ROSS STORES, INC.
NOTICE OF GRANT OF PERFORMANCE SHARES
 
The Participant has been granted an award of Performance Shares (the “Award”)
pursuant to the Ross Stores, Inc. 2008 Equity Incentive Plan (the “Plan”) and
the Performance Share Agreement attached hereto (the “Agreement”), as follows:
 

Participant:   ________________   Employee ID:           ________________ Grant
Date:   ________________   Grant No.:   ________________ Target Number of
                    Performance Shares:   ________________, subject to
adjustment as provided by the Agreement.
Maximum Number of
            Performance Shares:   ________________, subject to adjustment as
provided by the Agreement. Adjusted Pre-Tax Profit             Target:  
$________________         Performance Period:   Company fiscal year beginning
________________, and ending ______________. Earned Performance            
Share Determination             Date:   ________________         Earned
Performance
Shares:   The number of Earned Performance Shares (not to exceed the Maximum
Number of Performance Shares) shall be determined by the Compensation Committee
on or before the Earned Performance Share Determination Date by multiplying the
Target Number of Performance Shares by the Adjusted Pre-Tax Profit Multiplier
(as defined by the Agreement and certified by the Compensation Committee).
Performance Share
Vesting Date; Vested
Performance Shares:
  Except as provided by the Agreement and provided that the Participant’s
Service has not previously terminated, 100% of the Earned Performance Shares
shall vest and become Vested Performance Shares on _______________. Settlement
Date:   ________________, except as provided by the Agreement. Employment
Agreement:   Executive Employment Agreement between the Company and the
Participant, as in effect at any applicable time.

 
By their signatures below or by electronic acceptance or authentication in a
form authorized by the Company, the Company and the Participant agree that the
Award is governed by this Notice and by the provisions of the Plan and the
Performance Share Agreement, both of which are made a part of this document. The
Participant acknowledges that copies of the Plan, Performance Share Agreement
and the prospectus for the Plan are available on the Company’s internal web site
and may be viewed and printed by the Participant for attachment to the
Participant’s copy of this Grant Notice. The Participant represents that the
Participant has read and is familiar with the provisions of the Plan and
Performance Share Agreement, and hereby accepts the Award subject to all of
their terms and conditions.
 

ROSS STORES, INC.       PARTICIPANT       By:               Signature Its:      
        Date Address:        4440 Rosewood Drive              Pleasanton, CA
94588   Address        

ATTACHMENTS:       Performance Share Agreement
 

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ROSS STORES, INC.
PERFORMANCE SHARE AGREEMENT
 
     Ross Stores, Inc. has granted to the Participant named in the Notice of
Grant of Performance Shares (the “Grant Notice”) to which this Performance Share
Agreement (the “Agreement”) is attached an Award consisting of Performance
Shares subject to the terms and conditions set forth in the Grant Notice and
this Agreement. The Award has been granted pursuant to and shall in all respects
be subject to the terms and conditions of the Ross Stores, Inc. 2008 Equity
Incentive Plan (the “Plan”), as amended to the Grant Date, the provisions of
which are incorporated herein by reference. By signing the Grant Notice, the
Participant: (a) acknowledges receipt of and represents that the Participant has
read and is familiar with the Grant Notice, this Agreement, the Plan and a
prospectus for the Plan (the “Plan Prospectus”) in the form most recently
prepared in connection with the registration with the Securities and Exchange
Commission of shares issuable pursuant to the Plan, (b) accepts the Award
subject to all of the terms and conditions of the Grant Notice, this Agreement
and the Plan and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Grant Notice, this Agreement or the Plan.
 
     1. DEFINITIONS AND CONSTRUCTION.
 
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned in the Grant Notice or the Plan. Whenever used
herein, the following terms shall have their respective meanings set forth
below:
 
               (a) “Adjusted Pre-Tax Profit” means the earnings before taxes as
reported in the Consolidated Statements of Earnings of the Company for the
fiscal year of the Company coinciding with the Performance Period, adjusted to
exclude from the determination of such amount the reduction in earnings
resulting from the accrual of compensation expense for Performance Awards under
the Plan and incentive awards under the Second Amended and Restated Ross Stores,
Inc. Incentive Compensation Plan, granted in each case, with respect to the
Performance Period.
 
               (b) “Adjusted Pre-Tax Profit Multiplier” means a number
determined as follows:
 

Percentage of Adjusted Pre-      Adjusted Pre-Tax Profit Tax Profit Target
Achieved   Multiplier Less than 90%   0.00% 90%   66.70% 95%   83.33% 100%  
100.00% 105%   125.00% 110%   150.00% 115%   175.00% Equal to or greater than
120%   200.00%

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The Adjusted Pre-Tax Profit Multiplier for percentages of Adjusted Pre-Tax
Profit Target achieved falling between the percentages set forth in the table
above shall be determined by linear interpolation.
 
               (c) “Change in Control” means a “Change in Control” as defined by
the Employment Agreement.
 
               (d) “Common Shares” mean shares of Stock issued in settlement of
the Award.
 
               (e) “Dividend Equivalent Right” means the right of the
Participant to receive for each Earned Performance Share held on a dividend
record date an amount equal to the cash dividend declared and paid on one (1)
share of Stock, with such amount to be paid in cash on the date on which the
Company pays such dividend to its stockholders.
 
               (f) “Expiration of Participant’s Employment Agreement Due to
Non-Renewal” means the expiration of the Employment Agreement due to its
“Non-Renewal,” as provided by the Employment Agreement.
 
               (g) “Performance Shares” mean the Performance Shares granted
pursuant to the Award, as adjusted from time to time pursuant to Section 9. Each
Performance Share represents a right to receive on the Settlement Date one (1)
Common Share, subject to further restrictions as provided by this Agreement, if
such Performance Share is then a Vested Performance Share.
 
               (h) “Termination Due to Disability” means the termination of the
Participant’s employment due to “Disability” as defined by and upon terms set
forth in the Employment Agreement.
 
               (i) “Termination for Cause” means the termination of the
Participant’s employment for “Cause” as defined by the Employment Agreement.
 
               (j) “Termination for Good Reason” means the Participant’s
termination of employment for “Good Reason” as defined by the Employment
Agreement.
 
               (k) “Termination Without Cause” means the termination of the
Participant’s employment “Without Cause” as defined by the Employment Agreement.
 
               (l) “Voluntary Termination” means the “Voluntary Termination” of
the Participant’s employment as defined by the Employment Agreement.
 
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. 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.
 
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     2. ADMINISTRATION.
 
          All questions of interpretation concerning the Grant Notice, this
Agreement and the Plan shall be determined by the Committee. All determinations
by the Committee shall be final and binding upon all persons having an interest
in the Award as provided by the Plan. Any Officer shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation, 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, or election. If the Participant is a Covered Employee,
compensation realized by the Participant pursuant to the Award is intended to
constitute qualified performance-based compensation within the meaning of
Section 162(m) of the Code and the regulations thereunder, and the provisions of
this Agreement shall be construed and administered in a manner consistent with
this intent. The Company intends that the Award comply with Section 409A of the
Code (including any amendments or replacements of such section) and the
regulations thereunder, and the provisions of this Agreement shall be construed
and administered in a manner consistent with this intent.
 
     3. THE AWARD.
 
          3.1 Grant of Performance Shares. On the Grant Date, the Participant
shall acquire, subject to the provisions of this Agreement, a right to receive a
number of Performance Shares which shall not exceed the Maximum Number of
Performance Shares set forth in the Grant Notice, subject to adjustment as
provided in Section 9. The number of Performance Shares, if any, ultimately
earned by the Participant shall be that number of Performance Shares which
become Earned Performance Shares, if any.
 
          3.2 No Monetary Payment Required. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Performance Shares or the Common Shares issued upon
settlement of the Earned Performance Shares that become Vested Performance
Shares, the consideration for which shall be past services actually rendered
and/or future services to be rendered to a Participating Company or for its
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to a Participating Company or for its benefit having a
value not less than the par value of the Common Shares issued upon settlement of
the Earned Performance Shares that become Vested Performance Shares.
 
          3.3 Dividend Equivalent Rights. On each day occurring on or after the
Earned Performance Share Determination Date and prior to the Settlement Date
that is established by the Board as the record date with respect to a dividend
declared by the Board on shares of Stock generally and to be paid by the Company
in cash to stockholders of record on such date, the Participant shall be
credited with one Dividend Equivalent Right for each Earned Performance Share.
Each such Dividend Equivalent Right shall be settled and paid to the Participant
in cash on the same day that the Company pays the dividend to its stockholders.
 
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     4. CERTIFICATION OF THE COMMITTEE.
 
          4.1 Level of Adjusted Pre-Tax Profit Attained. As soon as practicable
following completion of the Performance Period, and in any event prior to the
Earned Performance Share Determination Date, the Committee shall certify in
writing the level of attainment of Adjusted Pre-Tax Profit during the
Performance Period and the resulting number of Performance Shares which shall be
Earned Performance Shares. The Company shall promptly notify the Participant of
the determination by the Plan Administrator.
 
          4.2 Adjustment to Adjusted Pre-Tax Profit for Extraordinary Items. The
Committee shall adjust Adjusted Pre-Tax Profit, as it deems appropriate, to
exclude the effect (whether positive or negative) of any of the following
occurring after the grant of the Award: (a) a change in accounting standards
required by generally accepted accounting principles or (b) any extraordinary,
unusual or nonrecurring item. Each such adjustment, if any, shall be made solely
for the purpose of providing a consistent basis from period to period for the
calculation of Adjusted Pre-Tax Profit in order to prevent the dilution or
enlargement of the Participant’s rights with respect to the Award.
 
     5. VESTING OF EARNED PERFORMANCE SHARES.
 
          5.1 In General. Except as provided by this Section 5 and Section 8,
the Earned Performance Shares shall vest and become Vested Performance Shares as
provided in the Grant Notice.
 
          5.2 Effect of Termination for Cause or Voluntary Termination. In the
event of the Termination for Cause or Voluntary Termination of the Participant
prior to the Performance Share Vesting Date, the Participant shall forfeit and
the Company shall automatically reacquire all of the Performance Shares subject
to the Award. The Participant shall not be entitled to any payment for such
forfeited Performance Shares.
 
          5.3 Effect of Death, Termination Due to Disability, Termination
Without Cause, Termination for Good Reason or Expiration of Participant’s
Employment Agreement Due to Non-Renewal. In the event of death, Termination Due
to Disability, Termination Without Cause, Termination for Good Reason or
Expiration of Participant’s Employment Agreement Due to Non-Renewal (in any such
case, a “Termination Event”) prior to the Performance Share Vesting Date, a
number of Performance Shares shall become Vested Performance Shares at the time
and in the manner determined as follows:
 
               (a) If the Termination Event occurs prior to the Earned
Performance Share Determination Date, then on the Earned Performance Share
Determination Date a number of Performance Shares shall be deemed Vested
Performance Shares determined by multiplying (i) that number of Performance
Shares that would have become Earned Performance Shares had no such Termination
Event occurred (but in no case in excess of 100% of the Target Number of
Performance Shares) by (ii) the ratio of the number of full months of the
Participant’s employment with the Company during the Performance Period to the
number of full months contained in the Performance Period.
 
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               (b) If the Termination Event occurs on or after the Earned
Performance Share Determination Date but prior to the Performance Share Vesting
Date, then on the date of the Termination Event a number of Performance Shares
equal to the number of Earned Performance Shares shall be deemed Vested
Performance Shares.
 
          5.4 Forfeiture of Unvested Performance Shares. Except as otherwise
provided by this Section 5 or Section 8, in the event that the Participant’s
Service terminates for any reason, the Participant shall forfeit and the Company
shall automatically reacquire all Performance Shares which are not, as of the
time of such termination, Vested Performance Shares (“Unvested Performance
Shares”). The Participant shall not be entitled to any payment for such
forfeited Performance Shares.
 
          5.5 Ownership Change Event, Dividends, Distributions and Adjustments.
Upon the occurrence of an Ownership Change Event, a dividend or distribution to
the stockholders of the Company paid in shares of Stock or other property, or
any other adjustment upon a change in the capital structure of the Company as
described in Section 4.4 of the Plan, any and all new, substituted or additional
securities or other property (other than regular, periodic dividends paid on
Stock pursuant to the Company’s dividend policy) to which the Participant is
entitled by reason of the Participant’s ownership of Unvested Performance Shares
shall be included in the terms “Performance Shares” and “Unvested Performance
Shares” for all purposes of this Section 5 with the same force and effect as the
Unvested Performance Shares immediately prior to the Ownership Change Event,
dividend, distribution or adjustment, as the case may be. For purposes of
determining the number of Vested Performance Shares following an Ownership
Change Event, dividend, distribution or adjustment, credited Service shall
include all Service with any corporation which is a Participating Company at the
time the Service is rendered, whether or not such corporation is a Participating
Company both before and after any such event.
 
          5.6 Obligation to Repay Certain Dividend Equivalent Right Payments.
The Participant shall, at the discretion of the Company, be obligated to
promptly repay to the Company upon termination of the Participant’s Service any
amounts previously paid to the Participant in cash in settlement of Dividend
Equivalent Rights credited on Unvested Performance Shares that are subsequently
forfeited pursuant to Section 5.4.
 
     6. SETTLEMENT OF THE AWARD.
 
          6.1 Issuance of Common Shares. Subject to the provisions of Section
6.3 below, the Company shall issue to the Participant on the Settlement Date
with respect to each Vested Performance Share one (1) Common Share. Common
Shares issued in settlement of Performance Shares shall not be subject to any
restriction on transfer other than such restrictions as may be required pursuant
to Section 6.3, Section 7 or the Insider Trading Policy.
 
          6.2 Beneficial Ownership of Common Shares; Certificate Registration.
The Participant hereby authorizes the Company, in its sole discretion, to
deposit for the benefit of the Participant with any broker with which the
Participant has an account relationship of which the Company has notice any or
all Common Shares acquired by the Participant pursuant to the settlement of the
Award. Except as otherwise provided by this Section, a certificate for the
Common Shares as to which the Award is settled shall be registered in the name
of the Participant, or, if applicable, in the names of the heirs of the
Participant.
 
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          6.3 Restrictions on Grant of the Award and Issuance of Common Shares.
The grant of the Award and issuance of Common Shares upon settlement of the
Award shall be subject to compliance with all applicable requirements of
federal, state law or foreign law with respect to such securities. No Common
Shares may be issued hereunder if the issuance of such shares 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 Common
Shares subject to the Award 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 settlement of the 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.
 
          6.4 Fractional Shares. The Company shall not be required to issue
fractional Common Shares upon the settlement of the Award. Any fractional share
resulting from the determination of the number of Vested Performance Shares
shall be rounded up to the nearest whole number.
 
     7. TAX WITHHOLDING.
 
          7.1 In General. At the time the Grant Notice is executed, or at any
time thereafter as requested by the Company, the Participant hereby authorizes
withholding from payroll and any other amounts payable to the Participant, and
otherwise agrees to make adequate provision for, any sums required to satisfy
the federal, state, local and foreign tax withholding obligations of the
Company, if any, which arise in connection with the Award, the vesting of the
Vested Performance Shares, or the issuance of Common Shares in settlement
thereof. The Company shall have no obligation to process the settlement of the
Award or to deliver Common Shares until the tax withholding obligations as
described in this Section have been satisfied by the Participant.
 
          7.2 Assignment of Sale Proceeds; Payment of Tax Withholding by Check.
Subject to compliance with applicable law and the Company’s Insider Trading
Policy, the Company may permit the Participant to satisfy the Participating
Company’s tax withholding obligations in accordance with procedures established
by the Company providing for either (i) delivery by the Participant to the
Company or a broker approved by the Company of properly executed instructions,
in a form approved by the Company, providing for the assignment to the Company
of the proceeds of a sale with respect to some or all of the Common Shares, or
(ii) payment by check. The Participant shall deliver written notice of any such
permitted election to the Company on a form specified by the Company for this
purpose at least thirty (30) days (or such other period established by the
Company) prior to the date on which the Company’s tax withholding obligation
arises (the “Withholding Date”). If the Participant elects payment by check, the
Participant agrees to deliver a check for the full amount of the required tax
withholding to the applicable Participating Company on or before the third
business day following the Withholding Date. If the Participant elects payment
by check but fails to make such payment as required by the preceding sentence,
the Company is hereby authorized, at its discretion, to satisfy the tax
withholding obligations through any means authorized by this Section 7,
including by directing a sale for the account of the Participant of some or all
of the Common Shares from which the required taxes shall be withheld, by
withholding from payroll and any other amounts payable to the Participant or by
withholding shares in accordance with Section 7.3.
 
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          7.3 Withholding in Common Shares. The Company may require the
Participant to satisfy its tax withholding obligations by deducting from the
Common Shares otherwise deliverable to the Participant in settlement of the
Award a number of whole Common Shares having 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.
 
     8. CHANGE IN CONTROL.
 
          8.1 Effect of Change in Control on Performance Shares. In the event of
a Change in Control prior to the Performance Share Vesting Date, a number of
Performance Shares shall be deemed Vested Performance Shares effective
immediately prior to the consummation of the Change in Control determined as
follows:
 
               (a) If the Change in Control occurs prior to the Earned
Performance Share Determination Date, then 100% of the Target Number of
Performance Shares shall be deemed Vested Performance Shares.
 
               (b) If the Change in Control occurs on or after the Earned
Performance Share Determination Date, then 100% of the Earned Performance Shares
shall be deemed Vested Performance Shares.
 
The Award shall be settled in full in accordance with Section 6 immediately
prior to the Change in Control (and such time shall be treated as the Settlement
Date for this purpose), provided that the Participant’s Service has not
terminated prior to the Change in Control. The vesting of Performance Shares and
settlement of the Award that was permissible solely by reason of this Section
shall be conditioned upon the consummation 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 acceleration
of vesting the Performance Shares or the Common Shares 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 acceleration of vesting, payment or benefit as an
“excess parachute payment” under Section 280G of the Code, the amount of any
acceleration of vesting called for by this Agreement shall not exceed the amount
which produces the greatest after-tax benefit to the Participant.
 
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               (b) Determination by Independent Accountants. Upon the occurrence
of any event that might reasonably be anticipated to result in an “excess
parachute payment” to the Participant as described in Section 8.2(a) (an
“Event”), the Company shall 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 acceleration of vesting, 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.
 
     9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
 
          Subject to any required action by the stockholders of the Company and
the requirements of Section 409A of the Code to the extent applicable, in the
event of any change in the Stock effected without receipt of consideration by
the Company, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the
Company, or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Stock (excepting normal cash
dividends) that has a material effect on the Fair Market Value of shares of
Stock, appropriate adjustments shall be made in the number of Performance Shares
and/or the number and kind of shares to be issued in settlement of the Award, in
order to prevent dilution or enlargement of the Participant’s rights under the
Award. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of
consideration by the Company.” Any fractional share resulting from an adjustment
pursuant to this Section shall be rounded down to the nearest whole number. Such
adjustments shall be determined by the Committee, and its determination shall be
final, binding and conclusive.
 
     10. RIGHTS AS A STOCKHOLDER OR EMPLOYEE.
 
          The Participant shall have no rights as a stockholder with respect to
any Common Shares which may be issued in settlement of this 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 3.3 or Section 9. If the Participant is
an Employee, the Participant understands and acknowledges that, except as
otherwise provided in a separate, written employment agreement between the
Company or a Parent or Subsidiary and the Participant, the Participant’s
employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in Service interfere in
any way with any right of the Company or any Parent or Subsidiary to terminate
the Participant’s Service at any time.
 
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     11. LEGENDS.
 
          The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing Common Shares issued pursuant to this Agreement. The Participant
shall, at the request of the Company, promptly present to the Company any and
all certificates representing shares acquired pursuant to this Award in the
possession of the Participant in order to carry out the provisions of this
Section.
 
     12. COMPLIANCE WITH SECTION 409A.
 
          It is intended that any election, payment or benefit which is made or
provided pursuant to or in connection with this Award that may result in Section
409A Deferred Compensation shall comply in all respects with the applicable
requirements of Section 409A (including applicable regulations or other
administrative guidance thereunder, as determined by the Committee in good
faith) to avoid the unfavorable tax consequences provided therein for
non-compliance. In connection with effecting such compliance with Section 409A,
the following shall apply:
 
          12.1 Required Delay in Payment to Specified Employee. If the
Participant is a “specified employee” of a publicly traded corporation as
defined under Section 409A(a)(2)(B)(i) of the Code, unless subject to an
applicable exception under Section 409A, any payment of Section 409A Deferred
Compensation in connection with a “separation from service” (as determined for
purposes of Section 409A) shall not be made until six (6) months after the
Participant’s separation from service (the “Section 409A Deferral Period”). In
the event such payments are otherwise due to be made in installments or
periodically during the Section 409A Deferral Period, to the extent permitted
under Section 409A, the payments of Section 409A Deferred Compensation which
would otherwise have been made in the Section 409A Deferral Period shall be
accumulated and paid in a lump sum as soon as the Section 409A Deferral Period
ends, and the balance of the payments shall be made as otherwise scheduled.
 
          12.2 Other Delays in Payment. Neither the Participant nor the Company
shall take any action to accelerate or delay the payment of any benefits under
this Agreement in any manner which would not be in compliance with Code Section
409A (including any transition or grandfather rules thereunder).
 
          12.3 Amendments to Comply with Section 409A; Indemnification.
Notwithstanding any other provision of this Agreement to the contrary, the
Company is authorized to amend this Agreement, to void or amend any election
made by the Participant under this Agreement and/or to delay the payment of any
monies and/or provision of any benefits in such manner as may be determined by
the Company, in its discretion, to be necessary or appropriate to comply with
Section 409A (including any transition or grandfather rules thereunder) without
prior notice to or consent of the Participant. The Participant hereby releases
and holds harmless the Company, its directors, officers and stockholders from
any and all claims that may arise from or relate to any tax liability,
penalties, interest, costs, fees or other liability incurred by the Participant
in connection with the Award, including as a result of the application of
Section 409A.
 
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          12.4 Advice of Independent Tax Advisor. The Company has not obtained a
tax ruling or other confirmation from the Internal Revenue Service with regard
to the application of Section 409A to the Award, and the Company does not
represent or warrant that this Agreement will avoid adverse tax consequences to
the Participant, including as a result of the application of Section 409A to the
Award. The Participant hereby acknowledges that he or she has been advised to
seek the advice of his or her own independent tax advisor prior to entering into
this Agreement and is not relying upon any representations of the Company or any
of its agents as to the effect of or the advisability of entering into this
Agreement.
 
     13. MISCELLANEOUS PROVISIONS.
 
          13.1 Termination or Amendment. The Committee may terminate or amend
the Plan or this Agreement at any time; provided, however, that except as
provided in Section 8 in connection with a Change in Control, no such
termination or amendment may adversely affect the Participant’s rights under
this Agreement without the consent of the Participant unless such termination or
amendment is necessary to comply with applicable law or government regulation,
including, but not limited to, Section 409A. No amendment or addition to this
Agreement shall be effective unless in writing.
 
          13.2 Nontransferability of the Award. Prior the issuance of Common
Shares on the Settlement Date, neither this Award nor any Performance Shares
subject to this Award shall 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 transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.
 
          13.3 Unfunded Obligation. The Participant shall have the status of a
general unsecured creditor of the Company. Any amounts payable to the
Participant pursuant to the Award shall be an unfunded and unsecured obligation
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 the Participant, or
otherwise create any vested or beneficial interest in the Participant or the
Participant’s creditors in any assets of the Company. The Participant 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 Award.
 
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          13.4 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
 
          13.5 Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
 
          13.6 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by the Company or a Parent or Subsidiary, or
upon deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature to the Grant Notice or at such other address as
such party may designate in writing from time to time to the other party.
 
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Grant Notice, this
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the Participant may deliver electronically the
Grant Notice to the Company or to such third party involved in administering the
Plan as the Company may designate from time to time. Such means of electronic
delivery may include but do not necessarily include the delivery of a link to a
Company intranet or the Internet site of a third party involved in administering
the Plan, the delivery of the document via e-mail or such other means of
electronic delivery specified by the Company.
 
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 13.6(a) of this Agreement and consents to
the electronic delivery of the Plan documents and Grant Notice, as described in
Section 13.6(a). The Participant acknowledges that he or she may receive from
the Company a paper copy of any documents delivered electronically at no cost to
the Participant by contacting the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 13.6(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in Section
13.6(a).
 
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          13.7 Integrated Agreement. The Grant Notice, this Agreement and the
Plan, together with the Employment Agreement, shall constitute the entire
understanding and agreement of the Participant and the Company with respect to
the subject matter contained herein or therein and supersede any prior
agreements, understandings, restrictions, representations, or warranties between
the Participant and the Company with respect to such subject matter other than
those as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of the Grant Notice, this Agreement and the
Plan shall survive any settlement of the Award and shall remain in full force
and effect.
 
          13.8 Applicable Law. This Agreement 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.
 
          13.9 Counterparts. The Grant Notice may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
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