $14.1 million, respectively, related to stock options 
exercised and the vesting of restricted stock that were credited to 
additional paid-in capital.

The provision for taxes for financial reporting purposes is different from 
the tax provision computed by applying the statutory federal income tax rate. 
The differences are reconciled as follows:

----------------------------------------------------------------------------------------------------------
1999              1998             1997
----------------------------------------------------------------------------------------------------------

Federal income taxes at the statutory rate                         35%               35%              35%

Increased income taxes resulting from 
state income taxes (net of federal benefit)
and other, net
4%                4%               5%
---------------------------------------------------
39%               39%              40%

----------------------------------------------------------------------------------------------------------

23

The components of the net deferred tax assets at year-end are as follows:

-------------------------------------------------------------------------
($000)                                                1999          1998
-------------------------------------------------------------------------

DEFERRED TAX ASSETS
Deferred compensation                              $20,362       $15,765
Non-deductible reserves                              6,840         3,895
Straight-line rent                                   4,989         4,519
Employee benefits                                    4,782         6,610
California franchise taxes                           3,367         2,657
Reserve for uninsured losses                           553         2,049
All other                                            1,145           135
---------------------------
42,038        35,630

DEFERRED TAX LIABILITIES
Depreciation                                      (18,938)      (18,210)
Inventory                                          (4,304)       (4,297)
Supplies                                           (2,006)       (1,849)
Prepaid expenses                                     (614)       (1,377)
All other                                          (1,174)         (191)
---------------------------
(27,036)      (25,924)

---------------------------

NET DEFERRED TAX ASSETS                            $15,002        $9,706

-------------------------------------------------------------------------

NOTE E: EMPLOYEE BENEFIT PLANS

The company has available to certain employees a profit sharing retirement 
plan. Under the plan, employee and company contributions and accumulated plan 
earnings qualify for favorable tax treatment under Section 401(k) of the 
Internal Revenue Code. This plan permits employees to make contributions up 
to the maximum limits allowable under the Internal Revenue Code. The company 
matches up to 3% of the employee's salary up to plan limits. Company 
contributions to the retirement plan were $2.4 million, $2.1 million and $1.8 
million in 1999, 1998 and 1997, respectively. The company has in place an 
Incentive Compensation Plan, which provides cash awards to key management 
employees based on the company's and the individual's performance. The 
company offers a Supplemental Retirement Plan, which allows eligible 
employees to purchase annuity contracts. The company makes available to 
management a Nonqualified Deferred Compensation Plan which allows management 
to make payroll contributions on a pre-tax basis in addition to the 401(k) 
Plan. This plan does not qualify under Section 401(k) of the Internal Revenue 
Code. Other long-term assets and other long-term liabilities include $37.0 
million and $26.3 million in 1999 and 1998, respectively, related to the 
Nonqualified Deferred Compensation Plan.

NOTE F: STOCKHOLDERS' EQUITY

PREFERRED STOCK. The company has four million shares of preferred stock 
authorized, with a par value of $.01 per share. No preferred stock has been 
issued or outstanding during the past three years.

COMMON STOCK. The company's Board of Directors has approved repurchase 
programs over the past several years that resulted in the buyback of 5.4 
million shares at an average price of $22.07 in 1999, 5.6 million shares at 
an average price of $19.52 in 1998 and 6.0 million shares at an average price 
of $16.36 in 1997. In January 2000, the company's Board of Directors approved 
a new stock repurchase program authorizing the buyback of up to $300.0 
million of the company's common stock over the next two years.

24

DIVIDENDS. The company's Board of Directors declared dividends of $.0375 per 
common share in January 2000; $.0325 per common share in January, May, August 
and November 1999; and $.0275 per common share in January, May, August and 
November 1998.

STOCK-BASED COMPENSATION PLANS. At January 29, 2000, the company had four 
stock-based compensation plans, which are described below. Statement of 
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for 
Stock-Based Compensation," establishes a fair value method of accounting for 
stock options and other equity instruments. Had compensation cost for these 
stock option and stock purchase plans been determined based on the fair value 
at the grant dates for awards under those plans consistent with the methods 
of SFAS 123, the company's net income and earnings per share would have been 
reduced to the pro forma amounts indicated below:

-------------------------------------------------------------------------------------------------------------------------
($000, except per share data)                                                    1999             1998            1997
-------------------------------------------------------------------------------------------------------------------------

NET INCOME                                          As reported              $150,106         $133,843        $117,474
Pro forma                $142,800         $128,820        $114,109

BASIC EARNINGS PER SHARE                            As reported                 $1.66            $1.42           $1.20
Pro forma                   $1.58            $1.37           $1.17

DILUTED EARNINGS PER SHARE                          As reported                 $1.64            $1.40           $1.17
Pro forma                   $1.57            $1.36           $1.15

-------------------------------------------------------------------------------------------------------------------------

The impact of outstanding non-vested stock options granted prior to 1995 has 
been excluded from the pro forma calculation; accordingly, the 1999, 1998 and 
1997 pro forma adjustments are not indicative of future period pro forma 
adjustments, when the calculation will apply to all applicable stock options.

1992 STOCK OPTION PLAN. The company's 1992 Stock Option Plan allows for the 
granting of incentive and non-qualified stock options. Stock options are to 
be granted at prices not less than the fair market value of the common shares 
on the date the option is granted, expire ten years from the date of grant 
and normally vest over a period not exceeding four years from the date of 
grant. Options under the plan are exercisable upon grant, subject to the 
company's conditional right to repurchase unvested shares.

OUTSIDE DIRECTORS STOCK OPTION PLAN. The company's Outside Directors Stock 
Option Plan provides for the automatic grant of stock options at 
pre-established times and for fixed numbers of shares to each non-employee 
director. Stock options are to be granted at exercise prices not less than 
the fair market value of the common shares on the date the option is granted, 
expire ten years from the date of grant and normally vest over a period not 
exceeding three years from the date of the grant.

25

A summary of the activity under the company's two option plans for 1999, 1998 
and 1997 is presented below:

--------------------------------------------------------------------------------
Weighted
Number of          Average
Shares         Exercise
(000)           Price
--------------------------------------------------------------------------------

Outstanding and exercisable at
February 1, 1997                             6,466            $ 4.95
Granted                                 2,050            $13.32
Exercised                              (2,310)           $ 4.50
Forfeited                                (497)           $ 5.52
--------------------------------------------------------------------------------
Outstanding and exercisable at
January 31, 1998                             5,709            $ 8.09
Granted                                 2,254            $19.68
Exercised                              (1,400)           $ 6.26
Forfeited                               (307)            $12.35
--------------------------------------------------------------------------------
Outstanding and exercisable at
January 30, 1999                             6,256            $12.46
Granted                                 1,574            $21.80
Exercised                              (1,162)           $ 8.43
Forfeited                               (253)            $16.59
--------------------------------------------------------------------------------
Outstanding and exercisable at
January 29, 2000                             6,415            $15.32
--------------------------------------------------------------------------------

At year-end 1999, 1998 and 1997, there were 4.4 million, 5.7 million and 3.1 
million shares, respectively, available for future issuance under these plans.

The weighted average fair values per share of options granted during 1999, 
1998 and 1997 were $7.85, $6.21 and $3.99, respectively. For determining pro 
forma earnings per share, the fair values for each option granted were 
estimated on the date of grant using the Black-Scholes option pricing model 
with the following assumptions for 1999, 1998 and 1997, respectively: (i) 
dividend yield of 0.7%, 0.6% and 0.6%; (ii) expected volatility of 46.1%, 
45.8% and 43.0%; (iii) risk-free interest rate of 5.9%, 5.2% and 6.2%; and 
(iv) expected life of 3.2 years, 3.3 years and 3.3 years. The company's 
calculations are based on a multiple option approach, and forfeitures are 
recognized as they occur.

The following table summarizes information about stock options outstanding 
and exercisable at January 29, 2000:

---------------------------------------------------------------------------------------------------------------------

Weighted Average
-------------------------------------------

Remaining
Number of Shares       Contractual Life
Range of Exercise Prices                                     (000)                 (Years)          Exercise Price
---------------------------------------------------------------------------------------------------------------------

$2.13 to $6.78                                               1,418                  4.42                $ 4.64
$6.81 to $12.94                                              1,266                  7.05                $12.43
$13.09 to $20.97                                             1,031                  8.65                $17.12
$21.00 to $21.00                                             1,160                  8.14                $21.00
$21.06 to $21.66                                             1,105                  9.12                $21.60
$21.66 to $25.56                                               435                  9.07                $23.13
---------------------------------------------------------------------------------------------------------------------
TOTALS                                                       6,415                  7.42                $15.32
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------

26

EMPLOYEE STOCK PURCHASE PLAN. Under the Employee Stock Purchase Plan, 
eligible full-time employees can choose to have up to 10% of their annual 
base earnings withheld to purchase the company's common stock. The purchase 
price of the stock is 85% of the lower of the beginning of the offering 
period or end of the offering period market price. During 1999, 1998 and 
1997, employees purchased approximately 171,000, 149,000 and 171,000 shares, 
respectively, of the company's common stock under the plan at weighted 
average per-share prices of $15.25, $15.44 and $10.90, respectively. Through 
January 29, 2000, approximately 3,367,000 shares had been issued under this 
plan and 633,000 shares remained available for future issuance.

The weighted average fair values of the 1999, 1998 and 1997 awards were 
$6.49, $6.27 and $4.10 per share, respectively. For determining pro forma 
earnings per share, the fair value of the employees' purchase rights was 
estimated using the Black-Scholes option pricing model using the following 
assumptions for 1999, 1998 and 1997, respectively: (i) dividend yield of 
0.6%, 0.6% and 0.6%; (ii) expected volatility of 44.7%, 49.3% and 43.1%; 
(iii) risk-free interest rate of 5.6%, 5.0% and 5.6%; and (iv) expected life 
of 1.0 year, 1.0 year and 1.0 year.

RESTRICTED STOCK PLAN. The company's Restricted Stock Plan provides for stock 
awards to officers and certain key employees. All awards under the plan 
entitle the participant to full dividend and voting rights. Unvested shares 
are restricted as to disposition and subject to forfeiture under certain 
circumstances. The market value of these shares at date of grant is amortized 
to expense ratably over the vesting period of generally two to five years. At 
year-end 1999, 1998 and 1997, the unamortized compensation expense was $14.4 
million, $15.3 million and $9.4 million, respectively. A summary of 
restricted stock award activity follows:

--------------------------------------------------------------------------------------------------------------------------

RESTRICTED STOCK PLAN (000)                              1999                  1998                   1997
--------------------------------------------------------------------------------------------------------------------------

Shares available for grant beginning of year                           4,297                  5,059                 5,744
Restricted shares granted                                              (403)                  (814)                 (781)
Restricted shares forfeited                                               27                     52                    96
------------------------------------------------------------------
Shares available for grant end of year                                 3,921                  4,297                 5,059
------------------------------------------------------------------
------------------------------------------------------------------
Weighted average market value per share on 
grant date                                                         $21.34                 $19.28                $13.28
------------------------------------------------------------------
------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------

NOTE G: PROVISION FOR LITIGATION EXPENSE AND OTHER LEGAL PROCEEDINGS

The company has reached a preliminary understanding to resolve a class action 
complaint alleging store managers and assistant managers in California are 
incorrectly classified as exempt from state overtime laws. As a result, the 
company recorded a non-recurring pre-tax charge of $9.0 million in 1999 
relating to this matter. When terms are completed, the company expects to 
execute a settlement agreement, without any admission of wrongdoing, which 
will be subject to judicial approval.

The company is party to various other legal proceedings arising from normal 
business activities. In the opinion of management, resolution of these 
matters will not have a material adverse effect on the company's financial 
condition or results of operations.

27

NOTE H: QUARTERLY FINANCIAL DATA (UNAUDITED)

---------------------------------------------------------------------------------------------------------------------------------
13 Weeks Ended     13 Weeks Ended     13 Weeks Ended   13 Weeks  Ended    52 Weeks  Ended
May 1,           July 31,        October 30,       January 29,        January 29,
($000, except per share data)                    1999               1999               1999              2000               2000
---------------------------------------------------------------------------------------------------------------------------------

Sales                                        $580,825           $614,576           $608,720          $694,517         $2,468,638
Net earnings(1)                                34,163             38,636             34,615            42,692            150,106
Net earnings per
diluted share(1,2)                              .36                .42                .38               .48               1.64
Dividends declared per
share on common stock(2)                                         .0325              .0325               .07(3)            .135
Closing stock price(2,4)
High                                         $23.91             $26.00             $24.00            $21.00             $26.00
Low                                          $20.16             $22.09             $18.59            $12.25             $12.25

---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
13 Weeks Ended     13 Weeks Ended     13 Weeks Ended   13 Weeks  Ended    52 Weeks  Ended
May 2,          August 1,        October 31,       January 30,        January 30,
($000, except per share data)                    1998               1998               1998              1999               1999
---------------------------------------------------------------------------------------------------------------------------------

Sales                                        $484,276           $536,975           $531,139          $629,971         $2,182,361
Net earnings                                   27,850             32,409             28,005            45,579            133,843
Net earnings per
diluted share(2)                                .29                .33                .29               .49               1.40
Dividends declared per
share on common stock(2)                                         .0275              .0275               .06(5)            .115
Closing stock price(2,4)
High                                         $24.16             $24.84             $22.00            $20.34             $24.84
Low                                          $16.78             $20.19             $12.22            $15.94             $12.22

---------------------------------------------------------------------------------------------------------------------------------

1    Fiscal 1999 includes a non-recurring pre-tax charge of $9.0 million, or 
$.06 per share, related to litigation. See Note G of Notes to 
Consolidated Financial Statements.
2    All per share information is adjusted to reflect the effect of the 
two-for-one stock split effected in the form of a stock dividend paid on 
September 22, 1999.
3    Includes $.0325 per share dividend declared November 1999 and $.0375 per 
share dividend declared January 2000.
4    Ross Stores, Inc. common stock trades on the Nasdaq National Market tier 
of The Nasdaq Stock MarketSM under the symbol ROST.
5    Includes $.0275 per share dividend declared November 1998 and $.0325 per 
share dividend declared January 1999.

28

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Ross Stores, Inc.
Newark, California

We have audited the accompanying consolidated balance sheets of Ross Stores, 
Inc. and subsidiaries (the "Company") as of January 29, 2000 and January 30, 
1999, and the related consolidated statements of earnings, stockholders' 
equity, and cash flows for each of the three years in the period ended 
January 29, 2000. These financial statements are the responsibility of the 
Company's management. Our responsibility is to express an opinion on these 
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally 
accepted in the United States of America. Those standards require that we 
plan and perform the audit to obtain reasonable assurance about whether the 
financial statements are free of material misstatement. An audit includes 
examining, on a test basis, evidence supporting the amounts and disclosures 
in the financial statements. An audit also includes assessing the accounting 
principles used and significant estimates made by management, as well as 
evaluating the overall financial statement presentation. We believe that our 
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all 
material respects, the financial position of the Company as of January 29, 
2000 and January 30, 1999, and the results of its operations and its cash 
flows for each of the three years in the period ended January 29, 2000 in 
conformity with accounting principles generally accepted in the United States 
of America.

DELOITTE & TOUCHE LLP
SAN FRANCISCO, CALIFORNIA

MARCH 10, 2000

29

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this item is incorporated herein by reference to 
the sections entitled (i) "Executive Officers of the Registrant" at the end 
of Part I of this report; (ii) "Information Regarding Nominees and Incumbent 
Directors" of the Ross Stores, Inc. Proxy Statement for the Annual Meeting of 
Stockholders to be held on Wednesday, June 7, 2000 (the "Proxy Statement"); 
and (iii) "Section 16(a) Beneficial Ownership Reporting Compliance" in the 
Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by 
reference to the sections of the Proxy Statement entitled (i) "Compensation 
Committee Interlocks and Insider Participation"; (ii) "Compensation of 
Directors"; (iii) "Employment Contracts, Termination of Employment and 
Change-in-Control Arrangements"; and (iv) the following tables, and their 
footnotes: Summary Compensation, Option Grants in Last Fiscal Year and 
Aggregated Option Exercises and Year-End Values.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated herein by 
reference to the section of the Proxy Statement entitled "Stock Ownership of 
Certain Beneficial Owners and Management".

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by 
reference to the sections of the Proxy Statement entitled (i) "Compensation 
of Directors" and (ii) "Certain Transactions".

30

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)    The following financial statements, schedules and exhibits are
filed as part of this report or are incorporated herein as
indicated:

1.     List of Financial Statements.

The following consolidated financial statements included
herein as Item 8:

Consolidated Balance Sheets at January 29, 2000 and January
30, 1999.
Consolidated Statements of Earnings for the years ended
January 29, 2000, January 30, 1999 and January 31,
1998.
Consolidated Statements of Stockholders' Equity for the
years ended January 29, 2000, January 30, 1999 and
January 31, 1998.
Consolidated Statements of Cash Flows for the years ended
January 29, 2000 January 30, 1999 and January 31,
1998.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.

2.     List of Financial Statement Schedules.

Schedules are omitted because they are not required, not 
applicable, or shown in the financial statements or notes 
thereto which are contained in this Report.

3. List of Exhibits (in accordance with Item 601 of Regulation S-K).

Incorporated herein by reference to the list of Exhibits 
contained in the Exhibit Index which begins on page 33 of 
this Report.

(b) Reports on Form 8-K.

None.

31

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the 
Securities Exchange Act of 1934, the Registrant has duly caused this Report 
to be signed on its behalf by the undersigned, thereunto duly authorized.

ROSS STORES, INC.
----------------------------------
(Registrant)

Date:  April 26, 2000             By: /s/Michael Balmuth
Michael Balmuth
Vice Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.

SIGNATURE                                 TITLE                                       DATE
--------------------------------------------------------------------------------------------------------------------

/s/Michael Balmuth                          Vice Chairman and                             April 26, 2000
Michael Balmuth                             Chief Executive Officer

/s/J. Call                                  Senior Vice President,                        April 26, 2000
John G. Call                                Chief Financial Officer,
Principal Accounting Officer and
Corporate Secretary

/s/Norman A. Ferber                         Chairman of the Board                         April 26, 2000
Norman A. Ferber

/s/Lawrence M. Higby                        Director                                      April 26, 2000
Lawrence M. Higby

/s/Stuart G. Moldaw                         Chairman Emeritus                             April 26, 2000
Stuart G. Moldaw                            and Director

/s/G. Orban                                 Director                                      April 26, 2000
George P. Orban

/s/Philip Schlein                           Director                                      April 26, 2000
Philip Schlein

/s/Donald H. Seiler                         Director                                      April 26, 2000
Donald H. Seiler

/s/D. L. Weaver                             Director                                      April 26, 2000
Donna L. Weaver

32

INDEX TO EXHIBITS

EXHIBIT
NUMBER                                      EXHIBIT

3.1      Corrected First Restated Certificate of Incorporation of Ross 
Stores, Inc. ("Ross Stores"), dated and filed with the Delaware 
Secretary of State on March 17, 1999, incorporated by reference to 
Exhibit 3.1 to the Form 10-K filed by Ross Stores for the year ended 
January 30, 1999.

3.2      Amended By-laws, dated August 25, 1994,  incorporated by reference 
to Exhibit 3.2 to the Form 10-Q filed by Ross Stores for its quarter 
ended July 30, 1994.

10.1     Credit Agreement, dated September 15, 1997, among Ross Stores, Bank 
of America, National Trust and Savings Association ("Bank of 
America") as Agent and the other financial institutions party 
thereto, incorporated by reference to Exhibit 10.2 to the Form 10-Q 
filed by Ross Stores for its quarter ended November 1, 1997.

10.2     Letter of Credit Agreement, dated September 15, 1997, between Ross 
Stores and Bank of America, incorporated by reference to Exhibit 
10.3 to the Form 10-Q filed by Ross Stores for its quarter ended 
November 1, 1997.

10.3     Amendment to Credit Agreement, dated October 7, 1997, between Ross 
Stores and Bank of America, incorporated by reference to 
Exhibit 10.4 to the Form 10-Q filed by Ross Stores for its quarter 
ended November 1, 1997.

10.4     Second Amendment to Credit Agreement, dated January 30, 1998, 
between Ross Stores and Bank of America, incorporated by reference 
to Exhibit 10.5 to the Form 10-K filed by Ross Stores for its fiscal 
year ended January 31, 1998.

MANAGEMENT CONTRACTS AND COMPENSATORY PLANS (EXHIBITS 10.5 - 10.36)

10.5     Third Amended and Restated Ross Stores, Inc. 1992 Stock Option Plan

10.6     Amended and Restated 1992 Stock Option Plan, incorporated by 
reference to Exhibit 10.1 to the Form 10-Q filed by Ross Stores for 
its quarter ended August 1, 1998.

10.7     Ross Stores, Inc. 2000 Equity Incentive Plan

10.8     Third Amended and Restated Ross Stores Employee Stock Purchase Plan, 
incorporated by reference to Exhibit 10.6 to the Form 10-K filed by 
Ross Stores for its year ended January 30, 1999.

10.9     Fourth Amended and Restated Ross Stores, Inc. 1988 Restricted Stock Plan

10.10    Third Amended and Restated Ross Stores 1988 Restricted Stock Plan, 
incorporated by reference to Exhibit 10.7 to the Form 10-K filed by 
Ross Stores for its year ended January 30, 1999.

10.11    Amended and Restated 1991 Outside Directors Stock Option Plan 
effective March 16, 2000

10.12    Amended and Restated 1991 Outside Directors Stock Option Plan, 
incorporated by reference to Exhibit 10.8 to the Form 10-K filed by 
Ross Stores for its year ended January 30, 1999.

10.13    1991 Outside Directors Stock Option Plan, as amended May 27, 1999, 
incorporated by reference to Exhibit 10.40 of the Form 10-Q filed by 
Ross Stores for its quarter ended July 31, 1999.

10.14    Ross Stores Executive Medical Plan, incorporated by reference to 
Exhibit 10.9 to the Form 10-K filed by Ross Stores for its year 
ended January 30, 1999.

33

EXHIBIT
NUMBER                                      EXHIBIT

10.15    Ross Stores Executive Dental Plan, incorporated by reference to 
Exhibit 10.10 to the Form 10-K filed by Ross Stores for its year 
ended January 30, 1999.

10.16    Third Amended and Restated Ross Stores Executive Supplemental 
Retirement Plan, incorporated by reference to Exhibit 10.14 to the 
Form 10-K filed by Ross Stores for the fiscal year ended January 29, 
1994.

10.17    Ross Stores Second Amended and Restated Non-Qualified Deferred 
Compensation Plan, incorporated by reference to Exhibit 10.12 to the 
Form 10-K filed by Ross Stores for its year ended January 30, 1999.

10.18    Amended and Restated Ross Stores, Inc. Incentive Compensation Plan

10.19    Ross Stores Incentive Compensation Plan, incorporated by reference 
to Exhibit 10.6 to the Form 10-K filed by Ross Stores for its year 
ended January 30, 1999

10.20    Amended and Restated Employment Agreement between Ross Stores and 
Norman A. Ferber, effective as of June 1, 1995, incorporated by 
reference to Exhibit 10.17 to the Form 10-Q filed by Ross Stores for 
its quarter ended October 28, 1995.

10.21    Amendment to Amended and Restated Employment Agreement between Ross 
Stores and Norman A. Ferber, entered into July 29, 1996, 
incorporated by reference to Exhibit 10.17 to the Form 10-Q filed by 
Ross Stores for its quarter ended August 3, 1996.

10.22    Amendment to Amended and Restated Employment Agreement between Ross 
Stores and Norman A. Ferber effective as of March 20, 1997, 
incorporated by reference to Exhibit 10.19 to the Form 10-Q filed by 
Ross Stores for its quarter ended May 3, 1997.

10.23    Third Amendment to Amended and Restated Employment Agreement between 
Ross Stores and Norman A. Ferber, effective as of April 15, 1997, 
incorporated by reference to Exhibit 10.20 to the Form 10-Q filed by 
Ross Stores for its quarter ended May 3, 1997.

10.24    Fourth Amendment to Amended and Restated Employment Agreement 
between Ross Stores and Norman A. Ferber, effective as of November 
20, 1997, incorporated by reference to Exhibit 10.18 to the Form 
10-K filed by Ross Stores for its fiscal year ended January 31, 1998.

10.25    Fifth Amendment to Amended and Restated Employment Agreement between 
Ross Stores and Norman A. Ferber, effective as of December 16, 1998, 
incorporated by reference to Exhibit 10.19 to the Form 10-K filed by 
Ross Stores for its fiscal year ended January 30, 1999.

10.26    Employment Agreement between Ross Stores and Melvin A. Wilmore, 
effective as of March 15, 1994, incorporated by reference to Exhibit 
10.20 to the Form 10-Q filed by Ross Stores for its quarter ended 
April 30, 1994.

10.27    Amendment to Employment and Stock Grant Agreement by and between 
Ross Stores and Melvin A. Wilmore, effective as of March 16, 1995, 
incorporated by reference to Exhibit 10.20 to the Form 10-Q filed by 
Ross Stores for its quarter ended October 28, 1995.

10.28    Second Amendment to Employment Agreement by and between Ross Stores 
and Melvin A. Wilmore, effective as of June 1, 1995, incorporated by 
reference to Exhibit 10.21 to the Form 10-Q filed by Ross Stores for 
its quarter ended October 28, 1995.

34

EXHIBIT
NUMBER                             EXHIBIT

10.29    Third Amendment to Employment Agreement by and between Ross Stores 
and Melvin A. Wilmore, entered into July 29, 1996, incorporated by 
reference to Exhibit 10.22 to the Form 10-Q filed by Ross Stores for 
its quarter ended August 3, 1996.

10.30    Fourth Amendment to Employment Agreement by and between Ross Stores 
and Melvin A. Wilmore, entered into May 19, 1997, incorporated by 
reference to Exhibit 10.25 to the Form 10-Q filed by Ross Stores for 
its quarter ended August 2, 1997.

10.31    Fifth Amendment to Employment Agreement by and between Ross Stores 
and Melvin A. Wilmore, entered into June 29, 1998, incorporated by 
reference to Exhibit 10.2 to the Form 10-Q filed by Ross Stores for 
its quarter ended August 1, 1998.

10.32    Letter of Agreement between Ross Stores and Melvin A. Wilmore, 
signed by both parties on January 27, 2000, amending the Employment 
Agreement as amended between Ross Stores and Melvin A. Wilmore.

10.33    Employment Agreement between Ross Stores and Michael Balmuth, 
effective as of February 3, 1999, incorporated by reference to 
Exhibit 10.26 to the Form 10-K filed by Ross Stores for its fiscal 
year ended January 30, 1999.

10.34    Amendment dated March 20, 2000 to Employment Agreement between Ross 
Stores and Michael Balmuth effective as of February 3, 1999.

10.35    Employment Agreement between Ross Stores and Barry S. Gluck, 
effective as of March 1, 1996, incorporated by reference to Exhibit 
10.23 to the Form 10-Q filed by Ross Stores for its quarter ended 
May 4, 1996.

10.36    First Amendment to Employment Agreement between Ross Stores and 
Barry S. Gluck, dated September 1, 1996, incorporated by reference 
to Exhibit 10.28 to the Form 10-Q filed by Ross Stores for its 
quarter ended November 2, 1996.

10.37    Second Amendment to Employment Agreement between Ross Stores and 
Barry S. Gluck, dated March 1, 1998, incorporated by reference to 
Exhibit 10.30 to the Form 10-Q filed by Ross Stores for its quarter 
ended May 2, 1998.

10.38    Employment Agreement between Ross Stores and Irene A. Jamieson, 
effective as of March 1, 1996, incorporated by reference to Exhibit 
10.24 to the Form 10-Q filed by Ross Stores for its quarter ended 
May 4, 1996.

10.39    First Amendment to Employment Agreement between Ross Stores and 
Irene A. Jamieson, dated September 1, 1996, incorporated by 
reference to Exhibit 10.30 to the Form 10-Q filed by Ross Stores for 
its quarter ended November 2, 1996.

10.40    Second Amendment to Employment Agreement between Ross Stores and 
Irene A. Jamieson dated March 1, 1998, incorporated by reference to 
Exhibit 10.33 to the Form 10-Q filed by Ross Stores for its quarter 
ended May 2, 1998.

35

EXHIBIT
NUMBER                             EXHIBIT

10.41    Employment Agreement between Ross Stores and Barbara Levy, effective 
as of March 1, 1996, incorporated by reference to Exhibit 10.25 to 
the Form 10-Q filed by Ross Stores for its quarter ended May 4, 1996.

10.42    First Amendment to Employment Agreement between Ross Stores and 
Barbara Levy, dated September 1, 1996, incorporated by reference to 
Exhibit 10.32 to the Form 10-Q filed by Ross Stores for its quarter 
ended November 2, 1996.

10.43    Second Amendment to Employment Agreement between Ross Stores and 
Barbara Levy, dated March 1, 1998, incorporated by reference to 
Exhibit 10.36 to the Form 10-Q filed by Ross Stores for its quarter 
ended May 2, 1998.

10.44    Consulting Agreement between Ross Stores and Stuart G. Moldaw, 
effective as of April 1, 1997, incorporated by reference to Exhibit 
10.34 to the Form 10-Q filed by Ross Stores for its quarter ended 
May 3, 1997.

10.45    Consulting Agreement between Ross Stores and Stuart G. Moldaw, 
effective as of April 1, 1999 through March 31, 2002, incorporated 
by reference to Exhibit 10.36 to the Form 10-Q filed by Ross Stores 
for its quarter ended May 1, 1999.

10.46    Employment Agreement between Ross Stores and Michael Hamilton, 
effective as of March 1, 1999 through March 1, 2002, incorporated by 
reference to Exhibit 10.37 to the Form 10-Q filed by Ross Stores for 
its quarter ended May 1, 1999.

10.47    Employment Agreement between Ross Stores and James Fassio, effective 
as of April 1, 1999, incorporated by reference to Exhibit 10.38 to 
the Form 10-Q filed by Ross Stores for its quarter ended May 1, 1999.

10.48    Employment Agreement between Ross Stores and Michael Wilson, 
effective as of May 1, 1999, incorporated by reference to Exhibit 
10.39 to the Form 10-Q filed by Ross Stores for its quarter ended 
July 31, 1999.

23       Independent Auditors' Consent.

27       Financial Data Schedules (submitted for SEC use only).

36

ROSS STORES, INC.
FISCAL 1999 FORM 10-K
EXHIBIT 10.5

THIRD AMENDED AND RESTATED
ROSS STORES, INC.
1992 STOCK OPTION PLAN

(EFFECTIVE AS OF MARCH 16, 2000)

1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

1.1  ESTABLISHMENT. The Second Amended and Restated Ross 
Stores, Inc. 1992 Stock Option Plan is hereby amended and restated in its 
entirety as the Third Amended and Restated Ross Stores, Inc. 1992 Stock 
Option Plan (the "PLAN") effective as of March 16, 2000 (the "EFFECTIVE 
DATE").

1.2  PURPOSE. The purpose of the Plan is to advance the 
interests of the Participating Company Group and its stockholders by 
providing an incentive to attract, retain and reward persons performing 
services for the Participating Company Group and by motivating such persons 
to contribute to the growth and profitability of the Participating Company 
Group.

1.3  TERM OF PLAN. The Plan shall continue in effect until the 
earlier of its termination by the Board or the date on which all of the 
shares of Stock available for issuance under the Plan have been issued and 
all restrictions on such shares under the terms of the Plan and the 
agreements evidencing Options granted under the Plan have lapsed. However, 
all Options shall be granted, if at all, prior to March 16, 2002.

2.    DEFINITIONS AND CONSTRUCTION.

2.1  DEFINITIONS. Whenever used herein, the following terms 
shall have their respective meanings set forth below:

(a)  "BOARD" means the Board of Directors of the Company. 
If one or more Committees have been appointed by the Board to administer the 
Plan, "BOARD" also means such Committee(s).

(b)  "CODE" means the Internal Revenue Code of 1986, as 
amended, and any applicable regulations promulgated thereunder.

(c)  "CHANGE IN CONTROL" means the occurrence of any of 
the following:

(i)   any "person" (as such term is used in Sections 
13(d) and 14(d) of the Exchange Act), other than (1) a trustee or other 
fiduciary holding stock of the Company under an employee benefit plan of a 
Participating Company or (2) a corporation owned directly or indirectly by 
the stockholders of the Company in substantially the same proportions as 
their ownership of the stock of the Company, becomes the "beneficial owner" 
(as defined in Rule 13d-3 promulgated under the Exchange Act), directly or 
indirectly, of stock of the Company representing more than fifty percent 
(50%) of the total combined voting power of the Company's then-outstanding 
voting stock; or

(ii)  an Ownership Change Event or a series of 
related Ownership Change Events (collectively, a "TRANSACTION") wherein the 
stockholders of the Company immediately before the Transaction do not retain 
immediately after the Transaction direct or indirect beneficial ownership of 
more than fifty percent (50%) of the total combined voting power of the 
outstanding voting stock of the Company or, in the event of a sale of assets, 
of the corporation or corporations to which the assets of the Company were 
transferred (the "TRANSFEREE CORPORATION(S)"); or

(iii) a liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall 
include, without limitation, an interest resulting from ownership of the 
voting stock of one or more corporations which, as a result of the 
Transaction, own the Company or the Transferee Corporation(s), as the case 
may be, either directly or through one or more subsidiary corporations. The 
Board shall have the right to determine whether multiple Ownership Change 
Events are related, and its determination shall be final, binding and 
conclusive.

(d)  "COMMITTEE" means the Compensation Committee or 
other committee of one or more members of the Board duly appointed to 
administer the Plan and having such powers as shall be specified by the 
Board. Unless the powers of the Committee have been specifically limited, the 
Committee shall have all of the powers of the Board granted herein, 
including, without limitation, the power to amend or terminate the Plan at 
any time, subject to the terms of the Plan and any applicable limitations 
imposed by law.

(e)  "COMPANY" means Ross Stores, Inc. a Delaware 
corporation, or any successor corporation thereto.

(f)  "CONSULTANT" means a person engaged to provide 
consulting or advisory services (other than as an Employee or a Director) to 
a Participating Company, provided that the identity of such person, the 
nature of such services or the entity to which such services are provided 
would not preclude the Company from offering or selling securities to such 
person pursuant to the Plan in reliance on registration on a Form S-8 
Registration Statement under the Securities Act.

(g)  "DIRECTOR" means a member of the Board.

(h)  "DISABILITY" means the permanent and total 
disability of the Optionee within the meaning of Section 22(e)(3) of the Code.

(i)  "EMPLOYEE" means any person treated as an
employee (including an officer or a Director who is also treated as an employee)
in the records of a Participating Company and, with respect to any Incentive
Stock Option granted to such person, who is an employee for purposes of Section
422 of the Code; provided, however, that neither service as a Director nor
payment of a director's fee shall be sufficient to constitute employment for
purposes of the Plan.

(j) "EXCHANGE ACT" means the Securities Exchange Act of 
1934, as amended.

(k) "FAIR MARKET VALUE" means, as of any date, the value 
of a share of Stock or other property as determined by the Board, in its 
discretion, or by the Company, in its discretion, if such determination is 
expressly allocated to the Company herein, subject to the following:

(i)  If, on such date, the Stock is listed on a 
national or regional securities exchange or market system, the Fair Market 
Value of a share of Stock shall be the closing price of a share of Stock (or 
the closing bid price of a share of Stock if the Stock is so quoted instead) 
as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such 
other national or regional securities exchange or market system constituting 
the primary market for the Stock, as reported in THE WALL STREET JOURNAL or 
such other source as the Company deems reliable. If the relevant date does 
not fall on a day on which the Stock has traded on such securities exchange 
or market system, the date on which the Fair Market Value shall be 
established shall be the last day on which the Stock was so traded prior to 
the relevant date, or such other appropriate day as shall be determined by 
the Board, in its discretion.

(ii)  If, on such date, the Stock is not listed on a 
national or regional securities exchange or market system, the Fair Market 
Value of a share of Stock shall be as determined by the Board in good faith 
without regard to any restriction other than a restriction which, by its 
terms, will never lapse.

(l)  "INCENTIVE STOCK OPTION" means an Option intended to 
be (as set forth in the Option Agreement) and which qualifies as an incentive 
stock option within the meaning of Section 422(b) of the Code.

(m)  "INSIDER" means an officer of the Company, Director 
or any other person whose transactions in Stock are subject to Section 16 of 
the Exchange Act.

(n)  "NON-EMPLOYEE DIRECTOR" means a Director who (i) is 
not a current employee or officer of a Participating Company; (ii) does not 
receive compensation, either directly or indirectly, from a Participating 
Company for services rendered as a consultant or in any capacity other than 
as a Director, except for an amount that does not exceed the dollar amount 
for which disclosure would be required pursuant to Item 404(a) of Regulation 
S-K under 

the Securities Act ("REGULATION S-K"); (iii) does not possess an interest in 
any other transaction for which disclosure would be required pursuant to Item 
404(a) of Regulation S-K; and (iv) is not engaged in a business relationship 
for which disclosure would be required pursuant to Item 404(b) of Regulation 
S-K.

(o)  "NONSTATUTORY STOCK OPTION" means an Option not 
intended to be (as set forth in the Option Agreement) or which does not 
qualify as an Incentive Stock Option.

(p)  "OPTION" means a right to purchase Stock (subject to 
adjustment as provided in Section 4.2) pursuant to the terms and conditions 
of the Plan. An Option may be either an Incentive Stock Option or a 
Nonstatutory Stock Option.

(q)  "OPTION AGREEMENT" means a written agreement between 
the Company and an Optionee setting forth the terms, conditions and 
restrictions of the Option granted to the Optionee and any shares acquired 
upon the exercise thereof.

(r)  "OPTIONEE" means a person who has been granted one 
or more Options.

(s)  "OUTSIDE DIRECTOR" means a Director who (i) is not a 
current employee of the Company or a member of an affiliated group of 
corporations within the meaning of Section 162(m) of the Code (together with 
the Company, the "AFFILIATED GROUP"); (ii) is not a former employee of the 
Affiliated Group who receives compensation for prior services (other than 
benefits under a tax-qualified retirement plan) during the taxable year; 
(iii) has not been an officer of the Affiliated Group; and (iv) does not 
receive remuneration within the meaning of Section 162(m) of the Code from 
the Affiliated Group, either directly or indirectly, in any capacity other 
than as a Director.

(t)  "OWNERSHIP CHANGE EVENT" means the occurrence of any 
of the following with respect to the Company: (i) the direct or indirect sale 
or exchange in a single or series of related transactions by the stockholders 
of the Company of more than fifty percent (50%) of the voting stock of the 
Company; (ii) a merger or consolidation in which the Company is a party; or 
(iii) the sale, exchange, or transfer of all or substantially all of the 
assets of the Company.

(u)  "PARENT CORPORATION" means any present or future 
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

(v)  "PARTICIPATING COMPANY" means the Company or any 
Parent Corporation or Subsidiary Corporation.

(w)  "PARTICIPATING COMPANY GROUP" means, at any point in 
time, all corporations collectively which are then Participating Companies.

(x)  "RULE 16b-3" means Rule 16b-3 under the Exchange 
Act, as amended from time to time, or any successor rule or regulation.

(y)  "SECURITIES ACT" means the Securities Act of 1933, 
as amended.

(z)  "SERVICE" means an Optionee's employment or service 
with the Participating Company Group, whether in the capacity of an Employee, 
a Director or a Consultant. An Optionee's Service shall not be deemed to have 
terminated merely because of a change in the capacity in which the Optionee 
renders Service to the Participating Company Group or a change in the 
Participating Company for which the Optionee renders such Service, provided 
that there is no interruption or termination of the Optionee's Service. 
Furthermore, an Optionee's Service shall not be deemed to have terminated if 
the Optionee takes any military leave, sick leave, or other bona fide leave 
of absence approved by the Company; provided, however, that if any such leave 
exceeds ninety (90) days, on the one hundred eighty-first (181st) day 
following the commencement of such leave any Incentive Stock Option held by 
the Optionee shall cease to be treated as an Incentive Stock Option and 
instead shall be treated thereafter as a Nonstatutory Stock Option unless the 
Optionee's right to return to Service with the Participating Company Group is 
guaranteed by statute or contract. Unless otherwise provided by the Board in 
the grant of an Option and set forth in the Option Agreement evidencing such 
Option, an approved leave of absence shall be treated as Service for purposes 
of determining vesting under the Option. The Optionee's Service shall be 
deemed to have terminated either upon an actual termination of Service or 
upon the corporation for which the Optionee performs Service ceasing to be a 
Participating Company. Subject to the foregoing, the Company, in its 
discretion, shall determine whether the Optionee's Service has terminated and 
the effective date of such termination.

(aa) "STOCK" means the common stock of the Company, 
as adjusted from time to time in accordance with Section 4.2.

(bb) "SUBSIDIARY CORPORATION" means any present or 
future "subsidiary corporation" of the Company, as defined in Section 424(f) 
of the Code.

(cc) "TEN PERCENT OWNER OPTIONEE" means an Optionee who, 
at the time an Option is granted to the Optionee, owns stock possessing more 
than ten percent (10%) of the total combined voting power of all classes of 
stock of a Participating Company within the meaning of Section 422(b)(6) of 
the Code.

2.2  CONSTRUCTION. Captions and titles contained herein are 
for convenience only and shall not affect the meaning or interpretation of 
any provision of the Plan. Except when otherwise indicated by the context, 
the singular shall include the plural and the plural shall include the 
singular. Use of the term "or" is not intended to be exclusive, unless the 
context clearly requires otherwise.

3.    ADMINISTRATION.

3.1  ADMINISTRATION BY THE BOARD. The Plan shall be 
administered by the Board. All questions of interpretation of the Plan or of 
any Option shall be determined by the 

Board, and such determinations shall be final and binding upon all persons 
having an interest in the Plan or such Option.

3.2  AUTHORITY OF OFFICERS. Any officer of a Participating 
Company shall have the authority to act on behalf of the Company with respect 
to any matter, right, obligation, determination or election which is the 
responsibility of or which is allocated to the Company herein, provided the 
officer has apparent authority with respect to such matter, right, 
obligation, determination or election.

3.3  POWERS OF THE BOARD. In addition to any other powers set 
forth in the Plan and subject to the provisions of the Plan, the Board shall 
have the full and final power and authority, in its discretion:

(a)  to determine the persons to whom, and the time or 
times at which, Options shall be granted and the number of shares of Stock to 
be subject to each Option;

(b)  to designate Options as Incentive Stock Options or 
Nonstatutory Stock Options;

(c)  to determine the Fair Market Value of shares of 
Stock or other property;

(d)  to determine the terms, conditions and restrictions 
applicable to each Option (which need not be identical) and any shares 
acquired upon the exercise thereof, including, without limitation, (i) the 
exercise price of the Option, (ii) the method of payment for shares purchased 
upon the exercise of the Option, (iii) the method for satisfaction of any tax 
withholding obligation arising in connection with the Option or such shares, 
including by the withholding or delivery of shares of stock, (iv) the timing, 
terms and conditions of the exercisability of the Option or the vesting of 
any shares acquired upon the exercise thereof, (v) the time of the expiration 
of the Option, (vi) the effect of the Optionee's termination of Service with 
the Participating Company Group on any of the foregoing, and (vii) all other 
terms, conditions and restrictions applicable to the Option or such shares 
not inconsistent with the terms of the Plan;

(e)  to approve one or more forms of Option Agreement;

(f)  to amend, modify, extend, cancel or renew any Option 
or to waive any restrictions or conditions applicable to any Option or any 
shares acquired upon the exercise thereof;

(g)  to accelerate, continue, extend or defer the 
exercisability of any Option or the vesting of any shares acquired upon the 
exercise thereof, including with respect to the period following an 
Optionee's termination of Service with the Participating Company Group;

(h)  to prescribe, amend or rescind rules, guidelines and 
policies relating to the Plan, or to adopt supplements to, or alternative 
versions of, the Plan, including, without limitation, as the Board deems 
necessary or desirable to comply with the laws of, or to accommodate the tax 
policy or custom of, foreign jurisdictions whose citizens may be granted 
Options; and

(i)  to correct any defect, supply any omission or 
reconcile any inconsistency in the Plan or any Option Agreement and to make 
all other determinations and take such other actions with respect to the Plan 
or any Option as the Board may deem advisable to the extent not inconsistent 
with the provisions of the Plan or applicable law.

3.4  ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to 
participation by Insiders in the Plan, at any time that any class of equity 
security of the Company is registered pursuant to Section 12 of the Exchange 
Act, the Plan shall be administered in compliance with the requirements, if 
any, of Rule 16b-3. For this purpose, the Board may delegate authority to 
administer the Plan to a Committee composed solely of two or more 
Non-Employee Directors.

3.5  ADMINISTRATION IN COMPLIANCE WITH SECTION 162(m). The 
Board may establish a Committee composed solely of two or more Outside 
Directors to approve the grant of any Option which might reasonably be 
anticipated to result in the payment of employee remuneration that would 
otherwise exceed the limit on employee remuneration deductible for income tax 
purposes pursuant to Section 162(m) of the Code.

3.6  INDEMNIFICATION. In addition to such other rights of 
indemnification as they may have as members of the Board or officers or 
employees of the Participating Company Group, members of the Board and any 
officers or employees of the Participating Company Group to whom authority to 
act for the Board or the Company is delegated shall be indemnified by the 
Company against all reasonable expenses, including attorneys' fees, actually 
and necessarily incurred in connection with the defense of any action, suit 
or proceeding, or in connection with any appeal therein, to which they or any 
of them may be a party by reason of any action taken or failure to act under 
or in connection with the Plan, or any right granted hereunder, and against 
all amounts paid by them in settlement thereof (provided such settlement is 
approved by independent legal counsel selected by the Company) or paid by 
them in satisfaction of a judgment in any such action, suit or proceeding, 
except in relation to matters as to which it shall be adjudged in such 
action, suit or proceeding that such person is liable for gross negligence, 
bad faith or intentional misconduct in duties; provided, however, that within 
sixty (60) days after the institution of such action, suit or proceeding, 
such person shall offer to the Company, in writing, the opportunity at its 
own expense to handle and defend the same.

4.    SHARES SUBJECT TO PLAN.

4.1  MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment 
as provided in Section 4.2, the maximum aggregate number of shares of Stock 
that may be issued under the Plan shall be thirty-five million 
(35,000,000)(1) and shall consist of authorized but

--------
(1) As adjusted through the two-for-one stock split effective on September 22,
1999.

unissued or reacquired shares of Stock or any combination thereof. If an 
outstanding Option for any reason expires or is terminated or canceled or if 
shares of Stock are acquired upon the exercise of an Option subject to a 
Company repurchase option and are repurchased by the Company at the 
Optionee's exercise price, the shares of Stock allocable to the unexercised 
portion of such Option or such repurchased shares of Stock shall again be 
available for issuance under the Plan; provided, however, that in no event 
shall more than 35,000,000 shares of Stock be available for issuance pursuant 
to the exercise of Incentive Stock Options (the "ISO SHARE ISSUANCE LIMIT").

4.2  ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the 
event of any stock dividend, stock split, reverse stock split, 
recapitalization, merger, combination, exchange of shares, reclassification 
or similar change in the capital structure of the Company, appropriate 
adjustments shall be made in the number and class of shares subject to the 
Plan and to any outstanding Options, in the Section 162(m) Grant Limit set 
forth in Section 5.4, in the ISO Share Issuance Limit set forth in Section 
4.1, and in the exercise price per share of any outstanding Options. If a 
majority of the shares which are of the same class as the shares that are 
subject to outstanding Options are exchanged for, converted into, or 
otherwise become (whether or not pursuant to an Ownership Change Event) 
shares of another corporation (the "NEW SHARES"), the Board may unilaterally 
amend the outstanding Options to provide that such Options are exercisable 
for New Shares. In the event of any such amendment, the number of shares 
subject to, and the exercise price per share of, the outstanding Options 
shall be adjusted in a fair and equitable manner as determined by the Board, 
in its discretion. Notwithstanding the foregoing, any fractional share 
resulting from an adjustment pursuant to this Section 4.2 shall be rounded 
down to the nearest whole number, and in no event may the exercise price of 
any Option be decreased to an amount less than the par value, if any, of the 
stock subject to the Option. The adjustments determined by the Board pursuant 
to this Section 4.2 shall be final, binding and conclusive.

5.    ELIGIBILITY AND OPTION LIMITATIONS.

5.1  PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only 
to Employees (including Directors who are also Employees) and Consultants. 
For purposes of the foregoing sentence, the term "Employees" shall include 
persons who become Employees within thirty (30) days of the date of grant of 
an Option to such person. Eligible persons may be granted more than one (1) 
Option.

5.2  OPTION GRANT RESTRICTIONS. Any person who is not an 
Employee on the effective date of the grant of an Option to such person may 
be granted only a Nonstatutory Stock Option. An Incentive Stock Option 
granted to a prospective Employee upon the condition that such person become 
an Employee shall be deemed granted effective on the date such person 
commences Service, with an exercise price determined as of such date in 
accordance with Section 6.1. Notwithstanding the foregoing, no Director who 
is not also an Employee shall be eligible to be granted an Option, even if 
such person is also a Consultant.

5.3  FAIR MARKET VALUE LIMITATION. To the extent that options 
designated as Incentive Stock Options (granted under all stock option plans 
of the Participating Company 

Group, including the Plan) become exercisable by an Optionee for the first 
time during any calendar year for stock having a Fair Market Value greater 
than One Hundred Thousand Dollars ($100,000), the portions of such options 
which exceed such amount shall be treated as Nonstatutory Stock Options. For 
purposes of this Section 5.3, options designated as Incentive Stock Options 
shall be taken into account in the order in which they were granted, and the 
Fair Market Value of stock shall be determined as of the time the option with 
respect to such stock is granted. If the Code is amended to provide for a 
different limitation from that set forth in this Section 5.3, such different 
limitation shall be deemed incorporated herein effective as of the date and 
with respect to such Options as required or permitted by such amendment to 
the Code. If an Option is treated as an Incentive Stock Option in part and as 
a Nonstatutory Stock Option in part by reason of the limitation set forth in 
this Section 5.3, the Optionee may designate which portion of such Option the 
Optionee is exercising. In the absence of such designation, the Optionee 
shall be deemed to have exercised the Incentive Stock Option portion of the 
Option first. Separate certificates representing each such portion shall be 
issued upon the exercise of the Option.

5.4  SECTION 162(m) GRANT LIMIT. Subject to adjustment as 
provided in Section 4.2, no person shall be granted one or more Options 
within any calendar year which in the aggregate are for the purchase of more 
than 1,970,622 shares(2) (representing that number of shares equal to 2% of 
the number of shares of Stock issued and outstanding at the close of business 
on the records of the Company's transfer agent on April 10, 1995) (the 
"SECTION 162(m) GRANT LIMIT"). An Option which is canceled in the same 
calendar year of the Company in which it was granted shall continue to be 
counted against the Section 162(m) Grant Limit for such period.

6.    TERMS AND CONDITIONS OF OPTIONS.

Options shall be evidenced by Option Agreements specifying the 
number of shares of Stock covered thereby, in such form as the Board shall 
from time to time establish. No Option or purported Option shall be a valid 
and binding obligation of the Company unless evidenced by a fully executed 
Option Agreement. Option Agreements may incorporate all or any of the terms 
of the Plan by reference and shall comply with and be subject to the 
following terms and conditions:

6.1  EXERCISE PRICE. The exercise price for each Option shall 
be established in the discretion of the Board; provided, however, that (a) 
the exercise price per share for any Option shall be not less than one 
hundred percent (100%) of the Fair Market Value of a share of Stock on the 
effective date of grant of the Option and (b) no Option granted to a Ten 
Percent Owner Optionee shall have an exercise price per share less than one 
hundred ten percent (110%) of the Fair Market Value of a share of Stock on 
the effective date of grant of the Option. Notwithstanding the foregoing, an 
Option (whether an Incentive Stock Option or a Nonstatutory

--------
(2) On April 10, 1995, a total of 24,632,786 shares of common stock were
outstanding, two percent of which is 492,655 shares. Under Section 4.2, this
limit was adjusted to 985,311 shares to reflect a two-for-one stock split on
March 5, 1997 (2% of 49,265,572 shares), and to 1,970,622 shares to reflect a
two-for-one stock split on September 22, 1999 (2% of 98,531,144 shares).

Stock Option) may be granted with an exercise price lower than the minimum
exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.

6.2  EXERCISABILITY AND TERM OF OPTIONS. Options shall be 
exercisable at such time or times, or upon such event or events, and subject 
to such terms, conditions, performance criteria and restrictions as shall be 
determined by the Board and set forth in the Option Agreement evidencing such 
Option; provided, however, that (a) no Incentive Stock Option shall be 
exercisable after the expiration of ten (10) years after the effective date 
of grant of such Option, (b) no Incentive Stock Option granted to a Ten 
Percent Owner Optionee shall be exercisable after the expiration of five (5) 
years after the effective date of grant of such Option, and (c) no 
Nonstatutory Stock Option shall be exercisable after the expiration of ten 
(10) years and one (1) month after the effective date of grant of such 
Option. Subject to the foregoing, unless otherwise specified by the Board in 
the grant of an Option, any Option granted hereunder shall terminate ten (10) 
years after the effective date of grant of the Option, unless earlier 
terminated in accordance with its provisions.

6.3  PAYMENT OF EXERCISE PRICE.

(a)  FORMS OF CONSIDERATION AUTHORIZED. Except as 
otherwise provided below, payment of the exercise price for the number of 
shares of Stock being purchased pursuant to any Option shall be made (i) in 
cash or by check, (ii) by tender to the Company, or attestation to the 
ownership, of shares of Stock owned by the Optionee having a Fair Market 
Value (as determined by the Company without regard to any restrictions on 
transferability applicable to such stock by reason of federal or state 
securities laws or agreements with an underwriter for the Company) not less 
than the exercise price, (iii) by delivery of a properly executed notice 
together with irrevocable instructions to a broker providing for the 
assignment to the Company of the proceeds of a sale or loan with respect to 
some or all of the shares being acquired upon the exercise of the Option 
(including, without limitation, through an exercise complying with the 
provisions of Regulation T as promulgated from time to time by the Board of 
Governors of the Federal Reserve System) (a "CASHLESS EXERCISE"), (iv) 
provided that the Optionee is an Employee (unless otherwise not prohibited by 
law, including, without limitation, any regulation promulgated by the Board 
of Governors of the Federal Reserve System) and in the Company's sole 
discretion at the time the Option is exercised, by delivery of the Optionee's 
promissory note in a form approved by the Company for the aggregate exercise 
price, provided that, if the Company is incorporated in the State of 
Delaware, the Optionee shall pay in cash that portion of the aggregate 
exercise price not less than the par value of the shares being acquired, (v) 
by such other consideration as may be approved by the Board from time to time 
to the extent permitted by applicable law, or (vi) by any combination 
thereof. The Board may at any time or from time to time, by approval of or by 
amendment to the standard forms of Option Agreement described in Section 7, 
or by other means, grant Options which do not permit all of the foregoing 
forms of consideration to be used in payment of the exercise price or which 
otherwise restrict one or more forms of consideration.

(b)  LIMITATIONS ON FORMS OF CONSIDERATION.

(i)  TENDER OF STOCK. Notwithstanding the foregoing, 
an Option may not be exercised by tender to the Company, or attestation to 
the ownership, of shares of Stock to the extent such tender or attestation 
would constitute a violation of the provisions of any law, regulation or 
agreement restricting the redemption of the Company's stock. Unless otherwise 
provided by the Board, an Option may not be exercised by tender to the 
Company, or attestation to the ownership, of shares of Stock unless such 
shares either have been owned by the Optionee for more than six (6) months or 
were not acquired, directly or indirectly, from the Company.

(ii)  CASHLESS EXERCISE. The Company reserves, at 
any and all times, the right, in the Company's sole and absolute discretion, 
to establish, decline to approve or terminate any program or procedures for 
the exercise of Options by means of a Cashless Exercise.

(iii) PAYMENT BY PROMISSORY NOTE. No promissory note 
shall be permitted if the exercise of an Option using a promissory note would 
be a violation of any law. Any permitted promissory note shall be on such 
terms as the Board shall determine at the time the Option is granted. The 
Board shall have the authority to permit or require the Optionee to secure 
any promissory note used to exercise an Option with the shares of Stock 
acquired upon the exercise of the Option or with other collateral acceptable 
to the Company. Unless otherwise provided by the Board, if the Company at any 
time is subject to the regulations promulgated by the Board of Governors of 
the Federal Reserve System or any other governmental entity affecting the 
extension of credit in connection with the Company's securities, any 
promissory note shall comply with such applicable regulations, and the 
Optionee shall pay the unpaid principal and accrued interest, if any, to the 
extent necessary to comply with such applicable regulations.

6.4  TAX WITHHOLDING. The Company shall have the right, but 
not the obligation, to deduct from the shares of Stock issuable upon the 
exercise of an Option, or to accept from the Optionee the tender of, a number 
of whole shares of Stock having a Fair Market Value, as determined by the 
Company, equal to all or any part of the federal, state, local and foreign 
taxes, if any, required by law to be withheld by the Participating Company 
Group with respect to such Option or the shares acquired upon the exercise 
thereof. Alternatively or in addition, in its discretion, the Company shall 
have the right to require the Optionee, through payroll withholding, cash 
payment or otherwise, including by means of a Cashless Exercise, to make 
adequate provision for any such tax withholding obligations of the 
Participating Company Group arising in connection with the Option or the 
shares acquired upon the exercise thereof. The Fair Market Value of any 
shares of Stock withheld or tendered to satisfy any such tax withholding 
obligations shall not exceed the amount determined by the applicable minimum 
statutory withholding rates. The Company shall have no obligation to deliver 
shares of Stock or to release shares of Stock from an escrow established 
pursuant to the Option Agreement until the Participating Company Group's tax 
withholding obligations have been satisfied by the Optionee.

6.5  REPURCHASE RIGHTS. Shares issued under the Plan may be 
subject to one or more repurchase options or other conditions and 
restrictions as determined by the Board in its discretion at the time the 
Option is granted. The Company shall have the right to assign at any 

time any repurchase right it may have, whether or not such right is then 
exercisable, to one or more persons as may be selected by the Company. Upon 
request by the Company, each Optionee shall execute any agreement evidencing 
such transfer restrictions prior to the receipt of shares of Stock hereunder 
and shall promptly present to the Company any and all certificates 
representing shares of Stock acquired hereunder for the placement on such 
certificates of appropriate legends evidencing any such transfer restrictions.

6.6  EFFECT OF TERMINATION OF SERVICE.

(a)  OPTION EXERCISABILITY. Subject to earlier 
termination of the Option as otherwise provided herein and unless otherwise 
provided by the Board in the grant of an Option and set forth in the Option 
Agreement, an Option shall be exercisable after an Optionee's termination of 
Service only during the applicable time period determined in accordance with 
this Section 6.6 and thereafter shall terminate:

(i)  DISABILITY. If the Optionee's Service 
terminates because of the Disability of the Optionee, the Option, to the 
extent unexercised and exercisable on the date on which the Optionee's 
Service terminated, may be exercised by the Optionee (or the Optionee's 
guardian or legal representative) at any time prior to the expiration of 
twelve (12) months (or such longer period of time as determined by the Board, 
in its discretion) after the date on which the Optionee's Service terminated, 
but in any event no later than the date of expiration of the Option's term as 
set forth in the Option Agreement evidencing such Option (the "OPTION 
EXPIRATION DATE").

(ii)  DEATH. If the Optionee's Service terminates 
because of the death of the Optionee, the Option, to the extent unexercised 
and exercisable on the date on which the Optionee's Service terminated, may 
be exercised by the Optionee's legal representative or other person who 
acquired the right to exercise the Option by reason of the Optionee's death 
at any time prior to the expiration of twelve (12) months (or such longer 
period of time as determined by the Board, in its discretion) after the date 
on which the Optionee's Service terminated, but in any event no later than 
the Option Expiration Date. The Optionee's Service shall be deemed to have 
terminated on account of death if the Optionee dies within three (3) months 
(or such longer period of time as determined by the Board, in its discretion) 
after the Optionee's termination of Service.

(iii) TERMINATION FOR CAUSE. Notwithstanding any 
other provision of the Plan to the contrary, if the Optionee's Service is 
terminated for Cause, as defined by the Optionee's Option Agreement or 
contract of employment or service (or, if not defined in any of the 
foregoing, as defined below), the Option, to the extent unexercised and 
exercisable by the Optionee on the date on which the Optionee's Service 
terminated, may be exercised by the Optionee at any time prior to the 
expiration of three (3) months after the date on which the Optionee's Service 
terminated, but in any event no later than the Option Expiration Date. Unless 
otherwise defined by the Optionee's Option Agreement or contract of 
employment or service, for purposes of this Section 6.6(a)(iii) "CAUSE" shall 
mean any of the following: (1) the Optionee's theft, dishonesty, or 
falsification of any Participating Company documents or records; (2) the 
Optionee's improper use or disclosure of a Participating Company's 
confidential 

or proprietary information; (3) any action by the Optionee which has a 
detrimental effect on a Participating Company's reputation or business; (4) 
the Optionee's failure or inability to perform any reasonable assigned duties 
after written notice from a Participating Company of, and a reasonable 
opportunity to cure, such failure or inability; (5) any material breach by 
the Optionee of any employment or service agreement between the Optionee and 
a Participating Company, which breach is not cured pursuant to the terms of 
such agreement; or (6) the Optionee's conviction (including any plea of 
guilty or nolo contendere) of any criminal act which impairs the Optionee's 
ability to perform his or her duties with a Participating Company.

(iv)  OTHER TERMINATION OF SERVICE. If the 
Optionee's Service terminates for any reason, except Disability, death or 
Cause, the Option, to the extent unexercised and exercisable by the Optionee 
on the date on which the Optionee's Service terminated, may be exercised by 
the Optionee at any time prior to the expiration of three (3) months (or such 
longer period of time as determined by the Board, in its discretion, or as 
provided by the Option Agreement evidencing such Option) after the date on 
which the Optionee's Service terminated, but in any event no later than the 
Option Expiration Date.

(b)  EXTENSION IF EXERCISE PREVENTED BY LAW. 
Notwithstanding the foregoing other than termination of an Optionee's Service 
for Cause, if the exercise of an Option within the applicable time periods 
set forth in Section 6.6(a) is prevented by the provisions of Section 9 
below, the Option shall remain exercisable until three (3) months (or such 
longer period of time as determined by the Board, in its discretion) after 
the date the Optionee is notified by the Company that the Option is 
exercisable, but in any event no later than the Option Expiration Date.

(c)  EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). 
Notwithstanding the foregoing other than termination of an Optionee's Service 
for Cause, if a sale within the applicable time periods set forth in Section 
6.6(a) of shares acquired upon the exercise of the Option would subject the 
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall 
remain exercisable until the earliest to occur of (i) the tenth (10th) day 
following the date on which a sale of such shares by the Optionee would no 
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) 
day after the Optionee's termination of Service, or (iii) the Option 
Expiration Date.

6.7  TRANSFERABILITY OF OPTIONS. During the lifetime of the 
Optionee, an Option shall be exercisable only by the Optionee or the 
Optionee's guardian or legal representative. No Option shall be assignable or 
transferable by the Optionee, except by will or by the laws of descent and 
distribution. Notwithstanding the foregoing, to the extent permitted by the 
Board, in its discretion, and set forth in the Option Agreement evidencing 
such Option, a Nonstatutory Stock Option shall be assignable or transferable 
subject to the applicable limitations, if any, described in the General 
Instructions to the Form S-8 Registration Statement under the Securities Act.

7.    STANDARD FORMS OF OPTION AGREEMENT.

7.1  OPTION AGREEMENT. Unless otherwise provided by the Board 
at the time the Option is granted, an Option shall comply with and be subject 
to the terms and conditions set forth in the form of Option Agreement 
approved by the Board concurrently with its adoption of the Plan and as 
amended from time to time.

7.2  AUTHORITY TO VARY TERMS. The Board shall have the 
authority from time to time to vary the terms of any standard form of Option 
Agreement described in this Section 7 either in connection with the grant or 
amendment of an individual Option or in connection with the authorization of 
a new standard form or forms; provided, however, that the terms and 
conditions of any such new, revised or amended standard form or forms of 
Option Agreement are not inconsistent with the terms of the Plan.

8.    EFFECT OF CHANGE IN CONTROL.

Except as otherwise provided by the Board in the grant of any 
Option and set forth in the Option Agreement evidencing such Option, in the 
event of a Change in Control, the Board, in its discretion, shall either (a) 
arrange for the surviving, continuing, successor, or purchasing corporation 
or parent corporation thereof, as the case may be (the "ACQUIRING 
CORPORATION"), to either assume the Company's rights and obligations under 
outstanding Options or substitute for outstanding Options substantially 
equivalent options for the Acquiring Corporation's stock, or (b) provide that 
any unexercisable or unvested portion of such outstanding Option and any 
shares acquired upon the exercise thereof held by an Optionee whose Service 
has not terminated prior to such date shall be immediately exercisable and 
vested in full as of the date ten (10) days prior to the Change in Control. 
Furthermore, the Board may, in its discretion, provide in any Option 
Agreement or employment or other agreement between the Optionee and a 
Participating Company that if the Optionee's Service ceases as a result of a 
"Termination After Change in Control" (as defined in such agreement) then the 
exercisability and vesting of any Option held by such Optionee and any shares 
acquired upon the exercise thereof shall be accelerated effective as of the 
date on which the Optionee's Service terminated to such extent, if any, as 
shall have been determined by the Board, in its discretion, and set forth in 
such agreement. The exercise or vesting of any Option and any shares acquired 
upon the exercise thereof that was permissible solely by reason of this 
Section 8 shall be conditioned upon the consummation of the Change in 
Control. Any Options which are neither assumed or substituted for by the 
Acquiring Corporation in connection with the Change in Control nor exercised 
as of the date of the Change in Control shall terminate and cease to be 
outstanding effective as of the date of the Change in Control.

9.    COMPLIANCE WITH SECURITIES LAW.

The grant of Options and the issuance of shares of Stock upon 
exercise of Options shall be subject to compliance with all applicable 
requirements of federal, state and foreign law with respect to such 
securities. Options may not be exercised if the issuance of shares of Stock 
upon exercise would constitute a violation of any applicable federal, state 
or foreign securities laws or other law or regulations or the requirements of 
any stock exchange or market system 

upon which the Stock may then be listed. The inability of the Company to 
obtain from any regulatory body having jurisdiction the authority, if any, 
deemed by the Company's legal counsel to be necessary to the lawful issuance 
and sale of any shares hereunder shall relieve the Company of any liability 
in respect of the failure to issue or sell such shares as to which such 
requisite authority shall not have been obtained. As a condition to the 
exercise of any Option, the Company may require the Optionee to satisfy any 
qualifications that may be necessary or appropriate, to evidence compliance 
with any applicable law or regulation and to make any representation or 
warranty with respect thereto as may be requested by the Company.

10.   TERMINATION OR AMENDMENT OF PLAN.

The Board may terminate or amend the Plan at any time. 
However, subject to changes in applicable law, regulations or rules that 
would permit otherwise, without the approval of the Company's stockholders, 
there shall be (a) no increase in the maximum aggregate number of shares of 
Stock that may be issued under the Plan (except by operation of the 
provisions of Section 4.2), (b) no change in the class of persons eligible to 
receive Incentive Stock Options, and (c) no other amendment of the Plan that 
would require approval of the Company's stockholders under any applicable 
law, regulation or rule. No termination or amendment of the Plan shall affect 
any then outstanding Option unless expressly provided by the Board. In any 
event, no termination or amendment of the Plan may adversely affect any then 
outstanding Option without the consent of the Optionee, unless such 
termination or amendment is required to enable an Option designated as an 
Incentive Stock Option to qualify as an Incentive Stock Option or is 
necessary to comply with any applicable law, regulation or rule.

11.   MISCELLANEOUS PROVISIONS.

11.1      PROVISION OF INFORMATION. Each Optionee shall be 
given access to information concerning the Company equivalent to that 
information generally made available to the Company's common stockholders.

11.2      BENEFICIARY DESIGNATION. Each Optionee may file with 
the Company a written designation of a beneficiary who is to receive any 
benefit under the Plan to which the Optionee is entitled in the event of such 
Optionee's death before he or she receives any or all of such benefit. Each 
designation will revoke all prior designations by the same Optionee, shall be 
in a form prescribed by the Company, and will be effective only when filed by 
the Optionee in writing with the Company during the Optionee's lifetime. If a 
married Optionee designates a beneficiary other than the Optionee's spouse, 
the effectiveness of such designation shall be subject to the consent of the 
Optionee's spouse.

11.3      RIGHTS AS A STOCKHOLDER. An Optionee shall have no 
rights as a stockholder with respect to any shares covered by an Option until 
the date of the issuance of a certificate for such shares (as evidenced by 
the appropriate entry on the books of the Company or of a duly authorized 
transfer agent of the Company). No adjustment shall be made for dividends, 
distributions or other rights for which the record date is prior to the date 
such certificate is issued, except as provided in Section 4.2 or another 
provision of the Plan.

11.4      RIGHTS AS EMPLOYEE, CONSULTANT OR DIRECTOR. No 
person, even though eligible pursuant to Section 5, shall have a right to be 
granted an Option, or, having been once been granted an Option, to be granted 
an additional Option. Nothing in the Plan or any Option Agreement shall 
confer on any Optionee a right to remain an Employee, Consultant or Director, 
or interfere with or limit in any way the right of a Participating Company to 
terminate the Optionee's Service at any time.

11.5      CONTINUATION OF PRIOR VERSIONS OF THE PLAN AS TO 
OUTSTANDING OPTIONS. Notwithstanding any other provision of the Plan to the 
contrary, each Option outstanding prior to the Effective Date shall continue 
to be governed by the terms of the applicable version of the Plan as in 
effect on the date of grant of such Option. For purposes of the preceding 
sentence, such prior versions of the Plan include the Ross Stores, Inc. 1984 
Stock Option Plan adopted on February 24, 1984; the Amended and Restated Ross 
Stores, Inc. 1984 Stock Option Plan adopted on February 19, 1987; the Second 
Amended and Restated Ross Stores, Inc. 1984 Stock Option Plan adopted on 
March 14, 1988; the Third Amended and Restated Ross Stores, Inc. 1984 Stock 
Option Plan adopted on March 17, 1989; the Fourth Amended and Restated Ross 
Stores, Inc. 1984 Stock Option Plan adopted on March 18, 1991; the Ross 
Stores, Inc. 1992 Stock Option Plan adopted on March 16, 1992; the Amended 
and Restated Ross Stores, Inc. 1992 Stock Option Plan adopted on March 16, 
1995; and the Second Amended and Restated Ross Stores, Inc. 1992 Stock Option 
Plan adopted on May 28, 1998.

IN WITNESS WHEREOF, the undersigned Secretary of the Company 
certifies that the foregoing sets forth the Third Amended and Restated Ross 
Stores, Inc. 1992 Stock Option Plan as duly adopted by the Board on March 16, 
2000.

------------------------------------
Secretary

ROSS STORES, INC.
FISCAL 1999 FORM 10-K
EXHIBIT 10.7

ROSS STORES, INC.

2000 EQUITY INCENTIVE PLAN

ADOPTED [MARCH 16, 2000]

1.       PURPOSES.

(a) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive 
Stock Awards are the Employees, Directors and Consultants of the Company and 
its Affiliates.

(b) AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a 
means by which eligible recipients of Stock Awards may be given an 
opportunity to benefit from increases in value of the Common Stock through 
the granting of the following Stock Awards: (i) Nonstatutory Stock Options, 
(ii) restricted stock bonus awards and (iii) rights to acquire restricted 
stock.

(c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to 
retain the services of the group of persons eligible to receive Stock Awards, 
to secure and retain the services of new members of this group and to provide 
incentives for such persons to exert maximum efforts for the success of the 
Company and its Affiliates.

2.       DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary 
corporation of the Company, whether now or hereafter existing, as those terms 
are defined in Sections 424(e) and (f), respectively, of the Code.

(b) "BOARD" means the Board of Directors of the Company.

(c) "CAUSE" means any of the following: (i) the Optionholder's 
theft, dishonesty, or falsification of any Company or Affiliate documents or 
records; (ii) the Optionholder's improper use or disclosure of the Company's 
or an Affiliate's confidential or proprietary information; (iii) any action 
by the Optionholder which has a detrimental effect on the Company's or an 
Affiliate's reputation or business; (iv) the Optionholder's failure or 
inability to perform any reasonable assigned duties after written notice from 
the Company or an Affiliate of, and thirty (30) days to cure, such failure or 
inability; (v) any material breach by the Optionholder of any employment or 
service agreement between the Optionholder and the Company or an Affiliate, 
which breach is not cured pursuant to the terms of such agreement; or (vi) 
the Optionholder's conviction (including any plea of guilty or nolo 
contendere) of any criminal act which impairs the Optionholder's ability to 
perform his or her duties with the Company or an Affiliate.

(d) "CHANGE IN CONTROL" means the occurrence of any of the following:

(i) any "person" (as such term is used in Section 13(d) and 
14(d) of the Exchange Act), other than (1) a trustee or other fiduciary 
holding stock of the Company under an employee benefit plan of the Company or 
an Affiliate or (2) a corporation owned directly or indirectly by the 
stockholders of the Company in substantially the same proportion as their 
ownership of the stock of the Company, becomes the "beneficial owner" (as 
defined in Rule 13d-3 promulgated under the Exchange Act), directly or 
indirectly, of the stock of the Company representing more than fifty percent 
(50%) of the total combined voting power of the Company's then-outstanding 
voting stock; or

(ii) an Ownership Change Event or series of related Ownership 
Change Events (collectively, a "Transaction") wherein the stockholders of the 
Company immediately before the Transaction do not retain immediately after 
the Transaction direct or indirect beneficial ownership of more than fifty 
percent (50%) of the total combined voting power of the outstanding voting 
stock of the Company or, in the event of a sale of assets, of the corporation 
or corporations to which the assets of the Company were transferred (the 
"Transferee Corporation(s)");

(iii) a liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall 
include, without limitation, an interest resulting from ownership of the 
voting stock of one or more corporations which, as a result of the 
Transaction, own the Company or the Transferee Corporation(s), as the case 
may be, either directly or through one or more subsidiary corporations. The 
Board shall have the right to determine whether multiple Ownership Change 
Events are related, and its determination shall be final, binding and 
conclusive.

(e) "CODE" means the Internal Revenue Code of 1986, as amended.

(f) "COMMITTEE" means a committee of one or more members of the 
Board appointed by the Board in accordance with subsection 3(c).

(g) "COMMON STOCK" means the common stock of the Company.

(h) "COMPANY" means Ross Stores, Inc., a Delaware corporation.

(i) "CONSULTANT" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for such services. However, the term "Consultant" shall not include
either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a director's fee by the Company for
their services as Directors.

(j) "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant

renders such service, provided that there is no interruption or termination 
of the Participant's Continuous Service. For example, a change in status from 
an Employee of the Company to a Consultant of an Affiliate or a Director will 
not constitute an interruption of Continuous Service. The Board or the chief 
executive officer of the Company, in that party's sole discretion, may 
determine whether Continuous Service shall be considered interrupted in the 
case of any leave of absence approved by that party, including sick leave, 
military leave or any other personal leave.

(k) "COVERED EMPLOYEE" means the chief executive officer and the 
four (4) other highest compensated officers of the Company for whom total 
compensation is required to be reported to shareholders under the Exchange 
Act, as determined for purposes of Section 162(m) of the Code.

(l) "DIRECTOR" means a member of the Board of Directors of the Company.

(m) "DISABILITY" means the permanent and total disability of a 
person within the meaning of Section 22(e)(3) of the Code.

(n) "EMPLOYEE" means any person employed by the Company or an 
Affiliate. Mere service as a Director or payment of a director's fee by the 
Company or an Affiliate shall not be sufficient to constitute "employment" by 
the Company or an Affiliate.

(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

(p) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:

(i) If the Common Stock is listed on any established stock 
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap 
Market, the Fair Market Value of a share of Common Stock shall be the closing 
sales price for such stock (or the closing bid if no sales were reported) as 
quoted on such exchange or market (or the exchange or market with the 
greatest volume of trading in the Common Stock) on the date of grant, or if 
the date of grant is not a market trading day, then the last market trading 
day prior to the date of grant, as reported in THE WALL STREET JOURNAL or 
such other source as the Board deems reliable.

(ii) In the absence of such markets for the Common Stock, the 
Fair Market Value shall be determined in good faith by the Board.

(q) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a 
current Employee or Officer of the Company or its parent or a subsidiary, 
does not receive compensation (directly or indirectly) from the Company or 
its parent or a subsidiary for services rendered as a consultant or in any 
capacity other than as a Director (except for an amount as to which 
disclosure would not be required under Item 404(a) of Regulation S-K 
promulgated pursuant to the Securities Act ("Regulation S-K")), does not 
possess an interest in any other transaction as to which disclosure would be 
required under Item 404(a) of Regulation S-K and is not engaged in a business 
relationship as to which disclosure would be required under Item 404(b) of 
Regulation S-K; or (ii) is otherwise considered a "non-employee director" for 
purposes of Rule 16b-3.

(r) "NONSTATUTORY STOCK OPTION" means an Option not intended to 
qualify as an "incentive stock option" within the meaning of Section 422 of 
the Code and the regulations promulgated thereunder.

(s) "OFFICER" means a person who possesses the authority of an 
"officer" as that term is used in Rule 4460(i)(1)(A) of the Rules of the 
National Association of Securities Dealers, Inc. For purposes of the Plan, a 
person in the position of "Vice President" or higher shall be classified as 
an "Officer" unless the Board or Committee expressly finds that such person 
does not possess the authority of an "officer" as that term is used in Rule 
4460(i)(1)(A) of the Rules of the National Association of Securities Dealers, 
Inc.

(t) "OPTION" means a Nonstatutory Stock Option granted pursuant to 
the Plan.

(u) "OPTION AGREEMENT" means a written agreement between the Company 
and an Optionholder evidencing the terms and conditions of an individual 
Option grant. Each Option Agreement shall be subject to the terms and 
conditions of the Plan.

(v) "OPTIONHOLDER" means a person to whom an Option is granted 
pursuant to the Plan or, if applicable, such other person who holds an 
outstanding Option.

(w) "OWNERSHIP CHANGE EVENT" means the occurrence of any of the 
following with respect to the Company: (i) the direct or indirect sale or 
exchange in a single or series of related transactions by the stockholders of 
the Company of more than fifty percent (50%) of the voting stock of the 
Company; (ii) a merger or consolidation in which the Company is a party; or 
(iii) the sale, exchange, or transfer of all or substantially all of the 
assets of the Company.

(x) "PARTICIPANT" means a person to whom a Stock Award is granted 
pursuant to the Plan or, if applicable, such other person who holds an 
outstanding Stock Award.

(y)  "PLAN" means this Ross Stores, Inc. 2000 Equity Incentive Plan.

(z) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

(aa) "SECURITIES ACT" means the Securities Act of 1933, as amended.

(bb) "STOCK AWARD" means any right granted under the Plan, including an
Option, a stock purchase award and a restricted stock bonus award.

(cc) "STOCK AWARD AGREEMENT" means a written agreement between the 
Company and a holder of a Stock Award evidencing the terms and conditions of 
an individual Stock Award grant. Each Stock Award Agreement shall be subject 
to the terms and conditions of the Plan.

3.       ADMINISTRATION.

(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan 
unless and until the Board delegates administration to a Committee, as 
provided in subsection 3(c).

(b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

(i) To determine from time to time which of the persons eligible 
under the Plan shall be granted Stock Awards; when and how each Stock Award 
shall be granted; what type or combination of types of Stock Award shall be 
granted; the provisions of each Stock Award granted (which need not be 
identical), including the time or times when a person shall be permitted to 
receive Common Stock pursuant to a Stock Award; and the number of shares of 
Common Stock with respect to which a Stock Award shall be granted to each 
such person.

(ii) To construe and interpret the Plan and Stock Awards granted 
under it, and to establish, amend and revoke rules and regulations for its 
administration. The Board, in the exercise of this power, may correct any 
defect, omission or inconsistency in the Plan or in any Stock Award 
Agreement, in a manner and to the extent it shall deem necessary or expedient 
to make the Plan fully effective.

(iii) To amend the Plan or a Stock Award as provided in Section 
12.

(iv) Generally, to exercise such powers and to perform such acts 
as the Board deems necessary or expedient to promote the best interests of 
the Company which are not in conflict with the provisions of the Plan.

(c) DELEGATION TO COMMITTEE.

(i) GENERAL. The Board may delegate administration of the Plan 
to a Committee or Committees of one (1) or more members of the Board, and the 
term "Committee" shall apply to any person or persons to whom such authority 
has been delegated. If administration is delegated to a Committee, the 
Committee shall have, in connection with the administration of the Plan, the 
powers theretofore possessed by the Board, including the power to delegate to 
a subcommittee any of the administrative powers the Committee is authorized 
to exercise (and references in this Plan to the Board shall thereafter be to 
the Committee or subcommittee), subject, however, to such resolutions, not 
inconsistent with the provisions of the Plan, as may be adopted from time to 
time by the Board. The Board may abolish the Committee at any time and revest 
in the Board the administration of the Plan.

(ii) COMMITTEE COMPOSITION WHEN COMMON STOCK IS PUBLICLY TRADED. 
At such time as the Common Stock is publicly traded, in the discretion of the 
Board, a Committee may consist solely of two or more Outside Directors, in 
accordance with Section 162(m) of the Code, and/or solely of two or more 
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of 
such authority, the Board or the Committee may (1) delegate to a committee of 
one or more members of the Board who are not Outside Directors the authority 
to grant Stock Awards to eligible persons who are either (a) not then Covered 
Employees and are not expected to be Covered Employees at the time of 
recognition of income resulting from such Stock Award or (b) not persons with 
respect to whom the Company wishes to comply with Section 162(m) of the Code 
and/or) (2) delegate to a committee of one or more members of the Board who 
are not Non-Employee Directors the authority to grant Stock Awards to 
eligible persons who are not then subject to Section 16 of the Exchange Act.

(d) EFFECT OF BOARD'S DECISION. All determinations, interpretations 
and constructions made by the Board in good faith shall not be subject to 
review by any person and shall be final, binding and conclusive on all 
persons.

4.       SHARES SUBJECT TO THE PLAN.

(a) SHARE RESERVE. Subject to the provisions of Section 11 relating 
to adjustments upon changes in Common Stock, the Common Stock that may be 
issued pursuant to Stock Awards shall not exceed in the aggregate four 
million (4,000,000) shares of Common Stock.

(b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award 
shall for any reason expire or otherwise terminate, in whole or in part, 
without having been exercised in full, the shares of Common Stock not 
acquired under such Stock Award shall revert to and again become available 
for issuance under the Plan.

(c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan 
may be unissued shares or reacquired shares, bought on the market or 
otherwise.

5.       ELIGIBILITY.

(a) ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Stock Awards may be 
granted to Employees, Directors and Consultants.

(b) RESTRICTIONS ON ELIGIBILITY. Notwithstanding the foregoing, the 
aggregate number of shares issued pursuant to Stock Awards granted to 
Officers and Directors cannot exceed forty percent (40%) of the number of 
shares reserved for issuance under the Plan as determined at the time of each 
such issuance to an Officer or Director, except that there shall be excluded 
from this calculation shares issued to Officers not previously employed by 
the Company pursuant to Stock Awards granted as an inducement essential to 
such individuals entering into employment contracts with the Company.

(c)  CONSULTANTS.

(i) A Consultant shall not be eligible for the grant of a Stock 
Award if, at the time of grant, a Form S-8 Registration Statement under the 
Securities Act ("Form S-8") is not available to register either the offer or 
the sale of the Company's securities to such Consultant because of the nature 
of the services that the Consultant is providing to the Company, or because 
the Consultant is not a natural person, or as otherwise provided by the rules 
governing the use of Form S-8, unless the Company determines both (i) that 
such grant (A) shall be registered in another manner under the Securities Act 
(E.G., on a Form S-3 Registration Statement) or (B) does not require 
registration under the Securities Act in order to comply with the 
requirements of the Securities Act, if applicable, and (ii) that such grant 
complies with the securities laws of all other relevant jurisdictions.

(ii) Form S-8 generally is available to consultants and advisors 
only if (i) they are natural persons; (ii) they provide bona fide services to 
the issuer, its parents, its majority-owned subsidiaries or majority-owned 
subsidiaries of the issuer's parent; and (iii) the services are

not in connection with the offer or sale of securities in a capital-raising 
transaction, and do not directly or indirectly promote or maintain a market 
for the issuer's securities.

6.       OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

(a) TERM. The term of an Option shall be the term determined by the 
Board, either at the time of grant of the Option or as the Option may be 
amended thereafter.

(b) EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise 
price of each Nonstatutory Stock Option shall be not less than eighty-five 
percent (85%) of the Fair Market Value of the Common Stock subject to the 
Option on the date the Option is granted. Notwithstanding the foregoing, a 
Nonstatutory Stock Option may be granted with an exercise price lower than 
that set forth in the preceding sentence if such Option is granted pursuant 
to an assumption or substitution for another option in a manner satisfying 
the provisions of Section 424(a) of the Code.

(c) CONSIDERATION. The purchase price of Common Stock acquired 
pursuant to an Option shall be paid, to the extent permitted by applicable 
statutes and regulations, either (i) in cash at the time the Option is 
exercised or (ii) at the discretion of the Board at the time of the grant of 
the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) 
by delivery to the Company of other Common Stock, (2) according to a deferred 
payment or other similar arrangement with the Optionholder or (3) in any 
other form of legal consideration that may be acceptable to the Board. Unless 
otherwise specifically provided in the Option, the purchase price of Common 
Stock acquired pursuant to an Option that is paid by delivery to the Company 
of other Common Stock acquired, directly or indirectly from the Company, 
shall be paid only by shares of the Common Stock of the Company that have 
been held for more than six (6) months (or such longer or shorter period of 
time required to avoid a charge to earnings for financial accounting 
purposes). At any time that the Company is incorporated in Delaware, payment 
of the Common Stock's "par value," as defined in the Delaware General 
Corporation Law, shall not be made by deferred payment.

In the case of any deferred payment arrangement, interest shall be 
compounded at least annually and shall be charged at the minimum rate of 
interest necessary to avoid the treatment as interest, under any applicable 
provisions of the Code, of any amounts other than amounts stated to be 
interest under the deferred payment arrangement.

(d) TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory 
Stock Option shall be transferable to the extent provided in the Option 
Agreement. If the Nonstatutory Stock Option does not provide for 
transferability, then the Nonstatutory Stock Option shall not be transferable 
except by will or by the laws of descent and distribution and shall be 
exercisable during the lifetime of the Optionholder only by the Optionholder. 
Notwithstanding the foregoing, the Optionholder may, by delivering written 
notice to the Company, in a form 

satisfactory to the Company, designate a third party who, in the event of the 
death of the Optionholder, shall thereafter be entitled to exercise the 
Option.

(e) VESTING GENERALLY. The total number of shares of Common Stock 
subject to an Option may, but need not, vest and therefore become exercisable 
in periodic installments that may, but need not, be equal. The Option may be 
subject to such other terms and conditions on the time or times when it may 
be exercised (which may be based on performance or other criteria) as the 
Board may deem appropriate. The vesting provisions of individual Options may 
vary. The provisions of this subsection 6(e) are subject to any Option 
provisions governing the minimum number of shares of Common Stock as to which 
an Option may be exercised.

(f) TERMINATION OF CONTINUOUS SERVICE. In the event an 
Optionholder's Continuous Service terminates for any reason other than upon 
the Optionholder's death or Disability, the Optionholder may exercise his or 
her Option (to the extent that the Optionholder was entitled to exercise such 
Option as of the date of termination) but only within such period of time 
ending on the earlier of (i) the date three (3) months following the 
termination of the Optionholder's Continuous Service (or such longer or 
shorter period specified in the Option Agreement), or (ii) the expiration of 
the term of the Option as set forth in the Option Agreement. If, after 
termination, the Optionholder does not exercise his or her Option within the 
time specified in the Option Agreement, the Option shall terminate.

(g) EXTENSION OF TERMINATION DATE. An Optionholder's Option 
Agreement may also provide that if the exercise of the Option following the 
termination of the Optionholder's Continuous Service (other than upon the 
Optionholder's death or Disability) would be prohibited at any time solely 
because the issuance of shares of Common Stock would violate the registration 
requirements under the Securities Act, then the Option shall terminate on the 
earlier of (i) the expiration of the term of the Option set forth in the 
Option Agreement, or (ii) the expiration of a period of three (3) months 
after the termination of the Optionholder's Continuous Service during which 
the exercise of the Option would not be in violation of such registration 
requirements.

(h) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's 
Continuous Service terminates as a result of the Optionholder's Disability, 
the Optionholder may exercise his or her Option (to the extent that the 
Optionholder was entitled to exercise such Option as of the date of 
termination), but only within such period of time ending on the earlier of 
(i) the date twelve (12) months following such termination (or such longer or 
shorter period specified in the Option Agreement) or (ii) the expiration of 
the term of the Option as set forth in the Option Agreement. If, after 
termination, the Optionholder does not exercise his or her Option within the 
time specified herein, the Option shall terminate.

(i) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's 
Continuous Service terminates as a result of the Optionholder's death or (ii) 
the Optionholder dies within the period (if any) specified in the Option 
Agreement after the termination of the Optionholder's Continuous Service for 
a reason other than death, then the Option may be exercised (to the extent 
the Optionholder was entitled to exercise such Option as of the date of 
death) by the Optionholder's estate, by a person who acquired the right to 
exercise the Option by bequest or inheritance or by a person designated to 
exercise the Option upon the Optionholder's death

pursuant to subsection 6(d), but only within the period ending on the earlier 
of (1) the date twelve (12) months following the date of death (or such 
longer or shorter period specified in the Option Agreement) or (2) the 
expiration of the term of such Option as set forth in the Option Agreement. 
If, after death, the Option is not exercised within the time specified 
herein, the Option shall terminate.

(j) EARLY EXERCISE. The Option may, but need not, include a 
provision whereby the Optionholder may elect at any time before the 
Optionholder's Continuous Service terminates to exercise the Option as to any 
part or all of the shares of Common Stock subject to the Option prior to the 
full vesting of the Option. Any unvested shares of Common Stock so purchased 
may be subject to a repurchase option in favor of the Company or to any other 
restriction the Board determines to be appropriate. The Company will not 
exercise its repurchase option until at least six (6) months (or such longer 
or shorter period of time required to avoid a charge to earnings for 
financial accounting purposes) have elapsed following exercise of the Option 
unless the Board otherwise specifically provides in the Option.

(k) RE-LOAD OPTIONS.

(i) Without in any way limiting the authority of the Board to 
make or not to make grants of Options hereunder, the Board shall have the 
authority (but not an obligation) to include as part of any Option Agreement 
a provision entitling the Optionholder to a further Option (a "Re-Load 
Option") in the event the Optionholder exercises the Option evidenced by the 
Option Agreement, in whole or in part, by surrendering other shares of Common 
Stock in accordance with this Plan and the terms and conditions of the Option 
Agreement. Unless otherwise specifically provided in the Option, the 
Optionholder shall not surrender shares of Common Stock acquired, directly or 
indirectly from the Company, unless such shares have been held for more than 
six (6) months (or such longer or shorter period of time required to avoid a 
charge to earnings for financial accounting purposes).

(ii) Any such Re-Load Option shall (1) provide for a number of 
shares of Common Stock equal to the number of shares of Common Stock 
surrendered as part or all of the exercise price of such Option; (2) have an 
expiration date which is the same as the expiration date of the Option the 
exercise of which gave rise to such Re-Load Option; and (3) have an exercise 
price which is equal to one hundred percent (100%) of the Fair Market Value 
of the Common Stock subject to the Re-Load Option on the date of exercise of 
the original Option. Notwithstanding the foregoing, a Re-Load Option shall be 
subject to the same exercise price and term provisions heretofore described 
for Options under the Plan.

(iii) There shall be no Re-Load Options on a Re-Load Option. Any 
such Re-Load Option shall be subject to the availability of sufficient shares 
of Common Stock under subsection 4(a) and shall be subject to such other 
terms and conditions as the Board may determine which are not inconsistent 
with the express provisions of the Plan regarding the terms of Options.

7.       PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

(a) RESTRICTED STOCK BONUS AWARDS. Each restricted stock bonus 
agreement shall be in such form and shall contain such terms and conditions 
as the Board shall deem appropriate. The terms and conditions of restricted 
stock bonus agreements may change from time to time, and the terms and 
conditions of separate restricted stock bonus agreements need not be 
identical, but each restricted stock bonus agreement shall include (through 
incorporation of provisions hereof by reference in the agreement or 
otherwise) the substance of each of the following provisions:

(i) CONSIDERATION. A restricted stock bonus award may be awarded 
in consideration for past services actually rendered to the Company or an 
Affiliate for its benefit.

(ii) VESTING. Shares of Common Stock awarded under the 
restricted stock bonus agreement may, but need not, be subject to a share 
repurchase option in favor of the Company in accordance with a vesting 
schedule to be determined by the Board.

(iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the 
event a Participant's Continuous Service terminates, the Company may 
reacquire any or all of the shares of Common Stock held by the Participant 
which have not vested as of the date of termination under the terms of the 
restricted stock bonus agreement.

(iv) TRANSFERABILITY. Rights to acquire shares of Common Stock 
under the restricted stock bonus agreement shall be transferable by the 
Participant only upon such terms and conditions as are set forth in the 
restricted stock bonus agreement, as the Board shall determine in its 
discretion, so long as Common Stock awarded under the restricted stock bonus 
agreement remains subject to the terms of the restricted stock bonus 
agreement.

(b) STOCK PURCHASE AWARDS. Each stock purchase agreement shall be in 
such form and shall contain such terms and conditions as the Board shall deem 
appropriate. The terms and conditions of the stock purchase agreements may 
change from time to time, and the terms and conditions of separate stock 
purchase agreements need not be identical, but each stock purchase agreement 
shall include (through incorporation of provisions hereof by reference in the 
agreement or otherwise) the substance of each of the following provisions:

(i) PURCHASE PRICE. The purchase price under each stock purchase 
agreement shall be such amount as the Board shall determine and designate in 
such stock purchase agreement. The purchase price shall not be less than 
eighty-five percent (85%) of the Common Stock's Fair Market Value on the date 
such award is made or at the time the purchase is consummated.

(ii) CONSIDERATION. The purchase price of Common Stock acquired 
pursuant to the stock purchase agreement shall be paid either: (i) in cash at 
the time of purchase; (ii) at the discretion of the Board, according to a 
deferred payment or other similar arrangement with the Participant; or (iii) 
in any other form of legal consideration that may be acceptable to the Board 
in its discretion; provided, however, that at any time that the Company is 
incorporated in Delaware, then payment of the Common Stock's "par value," as 
defined in the Delaware General Corporation Law, shall not be made by 
deferred payment.

(iii) VESTING. Shares of Common Stock acquired under the stock 
purchase agreement may, but need not, be subject to a share repurchase option 
in favor of the Company in accordance with a vesting schedule to be 
determined by the Board.

(iv) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the 
event a Participant's Continuous Service terminates, the Company may 
repurchase or otherwise reacquire any or all of the shares of Common Stock 
held by the Participant which have not vested as of the date of termination 
under the terms of the stock purchase agreement.

(v) TRANSFERABILITY. Rights to acquire shares of Common Stock 
under the stock purchase agreement shall be transferable by the Participant 
only upon such terms and conditions as are set forth in the stock purchase 
agreement, as the Board shall determine in its discretion, so long as Common 
Stock awarded under the stock purchase agreement remains subject to the terms 
of the stock purchase agreement.

8.       COVENANTS OF THE COMPANY.

(a) AVAILABILITY OF SHARES. During the terms of the Stock Awards, 
the Company shall keep available at all times the number of shares of Common 
Stock required to satisfy such Stock Awards.

(b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from 
each regulatory commission or agency having jurisdiction over the Plan such 
authority as may be required to grant Stock Awards and to issue and sell 
shares of Common Stock upon exercise of the Stock Awards; provided, however, 
that this undertaking shall not require the Company to register under the 
Securities Act the Plan, any Stock Award or any Common Stock issued or 
issuable pursuant to any such Stock Award. If, after reasonable efforts, the 
Company is unable to obtain from any such regulatory commission or agency the 
authority which counsel for the Company deems necessary for the lawful 
issuance and sale of Common Stock under the Plan, the Company shall be 
relieved from any liability for failure to issue and sell Common Stock upon 
exercise of such Stock Awards unless and until such authority is obtained.

9.       USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of Common Stock pursuant to Stock Awards 
shall constitute general funds of the Company.

10.      MISCELLANEOUS.

(a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have 
the power to accelerate the time at which a Stock Award may first be 
exercised or the time during which a Stock Award or any part thereof will 
vest in accordance with the Plan, notwithstanding the provisions in the Stock 
Award stating the time at which it may first be exercised or the time during 
which it will vest.

(b) SHAREHOLDER RIGHTS. No Participant shall be deemed to be the 
holder of, or to have any of the rights of a holder with respect to, any 
shares of Common Stock subject to such

Stock Award unless and until such Participant has satisfied all requirements 
for exercise of the Stock Award pursuant to its terms.

(c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or 
any instrument executed or Stock Award granted pursuant thereto shall confer 
upon any Participant any right to continue to serve the Company or an 
Affiliate in the capacity in effect at the time the Stock Award was granted 
or shall affect the right of the Company or an Affiliate to terminate (i) the 
employment of an Employee with or without notice and with or without cause, 
(ii) the service of a Consultant pursuant to the terms of such Consultant's 
agreement with the Company or an Affiliate or (iii) the service of a Director 
pursuant to the Bylaws of the Company or an Affiliate, and any applicable 
provisions of the corporate law of the state in which the Company or the 
Affiliate is incorporated, as the case may be.

(i) INVESTMENT ASSURANCES. The Company may require a 
Participant, as a condition of exercising or acquiring Common Stock under any 
Stock Award, (i) to give written assurances satisfactory to the Company as to 
the Participant's knowledge and experience in financial and business matters 
and/or to employ a purchaser representative reasonably satisfactory to the 
Company who is knowledgeable and experienced in financial and business 
matters and that he or she is capable of evaluating, alone or together with 
the purchaser representative, the merits and risks of exercising the Stock 
Award; and (ii) to give written assurances satisfactory to the Company 
stating that the Participant is acquiring Common Stock subject to the Stock 
Award for the Participant's own account and not with any present intention of 
selling or otherwise distributing the Common Stock. The foregoing 
requirements, and any assurances given pursuant to such requirements, shall 
be inoperative if (1) the issuance of the shares of Common Stock upon the 
exercise or acquisition of Common Stock under the Stock Award has been 
registered under a then currently effective registration statement under the 
Securities Act or (2) as to any particular requirement, a determination is 
made by counsel for the Company that such requirement need not be met in the 
circumstances under the then applicable securities laws. The Company may, 
upon advice of counsel to the Company, place legends on stock certificates 
issued under the Plan as such counsel deems necessary or appropriate in order 
to comply with applicable securities laws, including, but not limited to, 
legends restricting the transfer of the Common Stock.

(d) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of 
a Stock Award Agreement, the Participant may satisfy any federal, state or 
local tax withholding obligation relating to the exercise or acquisition of 
Common Stock under a Stock Award by any of the following means (in addition 
to the Company's right to withhold from any compensation paid to the 
Participant by the Company) or by a combination of such means: (i) tendering 
a cash payment; (ii) authorizing the Company to withhold shares of Common 
Stock from the shares of Common Stock otherwise issuable to the Participant 
as a result of the exercise or acquisition of Common Stock under the Stock 
Award, provided, however, that no shares of Common Stock are withheld with a 
value exceeding the minimum amount of tax required to be withheld by law; or 
(iii) delivering to the Company owned and unencumbered shares of Common Stock.

11.      ADJUSTMENTS UPON CHANGES IN STOCK.

(a) CAPITALIZATION ADJUSTMENTS. If any change is made in the Common 
Stock subject to the Plan, or subject to any Stock Award, without the receipt 
of consideration by the Company (through merger, consolidation, 
reorganization, recapitalization, reincorporation, stock dividend, dividend 
in property other than cash, stock split, liquidating dividend, combination 
of shares, exchange of shares, change in corporate structure or other 
transaction not involving the receipt of consideration by the Company), the 
Plan will be appropriately adjusted in the class(es) and maximum number of 
securities subject to the Plan pursuant to subsection 4(a), and the 
outstanding Stock Awards will be appropriately adjusted in the class(es) and 
number of securities and price per share of Common Stock subject to such 
outstanding Stock Awards. The Board shall make such adjustments, and its 
determination shall be final, binding and conclusive. (The conversion of any 
convertible securities of the Company shall not be treated as a transaction 
"without receipt of consideration" by the Company.)

(b) EFFECT OF CHANGE IN CONTROL. Except as otherwise provided by the 
Board in the grant of any Stock Award and set forth in the Stock Award 
Agreement evidencing such Stock Award, in the event of a Change in Control, 
the Board, in its discretion, shall either (a) arrange for the surviving, 
continuing, successor, or purchasing corporation or parent corporation 
thereof, as the case may be (the "Acquiring Corporation"), to either assume 
the Company's rights and obligations under outstanding Stock Awards or 
substitute for outstanding Stock Awards substantially equivalent stock awards 
for the Acquiring Corporation's stock, or (b) provide that any unexercisable 
or unvested portion of such outstanding Stock Awards and any shares acquired 
upon the exercise thereof held by a Participant whose Continuous Service has 
not terminated prior to such date shall be immediately exercisable and vested 
in full as of the date ten (10) days prior to the Change in Control. 
Furthermore, the Board may, in its discretion, provide in any Stock Award 
Agreement or employment or other agreement between the Participant and a the 
Company or an Affiliate that if the Participant's Continuous Service ceases 
as a result of a Change in Control then the exercisability and vesting of any 
Stock Award held by such Participant and any shares acquired upon the 
exercise thereof shall be accelerated effective as of the date on which the 
Participant's Continuous Service terminated to such extent, if any, as shall 
have been determined by the Board, in its discretion, and set forth in such 
agreement. The exercise or vesting of any Stock Award and any shares of 
Common Stock acquired upon the exercise thereof that was permissible solely 
by reason of this Section 11(b) shall be conditioned upon the consummation of 
the Change in Control. Any Stock Awards which are neither assumed or 
substituted for by the Acquiring Corporation in connection with the Change in 
Control nor exercised as of the date of the Change in Control shall terminate 
and cease to be outstanding effective as of the date of the Change in Control.

12.      AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a) AMENDMENT OF PLAN. The Board at any time, and from time to time, 
may amend the Plan.

(b) SHAREHOLDER APPROVAL. The Board may, in its sole discretion, submit
any amendment to the Plan for shareholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section 422
of the Code, Rule 16b-3, any Nasdaq

or securities exchange listing requirements or Section 162(m) of the Code and 
the regulations thereunder regarding the exclusion of performance-based 
compensation from the limit on corporate deductibility of compensation paid 
to certain executive officers.

(c) CONTEMPLATED AMENDMENTS. It is expressly contemplated that the 
Board may amend the Plan in any respect the Board deems necessary or 
advisable to provide eligible Employees with the maximum benefits provided or 
to be provided under the provisions of the Code and the regulations 
promulgated thereunder and/or to bring the Plan and/or Options into 
compliance therewith.

(d) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted 
before amendment of the Plan shall not be impaired by any amendment of the 
Plan unless (i) the Company requests the consent of the Participant and (ii) 
the Participant consents in writing.

(e) AMENDMENT OF STOCK AWARDS. The Board at any time, and from time 
to time, may amend the terms of any one or more Stock Awards; provided, 
however, that the rights under any Stock Award shall not be impaired by any 
such amendment unless (i) the Company requests the consent of the Participant 
and (ii) the Participant consents in writing.

13.      TERMINATION OR SUSPENSION OF THE PLAN.

(a) PLAN TERM. The Board may suspend or terminate the Plan at any 
time. No Stock Awards may be granted under the Plan while the Plan is 
suspended or after it is terminated.

(b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan 
shall not impair rights and obligations under any Stock Award granted while 
the Plan is in effect except with the written consent of the Participant.

14.      EFFECTIVE DATE OF PLAN.

The Plan shall become effective as determined by the Board.

15.      CHOICE OF LAW.

The law of the State of California shall govern all questions 
concerning the construction, validity and interpretation of this Plan, 
without regard to such state's conflict of laws rules.

ROSS STORES, INC.
FISCAL 1999 FORM 10-K

EXHIBIT 10.9

FOURTH AMENDED AND RESTATED
ROSS STORES, INC.

1988 RESTRICTED STOCK PLAN

(EFFECTIVE AS OF MARCH 16, 2000)

1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

1.1 ESTABLISHMENT. The Third Amended and Restated Ross Stores, 
Inc. 1988 Restricted Stock Plan is hereby amended and restated in its 
entirety as the Fourth Amended and Restated Ross Stores, Inc. 1988 Restricted 
Stock Plan (the "PLAN") effective as of March 16, 2000 (the "EFFECTIVE DATE").

1.2 PURPOSE. The purpose of the Plan is to advance the 
interests of the Participating Company Group and its stockholders by 
providing an incentive to attract, retain and reward selected employees of 
the Participating Company Group and by motivating such persons to contribute 
to the success of the Participating Company Group.

1.3 TERM OF PLAN. The Plan shall continue in effect until the 
earlier of its termination by the Board or the date on which all of the 
shares of Stock available for issuance under the Plan have been issued and 
all restrictions on such shares under the terms of the Plan and the 
agreements pursuant to which such shares were granted have lapsed.

2.   DEFINITIONS AND CONSTRUCTION.

2.1 DEFINITIONS. Whenever used herein, the following terms 
shall have their respective meanings set forth below:

(a) "AWARD" means any award of Stock under the Plan.

(b) "AWARD AGREEMENT" means a written agreement between the 
Company and a Participant setting forth the terms, conditions and 
restrictions of an Award granted to the Participant.

(c) "BOARD" means the Board of Directors of the Company. If 
one or more Committees have been appointed by the Board to administer the 
Plan, "BOARD" also means such Committee(s).

(d) "CHANGE IN CONTROL" means the occurrence of any of the 
following:

(i) any "person" (as such term is used in Sections 
13(d) and 14(d) of the Exchange Act), other than (1) a trustee or other 
fiduciary holding stock of the Company under an employee benefit plan of a 
Participating Company or (2) a corporation owned directly or indirectly by 
the stockholders of the Company in substantially the same proportions as 
their ownership of the stock of the Company, becomes the "beneficial owner" 
(as defined in Rule 13d-3 promulgated under the Exchange Act), directly or 
indirectly, of stock of the Company representing more than fifty percent 
(50%) of the total combined voting power of the Company's then-outstanding 
voting stock; or

(ii) an Ownership Change Event or a series of related 
Ownership Change Events (collectively, a "TRANSACTION") wherein the 
stockholders of the Company immediately before the Transaction do not retain 
immediately after the Transaction direct or indirect beneficial ownership of 
more than fifty percent (50%) of the total combined voting power of the 
outstanding voting stock of the Company or, in the event of a sale of assets, 
of the corporation or corporations to which the assets of the Company were 
transferred (the "TRANSFEREE CORPORATION(S)"); or

(iii) a liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall 
include, without limitation, an interest resulting from ownership of the 
voting stock of one or more corporations which, as a result of the 
Transaction, own the Company or the Transferee Corporation(s), as the case 
may be, either directly or through one or more subsidiary corporations. The 
Board shall have the right to determine whether multiple Ownership Change 
Events are related, and its determination shall be final, binding and 
conclusive.

(e) "CODE" means the Internal Revenue Code of 1986, as 
amended, and any applicable regulations promulgated thereunder.

(f) "COMMITTEE" means the Compensation Committee or other 
committee of one or more members of the Board duly appointed to administer 
the Plan and having such powers as shall be specified by the Board. Unless 
the powers of the Committee have been specifically limited, the Committee 
shall have all of the powers of the Board granted herein, including, without 
limitation, the power to amend or terminate the Plan at any time, subject to 
the terms of the Plan and any applicable limitations imposed by law.

(g) "COMPANY" means Ross Stores, Inc., a Delaware 
corporation, or any successor corporation thereto.

(h) "EMPLOYEE" means any person treated as an employee 
(including an officer or a member of the Board who is also treated as an 
employee) in the records of a Participating Company; provided, however, that 
neither service as a member of the Board nor payment of a director's fee 
shall be sufficient to constitute employment for purposes of the Plan.

(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

(j) "INSIDER" means an officer of the Company, member of 
the Board or any other person whose transactions in Stock are subject to 
Section 16 of the Exchange Act.

(k) "NON-EMPLOYEE DIRECTOR" means a Director who (i) is not 
a current employee or officer of a Participating Company; (ii) does not 
receive compensation, either directly or indirectly, from a Participating 
Company for services rendered as a consultant or in any capacity other than 
as a Director, except for an amount that does not exceed the dollar amount 
for which disclosure would be required pursuant to Item 404(a) of Regulation 
S-K under the Securities Act ("REGULATION S-K"); (iii) does not possess an 
interest in any other transaction for which disclosure would be required 
pursuant to Item 404(a) of Regulation S-K; and (iv) is not engaged in a 
business relationship for which disclosure would be required pursuant to Item 
404(b) of Regulation S-K.

(l) "OWNERSHIP CHANGE EVENT" means the occurrence of any of 
the following with respect to the Company: (i) the direct or indirect sale or 
exchange in a single or series of related transactions by the stockholders of 
the Company of more than fifty percent (50%) of the voting stock of the 
Company; (ii) a merger or consolidation in which the Company is a party; or 
(iii) the sale, exchange, or transfer of all or substantially all of the 
assets of the Company.

(m) "PARENT CORPORATION" means any present or future 
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

(n) "PARTICIPANT" means a person who has been granted one 
or more Awards.

(o) "PARTICIPATING COMPANY" means the Company or any Parent 
Corporation or Subsidiary Corporation.

(p) "PARTICIPATING COMPANY GROUP" means, at any point in 
time, all corporations collectively which are then Participating Companies.

(q) "RULE 16B-3" means Rule 16b-3 under the Exchange Act, 
as amended from time to time, or any successor rule or regulation.

(r) "SERVICE" means a Participant's employment or service 
with the Participating Company Group, whether in the capacity of an Employee, 
a member of the Board or a consultant or advisor, unless otherwise provided 
in the Participant's Award Agreement. Unless otherwise provided in a 
Participant's Award Agreement, the Participant's Service shall not be deemed 
to have terminated merely because of a change in the capacity in which the 
Participant renders Service to the Participating Company Group or a change in 
the Participating Company for which the Participant renders such Service, 
provided that there is no interruption or termination

of the Participant's Service. Furthermore, a Participant's Service with the 
Participating Company Group shall not be deemed to have terminated if the 
Participant takes any bona fide leave of absence approved by the Company; 
provided, however, that unless otherwise designated by the Board or required 
by law, a leave of absence shall not be treated as Service for purposes of 
determining the Vesting under the Participant's Award Agreement. The 
Participant's Service shall be deemed to have terminated either upon an 
actual termination of Service or upon the corporation for which the 
Participant performs Service ceasing to be a Participating Company. Subject 
to the foregoing, the Company, in its discretion, shall determine whether the 
Participant's Service has terminated and the effective date of such 
termination.

(s) "STOCK" means the common stock of the Company, as 
adjusted from time to time in accordance with Section 4.2.

(t) "SUBSIDIARY CORPORATION" means any present or future 
"subsidiary corporation" of the Company, as defined in Section 424(f) of the 
Code.

(u) "VEST, " "VESTED" and "VESTING" refer to the right of a 
Participant, earned through continued Service and/or satisfaction of other 
conditions specified by the Plan or the Board to hold the securities acquired 
pursuant to an Award free of any substantial risk of forfeiture.

2.2 CONSTRUCTION. Captions and titles contained herein are for 
convenience only and shall not affect the meaning or interpretation of any 
provision of the Plan. Except when otherwise indicated by the context, the 
singular shall include the plural and the plural shall include the singular. 
Use of the term "or" is not intended to be exclusive, unless the context 
clearly requires otherwise.

3.   ADMINISTRATION.

3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered 
by the Board. All questions of interpretation of the Plan or of any Award 
shall be determined by the Board, and such determinations shall be final and 
binding upon all persons having an interest in the Plan or such Award.

3.2 AUTHORITY OF OFFICERS. Any officer of a Participating 
Company shall have the authority to act on behalf of the Company with respect 
to any matter, right, obligation, determination or election which is the 
responsibility of or which is allocated to the Company herein, provided the 
officer has apparent authority with respect to such matter, right, 
obligation, determination or election.

3.3 POWERS OF THE BOARD. In addition to any other powers set 
forth in the Plan and subject to the provisions of the Plan, the Board shall 
have the full and final power and authority, in its discretion:

(a) to determine the persons to whom, and the time or times 
at which, Awards shall be granted and the number of shares of Stock to be 
subject to each Award;

(b) to determine the terms, conditions and restrictions 
applicable to each Award (which need not be identical);

(c) to approve one or more forms of Award Agreement;

(d) to amend or modify any Award Agreement or to waive any 
restrictions or conditions applicable to any Award;

(e) to accelerate, continue, extend or defer the Vesting of 
any shares acquired under the Plan, including with respect to the period 
following a Participant's termination of Service;

(f) to prescribe, amend or rescind rules, guidelines and 
policies relating to the Plan, or to adopt supplements to, or alternative 
versions of, the Plan, including, without limitation, as the Board deems 
necessary or desirable to comply with the laws of, or to accommodate the tax 
policy or custom of, foreign jurisdictions whose citizens may be granted 
Awards; and

(g) to correct any defect, supply any omission or reconcile 
any inconsistency in the Plan or any Award Agreement and to make all other 
determinations and take such other actions with respect to the Plan or any 
Award as the Board may deem advisable to the extent not inconsistent with the 
provisions of the Plan or applicable law.

3.4 ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to 
participation by Insiders in the Plan, at any time that any class of equity 
security of the Company is registered pursuant to Section 12 of the Exchange 
Act, the Plan shall be administered in compliance with the requirements, if 
any, of Rule 16b-3. For this purpose, the Board may delegate authority to 
administer the Plan to a Committee composed solely of two or more 
Non-Employee Directors.

3.5 INDEMNIFICATION. In addition to such other rights of 
indemnification as they may have as members of the Board or officers or 
employees of the Participating Company Group, members of the Board and any 
officers or employees of the Participating Company Group to whom authority to 
act for the Board or the Company is delegated shall be indemnified by the 
Company against all reasonable expenses, including attorneys' fees, actually 
and necessarily incurred in connection with the defense of any action, suit 
or proceeding, or in connection with any appeal therein, to which they or any 
of them may be a party by reason of any action taken or failure to act under 
or in connection with the Plan, or any right granted hereunder, and against 
all amounts paid by them in settlement thereof (provided such settlement is 
approved by independent legal counsel selected by the Company) or paid by 
them in satisfaction of a judgment in any such action, suit or proceeding, 
except in relation to matters as to which it shall be adjudged in such 
action, suit or proceeding that such person is liable for gross negligence, 
bad faith or intentional misconduct in duties; provided, however, that within 
sixty (60) days after the institution of such action, suit or proceeding, 
such person shall offer to the Company, in writing, the opportunity at its 
own expense to handle and defend the same.

4.   SHARES SUBJECT TO PLAN.

4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as 
provided in Section 4.2, the maximum aggregate number of shares of Stock that 
may be issued under the Plan shall be fourteen million six hundred thousand 
(14,600,000)(1) and shall consist of authorized but unissued or reacquired 
shares of Stock or any combination thereof. If shares of Stock issued 
pursuant to the Plan are reacquired by the Company under the terms of the 
Plan, such shares of Stock shall again be available for issuance under the 
Plan.

4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event 
of any stock dividend, stock split, reverse stock split, recapitalization, 
merger, combination, exchange of shares, reclassification or similar change 
in the capital structure of the Company, appropriate adjustments shall be 
made in the number and class of shares subject to the Plan and to any 
outstanding Award. If a majority of the shares which are of the same class as 
the shares that are subject to outstanding Awards are exchanged for, 
converted into, or otherwise become (whether or not pursuant to an Ownership 
Change Event) shares of another corporation (the "NEW SHARES"), the Board may 
unilaterally amend the outstanding Awards to provide that such Awards shall 
be for New Shares. In the event of any such amendment, the number of shares 
subject to the outstanding Awards shall be adjusted in a fair and equitable 
manner as determined by the Board, in its discretion. Notwithstanding the 
foregoing, any fractional share resulting from an adjustment pursuant to this 
Section 4.2 shall be rounded down to the nearest whole number. The 
adjustments determined by the Board pursuant to this Section 4.2 shall be 
final, binding and conclusive.

5.   ELIGIBILITY.

Awards may be granted only to Employees. Awards are granted 
solely at the discretion of the Board. Eligibility in accordance with this 
Section shall not entitle any person to be granted an Award, or, having been 
granted an Award, to be granted an additional Award.

6.   TERMS AND CONDITIONS OF AWARDS.

Awards shall be evidenced by Award Agreements specifying the 
number of shares of Stock subject to and the other terms, conditions and 
restrictions of the Award, and shall be in such form as the Board shall from 
time to time establish. No Award or purported Award shall be a valid and 
binding obligation of the Company unless evidenced by a fully executed Award 
Agreement. Award Agreements may incorporate all or any of the terms of the 
Plan by reference and shall comply with and be subject to the following terms 
and conditions:

6.1 PAYMENT FOR SHARES. No monetary payment (other than 
applicable tax withholding) shall be required as a condition of receiving 
shares of Stock pursuant to an Award, the consideration for which shall be 
past services actually rendered or future services to be rendered to a 
Participating Company or for its benefit, as determined by the Board in its 
discretion; provided, however, that to the extent that newly issued shares of 
Stock are awarded to 

------------------
(1) As adjusted through the two-for-one stock split effective on September 12,
1999.

a Participant, the Participant shall have provided past services to a 
Participating Company or for its benefit having a value not less than the par 
value of such shares.

6.2 VESTING AND RESTRICTIONS ON TRANSFER. Shares of Stock 
issued pursuant to any Award shall Vest upon the satisfaction of such Service 
requirements, conditions, restrictions or performance criteria, if any, as 
shall be established by the Board and set forth in the Award Agreement 
evidencing such Award. During any period (the "RESTRICTION PERIOD") in which 
shares acquired pursuant to an Award have not Vested, such shares may not be 
sold, exchanged, transferred, pledged, assigned or otherwise disposed of 
other than pursuant to an Ownership Change Event or as provided in Section 
6.5. Upon request by the Company, each Participant shall execute any 
agreement evidencing such transfer restrictions prior to the receipt of 
shares of Stock hereunder and shall promptly present to the Company any and 
all certificates representing shares of Stock acquired hereunder for the 
placement on such certificates of appropriate legends evidencing any such 
transfer restrictions.

6.3 VOTING RIGHTS; DIVIDENDS. Except as provided in this 
Section and Section 6.2, during the Restriction Period applicable to shares 
acquired by a Participant pursuant to an Award, the Participant shall have 
all of the rights of a stockholder of the Company holding shares of Stock, 
including the right to vote such shares and to receive all dividends and 
other distributions paid with respect to such shares; provided, however, that 
if any such dividends or distributions are paid in shares of Stock, such 
shares shall be subject to the same Vesting conditions as the shares subject 
to the Award with respect to which the dividends or distributions were paid.

6.4 EFFECT OF TERMINATION OF SERVICE. Unless otherwise provided 
in the grant of an Award to a Participant and set forth in the Award 
Agreement evidencing such Award or unless otherwise provided in an employment 
agreement between a Participating Company and the Participant, if a 
Participant's Service with the Participating Company Group terminates for any 
reason, whether voluntary or involuntary (including as a result of the 
Participant's death or disability), then the Participant shall forfeit to the 
Company and the Company shall automatically reacquire without any payment 
therefor to the Participant any and all shares acquired by the Participant 
pursuant to the Award which have not Vested as of the date of the 
Participant's termination of Service.

6.5 NONTRANSFERABILITY OF AWARD RIGHTS. Rights to acquire 
shares of Stock pursuant to an Award may not be assigned or transferred in 
any manner except by will or the laws of descent and distribution, and, 
during the lifetime of the Participant, shall be exercisable only by the 
Participant.

6.6 TAX WITHHOLDING.

(a) IN GENERAL. The Company shall have the right to require 
the Participant, through payroll withholding, cash payment or otherwise, to 
make adequate provision for the federal, state, local and foreign taxes, if 
any, required by law to be withheld by the Participating Company Group with 
respect to an Award or the shares acquired pursuant thereto. The Company 
shall have no obligation to deliver shares of Stock or to release shares of 
Stock

from an escrow established pursuant to an Award Agreement until the 
Participating Company Group's tax withholding obligations have been satisfied 
by the Participant.

(b) WITHHOLDING IN SHARES. The Board may permit a 
Participant to satisfy all or any portion of the Participating Company 
Group's tax withholding obligations by requesting the Company to withhold a 
number of whole, Vested shares of Stock otherwise deliverable to the 
Participant pursuant to the Award or by tendering to the Company a number of 
whole, Vested shares of Stock acquired pursuant to the Award or otherwise 
having in any such case a fair market value, as determined by the Company as 
of the date on which the tax withholding obligations arise, not in excess of 
the amount of such tax withholding obligations determined by the applicable 
minimum statutory withholding rates. Any adverse consequences to the 
Participant resulting from the procedure permitted under this Section, 
including, without limitation, tax consequences, shall be the sole 
responsibility of the Participant.

7.   STANDARD FORM OF AWARD AGREEMENT.

7.1 RESTRICTED STOCK AGREEMENT. Unless otherwise provided by 
the Board at the time an Award is granted, each Award shall comply with and 
be subject to the terms and conditions set forth in the form of Restricted 
Stock Agreement approved by the Board concurrently with its adoption of the 
Plan and as amended from time to time.

7.2 AUTHORITY TO VARY TERMS. The Board shall have the authority 
from time to time to vary the terms of any standard form of Restricted Stock 
Agreement described in this Section 7 either in connection with the grant or 
amendment of an individual Award or in connection with the authorization of a 
new standard form or forms; provided, however, that the terms and conditions 
of any such new, revised or amended standard form or forms of Restricted 
Stock Agreement are not inconsistent with the terms of the Plan.

8.   EFFECT OF CHANGE IN CONTROL.

In the event of a Change in Control, the Vesting of shares 
subject to each then outstanding Award held by a Participant whose Service 
has not terminated prior to the date of the Change in Control shall be 
accelerated in full effective as of the date of the Change in Control.

9.   COMPLIANCE WITH SECURITIES LAW.

The issuance of shares of Stock pursuant to an Award shall be 
subject to compliance with all applicable requirements of federal, state and 
foreign law with respect to such securities. Shares of Stock may not be 
issued if such issuance would constitute a violation of any applicable 
federal, state or foreign securities laws or other law or regulations or the 
requirements of any stock exchange or market system upon which the Stock may 
then be listed. The inability of the Company to obtain from any regulatory 
body having jurisdiction the authority, if any, deemed by the Company's legal 
counsel to be necessary to the lawful issuance of any shares hereunder shall 
relieve the Company of any liability in respect of the failure to issue such 
shares as to which such requisite authority shall not have been obtained. As 
a condition to the grant of any Award, the Company may require the 
Participant to satisfy any qualifications that may be

necessary or appropriate, to evidence compliance with any applicable law or 
regulation and to make any representation or warranty with respect thereto as 
may be requested by the Company.

10.  TERMINATION OR AMENDMENT OF PLAN.

The Board may terminate or amend the Plan at any time; 
provided, however, that without the approval of the Company's stockholders, 
there shall be no amendment of the Plan that would require approval of the 
Company's stockholders under any applicable law, regulation or rule. No 
termination or amendment of the Plan shall affect any then outstanding Award 
unless expressly provided by the Board. In any event, no termination or 
amendment of the Plan may adversely affect any then outstanding Award without 
the consent of the Participant.

11.  MISCELLANEOUS PROVISIONS.

11.1 PROVISION OF INFORMATION. Each Participant shall be given 
access to information concerning the Company equivalent to that information 
generally made available to the Company's common stockholders so long as the 
Participant remains a stockholder.

11.2 RIGHTS AS A STOCKHOLDER. A Participant shall have no 
rights as a stockholder with respect to any shares covered by an Award until 
the date of the issuance of a certificate for such shares (as evidenced by 
the appropriate entry on the books of the Company or of a duly authorized 
transfer agent of the Company). No adjustment shall be made for dividends, 
distributions or other rights for which the record date is prior to the date 
such certificate is issued, except as provided in Section 4.2 or another 
provision of the Plan.

11.3 RIGHTS AS EMPLOYEE, CONSULTANT OR BOARD MEMBER. No person, 
even though eligible pursuant to Section 5, shall have a right to be selected 
as a Participant, or, having been so selected, to be selected again as a 
Participant. Nothing in the Plan or any Award granted under the Plan shall 
confer on any Participant a right to remain an Employee, a member of the 
Board or a consultant or advisor, or interfere with or limit in any way the 
right of a Participating Company to terminate the Participant's Service at 
any time.

11.4 CONTINUATION OF PRIOR VERSIONS OF THE PLAN AS TO 
OUTSTANDING AWARDS. Notwithstanding any other provision of the Plan to the 
contrary, each Award outstanding prior to the Effective Date shall continue 
to be governed by the terms of the applicable version of the Plan as in 
effect on the date of grant of such Award. For purposes of the preceding 
sentence, such prior versions of the Plan include the Ross Stores, Inc. 1988 
Restricted Stock Plan adopted on March 14, 1988; the Amended and Restated 
Ross Stores, Inc. 1988 Restricted Stock Plan adopted on March 17, 1989; the 
Second Amended and Restated Ross Stores, Inc. 1988 Restricted Stock Plan 
adopted on March 18, 1991; and the Third Amended and Restated Ross Stores, 
Inc. 1988 Restricted Stock Plan adopted on March 16, 1992.

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing sets forth the Fourth Amended and Restated Ross Stores, Inc.
1988 Restricted Stock Plan as duly adopted by the Board on March 16, 2000.

------------------------------------
Secretary

ROSS STORES, INC.
FISCAL 1999 FORM 10-K
EXHIBIT 10.11

AMENDED AND RESTATED
ROSS STORES, INC.

1991 OUTSIDE DIRECTORS STOCK OPTION PLAN

(EFFECTIVE AS OF MARCH 16, 2000)

1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

1.1 ESTABLISHMENT. The Ross Stores, Inc. 1991 Outside Directors 
Stock Option Plan is hereby amended and restated in its entirety as the 
Amended and Restated Ross Stores, Inc. 1991 Outside Directors Stock Option 
Plan (the "PLAN") effective as of March 16, 2000 (the "EFFECTIVE DATE").

1.2 PURPOSE. The purpose of the Plan is to advance the 
interests of the Company and its stockholders by providing an incentive to 
attract, retain and reward persons performing services as Outside Directors 
of the Company and by motivating such persons to contribute to the growth and 
profitability of the Company.

1.3 TERM OF PLAN. The Plan shall continue in effect until 
terminated by the Board.

2.   DEFINITIONS AND CONSTRUCTION.

2.1 DEFINITIONS. Whenever used herein, the following terms 
shall have their respective meanings set forth below:

(a) "BOARD" means the Board of Directors of the Company. If 
one or more Committees have been appointed by the Board to administer the 
Plan, "BOARD" also means such Committee(s).

(b) "CODE" means the Internal Revenue Code of 1986, as 
amended, and any applicable regulations promulgated thereunder.

(c) "CHANGE IN CONTROL" means the occurrence of any of the 
following:

(i) any "person" (as such term is used in Sections 
13(d) and 14(d) of the Exchange Act), other than (1) a trustee or other 
fiduciary holding stock of the Company under an employee benefit plan of the 
Company or any Parent Corporation or Subsidiary Corporation, or (2) a 
corporation owned directly or indirectly by the stockholders of 

1

the Company in substantially the same proportions as their ownership of the 
stock of the Company, becomes the "beneficial owner" (as defined in Rule 
13d-3 promulgated under the Exchange Act), directly or indirectly, of stock 
of the Company representing more than fifty percent (50%) of the total 
combined voting power of the Company's then-outstanding voting stock; or

(ii) an Ownership Change Event or a series of related 
Ownership Change Events (collectively, a "TRANSACTION") wherein the 
stockholders of the Company immediately before the Transaction do not retain 
immediately after the Transaction direct or indirect beneficial ownership of 
more than fifty percent (50%) of the total combined voting power of the 
outstanding voting stock of the Company or, in the event of a sale of assets, 
of the corporation or corporations to which the assets of the Company were 
transferred (the "TRANSFEREE CORPORATION(S)"); or

(iii) a liquidation or dissolution of the Company. For 
purposes of the preceding sentence, indirect beneficial ownership shall 
include, without limitation, an interest resulting from ownership of the 
voting stock of one or more corporations which, as a result of the 
Transaction, own the Company or the Transferee Corporation(s), as the case 
may be, either directly or through one or more subsidiary corporations. The 
Board shall have the right to determine whether multiple Ownership Change 
Events are related, and its determination shall be final, binding and 
conclusive.

(d) "COMMITTEE" means the Compensation Committee or other 
committee of one or members of the Board duly appointed to administer the 
Plan and having such powers as shall be specified by the Board. Unless the 
powers of the Committee have been specifically limited, the Committee shall 
have all of the powers of the Board granted herein, including, without 
limitation, the power to amend or terminate the Plan at any time, subject to 
the terms of the Plan and any applicable limitations imposed by law.

(e) "COMPANY" means Ross Stores, Inc. a Delaware 
corporation, or any successor corporation thereto.

(f) "DIRECTOR" means a member of the Board.

(g) "DISABILITY" means the permanent and total disability 
of the Optionee within the meaning of Section 22(e)(3) of the Code.

(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

(i) "FAIR MARKET VALUE" means, as of any date, the value of 
a share of Stock or other property as determined by the Board, in its 
discretion, or by the Company, in its discretion, if such determination is 
expressly allocated to the Company herein, subject to the following:

2

(i) If, on such date, the Stock is listed on a 
national or regional securities exchange or market system, the Fair Market 
Value of a share of Stock shall be the closing price of a share of Stock (or 
the closing bid price of a share of Stock if the Stock is so quoted instead) 
as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such 
other national or regional securities exchange or market system constituting 
the primary market for the Stock, as reported in THE WALL STREET JOURNAL or 
such other source as the Company deems reliable. If the relevant date does 
not fall on a day on which the Stock has traded on such securities exchange 
or market system, the date on which the Fair Market Value shall be 
established shall be the last day on which the Stock was so traded prior to 
the relevant date, or such other appropriate day as shall be determined by 
the Board, in its discretion.

(ii) If, on such date, the Stock is not listed on a 
national or regional securities exchange or market system, the Fair Market 
Value of a share of Stock shall be as determined by the Board in good faith 
without regard to any restriction other than a restriction which, by its 
terms, will never lapse.

(j) "NON-EMPLOYEE DIRECTOR" means a Director who (i) is not 
a current employee or officer of the Company or any Parent Corporation or 
Subsidiary Corporation; (ii) does not receive compensation, either directly 
or indirectly, from the Company or any Parent Corporation or Subsidiary 
Corporation for services rendered as a consultant or in any capacity other 
than as a Director, except for an amount that does not exceed the dollar 
amount for which disclosure would be required pursuant to Item 404(a) of 
Regulation S-K under the Securities Act ("REGULATION S-K"); (iii) does not 
possess an interest in any other transaction for which disclosure would be 
required pursuant to Item 404(a) of Regulation S-K; and (iv) is not engaged 
in a business relationship for which disclosure would be required pursuant to 
Item 404(b) of Regulation S-K.

(k) "OPTION" means a right to purchase Stock (subject to 
adjustment as provided in Section 4.2) pursuant to the terms and conditions 
of the Plan. Each Option shall be a nonstatutory stock option; that is, an 
option not intended to qualify as an incentive stock option within the 
meaning of Section 422(b) of the Code.

(l) "OPTION AGREEMENT" means a written agreement between 
the Company and an Optionee setting forth the terms, conditions and 
restrictions of the Option granted to the Optionee and any shares acquired 
upon the exercise thereof.

(m) "OPTIONEE" means a person who has been granted one or 
more Options.

(n) "OUTSIDE DIRECTOR" means a Director who is not an 
employee of the Company or of any Parent Corporation or Subsidiary 
Corporation.

(o) "OWNERSHIP CHANGE EVENT" means the occurrence of any of 
the following with respect to the Company: (i) the direct or indirect sale or 
exchange in a single or series of related transactions by the stockholders of 
the Company of more than fifty percent (50%) of the voting stock of the 
Company; (ii) a merger or consolidation in which the Company

3

is a party; or (iii) the sale, exchange, or transfer of all or substantially 
all of the assets of the Company.

(p) "PARENT CORPORATION" means any present or future 
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

(q) "RULE 16b-3" means Rule 16b-3 under the Exchange Act, 
as amended from time to time, or any successor rule or regulation.

(r) "SECURITIES ACT" means the Securities Act of 1933, as 
amended.

(s) "SERVICE" means an Optionee's service with the Company 
as a Director. An Optionee's Service shall be deemed to have terminated if 
the Optionee ceases to be a Director, even if the Optionee continues to 
render service to the Company in a capacity other than as a Director or 
commences rendering service to a Parent Corporation or Subsidiary 
Corporation. An Optionee's Service shall not be deemed to have terminated if 
the Optionee takes any bona fide leave of absence approved by the Company. 
Unless otherwise provided by the Board in the grant of an Option and set 
forth in the Option Agreement evidencing such Option, an approved leave of 
absence shall be treated as Service for purposes of determining vesting under 
the Option. Subject to the foregoing, the Company, in its discretion, shall 
determine whether the Optionee's Service has terminated and the effective 
date of such termination.

(t) "STOCK" means the common stock of the Company, as 
adjusted from time to time in accordance with Section 4.2.

(u) "SUBSIDIARY CORPORATION" means any present or future 
"subsidiary corporation" of the Company, as defined in Section 424(f) of the 
Code.

2.2 CONSTRUCTION. Captions and titles contained herein are for 
convenience only and shall not affect the meaning or interpretation of any 
provision of the Plan. Except when otherwise indicated by the context, the 
singular shall include the plural and the plural shall include the singular. 
Use of the term "or" is not intended to be exclusive, unless the context 
clearly requires otherwise.

3.   ADMINISTRATION.

3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered 
by the Board. All questions of interpretation of the Plan or of any Option 
shall be determined by the Board, and such determinations shall be final and 
binding upon all persons having an interest in the Plan or such Option. At 
any time that any class of equity security of the Company is registered 
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in 
compliance with the requirements, if any, of Rule 16b-3. For this purpose, 
the Board may delegate authority to administer the Plan to a Committee 
composed solely of two or more Non-Employee Directors.

4

3.2 AUTHORITY OF OFFICERS. Any officer of the Company shall 
have the authority to act on behalf of the Company with respect to any 
matter, right, obligation, determination or election which is the 
responsibility of or which is allocated to the Company herein, provided the 
officer has apparent authority with respect to such matter, right, 
obligation, determination or election.

3.3 INDEMNIFICATION. In addition to such other rights of 
indemnification as they may have as members of the Board or officers or 
employees of the Company, members of the Board and any officers or employees 
of the Company to whom authority to act for the Board or the Company is 
delegated shall be indemnified by the Company against all reasonable 
expenses, including attorneys' fees, actually and necessarily incurred in 
connection with the defense of any action, suit or proceeding, or in 
connection with any appeal therein, to which they or any of them may be a 
party by reason of any action taken or failure to act under or in connection 
with the Plan, or any right granted hereunder, and against all amounts paid 
by them in settlement thereof (provided such settlement is approved by 
independent legal counsel selected by the Company) or paid by them in 
satisfaction of a judgment in any such action, suit or proceeding, except in 
relation to matters as to which it shall be adjudged in such action, suit or 
proceeding that such person is liable for gross negligence, bad faith or 
intentional misconduct in duties; provided, however, that within sixty (60) 
days after the institution of such action, suit or proceeding, such person 
shall offer to the Company, in writing, the opportunity at its own expense to 
handle and defend the same.

4.   SHARES SUBJECT TO PLAN.

4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as 
provided in Section 4.2, the maximum aggregate number of shares of Stock that 
may be issued under the Plan shall be seven hundred thousand (700,000)(1) and 
shall consist of authorized but unissued or reacquired shares of Stock or any 
combination thereof. If an outstanding Option for any reason expires or is 
terminated or canceled or if shares of Stock are acquired upon the exercise 
of an Option subject to a Company repurchase option and are repurchased by 
the Company, the shares of Stock allocable to the unexercised portion of such 
Option or such repurchased shares of Stock shall again be available for 
issuance under the Plan.

4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event 
of any stock dividend, stock split, reverse stock split, recapitalization, 
merger, combination, exchange of shares, reclassification or similar change 
in the capital structure of the Company, appropriate adjustments shall be 
made in the number and class of shares subject to the Plan, to the Options to 
be granted automatically pursuant to Section 6.1 and to any outstanding 
Options, and in the exercise price per share of any outstanding Options. If a 
majority of the shares which are of the same class as the shares that are 
subject to outstanding Options are exchanged for, converted into, or 
otherwise become (whether or not pursuant to an Ownership Change Event) 
shares of another corporation (the "NEW SHARES"), the Board may unilaterally 
amend the outstanding Options to provide that such Options are exercisable 
for New Shares. In the event of any such amendment, the number of shares 
subject to, and the exercise price per share of, the outstanding 

-----------------------
(1) As adjusted through the two-for-one stock split effective on September 22,
1999.

5

Options shall be adjusted in a fair and equitable manner as determined by the 
Board, in its discretion. Notwithstanding the foregoing, any fractional share 
resulting from an adjustment pursuant to this Section 4.2 shall be rounded 
down to the nearest whole number, and in no event may the exercise price of 
any Option be decreased to an amount less than the par value, if any, of the 
stock subject to the Option. The adjustments determined by the Board pursuant 
to this Section 4.2 shall be final, binding and conclusive.

5.   ELIGIBILITY.

Options shall be granted only to those persons who, at the time of
grant, are serving as Outside Directors.

6.   TERMS AND CONDITIONS OF OPTIONS.

Options shall be evidenced by Option Agreements specifying the 
number of shares of Stock covered thereby, in such form as the Board shall 
from time to time establish. Option Agreements may incorporate all or any of 
the terms of the Plan by reference and shall comply with and be subject to 
the following terms and conditions:

6.1 AUTOMATIC GRANT. Subject to the execution by an Outside 
Director of an appropriate Option Agreement, Options shall be granted 
automatically and without further action of the Board, as follows:

(a) INITIAL OPTION. Each person who first becomes an 
Outside Director on or after the Effective Date shall be granted on the date 
such person first becomes an Outside Director an Option to purchase twenty 
thousand (20,000)(2) shares of Stock (an "INITIAL OPTION").

(b) ANNUAL OPTION. Each Outside Director shall be granted 
on the date of each annual meeting of the stockholders of the Company which 
occurs on or after the Effective Date (an "ANNUAL MEETING") immediately 
following which such person remains an Outside Director an Option to purchase 
four thousand (4,000)(2) shares of Stock (an "ANNUAL OPTION"); provided, 
however, that an Outside Director granted an Initial Option after the 
December 1 immediately preceding the date of an Annual Meeting shall not be 
granted an Annual Option pursuant to this Section with respect to the same 
Annual Meeting.

(c) RIGHT TO DECLINE OPTION. Notwithstanding the foregoing, 
any person may elect not to receive an Option by delivering written notice of 
such election to the Board no later than the day prior to the date such 
Option would otherwise be granted. A person so declining an Option shall 
receive no payment or other consideration in lieu of such declined Option. A 
person who has declined an Option may revoke such election by delivering 
written notice of such revocation to the Board no later than the day prior to 
the date such Option would be granted pursuant to Section 6.1(a) or (b), as 
the case may be.

-----------------------
(2) As adjusted for the two-for-one stock split effective on September 22,
1999.

6

6.2 EXERCISE PRICE. The exercise price per share of Stock 
subject to an Option shall be the Fair Market Value of a share of Stock on 
the date of grant of the Option. Notwithstanding the foregoing, an Option may 
be granted with an exercise price lower than the minimum exercise price set 
forth above if such Option is granted pursuant to an assumption or 
substitution for another option in a manner qualifying under the provisions 
of Section 424(a) of the Code.

6.3 EXERCISABILITY AND TERM OF OPTIONS. Except as otherwise 
provided in the Plan or in the Option Agreement evidencing an Option and 
provided that the Optionee's Service has not terminated prior to the relevant 
date, each Option shall vest and become exercisable as to one-sixth (1/6) of 
the shares initially subject thereto on the date occurring six (6) months 
after the date of grant and as to one thirty-sixth (1/36) of the shares 
initially subject thereto following each full month of the Optionee's 
continuous Service thereafter until the Option is fully vested. Unless 
earlier terminated in accordance with the terms of the Plan or the Option 
Agreement evidencing an Option, each Option shall terminate and cease to be 
exercisable on the tenth (10th) anniversary of the date of grant of the 
Option.

6.4 PAYMENT OF EXERCISE PRICE.

(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise 
provided below, payment of the exercise price for the number of shares of 
Stock being purchased pursuant to any Option shall be made (i) in cash or by 
check, (ii) by tender to the Company, or attestation to the ownership, of 
shares of Stock owned by the Optionee having a Fair Market Value (as 
determined by the Company without regard to any restrictions on 
transferability applicable to such stock by reason of federal or state 
securities laws or agreements with an underwriter for the Company) not less 
than the exercise price, (iii) by delivery of a properly executed notice 
together with irrevocable instructions to a broker providing for the 
assignment to the Company of the proceeds of a sale or loan with respect to 
some or all of the shares being acquired upon the exercise of the Option 
(including, without limitation, through an exercise complying with the 
provisions of Regulation T as promulgated from time to time by the Board of 
Governors of the Federal Reserve System) (a "CASHLESS EXERCISE"), or (iv) by 
any combination thereof.

(b) LIMITATIONS ON FORMS OF CONSIDERATION.

(i) TENDER OF STOCK. Notwithstanding the foregoing, an 
Option may not be exercised by tender to the Company, or attestation to the 
ownership, of shares of Stock to the extent such tender or attestation would 
constitute a violation of the provisions of any law, regulation or agreement 
restricting the redemption of the Company's stock. Unless otherwise provided 
by the Board, an Option may not be exercised by tender to the Company, or 
attestation to the ownership, of shares of Stock unless such shares either 
have been owned by the Optionee for more than six (6) months or were not 
acquired, directly or indirectly, from the Company.

(ii) CASHLESS EXERCISE. The Company reserves, at any 
and all times, the right, in the Company's sole and absolute discretion, to 
establish, decline to approve or

7

terminate any program or procedures for the exercise of Options by means of a 
Cashless Exercise.

6.5 TAX WITHHOLDING. The Company shall have the right, but not 
the obligation, to deduct from the shares of Stock issuable upon the exercise 
of an Option, or to accept from the Optionee the tender of, a number of whole 
shares of Stock having a Fair Market Value, as determined by the Company, 
equal to all or any part of the federal, state, local and foreign taxes, if 
any, required by law to be withheld by the Company with respect to such 
Option or the shares acquired upon the exercise thereof. Alternatively or in 
addition, in its discretion, the Company shall have the right to require the 
Optionee, by cash payment or otherwise, including by means of a Cashless 
Exercise, to make adequate provision for any such tax withholding obligations 
of the Company arising in connection with the Option or the shares acquired 
upon the exercise thereof. The Fair Market Value of any shares of Stock 
withheld or tendered to satisfy any such tax withholding obligations shall 
not exceed the amount determined by the applicable minimum statutory 
withholding rates. The Company shall have no obligation to deliver shares of 
Stock until the Company's tax withholding obligations have been satisfied by 
the Optionee.

6.6 EFFECT OF TERMINATION OF SERVICE.

(a) OPTION EXERCISABILITY. Subject to earlier termination 
of the Option as otherwise provided herein, an Option shall be exercisable 
after an Optionee's termination of Service only during the applicable time 
period determined in accordance with this Section 6.6 and thereafter shall 
terminate:

(i) DISABILITY. If the Optionee's Service terminates 
because of the Disability of the Optionee, the Option, to the extent 
unexercised and exercisable on the date on which the Optionee's Service 
terminated, may be exercised by the Optionee (or the Optionee's guardian or 
legal representative) at any time prior to the expiration of twelve (12) 
months after the date on which the Optionee's Service terminated, but in any 
event no later than the date of expiration of the Option's term as set forth 
in the Option Agreement evidencing such Option (the "OPTION EXPIRATION DATE").

(ii) DEATH. If the Optionee's Service terminates 
because of the death of the Optionee, the Option, to the extent unexercised 
and exercisable on the date on which the Optionee's Service terminated, may 
be exercised by the Optionee's legal representative or other person who 
acquired the right to exercise the Option by reason of the Optionee's death 
at any time prior to the expiration of twelve (12) months after the date on 
which the Optionee's Service terminated, but in any event no later than the 
Option Expiration Date. The Optionee's Service shall be deemed to have 
terminated on account of death if the Optionee dies within three (3) months 
after the Optionee's termination of Service.

(iii) OTHER TERMINATION OF SERVICE. If the Optionee's 
Service terminates for any reason, except Disability or death, the Option, to 
the extent unexercised and exercisable by the Optionee on the date on which 
the Optionee's Service terminated, may be exercised by the Optionee at any 
time prior to the expiration of six (6) months after the date on

8

which the Optionee's Service terminated, but in any event no later than the 
Option Expiration Date.

(b) EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding 
the foregoing, if the exercise of an Option within the applicable time 
periods set forth in Section 6.6(a) is prevented by the provisions of Section 
9 below, the Option shall remain exercisable until three (3) months after the 
date the Optionee is notified by the Company that the Option is exercisable, 
but in any event no later than the Option Expiration Date.

(c) EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). 
Notwithstanding the foregoing, if a sale within the applicable time periods 
set forth in Section 6.6(a) of shares acquired upon the exercise of the 
Option would subject the Optionee to suit under Section 16(b) of the Exchange 
Act, the Option shall remain exercisable until the earliest to occur of (i) 
the tenth (10th) day following the date on which a sale of such shares by the 
Optionee would no longer be subject to such suit, (ii) the one hundred and 
ninetieth (190th) day after the Optionee's termination of Service, or (iii) 
the Option Expiration Date.

6.7 TRANSFERABILITY OF OPTIONS.

(a) Except as provided in Section 6.7(b), an Option may be 
exercised during the lifetime of the Optionee only by the Optionee or the 
Optionee's guardian or legal representative and may not be assigned or 
transferred in any manner except by will or by the laws of descent and 
distribution. Following the death of an Optionee, the Option, to the extent 
provided in Section 6.6, may be exercised by the Optionee's legal 
representative or by any person empowered to do so under the deceased 
Optionee's will or under the then applicable laws of descent and distribution.

(b) With the consent of the Board and subject to any 
conditions or restrictions as the Board may impose, in its discretion, an 
Optionee may transfer during the Optionee's lifetime and prior to the 
Optionee's termination of Service all or any portion of the Option to one or 
more of such persons (each a "PERMITTED TRANSFEREE") as permitted in 
accordance with the applicable limitations, if any, described in the General 
Instructions to the Form S-8 Registration Statement under the Securities Act. 
No transfer or purported transfer of the Option shall be effective unless and 
until: (i) the Optionee has delivered to the Company a written request 
describing the terms and conditions of the proposed transfer in such form as 
the Company may require, (ii) the Optionee has made adequate provision, in 
the sole determination of the Company, for satisfaction of the tax 
withholding obligations of the Company as provided in Section 6.5 that may 
arise with respect to the transferred portion of the Option, (iii) the Board 
has approved the requested transfer, and (iv) the Optionee has delivered to 
the Company written documentation of the transfer in such form as the Company 
may require. With respect to the transferred portion of the Option, all of 
the terms and conditions of the Plan and the Option Agreement shall apply to 
the Permitted Transferee and not to the original Optionee, except for (i) the 
Optionee's rendering of Service, (ii) provision for the Company's tax 
withholding obligations, if any, and (iii) any subsequent transfer of the 
Option by the Permitted Transferee, which shall be prohibited except as 
provided in Section 6.7(a), unless otherwise permitted by the Board, in its 
sole discretion. The Company shall have no obligation to notify a Permitted 

9

Transferee of any expiration, termination, lapse or acceleration of the 
transferred Option, including, without limitation, an early termination of 
the transferred Option resulting from the termination of Service of the 
original Optionee. Exercise of the transferred Option by a Permitted 
Transferee shall be subject to compliance with all applicable federal, state 
and foreign securities laws; however, the Company shall have no obligation to 
register with any federal, state or foreign securities commission or agency 
such transferred Option or any shares that may be issuable upon the exercise 
of the transferred Option by the Permitted Transferee.

7.   STANDARD FORMS OF OPTION AGREEMENT.

7.1 OPTION AGREEMENT. Each Option shall comply with and be 
subject to the terms and conditions set forth in the form of Option Agreement 
approved by the Board concurrently with its adoption of the Plan and as 
amended from time to time.

7.2 AUTHORITY TO VARY TERMS. The Board shall have the authority 
from time to time to vary the terms of any standard form of Option Agreement 
described in this Section 7 either in connection with the grant or amendment 
of an individual Option or in connection with the authorization of a new 
standard form or forms; provided, however, that the terms and conditions of 
any such new, revised or amended standard form or forms of Option Agreement 
are not inconsistent with the terms of the Plan. Such authority shall 
include, but not by way of limitation, the authority to grant Options which 
are immediately exercisable subject to the Company's right to repurchase any 
unvested shares of Stock acquired by the Optionee on exercise of an Option in 
the event such Optionee's Service is terminated for any reason.

8.   EFFECT OF CHANGE IN CONTROL.

In the event of a Change in Control, any unexercisable or 
unvested portions of outstanding Options and any shares acquired upon the 
exercise thereof shall be immediately exercisable and vested in full as of 
the date ten (10) days prior to the date of the Change in Control. The 
exercise or vesting of any Option and any shares acquired upon the exercise 
thereof that was permissible solely by reason of this Section 8 shall be 
conditioned upon the consummation of the Change in Control. In addition, the 
surviving, continuing, successor, or purchasing corporation or parent 
corporation thereof, as the case may be (the "ACQUIRING CORPORATION"), may 
either assume the Company's rights and obligations under outstanding Options 
or substitute for outstanding Options substantially equivalent options for 
the Acquiring Corporation's stock. Any Options which are neither assumed or 
substituted for by the Acquiring Corporation in connection with the Change in 
Control nor exercised as of the date of the Change in Control shall terminate 
and cease to be outstanding effective as of the date of the Change in Control.

9.   COMPLIANCE WITH SECURITIES LAW.

The grant of Options and the issuance of shares of Stock upon 
exercise of Options shall be subject to compliance with all applicable 
requirements of federal, state and foreign law with respect to such 
securities. Options may not be exercised if the issuance of shares of Stock 
upon exercise would constitute a violation of any applicable federal, state 
or foreign securities

10

laws or other law or regulations or the requirements of any stock exchange or 
market system upon which the Stock may then be listed. The inability of the 
Company to obtain from any regulatory body having jurisdiction the authority, 
if any, deemed by the Company's legal counsel to be necessary to the lawful 
issuance and sale of any shares hereunder shall relieve the Company of any 
liability in respect of the failure to issue or sell such shares as to which 
such requisite authority shall not have been obtained. As a condition to the 
exercise of any Option, the Company may require the Optionee to satisfy any 
qualifications that may be necessary or appropriate, to evidence compliance 
with any applicable law or regulation and to make any representation or 
warranty with respect thereto as may be requested by the Company.

10.  TERMINATION OR AMENDMENT OF PLAN.

The Board may terminate or amend the Plan at any time. However, 
without the approval of the Company's stockholders, there shall be (a) no 
increase in the maximum aggregate number of shares of Stock that may be 
issued under the Plan (except by operation of the provisions of Section 4.2), 
(b) no material change in the class of persons eligible to receive Options, 
and (c) no material change in the amount, timing or exercise price formula of 
automatic grants of Options pursuant to Section 6.1 above. No termination or 
amendment of the Plan shall affect any then outstanding Option unless 
expressly provided by the Board. In any event, no termination or amendment of 
the Plan may adversely affect any then outstanding Option without the consent 
of the Optionee.

11.  MISCELLANEOUS PROVISIONS.

11.1 PROVISION OF INFORMATION. Each Optionee shall be given 
access to information concerning the Company equivalent to that information 
generally made available to the Company's common stockholders.

11.2 BENEFICIARY DESIGNATION. Each Optionee may file with the 
Company a written designation of a beneficiary who is to receive any benefit 
under the Plan to which the Optionee is entitled in the event of such 
Optionee's death before he or she receives any or all of such benefit. Each 
designation will revoke all prior designations by the same Optionee, shall be 
in a form prescribed by the Company, and will be effective only when filed by 
the Optionee in writing with the Company during the Optionee's lifetime. If a 
married Optionee designates a beneficiary other than the Optionee's spouse, 
the effectiveness of such designation shall be subject to the consent of the 
Optionee's spouse.

11.3 RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights 
as a stockholder with respect to any shares covered by an Option until the 
date of the issuance of a certificate for such shares (as evidenced by the 
appropriate entry on the books of the Company or of a duly authorized 
transfer agent of the Company). No adjustment shall be made for dividends, 
distributions or other rights for which the record date is prior to the date 
such certificate is issued, except as provided in Section 4.2 or another 
provision of the Plan.

11.4 CONTINUATION OF PRIOR VERSION OF THE PLAN AS TO 
OUTSTANDING OPTIONS. Notwithstanding any other provision of the Plan to the 
contrary, each Option outstanding prior to

11

the Effective Date shall continue to be governed by the terms of the version 
of the Plan as in effect on the date of grant of such Option. For purposes of 
the preceding sentence, such prior version of the Plan means the Ross Stores, 
Inc. 1991 Outside Directors Stock Option Plan adopted on March 18, 1991 and 
amended from time to time.

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing sets forth the Amended and Restated Ross Stores, Inc. Outside
Directors Stock Option Plan as duly adopted by the Board on March 16, 2000.

------------------------------------
Secretary

ROSS STORES, INC.
FISCAL 1999 FORM 10-K
EXHIBIT 10.18

AMENDED AND RESTATED
ROSS STORES, INC.
INCENTIVE COMPENSATION PLAN

(AS AMENDED EFFECTIVE MARCH 16, 2000)

1.       ESTABLISHMENT, PURPOSE, TERM OF PLAN.

1.1 ESTABLISHMENT. The Ross Stores, Inc. Incentive 
Compensation Plan is hereby amended and restated in its entirety as the 
Amended and Restated Ross Stores, Inc. Incentive Compensation Plan (the 
"PLAN") effective as of March 16, 2000 (the "EFFECTIVE DATE").

1.2 PURPOSE. The purposes of the Plan is to advance the 
interests of the Company and its stockholders by providing an incentive to 
management and other key employees of the Company to meet or exceed 
pre-established, corporate profit performance and individual performance 
goals.

1.3 TERM OF PLAN. The Plan shall continue in effect until 
its termination by the Committee.

2.       DEFINITIONS AND CONSTRUCTION.

2.1 DEFINITIONS. Whenever used herein, the following terms 
shall have their respective meanings set forth below:

(a) "AWARD" means an incentive award granted under the 
Plan.

(b) "AWARD FORMULA" means, for any Award granted to a 
Participant, a formula or table establishing the percentage of the 
Participant's base salary, as in effect on the last day of the Fiscal Year 
with respect to which such Award was granted, that will become payable 
(except as otherwise provided by the Plan) as a cash bonus at one or more 
specified thresholds of attainment of the Performance Goal for the Fiscal 
Year.

(c) "BOARD" means the Board of Directors of the Company.

(d) "CAUSE" means, unless otherwise defined by a 
contract of employment between the Participant and the Company, any of the 
following: (i) the Participant's theft, dishonesty, or falsification of any 
Company documents or records; (ii) the Participant's improper use or 
disclosure of the Company's confidential or proprietary information; (iii) 
any 

action by the Participant which has a detrimental effect on the Company's 
reputation or business; (iv) the Participant's failure or inability to 
perform any reasonable assigned duties after written notice from the Company 
of, and a reasonable opportunity to cure, such failure or inability; (v) any 
material breach by the Participant of any employment agreement between the 
Participant and the Company, which breach is not cured pursuant to the terms 
of such agreement; or (vi) the Participant's conviction (including any plea 
of guilty or nolo contendere) of any criminal act which impairs the 
Participant's ability to perform his or her duties with the Company.

(e) "CODE" means the Internal Revenue Code of 1986, as 
amended, and any applicable regulations promulgated thereunder.

(f) "CHANGE IN CONTROL" means the occurrence of any of 
the following:

(i) any "person" (as such term is used in Sections 
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the 
"EXCHANGE ACT")), other than (1) a trustee or other fiduciary holding stock 
of the Company under an employee benefit plan of a Participating Company or 
(2) a corporation owned directly or indirectly by the stockholders of the 
Company in substantially the same proportions as their ownership of the stock 
of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 
promulgated under the Exchange Act), directly or indirectly, of stock of the 
Company representing more than fifty percent (50%) of the total combined 
voting power of the Company's then-outstanding voting stock; or

(ii) an Ownership Change Event or a series of 
related Ownership Change Events (collectively, a "TRANSACTION") wherein the 
stockholders of the Company immediately before the Transaction do not retain 
immediately after the Transaction direct or indirect beneficial ownership of 
more than fifty percent (50%) of the total combined voting power of the 
outstanding voting stock of the Company or, in the event of a sale of assets, 
of the corporation or corporations to which the assets of the Company were 
transferred (the "TRANSFEREE CORPORATION(S)").

For purposes of the preceding sentence, indirect beneficial ownership shall 
include, without limitation, an interest resulting from ownership of the 
voting stock of one or more corporations which, as a result of the 
Transaction, own the Company or the Transferee Corporation(s), as the case 
may be, either directly or through one or more subsidiary corporations. The 
Board shall have the right to determine whether multiple Ownership Change 
Events are related, and its determination shall be final, binding and 
conclusive.

(g) "COMMITTEE" means the Compensation Committee or 
other committee of one or more members of the Board duly appointed to 
administer the Plan and having such powers as shall be specified by the 
Board. If no committee of the Board has been appointed to administer the 
Plan, the Board shall exercise all of the powers of the Committee granted 
herein, and, in any event, the Board may in its discretion exercise any or 
all of such powers.

(h) "COMPANY" means Ross Stores, Inc. a Delaware 
corporation, or any successor corporation thereto.

(i) "DISABILITY" means a long-term disability as 
defined by the long-term disability plan established by the Company for its 
employees.

(j) "EMPLOYEE" means any person treated as an employee 
(including an officer or a member of the Board who is also treated as an 
employee) in the records of the Company.

(k) "EXECUTIVE OFFICER" mean a person who, on the last 
day of a Fiscal Year, is then serving as the Chief Executive Officer, the 
President, an Executive Vice President or a Senior Vice President of the 
Company.

(l) "FISCAL YEAR" means a fiscal year of the Company.

(m) "OUTSIDE DIRECTOR" means a member of the Board who 
(i) is not a current employee of the Company or a member of an affiliated 
group of corporations within the meaning of Section 162(m) of the Code 
(together with the Company, the "AFFILIATED GROUP"); (ii) is not a former 
employee of the Affiliated Group who receives compensation for prior services 
(other than benefits under a tax-qualified retirement plan) during the 
taxable year; (iii) has not been an officer of the Affiliated Group; and (iv) 
does not receive remuneration within the meaning of Section 162(m) of the 
Code from the Affiliated Group, either directly or indirectly, in any 
capacity other than as a member of the Board.

(n) "PARTICIPANT" means a person who has been granted 
one or more Awards.

(o) "PERFORMANCE GOAL" means a target level of the 
pretax earnings of the Company determined in accordance with generally 
accepted accounting principles but prior to the accrual or payment of any 
Award and excluding the impact (whether positive or negative) thereon of any 
change in accounting standards or extraordinary, unusual or nonrecurring 
item, as determined by the Committee.

(p) "SERVICE" means a Participant's employment with the 
Company in the capacity of an Employee. A Participant's Service shall be 
deemed to have terminated if the Participant ceases to be an Employee, even 
if the Participant continues to render service to the Company in a capacity 
other than as an Employee or commences rendering service to a parent or 
subsidiary of the Company. A Participant's Service shall not be deemed to 
have terminated if the Participant takes any military leave, sick leave, or 
other bona fide leave of absence approved by the Company. Subject to the 
foregoing, the Company, in its discretion, shall determine whether a 
Participant's Service has terminated and the effective date of such 
termination.

2.2 CONSTRUCTION. Captions and titles contained herein are 
for convenience only and shall not affect the meaning or interpretation of 
any provision of the Plan. Except when otherwise indicated by the context, 
the singular shall include the plural and the plural shall 

include the singular. Use of the term "or" is not intended to be exclusive, 
unless the context clearly requires otherwise.

3.       ADMINISTRATION.

3.1 ADMINISTRATION BY THE COMMITTEE. The Plan shall be 
administered by the Committee. All questions of interpretation of the Plan or 
of any Award shall be determined by the Committee, and such determinations 
shall be final and binding upon all persons having an interest in the Plan or 
such Award.

3.2 ADMINISTRATION IN COMPLIANCE WITH SECTION 162(m). The 
Board shall establish a Committee of composed solely of two or more Outside 
Directors to administer the Plan with respect to any Award which might 
reasonably be anticipated to result in the payment of employee remuneration 
that would otherwise exceed the limit on employee remuneration deductible for 
income tax purposes pursuant to Section 162(m) of the Code.

3.3 AUTHORITY OF OFFICERS. Any Executive Officer of the 
Company shall have the authority to act on behalf of the Company with respect 
to any matter, right, obligation, determination or election which is the 
responsibility of or which is allocated to the Company herein, provided the 
Executive Officer has apparent authority with respect to such matter, right, 
obligation, determination or election.

3.4 POWERS OF THE COMMITTEE. In addition to any other 
powers set forth in the Plan and subject to the provisions of the Plan, the 
Committee shall have the full and final power and authority, in its 
discretion:

(a) to determine the persons to whom, and the time or 
times at which Awards shall be granted;

(b) to determine the terms, conditions and restrictions 
applicable to each Award (which need not be identical);

(c) to amend or modify any Award or to waive any 
restrictions or conditions applicable to any Award;

(d) to prescribe, amend or rescind rules, guidelines 
and policies relating to the Plan, or to adopt supplements to, or alternative 
versions of, the Plan, including, without limitation, as the Committee deems 
necessary or desirable to comply with the laws of, or to accommodate the tax 
policy or custom of, foreign jurisdictions whose citizens may be granted 
Awards; and

(e) to correct any defect, supply any omission or 
reconcile any inconsistency in the Plan or any Award and to make all other 
determinations and take such other actions with respect to the Plan or any 
Award as the Committee may deem advisable to the extent not inconsistent with 
the provisions of the Plan or applicable law.

3.5 INDEMNIFICATION. In addition to such other rights of 
indemnification as they may have as members of the Board or officers or 
employees of the Company, members of 

the Board and any officers or employees of the Company to whom authority to 
act for the Board or the Company is delegated shall be indemnified by the 
Company against all reasonable expenses, including attorneys' fees, actually 
and necessarily incurred in connection with the defense of any action, suit 
or proceeding, or in connection with any appeal therein, to which they or any 
of them may be a party by reason of any action taken or failure to act under 
or in connection with the Plan, or any right granted hereunder, and against 
all amounts paid by them in settlement thereof (provided such settlement is 
approved by independent legal counsel selected by the Company) or paid by 
them in satisfaction of a judgment in any such action, suit or proceeding, 
except in relation to matters as to which it shall be adjudged in such 
action, suit or proceeding that such person is liable for gross negligence, 
bad faith or intentional misconduct in duties; provided, however, that within 
sixty (60) days after the institution of such action, suit or proceeding, 
such person shall offer to the Company, in writing, the opportunity at its 
own expense to handle and defend the same.

4.       ELIGIBILITY AND AWARD LIMITATION.

4.1 PERSONS ELIGIBLE FOR AWARDS. Awards may be granted only 
to Employees who are officers of the Company or who are designated as 
District Managers, Directors, Buyers, Counselors, Regional Area Managers, Key 
Employees, First Line Employees or are otherwise Employees selected by the 
Committee. No person whose Service commences or recommences after October 31 
of any Fiscal Year shall be eligible to be granted an Award with respect to 
such Fiscal Year.

4.2 MAXIMUM AWARD. No Participant may be granted an Award 
which would result in the Participant receiving in settlement of the Award 
for any Fiscal Year an amount in excess of $1,522,000, representing 200% of 
the salary of the Chief Executive Officer of the Company as in effect on May 
30, 1996, the date of approval of the Plan by the Company's stockholders.

5.       GRANT OF AWARDS.

Subject to the provisions of the Plan, the Committee, at 
any time and from time to time, may grant Awards in such amounts and upon 
such conditions as it shall determine, subject to the following:

5.1 ESTABLISHMENT OF PERFORMANCE GOAL AND AWARD FORMULAS. 
For each Fiscal Year in which an Award is to be granted, the Committee shall 
establish in writing (a) the Performance Goal applicable to any and all 
Awards which may be granted for such Fiscal Year and (b) the respective Award 
Formula to be applicable to each Award which may be granted for such Fiscal 
Year. The Committee may, in its discretion, establish different Award 
Formulas applicable to different classes, categories, positions or 
organizational levels of Participants or to individual Participants. In 
establishing the Performance Goal and Award Formulas, the Committee shall 
take into account the recommendations of the Management Committee of the 
Company. Unless otherwise permitted in compliance with the requirements under 
Section 162(m) of the Code with respect to "performance-based compensation," 
the Committee shall establish the Performance Goal applicable to a Fiscal 
Year and the applicable Award Formulas no later than the earlier of (a) the 
date ninety (90) days after the commencement of the Fiscal 

Year or (b) the date on which 25% of the Fiscal Year has elapsed, and, in any 
event, at a time when the outcome of the Performance Goal remains 
substantially uncertain. Once established for a Fiscal Year, the Performance 
Goal and Award Formulas (except as provided in Section 5.2 or Section 6.2) 
shall not be changed.

5.2 DISCRETIONARY ADJUSTMENT OF AWARD FORMULAS. In its 
discretion, the Committee may, either at the time it grants an Award or at 
any time thereafter, provide for the adjustment of the Award Formula 
applicable to an Award granted to any Participant who is not an Executive 
Officer to reflect such Participant's individual performance in his or her 
position with the Company or such other factors as the Committee may 
determine. However, once established in accordance with Section 5.1, the 
Committee shall have no discretion to alter an Award Formula applicable to 
any Award granted to an Executive Officer.

5.3 NEW OR PROMOTED EMPLOYEES. Any Award granted by the 
Committee to an Employee who becomes eligible to participate in the Plan 
following the commencement of a Fiscal Year, whether as a result of hiring or 
promotion, shall provide for an Award Formula prorated on the basis the 
length of the Fiscal Year remaining from the date on which the Employee 
becomes eligible to participate. If a Participant previously granted an Award 
for a Fiscal Year is promoted to a position within a category of Participants 
for which the Committee has established a more favorable Award Formula, the 
more favorable Award Formula shall be applied on a pro rata basis to that 
portion of the Fiscal Year remaining from the date of the Employee's 
promotion, and the original Award Formula shall be applied on a pro rata 
basis to that portion of the Fiscal Year preceding the date of promotion. 
Notwithstanding the foregoing, no discretionary adjustment pursuant to 
Section 5.2 or Section 6.2 may be made to any Award held by a Participant who 
is promoted to a position of Executive Officer following the commencement of 
a Fiscal Year.

5.4 NOTICE TO PARTICIPANTS. The Company shall notify each 
Participant of the terms of the Award granted to him or her for the Fiscal 
Year, including the Performance Goal and Award Formula.

6.       SETTLEMENT OF AWARDS.

6.1 DETERMINATION OF FINAL AWARD VALUES. As soon as 
practicable following the completion of each Fiscal Year, the Committee shall 
certify in writing the extent to which the applicable Performance Goal has 
been attained and the resulting final values of the Awards for such Fiscal 
Year earned by the Participants and to be paid upon settlement of the Awards 
in accordance with the applicable Award Formula. Except as provided in 
Section 6.2, the Committee shall have no discretion to increase the value of 
an Award payable upon its settlement in excess of the amount called for by 
the terms of the applicable Award Formula on the basis of the degree of 
attainment of the Performance Goal as certified by the Committee.

6.2 ADJUSTMENT FOR EXCEPTIONAL INDIVIDUAL PERFORMANCE. In 
the event that the Performance Goal is not attained for a Fiscal Year, but 
the Company is profitable in the judgment of the Committee, those 
Participants who are not Executive Officers and who have received an 
individual performance appraisal rating of "exceptional" shall be eligible to 
receive the amount of the final Award value that would have become payable to 
the Participant under the 

applicable Award Formula had 100% of the Performance Goal been attained and 
had the Participant received an individual performance appraisal rating of 
"good."

6.3 EFFECT OF LEAVES OF ABSENCE. Unless otherwise required 
by law, payment of the final value of an Award held by a Participant who has 
taken in excess of seven (7) days of military leave, sick leave or other 
approved leaves of absence during the Fiscal Year shall be prorated on the 
basis of the number of days of the Participant's Service during the Fiscal 
Year during which the Participant was not on a leave of absence.

6.4 NOTICE TO PARTICIPANTS. As soon as practicable 
following the Committee's determination and certification in accordance with 
Section 6.1, the Company shall notify each Participant of the determination 
of the Committee.

6.5 PAYMENT IN SETTLEMENT OF AWARDS. As soon as practicable 
following the Committee's determination and certification in accordance with 
Section 6.1, payment shall be made to each eligible Participant of the 
resulting final value, if any, of such Participant's Award (subject to 
applicable tax withholding). Except as otherwise provided in Section 7, no 
Participant shall be eligible to receive a payment under any Award unless the 
Participant remains an active, full-time Employee on the last day of the 
Fiscal Year applicable to such Award. For this purpose, a Participant on an 
approved leave of absence shall be deemed to be an active Employee. All such 
payments shall be made in cash or by check.

6.6 TAX WITHHOLDING. The Company shall have the right to 
deduct from any and all payments made under the Plan or otherwise all 
federal, state, local and foreign taxes, if any, required by law to be 
withheld by the Company with respect to any such payment.

7.       EFFECT OF TERMINATION OF SERVICE.

7.1 DEATH OR DISABILITY. If a Participant's Service 
terminates because of the death or Disability of the Participant prior to the 
completion of the Fiscal Year applicable to an Award held by the Participant, 
the final value of the Award shall be determined under the Award Formula by 
the extent to which the applicable Performance Goal is attained with respect 
to the entire Fiscal Year and by assuming for the purpose of this 
determination that the Participant (if not an Executive Officer) has received 
an individual performance rating of "good;" provided, however, that the 
resulting amount shall be prorated on the basis of the number of days of the 
Participant's Service during the Fiscal Year. Payment shall be made following 
the end of the Fiscal Year in the manner provided in Section 6.

7.2 INVOLUNTARY TERMINATION. If a Participant's Service is 
involuntarily terminated by the Company for any reason other than Cause (an 
"INVOLUNTARY TERMINATION") prior to the completion of the Fiscal Year 
applicable to an Award held by the Participant, the final value of the Award 
shall be determined under the Award Formula by the extent to which the 
applicable Performance Goal is attained with respect to the entire Fiscal 
Year and by assuming for the purpose of this determination that the 
Participant (if not an Executive Officer) has received an individual 
performance rating of "good;" provided, however, that the resulting amount 
shall be prorated on the basis of the number of days of the Participant's 
Service during 

the Fiscal Year. Payment shall be made following the end of the Fiscal Year 
in the manner provided in Section 6.

7.3 OTHER TERMINATION OF SERVICE. If a Participant's 
Service terminates for any reason other than death, Disability or Involuntary 
Termination prior to the completion of the Fiscal Year applicable to an Award 
held by the Participant, the Participant shall immediately forfeit the Award 
and shall be entitled to receive no payment therefor.

8.       CHANGE IN CONTROL.

8.1 EFFECT OF CHANGE IN CONTROL. Unless otherwise provided 
by a contract of employment between the Participant and the Company, in the 
event of the consummation of a Change in Control prior to the completion of 
the Fiscal Year applicable to the Participant's Award, then the Award shall 
become payable, effective as of the date of the Change in Control, in the 
amount that would constitute the final value of the Award determined in 
accordance with the Award Formula had 100% of the Performance Goal for the 
Fiscal Year been attained and had the Participant (if not an Executive 
Officer) received an individual performance rating of "good;" provided, 
however, that such amount shall be prorated on the basis of the number of 
days of the Participant's Service during the Fiscal Year prior to the date of 
the Change in Control. Subject to Section 8.2, payment pursuant to this 
Section 8.1 (subject to applicable tax withholding) shall be made in cash or 
by check as soon as practicable following the date of the Change in Control.

8.2 FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE CODE.

(a) EXCESS PARACHUTE PAYMENT. In the event that any 
payment pursuant to an Award and any other payment or benefit received or to 
be received by the Participant would subject the Participant to any excise 
tax pursuant to Section 4999 of the Code due to the characterization of such 
payment or benefit as an excess parachute payment under Section 280G of the 
Code, the Participant may elect, in his or her sole discretion, to reduce the 
amount of any payment called for under the Award in order to avoid such 
characterization.

(b) DETERMINATION BY INDEPENDENT ACCOUNTANTS. To aid 
the Participant in making any election called for under Section 8.2(a), upon 
the occurrence of any event that might reasonably be anticipated to give rise 
to a payment under Section 8.1 (an "EVENT"), the Company shall promptly 
request a determination in writing by independent public accountants selected 
by the Company (the "ACCOUNTANTS"). Unless the Company and the Participant 
otherwise agree in writing, the Accountants shall determine and report to the 
Company and the Participant within twenty (20) days of the date of the Event 
the amount of such payments and benefits which would produce the greatest 
after-tax benefit to the Participant. For the purposes of such determination, 
the Accountants may rely on reasonable, good faith interpretations concerning 
the application of Sections 280G and 4999 of the Code. The Company and the 
Participant shall furnish to the Accountants such information and documents 
as the Accountants may reasonably request in order to make their required 
determination. The Company shall bear all fees and expenses the Accountants 
may reasonably charge in connection with their services contemplated by this 
Section 8.2(b).

9.       AMENDMENT OR TERMINATION OF THE PLAN.

The Plan, as set forth in this document, represents the 
general guidelines the Company presently intends to utilize to determine what 
Awards, if any, will be granted and paid. If, however, at the sole discretion 
of the Committee, the Company's best interest is served by applying different 
guidelines to certain individuals, or to individuals under special or unusual 
circumstances, it reserves the right to do so by notice to such individuals 
at any time, or from time to time. To the extent that such applications are 
contrary to any provisions of the Plan, the Plan will be deemed amended to 
such extent. The Committee may terminate or amend the Plan at any time; 
provided, however, that in amending the Plan the Committee shall take into 
account whether the approval of the Company's stockholders of such amendment 
may be required in order to continue to qualify amounts paid pursuant to the 
Plan as "performance-based compensation" within the meaning of Section 162(m) 
of the Code.

10.      MISCELLANEOUS PROVISIONS.

10.1 NONTRANSFERABILITY OF AWARDS. Prior to settlement in 
accordance with the provisions of the Plan, no Awards may be subject in any 
manner to anticipation, alienation, sale, exchange, transfer, assignment, 
pledge, encumbrance, or garnishment by creditors of the Participant or the 
Participant's beneficiary, except by will or by the laws of descent and 
distribution. All rights with respect to an Award granted to a Participant 
hereunder shall be exercisable during his or her lifetime only by such 
Participant.

10.2 RIGHTS AS EMPLOYEE. No person, even though eligible 
pursuant to Section 4, shall have a right to be selected as a Participant, 
or, having been so selected, to be selected again as a Participant. Nothing 
in the Plan or any Award granted under the Plan shall confer on any 
Participant a right to remain an Employee or interfere with or limit in any 
way the right of the Company to terminate the Participant's Service at any 
time.

10.3 BENEFICIARY DESIGNATION. Each Participant may file 
with the Company a written designation of a beneficiary who is to receive any 
benefit under the Plan to which the Participant is entitled in the event of 
such Participant's death before he or she receives any or all of such 
benefit. Each designation will revoke all prior designations by the same 
Participant, shall be in a form prescribed by the Company, and will be 
effective only when filed by the Participant in writing with the Company 
during the Participant's lifetime. If a married Participant designates a 
beneficiary other than the Participant's spouse, the effectiveness of such 
designation shall be subject to the consent of the Participant's spouse. If a 
Participant dies without an effective designation of a beneficiary who is 
living at the time of the Participant's death, the Company will pay any 
remaining unpaid benefits to the Participant's legal representative.

10.4 UNFUNDED OBLIGATION. Any amounts payable to 
Participants pursuant to the Plan shall be unfunded obligations for all 
purposes, including, without limitation, Title I of the Employee Retirement 
Income Security Act of 1974. The Company shall not be required to segregate 
any monies from its general funds, or to create any trusts, or establish any 
special accounts with respect to such obligations. The Company shall retain 
at all times beneficial ownership of any investments, including trust 
investments, which the Company may make to fulfill its payment obligations 
hereunder. Any investments or the creation or maintenance of any trust or any 
Participant account shall not create or constitute a trust or fiduciary 
relationship 

between the Committee or the Company and a Participant, or otherwise create 
any vested or beneficial interest in any Participant or the Participant's 
creditors in any assets of the Company. The Participants shall have no claim 
against the Company for any changes in the value of any assets which may be 
invested or reinvested by the Company with respect to the Plan.

10.5 APPLICABLE LAW. The Plan shall be governed by the laws 
of the State of California as such laws are applied to agreements between 
California residents entered into and to be performed entirely within the 
State of California.

10.6 CONTINUATION OF PRIOR VERSION OF THE PLAN AS TO 
OUTSTANDING AWARDS. Notwithstanding any other provision of the Plan to the 
contrary, each Award outstanding prior to the Effective Date shall continue 
to be governed by the terms of the version of the Plan as in effect on the 
date of grant of such Award. For purposes of the preceding sentence, such 
prior version of the Plan includes the Ross Stores, Inc. Incentive 
Compensation Plan adopted on May 30, 1996.

IN WITNESS WHEREOF, the undersigned Secretary of the Company 
certifies that the foregoing sets forth the Amended and Restated Ross Stores, 
Inc. Incentive Compensation Plan as duly adopted by the Board on March 16, 
2000.

------------------------------------
Secretary

Ross Stores, Inc.
Fiscal 1999 Form 10-K
Exhibit 10.32

January 26, 2000

Mel Wilmore
President, COO
Ross Stores, Inc.

8333 Central Avenue
Newark, CA 94560

Dear Mel:

Your contract shall be amended as follows:

1.   The first sentence in Paragraph 5.vii, shall now say "Until both the 
death of the Executive and the death of his spouse (strike "or the date 
of his 65th birthday, whichever occurs first"), the Executive shall be 
entitled to continue to participate (at no cost to the Executive) in the 
following Company employee benefit plans and arrangements in effect on 
the date hereof (or other benefit plans or arrangements providing 
substantially similar benefits) in which the Executive now participates: 
executive medical, dental, vision and mental health insurance.

2.   After amending the first sentence, another sentence will be added to 
Paragraph 5.vii stating "Until his death, the Executive shall be 
entitled to continue to participate (at no cost to the Executive) in the 
following Company employee benefit plans and arrangements in effect on 
the date hereof (or other benefit plans or arrangements providing 
substantially similar benefits) in which the Executive now participates: 
life insurance; accidental death and dismemberment insurance; travel 
insurance; group excess personal liability insurance; and matching of 
Executive's 401(k) and supplemental 401(k) contributions (the "Matching 
Contributions").

3.   Paragraph 5.ix, shall now say "Until his death (strike "or the date of 
his 65th birthday, whichever occurs first"), the Executive shall be 
reimbursed by the Company for any estate planning fees or expenses 
actually incurred by the Executive, up to the current annual limit of 
$10,000 (strike "up to a maximum annual reimbursement of $5000"); 
provided, however, that such annual limit shall be increased from time 
to time consistent with increases in similar benefits provided to Norman 
Ferber.

Your signature below indicates that you agree with the amendments noted above.

/s/ Melvin A. Wilmore                  /s/ Michael A. Balmuth
-------------------------------------  -------------------------------------
Melvin A. Wilmore                      Michael A. Balmuth

President and Chief Operating Officer  Vice Chairman and Chief Executive Officer

Date: January 27, 2000                 Date: January 27, 2000

ROSS STORES, INC.
FISCAL 1999 FORM 10-K

EXHIBIT 10.34

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made 
effective as of February 25, 2000, by and between Ross Stores, Inc. (the 
"Company") and Michael Balmuth (the "Executive"). The Executive and the 
Company previously entered into an Employment Agreement dated as of February 
3, 1999 (the "Agreement") and now intend to amend the Agreement to clarify 
certain terms and conditions of the Agreement, as set forth below.

I.   The Agreement is hereby amended as follows:

A. MITIGATION NOT REQUIRED. Paragraph 17 
[Mitigation Not Required]of the Agreement is amended in its entirety as 
follows:

If the Executive's employment with the Company is terminated for any 
reason, the Executive shall not be obligated to seek other 
employment following such termination; provided, however, that the 
amount of salary and bonus to which the Executive will be entitled 
under paragraph 9 hereof shall be reduced by the amount of salary 
and/or bonus earned by the Executive for services performed for 
another employer during the period that the Executive is entitled to 
receive continued salary or bonus payments under paragraph 9 hereof.

B. NO OTHER MODIFICATIONS. Except as modified by this 
Amendment, the Agreement shall remain in full force and effect.

ROSS STORES, INC.                  EXECUTIVE

By: /s/ Norman A. Ferber           /s/ Michael Balmuth
-------------------------      ----------------------------
Chairman of the Board          Michael Balmuth

March 20, 2000

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement Nos. 
33-61373, 33-51916, 33-51896, 33-51898, 33-41415, 33-41413, 33-29600 and 
333-56831 of Ross Stores, Inc. on Form S-8 of our report dated March 10, 
2000, appearing in this Annual Report on Form 10-K of Ross Stores, Inc. for 
the year ended January 29, 2000.

DELOITTE & TOUCHE LLP
San Francisco, CA
April 28, 2000

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE
TWELVE MONTHS ENDED JANUARY 29, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JAN-29-2000
<PERIOD-START>                             JAN-31-1999
<PERIOD-END>                               JAN-29-2000
<CASH>                                          79,329
<SECURITIES>                                         0
<RECEIVABLES>                                   15,689
<ALLOWANCES>                                         0
<INVENTORY>                                    500,494
<CURRENT-ASSETS>                               613,194
<PP                                         499,552
<DEPRECIATION>                                 226,388
<TOTAL-ASSETS>                                 947,678
<CURRENT-LIABILITIES>                          422,470
<BONDS>                                              0
<PREFERRED-MANDATORY>                              888
<PREFERRED>                                          0
<COMMON>                                             0
<OTHER-SE>                                     472,543
<TOTAL-LIABILITY-AND-EQUITY>                   947,678
<SALES>                                      2,468,638
<TOTAL-REVENUES>                             2,468,638
<CGS>                                        1,702,342
<TOTAL-COSTS>                                2,222,159
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               (322)
<INCOME-PRETAX>                                246,479
<INCOME-TAX>                                    96,373
<INCOME-CONTINUING>                            150,106
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   150,106
<EPS-BASIC>                                       1.66
<EPS-DILUTED>                                     1.64