As filed with the Securities and Exchange Commission on April 19, 1999
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. 1999 Stock Option Plan
(Full Title of the Plan)
Lauri Shanahan, 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.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Calculation of Registration Fee
Title of Amount to Proposed Proposed Amount of
securities to be maximum maximum fee*
be registered registered offering aggregate
price per offering
share* price*
Common 15,000,000 $69.625 $1,044,375,000 $290,336.25
Stock shares
* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), on the basis of $69.625, the average of the high
and low prices of shares on the New York Stock Exchange on April 15, 1999.
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, as a matter of contractual right, 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. 1999 Stock Option 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 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of The Gap, Inc. (incorporated by reference to Exhibit (3)
to the registrant's Quarterly Report on Form 10-Q for the quarter ended
May 2, 1998, Commission File No. 1-7562).
4.4 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).
4.5 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).
4.6 Form of nonqualified stock option agreement under the Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
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 16th day
of April, 1999.
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
Millard S. Drexler President and Chief Executive April 16, 1999
Officer
Principal Financial and
Principal Accounting Officer:
/s/ WARREN R. HASHAGEN
Warren R. Hashagen Senior Vice President and April 16, 1999
Chief Financial Officer
Directors:
*
Adrian D. P. Bellamy Director April 16, 1999
*
Evan S. Dobelle Director April 16, 1999
*
Millard S. Drexler Director April 16, 1999
*
Donald G. Fisher Director April 16, 1999
*
Doris F. Fisher Director April 16, 1999
*
Robert J. Fisher Director April 16, 1999
*
Glenda A. Hatchett Director April 16, 1999
*
John M. Lillie Director April 16,1999
*
Charles R. Schwab Director April 16,1999
*
Brooks Walker, Jr. Director April 16,1999
*
Sergio S. Zyman Director April 16,1999
*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. 1999 Stock Option 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 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of The Gap, Inc. (incorporated by reference to Exhibit (3)
to the registrant's Quarterly Report on Form 10-Q for the quarter ended
May 2, 1998, Commission File No. 1-7562).
4.4 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).
4.5 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).
4.6 Form of nonqualified stock option agreement under the Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
is contained in Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney of Directors.
THE GAP, INC.
1999 STOCK OPTION PLAN
THE GAP, INC., hereby adopts the 1999 Stock Option Plan, effective
as of March 29, 1999, as follows:
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1 Background and Effective Date. The Plan is effective as of
March 29, 1999. The Plan is intended to increase incentive and to encourage
Share ownership on the part of eligible non-officer regular employees of the
Company and its Affiliates by providing grants of nonqualified stock options
to such employees. The Plan also is intended to further the growth and
profitability of the Company.
SECTION 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) that the
Committee (in its discretion) determines to be controlling, controlled by, or
under common control with the Company.
2.2 "Board" or "Board of Directors" means the Board of
Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated
under such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
2.4 "Company" means The Gap, Inc., a Delaware corporation, or
any successor thereto.
2.5 "Committee" means the committee appointed by the Board
(pursuant to Section 3.1) to administer the Plan. As of the effective date of
the Plan, the Plan shall be administered by the Compensation and Stock Option
Committee of the Board.
2.6 "Disability" means a permanent and total disability as
determined by the Committee in accordance with uniform and non-discriminatory
standards adopted by the Committee (in its discretion) from time to time.
2.7 "Eligible Employee" means an Employee who, as of the Grant
Date, is not an Officer of the Company.
2.8 "Employee" means any regular full-time or part-time
employee of the Company or of any designated Affiliate. The Committee, in its
sole discretion, shall determine which Affiliates shall be designated for
purposes of this Section 2.8.
2.9 "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option.
2.10 "Fair Market Value" means the fair market value of a share
on the relevant date, as determined by the Committee in good faith.
Notwithstanding the preceding, for federal, state, and local income tax
purposes, fair market value shall be determined by the Committee (or its
delegate) in accordance with uniform and nondiscriminatory standards adopted
from time to time.
2.11 "Grant Date" means, with respect to an option, the date
that the Option is granted.
2.12 "Incentive Stock Option" means an option to purchase
Shares which is designated as an Incentive Stock Option and is intended to
meet the requirements of section 422 of the Code.
2.13 "Nonqualified Stock Option" means an option to purchase
Shares which is not intended to be an Incentive Stock Option.
2.14 "Officer" means any Employee of the Company who is at
least one of the following: (a) an officer of the Corporation, (b) an officer
of an Affiliate, or (c) a member of the Board.
2.15 "Option" means a Nonqualified Stock Option.
2.16 "Option Agreement" means the written agreement setting
forth the terms and provisions applicable to each Option granted under the
Plan. The Committee, in its discretion, shall determine the form of each
Option Agreement and any conditions that must be satisfied in order for each
Option Agreement to be effective.
2.17 "Participant" means an Eligible Employee who has an
outstanding Option.
2.18 "Plan" means the 1999 Stock Option Plan, as set forth in
this instrument and as hereafter amended from time to time.
2.19 "Retirement" means a Termination of Employment by reason
of the Participant's retirement at or after his or her normal retirement date
under GapShare (the Company's "401(k)" plan), or any successor plan.
2.20 "Shares" means the shares of the Company's common stock,
$0.05 par value.
2.21 "Termination of Employment" means a cessation of the
employee-employer relationship between a Participant and the Company or an
Affiliate for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate.
SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the
Committee. The members of the Committee shall be appointed from time to time
by, and shall serve at the pleasure of, the Board of Directors.
3.2 Authority of the Committee. It shall be the duty of the
Committee to administer the Plan in accordance with the Plan's provisions.
The Committee 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) prescribe the terms and conditions of the Options,
(b) interpret the Plan and the Options, (c) adopt such sub-plans or rules as
may be necessary or appropriate to permit participation in the Plan by
Eligible Employees who are not United States citizens or residents, (d) adopt
rules for the administration, interpretation and application of the Plan as
are consistent therewith, and (e) interpret, amend or revoke any such rules.
3.3 Delegation by the Committee. The Committee, 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.
3.4 Decisions Binding. All determinations and decisions made by
the Committee, the Board, and any delegate of the Committee 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.
SECTION 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 15,000,000. Shares granted under the Plan may be either
authorized but unissued Shares or treasury Shares.
4.2 Lapsed Options. If an Option terminates, expires, or lapses
for any reason, any Shares subject to such Option shall again be available to
be the subject of another 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 Committee
shall adjust the number and class of Shares which may be delivered under the
Plan, the number, class, and price of Shares subject to outstanding Options,
and the maximum number of Shares which may be granted to an Eligible Employee
within one (1) fiscal year of the Company, in such manner as the Committee (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.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and provisions of
the Plan, Options may be granted to Eligible Employees. The Committee, in its
sole discretion shall determine which Eligible Employees, if any, are granted
Options under the Plan, and shall determine the number of Shares subject to
each such Option. The Committee, in its sole discretion, shall determine the
Grant Date for each Option.
5.2 Option Agreement. Each Option shall be evidenced by an
Option Agreement that shall specify the Exercise Price, the expiration date of
the Option, the number of Shares to which the Option pertains, any conditions
to the exercise of the Option and such other terms and conditions as the
Committee, in its discretion, shall determine. The Option Agreement shall
specify that the Option is intended to be a Nonqualified Stock Option.
5.3 Exercise Price. The Exercise Price for each Option shall be
determined by the Committee in its sole discretion, but the Exercise Price
shall be not less than twenty-five percent (25%) of the Fair Market Value of a
Share on the Grant Date.
5.4 Expiration of Options. Each Option shall terminate no later
than the first to occur of the following events:
(a) The date for termination of the Option set forth in
the written Option Agreement; or
(b) The expiration of ten (10) years from the Grant Date;
or
(c) The expiration of three (3) months from the date of
the Participant's Termination of Employment for a reason other than the
Participant's death or Retirement; or
(d) The expiration of one (1) year from the date of the
Participant's Termination of Employment by reason of Retirement or
death.
5.5 Exercisability of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions and
conditions, as the Committee shall determine in its sole discretion.
5.6 Payment. Options shall be exercised by the Participant's
delivery of a 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, and accompanied by full payment for the Shares. The form
of the notice of exercise shall be determined in the discretion of the
Secretary of the Company (or its designee). Upon the exercise of any Option,
the Exercise Price shall be payable to the Company in full (in United States
dollars) in cash or its equivalent. The Secretary of the Company (or its
designee), in its sole discretion, also may permit exercise by a "same day
sale" using a broker or brokers approved in advance by the Secretary of the
Company (or its designee) for such an arrangement. As soon as 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.
5.7 Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option as it may deem advisable, including, but not limited to, restrictions
related to applicable federal securities laws, the requirements of any
national securities exchange or system upon which Shares are then listed or
traded, or any blue sky or state securities laws.
SECTION 6
MISCELLANEOUS
6.1 No Effect on Employment. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Employment. Employment with the Company and its
Affiliates is on an at-will basis only.
6.2 Indemnification. The Committee, its delegates (if any) and
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 in the discretion of
the Secretary of the Company (or its designee), a Participant under the Plan
may name a beneficiary or beneficiaries to whom any vested but unpaid 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 Secretary of the Company
(or its designee). In the absence of any such designation, any vested
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate and, subject to the terms of the Plan and of the
applicable 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. 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 pursuant to an Option, 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 any taxes required to be withheld with respect to
such Option or its exercise, including (but not way of limitation) income
taxes and payroll taxes of any taxing authority whose laws or rules are
applicable to the Participant.
SECTION 7
AMENDMENT, TERMINATION, AND DURATION
7.1 Amendment, Suspension, or Termination. The Board, in its
sole discretion, may amend or terminate the Plan, or any part thereof, at any
time and for any reason. The amendment, suspension, 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. No Option may be granted during any period of suspension or
after termination of the Plan.
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.
SECTION 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 under the Plan 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 Governing Law. The Plan and all Option Agreements shall be
construed in accordance with and governed by the laws of the State of
California (with the exception of its conflict of laws provisions).
8.5 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 as of the date indicated below.
THE GAP, INC.
Dated: March 29, 1999 By: /s/ ANNE B. GUST
Anne B. Gust
Executive Vice President
Grant No. ________
THE GAP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
The Gap, Inc. (the "Company") hereby grants to
_________________________ (the "Employee"), a stock option under The Gap, Inc.
1999 Stock Option 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 the Plan and in this Agreement, this option may
terminate before the date written above, including before the option becomes
exercisable or is exercised. For example, if Employee's employment ends
before the date this option becomes exercisable, this option will terminate at
the same time as Employee's employment terminates. See paragraphs 5, 6 and 7
of Appendix A for further information concerning how changes in employment
affect termination of this option. 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 Employee have executed
this Agreement, in duplicate, to be effective as of the date first above
written.
THE GAP, INC.
Dated: ________ ________________________________________________
Millard S. Drexler
President and Chief Executive Officer
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.
EMPLOYEE
Dated: _______________________ _________________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Social Security No.:
________________________
APPENDIX A
TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION
1. Grant of Option. The Company hereby grants to Employee under
the Plan, as a separate incentive in connection with his or her employment and
not in lieu of any salary or other compensation for his or her services, 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 of 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.
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 stock dividends, split-ups or combinations of shares,
reclassifications, mergers, consolidations, reorganizations or liquidations.
Subject to any required action of the stockholders of the Company, if the
Company shall be the surviving corporation in any merger or consolidation, the
option granted hereunder (to the extent that it is still outstanding) shall
pertain to and apply to the securities to which a holder of the same number of
Shares that are then subject to the option would have been entitled. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Compensation and Stock Option
Committee of the Company's Board of Directors (the "Committee"), whose
determination in that respect shall be final, binding and conclusive.
4. Commencement of Exercisability. Except as otherwise provided
in this Agreement, the right to exercise the option awarded by this Agreement
shall accrue as set forth on page 1 of this Agreement, assuming that Employee
is still employed with the Company or an Affiliate through such date(s). If
Employee is not employed on such date(s), the option shall terminate, as set
out in paragraph 7.
5. Postponement of Exercisability. Notwithstanding paragraph 4
or any other provision of this Agreement, prior to the date this option is
scheduled to become exercisable, the Committee, in its sole discretion, may
determine that the right to exercise the option awarded by this Agreement
shall accrue on a date later than such date. The Committee shall exercise
its power to postpone the commencement of exercisability only if the
Committee, in its sole discretion, determines that Employee has taken a
personal leave of absence (as defined from time to time by the Committee)
since the date of this Agreement. The duration of the period of postponement
shall equal the duration of the personal leave of absence. If Employee does
not return from the personal leave of absence, the option shall terminate as
set out in paragraph 7.
6. Elimination of Exercisability. Notwithstanding paragraph 4 or
any other provision of this Agreement, prior to the date this option is
scheduled to become exercisable, the Committee, in its sole discretion, may
determine that the right to exercise the option awarded by this Agreement
shall never accrue as to all or part of the Shares specified in paragraph 1
(and as adjusted pursuant to paragraph 3, if appropriate), in which case
the option shall terminate as to such Shares. The Committee shall exercise
such power only if the Committee, in its sole discretion, determines that
(a) Employee's employment with the Company or an Affiliate has been reduced
to less than a full-time basis, and/or (b) Employee has transferred to a
position which, under the Committee's then existing policy, normally would
not qualify Employee to be granted options under the Plan or to be granted
the number of options granted under this Agreement.
7. Termination of Option. In the event that Employee's
employment with the Company or an Affiliate terminates for any reason other
than Retirement (as defined in the Plan) or death, this option shall
immediately thereupon terminate. In the event of Employee's Retirement,
Employee may, within one (1) year after the date of such Retirement, or
within ten (10) years from the date of this Agreement, whichever shall first
occur, exercise any unexercised portion of the option (whether or not
exercisable). In the event that Employee shall die while in the employ of
the Company or an Affiliate, any unexercised portion of the option (whether
or not exercisable) may be exercised by Employee's beneficiary or transferee,
as hereinafter provided, for a period of one (1) year after the date of
Employee's death or within ten (10) years from the date of this Agreement,
whichever shall first occur. Notwithstanding the preceding two sentences,
in the event that within one year of the date of this Agreement, Employee
dies or terminates employment due to Retirement, this option shall
immediately thereupon terminate.
8. Persons Eligible to Exercise. The option shall be
exercisable during Employee's lifetime only by Employee. The option shall
be non-transferable by Employee other than by a beneficiary designation made
in a form and manner acceptable to the Committee, or by will or the
applicable laws of descent and distribution.
9. Death of Employee. To the extent exercisable after
Employee's death, the option shall be exercised only by Employee's designated
beneficiary or beneficiaries, or if no beneficiary survives Employee, by the
person or persons entitled to the option under Employee's will, or if
Employee shall fail to make testamentary disposition of the option, 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.
10. 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
(a) 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
determines is required to be withheld by reason of such exercise), and (b)
by giving satisfactory assurances in writing if requested by the Company,
signed by the person exercising the option, that the Shares to be purchased
upon such exercise are being purchased for investment and not with a view to
the distribution thereof.
11. No Rights of Stockholder. Neither Employee nor any person
claiming under or through said Employee 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 Employee.
12. No Right to Continued Employment. Employee understands and
agrees that this Agreement does not impact in any way the right of the Company,
or the Affiliate employing Employee, as the case may be, to terminate or
change the terms of the employment of Employee at any time for any reason
whatsoever, with or without good cause. Employee understands and agrees that
his or her employment is "at-will" and that either the Company or Employee
may terminate Employee's employment at any time and for any reason. Employee
also understands and agrees that his or her "at-will" status can only be
changed by an express written contract signed by an authorized officer of
the Company and Employee.
13. 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, San Francisco,
California 94105, or at such other address as the Company may hereafter
designate in writing. Any notice to be given to Employee shall be addressed
to Employee at the address set forth beneath Employee's signature hereto, or
at such other address as Employee 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.
14. 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.
15. Maximum Term of Option. Notwithstanding any other provision
of this Agreement, this option is not exercisable after the expiration of ten
(10) years from the date of this Agreement.
16. 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.
17. Plan Governs. This Agreement is subject to all 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.
18. Committee Authority. The Committee 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 Committee in good faith
shall be final and binding upon Employee, the Company and all other
interested persons. No member of the Committee shall be personally liable
for any action, determination or interpretation made in good faith with
respect to the Plan or this Agreement.
19. Captions. Captions provided herein are for convenience only
and are not to serve as a basis for interpretation or construction of this
Agreement.
20. Modification to this Agreement. This Agreement constitutes
the entire understanding of the parties on the subjects covered. Employee
expressly warrants that he or she is not accepting 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.
21. 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.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Telephone 650-493-9300
Facsimile 650-493-6811
www.wsgr.com
April 13, 1999
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. 1999 Stock Option Plan (the
"Plan"), of up to 15,000,000 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 15,000,000
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/ WILSON SONSINI GOODRICH & ROSATI
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
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 25, 1999, appearing in
and incorporated by reference in the Annual Report on Form 10-K of The Gap,
Inc. for the year ended January 30, 1999.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
April 15, 1999
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
15,000,000 shares of common stock issuable under The Gap, Inc. 1999 Stock
Option Plan, and any and all amendments of such Registration Statement,
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: March 30, 1999
Adrian D. P. Bellamy
/s/ EVAN S. DOBELLE Date: March 30, 1999
Evan S. Dobelle
/s/ MILLARD S. DREXLER Date: March 30, 1999
Millard S. Drexler
/s/ DONALD G. FISHER Date: March 30, 1999
Donald G. Fisher
/s/ DORIS F. FISHER Date: March 30, 1999
Doris F. Fisher
/s/ ROBERT J. FISHER Date: March 30, 1999
Robert J. Fisher
/s/ GLENDA A. HATCHETT Date: March 30, 1999
Glenda A. Hatchett
/s/ JOHN M. LILLIE Date: March 30, 1999
John M. Lillie
/s/ CHARLES R. SCHWAB Date: March 30, 1999
Charles R. Schwab
/s/ BROOKS WALKER, JR. Date: March 30, 1999
Brooks Walker, Jr.
/s/ SERGIO ZYMAN Date: March 30, 1999
Sergio Zyman
