Item 1.01 Entry into a Material Definitive Agreement.

Second Amendment to Employment Agreement of Michael Balmuth

On May 18, 2005, Ross Stores, Inc. (the “Company”) entered into a Second Amendment to the employment agreement with Michael Balmuth, the Company’s Vice Chairman of the Board, President and Chief Executive Officer (the “Second Amendment”).  Mr. Balmuth and the Company had previously entered into an Employment Agreement effective May 31, 2001 and a First Amendment to the Employment Agreement effective January 30, 2003 (together, the original Agreement and First Amendment to the Employment Agreement are the “Original Agreement”).

The Second Amendment (a) extends the term of Mr. Balmuth’s employment to January 29, 2009, subject to further extension or termination as provided therein, (b) establishes his position as Vice Chairman of the Board, President and Chief Executive Officer of the Company, (c) establishes his base salary at $938,000 per year, subject to adjustment as provided therein, (d) provides for payment to Mr. Balmuth each year of an amount sufficient to cover the total premiums on certain life insurance policies on Mr. Balmuth’s life with an aggregate face value of $12 million, plus the amount necessary to cover any federal, state and local income tax liability of Mr. Balmuth attributable to the premium amounts, and (e) adds provisions pertaining to compliance with Section 409A of the Internal Revenue Code (concerning the treatment of nonqualified deferred compensation plans), including provision for further modifications to be made at the election of Mr. Balmuth to the extent he determines that compliance with Section 409A will benefit him, and provision for payment of interest to Mr. Balmuth on the principal amount of any payments or benefits for which payment is delayed to a date six months or more following the date of termination of Mr. Balmuth’s employment.  The Second Amendment also provides that Mr. Balmuth is solely responsible for any additional tax or interest imposed by Section 409A as a result of his failure to elect any modification to his employment agreement.

Other terms and conditions of the Original Agreement were left unchanged.  A description of the terms of the Original Agreement can be found under the heading “Employment Contracts, Termination of Employment and Change in Control Arrangements” in the Company’s definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, filed with the SEC on April 14, 2005.

Amendment to Standard Terms of Options for Non-employee Directors

On May 17, 2005, the Compensation Committee of the Company’s Board of Directors approved an amendment to the Company’s 2004 Equity Incentive Plan, to provide that options granted on or after May 19, 2005 to non-employee directors will remain exercisable (by the director or the director’s guardian or legal representative) for sixty months after the date on which the director resigns from service on the Board of Directors, or (if shorter) until the option expiration date, if such resignation constitutes retirement, which is defined as resignation after attaining the age of 55 and after at least ten years of service as a member of the Board of Directors.