As filed with the Securities and Exchange Commission on September 24, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
THE GAP, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 94-1697231
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Harrison Street, San Francisco, CA 94105
(Address of Principal Executive Offices)
The Gap, Inc. Nonemployee
Director Deferred Compensation Plan
(Full Title of the Plan)
Anne B. Gust, Esq.
The Gap, Inc.
One Harrison Street
San Francisco, CA 94105
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(415) 427-2000
Copies to:
John E. Aguirre, Esq.
Orrick, Herrington & Sutcliffe
400 Sansome Street
San Francisco, CA 94111
Calculation of Registration Fee
Title of Amount to Proposed Proposed Amount of
securities to be registered maximum maximum fee*
be registered offering aggregate
price per offering
share* price*
Common Stock** 200,000 $52.25 $10,450,000 $3,166.67
shares
* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), on the basis of $52.25, the average of the high
low prices of shares on the New York Stock Exchange on September 19, 1997.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this
registration statement: (i) The Gap, Inc.'s (the "Company")
latest annual report filed pursuant to Sections 13(a) or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"); (ii) all
other reports filed by the Company pursuant to Sections 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered
by the Company's latest annual report; and (iii) the description
of the Company's common stock set forth in the Company's
Registration Statement on Form 8-B relating thereto, including any
amendment or report filed for the purpose of updating such
description. All documents filed by the Company after the date of
this registration statement pursuant to Sections 13(a), 13(c), 14,
and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment (that indicates all securities offered
have been sold or deregisters all securities then remaining
unsold), shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation of the Company, as permitted in
Section 102 of the General Corporation Law of the State of
Delaware (the "GCL"), eliminates the personal liability of a
director to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability
for (i) any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law, (iii) paying a dividend or approving a stock
repurchase in violation of Delaware law, or (iv) any transaction
from which the director derived any improper personal benefit.
Under the Bylaws of the Company, each director and officer of the
Company is entitled to indemnification, to the fullest extent
permitted by the GCL as the same exists or may hereafter be
amended, against all expenses, liability and loss incurred in
connection with any action, suit or proceeding in which he or she
may be involved by reason of the fact that he or she is or was a
director or officer of the Company. Section 145 of the GCL
empowers a corporation to indemnify any director or officer, or
former director or officer against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred in
connection with any action, suit or proceeding (other than a
derivative action) by reason of the fact that he or she is or was
a director or officer or is or was serving at the request of the
corporation as an agent of another entity, if he or she acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to
any criminal action, had no reasonable cause to believe his
conduct was unlawful. In regard to a derivative action,
indemnification may not be made in respect of any matter as to
which an officer or director is adjudged to be liable unless the
Delaware Court of Chancery, or the court in which such action was
brought, shall determine such person is fairly and reasonably
entitled to indemnity.
The Company carries insurance policies in standard form
indemnifying its directors and officers against liabilities
arising from certain acts performed by them in their respective
capacities as such. The policies also provide for reimbursement
of the Company for any sums it may be required or permitted to pay
pursuant to applicable law to its directors and officers by way of
indemnification against liabilities incurred by them in their
capacities as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
4.1 The Gap, Inc. Nonemployee Director Deferred Compensation Plan
(the "Plan").
4.2 Amended and Restated Certificate of Incorporation of The Gap,
Inc. (incorporated by reference to Exhibit 3.1 to the
registrant's Annual Report on Form 10-K for the year ended
January 30, 1993, Commission File No. 1-7562).
4.3 By-Laws of The Gap, Inc. (incorporated by reference to
Exhibit C to the registrant's Proxy Statement for its May 24,
1988 annual meeting of stockholders, Commission File
No. 1-7562).
4.4 Amended Article IV of By-Laws of The Gap, Inc. (incorporated
by reference to Exhibit 4.4 to the registrant's Registration
Statement on Form S-8, Commission File No. 333-00417).
4.5 Form of Discounted Stock Option Agreement under the Plan.
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
15.1 Letter re unaudited financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney of Directors.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form
S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933 each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of the Plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Signatures
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of San Francisco, State of California on the 23rd day of
September, 1997.
THE GAP, INC.
(Registrant)
/s/ Millard S. Drexler
Millard S. Drexler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dated indicated.
Signature Title Date
Principal Executive Officer:
/s/ Millard S. Drexler President and September 23, 1997
Millard S. Drexler Chief Executive
Officer
Principal Financial and
Principal Accounting Officer:
/s/ Warren R. Hashagen Senior Vice September 23, 1997
Warren R. Hashagen President and
Chief Financial
Officer
Directors:
*
Adrian D. P. Bellamy Director September 23, 1997
*
John G. Bowes Director September 23, 1997
*
Millard S. Drexler Director September 23, 1997
*
Donald G. Fisher Director September 23, 1997
*
Doris F. Fisher Director September 23, 1997
*
Robert J. Fisher Director September 23, 1997
*
Lucie J. Fjeldstad Director September 23, 1997
*
William A. Hasler Director September 23, 1997
*
John M. Lillie Director September 23, 1997
*
Charles R. Schwab Director September 23, 1997
*
Brooks Walker, Jr. Director September 23, 1997
*
Sergio Zyman Director September 23, 1997
*By: /s/ Anne B. Gust
Anne B. Gust
Attorney-in-Fact
A majority of the members of the Board of Directors.
EXHIBIT INDEX
4.1 The Gap, Inc. Nonemployee Director Deferred Compensation Plan
(the "Plan").
4.2 Amended and Restated Certificate of Incorporation of The Gap,
Inc. (incorporated by reference to Exhibit 3.1 to the
registrant's Annual Report on Form 10-K for the year ended
January 30, 1993, Commission File No. 1-7562).
4.3 By-Laws of The Gap, Inc. (incorporated by reference to
Exhibit C to the registrant's Proxy Statement for its May 24,
1988 annual meeting of stockholders, Commission File
No. 1-7562).
4.4 Amended Article IV of By-Laws of The Gap, Inc. (incorporated
by reference to Exhibit 4.4 to the registrant's Registration
Statement on Form S-8, Commission File No. 333-00417).
4.5 Form of Discounted Stock Option Agreement under the Plan.
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
15.1 Letter re unaudited financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney of Directors.
THE GAP, INC. NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
THE GAP, INC., hereby adopts The Gap, Inc. Nonemployee
Director Deferred Compensation Plan, as follows:
1 BACKGROUND, PURPOSE AND DURATION
1.1 Effective Date. The Plan is effective as of August 26,
1997.
1.2 Purpose of the Plan. The Plan is intended to increase
incentive and to encourage Share ownership on the part of
directors of the Company who are employees of neither the Company
nor of any Affiliate, and to provide such directors with the
opportunity to defer compensation on a pre-tax basis. The Plan
also is intended to further the growth and profitability of the
Company.
2 DEFINITIONS
The following words and phrases shall have the
following meanings unless a different meaning is plainly required
by the context:
2.1 "Affiliate" means any corporation or any other entity
(including, but not limited to, partnerships and joint ventures)
controlling, controlled by, or under common control with the
Company.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Company" means The Gap, Inc., a Delaware corporation, or
any successor thereto.
2.4 "Compensation" means a Nonemployee Director's quarterly cash
retainer for serving as a Nonemployee Director. A Participant's
Compensation shall not include any other type of remuneration.
2.5 "Director" means any individual who is a member of the
Board.
2.6 "Disability" means the permanent and total disability of the
Participant, as determined by the Board in its discretion in
accordance with uniform and nondiscriminatory standards adopted
by the Board from time to time.
2.7 "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option.
2.8 "Fair Market Value" means the arithmetic mean of the highest
and lowest quoted per Share selling prices for Shares on the
relevant date, as quoted in the New York Stock Exchange Composite
Transactions Index published in the Wall Street Journal, or if
there were no sales on such date, the arithmetic mean of the
highest and lowest quoted selling prices on the nearest day after
the relevant date, as determined by the Committee.
2.9 "Fiscal Quarter" means a fiscal quarter of the Company.
2.10 "Fiscal Year" means the fiscal year of the Company.
2.11 "Grant Date" means, with respect to an Option, the date
on which the Option was granted.
2.12 "Nonemployee Director" means a Director who is an
employee of neither the Company nor of any Affiliate.
2.13 "Option" means an option to purchase Shares granted
pursuant to Sections 5.2 and 5.3.
2.14 "Option Agreement" means the written agreement setting
forth the terms and provisions applicable to each Option granted
under the Plan.
2.15 "Participant" means a Nonemployee Director who has
elected to make Compensation deferrals under the Plan and to
receive an Option in lieu of such Compensation.
2.16 "Plan" means The Gap, Inc. Nonemployee Director
Deferred Compensation Plan, as set forth in this instrument and
as hereafter amended from time to time.
2.17 "Retirement" means termination of service on the Board
on account of retirement pursuant to The Gap, Inc. Nonemployee
Director Retirement Plan.
2.18 "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, and any future
regulation amending, supplementing or superseding such
regulation.
2.19 "Shares" means the shares of the Company's common
stock, $0.05 par value.
2.20 "Termination of Service" means a cessation of the
Participant's service on the Board for any reason.
3 ADMINISTRATION
3.1 Authority of the Board. The Plan shall be administered by
the Board. It shall be the duty of the Board to administer the
Plan in accordance with the Plan's provisions. The Board shall
have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but
not limited to, the power to (a) interpret the Plan and the
Options, (b) adopt rules for the administration, interpretation
and application of the Plan as are consistent therewith, (c)
interpret, amend or revoke any such rules, and (d) adopt such
procedures and subplans as are necessary or appropriate to permit
participation in the Plan by Nonemployee Directors who are
foreign nationals or employed outside of the United States.
3.2 Delegation by the Board. The Board, in its sole discretion
and on such terms and conditions as it may provide, may delegate
all or any part of its authority and powers under the Plan to one
or more Directors or officers of the Company; provided, however,
that the Board may not delegate its authority and powers in any
way which would jeopardize the Plan's qualification under Rule
16b-3.
3.3 Decisions Binding. All determinations and decisions made by
the Board, and any delegate of the Board pursuant to the
provisions of the Plan shall be final, conclusive, and binding on
all persons, and shall be given the maximum deference permitted
by law.
4 SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in
Section 4.3, the total number of Shares available for grant under
the Plan shall not exceed 200,000. Shares issued under the Plan
shall be treasury Shares only.
4.2 Lapsed Options. If an Option terminates, expires, or lapses
for any reason, any Shares subject to such Option again shall be
available to be the subject of an Option.
4.3 Adjustments in Options and Authorized Shares. In the event
of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, Share
combination, or other change in the corporate structure of the
Company affecting the Shares, the Board shall adjust the number
and class of Shares which may be delivered under the Plan, and
the number, class, and Exercise Price of Shares subject to
outstanding Options, as the Board (in its sole discretion) shall
determine to be appropriate to prevent the dilution or diminution
of such Options. Notwithstanding the preceding, the number of
Shares subject to any Option always shall be a whole number.
5 COMPENSATION DEFERRALS AND OPTIONS
5.1 Elections by Nonemployee Directors. Each Nonemployee
Director's decision to become a Participant shall be entirely
voluntary.
5.1.1 Current Nonemployee Directors. A Nonemployee Director
who is such on August 26, 1997, may elect to become a Participant
in the Plan by electing, no later than October 31, 1997, to defer
receipt of all of his or her Compensation in exchange for an
Option. An election under this Section 5.1.1 to make
Compensation deferrals shall be effective for the remainder of
the 1997 Fiscal Year (beginning with the quarterly payment that
would be made for and in the fourth quarter ending January 31,
1998) and for each succeeding Fiscal Year, until changed by the
Nonemployee Director in accordance with such procedures as the
Board (in its discretion) may specify from time to time.
5.1.2 New Nonemployee Directors. A Nonemployee Director who
first becomes such after August 26, 1997, may elect to become a
Participant in the Plan by electing, within thirty (30) days of
the date on which he or she first becomes a Nonemployee Director,
to defer receipt of all of his or her Compensation in exchange
for an Option. An election under this Section 5.1.2 to make
Compensation deferrals shall be effective for the remainder of
the Fiscal Year in which the election is made and for each
succeeding Fiscal Year, until changed by the Nonemployee Director
in accordance with such procedures as the Board (in its
discretion) may specify from time to time.
5.1.3 Timing and Form of Elections. Notwithstanding any
contrary provision of the Plan, the Board (in its sole
discretion) shall determine the manner and deadlines for
Participants to make elections under the Plan.
5.2 Terms of Options.
5.2.1 Grant Date of Options. Each Option shall be granted on
the last business day of the Fiscal Quarter in which the
Compensation deferred by the Nonemployee Director otherwise would
have been paid to him or her.
5.2.2 Option Agreement. Each Option shall be evidenced by a
written stock option agreement which shall be executed by the
Participant and the Company.
5.2.3 Exercisability. Each Option shall be fully exercisable
on its Grant Date.
5.2.4 Not Incentive Stock Options. Options granted under the
Plan are not incentive stock options intended to meet the
requirements of section 422 of the Internal Revenue Code of 1986,
as amended.
5.2.5 Exercise. Options shall be exercised by the
Participant's delivery of a written notice of exercise to the
Secretary of the Company (or its designee), setting forth the
number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares. Upon the
exercise of any Option, the Exercise Price shall be payable to
the Company in full in cash or its equivalent. The Board, in its
sole discretion, also may permit exercise (a) by tendering
previously acquired Shares having an aggregate Fair Market Value
at the time of exercise equal to the total Exercise Price, or (b)
by any other means which the Board, in its sole discretion,
determines to both provide legal consideration for the Shares,
and to be consistent with the purposes of the Plan. As soon as
administratively practicable after receipt of a written
notification of exercise and full payment for the Shares
purchased, the Company shall deliver to the Participant (or the
Participant's designated broker), Share certificates (which may
be in book entry form) representing such Shares.
5.3 Additional Terms of Options.
5.3.1 Number of Shares. The number of Shares subject to each
Option shall be 625.
5.3.2 Exercise Price. The per Share Exercise Price for the
Shares subject to each Option shall equal (a) minus (b), divided
by (c). For purposes of this Section 5.3.2, (a) shall equal the
Fair Market Value of such Shares on the applicable Grant Date,
(b) shall equal the amount of the Participant's Compensation
deferrals for the Fiscal Quarter which includes the Grant Date,
and (c) shall equal 625. For example, if the Fair Market Value
of the Shares covered by an Option is $27,500 and the
Participant's Compensation deferrals for the Fiscal Quarter are
$9,000, the Exercise Price per Share will equal $29.60 (i.e.,
$27,500 minus $9,000, divided by 625).
5.3.3 Expiration of Options. Each Option shall terminate upon
the first to occur of the following events:
(a) The expiration of seven (7) years from the Grant
Date; or
(b) The expiration of three (3) months from the date
of the Participant's Termination of Service for a reason other
than death, Disability or Retirement; or
(c) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of Disability
or Retirement.
5.3.4 Death of Participant. Notwithstanding Section 5.3.3, if
a Director dies prior to the expiration of his or her Option
pursuant to Section 5.3.3, such Option shall terminate one (1)
year after the date of his or her death.
6 MISCELLANEOUS
6.1 No Effect on Service. Neither the establishment or
maintenance of the Plan, nor any action of the Company or the
Board, shall be held or construed to confer upon any individual
any right to continue as a member of the Board.
6.2 Indemnification. Each person who is or shall have been a
member of the Board shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit,
or proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action taken or failure to
act under the Plan or any Option Agreement, and (b) from any and
all amounts paid by him or her in settlement thereof, with the
Company's approval, or paid by him or her in satisfaction of any
judgment in any such claim, action, suit, or proceeding against
him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her
own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to
indemnify them or hold them harmless.
6.3 Successors. All obligations of the Company under the Plan,
with respect to Options granted hereunder, shall be binding on
any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.
6.4 Beneficiary Designations. If permitted by the Board, a
Participant under the Plan may name a beneficiary or
beneficiaries to whom any vested Option shall be paid in the
event of the Participant's death. Each such designation shall
revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the
Board. In the absence of any such designation, any vested Option
remaining unexercised and unexpired at the Participant's death
shall be paid to the Participant's estate and, subject to the
terms of the Plan and of the Option Agreement, any unexercised
vested Option may be exercised by the administrator or executor
of the Participant's estate.
6.5 Nontransferability of Options. No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, by the laws of
descent and distribution, or to the limited extent provided in
Section 6.4. All rights with respect to an Option granted to a
Participant shall be available during his or her lifetime only to
the Participant.
6.6 No Rights as Stockholder. Except to the limited extent
provided in Sections 6.4 and 6.5, no Participant (nor any
beneficiary) shall have any of the rights or privileges of a
stockholder of the Company with respect to any Shares issuable
pursuant to an Option, unless and until certificates representing
such Shares shall have been issued, recorded on the records of
the Company or its transfer agents or registrars, and delivered
to the Participant (or beneficiary).
6.7 Withholding Requirements. Prior to the delivery of any
Shares or cash pursuant to an Option (or exercise thereof), the
Company shall have the power and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including
the Participant's FUTA obligation) required to be withheld with
respect to such Option (or exercise thereof).
6.8 Withholding Arrangements. The Board, in its sole discretion
and pursuant to such procedures as it may specify from time to
time, may permit or require a Participant to satisfy all or part
of the tax withholding obligations in connection with an Option
by (a) having the Company withhold otherwise deliverable Shares,
or (b) delivering to the Company already-owned Shares having a
Fair Market Value equal to the amount required to be withheld.
The amount of the withholding requirement shall be deemed to
include any amount which the Board determines, not to exceed the
amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with
respect to the Option on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the
Shares to be withheld or delivered shall be determined as of the
date that the taxes are required to be withheld.
7 AMENDMENT, TERMINATION, AND DURATION
7.1 Amendment, Suspension, or Termination. The Board, in its
sole discretion, may amend or terminate the Plan, at any time and
for any reason. The amendment or termination of the Plan shall
not, without the consent of the Participant, alter or impair any
rights or obligations under any Option theretofore granted to
such Participant.
7.2 Duration of the Plan. The Plan shall commence on the date
specified herein, and subject to Section 7.1 (regarding the
Board's right to amend or terminate the Plan), shall remain in
effect thereafter.
8 LEGAL CONSTRUCTION
8.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular
shall include the plural.
8.2 Severability. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
8.3 Requirements of Law. The granting of Options and the
issuance of Shares pursuant to the exercise of Options shall be
subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national
securities exchanges as may be required.
8.4 Compliance with Rule 16b-3. All transactions under this
Plan are intended to comply with all applicable conditions of
Rule 16b-3. To the extent any provision of the Plan, an Option
Agreement or action by the Board fails to so comply, it shall be
deemed null and void, to the extent deemed advisable by the
Board. Notwithstanding any contrary provision of the Plan, if
the Board specifically determines that compliance with Rule 16b-3
no longer is required, all references in the Plan to Rule 16b-3
shall be null and void.
8.5 Governing Law. The Plan and all Option Agreements shall be
construed in accordance with and governed by the laws of the
State of California.
8.6 Captions. Captions are provided herein for convenience
only, and shall not serve as a basis for interpretation or
construction of the Plan.
EXECUTION
IN WITNESS WHEREOF, The Gap, Inc., by its duly
authorized officer, has executed the Plan on the date indicated
below.
THE GAP, INC.
Dated: August 26, 1997 By /s/ Anne B. Gust
Title: Senior Vice President
and General Counsel
[FORM OF STANDARD DISCOUNTED OPTION AGREEMENT]
THE GAP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Grant No. ______
The Gap, Inc. (the "Company") hereby grants to ___________ (the
"Director"), a stock option under The Gap, Inc. Nonemployee Director Deferred
Compensation Plan (the "Plan"), to purchase shares of common stock of the
Company, $0.05 par value ("Shares"). This option is subject to all of the
terms and conditions contained in this Agreement, including the terms and
conditions contained in the attached Appendix A. The date of this Agreement
is _______. Subject to the provisions of Appendix A and of the Plan, the
principal features of this option are as follows:
Number of Shares
Purchasable with this Option:
Price per Share:
Date Option was Granted:
Date Option is
Scheduled to become Exercisable:
Latest Date Option Expires:
As provided in this Plan and in this Agreement, this option may
terminate before the date written above, including before the option is
exercised. For example, if Director's service ends for a reason other than
death, Disability or Retirement, this option will terminate on the earlier of
its normal expiration date or three months after the date on which Director's
service ends. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE
SPECIFIC TERMS AND CONDITIONS OF THIS OPTION.
IN WITNESS WHEREOF, the Company and the Director have executed
this Agreement, in duplicate, to be effective as of the day and year first
above written.
Dated: THE GAP, INC.
Donald G. Fisher
Chairman of the Board
My signature below indicates that I understand that this option is
subject to all of the terms and conditions of this Agreement (including the
attached Appendix A) and of the Plan.
Dated: DIRECTOR
Address:
Social Security No.:
APPENDIX A
TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION
1. Grant of Option. The Company hereby grants to the Director under the
Plan a non-qualified stock option to purchase, on the terms and conditions set
forth in this Agreement and the Plan, all or any part of the number shares set
forth on page 1 of this Agreement. The option granted hereby is not intended
to be an Incentive Stock Option within the meaning of Section 422 of the Code.
2. Exercise Price. The purchase price per Share (the "Option Price") shall
be equal to the price set forth on page 1 of this Agreement, which is the fair
market value of the Shares subject to the option on the date of this
Agreement, minus the amount of the Director's Compensation deferrals for the
Fiscal Quarter which includes the date of this Agreement, and divided by 625
(rounded to the nearest whole cent). The Option Price shall be payable in the
legal tender of the United States.
3. Number of Shares. The number and class of Shares specified in paragraph
1 above, and/or the Option Price, are subject to appropriate adjustment in the
event of changes in the capital stock of the Company by reason of merger,
reorganization, consolidation, recapitalization, separation, liquidation,
stock dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares. Such adjustments shall be made
by the Board of Directors (the "Board"), whose determination in that respect
shall be final, binding and conclusive.
4. Commencement of Exercisability. The option awarded by this Agreement
shall be fully exercisable on the date of this Agreement.
5. Termination of Option. In the event of the Director's Termination of
Service for any reason other than Retirement, Disability or death, the
Director may, within three (3) months after the date of such Termination of
Service, or within seven (7) years from the date of this Agreement, whichever
shall first occur, exercise any unexercised portion of the option. In the
event of the Director's Termination of Service by reason of his or her
Retirement or Disability, the Director may, within one (1) year after the date
of such Termination of Service, or within seven (7) years from the date of
this Agreement, whichever shall first occur, exercise any unexercised portion
of the option. In the event that the Director shall die prior to the
expiration of his or her option, any unexercised portion of the option may be
exercised by the Director's beneficiary or transferee, as hereinafter
provided, for a period of one (1) year after the date of the Director's death.
6. Persons Eligible to Exercise. The option shall be exercisable during
the Director's lifetime only by the Director. The option shall be non-
transferable by the Director other than by a beneficiary designation made in a
form and manner acceptable to the Board, or by will or the applicable laws of
descent and distribution.
7. Death of Director. To the extent exercisable after the Director's
death, the option shall be exercised only by the Director's designated
beneficiary or beneficiaries, or if no such beneficiary is designated, by his
or her legal representative. Any transferee exercising the option must
furnish the Company (a) written notice of his or her status as transferee, (b)
evidence satisfactory to the Company to establish the validity of the transfer
of the option and compliance with any laws or regulations pertaining to said
transfer, and (c) written acceptance of the terms and conditions of the option
as prescribed in this Agreement.
8. Exercise of Option. The option may be exercised by the person then
entitled to do so as to any Shares which may then be purchased by giving
written notice of exercise to the Company, specifying the number of full
Shares to be purchased and accompanied by full payment of the purchase price
thereof (and the amount of any income tax the Company is required by law to
withhold by reason of such exercise).
9. No Rights of Stockholder. Neither the Director nor any person claiming
under or through said Director shall be or have any of the rights or
privileges of a stockholder of the Company in respect of any of the Shares
issuable upon the exercise of the option, unless and until certificates
representing such Shares shall have been issued, recorded on the records of
the Company or its transfer agents or registrars, and delivered to Director.
10. No Effect on Service. Nothing in this Agreement shall confer upon the
Director the right to continue in service on the Board.
11. Addresses for Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company, in care of its Law
Department, at The Gap, Inc., One Harrison Street, San Francisco, California
94105, or at such other address as the Company may hereafter designate in
writing. Any notice to be given to the Director shall be addressed to the
Director at the address set forth beneath the Director's signature hereto, or
at such other address as the Director may hereafter designate in writing. Any
such notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, registered or certified and
deposited, postage and registry fee prepaid, in a United States post office.
12. Non-Transferability of Option. Except as otherwise herein provided, the
option herein granted and the rights and privileges conferred hereby shall not
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of said option, or of any
right or privilege conferred hereby, contrary to the provisions hereof, or
upon any attempted sale under any execution, attachment or similar process
upon the rights and privileges conferred hereby, said option and the rights
and privileges conferred hereby shall immediately become null and void.
13. Maximum Term of Option. Notwithstanding any other provision of this
Agreement except the last sentence of Paragraph 5 above relating to the death
of the Director (in which case this option is exercisable to the extent set
forth therein), this option is not exercisable after the expiration of seven
(7) years from the date of this Agreement.
14. Binding Agreement. Subject to the limitation on the transferability of
the option contained herein, this Agreement shall be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
15. Plan Governs. This Agreement is subject to all the terms and provisions
of the Plan. In the event of a conflict between one or more provisions of
this Agreement and one or more provisions of the Plan, the provisions of the
Plan shall govern. Terms used and not defined in this Agreement shall have
the meaning set forth in the Plan.
16. Board Authority. The Board shall have the power to interpret the Plan
and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Board in good faith shall be final and binding
upon Director, the Company and all other interested persons. No member of the
Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.
17. Captions. Captions provided herein are for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
18. Agreement Severable. In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have
any effect on, the remaining provisions of this Agreement.
19. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Director expressly
warrants that he or she is not executing this Agreement in reliance on any
promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.
September 22, 1997
The Gap, Inc.
One Harrison Street
San Francisco, CA 94105
Re: The Gap, Inc. Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we are rendering this opinion in
connection with the proposed issuance pursuant to The Gap, Inc.
Nonemployee Director Deferred Compensation Plan (the "Plan"), of
up to 200,000 shares of common stock, $0.05 par value ("Common
Stock"), of The Gap, Inc., a Delaware corporation (the "Company").
We have examined instruments, documents, and records
which we deemed relevant and necessary for the basis of our
opinion hereinafter expressed. In such examination, we have
assumed the following: (a) the authenticity of original documents
and the genuineness of all signatures; (b) the conformity to the
originals of all documents submitted to us as copies; and (c) the
truth, accuracy, and completeness of the information,
representations, and warranties contained in the records,
documents, instruments, and certificates we have reviewed.
Based on such examination, we are of the opinion that
the 200,000 shares of Common Stock to be issued by the Company
pursuant to the Plan are validly authorized shares of Common
Stock, and, when issued in accordance with the provisions of the
Plan, will be legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to this Registration Statement on Form S-8 and to the use
of our name wherever it appears in the Registration Statement. In
giving such consent, we do not consider that we are "experts"
within the meaning of such term as used in the Securities Act of
1933, as amended, or the rules and regulations of the Securities
and Exchange Commission issued thereunder with respect to any part
of the Registration Statement, including this opinion, as an
exhibit or otherwise.
Very truly yours,
/s/ ORRICK, HERRINGTON & SUTCLIFFE LLP
ORRICK, HERRINGTON & SUTCLIFFE LLP
Deloitte &
Touche LLP
50 Fremont Street Telephone: (415)247-4000
San Francisco, California 94105-2230 Facsimile: (415)247-4329
September 22, 1997
The Gap, Inc.
One Harrison Street
San Francisco, California, 94105
We have made a review, in accordance with standards established by
the American Institute of Certified Public Accountants, of the
unaudited interim financial information of The Gap, Inc. and
subsidiaries for the periods ended August 2, 1997, August 3,1996,
May 3, 1997, and May 4, 1996, as indicated in our reports dated
August 12, 1997, and May 14, 1997 respectively; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were
included in your Quarterly Reports on Form 10-Q for the quarters
ended August 2, 1997, and May 3, 1997, are being used in this
Registration Statement on Form S-8.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not considered a
part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
San Francisco, California
Deloitte &
Touche LLP
50 Fremont Street Telephone: (415)247-4000
San Francisco, California 94105-2230 Facsimile: (415)247-4329
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The Gap, Inc. on Form S-8 of our report dated
February 27, 1997 incorporated by reference in the Annual Report
on Form 10-K of The Gap, Inc. for the year ended February 1, 1997.
/s/Deloitte & Touche LLP
San Francisco, California
September 22, 1997
POWER OF ATTORNEY OF DIRECTORS
KNOW BY ALL PERSONS BY THESE PRESENTS:
Each of the undersigned hereby constitutes and appoints
Donald G. Fisher and Anne B. Gust, each of them with power to act
alone, his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to
sign a Registration Statement on Form S-8 relating to 200,000
shares of common stock issuable under The Gap, Inc. Nonemployee
Director Deferred Compensation Plan, and any and all amendments of
such Registration Statements, including post-effective amendments,
and to file the same, together with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto such attorney-in-fact full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises
hereof, as fully to all intents and purposes as he or she might do
or could do in person, thereby ratifying and confirming all that
said attorney-in-fact or his or her substitutes may lawfully do or
cause to be done by virtue hereof.
/s/ Adrian D.P. Bellamy Date: August 26, 1997
Adrian D. P. Bellamy
/s/ John G. Bowes Date: August 26, 1997
John G. Bowes
/s/ Millard S. Drexeler Date: August 26, 1997
Millard S. Drexler
/s/ Donald G. Fisher Date: August 26, 1997
Donald G. Fisher
/s/ Doris F. Fisher Date: August 26, 1997
Doris F. Fisher
/s/ Robert J. Fisher Date: August 26, 1997
Robert J. Fisher
/s/ Lucie J. Fjeldstad Date: August 26, 1997
Lucie J. Fjeldstad
/s/ William A. Hasler Date: August 26, 1997
William A. Hasler
/s/ John M. Lillie Date: August 26, 1997
John M. Lillie
/s/ Charles R. Schwab Date: August 26, 1997
Charles R. Schwab
/s/ Brooks Walker, Jr. Date: August 26, 1997
Brooks Walker, Jr.
/s/ Sergio Zyman Date: August 26, 1997
Sergio Zyman
