<PAGE>
As filed with the Securities and Exchange Commission on January 22, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
THE GAP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1697231
(State of Incorporation) (I.R.S. Employer Identification No.)
One Harrison Street, San Francisco, California 94105, (415) 427-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
LAURI SHANAHAN, ESQ.
Senior Vice President and General Counsel
The Gap, Inc.
One Harrison Street, San Francisco, California 94105
(415) 427-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<CAPTION>
<S> <C>
JOHN F. SEEGAL, ESQ. JOHN L. SAVVA, ESQ.
MARIE B. RIEHLE, ESQ. Sullivan & Cromwell
Orrick, Herrington & Sutcliffe LLP 1888 Century Park East
Old Federal Reserve Building Suite 2100
400 Sansome Street Los Angeles, California 90067
San Francisco, California 94111 (310) 712-6600
(415) 392-1122
</TABLE>
---------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered* per Unit** Offering Price** Registration Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities................. $500,000,000 100% $500,000,000 $139,000
======================================================================================================
</TABLE>
* Or, if any Debt Securities are issued (i) with a principal amount
denominated in one or more foreign currencies or currency units, such
principal amount as shall result in an aggregate initial offering price
equivalent to $500,000,000 at the time of initial offering, or (ii) at an
original issue discount, such greater principal amount as shall result in
proceeds to the registrant of $500,000,000.
** Estimated solely for the purpose of calculating the registration fee.
Exclusive of accrued interest, if any.
---------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated January 22, 1999
$500,000,000
[LOGO OF GAP INC.]
Debt Securities
-------------
The Gap, Inc. may from time to time issue up to $500,000,000 aggregate
principal amount of Debt Securities. The accompanying Prospectus Supplement
will specify the terms of the securities.
The Gap, Inc. may sell these securities to or through underwriters, and also
to other purchasers or through agents. The names of any underwriters or agents
involved in the sale of the securities will be set forth in the accompanying
Prospectus Supplement.
-------------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
-------------
Prospectus dated , 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov. Reports, proxy material and other information about us can
also be inspected at the offices of the New York and Pacific Stock Exchanges.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below as well as all future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), until we sell
all the Debt Securities:
(a) Our Annual Report on Form 10-K for the fiscal year ended January 31,
1998; and
(b) Our Quarterly Reports on Form 10-Q for the fiscal quarters ended May
2, 1998, August 1, 1998 and October 31, 1998.
This Prospectus is part of a Registration Statement on Form S-3 (the
"Registration Statement") we filed with the SEC under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC. You
should look at the Registration Statement and its exhibits for further
information about us and about the Debt Securities.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
The Gap, Inc.
One Harrison Street
San Francisco, CA 94105
Attention: Investor Relations
Telephone: 1-800-GAP-NEWS.
In addition, documents incorporated by reference in this Prospectus are made
available by the SEC to any person through (i) the public reference facilities
maintained by the SEC by calling the SEC at 1-800-SEC-0330 and (ii) the SEC's
Internet site at http://www.sec.gov.
2
<PAGE>
THE COMPANY
General
The Gap, Inc. (together with its subsidiaries, the "Company") is an
international specialty retailer which operates stores selling casual apparel,
personal care and other accessories for men, women and children under the Gap,
GapKids, babyGap, Banana Republic and Old Navy brands. As of January 2, 1999,
the Company operated 2,430 stores in the United States, Canada, the United
Kingdom, France, Germany and Japan.
The Company designs virtually all of its products for sale under its brands
in Company-operated stores. These brands and their corresponding store formats
collectively are positioned to address a broad consumer base. The Company
operates the following store formats:
Gap, GapKids and babyGap. Founded in 1969, Gap stores offer extensive
selections of classically-styled, high quality, casual apparel at moderate
price points. Products range from wardrobe basics, such as denim, khakis
and T-shirts, to accessories and personal care products for men and women
aged teen to adult. At January 2, 1999, the Company operated 1,108 Gap
stores, including 161 in international locations. One hundred of the
domestic stores are Gap Outlet stores. The Company entered the children's
apparel market with the introduction of GapKids in 1986 and babyGap in
1989. These stores offer casual basics, outerwear, shoes and other
accessories in the tradition of Gap style and quality for children aged
newborn through teen. At January 2, 1999, the Company operated a total of
634 GapKids and babyGap stores, including 128 in international locations.
Banana Republic. Acquired in 1983 with two stores, Banana Republic now
offers sophisticated, fashionable collections of dress-casual and tailored
clothing and accessories for men and women at higher price points. At
January 2, 1999, the Company operated 290 Banana Republic stores, including
9 in Canada.
Old Navy. The Company launched Old Navy in 1994 to address the market
for value-priced family apparel. Old Navy offers broad selections of
apparel, shoes and accessories for adults, children and infants in an
innovative, exciting shopping environment. At January 2, 1999, the Company
operated 398 Old Navy stores.
Direct. The Company established "Gap Online" in 1997, a web-based store
located at www.gap.com. Products from Gap, GapKids and babyGap stores can
be purchased on-line. In 1998, Banana Republic reintroduced its catalog
format, which offers clothing and accessories comparable to those carried
in its collections, and is aimed at developing a closer relationship with
its customer base.
The Company's executive offices are located at One Harrison Street, San
Francisco, California 94105, and its telephone number is (415) 427-2000.
Recent Developments
The Company has been named as a defendant in two lawsuits relating to
sourcing of products from Saipan (Commonwealth of the Northern Mariana
Islands). A complaint was filed on January 13, 1999 in California Superior
Court in San Francisco by the Union of Needletrades Industrial and Textile
Employees, AFL-CIO; Global Exchange; Sweatshop Watch; and Asian Law Caucus
against the Company and 17 other parties. The plaintiffs allege violations of
California's unlawful, fraudulent and unfair business practices and untrue and
misleading advertising statutes in connection with labeling of product and
labor practices regarding workers of factories that make product for the
Company in Saipan. The plaintiffs seek injunctive relief, restitution,
disgorgement of profits and other damages. A second complaint was filed on
January 13, 1999 in Federal District Court, Central
3
<PAGE>
District of California, by various unidentified worker plantiffs against the
Company and 25 other parties. Those unidentified worker plaintiffs seek class-
action status and allege, among other things, that the Company violated the
Racketeer Influenced and Corrupt Organizations Act in connection with the labor
practices and treatment of workers of factories in Saipan that make product for
the Company. The plaintiffs seek injunctive relief as well as actual and
punitive damages.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby will be
used by the Company as set forth in a Prospectus Supplement relating to such
Debt Securities. Except as otherwise specified in the Prospectus Supplement
relating to a particular series of Debt Securities, the net proceeds from any
offering will be used for general corporate purposes, including expansion of
stores, distribution centers and headquarters facilities, brand investment,
development of additional distribution channels and repurchase of the Company's
common stock pursuant to the Company's ongoing share repurchase program.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated:
<TABLE>
<CAPTION>
Fiscal Year Ended Nine Months Ended
--------------------------------------------------------------- ----------------------
January 29, January 28, February 3, February 1, January 31, November 1, October 31,
1994 1995 1996 1997 1998 1997 1998
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
3.81 4.07 3.92 4.18 4.01 2.96 3.52
</TABLE>
For purposes of computing the ratios of earnings to fixed charges, earnings
consist of income before taxes plus fixed charges (less capitalized interest),
and fixed charges consist of interest expense, capitalized interest and the
portion of rental expense under operating leases representative of an interest
factor.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (as amended or
supplemented from time to time, the "Indenture") between the Company and Harris
Trust Company of California, as Trustee (the "Trustee"), a copy of which is
incorporated by reference as an exhibit to the Registration Statement. The
statements herein relating to the Debt Securities and the following summaries
of certain provisions of the Indenture do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain
terms, and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Wherever particular sections or defined terms of the Indenture are
referred to in this Prospectus or in a Prospectus Supplement, such sections or
defined terms are incorporated herein or therein by reference.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") and the extent, if
any, to which such general terms and provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating
to such Offered Debt Securities (the "Applicable Prospectus Supplement").
General
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and Debt Securities may be issued thereunder from time to
time in one or more series. The Debt
4
<PAGE>
Securities will be unsecured and unsubordinated obligations of the Company and
will rank equally and ratably with other unsecured and unsubordinated
obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the office
or agency to be maintained by the Company in The City of New York and at any
other office or agency maintained by the Company for this purpose. (Sections
301, 305 and 1002) The Debt Securities will be issued only in fully registered
form without coupons and, unless otherwise indicated in the Applicable
Prospectus Supplement, in denominations of $1,000 or integral multiples of
$1,000. (Section 302) No service charge will be made for any registration of
transfer or exchange of the Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith. (Section 305)
The Applicable Prospectus Supplement will describe the terms of the Offered
Debt Securities, including:
(1) the title of the Offered Debt Securities;
(2) any limit on the aggregate principal amount of the Offered Debt
Securities;
(3) the person or entity to whom any interest on the Offered Debt
Securities shall be payable, if other than the person or entity in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest;
(4) the date or dates on which the principal of and premium, if any, on
the Offered Debt Securities is payable or the method of determination
thereof;
(5) the rate or rates at which the Offered Debt Securities shall bear
interest, if any, or the method of calculating the rate or rates of
interest, the date or dates from which any interest shall accrue or
the method by which the date or dates shall be determined, the
Interest Payment Dates on which any interest shall be payable and the
Regular Record Date for interest payable on any Interest Payment Date;
(6) the place or places where the principal of, premium, if any, and
interest on the Offered Debt Securities shall be payable;
(7) the period or periods within which, the price or prices at which, the
currency or currencies (including currency units) in which and the
other terms and conditions upon which the Offered Debt Securities may
be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase the
Offered Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a holder and the period or periods
within which, the price or prices at which and the other terms and
conditions upon which the Offered Debt Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple of
$1,000, the denominations in which the Offered Debt Securities shall
be issuable;
(10) the currency, currencies or currency units in which payment of the
principal of and any premium and interest on any Offered Debt
Securities shall be payable if other than the currency of the United
States of America and the manner of determining the equivalent thereof
in the currency of the United States of America;
(11) if the amount of payments of principal of or any premium or interest
on any Offered Debt Securities may be determined with reference to an
index, formula or other method, the index, formula or other method by
which these amounts shall be determined;
5
<PAGE>
(12) if the principal of or any premium or interest on any Offered Debt
Securities is to be payable, at the election of the Company or a
holder, in one or more currencies or currency units other than that or
those in which the Debt Securities are stated to be payable, the
currency, currencies or currency units in which payment of the
principal of and any premium and interest on the Offered Debt
Securities as to which such election is made shall be payable, and the
periods within which and the other terms and conditions upon which
such election is to be made;
(13) if other than the principal amount, the portion of the principal
amount of the Offered Debt Securities which shall be payable upon
declaration of acceleration of maturity or the method by which the
portion may be determined;
(14) the applicability of the provisions described under "Defeasance of
Offered Debt Securities or Certain Covenants in Certain
Circumstances";
(15) if the Offered Debt Securities will be issuable only in the form of
one or more Global Debt Securities as described under "Global Debt
Securities", the Depositary or its nominee with respect to the Offered
Debt Securities and the circumstances under which the Global Debt
Security may be registered for transfer or exchange or authenticated
and delivered in the name of a person or entity other than the
Depositary or its nominee; and
(16) any other terms of the Offered Debt Securities.
(Section 301)
Debt Securities may be issued under the Indenture as Original Issue Discount
Debt Securities to be offered and sold at a substantial discount below their
stated principal amount. Special Federal income tax, accounting and other
considerations applicable thereto will be described in the Prospectus
Supplement relating thereto. "Original Issue Discount Debt Security" means any
Debt Security which provides for an amount less than the principal amount to be
due and payable upon a declaration of acceleration of maturity upon the
occurrence and continuance of an Event of Default. (Section 101)
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units, if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, material U.S. federal income tax considerations and other
information with respect to such issue of Debt Securities and such foreign
currency or currency units will be set forth in the Applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest, if any, on any series of Debt Securities,
material U.S. federal income tax, accounting and other considerations
applicable thereto will be described in the Applicable Prospectus Supplement.
Global Debt Securities
The following description of Global Debt Securities will apply to any series
of Debt Securities except as otherwise provided in the Applicable Prospectus
Supplement.
The Debt Securities of a series may be issued in the form of one or more
Global Debt Securities that will be deposited with or on behalf of a
Depositary, which will be a clearing agent registered under the Exchange Act.
Global Debt Securities will be registered in the name of the Depositary or a
nominee of the Depositary, will be deposited with the Depositary or nominee or
a custodian therefor and will bear a legend regarding the restrictions on
exchanges and registration of transfer and any other matters as may be provided
for pursuant to the Indenture. Unless and until it is exchanged in whole or in
part for Debt Securities in definitive certificated form, a Global Debt
Security may not be transferred or exchanged except as a whole by the
Depositary for such Global Debt Security to a
6
<PAGE>
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any nominee to a
successor Depositary for such series or a nominee of a successor Depositary, or
except in the circumstances described in the Applicable Prospectus Supplement.
(Section 305)
Upon the issuance of any Global Debt Security, and the deposit of the Global
Debt Security with or on behalf of the Depositary for the Global Debt Security,
the Depositary will credit on its book-entry registration and transfer system
the respective principal amounts of the Debt Securities represented by the
Global Debt Security to the accounts of institutions ("Participants") that have
accounts with the Depositary. The accounts to be credited will be designated by
the underwriters or agents engaging in the distribution of the Debt Securities
or by the Company, if the Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Debt Security will be
limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in a Global Debt Security will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary for the Global Debt Security or by its
nominee. Ownership of beneficial interests in the Global Debt Security by
persons who hold through Participants will be shown on, and the transfer of
beneficial interests within such Participants will be effected only through,
records maintained by those Participants. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of
securities in definitive form. These laws may impair the ability to transfer
beneficial interests in a Global Debt Security.
So long as the Depositary for a Global Debt Security, or its nominee, is the
owner of that Global Debt Security, the Depositary or its nominee, as the case
may be, will be considered the sole owner or holder of the Debt Security
represented by that Global Debt Security for all purposes under the Indenture.
Accordingly, each person owning a beneficial interest in the Global Debt
Security must rely on the procedures of the Depositary and, if the person is
not a Participant, on the procedures of the Participant through which that
person owns its interest, to exercise any rights of a holder under the
Indenture. The Company understands that under existing industry practices, if
it requests any action of holders or if an owner of a beneficial interest in a
Global Debt Security desires to give or take any instruction or action which a
holder is entitled to give or take under the Indenture, the Depositary would
authorize the Participants holding the relevant beneficial interests to give or
take that instruction or action, and the Participants would authorize
beneficial owners owning through those Participants to give or take that
instruction or action or would otherwise act upon the instructions of
beneficial owners holding through them.
Unless otherwise specified in the Applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest, if any, on the Debt
Securities represented by a Global Debt Security registered in the name of the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of that Global Debt Security. The Company
expects that the Depositary for any Debt Securities represented by a Global
Debt Security, upon receipt of any payment of principal or interest in respect
of the Global Debt Security, will credit immediately Participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the Global Debt Security as shown on the records of the Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in the Global Debt Security held through those Participants will be
governed by standing instructions and customary practices, as is now the case
with securities in bearer form held for the accounts of customers or registered
in "street name", and will be the responsibility of those Participants. None of
the Company, the Trustee or any agent of the Company or the Trustee shall have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial interests in any Global Debt Security,
or for maintaining, supervising or reviewing any records relating to those
beneficial interests.
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<PAGE>
A Global Debt Security shall be exchangeable for Debt Securities in
certificated registered form, of like tenor and of an equal aggregate principal
amount, only if:
(a) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for that Global Debt Security or if at any time
the Depositary ceases to be a clearing agency registered under the
Exchange Act;
(b) the Company in its sole discretion determines that such Global Debt
Security shall be exchangeable for Debt Securities in certificated
registered form; or
(c) there shall have occurred and be continuing an Event of Default with
respect to the Debt Securities.
Any Global Debt Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Debt Securities registered in the name or
names of such person or persons as the Depositary shall instruct the Trustee.
It is expected that these instructions may be based upon directions received by
the Depositary from its Participants with respect to ownership of beneficial
interests in the Global Debt Security.
Events of Default
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series:
(a) failure to pay any interest on any Debt Security of that series when
due, continued for 30 days;
(b) failure to pay principal of or any premium on any Debt Security of that
series when due;
(c) failure to deposit any sinking fund payment, when due, in respect of
any Debt Security of that series;
(d) failure to perform, or breach of, any covenant or warranty of the
Company in the Indenture with respect to Debt Securities of that series
continued for 60 days after written notice as provided in the
Indenture;
(e) a default under any indebtedness for money borrowed by the Company or
any Subsidiary if (A) the default either (1) results from the failure
to pay the principal of any such indebtedness at its stated maturity or
(2) relates to an obligation other than the obligation to pay the
principal of such indebtedness at its stated maturity and results in
such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, (B) the
principal amount of such indebtedness, together with the principal
amount of any other such indebtedness in default for failure to pay
principal at stated maturity or the maturity of which has been so
accelerated, aggregates $25,000,000 or more at any one time outstanding
and (C) such indebtedness is not discharged, or such acceleration is
not rescinded or annulled, within 10 business days after written notice
as provided in the Indenture;
(f) certain events of bankruptcy, insolvency or reorganization of the
Company; or
(g) any other Event of Default provided with respect to Debt Securities of
that series.
(Section 501)
If an Event of Default (other than an Event of Default described in clause
(f) of the preceding paragraph) with respect to the Debt Securities of any
series at the time Outstanding shall occur and be continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series may accelerate the maturity of all
Debt Securities of that series; provided, however, that after such
acceleration, but before a judgment or decree based on acceleration, the
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities
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<PAGE>
of that series may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
If an Event of Default described in clause (f) of the immediately preceding
paragraph occurs, the Outstanding Debt Securities will ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder. (Section 502)
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Debt
Securities for the particular provisions relating to acceleration of the Stated
Maturity of a portion of the principal amount of such series of Original Issue
Discount Debt Securities upon the occurrence of an Event of Default and the
continuation thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Debt Securities, unless such
holders shall have offered to the Trustee reasonable indemnity. (Section 603)
Subject to such provisions for the indemnification of the Trustee and to
certain other conditions, the holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series. (Section 512)
No holder of Debt Securities of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless that holder shall have previously given to the Trustee written notice of
a continuing Event of Default and unless the holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. (Section 507)
However, these limitations do not apply to a suit instituted by a holder of
Debt Securities for enforcement of payment of the principal of and premium, if
any, or interest on such Debt Securities on or after the respective due dates
expressed in such Debt Securities. (Section 508)
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1004)
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of the holders of any of the Debt Securities in
order
(1) to evidence the succession of another entity to the Company and the
assumption of the covenants and obligations of the Company under the
Debt Securities and the Indenture by such successor to the Company;
(2) to add to the covenants of the Company for the benefit of the holders
of all or any series of Debt Securities or to surrender any right or
power conferred on the Company by the Indenture;
(3) to add additional Events of Default with respect to any series of Debt
Securities;
(4) to add to or change any provisions to such extent as may be necessary
to permit or facilitate the issuance of Debt Securities in bearer form
or to facilitate the issuance of Global Debt Securities;
(5) to add to, change or eliminate any provision affecting only Debt
Securities not yet issued;
9
<PAGE>
(6) to secure the Debt Securities;
(7) to establish the form or terms of Debt Securities of any series;
(8) to evidence and provide for successor Trustees or to add or change any
provisions to such extent as may be necessary to provide for or
facilitate the appointment of a separate Trustee or Trustees for
specific series of Debt Securities;
(9) to permit payment in respect of Debt Securities in bearer form in the
United States to the extent allowed by law; or
(10) to cure any ambiguity, to correct or supplement any mistaken or
inconsistent provisions or to make any other provisions with respect
to matters or questions arising under the Indenture, provided that any
such action (other than in respect of a mistaken provision) does not
adversely affect in any material respect the interests of any holder
of Debt Securities of any series then outstanding.
(Section 901)
Modifications and amendments of the Indenture also may be made by the
Company and the Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series issued under the Indenture and affected by the modification or
amendments; provided, however, that no modification or amendment may, without
the consent of the holders of all Debt Securities affected thereby,
(1) change the Stated Maturity of the principal amount of, or any
installment of principal of or interest on, any Debt Security;
(2) reduce the principal amount of, or the premium, if any, or (except as
otherwise provided in the Applicable Prospectus Supplement) interest
on any Debt Security (including in the case of an Original Issue
Discount Debt Security the amount payable upon acceleration of
maturity);
(3) change the place or currency of payment of principal of, premium, if
any, or interest on any Debt Security;
(4) impair the right to institute suit for the enforcement of any payment
on any Debt Security on or after its Stated Maturity (or in the case
of redemption, on or after the Redemption Date); or
(5) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose holders is required for
modification or amendment of the Indenture or for waiver of compliance
with certain provisions of the Indenture or for waiver of certain
defaults.
(Section 902)
The holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all holders of Debt
Securities of that series, waive compliance by the Company with certain
restrictive provisions of the Indenture. (Section 1008) The holders of not less
than a majority in aggregate principal amount of the Outstanding Debt
Securities of any series may, on behalf of all holders of Debt Securities of
that series, waive any past default under the Indenture, except a default in
the payment of principal, premium or interest or in respect of a covenant or
provision of the Indenture that cannot be modified or amended without the
consent of the holder of each Outstanding Debt Security of such series affected
thereby. (Section 513)
No Protection In the Event of a Change of Control
Unless otherwise set forth in the Applicable Prospectus Supplement, the Debt
Securities will not contain any provisions which may afford holders of the Debt
Securities protection in the event of a change in control of the Company or in
the event of a highly leveraged transaction (whether or not the transaction
results in a change in control of the Company).
10
<PAGE>
Covenants
Unless otherwise set forth in the Applicable Prospectus Supplement, and
except as set forth below, the Debt Securities will not contain any restrictive
covenants, including covenants restricting the Company or any of its
Subsidiaries from incurring, issuing, assuming or guaranteeing any indebtedness
or encumbering any property of the Company or any subsidiary, or restricting
the Company or any Subsidiary from transferring assets or entering into any
sale and leaseback transaction.
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge with or into any other entity
or transfer or lease its assets substantially as an entirety to any entity,
unless
(1) either the Company is the continuing corporation, or any successor or
purchaser is a corporation, partnership or trust organized under the
laws of the United States of America, any State or the District of
Columbia, and the successor or purchaser expressly assumes the
Company's obligations on the Debt Securities under a supplemental
indenture,
(2) immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing, and
(3) if a supplemental indenture is to be executed in connection with such
consolidation, merger, transfer or lease, the Company has delivered to
the Trustee an officers' certificate and an opinion of counsel stating
compliance with these provisions.
(Section 801)
Defeasance of Offered Debt Securities or Certain Covenants in Certain
Circumstances
Defeasance and Discharge
The Indenture provides that the terms of any series of Debt Securities may
provide the Company with the option to be discharged from any and all
obligations in respect of the Debt Securities of such series (except for
certain transfer and administrative duties) upon the deposit with the Trustee,
in trust, of money and/or U.S. Government Obligations which, through the
payment of interest and principal in accordance with their terms, will provide
money in an amount sufficient to pay any installment of principal (and premium,
if any) and interest on, and any mandatory sinking fund payments in respect of,
the Debt Securities of such series on the Stated Maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Discharge
may only occur if, among other things, the Company has delivered to the Trustee
an opinion of counsel to the effect that the Company has received from, or
there has been published by, the United States Internal Revenue Service a
ruling, or there has been a change in tax law, in either case to the effect
that such discharge will not be deemed, or result in, a taxable event with
respect to holders of the Debt Securities of such series. (Sections 1302 and
1304)
Defeasance of Certain Covenants
The Indenture provides that the terms of any series of Debt Securities may
provide the Company with the option to omit to comply with the restrictive
covenant described in this Prospectus under "Consolidation, Merger and Sale of
Assets" and any other covenants made applicable to any series of Debt
Securities as described in the Applicable Prospectus Supplement. The Company,
in order to exercise this option, will be required to deposit with the Trustee
money and/or U.S. Government Obligations which, through the payment of interest
and principal in accordance with their terms, will provide money in an amount
sufficient to pay principal (and premium, if any) and interest on, and any
mandatory sinking fund payments in respect of, the Debt Securities of such
series on the Stated Maturity of such payments in accordance with the terms of
the Indenture and such Debt Securities. The
11
<PAGE>
Company will also be required to deliver to the Trustee an opinion of counsel
to the effect that the deposit and related covenant defeasance will not cause
the holders of the Debt Securities of such series to recognize income, gain or
loss for federal income tax purposes. (Sections 1303 and 1304)
In the event the Company exercises this option and the Debt Securities of
such series are declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series at the time of their Stated Maturity but may not be sufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments.
The Applicable Prospectus Supplement will state if any defeasance provisions
will apply to the Offered Debt Securities.
Concerning the Trustee
Harris Trust Company of California, a California trust company, is the
Trustee under the Indenture. The Trustee may resign at any time or may be
removed by the holders of at least a majority in aggregate principal amount of
the Outstanding Debt Securities. If the Trustee resigns, is removed or becomes
incapable of acting as Trustee or if a vacancy occurs in the office of the
Trustee for any cause, a successor Trustee shall be appointed in accordance
with the provisions of the Indenture.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through one or more underwriters
or dealers and also may sell Debt Securities to other investors directly or
through agents.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to those
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and those dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on
the resale of Debt Securities by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any underwriter or agent
will be identified, and any compensation received from the Company will be
described, in the applicable Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
VALIDITY OF THE DEBT SECURITIES
The validity of the Debt Securities will be passed upon by Orrick,
Herrington & Sutcliffe LLP, San Francisco, California, and, unless otherwise
indicated in a Prospectus Supplement relating to Offered Debt Securities, by
Sullivan & Cromwell, Los Angeles, California, counsel for the underwriters or
agents.
12
<PAGE>
EXPERTS
The consolidated financial statements of the Company as of January 31, 1998
and February 1, 1997 and for each of the three fiscal years in the period ended
January 31, 1998, incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended May 2, 1998 and May 3, 1997, and for the periods ended August 1, 1998 and
August 2, 1997, and for the periods ended October 31, 1998 and November 1, 1997
which is incorporated herein by reference, Deloitte & Touche LLP have applied
limited procedures in accordance with professional standards for a review of
such information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended May 2, 1998, August 1,
1998 and October 31, 1998 and incorporated by reference herein, they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Securities Act.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of expenses of the Company in
connection with the issue of the Debt Securities.
<TABLE>
<S> <C>
Registration fee................................................ $ 139,000
Rating Agencies fees............................................ 250,000
Fees and expenses of Trustee.................................... 7,000
Printing expenses............................................... 30,000
Blue Sky and legal investment fees and expense.................. 10,000
Accountants' fees and expenses.................................. 75,000
Counsel fees and expenses....................................... 30,000
Miscellaneous................................................... 4,000
---------
Total......................................................... $ 545,000
=========
</TABLE>
All except the first of the foregoing amounts are estimates.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware Corporation Law authorizes a court to award or a
corporation's board of directors to grant indemnity to officers and directors
in terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act. The Registrant's By-laws provide for
indemnification of the Registrant's directors and officers to the maximum
extent permitted by the Delaware law.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Indenture, dated as of September 1, 1997, between the Company and
Harris Trust Company of California, as Trustee (incorporated by
reference to Exhibit 4 to the Company's Quarterly Report on Form 10-
Q for the quarter ended November 1, 1997, SEC's File No. 1-7562).
4.2 Form of Debt Security (included in Exhibit 4.1 hereto).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP as to the validity of
the Debt Securities.
12.1 Statement Setting Forth Computation of Ratio of Earnings to Fixed
Charges.
15.1 Letter re unaudited interim financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 The consent of Orrick, Herrington & Sutcliffe LLP is contained in
the opinion filed as Exhibit 5.1 to this Registration Statement.
24.1 Powers of Attorney of Directors and Officers of the Company (set
forth on the signature pages to this Registration Statement).
25.1 Form T-1 Statement of Eligibility and Qualification of Harris Trust
Company of California, as Trustee.
</TABLE>
II-1
<PAGE>
Item 17. Undertakings.
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;
(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) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
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 (i) and (ii) shall not apply if 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 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act 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.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, 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 against the registrant 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.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on the 22nd
day of January, 1999.
The Gap, Inc.
(Registrant)
By:/s/ Millard S. Drexler
___________________________________
Name:Millard S. Drexler
Title:Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints Millard S. Drexler,
Warren R. Hashagen and Anne B. Gust, and each of them, as his or her true and
lawful attorneys-in-fact and agents 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 any or all amendments (including post-effective
amendments) to this Registration Statement or any subsequent registration
statements pursuant to Rule 462 (including any amendments thereto), and to file
the same, with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the foregoing, as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them or their substitutes, may lawfully do or cause to be
done by virtue hereof.
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 dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Millard S. Drexler Chief Executive Officer and January 22, 1999
____________________________________ Director (Principal
Millard S. Drexler Executive Officer)
/s/ Warren R. Hashagen Senior Vice President and January 22, 1999
____________________________________ Chief Financial Officer
Warren R. Hashagen (Principal Financial and
Accounting Officer)
/s/ Donald G. Fisher Chairman and Director January 22, 1999
____________________________________
Donald G. Fisher
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Adrian D. P. Bellamy Director January 22, 1999
____________________________________
Adrian D. P. Bellamy
/s/ Doris F. Fisher Director January 22, 1999
____________________________________
Doris F. Fisher
/s/ Robert J. Fisher Director January 22, 1999
____________________________________
Robert J. Fisher
/s/ John M. Lillie Director January 22, 1999
____________________________________
John M. Lillie
/s/ Charles R. Schwab Director January 22, 1999
____________________________________
Charles R. Schwab
/s/ Brooks Walker, Jr. Director January 22, 1999
____________________________________
Brooks Walker, Jr.
/s/ Sergio S. Zyman Director January 22, 1999
____________________________________
Sergio S. Zyman
</TABLE>
II-4
<PAGE>
EXHIBIT 1.1
The Gap, Inc.
Debt Securities
-----------------------------------------
Underwriting Agreement
----------------------
, 1999
---------------
[Name(s) of Co-Representative(s)],
[Address]
Ladies and Gentlemen:
From time to time, The Gap, Inc., a Delaware corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain of its debt securities (the "Securities") specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of
<PAGE>
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-_______) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement, but
including all documents incorporated by reference in the prospectus
contained therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form heretofore
delivered to the Representatives); and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement, any
post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the Initial Registration Statement
became effective but excluding Form T-1, each as amended at the time such
part of the Initial Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended
2
<PAGE>
(the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and in the case of a registration statement which
became effective under the Act, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and in
the case of other documents filed under the Act or the Exchange Act with
the Commission, did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made when such
documents were so filed, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such documents were so filed,
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Securities;
3
<PAGE>
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there has not been any change in the capital stock (other
than upon exercise of options issued pursuant to the Company's stock option
plans, the issuance and cancellation of restricted stock pursuant to the
Company's restricted stock plans, the issuance of Common Stock pursuant to
the Company's 401(k) Plan and Employee Stock Purchase Plan, and the
repurchase of Common Stock pursuant to the Company's stock repurchase
program) or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which will
be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will constitute
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or supplemented
with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject, which conflict,
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breach or violation would (x) have a material adverse effect on the current
or future consolidated financial position, stockholders' equity or results
of operations of the Company and its Subsidiaries or (y) adversely affect
the validity of the Securities, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or the Indenture, except such as have
been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(i) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, or insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair;
(j) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound, which violation or
default would have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
and
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries are, to the Company's
knowledge, independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder.
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3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by check or wire
transfer in the funds specified in such Pricing Agreement, all in the manner and
at the place and time and date specified in such Pricing Agreement or at such
other place and time and date as the Representatives and the Company may agree
upon in writing, such time and date being herein called the "Time of Delivery"
for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities promptly
after reasonable notice thereof; to advise the Representatives promptly of
any such amendment or supplement after such Time of Delivery and furnish
the Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to promptly use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws
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<PAGE>
of such jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the day next
succeeding the date of the Pricing Agreement for such Designated Securities
that is a Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in New York are not generally authorized or obligated by law
or executive order to close (each such day, a "New York Business Day"), to
furnish the Underwriters with copies of the Prospectus in New York City as
amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the later of
(i) the termination of trading restrictions for such Designated Securities,
as notified to the Company by the Representatives and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without the prior
written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b) in respect of the
offering and sale of any Designated Securities, to file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 p.m., Washington, D.C. time, on the date of the Pricing Agreement
for such Designated Securities, and, at the time of filing, to either pay
to the Commission the filing fee for the Rule 462(b) Registration Statement
or
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<PAGE>
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities
rating services for rating the Securities;(v) the cost of preparing the
Securities; (vi) the fees and expenses of any Trustee and any agent of any
Trustee and the fees and disbursements of counsel for any Trustee in connection
with any Indenture and the Securities; and (vii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b) in respect of the offering and sale of any Designated Securities,
the applicable Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of the Pricing
Agreement for such Designated Securities; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of such
opinion is attached as Annex
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<PAGE>
II(a) hereto), dated the Time of Delivery for such Designated Securities,
with respect to the incorporation of the Company, the Indenture, the
Designated Securities, the Registration Statement, the Prospectus, as
amended or supplemented, as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Orrick, Herrington & Sutcliffe LLP, counsel for the Company, shall
have furnished to the Representatives their written opinion (a draft of
such opinion is attached as Annex II(b) hereto), dated the Time of Delivery
for such Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) When authenticated and issued in accordance with the
Indenture, the Designated Securities will constitute valid and legally
binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and will
be entitled to the benefits provided by the Indenture; and the
Designated Securities and the Indenture conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(ii) The Indenture constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(iii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any statute, rule or regulation
known to such counsel, which conflict, breach or violation would
individually or in the aggregate (x) have a material adverse effect on
the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries or
(y) adversely affect the validity of the Designated Securities;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required
for the issue and sale of the Designated Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Designated Securities by the Underwriters;
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<PAGE>
(v) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Notes",
insofar as they purport to constitute a summary of the terms of the
Debt Securities, and insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate
and fair in all material respects;
(vi) Based on the intended use of proceeds from the sale of the
Securities and the Company's current business operations, it is not
necessary to register the Company under the Investment Company Act;
and
(vii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery for the Designated
Securities (other than the financial statements and related schedules
and financial data derived from accounting records therein and the
Statement of Eligibility of the Trustee on Form T-1, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Trust Indenture Act and the
rules and regulations thereunder.
(d) Lauri Shanahan, Senior Vice President and General Counsel of the
Company, shall have furnished to the Representatives her written opinion (a
draft of such opinion is attached as Annex II(c) hereto), dated the Time of
Delivery for such Designated Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority
to own its properties and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented;
(iii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject, which would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and
delivered by the Company;
(v) The Designated Securities and the Indenture have been duly
authorized, executed and delivered by the Company;
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<PAGE>
(vi) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument known to such
counsel to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, which conflict, breach, violation or default would (x) have a
material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries or (y) adversely affect the validity
of the Designated Securities, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or By-
laws of the Company or any order of any court or governmental agency
or body having jurisdiction over the Company or any of its material
properties;
(vii) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules and financial data derived from accounting records
included therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and
(viii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery for the Designated
Securities (other than the financial statements and related schedules
and financial data derived from accounting records included therein
and the Statement of Eligibility of the Trustee on Form T-1, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although she does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
nothing has come to her attention that would lead her to believe that,
as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules and
financial data derived from accounting records included therein and
the Statements of Eligibility of the Trustee on Form T-1, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial
statements and related schedules and financial data derived from
accounting records therein and the Statements of Eligibility of the
Trustee on Form T-1, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary
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<PAGE>
to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules and financial data derived
from accounting records therein and the Statement of Eligibility of
the Trustee on Form T-1, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and she does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required.
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at the Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex III hereto, and with respect
to such letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Securities any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall not have been any change in the capital
stock (other than upon exercise of options issued pursuant to the Company's
stock option plans, the issuance of restricted stock pursuant to the
Company's restricted stock plans, the issuance of Common Stock pursuant to
the Company's 401(k) Plan and Employee Stock Purchase Plan and the
repurchase of Common Stock pursuant to the Company's stock repurchase
program) or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the
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Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York or California State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms
and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the applicable Pricing Agreement;
and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (f) of this Section and as to such other matters as
the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other
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<PAGE>
prospectus relating to the Securities, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to
14
<PAGE>
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Securities and not joint.
15
<PAGE>
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Designated Securities, or the
Company notifies the Representatives that it has so arranged for the purchase of
such Designated Securities, the Representatives or the Company shall have the
right to postpone the Time of Delivery for such Designated Securities for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase
16
<PAGE>
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: General Counsel; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such
17
<PAGE>
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
18
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us ____ counterparts hereof.
Very truly yours,
The Gap, Inc.
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Co-Representative(s)
By: ...............................
Name:
Title:]
19
<PAGE>
ANNEX I
Pricing Agreement
-----------------
[Name(s) of Co-Representative(s)],
As Representatives of the several
Underwriters named in Schedule I hereto,
[Address]
, 199_
Ladies and Gentlemen:
The Gap, Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
_______________________, 1999 (the "Underwriting Agreement"), between the
Company on the one hand and [Name(s) of Co-Representative(s)] on the other hand,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us ______ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the
1
<PAGE>
Underwriters, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
The Gap, Inc.
By: ________________________________
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Co-Representative(s)]
By: ________________________________
Name:
Title:
On behalf of each of the Underwriters
2
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
- ----------- ----------
<S> <C>
[Name(s) of Co-Representative(s)]...................... $
[Names of other Underwriters]..........................
----------
Total.................................................. $
==========
</TABLE>
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued
amortization[, if any,] from to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the Representatives]]
[Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.]
Specified funds for payment of purchase price:
[Same day funds]
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated , 19 , between the Company and
, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
<PAGE>
Interest Payment Dates:
[months and dates, commencing _____________________, 19__]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before , %,
and if] redeemed during the 12-month period beginning ,
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
</TABLE>
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount
plus accrued interest[, together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional [$ ]
principal amount of Designated Securities in the years through at
100% of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
II-2
<PAGE>
Extendable provisions:
Designated Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with accrued
interest. The initial annual interest rate will be %, and thereafter
the annual interest rate will be adjusted on , and
to a rate not less than % of the effective annual interest rate on U.S.
Treasury obligations with -year maturities as of the [insert date 15
days prior to maturity date] prior to such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ] [to an annual
rate of % above the average rate for -year [month][securities]
[certificates of deposit] issued by and [insert names of banks].]
[and the annual interest rate [thereafter] [from through ] will be
the interest yield equivalent of the weekly average per annum market discount
rate for -month Treasury bills plus % of Interest Differential (the
excess, if any, of (i) the then current weekly average per annum secondary
market yield for -month certificates of deposit over (ii) the then current
interest yield equivalent of the weekly average per annum market discount
rate for -month Treasury bills); [from and thereafter the rate will
be the then current interest yield equivalent plus % of Interest
Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms] :
II-3
<PAGE>
ANNEX III
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been separately furnished to the representative or
representatives of the Underwriters (the "Representatives") such term to
include an Underwriter or Underwriters who act without any firm being
designated as its or their representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their reports
thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for financial
and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the
<PAGE>
foregoing procedures that caused them to believe that this information does
not conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
III-2
<PAGE>
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
III-3
<PAGE>
Exhibit 5.1
January 22, 1999
The Gap, Inc.
One Harrison Street
San Francisco, CA 94105
Re: The Gap, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement"), in the form to be filed by The Gap, Inc. (the
"Company") with the Securities and Exchange Commission (the "SEC") in connection
with the registration under the Securities Act of 1933, as amended (the "Act"),
of the Company's debt securities (the "Debt Securities"). The Debt Securities
are to be issued under an Indenture (the "Indenture"), dated as of September 1,
1997, between the Company and Harris Trust Company of California, as Trustee
(the "Trustee"), which has been incorporated by reference as an exhibit to the
Registration Statement. The Debt Securities are to be issued pursuant to an
Underwriting Agreement (the "Underwriting Agreement"), in the form filed as an
exhibit to the Registration Statement. The Debt Securities are to be issued in
the form set forth in the Indenture. The Debt Securities are to be sold from
time to time as set forth in the Registration Statement, the Prospectus (the
"Prospectus") and the supplements to the Prospectus (the "Prospectus
Supplements").
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:
1. When the issuance of Debt Securities has been duly authorized by
appropriate corporate action and the Debt Securities, in the form set forth in
the Indenture, have been duly completed, executed, authenticated and delivered
in accordance with the Indenture and sold pursuant to the Underwriting Agreement
and as described in the Registration Statement, any amendment thereto, the
Prospectus and any Prospectus Supplement relating thereto, the Debt Securities
will be legal, valid and binding obligations of the Company, entitled to the
benefits of such Indenture.
<PAGE>
Page 2
The Gap, Inc.
January 22, 1999
Our opinion that any document is legal, valid and binding is qualified as
to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the rights of creditors generally; and
(b) general principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
We hereby consent to the filing of this opinion as an exhibit to the above-
referenced Registration Statement and to the use of our name wherever it appears
in the Registration Statement, the Prospectus, the Prospectus Supplement, and in
any amendment or supplement thereto. In giving such consent, we do not believe
that we are "experts" within the meaning of such term as used in the Act or the
rules and regulations of the SEC 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
<PAGE>
The Gap, Inc. Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Fiscal Year Ended Nine Months Ended
--------------------------------------------------------------- ----------------------
Jan 29, Jan 28, Feb 3, Feb 1, Jan 31, Nov. 1, Oct. 31,
1994 1995 1996 1997 1998 1997 1998
--------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Before Income Taxes 424,888 529,322 585,199 748,527 854,242 509,256 817,102
Add:
Interest Expense 7,624 5,795 5,490 5,529 17,779 5,901 34,221
Interest on rental expense 143,447 166,892 195,168 218,403 250,025 240,455 279,910
--------------------------------------------------------------- ----------------------
Earnings 575,959 702,009 785,857 972,459 1,122,046 755,612 1,131,233
=============================================================== =====================
Interest Expense 7,624 5,795 5,490 5,529 17,779 5,901 34,221
Capitalized Interest - - - 8,564 12,186 9,199 7,525
Interest on rental expense 143,447 166,892 195,168 218,403 250,025 240,455 279,910
--------------------------------------------------------------- ----------------------
Fixed Charges 151,071 172,687 200,658 232,496 279,990 255,555 321,656
=============================================================== ======================
Ratio of Earnings
to Fixed Charges 3.81 4.07 3.92 4.18 4.01 2.96 3.52
</TABLE>
<PAGE>
Exhibit 15.1
January 21, 1999
The Gap, Inc.
One Harrison Street
San Francisco, California 94105
We have made reviews, 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 October 31,
1998 and November 1, 1997, for the periods ended August 1, 1998 and August 2,
1997, and for the periods ended May 2, 1998 and May 3, 1997, as indicated in our
reports dated November 10, 1998, August 11, 1998, and May 12, 1998,
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 October 31, 1998, August
1, 1998, and May 2, 1998, are being incorporated by reference in this
Registration Statement on Form S-3.
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
San Francisco, California
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Gap, Inc. on Form S-3 of our report dated February 27, 1998, appearing in
and incorporated by reference in the Annual Report on Form 10-K of The Gap, Inc.
for the year ended January 31, 1998, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
San Francisco, California
January 21, 1999
<PAGE>
Exhibit 25.1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
_____________________
HARRIS TRUST COMPANY OF CALIFORNIA
(Exact name of trustee as specified in its charter)
California 94-0304530
(State of incorporation (I.R.S. employer
if not a national bank) Identification No.)
601 South Figueroa Street, 49th Floor
Los Angeles, California 90017
(Address of principal executive offices)
Esther Cervantes, Harris Trust Company of California
601 South Figueroa Street, 49th Floor
Los Angeles, California 90017
(213) 239-0675
(Name, address and telephone number for agent for service)
_____________________
THE GAP, INC.
(Exact name of obligor as specified in its charter)
Delaware 94-1697231
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One Harrison Street
San Francisco, California 94105
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (415) 952-4400
_____________________
DEBT SECURITIES
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
--------------------
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervisory authority to which it is
subject.
Department of Financial Institutions Federal Reserve Bank of San Fancisco
111 Pine Street 101 Market Street
Suite 1100 San Francisco, California 94105
San Francisco, California 94104
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
--------------------------
If the obligor is an affiliate of the Trustee, describe each
affiliation.
None.
<PAGE>
Item 16. List of Exhibits.
-----------------
Exhibit T-1A. A copy of the articles of association of Trustee as presently
in effect: Restated Articles of Incorporation and Amendment of
February 9, 1994.
Exhibit T-1A is incorporated herein by reference to S.E.C. File
No. 33-54627 of the Registration Statement of FirstFed
Financial Corp. Exhibit T-1A.
Exhibit T-1B. A copy of the certificate of authority of the Trustee to
commence business, if not contained in the articles of
association: Certificate of Authorization to transact business.
Exhibit T-1B is incorporated herein by reference to S.E.C. File
No. 333-2688 of the Registration Statement of Western Wireless
Corporation Exhibit T-1B.
Exhibit T-1C. A copy of the authorization of the Trustee to exercise
corporate trust powers, if such authorization is not contained
in the documents specified in paragraph (1) and (2) above:
Contained in Exhibits T-1A and T-1B above.
Exhibit T-1D. Copy of the existing bylaws of the Trustee or instruments
corresponding thereto: By-Laws of Harris Trust Company of
California as of April 27, 1995, as presently in effect.
Exhibit T-1D is incorporated herein by reference to S.E.C. File
No. 333-2688 of the Registration Statement of Western Wireless
Corporation Exhibit T-1D.
Exhibit T-1E. A copy of each indenture referred to in Item 4, if obligor is
in default.
Not Applicable.
Exhibit T-1F. The consents of United States institutional trustees required
by Section 321 of the Act: Consent dated as of January, 1994.
Exhibit T-1F is incorporated herein by reference to S.E.C. File
No. 33-69382 of the Registration Statement of Pacific Gulf
Properties, Inc. Exhibit T-1F.
Exhibit T-1G. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirement of its supervising
or examining authority: Trust Company Consolidated Report of
Condition provided to the Department of Financial Institutions
for the period ending September 30, 1998. (COPY ATTACHED)
Exhibit T-1H. A copy of any order pursuant to which the foreign trustee is
authorized to act as sole trustee under the indentures
qualified or to be qualified under the Act.
Not Applicable.
Exhibit T-1I. Foreign trustees are required to file a consent to service of
process on Forms F-X.
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Harris Trust Company of California, a corporation organized and
existing under the laws of California, has duly caused this Statement of
Eligibility and Qualification to the signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Los Angeles, State of California,
on January 22, 1999.
HARRIS TRUST COMPANY OF
CALIFORNIA
By /S/ ESTHER CERVANTES
------------------------------
Esther Cervantes
Vice President
<PAGE>
<TABLE>
TRUST COMPANY CONSOLIDATED REPORT OF CONDITION
<S> <C>
Legal Title of Trust Company
HARRIS TRUST COMPANY OF CALIFORNIA
City County State Zip Code
LOS ANGELES LOS ANGELES CALIFORNIA 90017
At the Close of Business on (Date) State Banking Department Number
SEPTEMBER 30, 1998 642
Name and Title of Person to Whom inquiries may be Directed Area Code & Telephone Number
JIM CUSTER, FINANCIAL ANALYST 312-461-6164
ASSETS
1. Cash and due from........................................................ 62 1
2. U.S. Treasury securities................................................. 759 2
3. Obligations of other U.S. Government agencies and corporations........... 3
4. Obligations of States and political subdivisions......................... 5696 4
5. (a) Other securities..................................................... 1250 5
6. (a) Loans............................................................... 6(a)
(b) Less: Reserve for possible loan losses.............................. 6(b)
(c) Loans (net)......................................................... 0 6(c)
7. (a) Bank premises, furniture and fixtures and other assets representing
bank premises........................................................ 167 7(a)
(b) Capital leases included in 7(a) above.............................. 7(b)
8. Real estate owned other than bank premises............................... 8
9. Investments in subsidiaries not consolidated............................. 9
10. Other assets (complete schedule on reverse).............................. 999 10
11. TOTAL ASSETS............................................................. 8933 11
LIABILITIES
12. Liabilities for borrowed money........................................... 12
13. Mortgage indebtedness.................................................... 13
14. Other liabilities........................................................ 580 14
15. TOTAL LIABILITIES........................................................ 580 15
16. Capital notes and debentures............................................. 16
SHAREHOLDERS EQUITY
17. Preferred stock.......................................................... 17
(a) Number shares outstanding............................................ 17(a)
18. Common stock............................................................. 2500 18
(a) Number shares authorized............................................. 18(a)
(b) Number shares outstanding............................................ 18(b)
19. Surplus.................................................................. 2500 19
20. TOTAL CONTRIBUTED CAPITAL................................................ 5000 20
21. Retained earnings and other capital reserves............................. 3353 21
22. TOTAL SHAREHOLDERS EQUITY................................................ 8353 22
23. TOTAL LIABILITIES AND CAPITAL ACCOUNTS................................... 8933 23
MEMORANDA
1. Assets deposited with State Treasurer to qualify for exercise of
fiduciary powers (market value)..\......................................... 254 M1
</TABLE>
D. Certification
The undersigned,
Name Title
M. VALOISE DOUGLAS V.P. & G.M.
and
Name Title
STEVEN ROTHBLOOM PRESIDENT & CHAIRMAN
of the above named trust company, each declares, for himself alone and not for
the other:
I have personal knowledge of the matters contained in this report and I believe
that each statement in said report is true. Each of the undersigned, for himself
alone and not for the other, certified under penalty of perjury that the
foregoing is true and correct.
Executed on: At:
Signature Signature
/s/ STEVEN ROTHBLOOM /s/ M. VALOISE DOUGLAS
Form 502 (Rev. 12/95)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF OTHER ASSETS
Description Amount
<S> <C> <C>
RECEIVABLES 564
GOODWILL 100
OTHER INTANGIBLES 228
DEFERRED TAXES 107
Total (Same as Item 10) 999
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF OTHER LIABILITIES
Description Amount
<S> <C> <C>
PAYABLES 276
ACCRUED EXPENSES 304
Total (Same as Item 14) 580
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST CALLED REPORT OF CONDITION (FIDUCIARY STATEMENT)
<S> <C>
Name of Institution
Harris Trust Company of California
City County State Zip Code
Los Angeles Los Angeles California 90017
at the close of business on (date) State Banking Department Number
September 30, 1998 642
Name and title of person to whom inquiries may be directed Area Code & Telephone Number
Esther Cervantes, Vice President (213) 239-0675
A. ASSETS
1. Investments Dollars in Thousands
(a) U.S. Government & Agency Obligations....................... 500039 1(a)
(b) State, County & Municipal Obligations...................... 0 1(b)
(c) Other Obligations.......................................... 0 1(c)
(d) Stocks (Common and Preferred).............................. 0 1(d)
(e) Mutual Funds............................................... 357357 1(e)
(f) Real Estate................................................ 5280 1(f)
(g) Real Estate Loans.......................................... 0 1(g)
(h) All Other Loans............................................ 0 1(h)
(i) Miscellaneous.............................................. 74988 1(i)
2. Interest-bearing Deposits
(a) Own Institution............................................ 0 2(a)
(b) Other Federally Insured Financial Institutions............. 0 2(b)
3. Noninterest-bearing Deposits
(a) Own Institution............................................ 0 3(a)
(b) Other Federally Insured Financial Institutions............. 74 3(b)
4.TOTAL ASSETS.................................................... 937738 4
</TABLE>
<TABLE>
<CAPTION>
B. LIABILITIES COLUMN A COLUMN B
Discretionary Non-Discretionary
<S> <C> <C> <C> <C>
5. Fiduciary Accounts ($) (#) ($) (#)
(a) Court Trusts.............................................. 0 0 0 0 5(a)
(b) Personal Trusts........................................... 0 0 5280 3 5(b)
(c) Employee Benefit Trusts................................... 0 0 0 0 5(c)
(d) Collective Investment Funds (Total Market Value).......... 5(d)
6. Subtotal (Col A5(a) through (d) plus Col B5(a) through (d))........................................... 5280 6
7. Local Agency Security Accounts ..................................... 0 0 7
8. Corporate Accounts ................................................. 237310 56 8
9. Agency, Safekeeping, Custodian, and Escrow Accounts ........... 695148 56 9
10. TOTAL LIABILITIES.................................................................................... 937738 10
C. Trust Business for Which Securities Are on Deposit with the State Treasurer
Court Trusts Private Trusts
11. Trust Business......................................... 0 0 11
12. Less Real Estate....................................... 0 12
13. Trust Business on Which Security is Required............ 0 0 13
14. Amount of Security Required by Sections 1540 and
1541 of the Financial Code ..................... 100 100 14
15. Market Value of Securities on Deposit with the State Treasurer 127 127 15
16. Excess or Deficiency.................................... 27 27 16
D. Miscellaneous Information
17. Overdrafts............................................................................ 0 17
</TABLE>
E. Certification
The undersigned,
Name Title
M. Valoise Douglas Vice President and General Manager
and
Name Title
Steven Rothbloom President and Chief Executive Officer
of the above named bank, each declares, for himself alone and not for the other:
I have personal knowledge of the matters contained in this report and I believe
that each statement in said report is true. Each of the undersigned, for himself
alone and not for the other, certified under penalty of perjury that the
foregoing is true and correct.
Executed on: At:
Signature Signature
/s/ STEVEN ROTHBLOOM /s/ M. VALOISE DOUGLAS
Form 503 (Rev. 9/97)
